E
d
e
n
R
e
s
e
a
r
c
h
p
l
c
A
n
n
u
a
l
R
e
p
o
r
t
2
0
2
3
Eden Research plc
Annual Report 2023
Sustainable Solutions
for Crop Protection,
Animal Health and
Consumer Products
Eden Research plc is the only UK-quoted
company focused on sustainable biopesticides
and plastic-free encapsulation technology
for use in global crop protection, animal
health and consumer products industries.
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
I
2023 Highlights
Total revenue
for the year was up 78% to
£3.2m (2022: £1.8m).
In particular, product sales,
driven by CedrozTM and
Mevalone®, increased by 63%
to £2.6m (2022: £1.6m).
Operating loss
improved to £1.9m (2022:
£2.6m loss), after non-cash
amortisation of intangible
assets and share-based
payments of £0.7m
(2022: £0.6m).
Loss before tax
was £6.9m (2022: £2.6m)
after non-cash impairment of
Contents
intangible assets of £5.0m
(2022: £nil), and statutory
operating loss improved to
£1.9m (2022: £2.6m).
Cash position
at the year-end was £7.4m
(2022: £2.0m).
Company
Overview
Investment case
2023 Highlights
I
II At a Glance
IV
VI Our products
X Our Markets
XII Our Business model
XIV Our Strategy
Revenue
£3.2m
2022: £1.8m
Operating Loss
£1.9m
2022: £2.6m loss
Product Sales
£2.6m
2022: £1.6m
•
•
•
•
In January 2023,
Mevalone® received
authorisation for home
garden use in Italy.
In April 2023,
Mevalone® received full
authorisation in Poland.
In May 2023, Eden
received regulatory
approvals for its
formulated products
Cedroz™ in California and
Mevalone® and Cedroz™
in Florida.
In December 2023,
Ecovelex™ was granted,
according to Reg.
EU/1107/2009, a
temporary approval in
Italy for use as a bird
repellent seed treatment
in corn for the 2024
growing season.
Annual Report Statements
02 Chairman’s Statement
04 Chief Executive Officer’s Review
08 Strategic Report
10 ESG Report
Governance
20 Board of Directors
24 Chairman's letter
26 Business model and strategy
28 The QCA Corporate Governance
Financial Statements
44 Independent Auditor’s Report to the
members of Eden Research plc
50 Consolidated statement of
comprehensive income
51 Consolidated statement of financial
position
52 Company statement of financial
position
53 Consolidated statement of changes in
equity
Code
54 Company statement of changes in
34 Remuneration Report
37 Audit Committee Report
39 Directors’ Report
41 Directors’ Responsibilities Statement
equity
55 Consolidated statement of cash flows
56 Company statement of cash flows
57 Notes to the group financial
statements
See our website for the latest information: www.edenresearch.com
Eden Research plc Annual Report 2023
II
At a Glance
Our vision:
To be the leader in
sustainable bioactive
products enabled or
enhanced by our novel
encapsulation and
delivery technologies.
• Eden is the only UK-quoted company focused on
biopesticides for sustainable agriculture. We have two
established products with multiple regulatory clearances
and strategic partnerships, Mevalone® and Cedroz™, now
commercially available.
• Eden’s focus is on protecting high-value crops, improving
crop yields and marketability.
• Our products are based upon natural chemistries and deliver
performance, ease of use, and cost on par with conventional
alternatives. Additionally, they have the benefit of being
approved for use as organic inputs in multiple territories.
• Eden has commercialised its first biofungicide product,
Mevalone®, on three continents and its first bionematicide
product, Cedroz™, on two continents.
• Eden is partnered with Eastman Chemical for the
commercialisation of Cedroz™ in 29 countries.
22 (2022: 19)
Countries have granted
product authorisation
100(2022: 66)
Crop use approvals for
Eden’s biopesticides
£17m (2022: £16m)
Invested in IP and registration
130 (2022: 130)
Granted and pending patents
10 (2022: 10)
Pests and disease targets
addressed with Eden’s
registered products
Eden Research plc Annual Report 2023
III
Our Geographic And Regulatory Footprint
For our developed products, we have commercial partners in place across
six continents and product registration activities in around 30 countries.
We are well-positioned to leverage our commercial partnerships as and
when regulatory clearance is granted by the relevant regulators around
the world.
Where we are now
Product sales have commenced in key
markets where we have authorisation to
market and sell our first product, Mevalone®
and our second product, Cedroz™.
Commercial Partnerships and Regulatory Activity
Our products are
sold in the top 3 wine
producing countries.
We have trials and
registration work on-
going in 6 continents.
Both Mevalone®
and Cedroz™ are
approved in Spain
which produces 24%
of the EU’s fruit and
vegetables.
Product authorisations
have been granted in
22 countries.
We are expanding and
developing our base of
commercial clients and
partners.
Eden Research plc Annual Report 2023
Company OverviewAnnual Report StatementsGovernanceFinancial Statements IV
Investment case
United Nations Sustainable Development Goals
Focus on
Biological
Solutions
Eden is the only UK-
quoted company with a
focus on biopesticides
for the crop protection
market.
Regulatory
Drivers for
Sustainable
Solutions
Regulatory changes are
creating significant growth
opportunities for Eden’s
products and technologies.
The EU Green Deal has
a target of 25% organic
agriculture and 50%
reduction in chemical
pesticides.
Technology
Exploitation
Eden is poised
to exploit its core
technologies beyond
biopesticides and crop
protection.
Commercial
Development
Eden is resourced to
support accelerated
new product
development and
growth.
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
V
Increased
Number of
Commercial
Partners
Eden is expanding
existing commercial
relationships and
is focused on the
establishment of
new partnerships.
Strong
Patent
Portfolio
130 granted and
pending patents
enable strong
technological
defensibility.
Revenue
Growth
Eden has the potential
to generate significant
additional revenue in
the medium term as
new authorisations are
received and existing
and new commercial
partnerships are
‘activated’ following
approvals.
Corteva
Agreement
This deal presents new
product opportunities
in the seed treatment
market in a number of
global territories.
Overall, the seed
treatment sector is
estimated to be worth
$6.5 billion globally.
Eden Research plc Annual Report 2023
Eden Research plc ^a Annual Report 2023
VI
VI
Our products
Industry Applications
We work globally through multi-national and local partnerships to develop and launch solutions for challenges facing
three key industries.
Crop Protection
Consumer products
Foliar disease & insect control
Open field & greenhouses
Soil pests
Post-harvest shelf-life extension
Seed treatments
Head-lice treatment
Deodorants
Odour neutralisers
Fragrances
Animal Health
Companion animal
Bio-control
Parasite treatments
Insect sprays
*
$33bn
*
$50+bn
*
$51bn
*Estimated addressable market size per year
Eden’s products serve as sustainable alternatives to conventional chemicals without limitations such as residue limits,
disease and pest resistance, pre-harvest intervals, long field re-entry periods, microplastics or increasing restrictions on use.
WE HAVE DEVELOPED A NATURAL,
PLASTIC-FREE FORMULATION
TECHNOLOGY - SUSTAINE®
Sustaine®
microencapsulation
technology is derived
from yeast. Multiple active
ingredients can be loaded
into the core.
Active ingredients
are released while the
pores remain open in
the presence of water.
When diluted in
water, pores in the
walls of the capsule
open.
If the capsules dry, the pores
will close again, locking in
the active ingredient until
the next re-wetting event,
when further release occurs.
Sustaine® is a novel
microencapsulation solution
patented by Eden, suitable for
applications in a wide range of
agricultural, animal health and
consumer products:
1
Sustaine® is cost effective,
useful for a wide range of
active ingredients, plastic-
free, high capacity, robust,
and sustainable.
2
Sustaine® encapsulates
active ingredients and
provides for the sustained
release of these ingredients
enabling their safe, more
efficient use.
3
Sustaine® particles are
derived from natural yeast
cells originally developed
for use in human health
applications.
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
VII
Our Product Focus
Our current focus is on developing products based on sustainable chemistries to protect high-value crops from pests and
disease, with equal or better performance compared to conventional pesticides. We look for opportunities to replace
conventional pesticides where regulatory action is removing these products from the market, or severely limiting their use.
Our Products
Our products give growers reduced risk, increased flexibility and security.
Exempt from
pesticide
residue limits
Allowed in EU
organic agriculture
Can be used up to
the point of harvest
At least equally
effective vs
conventional chemistry
Organic crops command a higher value and have a significant commercial advantage in the valuable
export markets.
OWNERSHIP of the
patents behind the
Sustaine® encapsulation
technology
SIGNIFICANT
INVESTMENT in patent
protection and the
registration of new actives
PROVEN EFFICACY
with strong commercial
validation by farmers and
our partners
SCOPE to exploit the
core technologies
beyond existing markets
and products
APPLICATIONS
FUNGICIDES
NEMATICIDES
INSECTICIDES
Botrytis, powdery mildew,
downy mildew
Root knot nematodes
Mites and whiteflies
SEED TREATMENTS
Bird repellency
(under development)
Our products harness the biocidal activity of naturally occurring molecules produced by plants as part of
their defence systems. These active ingredients are known as terpenes.
Product Characteristics
Our biopesticides, formulated with Sustaine®, add value compared to conventional pesticides by:
Enabling sustained
delivery, increasing
residual efficacy and
reducing use rates
Tackling resistance
build-up
Solvent-
free, stable
formulations with
high loadings of
active ingredients
Protecting plants
from potentially
damaging chemicals
Polymer-free
formulation
technology
Low or no
preharvest
intervals giving
growers flexibility,
security and control
‘Residue
free’
Eden Research plc Annual Report 2023
VIII
Products in action
Sustainable Control
Mevalone® is used as a preventative and curative
solution for Botrytis cinerea.
Mevalone® is now authorised on an expanded
number of crops against diseases such as powdery
mildew, downy mildew and sclerotinia.
Mevalone® has recently been authorised in France
and Poland for use on apples against storage-related
diseases, thereby helping to reduce food waste in the
supply chain.
The terpene active ingredients are derived from
nature which means the product has a favourable
environmental profile.
The multi-site mode of action means risk of resistance
is minimised.
Free from residue limits and with short pre-harvest
intervals, it provides growers with maximum flexibility.
The cost of
controlling Botrytis
cinerea and related
species accounts
for about 8 per cent
of the fungicide
market worldwide.
8%
Botrytis cinerea is one of the most
extensively studied fungal pathogens and
causes "grey mould” rot in more than
500 plant species
$10-100
Billion
The annual economic
losses due to B. cinerea
28%
Estimated post-
harvest apple
losses caused by
B. cinerea
50%
Potential B.
cinerea yield
losses in
grape vines
Eden Research plc Annual Report 2023
Food Waste Spotlight
Mevalone® is proven to be efficacious against a number
of other crop diseases, including post-harvest storage
diseases on apples.
Used as a foliar spray in the weeks leading up to harvest,
it ensures that apples enter storage free from pathogens,
which extends their shelf life and reduces food waste.
Mevalone® has received full authorisation for use on
apples in France and Poland.
THIS (AUTHORISATION)
IS ANOTHER IMPORTANT
OPPORTUNITY TO PROMOTE
MEVALONE® TO GROWERS AND
TO BETTER SERVE A MODERN
AND EVOLVING AGRICULTURE
RESPONDING FULLY TO THE NEEDS
OF SOCIETY.
Antoine Meyer – President of Sumi
Agro Europe
Top 3 EU apple producers
France
22.9%
Poland
17.6%
Italy
17.0%
French exports
$433.6
Million
Of apples each year are
exported by France
Export regions
Normandy
Brittany
PACA Region
Current global food waste
1.3bn
tonnes
525
tonnes
£19
billion
Food wasted
around the world
every year
Food wasted
every minute
globally
Value of edible
food wasted in the
UK every year
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
IX
Sustainable Control
Sustaine® microcapsules are naturally derived,
biodegradable micro-spheres produced from yeast
extract.
The technology produces stabilised aqueous
suspensions which are easy to mix and apply and
have phased release patterns.
Sustaine® is used to encapsulate the active
ingredients in Cedroz™ and Mevalone® and is
also effective with other natural and synthetic
compounds.
Eden is engaged in a number of projects around the
world to test the compatibility of Sustaine® with third
party active ingredients.
Science Spotlight
Cedroz™ is a water-based formulation which utilizes Eden’s
terpene technology to naturally fight nematodes, a pest
known to cause severe damage to crops globally in both
open fields and greenhouses.
In line with consumer and regulatory drivers for safer
products, Cedroz™ is an attractive alternative for farmers
looking to fight nematodes in an environmentally friendly
way.
Cedroz™ can be used on a wide range of crops including
tomatoes, strawberries, cucumbers, courgettes, peppers,
aubergines and melons.
Changing regulation
Pressure is building to cut out the use of
microplastics in agriculture. A landmark
proposal from the European Chemicals Agency
(ECHA) will restrict the use of microplastics in
agricultural products as part of a wider ban on
the intentional use of plastics.
1
2
3
There is increasing consumer and
regulatory pressure to cut out the use of
plastic in supply chains. Food production
has faced significant scrutiny due to its
widespread use of plastics, from farming to
packaging.
In farming, microplastics are used for
encapsulation to boost the performance
of agricultural inputs, including crop
protection products. The intentional,
direct application of these products to the
environment causes agriculture to be a
major contributor to microplastics pollution.
Sustaine® is one of the only viable
alternatives to microplastics used for
encapsulation of active ingredients in these
agricultural products.
Brittany
Normandy
2
1
PACA
Region
3
“IN CEDROZ™, WE HAVE DEVELOPED
A BIOPESTICIDE THAT MEETS THE
DEMANDS OF MODERN-DAY FARMING,
WHETHER THAT IS IN AN OPEN FIELD
OR GREENHOUSE ENVIRONMENT.”
Sean Smith – CEO of Eden
1
2
The majority of crops in Europe are grown in
open field. However, there is an increasing level
of investment in greenhouse and glasshouse
farming, especially for salad vegetables.
The use of greenhouses will help to reduce
emissions from the agriculture sector which is
considered a “hard to treat” area of the carbon-
cutting agenda. In addition, the use of greenhouses
cuts down on the agricultural sector’s land use by
increasing the yield of a given crop per hectare.
Being able to control conditions
indoors has been proven to
more than double yields in
some cases, reducing the
consumption of resources
required to grow crops.
3
2
2
3
1
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
X
Our Markets
Significant Market Potential
A growing global market
for sustainable products
Crop protection products formulated with
Sustaine® and Eden’s active ingredients
can help address many of these issues:
Consumer concerns
over food safety
EU restrictions on
intentionally added
microplastics
Increasingly challenging
regulatory requirements
Farmers seeking
effective alternatives to
conventional pesticides
$11bn
The global biopesticides market is projected
to be worth more than $11 billion by 2027.
30%of active ingredients in the EU are at medium
to high risk of failing to receive renewal of
their regulatory authorisations.
15%The biopesticides market is growing at a
Compound Annual Growth Rate (CAGR) of
approximately 15% per annum.
$300m
Increasing time and cost of bringing
a single new conventional, synthetic
agrochemical product to market: 10 to
12 years and around $300 million.
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
XI
Crop protection market
The growth of biopesticides is
projected to outpace the demand
for synthetic chemical pesticides in
the coming years.
Product commercialisation
Product sales have commenced in key
markets where we have authorisation to
market and sell our first two commercial
products, Mevalone® and Cedroz™.
Eden has new product registration
applications in-process in multiple
new countries.
North America and the EU are the
two largest biopesticide markets
at this point in time. Currently, 30%
of all pesticide sales in the EU are
biopesticides or biologicals.
The seed treatment market is
forecast to grow from USD 6.1
billion in 2022 to USD 9.2 billion by
2027, a CAGR of 8.3% during the
forecast period.
Strong intellectual property
portfolio
Active engagement
with new partners
A demonstrated platform for
future product development
Growing market share
Regulatory approvals in a
growing list of key markets
Investment in research
and development
Significant market
opportunities
There is high demand for sustainable
products that can compete with
conventional products on ease-of-use,
efficacy, safety, cost and reliability.
The Company has built a strong
portfolio of IP rights and know-how as
well as a growing register of national
product authorisations granting access
to key markets globally for its customers
and partners. Sustainability drives all
that we do in the development of our
products, business, partnerships and
team.
Numerous successful
commercial partnerships
€5.2bn
€1.9bn
€0.5bn
€0.6bn
Seed Treatment
Insecticide
Cedroz™
Mevalone®
Eden Research plc Annual Report 2023
XII
Our Business model
What we do and How we do it
Developing our
product pipeline
We have a pipeline of
products at differing stages of
development targeting specific
opportunities across our key
markets. These include new
seed treatments, fungicides
and insecticides as well as new
solutions for animal health and
consumer products.
Gaining regulatory
approval
We seek regulatory authorisation
for our products on a country-
by-country or regional basis, with
approvals already granted in a
number of European countries
as well as Kenya, Mexico and
Australia. We are in the process
of extending product registration
into new territories, including
the US where we have already
received federal and multiple
state approvals.
Signing commercial
agreements
We work with our sector-
leading partners to
commercialise products
through a range of commercial
production, marketing and
distribution agreements.
Eden is leveraging two technology platforms to
provide sustainable solutions for crop protection,
animal health and consumer products:
• Terpene Chemistry
• Sustaine® microencapsulation technology
Identifying suitable
industrial partners
We partner with global
and regional industry
leaders who have existing
distribution channels, local
experience and knowledge
to maximise sales of our
products. We also add value
to our partners’ products
using Sustaine® to extend IP
protection, ease regulatory
burdens and enhance
performance.
Securing patent
protection for
intellectual property
Our Sustaine® encapsulation
technology is patent
protected throughout the
world.
Investment in research
and development
We are executing a significant
research and development
programme which will
move forward multiple
pipeline products towards
commercialisation.
Generating revenue
Revenue is generated
through:
• Product sales
• Licence-based royalties
• Up-front or milestone
payments
• R & D charges
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
XIII
The Value this Creates
The Company has built a
strong portfolio of IP rights
and know-how, as well as a
growing register of national
product authorisations
granting access to key
markets globally for its
customers and partners.
Sustainability drives all that
we do in the development
of our products, business,
partnerships and team.
For customers
We provide customers
in the crop protection,
animal health and
consumer products
sectors with sustainable,
cost-efficient and
effective alternatives to
conventional products.
For shareholders
We are well positioned
to deliver long-term
shareholder value
through further
commercialisation and
sales of our products.
For partners
We give our partners
market access to
sustainable, efficient and
effective alternatives to
conventional chemical
products.
For the
environment
We use natural
chemistries to create
environmentally friendly
products which support
sustainable agriculture.
For employees
We promote the
development of our
employees through
skills enhancement and
training programmes.
Eden Research plc Annual Report 2023
XIV
Our Strategy
Business Line
Diversification
Research,
Development
and Operations
We will address this by:
Pursuing opportunities in the seed treatments market
Developing insecticide products
Expanding crops and diseases treated with existing
products
We will address this through:
Supply chain optimisation
Expansion of in-house screening and field trials
capability
Accelerating commercialization of Sustaine® for
Geographical diversification (seasonal and climate
conventional actives
variation)
Key achievements in 2023:
Home garden application added to the Mevalone®
Key achievements in 2023:
Increased capability of biological, analytical and
label in Italy
formulation laboratories
Regulatory approval of Cedroz™ and Mevalone®
Expansion of in-house technical expertise
in Florida and Cedroz™ in California
Crop trials ongoing for insecticides and seed
treatments
Mevalone® received full authorisation in Poland
in April 2023
Ecovelex™ granted a temporary approval in Italy
for use as a bird repellent seed treatment in corn
for the 2024 growing season
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
XV
Commercial
Growth
Strengthening and
Growing the Team
We will address this through:
Gaining regulatory clearance in new countries,
crops and diseases
Accelerating Sustaine® business development
Partnerships for Mevalone® in new territories
Pursuing collaboration with majors
We will address this through:
Analytical & Formulation Chemistry Expertise
Regulatory Expertise
Biology Expertise
Key achievements in 2023:
Distribution Agreement signed with Anasac
(Colombia) for Mevalone®
Progression of seed treatment work. Further field
trials and initial regulatory steps
Successful field trials of third-party actives,
encapsulated in Sustaine® technology
Key achievements in 2023:
Lab team strengthened - formulation, analytical
and biology expertise
Eden Research plc Annual Report 2023
XVI
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
01
Annual Report
Statements
02 Chairman’s Statement
04 Chief Executive Officer’s Review
08 Strategic Report
10 ESG Report
Eden has never been short of
opportunities, and this continues to be the
case. The market drivers which underpin
Eden’s investment case continue to
increase with growing regulatory pressure
on older agrochemicals and a shift in
business and consumer preferences to
use sustainable, low residue alternatives.
Eden Research plc Annual Report 2023
02
Chairman’s Statement
“ The successful fundraise that we
completed in October 2023, at a time
when the stock markets were very
challenging, has put us in a position
of financial strength and will enable
us to continue on this path and to
fully exploit the opportunities that lie
before us.”
Lykele van der Broek – Non-Executive Chairman
2023 has been a very fruitful
year for Eden.
We have received numerous
product approvals in key
markets such as Poland, New
Zealand and California, which
directly and significantly
increase our addressable
markets and, therefore,
revenue opportunities.
We have seen revenue grow by 78%
which is due, in part, to the introduction
of Ecovelex™ into the market in
December 2023 following the grant of a
temporary approval in Italy for its use as
a bird repellent seed treatment in corn
for the 2024 growing season.
In 2020, just four years ago, Ecovelex™
was only an idea; a concept which
was discussed at a meeting with
Corteva Agriscience International
Sàrl (“Corteva”), Eden’s commercial
partner. Corteva had foreseen that
an opportunity existed for a new bird
repellent seed treatment product to
come into the market to replace the
existing chemistry that had known
issues, and was looking to Eden to
provide a solution.
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
03
What followed, in relatively short
order, was initial formulation work
undertaken by Eden’s newly created
lab team in Oxfordshire, then field trials
in numerous countries to determine
the efficacy of the newly developed
product.
Following those initial field trials, it
became clear that the product was
efficacious, and so further development
continued apace.
Since that time, both Corteva and
Eden have worked hard, through
a collaborative approach, to take
Ecovelex™ to a point where an EU
regulatory submission could be made
to the Austrian authorities in May 2023.
At around the same time, growers, who
were in need of a new solution for bird
repellency, were sufficiently confident
in the product to apply for a temporary
approval in Italy.
This approval was granted in December
2023, and led to Eden selling a
significant amount of Ecovelex™ to
Corteva for seeds to be treated in time
for the 2024 growing season.
From my years of experience in the crop
protection industry, I can assure you
that taking a product from an idea into
the market in under four years is quite
exceptional.
It is a testament to not only the teams
at Eden and Corteva working very
hard and well together, but also to the
diversity that Eden’s technologies bring.
developing more products to address
growers’ needs, driven by the ever-
changing regulatory landscape.
The successful fundraise that we
completed in October 2023, at a time
when the stock markets were very
challenging, has put us in a position of
financial strength and will enable us to
continue on this path and to fully exploit
the opportunities that lie before us.
And this is just one example of the
numerous opportunities that the team
at Eden is busy developing.
A number of potential commercial
partners for Eden’s insecticide
formulation have been testing the
product in field trials throughout 2023,
with promising results seen.
We are now at the stage of commercial
negotiations to determine with whom
we move that product forward.
As time goes on, we aim to continue to
build on the firm foundations that we
have created, adding to the revenue
streams we are currently receiving from
our first three products (Mevalone®,
Cedroz™ and Ecovelex™) and
I remain very optimistic about Eden’s
future prospects and it becoming a
leader in biological crop protection
products and solutions.
I would like to thank Eden’s
shareholders for their ongoing and
much appreciated support.
Lykele van der Broek
Non-Executive Chairman
2 May 2024
Eden Research plc Annual Report 2023
04
Chief Executive Officer’s Review
“ Upon reviewing our targets, it’s
evident that we’ve achieved notable
advancements in the expansion of
our current product portfolio, whilst
actively seeking and capitalising
on fresh opportunities via the
development of new products such as
our insecticide and even new, second
generation fungicides.”
Sean Smith – Chief Executive Officer
but they all contribute to increasing strain
on our food systems. While the crop
protection industry aims to bounce back
to its previous heights, the seed market
is experiencing its renaissance moment,
driven in large part by new genetics and
seed treatment technologies. Not only do
we find ourselves in the right place at the
right time with our new seed treatment
Ecovelex™, but we have also built a more
diversified platform from which to grow
our business.
In this era where food supply is at a critical
point, we remain absolutely committed to
empowering farmers to use sustainable
tools to grow more high-quality crops
with the same or less land, with no
compromise when it comes to soil health,
the wider environment and cost-effective
production.
Section two:
Delivering on our strategy
By 2027, it is estimated that the global
biopesticide market will be worth more
than $11 billion, growing at a CAGR
of 15% per annum. On average, the
time it takes to bring new conventional
agricultural products to the market is
estimated at around 10 to 12 years at
a cost of $300 million. With that as the
backdrop, it is important to note that
Eden’s leverage of its three registered
active ingredients and formulation
delivery system, Sustaine®, allows us
to move relatively quickly to formulate
new products and introduce new
solutions to the increasing challenges
facing growers, particularly as regulatory
compliance becomes more demanding,
slower and more costly.
As the only UK-quoted company
developing plant-derived biopesticide
formulations and plastic free formulation
technology, we believe that Eden is
uniquely positioned to offer investors
exposure to a compelling segment of
the sustainable agricultural market.
The Company strategy is built on four
key objectives:
a) Business line diversification
Pursuit of opportunities in seed
treatments
Development of insecticides
Expand crops and diseases
treated, increasing the
addressable market for existing
products
Geographic diversification
b) Research, development, and
operations
Supply chain optimisation
Expansion of in-house screening
and field trials capability
Accelerate commercialisation of
Sustaine® for conventional actives
Increase self-reliance in R&D
Reduce time to market
c) Commercial growth
Regulatory clearance in new
countries, crops, and diseases
Accelerate Sustaine®
development
Partnerships for Mevalone® in
new territories
Pursue collaboration with majors
and select national partners
Route to market optimisation
Section one: Introduction
Eden’s mission is to meet the needs of
global farmers by developing, registering
and supplying sustainable solutions in
support of crop health and productivity. In
2023 Eden demonstrated strong progress
towards this goal as we launched a brand
new product and product category,
expanded our existing labels and
continued to develop innovative solutions
for farmers. The long-term strategy that
we have set in place is beginning to bear
fruit, evidenced by our strong year-on-year
sales growth. Our focus over the medium
term will be bringing the business to
profitability, balanced with meeting our
new investment plans to accelerate our
research, development, registration and
commercialisation workstreams as set out
at our last fundraise in the second half of
2023.
Macroeconomic context
The importance of food availability,
cost and quality is perhaps as relevant
today as it has ever been, given the high
level of uncertainty with global inflation,
unpredictable weather patterns, and,
unfortunately, an increasing level of
armed conflict in some regions of the
world. Farmers across the world have
not hesitated in letting their respective
governments know about the difficulties
that they face – particularly with respect
to difficult-to-navigate regulations, lack of
government support and subsidies, and
strained finances driven by constrained
margins and ever-increasing costs.
These issues may appear much larger
than agricultural pest and disease control,
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
05
d) Strengthening and growing
the team
Added capabilities in R&D,
including microbiology, plant
biology, agronomy, and
analytical chemistry
Robust approach to data quality
Expand commercial team
Addition of in-house regulatory
expertise – accelerating time to
market and reducing regulatory
costs
Upon reviewing our targets, it’s
evident that we’ve achieved notable
advancements in the expansion of
our current product portfolio, whilst
actively seeking and capitalising
on fresh opportunities via the
development of new products such as
our insecticide and even new, second
generation fungicides.
New market opportunities: the
launch of Ecovelex™
The unveiling of Ecovelex™, our
first seed treatment innovation,
stands as a significant milestone for
the first half of the year. Developed
over the course of less than four
years, in collaboration with Corteva
Agriscience, Ecovelex™ has initially
been designed as a seed treatment
for maize, offering protection against
bird predation and thereby increasing
crop yields from the outset of the
growth cycle.
This product emerges as a
pioneering alternative to existing
bird repellent seed treatments,
which rely on conventional synthetic
active ingredients facing market
withdrawal in the EU and elsewhere.
With no immediate replacements
available, Ecovelex™ not only offers
a viable solution but also aligns with
sustainable agricultural practices by
utilising naturally derived compounds
without an adverse impact on soil
or avian health. Comparative field
trials have underscored its efficacy,
matching or exceeding that of the
current market leaders.
Our management and regulatory
teams are proactively engaging with
these authorities to facilitate the
regulatory authorisation of Ecovelex™.
In December 2023, we were pleased
to announce that Ecovelex™ had
received its first authorisation in the
form of a temporary approval in Italy,
under EU regulation 1107/2009. This
temporary licence will permit the
treatment’s use as a bird repellent in
maize seeds over a 120-day period.
Since this licence approval, we have
subsequently supplied commercial
quantities of Ecovelex™ for use
during the allowed regulatory window.
In May, we communicated to
stakeholders our submission of a
regulatory dossier to the Austrian
authorities, who serve as the
interzonal rapporteur for EU-wide
approval. This step is crucial for market
access across the European Union,
with the process subject to individual
state reviews for local authorisations.
A parallel application was submitted
to the UK’s Chemicals Regulation
Division, marking our intent for
domestic market approval. The review
process by these regulatory bodies is
anticipated to span 18 to 24 months,
though timelines are dependent upon
the regulatory authorities’ capacities,
workload and other factors generally
beyond Eden’s control.
Building on this short-term success,
the Company is working tirelessly to
ensure its commercial success through
various regulatory approval channels
(both on a full authorisation basis
and emergency authorisation basis),
as well as its potential development
across new crops and targets.
Geographic label expansion:
Mevalone® and Cedroz™
Our recent commercial achievements
are attributed to the strategic
market expansion of our flagship
biopesticides, Mevalone® and
Cedroz™, Focused on broadening
their addressable market and
expanding their approved uses,
we’ve made notable progress,
particularly following the pivotal EPA
authorisations received in the United
States.
Eden Research plc Annual Report 2023
06
06
Chief Executive Officer’s Review continued
In the past year, national-level EPA
endorsements for both Mevalone®
and Cedroz™ set the stage for
subsequent state-level approvals in
17 states, including key agricultural
markets such as Florida and California.
These states are crucial due to their
high-value crop production and a
pronounced preference for natural
over conventional agricultural inputs.
Just after the year-end, Californian
authorities granted approval for
Mevalone®. This led to a sizeable order
fulfilment for Eden’s US distribution
partner, Sipcam Agro USA, setting the
stage for significantly more sales of
Mevalone® to come in the US in 2024.
In Europe, the approval of Mevalone®
in Poland marks a strategic entry into
the EU’s largest apple production
market and opens doors to Central
Europe — a highly significant milestone
for accessing markets in Austria,
Hungary, and Germany, known for
their apple and wine production. Our
regulatory team is actively working
towards gaining approval in these
jurisdictions to further the growth of
our addressable market.
In the Southern Hemisphere, we’ve
secured regulatory approval for
Mevalone® (marketed as Novellus)
in New Zealand, capitalising on the
region’s susceptibility to Botrytis due
to its damp, variable climate. This
approval complements our existing
presence in Australia’s wine regions,
with significant demand for our
products anticipated.
Our expansion into South America
through a partnership with Anasac
for the distribution of Mevalone® in
Colombia represents our first strategic
move in the region. Targeting the
ornamental crops sector, notably cut
flowers, our approach aligns with
Colombia’s status as a major exporter
to the US, which imports over $1.35
billion in cut flowers annually. This
move, coupled with our established
presence in Mexico, underscores
our strategic intent to broaden our
presence and commercial activity
across Latin America.
Closer to home, Mevalone® was
granted its first regulatory approval
for non-professional use in Italy. By
extending the availability of sustainable
biopesticides to home gardeners,
we’re not only broadening our market
but also contributing to the wider
adoption of biocontrol solutions
against common plant pathogens like
Botrytis cinerea and powdery mildew.
In Q3 2023, Eden concluded a
successful fundraise of £9.9 million
(before expenses), which will
allow the Company to expedite
the development of its new and
existing products and expand into
new geographies. It also serves to
strengthen our balance sheet and
provide greater flexibility during this
high-growth period.
In summary, our strategic expansions
supported by regulatory approvals
across key markets reflect our
commitment to broadening the
accessibility and application of our
biopesticide portfolio, aligning with
our growth objectives and reinforcing
our position in the global biopesticide
market.
Section three: Financial
review
Revenue for the year was £3.2 million
which marked a 78% increase on the
previous year (2022: £1.8m). This
reflects a significant increase in product
sales which were £2.6m, a 63% rise on
last year’s product sales (2022: £1.6m).
Our operating loss also improved.
In 2023, we recorded a reduced
operating loss of £1.9m which
compared favourably to the previous
year’s performance (2022: £2.6 million
loss).
Administrative expenses increased
in line with expansion of the
development and commercialisation
team to £3.0 million (2022: £2.7
million), while additions to intangible
assets, including development costs,
increased to £1.7 million from £1.0
million in 2022.
While the loss before taxation
increased to £6.9m (2022: £2.6m loss),
this was after a significant non-cash
impairment of intangible assets of
£5.0m (2022: £nil) – see note 12 to the
financial statements.
Our cash balance at year-end was
£7.4 million (2022: £2.0 million).
At present, there is currently no near-
term plan to pay a dividend. However,
the Board continues to review the
Company’s dividend policy.
Section four: 2024 outlook
As we look to continue our positive
momentum from 2023, Eden expects
to see a healthy increase in existing
product sales throughout 2024, driven
by new regulatory approvals and label
extensions in key geographies and
supported by our key partnerships with
industry-leading partners.
Accelerating development and
commercial growth
Following the completion of the £9.9
million fundraise in Q3 2023, the use of
net proceeds of £1.3m raised from the
firm placing and retail offer has, in part,
been allocated towards the funding
of materials to build up stocks for our
new seed treatment. We also intend
to grow the Ecovelex™ label through
further development work and field
trials. Further, we plan to expand our
activities in new regions such as Latin
America and South-East Asia. Lastly, we
intend to strengthen our commercial
team with the appointment of a
new commercial lead and a market
development and product manager.
Additionally, a significant proportion of
the net proceeds from the conditional
capital raise of £7.7m will be dedicated
towards the development efforts for
our bio-insecticide, a project initiated
with the capital raised three years prior.
This product is designed to target
critical agricultural pests including
spider mites, whiteflies, aphids, and
thrips. Through extensive greenhouse
and field trials conducted by Eden and
its partners over the past two years, we
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
07
have observed promising efficacy and
consistency in combating these pests.
Eden is now in the midst of discussions
with various potential partners in
order to finalise our commercial
partnership strategy. Our strategic plan
also includes submitting regulatory
applications as soon as practicable,
aiming for a market launch initially in
the US and ultimately in the EU and
elsewhere, conditional on favourable
regulatory review and trial outcomes.
Elsewhere, we are actively evaluating
the potential of our biopesticide
portfolio against a broader spectrum of
crops and pests, such as cannabis, black
sigatoka, potato blight, and wireworm,
with initial assessments yielding
optimistic results.
Finally, we have allocated funds to
establish a US-based team to help
support the Company’s growth across
the Americas in the coming two years.
Section five: Driving positive
impact
Sustainability lies at the heart of what
we do at Eden. We are focused on
providing innovative and sustainable
solutions to the global agriculture
industry and beyond. It is with this
philosophy that we aim to perform a
fundamental role for farmers looking
to adopt sustainable farming practices
without adversely impacting their
output or bottom line.
Sustainability can often pose a
systematic challenge for the agricultural
industry as it looks to feed a growing
population while also protecting our
planet and complying with increasingly
stringent regulations. Our growing
portfolio of products helps farmers to
protect natural ecosystems, as well as
their high value crops, meeting the
growing demands of both consumers
and regulators. The ingredients we use
to formulate our products; geraniol,
eugenol and thymol, are naturally-
occurring materials used by plants
themselves as a part of their own
defence systems.
Moreover, our products have been
certified as organic in the EU. This
is a valuable classification for Eden
as we are seeing rising demand for
organic produce amongst consumers
and growers, a trend also reinforced
by regulation. Under its Farm to Fork
strategy, the EU has proposed that at
least 25% of the EU’s agricultural land
should be farmed organically by 2030,
and the action plan supporting this
change has now reached the public
consultation phase.
Increasingly, regulatory restrictions
over crop protection product usage
and a drive towards organic farming
is apparent across the globe and
demonstrated quite clearly in the UK
with the introduction of the Department
of Environment, Food, and Rural Affairs’
new Environmental Land Management
Schemes (ELMS). Under ELMS,
farmers in England will be entitled to a
Sustainable Farming Incentive payment
which focuses on soil health and
reducing the use of damaging inputs
such as fertilisers and insecticides. In the
context of our regulatory applications
in the UK, we continue to review the
associated opportunities and risks.
Moving forward, we look forward to
working with our distribution partners
and local farmers as these regulations
evolve in a post-Brexit environment.
TerpeneTech (UK)
Sales of geraniol into the biocide sector
have continued to increase year on year
and TerpeneTech (UK) is investigating
the potential to register additional
active ingredients under the EU’s
Biocide Directive.
TerpeneTech (Ireland)
TerpeneTech (Ireland) was established
in 2019 to hold the registration of
geraniol under the EU’s Biocidal
Products Regulation due to changes
brought about by Brexit. As such,
TerpeneTech (Ireland) receives royalty
income from TerpeneTech (UK) on the
sales of geraniol but is otherwise non-
operational.
Section six: Summary
In reviewing the past year, it’s evident
that our financial and operational
strategy has yielded positive outcomes,
particularly in sales, market position,
regulatory advancements, and our
product development pipeline, which
contains opportunities that will fuel
future growth. Despite the challenges
that our industry has faced over the
past year, we have successfully brought
one new product, Ecovelex™, to the
start of commercial use within an
extremely short timeframe. Additionally,
we have also witnessed a notable
increase in sales growth across our
flagship biopesticides – Mevalone® and
Cedroz™. This growth is a testament to
the commitment and support that our
team and shareholders have provided
towards our long-term objectives
and reflects the level of ambition of
our management team and Board of
Directors in building the company’s
business and market presence in the
rapidly-growing bio-pesticides industry.
As we deploy our company’s resources
through 2024 and beyond, we are
dedicated to continuing our trajectory
of growth and green innovation. I am
very proud of the team that we have
built in only the last four years, and I
look forward continuing the expansion
of our mission-critical capabilities and
capacity, all in support of our objective
to become a leader in sustainable crop
protection solutions. It is only with the
support of our shareholders that we
have been able to evolve Eden into
the company that it is today, with far
greater capabilities and an expanding
platform for future growth. On behalf
of the Board of Directors and the
Management Team, I’d like to express
our gratitude to our staff, industry
partners, and shareholders for their
continued support and contribution.
Sean Smith
Chief Executive Officer
2 May 2024
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
08
Strategic Report
Review of Business
The review of this year’s business activities is as set out in
the Chairman’s Report and Chief Executive Officer’s Report.
An update on TerpeneTech (UK), Eden’s
associate company, and TerpeneTech (Ireland),
Eden’s subsidiary, is also included in the Chief
Executive Officer’s Report.
Key financial performance indicators
The key performance indicators of the business are the
development and commercialisation of the Group’s products
and the management of its cash position.
Revenue derived from product sales, milestone payments
and R & D charges are considered to be key financial
performance indicators. Maintaining a low overhead base,
progress towards profitability and regulatory approvals are
also key indicators.
Revenue in 2023 consisted of royalties, R & D charges and
product sales and was £3.2m compared to £1.8m in 2022.
The operating loss for the year was £1.9m compared to a loss
of £2.6m for the previous year. The loss before tax for 2022
was £6.9m (including an impairment charge of £5.0m – see
note 12 for further information), up from a loss of £2.6m in
the previous year. More information on the drivers behind
the performance is included in the Chief Executive Officer’s
Report.
The basic loss per share for 2023 was 1.54 pence (2022: a
loss of 0.59 pence).
Administrative expenses for the year were £3.0m (2022:
£2.7m), which reflects balancing the need to maintain a
modest overhead base with ensuring the Group has the
necessary skillset to drive growth.
Intellectual property, including development expenditure,
is written off over seven years in line with the remaining life
of the Group’s key patents, taking into account additional
protection provided by granted Supplementary Protection
Certificates.
The Group capitalised £1.7m (2022: £0.9m) of development
expenditure in the year, which is a reflection of the continued
development of the Group’s products. A significant
proportion of this expenditure relates to regulatory approvals
which strengthens the Group’s competitive advantage,
ultimately supporting sales growth.
An impairment review of Eden’s intangible assets led to a
charge of £5.0m in the year (2022: £nil). Further details of this
review can be found in note 12 to the financial statements.
An impairment review of Eden’s investment in its associate
company, TerpeneTech (UK), led to no charge in the year
(2022: £nil). Further details of this review can be found in
note 15 to the financial statements.
Cash is safeguarded by close working capital management,
including tightly controlling the Group’s creditor position.
The cash position at the year-end was £7.4m (2022: £2.0m).
This is in line with management’s expectations.
Other key non-financial performance indicators
The regulatory approval of products and milestones related
to such processes are deemed to be key non-financial
performance indicators.
At the end of 2023, 22 (2022: 19) countries had granted
product authorisation with 100 (2022: 66) crop use approvals
for Eden’s biopesticides and 10 (2022: 10) pests and
disease targets addressed with Eden’s registered products,
which shows positive progress in this KPI and translates
into an increased addressable market from a product sales
perspective.
The progress of the development of the Group’s products is
measured against internally set timescales as well as against
the regulatory process, which are expected to result in the
registration of products. The Chief Executive Officer’s Report
contains an update regarding this progress.
The on-going registrations of the Group’s first product,
Mevalone®, for use as a pesticide is not only a key milestone
in terms of its commercialisation, but is also indicative of
the likely registrability of Eden’s future products as the three
active substances that are registered in the EU are the basis
of Eden’s future product portfolio. Thus far, Mevalone® has
been approved for use in a number of key countries whilst
Eden and its partners pursue regulatory clearance in new
territories, thereby seeking to grow Eden’s addressable
market globally.
Eden’s second product, Cedroz™, is a nematicide which is
registered for sale on two continents and Eden’s commercial
collaborator, Eastman Chemical, is pursuing registration and
commercialisation of this important product in numerous
countries globally.
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
09
Further commercialisation of Eden’s products and Sustaine®
encapsulation technology through supply, licensing,
evaluation and option agreements also serve as a key
indicator of the Company’s performance.
The retention of skilled and experienced employees is a
key risk since the work at Eden is technical. Eden manages
this risk by ensuring that staff welfare is a priority and that
employees are well incentivised to stay with the business.
Employee diversity and inclusion
The Board remains committed to a culture that encourages
the inclusion and diversity of all of the Company’s employees
through respecting and appreciating their differences and
promoting the continuous development of employees
through skills enhancement and training programmes. The
Group’s employment policies are designed to attract, retain,
train and motivate the very best people, recognising that this
can be achieved only through offering equal opportunities
regardless of gender, race, religion, age, disability, sexual
orientation or any other aspect of diversity. Applications from
disabled persons are always fully considered, bearing in
mind the aptitudes of the applicant concerned. It is the policy
of the Company that the training, career development and
promotion of disabled persons (including those who become
disabled whilst employees of the Group) should, as far as
reasonably possible, be identical to that of other employees.
Indemnity cover
The Company purchases insurance cover for Directors and
Officers to offer protection from third party claims.
Environment
The Company has an environment policy and acknowledges
that environmental considerations form an integral part of its
corporate social responsibility. The Company’s environment
committee meets to discuss ways in which the business can
contribute to its environment by getting involved in local
initiatives and also looks at ways of promoting environmental
wellbeing amongst the staff. Employees are actively
encouraged to ensure conservation of energy and resource
through awareness campaigns and positive action.
Sean Smith
Chief Executive Officer
Finally, successful trial results help demonstrate the technical
and commercial viability of our intellectual property.
Principal risks and uncertainties
The Group’s prime risk is associated with the on-going
commercialisation of its intellectual property, which involves
testing of the Group’s products, obtaining regulatory
approvals, which are required for commercialisation,
and reaching a commercially beneficial arrangement for
each product to be taken to market. This is measured by
comparing actual results with forecasts that have been
agreed by the Group’s Board of Directors. The risk of
commercial failure is managed by employing suitable,
experienced people in commercial roles and engaging with
partners on a regular and professional basis.
The Group’s credit risk is primarily attributable to its trade
receivables. Credit risk is managed by running credit
checks on customers and by monitoring payments against
contractual agreements.
The Group monitors cash flow as part of its day to day control
procedures. The Board considers cash flow projections at
its meetings and ensures that the Group has sufficient cash
resources to meet its on-going cash flow requirements.
Due to the nature of the business, there is inherent risk of
infringement of Eden’s intellectual property rights by third
parties, and the potential infringement of third party rights
by Eden. The risk of infringement is managed by taking (and
acting on) the relevant legal advice as and when required.
There is also inherent uncertainty surrounding the regulatory
approval of products in terms of both timing and outcome.
This risk is managed by retaining appropriately experienced
staff and contracting with expert consultants as needed.
Risk from competitors derives from existing or new products
on the market which are potentially superior to, or cheaper
than, Eden’s products. Eden continually looks to reduce costs
and improve products through development in order to
mitigate this risk.
Supply chain issues, such as availability of toll manufacturing
capacity, or low supply of raw materials, may occur. Eden
addresses this risk by sourcing raw materials from multiple
suppliers and using a number of toll manufacturers.
Eden Research plc Annual Report 2023
10
ESG Report
Introduction
The Transition to Sustainable Agriculture
Shapes Market Needs
In agriculture there is an urgent need to move to a safe,
equitable and sustainable food system.
Our ESG Strategy
We deliver bio-innovation to support sustainable agriculture
supported by a resilient and efficient supply chain and our
sustainable operations.
Our food system accounts for over a third of global CO2
emissions and is a key driver of accelerating biodiversity
loss.
Our innovative products are positioned to serve
growing markets with more sustainable solutions. They
reduce on-farm impacts on nature, food waste and the
risks to human safety and health from conventional
agrochemicals.
Eden’s products provide effective crop protection
resulting in improved crop yields and produce quality,
enhancing the financial sustainability of farming
businesses whilst reducing the risk to the environment.
About our ESG Strategy
Developed with input from ESG experts to ensure that it
reflects best-practice.
Informed by a materiality analysis to identify and prioritise
the ESG issues that matter most to the business and are to
be addressed.
Describes our ESG focus areas and sets clear standards
that we integrate into our business strategy and
management approach.
We integrate Environmental, Social and Governance (ESG)
issues into our business strategy and management approach.
Supporting the UN Sustainable Development
Goals (SDGs)
The SDGs are a call to action to end poverty, protect the
planet and ensure peace and prosperity for all. They define
a framework for action for governments and business.
Through our products, innovation expertise and sustainable
operations we believe we can make a powerful contribution
to support the SDGs.
We particularly contribute to:
Reducing food waste
Protecting soil
and ecosystems
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
11
Integrating ESG
Into All that We Do
Sustainability lies at the heart of what we do at
Eden. We are focused on providing innovative and
sustainable solutions to the global agriculture industry
and beyond.
We want to ensure that this mission extends to, and
is reflected in, our reporting, and we believe that
setting high ESG standards means that we can deliver
more value to our stakeholders and accelerate the
contribution we make to sustainability.
It also means that we can demonstrate high standards
of transparency and accountability, helping our
investors understand the contribution that we are
making to sustainability outcomes and evaluate our
performance.
We recognise that integrating ESG is a journey and, as
for all businesses, this is just the start and we have a lot
to accomplish.
However, I am confident that our committed team
and strong processes, coupled with our sustainable
innovation platforms will deliver value for our investors
and partners.
Sean Smith
Chief Executive Officer
We are committed
to delivering
high standards of
Environmental,
Social and
Governance (ESG)
performance across
our business.
Our ESG Strategy
is designed to
integrate ESG into
all that we do.
Eden Research plc Annual Report 2023
12
ESG Report continued
A Resilient and Efficient Supply Chain
Working with leading suppliers of raw materials and
high-quality manufacturers. We work with our partners to
manage ESG issues across our supply chain.
Case Study:
Sipcam
Manufacturing Excellence
We work with partners, such as Sipcam-Oxon, to manufacture a number
of our key products.
Our products are manufactured at Sipcam’s facility near Milan, Italy.
Sipcam is a specialist in the manufacture and marketing of
agrochemicals. Sipcam is a Responsible Care® company, the chemical
industry’s environmental, health and safety initiative to drive continuous
improvement in performance. Its sites are also certified to the ISO14001
environmental management system standard.
Our Ingredients
Applying high standards to ensure
the quality and sustainability of the
ingredients used for the manufacture
of our innovative products, including
yeast extract – a key building block
of our Sustaine® microcapsules, and
terpenes – the nature identical active
substances in our products.
Our Manufacturing
Working with leading manufacturers
who apply robust sustainability
standards to reduce environmental
impacts and ensure safety in the
manufacture of our products.
Our Priorities:
Manufacturing
Safely
Ensuring high health and safety
standards are applied in the
manufacture of our products.
Protecting the
environment and climate
Reducing greenhouse gas
emissions, improving resource
efficiency, supporting the circular
economy and reducing air
pollution.
Protecting
Human Rights
Protecting human rights and
managing risks associated
with modern slavery across our
supply chain.
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
13
Delivering our ESG
standards at our laboratory
Our laboratory facility in Oxfordshire has
allowed us to establish high ESG standards in
research and testing. We follow best practice
standards to manage risks, including to safety,
the environment and to ensure high quality
standards.
Eden’s laboratory also has sophisticated
equipment to analyse a wide range of
compounds from a chemical and physical
standpoint and the ability to perform lab scale
formulation development and stability testing
(rheometry, homogenization, particle size
analysis, etc).
Our in-house capabilities will speed the
commercialisation and deployment of new
sustainable products.
Sustainable
Operations
We apply high standards in our
own operations. Our operations are
centered around the Company’s
laboratory facility in Milton Park,
Oxfordshire.
Eden’s team brings deep experience
in bio-innovation for sustainable
agriculture.
Our Priorities:
Acting Safely
Protecting our team by applying
the highest standards of health
and safety in our own operations.
Reducing Our
Environmental Impacts
Minimising our operational
impact by reducing greenhouse
gas emissions and reducing
waste.
Acting Ethically
Applying best practices in
business ethics including in
the prevention of bribery and
corruption, fraud and ensuring
legal compliance.
Developing a
Diverse Team
Building a diverse, engaged and
highly skilled team through the
attraction, development and
retention of the best talent.
Eden Research plc Annual Report 2023
1414
ESG Report continued
Bio-Innovation for Sustainable Agriculture
Leading innovation in sustainable
biopesticides and plastic-free
encapsulation to deliver products that
improve agricultural sustainability. Our
innovative products are derived from
natural plant chemistry and used on
high-value fruits and vegetables to
improve crop yields and marketability.
They address key sustainable agriculture
drivers including:
Consumer demand
for residue-free
produce
Protecting soil
health and
reducing impact
on biodiversity
Case Study:
Our Impact on
Food Waste
Eden’s product, Mevalone®, can be used to extend the shelf-life of
produce. Approved for use on grapes, apples, kiwis, aubergines,
pomegranates, spring onions and more, Mevalone® is exempt from
pesticide residue limits due to its favourable safety profile. In contrast
to many conventional chemistries, it can be applied up to the point of
harvest giving flexibility to growers and allowing treatment to extend
shelf life.
Extending shelf life can dramatically reduce food waste in the supply
chain and consumer homes. Globally, 25-30% of all food produced is
wasted. Not only does this have a significant financial impact on the food
industry and in homes, but it also has a significant impact on our climate
with food waste accounting for up to 10% of global CO2 emissions.
Tackling food waste also means we can protect nature by limiting the
need for agricultural land.
Our Priorities:
Safe products
Ensuring our products are safe
for people and the environment
including in use and disposal.
Reducing food waste
and toxic residues
Reducing food waste by
improving produce treatment and
processing and reducing toxic
residues.
Protecting soil and water
Reducing the application and
release of toxic, bio-accumulative
or persistent chemicals and plastic
pollution to soil and water.
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
25-30%
of food is wasted globally
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
15
How we will deliver on ESG
Integrated into the business: We integrate ESG into our
business strategy and management practices and consider
the implications of key business decisions on our ESG
performance.
ESG Drives our Future Growth
The sustainability challenge
Our agricultural system faces the dual challenge of safely
feeding a growing population while decarbonizing and
protecting human health and the natural environment.
Integrating ESG into innovation is a key focus: As an
innovation led business our innovation strategy and pipeline
are key opportunities to deliver improved ESG outcomes. We
actively consider ESG opportunities and risks in our innovation
strategy.
Integrating into governance: We integrate ESG
considerations into roles and responsibilities of key leaders.
• Delivery of our ESG plan is the responsibility of the Eden
Research CEO.
• Our ESG Steering Committee coordinates and drives our
ESG actions.
• We report our performance regularly to the Board.
Leadership in bio-innovation positions Eden Research
for growth
Our unique technologies provide important solutions
to some of the most pressing sustainable agriculture
challenges. As the world transitions towards a sustainable
agri-food system, products that can deliver more sustainable
outcomes are set for significant growth.
Our ESG approach will drive impact
Our sustainable agriculture solutions, delivered through our
integrated ESG platform make Eden Research an exciting
opportunity for ESG investors.
Our future plans
Our next steps on ESG are to:
Identify and address gaps in
our ESG management.
Establish specific ESG targets,
including KPI’s and metrics.
Define reporting output.
01
02
03
Eden’s formulations are well
suited for a wide range of
crop protection applications.
The fact that our Sustaine®
encapsulation technology
is completely free from
microplastics is just one of
the elements that makes
them stand out in this
rapidly evolving market.
Sean Smith
Chief Executive Officer
Eden Research plc Annual Report 2023
16
Strategic Report continued
Section 172 statement
The Directors are
fully aware of their
responsibilities to promote
the success of the Company
in accordance with s172
of the Companies Act and
have acted in accordance
with these responsibilities
during the year.
The Board has identified that its key
stakeholders are its:
• workforce
• shareholders
• customers
• regulators
Eden’s core values, which are professionalism,
integrity, effectiveness and dynamism, reflect the
Company’s commitment to do the right thing simply
because it is the right thing to do. The requirement
to adhere to this principle is embedded within all job
descriptions across the Group.
Throughout the year, the Board considered the wider
impact of strategic and operational decisions on the
Company’s stakeholders.
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
17
Our workforce
Our workforce is fundamental to the long-term success
of the Company. We have various engagement
mechanisms, many of which have been in place for a
number of years. The team at Eden generally meets
every Monday morning to review the various on-going
projects and plan the week ahead. Annual employee
reviews are undertaken and regular communication
takes place between management and staff to
ensure that any concerns or issues are identified and
appropriately addressed. The Company provides
training to employees as well as arranging social
occasions to promote the well-being and connectivity
of the team.
Shareholders
The support and engagement of our shareholders is
imperative to the future success of our business. In
all of its decision making, the Board ensures that it
acts fairly with regard to members of the Company.
We have productive, ongoing dialogue with a
number of our investors. We are also in touch with all
of our shareholders at least three times a year with
information about shareholder meetings and the
Company’s financial results. We have regular meetings
with institutional and other investors, research analysts,
market commentators and advisors to understand
shareholder views and address any concerns.
Customers
The commercial team at Eden is in regular contact with
our customers to ensure that they are satisfied with the
products that Eden is selling to them, or that any projects
that are taking place with them are on track and without
issue. Face to face meetings take place, as well as other
communication such as emails or video or phone
conferences, which allow for an on-going dialogue
with the objective of reducing any potential issues or
concerns. A project management system is operated by
Eden to ensure that all customers are communicated
with on a regular basis to keep customers satisfied as
much as possible.
Regulators
The regulatory team at Eden, which includes both
employees and expert consultants, communicates
directly with regulators around the world to promote an
efficient and successful relationship. Clearly, regulation
is a key factor in Eden’s industries and so it is important
for the team at Eden to be in regular contact with
regulators to promote the long-term success of the
business through the approval of product marketing
authorisations. The regulatory team also keeps itself
up to date on regulatory matters through training and
relevant publications.
On behalf of the board:
Sean Smith
Director
2 May 2024
Eden Research plc Annual Report 2023
18
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Governance
Financial
Statements
19
Governance
20 Board of Directors
24 Chairman’s letter
26 Business model and strategy
28 The QCA Corporate Governance Code
34 Remuneration Report
37 Audit Committee Report
39 Directors’ Report
41 Directors’ Responsibilities Statement
The Directors of Eden champion
openness and accountability
at every level. This involves
focusing on how this takes place
throughout the Company and on
those who act on its behalf.
Eden Research plc Annual Report 2023
20
Board of Directors
Leading the way, in
achieving successful
business growth.
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
Lykele van der Broek
Non-Executive Chairman
Appointed
October 2017 (Board)
January 2018 (Chairman)
Independent
Yes
Full-time (FT) or part-time (PT)
PT – 10 days per year
Background and experience
Lykele retired as a Member of the
Board of Management of Bayer
CropScience, a division of Bayer AG,
in 2014, having been responsible for
the commercialisation of innovative
agricultural products and services
globally. Prior to this, he held senior
international roles including the Head of
Bayer CropScience’s BioScience division
and President of the Bayer HealthCare
Animal Health division.
Committee membership
AIM Compliance Committee
(Chairman)
Nominations Committee (Chairman)
Remuneration Committee
(Chairman)
Audit Committee
External appointments
Genus plc (Non-Executive Director) –
retired 22 November 2023
Company
Overview
Annual Report
Statements
Governance
Governance
Financial
Statements
21
Sean Smith
Chief Executive Officer
Alex Abrey
Chief Financial Officer
Robin Cridland
Non-Executive Director
Appointed
September 2014
Appointed
September 2007
Appointed
May 2015
Independent
No
Independent
No
Independent
Yes
Full-time (FT) or part-time (PT)
FT
Full-time (FT) or part-time (PT)
FT
Full-time (FT) or part-time (PT)
PT – 10 days per year
Background and experience
Sean has a bachelor’s degree in
microbiology and over 25 years of
experience in the speciality chemicals
and industrial biotechnology industries.
He has held senior commercial
leadership roles ranging from sales and
marketing to business management
and intellectual property licensing in
blue chip companies such as Ciba
(now BASF) and Honeywell. In recent
years, Sean has focused on technology
commercialisation through licensing
and company formation working
with Intellectual Ventures and several
start-ups.
Background and experience
Alex, a Chartered Certified Accountant,
joined the Board in September 2007,
having been Chief Accountant to Eden
for the previous four years. He has acted
as Financial Director to a diverse range
of businesses including a financial and
management consultancy business
based in Oxfordshire, a medical
waste management company and an
intellectual property licensee involved
in plastics manufacturing. Alex has over
twenty years’ experience in both practice
and industry.
Background and experience
Rob served as Chief Financial Officer
and Company Secretary of Itaconix plc
until the end of August 2018. He joined
Itaconix in September 2008 from Renovo
Group plc where he spent seven years
as Executive Director of Finance and
Business Development. He began his
career at Coopers & Lybrand Deloitte,
before moving on to senior transactional
roles at Enskilda Securities and senior
finance and transactional roles at
GlaxoWellcome and GlaxoSmithKline. He
has also been a Governor and a Non-
Executive Director of Cheadle Hulme
School, Cheshire.
Committee membership
None
Committee membership
None
Committee membership
Audit Committee (Chairman)
Nominations Committee
AIM Compliance Committee
Remuneration Committee
External appointments
None
External appointments
Ricewood Ltd (Director)
External appointments
Broadhey Barns Management Company
Limited (Director)
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
Annual Report 2023
Eden Research plc
22
Board of Directors continued
Attendance at Board and Committee meetings
Board and Committee meetings are scheduled in advance
for each calendar year. Additional meetings are arranged as
necessary to review strategic and financial plans.
The scheduled Board and Committee meetings and
attendance during the year ended 31 December 2023 were
as follows:
Board
(10 meetings)
AIM
Compliance
(1 meeting)
Remuneration
& Nominations
(3 meetings)
Audit
(3 meetings)
Director
Role
A Abrey
Chief Financial Officer
R Cridland
Non-Executive Director
R Horsman*
Non-Executive Director
–
S Smith
Chief Executive Officer
L van der Broek
Non-Executive Chairman
*Resigned on 31 January 2024
The role of each committee can be found on page 39 and 40.
–
–
–
–
Professional development and training
Alex Abrey is a Chartered Certified Accountant. As part of his
professional development, he attends relevant courses and
maintains his qualification through Continuing Professional
Development under the Association of Certified Chartered
Accountants.
Robin Cridland qualified as a Chartered Accountant with the
Institute of Chartered Accountants in England and Wales
(ICAEW) in 1992. As part of his professional development,
he attends relevant updates and courses through Continuing
Professional Development under the ICAEW requirements.
Sean Smith has access to online tools and courses and
attends industry conferences including the Association of
Biocontrol Industry Manufacturers.
Lykele van der Broek keeps up-to-date by regularly reading
economic and management literature, by being briefed
by external advisors on matters such as remuneration and
corporate governance, and liaising with consultants who
inform the Board of changes in legislation, best practice or
public perception.
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
23
Board skill-set
Product supply
chain and
management
Intellectual
Property
Chemicals
Industry
General
management
Other public
Company
(Board level)
Funding
–
–
Director
A Abrey
R Cridland
R Horsman
S Smith
–
–
L van der Broek
–
External advisors
The Company uses external advisors, where necessary, as follows:
Advisor
Role
Nominated Advisor
Provides advice on AIM Compliance
Commercial lawyer
Provides advice on legal issues, such as commercial agreements
Regulatory lawyer
Provides advice on regulatory aspects of the business
The Board’s Role
The Board, under the Chairman’s leadership, is responsible
for ensuring our long-term success.
approving material contracts and other third party
arrangements; and reporting to shareholders.
It informs and approves our strategy and corporate goals
and monitors our performance against them. It determines
that we have the necessary resources, systems and controls
to achieve our objectives, and assesses the culture and
standards of behaviour throughout Eden.
The Directors believe that the Board, taken as a whole,
has sufficient expertise and a variety of complementary
skills for the Company to operate and develop its business
satisfactorily for the benefit of the shareholders over the
medium to long-term.
The Board is also responsible for other critical decisions,
including approving strategy, medium term plans and
corporate budgets; ensuring we have the right funding;
As the Company grows, the Board will inevitably grow, which
will provide an opportunity for the gender imbalance that the
Board currently has, to be addressed.
Internal advisors
The Company Secretary is the only internal advisor that the
Company currently has.
The Company Secretary is responsible for the efficient
administration of Eden, particularly with regard to ensuring
compliance with statutory and regulatory requirements and
for ensuring that decisions of the Board of Directors are
implemented.
Eden Research plc Annual Report 2023
24
Chairman’s letter
The quality of our governance is
evident in the way we conduct
business and how we treat our
workforce, customers and suppliers.
Lykele van der Broek
Non-Executive Chairman
Dear shareholder,
The Directors have adopted the
principles set out in the Quoted
Companies Alliance Governance
Code. The Directors have applied
these principles, as far as practicable
and appropriate for a relatively small
public company, as follows:
The Board currently comprises two
Executive Directors and two Non-
Executive Directors.
The Board meets regularly to consider
strategy, performance and the
framework of internal controls.
To enable the Board to discharge its
duties, all Directors receive appropriate
and timely information. Briefing papers
are distributed to all Directors in
advance of Board meetings.
All Directors have access to the advice
and services of the Company Secretary
and the Chief Financial Officer, who is
responsible for ensuring that the Board
procedures are followed, and that
applicable rules and regulations are
complied with.
In addition, procedures are in place
to enable the Directors to obtain
independent professional advice in the
furtherance of their duties, if necessary,
at the Company’s expense.
The Directors of Eden champion
openness and accountability at every
level. This involves focusing on
how this takes place throughout the
Company and on those who act on its
behalf.
The quality of our governance is
evident in the way we conduct business
and how we treat our workforce,
customers and suppliers.
The Board sets the framework of values
within which the desired corporate
culture can evolve and thrive.
Ownership of the values is
strengthened by a collaborative
approach by both the leadership and
the workforce being involved in a two-
way process to define the Company’s
values.
Clear messages are given through
decisions, strategies and conduct.
Directors reinforce values through
their own behaviour and decisions. To
increase the effectiveness, Executive
and Non-Executive Directors have
increased visibility.
The Board demonstrates ethical
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
25
leadership and displays the
behaviours it expects from others and
communicates what it considers to be
acceptable business practice, and it
considers appropriate behaviours when
setting strategy and financial targets.
The Company seeks to keep its strategy
consistent with its purpose and values
and its responsibilities for long-term
success and to contribute to wider
society.
Values are embedded at every level of
the organisation and the Board seeks
assurance from management that it has
effectively embedded the Company’s
purpose and values in operational
policies and practices including aligning
incentives, rewards and promotion
decisions to values.
Values and expected behaviours are
reinforced through our recruitment,
promotion, reward, performance
management and policies, processes
and practices.
Our reward structures produce
appropriate incentives to encourage
desired behaviours and responsible
and appropriate risk-taking
and management consistently
communicates values and expected
behaviours widely and clearly across
the Company and ensures that they are
understood by the workforce.
Management also encourages suppliers
to meet the expected standards of
behaviour.
Values and expected
behaviours include:-
Honesty
Openness
Transparency
Respect
Adaptability
Reliability
Recognition
Monitoring of effectiveness
Monitoring efforts are focused on
existing internal capabilities and
information:-
Training data
Recruitment, reward and promotion
decisions
Use of non-disclosure agreements
Whistleblowing, grievance and
‘speak-up’ data
Board interaction with senior
management and workforce
Health and safety data, including
Acceptance of challenge
near misses
Accountability
A sense of shared purpose
Professionalism, integrity,
effectiveness and dynamism
.
The Board is alert to signs of possible
cultural problems and recognises that
the workforce is a vital source of insight
into the culture of the Company.
Promptness of payments to
suppliers
Attitudes to regulators, internal audit
(if applicable) and employees
Areas including human resources,
audit and risk, and compliance
offer an integrated approach to aid
understanding of how behaviours and
culture impact performance and offer
analysis and advice to the Board.
The Board identifies areas of good
practice and excellence that are used to
drive up standards across the business
which reinforces the value that a healthy
culture adds.
Lykele van der Broek
Non-Executive Chairman
Eden Research plc Annual Report 2023
26
Business model and strategy
The Company’s business model
can be found on the Company’s
website www.edenresearch.com.
Key challenges
Our vision is to be the leader in sustainable bioactive products enabled
or enhanced by our novel encapsulation and delivery technologies, in
crop protection, animal health and consumer products.
Key challenges
We will address these by:
Stable financial base and revenue growth
• Continuing to evolve our business model to focus primarily on product sales
• Signing further agreements with industry partners to expand commercialisation of our
products
• Ensuring a well-funded balance sheet
Product development
• Furthering development of the encapsulation technology for new applications
Growing a diverse product development pipeline
• Investing in patents for new market opportunities
• Building our internal technical resources in terms of capability and capacity
Geographic expansion
• Extending registrations for product authorisation into new territories
Targeting new geographies where there is
a demand for sustainable solutions
• Investing in patent protection for our intellectual property in new territories
• Identifying suitable industrial partners with access to new geographies and customers
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Governance
Financial
Statements
27
The Company seeks
to keep its strategy
consistent with its
purpose and values and
its responsibilities for
long-term success and
to contribute to wider
society.
Eden Research plc Annual Report 2023
28
The QCA Corporate Governance Code
In accordance with Aim
Rule 26 of the AIM rules for
companies, the corporate
governance code that the
Board of Directors has chosen
to apply and benchmark
against is The QCA Corporate
Governance Code.
The Company acknowledges the new QCA Code
but notes that it is not required to comply with it yet.
However, its adoption is being considered for future
periods, notably the period commencing 1 January
2025, which is the first period in which Eden will be
required to comply with the new Code.
This information is reviewed annually:
Last review date 20 March 2024.
Published Disclosures:
Principle
No.
1
Principle
Establish a strategy and
business model which
promote long-term
value for shareholders
Location of
disclosure
ANNUAL
REPORT &
ACCOUNTS See
page XII
WEBSITE
2
3
4
5
Seek to understand and
meet shareholder needs
and expectations
ANNUAL
REPORT &
ACCOUNTS
WEBSITE
WEBSITE
Take into account wider
stakeholder and social
responsibilities and their
implications for long-
term success
Embed effective risk
management, considering
both opportunities and
threats, throughout the
organisation
ANNUAL
REPORT &
ACCOUNTS See
pages 8-9
WEBSITE
Maintain the board
as a well-functioning,
balanced team led by the
chair
ANNUAL
REPORT &
ACCOUNTS See
pages 20-21
WEBSITE
Disclosure Detail Required
Explanation
Link
DISCLOSURE: Explain the Company’s business model and
The Company seeks to keep its strategy
Business model
strategy, including key challenges in their execution (and how
consistent with its purpose and values
and strategy
Disclosure
status
Compliant
those will be addressed).
DISCLOSURE: Explain the ways in which the Company seeks to
The CEO + CFO communicate regularly
Shareholder
Compliant
engage with shareholders and how successful this has been.
with shareholders, investors and
engagement
This should include information on those responsible for
shareholder liaison or specification of the point of contact for
such matters.
DISCLOSURE: Explain how the business model identifies the key
resources and relationships on which the business relies.
Compliant
Explain how the Company obtains feedback from stakeholders
and the actions that have been generated as a result of this
feedback (e.g. changes to inputs or improvements in products).
The Board has identified the main
stakeholders in the business and
Stakeholder
engagement
regularly discusses how employees,
and social
suppliers and customers and others
responsibility
and its responsibilities for long-term
success and to contribute to wider
society.
analysts, including at our half yearly
results roadshows. The full Board
is available at the Annual General
Meeting (AGM) to communicate with
shareholders.
might be affected by decisions and
developments in the business.
We constantly strive to enhance our
environmental and social credentials.
In order to obtain feedback from
stakeholders, management meets
regularly with them. The Company’s
website, email footers and business
cards all provide contact details of the
relevant person at the Company that
they can use, should they need to get
in touch.
Both the Board and Audit Committee
regularly review risks, including new
threats and the processes to mitigate
and contain them.
Whilst the Board is responsible for
risk, our culture seeks to encourage all
colleagues to manage risk effectively.
DISCLOSURE: Describe how the board has embedded effective
risk management in order to execute and deliver strategy.
Compliant
Effective risk
management
This should include a description of what the board does to
identify, assess and manage risk and how it gets assurance that
the risk management and related control systems in place are
effective.
DISCLOSURE: Identify those directors who are considered
to be independent; where there are grounds to question
the independence of a director, through length of service or
otherwise, this must be explained.
Compliant
team.
The Board works well together as a
Board
Meetings are characterised by lively
discussion and active idea generation
and management are rigorously
challenged and held to account.
composition,
Board culture,
dynamics and
contribution
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Governance
Financial
Statements
29
Published Disclosures:
Principle
No.
1
Principle
Establish a strategy and
ANNUAL
business model which
promote long-term
value for shareholders
Location of
disclosure
REPORT &
ACCOUNTS See
page XII
WEBSITE
2
Seek to understand and
ANNUAL
meet shareholder needs
REPORT &
and expectations
ACCOUNTS
WEBSITE
3
Take into account wider
WEBSITE
stakeholder and social
responsibilities and their
implications for long-
term success
4
Embed effective risk
ANNUAL
management, considering
REPORT &
both opportunities and
ACCOUNTS See
threats, throughout the
pages 8-9
organisation
WEBSITE
5
Maintain the board
as a well-functioning,
ANNUAL
REPORT &
balanced team led by the
chair
ACCOUNTS See
pages 20-21
WEBSITE
Disclosure Detail Required
DISCLOSURE: Explain the Company’s business model and
strategy, including key challenges in their execution (and how
those will be addressed).
Disclosure
status
Compliant
DISCLOSURE: Explain the ways in which the Company seeks to
engage with shareholders and how successful this has been.
Compliant
This should include information on those responsible for
shareholder liaison or specification of the point of contact for
such matters.
DISCLOSURE: Explain how the business model identifies the key
resources and relationships on which the business relies.
Compliant
Explain how the Company obtains feedback from stakeholders
and the actions that have been generated as a result of this
feedback (e.g. changes to inputs or improvements in products).
DISCLOSURE: Describe how the board has embedded effective
risk management in order to execute and deliver strategy.
Compliant
This should include a description of what the board does to
identify, assess and manage risk and how it gets assurance that
the risk management and related control systems in place are
effective.
Explanation
The Company seeks to keep its strategy
consistent with its purpose and values
and its responsibilities for long-term
success and to contribute to wider
society.
The CEO + CFO communicate regularly
with shareholders, investors and
analysts, including at our half yearly
results roadshows. The full Board
is available at the Annual General
Meeting (AGM) to communicate with
shareholders.
The Board has identified the main
stakeholders in the business and
regularly discusses how employees,
suppliers and customers and others
might be affected by decisions and
developments in the business.
We constantly strive to enhance our
environmental and social credentials.
In order to obtain feedback from
stakeholders, management meets
regularly with them. The Company’s
website, email footers and business
cards all provide contact details of the
relevant person at the Company that
they can use, should they need to get
in touch.
Both the Board and Audit Committee
regularly review risks, including new
threats and the processes to mitigate
and contain them.
Whilst the Board is responsible for
risk, our culture seeks to encourage all
colleagues to manage risk effectively.
DISCLOSURE: Identify those directors who are considered
to be independent; where there are grounds to question
the independence of a director, through length of service or
otherwise, this must be explained.
Compliant
The Board works well together as a
team.
Meetings are characterised by lively
discussion and active idea generation
and management are rigorously
challenged and held to account.
Link
Business model
and strategy
Shareholder
engagement
Stakeholder
engagement
and social
responsibility
Effective risk
management
Board
composition,
Board culture,
dynamics and
contribution
Eden Research plc Annual Report 2023
30
The QCA Corporate Governance Code continued
Principle
No.
6
Principle
Ensure that between
them the directors have
the necessary up-to-date
experience, skills and
capabilities
Location of
disclosure
ANNUAL
REPORT &
ACCOUNTS
See page 23
WEBSITE
Disclosure Detail Required
DISCLOSURE: Identify each director.
Describe the relevant experience, skills and personal qualities and capabilities that
each director brings to the board (a simple list of current and past roles is insufficient);
the statement should demonstrate how the board as a whole contains (or will
contain) the necessary mix of experience, skills, personal qualities (including gender
balance) and capabilities to deliver the strategy of the Company for the benefit of the
shareholders over the medium to long-term.
• Explain how each director keeps his/her skillset up-to-date.
• Where the board or any committee has sought external advice on a significant
matter, this must be described and explained.
• Where external advisers to the board or any of its committees have been engaged,
explain their role.
• Describe any internal advisory responsibilities, such as the roles performed by
the Company secretary and the senior independent director, in advising and
supporting the board.
WEBSITE
DISCLOSURE: Include a high-level explanation of the board performance
effectiveness process.
Compliant
The Board regularly considers the
Board performance
Evaluate board
performance based
on clear and
relevant objectives,
seeking continuous
improvement
7
8
Promote a corporate
culture that is based
on ethical values and
behaviours
ANNUAL
REPORT &
ACCOUNTS
See
Chairman’s
Letter on
pages 2-3
WEBSITE
Where a board performance evaluation has taken place in the year, provide a brief
overview of it, how it was conducted and its results and recommendations. Progress
against previous recommendations should also be addressed.
DISCLOSURE: Include a more detailed description of the board performance
evaluation process/cycle adopted by the Company. This should include a summary of:
• The criteria against which board, committee, and individual effectiveness is
considered;
• How evaluation procedures have evolved from previous years, the results of the
evaluation process and action taken or planned as a result; and
• How often board evaluations take place.
Explain how the Company approaches succession planning and the processes by
which it determines board and other senior management appointments, including any
links to the board evaluation process.
DISCLOSURE: Include in the Chair’s corporate governance statement how the culture
is consistent with the Company’s objectives, strategy and business model in the
strategic report and with the description of principal risks and uncertainties.
The statement should explain what the board does to monitor and promote a healthy
corporate culture and how the board assesses the state of the culture at present.
DISCLOSURE: Explain how the board ensures that the Company has the means to
determine that ethical values and behaviours are recognised and respected.
Disclosure
status
Compliant
Explanation
Link
We assess the adequacy of the Board’s
Professional
collective skills and experience and
development
Directors’ individual development needs
and training
are discussed annually with the Chairman.
effectiveness and relevance of its
contributions. Any learning and
development needs are reviewed and
continual improvement implemented.
Compliant
The Board sets the framework of values
Corporate culture
within which the desired corporate
culture can evolve and thrive.
Ownership of the values is strengthened
by a collaborative approach by both
the leadership and the workforce being
involved in a two-way process to define
the Company’s values.
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Governance
Financial
Statements
31
Principle
No.
6
Principle
Disclosure Detail Required
Ensure that between
ANNUAL
DISCLOSURE: Identify each director.
Location of
disclosure
them the directors have
REPORT &
the necessary up-to-date
ACCOUNTS
experience, skills and
See page 23
capabilities
Describe the relevant experience, skills and personal qualities and capabilities that
each director brings to the board (a simple list of current and past roles is insufficient);
the statement should demonstrate how the board as a whole contains (or will
WEBSITE
contain) the necessary mix of experience, skills, personal qualities (including gender
balance) and capabilities to deliver the strategy of the Company for the benefit of the
shareholders over the medium to long-term.
Disclosure
status
Compliant
Explanation
We assess the adequacy of the Board’s
collective skills and experience and
Directors’ individual development needs
are discussed annually with the Chairman.
Link
Professional
development
and training
7
Evaluate board
WEBSITE
DISCLOSURE: Include a high-level explanation of the board performance
performance based
on clear and
relevant objectives,
seeking continuous
improvement
Compliant
The Board regularly considers the
effectiveness and relevance of its
contributions. Any learning and
development needs are reviewed and
continual improvement implemented.
Board performance
8
Promote a corporate
culture that is based
ANNUAL
REPORT &
on ethical values and
ACCOUNTS
behaviours
See
Chairman’s
Letter on
pages 2-3
WEBSITE
Corporate culture
Compliant
The Board sets the framework of values
within which the desired corporate
culture can evolve and thrive.
Ownership of the values is strengthened
by a collaborative approach by both
the leadership and the workforce being
involved in a two-way process to define
the Company’s values.
• Explain how each director keeps his/her skillset up-to-date.
• Where the board or any committee has sought external advice on a significant
matter, this must be described and explained.
• Where external advisers to the board or any of its committees have been engaged,
• Describe any internal advisory responsibilities, such as the roles performed by
the Company secretary and the senior independent director, in advising and
explain their role.
supporting the board.
effectiveness process.
Where a board performance evaluation has taken place in the year, provide a brief
overview of it, how it was conducted and its results and recommendations. Progress
against previous recommendations should also be addressed.
DISCLOSURE: Include a more detailed description of the board performance
evaluation process/cycle adopted by the Company. This should include a summary of:
• The criteria against which board, committee, and individual effectiveness is
considered;
• How evaluation procedures have evolved from previous years, the results of the
evaluation process and action taken or planned as a result; and
• How often board evaluations take place.
Explain how the Company approaches succession planning and the processes by
which it determines board and other senior management appointments, including any
links to the board evaluation process.
DISCLOSURE: Include in the Chair’s corporate governance statement how the culture
is consistent with the Company’s objectives, strategy and business model in the
strategic report and with the description of principal risks and uncertainties.
The statement should explain what the board does to monitor and promote a healthy
corporate culture and how the board assesses the state of the culture at present.
DISCLOSURE: Explain how the board ensures that the Company has the means to
determine that ethical values and behaviours are recognised and respected.
Eden Research plc Annual Report 2023
32
The QCA Corporate Governance Code continued
The QCA Corporate Governance Code continued
Location of
disclosure
WEBSITE
Principle
No.
9
Principle
Maintain governance
structures and processes
that are fit for purpose
and support good
decision-making by the
board
10
Communicate how the
Company is governed
and is performing by
maintaining a dialogue
with shareholders
and other relevant
stakeholders
ANNUAL
REPORT &
ACCOUNTS
WEBSITE
Disclosure Detail Required
DISCLOSURE: In addition to the high level explanation of the application of the QCA
Code set out in the chair’s corporate governance statement:
• Describe the roles and responsibilities of the chair, chief executive and any
other directors who have specific individual responsibilities or remits (e.g. for
engagement with shareholders or other stakeholder Groups).
• Describe the roles of any committees (e.g. audit, remuneration and nomination
committees) setting out any terms of reference and matters reserved by the board
for its consideration.
• Describe which matters are reserved for the board.
• Describe any plans for evolution of the governance framework in line with the
company’s plans for growth.
DISCLOSURE: Describe the work of any board committees undertaken during the year.
Include an audit committee report (or equivalent report if such committee is not
in place). Include a remuneration committee report (or equivalent report if such
committee is not in place).
If the Company has not published one or more of the disclosures set out under
Principles 1-9, the omitted disclosures must be identified and the reason for their
omission explained.
WEBSITE DISCLOSURE: Disclose the outcomes of all votes in a clear and transparent
manner.
Where a significant proportion of votes (e.g. 20% of independent votes) have been
cast against a resolution at any general meeting, the Company should include, on
a timely basis, an explanation of what actions it intends to take to understand the
reasons behind that vote result, and, where appropriate, any different action it has
taken, or will take, as a result of the vote.
Include historical annual reports and other governance-related material, including
notices of all general meetings over the last five years.
Disclosure
status
Compliant
Explanation
Link
The Board is responsible for the
Corporate governance
Company’s overall strategic direction and
structure
management and for the establishment
and maintenance of a framework of
delegated authorities and controls
to ensure the efficient and effective
management of the Company’s
operations.
Compliant
The Investors section of our website
Audit committee terms
includes our results, presentations and
of reference
communications to shareholders. We
release the results of general meetings
through a regulatory news services and
also on the Regulatory News Section of
our website.
Audit committee report
Remuneration
committee report
Remuneration
committee terms of
reference
AGM Voting outcomes
Annual reports
Notices of general
meetings
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Governance
Financial
Statements
33
Principle
No.
9
Principle
Disclosure Detail Required
Location of
disclosure
Maintain governance
WEBSITE
DISCLOSURE: In addition to the high level explanation of the application of the QCA
Code set out in the chair’s corporate governance statement:
Disclosure
status
Compliant
structures and processes
that are fit for purpose
and support good
decision-making by the
board
• Describe the roles and responsibilities of the chair, chief executive and any
other directors who have specific individual responsibilities or remits (e.g. for
engagement with shareholders or other stakeholder Groups).
• Describe the roles of any committees (e.g. audit, remuneration and nomination
committees) setting out any terms of reference and matters reserved by the board
for its consideration.
• Describe which matters are reserved for the board.
• Describe any plans for evolution of the governance framework in line with the
company’s plans for growth.
Explanation
Link
Corporate governance
structure
The Board is responsible for the
Company’s overall strategic direction and
management and for the establishment
and maintenance of a framework of
delegated authorities and controls
to ensure the efficient and effective
management of the Company’s
operations.
10
Communicate how the
ANNUAL
DISCLOSURE: Describe the work of any board committees undertaken during the year.
Compliant
Company is governed
REPORT &
and is performing by
ACCOUNTS
maintaining a dialogue
with shareholders
and other relevant
stakeholders
Include an audit committee report (or equivalent report if such committee is not
in place). Include a remuneration committee report (or equivalent report if such
WEBSITE
committee is not in place).
If the Company has not published one or more of the disclosures set out under
Principles 1-9, the omitted disclosures must be identified and the reason for their
The Investors section of our website
includes our results, presentations and
communications to shareholders. We
release the results of general meetings
through a regulatory news services and
also on the Regulatory News Section of
our website.
omission explained.
manner.
WEBSITE DISCLOSURE: Disclose the outcomes of all votes in a clear and transparent
Where a significant proportion of votes (e.g. 20% of independent votes) have been
cast against a resolution at any general meeting, the Company should include, on
a timely basis, an explanation of what actions it intends to take to understand the
reasons behind that vote result, and, where appropriate, any different action it has
taken, or will take, as a result of the vote.
Include historical annual reports and other governance-related material, including
notices of all general meetings over the last five years.
Audit committee terms
of reference
Audit committee report
Remuneration
committee report
Remuneration
committee terms of
reference
AGM Voting outcomes
Annual reports
Notices of general
meetings
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
34
Remuneration Report
Salary
A salary review usually occurs in Q4 each year, to take
effect from 1 January in the following year, unless a market
adjustment is required at a different time.
Generally, salaries are benchmarked and comparable to
similar positions in similar sized AIM listed companies in
similar industry segments.
Cash Bonus
Bonuses are paid to the extent their payment does not
shorten the funded runway of the business to less than
eighteen months, based upon an up-to-date forecast using
reasonable assumptions, as agreed by the Board (the “cash
override”). This figure may be adjusted by the Remuneration
Committee.
The Target bonus levels are a percentage of salary.
The Target is generally made up of, and released
incrementally by:
• the achievement of new commercial partnership deals and
other commercial milestones (e.g. regulatory approvals)
• the return received on such agreements
• meeting or exceeding revenue, EBITDA and earnings
targets
As the business matures, the balance between deal value,
other commercial milestones and revenue/contribution/profit
is expected to transition in weighting (i.e. from deals through
other milestones towards profit).
Bonus payments are calculated prior to completion of (and
included in) the Annual Report and paid out after the Annual
Report has been approved by the Board and the auditors.
Equity Incentive
Unapproved share option scheme
The Company operated an unapproved share option scheme
for Executive Directors, senior management and certain
employees up to 28 September 2017.
Long-Term Incentive Plan (“LTIP”)
Since September 2017 Eden has operated an option scheme
for Executive Directors, senior management and certain
employees under a LTIP which allows for certain qualifying
grants to be HMRC approved.
Introduction
The Remuneration Policy for Eden Research plc includes the
three main elements of remuneration; salary, cash bonus and
equity incentive.
The policy is based on market facing structures, precedented
in other AIM listed companies. The policy has been prepared
for the Executive Directors, however it is intended that the
principles should apply to all staff.
An important principle is that the elements of remuneration
should not overlap (to ensure that an Executive is not
rewarded more than once for the same achievement).
Salary is a reward for the day to day execution of a role (which
is documented in a job description).
The cash bonus is a reward for the achievement of challenging
milestones in a year, such as exceeding revenue and EBITDA
targets, or signing new distribution agreements over a certain
value, over and above the day to day role and linked to
significant commercial progress.
The equity incentive should deliver value to the Executive in
the medium to long term, based on a sustainable increase in
the share price over the corresponding period of time, and
of a magnitude related to the actual increase in share price,
in order to align management’s incentive with the interests of
shareholders.
The Remuneration Committee has absolute discretion in the
application of these principles and may make adjustments,
where appropriate, and acting reasonably.
Eden Research plc Annual Report 2023
35
In 2021, certain changes were made to the LTIP in connection
with a financing round completed in 2020, further details of
which can be found below.
Share-based payments
The share options granted to individual Directors to date are
shown below and include grants made in prior years.
Application of the Policy
Emoluments
Details of the remuneration of those who served as Directors
during the year are set out below.
Executive Directors
S Smith
A Abrey
Non-Executive Directors
L van der Broek
R Cridland
R Horsman
Base salary
2023
£
2022
£
289,030
217,100
273,240
205,200
45,000
40,000
35,000
45,000
40,000
*35,000
*
R Horsman was appointed on 1 September 2022 and was paid a
proportionate amount of the base salary.
The changes to the Executive Directors salaries in 2023 were
the result of an external benchmarking exercise.
The Company operates its annual, discretionary cash bonus
scheme for the Executive Directors only.
For 2023, the target bonus levels and actual bonus achieved
for Executive Directors were:
Sean Smith
Alex Abrey
70% of base salary, achieved 54.25%
(£156,799), (2022: 70% of base salary,
achieved 47.25% (£129,106)**)
70% of base salary, achieved 54.25%
(£117,777), (2022: 70% of base salary,
achieved 47.25% (£96,957)**)
*
In accordance with operation of the cash override referred to above in the
cash bonus policy, and in the interest of cash preservation and to ensure
continued investment in the business, the Executive Directors offered, and
the Board agreed and accepted, that bonuses earned in 2022 by reference
to the relevant targets, would not be paid and have been cancelled.
The Committee considers that the performance metrics
underpinning the annual, discretionary cash bonus scheme are
in line with shareholders’ reasonable expectations.
Pensions
For the Executive Directors, the Company makes contributions
to a defined contribution pension scheme. The Company
contributes a maximum of 7% provided that the Director
makes a minimum 4% contribution. Below this, the Company
contributes the same percentage as the Director.
Non-Executive Directors
Non-Executive Directors receive a fee only, with no additional
benefits, bonuses or option grants.
Directors’ contracts
The Executive Directors have a service contract of indefinite
term with a notice period of no more than six months.
Non-Executive Directors have Letters of Appointment which
are terminable by the Director or the Company with three
months’ notice.
Share option scheme grants
Long Term Incentive Plan (“LTIP”)
In 2017, the Company established a LTIP to incentivise the
Executives to deliver long-term value creation for shareholders
and ensure alignment with shareholder interests. Awards were
generally made annually subject to continued service and
challenging performance conditions over a three year period.
The performance conditions were reviewed on an annual
basis to ensure they remained appropriate and were based
on increasing shareholder value. Awards were structured as nil
cost options with a seven year life after vesting.
Other than in exceptional circumstances, awards were up
to 100% of salary in any one year and granted subject to
achieving challenging performance conditions set at the
date of the grant. A percentage of the award vested for
"Threshold" performance with full vesting taking place for
equalling or exceeding the performance "Target". In between
the Threshold and Target there was pro rata vesting. All grants
under this scheme have now lapsed.
LTIP Plan Update
In 2021, the Company made changes to the LTIP in line with
the requirements of a fundraise completed in 2020. The new
plan was deemed a more appropriate scheme to incentivise
management given the Company’s stage of development and
replaced the scheme used from 2017.
Pursuant to the updated plan, in 2021 the Company granted
options over 10.5 million new Ordinary Shares, at a strike price
of 6p each, in the amounts of 6 million awarded to Sean Smith
and 4.5 million awarded to Alex Abrey. The options vested
immediately and lapse in three equal tranches in June 2022,
June 2023 and June 2024. For the first five years following
grant, no shares arising from the exercise of these options may
be sold unless the Company’s prevailing share price is equal
to, or in excess of, 10p.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 36
Remuneration Report continued
The shares arising from exercise of options are subject to a
one-year lock-in restriction, followed by a one-year orderly
market restriction.
Further details can be found in note 22.
2021 Award
Also in 2021, the Company made a further grant of options in
order to ensure continuity of long term incentive of options
over 7,183,784 new Ordinary Shares in Eden, at a strike price
of 10.37p each, in the amounts of 4,102,703 awarded to Sean
Smith and 3,081,081 awarded to Alex Abrey.
These grants expire on 31 July 2025 and vest as follows:
2023 Award
During the year, the Company made a grant to the Executive
Directors in respect of 2022, in order to ensure continuity of
long term incentive, of options over 8,698,909 new Ordinary
Shares in Eden at a strike price of 5.05p each, being the 2022
Volume Weighted Average Price, in the amounts of 4,968,000
awarded to Sean Smith and 3,730,909 awarded to Alex Abrey.
The Options expire on 31 August 2027 and vest as follows:
1/3 upon grant
1/3 12 months from the date of grant
1/3 24 months from the date of grant
1/3 upon grant
1/3 12 months from the date of grant
1/3 24 months from the date of grant
Accordingly, at 31 December 2023, the Directors had the following interests in share option schemes:
Granted in
the year
Exercised in
the year
Lapsed in
the year
Number at
31 December
2023
Number at
1 January
2023
1,500,000
1,500,000
1,027,027
1,027,027
1,027,027
–
–
–
–
–
–
–
–
1,243,636
1,243,636
1,243,637
6,081,081
3,730,909
2,000,000
2,000,000
1,367,567
1,367,568
1,367,568
–
–
–
–
–
–
–
–
1,656,000
1,656,000
1,656,000
8,102,703
4,968,000
Date from which
exercisable
Expiry Date
Exercise
price £
A J Abrey
30/06/2021
30/06/2021
22/07/2021
22/07/2022
22/07/2023
30/08/2023
30/08/2024
30/08/2025
S M Smith
30/06/2021
30/06/2021
22/07/2021
22/07/2022
22/07/2023
30/08/2023
30/08/2024
30/08/2025
30/06/2023
30/06/2024
31/07/2025
31/07/2025
31/07/2025
31/08/2027
31/08/2027
31/08/2027
30/06/2023
30/06/2024
31/07/2025
31/07/2025
31/07/2025
31/08/2027
31/08/2027
31/08/2027
0.06
0.06
0.10
0.10
0.10
0.05
0.05
0.05
0.06
0.06
0.10
0.10
0.10
0.05
0.05
0.05
Lykele van der Broek
Remuneration Committee Chairman
Eden Research plc Annual Report 2023
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,500,000
–
–
–
–
–
–
–
–
1,500,000
1,027,027
1,027,027
1,027,027
1,243,636
1,243,636
1,243,637
1,500,000
8,311,990
2,000,000
–
–
–
–
–
–
–
–
2,000,000
1,367,567
1,367,568
1,367,568
1,656,000
1,656,000
1,656,000
2,000,000
11,070,703
Audit Committee Report
37
Composition of Committee and meetings
During the year, the Audit Committee comprised the three
Non-Executive Directors; Robin Cridland, who is Chairman of
the Committee, Richard Horsman and Lykele van der Broek.
The Chairman of the Committee has recent and relevant
financial experience and collectively the members of the
Committee have experience of the chemical, agricultural and
animal health industries. Details of Committee members’
qualifications can be found on page 23. The Audit Committee
met three times during the year, and has a rolling agenda
linked to the Company’s financial calendar. It invites the Chief
Executive Officer, the Chief Financial Officer and the external
auditors to attend its meetings. The Committee Chairman
aims to have an open dialogue with the external auditors and
accordingly had discussions with the external audit partner
before, during and at the conclusion of the audit without the
Executive Directors being present. The Committee has also
met since the end of the financial year to consider the results
and the Annual Report for the year ended 31 December 2023.
Main activities during the year
Set out below is a summary of the key areas considered by the
Committee during the year and up to the date of this report.
Financial reporting
During the year, the Audit Committee reviewed reports and
information provided by the Chief Financial Officer in respect
of the half year and by both the Chief Financial Officer and the
external auditors in respect of the annual financial report. An
important responsibility of the Audit Committee is to review
and agree significant estimates and judgements made by
management. To satisfy this responsibility, the Committee
reviewed a written formal update from the Chief Financial
Officer on such issues at the two meetings that reviewed
the half year and year end results, as well as reports from
the external auditors in respect of the year end results. The
Committee carefully considered the content of these reports
in evaluating the significant issues and areas of judgement
across the Company.
The key areas of review, including those requiring significant
judgements to be made, in the year were as follows:
• Revenue recognition
• Going Concern
Introduction
On behalf of the Audit Committee, I present this report to
shareholders. The purpose of the report is to highlight the
areas that the Committee has reviewed and how we have
discharged our responsibilities effectively during the year.
Responsibilities
The key responsibility of the Committee is to provide effective
governance over the Company’s financial reporting to
ensure its appropriateness. Under its terms of reference, the
Committee is required, amongst other things, to:
• monitor the integrity of the financial statements of the
Company including the appropriateness of the accounting
policies adopted and whether the Annual Report is fair,
balanced and understandable;
• review, understand and evaluate the effectiveness of the
Company’s internal controls and risk management systems,
particularly, but not exclusively, as they pertain to financial
matters;
• appraise the Board on how the Company’s prospects are
assessed;
• oversee the relationship with the external auditors,
making recommendations to the Board in relation to their
appointment, remuneration and terms of engagement;
• monitor and review the effectiveness of the external audit
including the external auditors’ independence, objectivity
and effectiveness and to approve the policy on the
engagement of the external auditors to supply non-audit
services; and
• monitor and review the requirement for and activities of (as
applicable) internal audit activities in the Company.
•
Impairment of intangible assets including intellectual
property and investments
The Committee’s terms of reference can be found on the
Company’s website www.edenresearch.com.
• Management override of controls
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 38
Audit Committee Report continued
Other areas reviewed in the year were as follows:
• Consolidation
• Share based payments
• Accruals and provisions
• Related party transactions
Internal control and risk management
During the year, the Committee continued to review the
effectiveness of the Company’s internal control and risk
management systems.
External audit
During the year, the Audit Committee reviewed and approved
the terms of engagement and remuneration of the external
auditors for the 2023 financial year. PKF’s current engagement
partner is Adam Humphreys, and he has been in place since
being appointed for the Company’s 2022 year end. The Audit
Committee annually assesses the qualification, expertise and
independence of the auditors and the effectiveness of the
audit process.
The external auditor is also required to tell the Company
about any significant facts and matters that may reasonably be
thought to bear on their independence or on the objectivity
of the lead partner and the audit team. The lead partner in the
audit team must change every five years.
For the 2023 financial year end, there was no non-audit work
undertaken by the Company’s auditors, other than an informal
review of the Company’s 2023 interim financial statements,
and the Committee considers the external auditor to be
independent, taking into account the factors described above.
Internal audit
Due to the size of the business, the Company does not
have a separate internal audit function. The Company’s Risk
Management Team takes this into account when deciding
how to mitigate risks associated with not having an internal
audit function and manages the situation accordingly. Every
year the Audit Committee reviews the appropriateness of
this arrangement and specifically whether an internal audit
function is necessary. The Committee’s view remains that an
internal audit function is not yet necessary.
Auditor effectiveness
Other activities
The effectiveness of the external audit process is dependent
on appropriate audit risk identification at the start of the
audit cycle. PKF presented its detailed audit plan to the Audit
Committee identifying its assessment of these key risks. The
Audit Committee’s assessment of the effectiveness and quality
of the audit process in addressing these key risks is informed
by, amongst other things, the reporting from the auditors.
In addition, each year, the Audit Committee assesses its
performance and the effectiveness of the external auditor in
liaison with the Chief Financial Officer. The Committee has so
far been satisfied with the performance and the effectiveness
of the external auditor.
In respect of 2023, and as part of a continuous process, the
Committee assessed the clarity of the financial statements
and the need for changes in presentation to enable and assist
understanding of users of the accounts as the operations of
the Group continue to evolve.
During the year, the Committee also worked to its rolling
agenda, reviewing areas such as Treasury Policy, Directors’
expenses, Disclosures Report, Review of Significant
Transactions and also undertook a review of the Company’s
insurance policies, ensuring relevant, adequate coverage of
various risks was in place.
Environmental Impact
The Company continues to review its Environmental,
Sustainable and Corporate Governance (“ESG”) credentials
with external advisors.
In part, the aim of the review is to better understand the
impact that Eden, including its supply chain partners, has on
the environment.
Robin Cridland
Audit Committee Chairman
Auditor independence
The Company meets its obligations for maintaining an
appropriate relationship with the external auditors through
the Audit Committee, whose terms of reference include an
obligation to consider and keep under review the degree
of work undertaken by the external auditor other than
the statutory audit, to ensure the auditor’s objectivity and
independence is safeguarded. The Audit Committee also
considers the period of the auditor’s appointment and any
considerations of rotation of auditors.
In accordance with the relevant regulations pertaining to
ethical standards, the Company’s external auditor must
implement rules and requirements which include that none of
their employees working on our audit can hold any shares in
Eden.
Eden Research plc Annual Report 2023
Directors' Report
39
The Directors present their annual report and financial
statements for the year ended 31 December 2023.
General information
Eden Research plc (“Eden”) is a public limited company
incorporated in England and Wales (company number
03071324). The principal activity of the Company is the
development and sale of biopesticides.
Eden’s registered office and its principal place of business is
67c Innovation Drive, Milton Park, Abingdon, Oxfordshire,
OX14 4RQ, United Kingdom.
Eden is the parent and ultimate parent company of the Group.
Results and dividends
The Group’s loss for the year after taxation amounted to
£6,491,936 (2022: £2,243,879). The Directors are unable to
recommend any dividend.
Research and development
An indication of research and development activities is
included within the Chief Executive Officer’s Report.
Future developments
An indication of future developments is included within the
Chief Executive Officer’s Report.
Directors
The Directors who held office during the year and up to the
date of signature of the financial statements were as follows:
A Abrey
R Cridland
R Horsman (resigned 31 January 2024)
S Smith
L van der Broek
Political donations
The Company did not make any political donations during the
year (2022: £nil).
Directors’ indemnity
Details of Directors’ indemnity can be found in the Strategic
Report.
Financial instruments
Details of Financial instruments can be found in note 30 to the
financial statements.
Corporate Governance
The Directors acknowledge the importance of the principles
set out in the UK Corporate Governance Code. Although
the Corporate Governance Code is not compulsory for
AIM quoted companies, the Directors have tried to apply
the principles as far as practicable and appropriate for a
relatively small public company by following QCA Corporate
Governance Code as follows:
The Board currently comprises two Executive Directors and
two Non-Executive Directors. The Board meets regularly to
consider strategy, performance and the framework of internal
controls. To enable the Board to discharge its duties, all
directors receive appropriate and timely information. Briefing
papers are distributed to all Directors in advance of Board
meetings. All Directors have access to the advice and services
of the Company Secretary and the Chief Financial Officer,
who is responsible for ensuring that the Board procedures
are followed and that applicable rules and regulations are
complied with. In addition, procedures are in place to enable
the Directors to obtain independent professional advice in
the furtherance of their duties, if necessary, at the Company's
expense.
The Directors have established Audit, Nominations,
Remuneration and AIM Compliance Committees.
The Audit Committee has Robin Cridland as Chairman
and has primary responsibility for monitoring the quality of
internal controls, ensuring that the financial performance of
the Company is properly measured and reported on and
reviewing reports from the Company's auditors relating to
the Company's accounting and internal controls, in all cases
having due regard to the interests of shareholders. The Audit
Committee meets at least twice a year. Lykele van der Broek
and Richard Horsman were the other members of the Audit
Committee during the year.
Streamlined Energy and Carbon Reporting
(“SECR”)
The UK government’s SECR policy was implemented on
1 April 2019, when the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018 came into force. The regulations require that
quoted companies and large unquoted companies that have
consumed more than 40,000 kilowatt-hours (kWh) of energy
in the reporting period must include energy and carbon
information within their Directors’ report. The Company is
not currently required to report under SECR and does not
currently exceed this threshold.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 40
Directors' Report continued
The Company will comply with applicable reporting
obligations in line with the SECR regulations as they
become applicable. The Board is conscious of its corporate
governance responsibilities and ensures appropriate financial
reporting and disclosures. As such, the Board is keeping in
mind the SECR requirements to ensure adequate disclosure
when applicable.
The Nominations Committee had Lykele van der Broek as
Chairman during the year and identifies and nominates for the
approval of the Board, candidates to fill Board vacancies as
and when they arise. The Nominations Committee meets at
least twice a year. Robin Cridland and Richard Horsman were
the other members of the Nominations Committee during the
year.
The Remuneration Committee had Lykele van der Broek as
Chairman during the year and reviews the performance of the
Executive Directors and determines their terms and conditions
of service, including their remuneration and the grant of
options, having due regard to the interests of shareholders.
The Remuneration Committee meets at least twice a year.
Robin Cridland and Richard Horsman were the other members
of the Remuneration Committee during the year.
The AIM Compliance Committee had Lykele van der Broek
as Chairman during the year and meets at least once a year
with the NOMAD to discuss AIM compliance and related
issues. The other members of the committee are Robin
Cridland and Richard Horsman. The Directors comply with
Rule 21 of the AIM Rules relating to directors' dealings and
there are procedures in place to ensure compliance by the
Company's applicable employees. The Company has adopted
a share dealing code which is appropriate for an AIM quoted
company.
The shareholdings of the Directors of the Company are as
follows:
Alex Abrey
Lykele van der Broek
Sean Smith
Robin Cridland
Richard Horsman*
Total
Holdings
% of share
capital
1,774,192
1,621,808
1,372,577
745,552
475,000
0.33%
0.30%
0.26%
0.14%
0.09%
Richard Horsman resigned as a Director of Eden on 31 January
2024.
During the year, the Directors purchased the following shares
in Eden at a price of 6.5p per share, being the fair value on the
market at that time:
Alex Abrey
Lykele van der Broek
Robin Cridland
Richard Horsman
Sean Smith
153,846
692,308
615,385
475,000
461,538
The Company has been notified that the following are
substantial shareholders of Eden, each holding more
than 3% of the Company’s issued share capital, as at
31 December 2023:
Entity
Hargreaves Lansdown
Gresham House Asset
Management
Octopus Investments
Sipcam Oxon SpA
Interactive Investor Services
Cannacord Genuity Group
Unicorn Asset Management
Rathbones
Atul Unadkat
JM Finn & Co
Amati Global Investors
BGF Investment Management
Limited
Total
Holdings
% of Share
Capital
53,364,313
10.01%
52,882,786
41,551,047
39,285,138
33,363,457
30,276,307
23,076,923
23,040,287
22,099,924
20,147,562
16,744,070
9.92%
7.79%
7.37%
6.26%
5.68%
4.33%
4.32%
4.14%
3.78%
3.14%
16,000,576
3.00%
Directors’ remuneration
For details of Directors’ remuneration, please see note 7 to
the financial statements.
Suppliers
The Company agrees terms and conditions for business
transactions with its suppliers. Payment is then made on
these terms, subject to the terms and conditions being met
by the supplier.
Eden Research plc Annual Report 2023
41
Directors’ responsibilities statement
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulations.
Statement as to disclosure information to
auditors
Each Director in office at the date of approval of this annual
report confirms that:
Company law requires the Directors to prepare financial
statements for each financial year. Under the AIM Rules of
the London Stock Exchange they are required to prepare the
Group and Company financial statements in accordance with
UK-adopted international accounting standards.
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 Group and
Company and of the Group’s profit or loss for that period.
In preparing each of the Group and Company 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
international accounting standards in conformity with the
requirements of the Companies Act 2006;
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
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 Group and Company
and enable them to ensure that its financial statements
comply with the 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 Group
and to prevent and detect fraud and other irregularities.
• so far as the Director is aware, there is no relevant audit
information of which the Company's auditor is unaware,
and
• the Director has taken all the steps that he / she ought to
have taken as a director in order to make himself / herself
aware of any relevant audit information and to establish
that the Company's auditor is aware of that information.
This confirmation is given and should be interpreted
in accordance with the provisions of section 418 of the
Companies Act 2006.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report and a Directors’
Report that complies with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions. The Company is
compliant with AIM Rule 26 regarding the Company’s website.
Auditor
In accordance with Section 489 of the Companies Act 2006,
a resolution for the appointment of PKF as auditor of the
Company is to be proposed at the forthcoming Annual
General Meeting.
On behalf of the board
Sean Smith
Director
2 May 2024
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 42
42
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
Company
Overview
Annual Report
Statements
Governance
Financial
Statements
43
43
Financial Statements
Independent Auditor’s Report
44
50 Consolidated statement of comprehensive income
51 Consolidated statement of financial position
52 Company statement of financial position
53 Consolidated statement of changes in equity
54 Company statement of changes in equity
55 Consolidated statement of cash flows
56 Company statement of cash flows
57 Notes to the group financial statements
Sustainability lies at the heart
of what we do at Eden. We are
focused on providing innovative
and sustainable solutions to
the global agriculture industry
and beyond.
Eden Research plc Annual Report 2023
Eden Research plc Annual Report 2023
Company OverviewAnnual Report StatementsGovernanceFinancial Statements 44
Independent Auditor’s Report
to the members of Eden Research plc
Opinion
We have audited the financial statements of Eden Research plc (the ‘Company’) and its subsidiaries (the ‘Group’) for the year
ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and
Company Statements of Financial Position, the Consolidated and Company Statements of Changes in Equity, the Consolidated
and Company Statements of Cash Flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international
accounting standards and as regards the Company financial statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December
2023 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
the Company financial statements have been properly prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the Companies Act 2006; and
•
the financial statements have been 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 under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the Group and Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group’s and
Company’s ability to continue to adopt the going concern basis of accounting included:
•
•
•
•
•
•
consideration of the Group’s objectives, policies and processes in managing its working capital as well as exposure to
financial, credit and liquidity risks;
reviewing management’s forecast and going concern memorandum covering the period to 31 December 2025 and
discussing with management the future plans and availability of funding;
reviewing the cash flow forecast to ensure mathematical accuracy;
obtaining corroborative and contradictory documentation for the key assumptions and estimates used in the cashflow
forecast and challenging the reasonableness of these with management;
performing sensitivity analysis on the cash flow forecasts prepared by management, and assessing management’s
assessment of the worst case scenario and cash flows;
reviewing performance of the Group subsequent to the year end and other events impacting the going concern assumption;
and
•
reviewing the adequacy and completeness of disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group's or Company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Eden Research plc Annual Report 2023
45
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing and extent of our audit procedures. We also determine
a level of performance materiality which we use to assess the extent of testing needed to reduce to an appropriately low
level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial
statements as a whole.
Materiality for the Group financial statements was set at £244,000 (2022: £196,000). This was calculated based on 1.5% of gross
assets which we determined to be the principal benchmark relevant to stakeholders in assessing the financial performance of
the Group, given that the key focus of the Group is to develop and commercialise products for sale. The ongoing performance
of the Group is dependent on the success of these developed products held as intangible assets.
Materiality for the significant component of the Group, being the Company, was £240,000 (2022: £195,000) based on 1.5% of
gross assets of the component and capped below Group materiality.
Performance materiality for the Group and Company financial statements was set at £146,400 (2022: £117,600) and £144,000
(2022: £117,000) respectively, being 60% of materiality for the financial statements as a whole.
In determining performance materiality, we considered the following factors:
•
•
our cumulative knowledge of the Group and its environment, including industry specific trends;
the change in the level of judgement required in respect of the key accounting estimates;
• significant transactions during the year;
• the stability in key management personnel; and
• the level of misstatements identified in prior periods.
We agreed to report to those charged with governance all corrected and uncorrected misstatements we identified through
our audit with a value in excess of £12,200 (2022: £9,800) and for the Company a value in excess of £12,000 (2022: £9,750).
We also agreed to report any other audit misstatements below that threshold that we believe warranted reporting on
qualitative grounds.
We applied the concept of materiality in planning and performing our audit and in evaluating the effect of misstatement. No
significant changes have come to light during the audit which required a revision to our materiality for the financial statements
as a whole.
Our approach to the audit
Our audit was risk based and was designed to focus our efforts on the areas at greatest risk of material misstatement, aspects
subject to significant management judgement as well as greatest complexity, risk and size.
The Group includes the Company and its subsidiaries, TerpeneTech Limited (‘TT Ireland’) and Eden Research Europe Limited
(‘Eden Ireland’).
The Company and TT Ireland were trading entities, whilst Eden Ireland was dormant during the year.
The scope of our audit was based on the significance of component’s operations and materiality. Each component was
assessed as to whether they were significant or not to the Group by either their size or risk. The Company was identified as the
only significant component due to its size and identified risks. As a result, a full scope audit of the Company was carried out by
us as the Group auditor.
TT Ireland and Eden Ireland were trivial to the Group financial statements and therefore Group analytical procedures were
performed in respect of these entities.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 46
Independent Auditor’s Report continued
to the members of Eden Research plc
In designing our audit, we determined materiality, as above, and assessed the risk of material misstatement in the financial
statements. In particular, we looked at areas involving significant accounting estimates and judgements by the directors and
considered future events that are inherently uncertain. These areas of estimate and judgement included:
•
The capitalisation and carrying value of the intangible assets;
• The useful-life of intangible assets;
• The carrying value of investments;
• Revenue recognition;
• Going concern; and
• The fair value of share based payments.
We also addressed the risk of management override of controls, including evaluating whether there was evidence of bias by
the directors that represented a risk of material misstatement due to fraud.
The Group’s and Company’s accounting function is based in the United Kingdom and the audit was performed by our team in
London with regular contact maintained with the Group and Company throughout.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current year and include the most significant assessed risks of material misstatement (whether or not due
to fraud) we identified, 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.
Key Audit Matter
How our scope addressed this matter
Capitalisation and recoverability of the carrying value of
intangible assets (Note 12)
As at 31 December 2023, the carrying value of intangible
assets was £4.7m (2022: £8.4m). These intangible assets
comprise of licences, intellectual property and capitalised
product development costs. During the year, the Group
recognised an impairment charge of £4.97m following their
impairment assessment.
This assessment requires significant judgement and
estimation, including allocating costs to cash generating units
and the future revenue to be generated which may involve
management bias.
There were also additions to the balance in the year,
capitalised in accordance with IAS 38 Intangible Assets.
Following the impairment, there is a risk that additions are
not eligible for capitalisation and that the carrying value is
misstated.
Due to the above and the fact that intangibles are a material
balance in the financial statements, the capitalisation and
valuation of the intangible assets are considered to be a key
audit matter.
Eden Research plc Annual Report 2023
Our work in this area included:
•
Updating our understanding of management’s process and
controls in relation to capitalisation and their impairment
assessment of the intangible assets, including a separate
assessment of the different cash generating units (“CGUs”);
Testing ownership of the assets within the CGUs by
agreeing to underlying documentation, including verifying
the validity of patents and good standing over the other
assets held;
Testing additions during the year to supporting
documentation assessing the point and eligibility of
capitalisation in line with IAS 38 criteria;
Obtaining management's formal assessment in relation to
impairment and performing procedures to determine the
mathematical accuracy, reasonableness and sensitivity of
estimates and judgements used. The assessment included
reviewing the methodology and assumptions made for
consistency with the prior year;
Undertaking sensitivity analysis on the projections to assess
the impact on the headroom of possible changes in the key
underlying assumptions, and ensuring the discount rate has
been appropriately risk adjusted;
Challenging the key assumptions used and obtaining
supporting and contradicting evidence to assess the
reasonableness of these assumptions; and
Reviewing the disclosures and presentation in the financial
statements.
•
•
•
•
•
•
47
Other information
The other information comprises the information included in the Annual Report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report. Our
opinion on the Group and Company financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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 course of the audit, or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
•
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Company and their environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been
received from branches not visited by us; or
the Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibility statement within the director’s report, the directors are responsible for
the preparation of the Group and Company financial statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the Group and Company financial statements, the directors are responsible for assessing the Group and 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 the directors either intend to liquidate the Group or the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
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 an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 48
Independent Auditor’s Report continued
to the members of Eden Research plc
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:
•
We updated our understanding of the Group, the Company and the sector in which it operates to identify laws and
regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management, industry research and experience of the sector or similar
sectors. We also selected a specific audit team with experience of auditing entities facing similar audit and business risks.
•
We determined the principal laws and regulations relevant to the Group in this regard to be those arising from:
– AIM Rules for Companies;
– UK–adopted international accounting standards;
– UK Companies Act 2006;
– UK Employment Laws and Health and Safety Regulations;
– UK Tax Laws;
– Local Plant Protection Regulations and Patent Laws;
– General Data Protection Regulations;
– Anti–Bribery Act; and
– Anti–Money Laundering Regulations.
•
We designed our audit procedures to ensure the audit considered whether there were any indications of non–compliance
by the Group with those laws and regulations. These procedures included, but were not limited to:
– enquiries of management;
–
–
reviewing the board minutes and RNS announcements; and
reviewing the nature of legal and professional fees incurred in the year to assess for any evidence of non–compliance
with laws and regulations.
•
We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to
the non–rebuttable presumption of a risk of fraud arising from management override of controls, whether key management
judgements could include management bias. Key management judgements identified included:
– The capitalisation and carrying value of the intangible assets;
– The useful–life of intangible assets;
– The carrying value of investments;
– Revenue recognition;
– Going concern; and
– The fair value of share based payments.
We addressed these areas by challenging management’s estimates/judgements and designing audit procedures to
either recalculate the balance or review management’s workings agreeing key assumptions to supporting document and
sensitising to assess the reasonableness of the inputs used.
•
As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit
procedures, which included, but were not limited to testing of journals, reviewing key accounting judgement and estimates
for evidence of bias and evaluating the business rationale of any significant transactions that are unusual or outside the
normal course of business.
•
Compliance with laws and regulations as the subsidiary level was ensured through enquiry of management, review of the
subsidiary ledgers and correspondence for any evidence of instances of non-compliance.
Eden Research plc Annual Report 2023
49
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will
be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission, or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 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.
Adam Humphreys (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
2 May 2024
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 50
Consolidated statement of comprehensive income
For the year ended 31 December 2023
Revenue
Cost of sales
Gross profit
Other operating income
Amortisation of intangible assets
Administrative expenses
Share-based payments
Operating loss
Interest income
Finance costs
Foreign exchange (losses)/gains
Impairment of intangible assets
Share of loss of equity accounted Investee, net of tax
Loss before taxation
Income tax credit
Loss and total comprehensive loss for the year
Total comprehensive loss for the year is attributable to:
- Owners of the Parent Company
- Non-controlling interests
Loss per share
Basic
Diluted
Notes
4
12
22
5
8
9
9
12
15
10
11
2023
£
3,192,027
(1,426,547)
1,765,480
20,689
(418,651)
2022
£
1,827,171
(997,011)
830,160
–
(495,818)
(2,997,633)
(2,749,240)
(236,576)
(152,135)
(1,866,691)
(2,567,033)
34,014
(17,207)
(68,802)
(4,968,529)
(33,047)
192
(22,046)
52,736
–
(31,444)
(6,920,262)
(2,567,595)
428,326
323,716
(6,491,936)
(2,243,879)
(6,494,249)
(2,237,262)
2,313
(6,617)
(6,491,936)
(2,243,879)
(1.54p)
(1.54p)
(0.59p)
(0.59p)
The income statement has been prepared on the basis that all operations are continuing operations.
The accompanying notes from page 57 to 91 form an integral part of these financial statements.
Eden Research plc Annual Report 2023
Consolidated statement of financial position
As at 31 December 2023
51
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Investments
Current assets
Inventories
Trade and other receivables
Current tax recoverable
Cash and cash equivalents
Current liabilities
Trade and other payables
Lease liabilities
Net current assets
Non-current liabilities
Lease liabilities
Net assets
Equity
Called up share capital
Share premium account
Warrant reserve
Merger reserve
Retained earnings
Non-controlling interest
Total equity
Notes
12
13
14
15
17
18
10
19
20
20
23
24
25
26
27
2023
£
4,710,511
230,091
212,437
297,197
5,450,236
964,552
2,449,623
317,201
7,413,107
11,144,483
2,819,153
142,849
2,962,002
8,182,481
86,920
86,920
2022
£
8,447,226
198,786
332,814
330,244
9,309,070
625,458
658,866
323,716
1,994,472
3,602,512
1,813,341
139,547
1,952,888
1,649,624
215,776
215,776
13,545,797
10,742,918
5,333,529
6,413,652
758,234
–
1,013,567
26,815
3,808,589
39,308,529
701,065
10,209,673
(43,309,440)
24,502
13,545,797
10,742,918
The accompanying notes from page 57 to 91 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 2 May 2024 and are signed on its
behalf by:
Sean Smith
Director
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 52
Company statement of financial position
As at 31 December 2023
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Investments
Current assets
Inventories
Trade and other receivables
Current tax recoverable
Cash and cash equivalents
Current liabilities
Trade and other payables
Lease liabilities
Net current assets
Non-current liabilities
Lease liabilities
Net assets
Equity
Called up share capital
Share premium account
Warrant reserve
Merger reserve
Retained earnings
Total equity
Notes
12
13
14
15
17
18
10
19
20
20
23
24
25
26
2023
£
4,630,856
230,091
212,437
297,197
5,370,581
964,552
2,559,651
317,201
7,413,107
11,254,511
2,819,153
142,849
2,962,002
8,292,509
86,920
86,920
2022
£
8,354,299
198,786
332,814
330,244
9,216,143
625,458
786,791
323,716
1,994,472
3,730,437
1,813,341
139,547
1,952,888
1,777,549
215,776
215,776
13,576,170
10,777,916
5,333,529
6,413,652
758,234
–
1,070,755
3,808,589
39,308,529
701,065
10,209,673
(43,249,940)
13,576,170
10,777,916
The accompanying notes from page 57 to 91 form an integral part of these financial statements.
As permitted by s408 Companies Act 2006, the Company has not presented its own income statement and related notes. The
Company’s loss for the year was £6,496,561 (2022: £2,230,645).
The financial statements were approved by the Board of Directors and authorised for issue on 2 May 2024 and are signed on its
behalf by:
Sean Smith
Director
Company Registration No. 03071324
Eden Research plc Annual Report 2023
Consolidated statement of changes in equity
As at 31 December 2023
53
Share
Capital
£
Share
premium
account
£
Notes
Merger
reserve
£
Warrant
reserve
£
Retained
earnings
£
Non-
controlling
interest
£
Total
£
Total
£
3,803,402 39,308,529 10,209,673
937,505 (41,460,753) 12,798,356
31,119 12,829,475
–
23/24
22
22
5,187
–
–
–
–
–
–
–
–
–
–
–
(2,237,262) (2,237,262)
(6,617) (2,243,879)
–
152,135
(388,575)
–
–
388,575
5,187
152,135
–
–
–
–
5,187
152,135
–
3,808,589 39,308,529 10,209,673
701,065 (43,309,440) 10,718,416
24,502 10,742,918
3,808,589 39,308,529 10,209,673
701,065 (43,309,440) 10,718,416
24,502 10,742,918
–
(6,494,249) (6,494,249)
2,313 (6,491,936)
–
–
23/24
24
1,524,940
–
7,533,299
(40,428,176)
–
–
–
26
22
22
–
–
–
– (10,209,673)
–
–
–
–
– 10,209,673
–
179,407
236,576
(179,407)
–
236,576
–
–
– 40,428,176
– 9,058,239
–
– 9,058,239
–
–
–
–
–
–
236,576
–
Balance at
1 January 2022
Year ended
31 December
2022:
Loss and total
comprehensive
loss
Transactions with
owners in their
capacity as owners:
Issue of share
capital
Options granted
Options lapsed
Balance at
31 December
2022
Balance at
1 January 2023
Year ended
31 December
2023:
Loss and total
comprehensive
loss
Transactions with
owners in their
capacity as owners:
Issue of share
capital – net of
costs
Capital reduction
Transfer of merger
reserve
Options granted
Options lapsed
Balance at
31 December
2023
5,333,529
6,413,652
–
758,234
1,013,567 13,560,982
26,815 13,545,797
The accompanying notes from page 57 to 91 form an integral part of these financial statements.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 54
Company statement of changes in equity
As at 31 December 2023
Balance at 1 January 2022
Year ended 31 December 2022:
Loss and total comprehensive loss
Transactions with owners in their capacity
as owners:
Issue of share capital
Options granted
Options lapsed
Share
Capital
£
Share
premium
account
£
Notes
Merger
reserve
£
Warrant
reserve
£
Retained
earnings
£
Total
£
3,803,402 39,308,529 10,209,673
937,505 (41,407,870) 12,851,239
–
5,187
–
–
23/24
22
22
–
–
–
–
–
–
–
–
–
(2,230,645) (2,230,645)
–
152,135
(388,575)
–
–
388,575
5,187
152,135
–
Balance at 31 December 2022
3,808,589 39,308,529 10,209,673
701,065 (43,249,940) 10,777,916
Balance at 1 January 2023
Year ended 31 December 2023:
Loss and total comprehensive loss
Transactions with owners in their capacity
as owners:
Issue of share capital – net of costs
Capital reduction
Transfer of merger reserve
Options granted
Options lapsed
23/24
24
26
22
22
3,808,589 39,308,529 10,209,673
701,065 (43,249,940) 10,777,916
–
–
1,524,940 7,533,299
–
–
–
–
(6,496,561)
(6,496,561)
–
– 40,428,176
– 10,209,673
–
179,407
– 9,058,239
–
–
236,576
–
236,576
(179,407)
– (40,428,176)
–
–
–
– (10,209,673)
–
–
–
–
Balance at 31 December 2023
5,333,529 6,413,652
–
758,234
1,070,755 13,576,170
The accompanying notes from page 57 to 91 form an integral part of these financial statements.
Eden Research plc Annual Report 2023
55
Consolidated statement of cash flows
For the year ended 31 December 2023
Cash flow from operating activities
Cash absorbed by operations
R&D tax credit received
Net cash outflow from operating activities
Investing activities
Development of intangible assets
Purchase of property, plant and equipment
Interest received
Net cash used in investing activities
Financing activities
Issue of share capital – net of costs
Payment of lease liabilities
Interest on lease liabilities
Net cash generated from/(used in)
financing activities
Net increase/(decrease) in cash and
cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rates
Cash and cash equivalents at end of year
Relating to:
Bank balances
Notes
2023
£
31
12
13
8
23
20
20
(1,650,465)
(102,391)
34,014
9,058,239
(139,539)
(17,009)
£
(2,130,252)
434,841
(1,695,411)
2022
£
£
(1,586,531)
903,244
(683,287)
(1,023,262)
(30,929)
192
(1,718,842)
(1,053,999)
–
(128,301)
(22,046)
8,901,690
5,487,437
1,994,472
(68,802)
7,413,107
(150,347)
(1,887,633)
3,829,369
52,736
1,994,472
7,413,107
1,994,472
Non-cash movement on account of financing activities:
Note
14 Right of use asset additions of £14,963 (2022: £87,228).
22 Share-based payment charge of £236,576 (2022: £152,135).
23 Issue of shares of £nil (2022: £5,187) where proceeds remain unpaid at the year end.
The accompanying notes from page 57 to 91 form an integral part of these financial statements.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 56
Company statement of cash flows
For the year ended 31 December 2023
Cash flow from operating activities
Cash absorbed by operations
R&D tax credit received
Net cash outflow from operating activities
Investing activities
Development of intangible assets
Purchase of property, plant and equipment
Interest received
Net cash used in investing activities
Financing activities
Issue of share capital – net of costs
Payment of lease liabilities
Interest on lease liabilities
Net cash generated from/(used in)
financing activities
Net increase/(decrease) in cash and
cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rates
Cash and cash equivalents at end of year
Relating to:
Bank balances
Notes
2023
£
31
12
13
8
23
20
20
(1,650,465)
(102,391)
34,014
9,058,239
(139,539)
(17,009)
£
(2,130,252)
434,841
(1,695,411)
2022
£
£
(1,586,531)
903,244
(683,287)
(1,023,262)
(30,929)
192
(1,718,842)
(1,053,999)
–
(128,301)
(22,046)
8,901,690
5,487,437
1,994,472
(68,802)
7,413,107
(150,347)
(1,887,633)
3,829,369
52,736
1,994,472
7,413,107
1,994,472
Non-cash movement on account of financing activities:
Note
14 Right of use additions of £14,963 (2022: £87,228).
22 Share-based payment charge of £236,576 (2022: £152,135).
23 Issue of shares of £nil (2022: £5,187) where proceeds remain unpaid at the year end.
The accompanying notes from page 57 to 91 form an integral part of these financial statements.
Eden Research plc Annual Report 2023
57
Notes to the group financial statements
For the year ended 31 December 2023
1 Accounting policies
Company information
Eden Research plc (the “Company”) is a public company limited by shares incorporated in England and Wales. The registered
office is 67C Innovation Drive, Milton Park, Abingdon, Oxfordshire, OX14 4RQ.
The Group is defined as, and consists of, Eden Research plc, its subsidiaries, TerpeneTech Limited (Ireland), Eden Research
Europe Limited (Ireland) (see note 16) and its associate company, TerpeneTech Limited (UK) (see note 15).
The Group and Company's principal activities and nature of its operations are disclosed in the Directors' report.
1.1 Accounting convention
The Group and Company financial statements have been prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the Companies Act 2006.
The financial statements are prepared in pound sterling, which is the functional currency of the Group and Company. Monetary
amounts in these financial statements are rounded to the nearest £.
They have been prepared on the historical cost basis, except for the re-measurement of certain financial instruments that are
measured at fair value at the end of each reporting period. The principal accounting policies adopted are set out below.
The Company applies accounting policies consistent with those applied by the Group except where specified within the
accounting policies disclosed below.
See note 2 for further information on changes to standards adopted during the year and standards that have been issued but
are not yet effective at the year end.
The preparation of the Group and Company financial statements involves making accounting estimates and assumptions
concerning the future. The critical accounting estimates and assumptions that have a significant risk to the carrying amounts of
assets and liabilities within the next financial year are discussed in note 3.
1.2 Basis of consolidation
The consolidated financial statements consolidate the financial statements of the Company and its subsidiary undertakings up
to 31 December each year. The profits and losses of the Company and its subsidiary undertakings are consolidated from the
date from which control is achieved. All members of the Group have the same reporting period.
Subsidiary undertakings are entities controlled by the Company. The Company controls an entity when it is exposed to, or has the right
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Associates
Associates are those entities in which the Company has significant influence, but not control, over the financial and operating
policies. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of
another entity, or where the Company has a lower interest but the right to appoint a Director. The Company acquired 29.9% of
TerpeneTech Limited (“TerpeneTech (UK)”) during 2015; TerpeneTech (UK) is an associated undertaking.
Application of the equity method to associates
The investment in TerpeneTech (UK) is accounted for using the equity method. The investment was initially recognised at cost.
The Company's investment includes goodwill identified on acquisition, net of any accumulated impairment losses and any
separable intangible assets. The financial statements include the Company's share of the total comprehensive income and
equity movements of TerpeneTech (UK), from the date that significant influence commenced.
Merger accounting
The merger reserve detailed in note 26 arose on historical acquisitions of subsidiary undertakings for which merger relief was
permitted under the Companies Act 2006.
During the year, the carrying value of the intellectual property which had arisen from an acquisition in 2003 had been reduced to £nil.
As such, under the Companies Act 2006, the full balance of the merger reserve of £10,209,673 was transferred to retained earnings.
1.3 Going concern
The Directors have, at the time of approving the financial statements, a reasonable expectation that the Group and Company
have adequate resources to continue in operational existence for at least 12 months from the approval of the financial
statements. Thus, the financial statements have been prepared on a going concern basis which contemplates the realisation of
assets and the settlement of liabilities in the ordinary course of business.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 58
Notes to the group financial statements continued
The Group has reported a loss for the year after taxation of £6,491,936 (2022: £2,243,879). Net current assets at that date
amounted to £8,182,481 (2022: £1,649,624). Cash at that date amounted to £7,413,107 (2022: £1,994,472).
The Company has reported a loss for the year after taxation of £6,496,561 (2022: £2,230,645). Net current assets at that date
amounted to £8,292,509 (2022: £1,777,549). Cash at that date amounted to £7,413,107 (2022: £1,994,472).
Net cash outflow from operating activities for the Group was £1,695,411 (2022: £683,287) and net cash used in investing
activities was £1,718,842 (2022: £1,053,999).
The Directors have prepared budgets and projected cash flow forecasts, based on forecast sales provided by the Group’s
distributors where available, for a period of at least 12 months from the date of approval of the financial statements and they
consider that the Group and Company will be able to operate with the cash resources that are available to it for this period.
The forecasts adopted include revenue derived from existing contracts as well as expected new contracts in respect of
products not yet available for use.
The Group has relatively low fixed running costs, as production is undertaken through toll manufacturers, and the Directors
have previously demonstrated ability and willingness to delay certain costs, such as research and development expenditure,
where required and are willing and able to delay costs in the forecast period should the need arise. A positive cash balance is
forecasted to be maintained in this base scenario throughout the entire forecast period.
The Directors have also considered a downside scenario which includes reductions to revenue derived from existing
contracts as well as elimination of revenue from products not yet available for use offset by mitigations around research and
development expenditure as well as some reductions in expansionary overheads. Under this scenario, a positive cash balance
would be maintained over the forecast period.
Consequently, the Directors are confident that the Group and Company will have sufficient funds to continue to meet their
liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have
prepared the financial statements on a going concern basis.
The Group’s achievement of long-term positive cash generation is reliant on the completion of ongoing product development
and successful initial approval and registration of these products with various regulatory bodies, as well as the registration of
existing products in new territories.
In 2023, the Company raised £9.9m (gross) through a placing of its shares. As such, the Directors believe that the Group is
currently sufficiently funded to take it through to cash generation.
The Group has planned its cashflows taking into account its current cash availability and is satisfied that it can continue for the
foreseeable future, albeit with careful management of the levels of investment in the short term, depending on the positive
outcome and/or timing of certain commercial and regulatory events.
However, given the plethora of opportunities and strong interest that the Group is presented with, the Board of the Company may
seek to invest to a greater extent than it is currently able to and to expedite the commercialisation of its product portfolio. To that
end, the Board continues to assess all funding and commercial opportunities, taking into account commercial and market conditions.
1.4 Revenue
Revenue received by the Group is recognised net of any taxes and in accordance with IFRS 15. Policies for each significant
revenue stream are as follows:
Milestone payments
The Group receives milestone payments from other commercial arrangements, including any fees it has charged to partners for
rights granted in respect of distribution agreements.
These agreements are bespoke, and any such revenue is specific to the particular agreement. Consequently, for each such
agreement, the nature of the underlying performance obligations is assessed in order to determine whether revenue should be
recognised at a point in time or over time.
Revenue is then recognised based on the above assessment upon satisfaction of the performance obligation.
The Corteva agreement entered into in 2021 included milestone payments of £141,293 received in 2021, a further £164,148 in 2022 and
£195,884 in 2023. These milestone payments were assessed to relate to a performance obligation being satisfied at a point in time.
Eden Research plc Annual Report 2023
59
By the year end, this first performance obligation had been reached and, consequently, the amounts received have been
recorded as revenue in the year.
The second performance obligation relates to product sales and will be accounted for in line with the product sales policy
disclosed below once the commercial sales have commenced.
Upfront and annual payments made by customers at commencement and for renewal of distribution and other agreements
are recognised in accordance with the terms of the agreement. Where there is no ongoing obligation on the Group under the
agreement, the payment is recognised in full in the period in which it is made. Where there is an ongoing obligation on the
Group, the separate performance obligations under the agreement are identified and revenue allocated to each performance
obligation. Revenue is then recognised when a corresponding performance obligation has been met.
R & D charges
The Group sometimes charges its partners for R&D costs that it has incurred which usually relate to specific projects and which
it has incurred through a third party.
Upon agreement with a partner, or if a specific milestone is met, then the Group will raise an invoice which is usually payable
between 30 and 120 days. Revenue is recognised upon satisfaction of the underlying performance obligation.
Royalties
The Group receives royalties from partners who have entered into a licence arrangement with the Group to use its intellectual
property and who have sold products, which then gives rise to an obligation to pay the Group a royalty on those sales.
Generally, royalties relate to specific time periods, such as quarterly or annual dates, in which product sales have been made.
Revenue is recognised in line with when these sales occur.
Once an invoice is raised by the Group, following the period to which the royalties relate, payment is due to the Company in
30 to 60 days.
Sales-based royalty income arising from licences of the Group's intellectual property is recognised in accordance with the terms
of the underlying contract and is based on net sales value of product sold by the Group's licensees. It is recognised when the
underlying sales occur.
Product sales
Generally, where the Group has entered into a distribution agreement with a partner, the Group is responsible for supplying
product to that partner once a sales order has been signed.
At that point, the Group has the product manufactured through a third-party, toll manufacturer. At the point at which the product
is finished and is made available to the partner to collect, or, if the Group is responsible for the shipping, the product has been
delivered to the partner, the partner is liable for the product and obliged to pay the Group. Normal terms for product sales are
90 to 120 days. Returns are accepted and refunds are only made when product supplied is notified as defective within 60 days.
The Group does not have any contract assets or liabilities other than the liability in respect of the Corteva milestone payments
noted in the milestone section (2022: none, other than the Corteva milestone payment).
Product sales are recorded once the ownership and related rights and responsibilities are passed to the customer and the
product is made available to the partner to collect, or, if the Group is responsible for the shipping, the product has been
delivered to the customer.
No warranty provision is required as products are sold on the basis of meeting an agreed specification, confirmation of which is
provided by way of a certificate of analysis.
Segmental information
The Group reports on operating segments in a manner consistent with the internal reporting provided to the chief operating
decision-maker in accordance with IFRS 8. Please see note 4 for further details.
1.5 Intangible assets other than goodwill
Intellectual property, which is made up of patent costs, trademarks and development costs, is capitalised and amortised on a
straight-line basis over its remaining estimated useful economic life of 7 years (2022: 8 years) in line with the remaining life of
the Group's master patent, which was originally 20 years, with additional Supplementary Protection Certificates having been
granted in the majority of the countries in the EU in which the Group is selling Mevalone® and CedrozTM. The useful economic
life of intangible assets is reviewed on an annual basis.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 60
Notes to the group financial statements continued
An internally generated intangible asset arising from the Group's development activities is recognised only if all the following
conditions are met:
• the project is technically and commercially feasible;
• an asset is created that can be identified;
• the Group intends to complete the asset and use or sell it and has the ability to do so;
•
it is probable that the asset created will generate future economic benefits;
• the development cost of the asset can be measured reliably; and
• there are sufficient resources available to complete the project.
Internally-generated intangible assets are amortised on a straight-line basis over their useful lives from the date they are
available for use. Where no internally-generated intangible asset can be recognised, development expenditure is recognised
as an expense in the period in which it is incurred.
1.6 Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any
impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the
following straight-line basis:
Leasehold land and buildings
Over the term of the lease
Fixtures and fittings
Motor vehicles
5 years
Over the term of the lease
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying
value of the asset, and is recognised in the income statement.
1.7 Impairment of tangible and intangible assets
The Directors regularly review the intangible assets for impairment and provision is made if necessary. Assets that are subject to
amortisation and those that are under development are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For
the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the
impairment at each reporting date. See note 12 for further details in the intangible asset impairment review completed in the year.
1.8 Inventories
Inventories are stated at the lower of cost and estimated selling price, less costs to complete and sell. Cost is based on the
first-in-first-out principle. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that
have been incurred in bringing the inventories to their present location and condition.
1.9 Financial instruments
(i) Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities (including
trade payables) are initially recognised when the Group becomes a part to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable with a significant financing component) or financial liability is initially measured at
fair value plus, for an item not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to its
acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
(ii) Classification and subsequent measurement
Financial assets
(a) Classification
On initial recognition, a financial asset is classified as measured at amortised cost or FVTPL.
Financial assets are not reclassified subsequently to their initial recognition unless the Group changes its business model for
managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period
following the change in the business model.
Eden Research plc Annual Report 2023
61
A financial asset is measured at amortised cost if it meets both of the following conditions:
•
•
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 specific dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Investments in associates accounted for using the equity method and subsidiaries are carried at cost less impairment.
(a) Subsequent measurement and gains and losses
Financial assets at amortised cost are subsequently measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are
recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and short-term highly liquid investments with an original maturity of three
months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a
component of cash and cash equivalents for the purpose only of the cash flow statement.
Financial liabilities and equity
Financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:
(a) they include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in the Group’s own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Group’s own equity instruments or is a derivative that will be settled by the
Group’s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so
classified takes the legal form of the Group ’s own shares, the amounts presented in these financial statements for called up
share capital and share premium account exclude amounts in relation to those shares.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is
classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are
measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial
liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign
exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
Where a financial instrument that contains both equity and financial liability components exists these components are
separated and accounted for individually under the above policy.
(iii) Impairment
The Group recognises loss allowances for expected credit losses (ECLs) on financial assets measured at amortised cost.
The Group measures loss allowances at an amount equal to lifetime ECL, except for other debt securities and bank balances
for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased
significantly since initial recognition, which are measured as 12-month ECL.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL. During the
year, an expected credit loss provision of £nil (2022: £107,188) has been recognised on trade receivables over 12 months old, on
which payment is uncertain.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience
and informed credit assessment and including forward-looking information.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 62
Notes to the group financial statements continued
The Group considers a financial asset to be in default when:
• the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions
such as realising security (if any is held); or
• the financial asset is more than 120 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting
date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed
to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group
expects to receive). ECLs are discounted at the effective interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial
asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the
financial asset have occurred.
Write-offs
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery.
1.10 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the reporting end date. The current tax charge includes any research and development tax
credits claimed by the Group.
R&D tax credits are accounted for on an accruals basis by reference to IAS 12 and are calculated based on development
costs incurred by the Group through third party contractors, as well as members of staff who are involved in research and
development of the Group’s products.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and
is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates,
and interest in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is
realised based on the tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred
Eden Research plc Annual Report 2023
63
tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case
the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
1.11 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be
recognised as part of the cost of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
A defined contribution plan is a post-employment benefit plan under which the Group pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined
contribution pension plans are recognised as an expense in the income statement in the periods during which services are
rendered by employees.
1.12 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13 Share-based payments
The Company has applied the requirements of IFRS 2 Share-Based Payments.
Unapproved share option scheme
The Company operated an unapproved share option scheme for executive directors, senior management and certain
employees up to September 2017.
Long-Term Incentive Plan ('LTIP')
In 2017, the Company established a LTIP to incentivise the Executives to deliver long-term value creation for shareholders and
ensure alignment with shareholder interest. Awards were made annually and were subject to continued service and challenging
performance conditions usually over a three-year period. The performance conditions were reviewed on an annual basis to
ensure they remained appropriate and were based on increasing shareholder value. Awards were structured as nil cost options
with a seven-year lift after vesting.
Other than in exceptional circumstances, awards were up to 100% of salary in any one year and granted subject to achieving challenging
performance conditions set at the date of the grant. A percentage of the award vested for 'Threshold' performance with full vesting
taking place for equalling or exceeding the performance 'Target'. In between the Threshold and Target there was pro rata vesting.
The LTIP was adopted by the Board of Directors of the Company on 28 September 2017.
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the Statement
of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the
number of equity instruments expected to vest at each reporting date so that ultimately the cumulative amount recognised
over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the
fair value of the options granted, as long as other vesting conditions are satisfied. The cumulative expense is not adjusted for
failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the increase in fair value of the options, measured
immediately before and after the modification is also charged to the Statement of Profit or Loss and Other Comprehensive
Income over the remaining vesting period.
In June 2021, the Company made changes to the LTIP. Details can be found on pages 39 to 40.
The changes to the LTIP have been treated as a modification of the existing plan for financial reporting purposes which means
that the Fair Value of previous awards has been recognised over their remaining term and the incremental Fair Value of the new
options granted has been recognised separately over their own vesting period.
The Company issued options under the modified LTIP, details of which can be found in note 22. These include graded vesting.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 64
Notes to the group financial statements continued
Share options which vest in instalments over a specified vesting period (graded vesting) where the only vesting condition
is service from grant date to vesting date of each instalment are accounted for as separate share-based payments. Each
instalment's fair value is assessed separately based on its term and the resulting charge recognised over each instalment's
vesting period.
Other share options
In addition to the LTIP grants, the Company awarded certain employees approved options. Details of these options can be
found in note 22. The accounting treatment for these options is consistent with that indicated under the LTIP section at the start
of this page.
1.14 Leases
At inception, the Group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange
for consideration. Where a tangible asset is acquired through a lease, the Group recognises a right-of-use asset and a lease
liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from
those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at, or before, the commencement date, plus any initial direct costs and an estimate of the cost of obligations to
dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier
of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use
assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental
borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease
payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the
cost of any options that the Group is reasonably certain to exercise, such as the exercise price under a purchase option, lease
payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in:
future lease payments arising from a change in an index or rate; the Group's estimate of the amount expected to be payable
under a residual value guarantee; or the Group's assessment of whether it will exercise a purchase, extension or termination
option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a
lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these
leases are recognised in profit or loss on a straight-line basis over the lease term.
1.15 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the
transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the
income statement for the period.
Whilst the majority of the Group's revenue is in Euros, the Company also incurs a significant level of expenditure in that
currency. As such, the Company does not currently use any hedging facilities and instead chooses to keep some of its cash at
the bank in Euros.
1.16 Functional and presentation currency
The Group’s consolidated financial statements are presented in pound sterling, which is the Group’s functional currency due
to its own operations and assets being based in the UK. For each entity, the Group determines the functional currency, and
items included in the financial statements of each entity are measured using that functional currency. The Company’s financial
statements are prepared and presented in sterling, which is its functional currency.
1.17 Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Eden Research plc Annual Report 2023
65
1.18 Financial risk management
The Group 's activities expose it to a variety of financial risks: market risks (including currency risk and interest rate risks),
credit risk and liquidity risk. Risk management focuses on minimising any potential adverse effect on the Company's financial
performance and is carried out under policies approved by the Board of Directors. See note 30 for further information.
1.19 Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions or valuation (where items are remeasured). Monetary assets and liabilities denominated in foreign currencies
are translated at the functional currency spot rates of exchange at the reporting date. Foreign exchange gains and losses
resulting from the settlement of monetary assets and liabilities denominated in foreign currencies are recognised in the income
statement. All foreign exchange gains and losses are presented in the income statement within administrative expenses.
Translation differences related to items classified through other comprehensive income are recognised in other comprehensive
income (OCI), while remaining translation differences are recognised in the income statement.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates
at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e.
translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or
profit or loss respectively).
In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) or the
derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction
is the date on which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance
consideration. If there are multiple payments or receipts in advance, the Group determines the transaction date for each
payment or receipt of advance consideration.
1.20 Current versus non-current classification
The Group classifies assets and liabilities in the statement of financial position as either current or non-current.
An asset is classified as current when it is:
• Expected to be realised or intended to be sold or consumed in the normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period.
All other assets are classified as non-current.
A liability is classified as current when it is:
• Expected to be settled in the normal operating cycle
• Held primarily for the purpose of trading
• Due to be settled within twelve months after the reporting period; or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments
do not affect its classification.
The Group classifies all other liabilities as non-current.
1.21 Equity and reserves
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are
shown in equity as a deduction, net of tax, from the proceeds over nominal value in share premium. Share premium represents
the proceeds from shares, less the nominal value and directly attributable costs.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 66
Notes to the group financial statements continued
1.22 Earnings per share
Basic earnings per share is calculated by dividing:
• the profit or loss attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares;
• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
• the after-income tax effects of interest and other financing costs associated with dilutive potential ordinary shares; and
• the weighted average number of additional ordinary shares that would have been outstanding, assuming the conversion of
all dilutive potential ordinary shares.
2 New standards and interpretations
The IASB and IFRS Interpretations Committee have issued the following standards and interpretations with an effective date of
implementation for accounting periods beginning after the date on which the Group’s financial statements for the current year
commenced.
i) New standards and amendments – applicable 1 January 2023
The following standards and interpretations apply for the first time to financial reporting periods commencing on or after
1 January 2023:
Standard or Amendment
IFRS 17 – Insurance Contracts
Amendments to IAS 1 – Presentation of Financial Statements and IFRS Practice Statement 2 – Making
Materiality Judgements: Disclosure of material accounting policies
Amendment to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors: Definition of
accounting estimates
Amendment to IAS 12 – Income Taxes: Deferred tax assets and liabilities arising from a single transaction
Amendment to IAS 12 – Income Taxes: International tax reform and temporary exception for deferred tax
assets and liabilities related to the OECD pillar two income taxes
Material impact
on financial
statements
No
No
No
No
No
ii) Forthcoming requirements
As at 31 December 2023, the following standards and interpretations had been issued but were not mandatory for annual
reporting periods commencing on or after 1 January 2024:
Standard or Amendment
Effective for
accounting
periods
beginning on or
after
Expected Impact
Amendment to IFRS 16 – Leases: Leases on sale and leaseback
1 January 2024
None
Amendment to IAS 1 – Presentation of Financial Statements: Non-current liabilities with
covenants
1 January 2024
None
Amendments to IAS 7 – Statement of Cash Flows and IFRS 7 – Financial Instruments:
Supplier finance
1 January 2024
None
Amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates: Lack of
exchangeability
1 January 2025
None
Eden Research plc Annual Report 2023
67
3 Critical accounting estimates and judgements
The Group and Company make estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk to the carrying
amounts of assets and liabilities within the next financial year are discussed below:
Going concern
The Directors have considered the ability of the Group and the Company to continue as a going concern and this is considered
to be a significant judgement made by the Directors in preparing the financial statements.
The ability of the Group and Company to continue as a going concern is ultimately dependent upon the amount and timing of
cash flows arising from the exploitation of the Group and Company's intellectual property and the availability of existing and/
or additional funding to meet the short-term needs of the business until the commercialisation of the Group and Company's
portfolio is reached. The Directors consider it is appropriate for the financial statements to be prepared on a going concern
basis based on the estimates they have made. See note 1 for further information.
Associate
A judgement has been made that the Group exerts significant influence on TerpeneTech (UK) such that it is an associate
company and, as such, adoption of equity accounting is appropriate. See note 1.2 for further information of assumptions made.
Impairment assessment of intangibles and investments
The Group and Company have made estimates of future revenues that are likely to be derived from the business when
considering the carrying value of intangible assets owned by the Group. Assumptions have been made the products will
be successfully developed, registered and commercialised in reasonable timescales and at reasonable cost. Estimates have
also been made for weighted average cost of capital and profit margins. See note 12 and note 15 for further information of
assumptions and estimates made.
Assessment of useful life of intangible assets
The Group and Company have estimated the useful life of intangible assets by considering intellectual property protection that
it owns, such as patents which have a known expiry date. See note 12 for further information on assumptions and estimates
made.
Share-based payments
The Group and Company have used appropriate models to value share options granted by the Company. Please refer to note
22 for information on estimates and judgements used.
Other accounting judgements
In addition to the above, the Group and Company have made other judgements which are considered of lesser significance.
Capitalised development costs and Intellectual property
The Directors have exercised a judgement that the development costs incurred meet the criteria in IAS 38 Intangible Assets for
capitalisation. In making this judgement, the Directors considered the following key factors:
• The availability of the necessary financial resources and hence the ability of the Group and Company to continue as a going
concern.
• The assumptions surrounding the perceived market sizes for the products and the achievable market share for the Group
and Company.
• The successful conclusion of commercial arrangements, which serves as an indicator as to the likely success of the projects
and, as such, any need to potential impairment.
£37,627 of research expenditure, not including R & D payroll costs, has been recognised as an expense in the current year in
the P&L in excess of the amortisation of intangible assets as disclosed in note 12 (2022: £64,273).
Revenue - Performance obligations
The Directors exercised a judgement that the performance obligations set out in a contract with a customer had not yet been
met and, as such, did not recognise revenue which had been invoiced and paid at the prior year end. See note 1.4 for further
information on policies applied.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 68
Notes to the group financial statements continued
4 Revenue and Segmental Information
IFRS 8 requires operating segments to be reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for the resource allocation and assessing
performance of the operating segments has been identified as the Executive Directors as they are primarily responsible for the
allocation of the resources to segments and the assessment of performance of the segments.
The Executive Directors monitor and then assess the performance of segments based on product type and geographical
area using a measure of adjusted EBITDA. This is the operating loss of the segment after excluding the share-based payment
charge, amortisation of intangible and Right of Use assets and depreciation of plant, property and equipment. These items,
together with interest income and expense are allocated to Agrochemicals, being the Group and Company’s primary focus.
The segment information for the year ended 31 December 2023 is as follows:
Revenue
R & D charges
Royalties
Product sales
Total revenue
Adjusted EBITDA(1)
Share Based Payment charge
EBITDA
Amortisation of intangible assets
Depreciation of plant, property and equipment and right-of-use
assets
Finance costs, foreign exchange and investment revenues
Impairment of intangible assets
Income Tax
Share of Associate’s loss
(Loss)/Profit for the Year
Total Assets
Total assets includes:
Additions to Non-Current Assets
Total Liabilities
Agrochemicals
£
Consumer
products
£
501,324
17,391
2,613,368
3,132,083
(1,064,982)
(236,576)
(1,301,558)
(405,379)
(206,426)
(51,995)
(4,968,529)
428,326
–
(6,505,561)
16,458,177
1,730,280
3,048,922
9,133
50,811
–
59,944
59,944
–
59,944
(13,272)
–
–
–
–
(33,047)
13,625
136,542
37,539
–
Total
£
510,457
68,202
2,613,368
3,192,027
(1,005,038)
(236,576)
(1,241,614)
(418,651)
(206,426)
(51,995)
(4,968,529)
428,326
(33,047)
(6,491,936)
16,594,719
1,767,819
3,048,922
(1) Adjusted EBITDA is adjusted to remove the effect of the non-cash share based payment charge only.
Eden Research plc Annual Report 2023
69
The segment information for the year ended 31 December 2022 is as follows:
Agrochemicals
£
Consumer
products
£
Revenue
R & D charges
Royalties
Product sales
Total revenue
Adjusted EBITDA
Share Based Payment charge
EBITDA
Amortisation of intangible assets
Depreciation of plant, property and equipment and right-of-use
assets
Finance costs, foreign exchange and investment revenues
Income Tax
Share of Associate’s loss
(Loss)/Profit for the Year
Total Assets
Total assets includes:
Additions to Non-Current Assets
Total Liabilities
Revenue analysed by geographical market
UK
Europe
75,334
17,694
1,619,796
1,712,824
(1,841,805)
(152,135)
(1,993,940)
(482,546)
(191,622)
30,882
323,716
–
(2,313,510)
12,812,579
1,141,418
2,168,664
14,309
100,038
–
114,347
114,347
–
114,347
(13,272)
–
–
–
(31,444)
69,631
99,003
–
–
2023
£
59,944
3,132,083
3,192,027
Total
£
89,643
117,732
1,619,796
1,827,171
(1,727,458)
(152,135)
(1,879,593)
(495,818)
(191,622)
30,882
323,716
(31,444)
(2,243,879)
12,911,582
1,141,418
2,168,664
2022
£
114,347
1,712,824
1,827,171
The above analysis represents sales to the Group’s direct customers who further distribute these products to their end markets.
Revenues of approximately £2,464,372 (2022: £1,655,329) are derived from two customers who each account for greater than 10%
of the Group’s total revenues:
Customer
A
B
C
2023
£
1,594,410
869,962
–
2023
%
49.9%
27.3%
–
2022
£
–
1,450,518
204,811
2022
%
–
79.4
11.2
100% of the revenue generated in the year (2022: 100%) was recognised at a point in time.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 70
Notes to the group financial statements continued
5 Operating loss
Operating loss for the year is stated after charging:
Fees payable to the Company's auditor for the audit of the Company's financial
statements*
Fees payable to the Company's auditor for interim review of half-yearly results
Depreciation of right-of-use assets (note 14)
Depreciation on property, plant and equipment (note 13)
Amortisation of intangible assets (note 12)
Provision for doubtful debts
Research expenses
Share-based payment charge (note 22)
2023
£
2022
£
78,000
8,000
135,340
71,086
418,651
–
37,627
236,576
67,000
3,500
127,201
64,421
495,818
107,188
64,273
152,135
* Included in the fees payable to the Company’s auditor for the audit of the Company’s financial statements are overruns from
the prior year audit of £10,000 (2022: £nil).
6 Employees
The average monthly number of persons (including Directors) employed by the Group and Company during the year was:
Management
Operational
Their aggregate remuneration (including Directors) comprised:
Wages and salaries
Social security costs
Pension costs
Benefits in kind
Share-based payment charge
2023
Number
2022
Number
5
14
19
2023
£
1,569,096
154,538
54,991
7,186
236,576
4
13
17
2022
£
1,205,424
145,871
47,964
6,486
152,135
2,022,387
1,557,880
Eden Research plc Annual Report 2023
71
7 Directors' remuneration
Remuneration for qualifying services
Company pension contributions to defined contribution schemes
Non-executive Directors’ fees
Share-based payment charge relating to all Directors
Benefits in kind
Social security costs
2023
£
780,706
31,010
120,000
198,749
1,130,465
7,186
77,384
1,215,035
2022
£
478,440
33,491
96,667
119,083
727,681
6,486
71,708
805,875
The number of Directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022: 2).
The number of Directors who are entitled to receive shares under long term incentive schemes during the year is 2 (2022: 2).
Remuneration disclosed above includes the following amounts paid to the highest paid Director:
Remuneration for qualifying services (including pension and excluding share-based
payment charge)
2023
£
2022
£
463,539
292,367
The Executive Directors are considered to also be the key management personnel of the Company and Group. Details of
Directors’ share options can be found on page 35 in the Remuneration report.
2023
A Abrey
S Smith
R Cridland
L van der Broek
R Horsman
2022
A Abrey
S Smith
R Cridland
L van der Broek
R Horsman
Salary
£
217,100
289,030
Bonus
£
117,777
156,799
Fees
£
Pension
£
Share-
based
Payments
£
–
–
13,300
17,710
85,242
113,507
–
–
–
–
–
–
40,000
45,000
35,000
–
–
–
–
–
–
Total
£
433,419
577,046
40,000
45,000
35,000
506,130
274,576
120,000
31,010
198,749
1,130,465
Bonus
£
Fees
£
Pension
£
Share-
based
Payments
£
–
–
–
–
–
–
–
–
14,364
19,127
51,074
68,009
–
–
–
–
–
–
40,000
45,000
11,667
96,667
33,491
119,083
727,681
Total
£
270,638
360,376
40,000
45,000
11,667
Salary
£
205,200
273,240
–
–
–
478,440
Benefit in kind relates to cumulative life insurance charge and cannot be allocated to individual directors.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 72
Notes to the group financial statements continued
8 Interest income
Interest income
Bank Deposits
2023
£
2022
£
34,014
192
Total interest income for financial assets that are not held at fair value through profit or loss is £34,014 (2022: £192).
9 Finance costs and foreign exchange differences
Interest on lease liabilities
Credit charges
Finance costs
Foreign exchange (losses)/gains
10 Income tax credit
Current tax
UK corporation tax on loss for the current year
Adjustments in respect of prior years
Total UK current tax income
The credit for the year can be reconciled to the loss per the income statement as follows:
Loss before tax
Expected tax credit based on a corporation tax rate of 23.52% (2022: 19.00%)
Ineligible fixed asset differences
Expenses not deductible for tax purposes
Additional deduction for R&D expenditure
R&D claim
Surrender of tax losses for R&D tax credit refund
Adjustment in respect of prior years
Deferred tax not recognised
Taxation credit for the year
2023
£
17,009
198
17,207
(68,802)
2023
£
(317,201)
(111,125)
(428,326)
2023
£
(6,920,262)
(1,627,683)
138,762
72,069
(324,836)
(317,201)
660,006
(111,125)
1,081,682
(428,326)
2022
£
22,046
–
22,046
52,736
2022
£
(323,716)
–
(323,716)
2022
£
(2,567,595)
(487,843)
9,489
75,663
(239,754)
(323,716)
424,180
–
218,265
(323,716)
The rate of UK Corporation tax increased from 19% to 25% on 6 April 2023. There are no future factors at the reporting date
that are expected to impact the Group’s future tax charge. The Group is not within the scope of the OECD Pillar Two model
rules.
The taxation credit for the year represents the research and development credit for the year ended 31 December 2023.
Eden Research plc Annual Report 2023
73
The current tax recoverable as at 31 December 2023 represents R&D tax credits and is made up as follows:
Current tax
R & D cash tax credit for the current year
Total UK current tax recoverable
2023
£
(317,201)
(317,201)
2022
£
(323,716)
(323,716)
Deferred Tax
The losses carried forward, after the above offset, for which no deferred tax asset has been recognised, amount to
approximately £29,635,304 (2022: £29,199,472).
The unprovided deferred tax asset of £7,408,826 (2022: £7,299,868) arises principally in respect of trading losses. It has been
calculated at 25% (2022: 25%) and has not been recognised due to the uncertainty of timing of future profits against which it
may be realised.
Only U.K. tax is considered as most of the operations are in the U.K and Ireland is immaterial in terms of operations.
11 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all
dilutive potential ordinary shares.
Share options outstanding are anti-dilutive in nature due to the loss incurred and therefore are not considered for computing
diluted EPS.
Weighted average number of ordinary shares for basic and diluted earnings per share
420,921,123
380,549,418
Earnings (all attributable to equity shareholders of the Company)
2023
£
2022
£
Loss for the period
Basic earnings per share
Diluted earnings per share
(6,494,249)
(2,243,879)
(1.54p)
(1.54p)
(0.59p)
(0.59p)
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 74
Notes to the group financial statements continued
12 Intangible assets
Group
Cost
At 1 January 2022
Additions
At 31 December 2022
Additions
At 31 December 2023
Amortisation and impairment
At 1 January 2022
Amortisation charge for the year
At 31 December 2022
Impairment charge for the year
Amortisation charge for the year
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
Company
Cost
At 1 January 2022
Additions
At 31 December 2022
Additions
At 31 December 2023
Amortisation and impairment
At 1 January 2022
Amortisation charge for the year
At 31 December 2022
Impairment charge for the year
Amortisation charge for the year
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
Licences and
trademarks
£
Development
costs
£
Intellectual
property
£
456,684
–
456,684
–
8,150,140
923,891
9,074,031
1,605,299
456,684
10,679,330
Total
£
18,014,510
1,023,262
19,037,772
1,650,465
20,688,237
10,094,728
495,818
10,590,546
4,968,529
418,651
15,977,726
Total
£
17,881,767
1,023,261
18,905,028
1,650,465
20,555,493
10,068,184
482,545
10,550,729
4,968,529
405,379
15,924,637
9,407,686
99,371
9,507,057
45,166
9,552,223
6,936,627
210,348
7,146,975
1,705,122
163,452
9,015,549
9,274,943
99,371
9,374,314
45,166
9,419,480
6,910,083
197,075
7,107,158
1,705,122
150,180
8,962,460
4,171,278
536,674
4,710,511
6,080,652
2,360,082
8,447,226
Licences and
trademarks
£
Development
costs
£
Intellectual
property
£
456,684
–
456,684
–
8,150,140
923,890
9,074,030
1,605,299
456,684
10,679,329
2,709,205
284,174
2,993,379
3,260,862
253,811
6,508,052
2,709,205
284,174
2,993,379
3,260,862
253,811
6,508,052
448,896
1,296
450,192
2,545
1,388
454,125
2,559
6,492
448,896
1,296
450,192
2,545
1,388
454,125
2,559
6,492
4,171,277
457,020
4,630,856
6,080,651
2,267,156
8,354,299
Intellectual property represents intellectual property in relation to use of encapsulated terpenes in agrochemicals in the form
of licences, patents and development costs. Intellectual property includes patents and know-how acquired by the Group.
The remaining useful economic life of these assets is 7 years (2022: 8 years) to 31 December 2030.
Eden Research plc Annual Report 2023
75
Licences and trademarks include an inward licence in respect of a patented technology.
Development costs includes trials and study costs relating to products that have been, or are being developed, by the Group
and Company.
£ 1,096,545 (2022: £3,799,161) of development costs relate to assets under development for which no amortisation has been
charged in 2023 or 2022. The decrease of £1.6m in such development costs in the year is due to the impact of the impairment
review at 30 June 2023 as discussed below.
Impairment review at 30 June 2023
The impairment review that was undertaken as part of the Group’s 2022 accounts preparation resulted in headroom over the
carrying value of only £0.9m (down from £8.3m in 2021), a small margin given intangible assets amounted to £8.4m at that time.
Given the marginal headroom and general downward trend, the management team and Audit Committee agreed it was
appropriate to undertake a further impairment review of the Group’s intangible assets, as part of the preparation of the Group’s
2023 Interim reporting.
The need for an interim impairment review was also driven by external factors such as continuing high interest rates and
inflation which it was felt might impact the discount rate used in the Cash Generating Unit (CGU) calculations. The Board
agreed to appoint an independent advisor to undertake an impairment review, based on the current position of the Group and
Company, and the current financial environment.
The total carrying value of the intangible assets was allocated to the Agrochemicals CGU as the largest CGU in which cash
inflows are generated. The recoverable amounts of the intangible assets were determined based on value in use calculations
based on the Agrochemicals CGU.
The Directors prepared a discounted cash-flow forecast, based on product sales forecasts including those provided by the
Group's commercial partners, and have taken into account the market potential for the Group's products and technologies
using third party market data that the Group has acquired licences to. The discounted cash-flow forecast is limited to those
products which are already being sold, or are expected to be sold in 2023, or early 2024.
The forecast covered a period of 7.5 years to 31 December 2030, with no terminal value, reflecting the useful economic life of
the patent in respect of the underlying technology. Financial forecasts were based on the approved budget. Financial forecasts
were used on the approved long-term plan.
The discount rate was derived from the Group's weighted average cost of capital, taking into account the cost of equity and
debt, to which specific market-related premium and company-related premium adjustments were made. The discount rate
used was 16.36%.
Tax rate was assumed at 25% which is in line with the rate in the years the Group have earnings, however the current losses brought
forward as at 30 June 2023 exceed £30m so not tax charge was included in the forecasted years where the Group is profitable.
Based on the above assumptions, the value in use of the intangible assets was £4,968,529 lower than the carrying value of the
intangible assets indicating that an impairment of intangible assets is required at 30 June 2023. The impairment charge of
£4,968,529 was charged immediately to the statement of comprehensive income.
Impairment review at 31 December 2023
An annual impairment review is undertaken by the Board of Directors. The Directors have considered the progress of the
business in the current year, including a review of the potential market for its products, the progress the Group and Company
have made in registering its products and other key commercial factors to perform the review.
As with the interim review at 30 June 2023, the Board agreed to appoint an independent advisor to undertake an impairment
review, based on the current position of the Group and Company, and the current financial environment.
The total carrying value of the intangible assets was allocated to the Agrochemicals CGU as the largest CGU in which cash
inflows are generated. The recoverable amounts of the intangible assets were determined based on value in use calculations
based on the Agrochemicals CGU.
The Directors prepared a discounted cash-flow forecast, based on product sales forecasts including those provided by the
Group's commercial partners, and have taken into account the market potential for the Group's products and technologies
using third party market data that the Group has acquired licences to. The discounted cash-flow forecast is limited to those
products which are already being sold, or are expected to be sold in 2024.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 76
Notes to the group financial statements continued
The forecast covered a period of 7 years to 31 December 2030, with no terminal value, reflecting the useful economic life of
the patent in respect of the underlying technology. Financial forecasts were based on the approved budget. Financial forecasts
for 2024-2028 were used on the approved long-term plan. Financial forecasts for 2029-2030 were extrapolated based on
a long-term growth rate of 3.93%.
The discount rate was derived from the Group's weighted average cost of capital, taking into account the cost of equity and
debt, to which specific market-related premium and company-related premium adjustments were made. The discount rate
used was 16.62%.
Tax rate was assumed at 25% which is in line with the rate in the years the Group have earnings, however the current losses brought
forward as at 31 December 2023 exceed £30m so not tax charge was included in the forecasted years where the Group is profitable.
The estimated recoverable amount of the CGU exceeded its carrying amount by £1.25m and based on the review carried out,
the Board is satisfied that intangible assets are not impaired further.
The key assumptions of the forecast are the future cash flows, driven primarily by level of sales, and the discount rate. The
discount rate is estimated using pre-tax rates that reflect current market assessments of the time value of money and the risk
specific to the CGU. The rate used was 16.62% (2022: 13.5%). The increase in the rate reflects wider market movements as well
as increased forecasting risk given high, current inflation rates.
As part of the advisor’s impairment review, a sensitivity analysis was conducted to stress test the impairment review. The
assumed sensitivities included increasing the discount rate by 1%, increasing the working capital investment as a percentage
of revenue growth by 1% and reducing the growth rate in which YE2029 and YE2030 are projected on by 1%. On a sensitised
scenario, the headroom calculated is £0.4m with no impairment required.
The Board is therefore satisfied that reasonable changes in assumptions have been considered and no further impairments
have been identified at 31 December 2023.
As set out in the Strategic Report, the business is in a critical phase of its development as the development of products is
transitioned to revenue generation. The value of the CGU is supported by forecasts of continued revenue growth of existing
products and the successful introduction and growth of sales of products currently under development. The forecasts are highly
sensitive to the revenue growth assumptions and are reliant on the Group meeting the forecast sales, with small deviations
from this leading to impairment indicators. The Board has determined to not reverse the impairment charge recognised at
30 June 2023 given the results of the sensitivity analysis to allow for further review of the CGU’s performance in 2024.
13 Property, plant and equipment
Group and Company
Cost
At 1 January 2022
Additions – owned
At 31 December 2022
Additions – owned
At 31 December 2023
Accumulated depreciation and impairment
At 1 January 2022
Charge for the year
At 31 December 2022
Charge for the year
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
Eden Research plc Annual Report 2023
Fixtures and
Fittings
£
302,027
30,929
332,956
102,391
435,347
69,749
64,421
134,170
71,086
205,256
230,091
198,786
Total
£
302,027
30,929
332,956
102,391
435,347
69,749
64,421
134,170
71,086
205,256
230,091
198,786
Leasehold
premises
£
Motor
vehicles
£
14 Right-of-use assets
Group and Company
Cost
At 1 January 2022
Additions
Disposals
At 31 December 2022
Additions
Disposals
At 31 December 2023
Accumulated depreciation and impairment
At 1 January 2022
Charge for the year
Eliminated on disposals
At 31 December 2022
Charge for the year
Eliminated on disposals
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
15 Investments
Group and Company
Investment in associates
443,777
–
–
443,777
–
–
443,777
119,865
90,876
–
210,741
90,876
–
301,617
142,160
233,036
2022
£
–
Current
2023
£
–
77
Total
£
529,850
87,228
(35,865)
581,213
14,963
(22,282)
573,894
157,063
127,201
(35,865)
248,399
135,340
(22,282)
361,457
86,073
87,228
(35,865)
137,436
14,963
(22,282)
130,117
37,198
36,325
(35,865)
37,658
44,464
(22,282)
59,840
70,277
99,778
212,437
332,814
Non-current
2023
£
297,197
2022
£
330,244
Details of the Group’s associates at 31 December 2023 are as follows:
Name of
undertaking
TerpeneTech
Limited (UK)
Registered
office
United
Kingdom
Principal
activities
Research and
experimental
development on
biotechnology
Class of shares
held
Ordinary
Direct
29.90
% held
Voting
29.90
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 78
Notes to the group financial statements continued
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets (100%)
Company’s share of net assets
Separable intangible assets
Goodwill
Impairment of investment in associate
Carrying value of interest in associate
Revenue
100% of loss after tax
29.9% of loss after tax
Amortisation of separable intangible
Company’s share of loss including amortisation of separable intangible asset
2023
£
315,918
311,599
(23,819)
(309,349)
294,349
88,010
96,059
412,649
(299,521)
297,197
515,647
(61,802)
(18,479)
(14,568)
(33,047)
2022
£
378,271
382,753
(92,341)
(340,419)
328,264
98,151
118,965
412,649
(299,521)
330,244
497,292
(56,440)
(16,876)
(14,568)
(31,444)
The separable intangible assets relate to the biocide registration for geraniol which TerpeneTech (UK) co-owns which was
originally valued using discounted cashflows.
The associate is included in the Consumer Products operating segment.
TerpeneTech Limited's (“TerpeneTech (UK)”) registered office is Kemp House, 152 City Road, London, EC1V 2NX and its
principal place of business is 3 rue de Commandant Charcot, 22410, St Quay Portrieux, France.
The Directors have considered the progress of the business in the current year, including a review of the potential market for its
products, the progress TerpeneTech (UK) has made in registering its products and other key commercial factors to determine
whether any indicators of impairment exist. As a result of identification of indicators of impairment, an impairment review of the
investment in TerpeneTech (UK) was undertaken by the Board of Directors.
The Directors have used discounted cash-flow forecasts, based on product sales forecasts provided by TerpeneTech (UK), and
have taken into account the market potential for those products. These forecasts cover a 7-year period, with no terminal value,
in line with the patent of the underlying technology.
The key assumptions of the forecast are the growth rate and the discount rate. The discount rate is estimated using pre-tax
rates that reflect current market assessments of the time value of money and the risk specific to the asset. The rate used was
16.62% (2022: 13.5%). The increase in the rate reflects the wider market movements as based on the comparable group as well
as increased forecasting risk given high, current inflation rates.
Based on the review the Directors carried out, it was determined that the Investment was not impaired and, as such,
no impairment charge (2022: £nil) was recognised.
An increase in the discount rate of 0.21% would result in an impairment.
The growth rates are derived from discussions with the Company's commercial partner, TerpeneTech (UK), as described above.
The average annual growth rate has been assumed at 20% (2022: 15%) and is based on the sales of geraniol only.
With no growth in the forecast geraniol sales from 2024 over the entire forecast period, there would be an impairment
of £181,117.
The Directors have also considered whether any reasonable change in assumptions would lead to a material change
in impairment recognised and are satisfied that this is not the case.
Eden Research plc Annual Report 2023
79
16 Subsidiaries
Details of the Company's subsidiaries at 31 December 2023 are as follows:
Name of
undertaking
TerpeneTech
Limited
Eden Research
Europe Limited
Registered
office
Principal
activities
Class of shares
held
Republic of Ireland Sale of biocide
Ordinary
% held
Direct
50.00
Voting
50.00
products
Republic of Ireland Dormant
Ordinary
100.00
100.00
TerpeneTech Limited (“TerpeneTech (Ireland)”), whose registered office is 108 Q House, Furze Road, Sandyford, Dublin,
Ireland, was incorporated on 15 January 2019 and is jointly owned by both the Company and TerpeneTech (UK), the Company's
associate.
The Company has the right to appoint a director as chairperson who will have a casting vote, enabling the Group to exercise
control over the Board of Directors in the absence of an equivalent right for TerpeneTech (UK). The Company owns 500 ordinary
shares in TerpeneTech (Ireland).
Eden Research Europe Limited, whose registered office is 108 Q House, Furze Road, Sandyford, Dublin, Ireland, was
incorporated on 18 November 2020 and is wholly owned by the Company.
Non-controlling interests
The following table summarises the information relating to the Group’s subsidiary with material non-controlling interest, before
intra-Group eliminations:
Non-controlling interest (NCI) percentage
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net liabilities (100%)
Carrying amount of NCI (50% of net liabilities)
Revenue
Profit/(loss) after tax
Other comprehensive income
Total comprehensive loss
Share of NCI (50% of total comprehensive profit/(loss))
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase / (decrease) in cash and cash equivalents
Dividends paid to non-controlling interests
2023
50%
£
79,655
56,887
–
(166,914)
(30,372)
(15,186)
50,811
4,625
–
4,625
2,313
–
–
–
–
–
2022
50%
£
92,927
6,076
–
(134,000)
(34,997)
(17,499)
50,038
(13,234)
–
(13,234)
(6,617)
–
–
–
–
–
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 80
Notes to the group financial statements continued
17 Inventories
Raw materials
Goods in transit
Finished goods
Inventory above is shown net of a provision of:
Provision for obsolete inventory
Group and Company
2023
£
149,644
27,736
787,172
964,552
–
–
2022
£
115,929
411,181
98,348
625,458
76,250
76,250
Raw materials of £1,276,677 (2022: £580,851) were consumed during the year. This has been recognised within cost of sales in the
Consolidated statement of comprehensive income.
18 Trade and other receivables
Trade receivables
VAT recoverable
Other receivables
Prepayments and accrued income
Group
Company
2023
£
1,788,151
386,684
112,375
162,413
2,449,623
2022
£
322,489
179,214
67,410
89,753
658,866
2023
£
1,788,151
386,684
222,403
162,413
2,559,651
Trade receivables above are shown net of a provision for doubtful debt of:
Provision for doubtful debts
Group and Company
2023
£
–
–
2022
£
322,489
179,214
195,335
89,753
786,791
2022
£
107,188
107,188
Trade receivables disclosed above are measured at amortised cost. The Directors consider that the carrying amount of trade
and other receivables approximates their fair value.
Trade receivables of £1,355,690 (2022: £184,746) at the reporting date were held in Euros and £111,654 (2022: £117,229) were
held in USD, with the remainder being in GBP. Please see note 30 for further details.
19 Trade and other payables
Current
Trade payables
Accruals and deferred income
Social security and other taxation
Other payables
Group
2023
£
1,925,559
640,342
56,841
196,411
2,819,153
2022
£
1,150,873
515,860
52,849
93,759
1,813,341
Company
2023
£
1,925,559
640,342
56,841
196,411
2,819,153
2022
£
1,150,873
515,860
52,849
93,759
1,813,341
Trade payables of £597,876 (2022: £233,410) at the reporting date were held in Euros and £382,852 (2022: £460,470) were held in
USD, with the remainder being in GBP. Please see note 30 for further details.
Eden Research plc Annual Report 2023
81
20 Lease liabilities
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more
than 12 months from the reporting date, as follows:
Current liabilities
Non-current liabilities
Maturity analysis – total future payments due under leases:
Within one year
In two to five years
Total undiscounted liabilities
Future finance charges and other adjustments
Lease liabilities in the financial statements
Group and Company
2023
£
142,849
86,920
229,769
Group and Company
2023
£
152,694
89,285
241,979
(12,210)
229,769
Set out below are the future undiscounted cash outflows to which the lessee is exposed to that are reflected in the
measurement of lease liabilities, categorised by type of leased item:
Land and buildings
Within one year
Between two and five years
Motor vehicles
Within one year
Between two and five years
2023
£
106,735
59,949
166,684
2023
£
45,959
29,336
75,295
2022
£
139,547
215,776
355,323
2022
£
156,548
226,541
383,089
(27,766)
355,323
2022
£
106,735
166,684
273,419
2022
£
49,813
59,857
109,670
Cash paid in respect of lease liabilities in the year was £156,548 (2022: £128,301) excluding interest and expenses relating to
leases of low-value assets.
The Group holds eight leases, for two properties and six vehicles. All leases have fixed lease repayments and average
remaining terms of 1.6 years (2022: 2.6 years) for the properties and 1.7 years (2022: 2.3 years) for the vehicles.
The incremental borrowing rates applied to lease liabilities recognised in the statement of financial position at the date of
initial application of IFRS 16 were 4.75% for land and buildings and 8.71% for other assets.
Amounts recognised in profit or loss include the following:
Interest on lease liabilities
Expense relating to leases of low-value assets
2023
£
17,009
740
2022
£
22,046
740
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 82
Notes to the group financial statements continued
21 Retirement benefit schemes
Defined contribution schemes
The Group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held
separately from those of the Group in an independently administered fund.
The total costs charged to the income statement in respect of defined contribution plans is £54,991 (2022: £47,964).
22 Share-based payment transactions
Long-Term Incentive Plan (“LTIP”)
Since September 2017 the Group has operated an option scheme for executive directors, senior management and certain
employees under an LTIP which allows for certain qualifying grants to be HMRC approved. Further details can be found on
page 34 of the Remuneration Report.
LTIP Replacement Award
In 2021, the Company made changes to the LTIP in line with the requirements of a fundraise completed in 2020. The new plan
was deemed a more appropriate scheme to incentivise management given the Company’s stage of development and replaced
the 2019 Award, which lapsed in its entirety in 2021.
Pursuant to the updated plan, in 2021 the Company granted options over 10.5 million new Ordinary Shares, at a strike price
of 6p each, in the amounts of 6 million awarded to Sean Smith and 4.5 million awarded to Alex Abrey. The options vested
immediately and lapse in three equal tranches in June 2022, June 2023 and June 2024. For the first five years following grant,
no shares arising from the exercise of these options may be sold unless the Company’s prevailing share price is equal to, or in
excess of, 10p.
The shares arising from exercise of options are subject to a one-year lock-in restriction, followed by a one-year orderly market
restriction.
For accounting purposes, the options granted under the LTIP Replacement Award have been treated as a modification of
the 2019 Award as per IFRS 2. Where awards previously granted have been deemed to be modified, IFRS 2 requires the
share-based payment charge to comprise the original fair value of the awards, together with an incremental fair value.
The following information is relevant in the determination of the fair value of options granted under the LTIP Replacement Award.
Grant date
Number of awards
Share price
Exercise price
Expected dividend yield
Expected volatility
Risk free rate
Vesting period
Expected Life (from date of grant)
Replacement
Awards
30/06/2021
10,500,000
£0.10
£0.06
-%
55%
0.03%
Nil
0.5/1/1.5 years
As the options have been issued at a significant discount to the share price, the expected exercise has been assumed to equal
the midpoint between the vest and lapse date.
During the year, 3,500,000 (2022: 3,500,000) of the above options lapsed and £171,251 (2022: £171,251) was transferred from the
warrant reserve to retained earnings.
At 31 December 2023, there were 3,500,000 (2022: 7,000,000) options still in issue. The share-based payment charge for the year
ended 31 December 2023 in respect of the above LTIP Replacement Awards was £nil (2022: £nil).
Eden Research plc Annual Report 2023
83
2021 Award
Also in 2021, the Company made a further grant of options in order to ensure continuity of long-term incentive of options
over 7,183,784 new Ordinary Shares in the Company, at a strike price of 10.37p each, in the amounts of 4,102,703 awarded to
Sean Smith and 3,081,081 awarded to Alex Abrey.
These grants expire on 31 July 2025 and vest as follows:
• 1/3 upon grant;
• 1/3 12 months from the date of grant; and
• 1/3 24 months from the date of grant.
The share-based payment charge for the year ended 31 December 2023 in respect of the above 2022 LTIP awards was £119,083
(2022: £119,083).
Other share options
2021 Award
In addition to the options granted under the LTIP, certain employees were awarded approved options over a total of 996,220
shares in 2021. These have been issued at a strike price of 10-10.37p with expiry date between 30 June 2022 and 30 June 2024.
640,664 of these vested immediately with the remainder vesting over a 3-year period. The share-based payments charge in
respect of all these options for the year ended 31 December 2023 was £nil (2022: £nil). During the year, none (2022: 518,738) of
these options were exercised and none (2022: 355,556) lapsed and £nil (2022: £63,498) was transferred from the warrant reserve
to retained earnings.
2022 Award
In 2022, the Company granted to employees a total of 2,006,939 options at an average exercise price of 6p. No awards were
made to directors in 2022.
50% of the options vest immediately, with the remaining 50% vesting after one year.
The following information is relevant in the determination of the fair value of options granted under the 2022 Award.
Grant date
Number of awards
Share price
Exercise price
Expected dividend yield
Expected volatility
Risk free rate
Vesting period
Expected Life (from date of grant)
30/6/22
2,006,939
£0.04
£0.06
–
63%
0.95%
1 year
3 years
The share-based payments charge in respect of all these options for the year ended 31 December 2023 was £nil (2022: £33,052).
During the year, 250,000 (2022: none) of these options were exercised and none (2022: none) lapsed and £8,156 (2022: £nil) was
transferred from the warrant reserve to retained earnings.
2023 Award to Directors
The Company made a further grant of options in order to ensure continuity of long-term incentive of options over 8,698,909
new Ordinary Shares in the Company, at a strike price of 5.1p each, in the amounts of 4,968,000 awarded to Sean Smith and
3,730,909 awarded to Alex Abrey.
The Options expire on 31 August 2027 and vest as follows:
• 1/3 upon grant;
• 1/3 12 months from the date of grant; and
• 1/3 24 months from the date of grant.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 84
Notes to the group financial statements continued
The following information is relevant in the determination of the fair value of options granted under the 2023 Award to
Directors.
Grant date
Number of awards
Share price
Exercise price
Expected dividend yield
Expected volatility
Risk free rate
Vesting period
Expected Life (from date of grant)
30/8/23
8,698,909
£0.06
£0.05
–
65.6%
5.4%
2 years
3 years
The share-based payments charge in respect of all these options for the year ended 31 December 2023 was £79,666. During the year,
none of these options were exercised and none lapsed and £nil was transferred from the warrant reserve to retained earnings.
2023 Award to Employees
In addition to the above options granted to Directors, the Company granted employees a total of 2,224,976 options at an
average exercise price of 6p.
The Options expire on 30 June 2026 and vest as follows:
• 1/2 upon grant; and
• 1/2 12 months from the date of grant.
The following information is relevant in the determination of the fair value of options granted under the 2023 Award to
Employees.
Grant date
Number of awards
Share price
Exercise price
Expected dividend yield
Expected volatility
Risk free rate
Vesting period
Expected Life (from date of grant)
18/12/23
2,224,976
£0.04
£0.05
–
65.4%
5.4%
2 years
3 years
The share-based payments charge in respect of all these options for the year ended 31 December 2023 was £37,827 (2022:
£nil). During the year, none (2022: none) of these options were exercised and none (2022: none) lapsed and £nil (2022: £nil) was
transferred from the warrant reserve to retained earnings.
A summary of all the above options is set out in the table below.
Options awards
Outstanding at 1 January
Granted during the year
Exercised during the year
Lapsed during the year
Number of share options
2023
16,312,649
10,923,885
(250,000)
(3,500,000)
2022
18,680,004
2,006,939
(518,738)
(3,855,556)
Exercisable at 31 December
23,486,534
16,312,649
Weighted average exercise price
(pence)
2023
2022
8
5
1
6
7
7
5
1
6
8
The exercise price of options outstanding at the end of the year ranged between 5p and 10p (2022: 6p and 10p) and their
weighted average contractual life was 2.2 years (2022: 1.9 years.)
The share-based payment charge for the year, in respect of options, was £236,576 (2022: £152,135).
Eden Research plc Annual Report 2023
85
A total of £179,407 (2022: £234,749) was transferred from the warrant reserve to retained earnings in relation to share options
that lapsed in the year.
Warrants
Outstanding at 1 January
Granted during the year
Exercised during the year
Lapsed during the year
Exercisable at 31 December
Number of warrants
2023
–
–
–
–
–
2022
2,989,865
–
–
(2,989,865)
–
Weighted average exercise price
(pence)
2023
2022
–
–
–
–
–
19
–
–
19
–
The exercise price of warrants outstanding at the end of the year was nil p (2022: nil p) and their weighted average contractual
life was nil years (2022: nil years.)
The share-based payment charge for the year, in respect of warrants, was £nil (2022: £nil).
During the prior year, 2,989,865 of these warrants lapsed and £153,826 was transferred from the warrant reserve to retained
earnings, resulting in a total transfer of £388,575 from the warrant reserve to retained earnings in the prior year including the
lapsed share options and warrants.
For all options and warrants, fair value is measured using the Black-Scholes model. The expected life used in the model
has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and
behavioural conditions.
23 Share capital
Ordinary share
Issued and fully paid
At the beginning of the year
Issue of shares
At the end of the year
2023
Number
2022
Number
380,858,607
152,493,916
533,352,523
380,240,229
618,378
380,858,607
2023
£
3,808,589
1,524,940
5,333,529
2022
£
3,803,402
5,187
3,808,589
Each ordinary share of £0.01 has voting and dividend rights attached to them.
Shares issued in the year
17 May 2023 – Exercise of Options
On 17 May 2023, the Company issued 250,000 ordinary shares of 1 pence each in the Company following the exercise of
250,000 options with an exercise price of 1 pence per share under the Company's share option scheme.
This share issue has been recognised as £2,500 in share capital.
Net proceeds of £2,500 have been recognised in the statement of cash flows.
3 August 2023 – Placing, Subscription and Retail Offer
Following the closing of the Retail Offer on the BookBuild Platform on 2 August 2023, 6,090,070 ordinary shares were issued on
3 August 2023 at a price of 6.5 pence per Retail Offer Share in connection with the Retail Offer.
In addition, 13,945,076 “Firm Placing” ordinary shares and 2,978,001 “Firm Subscription” ordinary shares were issued at a price
of 6.5 pence per ordinary share, resulting in a total of 23,013,147 new ordinary shares in relation to the Placing, Subscription and
Retail Offer. This raised total gross proceeds of £1,495,855. Issue costs of £146,076 were incurred and have been deducted from
the share premium account on recognition.
This share issue has been recognised as £230,131 in share capital and £1,119,648 in share premium.
Net proceeds of £1,349,779 have been recognised in the statement of cash flows.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 86
Notes to the group financial statements continued
6 October 2023 – Conditional Placing
On 6 October 2023, 129,230,769 ordinary shares were issued via the Conditional Placing, raising gross proceeds of £8,400,000.
Issue costs of £694,040 were incurred and have been deducted from the share premium account on recognition.
This share issue has been recognised as £1,292,309 in share capital and £6,413,651 in share premium.
Net proceeds of £7,705,960 have been recognised in the statement of cash flows.
Total net proceeds after deduction of issue costs for all new ordinary shares recognised in the statement of cash flows are
£9,058,239.
All new ordinary shares rank, pari passu, with the existing ordinary shares in issue.
24 Share premium account
At the beginning of the year
Issue of shares
Share issue costs
Capital reduction
At the end of the year
Group and Company
2023
£
39,308,529
8,373,415
(840,116)
(40,428,176)
6,413,652
2022
£
39,308,529
–
–
–
39,308,529
Please see note 23 for information on the issue of shares and resulting £7,533,299 increase in share premium, being the excess
of proceeds over par value less issue cost, in the year.
Capital reduction
The Company had accumulated losses of £43,309,440, largely offset by the credit of its share premium account shown by its
audited accounts for the period to 31 December 2022.
During the year, and pursuant to a Court order, the Company cancelled £40,428,176 of its share premium account which had
the effect of leaving it with distributable reserves of £1,033,568 at 31 December 2023.
Whilst the Board and management remain focussed on the continued execution of the Company's stated growth strategy as the
primary means of delivering shareholder value in the near term and has no current intention of declaring dividends, the Capital
Reduction provides greater scope to do so in the future if the Board determined that the declaration of dividends were appropriate.
In addition, the Capital Reduction provides the Board with the option, should it so wish, and should it be appropriate to do so,
of purchasing the Company's own Ordinary Shares pursuant to the power granted at the Company's annual general meeting
on 29 June 2023, which requires sufficient distributable reserves to do so.
25 Warrant reserve
Balance at 1 January 2022
Share-based payment expense in respect of options granted
Share-based payment expense in respect of options/warrants lapsed/exercised
Balance at 1 January 2023
Share-based payment expense in respect of options granted
Share-based payment expense in respect of options/ warrants lapsed/ exercised
Balance at 31 December 2023
Group and
Company
£
937,505
152,135
(388,575)
701,065
236,576
(179,407)
758,234
The warrant reserve represents the fair value of share options and warrants grants, and not exercised or lapsed, in accordance
with the requirements of IFRS 2 Share Based Payments.
Eden Research plc Annual Report 2023
26 Merger reserve
At the beginning of the year
Transfer of merger reserve
At the end of the year
87
Group and Company
2023
£
10,209,673
(10,209,673)
–
2022
£
10,209,673
–
10,209,673
The merger reserve arose on historical acquisitions of subsidiary undertakings for which merger relief was permitted under the
Companies Act 2006.
During the year, the carrying value of the intellectual property which had arisen from an acquisition in 2003 had been reduced
to zero. As such, under the Companies Act 2006, the full balance of the merger reserve of £10,209,673 was transferred to
retained earnings.
27 Non-controlling interest
At the beginning of the year
Share of total comprehensive profit/(loss) for the year
At the end of the year
Group
2023
£
24,502
2,313
26,815
2022
£
31,119
(6,617)
24,502
The non-controlling interest arose from the Company’s 50% share in TerpeneTech (Ireland) Limited. See note 16 for further
information.
28 Other interest-bearing loans and borrowings – Group and Company
Change in liabilities, arising from financing activities are presented below:
Balance at 1 January
Changes from financing cashflows
Payment of lease liabilities*
Total changes from financing cashflows
Other changes
New leases
Adjustment to Right of Use Assets
Surrender of lease
Total other changes
Balance as at 31 December
* excluding lease interest of £17,009 (2022: £22,047)
2023
£
355,323
(139,539)
(139,539)
14,963
(978)
–
13,985
229,769
2022
£
398,352
(128,301)
(128,301)
87,228
33,909
(35,865)
85,272
355,323
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 88
Notes to the group financial statements continued
29 Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, including Directors, is set out in note 7 in aggregate for each of the
categories specified in IAS 24 Related Party Disclosures.
Group
During the year, the Group invoiced its associate, TerpeneTech (UK), £9,133 for administration charges (2022: £7,212) and
invoiced income of £nil (2022: £50,000) for minimum royalties due under the head-lice agreement.
Also, during the year the Group recharged £7,054 (2022: £7,096) of expenses to TerpeneTech (UK) and incurred consultancy
charges of £13,274 (2022: £nil).
At the year end, an amount of £233,686 was due from TerpeneTech (UK) (2022: £238,375) to the Company. This amount is
included within Trade Receivables.
At the year end, an amount of £99,820 was due to TerpeneTech (UK) (2022: £93,759) from the Company. This amount is included
within Other Payables.
At the year end, a net amount of £56,887 was due to TerpeneTech (Ireland) from TerpeneTech (UK) (2022: £6,076 due to
TerpeneTech (Ireland) from TerpeneTech (UK)). It represents the amount due in respect of the intangible asset reduced by fees
receivable in respect of sales which amounted to £50,811 (2022: £50,038). This amount is included within Other Receivables.
Company
During the year, the Company invoiced its associate, TerpeneTech (UK), £9,133 for administration charges (2022: £7,212) and
invoiced income of £nil (2022: £50,000) for minimum royalties due under the head-lice agreement.
Also, during the year the Company recharged £7,054 (2022: £7,096) of expenses to TerpeneTech (UK) and incurred consultancy
charges of £13,274 (2022: £nil).
Further, at year end, £10,000 has been accrued in respect of management recharges from the Company to TerpeneTech
(Ireland) (2022: £50,000) and £22,914 has been recharged for audit fees (2022: £nil). An amount of £166,914 (2022: £134,000) is
included within the Other Receivables.
At the year end, an amount of £233,686 was due from TerpeneTech (UK) (2022: £238,375). This amount is included within Trade
Receivables.
At the year end, an amount of £99,820 was due to TerpeneTech (UK) (2022: £93,759). This amount is included within Other Payables.
30 Financial risk management
Credit risk
Cash and cash equivalents
Trade receivables*
VAT recoverable*
Other receivables*
* See note 18
Group
Company
2023
£
7,413,107
1,788,151
386,684
112,375
9,700,317
2022
£
1,994,472
322,489
179,214
67,410
2,563,585
2023
£
7,413,107
1,788,151
386,684
222,403
9,810,345
2022
£
1,994,472
322,489
179,214
195,335
2,691,510
The average credit period for sales of goods and services is 204 days (2022: 64). No interest is charged on overdue trade
receivables. At 31 December 2023, trade receivables of £262,322 (2022: £219,727) were past due. During the year the Group
and Company provided for doubtful debts in the amount of £nil (2022: £107,188).
Trade receivables of £1,355,690 (2022: £184,746) at the reporting date were held in Euros and £111,654 (2022: £117,229) were
held in USD.
Eden Research plc Annual Report 2023
89
Cash at bank of £48,515 (2022: £1,824,866) at the reporting date were held in Euros and £28,510 (2022: £10,829) were held in USD.
The Group's policy is to recognise loss allowances for expected credit losses (ECLs) on financial assets measured at amortised
cost. The Group measures loss allowances for trade receivables at an amount equal to lifetime ECL. When determining whether
the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group
considered reasonable and supportable information that is relevant and available without undue cost of effect. This includes
both quantitative and qualitative information and analysis, based on the Group's historical experience and information credit
assessment and including forward-looking information.
The largest trade debtor at the year is Corteva, which owed gross £1,339,072 to the Group at the year-end (2022: TerpeneTech
(UK), the Group’s associate company, which owed gross £238,375).
The Group has had no issue of collecting debtors due from Corteva or TerpeneTech (UK) before and does not expect to have
any going forward.
Considering these factors, the Directors consider the ECL to be immaterial.
Liquidity risk (excluding lease liabilities)
Trade payables
Other payables
Social security and other taxation
Notes
19
19
19
Group and Company
2023
£
1,925,559
196,411
56,841
2,178,811
2022
£
1,150,873
93,759
52,849
1,297,481
The carrying amount of trade and other payables approximates their fair value.
The average credit period on purchases of goods is 117 days (2022: 141 days). No interest is charged on trade payables. The
Group has policies in place to ensure that trade payables are paid within the credit timeframe or as otherwise agreed.
Trade payables of £597,876 (2022: £233,410) at the reporting date were held in Euros and £382,852 (2022: £460,470) were held in USD.
Maturity of financial liabilities (excluding lease liabilities)
The maturity profile of the Group’s financial liabilities at 31 December 2023 was as follows:
In one year or less, or on demand
Over one year
2023
£
2,178,811
–
2,178,811
2022
£
1,297,481
–
1,297,481
Liquidity risk is managed by regular monitoring of the Group’s level of cash and cash equivalents, debtor and creditor
management and expected future cash flows. See note 1 for further details on the going concern position of the Group and
Company. For details of lease liabilities, see note 20.
Market price risk
The Group’s exposure to market price risk comprises currency risk exposure. It monitors this exposure primarily through a
process known as sensitivity analysis. This involves estimating the effect on results before tax over various periods of a range
of possible changes in exchange rates. The sensitivity analysis model used for this purpose makes no assumptions about
any interrelationships between such rates or about the way in which such changes may affect the economies involved. As a
consequence, figures derived from the Group’s sensitivity analysis model should be used in conjunction with other information
about the Group’s risk profile.
The Group’s policy towards currency risk is to eliminate all exposures that will impact on reported results as soon as they arise.
Based on the foreign currency break down provided under credit risk and liquidity risk, the impact of 5%-10% movement in
foreign exchange will not have material effect.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 90
Notes to the group financial statements continued
Capital risk management
The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to support
its business and maximise shareholder value.
The Group seeks to enhance shareholder value by capturing business opportunities as they develop. To achieve this goal, the
Group maintains sufficient capital to support its business.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions.
The Group looks to maintain a reasonable debt position by repaying debt or issuing equity, as and when it is deemed to be required.
No changes were made in the objectives, policies or processes for managing capital during the years ended 31 December 2023
and 31 December 2022.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group’s policy
is to keep the gearing ratio below 10% (2022: below 10%). The Group includes within net debt, any interest-bearing loans and
borrowings (none in the current or prior year), any loans from a venture partner (none in the current or prior year), trade and
other payables, less cash and cash equivalents.
The Group is not subject to any externally imposed capital requirements.
31 Cash absorbed by operations
Consolidated
Loss for the year after tax
Adjustments for:
Taxation credited
Finance costs
Interest income
Foreign exchange currency (gains)/losses
Amortisation and impairment of intangible assets
Xinova liability written off
Depreciation and property, plant and equipment and right-of-use assets
Share of associate's loss
Share-based payment expense
Inventory provision
Doubtful debt provision
Movements in working capital:
Increase in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Cash absorbed by operations
2023
£
2022
£
(6,491,936)
(2,243,879)
(428,326)
17,009
(34,014)
68,802
5,387,180
-
206,426
33,047
236,576
-
-
(339,094)
(1,790,757)
1,004,833
(2,130,252)
(323,716)
22,046
(192)
(74,782)
495,818
43,855
191,622
31,444
152,135
76,250
107,188
(180,357)
125,720
(9,683)
(1,586,531)
Eden Research plc Annual Report 2023
91
2023
£
2022
£
(6,496,561)
(2,230,645)
(428,326)
17,009
(34,014)
68,802
5,373,908
-
206,426
33,047
236,576
-
-
(339,094)
(1,772,860)
1,004,833
(2,130,252)
(323,716)
22,046
(192)
(74,782)
482,546
43,855
191,622
31,444
152,135
76,250
107,188
(180,357)
75,720
40,355
(1,586,531)
Company
Loss for the year after tax
Adjustments for:
Taxation credited
Finance costs
Interest income
Foreign exchange currency (gains)/losses
Amortisation and impairment of intangible assets
Xinova liability written off
Depreciation and property, plant and equipment and right-of-use assets
Share of associate's loss
Share-based payment expense
Inventory provision
Doubtful debt provision
Movements in working capital:
Increase in inventories
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
Cash absorbed by operations
32 Capital commitments
As at 31 December 2023, an amount of £481,557 (2022: £102,109) had been committed to by the Group and Company, for work
not yet completed, or invoiced. In the prior year, the work related to on-going field trials and other regulatory studies and was
invoiced during 2024.
33 Contingent liabilities
The Company provides a two-year warranty for one of its products which solely relates to the product not being defective.
Given the quality control processes that are in place, the Company is satisfied that no provision is required in this respect.
34 Post balance sheet events
There were no adjusting or significant non-adjusting events between 31 December 2023 and the approval of the financial
statements.
Eden Research plc Annual Report 2023
Financial StatementsAnnual Report StatementsCompany OverviewGovernance 92
Eden Research plc Annual Report 2023
E
d
e
n
R
e
s
e
a
r
c
h
p
l
c
A
n
n
u
a
l
R
e
p
o
r
t
2
0
2
3
EDEN RESEARCH PLC
67C INNOVATION DRIVE
MILTON PARK
ABINGDON
OXFORDSHIRE
ENGLAND
OX14 4RQ
WWW.EDENRESEARCH.
COM