Annual Report & Accounts FY2024 Hardy plc Directors, Officers and Advisers Directors Michael Bretherton Chairman Richard Galvin Non-Executive Director Company Secretary Christopher Stobart, First Names House, Victoria Road, Douglas, Isle of Man, IM2 4DF Registrar and Registered office IQ EQ (Isle of Man) Limited, First Names House, Victoria Road, Douglas, Isle of Man, IM2 4DF Company e-mail contact and website Email: office@hardyplc.com Website: www.hardyplc.com Independent Auditor Crowe U.K. LLP, 55 Ludgate Hill, London, EC4M 7JW Transfer Agent Computershare Investor Services, (Channel Islands) Limited, Ordnance House, 31 Pier Road, St. Helier, Jersey, JE4 8PW Isle of Man Legal Advisers Cains Advocates Limited, Fort Anne, Douglas, Isle of Man, IM1 5PD Hardy plc Annual Report and Accounts FY2024 1 Contents Directors, Officers and Advisers IFC Chairman’s Statement 2 Strategic Report 5 Directors’ Report 8 Independent Auditor’s Report 13 Statement of Comprehensive Income 16 Statement of Changes in Equity 17 Statement of Financial Position 18 Statement of Cash flows 19 Notes to the Financial Statements 20 Notice of AGM and explanatory notes thereto 30 2 Hardy plc Annual Report and Accounts FY2024 Chairman’s Statement Hardy generated a profit of £0.27 million for the year to 31 March 2024 (FY2024) compared to a loss of (£0.83) million in the previous year ended 31 March 2023 (FY2023). This FY2024 profit comprised an investment return of £0.39 million, partially offset by administrative costs of £0.12 million. The previous FY2023 loss comprised an investment loss of £0.72 million, together with administrative costs of £0.11 million. During FY2024, Hardy undertook a full disposal of its investment in Redcentric Plc, which generated total disposal proceeds to £1.58 million. Hardy spent £1.62 million on the purchase of three equity investments in FY2024. One of these was a new investment in NCC Group Plc and the other two were follow on investments in Cirata Plc and IQE Plc. The carrying value of the Company’s equity investments at 31 March 2024 was £7.22 million represented by four quoted investment holdings and one private investment (31 March 2023: £6.88 million represented by four quoted investment holdings and one private investment). In addition, Hardy holds a derivative investment in the form of warrants in C4X Holdings Plc which has an exercise price that is significantly above the current value of the underlying shares and the warrants are therefore considered to have a nil fair value. The Company held cash and cash receivables amounting to £0.14 million at 31 March 2024, compared to cash and cash receivables balances of £0.19 million at the previous 31 March 2023 year end. The £0.05 million decrease reflects cash outflows of £1.62 million on investment purchases, together with outflows of £0.10 million on administrative costs net of working capital movements, partially offset by cash inflows of £1.58 million from investment disposals and £0.09 million from dividend income receipts. Net assets increased to £7.30 million (equivalent to 9.89p per share) at the 31 March 2024 balance sheet date, compared with £7.03 million (equivalent to 9.52p per share) at 31 March 2023. The £0.27 million increase in net assets reflects the profit reported for the year. Business model and investing policy In the prior year Strategic Report to 31 March 2023, it was reported that the Board had decided to evaluate a range of strategic options for the Company. Following that evaluation and during this financial year to 31 March 2024, the Directors formally agreed to change the business strategy of the Company to that of an investment company. The Directors felt this would better reflect the economic realities of the Company given that an appropriate single long-term investment opportunity had not presented itself. The Directors have adopted an investment policy which is set out in this year’s Strategic Report on page 5. Hardy is now an investing company with an investing policy under which the Board is seeking to acquire interests in investment opportunities that they perceive to be undervalued and where they believe there is an opportunity to generate added value for shareholders over the medium to long term, primarily in the form of a capital gain. This change in business strategy did not result in any changes to accounting policies, but certain presentational changes have been made in this Annual Report. These include presenting investment return as top line income and more detailed disclosures in respect of the portfolio investment assets, which are now described as being “non-current asset” investments, although the potential for their early realisation within the ordinary course of business remains unchanged. Hardy plc Annual Report and Accounts FY2024 3 Investment Portfolio The principal listed investments held by the Company at 31 March 2024 comprised Niox Group Plc (“Niox”), IQE Plc (“IQE”), and NCC Group Plc (“NCC”) and Hardy also holds Telit Cinteron Ltd (“Telit”) as a principal unquoted investment. Niox is an AIM listed global medical device company focused on point of care asthma diagnosis and management. Niox is a debt-free business with a strong NIOX® asthma management products-based business. The company is continuing its growth as a distributor-led business implementing access to a large and underserved population of patients suffering from asthma. All three of its key geographic areas of Asia Pacific, EU and USA generated good growth in the 2023 year. Niox is also making good progress in expanding sales into the UK primary care sector and where the NHS is supporting the use of FeNO testing using Niox devices. For the year ended 31 December 2023, Niox sales increased 18% to £36.8 million and generated an EBITDA profit of £11.4 million. The company had net cash balances of £19.9 million at the year-end, reflecting £11.0 million of operating cash flow generation in the year, plus a further $3.5 million received from Beyond Air under the settlement agreement following FDA approval for its LungFit PH device, partially offset by a special dividend of £10.5 million paid to shareholders. During 2024, management’s focus will be on growing revenues in the USA, expanding into new healthcare professional channels and developing a product for home-use. The shareholding of Hardy at 31 March 2024 was, and continues to be, 0.77% of the Niox shares in issue. IQE is an AIM listed leading global supplier of compound semiconductor wafer products and advanced material solutions to the semiconductor industry and has a three-continent manufacturing footprint, offering world-class technology, flexibility and supply chain security to its customers. The global semiconductor industry has over the last 18 months, seen an unprecedented cyclical downturn in terms of both its extent and duration and which in the year ended 31 December 2023, resulted in a 31% revenue reduction to £115.3 million at IQE and with an adjusted EBITDA profit reduced to £4.3 million. There are increasingly positive signs that the global semiconductor industry is now recovering with inventory levels beginning to normalise and customer demand increasing as evidenced by IQE’s return to double digit growth in H2 of 2023 over H1, and additionally the company took strategic actions to reshape its cost base as part of an ongoing commitment to improving margins and profitability going forward. The adoption of IQE’s world leading technologies is being fuelled by the macro trends of 5G communications and connected devices and it is expected that increasing demand for compound semiconductors will underpin significant future growth for IQE. The shareholding of Hardy in IQE at 31 March 2024 was, and continues to be, 0.67% of the IQE shares in issue. NCC is a FTSE All-Share listed global tech-enabled cyber and software resilience business operating across multiple sectors, geographies and technologies. The company advises global technology, manufacturers, financial institutions, critical national infrastructure providers, retailers and governments on the best way to keep businesses, software and personal data safe and provides solutions to manage all manner of cyber threats. The last 12 months has seen the company transitioning from a business operating internationally to becoming a truly global organisation and which has included the recent opening of its new office in Manila, the Philippines, alongside the creation of further universal processes within its technology platform. For the 6 month half year ended 30 November 2023, NCC generated revenue of £159.2 million and an adjusted EBITDA profit of £15.6 million. A recent trading update by the company has reported that revenues for the 12 months to 31 May 2024 are expected to be £324.0 million. Looking ahead, NCC is well placed for sustainable long-term growth as cyber security is now an essential component of digital risk management across an increasingly connected society. The shareholding of Hardy in NCC as at 31 March 2024 was, and continues to be, 0.18% of the NCC shares in issue. 4 Hardy plc Annual Report and Accounts FY2024 Chairman’s Statement (continued) Telit is a private company and a global leader in Internet of Things (IoT) enablement. Telit has over twenty years of experience designing, building, and executing complex digital business. The company has an extensive portfolio of wireless connectivity modules, software platforms and global IoT connectivity services, empowering hundreds of millions of connected ‘things’ to date, and trusted by thousands of direct and indirect customers, globally. On 1 January 2023, the company completed a transaction with the global defence, aerospace and security group, Thales, under which it acquired the cellular IoT products business of Thales and thereby expanded Telit’s presence in the growing industrial IoT segments and end markets, including payment systems, energy, e-health, and security. It will also enhance the company’s capabilities in the rapidly growing cybersecure IoT solutions market. At 31 March 2024, the investment holding by Hardy in Telit represents 1.14% of Telit’s issued share capital at that date. In addition to the above investments, at 31 March 2024 Hardy held one other quoted holding in Cirata Plc which is a data activation company that enables organisations to move large datasets to the cloud at scale with zero down-time in order to activate all their data for AI, machine learning and analytics on modern cloud data platforms. Outlook The global economy is still being impacted by concerns over the impact of Russia’s invasion of Ukraine and the conflict in Gaza, together with the increasing geopolitical tensions between the USA and China. In addition, the economic outlook is also still being impacted by high levels of government debt in much of the developed world and with growth expected to remain weak by historical standards. These risks and concerns continue to make the current environment a challenging one for investors and your Board will, therefore, maintain a rigorous and highly selective investment approach, coupled with strict cost control with a view to delivering additional value for shareholders going forward. We are confident in the underlying fundamentals, technologies and long-term potential for growth at the businesses within our investment portfolio. Michael Bretherton Chairman 18 July 2024 Hardy plc Annual Report and Accounts FY2024 5 Strategic Report The Directors present their Strategic Report with the Financial Statements for Hardy Plc (‘Hardy’ or ‘the Company’) for the year ended 31 March 2024. Change in Principal Activity In the prior year Strategic Report it was reported, under future developments, that the Board had decided to evaluate a range of strategic options for the Company. Following that evaluation and during this financial year to 31 March 2024, the Directors formally agreed to change the business strategy of the Company to that of an investment company. The Directors felt this would better reflect the economic realities of the Company given that an appropriate single long-term investment opportunity had not presented itself. The Directors have now adopted the following investment policy (a copy of which can be found on the Company website at hardyplc.com): The Board will seek to acquire direct and/or indirect interests in investment opportunities that they perceive to be undervalued and where they believe there is an opportunity to generate added value for Shareholders over the medium to long term, primarily in the form of a capital gain. The Company’s interest in a potential investment may range from a minority position to 100% ownership and the interest may be either quoted or unquoted. Investments may be made in shares, or by the acquisition of assets (including intellectual property) of a relevant business, or by entering into partnerships, joint ventures, equity derivatives, contracts for differences or other equity or debt related securities that the Board deem appropriate. There will be no limit on the number of projects into which the Company may invest, and the Company’s financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover. This change in principal activity did not result in any changes to accounting policies, but certain presentational changes have been made in this Annual Report. These include presenting portfolio return as top line income and more detailed disclosures in respect of the portfolio investment assets, which are no longer described as being “short- term” investments, although the potential for their early realisation within the ordinary course of business remains unchanged. Business review A summary review of the Company’s performance and prospects is included in the Chairman’s Statement on pages 2 to 4 and is covered in more detail below. Financial review The Financial Statements have been prepared for the year to 31 March 2024. Key performance indicators for the Company are set out below: 31 March 2024 31 March 2023 Net assets (£ million) 7.30 7.03 Net asset value per share (pence) 9.89 9.52 Profit / (loss) after tax (£ million) 0.27 (0.83) Cash and cash receivables with brokers (£ million) 0.14 0.19 Profit and loss The Company’s profit after tax for the year ended 31 March 2024 was £0.27 million compared to a loss of (£0.83) million in the previous year. The current year profit includes an investment return of £0.39 million, partially offset by administrative costs of (£0.12) million. The prior year loss resulted from a loss on investments of (£0.72) million together with administrative costs of (£0.11) million. 6 Hardy plc Annual Report and Accounts FY2024 Balance Sheet Net assets of the Company at 31 March 2024 amounted to £7.30 million compared with £7.03 million at 31 March 2023. The £0.27 million uplift in net assets reflects the profit for the year. The carrying value of portfolio investments at 31 March 2024 was £7.22 million represented by four quoted and one private investment holding. At 31 March 2023 short-term investments amounted to £6.88 million, represented by four quoted investment holdings and one private investment holding. Cash and short-term deposit balances, together with cash receivable balances held with brokers, amounted to £0.14 million at 31 March 2024 compared to £0.19 million at 31 March 2023 as set out in note 13 to the financial statements. Cash flow The Company’s overall cash and cash receivables position decreased by £0.05 million during the year. This decrease mainly reflects cash outflows of (£1.62) million spent on investment purchases, partially offset by investment disposal proceeds of £1.58 million and dividend income received of £0.09 million, less outflows of (£0.10) million from administration costs paid net of working capital movements. Risk review Risk management The Company’s risk management objectives and exposure to various risks are detailed in note 13 to the financial statements. The main risks arising from the Company’s operations are considered to be market risk, credit risk and liquidity risk, financial and external in nature. The Directors review and agree policies for managing risk at least annually. Strategic risk No assurance can be given that an investment in a target company or business will be successful or that any investment will be made. The Directors have established an open dialogue with shareholders to ensure their support of proposed investments and provide a source to identify appropriate targets. Market risk Market Price risk – The majority of the Company’s assets are currently held in short-term UK equity investments. The Company is exposed to market price risk in respect of these investments. The Company mitigates this risk by having established investment appraisal processes and asset monitoring procedures which are subject to overall review by the Board. Interest rate risk – The Company has no external financing facility; therefore, its interest rate risk is limited to the level of interest received on its cash surpluses. Interest rate risk on cash, cash equivalents and short-term deposits may be mitigated partially by using an element of fixed-rate accounts and short-term deposits. Credit risk – The Company’s principal financial assets are its investments, its bank balances and cash held with brokerage institutions. The Company seeks to reduce the associated custody risk by only holding cash with institutions that have good credit ratings. The custody risk associated with the Company’s investments is considered acceptable. Liquidity risk – The Company seeks to manage liquidity by ensuring enough funds are available to meet foreseeable needs and to invest cash assets safely and profitably. The Company had cash and cash receivables with brokers of £0.14 million as at 31 March 2024. In order to minimise risk to the Company’s capital, surplus funds are invested across several financial institutions with strong credit ratings. Cash forecasts are updated regularly to ensure that there is sufficient cash available for foreseeable requirements. The Directors are satisfied that the current cash and receivable balances, the liquidity of investment assets and the relatively low running cost base of the Company, ensures that the going concern assumption remains valid. Strategic Report (continued) Hardy plc Annual Report and Accounts FY2024 7 External Risks The conflicts between Russia and Ukraine, and Israel and Hamas in the Middle East continue to weigh on investor sentiment and have revealed an increasingly polarized world. Signs of slowing inflation are beginning to emerge, however uncertainty on the timing and quantum of any interest rate cuts remain and the impact of the costs on indebted governments and consumers cannot be understated. National elections take place in the U.S. later in the year and whose unknown outcome adds more political and fiscal uncertainty. Future developments The Board will pursue investments in companies that target accretive capital growth for shareholders in line with its investment policy. It is hoped that through maintaining a disciplined, balanced and realistic investment criterion, and through exploiting market opportunity via a positive and flexible investment mandate, this objective can be achieved in the medium to long term. Following the Company’s transition to an investment company during the year, the Board will continue to assess the strategic options available to the Company, including a further potential return of capital to shareholders, in tandem with any change in the economic outlook. Approved on behalf of the Board Richard Galvin Non-Executive Director 18 July 2024 8 Hardy plc Annual Report and Accounts FY2024 Directors’ Report The Directors of Hardy Plc (‘Hardy’ or ‘the Company’) present their report, together with the audited financial statements for the year ended 31 March 2024. Change in Principal Activity In the prior year Strategic Report it was reported, under future developments, that the Board had decided to evaluate a range of strategic options for the Company. Following that evaluation and during this financial year to 31 March 2024, the Directors formally agreed to change the business strategy of the Company to that of an investment company. The investment policy adopted by the Directors is set out in the Strategic Report on page 5 together with details of certain presentation changes that have been made in the Annual Report. This change in business strategy did not result in any changes to accounting policies. Business review and future developments A full review of the Company’s activities during the year ended 31 March 2024 is given in the Chairman’s Statement on pages 2 to 4. Results and dividend distributions The Company’s profit after tax for the year ended 31 March 2024 was £0.27 million, (FY2023: loss of £0.83 million). Share capital There were no changes in the share capital of the Company during the financial year. Full details of the Company’s share capital movements are given in Note 12 of the financial statements. Directors The Directors that served in office throughout the year ended 31 March 2024 were: Board member Position Michael Bretherton Chairman Richard Galvin Non-Executive Director Richard Galvin is engaged as a non-executive director under a letter of appointment which may be terminated on not less than three months’ notice and which sets his Director’s fee at £15,000 per annum. Michael Bretherton, is engaged as a Director under a letter of appointment which may be terminated on not less than three months’ notice and which sets his Director’s fee at £20,000 per annum. Hardy plc Annual Report and Accounts FY2024 9 Director Profiles Michael Bretherton, Chairman Michael Bretherton was appointed as Chairman of Hardy on 22 February 2020. Michael is also Chief Executive Officer of Sarossa Plc, Chairman of Adams Plc and is a Non-executive director of E-Therapeutics Plc. He is also a Director of ORA Limited and Blake Holdings Limited. In addition, Mr Bretherton has been a Director of seven other AIM quoted companies during the last thirteen years, including Tissue Regeneix Group Plc, Nanoco Group Plc, Ceres Power Holdings Plc and DeepMatter Group Plc. He has a degree in Economics from Leeds University and is a member of the Institute of Chartered Accountants in England and Wales. His early career included working as an accountant and manager with PriceWaterhouse for seven years in London and Abu Dhabi. Richard Galvin, Executive Director Richard Galvin was appointed Non-Executive Director on 31 May 2020. Mr Galvin has served Hardy for over 15 years holding progressively more senior commercial and financial roles culminating with his appointment as the Company’s Executive Director in 2019. Mr Galvin was instrumental in securing the sale of the Company’s India based assets for US$8.75 million and the subsequent liquidity event for shareholders. Mr Galvin has over 20 years of commercial and corporate finance experience in the energy industry. Mr Galvin is currently a director of Yamnuska Limited, a financial and managerial service provider specialising in corporate transactions. Mr Galvin started his career at Ovintiv Inc. (formally Encana Corporation) working in progressively senior commercial roles over seven years. Mr Galvin holds a Master of Business Administration from the London Business School, a Bachelor of Commerce from the University of Calgary and was a qualified petroleum landman. Set out below are the total emoluments of the Directors of the Company for the years indicated (£): Salaries/ Pension Name of Director fees Benefits contribution Total Richard Galvin FY2024 15,000 6,906 – 21,906 FY2023 15,000 6,585 – 21,585 Michael Bretherton FY2024 20,000 – – 20,000 FY2023 20,000 – – 20,000 Total FY2024 35,000 6,906 – 41,906 FY2023 35,000 6,585 – 41,585 Richard Galvin’s benefits comprise insurance cover for income protection, critical illness, life and medical. Directors’ interests The interests of Directors in the shares of the Company as at 31 March are given below: Ordinary Ordinary shares of shares of £0.01 each £0.01 each 31 March 2024 31 March 2023 Richard Galvin 10,000 10,000 Michael Bretherton 500,000 500,000 10 Hardy plc Annual Report and Accounts FY2024 Capital structure and significant shareholders The Company’s authorised and issued share capital are disclosed in note 12 to the financial statements. There were no share options or other long-term incentives in place as at 31 March 2024 or 2023. At 31 March 2024 and at the date of this report, there were 73,764,035 Ordinary Shares of Hardy issued and fully paid. Major interests in share capital of the Company, of 3%. or more, as of 18 July 2024 were as follows: Ordinary shares of £0.01 each 18 July 2024 Richard Griffiths 91.11% Corporate governance The Directors recognise the importance of sound corporate governance and where practical seek to observe the principles of the UK Corporate Governance Code 2016 (UK Code). The Company follows the Quoted Companies Alliance (“QCA”) Corporate Governance Code to the extent that they consider the principles appropriate for the Company’s size and nature. The Board The Board comprises currently of a Chairman and one non-executive Director. Audit committee The Audit Committee’s primary responsibilities are to monitor the integrity of the financial affairs and statements of the Company, to ensure that the financial performance of the Company is properly measured and reported on, to review reports from the Company’s auditors relating to the accounting and internal controls and to make recommendations relating to the appointment of the external auditors. The Audit Committee comprises of Richard Galvin and Michael Bretherton, who acts as chairman. Internal Control The Board is responsible for maintaining a sound system of internal control. The Board’s measures are designed to manage, but not eliminate, risk and such a system provides reasonable but not absolute assurance against material misstatement or loss. Some key features of the internal control system include: i) Management accounts information, budgets, forecasts and business risk issues are regularly reviewed by the Board which meets at least four times per year; ii) The Company has operational, accounting and employment policies in place; iii) The Board actively evaluates the risks inherent in the business and ensures that appropriate controls and procedures are in place to manage these risks; and iv) There is a clearly defined organisational structure and well-established financial reporting and control systems. Directors’ Report (continued) Hardy plc Annual Report and Accounts FY2024 11 Annual General Meeting The Company’s next Annual General Meeting (the “AGM”) will be held at Floor 1 Liberation Station, The Esplanade, St Helier, Jersey on 18 September 2024 at 11.00 a.m. A Notice of AGM setting out the business to be conducted at the meeting (the “Notice”) accompanies this Annual Report and can be found on the Company’s website www.hardyplc.com. A form of proxy for use at the meeting also accompanies this document. Shareholders not physically attending the AGM are recommended to vote using the form of proxy, in accordance with the instructions set out on the forms of proxy, so as to arrive not later than 11 a.m. on 16 September 2024, being 48 hours before the time of the meeting. The business of the AGM is set out in the Notice, and comprises the usual business of: • adopting the audited accounts of the Company for the year ended 31 March 2024; and • the re-appointment of Crowe U.K. LLP as auditors. The Board of Directors is satisfied that the performance of all Directors continues to be effective and is also satisfied as to their commitment to their role as Directors. Post balance sheet events Subsequent to the 31 March 2024 year end, C4X Discovery Holdings Plc (“C4XD”) delisted from AIM on 25 April 2024 and will now be held by Hardy as an unquoted investment as opposed to a more liquid quoted investment. The fair value of the C4XD warrants held by Hardy at 31 March 2024 was £nil. No other significant events have occurred since 31 March 2024 (see note 14). Statement of Directors’ responsibilities The Directors are responsible for preparing the financial statements in accordance with applicable law and IFRS as adopted by the United Kingdom. Under such requirements, the Directors are required to prepare financial statements of Hardy Plc for the year ended 31 March 2024, which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Cash Flows, Statement of Changes in Equity, and related notes. In preparing these financial statements, the Directors are required to: • Select suitable accounting policies and apply them consistently • Make judgements and estimates that are reasonable and prudent • State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • Prepare the financial statements on a going concern basis. The Directors are responsible for ensuring that proper accounting records are kept and which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Isle of Man Companies Act 2006. The Directors are responsible for ensuring the Directors’ Report and other information included in the Annual Report are prepared in accordance with company law of the Isle of Man. In addition to the above, the Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud or other irregularities. The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the Isle of Man governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 12 Hardy plc Annual Report and Accounts FY2024 Directors’ Report (continued) The Directors confirm that, to the best of their knowledge: • The financial statements, which are prepared in accordance with IFRS as adopted by the United Kingdom, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and • The Annual Report and statement of accounts includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face. Internal control and risk management systems The Board has the ultimate responsibility for the Company’s internal control and risk management systems. The Audit Committee monitors internal controls and risk management systems on an annual basis. The Company has established a system of control and risk management involving an appropriate degree of oversight by senior management. Reappointment of auditor Crowe U.K. LLP have expressed their willingness to continue as auditor. In accordance with the Isle of Man Companies Act 2006, a resolution reappointing Crowe U.K. LLP as auditor of the Company will be proposed at the next Annual General Meeting. Going concern The financial information has been prepared assuming the Company will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. As at the 31 March 2024 the Company had cash and cash receivables with brokers of £0.14 million in total, together with investment portfolio assets of £7.22 million. The Directors have reviewed the Company’s ongoing activities and, having regard to the Company’s existing working capital position, the Directors are of the opinion that the Company has adequate resources to enable it to undertake its planned activities over the next 12 months from the date of these financial statements. Risk management The Company’s risk management objectives and exposure are detailed in the Strategic Report on pages 5 to 7 and in Note 13 to the financial statements. Disclosure of information to auditors So far as each Director is aware, there is no relevant audit information of which the Company’s auditors are unaware. Each Director has taken all the steps that he ought to have taken in his duty as a Director in order to make himself aware of any relevant audit information and to establish that the Company’s auditors are aware of that information. Approved by the Board of Directors. Richard Galvin Non-Executive Director 18 July 2024 Hardy plc Annual Report and Accounts FY2024 13 Independent auditor’s report to the shareholders of Hardy plc Opinion We have audited the financial statements of Hardy plc (the ‘Company’) for the year ended 31 March 2024 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Accounting Standards (IAS) as adopted by the UK, and, in conformity with the requirements of the Isle of Man Companies Act 2006. In our opinion the financial statements • give a true and fair view of the state of the Company’s affairs as at 31 March 2024 and of the Company’s profit for the year then ended; • have been properly prepared in accordance with IAS as adopted by the UK; • have been properly prepared in accordance with IAS as adopted by the UK and in conformity with the requirements of the Isle of Man Companies Act 2006. • have been prepared in accordance with the requirements of the Isle of Man 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 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, 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. 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 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. Other information The Directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the 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. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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. 14 Hardy plc Annual Report and Accounts FY2024 Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Isle of Man Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, 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’ loans and 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’ responsibilities statement, the Directors are responsible for the preparation of the 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 financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate 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. 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 audit procedures are capable of detecting irregularities, including fraud is detailed below: We obtained an understanding of the legal and regulatory frameworks within which the parent company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. As part of our audit planning process we assessed the different areas of the financial statements, including disclosures, for the risk of material misstatement. This included considering the risk of fraud where direct enquiries were made of management and those charged with governance concerning both whether they had any knowledge of actual or suspected fraud and their assessment of the susceptibility of fraud. We considered the risk was greater in areas involving significant management estimate or judgement. Based on this assessment we designed audit procedures to focus on the key areas of estimate or judgement, this included specific testing of journal transactions, both at the year end and throughout the year. Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations. Independent auditor’s report to the shareholders of Hardy plc (continued) Hardy plc Annual Report and Accounts FY2024 15 A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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 Section 80(c) of the Isle of Man 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. Leo Malkin For and on behalf of Crowe U.K. LLP Chartered Accountants London 18 July 2024 16 Hardy plc Annual Report and Accounts FY2024 Statement of Comprehensive Income For the year ended 31 March 2024 Year ending Year ending 31 March 2024 31 March 2023 Notes £’000 £’000 Investment return 8 385 (714) Expenses & other income Administrative expenses (121) (111) Operating gain/(loss) 264 (825) Interest income 6 – Profit/(loss) before taxation 270 (825) Taxation 5 – – Profit/(loss) for the year and total comprehensive income 270 (825) Profit/(loss) per share Basic & diluted 6 0.37p (1.12)p All activities are in respect of continuing operations and there are no other items of comprehensive income. Hardy plc Annual Report and Accounts FY2024 17 Statement of Changes in Equity For the year ended 31 March 2024 Share Share Retained capital premium earnings Total £’000 £’000 £’000 £’000 At 31 March 2022 738 – 7,113 7,851 Total comprehensive loss for the year – – (825) (825) At 31 March 2023 738 – 6,288 7,026 Total comprehensive profit for the year – – 270 270 At 31 March 2024 738 – 6,558 7,296 18 Hardy plc Annual Report and Accounts FY2024 Statement of Financial Position As at 31 March 2024 31 March 31 March 2024 2023 Notes £’000 £’000 Non-current assets Investment portfolio 10 7,221 6,884 Total non-current assets 7,221 6,884 Current assets Trade and other receivables 9 43 90 Cash and cash equivalents 13 102 101 Total current assets 145 191 Total assets 7,366 7,075 Liabilities Trade and other payables 11 (70) (49) Total liabilities (70) (49) Net assets 7,296 7,026 Shareholders’ Equity Share capital 12 738 738 Retained earnings 6,558 6,288 Total equity 7,296 7,026 Approved and authorised for issue by the Board of Directors on 18 July 2024. Hardy plc Annual Report and Accounts FY2024 19 Statement of Cash Flows For the year ended 31 March 2024 Year ending Year ending 31 March 2024 31 March 2023 Notes £’000 £’000 Cash flow from operating activities Profit/(loss) before tax 270 (825) Adjustments for: Interest Income (6) – Realised loss/(gain) on sale of portfolio investments 8 120 (521) Unrealised (gain)/loss on revaluation of portfolio investments 8 (420) 1,294 Operating cash outflows before movement in working capital (36) (52) Purchase of portfolio investments 10 (1,621) (4,116) Proceeds from sale of investments 1,584 2,601 Decrease in trade and other receivables 47 1,590 Increase/(decrease) in trade and other payables 21 (17) Net cash (used in)/from operations (5) 6 Cash flows from investing activities Interest income earned 6 – Net cash generated from investing activities 6 – Net increase in cash and cash equivalents 1 6 Cash and cash equivalents at the beginning of the year 101 95 Cash and cash equivalents at the end of the year* 102 101 * Excludes cash receivables from brokers as detailed in note 9. Notes to the Financial Statements For the year ended 31 March 2024 20 Hardy plc Annual Report and Accounts FY2024 1 Accounting Policies The following accounting policies have been applied in the preparation of the financial statements of Hardy plc (“Hardy” or the “Company”). The domicile, country of incorporation, address of the registered office and a description of the Company’s principal activities can be found in the Directors’ Report. These Company financial statements are for the year ending 31 March 2024 (FY2024) together with prior year Company comparatives. The accounting policies adopted are consistent with those of the previous financial year. a) Basis of measurement Hardy prepares its financial statements on a historical cost basis except as otherwise stated. b) Going Concern The financial information has been prepared assuming the Company will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. At 31 March 2024 the Company had cash and cash receivable totalling £0.14 million. The Company also has a sufficiently liquid investment portfolio. The Directors have reviewed the Company’s ongoing activities and having regard to the Company’s existing working capital position, the Directors are of the opinion that the Company has adequate resources to enable it to undertake its planned activities for at least 12 months from the date of these financial statements. c) Basis of Preparation Hardy prepares its financial statements in accordance with applicable International Financial Reporting Standards as adopted by the UK (IFRS). The financial statements are presented in GBP pounds sterling rounded to the nearest thousand. d) Accounting Standards Interpretations and amendments New Accounting Standards, interpretations and amendments The following new standards and amendments to IFRS effective as for the financial reporting period have been reviewed by the Company and there has been no material impact on the financial statements as a result of these standards and amendments. • IAS 8 Accounting Policies, Estimates and Errors – definition of accounting estimate amendment • IAS 1 Presentation of Financial Statements – amendments to materiality judgements • IAS 12 Income Taxes – amendments to initial recognition exception • IFRS 17 Insurance Contracts – new standard which supersedes IFRS 4 New Accounting Standards, interpretations and amendments adopted early. There were no new standards or amendments to existing standards, relevant to the Company, that are not yet effective, that have been adopted early. Standards issued but not yet effective: Accounting Standards or interpretations, not yet early adopted The following new standards, amendments to existing standards and interpretations which have been issued or amended by the IASB, are not yet effective and have not been applied in preparing these financial statements. The Directors are considering the standards, however, at this time they are not expected to have a significant impact on the Company. Effective for Financial Periods beginning 1 January 2024 • IFRS 16 – Leases – added clarity to sale and leaseback transactions • IAS 1 Presentation of Financial Statements – clarification of non-current liabilities • IAS 7 Cashflows/IFRS 7 Financial Instruments – disclosure of supplier financing arrangements Effective for Financial Periods beginning 1 January 2025 • IAS 21 Amendment – Lack of Exchangeability Effective for Financial Periods beginning 1 January 2027 • IFRS 18 Presentation and Disclosure in Financial Statements – new standard to replace IAS 1 Notes to the Financial Statements For the year ended 31 March 2024 Hardy plc Annual Report and Accounts FY2024 21 e) Presentational reporting currency The functional and presentational currency of the Company continues to be that of the primary economic environment in which the Company operates, which is £GBP. This is the currency in which expenses are incurred, salaries are paid, income is received, and equity funds are raised. f) Income Income is measured at the fair value of the consideration received or receivable in the normal course of business, net of discounts and other sales-related taxes. The Company recognises income when the amount of income can be reliably measured and when it is probable that the future economic benefits will flow into the Company. i) Investment return Investment return represents the sum of realised gains and losses on the disposal of short-term investment portfolio assets and derivative financial instruments and the unrealised gains and losses on the revaluation of these, together with any related investment income received and receivable. Realised gains and losses on the disposal of investments is the difference between the fair value of the consideration received less any directly attributable costs on the sale and the fair value of the investments at the start of the accounting period or acquisition date if later. Unrealised gains and losses on the revaluation of investments is the movement in carrying value of investments between the start of the accounting period or acquisition date if later and the end of the accounting period less the reversal of previously recognised unrealised gains and losses in respect of disposals made during the period. Dividends from investments are recognised when the Company’s right to receive payment has been established. ii) Interest income Interest income is recognised as interest accrued using the effective interest rate method. g) Financial Instruments Recognition and derecognition Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Classification and initial measurement of financial assets All financial assets are initially measured at fair value adjusted for transaction costs (where applicable). Financial assets are classified into the following categories: • amortised cost. • fair value through profit or loss (FVTPL). • fair value through other comprehensive income (FVOCI). The classification is determined by both the entity’s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset. Financial assets at amortised cost Financial assets are measured at amortised cost if the assets meet the following conditions: • held under a business model objective to hold the financial assets and collect its contractual cash flows. • the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding. After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Company’s cash and cash receivables fall into this category of financial instrument. Notes to the Financial Statements For the year ended 31 March 2024 22 Hardy plc Annual Report and Accounts FY2024 Financial assets at fair value through profit or loss (FVTPL) Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair value through profit and loss. Further, irrespective of business model, financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL. Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The Company’s Investment Portfolio assets fall into this category and are further described below: Investment Portfolio Assets Investment assets that are held by the Company with a long-term view to the ultimate realisation of capital gains are classified as investment portfolio assets and are stated at the Directors’ estimate of their fair value determined in accordance with International Private Equity and Venture Capital Valuation Guidelines (“IPEVCVG”) on the basis set out below. Investment portfolio assets are designated at fair value through profit or loss on initial recognition which is considered most appropriate as investment portfolio assets are assessed and evaluated on a fair value basis. i) Quoted investments for which an active market exists are valued at closing bid-market price at the reporting date with any gains or losses arising from subsequent changes in fair value being presented in the Statement of Comprehensive Income as they arise. ii) Unquoted investments are measured at fair value by the Directors as follows: – Investments in companies that are still in a development phase continue to be valued based on cost unless there have been more recent benchmark subscriptions and investments which give a guide to fair value (“Price of Recent Investment”) or where there are factors that indicate a change in fair value has occurred. – Once the business becomes established, investments are valued based on an estimate of the fair value for the investee company derived using methodologies which include applying an average sector earnings multiple to operating profits, valuation by reference to comparable transactions or net asset base and discounted cash flows. Investment portfolio assets also include derivative trading assets, which are valued at the trade date, being the date at which the Company becomes party to the contractual provisions of the instrument. The related financial assets or liabilities are stated at fair value with any change in fair value being recognised through profit or loss. The Company currently only holds share warrants with an exercise price which is significantly above the market price of the underlying shares and are therefore considered to have a nil fair value. Derivative Trading Contracts Purchases and sales of derivative financial instruments are recognised at the trade date which is the date that the Company became a party to the contractual provisions of the instrument. The Company only trades in derivative financial instruments that are quoted in active markets and the related financial assets and liabilities are stated at fair value based on the quoted market prices of those instruments. Changes in the fair value of the derivative financial instruments are recognised in the Statement of Comprehensive Income as they arise. Financial assets at fair value through other comprehensive income (FVOCI) The Company accounts for financial assets at FVOCI if the assets meet the following conditions: • held under a business model objective to “hold to collect” the associated cash flows; and • the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding. Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset. In the periods presented the Company does not have any financial assets categorised as FVOCI. Notes to the Financial Statements For the year ended 31 March 2024 Hardy plc Annual Report and Accounts FY2024 23 Impairment of financial assets IFRS 9’s impairment requirements use forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL) model’. This replaces IAS 39’s ‘incurred loss model’. Instruments within the scope of the requirements include loan commitments and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under IFRS 15 and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss. Recognition of credit losses is no longer dependent on the Company first identifying a credit loss event. Instead the Company considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument. In applying this forward-looking approach, a distinction is made between: • financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Stage 1’); and • financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’). • ‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date. ‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second category. Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument. Classification and measurement of financial liabilities Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Company designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method. All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income. The Company’s financial liabilities includes trade and other payables. h) Taxation The tax expense represents the sum of current tax and deferred tax. Current tax is based on the taxable profit of the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income as it excludes certain items of income or expenses that are taxable or deductible in years other than the current year and it further excludes items that are never taxable or deductible. The current tax liability is calculated using the tax rates that have been enacted or substantially enacted by the year end date. 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 liability method. Deferred tax liabilities are 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 in the future against which deductible temporary differences can be utilised. Deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which temporary differences reverse, based on tax rates and laws enacted at the year-end date. i) Foreign currencies Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. At the year-end date, all foreign currency monetary assets and monetary liabilities are restated at the closing exchange rate. Exchange differences arising from transactions during the year and from the year end translation are reflected through the statement of comprehensive income. The Company held no foreign currency monetary assets or liabilities of significance at 31 March 2024 or 31 March 2023. Notes to the Financial Statements For the year ended 31 March 2024 24 Hardy plc Annual Report and Accounts FY2024 2 Critical accounting estimates and judgments The preparation of the Company’s financial statements requires the use of estimates and judgements that affect the carrying value of assets and liabilities at the reporting date and the reported amounts of revenue and expenditure for the year. These estimates and judgements are made based on management’s knowledge of the facts, taking into account historical experiences and expectations of future events that are believed to be reasonable under the particular circumstances. The actual results will likely differ from the estimates made. The estimate and assumption that has the most significant effect on the carrying amounts of assets and liabilities in the financial statements is the valuation of investment portfolio assets. These are valued as set out in note 1(g) to the financial statements and in accordance with IFRS. However, it may not always be possible to trade the investment portfolio assets at the carrying valuation. As at 31 March 2024, quoted investments are carried in the financial statements at a valuation of £4.40 million and unquoted investments are carried at a valuation of £2.82 million – see note 10 to the financial statements. 3 Segmental Reporting The Company operates in a single segment, being that of an investment company business. An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company operates under a single segment, being that of investment company business. 4 Staff costs 2024 2023 £’000 £’000 Directors’ remuneration 42 42 Social security costs 2 2 44 44 Staff costs include the chairman & non-executive directors’ salaries and fees and any personal insurance benefits covering health and income protection. The Company had no pension costs in the year or commitments at the year-end date. The weighted average monthly number of employees, including executive directors and individuals employed by the Company, were as follows: 2024 2023 Management and administration 2.0 2.0 Notes to the Financial Statements For the year ended 31 March 2024 Hardy plc Annual Report and Accounts FY2024 25 5 Taxation Analysis of taxation charge for the year 2024 2023 £’000 £’000 Current tax charge Jersey corporation tax – – Current tax charge – – Deferred tax – – Total taxation charge – – Factors affecting tax charge for the year 2024 2023 £ £ Profit/(loss) before tax Jersey domiciled 270 (825) 270 (825) Total tax on (profit/(loss) at the appropriate rate of tax Jersey domiciled (FY2024: nil, FY2023: nil) – – 6 Earnings per share Basic earnings per share is calculated on a weighted average of 73,764,035 Ordinary Shares in issue for the year ended 31 March 2024 (FY2023: 73,764,035) to give a gain of 0.37 pence per share for FY2024 (FY2023: loss of (1.12) pence per share). Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares in issue during the year to assume conversion of all dilutive potential Ordinary Shares. There were no dilutive potential Ordinary Shares in issue at 31 March 2024 (2023: nil). 2024 2023 Earnings/(loss) per Ordinary Share £’000 £’000 Profit/(loss) for the year 270 (825) Weighted average number of shares 73,764 73,764 Basic and diluted earnings/(loss) per Ordinary Share (pence) 0.37 (1.12) 7 Audit fees Audit fees to the Company’s auditors for the audit of the financial statements for the year ended 31 March 2024 is £26,400 (2023: £25,000). 8 Investment return 2024 2023 £’000 £’000 Unrealised gains/(losses) on the revaluation of investments 420 (1,294) Realised (losses)/gains on the disposal of portfolio investments (120) 521 Dividend income 85 59 Investment Return 385 (714) Notes to the Financial Statements For the year ended 31 March 2024 26 Hardy plc Annual Report and Accounts FY2024 9 Trade and other receivables At At 31 March 2024 31 March 2023 £’000 £’000 Other receivables 37 84 Prepaid expenses 6 6 43 90 Other receivables comprise cash held on demand with a reputable international brokerage firm pending investment. 10 Portfolio Investments Quoted Unquoted Equity Shares Equity Shares Total £’000 £’000 £’000 Fair value at 31 March 2022 3,319 2,823 6,142 Additions in the year 4,116 – 4,116 Investment disposals (2,080) – (2,080) Unrealised loss on the revaluation of investments (1,294) – (1,294) Fair value at 31 March 2023 4,061 2,823 6,884 Additions in the year 1,621 – 1,621 Investment disposals (1,704) – (1,704) Unrealised gain on the revaluation of investments 420 – 420 Fair value at 31 March 2024 4,398 2,823 7,221 Quoted equity investments are classed as Level 1 investments with the unquoted private equity investments being classed as Level 3 investments. Both are valued in line with the accounting policy for investment portfolio assets as described in Note 1. During the financial year the Company formally transitioned to an investment company and consequently adopted an investment policy, as described in the Chairman’s Statement on pages 2 to 4. 11 Trade and other payables At At 31 March 2024 31 March 2023 £’000 £’000 Trade and other payables 23 8 Accruals 47 41 70 49 12 Share capital Number of Nominal Ordinary Value Shares £’000 Authorised Ordinary Shares At 31 March 2023 200,000,000 2,000 At 31 March 2024 200,000,000 2,000 Allotted, issued and fully paid Ordinary Shares At 31 March 2023 73,764,035 738 At 31 March 2024 73,764,035 738 The Ordinary Shares in issue have a par value of £0.01 per share and have equal voting and other rights with no guarantee to dividend or other payments. Notes to the Financial Statements For the year ended 31 March 2024 Hardy plc Annual Report and Accounts FY2024 27 13 Financial risk & capital management The Company’s activities expose it to a variety of financial risks: market risk (including price risk, interest rate risk and foreign currency risk), custody risk and liquidity risk. The Company’s overall risk management programme focusses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance. The management of these risks is vested in the Board of Directors. The policies for managing each of these risks are summarised below: Management of market risk i) Price risk The Company is exposed to market price risk in respect of its portfolio investments. The Company mitigates this risk by having established investment appraisal processes and asset monitoring procedures which are subject to overall review by the Board. The Company has in place procedures and levels of authority designated to control the level of commitment to such financial instruments, either in single investments or in aggregate. Details of the Company’s investment portfolio are given in note 10 to the financial statements. Price risk sensitivity The table below summarises the impact on the Company’s profit before taxation for the year and on equity of a 10% increase or decrease in the price of its investment portfolio. 2024 2023 Quoted Unquoted Total Quoted Unquoted Total £’000 £’000 £’000 £’000 £’000 £’000 Impact of 10% price change Portfolio investments 440 282 722 406 282 688 Total 440 282 722 406 282 688 ii) Interest rate risk As the Company has no borrowings, the risk is limited to the variability of interest received on cash surpluses held. Interest rate risk is managed in accordance with the liquidity requirements of the Company, with minimum appropriate levels of its cash surpluses held within an instant access account, which has a fixed interest rate attributable to it, to ensure that sufficient funds are available to cover operating costs and investment opportunities. The interest rate risk profile of the financial assets of the Company as at 31 March is as follows: Financial assets Fixed rate where no interest Financial assets is earned Total £’000 £’000 £’000 Cash and cash equivalents 102 – 102 Cash with brokers pending investment 37 – 37 Portfolio Investments – 7,221 7,221 At 31 March 2024 139 7,221 7,360 Cash and cash equivalents 101 – 101 Cash with brokers pending investment 84 – 84 Portfolio investments – 6,884 6,884 At 31 March 2023 185 6,884 7,069 Financial assets include cash and cash receivables, and equity investments. Notes to the Financial Statements For the year ended 31 March 2024 28 Hardy plc Annual Report and Accounts FY2024 13 Financial risk & capital management – continued Interest rate sensitivity The principal impact to the Company is the result of interest-bearing cash and cash equivalent balances. During the year to 31 March 2024, the impact of a 5% increase or decrease in interest rates would have impacted the result for the year and equity by an immaterial amount as a result of higher/lower interest received on cash and cash receivables. As a result, no sensitivity analysis has been presented. iii) Foreign currency risk and sensitivity The Company has no material transactions denominated in foreign currencies and the majority of the Company’s assets and liabilities as at 31 March 2024 were denominated in Pounds Sterling (£). The Company does not hedge its foreign exchange exposures but is able to hold any material foreign currency amounts received into the broker account in the base currency for conversion into GBP when desired. The foreign exchange gain or loss recognised through the income statement for the years ended 31 March 2024 and 31 March 2023 in respect of foreign currency exposure was negligible. Given the immaterial impact any movement in foreign exchange rates would be likely to have on the financial performance and position of the Company, no currency exposure or sensitivity analysis is presented. Management of Custody risk Cash deposits and investments, as a general rule, are only placed with banks and financial institutions that have an investment grade rating, which is verified before placing the deposits, or with reputable international brokerages whose oversight, internal control environment and governance structure is deemed appropriate. At At 31 March 2024 31 March 2023 £’000 £’000 Cash on demand – rated AA 102 101 Other cash receivables – no rating provided* 37 84 Total cash and cash receivables 139 185 * These monies are held on demand with a reputable international brokerage company for which no credit rating is available, see note 9. The Board continues to assess the strategies for managing custody risk and is satisfied with the existing policies. The maximum financial risk exposure relating to the financial assets is represented by their carrying value, as outlined in the categorisation of financial instruments table below: Fair value Amortised through Cost profit or loss Total £’000 £’000 £’000 Cash and cash equivalents 102 – 102 Cash with brokers pending investment 37 – 37 Portfolio Investments – 7,221 7,221 At 31 March 2024 139 7,221 7,360 Cash and cash equivalents 101 – 101 Cash with brokers pending investment 84 – 84 Portfolio investments – 6,884 6,884 At 31 March 2023 185 6,884 7,069 The Company does not consider that any changes in the fair value of financial assets in the year are attributable to custody risk. No aged analysis of financial assets is presented as no financial assets are past due at the reporting date. Notes to the Financial Statements For the year ended 31 March 2024 Hardy plc Annual Report and Accounts FY2024 29 13 Financial risk management – continued Management of Liquidity risk The Company seeks to manage liquidity risk to ensure that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Directors deem there is sufficient liquidity for the foreseeable future. No maturity analysis is presented, as the Directors consider that the Company has sufficient liquidity in its investment portfolio and current assets relative to its financial liabilities such that liquidity risk is not material. The Company had cash and cash equivalents at 31 March as set out below: 2024 2023 £’000 £’000 Cash and cash equivalents Cash at banks 102 101 Cash with brokers pending investment 37 84 139 185 The level of cash balances held at the year end is considered to be in excess of the projected administrative expenses for the coming financial year. Capital Management The Company monitors the long-term cash flow requirements of the business in order to assess the requirement for changes to the capital structure to meet that objective and to maintain flexibility. The Company considers its capital to consist of issued share capital only. The Board manages the structure of its capital and makes necessary adjustments to accommodate any changes in economic conditions. To maintain or adjust the capital structure, the Board may issue or repurchase shares for cash, pay dividends or raise debt finance. No significant changes were made in the objectives, policies or processes during the year ended 31 March 2024. 14 Post balance sheet events Subsequent to the 31 March 2024 year end, C4X Discovery Holdings Plc (“C4XD”) delisted from AIM on 25 April 2024 and will now be held by Hardy as an unquoted investment as opposed to a more liquid quoted investment. The fair value of the C4XD warrants held by Hardy at 31 March 2024 was £nil. The rights of the warrant holders were unaffected by the delisting. No other significant events have occurred since 31 March 2024. 15 Related party transactions Related party transactions with Directors and the key management personnel of the Company are provided on page 9 of the Directors’ Report. The key management personnel are considered to be the Directors of the Company. There were no sales made to related parties (2023: Nil). Purchases and sales from related parties are made at normal market prices and when balances are outstanding at the period end, these are unsecured, interest free and settlement occurs in cash. During the year to 31 March 2024, accounting and administration fees of £15,000 (FY2023: £15,000) have been charged through the Statement of Comprehensive Income in relation to Sarossa Plc; a company with the same controlling shareholder as Hardy Plc and for which Michael Bretherton also acts as a director. The amount was outstanding at the year end (FY2023: £nil outstanding). Notice of Annual General Meeting (Incorporated under the Companies Act 2006 of the Isle of Man and registered in the Isle of Man with registered number 018168V) 30 Hardy plc Annual Report and Accounts FY2024 NOTICE IS HEREBY GIVEN that the 2024 ANNUAL GENERAL MEETING of the Company will be held at Floor 1 Liberation Station, The Esplanade, St Helier, Jersey on Wednesday 18 September 2024 at 11.00 a.m. Shareholders are welcome to physically attend the AGM. Shareholders wishing to vote by proxy should do so in accordance with the instructions below. All completed Forms of Proxy must arrive not later than 11.00 a.m. on 16 September 2024, being 48 hours before the time of the meeting. When completing your proxy forms, your attention is drawn to the notes to the forms of proxy. A. At the Annual General Meeting, the following ordinary business will be transacted: The consideration and, if thought fit, passing of the following resolutions which will be proposed as ordinary resolutions: 1. THAT the audited accounts of the Company for the year ended 31 March 2024 and the reports of the Directors and the Auditors and any other document required to be annexed thereto be and they are hereby considered and adopted. 2. THAT Crowe U.K. LLP, London, United Kingdom be and they are hereby re-appointed as Auditors to the Company and that the Directors be and they are hereby authorised to determine their remuneration. No special business of the Company is to be proposed. Registered office: By Order of the Board First Names House Christopher Stobart Victoria Road Company Secretary Douglas Isle of Man, IM2 4DF Dated 18 July 2024 Notes on entitlement to attend and vote at the Annual General Meeting: 1. A Form of Proxy is enclosed which, to be valid, must be completed and delivered, sent by post to First Names House, Victoria Road, Douglas, Isle of Man, IM2 4DF, or to be scanned and e-mailed to Maxine.Cleverley@iqeq.com, and cc Katie.Keyes@iqeq.com, together with the power of attorney or other authority (if any) under which it is signed (or a certified copy of such authority). All Forms of Proxy and any power of attorney of other authority must arrive not later than 11 a.m. on 16 September 2024, being 48 hours before the time of the meeting. 2. The Company, pursuant to Regulation 22 of the Uncertificated Securities Regulations 2006 (Isle of Man), specifies that only those members registered in the register of members as at 11.00 a.m. on 16 September 2024 (or in the event that the meeting is adjourned, on the register of members 48 hours before the time of any adjournment meeting) shall be entitled to vote in respect of the Ordinary Shares registered in their name at that time. Changes to entries on the register of members after 11.00 a.m. on 16 September 2024 (or, in the event that the meeting is adjourned, on the register of members less than 48 hours before the time of any adjourned meeting) shall be disregarded in determining the rights of any person to vote at the meeting. Hardy plc Annual Report and Accounts FY2024 31 Notes 32 Hardy plc Annual Report and Accounts FY2024 Notes