SEED INNOVATIONS LIMITED
ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
SEED INNOVATIONS LIMITED
CONTENT
Page No.
Directors and Advisers
3
Chairman's Statement
4
Report of the Chief Executive Officer
5
Investment Portfolio Report
6
Investing Policy
10
Directors
12
Report of Directors
13
Independent Auditor's Report
18
Statement of Comprehensive Income
22
Statement of Financial Position
23
Statement of Changes in Equity
24
Statement of Cash Flows
25
Notes to the Financial Statements
26
REGISTERED IN GUERNSEY No. 44403
www.seedinnovations.co
Incorporated under
the Companies (Guernsey) Law, 2008, as amended.
2
SEED INNOVATIONS LIMITED
DIRECTORS & ADVISERS
Directors
Ian Burns (Non - Executive Chairman)
Edward McDermott (Chief Executive Officer)
Lance De Jersey (Executive Director)
Luke Cairns (Non-Executive Director)
Alfredo Pascual (Executive Director)
Advisers
Administrator, Secretary and Registered Office
Nominated Adviser
Obsidian Fund Services Limited
Beaumont Cornish Limited
PO Box 343
Building 3, Chiswick Park
Obsidian House, La Rue D'Aval
566 Chiswick High Road
Vale
London
Guernsey
W4 5YA
GY6 8LB
Registrar
Independent Auditor
Share Registrars Limited
Grant Thornton Limited
3 Millennium Centre
St James Place
Crosby Way
St James Street
Farnham
St Peter Port
Surrey
Guernsey
GU9 7XX
GY1 2NZ
Brokers
Guernsey Legal Adviser to the Company
Shard Capital Partners LLP
Collas Crill
Floor 3
Glategny Esplanade
70 Saint Mary Axe
St Peter Port
London
Guernsey
EC3A 8BE
GY1 1WN
Investor Relations
English Legal Adviser to the Company
St Brides Partners Ltd
Hill Dickinson LLP
4th Floor
The Broadgate Tower
22 Bishopsgate
20 Primrose Street
London
London
EC2N 4BQ
EC2A 2EW
3
SEED INNOVATIONS LIMITED
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
Ian Burns
Non-Executive Chairman
SEED continues to operate within the dynamic landscape of the small-cap health and wellness sector, which has undergone a challenging
market and economic environment. Our strategy remains focused on identifying disruptive, high-growth opportunities within these
markets, which we believe present significant potential for innovation and shareholder value creation. Often the best time to buy quality
companies is when their market sector is unloved by the market in general. Accordingly, we are optimistic about the outlook for our
portfolio companies and remain ready to capitalise on emerging trends and investment catalysts in the market.
We remain frustrated that the market does not understand the value and quality of our Net Asset Value (NAV). We have taken
proactive measures during the year aimed at addressing the persistent, significant discount of the Company's market cap compared to
NAV and to reflect its financial strength and commitment to shareholder value, including the Share Buyback programme and Special
Dividend described below.
In the latter half of the financial year, we implemented a Share Buyback programme, which completed in May 2024, whereby Ordinary
Shares were repurchased below net asset value. In total, £513,536 (including fees) was spent on the purchase of 19,797,500 shares at
an average price per share of £0.0258 (2.58 pence). The programme has been funded from existing cash resources. The decision to
initiate this programme was made considering shareholder feedback and the significant 56.9% discount in share price at that time
relative to reported NAV, alongside robust cash and receivables of £7.1 million as of 11 September 2023.
We were also delighted to announce a maiden Special Dividend of 1.0 pence (£0.01) per SEED Share, post period end on 16 April 2024,
following the successful completion of the realisation of the investment in our portfolio company Fralis LLC, trading as Leap Gaming,
which was sold in April 2023. SEED’s proceeds from this sale totalled €5.8 million (£5.1 million), which was received in two tranches: €3
million (£2.7 million) upon completion; and the remaining €2.8 million (£2.4 million) on 12 April 2024.
In tandem with the Share Buyback and Special Dividend, we have focused on utilising other strategic initiatives to enhance investor
perception and communicate our intrinsic value proposition to the market. These include live investor events and leveraging digital and
social media platforms to augment communication and connectivity with our shareholders and the market generally.
Looking ahead, we remain optimistic about SEED’s current investment portfolio. The sector of the markets we invest in has undoubtedly
had a tough time, which means that there are some investment opportunities available at historically low prices and, with approximately
£3.9 million in cash post dividend, we are positioned to pursue opportunities that we anticipate will yield substantial returns for our
shareholders.
We look forward to providing further updates on our portfolio in the near future.
18 June 2024
4
SEED INNOVATIONS LIMITED
REPORT OF THE CHIEF EXECUTIVE OFFICER
FOR THE YEAR ENDED 31 MARCH 2024
Ed McDermott CEO
During the period, we have seen appreciation in one of our larger assets, Avextra AG, showing positive growth and Juvenescence
maintaining stability. However, it is important to address some disappointing outcomes experienced with certain investments, namely
Northern Leaf, OTO International Limited (OTO), and Inveniam Capital Partners, Inc. (Inveniam), which have faced notable challenges
stemming from down rounds and struggling business models and listed positions in Portage and Little Green Pharma which have seen
poor market price performance on their respective exchanges; such occurrences are unfortunately not uncommon across the market.
Our investment pipeline remains robust, and we are actively seeking new opportunities.
It is evident that investors, both listed and private, remain risk-averse, particularly towards smaller, developing companies. This
sentiment has affected the share price performance of funds like SEED. Despite these challenges, we believe that SEED is undervalued,
trading (2.1 pence as at 31 May 2024) at a 69% discount to the Company's NAV as at 31 March 2024 (and still a 64% discount after
adjustment for buy backs since 1 April 2024 and the Special Dividend payment).
Regarding our financial position, we ended the period with a healthy cash balance of £3.8 million, augmented by the final £2.4 million
tranche received just a few days later on the 12 April 2024 from the sale of Leap Gaming announced in December 2022. After accounting
for a Special Dividend and share buyback initiatives, we retain approximately £3.9 million for new and follow-on investments as at the
publication of this report. Holding cash in the current economic climate, where interest rates remain high, provides us with flexibility and
strategic advantage.
SEED remains committed to rewarding our shareholders through various initiatives, including our Share Buyback programme, and
recently announced Special Dividend. We aim to replenish the funds expended on these initiatives through future NAV increases on our
investments as they realise their potential.
Additionally, we have enhanced our visibility in the market through increased news flow and the dissemination of G-Force short videos
on social media platforms. We have also hosted in-person events, including a shareholder event in November 2023, along with
appearances by our team at Proactive Investors and Master Investor events.
In conclusion, SEED is committed to enhancing shareholder engagement and value through diverse strategies. With our enviable cash
position and robust investment pipeline, we are well-positioned to deliver new investments and drive growth in the foreseeable future.
The NAV of the Company at 31 March 2024 was £13,604,000 (2023: £16,032,000), equal to net assets of 6.73p per Ordinary Share
(2023: 7.54p per Ordinary Share).
18 June 2024
As of 31 May 2024, SEED share price of £0.021 (2.1 pence) was up 9% compared to 31 March 2023 (and up 66.5% when comparing the
adjusted close price which adjusts for the dividend payment), while the FTSE AIM All-Share Index was down 1% and the Thomson
Reuters Venture Capital Index was up 43.5% over the same period.
5
SEED INNOVATIONS LIMITED
INVESTMENT PORTFOLIO REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The table below lists the Company’s holdings at 31 March 2024 and 31 March 2023.
**Clean Food Group includes £216,000 further investment - see Clean Food Group section below for additional information
***Includes CLN due from SWB
344
8.7%
3.9%
2,509
2,740
18.4%
20.1%
100.0%
Holding
Juvenescence Limited
Avextra AG*
Clean Food Group Ltd**
Little Green Pharma
Inveniam Capital Partners, Inc.
Biotech/
Cannabis
Biotech/
Cannabis
Category
Gaming
Portage Biotech Inc.
OTO International Ltd
(SWB)***
Northern Leaf Ltd
Cannabis
Wellness
CBD
17
46.2%
Valuations at
31 March 2023
£'000
Valuations at
31 March 2024
£'000
% of Nav
Biotech
Biotech
Fintech
Biotech
2,556
4,436
965
715
596
94
2.5%
0.1%
1,182
529
Avextra AG (formally Eurox) ('Avextra')
Avextra is one of Europe’s leading vertically integrated medical cannabis operators focused on the development and production of
regulator-approved medicines. Founded in 2019 and based out of Germany, the company works in close collaboration with doctors and
pharmacists to develop and produce precisely formulated cannabis-based medicines. Avextra controls the entire value chain – from
cultivation in Portugal to EU-GMP certified extraction and manufacturing in Germany. Avextra operates across continental Europe
through an expansive distribution network of multiple channels and strategically developed assets for these key markets.
Leap Gaming
Cash and receivables, net of payables and accruals
Net Asset Value
-
53.8%
14
16,032
-
-
*Avextra movement in value follows the sale of 55% of this position for £2.45 million - for further information see the Avextra section
below.
590
960
5,106
-
Total Investment Value
16,019
6,283
13,604
-
-
7,321
Biotech/
Avextra remains focused on the German medical market, which is expected to expand following changes in German law-making medical
cannabis a more mainstream medical treatment. Within the reporting period, Avextra exported EU-GMP standardised cannabis extracts
manufactured at its German facility to its distribution partner in Italy, increasing its European footprint and validating its extract focused
business strategy. It also announced a collaboration with the German Pain Association (DGS) to support patients suffering from
Chemotherapy-induced neuropathic pain and announced an investment over the next five years of up to €15 million in the development
of new medical cannabis research in partnership with the Portuguese Instituto Universitário de Ciências da Saúde-Cooperativa de Ensino
Superior Politécnico e Universitário (IUCS-CESPU).
6
SEED INNOVATIONS LIMITED
INVESTMENT PORTFOLIO REPORT (continued)
FOR THE YEAR ENDED 31 MARCH 2024
Fralis LLC, trading as Leap Gaming
Clean Food Group Limited ('CFG')
In the first half of the reporting period, SEED invested a further £216,000 in CFG alongside other investors and industrial food specialists
such as AIM-listed Agronomics, Doehler Group, and Alianza Team. CFG raised an additional £2.5 million in March 2024 from the Clean
Growth Fund, which will be used to accelerate the commercialisation of its sustainable oils and fats technology. CFG was also awarded
£1 million in grant funding from the UK Government.
As well as JuvRx, Juvenescence has various other investments, which continue to develop. These include LyGenesis, which early in the
year formed a research partnership with Imagine Pharma to develop novel cell therapies for patients with type 1 diabetes; raised
+US$19 million in a Series A-2 financing round to complete its Phase 2a clinical trial and advance its pipeline of cell therapies; and post
period end, dosed its first patient in its Phase 2a clinical trial of a first-in-class regenerative cell therapy for patients with end-stage liver
disease.
Meanwhile, Serina Therapeutics. focused on Parkinson’s and other neurological diseases, entered into a merger agreement with AgeX
Therapeutics, Inc. (NYSE American: AGE), and Chrysea formed a partnership with Chalmers University of Technology to make/discover
medicinal compounds called Benzylisoquinoline alkaloids (BIAs) using yeast and synthetic biology, and strengthened its capabilities in
synthetic biology and biopharmaceutical products development with the acquisition of Rodon Biologics in February this year.
In April 2023, Leap Gaming was sold to IMG Arena US, LLC, securing approximately €5.8 million in cash to SEED over a two-year period,
with initial proceeds of €2.8 million and repayment of a term loan totalling €268,000. SEED announced the receipt of the remaining circa
£2.4 million (€2.76 million) post period end in April 2024.
CFG was co-founded by CEO Alex Neves and Co-Chairman (and SEED CEO) Ed McDermott in 2022 with the aim of becoming the leading
sustainable oils and fats solutions provider to global food and cosmetics manufacturers. Its focus is on developing a scalable, non-GMO
yeast technology that uses food waste as its food source, to deliver sustainable alternatives to traditional oil and fat ingredients. Oil
plants, such as Palm and Soy are ubiquitous in food and cosmetics and remain in massive (and growing) demand despite the negative
environmental impact when produced using traditional agricultural methods. To this end, Clean Food Group has brought together a
knowledgeable board and advisory team, with deep and broad experience with biotechnology, life sciences and high-growth industries.
Juvenescence has undergone a strategic refocus towards a pharmaceutical-oriented offering, with funding raised at its subsidiary JuvRX
to support drug development initiatives. SEED maintains exposure to the original company and JuvRX through its existing investment in
JuvVentures (formerly known as Juvenescence Ltd). The valuation of this investment remains broadly unchanged from the prior period.
During the reporting period, SEED sold 55% of its holding in Avextra, amounting to 2,900 shares at €1,000 per share and realising €2.9
million (£2.45 million) in proceeds. It continues to hold 2,242 shares valued at £2.74 million (€3.21 million) as of 31 March 2024. The
value of these remaining shares increased by approximately €1 million during the period. The carrying value of the remaining shares,
priced at €1,430 each, represents a 13% discount to Avextra’s latest equity raise price of €1,650 per share. This discount reflects the
likelihood that the realisable value of the remaining stake in Avextra, if sold, would be at a discount to the latest equity raise price per
share.
Juvenescence Ltd ('Juvenescence')
Juvenescence is a life sciences company developing therapies to modify aging and increase healthy human lifespan. It was founded
by Jim Mellon, Dr. Greg Bailey, and Dr. Declan Doogan. The Juvenescence team consists of highly experienced drug developers,
entrepreneurs, marketers, and investors with a significant history of success in pharmaceutical drug development, synthetic biology, and
tissue and cellular engineering.
Juvenescence has a broad portfolio of products in development and is driving innovation, with a focus on discovering and developing
these therapies to modify the aging process, through prevention and by regenerating damage, to support healthy aging and increase
health span.
7
SEED INNOVATIONS LIMITED
INVESTMENT PORTFOLIO REPORT (continued)
FOR THE YEAR ENDED 31 MARCH 2024
News generated during the period included significant findings from a large-scale cannabis study showing substantial improvements in
pain, quality of life, and fatigue, strengthening its board structure, and the awarding of various contracts, which have expanded its
footprint in Europe.
During the financial accounting period, LGP attempted to spin out RESET Mind Sciences, which was ultimately unsuccessful, partly due to
SEED's regulatory constraints in the UK that prevented support. SEED continues to engage with LGP and closely monitor the RESET
situation.
SEED views LGP as significantly undervalued compared to peers, with the ASX lagging behind the US and Canada in its support for
medical cannabis stocks' recovery. SEED hopes that Australia will follow suit in due course, with LGP potentially pursuing a secondary
listing elsewhere to lift its value in line with its improved trading results.
Inveniam Capital Partners ('Inveniam')
Inveniam is a private fintech company, which built Inveniam.io, a technology platform that uses big data, AI and blockchain technology
to provide surety of data and high-functioning use of that data in a distributed data ecosystem. Despite a small position held after recent
fundraising rounds, the valuation has decreased but remains at a 25% premium to the issue price of SEED’s shares. We anticipate further
fundraisings and the development of exciting blockchain technologies that support the tokenisation and potential future trading of
diverse private market assets. Past performance of similar companies suggests that Inveniam could experience a significant rerating and
valuation increase in the future if its technology can lead the race in providing these solutions.
OTO International Limited ('OTO')
OTO is an omni-channel premium CBD, wellness, and skincare brand.
SEED held 71,502 shares in OTO, representing approximately 0.44% of the issued share capital of this privately held company.
Unfortunately, OTO experienced a cash flow crisis in 2023, leading to a down round equity raise later that year at £0.24 per share, a
substantial discount compared to previous equity raises and the initial issue price of OTO shares to SEED (£5.91 per share) when OTO
acquired SEED's investee company South West Brands (‘SWB’).
CFG and Roberts Bakery have formed a collaboration to use manufactured bread waste from Robert’s as a feedstock for the production
of CFG’s oils and fats, pioneering sustainable practices and establishing a circular ecosystem to address food system challenges in the UK.
Another strategic collaboration within the period was with Latin American food technology specialist Alianza Team to accelerate the
market availability of healthy and sustainable oils and fats for global food manufacturers, combining CFG’s microbial oils expertise with
Alianza Team's experience in developing functional oils and fats.
SEED recognises the significant potential for further capital growth at CFG as it demonstrates the commercial scalability of its technology
in the precision fermentation space, which is both exciting and fast-growing. There is a genuine possibility that this technology could
have a transformative impact on the world, as well as creating significant further value for CFGs investors including SEED.
Little Green Pharma ('LGP')
Little Green Pharma is an Australian ASX-Listed (Ticker: LGP) global, vertically integrated, and geographically diverse medical cannabis
business with operations from cultivation and production through to manufacturing and distribution.
Recent results for LGP in the quarter ended 31 March 2024 have been strong, with highlights including record quarterly cash receipts of
A$8.1 million, up over 20% on previous corresponding period; record quarterly revenue of A$7.3 million (unaudited), up over 36% on
previous corresponding period; record revenue of A$25.6 million (unaudited) for FY24, up nearly 30% on previous financial year; and
cash in bank of A$5.0 million at 31 March 2024, up from A$3.7 million at 31 December 2023.
As of 31 March 2024, SEED valued its investment in OTO at £nil amid concerns regarding OTO’s solvency and ability to continue
operations.
8
SEED INNOVATIONS LIMITED
INVESTMENT PORTFOLIO REPORT (continued)
FOR THE YEAR ENDED 31 MARCH 2024
Following the failure of its IPO ambition, a disappointing emergency fundraise at a down round in late 2023/early 2024, and unsuccessful
merger with AQUIS-listed Voyager, SEED has written down its investment to a £nil valuation due to uncertainties regarding Northern
Leaf's ability to recover and raise sufficient funds to sustain operations.
Portage Biotech, Inc (‘Portage’)
NASDAQ listed Portage (Ticker: PRTG) is a clinical-stage immuno-oncology company advancing multi-targeted therapies to extend
survival and significantly improve the lives of patients with cancer. The company is focused on advancing its potentially best-in-class
adenosine antagonists in the ADPORT-601 trial of PORT-6 (adenosine 2A inhibitor) and PORT-7 (adenosine 2B inhibitor). These
programmes are being advanced using innovative trial designs and translational data to identify the patient populations most likely to
benefit from treatment. Its unique business model leverages a strong network of academic experts and large pharma partners to rapidly
and efficiently advance multiple products.
SEED holds a small position in Portage and continues to monitor its share price with the intention to sell as appropriate.
Northern Leaf Ltd ('Northern Leaf')
Northern Leaf was focused on becoming a key player in the European medical cannabis supply chain, having already built a secure
operational facility in Jersey.
9
SEED INNOVATIONS LIMITED
INVESTING POLICY
FOR THE YEAR ENDED 31 MARCH 2024
The Board proposes to invest in companies which, in normal circumstances, individual investors may have limited access.
Initially the geographical focus will be North America and Europe but investments may also be considered in other regions to the extent
that the Board considers that valuable opportunities exist and positive returns can be achieved.
In selecting investment opportunities, the Board will focus on businesses, assets and/or projects that are available at attractive
valuations and hold opportunities to unlock embedded value. In line with the existing portfolio it is expected that investments will be in
SMEs with sub £100m valuations but with the potential for significant growth. Where appropriate, the Board may seek to invest in
businesses where it may influence the business at a board level, add its expertise to the management of the business, and utilise its
industry relationships and access to finance. The extent that the Company will be a passive or active shareholder will depend on the
interest held and the maturity of the investee company.
The Company's interests in a proposed investment and/or acquisition will range from minority positions to full ownership and will
comprise multiple investments. The proposed investments may be in either quoted or unquoted companies; are likely to be made by
direct acquisitions or investments; and may be in companies, partnerships, earn-in joint ventures, debt or other loan structures, joint
ventures or direct or indirect interests in assets or businesses.
The Board will conduct initial due diligence appraisals of potential businesses or projects and, where it believes that further investigation
is warranted, it intends to appoint appropriately qualified persons to assist. The Board believes it has a broad range of contacts through
which it is likely to identify various opportunities which may prove suitable.
Investments sought will be in sectors which have, or have the potential for, significant intellectual property, principally in the wellness
and life sciences sectors (including biotech, longevity of life and pharmaceuticals) along with aligned technology sectors (including
artificial intelligence and digital delivery). Equally the Board will consider investments in established industries where the business is
applying new technologies and/or ‘know how’ to enhance its offering or taking established business models or products to new markets.
In keeping with its desire to provide its shareholders with access to investments they may otherwise not be able to participate in, the
Board also intends to apply a portion of the portfolio to opportunistic investments which may, by exception, fall outside the above
criteria but represent good potential for short term returns. Such investments will be limited at 15% of the Company’s NAV and would
typically be in fundraisings by listed companies or as part of an IPO.
Where the Company builds a portfolio of related assets it is possible that there may be cross holdings between such assets. The
Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate. Investments
are expected to be mainly in the form of equity, with debt potentially being raised later to fund the development of such assets.
Investments in later stage assets are more likely to include an element of debt to equity gearing. The Board may also offer new Ordinary
Shares by way of consideration as well as or in lieu of cash, thereby helping to preserve the Company's cash for working capital and as a
reserve against unforeseen contingencies including, for example, delays in collecting accounts receivable, unexpected changes in the
economic environment and operational problems.
There is no limit on the number of projects into which the Company may invest. The Directors intend to mitigate risk by appropriate due
diligence and transaction analysis. The Board considers that as investments are made, and new promising investment opportunities
arise, further funding of the Company may also be required.
The Company will pursue a balanced portfolio of an even mixture of early stage, pre-liquidity event and liquid investments which it will
aim to hold within the portfolio for 2-4 years, 6-24 months and up to 12 months respectively. Whilst the target is to have the portfolio
split fairly evenly between the different stages of liquidity there will be no set criteria for which the Company will hold an investment
and the proportion of the portfolio which will be represented by each investment type.
10
SEED INNOVATIONS LIMITED
INVESTING POLICY (continued)
FOR THE YEAR ENDED 31 MARCH 2024
The Board believes its expertise will enable it to determine quickly which opportunities could be viable and so progress quickly to formal
due diligence. The Company will not have a separate investment manager. The Board proposes to carry out a comprehensive and
thorough project review process in which all material aspects of a potential project or business will be subject to rigorous due diligence,
as appropriate. Due to the nature of the sectors in which the Company is focused it is unlikely that cash returns will be made in the short
to medium term on the majority of its portfolio; rather the Company expects a focus on capital returns over the medium to long term.
11
SEED INNOVATIONS LIMITED
DIRECTORS
Ian Burns (Non-Executive Chairman)
Ed McDermott (Chief Executive Officer)
Lance De Jersey (Finance Director)
Luke Cairns (Non-Executive Director)
Alfredo Pascual (Director, Investment Research)
Mr Burns, a fellow of both the Institute of Chartered Accountants in England & Wales and a member of STEP, is a serial entrepreneur
and one of the original founders of the Company. He also founded and is Executive Director of Via Executive Limited, a specialist
management consulting company and the Managing Director of Regent Mercantile Holdings Limited, a privately-owned investment
company. He is licensed by the Guernsey Financial Services Commission as a personal fiduciary.
Mr McDermott, a former investment banker, has over 20 years’ experience in the management, financing, and strategic development of
growth companies. He has broad experience in several high growth sectors and previously held several Executive and Non-Executive
roles with publicly quoted companies. As a finance specialist, he has been pivotal in raising over $750m for public and private companies
during his career.
Mr De Jersey is a member of the Institute of Chartered Secretaries and Administrators and The Institute of Directors. He previously
headed Partners Group’s Guernsey office, serving on the Guernsey boards and chairing the Risk & Audit and AML committees and was a
member of the Investment Oversight committee. He has over ten years’ experience in private equity investment administration and
management.
Mr McDermott is a co-founder and was Managing Director of Europe’s largest medical cannabis company, EMMAC Life Sciences, which
was acquired by Curaleaf international in a deal worth over $400m. He has previously held a number of Executive and Non-Executive
roles with publicly quoted companies.
In the past, Mr De Jersey has owned and operated retail franchises, marketed and sold small businesses as a business broker and worked
as a financial adviser in New Zealand. He is currently a Non-Executive Director of Pearl Holding Limited and Partners Group Private
Equity Performance Holdings Limited (both investment funds managed by Partners Group).
Mr Cairns is a highly experienced finance professional with a strong network having worked in the City of London for 19 years in
corporate finance. A Guernsey resident, Mr Cairns was previously Head of Corporate Finance and Managing Director at Northland
Capital Partners, an AIM focused Nomad and Broker, and has worked with many growth companies across a number of sectors and
regions on a wide range of transactions, including IPOs, secondary fundraisings, corporate restructurings and takeovers. Mr Cairns has
also held directorships on both listed and private companies across various sectors.
Mr Pascual, Chartered Financial Analyst, works on both assessing new investment opportunities and managing the relationships with
existing investments' management teams. He joined SEED in April 2021 as VP of Investment Analysis and was appointed to the role of
Executive Director in September 2023. Prior to SEED, Mr Pascual worked as an International Analyst at MJBizDaily, a leading cannabis
industry business news and analysis resource. His coverage focused on the evolving legal cannabis markets and regulations in Europe
and Latin America. Throughout his career, he has been recognized for his ability to provide unique insights for businesses and investors
within the rapidly evolving legal cannabis industry. He holds a Bachelor’s degree in Business Administration from the Catholic University
of Uruguay and a Master’s in Public Policy from the University of Passau in Germany.
Mr Burns is also a Non-Executive Director of Darwin Property Management (Guernsey) Limited and Curlew Capital Guernsey Limited,
and Chairman of One Hyde Park Limited.
12
SEED INNOVATIONS LIMITED
REPORT OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2024
Status and Activities
The Company is a closed-ended investment company.
The Company is domiciled and incorporated as a limited liability company in Guernsey.
The Company is quoted on Alternative Investment Market, a market operated by the London Stock Exchange ("AIM").
Changes during the year
Results
Dividends
Investments
Details of the Company’s investments are disclosed in the Investment Portfolio Report and notes 12, 13, 19 and 21.
Material Contracts
The Company’s material contracts are with:
• Obsidian Fund Services Limited (“Obsidian”), which acts as Administrator and Company Secretary;
• Share Registrars Limited, which acts as Registrar;
• Beaumont Cornish Limited, which acts as Nominated Adviser; and
• Shard Capital, which acts as Broker.
Directors
The registered office of the Company is PO Box 343, Obsidian House, La Rue D'Aval, Vale, Guernsey .
Mr Burns is the legal and beneficial owner of Smoke Rise Holdings Limited, which held 1,674,024 (0.83%) Ordinary Shares (2023:
1,674,024) in the Company at 31 March 2024 and the date of signing this report.
The present members of the Board are listed on page 3 of this report. Changes to the Board during the year are disclosed earlier on this
page. There are service contracts in place between each of the Directors and the Company. Details of Directors’ remuneration, bonuses
and Options granted to the Directors are disclosed in note 7.
The results of the Company for the year are shown on page 22. The Company made a loss for the year of £2.1 million (2023: Loss £4.5
million).
The Company did not pay any dividends during the year (2023: £Nil) and the Directors do not propose a final dividend for the year (2023:
£Nil).
The Directors are pleased to present their Annual Report and the Audited Financial Statements of SEED Innovations Limited (the
“Company”) for the year ended 31 March 2024.
Post year-end on 16 April 2024, the Company declared a special dividend of 1.0 pence (£0.01) per Ordinary Share.
On 1 September 2023, Mr Pascual was appointed as an Executive Director of the Company. Mr Pascual's biography is on page 12.
With effect from 3 May 2018 the Company has been authorised as a closed-ended investment scheme by the Guernsey Financial
Services Commission (the "GFSC") under Section 8 of the Protection of Investors (Bailiwick of Guernsey) Law, 2020 and the Authorised
Closed-Ended Investment Schemes Rules 2021.
13
SEED INNOVATIONS LIMITED
REPORT OF DIRECTORS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
Further details are explained in note 18.
Substantial Interests as at date of signing
The following interests in 3% or more of the issued Ordinary Shares of the Company:
Investors:
Jim Mellon
10.32%
Peter Saladino
8.91%
Norbert Teufelberger
3.73%
Going Concern
Corporate Governance
Board Responsibilities
The Directors note that the Company has sufficient cash and cash equivalent resources to meet its obligations for at least one year after
the approval of these financial statements.
As a Guernsey incorporated company and under the AIM Rules for Companies, the Company is not required to comply with the UK
Corporate Governance Code published by the Financial Reporting Council (the “FRC Code”). However, the Directors place a high degree
of importance on ensuring that high standards of Corporate Governance are maintained and that the Company complies with the
Finance Sector Code on Corporate Governance, issued by the Guernsey Financial Services Commission.
Mr De Jersey held 400,000 (0.20%) (2023: 400,000) Ordinary Shares in the Company at 31 March 2024 and at the date of signing this
report.
Mr McDermott held 4,680,000 (2.32%) Ordinary Shares (2023: 4,680,000) in the Company at 31 March 2024 and at the date of signing
this report.
Percentage of Share Capital
Number of
Ordinary Shares
The Company is self-managed, in that day-to-day investment management recommendations are made by the Executive Directors,
supported by analysis provided by the Board.
The Board has engaged Obsidian to undertake the administrative duties of the Company. Clearly documented contractual arrangements
are in place with this service provider which define the areas where the Board has delegated responsibility to it.
7,205,005
After making reasonable enquiries, and assessing all data relating to the Company’s liquidity, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and do not
consider there to be any threat to the going concern status of the Company. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
17,194,590
19,921,908
At 31 March 2024, the Board comprised of three Executive Directors, being Messrs. De Jersey, McDermott and Pascual; and two Non-
Executive Directors, Mr Burns, and Mr Cairns.
The Company holds at least three Board meetings per year, at which the Directors will review the Company's investments and all other
important issues to ensure control is maintained over the Company's affairs.
14
SEED INNOVATIONS LIMITED
REPORT OF DIRECTORS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
Board Committees
Audit Committee
Remuneration and Nomination Committee
Board Meetings
Board Meetings
Committee Meetings
Ian Burns (appointed 12 November 2014)
10/11
2/2
Ed McDermott (appointed 12 February 2018)
11/11
1/2
Lance De Jersey (appointed 3 January 2019)
10/11
2/2
Luke Cairns (appointed 3 January 2020)
11/11
2/2
Alfredo Pascual (appointed 1 September 2023)
6/6
0/0
Dialogue with Shareholders
The Board monitors the trading activity and shareholder profile on a regular basis and maintains contact with the Company's Broker to
ascertain the views of shareholders. Shareholder sentiment is also ascertained by the careful monitoring of the premium/discount that
the Ordinary Shares are traded at in the market when compared to those experienced by similar companies.
The Directors are always available to enter into dialogue with shareholders. All ordinary shareholders will have the opportunity, and
indeed are encouraged, to attend and vote at future Annual General Meetings during which the Board will be available to discuss issues
affecting the Company.
All members of the Board are expected to attend each Board meeting and to arrange their schedules accordingly, although non-
attendance may be unavoidable in certain circumstances. Directors’ attendance at Board and Committee meetings during the financial
year is set out below.
The Company reports formally to shareholders twice a year. Additionally, current information is provided to shareholders on an ongoing
basis through the Company website and Regulatory News Service ('RNS') announcements. The Company Secretary monitors the voting
of the shareholders and proxy voting is taken into consideration when votes are cast at the Annual General Meeting.
The Audit Committee is comprised of the two non-executive directors of the Company. Mr Cairns was appointed chairman of the
committee with effect from 5 June 2020, succeeding Mr Burns, who remains as a member.
Mr Burns is chairman of the Remuneration and Nomination Committee. Mr Cairns is a member of the Remuneration and Nomination
Committee. The function of the Remuneration and Nomination Committee is to consider the remuneration, and the appointment and
reappointment, of Directors.
Shareholders vote on the re-appointment or election of at least one Director at each Annual General Meeting (“AGM”), with every
Director’s appointment being voted on by Shareholders every three years. Mr Burns will be proposed for re- election at the forthcoming
AGM.
The Audit Committee meets at least once a year and provides a forum through which the Company’s Auditor reports to the Board. The
Audit Committee examines the effectiveness of the Company’s internal controls, the Annual Report and Financial Statements, the
Auditor’s remuneration and engagement as well as the Auditor’s independence and any non-audit services provided by them. The Audit
Committee receives information from the Administrator, the Company Secretary and the Auditor. The Audit Committee has formal
written terms of reference, which are available upon request from the Company Secretary.
The Company is committed to the principle of diversity and equal opportunities. The Board will continue to review the composition of
the Board to ensure it has the appropriate structure, diversity and skills to meet the needs of the Company as it develops.
15
SEED INNOVATIONS LIMITED
REPORT OF DIRECTORS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
Litigation
Internal Control and Financing
• The Board reviews financial information produced by the Administrator on a regular basis.
Risk Profile
Financial Risks
Independent Auditor
Statement of Directors’ Responsibilities
•
• make judgements and accounting estimates that are reasonable and prudent;
•
•
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
• The Board defines the duties and responsibilities of the service providers and advisers in the terms of their contracts; and
state whether International Financial Reporting Standards have been followed, subject to any material departures disclosed
and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will
continue in business.
The Company does not have an internal audit department. All of the Company's administrative functions are delegated to independent
third parties and it is therefore felt that there is no need for the Company to have an internal audit facility.
select suitable accounting policies and then apply them consistently;
The Directors are responsible for preparing the Annual Report and Audited Financial Statements in accordance with applicable law and
regulations. The Companies (Guernsey) Law, 2008 (the “Company law”) requires the Directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the Company and its profit or loss for that year. The Directors are
required to prepare the Financial Statements in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International
Accounting Standards Board (IASB) and applicable law. In preparing these financial statements, the Directors are required to:
The Company is not engaged in any litigation or claim of material importance, nor, so far as the Directors are aware, is any litigation or
claim of material importance pending or threatened against the Company.
The Board is responsible for establishing and maintaining the Company's system of internal control. Internal control systems are
designed to meet the particular needs of the Company and the risks to which it is exposed, and, by their very nature, provide
reasonable, but not absolute, assurance against material misstatement or loss. The key procedures which have been established to
provide effective internal controls are as follows:
• Obsidian Fund Services Limited is responsible for the provision of administration and Company Secretarial duties;
The Board feels that the procedures employed by the service providers adequately mitigate the risks to which the Company is exposed.
Grant Thornton Limited was appointed as auditor of the Company effective from 9 December 2020 and has indicated their willingness to
continue as auditors. A resolution to reappoint Grant Thornton Limited as Auditor will be put to the forthcoming AGM.
The Company's financial instruments comprise investments, cash and cash equivalents, and various items such as receivables and
payables that arise directly from the Company's operations.
The main risks arising from holding these financial instruments are market risk (including price risk, currency risk and interest rate risk),
credit risk and liquidity risk. Further details are given in note 19 to the financial statements.
16
SEED INNOVATIONS LIMITED
REPORT OF DIRECTORS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
Statement of Directors’ Responsibilities (continued)
Disclosure of Information to the Auditor
On behalf of the Board
Director
Director
18 June 2024
18 June 2024
The Directors who held office at the date of approval of this Report confirm that, so far as they are aware, there is no relevant audit
information of which the Company’s Auditor is unaware and each Director has taken all the steps that he ought to have taken as a
Director to make himself aware of any relevant audit information and to establish that the Company’s Auditor is aware of that
information.
The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company’s transactions
and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the Financial
Statements comply with the Company law. They are responsible for such internal control as they determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect
fraud and other irregularities.
Legislation in the United Kingdom and Guernsey governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s
website.
17
18
INDEPENDENT AUDITOR’S REPORT
To the members of Seed Innovations Limited
Opinion
We have audited the financial statements of Seed Innovations Limited (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 material accounting policy information.
In our opinion, the financial statements:
•
give a true and fair view of the financial position of the Company as at 31 March 2024 and of its
financial performance and its cash flows for year then ended;
•
are in accordance with IFRS Accounting Standards ("IFRS”) as issued by the International
Standards Board (“IASB”) and;
•
comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) 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 International Ethics Standards Board for Accountants’ International Code of Ethics
for Professional Accountants (including International Independence Standards) (IESBA Code), together
with the ethical requirements that are relevant to our audit of the financial statements in Guernsey, and
we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA
Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period. 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.
The key audit matter
How the matter was addressed in our audit
Valuation of unquoted investments (2024:
6.7 million and 2023: £15.02 million)
92% (2023: 95%) of the carrying value of the
Company’s investments consist of unquoted
investments that are valued using different
valuation techniques and involve significant
judgment and estimates, as described in Notes
3 d), 4 and 13 to the financial statements.
The valuations are subjective, with a high level
of judgement and estimation linked to the
determination of fair values. As a result, there is
a risk of an inappropriate valuation method
being applied, together with the risk of
inappropriate inputs to the model/calculation
being selected which might result in the fair
value being materially misstated.
The valuation of unquoted investments is the
key driver of the Company’s net asset value and
total return. Incorrect valuation could have a
Our audit procedures consisted of, but were not
restricted to the following:
• We obtained and inspected the valuation
models and supporting data to assess
whether the data used is appropriate and
relevant, and discussed these with
management to evaluate whether the fair
value of unquoted investments is reasonably
stated, challenging the assumptions made
by management.
• Assessed and corroborated significant
valuation inputs to independent sources and
supporting evidence obtained from
management and tested the arithmetical
accuracy of the Company’s calculations.
• Performed research on publicly available
information to assess for any contradictory
evidence of specific events which would
impact the fair value of the portfolio.
19
The key audit matter
How the matter was addressed in our audit
significant impact on the net asset value of the
Company and therefore the return generated for
shareholders.
Refer to the Report of the Chief Executive
Officer, Report of Directors, Accounting
policies in Notes 3 d), and Notes 4 and 13 to
the financial statements for additional
information.
• Performed a sensitivity analysis on the
inputs (i.e. latest transaction price) used in
the valuation to understand the impact on
the fair value of the equity investments.
• Performed back testing procedures (i.e.
historical investment price analysis and the
comparison of price of investment at
disposal to price as at 31 March 2023) to
evaluate the appropriateness of
management’s valuation methodologies in
the period.
• Evaluated the reasonableness of the
relevant valuation disclosures and notes to
the financial statements, including the
adequacy of the required disclosures.
• Evaluated whether the fair value disclosures
in the financial statements are appropriate,
complete and in accordance with the
requirements of IFRS 13 – Fair Value
Measurement.
Our result
We have no material matters arising from our
audit work on the valuation of unquoted
investments that we wish to bring to your
attention.
Other information in the Annual Report
The directors are responsible for the other information. The other information comprises the information
included in the annual report and audited financial statements but does not include the financial
statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and, 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,
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.
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities set out on page 16, the directors
are responsible for the preparation of the financial statements which give a true and fair view in
accordance with IFRS Accounting Standards as issued by the IASB, 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.
20
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 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.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Wynand Pretorius.
21
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with section 262 of
the Companies (Guernsey) Law, 2008. 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies
(Guernsey) Law, 2008 requires us to report to you if, in our opinion:
•
proper accounting records have not been kept by the Company; or
•
the Company’s financial statements are not in agreement with the accounting records; or
•
we have not obtained all the information and explanations, which to the best of our knowledge and
belief, are necessary for the purposes of our audit.
Grant Thornton Limited
Chartered Accountants
St Peter Port
Guernsey
Date:
SEED INNOVATIONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
Year ended
Year ended
31 March
31 March
Note
2024
2023
£'000
£'000
12
1,077
(836)
12
(2,296)
(3,056)
Interest income on financial assets at fair value through profit and loss
-
102
Total investment loss
(1,219)
(3,790)
Other income
Bank Interest income
114
3
Arrangement fee
-
9
Total other income
114
12
Expenses
Directors' remuneration and expenses
7
(385)
(340)
Recognition of Directors share based expense
-
(30)
Provision for loss on receivables
14
(108)
-
Legal and professional fees
(132)
(77)
Other Expenses
8
(207)
(183)
Administration fees
(44)
(41)
Adviser and broker's fees
(76)
(73)
Total expenses
(952)
(744)
Net loss before losses and gains on foreign currency exchange
(2,057)
(4,522)
Net foreign currency exchange (loss)/gain
(63)
63
Total comprehensive loss for the year
(2,120)
(4,459)
Loss per Ordinary share - basic and diluted
10
(1.01p)
(2.10p)
The Company has no recognised gains or losses other than those included in the results above.
All the items in the above statement are derived from continuing operations.
Net unrealised loss on revaluation of financial assets at fair value through
profit and loss
Net realised gain/(loss) on disposal of financial assets at fair value through
profit and loss
The accompanying notes on pages 26 to 46 form an integral part of these financial statements.
22
SEED INNOVATIONS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
31 March 2023
Note
£'000
£'000
Non-current assets
Financial assets at fair value through profit or loss
12
7,321
16,019
7,321
16,019
Current assets
Cash and cash equivalents
3,885
30
Other receivables
14
2,426
50
6,311
80
Total assets
13,632
16,099
Current liabilities
Payables and accruals
15
(28)
(67)
(28)
(67)
Net assets
13,604
16,032
Financed by
Share capital
16
2,020
2,127
Other distributable reserve
11,584
13,905
13,604
16,032
Net assets per Ordinary share
17
6.73
7.54
Ian Burns
Lance De Jersey
Director
Director
31 March 2024
The financial statements on pages 22 to 46 were approved by the Board of Directors on 18 June 2024 and were signed on their behalf
by:
23
SEED INNOVATIONS LIMITED
STATEMENT OF CHANGES IN EQUITY
AS AT 31 MARCH 2024
£'000
£'000
£'000
£'000
Balance as at 1 April 2022
Note
2,127
212
18,122
20,461
Total comprehensive loss for the year
-
-
(4,459)
(4,459)
Transactions with shareholders
Employee share scheme - value of employee services
7
-
30
-
30
Transfer of value of lapsed options
(242)
242
-
Balance as at 31 March 2023
2,127
-
13,905
16,032
Balance as at 1 April 2023
2,127
-
13,905
16,032
Total comprehensive loss for the year
-
-
(2,120)
(2,120)
Transactions with shareholders
Ordinary Share buyback
(107)
(201)
(308)
Balance as at 31 March 2024
2,020
-
11,584
13,604
The accompanying notes on pages 26 to 46 form an integral part of these financial statements.
Share Capital
Employee
share option
reserve
Other
distributable
reserve
Total
24
SEED INNOVATIONS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
Year ended
Year ended
31 March 2023
Notes
£'000
£'000
Cash flows from operating activities
Total comprehensive loss for the year
(2,120)
(4,459)
Adjustments for:
Unrealised loss on fair value adjustments on financial assets at FVTPL
12
2,296
3,056
Realised (gain)/loss on disposal of financial assets at FVTPL
12
(1,077)
836
Foreign exchange movement
63
(63)
Directors' share based payment expense
-
30
Finance income
-
(102)
Changes in working capital:
(Increase)/Decrease in other receivables and prepayments
14
(2,376)
7
(Decrease)/Increase in other payables and accruals
15
(39)
25
Net cash outflow from operating activities
(3,253)
(670)
Cash flows from investing activities
Acquisition of financial assets at fair value through profit or loss
12
(216)
(443)
Disposal of financial assets at fair value through profit or loss
12
7,694
158
Net cash inflow/(outflow) from investing activities
7,478
(285)
Cash flows from financing activities
Ordinary Share buyback
16
(308)
-
Net cash outflow from financing activities
(308)
-
Movement in cash and cash equivalents
3,917
(955)
Cash and cash equivalents brought forward
30
922
Foreign exchange movement
(63)
63
Cash and cash equivalents carried forward
3,885
30
31 March 2024
25
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
1. General Information
2. Basis of Preparation
(a) Standards and amendments to existing standards effective 1 April 2023
(b) New standards, amendments and interpretations effective after 1 April 2023 and have not been early adopted
A number of new standards, amendments to standards and interpretations are effective for the annual periods beginning on or after 1
April 2023 and have not been early adopted in preparing these financial statements. None of these are expected to have a material
effect on the financial statements of the Company.
SEED Innovations Limited (the “Company”) is an authorised closed-ended investment scheme. The Company is domiciled and
incorporated as a limited liability company in Guernsey. The registered office of the Company is PO Box 343, Obsidian House, La Rue
D'Aval, Vale, GY6 8LB.
The Company's objective is to invest in disruptive technologies with significant intellectual property rights which they are seeking to
exploit, principally within the technology sector (including digital and content focused businesses), life sciences sectors (including
biotech and pharmaceuticals) and health and wellness sectors. This includes investing in the cannabinoid sector where there has been
increased investor momentum due to regulation changes, and as companies’ profiles grow and investment in the sector becomes more
mainstream. The Company’s main geographical focus will be in North America and Europe though investments may also be considered
in other regions to the extent that the Board considers that valuable opportunities exist, and positive returns can be achieved. The
objective of the Company is to also provide its investors with exposure to disruptive growth opportunities, with a mix of liquid, pre-liquid
and longer term investments, which taken together greatly reduces the risk of the portfolio whilst giving much clearer visibility on
potential returns.
The financial statements of the Company have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the
International Accounting Standards Board (“IASB”) and applicable legal and regulatory requirements of the Companies (Guernsey) Law,
2008. The financial statements have been prepared under the historical cost convention except for financial assets at fair value through
profit or loss.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in Note 4.
The Company’s Ordinary Shares are quoted on AIM, a market operated by the London Stock Exchange and is authorised as a Closed-
ended investment scheme by the Guernsey Financial Services Commission (the "GFSC") under Section 8 of the Protection of Investors
(Bailiwick of Guernsey) Law, 2020 and the Authorised Closed-Ended Investment Schemes Guidance and Rules 2021.
There are no standards, amendments to standards or interpretations that are effective for the annual period beginning on or after 1
April 2023 that have a material effect on the financial statements of the Company.
In the current year, the Company has adopted all the applicable new and revised standards and interpretations issued by the IASB and
the International Financial Reporting Interpretations Committee ("IFRIC") of the IASB that are relevant to its operations and effective for
annual reporting periods beginning on or after 1 April 2023. The adoption of the standards and interpretations has not had a significant
impact on the content or presentation of these financial statements; refer below for additional consideration.
26
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
3. Material Accounting Policies
a) Investment Income
b) Expenses
c) Taxation
d) Financial instruments
(i) Recognition and initial measurement
(ii) Classification
Business model assessment
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
•
•
Investment income is recognised on an accruals basis using the effective interest method and includes bank interest and interest from
debt securities. Dividend income from investments designated at fair value through profit or loss is recognised through the Statement of
Comprehensive Income within dividend income when the Company’s right to receive payments is established.
the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”).
Financial instruments are classified into financial assets and financial liabilities. Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual provisions of the financial instrument.
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
Financial assets at fair value through profit or loss are initially recognised at fair value, with transaction costs recognised in profit or loss.
Financial assets or financial liabilities not at fair value through profit or loss are initially recognised at fair value plus transaction costs
that are directly attributable to its acquisition or issue.
All expenses are accounted for on an accruals basis and, with the exception of share issue and share buyback costs, are charged through
the Statement of Comprehensive Income in the period in which they are incurred. Costs of issuing and buying back equity instruments
are accounted for as a deduction from equity, net of any related income tax benefit.
The material accounting policies applied in the preparation of these financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
Financial assets at fair value through profit or loss are recognised initially on the trade date, which is the date on which the Company
becomes a party to the contractual provisions of the instrument. Other financial assets and liabilities are recognised on the date they are
originated.
The Company is exempt from taxation in Guernsey. However, in some jurisdictions, investment income and capital gains are subject to
withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment
income, if any, in the Statement of Comprehensive Income. For the purpose of the Statement of Cash Flows, cash inflows from financial
assets are presented net of withholding taxes when applicable.
On initial recognition, the Company classifies financial assets as measured at amortised cost or fair value through profit or loss
(“FVTPL”).
27
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
3. Material Accounting Policies (continued)
All other financial assets are classified as measured at FVTPL.
•
• how the performance of the portfolio is evaluated and reported to the Company’s management;
•
•
•
The Company has determined that it has two business models:
•
•
(iii) Assessment whether contractual cash flows are SPPI
In making the assessment, the Company considers:
• contingent events that would change the amount and timing of cash flows;
• leverage features;
• prepayment and extension terms;
• terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse loans); and
• features that modify consideration of the time value of money (e.g. periodical reset of interest rates).
(iv) Reclassification
how the Investment Manager is compensated: e.g. whether compensation is based on the fair value of the assets managed or
the contractual cash flows collected; and
In assessing whether the contractual cash flows are SPPI, the Company considers the contractual terms of the instrument. This includes
assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such
that it would not meet this condition.
Financial assets are not reclassified subsequent to their initial recognition unless the Company was to change its business model for
managing financial assets, in which case all affected financial assets would be reclassified on the first day of the first reporting period
following the change in the business model.
Other business model: this includes investment in unquoted securities that were not held for trading purposes. These financial
assets are managed and their performance is evaluated, on a fair value basis.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this
purpose, consistent with the Company’s continuing recognition of the assets.
the documented investment strategy and the execution of this strategy in practice. This includes whether the investment
strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration
of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the
sale of the assets;
Held-to-collect business model: this includes cash and cash equivalents and other receivables. These financial assets are held
to collect contractual cash flows; and
For the purpose of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined
as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular
period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin.
In making an assessment of the objective of the business model in which a financial asset is held, the Company considers all of the
relevant information about how the business is managed, including:
the risks that affect the performance of the business model (and the financial assets held within that business model) and
how those risks are managed;
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations
about future sales activity.
28
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
3. Material Accounting Policies (continued)
(v) Subsequent measurement
Financial assets at fair value through profit or loss
Financial assets at amortised cost
(vi) Financial liabilities – classification and subsequent measurement
Non - derivative financial liabilities
(vii) Fair value measurements
The fair value of financial assets and liabilities that are not traded in an active market is determined using valuation techniques in
accordance with the International Private Equity and Venture Capital Valuation (IPEV) Guidelines. The Company uses a variety of
methods and makes assumptions that are based on market conditions existing at each reporting date. Valuation techniques used include
the use of comparable recent ordinary transactions between market participants, reference to other instruments that are substantially
the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants
making the maximum use of market inputs and relying as little as possible on entity-specific inputs.
The Company classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are
recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities
are measured at amortised cost using the effective interest method. Other liabilities include other payables and accruals.
The Company initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other
financial liabilities (including liabilities designated as at fair value through profit or loss) are recognised initially on the trade date, which
is the date that the Company becomes a party to the contractual provisions of the instrument. The Company derecognises a financial
liability when its contractual obligations are discharged, cancelled or expired.
If a significant movement in fair value occurs subsequent to the close of trading up to midnight on the year end date, valuation
techniques will be applied to determine the fair value. A significant event is any event that occurs after the last market price for a
security, close of market or close of the foreign exchange, but before the Company’s valuation time that materially affects the integrity
of the closing prices for any security, instrument, currency or securities affected by that event so that they cannot be considered ‘readily
available’ market quotations.
These assets are subsequently measured at amortised cost using the effective interest method. Interest income is recognised in ‘interest
income on financial assets at fair value through profit or loss’, foreign exchange gains and losses are recognised in the Statement of
Comprehensive Income. Any gain or loss on derecognition is also recognised in profit or loss.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value of financial assets and liabilities traded in active markets (such as publicly traded
derivatives and trading securities) are based on quoted market prices at the close of trading on the reporting date. The Company utilises
the last traded market price for both financial assets and financial liabilities where the last traded price falls within the bid-ask spread. In
circumstances where the last traded price is not within the bid-ask spread, management will determine the point within the bid-ask
spread that is most representative of fair value.
These assets are subsequently measured at fair value. Net gains and losses, excluding any interest or dividend income and including
foreign exchange gains and losses are recognised in profit or loss in the Statement of Comprehensive Income.
29
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
3. Material Accounting Policies (continued)
Transfers between levels of the fair value hierarchy
(viii) Amortised cost measurement
(ix) Impairment
The Company recognises loss allowances for Expected Credit Losses (“ECL”) on financial assets measured at amortised cost.
• Financial assets that are determined to have low credit risk at the reporting date; and
•
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Company considers a financial asset to be in default:
•
• the financial asset is more than 90 days past due.
The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month
ECLs:
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the
interest income or interest expense over the relevant year. The effective interest rate is the rate that exactly discounts estimated future
cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net
carrying amount of the financial asset or financial liability at initial recognition. When calculating the effective interest rate, the
Company estimates the future cash flows considering all contractual terms of the financial instruments but not the future credit losses.
when the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions
such as realising assets (if any is held); or
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating
ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This
includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit
assessment and including forward-looking information.
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).
Where transfers between levels of the fair value hierarchy occur, they are deemed to have occurred at the beginning of the reporting
period.
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit
risk.
The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at
initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any
difference between the initial amount recognised and the maturity amount and for financial assets adjusted for any loss allowance.
Other financial assets and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the
asset) has not increased significantly since initial recognition.
30
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
3. Material Accounting Policies (continued)
Measurement of ECLs
ECLs are discounted at the effective interest rate of the financial asset.
Credit-impaired financial assets
Evidence that a financial asset is credit-impaired includes the following observable data:
• significant financial difficulty of the borrower or issuer;
• it is probable that the borrower will enter bankruptcy or other financial reorganisation;
• the underlying project is put on hold; and
• breach of contract such as a default or being more than 90 days past due.
Presentation of allowance for ECLs in the statement of financial position
Write-off
(x) Derecognition
• The rights to receive cash flows from the asset have expired; or
•
• Either (a) the Company has transferred substantially all the risks and rewards of the asset; or
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. Impairment
losses including reversals of impairment losses and gains are disclosed separately in the statement of profit or loss and other
comprehensive income.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to
receive).
The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial
asset in its entirety or a portion thereof.
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and
At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is
‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have
occurred.
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred
control of the asset.
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where:
31
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
3. Material Accounting Policies (continued)
(xi) Offsetting
e) Cash and cash equivalents
f) Foreign currency translation
Functional and presentation currency
Transactions and balances
g) Net assets per share
h) Earnings/(Loss) per share
Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing:
•
•
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement and
has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is
recognised to the extent of the Company’s continuing involvement in the asset. The Company derecognises a financial liability when the
obligation under the liability is discharged, cancelled or has expired.
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only
when, the Company has a legal right to offset the amounts and it intends either to settle on a net basis or to realise the asset and settle
the liability simultaneously.
the profit or loss attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares;
Cash comprises of cash at bank. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts
of cash, are subject to an insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments
rather than for investment or other purposes.
Income and expenses are presented on a net basis for gains and losses from financial instruments at fair value through profit or loss and
foreign exchange gains and losses.
The net assets per Ordinary Share disclosed on the face of the Statement of Financial Position is calculated by dividing the net assets of
the Company as at the year-end by the number of Ordinary Shares in issue at the year end.
Foreign currency transactions are translated into the functional currency using rates approximating to the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised through the
Statement of Comprehensive Income. Translation differences on non-monetary financial assets and liabilities, such as financial assets
designated at fair value through profit or loss, are recognised through the Statement of Comprehensive Income within the net
unrealised change in fair value of investments.
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements, if any,
in ordinary shares issued during the year and excluding treasury shares.
The Company’s Ordinary Shares are denominated in Sterling and are traded on AIM in Sterling. The primary activity of the Company is
detailed in the Investing Policy on page 10. The performance of the Company is measured and reported to the investors in Sterling and
the majority of the expenses incurred by the Company are in Sterling. Consequently, the Board of Directors considers that Sterling is the
currency that most faithfully represents the effects of the underlying transactions, events and conditions. The financial statements are
presented in Sterling, which is the Company’s functional and presentation currency. All amounts are rounded to the nearest thousand.
32
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
3. Material Accounting Policies (continued)
Diluted earnings/(loss) per share
Diluted earnings/(loss) per share adjusts the figures used in the determination of basic earnings/(loss) per share to take into account:
•
•
i) Transaction costs
j) Equity
Share Capital
Employee Share Option Reserve
Other Distributable Reserve
k) Going concern
4. Critical Accounting Estimates and Judgements
Ordinary shares are classified as equity. Where the Company purchases its own equity share (e.g. as the result of a share buyback), the
consideration paid, including any directly attributable incremental costs, is deducted from equity attributable to the owners of the
Company as Treasury Shares until the shares are cancelled or reissued. The Company will present any Treasury Shares acquired in the
Statement of Changes in Equity as a deduction from Ordinary Shares.
Transaction costs are the incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or
financial liability. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the
financial instrument. Transaction costs are legal and professional fees incurred to structure a deal to acquire the investments designated
as financial assets at fair value through profit or loss. They include the upfront fees and commissions paid to agents, advisers, brokers
and dealers and due diligence fees.
The Directors note that the Company has sufficient cash and cash equivalent resources to meet its obligations for at least one year after
the approval of these financial statements.
After making reasonable enquiries, and assessing all data relating to the Company’s liquidity, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and do not
consider there to be any threat to the going concern status of the Company. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
the after tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
The Company's cumulative profits and losses are known as distributable reserves. From time to time, the Company may transfer any
sum that it considers to be realised to the distributable reserve (for example, if ordinary shares are sold for more than their par value,
the excess will be moved to other distributable reserves).
The preparation of financial statements in conformity with IFRS requires the Board to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these estimates.
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.
Employee share options are valued when they are granted using the current accounting standard's fair value technique. However, the
value of the options may be calculated at the conclusion of the vesting period or when they are exercised.
The Board makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual results.
33
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
4. Critical Accounting Estimates and Judgements (continued)
Judgements
Assessment as an investment entity
•
•
•
Estimates and assumptions
Fair value of securities not quoted in an active market.
Although the Company met all three defining criteria, management has also assessed the business purpose of the Company, the
investment strategies for the private equity investments, the nature of any earnings from the private equity investments and the fair
value model. Management made this assessment in order to determine whether any additional areas of judgement exist with respect to
the typical characteristics of an investment entity versus those of the Company. Management have therefore concluded that from the
assessments made, the Company meets the criteria of an investment entity within IFRS 10.
the Company has raised the commitments from a number of investors in order to raise capital to invest and to provide
investor management services with respect to these private equity investments;
the Company evaluates its investment performance on a fair value basis, in accordance with the policies set out in these
financial statements.
the Company intends to generate capital and income returns from its investments which will, in turn, be distributed to the
investors; and
The Company may value positions by using its own models or commissioning valuation reports from professional third-party valuers. The
models used in either case are based on valuation methods and techniques generally recognised as standard within the industry and in
accordance with International Private Equity and Venture Capital Valuation (IPEV) Guidelines. The inputs into these models are primarily
revenue or earnings multiples and discounted cash flows. The inputs in the revenue or earnings multiple models include observable data,
such as the earnings multiples of comparable companies to the relevant portfolio company, and unobservable data, such as forecast
earnings for the portfolio company. In discounted cash flow models, unobservable inputs are the projected cash flows of the relevant
portfolio company and the risk premium for liquidity and credit risk that are incorporated into the discount rate. In some instances, the
cost of an investment is the best measure of fair value in the absence of further information. Models are calibrated by back-testing to
actual results/exit prices achieved to ensure that outputs are reliable, where possible.
In determining the Company meeting the definition of an investment entity in accordance with IFRS 10, it has considered the following:
Part of the assessment in relation to meeting the business purpose aspects of the IFRS 10 criteria also requires consideration of exit
strategies. Given that the Company does not intend to hold investments indefinitely, management have determined that the Company’s
investment plans support its business purpose as an investment entity.
The Board has also concluded that the Company meets the additional characteristics of an investment entity, in that: it holds more than
one investment; the investments will predominantly be in the form of equities, derivatives and similar securities; it has more than one
investor and the majority of its investors are not related parties.
The Directors believe that the underlying assumptions are appropriate and that the financial statements are fairly presented. Estimates
and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are outlined below:
34
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
4. Critical Accounting Estimates and Judgements (continued)
5. Segmental Information
6. Administration Fees
7. Directors' Remuneration
The Board agreed the following compensation packages for the Directors of the Company.
• Ian Burns is entitled to an annual remuneration of £36,000 (2023: £36,000).
•
• Lance De Jersey is entitled to an annual remuneration of £106,000 (2023: £106,000).
• Luke Cairns is entitled to an annual remuneration of £36,000 (2023: £36,000).
• Alfredo Pascual is entitled to an annual remuneration of €106,000 (£90,598) (2023: Nil).
The Chief Operating Decision Maker, which is the Board, is of the opinion that the Company is engaged in a single segment of business,
through its portfolio of investments in early stage businesses, with the aim of providing capital appreciation. The financial information
used by the Chief Operating Decision Maker to manage the Company presents the business as a single segment.
Segment information is measured on the same basis as that used in the preparation of the Company’s Financial Statements.
The Company receives no revenues from external customers. Other than its investments, the Company holds no non-current assets in
any geographical area other than Guernsey.
Ed McDermott is entitled to an annual remuneration of £161,063 (2023: £161,760).
The determination of what constitutes ‘observable’ requires significant judgement by the Company. The Company considers observable
data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by
independent sources that are actively involved in the relevant market.
In the year ended 31 March 2024, a total of £43,628 (2023: £40,759) was charged to the Statement of Comprehensive Income for
Obsidian, of which £4,033 was payable at the financial reporting date (2023: £3,333).
The Administrator is also entitled to recover by way of reimbursement from the Company, transaction costs associated with the
provision of specific services and reasonable out-of-pocket expenses incurred in the performance of its services to include any of the
Administrator’s approved services.
Models use observable data, to the extent practicable. However, areas such as credit risk (both own and counterparty), volatilities and
correlations require management to make estimates. Changes in assumptions about these factors could affect the reported fair value of
financial instruments. The sensitivity to unobservable inputs is based on management’s expectation of reasonable possible shifts in these
inputs, taking into consideration historical volatility and estimations of future market movements.
Obsidian Fund Services Limited (“Obsidian”) was the Administrator of the Company during the year and was entitled to an
administration fee of £40,000 per annum with an additional fee of £500 per Board or Committee meeting above the eight meetings
covered by the administration fee.
35
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
7. Directors' Remuneration (continued)
Additional information on Directors' Remuneration is noted in related parties. Refer to note 18.
Year ended 31 March 2024
Total
£'000
£'000
£'000
£'000
Ian Burns
36
-
-
36
Ed McDermott
161
-
-
161
Lance De Jersey
106
-
-
106
Luke Cairns
36
-
-
36
Alfredo Pascual
46
-
-
46
385
-
-
385
Year ended 31 March 2023
Total
£'000
£'000
£'000
£'000
Ian Burns
36
-
-
36
Ed McDermott
162
-
30
192
Lance De Jersey
106
-
-
106
Luke Cairns
36
-
-
36
Alfredo Pascual
-
-
-
-
340
-
30
370
8. Other Expenses
Year ended
Year ended
£'000
£'000
Regulatory and listing fees
26
27
Directors' and Officers' liability insurance
37
10
IT Costs
6
7
Consultancy fees
36
43
Salaries and Wages
26
84
Other expenses
76
12
207
183
9. Tax effects of other comprehensive income
31 March 2023
The Income Tax Authority of Guernsey has granted the Company exemption from Guernsey income tax under the Income Tax (Exempt
Bodies) (Guernsey) (Amendment) Ordinance, 2012 and the income of the Company may be distributed or accumulated without
deduction of Guernsey income tax. Exemption under the above mentioned Ordinance entails payment by the Company of an annual fee
of £1,200 for the calendar year ended 31 December 2023 and £1,600 from 1 January 2024 for each year in which the exemption is
claimed. It should be noted, however, that interest and dividend income accruing from the Company’s investments may be subject to
withholding tax in the country of origin.
Discretionary
Bonus
Recognition
of share
based
expense
Discretionary
Bonus
Directors’
Remuneration
Directors’
Remuneration
31 March 2024
Recognition
of share
based
expense
36
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
9. Tax effects of other comprehensive income (continued)
10. (Loss)/Earnings per Ordinary Share
11. Dividends
There were no tax effects arising from the other comprehensive income disclosed in the Statement of Comprehensive Income (2023:
The loss per Ordinary Share of 1.01p (2023: loss per Ordinary Share of 2.10p) is based on the loss for the year of £2,119,521 (2023: loss
£4,458,743) and on a weighted average number of 208,840,402 Ordinary Shares in issue during the year (2023: 212,747,395 Ordinary
Shares).
There are no dilutive effects on earnings per Ordinary Shares as all issued Options and Warrants expired without exercise during the
prior year.
12. Financial Assets designated at fair value through profit or loss
£'000
£'000
Fair value of investments brought forward
16,019
19,524
Purchases during the year
216
443
Proceeds from disposals during the year
(7,694)
(158)
Interest capitalised on convertible loan notes held
-
102
Realised gains/(losses) on disposals during the year
1,077
(836)
Net unrealised loss on revaluation of investments
(2,296)
(3,056)
7,321
16,019
13. Fair value of financial instruments
• Level 3 - Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs).
31 March 2023
During the year ended 31 March 2024, no dividend was paid to shareholders (2023: £Nil). The Directors do not propose a final dividend
for the year ended 31 March 2024 (2023: £Nil).
IFRS 13 requires the Company to classify financial instruments at fair value using a fair value hierarchy that reflects the significance of
the inputs used in making the measurement. The fair value hierarchy has the following levels:
• Level 2 - Those involving inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices); and
If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement
is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires
judgement, considering factors specific to the asset or liability.
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of
the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is
assessed against the fair value measurement in its entirety.
• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the year-end
date;
31 March 2024
The determination of what constitutes ‘observable’ requires judgement by the Company. The Company considers observable data to be
that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by
independent sources that are actively involved in the relevant market.
Post year-end on 16 April 2024, the Company declared a special dividend of 1.0 pence (£0.01) per Ordinary Share.
37
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
13. Fair value of financial instruments (continued)
• Income approach (utilising Discounted Cash Flow, Replacement Cost and Net Asset approaches);
• Price of a recent transaction when transaction price/cost is considered indicative of fair value; and
• Proposed sale price.
Aggregate
Range
(input)
Sensitivity
Valuation Basis
Valuation
£’000
£'000
£'000
6,773
n/a
n/a
-25% / 25%
(1,693)
1,693
Cost
-
Quoted price
548
Total
7,321
£'000
£'000
Fair value of investments brought forward
811
2,632
Purchases during the year
-
-
Disposals proceeds during the year
-
(104)
Realised gains on disposals during the year
-
4
Net unrealised change in fair value
(263)
(1,721)
Fair value of investments carried forward
548
811
• Market approach (utilising EBITDA or Revenue multiples, industry value benchmarks and available market prices approaches);
As at 31 March 2024, 2 investments were valued as Level 1 investments within the fair value hierarchy, with the value being taken from
the published bid price available as at that date (2023: 2 investments).
The remaining six investments were included within the Level 3 category and subject to a Level 3 valuation approach.
A reconciliation of the opening and closing balances of assets designated at fair value through profit or loss classified as Level 1 is shown
below:
Where investments are considered to be Level 3 investments for valuation purposes, it is required under IFRS 13 that information be
provided about the significant unobservable inputs used in the fair value measurement. In the case of the Company a balance is
necessary in providing commentary on such inputs, whilst at the same time not disclosing information about these private companies
which they have indicated cannot be published (primarily for competitive reasons). The table below provides a summary of the
valuations subject to unobservable inputs across the Company’s investment portfolio, split by valuation methodology and an indicative
aggregate value of the effect of either a more positive or negative valuation approach, without publication of specific metrics which
could be identified as relating to any one investee company.
Effect on fair value
31 March 2024
31 March 2023
Price
of
recent
transaction
(deal price)
The valuations used to determine fair values are validated and periodically reviewed by experienced personnel, in most cases this
validation and review is undertaken by members of the Board, however professional third-party valuation firms are used for some
valuations and the Company also has access to a network of industry experts by virtue of the personal networks of the directors and
substantial shareholders. The valuations prepared by the Company or received from third parties are in accordance with the IPEV
Guidelines. The valuations, when relevant, are based on a mixture of:
38
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
13. Fair value of financial instruments (continued)
£'000
£'000
Fair value of investments brought forward
15,208
16,892
Purchases during the year
216
443
Disposals proceeds during the year
(7,694)
(54)
Capitalised interest on loan
-
102
Realised gains/(losses) on disposals during the year
1,077
(840)
Net unrealised change in fair value
(2,034)
(1,335)
Fair value of investments carried forward
6,773
15,208
£'000
£'000
Level 1
548
811
Level 2
-
-
Level 3
6,773
15,208
Total
7,321
16,019
14. Other receivables
£'000
£'000
Prepaid expenses
43
50
Other receivables
2,383
-
2,426
50
15. Payables and accruals
£'000
£'000
Administration fees
4
3
Audit fees
18
30
Legal & professional fees
3
6
Other accrued expenses
3
28
28
67
The Company has made a provision at a default rate of 100% for £108,314 (2023: £Nil) for an outstanding receivable due from a loan
note issued to SWB. See Note 21 for further details.
31 March 2024
31 March 2023
31 March 2024
31 March 2023
31 March 2024
31 March 2023
31 March 2023
A reconciliation of the opening and closing balances of assets designated at fair value through profit or loss classified as Level 3 is shown
below:
31 March 2024
39
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
16. Share Capital, Warrants, Options, Treasury shares and Other distributable reserves
Authorised:
£'000
£'000
19,100
19,100
900
900
20,000
20,000
Allotted, called up and fully paid:
(i)
2,020
2,127
(ii)
-
-
Share options
(iii)
-
-
Warrants
(vi)
Treasury Shares:
(v)
132
25
(i) Ordinary Shares
During the year 10,714,500 Ordinary Shares were bought by the Company as part of a share buyback programme.
(ii) Deferred Shares
There were no changes to the number of deferred shares during the year.
(iii) Options
There are no options outstanding.
(iv) Directors’ Authority to Allot Shares
Nil Deferred Shares of 0.9p (2023: Nil)
-
The Directors are generally and unconditionally authorised to exercise all the powers of the Company to allot relevant securities. The
Directors may determine up to a maximum aggregate nominal amount of 50% of the issued share capital during the period until the
following Annual General Meeting. The Guernsey Companies Law does not limit the power of Directors to issue shares or impose any pre-
emption rights on the issue of new shares.
202,032,895 Ordinary Shares of 1p (2023:
212,747,395 Ordinary Shares)
1,910,000,000 Ordinary Shares of 1p
(2023: 1,910,000,000 Ordinary Shares)
100,000,000 Deferred Shares of 0.9p
(2023: 100,000,000 Deferred Shares)
31 March 2024
31 March 2023
-
13,186.946 Treasury Shares of 1p
(2023: 2,472,446)
40
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
16. Share Capital, Warrants, Options, Treasury shares and Other distributable reserves (continued)
(v) Shares held in Treasury
(vi) Warrants
(vii) Other Distributable Reserves
£'000
£'000
Opening balance as at 1 April
13,905
18,122
Total comprehensive loss for the year
(2,120)
(4,459)
Ordinary Share buyback
(201)
-
Transfer of value of lapsed options
-
242
Closing Balance as at 31 March
11,584
13,905
17. Net Assets per Ordinary Share
Basic and diluted
18. Related Parties
(i) Directors’ remuneration
Ian Burns
Ed McDermott
As part of a share buyback programme, share repurchases in the year saw the number of Ordinary Shares held as Treasury shares
increase to 13,186,946 (2023: 2,472,446).
Mr Burns received an annual remuneration of £36,000 (2023: £36,000) with no discretionary bonus for the year (2023: Nil). There was
no payable at the financial reporting date (2023: nil).
Mr Burns is the legal and beneficial owner of Smoke Rise Holdings Limited, which held 1,674,024 (0.83%) Ordinary Shares (2023:
1,674,024) in the Company at 31 March 2024 and the date of signing this report.
31 March 2023
Mr McDermott held 4,680,000 (2.32%) Ordinary Shares (2023: 4,680,000) in the Company at 31 March 2024 and at the date of signing
this report.
31 March 2024
The Directors’ remuneration for the year ended 31 March 2024 is disclosed in note 7. The Directors consider that there is no immediate
or ultimate controlling party.
The basic and diluted net asset value per Ordinary Share is based on the net assets attributable to equity shareholders of £13,604,000
(2023: £16,032,000) and on 202,032,895 Ordinary Shares (2023: 212,747,395 Ordinary Shares) in issue at the end of the year. As all
Warrants and Options expired unexercised during the prior year there was no dilutive effect as at 31 March 2024.
Mr McDermott received annual remuneration of £161,063 (2023: £161,760) which included pension contributions of 1.1% of salary.
There was no discretionary bonus (2023: Nil). There was no payable at the financial reporting date (2023: £13,168).
Mr McDermott is entitled to an annual remuneration of £160,000 effective 1 April 2021.
There are no warrants outstanding.
Mr McDermott is Co-chairman of Clean Food Group as disclosed in the Investment Portfolio Report on page 7.
41
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
18. Related Parties (continued)
Lance De Jersey
Luke Cairns
Alfredo Pascual
(ii) Administrator of the Company
(iii) Digital Marketing
19. Financial Risk Management
During the year the Company contracted with G-Force Media, a digital content creator and digital marketer. Ed McDermott, a Director
of the Company, is a one third shareholder of G-Force Media. During the year the Company paid £12,000 (2023: Nil) to G-Force Media.
Obsidian Fund Services Limited (“Obsidian”) was the Administrator of the Company during the year and was entitled to an
administration fee of £40,000 per annum with an additional fee of £500 per Board or Committee meeting above the eight meetings
covered by the administration fee.
Mr Cairns received annual remuneration of £36,000 (2023: £36,000) with no discretionary bonus (2023: Nil). There was no payable at
the financial reporting date (2023: nil).
In the year ended 31 March 2024, a total of £43,628 (2023: £40,759) was charged to the Statement of Comprehensive Income for
Obsidian, of which £4,033 was payable at the financial reporting date (2023: £3,333).
Mr Pascual, Executive Director of the Company is entitled to annual remuneration of€106,000 (£90,598) per annum, effective from the
date of his appointment on 1 September 2023.
Mr Pascual received annual remuneration of £71,781 (2023: £63,833) with no discretionary bonus (2023: Nil). There was no payable at
the financial reporting date (2023: nil).
Mr Cairns, Non-Executive Director of the Company is entitled to annual remuneration of £36,000 per annum, effective from the date of
his appointment on 3 January 2020.
Mr De Jersey, Finance Director of the Company held 400,000 ordinary shares in the Company as at 31 March 2024 and at the date of
signing of this report.
Mr De Jersey received annual remuneration of £106,000 (2023: £106,000). There was no discretionary bonus (2023: Nil). There was no
payable at the financial reporting date of (2023: nil).
The main risks arising from the Company’s financial instruments are credit risk, liquidity risk and market risk, and are set out below,
together with the policies currently applied by the Board for their management. Market risk comprises three types of financial risk, being
interest rate risk, currency risk and other price risk, being the risk that the fair value or future cash flows will fluctuate because of
changes in market prices other than from interest rate and currency risks.
42
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
19. Financial Risk Management (continued)
Treasury policies
The financial assets and liabilities of the Company were:
£'000
£'000
Financial assets at fair value through profit or loss
Investments
7,321
16,019
Financial assets at amortised cost
Other receivables
2,383
-
Cash and cash equivalents
3,885
30
6,268
30
Financial liabilities at amortised cost
Other payables
28
67
Prepayments of £42,900 (2023: £50,000) have been excluded from financial assets.
Credit risk
31 March 2023
31 March 2024
The Company finances its activities with cash, short-term deposits with maturities of three months or less and market traded securities.
Other financial assets and liabilities, such as receivables and payables, arise directly from the Company’s operating activities. Derivative
instruments may be used to change the economic characteristics of financial instruments in accordance with the Company’s treasury
policies.
The credit risk on cash and cash equivalents is limited by using banks with high credit ratings assigned by international credit-rating
agencies. At the year end, an amount of cash and cash equivalents of £3,728,206 was placed with HSBC Bank plc (2023: £22,977). The
Moody’s counterparty risk rating for HSBC Bank plc was A3 as at 31 March 2024.
The Company’s activities may give rise to settlement risk. ‘Settlement risk’ is the risk of loss due to the failure of an entity to honour its
obligations to deliver cash, securities or other assets as contractually agreed. For the majority of transactions, the Company mitigates
this risk by conducting settlements through a broker to ensure that a trade is settled only when both parties have fulfilled their
contractual settlement obligations. Settlement limits form part of the credit approval and limit monitoring processes by the Board.
The objective of the Company’s treasury policies is to manage the Company’s financial risk, secure cost effective funding for the
Company’s operations and to minimise the adverse effects of fluctuations in the financial markets on the value of the Company’s
financial assets and liabilities on reported profitability and on cash flows of the Company.
The Company takes on exposure to credit risk, which is the risk that one party will cause a financial loss for the other party by failing to
discharge an obligation.
The Company’s credit risk is primarily attributable to its cash and cash equivalents, other receivables, short term loans and convertible
loan notes to investees. In order to mitigate credit risk, the Company seeks to trade only with reputable counterparties that the
management believe to be creditworthy.
At the year end the Company held convertible loan notes with a face value of £150,000. In the year £12,500 had been repaid and a
provision made on the remaining outstanding such that the carrying amount at the year end was £Nil (2023: £167,095).
43
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
19. Financial Risk Management (continued)
Liquidity risk
Market risk
(i) Price risk
ii) Currency risk
Liquidity risk is the risk that the Company may not be able to generate sufficient cash resources to settle its obligations in full as they fall
due or can only do so on terms that are materially disadvantageous. The Company invests in private equities, which, by their very
nature, are illiquid. The Company incurs a range of fixed expenses for which it can budget.
Should it be identified that additional cash resources are required, the Company would propose to issue further equity to the market or
to sell part of the investment(s) held in market traded securities.
The contractual undiscounted cash flows of the Company’s financial liabilities, which are equal to the fair value of the Company’s
financial liabilities, comprise of payable within one year to the sum of £28,000 (2023: £57,000). The Company has no contractual
commitment to invest further in any of its existing investments.
The Company regularly holds assets (both monetary and non-monetary) denominated in currencies other than the functional currency
(Sterling). It is therefore exposed to currency risk, as the value of the financial instruments denominated in other currencies will
fluctuate due to changes in exchange rates.
The Company monitors its exposure to foreign exchange rates and, where exposure is considered significant, appropriate measures
would be adopted to minimise these exposures. The proportion of the net financial assets of the Company were denominated in
currencies other than Sterling as follows:
Given the higher levels of market volatility in the current year, the Directors consider 30% (2023: 30%) best represents the margin of
price risk associated with the Company risk. A 30% (2023: 30%) increase/decrease in the fair value of investments would result in a
£163,875 (2023: £242,580) increase/decrease in the net asset value.
As such it can appropriately plan as to how to maintain a sufficient cash balances to meet its working capital requirements.
The investment in these debt instruments is considered to be of an equal risk to the equity investments held in other Level 3 investments
as disclosed in Note 13.
The Company’s private equity investments are susceptible to price risk arising from uncertainties about future values of the private
equity investments or derivative financial instruments. This price risk is the risk that the fair value or future cash flows will fluctuate
because of changes in market prices, whether those changes are caused by factors specific to the individual investment or financial
instrument or its holder or factors affecting all similar financial instruments or investments traded in the market, if any. Investments that
are exposed to price risk are disclosed under level 1 in note 13.
Foreign currency risk, as defined in IFRS 7, arises as the values of recognised monetary assets and monetary liabilities denominated in
other currencies fluctuate due to changes in foreign exchange rates. IFRS 7 considers the foreign exchange exposure relating to non-
monetary assets and liabilities to be a component of market price risk, not foreign currency risk. The Company monitors the exposure on
all foreign-currency-denominated assets and liabilities.
44
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
19. Financial Risk Management (continued)
£'000
£'000
US Dollar
5
4
2,870
3,247
Euro
2,582
22
2,740
9,542
-
-
529
715
8,727
13,529
iii) Interest rate risk
20. Capital Management Policy and Procedures
The Company’s capital structure is derived solely from the issue of Ordinary Shares.
The Board monitors and reviews the structure of the Company’s capital on an ad hoc basis. This review includes:
• The need to obtain funds for new investments, as and when they arise;
• The current and future levels of gearing;
• The current and future dividend policy; and
• The current and future return of capital policy.
• The need to buy back Ordinary Shares for cancellation or to be held in treasury, which takes account of the difference between the net
asset value per Ordinary Share and the Ordinary Share price;
Cash and cash equivalents
Financial assets at fair value through profit and loss
Australian Dollar
Net currency exposure
31 March 2024
31 March 2023
Canadian dollar
Financial assets at fair value through profit and loss
The Company does not currently intend to fund any investments through debt or other borrowings but may do so if appropriate.
Investments in early stage assets are expected to be mainly in the form of equity, with debt potentially being raised later to fund the
development of such assets. Investments in later stage assets are more likely to include an element of debt to equity gearing. The
Company may also offer new Ordinary Shares as consideration as well as cash, thereby helping to preserve the Company's cash for
working capital and as a reserve against unforeseen contingencies including, for example, delays in collecting accounts receivable,
unexpected changes in the economic environment and operational problems.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss
The Company currently funds its operations through the use of equity. Cash at bank, the majority of which was in Euros at the year end,
is held at variable rates. At the year end, the Company’s financial liabilities did not suffer interest and thus were not subject to any
interest rate risk.
At 31 March 2024, if the exchange rate of the US Dollar had strengthened/weakened by 10% against the Sterling, with all other variables
remaining constant, the increase/(decrease) in the profit for the year would amount to +/- £261,341 (2023: +/- £325,061).
At 31 March 2024, if the exchange rate of the Euro had strengthened/weakened by 10% against the Sterling, with all other variables
remaining constant, the increase/(decrease) in the profit for the year would amount to +/- £483,873 (2023: +/- £956,365).
At 31 March 2024, if the exchange rate of the Australian Dollar had strengthened/weakened by 10% against the Sterling, with all other
variables remaining constant, the increase/(decrease) in the profit for the year would amount to +/- £48,133 (2023: £71,475).
Cash and cash equivalents
45
SEED INNOVATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2024
20. Capital Management Policy and Procedures (continued)
The Company is not subject to any externally imposed capital requirements.
21. Events after the Financial Reporting Date
On 12 April the Company received in full second and final instalment of monies from the sale of Fralis LLC (Leap Gaming) of EUR
2,766,048 (GBP 2,364,345).
The Share Buyback programme of Ordinary Shares announced on 29 September 2023 which commenced on 2 October 2023 ended on
31 May 2024. In total the Company purchased 19,797,500 shares at a volume weighted price of £0.0258 (2.58 pence).
On 16 April the Company declared a special dividend of 1.0 pence (£0.01) per SEED Share (the "Special Dividend"). This follows the
Company's realisation of its investment in Leap Gaming as originally announced on 7 December 2022. The Special Dividend was funded
from existing cash reserves and was paid on 13 May 2024 to SEED Shareholders on the register of members of the Company on 26 April
2024 (the "Record Date"), with the SEED Shares being marked ex dividend on 25 April 2024.
On 21 May 2024 the Company received information that the majority equity holding in OTO was being marketed for sale due to concern
around the liquidity and viability of OTO without further investment. The Company treated this as an adjusting event and revalued OTO
to £Nil (2023: £423,292). The Company also made a provision at a default rate of 100% for £108,314 (2023: £Nil) for an outstanding
receivable due from a loan note issued to SWB being repaid by OTO following the sale of SWB to OTO in April 2023.
46