24 December 2024

Agronomics Limited

("Agronomics" or the "Company")

Annual audited results for the year ending 30 June 2024

Notice of AGM

The Board of Agronomics, a leading listed investor in cellular agriculture, is pleased to announce its audited annual results for the year ending 30 June 2024.

Copies of the 2024 Audited Report and Financial Statements are being posted to shareholders and will shortly be available from the Company's website, https://agronomics.im/investors/, in the investor portal section, under the financial reports tab.

The Company will post its Notice of Annual General Meeting ("AGM") to Shareholders at the same time. The AGM will be held at the Sanderson Suite, Claremont Hotel, Loch Promenade, Douglas, Isle of Man IM1 2LX at 10:00 a.m. on 7 February 2025.

 

The Board considers it important that all shareholders should have the opportunity to exercise their voting rights at the AGM. To this end, the Company invites shareholders to complete the voting proxy form as early as possible. Shareholders may also submit questions to the Company Secretary either in writing at the registered office or by email to katie@burnbrae.com prior to the meeting and as early as possible.

 

Financial Highlights

 

-     Net Asset Value per share (NAV) at 30 June 2024 of 15.58 pence (2023: 16.94 pence), a decrease of 8%,

-     Net operating loss of £10,989,608 (2023: net operating profit of £22,373,676), with no Shellbay fee being due for the year (2023: Shellbay fee of £3,372,672),

-     Net unrealised investment losses of £8,342,317 (2023: net unrealised investment gains of £29,703,324),

-     The carrying amount of invested assets is £145,143,166 (2023: £141,773,297), an increase of 2.4%,

-     Cash and cash equivalents and cash deposits stood at £12,235,092 (2023: £28,093,984),

-     Total assets of £157,435,237 (2023: £170,203,091), and

-     Total liabilities of £166,167 (2023: £1,946,093).

 

The Board notes the c £10.9 million decline in the Company's NAV during the year which relates primarily to the following:

-     An unrealised foreign exchange loss of £2.1 million across the portfolio companies where we hold our investments in EUR, USD and AUD, due to negative currency movements against the Company's reporting currency of Pound Sterling during the year.

The USD, EUR and AUD rates had the following movements during the year, contributing to the unrealised foreign exchange loss noted above:

	30 June 2024	30 June 2023	% movement
USD:GBP	1.270	1.262	(0.6%)
EUR:GBP	1.180	1.165	(1.6%)
AUD:GBP	1.913	1.881	(1.7%)

 

-     A write-down of Agronomics position in Geltor Inc of £7.3 million. This adjustment was made in line with the new valuation that was set by the lead of the current round.  

 

-     A complete write-down of Agronomics' position in VitroLabs Inc of £7.8 million was undertaken as communicated previously (see announcement dated28 November 2024 ; and

-     Cash balance reduced by £2.4 million relating to ongoing operating costs.

-     The decrease in NAV is counter-balanced by the following gains:

o  An unrealised gain recognised on California Cultured of £2m, following the company's successful Series A raise;

o  An unrealised gain recognised on Onego Bio of £3.8 million, following the company's successful Series A raise;

o  An unrealised gain recognised on Clean Food Group of £0.7 million, following the company's successful Series A raise; and

o  A write up of the position held in Shiok Meats for £0.4 million following the company's merger with Umami Bioworks.

Operational Highlights

 

There have been several operational highlights throughout the period. During the financial year, the Company made two follow-on investments, had four positive revaluations and saw portfolio companies receive government support and form new strategic partnerships:

·      9 August, 2023, Meatable raised €30 million in its Series B including a contribution of €4 million by Agronomics;

·      5 April 2024, Agronomics invested $10 million into Liberation Labs for the continued construction of its facility in Richmond Indiana. This was followed by an additional $2 million investment in October 2024;

·      14 February 2024, California Cultured announced a partnership with leading Japanese chocolate company Meiji for the production of cell based cocoa products. The partnership involves a 10-year long arrangement for the supply and integration of California Cultured's cell cultured flavanol cocoa powder into an array of products tailored for both the US and Japanese markets;

·      13 March 2024, Agronomics announced its portfolio company Shiok Meats was acquired by UMAMI Bioworks Pte. Ltd. in a share-for-share transaction;

·      26 March 2024, Clean Food Group received a further £2.5 million in funding from Clean Growth Fund Management LLP ("Clean Growth Fund");

·      2 April 2024, Onego Bio successfully raised €27 million in its Series A financing, led by NordicNinja VC with participation of Agronomics for €1.55 million. In addition, Onego Bio secured a further €9.5 million in non-dilutive funding from Business Finland;

·      17 April 2024, Mosa Meat, a cultivated beef production company, successfully raised €40 million to finance scaling of their production processes and market entry;

·      26 April 2024, Solar Foods raised an additional €8 million in funding via Finnish investment organiser Springvest Oyj bringing its total Series B funding to €16 million; and

·      7 May 2024, portfolio company Meatly achieved a significant milestone in developing a protein-free culture medium costing only one pound per litre.

 

Post-period End Highlights

 

·      18 July 2024, Onego Bio Ltd secured €14 million in new funding from the European Innovation Council Accelerator Program and an additional Series A investor;

·      4 September 2024, Galy Co closed an oversubscribed $ 33 million Series B financing led by Breakthrough Energy Ventures LLC, with additional participation from new investors H&M Group Ventures and Industria de Diseño Textil, S.A. (through Mundi Ventures);

·      10 September 2024, Formo Bio GmbH secured $61 million in its Series B funding round, with participation from existing investors. Formo also welcomed new investors Sazaby League, Seven Ventures, Woodline Partners, The Nature Conservancy as well as the REWE Group, Europe's second-largest retailer;

·      24 September 2024, Meatable secured €7.6 million in funding under the Innovation Credit programme from the Netherlands Enterprise Agency; and

·      27 November 2024, All G announced it received regulatory approval for the sale of recombinant bovine lactoferrin in China.

 

Jim Mellon,      Chair of Agronomics Limited, commented:

 

"We continue to have high conviction in the potential of the portfolio and has continued to achieve significant milestones during the financial year and beyond. Since August 2023, eleven of the portfolio companies (representing 51% of NAV) have raised substantial funding rounds, collectively accounting for a substantial proportion of fundraising in the sector during the period.  

 

We have seen a decline in net asset value, driven primarily by unrealised losses and a reduction in the valuations of portfolio companies' Geltor and VitroLabs. We have proactively re-evaluated these positions to be confident that the net asset value is a true reflection of the portfolio. We will continue to focus our efforts on supporting the portfolio and identifying the companies which are emerging as early successes.

A number of our more mature portfolio companies are now turning their attention to scaling their production in order to supply the market with increased quantities of their products. Our focus will be on helping portfolio companies identify strategic partnerships, refine target markets and scale operations in order to capitalise on their commercial traction.  We are looking forward to the upcoming year and are optimistic on the overall outlook for our portfolio and the wider industry."

"

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

About Agronomics

Agronomics is a leading London-listed company focusing on investment opportunities within the field of cellular agriculture. The Company has established a portfolio of over 20 companies in this rapidly advancing sector. It seeks to invest in companies owning technologies with defensible intellectual property that offer new ways of producing food and materials with a focus on products historically derived from animals. These technologies are driving a major disruption in agriculture, offering solutions to improve sustainability, as well as addressing human health, animal welfare and environmental damage. This disruption will decouple supply chains from the environment and animals and improve food security for the world's expanding population. A full list of Agronomics' portfolio companies is available at https://agronomics.im/.

For further information please contact:

Agronomics Limited	Beaumont Cornish Limited	Canaccord Genuity Limited	Cavendish Capital Markets Limited	Peterhouse Capital Limited	SEC Newgate
The Company	Nomad	Joint Broker	Joint Broker	Joint Broker	Public Relations
Jim Mellon Denham Eke	Roland Cornish James Biddle	Andrew Potts Harry Pardoe	Giles Balleny Michael Johnson Charlie Combe	Lucy Williams Charles Goodfellow	Bob Huxford  Anthony Hughes
+44 (0) 1624 639396 info@agronomics.im	+44 (0) 207 628 3396	+44 (0) 207 523 8000	+44 (0) 207 397 8900	+44 (0) 207 469 0936	agronomics@secnewgate.co.uk

 

Nominated Adviser Statement

Beaumont Cornish Limited ("Beaumont Cornish"), is the Company's Nominated Adviser and is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in the announcement or any matter referred to in it.

 

 

Chairman's statement

I am pleased to present the Annual Report for Agronomics Limited ("Agronomics" or the "Company") for the year ended 30 June 2024.

This financial year, Agronomics' portfolio has continued to show significant technological and commercial progress and has achieved some of the largest financings in the sector, raising over $300m since August last year. This is markedly impressive against the backdrop of a challenging macroeconomic environment as well as a period of negative media headlines around lay-offs and commercial difficulties associated with larger players in the industry. We believe this is a real testament to the strength of the technology platforms, IP and management teams within our portfolio which are leading the way to a range of commercial products helping to transform food production towards an industry that is both ethically and environmentally sustainable and economically competitive.

We remain optimistic about the future of cellular agriculture, and our strategy has remained one of consolidation, continuing to support our portfolio of leading companies in the field through follow-on investments. We believe these technologies, including cell culture and precision fermentation, have the potential to address some of the world's most pressing challenges, including global food insecurity and environmental destruction.

Recent global crises, including the COVID-19 pandemic, the war in Ukraine, and climate-related disasters have highlighted the fragility of our existing food systems. Following two years of pandemic-produced shocks that stressed supply chains, the FAO Food price index for staples like vegetable oils and cereals increased by 182% and 68% respectively^[1]. This was immediately followed by Russia's invasion of Ukraine which further shocked the global food supply, as together, Russia and Ukraine export over 50% of the world's seed oils and between 20-30% of the world's corn, barley and wheat.^[2] Additionally, similar price spikes have been experienced in other industries such as the cocoa market. In the year between March 2023 and March 2024, the price of cocoa increased over 232% due to inconsistent rainfall, longer dry spells and fluctuating temperatures, making it challenging and expensive to source ^[3].

As the demand for protein increases globally, it is critical that our food system adapts to be able to increase food production for the growing population in a sustainable way. By decoupling production from conventional methods, cellular agriculture offers an opportunity to meet the increasing demand without the associated environmental damage and a way of diversifying our current supply chains, thereby mitigating exposure to exogenous risks from geopolitical and climate-related events.

Within the field of cellular agriculture, precision fermentation technology is currently the nearest-term opportunity to address the challenges associated with our food system. Precision fermentation is already used for the mass production of rennet, an enzyme used in cheese production, 97% of which is produced via precision fermentation. In addition, precision fermentation-produced ingredients can seamlessly slot into existing supply chains offering functionally identical replacements and price-stable supplies of animal proteins like eggs and dairy. Naturally, precision fermentation infrastructure which will enable the scale-up and commercialisation of biomanufactured proteins, is the nearest term cash generative opportunity. Precision fermentation infrastructure is not a bet on the success of any one company in the field but on the demand for precision fermentation as a means of production. In the last few years, this demand has been increasingly recognised by governments across the world, as they identify biomanufacturing as a strategic priority.

Product-agnostic facilities such as the one being built by Liberation Labs will host a variety of end products from food ingredients to industrial chemicals and biomaterials, further derisking its model. We continue to maintain high conviction in Liberation Labs' management team and business model and invested a further $10 million during the financial year, and a further US$ 2 million post yearend, to support it in advance of its series A round. Liberation Labs currently has LOIs representing over 200% of the available capacity and is nearing the signing of offtake agreements with its first customers for production starting in H2 2025.

In addition to this investment, Agronomics increased its exposure to precision fermentation via follow-on investments in Onego Bio and Clean Food Group, two strong companies in the precision fermentation space focusing on egg proteins and palm oil respectively. Onego Bio closed a €37m round in April, which was shortly followed by another €14m of both equity and non-dilutive funding. This will be used to continue scaling and optimising its production processes, finance its work with its contract manufacturing partners and prepare for FDA filing for regulatory approval in the United States. Agronomics also participated in Clean Food Group's £2.3m pre-series A round which was shortly followed by another £2.5m from Clean Growth Fund Management LLP, a climate-specific UK venture capital fund.

Post yearend, we saw the first approval of cultivated meat in Europe from Agronomics portfolio company Meatly, which also represented the first approval of cultivated pet food globally. This approval was a major milestone not only for Meatly but for the broader industry, signalling the UK as a target market for the commercialisation of cultivated meat. In October of this year, the UK government awarded the Food Standards Agency £1.6m in funding to develop an efficient safety assessment process for novel foods, further supporting the UK's position as an attractive market for cultivated meat.^[4]

Financial Review

The Company recorded a net operating loss of £10,989,608 for the year (2023: net operating profit of £22,373,676) prior to accounting for the fee due to Shellbay Investments Limited ("Shellbay"). During the year, no Shellbay fee was due (2023: £3,372,672). Our investment loss, including net unrealised losses on investment fair valuation, reflected a loss of £8,342,317 (2023: gain of £29,703,324). Unrealised foreign exchange losses of £2,143,477 (2023: losses of £3,364,673) have been recognised in profit and loss. The net operating loss for the year is a result of unrealised fair value investment losses and unrealised foreign exchange losses on investments held, which is detailed in the Investment Review section on page .

 

The carrying amount of invested assets is £145,143,166 (2023: £141,773,297), an increase of 2.4%, and cash and equivalents and bank deposits stood at £12,235,092 (2023: £28,093,984). Our total assets stood at £157,435,237 (2023: £170,203,091). Total liabilities stood at £166,167 (2023: £1,946,093). As a result, the net asset value per share at 30 June 2024 was 15.58 pence (2023: 16.94 pence), an decrease of 8%.

Financing activity

During the year, the Company received warrant exercise notices and issued a total of 5,702 Ordinary Shares, for cash proceeds of £1,680.

Corporate Governance

The Board of Agronomics is committed to best practice in corporate governance throughout the Company. The Directors have agreed to comply with the provisions of the Quoted Companies Alliance ("QCA") Corporate Governance Code for Small and Mid-Size Quoted Companies (2018) to the extent which is appropriate to its nature and scale of operations. Details of the Company's compliance with the QCA can be found on page 9.

Investment Strategy and Outlook

Looking forward, Agronomics' investment strategy will focus on continuing to strengthen our portfolio companies by assisting with expanding and supporting revenue generation opportunities as more companies receive regulatory approval for the commercial sale of their products in their respective target markets. Additionally, through the progress and development of Liberation Labs, we will continue to help expand manufacturing capabilities and off-take agreements to develop biomanufacturing capabilities that can help support the continued growth of the precision fermentation industry.

Post yearend, the Company announced that Shellbay Investments Limited, the adviser to the Company providing portfolio management and investment services, has appointed Dr Philip Boigner as its interim Chief Executive Officer with immediate effect. Dr Boigner serves as Director at New Agrarian Company Limited, an active investor in cell agriculture and fermentation technologies (and an affiliate of Agronomics, having a number of portfolio companies in common). Dr Philip Boigner, together with the Board, will ensure investors understand the great value opportunity that exists currently, the enormous strides that have been made by companies in the portfolio recently, and the great potential of these technologies.

Jim Mellon

Executive Chairperson

23 December 2024

Investment Review

During the year, the Company made two follow-on investments, had four positive revaluations and saw portfolio companies receive government support and form new strategic partnerships:

●      9 August 2023, Agronomics co-led portfolio company Meatable's €30 million Series B round with a €4 million investment alongside New Agrarian Company Limited.

●      14 August 2023, Agronomics invested £0.7 million in portfolio company Clean Food Group's £2.3 million pre-Series A financing round. The round was led by Alianza Team, a leading South American food company which has 75 years of experience and expertise in developing functional, value-add oils and fats products for the world's leading food manufacturers.

●      9 October 2023, portfolio company BlueNalu closed a US$ 33.5 million Series B round led by NEOM with a US$ 20 million investment. The investment was accompanied by the signing of a Memorandum of Understanding (announced on the 1^st of November) betwen BlueNalu for the commercialisation, marketing and distribution of BlueNalu's cultured seafood.

●      16 November 2023, portfolio company Solar Foods closed an €8 million Series B financing round through the Finnish-based investment organiser Springvest.

●      1 December 2023, portfolio company Liberation Labs secured a US$ 25 million loan for its biomanufacturing facility in Richmond, Indiana. The loan was awarded by Ameris Bank which received a loan guarantee from the USDA as part of its "Business and Industry" loan guarantee program.

●      5 December 2023, portfolio company Clean Food Group was awarded government funding towards a £1 million project to accelerate novel low-emission food production systems.

●      14 February 2024, portfolio company California Cultured announced a partnership with leading Japanese chocolate company Meiji for the production of cell based cocoa products. The partnership involves a 10-year long arrangement for the supply and integration of California Cultured's cell cultured flavanol cocoa powder into an array of products tailored for both the US and Japanese markets.

●      13 March 2024, Agronomics announced its portfolio company Shiok Meats was acquired by UMAMI Bioworks Pte. Ltd. in a share-for-share transaction. As disclosed in the audited results for the year ending 30 June 2022, Agronomics' position in Shiok Meats was fully written down. As a result of this transaction, Agronomics now holds an equity ownership of 0.71% in UMAMI Bioworks on a fully diluted basis.

●      26 March 2024, portfolio company Clean Food Group received a further £2.5 million in funding from Clean Growth Fund Management LLP ("Clean Growth Fund").

●      2 April 2024, portfolio company Onego Bio successfully raised €27 million in its Series A financing, led by NordicNinja VC, a Japanese-Nordic VC backing companies in climate and deep tech. In addition, Onego Bio secured a further €9.5 million in non-dilutive funding from Business Finland, a government organisation offering grant funding for innovative Finnish companies that address significant global needs and challenges. Agronomics participated in the round with a €1.55 million investment.

●      5 April 2024, Agronomics invested US$ 10 million in its portfolio company Liberation Labs as part of a wider US$ 12.5 million financing round with participation from existing investor Siddhi Capital. The investment was made in the form of a Secured Convertible Promissory Note ("SCPN"), a form of convertible debt, for the continued construction of its facility in Richmond, Indiana in advance of Liberation Labs' Series A round.

●      17 April 2024, portfolio company Mosa Meat, a leader in cultivated beef production, successfully raised €40 million in new capital to help finance further scaling up of production processes and prepare its products for market entry.

●      26 April 2024, portfolio company Solar Foods raised an additional €8 million in funding via Finnish investment organiser Springvest Oyj bringing its total Series B funding to €16 million.

●      7 May 2024, portfolio company Meatly achieved a significant milestone in developing a protein-free culture medium costing only one pound per litre. Medium costs account for a significant portion of the costs of producing cultivated meat and reducing them is a well-known hurdle the industry faces as it looks to scale up and achieve price parity with conventional meat products.

A reconciliation of investment carrying amounts is as follows:

Investment	30 June 2023   £'000	Capital Invested £'000	Unrealised fair value gain/(loss) £'000	Unrealised foreign exchange gain/(loss) £'000	Accrued interest on loan note £'000	30 June 2024   £'000
All G Foods	7,920	-	-	(9)	-	7,911
Blue Nalu Inc	13,523	-	-	(734)	66	12,855
Bond Pets	742	-	-	(4)	-	738
California Cultured	1,752	-	1,953	(47)	-	3,658
CellX Limited	2,020	-		17	-	2,037
Clean Food Group	5,636	700	648	-	-	6,984
EVERY Company	6,415	-	-	(88)	-	6,327
Formo	9,459	-	-	(151)	-	9,308
Galy Co	2,822	-	(167)	(43)	-	2,612
Geltor Inc	7,561	-	(7,260)	(48)	-	253
Good Protein Fund	99	39	-	(19)	-	119
HydGene Renewables	1,294	-	-	24	-	1,318
Laverock Therapeutics	-	-	48	-	-	48
Liberation Labs Holdings	17,752	7,960	-	(77)	235	25,870
Livekindley Inc	4,401	-	-	(12)	-	4,389
Meatable BV	8,376	3,436	-	9	-	11,821
Meatly	4,959	-	-	-	-	4,959
Mosa Meat B.V.	3,000	-	-	99	-	3,099
Onego Bio	5,970	1,337	3,829	(172)	-	10,964
Seattle Food Tech, Inc.	346	-	-	2	-	348
Solar Foods Oy	11,336	-	-	(96)	21	11,261
SuperMeat	15,584	-	-	(517)	-	15,067
Tropic Biosciences Limited	2,379	-	-	(6)	-	2,373
Umami Bioworks	-	-	380	2	-	382
Vitrolabs	7,798	-	(7,584)	(214)	-	-
Wild Microbes	392	-	-	2	-	394
Legacy Investments	237	-	(189)	-	-	48
	────────	────────	────────	────────	────────	────────
Total	141,773	13,472	(8,342)	(2,082)	322	145,143
	════════	════════	════════	════════	════════	════════

Post Yearend Highlights:

●      17 July 2024, portfolio company Meatly became the first company in the world to receive regulatory clearance for cultivated meat to be sold as pet food, following approval from UK regulators including the Food Standards Authority and the Department for Environment, Food and Rural Affairs. Meatly's cultivated chicken for pet food can now be sold in the UK.

●      18 July 2024, portfolio company Onego Bio secured EUR 14 million in new funding from the European Innovation Council Accelerator Program and an additional Series A investor. In April 2024, Onego Bio announced it closed EUR 37 million in its series A round which, including this new capital, brings Onego Bio's total funding to date to EUR 65 million.

●      3 September 2024, portfolio company Solar Foods announced that it has obtained self-affirmed Generally Recognized as Safe ("GRAS") status in the US for the sale of its single-cell protein, Solein®. Achieving GRAS status is a major step towards Solein's commercialisation and entry into the US market. This is the second approval Solar Foods has secured after the sale of food products containing Solein was approved in Singapore in September 2022.

 

●      4 September 2024, portfolio company Galy closed an oversubscribed US$ 33 million Series B financing led by Breakthrough Energy Ventures LLC, with additional participation from new investors H&M Group Ventures and Industria de Diseño Textil, S.A. (through Mundi Ventures).

 

●      10 September 2024, portfolio company Formo announced it secured US$ 61 million in its Series B funding round to scale its operations. In addition to the raise, Formo's first two products Frischhain and Camembritz, two pioneering products are now available at over 2000 REWE, BILLA and METRO stores across Germany and Austria.

 

●      10 September 2024, portfolio company Solar Foods began trading on the Nasdaq First North Growth Exchange today under the ticker "SFOODS".

 

At 30 June 2024, the following investments are held by the Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Richard Reed

Chairperson Investment Committee

23 December 2024

 

Directors' report

 

The Directors of Agronomics Limited (the "Company") take pleasure in presenting the Directors' report and financial statements for the year ended 30 June 2024.

 

Principal activity

 

Agronomics Limited is a Company domiciled in the Isle of Man. The Company's strategy is to create value for Shareholders through investing in companies that operate in the nascent industry of cellular agriculture, which are environmentally friendly alternatives to the traditional production of meat and plant-based sources.

 

Further details of the investing policy can be found on the Company's website at www.agronomics.im.

 

Results and transfer to reserves

 

The results and transfers to reserves for the year are set out on pages 22 and 24.

 

The Company recorded a net operating loss of £10,989,608 for the year (2023: net operating profit of £22,373,676) prior to accounting for the fee due to Shellbay Investments Limited ("Shellbay"). During the year, as no Shellbay fee was due, net operating loss remains at £10,989,608 (2023: net operating profit, after accounting for the Shellbay Fee, of £22,373,676).

 

The net asset value per share at 30 June 2024 was 15.58 pence (2023: 16.94 pence).

 

Dividend

 

The Directors do not propose the payment of a dividend (2023: £nil).

 

Policy and practice on payment of creditors

 

It is the policy of the Company to agree appropriate terms and conditions for its transactions with suppliers by means of standard written terms to individually negotiated contracts. The Company seeks to ensure that payments are always made in accordance with these terms and conditions.

 

Financial risks

 

Details relating to the financial risk management are set out in note 8 to the financial statements.

 

Directors

 

The Directors who served during the year and to date were:

 

Jim Mellon	Executive Chairperson (appointed as Chairperson on 14 December 2023)
Denham Eke	Executive Finance Director
Richard Reed	Independent Non-Executive (resigned as Chairperson on 14 December 2023)
David Giampaolo	Independent Non-Executive
Marisa Drew	Independent Non-Executive

 

Directors' interests

 

As at 30 June 2024, the interests of the Directors and their families (as such term is defined in the AIM Rules for Companies) in the share capital of the Company are as follows:

	Ordinary shares
	30 June 2024	30 June 2023
Jim Mellon 1	152,287,421	154,553,366
Denham Eke 2	1,551,824	739,390
Richard Reed	6,354,412	6,354,412
David Giampaolo	2,434,783	2,434,783

 

1 - Galloway Limited, a company where Jim Mellon is considered to be the ultimate beneficial owner, holds 147,591,813 shares and 2,313,647 are held by Shellbay Investments Limited, companies which are both indirectly wholly owned by Jim Mellon, and 2,381,961 ordinary shares are held directly by Mr Mellon.

² - Denham Eke is Managing Director of Galloway Limited.

 

Significant shareholdings

 

Except for the interests disclosed in this note, the Directors are not aware of any holding of ordinary shares as at 30 June 2024 representing 3% or more of the issued share capital of the Company:

 

	Number of ordinary shares	Percentage of total issued capital
Jim Mellon 1	152,287,421	15.09%
Hargreaves Lansdown (Nominees)	102,332,851	10.14%
Interactive Investor	58,201,536	5.77%
BlackRock	52,173,346	5.17%
Canaccord Genuity Wealth Management	39,500,000	3.91%
JPMorgan Chase Bank	37,989,575	3.76%

 

Note:

1 - Galloway Limited, a company where Jim Mellon is considered to be the ultimate beneficial owner, holds 147,591,813 shares and 2,313,647 are held by Shellbay Investments Limited, companies which are both indirectly wholly owned by Jim Mellon, and 2,381,961 ordinary shares are held directly by Mr Mellon.

 

Auditors

 

KPMG Audit LLC, being eligible, have expressed their willingness to continue in office.

 

On behalf of the Board

 

 

 

Denham Eke

Finance Director                                                                                                                                                                    

23 December 2024

 

1st Floor, Viking House

St Paul's Square

Ramsey, Isle of Man

IM8 1GB

 

Corporate Governance Statement

 

Corporate Governance Report

 

The Board of Agronomics (the "Board") is committed to best practice in corporate governance throughout the Company. The Directors have agreed to comply with the provisions of the Quoted Companies Alliance ("QCA") Corporate Governance Code for Small and Mid-Size Quoted Companies (2018) to the extent which is appropriate to its nature and scale of operations. This report illustrates how the Company complies with those principles.

QCA Principle 1: Establish a strategy and business model which promotes long-term value for shareholders

The strategy and business operations of the Company are set out in the Chairman's Statement on pages 2 to 3.

The Company's strategy and business model and amendments thereto are developed by the Chairperson and their senior management team and approved by the Board. The management team is responsible for implementing the strategy and managing the business at an operational level.

The Company's overall strategic objective is to develop a profitable and sustainable platform for investing in the nascent industry of modern foods which are environmentally friendly alternatives to the traditional production of meat and plant-based sources of nutrition.

In executing the Company's strategy and operational plans, management will typically confront a range of day-to-day challenges associated with these key risks and uncertainties and will seek to deploy the identified mitigation steps to manage these risks as they manifest themselves.

QCA Principle 2: Seek to understand and meet shareholder needs and expectations

The Company via the Chairperson seeks to maintain a regular dialogue with both existing and potential new shareholders in order to communicate the Company's strategy and progress and to understand the needs and expectations of shareholders.

Beyond the Annual General Meeting, the Chairperson and, where appropriate, other members of the senior management team or Board will meet with investors and analysts to provide them with updates on the Company's business and to obtain feedback regarding the market's expectations of the Company.

The Company's investor relations activities encompass dialogue with both institutional and private investors. From time to time, the Company attends private investor events, providing an opportunity for those investors to meet with representatives from the Company in a more informal setting.

QCA Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Company is aware of its corporate social responsibilities and the need to maintain effective working relationships across a range of stakeholders. These include the Company's advisors, suppliers, and investee companies. The Company's operations and working methodologies take account of the need to balance the needs of all these stakeholders while maintaining focus on the Board's primary responsibility to promote the success of the Company for the benefit of its members as a whole. The Company endeavours to take account of feedback received from stakeholders, and where appropriate, ensures any amendments are consistent with the Company's longer-term strategy.

The Company takes due account of any impact that its activities may have on the environment and seeks to minimise this impact wherever possible.

 

QCA Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Board is responsible for the systems of risk management and internal control and for reviewing their effectiveness. Internal controls are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss. Through the activities of the Company Audit, Risk and Compliance Committee, the effectiveness of these internal controls is reviewed annually.

A comprehensive budgeting process is completed once a year and is reviewed and approved by the Board. The Company's results, compared with the budget, are reported to the Board on a monthly basis.

The Company maintains appropriate insurance cover in respect of actions taken against the Directors because of their roles, as well as against material loss or claims against the Company. The insured values and type of cover are comprehensively reviewed on a periodic basis.

The senior management team meets at least monthly to consider new risks and opportunities presented to the Company, making recommendations to the Board and/or Company Audit, Risk and Compliance Committee as appropriate.

QCA Principle 5: Maintain the board as a well-functioning, balanced team led by the chair

The Company's Board currently comprises three Non-executive Directors and two Executive Directors.

All of the Directors are subject to election by shareholders at the first Annual General Meeting after their appointment to the Board and will continue to seek re-election at least once every three years.

The Board is responsible to the shareholders for the proper management of the Company and intends to meet at least four times a year to set the overall direction and strategy of the Company, to review operational and financial performance and to advise on management appointments. All key operational decisions are subject to Board approval.

Richard Reed, David Giampaolo and Marisa Drew, all Non-executive Directors, are considered to be independent. The QCA Code suggests that a board should have at least two independent Non-executive Directors. The Board considers that the current composition and structure of the Board of Directors is appropriate to maintain effective oversight of the Company's activities for the time being.

Non-executive Directors receive their fees in the form of a basic cash emolument. The current remuneration structure for the Board's Executive and Non-executive Directors is deemed to be proportionate.

 

QCA Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills, and capabilities

The Board considers that the Executive Directors and Non-executive Directors are of sufficient competence and calibre to add strength and objectivity to its activities and bring considerable experience in the operational and financial development of the Company.

The Directors' biographies are detailed on the Company's website www.agronomics.im.

The Board regularly reviews the composition of the Board to ensure that it has the necessary breadth and depth of skills to support the ongoing development of the Company.

The Chairperson, in conjunction with the Finance Director, ensures that the Directors' knowledge is kept up to date on key issues and developments pertaining to the Company, its operational environment and to the Directors' responsibilities as members of the Board. During the course of the year, Directors received updates from the Finance Director and various external advisers on a number of corporate governance matters.

Directors' service contracts or appointment letters make provision for a Director to seek professional advice in furtherance of his or her duties and responsibilities, normally via the Company Secretary.

QCA Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

Internal evaluation of the Board, the Committees and individual Directors is undertaken on an annual basis in the form of peer appraisal and discussions to determine their effectiveness and performance as well as the Directors' continued independence.

The results and recommendations that come out of the appraisals for the Directors shall identify the key corporate and financial targets that are relevant to each Director and their personal targets in terms of career development and training. Progress against previous targets is also assessed where relevant.

QCA Principle 8: Promote a corporate culture that is based on ethical values and behaviours

The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Company's operations. With the Company being a vehicle for holding investment, it has no employees and limited capacity to effect changes in culture in companies it is affiliated with. However, the Board will strive to ensure that the Company's in which it has an interest in, act in an ethical manner.

The Board ensures that all portfolio companies have policies in place to comply with applicable governance laws and regulations, such as anti-bribery and modern-day slavery.

The Board has a zero-tolerance approach to breaches of these laws and regulations. The Board promotes ethical behaviour throughout the portfolio, through directions to the Company's investment advisors in relation to the ethical management of the portfolio.

 

QCA Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision- making by the board

The Role of the Board

The Board is collectively responsible for the long-term success of the organisation. Its principal function is to determine the strategy and policies of the Company within an effective control framework which enables risk to be assessed and managed.

The Board ensures that the necessary financial and human resources are in place for the Company to meet its objectives and that business and management performance is reviewed. Furthermore, the Board ensures that the Company operates within its constitution, relevant legislation and regulation and that proper accounting records and effective systems of business control are established, maintained, documented, and audited.

There are at least four formal Board meetings each year. All Board members have the benefit, at the Company's expense, of liability insurance in respect of their responsibilities as Directors and have access to independent legal or other professional advice if required. The Board has a formal schedule of matters which are reserved for its consideration, and it has established three committees to consider specific issues in greater detail, being the Company Audit, Risk and Compliance, Remuneration and Nomination Committees. The Terms of Reference for each of these Committees are published on the Company's website.

The Chairperson

The Chairperson is responsible for leading the Board, ensuring its effectiveness in all aspects of its role, promoting a culture of openness of debate, and communicating with the Company's members on behalf of the Board. The Chairperson sets the direction of the Board and promotes a culture of openness and debate by facilitating the effective contribution of Non-executive Directors and ensuring constructive relations between Executive and Non-executive Directors. The Chairperson also ensures that Directors receive accurate, timely and clear information. In doing so, this fosters a positive corporate governance culture throughout the Company.

The Chief Executive Officer

At present, the Company does not have a Chief Executive Officer. Instead, the responsibility for managing the Company's business and operations within the parameters set by the Board is held by the Finance Director.

Non-executive Directors

The Non-executive Directors are responsible for bringing independent judgement to the discussions held by the Board, using their breadth of experience and understanding of the business. Their key responsibilities are to constructively challenge and contribute to strategic proposals, and to monitor performance, resources, and standards of conduct, compliance and control, whilst providing support to executive management in developing the Company.

 

The Board has established a Company Audit, Risk and Compliance Committee ("ARCC"), a Remuneration Committee and a Nominations Committee with formally delegated duties and responsibilities. Richard Reed chairs the ARCC, Jim Mellon chairs the Remuneration Committee, and the Nominations Committee is chaired by Richard Reed and comprised of the whole board.

Company Audit, Risk and Compliance Committee

The Company Audit, Risk and Compliance Committee meets at least two times each year is chaired by Richard Reed. The external auditors attend by invitation. Its role is to be responsible for reviewing the integrity of the financial statements and the balance of information disclosed in the accompanying Directors' Report, to review the effectiveness of internal controls and risk management systems and recommend to the Board (for approval by the members) the appointment or re-appointment of the external auditor. The ARCC reviews and monitors the external auditor's objectivity, competence, effectiveness and independence, ensuring that if it or its associates are invited to undertake non-audit work it will not compromise auditor objectivity and independence.

 

Further information can be found within the Company Audit, Risk and Compliance Report contained within this Annual Report.

 

Remuneration Committee

The Remuneration Committee intends to meet at least once a year and comprises of two Non-executive Directors and one Executive Director. It is chaired by Jim Mellon and is responsible for determining the remuneration of the Executive Director, the Company Secretary and other members of the management. Committee members do not take part in discussions concerning their own remuneration.

Further information can be found within the Remuneration Report contained within this Annual Report.

 

Nomination Committee

The Nomination Committee is comprised of the whole Board. It is chaired by the Chairperson of the Board and is responsible for making recommendations to the Board on matters relating to the composition of the Board, including Executive and Non-executive Director succession planning, the appointment of new Directors and the election and re-election of Directors. The Nomination Committee only meets as matters arise.

Appointments to the Board

The principal purpose of the Nomination Committee is to undertake the assessment of the balance of skills, experience, independence and knowledge on the Board against the requirements of the business, with a view to determining whether any shortages exist. Having completed the assessment, the Committee makes recommendations to the Board accordingly. Appointments to the Board are made on merit, with due regard to the benefits of diversity. Within this context, the paramount objective is the selection of the best candidate, irrespective of background, and it is the view of the Board that establishing quotas or targets for the diversity of the Board is not appropriate.

All Director appointments must be approved by the Company's Nominated Adviser, as required under the AIM Rules, before they are appointed to the Board.

Prior to appointment, Non-executive Directors are required to demonstrate that they are able to allocate sufficient time to undertake their duties.

 

Re-election

The Company's Rules require that all Directors are submitted for election at the AGM following their first appointment to the Board. Thereafter all directors will submit themselves for re-election at least once every three years, irrespective of performance.

 

Board and committee attendance

The number of formal scheduled Board and committee meetings held and attended by Directors during the year was as follows: -

 

	Board	ARCC	Nomination	Remuneration
Richard Reed	15/16	2/2	-	-
David Giampaolo	16/16	2/2	-	-
Jim Mellon	16/16	-	-	-
Denham Eke	16/16	2/2	-	-
Marisa Drew*	15/16	-	-	-

 

QCA Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company places a high priority on regular communications with its various stakeholders and aims to ensure that all communications concerning the Company's activities are clear, fair, and accurate. The Company's website is regularly updated, and users can register to be alerted when announcements or details of presentations and events are posted onto the website.

Notices of General Meetings of the Company can be found here: https://agronomics.im/latest-news/.

The results of voting on all resolutions in general meetings are posted to the Company's website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent shareholders.

 

Approval

 

This report was approved by the Board of Directors on 23 December 2024 and signed on its behalf by:

 

 

Denham Eke

Finance Director

 

Audit, Risk and Compliance Committee Report

 

The Directors ensure the Company complies with the provisions of the Quoted Companies Alliance ("QCA") Corporate Governance Code for Small and Mid-Size Quoted Companies (2018) to the extent which is appropriate to its nature and scale of operations.

This report illustrates how the Company complies with those principles in relation to its Audit, Risk and Compliance Committee (the "ARCC").

Membership

The Committee comprises of two Non-Executive Directors, being Richard Reed and David Giampaolo, and one Executive Director, being Denham Eke. The composition of the Committee has been reviewed during the year and the Board is satisfied that the Committee members have the relevant financial experience and the expertise to resource and fulfil its responsibilities effectively, including those relating to risk and controls.

Meetings

The Committee meets two times a year, including the review of the interim and full year results. Other Directors and representatives from the external auditors attend by invitation.

Duties

The Committee carries out the duties below for the Company, as appropriate:

§  Monitors the integrity of the financial statements of the Company, including annual and half-yearly reports, interim management statements, and any other formal announcement relating to financial performance, reviewing significant financial reporting issues and judgements which they contain.

 

§  Reviews and challenges the consistency of the information presented within the financial statements, compliance with stock exchange or other legal requirements, accounting policies and the methods used to account for significant or unusual transactions.

 

§  Keeps under review the effectiveness of the Company's internal controls and risk management systems.

 

§  KPMG Audit LLC was appointed as auditor in 2011 and the ARCC will oversee the relationship with them including meetings when considered appropriate to discuss their remit and review the findings and any issues with the annual audit. It will also review their terms of appointment and plans to meet them once a year independent of management and will consider and make recommendations to the Board, to be put to the Company for approval at the Annual General Meeting, in relation to the appointment, re-appointment and removal of the Company's external auditor. There are no contractual restrictions in place in respect of the auditor choice.

 

§  The Committee is governed by a Terms of Reference and a copy of this is available on the Company's website.

2024 Annual Report

During the year, ARCC confirms that it has received sufficient, reliable and timely information from management and the external auditors to enable it to fulfil its responsibilities.

The Committee has satisfied itself that there are no relationships between the auditor and the Company which could adversely affect the auditor's independence and objectivity.

All internal control and risk issues that have been brought to the attention of ARCC by the external auditors have been considered and the Committee confirms that it is satisfied that management has addressed the issues or has plans to do so.

The Company has a number of policies and procedures in place as part of its internal controls and these are subject to continuous review and as a minimum are reviewed by ARCC on an annual basis.

ARCC has reviewed and discussed together with management and the external auditor the Company's financial statements for the year ended 30 June 2024 and reports from the external auditor on the planning for and outcome of their reviews and audit. The key accounting issues and judgements considered relating to the Company's financial statements and disclosures were as follows:

 

§  Valuation of unquoted investments £145,099,814;

§  Going concern - ARCC reviewed the going concern position of the Company, taking into account the 12-month cash flow forecasts. ARCC is satisfied that preparing the financial statements on a going concern basis is appropriate.

 

 

 

Richard Reed

Chairperson ARCC

23 December 2024

Report of the Remuneration Committee

 

As an Isle of Man registered company there is no requirement to produce a Directors' Remuneration Report. However, the Board follows best practice and therefore has prepared such a report.

The Directors have agreed to comply with the provisions of the Quoted Companies Alliance ("QCA") Corporate Governance Code for Small and Mid-Size Quoted Companies (2018) to the extent which is appropriate to its nature and scale of operations.

This report illustrates how the Company complies with those principles in relation to directors' remuneration.

The Level and Components of Non-Executive Directors Remuneration

The Remuneration Policy reflects the Company's business strategy and objectives as well as sustained and long-term value creation for shareholders. In addition, the policy aims to be fair and provide equality of opportunity, ensuring that:

§  the Company is able to attract, develop and retain high-performing and motivated people in the competitive local and wider markets;

§  The Company offers a competitive remuneration package to encourage enhanced performance and rewards individual contributions to the success of the Company, in a fair and responsible manner;

§  it reflects the Company's culture and values; and

§  there is full transparency of the Remuneration Policy.

In line with the Board's approach, which reflects that adopted within other comparable organisations, the Remuneration Policy provides for the reward of the Non-Executive Directors through fees and other benefits.

Non-Executive Directors Emoluments

The remuneration for the Non-Executive Directors reflects their responsibilities. It comprises fees and may include eligibility to participate in an annual bonus scheme, private healthcare and share option incentives, when any of these are considered appropriate.

Annual bonus scheme payments are not pensionable and are not contracted.

Non-executive Directors' Remuneration

Non-executive Directors do not receive any benefits other than their fees and travelling expenses for which they are reimbursed. The level of fees payable to Non-executive Directors is assessed using benchmarks from a group of comparable organisations.

Executive Directors Remuneration

Executive Directors do not receive any benefits other than their fees and travelling expenses for which they are reimbursed. The level of fees payable to Executive Directors is assessed using benchmarks from a group of comparable organisations.

The Committee believes that share ownership by executives strengthens the link between their personal interests and those of shareholders. Options will be granted to executives periodically at the discretion of the Remuneration Committee. The grant of share options is not subject to fixed performance criteria. This is deemed to be appropriate as it allows the Committee to consider the performance of the executives and the contribution of the individual executives and, as with annual bonus payments, illustrates the relative importance placed on performance-related remuneration.

 

Except when required by statute, the Company does not intend to contribute to the personal pension plans of Directors in the forthcoming year.

 

Executive Directors' Contractual Terms

The service contract of the Executive Directors provides for a notice period of six months.

 

 

The Procedure for Determining Remuneration

The Remuneration Committee, comprising two Non-executive Directors and one Executive Director, is responsible for setting the remuneration of the Executive Directors and is chaired by Jim Mellon. Committee members do not take part in discussions concerning their own remuneration. The basic Non-executive Director fee is set by the Chairperson. The Chairperson of the Committee reports at the Board meeting following a Committee meeting.

It is the view of the Committee that Directors' remuneration awarded across the Company for the year has been in accordance with the Company's stated Remuneration Policy and, on behalf of the Committee I recommend that you endorse this report. An analysis of Directors' emoluments is as follows:

 

		2024  £	2023  £
Emoluments	- salaries, bonuses, and taxable benefits	-	-
	- fees	153,750	117,709
		153,750	117,709

 

Directors' Emoluments

	Fees  £	Bonus  £	Termination payments £	Benefits £	2024 Total  £	2023 Total  £
Executive - salary
Denham Eke **	-	-	-	-	-	-
Jim Mellon*	38,750	-	-	-	38,750	30,000
Non-executive - fees		-	-	-
Richard Reed	35,000	-	-	-	35,000	40,000
David Giampaolo	30,000	-	-	-	30,000	30,000
Marisa Drew	50,000	-	-	-	50,000	17,709
Aggregate emoluments	153,750	-	-	-	153,750	117,709

 

* In addition to director fees, further emoluments are subject to an agreement with Shellbay Investments Limited ("Shellbay"), whereby Shellbay shall be entitled to an annual fee equal to the value of 15% of any increase between the Company's net asset value ("NAV") on a per issued share basis at the start of a reporting period and 30 June each year during the term of the New Shellbay Agreement (please see Note 2 to the Accounts).

** Denham Eke was appointed as a Director on 30 May 2012 and currently receives no remuneration for providing his services (refer note 11).

 

 

Approval

The report was approved by the Board of directors and signed on behalf of the Board.

 

 

 

Jim Mellon

Chairperson of Remuneration Committee    

23 December 2024

Statement of Directors' Responsibilities in Respect of the Directors' Report and the Financial Statements

 

The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards as applicable to an Isle of Man company and applicable law.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period. In preparing the financial statements, the Directors are required to:

·      select suitable accounting policies and then apply them consistently;

·      make judgements and estimates that are reasonable, relevant and reliable;

·      state whether they have been prepared in accordance with IFRSs;

·      assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

·      use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Isle of Man Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the Isle of Man governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.