The directors are responsible for preparing the annual 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 the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards 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 the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Charles Connell & Company Limited is a private company limited by shares incorporated in Scotland. The registered office is Stableyard Office, Colquhalzie, Auchterarder, Perthshire, PH3 1LB.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The company has taken advantage of exemption in FRS102 from the requirement to produce a cash flow statement because it is a small company.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The company makes pension scheme payments to the personal pension plan of members of staff and directors. The scheme and its assets are held by independent managers. The pension charge represents contributions due from the company.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in off-shore trusts are based on the Net Asset Value (NAV) of the fund, Investments in equity shares are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Finance income and costs policy

Changes in fair value of investments held at fair value through profit and loss and gains and losses on disposals are recognised in the Statement of Total Comprehensive Income. Interest and dividends from shares and bonds are recognised as Investment Income when the company becomes entitled to the return.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Unrealised tax losses on investments are expected to be realised over the forthcoming years and will be used to offset gains on investments. The company's plans have been taken into account in the calculation of the deferred tax liabilities.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The company holds both listed and non-listed investments. The non-listed investments with an active market are not listed on a stock market but the funds have published their Net Asset Value (NAV). This is believed to be a reasonable estimate of the market value of the investments. The carrying amount of both listed and unlisted investments with an active market is £78,105,518 (2023: £70,894,668). This includes £29,387,386 (2023: £20,941,200) of investments valued at NAV. In addition, the company holds £7,825,571 (2023: £6,596,210) in unlisted investments without an active market. These investments are held at cost less impairment as there is not an active market for these investments.

Tax liabilities are recognised when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This requires the application of judgement as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognised in income in the period in which the change occurs.

The average monthly number of persons (including directors) employed by the company during the year was:

The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the surplus or deficit and the standard rate of tax as follows:

Details of the company's subsidiaries at 31 December 2024 are as follows:

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006.

The auditor's report is unqualified and includes the following:

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

The company has committed $250,000 to the Bitkraft Token Fund and $800,000 to Bitkraft Ventures Fund. At the year end the remaining capital commitment was $37,500 and $164,000 respectively.

The company has also committed $1,000,000 to the Bitkraft Ventures III Fund. At the year end the remaining capital commitment was $850,000.

In addition, the company committed £600,000 to True Growth III during the year to 31 December 2022. At the year end £348,465 had not been drawn down.

During the year to 31 December 2021 the company committed a total of £1.5m to the True Capital III fund. This can be drawn down as either expenditure or capital investment. £1,047,566 was drawn down at the year end, leaving a remaining commitment of £452,433.

During the year to 31 December 2017 the company committed to investing £750,000 into the True Capital II Fund. The total amount of financial commitments, in respect of the above, at the balance sheet date not provided in the financial statements was £14,543 (2023: £56,030).

After the balance sheet date, discussion over the CEO bonus for the years ended 31 December 2023 and 2024 are ongoing and dependent on the outcome of future contracts. The total amount of bonuses that may be due is approximately £13.98m including Employers National Insurance. The bonuses are not included in these financial statements as the bonuses are contingent on future events except a £1m installment that was agreed prior to the year end.

Key Management

The company classes the Directors of the company and the parent company as key management.

Mr Matthew Royde is a director of the entity's parent company: Charles Connell & Company (Holdings) Limited. Mr Royde holds the position of CEO in Kestrel Partners LLP, an independent investment manager. At the year end, the company held investments with a market value of £5,102,922 (2023: £5,121,101) in funds managed by Kestrel Partners LLP.

Summary of transactions with group companies

Charles Connell & Company Limited, Connell Ventures Limited and Charles Connell & Company (Colquhalzie Farms) Limited are all owned and controlled by Charles Connell & Company (Holdings) Limited. During the course of the year the company has had interest free loans with fellow group companies. Further details of the loans are set out below.

The following amounts were outstanding at the reporting end date:

The company has interest free balances due to fellow group companies. No interest is charged on interest free debt which is repayable on demand.

During the year £2,277,023 (2023: £16,688,133) was repaid to related parties and £1,929,630 (2023: £68,323,259) was received from related parties.

The following amounts were outstanding at the reporting end date:

The company is owned by Charles Connell and Company (Holdings) Limited, a company incorporated in Scotland.

Listed investments

Fair value is determined based on the market value at the reporting date from stock exchanges. The fair value is £48,718,132 (2023: 49,953,468).

Unlisted investments

The company has investments with a number of funds. There are no listed share prices for these investments. In the opinion of the Directors the Net Asset Value (NAV) provides a reliable estimate of the market value, The NAV will be based on the Accounting Principles applying in the region where the fund operates. Where this is not available then the Directors will use the cost of the investment as the most reliable estimate. The fair value is £29,387,386 (2023: £20,941,200).

Unlisted investments without an active market

Unlisted investments without an active market are held at their cost less any provision which is deemed by the Directors to be the most appropriate value. The cost of these investments is £7,825,571 (2023: 6,596,210).

Items of income, expense, gains or losses

The change in market value and gain//loss on disposal of financial assets measured at fair value is shown in the Other Gains and Losses note to these financial statement. The dividend income from these financial assets in the year was £86,218 (2023: £17,740).

The total interest income for financial assets not measured at fair value through profit or loss is £172,203 (2023: £163,126)

The company also generated £139,421 on forward contracts during the year (2023: £Nil).

Financial Instrument Risks

Market risk

The principal risk and uncertainty facing the business is market risk. The Company is exposed to market risk whereby its investments can be affected by adverse changes in interest rates and market performance. The Directors are confident, however, that the balanced investment strategies which they have adopted mitigate this risk to a satisfactory level. Unlisted investments have maturity dates ranging from 60 days to 5 years.

Liquidity risk

The company monitors its liquid resources on a regular basis and makes changes to its investment portfolio to manage its liquidity risk.