Kasei Holdings Plc - Posting of Annual Report and Notice of AGM

21 December 2022

KASEI HOLDINGS PLC

(“Kasei” or the “Company”)

Posting of Annual Report and Notice of AGM

Kasei Holdings PLC (AQSE: KASH) is pleased to announce its Annual Report and financial statements for the year ended 31 July 2022 (the “Annual Report”), Notice of Annual General Meeting (the “AGM”), and Form of Proxy for the AGM have each been post to shareholders today and are available on the Company’s website https://kaseiholdings.com/ .

The Company’s AGM will be held at 72 Charlotte Street, London W1T 4QQ on 24 January 2023 at 4.00pm.

For further information please contact:

About Kasei:

The Company is a technology specialist investor that focuses on cryptocurrencies and blockchain technologies.

The Company's goal is to provide investors with broad based exposure to the fast-growing ecosystem of digital assets, managed using traditional financial portfolio construction techniques. The Company also intends to invest in venture capital and private equity investments in the blockchain ecosystem.

The Company will leverage the Board's expertise, experience, and networks in the cryptocurrency sector and management of digital assets and decentralised finance, to drive value creation and to establish the business. The Board has a proven capability in portfolio management to achieve significant growth.

The Company’s website is located at https://kaseiholdings.com

Group Strategic Report

For the Period Ended 31 July 2022

Introduction

Kasei Holdings PLC (AQSE: KASH) is a digital asset and Web 3.0 investment company established in July 2021 to provide investors with broad based exposure to the digital asset ecosystem.

Business review

The company began trading on the Aquis Stock Exchange on 3rd November 2021 with a goal of deploying capital into the digital ecosystem in accordance with its investment strategy. The company began deployment in a buoyant market using drawdowns towards the end of 2021 to average down as macro uncertainties began to surface.

2022 saw a significant shift in the macro environment that has had a drastic effect on all asset prices. Persistent inflation due to COVID19 was exacerbated by the war in Ukraine and central banks across the globe began embarking on a significant tightening of monetary policy after years of accommodation. As a result, equity and bond markets have suffered dramatic falls and the nascent digital asset ecosystem has similarly seen significant drawdowns.

The steep declines in asset prices have brought into sharp focus many of the unsustainable business models in the space. The collapse of the Terra Luna ecosystem triggered a sharp deleveraging that led to the insolvency of large hedge funds such as 3 Arrows Capital in addition to the halting of withdrawals from centralised yield providers such as Celsius.

Kasei Holdings did establish a position in Terra (LUNA) as the ecosystem began to see significant growth. However, as the sustainability of some of the ecosystem’s protocols began to diminish, the company began exiting its positions and had liquidated approximately 70% of its exposure prior to the collapse of the ecosystem.

The company has also avoided exposure to any providers purporting to provide yields which in retrospect were merely credit exposures to questionable business models. The company does however stake its assets where participating in network security is rewarded.

Finally, the recent collapse of FTX has shone an even harsher light on the entire sector and has triggered a liquidation cascade across the board. The company is pleased to report that it has not suffered any adverse impact due to any of the insolvencies and does not have any direct credit exposures. Our internal operational and risk management practices have stood up well in the face of a significant test and we hope to weather these turbulent times accordingly.

The directors are satisfied with the performance to date given the overall decline in the market and we have continued to maintain outperformance versus the largest two assets Bitcoin and Ethereum. The drawdown has also enabled us to add exposure to high conviction ecosystems. Given the external environment the company has reduced overheads where possible to ensure the company has sufficient working capital to weather the crypto winter. Approximately £280,000 of initial fixed costs due to the formation and listing of the company are non-recurring leaving the company enough scope to take advantage of new opportunities as they arise.

    Our portfolio as of 31st October was as follows:

Principal risks and uncertainties

The digital asset industry is in an early stage of growth and adoption and as such carries significant risk. Asset prices are highly volatile and many of the protocols may ultimately fail. As such it is imperative for a diversified approach to be adopted as currently the winners are unclear. In addition, a stringent risk management framework is essential. We believe that the board’s expertise in managing volatile asset classes stands us in good stead to navigate the volatile landscape. The company continues to believe that significant growth and adoption lies ahead and intends to navigate the many pitfalls diligently.

Security of holding digital assets also remains challenging. However, more and more institutional grade custody solutions are appearing and the company continues to monitor the landscape in order to ensure all measures are taken to maximise security and custody of its assets using trusted partners and regulated entities.

Bear markets and crypto winters are the perfect time for protocols to concentrate on building and for investors to analyse which projects have been battle tested and yet remain. As such we see the current malaise as an opportunity to concentrate resources and focus on the opportunities that will arise.

Financial key performance indicators

The company’s business objective is to provide investors with broad based access to the digital asset ecosystem. Holding assets in a diversified manner and using yield generating strategies and stringent risk management has led to outperformance vs a core strategy of holding BTC or ETH. The price performance of Quant network (QNT), the company’s largest altcoin position has been a key highlight and has enhanced the company’s commitment to focus on utility within the asset class.

Directors' statement of compliance with duty to promote the success of the Group

This statement is intended by the Board of Directors to set out how they have approached and met their responsibilities under s172(1)(a) to (f) of the Companies Act 2006 in the year ending 31 July 2022.

Stakeholders of the Company include employees, shareholders, suppliers, creditors of the business and the community in which it operates.

The Directors, both collectively and individually, consider that they have acted in good faith to promote the success of the Company for the benefit of its stakeholders as a whole (having regard to the matters set out in s172 of the Act) in the decisions taken during the period. In particular:

To ensure that the Board take account of the likely consequences of their decisions in the long-term, they receive regular and timely information on all the key areas of the business including financial performance, operational matters, health and safety, environmental reports, risks and opportunities. The Company's performance and progress is also reviewed regularly at Board meetings.

The Directors' intentions are to behave responsibly towards all stakeholders and treat them fairly and equally, so that they all benefit from the long-term success of the Company.

The Directors have overall responsibility for determining the Company's purpose, values and strategy and for ensuring high standards of governance. The primary aim of the Directors is to promote the long-term sustainable success of the Company, generating value for stakeholders and contributing to the wider society. In the future, the Board will continue to review and challenge how the Company can improve its engagement with its stakeholders.

This report was approved by the board and signed on its behalf.

Brendan Kearns

Director

19th December 2022

Directors' Report

For the Period Ended 31 July 2022

The directors present their report and the financial statements for the period ended 31 July 2022.

Direcors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.

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

• select suitable accounting policies for the Group's financial statements and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Principal activity

The principal activity of the Company in the year under review was that of an investment company providing investors with broad based exposure to the digital asset ecosystem.

Results and dividends

The loss for the period, after taxation, amounted to £513,273.

The Directors do not propose a dividend in respect of the year ended 31st July 2022..

Directors

The directors who served during the period were: B Coyne (appointed 9 July 2021)

S Davis (appointed 5 August 2021)

B Kearns (appointed 28 July 2021)

J Patel (appointed 9 July 2021)

J Thomason (appointed 4 August 2021)

Future developments

The company intends to continue to leverage the Board’s expertise to identify compelling investments within the digital asset ecosystem.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

• so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
• the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Auditors

Under section 487(2) of the Companies Act 2006, Brindley Goldstein LTD will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.

Brendan Kearns

Director

19th December 2022

Independent Auditors' Report to the Members of KASEI HOLDINGS PLC

Opinion

We have audited the financial statements of KASEI HOLDINGS PLC (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 July 2022, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 July 2022 and of the Group's loss for the period 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
• the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
• the parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).

• In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non- compliance with laws and regulations, our procedures included the following:

• We obtained an understanding of the legal and regulatory frameworks applicable to the Group and the industry

in which it operates. We determined that the following laws and regulations were most significant: FRS 102 and the Companies Act 2006.

• We obtained an understanding of how the Group is complying with those legal and regulatory frameworks by making enquiries of management.

• We challenged assumptions and judgments made by management in its significant accounting estimates.

We did not identify any key audit matters relating to irregularities, including fraud.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' 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.

Charles Goldstein (Senior Statutory Auditor)

Brindley Goldstein LTD

Chartered Accountants and Statutory Auditors 103 High Street

Waltham Cross London

EN8 7AN

Date: 19/12/2022


Company Balance Sheet As at 31 July 2022

The financial statements were approved and authorised for issue by the board and were signed on its behalf on

B Kearns

Director

19/12/2022

 

Consolidated Statement of Changes in Equity For the Period Ended 31 July 2022

Company Statement of Changes in Equity For the Period Ended 31 July 2022

Consolidated Statement of Cash Flows For the Period Ended 31 July 2022