Riverfort Global Opportunities
Annual Report 2021

Plain-text annual report

RiverFort Global Opportunities plc Financial Statements for the year ended 31 December 2021 Company no: 269566 1 RiverFort Global Opportunities plc COMPANY INFORMATION DIRECTORS: SECRETARY: REGISTERED OFFICE: P Haydn-Slater (Non-Executive Chairman) N Lee (Investment Director) A van Dyke A Nesbitt M Nicholson Suite 39 18 High Street High Wycombe Buckinghamshire HP11 2BE COMPANY REGISTRATION NUMBER: 00269566 REGISTRAR AND TRANSFER OFFICE: BANKERS: SOLICITORS: INDEPENDENT AUDITOR: NOMINATED ADVISOR: JOINT BROKER: JOINT BROKER: Share Registrars Limited The Courtyard 17 West Street Farnham Surrey GU9 7DR Barclays Bank Plc 77 Albion Street Leeds LS1 5AW Keystone Law Ltd 48 Chancery Lane London WC2A 1LF PKF Littlejohn LLP Statutory Auditor 15 Westferry Circus Canary Wharf London E14 4HD Beaumont Cornish Limited Building 3 566 Chiswick High Road London W4 5YA Peterhouse Corporate Finance Limited 80 Cheapside London EC2V 6DZ Shard Capital Partners LLP 23rd Floor 20 Fenchurch Street London EC3M 3BY 2 RiverFort Global Opportunities plc CONTENTS REPORTS Chairman's statement Strategic Report Directors’ Report Directors’ Remuneration Report Corporate Governance Report Independent Auditor's report Statement of comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements page 3 5 9 12 13 18 22 23 24 25 26 3 RiverFort Global Opportunities plc CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021 HIGHLIGHTS • Total operating income generated of £2,469,441 • Net profit generated of £1,040,012 • Net asset value of £11,748,821 – an increase of 27% since the beginning of the year • Net asset value of 1.49 pence per share – an increase of 10% for the year • Substantial cash balance available for further investment • New funds raised for investment • Investments made in pre-IPO opportunities in technology, including the cyber security sector • Expected payment of a dividend for 2021 of 0.038 pence per share representing a current gross yield of 4% INTRODUCTION We are very pleased to report our results for the year to 31 December 2021. This period has been another active period for the Company and the Board is pleased with the results that have been achieved. REVIEW OF THE YEAR The Company has been actively deploying its investment capital by investing principally in listed junior companies through debt and equity linked products. These investment structures lower volatility and risk and enable the Company to drive profits and cash income. We believe that this is an attractive investment strategy and by investing in the Company, investors are able to gain access to this investment strategy via a publicly listed vehicle. Activity during the early part of the year was lower due to the strength of the equity markets, however, activity has increased as the period has progressed. As at the end of the year, the Company held around £5.8 million of its investment portfolio in this type of investment, with investments in over 20 different companies. At the same time, as previously announced, the Board has identified pre-IPO investment opportunities as an attractive area of investment focus where there is potential to achieve gains between the pre-IPO stage and a listing or exit. The logic for this being that, at this stage of an investee company’s development, valuations can be noticeably lower, notwithstanding the proximity to an exit or listing. Consequently, during the year, the Company has deployed capital in this area as demonstrated by its investments in Pluto Digital plc (“Pluto”) and Smarttech247. Pluto is a crypto technology and operations company with a focus on Decentralised Finance (DeFi) and the Metaverse (blockchain gaming and NFTs). Smarttech247 is a global managed detection and response company with a leading market position in security operations. Its platform provides threat intelligence with managed detection and response. Smarttech247’s service is geared towards proactive prevention using the latest in cloud, big data analytics and machine learning, along with its incident response team. Smarttech247 is an established profitable business and is actively progressing a listing on AIM. The Company’s principal listed equity investment comprises its shareholding in Pires Investments plc (“Pires”). Pires is an investment company listed on AIM focused on investing in next generation technology which has been extremely active over the period. The majority of its investments have been revalued upwards during the period and the company has made a number of new investments, including into a new Sure Valley Ventures venture capital fund alongside the British Business Bank. Pires has recently published its results for the year to 31 December 2021, which clearly demonstrate the progress that this company is making. Furthermore, it is also now subject to a share for share offer from Tern plc, on terms that equate to 8 pence per Pires share, representing a 53.6% premium to the Pires share price prior to announcement, based on the respective companies share prices just prior to announcement. This offer is subject to approval by both Pires and Tern plc shareholders. The Company has provided an irrevocable undertaking to accept this offer in respect of its shareholding. If the offer proceeds on the terms envisaged then based upon the share price of Tern plc at the point of announcement, the Company’s carrying value of this investment, including warrants, would be £2.67 million compared to the value as at 31 December 2021 of £2.31 million. On 10 May 2021, the Company announced a placing to raise £1.64 million, at the prevailing market price of 1.7 pence per share, in order to provide funds for further investment and to specifically fund the investment in Smarttech247 which was also announced at that time. This fund raising was supported both by current and new investors. The Company also expects to declare a dividend of 0.038 pence per share in relation to 2021, which would equate to a current gross yield of 4%. This continues the Company’s track record of providing a cash return to shareholders. 4 RiverFort Global Opportunities plc CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021 OUTLOOK AND STRATEGY The Company has continued to generate attractive returns through investing by way of structured financings in order to provide funding for junior companies. This strategy continues to have the benefit of providing both cash returns and downside protection. Furthermore, given the recent developments in global equity markets, the demand for the Company’s investment capital has been growing strongly. This strategy is now complemented with the pre-IPO investments that have been made, with Smarttech247 actively progressing towards a listing. In summary, we are pleased that the results for 2021 demonstrate a continuing trend of progress for the Company. The current year has also started well and we look forward to some exciting results for 2022. Philip Haydn-Slater Non-Executive Chairman 23 June 2022 5 RiverFort Global Opportunities plc STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 The Directors present their Strategic Report on the Company for the year ended 31 December 2021. REVIEW OF THE BUSINESS AND FUTURE DEVELOPMENTS Introduction The Company is an investment company listed on the AIM market of the London Stock Exchange. It is focused on investing in junior listed companies by way of debt or equity-linked debt investments. Returns are principally generated through a combination of fees, interest and other equity linked or performance-based instruments. This investing strategy enables the Company to reduce the risk and volatility normally associated with investing in junior companies solely by way of equity, and to generate cash income and returns. It also seeks to invest in exciting pre-IPO opportunities that are attractively valued and where there is a clear path to a liquidity event. For the year to 31 December 2021, the Company made a profit from continuing operations of £1,040,012 (2020: £1,497,305). The net asset value of the Company as at 31 December 2021 was £11,748,821 (2020: £9,239,936), representing a significant increase compared to the previous year. Whilst the operating income figure was similar to the previous year, profit after tax was lower due to the impact of a non-cash accounting charge in relation to share based payments and higher investment advisory fees. The Company’s investment portfolio at 31 December 2021 is divided into the following categories: Category Cost or valuation (£000) Debt and equity-linked debt investments Equity and other investments Pre IPO investments Cash resources Total Debt and equity linked portfolio 2021 5,807 2,562 2,703 2,012 13,084 2020 5,099 2,059 − 4,047 11,205 During the year, the Company has continued to develop its portfolio and, as at the year end, the value of these investments amounted to £5.8 million. The portfolio currently includes over 20 companies such as Jubilee Metals plc, Challenger Exploration Limited, Deepverge plc and Troy Resources Ltd. These investments principally generate income in the form of fees and interest. Investments are either made directly or by way of participation certificates in RiverFort Global Opportunities PCC Limited (“RGO PCC”), a Gibraltar based fund. These certificates are reference linked financial instruments that provide similar economic benefits to the holder as if they were co-investing directly in the underlying investment. Whilst there is no direct security into the underlying investment, the holder will benefit from the enforcement of any such security. Equity and other portfolio At the year end, the Company’s equity portfolio comprised the following: Company Description Pires Investments plc An investment company listed on AIM Other Total Various small holdings companies and warrants in listed Value of investment £000 2,272 290 2,562 6 RiverFort Global Opportunities plc STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 During the course of 2021, the Company has exercised warrants that it held in Pires and therefore its shareholding had increased to 19.5% or 30,914,193 shares as at the period end. It also still held 4,814,200 warrants in Pires, exercisable at 4 pence per share, although these have subsequently been exercised post period end. Pires has continued to invest in next generation technology and, during this period, a number of its investments have significantly increased in value. The company recently invested in a new Sure Valley Ventures (“SVV”) fund (“SVV2”), alongside the British Business Bank (“BBB”) who have committed £50 million to the new fund with other private investors, including Pires investing up to £35 million. SVV2 is being managed by the same team which, to date, has been highly successful in achieving a number of cash realisations from, and upward revaluations of, companies in the first SVV fund (“SVV1”). Furthermore, the profit share arrangements within SVV2 are designed to encourage the involvement of private investors alongside the BBB, meaning that Pires and the other private investors would expect to receive a significantly enhanced share of the total return generated by the fund compared to industry standard. Also, Getvisibility, one of Pires’ investments that it holds both directly and via its holdings in SVV1 and Sure Ventures plc, has recently raised €10 million at a significantly higher valuation compared to when Pires first invested. Getvisibility, is a leader in data visibility and control, using state-of-the-art artificial intelligence ("AI") to classify and secure unstructured information. Getvisibility also provides risk and compliance assessments as well as enforcing protection on sensitive data. The company operates across the US, Europe and the Middle East and North Africa with a presence in several industry sectors including banking, healthcare and the public sector. Getvisibility's clients include a leading global producer of energy and chemicals, a major airport group, one of the largest financial institutions in the Middle East as well as US government entities in the pharmaceutical and manufacturing sectors. Pires' direct stake in Getvisibility (including its recent additional investment) is now valued at circa €1,500,000 or over 4 times its total investment cost to date since it made its first investment two years ago. In addition, Pires has a further interest in Getvisibility via its 13% interest in SVV1 and an indirect interest through its holding in Sure Ventures plc, which together are now valued at circa €1,330,000. Pires' interest in Getvisibility, in aggregate, is therefore now valued at circa €2,830,000. As at the period end, RGO had a 19.54% stake in Pires. On 1 June 2022, Tern plc (“Tern”) announced a recommended share offer for the issued and to be issued share capital of Pires on the basis of 0.51613 Tern shares for each share in Pires. This valued each share in Pires at 8 pence based on the closing price of Tern shares on 31 May 2022 and represented a premium of 53.8% to the closing price of a Pires share on 31 May 2022. This offer is subject to approval by both Tern and Pires shareholders. On 15 June 2022, Pires published its results for the year to 31 December 2021, which clearly demonstrated the progress that this company is making. Often as part of the Company’s investment, the investee company will issue warrants. The value of the warrants attributable to the Company’s investments are calculated using the Black-Scholes option pricing model and the resulting figure is discounted by 75% to reflect the level of expected return associated with such holdings given their highly volatile nature. This balance is included within Other as set out in the table above. Pre IPO investments Pluto is a crypto technology and operations company with a focus on Decentralised Finance (DeFi) and the Metaverse (blockchain gaming and NFTs). based digital entertainment During the period, Pluto has invested in Maze Theory Limited (“Maze Theory”), a London studio, with a view to developing high quality games that incorporate token economics. As part of this arrangement, Pluto and Maze Theory formed a new gaming blockchain and metaverse studio joint venture called Emergent Games. Given the experience of the team at Maze Theory and the work that they have done, Pluto is planning to extend its relationship with Maze Theory as it believes that this is a sector that provides an exciting growth opportunity. Also, during 2021 Pluto fully acquired the YOP platform and has been actively developing this platform to help enable users to operate in and navigate the DeFi space, which has been growing rapidly. ‐ As at 31 December 2021, the Company’s equity holding in Pluto was valued at £1.3 million based on a price of 6 pence per share, which is the price at which the company’s most recent funding raising took place. Good progress continues to be made on the listing of Smarttech247, by way of a proposed reverse takeover of Smarttech247 by Conduity Capital plc. Smarttech247 is a global managed detection and response company with a leading market position in security operations. Its platform provides threat intelligence with managed detection and 7 RiverFort Global Opportunities plc STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 response. Smarttech247’s service is geared towards proactive prevention using the latest in cloud, big data analytics and machine learning, along with its incident response team. The company also recently hosted a global cybersecurity conference in Dublin which included over 25 speakers from organisations around the world who discussed many aspects of cybersecurity, from new technologies and new attack vectors to regulations that are reshaping cyber and business risks. Notable speakers included representatives from Microsoft, IBM, NCIS and the Institute of Cancer Research. Following on from Smarttech247’s performance for the period ended 31 July 2021, where revenue and profits increased by circa 50% compared to the previous year, the company has continued to win new clients. The company is also progressing the roll out of its stable of internally developed automated security products currently consisting of the successful ThreatHub (threat and vulnerability modelling and management) and NoPhish (an AI driven phishing response solution to threat emails). Smarttech247 continues to go from strength to strength as the world is increasingly exposed to cybersecurity attacks which can wreak havoc at companies and institutions around the globe. Cash resources The prior period end cash balance was higher as it included amounts that were due to RGO PCC at the year end in connection with the investment made in Tanzanian Gold Corporation which was partly held by the Company on behalf of RGO PCC. However, the Company still has a significant cash balance available for investment. Income breakdown Investment income Net gain from financial instruments at FVTPL Net foreign exchange losses on other financial instruments Total income Administration costs Investment advisory fees Other gains and losses Operating profit 2021 £000 1,801 680 (12) 2,469 (715) (594) (120) 1,040 2020 £000 1,251 1,476 (284) 2,443 (404) (375) (167) 1,497 Investment income derives principally from the fees and interest income in relation to our debt and equity linked debt investments. The net gain from financial instruments at FVTPL represents the impact of valuing the investment portfolio at fair value as required under IFRS 9. Whilst the total income figure was similar to the previous year, operating profit was lower due to the impact of a non- cash accounting charge in relation to share based payments and the payment of higher investment advisory fees. KEY PERFORMANCE INDICATORS The key performance indicators are set out below: COMPANY STATISTICS 31 December 2021 31 December 2020 Change % Net asset value £11,748,821 £9,239,936 Net asset value – fully diluted per share Closing share price Net asset value premium to the share price 1.49p 1.45p 3% 1.36p 0.965p 41% Market capitalisation £11,243,000 £6,552,000 +27% +10% +50% +72% 8 RiverFort Global Opportunities plc STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 KEY RISKS AND UNCERTAINTIES Investments in junior companies can carry a high level of risk and uncertainty, although the returns can be attractive. At this stage there can be no certainty of outcome and the Company may have difficulty in realising the full value from its investments in a forced sale. Furthermore, the Company limits the amount of each commitment, both as to the absolute amount and percentage of the target company. Details of other financial risks and their management are given in Note 22 to the financial statements. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Details of the Company's financial risk management objectives and policies are set out in Note 21 to these financial statements. Covid 19 - Due to the nature of the Company's activities, the impact of Covid 19 on the Company has been minimal, with continuing interest from junior companies for our investment capital. Management will, however, continue to assess its impact on the Company. PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE S172 of the Companies Act 2006 requires the Board to promote the Company for the benefit of the members as a whole. In particular, the requirements of s172 are for the Directors to: Consider the likely consequences of any decision in the long term Act fairly between the members of the Company • • • Maintain a reputation for high standards of business conduct • • • The Directors are collectively responsible for formulating the Company’s investment strategy, and during 2021 they have continued to focus on implementing the investment strategy previously approved by shareholders in 2018 which has resulted in a significant improvement in financial performance compared to previous years. Consider the interests of the Company’s employees Foster the Company’s relationships with suppliers, customers and others and Consider the impact of the Company’s operations on the community and the environment. In addition, the application of s172 requirements can be demonstrated in relation to some of the key decisions made during 2021: • Raising of additional funds for the Company for investment purposes; and • The making of further investments that have generated significant returns for the Company and its shareholders. The Board places equal importance on all shareholders and strives for transparent and effective external communications, within the regulatory confines of a listed company. The primary communication tool for regulatory matters and matters of material substance is through the Regulatory News Service, (“RNS”). We also provide an environment where shareholders can interact with the Board and management, ask questions and raise any concerns they may have. The Directors believe they have acted in a way they consider most likely to promote the success of the Company for the benefit of its members as a whole, as required by Section 172 (1) of the Companies Act 2006. GOING CONCERN The Company’s assets comprise mainly cash, debt securities and quoted securities. As at the year end, the Company held a significant balance of cash. Furthermore, the Company has prepared cash forecasts to June 2023 that show that the Company has sufficient cash resources for the foreseeable future. The Directors have also considered the impact of Covid-19 and have concluded that, given the cash reserves in place and the level of the Company’s ongoing costs, there are no material factors which are likely to affect the ability of the Company to continue as a going concern. Accordingly, the Directors believe that as at the date of this report it is appropriate to continue to adopt the going concern basis in preparing the financial statements. ON BEHALF OF THE BOARD Nicholas Lee Investment Director 23 June 2022 9 RiverFort Global Opportunities plc DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 The Directors present their annual report on the affairs of the Company, together with the audited financial statements for the year ended 31 December 2021. PRINCIPAL ACTIVITIES The Company’s principal activity is that of an investment company focused on making investments in the natural resources, technology and healthcare sectors. RESULTS AND DIVIDENDS The Company made a profit after taxation of £1,040,012 (2020: £1,497,305). it is expected that a dividend will be declared for 2021 of 0.038 pence per share. The key performance indicators are shown in the Strategic Report. DIRECTORS AND DIRECTORS’ INTERESTS The Directors of the Company, together with their beneficial interests in the shares of the Company at the end of the year, are listed below. All served on the Board throughout the year, unless otherwise stated. There is a qualifying third party indemnity provision in force for the benefit of the Directors and officers of the Company. P Haydn-Slater N Lee Ms A van Dyke A Nesbitt Percentage of issued share capital 31 December 2021 31 December 2020 2.95% 0.68% − 20,000,000 20,000,000 4,601,470 4,601,470 − − 0.15% 1,000,000 1,000,000 SUBSTANTIAL INTERESTS The Company is aware that as at 22 June 2022, the following, other than the Directors shown above, held in excess of 3% of the issued share capital of the Company: Number of ordinary shares Percentage of issued share capital Cannacord Genuity Group Inc (discretionary clients) 115,500,000 Premier Miton Group plc RiverFort Global Capital Ltd Shakoor Capital Limited James Lewis 97,867,897 37,545,600 31,500,000 24,295,454 14.90% 12.62% 4.84% 4.06% 3.13% 10 RiverFort Global Opportunities plc DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 CORPORATE GOVERNANCE The Board recognises its responsibility for the proper management of the Company and is committed to maintaining a high standard of corporate governance. Further details with regard to corporate governance are set out in the Corporate Governance Report. BOARD OF DIRECTORS The Company supports the concept of an effective Board leading and controlling the Company. The Board is responsible for approving Company policy and strategy. It meets regularly and has a schedule of matters specifically reserved to it for decision. Management supply the Board with appropriate and timely information and the Directors are free to seek any further information they consider necessary. All Directors have access to advice from the Company Secretary and independent professionals at the Company's expense. Training is available for new Directors and other Directors as necessary. The Board currently consists of four directors, the Investment Director, Nicholas Lee and three non-executive directors, Amanda van Dyke, Andrew Nesbitt and Philip Haydn-Slater. Each Director appointed by the Board since the last AGM holds office until the next AGM and is then eligible for reappointment. Furthermore, one third of Directors who were directors at the time of the two immediately preceding AGMs and who did not retire at such meetings, retire from office by rotation and are then eligible for reappointment. Given the size of the Board, there is no separate nomination committee. All Director appointments are approved by the Board as a whole. COMMUNICATIONS WITH SHAREHOLDERS Communications with shareholders are given a high priority. In addition to the publication of an annual report and an interim report, there is regular dialogue with shareholders and analysts. The Annual General Meeting is viewed as a forum for communicating with shareholders, particularly private investors. Shareholders may question the Chairman and other members of the Board at the Annual General Meeting. INTERNAL CONTROL The Directors acknowledge they are responsible for the Company's system of internal control and for reviewing the effectiveness of these systems. The risk management process and systems of internal control are designed to manage rather than eliminate the risk of the Company failing to achieve its strategic objectives. It should be recognised that such systems can only provide reasonable and not absolute assurance against material misstatement or loss. The Company has well established procedures which are considered adequate given the size of the business. POST YEAR END EVENTS On 1 June 2022, Tern plc (“Tern”) announced a recommended share offer for the issued and to be issued share capital of Pires on the basis of 0.51613 Tern shares for each share in Pires. This valued each share in Pires at 8 pence based on the closing price of Tern shares on 31 May 2022 and represented a premium of 53.8% to the closing price of a Pires share on 31 May 2022. This offer is subject to approval by both Tern and Pires shareholders. On 15 June 2022, Pires published its results for the year to 31 December 2021, which delivered NAV growth of 147% and NAV per share growth of circa 100%. On 16 June 2022, the Company exercised 4,812,200 of warrants in Pires at a price of 4 pence. 11 RiverFort Global Opportunities plc DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors are responsible for preparing the report of the directors and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. The Directors are required by the AIM Rules of the London Stock Exchange to prepare financial statements in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006. 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 and 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 judgments and accounting estimates that are reasonable and prudent • • state whether they have been prepared in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006, 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 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 are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions. The Company is compliant with AIM Rule 26 regarding the Company’s website. PROVISION OF INFORMATION TO AUDITOR So far as each of the directors are aware at the time this report was approved: • • there is no relevant audit information of which the Company’s auditor is unaware: and the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. AUDITORS The auditors, PKF Littlejohn LLP have indicated their willingness to continue in office, and a resolution that they be re-appointed will be proposed at the annual general meeting. This report was approved by the Board on 23 June 2022 and signed on its behalf. Nicholas Lee Investment Director 12 RiverFort Global Opportunities plc DIRECTORS’ REMUNERATION REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 The remuneration of the directors is fixed by the Board as a whole. The Board seeks to provide appropriate reward for the skill and time commitment required so as to retain the right calibre of director at a cost to the Company which reflects current market rates. Further details of directors’ fees and of payments made for professional services rendered are set out in Note 10 to the financial statements. During the period, the following remuneration and other benefits were charged to the Company: Name of director P Haydn-Slater N Lee A van Dyke A Nesbitt Fees and salaries £ 45,000 52,000 22,000 − 119,000 Bonus £ 30,000 50,000 − − 80,000 Total 2021 £ 75,000 102,000 22,000 − 199,000 Total 2020 £ 52,500 78,000 22,000 − 152,500 Included in P Haydn-Slater’s remuneration is £33,000 (2020: £23,000) invoiced by Musgrave Merchant Ltd, a company controlled by him. PENSION CONTRIBUTIONS No director has any pension entitlements. SHARE OPTIONS During the year Philip Haydn-Slater and Nicholas Lee were each granted 16,900,000 share options. Details of the Directors' share options are shown below: P Haydn-Slater N Lee Number outstanding at 31 December 2021 16,900,000 16,900,000 Exercise price 1.00p 1.00p Vesting date Various Various Expiry Date 12 Feb 2031 12 Feb 2031 Further details of the share options are set out in Note 20 DIRECTORS’ SHAREHOLDINGS As at 31 December 2021, the Directors had the following interests in the share capital of the Company: Percentage of issued share capital 31 December 2021 31 December 2020 2.95% 0.68% − 20,000,000 20,000,000 4,601,470 4,601,470 − − 0.15% 1,000,000 1,000,000 P Haydn-Slater N Lee Ms A van Dyke A Nesbitt Amanda van Dyke Director 23 June 2022 13 RiverFort Global Opportunities plc CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 The Board recognises its responsibility for the proper management of the Company and is committed to maintaining a high standard of corporate governance. The Directors recognise the importance of sound corporate governance commensurate with the size and nature of the Company and the interests of its Shareholders. The Quoted Companies Alliance has published the QCA Code, which includes a standard of minimum best practice for AIM companies, and recommendations for reporting corporate governance matters. The Directors take into account the QCA Code to the extent they consider it appropriate and having regard to the size and resources of the Company. The Board is responsible for formulating, reviewing and approving the Group’s strategy, budgets and corporate actions. The Company holds Board meetings at least six times each financial year and at other times as and when required. ANTI-CORRUPTION AND BRIBERY POLICY The Company has adopted an anti-corruption and bribery policy which applies to the Directors. It generally sets out their responsibilities in observing and upholding a zero-tolerance position on bribery and corruption in all the jurisdictions in which the Company operates as well as providing guidance on how to recognise and deal with bribery and corruption issues and the potential consequences. The Company expects all employees, suppliers, contractors and consultants to conduct their day-to-day business activities in a fair, honest and ethical manner, be aware of and refer to this policy in all of their business activities worldwide and to conduct business on the Company’s behalf in compliance with it. The Company has established a remuneration committee and an audit and compliance committee with formally delegated duties and responsibilities. AUDIT AND COMPLIANCE COMMITTEE The Audit and Compliance Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on. It receives and reviews reports from the Company’s management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company. The Audit and Compliance Committee is responsible for keeping under review the scope and results of the audit, its cost effectiveness and the independence and objectivity of the auditors. It also has responsibility for public reporting and internal controls. The Audit and Compliance Committee also monitors the Company’s compliance with the AIM Rules for Companies and ensures that procedures, resources and controls are in place to ensure the Company’s compliance with the AIM Rules for Companies. The members of the Audit and Compliance Committee are Philip Haydn-Slater and Amanda van Dyke. This committee met once during the year in connection with the approval of the accounts for the year ended 31 December 2021. REMUNERATION COMMITTEE The Remuneration Committee reviews the performance of the Directors and makes recommendations to the Board on matters relating to their remuneration and terms of employment. Under its terms of reference, it meets at least once a year and is responsible for ensuring that the Directors are fairly rewarded (which extends to all aspects of remuneration) for their individual contribution to the overall performance of the Company. The members of the Remuneration Committee are Amanda van Dyke and Andrew Nesbitt. This committee met once during the year. SHARE DEALING CODE The Company has adopted a share dealing policy which sets out the requirements and procedures for the Board in any of its AIM securities in accordance with the provisions of MAR and of the AIM Rules for Companies. 14 RiverFort Global Opportunities plc CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 COMPLIANCE WITH CORPORATE GOVERNANCE CODE BACKGROUND All members of the Board believe strongly in the value and importance of good corporate governance and in accountability to all of the Company’s stakeholders. The statement below explains the approach to governance and how the Board and its Committees operate. The corporate governance framework which the Company operates, including board leadership and effectiveness, board remuneration, and internal control is based upon practices which the Board believes are proportional to the size, risks, complexity and operations of the business and is reflective of the Company’s values. Of the two widely recognised formal codes, it has been decided to adopt the Quoted Companies Alliance’s (“QCA”) Corporate Governance Code for small and mid-size quoted companies. The QCA Code is constructed around ten broad principles and a set of disclosures. The QCA has stated what it considers to be appropriate arrangements for growing companies and asks companies to provide an explanation about how they are meeting the principles through the prescribed disclosures. The Board has considered how it applies each principle to the extent that the Board judges these to be appropriate in the circumstances, and below is an explanation of the approach taken in relation to each. The following paragraphs set out the Company’s compliance with the ten principles of the QCA Code and reasons for any non-compliance. 1. Establish a strategy and business model which promotes long-term value for shareholders The Company is an investing company listed on AIM. Its principal focus is investing in both listed and unlisted junior companies where it believes that it can make an attractive return for shareholders. This strategy has been further developed since 2018 by entering into a partnership with RiverFort Global Capital Limited, the specialist arranger of funding solutions for listed and unlisted junior companies. The Company is focused on deploying its capital in investments that provide both income and downside protection. Going forward it is expected that the Company will deliver returns to shareholders through a combination of capital growth and dividend income. During the year, the Company has continued to implement successfully this business model and has continued to experience demand for its investment capital notwithstanding the current Covid-19 pandemic. 2. Seek to understand and meet shareholder needs and expectations The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. Shareholders have the opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting (“AGM”). Investors also have access to current information on the Company through its website, www.riverfortglobalopportunities.com and via Nicholas Lee, Investment Director, who is available to answer investor relations enquiries and can be contacted on nick.lee@rgo-plc.com 3. Take into account wider stakeholder and social responsibilities and their implications for long-term success The Board recognises that the long-term success of the Company is reliant upon the efforts of its directors and partners, and upon its contractors, suppliers and regulators. The Board has put in place a range of processes and systems to ensure that there is close Board oversight and contact with its key resources and relationships. 15 RiverFort Global Opportunities plc CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 4. Embed effective risk management, considering both opportunities and threats, throughout the organisation It is the responsibility of the Board to ensure investments are managed within acceptable margins of risk. The Company’s investments are monitored on a regular basis which includes reviewing corporate developments and financial performance. The Board also ensures that no one investment represents too great a concentration in the investment portfolio. In addition to its other roles and responsibilities, the Audit and Compliance Committee (as set out in the composition details in the Corporate Governance section of the Company’s website) is responsible to the Board for ensuring that procedures are, being effectively implemented to identify, evaluate and manage the significant risks faced by the Company. Within the scope of the annual audit, specific financial risks are evaluated in detail, including in relation to foreign currency, interest rates, liquidity and credit. The Directors have established procedures, for the purpose of providing a system of internal control. This includes both the procedures referred to above and the preparation of financial information about the Company on a regular basis. In addition, there are a range of Company policies that are reviewed at least annually by the Board. These policies cover matters such as share dealing and insider legislation. The Board currently takes the view that an internal audit function is not considered necessary or practical due to the size of the Company and the close day to day control exercised by the Directors. However, the Board will continue to monitor the need for an internal audit function. As noted in the Strategic Report in the Annual Report, the Board regularly reviews operating and strategic risks and considers in such reviews financial and non-financial information including: – a review of the business at each Board meeting, focusing on any new decisions/risks arising; – the performance of investments; – selection criteria of new investments; and – reports prepared by third parties. 5. Maintain the Board as a well-functioning, balanced team led by the Chair The QCA Code requires that the boards of AIM companies have an appropriate balance between executive and non- executive directors of which at least two should be independent. The Board comprises, the Independent Non-Executive Chairman Philip Haydn-Slater. Investment Director Nicholas Lee, and two Non-Executive Directors, Andrew Nesbitt and Amanda van Dyke. The Board believes that Philip Haydn- Slater fulfils the role of being independent notwithstanding his equity interests in the Company and participation in the Company bonus scheme. The Board is assisted by Miles Nicholson with respect to financial accounting and Company Secretarial matters. The time commitment formally required by the Company is an overriding principal that each director will devote as much time as is required to carry out the roles and responsibilities that the director has agreed to take on. Biographical details of the current directors are set out within Principle Six below. Executive and non-executive directors are subject to re-election at intervals as prescribed in the Company’s Articles of Association. Each Director appointed by the Board since the last AGM holds office until the next AGM and is then eligible for reappointment. Furthermore, one third of Directors who were directors at the time of the two immediately preceding AGMs and who did not retire at such meetings, retire from office by rotation and they can then offer themselves for re- election. The letters of appointment of all directors are available for inspection at the Company’s registered office during normal business hours. The Directors receive fees for their services as directors which are approved by the Board, being mindful of the time commitment and responsibilities of their roles and of current market rates for comparable organizations and appointments. 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. Whilst, the Company does not have a specific CFO, the Investment Director is a qualified accountant and therefore is able to provide sufficient financial oversight. Furthermore, financial information is prepared on a regular basis by the Company’s third party accounting services provider thereby separating preparation from review. 16 RiverFort Global Opportunities plc CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 The Board meetings are held as regularly as necessary given the Company’s levels of activity but with at least six meetings held a year. It has established an Audit and Compliance Committee and a Remuneration Committee, particulars of which appear hereafter. The Board agreed that appointments to the Board are made by the Board as a whole and so has not created a Nominations Committee. The Board retains full control of the Company with day-to-day operational control delegated to the Investment Director and other Directors. Since the beginning of 2021, the Board has met four times with all Directors attending and the Directors communicate regularly at other times. 6. Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities All four members of the Board bring relevant sector experience and public markets experience and one member is a chartered accountant. One director is female and three are male. The Board believes that its blend of relevant experience, skills and personal qualities and capabilities is sufficient to enable it to successfully execute its strategy. Philip Haydn-Slater, Independent Non-Executive Chairman Philip has over 35 years of experience in stockbroking and commodities with a number of well-known stockbroking firms. He spent eight years as Head of Corporate Broking at WH Ireland Limited in London, where he was responsible for originating and managing equity transactions, including IPOs and secondary placings for corporate clients on AIM and other international exchanges including the Australian and Canadian stock exchanges largely in the natural resources sector. Philip has also worked in London and Sydney for various financial institutions including ABN Amro, Bankers Trust, James Capel & Co and Bain Securities (Deutsche Bank) Sydney. More recently, given his wealth of experience, he has acted as an independent director on the boards of a number of public and private companies. Nicholas Lee, Investment Director Nicholas read Engineering at St. John’s College, Cambridge and began his career at Coopers & Lybrand where he qualified as a chartered accountant. He then joined Dresdner Kleinwort where he worked in their corporate finance department advising a range of companies across a number of different sectors. When he left in 2009, he was a Managing Director and Head of Investment Banking for Dresdner Kleinwort’s hedge fund/alternative asset manager clients. Since then, Nicholas has been actively involved with AIM companies and is currently a director of a number of AIM listed companies including, Pires Investments plc and Immotion Group plc. Andrew Nesbitt, Non-Executive Director Andrew is a qualified mining engineer and is a consultant to RiverFort Global Capital Limited, the Company’s Investment Adviser. Accordingly, he is not considered independent. He holds a BSc (Eng) Mining and an MBA and has over 20 years of experience in the natural resources sector. He has held various production and technical roles with both De Beers and Goldfields and has carried out a number of feasibility studies across the world with the leading technical consulting group SRK. In addition, Andrew is also an experienced investor, having previously worked as a partner and portfolio manager for Craton Capital Pty Limited, a global precious metals fund with over US$400 million of assets under management. Amanda van Dyke, Independent Non-Executive Director Amanda van Dyke is currently a Managing Director at ARCH Emerging Markets Partners Limited. Amanda has previously worked for specialist fund manager at South River Asset Management, Dundee Securities, Ocean Equities and GMP as a mining specialist in equity sales. She has an MBA and an MA in international economics from SDA Bocconi. Amanda is also the chairman of Women in Mining (UK), sponsored by Rio Tinto, Anglo American and Glencore. 7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement Internal evaluation of the Board, its Committees and individual directors is important and will develop as the Company grows in the future. The expectation is that Board reviews will be undertaken on an annual basis in the form of peer appraisal, questionnaires and discussions to determine the effectiveness and performance in various areas as well as the directors’ continued independence 17 RiverFort Global Opportunities plc CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 DECEMBER 2021 8. Promote a corporate culture that is based on ethical values and behaviours The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Company as a whole and that this will impact the performance of the Company. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole. Therefore, the importance of sound ethical values and behaviour is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Company does. The Board assessment of the culture within the Company at the present time is one where there is respect for all individuals, open dialogue within the Company and a commitment to best practice. 9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board The Board schedule provides for quarterly meetings and, in addition, meets ad-hoc as required. Notwithstanding the above, the Board and its Committees receive appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting, and Board and Committee papers are distributed several days before meetings take place. Any Director may challenge Company proposals and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from such meetings are agreed by the Board or relevant Committee and then followed up by the Company’s management. The Audit and Compliance Committee monitors the integrity of financial statements, oversees risk management and control, monitors the effectiveness of the internal audit function and reviews external auditor independence. It also ensures that the Company is compliant with its relevant regulatory requirements. Philip Haydn-Slater and Amanda van Dyke are the members of this committee. The Remuneration Committee reviews the Board’s remuneration on a regular basis. Nicholas Lee and Andrew Nesbitt are the members of this committee. Nominations to the Board are decided on by the Board as a whole and therefore the Company does not believe that there is any need for a separate Nominations Committee. The Non-Executive Chairman has overall responsibility for corporate governance and in promoting high standards throughout the Company. He leads and chairs the Board, ensuring that committees are properly structured and operate with appropriate terms of reference, ensures that performance of individual directors, the board and its committees are reviewed on a regular basis, leads in the development of strategy and setting objectives, and oversees communication between the Company and its shareholders. The Non-Executive Directors contribute independent thinking and judgement through the application of their external experience and knowledge, scrutinise the performance of management, provide constructive challenge to the executive directors and ensure that the Company is operating within the governance and risk framework approved by the Board. The Company Secretary is responsible for providing clear and timely information flow to the Board and its committees and supports the Board on matters of corporate governance and risk. The Board has approved the adoption of the QCA Code as its governance framework against which this statement has been prepared and will monitor the suitability of this code on an annual basis and revise its governance framework as appropriate as the group evolves. 10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year announcements, the AGM and one-to-one meetings with large existing or potential new shareholders. A range of corporate information (including all Company announcements and presentations) is also available to shareholders, investors and the public on the Company’s corporate website, www.riverfortglobalopportunities.com 18 RiverFort Global Opportunities plc INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RIVERFORT GLOBAL OPPORTUNITIES PLC FOR THE YEAR ENDED 31 DECEMBER 2021 Opinion We have audited the financial statements of Riverfort Global Opportunities plc (the ‘company’) for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards. In our opinion, the financial statements: • • • give a true and fair view of the state of the company’s affairs as at 31 December 2021 and of its profit for the year then ended; have been properly prepared in accordance with UK-adopted international accounting standards; 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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting included a review of the directors’ statement in note 2 to the financial statements and the company’s budgets for the period of twelve months from the date of approval of the financial statements, including checking the mathematical accuracy of the budgets and discussion and challenge of significant assumptions used by the management. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Our application of materiality For the purposes of determining whether the financial statements are free from material misstatement, we define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the financial statements, would be changed or influenced. We also determine a level of performance materiality which we use to assess the extent of testing needed, to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. Materiality for the company financial statements as a whole was set at £334,000 (2020: £225,000). This has been calculated based on 2.5% (2020: 2%) of Gross Assets, being the same basis as applied in the prior year. Using our professional judgement, we have determined this to be the principal benchmark within the financial statements as it is most relevant to stakeholders in assessing the financial performance of the company, based on the growth in the value of the company’s investments. Performance materiality was set at £233,800 (2020: £157,500), being 70% of materiality for the financial statements as a whole respectively. We agreed to report to those charged with governance all corrected and uncorrected misstatements we identified through our audit with a value in excess of £16,700 (2020: £11,250). We also agreed to report any other misstatements below that threshold that we believe warranted reporting on qualitative grounds. 19 RiverFort Global Opportunities plc INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RIVERFORT GLOBAL OPPORTUNITIES PLC FOR THE YEAR ENDED 31 DECEMBER 2021 Our approach to the audit Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement, aspects subject to significant management judgement as well as greatest complexity and size. The financial asset investments balance is highly material and incorporates both equity investments and structured finance investments. We carried out a detailed review of the classification of the financial assets as fair value through profit and loss (FVTPL) and assessed the fair value of the instruments on a sample basis to ensure they are materially stated in these financial statements. This also incorporated the review of the net income from financial instruments at FVTPL. We consider the impact of the risks related to management override of controls and related party transactions and relationships to be material. We have tested manual and automated journal entries occurring throughout the period, including journal entries at year end. Additionally, as part of our audit procedures to address fraud risk, we assessed the overall control environment and reviewed whether there had been any reported actual or alleged instances of fraudulent activity during the year. Our work on related parties included assessment of the company’s procedures, as well as discussions with the directors. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our scope addressed this matter Valuation and classification of Financial asset investments (Note 15) financial asset At the year end, the company held non-current investments of and current £11,072,148, Equity investments, Structured Finance investments and share warrants. included which risk is a There financial asset investments are classified and valued incorrectly and are not owned by the company. that the in This matter was considered to be one of most significance the size, the audit due complexity and significance of estimates and judgements required in valuing the financial asset investments. to Our work in this area included: • Performing a review of the fair value of debt investment assets at the year end, to determine whether it is materially misstated; • Perform an impairment review of investments in debt outstanding at the year-end by assessing their ability to repay through review of post year end bank statements and share price of customer. • Obtain copies of contracts throughout the period and reconcile back to the investments held within the financial statements. Testing a sample of investments to certificate of title to ensure rights and ownership of investments; • • Verify a sample of investment carrying amounts to supporting information (e.g. stock market prices, cost information, other information available); For investments in privately owned entities, obtain details of recent fund-raising activities to assess their fair value; and review their latest financial statements to consider whether there are any impairment indicators; • • Discuss with management the business model of the company and ensure this has not changed from the prior period; • Ensure that any gains / losses charged through the Profit and Loss are correctly accounted for and classified appropriately. • Obtain copies of the loan agreements in place at the year end and reconcile to the financial asset balance. • Ensure disclosure IFRS 7 requirements and the significant estimates section is disclosed in appropriate detail and accuracy is adequate as per Our work did not highlight any material misstatements. 20 RiverFort Global Opportunities plc INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RIVERFORT GLOBAL OPPORTUNITIES PLC FOR THE YEAR ENDED 31 DECEMBER 2021 Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s 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. Opinions 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 strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or the 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 statement of directors’ responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 21 RiverFort Global Opportunities plc INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF RIVERFORT GLOBAL OPPORTUNITIES PLC FOR THE YEAR ENDED 31 DECEMBER 2021 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: • We obtained an understanding of the company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management and application of cumulative audit knowledge. • We determined the principal laws and regulations relevant to the company in this regard to be those arising from AIM rules, local tax law and regulations, UK-adopted international accounting standards and the Companies Act 2006. • We designed our audit procedures to ensure that the audit team considered whether there were any indications of non-compliance by the company with those laws and regulations. This is evidenced by our discussion of laws and regulations with management, reviewing minutes of meetings of those charged with governance and review of regulatory news. • We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the group with those laws and regulations. These procedures included, but were not limited to: • Making enquiries of management; • A review of Board minutes; • A review of legal ledger accounts; • A review of Regulatory News Service (“RNS”) announcements. • We addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business or where the business rationale is not clear. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Use of our report This report is made solely to the company's members, as a body, in accordance with 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. Eric Hindson (Senior Statutory Auditor) For and on behalf of PKF Littlejohn LLP Statutory Auditor Date 23 June 2022 15 Westferry Circus Canary Wharf London E14 4HD 22 RiverFort Global Opportunities plc STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2021 CONTINUING OPERATIONS: Investment income Net gain from financial instruments at FVTPL Foreign exchange losses on other financial instruments TOTAL OPERATING INCOME Administrative expenses Investment advisory fees Other gains and losses PROFIT BEFORE TAXATION Taxation PROFIT FOR THE YEAR AND TOTAL COMPREHENSIVE INCOME EARNINGS PER SHARE Basic earnings per share Fully diluted earnings per share Note 2021 £ 2020 £ 4 5 6 7 8 9 12 13 1,801,432 1,251,681 680,286 1,476,201 (12,272) (284,484) 2,469,446 2,443,398 (715,195) (403,564) (593,990) (375,446) (120,249) (167,083) 1,040,012 1,497,305 − − 1,040,012 1,497,305 0.140p 0.138p 0.221p 0.221p The accompanying accounting policies and notes are an integral part of these financial statements. 23 RiverFort Global Opportunities plc STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 DECEMBER 2021 NON-CURRENT ASSETS Financial asset investments CURRENT ASSETS Financial asset investments Trade and other receivables Cash and cash equivalents TOTAL ASSETS CURRENT LIABILITIES Trade and other payables NET ASSETS EQUITY Share capital Share premium account Share options reserve Retained profits/(losses) TOTAL EQUITY Note 15 15 16 17 18 19 19 2021 £ 2020 £ 8,105,633 8,105,633 4,249,249 4,249,249 2,966,515 317,539 2,012,483 5,296,537 2,908,855 246,149 4,046,856 7,201,860 13,402,170 11,451,109 1,653,349 1,653,149 2,211,173 2,211,173 11,748,821 9,239,936 77,540 1,568,353 201,034 9,901,894 67,893 − − 9,172,043 11,748,821 9,239,936 These Financial Statements were approved by the Board of Directors on 23 June 2022 and were signed on its behalf by: N Lee Director Company number: 269566 The accompanying accounting policies and notes are an integral part of these financial statements. 24 RiverFort Global Opportunities plc STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2021 Share capital £ Share premium £ Capital redemption reserve £ Share options reserve £ Retained profits £ Total equity £ BALANCE AT 1 JANUARY 2020 10,042,273 3,191,257 27,000 − (5,382,113) 7,878,417 Total comprehensive income − − − − 1,497,305 1,497,305 Capital reduction (9,974,380) (3,191,257) (27,000) − 13,192,637 − Dividend payment − BALANCE AT 31 December 2020 67,893 Total comprehensive income − − − − Share issue 9,647 1,568,353 Grant of share options Dividend payment − − − − BALANCE AT 31 December 2021 77,540 1,568,353 − − − − − − − − (135,786) (135,786) − 9,172,043 9,239,936 − − 201,034 1,040,012 1,040,012 − − 1,578,000 201,034 − (310,161) (310,161) 201,034 9,901,894 11,748,821 The accompanying accounting policies and notes are an integral part of these financial statements. 25 RiverFort Global Opportunities plc STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021 Note 2021 £ 2020 £ CASH FLOWS FROM OPERATING ACTIVITIES Investment income received Operating expenses paid NET CASH INFLOW FROM OPERATING ACTIVITIES INVESTING ACTIVITIES Purchase of investments Disposal of investments Debt instrument repayments Settlement of forward currency contracts NET CASH (USED IN)/GENERATED FROM INVESTING ACTIVITIES FINANCING ACTIVITIES Proceeds from share issues Dividend payment NET CASH GENERATED FROM/(USED IN) FINANCING ACTIVITIES NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the year Effect of foreign currency exchange on cash 15 15 14 1,195,653 (1,091,429) 1,178,181 (489,020) 104,224 689,161 (9,618,440) 493,332 5,730,944 − (4,854,799) 2,562,113 3,405,246 (212,456) (3,394,164) 900,104 1,578,000 (310,161) − (135,786) 1,267,839 (135,786) (2,022,101) 1,453,479 4,046,856 2,624,480 (12,272) (31,103) CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 17 2,012,483 4,046,856 The accompanying accounting policies and notes are an integral part of these financial statements. 26 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 1 GENERAL INFORMATION RiverFort Global Opportunities plc is a public limited company, limited by shares, incorporated in England and Wales. The shares of the Company are listed on the Alternative Investment Market (AIM). The address of its registered office is Suite 39, 18 High Street, High Wycombe, Buckinghamshire, HP11 2BE. The Company’s principal activities are described in the Directors’ Report. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied throughout all periods presented in the financial statements. The Company’s financial statements have been prepared in accordance with UK adopted international accounting standards and in accordance with the requirements of the Companies Act 2006. The financial statements have been prepared under the historical cost convention, as modified by financial assets and financial liabilities (including derivative instruments) measured at fair value through profit or loss. The measurement basis is more fully described in the accounting policies below. The financial statements are presented in pounds sterling (£) which is the functional currency of the Company. The comparative figures are for the year ended 31 December 2020. GOING CONCERN The Company’s assets comprise mainly cash, debt securities and quoted securities. Since the year end, the Company’s cash resources have continued to increase and the Company has prepared cash forecasts to June 2023 that show that the Company has sufficient cash resources for the foreseeable future. The directors have also considered the impacts of Covid-19 and have concluded that there are no material factors which are likely to affect the ability of the Company to continue as a going concern, as a result of the cash reserves in place and given the Company’s ongoing costs. Accordingly, the Directors believe that as at the date of this report it is appropriate to continue to adopt the going concern basis in preparing the financial statements. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. These estimates and assumptions are based upon management’s knowledge and experience of the amounts, events or actions. Actual results may differ from such estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In certain circumstances, where fair value cannot be readily established, the Company is required to make judgements over carrying value impairment and evaluate the size of any impairment required. 27 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued) FAIR VALUE OF FINANCIAL INSTRUMENTS The Company holds investments that have been designated as held for trading on initial recognition. Where practicable the Company determines the fair value of these financial instruments that are not quoted (Level 3), using the most recent bid price at which a transaction has been carried out (see accounting policy note, “Valuation of financial asset investments”). These techniques are significantly affected by certain key assumptions, such as market liquidity. Other valuation methodologies such as estimated net asset value may be used and it is important to recognise that in that regard, the derived fair value estimates cannot always be substantiated by comparison with independent markets and, in many cases, may not be capable of being realised immediately. The Company also holds unquoted share warrants as level 3 investments. The fair values of these warrants have been obtained using the Black Scholes valuation model and applying a 75% discount to allow for the warrants being untraded derivatives with the underlying securities being traded on junior markets. This model makes certain assumptions relating to the volatility of the underlying Company’s share price which are applied in the calculation of the fair value of the warrants. The volatility is measured based on the volatility of the share price of the underlying share over the 12 months prior to the issue of the warrants. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES New standards, amendments and interpretations adopted by the Company The Company has applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2021: • Amendments to IFRS 17 “Insurance Contracts” • Amendments to IFRS 16 “Leases” • Amendments to IFRS 9 “Financial Instruments” • Amendments to IAS 39 “Financial Instruments: Recognition and Measurement” • Amendments to IFRS 7 “Financial Instruments: Disclosures” The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods. New standards and interpretations not yet adopted A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2021 and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Company. There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company. 28 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) REVENUE RECOGNITION INVESTMENT INCOME Interest on fixed interest debt securities, designated at fair value through profit or loss, is recognised in the statement of comprehensive income using the effective interest rate method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liability. Other structured finance fees are recognised on the date of the relevant agreement. Income may be recognised at a point in time or over the time. Over time revenue recognition is proportional to progress towards satisfying a performance obligation by transferring control of promised services to a customer. Income which does not qualify for recognition over time is recognised at a point in time when the service is rendered. The Company has no material receivables and contract liabilities from contracts with customers as non- refundable up-front fees are not charged to customers upon commencement of contracts with customers. Bank deposit interest is recognised on an accruals basis. FOREIGN CURRENCY TRANSLATION The functional and presentation currency of the Company is Sterling. Foreign currency transactions are translated into Sterling using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to debt securities and equity investments denominated in currencies other than Sterling and measured at FVTPL are also presented in the income statement within Operating income. All other foreign exchange gains and losses are presented on a net basis in the income statement within ‘Other gains and losses”. SHARE BASED PAYMENTS The Company operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense and credited to the share option reserve within equity. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Options that lapse before vesting are credited back to income. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and, if applicable, share premium when the options are exercised. 29 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) CURRENT AND DEFERRED TAX Tax is recognised in the income statement, except to the extent that it relates to items recognised directly in equity. In this case the tax is also recognised directly in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Temporary differences include those associated with shares in subsidiaries and joint ventures and are only not recognised if the Company controls the reversal of the difference and it is not expected for the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets. Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the statement of financial position date. Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited to equity in which case the related deferred tax is also charged or credited directly to equity. SEGMENTAL REPORTING The accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by the chief operating decision maker, which is identified as the Board of Directors. In identifying its operating segments, management generally follows the Company's service lines which represent the main products and services provided by the Company. The Directors believe that the Company’s continuing investment operations comprise one segment. FINANCIAL ASSETS The Company's financial assets comprise investments, cash and cash equivalents and loans and receivables, and are recognised in the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument. 30 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) FINANCIAL ASSETS INVESTMENTS CLASSIFICATION OF FINANCIAL ASSETS The Company holds financial assets including equities and debt securities. The classification and measurement of financial assets at 31 December 2021 is in accordance with IFRS 9. On the initial recognition, the Company classifies financial assets as measured at amortised cost or FVTPL. A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: • • It is held within a business model whose objective is to hold assets to collect contractual cash flows; and its contractual terms give rise on specific dates to cash flows that are Solely Payments of Principal and Interest (SPPI). All other financial assets of the Company are measured at FVTPL. BUSINESS MODEL ASSESSMENT In making an assessment of the objective of the business model in which a financial asset is held, the Company considers all of the relevant information on how the business is managed, including: • • • • the documented investment strategy and the execution of this strategy in practice. This includes whether the investment strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realised cash flows through the sale of the assets; how the performance of the portfolio is evaluated and reported to the Company’s management; the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; how the investment advisor is compensated e.g. whether compensation is based on the fair value of the assets managed or the contractual cashflows collected IFRS 9 subsection B4.1.1-B4.1.2 stipulates that the objective of the entity’s business model is not based on management’s intentions with respect to an individual instrument, but rather determined at a higher level of aggregation. The assessment needs to reflect the way that an entity manages its business. The company has determined that it has two business models. • Held-to-collect business model: this includes cash and cash equivalents, balances due from brokers and other receivables. These financial assets are held to collect contractual cash flows. • Other Business model: this includes structured finance products, equity investments, investments in unlisted private equities and derivatives. These financial assets are managed and their performance is evaluated, on a fair value basis with frequent sales taking place in respect to equity holdings. VALUATION OF FINANCIAL ASSET INVESTMENTS Investment transactions are accounted for on a trade date basis. Assets are de-recognised at the trade date of the disposal. Assets are sold at their fair value, which comprises the proceeds of sale less any transaction cost. Financial asset investments are categorised as either Level 1, Level 2 or Level 3 investments as set out in Note 15. The fair value of Level 1 financial asset investments in the balance sheet is based on the quoted bid price at the balance sheet date, with no deduction for any estimated future selling cost. The valuation of Level 2 and Level 3 financial asset investments are set out in note 15 on page 37. Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the consolidated statement of comprehensive income as “Net gains/(losses) on investments”. Investments are initially measured at fair value plus incidental acquisition costs. Subsequently, they are measured at fair value. This is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted. 31 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) DERIVATIVE FINANCIAL INSTRUMENTS Derivative financial instruments include forward currency contracts. Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. All derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. Changes in the fair value of derivatives are recognised immediately in the statement of comprehensive income. The company is engaged in hedging activities of its foreign exchange risk. The company does not apply hedge accounting. Given the low level of trading activity, the Company has estimated that any valuation adjustments are not material and has therefore not incorporated these into the fair value of derivatives. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. They are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method. OTHER RECEIVABLES Other receivables from third parties are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method. IMPAIRMENT OF FINANCIAL ASSETS Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. A provision for impairment is made when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. Impaired debts are derecognised when they are assessed as uncollectible. FINANCIAL LIABILITIES The Company’s financial liabilities comprise trade payables. Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Company becomes a party to the contractual provisions of the instruments. TRADE PAYABLES Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method. EARNINGS PER SHARE Earnings per share are calculated by dividing the profit or loss for the year after tax by the weighted average number of shares in issue and is measured in pence per share. EQUITY Equity comprises the following: • • • • • “Share capital” represents the nominal value of equity shares. “Share premium” represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue. “Capital redemption reserve” represents the nominal value of shares repurchased or redeemed by the Company. Share option reserve represents the value of share options granted but not exercised. “Retained losses" represents retained losses. 32 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 3 SEGMENTAL INFORMATION The Company is organised around business class and the results are reported to the Chief Operating Decision Maker according to this class. There is one continuing class of business, being the investment in junior listed and unlisted companies. Given that there is only one continuing class of business, operating within the UK no further segmental information has been provided. 4 INVESTMENT INCOME Structured finance fees Other interest receivable 5 NET GAIN ON INVESTMENTS Net realised gains on disposal of investments Net movement in fair value of investments Net foreign exchange gain/(loss) on investments Net gain on investments 2021 £ 727,089 1,074,343 1,801,432 2020 £ 414,265 837,416 1,251,681 2021 £ 2020 £ 372,378 843,515 242,873 680,795 65,035 (48,109) 680,286 1,476,201 6 FOREIGN EXCHANGE LOSSES ON OTHER FINANCIAL INSTRUMENTS 2021 Net loss on foreign currency forward contracts Exchange loss on foreign currency cash balances 2020 £ (253,381) £ − (12,272) (31,103) (12,272) (284,484) 33 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 7 ADMINISTRATIVE EXPENSES Profit for the year has been arrived at after charging: Wages and salaries Share based payments Professional and regulatory expenses Audit and tax compliance Other administrative expenses Total administrative expenses as per the statement of comprehensive income 2021 £ 2020 £ 210,023 201,034 218,436 35,616 50,086 163,055 − 163,613 28,170 48,726 715,195 403,564 AUDITOR’S REMUNERATION During the year the Company obtained the following services from the Company’s auditor: Fees payable to the Company’s auditor for the audit of the parent company and the Company financial statements Fees payable to the Company’s auditor and its associates for other services: Other services relating to taxation 2021 £ 2020 £ 30,000 25,200 − 30,000 2,970 28,170 8 INVESTMENT ADVISORY FEES The charge of £593,990 (2020: £375,446) is payable to the Company’s investment adviser, RiverFort Global Capital Limited. In 2020, these fees had been waived in exchange for an extension of the investment adviser contract in order to allow the Company to build up its investment portfolio prior to incurring advisory fees. These charges are based on the level of Company’s net assets and the performance of its investments. 9 OTHER GAINS AND LOSSES Currency exchange differences 2021 £ 2020 £ (120,249) (167,083) (120,249) (167,083) 34 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 10 DIRECTORS’ EMOLUMENTS Aggregate emoluments Social security costs Share based payment expense Name of director P Haydn-Slater N Lee A van Dyke A Nesbitt 2021 £ 199,000 11,023 201,034 411,057 Total 2021 £ 75,000 102,000 22,000 − 199,000 2020 £ 152,500 10,555 − 163,055 Total 2020 £ 52,500 78,000 22,000 − 152,500 Salaries and fees £ *45,000 52,000 22,000 − 119,000 Bonuses £ 30,000 50,000 − − 80,000 *£33,000 of P Haydn-Slater’s salary and fees was invoiced by Musgrave Merchant Ltd, a company controlled by him. 11 EMPLOYEE INFORMATION Wages and salaries Consultancy fees Social security costs Share based payment expense Average number of persons employed: Office and management 2021 £ 166,000 33,000 11,023 201,034 411,057 2021 Number 3 2020 £ 129,500 23,000 10,555 − 163,055 2020 Number 3 COMPENSATION OF KEY MANAGEMENT PERSONNEL There are no key management personnel other than the Directors of the Company. 35 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 12 INCOME TAX EXPENSE Current tax – continuing operations 2021 2020 £ − £ − The tax on the Company's profit before tax differs from the theoretical amount that would arise using the weighted average rate applicable to profits of the Consolidated entities as follows: 2021 £ 2020 £ Profit/(loss) before tax from continuing operations 1,040,012 1,497,305 Profit/(loss) before tax multiplied by rate of corporation tax in the UK of 19% (2020: 19%) Expenses not deductible for tax purposes Offset against tax losses brought forward Total tax 197,602 38,667 284,488 7,091 (236,269) (291,579) − − Unrelieved tax losses of approximately £3,962,000 (2020: £5,206,000) remain available to offset against future taxable trading profits. No deferred tax asset has been recognised in respect of the losses as recoverability is uncertain. 13 EARNINGS PER SHARE The basic earnings per share is based on the loss for the year divided by the weighted average number of shares in issue during the year. The weighted average number of ordinary shares for the year assumes that all shares have been included in the computation based on the weighted average number of days since issue. 2021 £ 2020 £ Profit attributable to equity holders of the Company: Profit from continuing operations 1,040,012 1,497,305 Profit for the year attributable to equity holders of the Company 1,040,012 1,497,305 Weighted average number of ordinary shares in issue for basic earnings 741,044,800 678,933,600 Weighted average number of ordinary shares in issue for fully diluted earnings 751,278,700 678,933,600 EARNINGS PER SHARE BASIC AND FULLY DILUTED: - Basic earnings per share from continuing and total operations - Fully diluted earnings per share from continuing and total operations 0.140p 0.138p 0.221p 0.221p 36 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 14 DIVIDENDS Amounts recognised as distributions to shareholders in the year Interim dividend for 2020 Final dividend for 2020 2021 Pence 2020 Pence 2021 £ 2020 £ − 0.02p − 135,786 0.04p 0.04p − 310,161 − 0.02p 310,161 135,786 15 FINANCIAL ASSET INVESTMENTS All financial asset investments are designated at fair value through profit and loss (“FVTPL”) 2021 £ 2020 £ At 1 January – fair value Purchase of investments designated at FVTPL Equity investment disposals Debt security repayments Net gain/(loss) on disposal of investments Movement in fair value of investments Net foreign exchange loss on debt securities At 31 December – fair value Categorised as: Level 1 – Quoted investments Level 2 – Unquoted investments Level 3 – Unquoted investments 7,158,104 5,197,846 11,028,551 5,877,989 (2,063,849) (1,988,686) (5,730,944) (3,405,246) 372,378 242,873 65,035 843,515 680,795 (48,109) 11,072,148 7,158,104 Non-current 2020 £ 2021 £ 2020 £ − 2,372,323 1,706,712 Current 2021 £ − 2,966,515 2,908,855 2,840,270 2,166,674 − − 2,893,040 375,863 2,966,515 2,908,855 8,105,633 4,249,249 The table of investments sets out the fair value measurements using the IFRS 7 fair value hierarchy. Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset as follows: Level 1 – valued using quoted prices in active markets for identical assets. Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1. Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data. The valuation techniques used by the company for Level 1 financial asset investments are explained in the accounting policy note, “Valuation of financial asset investments”. The valuation of Level 2 and Level 3 financial assets are explained on the following page. Investments categorised as current are debt securities repayable by 31 December 2022. 37 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 15 FINANCIAL ASSET INVESTMENTS (continued) LEVEL 2 FINANCIAL ASSET INVESTMENTS Level 2 financial asset investments comprise debt securities valued by reference to their principal value, less appropriate allowance where there is a doubt as to whether the principal amount will be fully repaid in accordance with the contractual terms of the obligation. LEVEL 3 FINANCIAL ASSET INVESTMENTS Reconciliation of Level 3 fair value measurement of financial asset investments Brought forward Purchase of investments Movement in fair value Carried forward 2021 £ 375,863 2,402,153 115,024 2,893,040 2020 £ 38,931 − 336,932 375,863 The Company’s level 3 investments include a number of unquoted share warrants. which have been valued using the Black-Scholes valuation model, discounted by 75% to allow for there being no trading market for the warrant instruments and the underlying shares are quoted on the London Stock Exchange’s secondary Alternative Investment Market. The company’s pre-IPO investments principally comprise, Pluto Digital plc, whose shares are valued at the price of the last fund raise and convertible loan stock in Smarttech247 which is valued at face value which management considers approximates their fair value. In line with the investment strategy adopted by the Company, Nicholas Lee is on the board of the following investee company: Pires Investments plc 16 TRADE AND OTHER RECEIVABLES Prepayments and accrued income % held by the Company 2020 2021 19.2% 18.2% 2021 £ 2020 £ 317,539 246,149 317,539 246,149 The Directors consider that the carrying amount of other receivables is approximately equal to their fair value. 17 CASH AND CASH EQUIVALENTS Cash and cash equivalents 2021 £ 2020 £ 2,012,483 4,046,856 The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value. 38 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 18 TRADE AND OTHER PAYABLES Trade payables Other payables Accrued expenses 2021 £ 2020 £ 41,942 31,346 969,753 641,654 1,665,751 514,076 1,653,349 2,211,173 The Directors consider that the carrying amount of trade and other payables approximates to their fair value. Trade payables and Other payables are all due within 6 months of the year end. 19 SHARE CAPITAL ISSUED AND FULLY PAID: At 1 January 2020 Number of shares Share capital Deferred Ordinary Deferred £ Ordinary £ Share premium £ Deferred shares of 9.9p each 32,857,956 − 3,252,938 − − Ordinary shares of 0.1p each − 6,789,335,226 − 6,789,335 3,191,257 32,857,956 6,789,335,226 3,252,938 6,789,335 3,191,257 Issue of shares − 774 − 1 − Share reorganisation 67,893,400 (6,110,402,400) 6,721,443 (6,721,443) Capital reduction (100,751,356) (9,974,381) (3,191,257) 32,857,956 6,789,336,000 3,252,938 6,789,336 3,191,257 Ordinary shares of 0.01p each At 31 December 2020 Issue of shares Share issue costs At 31 December 2021 − − − − − 678,933,600 678,933,600 96,470,587 − 775,404,187 − − − − − 67,893 67,893 − − 9,647 1,630,353 − (62,000) 77,540 1,568,353 On 10 May 2021, the Company issued 96,470,587 new ordinary shares at 1.7p per share, raising £1,640,000 before expenses, as a result of a private placing. The placees also received one warrant for each share subscribed for, exercisable at 3.4p per share for a period of two years from the date of issue. 39 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 20 SHARE OPTIONS AND WARRANTS OPTIONS On 12 February 2021, the Company granted 16,900,000 options each to Philip Haydn-Slater and Nicholas Lee. The share options have an exercise price of 1.00p per share and will vest as to 50% on grant and 50% upon the Company's volume weighted average share price being 1.50 pence or greater (being 50% above the Exercise Price) for a period of 10 consecutive days. The options have a 10 year term from the date of grant. The fair value of the share options at the date of grant was calculated by reference to the Black-Scholes model. The significant inputs to the model in respect of the options granted in the year were as follows: Grant date Share price at date of grant Exercise price per share No. of warrants Risk free rate Expected volatility Expected life of warrant Calculated fair value per share 12 Feb 2021 1.25p 1.00p 33,800,000 0.9% 78.8% 10 years 0.59478p The share options outstanding at 31 December 2021 and their weighted average exercise price are as follows: Outstanding at 1 January Granted Outstanding at 31 December 2021 2020 Weighted average exercise price Pence Weighted average exercise price Pence Number − 1.00 1.00 − − − − − − Number − 33,800,000 33,800,000 The fair value of the share options recognised as an expense in the income statement was £201,034 (2020: £Nil). WARRANTS On 10 May 2021, the Company issued 96,470,587 warrants to the subscribers for a private placing, exercisable for a period of 2 years at 3.4p per share. The share warrants outstanding at 31 December 2021 and their weighted average exercise price are as follows: Outstanding at 1 January Issued Outstanding at 31 December 2021 2020 Weighted average exercise price Pence Weighted average exercise price Pence Number − 3.40 3.40 − − − − − − Number − 96,470,587 96,470,587 40 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 21 RISK MANAGEMENT OBJECTIVES AND POLICIES The Company is exposed to a variety of financial risks which result from both its operating and investing activities. The Company’s risk management is coordinated by the Board of Directors and focuses on actively securing the Company’s short to medium term cash flows by minimising the exposure to financial markets. The main risks the Company is exposed to through its financial instruments are credit risk, foreign currency risk, liquidity risk, market price risk and operational risk. CAPITAL RISK MANAGEMENT The Company’s objectives when managing capital are: • to safeguard the Company’s ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders; to support the Company’s growth; and to provide capital for the purpose of strengthening the Company’s risk management capability. • • The Company actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Company and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes. The Company is not subject to externally imposed capital requirements. CREDIT RISK The Company’s financial instruments that are subject to credit risk are cash and cash equivalents and loans and receivables. The credit risk for cash and cash equivalents is considered negligible since the counterparties are reputable financial institutions. The credit risk for loans and receivables is mainly in respect of short term loans, made on market terms, which are monitored regularly by the Board. The Company’s maximum exposure to credit risk is £2,029,573 (2020: £4,046,856) comprising cash and cash equivalents and other receivables. The ageing profile of trade and other receivables was: Current Overdue for less than one year LIQUIDITY RISK 2021 Total book value £ − − − 2020 Total book value £ − − − Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Company manages this risk through maintaining a positive cash balance and controlling expenses and commitments. The Directors are confident that adequate resources exist to finance current operations. 41 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 21 RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) FOREIGN CURRENCY RISK The Company invests in financial instruments and enters into transactions that are denominated in currencies other than its functional currency, primarily in US dollars (USD). Consequently, the Company is exposed to the risk that the exchange rate of its currency relative to other foreign currencies may change in manner that has an adverse effect on the fair value of the future cashflows of the Company’s financial assets denominated in currencies other than the GBP. The Company’s policy is to use derivatives to manage its exposure to foreign currency risk. The instruments used are foreign currency forward contracts. The Company does not apply hedge accounting. The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows: US Dollars Euro Canadian Dollars Australian Dollars Swiss Francs Assets Liabilities 31 Dec 2021 31 Dec 2020 £ £ 31 Dec 2021 31 Dec 2020 £ £ 3,216,128 4,847,200 1,185,685 152,196 535,106 1,028,669 658,389 − − − − 1,074,487 1,079,034 477,704 132,325 129,213 − − − − 6,623,977 4,999,396 1,818,276 1,074,487 The following table details the Company’s sensitivity to a 5 per cent increase and decrease in GBP against other currencies. 5 per cent is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in the foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 5 per cent change in the foreign currency exchange rates. A positive number below indicates an increase in profit and other equity where GBP weakens 5 per cent against the relevant currency. For a 5 per cent strengthening of GBP against the relevant currency, there would be a comparable impact on the profit and other equity, and the balances below would be negative. US Dollars Euro Canadian Dollars Australian Dollars Swiss Francs Effect on Profit and Loss 31 Dec 2021 £ 31 Dec 2020 £ 160,806 151,938 5,332 2,870 44,817 26,459 7,610 − − − INTEREST RATE RISK Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk is mitigated by the Company only entering into fixed rate interest agreements, therefore detailed analysis of interest rate risk is not disclosed. 42 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 21 RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) MARKET PRICE RISK The Company’s exposure to market price risk mainly arises from potential movements in the fair value of its investments. The Company manages this price risk within its long-term investment strategy to manage a diversified exposure to the market. If each of the Company’s equity investments were to experience a rise or fall of 10% in their fair value, this would result in the Company’s net asset value and statement of comprehensive income increasing or decreasing by £508,000 (2020: £171,000). Exposure to market price risk also arises in respect of the Company’s investments in debt securities which are mainly denominated in US Dollars. The Company’s strategy for the management of market risk is driven by the Company’s investment objective, which is focused on deploying its capital in investments that provide both income and downside protection. It is expected that the Company will deliver returns to shareholders through a combination of capital growth and dividend income. The Company’s market risk is managed on a continuous basis by the Investment Advisor in accordance with the policies and procedures in place. The Company’s market positions are monitored on a quarterly basis by the board of directors. OPERATIONAL RISK Operational Risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the processes, technology and infrastructure supporting the Company’s activities with financial instruments, either internally within the Company or externally at the Company’s service providers such as cash custodians/brokers, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of investment management behaviour. The Company’s objective is to manage operational risk so as to balance the limiting of financial losses and damage to its reputation with achieving its investment objective of generating returns to shareholders. The primary responsibility for the development and implementation of controls over the operational risk rests with the board of directors. This responsibility is supported by the development of overall standards for the management of operational risk, which encompasses the controls and processes over the investment, finance and financial reporting functions internally and the establishment of service levels with various service providers, in the following areas: Appropriate segregation of duties between various functions, roles and responsibilities; - - Reconciliation and monitoring of transactions - Compliance with regulatory and other legal requirements; The directors’ assessment of the adequacy of the controls and processes at the service providers with respect to operational risk is carried out via ad hoc discussions with the service providers. Substantially all the of the assets of the Company are held by Barclays Bank UK and Shard Capital Brokers. The bankruptcy or insolvency of the Company’s cash custodian/brokers may cause the Company’s rights with respect to the securities or cash and cash equivalents held by cash custodian/ broker to be limited. The board of directors’ monitors capital adequacy and reviews other publicly available information of its cash custodian/broker on a quarterly basis. 43 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 22 FINANCIAL INSTRUMENTS The Company uses financial instruments, other than derivatives, comprising cash to provide funding for the Company's operations. CATEGORIES OF FINANCIAL INSTRUMENTS The IFRS 9 categories of financial asset included in the statement of financial position and the headings in which they are included are as follows: FINANCIAL ASSETS: Cash and cash equivalents Financial assets at amortised cost Financial assets at fair value through profit or loss FINANCIAL LIABILITIES AT AMORTISED COST: 2021 £ 2020 £ 2,012,483 4,046,856 − − 11,072,148 7,158,104 The IFRS 9 categories of financial liabilities included in the statement of financial position and the headings in which they are included are as follows: Trade and other payables 23 RELATED PARTY TRANSACTIONS 2021 £ 2020 £ 1,011,695 1,697,097 The compensation payable to Key Management personnel comprised £199,000 (2020: £152,500) paid by the Company to the Directors in respect of services to the Company. Full details of the compensation for each Director are provided in the Directors’ Remuneration Report. Nicholas Lee’s directorships of companies in which Riverfort Global Opportunities plc has an investment are detailed in Note 15. 24 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS There were no contingent liabilities or capital commitments at 31 December 2021 or 31 December 2020. 25 POST YEAR END EVENTS On 1 June 2022, Tern plc (“Tern”) announced a recommended share offer for the issued and to be issued share capital of Pires on the basis of 0.51613 Tern shares for each share in Pires. This valued each share in Pires at 8 pence based on the closing price of Tern shares on 31 May 2022 and represented a premium of 53.8% to the closing price of a Pires share on 31 May 2022. This offer is subject to approval by both Tern and Pires shareholders. On 15 June 2022, Pires published its results for the year to 31 December 2021, which clearly demonstrated the progress that this company is making. On 16 June 2022, the Company exercised 4,812,200 warrants in Pires at a price of 4 pence. 44 RiverFort Global Opportunities plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 26 ULTIMATE CONTROLLING PARTY The Directors do not consider there to be a single ultimate controlling party. 

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