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
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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
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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.
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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
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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
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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
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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%
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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
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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%
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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.
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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
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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.
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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.