REG - Tooru PLC - Final Results
19/06/2025 07:00
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RNS Number : 4777N Tooru PLC 19 June 2025
For immediate
release
19 June 2025
Tooru plc
(formerly RiverFort Global Opportunities plc)
Financial Statements for the year ended 31 December 2024
Tooru plc is pleased to announce its audited final results for the year ended
31 December 2024 (extracts from which are set out below) and that the
financial statements will shortly be posted to shareholders and made available
on the website www.tooruplc.com (http://www.tooruplc.com)
Enquiries:
Tooru plc
Nicholas Lee, Non-Executive Chairman Tel: +44 (0) 20 3475 0230
Scott Livingstone, CEO
Nominated Adviser
Beaumont Cornish Tel: +44 (0) 20 7628 3396
Roland Cornish
Asia Szusciak
Felicity Geidt
Joint Broker Tel: +44 (0) 20 7186 9950
Fortified Securities
Guy Wheatley/Mark Wheeler
Joint Broker Tel: +44 (0) 20 7186 9950
Shard Capital Partners LLP
Damon Heath/Erik Woolgar
Joint Broker Tel: +44 (0) 20 7469 0935
Peterhouse Capital Limited Tel: +44 (0) 20 7469 0936
Duncan Vasey/Lucy Williams
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.
CHAIRMAN'S STATEMENT
HIGHLIGHTS
During the period
· Partial redemption of the Company's debt and equity linked
portfolio for cash
· Disposal of part of the Company's stake in Smarttech247 Group plc
· Investment made in S- Ventures plc with a view to acquiring its
business assets operating in the wellness sector
· Cash balance of circa £2.4 million and total net assets of £4.2
million at the period end
Post period end
· Completion of the acquisition of the assets and liabilities of
S-Ventures plc
· Placing of £0.5 million
· Re-admission of the Enlarged Group to trading on AIM
INTRODUCTION
We are pleased to report the Company's results for the year to 31 December
2024.
REVIEW OF THE YEAR
As previously announced, the Board has been conscious that small investment
companies listed on AIM have become increasingly less attractive to investors
and that the Company's share price has continued to trade at a significant
discount to its underlying net asset value. The Board had therefore embarked
on a review of various options to provide better value and returns for its
shareholders.
In early 2024, an opportunity was identified to acquire the business assets of
S-Ventures plc ("S-Ventures") on attractive terms (the "Proposed
Acquisition"). The proposed acquisition of the business assets of S-Ventures,
which operates in the health and wellness sector, would enable RGO to become
an operating business with attractive potential for growth and the creation of
shareholder value.
In March 2024, we announced the Proposed Acquisition and redeemed part of our
debt and equity linked portfolio for a cash consideration of £2.2 million in
order to be best placed to effect this transaction. At the same time, given
this potential change in direction by the Company, the advisory contract with
RiverFort Global Capital Limited was terminated by mutual agreement.
Furthermore, as the Proposed Acquisition would require the publication of an
Admission Document, trading in the Company's shares was suspended in
accordance with the AIM Rules for Companies.
The overall financial impact of the partial redemption of the Company's debt
and equity linked portfolio was, however, included in the financial position
of the Company as at the 31 December 2023 in order to provide a clear starting
position for the Company as it moved forward into 2024.
During 2024, the Company has been progressing the Proposed Acquisition and, on
8 May 2025, post period end, the terms of the transaction were formally
announced, the re-admission document published and a general meeting was
convened for shareholders to approve the Proposed Acquisition. At the same
time, trading in the Company's shares was also restored. On 29 May 2025, the
Proposed Acquisition was completed and the Company became an operating company
in the health and wellness sector with the Enlarged Group being re-admitted to
trading on AIM.
The Board believes that the Proposed Acquisition represents an exciting
opportunity and will enable the Company to bring additional funding to the
acquired operating businesses of S-Ventures. Going forward, the Enlarged
Group would continue to improve its existing businesses, taking advantage of
economies of scale and consolidation of infrastructure to support their
growth. At the same time, the Board believes that there are several
interesting acquisition opportunities available which would benefit from the
team's expertise and existing infrastructure and enable the enlarged group to
further scale its operations.
OUTLOOK AND STRATEGY
We are very much looking forward to being an operating company in the health
and wellness sector with a portfolio of attractive businesses.
Nicholas Lee
Non-Executive Chairman
18 June 2025
STRATEGIC REPORT
The Directors present their Strategic Report on the Company for the year ended 31 December 2024.
REVIEW OF THE BUSINESS AND FUTURE DEVELOPMENTS
Introduction
During the period, the Company was an investing company listed on the AIM
market of the London Stock Exchange. It focused on investing in junior
listed companies by way of debt or equity-linked debt investments. During
the year, the debt and equity linked portfolio was partially redeemed with a
view to the Company becoming an operating company in the health and wellness
sector through the potential acquisition of the business assets of S-Ventures.
Post period end, the business assets of S-Ventures were acquired and the
Company has become an operating company in the health and wellness sector.
For the year to 31 December 2024, the Company made a loss from continuing
operations of £1,046,050 (2023: loss £5,342,542). The net asset value of the
Company as at 31 December 2024 was £4,199,146 (2023: £5,245,196),
representing a decrease compared to the previous year.
The Company's investment portfolio at 31 December 2024 is divided into the
following categories:
Category Cost or valuation (£000)
2024 2023
Debt and equity-linked debt investments 1,301 2,150
Equity and other investments 571 2,005
Pre IPO investments - 200
Cash resources 2,352 1,062
Total 4,224 5,417
Debt and equity linked portfolio
In early 2024, it was decided to look at the possibility of revising the
Company's strategy to become an operating company and therefore this portfolio
was partially redeemed to realise cash. Given the subsequent redemption of
this portfolio in early 2024, its value as at 31 December 2023 was reduced to
the subsequent redemption value and so the financial impact of this redemption
was reflected in the prior period. As at 31 December 2024, this portfolio
principally comprised a loan to S-Ventures and a loan note in Mindflair plc
which was also acquired during the year. This loan note has now been
redeemed in full along with accrued interest post period end.
Equity and other portfolio
At the year end, the Company's equity portfolio comprised the following:
Company Description Value of investment Value of investment
2024 2023
£000
£000
Smarttech247 Group plc A cyber security company listed on AIM 303 1,605
Mindflair plc A technology investment company listed on AIM 229 344
Other Various small holdings and warrants in listed companies 39 56
Total 571 2,005
Smarttech247 Group plc ("Smarttech247") is a cyber security company listed on
AIM. Recent full year and interim results of Smarttech247 have demonstrated
positive growth by this company with a number of new contracts with leading
companies being won. During the year, around half of the Company's
shareholding in Smarttech247 was profitably sold due to demand from new
investors. The reduction in the value ascribed to this investment was due to a
combination of a reduction in the number of shares held as a result of this
sale along with a subsequent fall in this company's share price in 2024.
Mindflair plc ("Mindflair") invests in AI focused technology investments
through three separate venture capital funds managed by Sure Valley Ventures
which are cornerstoned by Enterprise Ireland and the British Business Bank.
This company's share price reduced significantly during the year, however,
post period end, one of its investments, Getvisibility, in which it had both
direct and indirect holdings, was sold realising proceeds of circa £2.6
million. This has led to a recovery in its share price.
Cash resources
At the year end, the Company had cash resources of £2.4 million.
Income breakdown 2024 2023
£000 £000
Investment income 203 391
Net loss from financial instruments at FVTPL (721) (4,673)
Net foreign exchange (losses)/gains on other financial instruments (7) (45)
Total loss (525) (4,327)
Administration costs (519) (366)
Investment advisory fees - (624)
Other gains and losses (2) (26)
Operating loss (1,046) (5,343)
Investment income was derived principally from the fees and interest income in
relation to the debt and equity linked debt investments. The net loss from
financial instruments at FVTPL represents the impact of a reduction in the
value of the Company's Equity and other investments portfolio.
KEY PERFORMANCE INDICATORS
The key performance indicators are set out below:
COMPANY STATISTICS 31 December 31 December Change %
2024 2023
Net asset value £4,199,000 £5,245,000 -18%
Net asset value - fully diluted per share 0.57p 0.68p -15%
Closing share price - 0.39p N/A
Net asset value premium to the share price N/A 74% N/A
Market capitalisation £1,706,000 £3,024,000 N/A
In connection with the proposed RTO, the trading in the Company's shares was
suspended at 31 December 2024, and so the suspension share price has been used
to calculate a market capitalisation at that date.
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 outcomes 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. Going forward, the key risks and
uncertainties have changed to those associated with being an operating
company.
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.
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
· 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.
The Directors are collectively responsible for formulating the Company's
investment strategy, and during 2024 they initially continued to focus on
implementing the investment strategy previously approved by shareholders in
2018, however, subsequently this focus changed to pursuing a reverse takeover
transaction in order to create greater value for shareholders.
In addition, the application of s172 requirements can be demonstrated in
relation to some of the key decisions made during 2024:
• Commitment to developing and applying high standards of corporate
governance
• The making of further investments to generate returns for the Company and
its shareholders.
• The potential revision of the Company's strategy in order to create more
value for 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
As at the year end, the Company held a significant balance of cash, along with
a portfolio of listed investments and loans. On 29 May 2025, the Company
completed the acquisition of the business assets of S-Ventures and became an
operating company in the health and wellness sector. Going forward, the
Company has therefore prepared cash forecasts to June 2026 on the basis of it
trading as an operating company. These forecasts show that the Company (as
expanded by the recent acquisition of the S-Ventures businesses) has
sufficient cash resources for the foreseeable future. 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
Non-Executive Chairman
18 June 2025
DIRECTORS' REPORT
The Directors present their annual report on the affairs of the Company,
together with the audited financial statements for the year ended 31 December
2024.
PRINCIPAL ACTIVITIES
The Company's principal activity during the period was that of an investment
company focused on making investments in a number of sectors including the
natural resources, technology and healthcare sectors.
RESULTS AND DIVIDENDS
The Company made a loss after taxation of £1,046,050 (2023: loss
£5,342,542). It is not expected that a dividend will be declared for 2024
(2023: £Nil).
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.
Percentage 31 December 31 December
of issued 2024 2023
share capital
P Haydn-Slater 2.58% 20,000,000 20,000,000
N Lee 0.59% 4,601,200 4,601,200
Ms A van Dyke - - -
A Nesbitt 0.13% 1,000,000 1,000,000
SUBSTANTIAL INTERESTS
The Company is aware that as at 17 June 2025, the following shareholders held
in excess of 3% of the issued share capital of the Company:
Number of Percentage of
ordinary shares issued share capital
S-Ventures plc 466,666,666 27.8%
Sherwood International Holdings Limited 160,000,000 9.5%
Scott Livingston and connected persons 123,093,600 7.3%
Premier Miton Group plc 123,251,669 7.3%
Canaccord Genuity Group 53,500,000 3.2%
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 supplies 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.
During the year, the Board consisted 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 8 May 2025, the terms of the Proposed Acquisition were formally announced
with the re-admission document and circular convening a general meeting
published. Trading in the Company's ordinary shares was restored on 9 May
2025.
On 29 May 2025, the Company completed the Proposed Acquisition of the business
assets of S-Ventures plc and the Enlarged Groups was re-admitted to trading on
AIM. The headline consideration payable by the Company to S-Ventures
comprised:
- the issue to S-Ventures of 466,666,666 ordinary shares at an issue
price of 0.75 pence, representing a monetary value of £3.5 million;
- the issue to certain creditors and management of S-Ventures of
356,335,200 ordinary shares at an issue price of 0.75 pence representing, a
monetary value £2,672,514; and
- approximately £1.9 million of S-Ventures liabilities to be settled
by the Company in cash.
The Company also raised new funds of £0.5 million through the issue of
66,666,666 new ordinary shares at a price of 0.75 pence per share.
The business assets acquired included:
We Love Purely Limited ("WLP")
WLP is a UK-based company that specialises in plant-based snack products,
primarily focused on plantain chips under the brand name "Purely".
WLP targets health-conscious consumers by offering snacks that are
gluten-free, vegan-friendly and made without artificial preservative, added
sugar or palm oil.
WLP's products are positioned as an alternative to traditional snack foods.
WLP emphasises the use of simple, sustainably sourced ingredients and aims to
meet the growing demand for plant-based and allergen-friendly snacks.
WLP's products are distributed through various retail and online channels
across the UK and Europe, including major supermarkets, health stores and
e-commerce platforms.
Pulsin Ltd ("Pulsin")
Pulsin specialises in plant-based nutrition technology, manufacturing and
sales, with a focus on protein bars, nutritional snacks and keto bars under
the brand name "Pulsin".
Pulsin formulates and produces plant-based products under its own brands as
well as for third parties from its facilities in Gloucester.
Pulsin's range of snack bars, protein powders, keto products and shakes are
gluten-free and suitable for vegetarians, with the majority being plant-based.
Pulsin does not use artificial ingredients, preservatives or palm oil.
Juvela Limited ("Juvela")
Juvela has been a provider of gluten-free foods for people diagnosed with
coeliac disease for over 25 years under the brand name "Juvela".
Juvela manufactures and distributes branded gluten-free products, including
breads, mixes, and pastas, through UK retailers and online stores.
Juvela primarily generates revenue from its gluten-free products, selling to
UK retailers and providing prescription services for eligible individuals. The
NHS funds prescription for those diagnosed with coeliac disease, allowing them
to receive regular packages of bread and flour mixes.
Juvela has a dedicated gluten-free bakery with master bakers based in South
Wales and an office in Liverpool.
Market Rocket Limited ("Market Rocket")
Market Rocket is a trusted digital partner agency for globally recognised
Fortune 500 and market- disrupting brands alike. Customers include JCB, Calvin
Klein and Tommy Hilfiger. Market Rocket is a member of Amazon's trusted
Service Provider Network and is certified as an accredited partner with Meta
and Google. The 20+ strong team is built around the four pillars, generally
accepted by the industry, required to sell online and return a profit: Account
Management, Paid Advertising, Graphic Design and Search Engine
Optimisation/Copywriting.
For the 6 months to 30 June 2024, the S-Ventures businesses generated net
revenues of £7.2 million with a
positive EBITDA of £0.8 million.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2024
2024 2023
Note £ £
CONTINUING OPERATIONS:
Investment income 4 203,031 391,151
Net loss from financial instruments at FVTPL 5 (721,323) (4,672,874)
Foreign exchange (losses)/gains on other financial instruments 6 (6,764) (45,154)
TOTAL OPERATING LOSS (525,056) (4,326,877)
Administrative expenses 7 (519,145) (365,715)
Investment advisory fees 8 - (624,243)
Other gains and losses 9 (1,849) (25,707)
LOSS BEFORE TAXATION (1,046,050 (5,342,542)
Taxation 12 - -
LOSS FOR THE YEAR AND TOTAL COMPREHENSIVE INCOME (1,046,050) (5,342,542)
EARNINGS PER SHARE 13
Basic earnings per share (0.135p) (0.689p)
Fully diluted earnings per share (0.135p) (0.689p)
2024 2023
STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2024
Note £ £
NON-CURRENT ASSETS
Financial asset investments 15 1,872,252 2,205,372
1,872,252 2,205,372
CURRENT ASSETS
Financial asset investments - 2,150,000
Trade and other receivables 16 194,465 729,347
Cash and cash equivalents 17 2,351,654 1,062,338
TOTAL CURRENT ASSETS 2,546,119 3,941,685
TOTAL ASSETS 4,418,371 6,147,057
CURRENT LIABILITIES
Trade and other payables 18 219,225 901,861
219,225 901,861
NET ASSETS 4,199,146 5,245,196
EQUITY
Share capital 19 77,540 77,540
Share premium account 19 1,568,353 1,568,353
Share options reserve 201,034 201,034
Retained profits 2,352,219 3,398,269
TOTAL EQUITY 4,199,146 5,245,196
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
Share Share premium Share options reserve Retained Total
capital profits equity
£ £ £ £ £
BALANCE AT 1 JANUARY 2023 77,540 1,568,353 201,034 8,740,811 10,587,738
Total comprehensive income - - - (5,342,542) (5,342,542)
BALANCE AT 31 December 2023 77,540 1,568,353 201,034 3,398,269 5,245,196
Total comprehensive income - - - (1,046,050) (1,046,050)
BALANCE AT 31 December 2024 77,540 1,568,353 201,034 2,352,219 4,199,146
STATEMENT OF CASHFLOWS
For the year ended 31 December 2024
2024 2023
Note £ £
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation (1,046,050) (5,342,542)
Adjustments for:
Fair value loss on trading investments 721,323 4,672,874
Foreign exchange differences on other financial instruments 6,764 45,154
Operating cash flow before working capital changes (317,963) (624,514)
Decrease in trade and other receivables 534,882 1,125,523
(Decrease)/increase in trade and other payables (682,636) 570,901
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (465,717) 1,071,910
INVESTING ACTIVITIES
Purchase of investments (1,301,727) (3,690,590)
Disposal of investments 15 913,524 -
Debt instrument repayments 15 2,150,000 2,768,037
NET CASH GENERATED FROM/ (USED IN) INVESTING ACTIVITIES 1,761,797 (922,553)
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,296,080 149,357
Cash and cash equivalents at the beginning of the year 1,062,338 958,135
Effect of foreign currency exchange on cash (6,764) (45,154)
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 17 2,351,654 1,062,338
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
1 GENERAL INFORMATION
Tooru plc (formerly 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 during the period was 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 2023.
GOING CONCERN
As at the year end, the Company held a significant balance of cash, along with
a portfolio of listed investments and loans. On 29 May 2025, the Company
completed the acquisition of the business assets of S-Ventures and became an
operating company in the health and wellness sector. Going forward, the
Company has therefore prepared cash forecasts to June 2026 on the basis of it
trading as an operating company. These forecasts show that the Company (as
expanded by the recent acquisition of the S-Ventures businesses) has
sufficient cash resources for the foreseeable future. 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.
· The entity raised £500,000 gross from a committed placing and
arranged a working capital facility as part of the transaction. As of May
2025, the enlarged entity was re-admitted to trading on AIM as an operating
entity under the name Tooru plc and will now generate revenue and cash from
the operations of the subsidiary entities of S-Ventures plc that have now been
acquired.
· Tooru plc is forecasted to maintain a positive cash headroom
throughout the going concern period to June 2026. The forecast has been
prepared on the basis of sales and gross profit increases in Juvela Limited,
Market Rocket Limited and Pulsin Limited (being the three largest newly
acquired entities within the Group), driven principally by new product
launches and expansion of sales volumes on new and existing revenue streams.
· Given that there is an inherent degree of uncertainty and
difficulty in forecasting future performance of the aforementioned newly
acquired entities, particularly in relation to launches of new products, there
is a reasonable worst-case scenario whereby sales within the Group
under-perform its forecasts which may result in negative cash headroom at June
2026.
· The Directors have identified a number of potential actions to
ensure that cash headroom remains positive throughout the going concern
period, although these mitigating actions are also subject to further
uncertainty at the date of this report and therefore there may be a
requirement to procure additional funding in these circumstances.
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.
FAIR VALUE OF FINANCIAL INSTRUMENTS
During the period, the Company held 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. For the current year, the value has been based
on the value achieved when the portfolio was redeemed.
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
Adoption of new and revised standards and interpretations
In the current year, the following new and revised standards have been adopted
· Amendments to IAS 1 Disclosure of Accounting Policies
· Amendments to IAS 8 Definition of Accounting Estimates
· Amendments to IAS 12 Deferred Tax Related to Assets and
Liabilities arising from a Single Transaction
· Amendments to IAS 12 International Tax Reform
Standards and Interpretations in issue but not yet effective
At the date of authorisation of these financial statements, the following
standards and interpretations which have not been applied in these financial
statements were in issue but not yet effective:
· Amendments to IAS 1 Classification of Liabilities as Current or
Non-current effective from 1 January 2024
· Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements
effective from 1 January 2024
· Amendments to IAS 21 Lack of Exchangeability effective from 1
January 2025
· Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture (deferred indefinitely)
· Amendment to IFRS 16 Leases Lease Liability in a Sale and
Leaseback effective from 1 January 2024
The Company does not expect these to have a significant impact on the
financial statements. This list excludes any standards or amendments which are
expected to have no relevance to the Company
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.
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
During the period, the Company's financial assets comprised investments, cash
and cash equivalents and loans and receivables, and were recognised in the
Company's statement of financial position when the Company becomes a party to
the contractual provisions of the instrument.
FINANCIAL ASSETS INVESTMENTS
CLASSIFICATION OF FINANCIAL ASSETS
During the period, the Company held financial assets including equities and
debt securities. The classification and measurement of financial assets at 31
December 2024 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. 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.
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.
· Share option reserve represents the value of share options
granted but not exercised.
· "Retained losses" represents retained losses.
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
2024 2023
£ £
Structured finance fees 80,566 211,696
Other interest receivable 122,465 179,455
203,031 391,151
5 NET LOSS ON INVESTMENTS
2024 2023
£ £
Net realised gains on disposal of investments 157,760 -
Net movement in fair value of investments (879,083) (4,589,673)
Net foreign exchange (loss)/gain on investments - (83,201)
Net loss on investments (721,323) (4,672,874)
A cash consideration of £2.15 million was received for the partial redemption
of the debt and equity linked portfolio in March 2024. However, due to the
significance of the transaction and its proximity to 31 December 2023, the
overall financial impact was included in the financial position of the Company
as at 31 December 2023 in order to provide a clear starting position for the
Company as it moved forward into 2024.
6 FOREIGN EXCHANGE LOSSES ON OTHER FINANCIAL INSTRUMENTS
2024 2023
£ £
Exchange (loss)/gain on foreign currency cash balances (6,764) (45,154)
(6,764) (45,154)
7 ADMINISTRATIVE EXPENSES
2024 2023
£ £
Loss for the year has been arrived at after charging:
Wages and salaries 192,502 148,362
Professional and regulatory expenses 242,991 121,498
Audit 43,420 62,460
Other administrative expenses 40,232 33,395
Total administrative expenses as per the statement of comprehensive income 519,145 365,715
AUDITOR'S REMUNERATION
During the year the Company obtained the following services from the Company's
auditor:
2024 2023
£ £
Fees payable to the Company's auditor for the audit of the Company's financial 34,800 46,200
statements
34,800 46,200
8 INVESTMENT ADVISORY FEES
The charge of £Nil (2023 £624,243) was payable to the Company's investment
adviser, RiverFort Global Capital Limited.
9 OTHER GAINS AND LOSSES
2024 2023
£ £
Currency exchange differences (1,849) (25,707)
(1,849) (25,707)
10 DIRECTORS' EMOLUMENTS
2024 2023
£ £
Aggregate emoluments 179,000 144,167
Social security costs 13,502 4,195
192,502 148,362
Name of director Salaries Bonuses Total Total
and fees 2024 2023
£ £ £ £
P Haydn-Slater *50,000 - 50,000 50,000
N Lee 85,000 - 85,000 52,000
A van Dyke 22,000 - 22,000 22,000
A Nesbitt 22,000 - 22,000 20,167
179,000 - 179,000 144,167
*P Haydn-Slater's remuneration of £50,000 was invoiced by Musgrave Financial
Ltd, a company controlled by him.
11 EMPLOYEE INFORMATION
2024 2023
£ £
Wages and salaries 129,000 94,167
Consultancy fees 50,000 50,000
Social security costs 13,502 4,195
Share based payment expense - -
192,502 148,362
Average number of persons employed:
2024 2023
Number Number
Office and management 4 4
COMPENSATION OF KEY MANAGEMENT PERSONNEL
There are no key management personnel other than the Directors of the Company.
12 INCOME TAX EXPENSE
2024 2023
£ £
Current tax - continuing operations - -
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:
2024 2023
£ £
Loss before tax from continuing operations (1,046,050) (5,342,542)
Loss before tax multiplied by rate of corporation tax in the UK of 19% (2023: (198,750) (1,015,083)
19%)
Expenses not deductible for tax purposes 35,203 630
Added to tax losses brought forward 163,547 1,014,453
Total tax - -
Unrelieved tax losses of approximately £9,620,000 (2023: £9,460,000) 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.
2024 2023
£ £
(Loss)/profit attributable to equity holders of the Company:
(Loss)/profit from continuing operations (1,046,050) (5,342,542)
(Loss)/profit for the year attributable to equity holders of the Company (1,046,050) (5,342,542)
Weighted average number of ordinary shares in issue for basic earnings 775,404,187 775,404,187
Weighted average number of ordinary shares in issue for fully diluted earnings 809,204,187 809,204,187
EARNINGS PER SHARE
BASIC AND FULLY DILUTED:
- Basic earnings per share from continuing and total operations (0.135)p (0.689)p
- Fully diluted earnings per share from continuing and total operations (0.135)p (0.689)p
Diluted earnings per share are the same as basic earnings per share as all
options currently issued are antidilutive in the current year.
14 FINANCIAL ASSET INVESTMENTS
All financial asset investments are designated at fair value through profit
and loss ("FVTPL")
2024 2023
£ £
At 1 January - fair value 4,355,372 8,105,693
Purchase of investments designated at FVTPL 1,301,727 3,690,590
Equity investment disposals (913,524) -
Debt security repayments (2,150,000) (2,768,037)
Net gain on disposal of investments 157,760 -
Movement in fair value of investments (879,083) (4,589,673)
Net foreign exchange (loss)/gain on debt securities - (83,201)
At 31 December - fair value 1,872,252 4,355,372
Current Non-current
2024 2023 2024 2023
£ £ £ £
Categorised as:
Level 1 - Quoted investments - - 570,526 2,005,372
Level 2 - Unquoted investments - 2,150,000 1,301,726 -
Level 3 - Unquoted investments - - - 200,000
- 2,150,000 1,872,252 2,205,372
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.
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
2024 2023
£ £
Brought forward 200,000 1,186,366
Transfer to Level 1 investments - -
Movement in fair value (200,000) (986,366)
Carried forward - 200,000
The above movement represents a write down of the value of the holding in
Drylab Media Tech Group plc which appointed a liquidator in March 2025.
In line with the investment strategy adopted by the Company, Nicholas Lee is
on the board of the following investee companies:
% held by the Company
2024 2023
Mindflair plc 8.2% 13.9%
Smarttech247 Group plc 2.3% 6.2%
15 TRADE AND OTHER RECEIVABLES
2024 2023
£ £
Other receivables - 721,056
Prepayments and accrued income 194,465 8,291
194,465 729,347
The Directors consider that the carrying amount of other receivables is
approximately equal to their fair value.
16 CASH AND CASH EQUIVALENTS
2024 2023
£ £
Cash and cash equivalents 2,351,654 1,062,338
The Directors consider the carrying amount of cash and cash equivalents
approximates to their fair value.
17 TRADE AND OTHER PAYABLES
2024 2023
£ £
Trade payables 157,118 56,063
Other payables - -
Accrued expenses 62,107 845,798
219,225 901,861
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.
18 SHARE CAPITAL
Number of Ordinary Shares Share Capital Ordinary shares Share premium
£ £
ISSUED AND FULLY PAID:
Ordinary shares of 0.1p each 775,404,187 77,540 1,568,353
At 31 December 2023 and 2024 775,404,187 77,540 1,568,353
19 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 12 Feb 2021
Share price at date of grant 1.25p
Exercise price per share 1.00p
No. of warrants 33,800,000
Risk free rate 0.9%
Expected volatility 78.8%
Expected life of warrant 10 years
Calculated fair value per share 0.59478p
The share options outstanding at 31 December 2023 and their weighted average
exercise price are as follows:
2024 2023
Weighted average exercise price Weighted average exercise price
Number Pence Number Pence
Outstanding at 1 January 33,800,000 1.00 33,800,000 1.00
Granted - - - -
Outstanding at 31 December 33,800,000 1.00 33,800,000 1.00
The fair value of the share options recognised as an expense in the income
statement was £Nil (2023: £Nil).
20 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 £2,351,654 (2023:
£1,789,416 comprising cash and cash equivalents and other receivables.
The ageing profile of trade and other receivables was:
2024 2023
Total book value Total book value
£ £
Current 179,582 721,056
Overdue for less than one year - -
179,582 721,056
LIQUIDITY RISK
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.
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:
Assets Liabilities
31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023
£ £ £ £
US Dollars 457,597 365,543 - -
Euro 91,777 33,345 - -
549,374 398,888 - -
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.
Effect on Profit and Loss
31 Dec 2024 31 Dec 2023
£ £
US Dollars 22,880 18,277
Euro 4,589 1,667
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.
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 £187,000 (2023: £221,000).
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.
21 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:
2024 2023
£ £
FINANCIAL ASSETS:
Cash and cash equivalents at amortised cost 2,351,654 1,062,338
Financial assets at fair value through profit or loss 1,872,252 2,205,372
Other receivables at amortised cost - 721,056
FINANCIAL LIABILITIES AT AMORTISED COST:
The
IFRS
9
cate
gori
es
of
fina
ncia
l
liab
ilit
ies
incl
uded
in
the
stat
emen
t of
fina
ncia
l
posi
tion
and
the
head
ings
in
whic
h
they
are
incl
uded
are
as
foll
ows:
2024 2023
£ £
Trade and other payables 157,118 56,063
22 RELATED PARTY TRANSACTIONS
The compensation payable to Key Management personnel comprised £179,000
(2023: £144,167) 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 Tooru plc has an investment
are detailed in Note 14.
23 Contingent LIABILITIES AND CAPITAL COMMITMENTS
There were no contingent liabilities or capital commitments at 31 December
2024 or 31 December 2023.
24 POST YEAR END EVENTS
Post year end events are set out in the Directors' Report.
25 ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be a single ultimate controlling party.
NOTE TO THE ANNOUNCEMENT
In accordance with Section 435 of the Companies Act 2006, the directors advise
that the information set out in this announcement does not constitute the
Company's statutory financial statements for the year ended 31 December 2023
or 2022 but is derived from these financial statements. The financial
statements for the year ended 31 December 2023 have been delivered to the
Registrar of Companies. The financial reporting framework that has been
applied in their preparation is applicable law and international accounting
standards in conformity with the requirements of the Companies Act 2006 and
will be forwarded to the Registrar of Companies following the Company's Annual
General Meeting. The Auditors have reported on these financial statements;
their reports were unqualified and did not contain statements under Section
498(2) or the Companies Act 2006.
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