GLI Alternative Finance. GLI Alternative Finance plc HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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1 GLI Alterative Fiace GLI Alterative Fiace plc HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD FROM 13 JULY 2015 (DATE OF INCORPORATION) TO 31 DECEMBER 2015

2 CONTENTS HIGHLIGHTS 31 December 2015 (uaudited) Net assets attributable to Ordiary Shares [1] 53,133,000 NAV per Ordiary Share p Share price at 31 December p Premium to NAV 0.6% Profit for the period 1,779,000 Divided per share declared i respect of the period [2] 1.55p Total retur per Ordiary Share (based o NAV) 3.4% Total retur per Ordiary Share (based o share price) 2.1% Ordiary Shares issued prior to 23 September 2015 IPO 52,660,350 [1] I additio to the Ordiary Shares i issue, 50,000 Maagemet Shares of 1 each are i issue. [2] Oly 0.6p of the 1.55p per Ordiary Share divideds declared out of the profits for the period eded 31 December 2015 had bee deducted from the 31 December 2015 NAV as the divideds of 0.4p ad 0.55p per Ordiary Share, which had ot bee paid as at 31 December 2015, were ot provided for at 31 December 2015 as, i accordace with IFRS, they were ot deemed to be liabilities of the Compay at that date. O 16 February 2016, the Compay declared a divided of 0.55p per share for the period from iceptio to 31 Jauary This divided will be paid o 30 March GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3 DIRECTORS AND ADVISERS Directors Norma Crighto (o-executive Chairma) Richard Hills (o-executive Director) David Steveso (o-executive Director) Nick Brid (o-executive Director) Registered Office 1 Fisbury Circus Lodo EC2M 7SH Broker Nplus1 Siger Advisory LLP Oe Bartholomew Lae Lodo EC2N 2AX Registrar Capita Asset Services The Registry 34 Beckeham Road Beckeham Ket BR3 4TU Advisers Admiistrator ad Secretary Elysium Fud Maagemet Limited PO Box 650 1st Floor Royal Chambers St Julia s Aveue St Peter Port Guersey GY1 3JX Eglish Legal Adviser Stepheso Harwood LLP 1 Fisbury Circus Lodo EC2M 7SH Bakers Butterfield Bak (Guersey) Limited Regecy Court Glategy Esplaade St Peter Port Guersey GY1 3AP Ivestmet Maager ad AIFM GLI Asset Maagemet Limited Saria House Le Truchot St Peter Port Guersey GY1 4NA Guersey Legal Adviser Carey Olse PO Box 98 Carey House Les Baques St Peter Port Guersey GY1 4BZ Auditors Baker Tilly UK Audit LLP 25 Farrigdo Street Lodo EC4A 4AB GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3

4 CHAIRMAN S STATEMENT Dear Shareholders, Welcome to the first Chairma s Statemet of GLI Alterative Fiace plc ( GLI Alt Fi or the Compay ). The Compay was listed o the Specialist Fud Market o 23 September 2015 raisig gross proceeds of 52.7 millio ( 51.7 millio et of issue costs). This comprised of a iitial seed portfolio of loas valued at 40.3 millio (provided by GLI Fiace Limited ( GLIF ) i exchage for GLI Alt Fi shares) together with cash raised of 12.4 millio. Sice iceptio the Compay has declared divideds of 0.6p, 0.4p, 0.55p ad 0.55p per Ordiary Share o 25 November 2015, 24 December 2015, 25 Jauary 2016 ad 16 February 2016 respectively. We are still i the early stages of the Compay s life ad we expect, as the year progresses, to see a icrease i mothly divided paymets ad a correspodig icrease i yield, gradually approachig our target of 8.0% per aum. I the short period sice the lauch, GLI Asset Maagemet Limited, the ivestmet maager ( the Ivestmet Maager ) has bee busy optimisig the portfolio of loa assets. This is agaist the backdrop of highly volatile debt ad equity markets, with iterest rates risig i the USA ad stock markets experiecig their worse start to a caledar year i decades. From iceptio to the half-year ed, the NAV (after fees ad expeses of the IPO) rose by 2.8% to 53.2 millio, the Compay geerated a total retur of 3.4%, ad the share price icreased from 100.0p per share to 101.5p per share, a gai of 1.5% did, however, see the Alterative Fiace market cotiue to grow expoetially with 2.8 billio loaed out by UK based platforms i the 12 moths to December 2015, compared to 1.6 billio i Over 1.5 billio was raised for UK listed closed ed fuds, icludig GLI Alt Fi. The iteratioal ivestmet commuity is begiig to view this asset class as a true diversifier withi balaced portfolios ad fuds raised i 2015 is a testamet to that. I this eviromet the Ivestmet Maager has worked hard to ivest the cash ad maage the portfolio i accordace with our ivestmet policy ad objectives. The wider backdrop for the Compay is that awareess of alterative sources of fudig amogst small ad medium sized eterprises ( SMEs ) is growig steadily, helped alog by the govermet s determiatio to icrease choice as evideced by the putative bak referral scheme which madates that baks must offer a choice to rejected busiess cliets lookig for a loa. More istitutioal fudig is also fidig its way ito both marketplace ad direct balace sheet ledig, which has had the effect i some cases of reducig the et cost of debt for SME borrowers. The Board was obviously disappoited that the IPO was ot more widely supported so it is our job, alog with the Ivestmet Maager ad N+1 Siger (the Compay s broker), to provide as much iformatio as possible so that potetial shareholders, as well as existig Shareholders, uderstad the portfolio, the Platforms through which we ivest ad the uderlyig compaies that you as Shareholders led to. The Board would hope that by doig so the Compay ca ecourage further ivestmet through a C Share Issue to icrease secodary market liquidity, reduce the burde of fixed costs ad provide a attractive retur to Shareholders. The Board is pleased to welcome Graham Glass as Maagig Director of the Ivestmet Maager. Graham has a wealth of experiece i debt istrumets ad this will be importat goig forward will o doubt cotiue to be challegig for both debt ad equity markets but the Board ad the Ivestmet Maager will work hard to esure that it is a positive year for our Shareholders. The Board is, as always, happy to meet with Shareholders or potetial shareholders. Ayoe who wishes to meet should cotact either the Ivestmet Maager or our broker. Norma Crighto Chairma 22 February GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5 INVESTMENT MANAGER S REPORT GLI Alterative Fiace plc was lauched o 23 September 2015, followig a successful listig o the Specialist Fud Market of the LSE, with gross proceeds raised of 52.7 millio ( 51.7 millio et of issue costs), the iitial seed portfolio of 40.3 millio was combied with cash raised of 12.4 millio. October was a active moth withi the Compay as the cash was put to work efficietly. A umber of ew loas were purchased across a wide diversificatio of borrowers; icludig a automotive repair busiess, a costructio compay ad also IT Software. Further ivestmet ito two wid turbie loas also icreased the reewable eergy allocatio to 13.4%. The stable cash flow characteristics of the wid turbie busiesses ad a gross yield of approximately 10% with good over-collateralisatio made these loas ideal diversifiers withi the portfolio. The task of ivestig the Compay s cash holdig cotiued durig November where further ivestmet was made ito Africa via Ovamba. These loas, whilst some may perceive as high risk, are actually extremely well collateralised. The Ivestmet Maager has also focussed o Solar Eergy projects origiated i the Uited States via the Ope Eergy Group. These loas do require itesive research ad due diligece, however with EBITDA / iterest cover ratios i some cases exceedig five times ad with purchase power agreemets ofte stretchig util the ed of the expected life spa of the plat, they are extremely attractive assets for the Compay. By the ed of the reportig period, reewable eergy projects, icludig wid turbie loas, accouted for 14.6% of the Compay s portfolio. The deploymet of cash ito SME loas cotiued apace durig December with the property sector beig the prime beeficiary of the Compay s capital; property exposure rose from 14.2% to 15.9% durig the moth. Cash* was reduced dow to 4.4% ad, as a result, the gross yield rose to 9.7%. Higher tha expected costs have, however, had the effect of reducig the estimated et yield to 7.9%. Whilst ivestig i a relatively illiquid asset class, the Compay has successfully participated i secodary market tradig of loas. The outright exposure sold has bee small as a percetage of the total NAV, the creatio of a secodary market is welcomed. With more iterest beig show i this asset class by global ivestors, we expect this healthy tred to cotiue. With equity ad fixed icome markets experiecig a sigificat spike i volatility as we head ito 2016, the low volatile, steady retur profile of the Fud s SME loa book is providig a welcome have for our ivestors. Sice the Compay s lauch the NAV of pece per share has rise to close the year at pece per share, a gai of 2.8%. Part of this gai arose from maagemet of the currecy exposure. This exposure was uhedged as Sterlig iitially declied agaist the US Dollar ad Euro but durig Jauary 2016, we fully hedged all currecy exposure back to Sterlig, the Compay s base currecy, lockig i the earlier gais. The Ivestmet Maager s Ivestmet Committee has sice take a decisio to maitai these hedges for the foreseeable future. Loa impairmets withi the Compay are ruig at extremely low levels; as at 31 December 2015 loas i default stood at 1.27%. Give the high level of security o these loas, the curret estimated recovery rate is 100% ad therefore o loss provisioig has bee ecessary. The Compay is extremely well diversified with i excess of 230 loas beig made to SMEs with a average loa duratio of two years. I keepig with the ivestmet objective, strict diversificatio across sectors, geographic regios ad maturities should esure that the Compay cotiues to provide ivestors with a balaced exposure to global SME loa markets. *Cash is deemed to be liquid cash that is readily available for use. This differs to the IFRS defiitio of cash which has bee used i the fiacial statemets. The calculatio is based o gross fiacial assets. GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5

6 INVESTMENT MANAGER S REPORT (CONTINUED) Compay aalytics as at 31/12/2015 GEOGRAPHICAL ALLOCATION US 13.7% UK 66.8% Offshore Britai 12.8% Europe 2.3% Africa 4.4% Source: GLI Asset Maagemet Limited MATURITY PROFILE 19.6% 27.8% 0 to 6 moths 6 moths to 18 moths 34.0% 18 moths to 3 years Source: GLI Asset Maagemet Limited 18.6% >3 years ASSET ALLOCATION CURRENCY ALLOCATION SME Loa 50.2% Property 15.9% Reewable Eergy 14.6% Platform/Workig Cap 5.9% IT Fiacial 6.4% Ivoice Fiace 1.1% Accrued Icome 1.5% Cash 4.4% Source: GLI Asset Maagemet Limited USD 13.9% EUR 6.5% GBP 79.6% Source: GLI Asset Maagemet Limited Graham Glass GLI Asset Maagemet Limited 22 February GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7 STATEMENT OF DIRECTORS RESPONSIBILITIES The Directors are resposible for preparig the half-yearly report ad codesed cosolidated fiacial statemets, which have ot bee audited or reviewed by a idepedet auditor, ad are required to: prepare the codesed cosolidated half-yearly fiacial statemets i accordace with Iteratioal Accoutig Stadard 34: Iterim Fiacial Reportig, as adopted by the Europea Uio, which give a true ad fair view of the assets, liabilities, fiacial positio ad profit for the period of the Group, as required by Disclosure ad Trasparecy Rules ( DTR ) R; iclude a fair review of the iformatio required by DTR R, beig importat evets that have occurred durig the period ad their impact o the half-yearly report ad codesed cosolidated fiacial statemets ad a descriptio of the pricipal risks ad ucertaities for the remaiig six moths of the fiacial year; ad iclude a fair review of iformatio required by DTR R, beig related party trasactios that have take place durig the period which have had a material effect o the fiacial positio or performace of the Compay. The Directors cofirm that the half-yearly report ad codesed cosolidated fiacial statemets comply with the above requiremets. O behalf of the Board. Norma Crighto Chairma 22 February 2016 GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 7

8 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 Period from icorporatio to 31 December 2015 (uaudited) NOTE 000 Icome Ivestmet icome 1,226 Total icome 1,226 Operatig expeses Maagemet fees 6a (105) Admiistratio fees 6b (51) Audit fees (40) Directors remueratio 6c (31) Other expeses 7 (82) Total operatig expeses (309) Ivestmet gais ad losses Movemet i urealised gais o loas 744 Movemet i urealised gai o ivestmet at fair value through profit or loss Total ivestmet gais ad losses 851 Net profit from operatig activities before gai o foreig currecy exchage 1,768 Net foreig exchage gai 13 Net profit before taxatio 1,781 Taxatio Withholdig tax 8 (2) Profit for the period 1,779 Earigs per Ordiary Share (basic ad diluted) p All of the items i the above statemet are derived from cotiuig operatios. There was o other comprehesive icome i the period. The accompayig otes o pages 12 to 22 form a itegral part of the uaudited codesed cosolidated half-yearly fiacial statemets. 8 GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 Share Called up premium Profit ad share capital accout loss accout Total (uaudited) (uaudited) (uaudited) (uaudited) NOTE Opeig balace at 13 July 2015 Share capital issued ,133 52,710 Share issue costs (990) (990) Profit for the period 16 1,779 1,779 Divideds paid 5, 16 (316) (316) At 31 December ,143 1,463 53,183 There was o other comprehesive icome i the period. The accompayig otes o pages 12 to 22 form a itegral part of the uaudited codesed cosolidated half-yearly fiacial statemets. GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 9

10 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER December 2015 (uaudited) NOTE 000 No-curret assets Loas 11 31,123 Ivestmets at fair value through profit or loss 12 1,730 Total o-curret assets 32,853 Curret assets Loas 11 12,126 Other receivables ad prepaymets 14 5,849 Cash held o cliet accouts with Platforms 1,899 Cash ad cash equivalets 723 Total curret assets 20,597 Total assets 53,450 Curret liabilities Other payables ad accruals (267) Total liabilities (267) Net assets 53,183 Capital ad reserves attributable to owers of the Compay Called up share capital Share premium accout 51,143 Profit ad loss accout 16 1,463 Net assets 53,183 NAV per Ordiary Share p These uaudited codesed cosolidated half-yearly fiacial statemets of GLI Alterative Fiace plc (registered umber ) were approved by the Board of Directors o 22 February 2016 ad were siged o its behalf by: NORMAN CRIGHTON RICHARD HILLS Chairma Director 22 February February 2016 The accompayig otes o pages 12 to 22 form a itegral part of the uaudited codesed cosolidated half-yearly fiacial statemets. 10 GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 Period from icorporatio to 31 December 2015 (uaudited) 000 Cash flows from operatig activities Net profit before taxatio 1,781 Adjustmets for: Movemet i urealised gais o loas (744) Movemet i urealised gai o ivestmet at fair value through profit or loss (107) No-cash iterest received (464) Icrease i ivestmets (11,793) Net cash outflow from operatig activities before workig capital chages (11,327) Icrease i other receivables ad prepaymets (278) Icrease i other payables ad accruals 253 Net cash outflow from operatig activities (11,352) Cash flows from fiacig activities Proceeds from issue of Maagemet Shares 50 Proceeds from issue of Ordiary Shares 12,801 Share issue costs paid (473) Divided paid (301) Net cash iflow from fiacig activities 12,077 Taxatio paid (2) Icrease i cash ad cash equivalets i the period 723 Cash ad cash equivalets at the begiig of the period Icrease i cash ad cash equivalets i the period 723 Cash ad cash equivalets at 31 December Supplemetal cash flow iformatio Cash received from iterest o loas durig the period 199 No-cash trasactio receipt of seed portfolio for issue of Ordiary Shares 40,271 No-cash trasactio iterest received ad reivested by Platforms 464 The accompayig otes o pages 12 to 22 form a itegral part of the uaudited codesed cosolidated half-yearly fiacial statemets. GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 11

12 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER GENERAL INFORMATION The Compay was icorporated i Eglad ad Wales uder the Compaies Act 2006 o 13 July 2015 with registered umber ad its shares were listed o the Lodo Stock Exchage Specialist Fud Market o 23 September 2015 ( Admissio ). The Compay is a ivestmet compay as defied i s833 of the Compaies Act Ivestmet objective The ivestmet objective of the Compay is to provide Shareholders with attractive risk adjusted returs through ivestmet, pricipally via a portfolio of Ivestee Platforms, i a rage of SME loa assets, diversified by way of asset class, geography ad duratio. The Compay may ivest directly or idirectly ito available opportuities, icludig by makig ivestmets i, or acquirig iterests held by, third party alterative ledig Platforms ad other ledig related opportuities as idetified by the Ivestmet Maager i accordace with the Compay's ivestmet policy. Ivestmet policy The Compay iteds to achieve its ivestmet objective by ivestig i a rage of loas origiated pricipally through the ivestee Platforms i which GLIF holds strategic equity ivestmets. The Compay may also make ivestmets through other third party alterative ledig Platforms that are idetified as suitable ivestmet opportuities by the Ivestmet Maager. The Compay will seek to esure that diversificatio of its portfolio is maitaied, with the aim of spreadig ivestmet risk. 2. STATEMENT OF COMPLIANCE a) Basis of preparatio These uaudited codesed cosolidated half-yearly fiacial statemets preset the results of the Compay ad its subsidiary for the period from 13 July 2015 (icorporatio) to 31 December These uaudited codesed cosolidated half-yearly fiacial statemets have bee prepared i accordace with the Disclosure ad Trasparecy Rules of the Fiacial Coduct Authority ad Iteratioal Accoutig Stadard 34 ( IAS 34 ), Iterim Fiacial Reportig, as adopted by the Europea Uio. The uaudited codesed cosolidated half-yearly fiacial statemets for the period eded 31 December 2015 have ot bee audited or reviewed by the Compay s auditors ad do ot costitute statutory fiacial statemets, as defied i sectio 434 of the Compaies Act The uaudited codesed cosolidated half-yearly fiacial statemets have bee prepared o the same basis as will be used to prepare the Compay s aual fiacial statemets. b) Basis of measuremet The uaudited codesed cosolidated half-yearly fiacial statemets have bee prepared o a historical cost basis, except for loas ad receivables which were iitially valued at fair value plus ay directly attributable trasactio costs, ad subsequetly valued at amortised cost usig the effective iterest rate method, ad ivestmets, which are measured at fair value. The uaudited codesed cosolidated half-yearly fiacial statemets have bee prepared o a goig cocer basis (ote 4i). c) Fuctioal ad presetatio curre cy The uaudited codesed cosolidated half-yearly fiacial statemets are preseted i Sterlig, which is also the Compay s fuctioal currecy as this is the currecy of the primary ecoomic eviromet withi which the Compay operates. All fiacial iformatio preseted i Sterlig has bee rouded to the earest thousad except whe otherwise idicated. d) Segmetal reportig The Directors are of the opiio that the Compay is egaged i a sigle ecoomic segmet of busiess, beig ivestmet i a rage of SME loa assets. e) Use of estimates ad judgemets The preparatio of uaudited codesed cosolidated half-yearly fiacial statemets i coformity with Iteratioal Fiacial Reportig Stadards ( IFRSs ) requires maagemet to make judgemets, estimates ad assumptios that affect the applicatio of policies ad the reported amouts of assets ad liabilities, icome ad expese. The estimates ad associated assumptios are based o historical experiece ad various other factors that are believed to be reasoable uder the circumstaces, the results of which form the basis of makig the judgemets about carryig values of assets ad liabilities that are ot readily apparet from other sources. Actual results may differ from these estimates. The estimates ad uderlyig assumptios are reviewed o a ogoig basis. Revisios to accoutig estimates are recogised i the period i which the estimate is revised, if the revisio affects oly that period, or i the period of the revisio ad future periods, if the revisio affects both curret ad future periods. Judgemets made by maagemet i the applicatio of IFRSs that have a sigificat effect o the uaudited codesed cosolidated half-yearly fiacial statemets ad estimates with a sigificat risk of material adjustmet i the ext year are discussed i ote GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER STATEMENT OF COMPLIANCE (CONTINUED) f) Basis of cosolidatio The uaudited codesed cosolidated half-yearly fiacial statemets icorporate the fiacial statemets of the Compay ad its whollyowed subsidiary. Cotrol is achieved whe the Compay is exposed, or has rights, to variable returs from its ivolvemet with the ivestee ad has the ability to affect those returs through its power over the ivestee. Subsidiaries are those etities, icludig special purpose etities, cotrolled by the Compay. Cotrol is achieved whe the Compay is exposed, or has rights, to variable returs from its ivolvemet with the ivestee ad has the ability to affect those returs through its power over the ivestee. I assessig cotrol, potetial votig rights that presetly are exercisable are take ito accout. The fiacial statemets of the subsidiary are icluded i the cosolidated fiacial statemets from the date that cotrol commeced to the date that cotrol ceases. The accoutig policies of the subsidiary are aliged with the policies adopted by the Compay. All itercompay balaces ad trasactios are elimiated o cosolidatio. 3. SIGNIFICANT ACCOUNTING POLICIES a) Foreig currecy Foreig currecy trasactios are traslated ito Sterlig usig the exchage rates prevailig at the dates of the trasactios. Foreig exchage gais ad losses resultig from the settlemet of such trasactios ad from the traslatio at period-ed exchage rates of moetary assets ad liabilities deomiated i foreig currecies are recogised i the Uaudited Codesed Cosolidated Statemet of Comprehesive Icome. Traslatio differeces o o-moetary fiacial assets ad liabilities are recogised i the Uaudited Codesed Cosolidated Statemet of Comprehesive Icome. b) Fiacial assets ad liabilities The fiacial assets ad liabilities of the Compay are defied as loas, ivestmets at fair value through profit or loss, cash ad cash equivalets, other receivables ad other payables. Recogitio The Compay recogises a fiacial asset or a fiacial liability whe, ad oly whe, it becomes a party to the cotractual provisios of the istrumet. Purchases ad sales of fiacial assets that require delivery of assets withi the time frame geerally established by regulatio or covetio i the marketplace are recogised o the trade date, i.e. the date that the Compay commits to purchase or sell the asset. Iitial measuremet Fiacial assets ad fiacial liabilities at fair value through profit or loss are recorded i the Uaudited Codesed Cosolidated Statemet of Fiacial Positio at fair value. All trasactio costs for such istrumets are recogised directly i profit or loss. Subsequet measuremet After iitial measuremet, the Compay measures fiacial assets desigated as loas ad receivables at amortised cost usig the effective iterest rate method, less impairmet allowace. Gais ad losses will be recogised i the Uaudited Codesed Statemet of Comprehesive Icome whe the asset is derecogised or impaired. Iterest eared or paid o these istrumets will be recorded separately as iterest icome. After iitial measuremet, the Compay measures fiacial istrumets which are classified at fair value through profit or loss at fair value. Subsequet chages i the fair value of those fiacial istrumets are recorded i et gai or loss o fiacial assets ad liabilities at fair value through profit or loss. Iterest ad divided eared or paid o these istrumets are recorded separately i iterest icome or expese ad divided icome or expese. Derecogitio A fiacial asset (or, where applicable, a part of a fiacial asset or part of a group of similar assets) is derecogised where: The rights to receive cash flows from the asset have expired; or The Compay has trasferred its rights to receive cash flows from the asset or has assumed a obligatio to pay the received cash flows i full without material delay to a third party uder a pass-through arragemet; ad Either (a) the Compay has trasferred substatially all the risks ad rewards of the asset, or (b) the Compay has either trasferred or retaied substatially all the risks ad rewards of the asset, but has trasferred cotrol of the asset. Whe the Compay has trasferred its rights to receive cash flows from a asset (or has etered ito a pass-through arragemet) ad has either trasferred or retaied substatially all the risks ad rewards of the asset or trasferred cotrol of the asset, the asset is recogised to the extet of the Compay s cotiuig ivolvemet i the asset. The Compay derecogises a fiacial liability whe the obligatio uder the liability is discharged, cacelled or expires. GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 13

14 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) c) Cash ad cash equivalets Cash ad cash equivalets are defied as cash i had, demad deposits ad short-term, highly liquid ivestmets readily covertible to kow amouts of cash ad subject to isigificat risk of chages i value. d) Receivables ad prepaymets Receivables are carried at the origial ivoice amout, less allowace for doubtful receivables. Provisio is made whe there is objective evidece that the Compay will be uable to recover balaces i full. Balaces are writte-off whe the probability of recovery is assessed as beig remote. e) Trasactio costs Trasactio costs icurred o the acquisitio of loas are capitalised upo recogitio of the fiacial asset. f) Icome ad expeses Bak iterest ad loa iterest are recogised o a time-proportioate basis usig the effective iterest rate method. Divided icome is recogised whe the right to receive paymet is established. All expeses are recogised o a accruals basis. All of the Compay s expeses (with the exceptio of share issue costs, which are charged directly to the distributable reserve) are charged through the Uaudited Codesed Cosolidated Statemet of Comprehesive Icome i the period i which they are icurred. g) Taxatio The Compay is exempt from UK corporatio tax o its chargeable gais as it satisfies the coditios for approval as a ivestmet trust. The Compay is, however, liable to UK corporatio tax o its icome. However, the Compay iteds to elect to take advatage of modified UK tax treatmet i respect of its qualifyig iterest icome i order to deduct all, or part, of the amout it distributes to Shareholders as divideds as a iterest distributio. h) Accoutig stadards issued but ot yet effective The Iteratioal Accoutig Stadards Board ( IASB ) has issued/revised a umber of relevat stadards with a effective date after the date of these uaudited codesed cosolidated half-yearly fiacial statemets. Ay stadards that are ot deemed relevat to the operatios of the Compay have bee excluded. The Directors have chose ot to early adopt these stadards ad iterpretatios ad they do ot aticipate that they, with the exceptio of IFRS 9, would have a material impact o the Compay s fiacial statemets i the period of iitial applicatio. A full assessmet of the impact of IFRS 9 ad IFRS 15 has ot yet bee performed. Effective date IFRS 9 Fiacial Istrumets 1 Jauary 2018 IFRS 15 Reveue from Cotracts with Customers 1 Jauary USE OF JUDGEMENTS AND ESTIMATES The preparatio of the Compay s uaudited codesed cosolidated half-yearly fiacial statemets requires the Directors to make judgemets, estimates ad assumptios that affect the reported amouts recogised i the uaudited codesed cosolidated half-yearly fiacial statemets ad disclosure of cotiget liabilities. However, ucertaity about these assumptios ad estimates could result i outcomes that could require a material adjustmet to the carryig amout of the asset or liability i future periods. Judgemets I the process of applyig the Compay s accoutig policies, maagemet has made the followig judgemets, which have had the most sigificat effects o the amouts recogised i the uaudited codesed cosolidated half-yearly fiacial statemets: i) Goig cocer After makig reasoable equiries, ad assessig all data relatig to the Compay s liquidity, the Directors have a reasoable expectatio that the Compay has adequate resources to cotiue i operatioal existece for the foreseeable future ad do ot cosider there to be ay threat to the goig cocer status of the Compay. Therefore, the uaudited codesed cosolidated half-yearly fiacial statemets have bee prepared o a goig cocer basis. 14 GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

15 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 (CONTINUED) 4. USE OF JUDGEMENTS AND ESTIMATES (CONTINUED) Estimates ad assumptios The Compay based its assumptios ad estimates o parameters available whe the uaudited codesed cosolidated half-yearly fiacial statemets were approved. However, existig circumstaces ad assumptios about future developmets may chage due to market chages or circumstaces arisig beyod the cotrol of the Compay. Such chages are reflected i the assumptios whe they occur. i) Determiatio of fuctioal currecy The performace of the Compay is measured ad reported to ivestors i Sterlig. The Directors cosider Sterlig to be the currecy that most accurately represets the ecoomic effects of the uderlyig trasactios, evets ad coditios. ii) Recoverability of loas ad other receivables The Directors assess the recoverability of the Compay s loas to determie whether ay impairmet provisio is required. At the period ed, there were o loas icluded i the Compay s portfolio which the Directors cosidered were i default or were impaired. I additio, there was o accrued iterest which the Directors cosidered to be ucollectable. 5. DIVIDENDS The Compay iteds to distribute at least 85% of its distributable icome eared i each fiacial year by way of divideds. The Compay will target a et divided yield of 8% per aum of the Issue Price per Ordiary Share as at Admissio. The Compay iteds to pay mothly divideds to Shareholders. As stated i the Compay s Prospectus, the Compay has elected to desigate all of the first divided for the period eded 31 December 2015 as a iterest distributio to its Shareholders. I doig so, the Compay is takig advatage of UK tax treatmet by "streamig" icome from iterest-bearig ivestmets ito divideds that will be taxed i the hads of shareholders as iterest icome. The Compay has declared the followig divideds i respect of earigs for the period from icorporatio to 31 December 2015: Total divided declared i Amout per Aoucemet date Pay date respect of earigs i the period Ordiary Share November December p 24 December Jauary p 25 Jauary February p 817 I accordace with IFRS, divideds are oly provided for whe they become a cotractual liability of the Compay. Therefore, durig the period, a total of 316,000 was icurred i respect of divideds, oe of which was outstadig at the reportig date. The secod ad third divideds of 211,000 ad 290,000 respectively had ot bee provided for at 31 December 2015 as, i accordace with IFRS, they were ot deemed to be liabilities of the Compay at that date. O 16 February 2016, the Compay declared a fourth divided of 0.55 pece per share for the period from iceptio to 31 Jauary This divided will be paid o 30 March RELATED PARTIES AND KEY CONTRACTS a) Ivestmet Maager The Compay pays the Ivestmet Maager a fee at the below rates expressed as a percetage of the Compay Value, where the Compay Value shall mea the lower of Net Asset Value ad Market Capitalisatio: 0.75% per aum of the Compay Value up to 100 millio; ad 0.50% per aum of the Excess, beig such part of the Compay Value i excess of 100 millio. For the period from Admissio util 6 November 2015 (the date o which the Ivestmet Maager cofirmed i writig that 90% of the et proceeds of the Issue had bee ivested or committed for ivestmet), ay cash istrumets were excluded from the calculatio of the Net Asset Value for the purposes of determiig the maagemet fee. GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 15

16 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 (CONTINUED) 6. RELATED PARTIES AND KEY CONTRACTS (CONTINUED) Durig the period, a total of 105,000 was icurred i respect of maagemet fees, of which 105,000 was payable at the reportig date. b) Admiistratio fees Elysium is etitled to a admiistratio fee of 100,000 per aum i respect of the services provided i relatio to the admiistratio of the Compay, together with time based fees i relatio to ivestmet trasactios. Durig the period, a total of 51,000 was icurred i respect of admiistratio fees, of which 48,000 was payable at the reportig date. A set-up fee of 25,000 was also paid to Elysium. c) Directors remueratio Norma Crighto receives 35,000 per aum as remueratio for his role as Chairma, Richard Hills receives 30,000 per aum as remueratio for his role as chairma of the Audit ad Valuatio Committee ad Nick Brid ad David Steveso receive 25,000 each per aum as remueratio for their roles as o-executive Directors. Durig the period, a total of 31,000 was icurred i respect of Directors remueratio, oe of which was payable at the reportig date. No bous or pesio cotributios were paid or payable o behalf of the Directors. d) Trasactios with GLI Fiace Limited ( GLIF ) The Compay purchased the subsidiary (see ote 10) from GLIF o Admissio, i retur for the 40,270,763 Ordiary Shares. I additio, durig the period the Compay purchased loas ad associated iterest of 4,675,000 from GLIF ad 1,250,000 from Sacus Limited (a subsidiary of GLIF). Further, o 23 December 2015, GLIF agreed to buy back a loa ad associated accrued iterest from the Compay. GLIF agreed that iterest would cotiue to accrue to the Compay, o the same terms, util such time that GLIF repaid the loa. As at 31 December 2015, GLIF owed the Compay 5,252,000, which was made up of 5,310,000 relatig to the above metioed loa ad (58,000) made up of various smaller items. As a matter of best practice ad good corporate goverace, the Compay has adopted a related party policy which applies to ay trasactio which it may eter ito with ay Director, the Ivestmet Maager, or ay of their affiliates which would costitute a "related party trasactio" as defied i, ad to which would apply, Chapter 11 of the Listig Rules. I accordace with its related party policy, the Compay obtaied: (i) the approval of a majority of the Directors; ad (ii) a third-party valuatio i respect of these trasactios from a appropriately qualified idepedet adviser. e) Trasactios with subsidiary udertakig Details of the trasactios with the Compay s subsidiary udertakig are disclosed i ote OTHER EXPENSES Period from icorporatio to 31 December 2015 (uaudited) 000 Broker fees 16 Tax ad accoutacy fees 14 Custodia fees 7 Legal ad professioal fees 7 Other expeses TAXATION The Compay is exempt from UK corporatio tax o its chargeable gais as it satisfies the coditios for approval as a ivestmet trust. The Compay is, however, liable to UK corporatio tax o its icome. However, the Compay iteds to elect to take advatage of modified UK tax treatmet i respect of its qualifyig iterest icome i order to deduct all, or part, of the amout it distributes to Shareholders as divideds as a iterest distributio. Withholdig tax of 2,000 was icurred by the Compay s Guersey subsidiary as a result of iterest o certai loas to UK idividuals/etities. The Compay oly owed the Guersey subsidiary from Admissio ad all loas made by the subsidiary were trasferred to the Compay o 1 October, so withholdig tax oly arose for a short period of time. It is iteded that all future loas i the UK will be made by the Compay ad therefore, uless tax laws chage, it is ot expected that UK withholdig tax will be suffered by the Compay i the future. 16 GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

17 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 (CONTINUED) 9. EARNINGS PER ORDINARY SHARE The earigs per Ordiary Share is based o a profit of 1,779,000 ad o a weighted average umber of 52,660,350 Ordiary Shares i issue sice Admissio. There is o differece betwee the basic ad diluted earigs per share. 10. INVESTMENT IN SUBSIDIARY UNDERTAKING Details of the subsidiary udertakig held by the Compay at 31 December 2015 were as follows: Name of subsidiary udertakig Coutry of icorporatio Pricipal activity % of ordiary shares held GLI Alterative Fiace Guersey Limited Guersey Ledig 100% Durig the period, loas ad associated iterest of 41,178,000 were ovated from the subsidiary udertakig to the Compay. As at 31 December 2015, the ivestmet i the subsidiary comprised a ivestmet at fair value through profit or loss of 41,089,000 less a amout of 41,089,000 due by the Compay to the subsidiary. 11. LOANS Period from icorporatio to 31 December 2015 (uaudited) 000 Amortised cost: Curret 12,126 No-curret 31,123 43,249 Impairmets* Balace at period ed 43,249 A loa is impaired whe the borrower has failed to make a paymet, either capital or iterest, whe cotractually due. The Compay assesses at each reportig date (ad at least o a mothly basis) whether there is objective evidece that a loa or group of loas, classified as loas at amortised cost, is impaired. As part of this process: Platforms are cotacted to determie default ad deliquecy levels of idividual loas; ad Recovery rates are estimated. At 31 December 2015, it was determied that oe of the loas of the Compay were impaired. *Impairmets are equal to loas i default or deliquecy where their expected recovery rate is less tha 100%. 12. INVESTMENT AT FAIR VALUE THROUGH PROFIT OR LOSS Period from icorporatio to 31 December 2015 (uaudited) 000 Balace brought forward at 13 July 2015 Additios i the period 1,623 Movemet i urealised gai i the period 107 Balace at period ed 1,730 GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 17

18 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 (CONTINUED) 13. FAIR VALUE OF FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS The followig table shows fiacial istrumets recogised at fair value, aalysed betwee those whose fair value is based o: Quoted prices i active markets for idetical assets or liabilities (Level 1); Those ivolvig iputs other tha quoted prices icluded i Level 1 that are observable for the asset or liability, either directly (as prices) or idirectly (derived from prices) (Level 2); ad Those with iputs for the asset or liability that are ot based o observable market data (uobservable iputs) (Level 3). At 31 December 2015, the fiacial assets desigated at fair value through profit or loss were as follows: 31 December 2015 (uaudited) Level 1 Level 2 Level 3 Total Ulisted preferece shares 1,730 1,730 Total fiacial assets desigated as at fair value through profit or loss 1,730 1,730 The Compay holds ulisted 25% preferece shares. The omial value of these shares has bee deemed to be the fair value, as the shares are ot actively traded ad it is expected that the omial value would be received if sold. No uobservable iputs were icluded i determiig the fair value of this ivestmet ad, as such, alterative carryig values for rages of uobservable iputs have ot bee provided. Trasfers betwee levels There were o ivestmets classified as Level 1 or Level 2 durig the period, ad o trasfers betwee levels i the period. See ote 12 for movemets i istrumets held at fair value through profit or loss. 14. OTHER RECEIVABLES AND PREPAYMENTS 31 December 2015 (uaudited) 000 Due from GLI Fiace Limited (ote 6) 5,252 Accrued iterest 489 Other receivables 74 Prepaymets 34 5, SHARE CAPITAL 31 December 2015 (uaudited) 000 Authorised share capital: Ulimited umber of Ordiary Shares of 1 pece each Ulimited C Shares of 10 pece each Ulimited Deferred Shares of 1 pece each 50,000 Maagemet Shares of 1 each 50 Called up share capital: 52,660,350 Ordiary Shares of 1 pece each ,000 Maagemet Shares of 1 each Durig the period, 52,660,350 Ordiary Shares were issued at 1 each, together with 50,000 Maagemet Shares at 1 each. 18 GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

19 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 (CONTINUED) 15. SHARE CAPITAL (CONTINUED) The Maagemet Shares, which are held by the Ivestmet Maager, are etitled (i priority to ay paymet of divided of ay other class of share) to a fixed cumulative preferetial divided of 0.01% per aum o the omial amout of the Maagemet Shares. The Maagemet Shares do ot carry ay right to receive otice of or to atted or vote at ay geeral meetig of the Compay uless o other shares are i issue at that time. The Maagemet Shares do ot cofer the right to participate i ay surplus of assets of the Compay o widigup, other tha the repaymet of the omial amout of capital. 16. RESERVES The Profit ad Loss Accout at 31 December 2015 comprised 928,000 of realised reveue profit, 851,000 of ivestmet gais ad losses ad (316,000) of divideds paid. The 211,000 ad 290,000 divideds (see ote 5), which were declared o 24 December 2015 ad 25 Jauary 2016 respectively, will be paid out of the 612,000 remaiig realised reveue profit. 17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT The Ivestmet Maager maages the Compay s portfolio to provide Shareholders with attractive risk adjusted returs through ivestmet, pricipally via a portfolio of Ivestee Platforms, i a rage of SME loa assets, diversified by way of asset class, geography ad duratio. The Ivestmet Maager seeks to achieve its ivestmet objective by ivestig i a rage of loas origiated pricipally through the ivestee Platforms i which the paret of the Ivestmet Maager (GLI Fiace Limited) holds a strategic equity ivestmet. The Compay also makes ivestmets through other third party alterative ledig Platforms that are idetified as suitable ivestmet opportuities by the Ivestmet Maager. The Compay will seek to esure that diversificatio of its portfolio is maitaied, with the aim of spreadig ivestmet risk. Risk is iheret i the Compay s activities, but it is maaged through a process of ogoig idetificatio, measuremet ad moitorig. The Compay is exposed to market risk (which icludes currecy risk, iterest rate risk ad price risk), credit risk ad liquidity risk from the fiacial istrumets it holds. Risk maagemet procedures are i place to miimise the Compay s exposure to these fiacial risks, i order to create ad protect Shareholder value. Risk maagemet structure The Ivestmet Maager is resposible for idetifyig ad cotrollig risks. The Board of Directors supervises the Ivestmet Maager ad is ultimately resposible for the overall risk maagemet approach withi the Compay. The Compay has o employees ad is reliat o the performace of third party service providers. Failure by the Ivestmet Maager, Admiistrator, Custodia, Registrar or ay other third party service provider to perform i accordace with the terms of its appoitmet could have a sigificat detrimetal impact o the operatio of the Compay. The market i which the Compay participates is competitive ad rapidly chagig. The risks have ot chaged from those detailed o pages 20 to 30 i the Compay s Prospectus, which is available o the Compay s website ( Risk cocetratio Cocetratio idicates the relative sesitivity of the Compay s performace to developmets affectig a particular idustry or geographical locatio. Cocetratios of risk arise whe a umber of fiacial istrumets or cotracts are etered ito with the same couterparty, or where a umber of couterparties are egaged i similar busiess activities, or activities i the same geographic regio, or have similar ecoomic features that would cause their ability to meet cotractual obligatios to be similarly affected by chages i ecoomic, political or other coditios. Cocetratios of liquidity risk may arise from the repaymet terms of fiacial liabilities, sources of borrowig facilities or reliace o a particular market i which to realise liquid assets. Cocetratios of foreig exchage risk may arise if the Compay has a sigificat et ope positio i a sigle foreig currecy, or aggregate et ope positios i several currecies that ted to move together. With the aim of maitaiig a diversified ivestmet portfolio, ad thus mitigatig cocetratio risks, the Compay has established the followig ivestmet restrictios i respect of the geeral deploymet of assets. GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 19

20 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION TO 31 DECEMBER 2015 (CONTINUED) 17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED) Geographical The Compay makes loas to SMEs i a broad spread of jurisdictios, but weighted towards the UK. The Compay iteds to comply with the followig restrictios o its percetage holdigs of loa assets i the followig jurisdictios: UK: o more tha 70% of Gross Assets; ad Rest of the World (beig ay jurisdictio outside the UK): at least 30% of Gross Assets. Duratio The Compay diversifies its risk portfolio by limitig the allocatio of ivestmets i terms of duratio to maturity, although weighted towards short-term fiacig to esure a degree of liquidity. The Compay limits the ivestmet of Gross Assets (based o the duratio to maturity of the loas), as follows: Six moths or less: betwee 10% ad 40% of Gross Assets; Six to 18 moths: betwee 10% ad 40% of Gross Assets; 18 to 36 moths: betwee 10% ad 40% of Gross Assets; ad 36 moths or more: betwee 10% ad 40% of Gross Assets. Security Loa assets have a rage of differet types of security. However, o more tha 50% of Gross Assets will be held i usecured loa assets. Other restrictios From time to time, the Compay provides loas to the Platforms themselves, to fud the geeral workig capital requiremets of the Platform, rather tha for oward deploymet i SME loa assets. At ay time, the provisio of such workig capital loas will be limited to 5% of Gross Assets i aggregate (calculated at the time of ivestmet). To avoid a cocetratio of risk, for the Compay s top te ivestmets (measured by Gross Assets), the Compay will ivest o more tha 2.5% of Gross Assets (calculated at the time of ivestmet) ito a idividual credit risk. For ivestmets outside the top te, the Compay will ivest o more tha 1% of Gross Assets (calculated at the time of ivestmet) ito a idividual credit risk. Where a loa fiaces a basket of uderlyig credits, the exposure to ay oe uderlyig credit will ot be more tha 2.5% of Gross Assets (calculated at the time of ivestmet) for the Compay s top te ivestmets, ad ot more tha 1% of Gross Assets (calculated at the time of ivestmet) outside the Compay s top te ivestmets. A umber of positios cotaied i the seed portfolio (as detailed i the Prospectus) breached these limits ad the Ivestmet Maager has bee workig to esure that the Compay s portfolio complies with the ivestmet restrictios goig forward. I particular, the Compay s largest loa to a sigle issuer was i excess of the 2.5% limit, but this has ow bee reduced to 1.8%, ad te positios outside of the top te were i excess of the 1% limit. At the time of writig this report, oly four positios outside of the top te were i breach of the 1% limit. Market risk (i) Price risk Price risk exposure arises from the ucertaity about future prices of fiacial istrumets held. It represets the potetial loss that the Compay may suffer through holdig market positios i the face of price movemets. The ivestmet at fair value through profit or loss (see otes 12 ad 13) is exposed to price risk ad it is ot the itetio to mitigate the price risk. At 31 December 2015, if the valuatio of the ivestmet at fair value through profit or loss had moved by 5% with all other variables remaiig costat, the chage i et assets would amout to approximately +/- 87,000. The maximum price risk resultig from fiacial istrumets is equal to the 1,730,000 carryig value of the ivestmet at fair value through profit or loss. (ii) Foreig currecy risk Foreig currecy risk is the risk that the value of a fiacial istrumet will fluctuate because of chages i foreig exchage rates. Currecy risk arises whe future commercial trasactios ad recogised assets ad liabilities are deomiated i a currecy that is ot the Compay's fuctioal currecy. The Compay ivests i securities ad other ivestmets that are deomiated i currecies other tha Sterlig. Accordigly, the value of the Compay s assets may be affected favourably or ufavourably by fluctuatios i currecy rates ad therefore the Compay will ecessarily be subject to foreig exchage risks. 20 GLI Alterative Fiace HALF-YEARLY REPORT AND UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS