River UK Micro Cap Limited
(formerly River and Mercantile UK Micro Cap Investment Company Limited)
Annual Report and Financial Statements
For the year ended 30 September 2024
1
The Company
at a glance
Purpose
River UK Micro Cap Limited (formerly River and Mercantile UK Micro
Cap Investment Company Limited) (the “Company”) is a closed-ended
investment company. Its purpose is to deliver high and sustainable
returns to investors by delivering the investment objective detailed
below.
Investment objective
The Company aims to achieve long term capital growth from investment
in a diversified portfolio of United Kingdom (“UK”) micro-cap companies,
typically comprising companies with a free float market capitalisation of
less than £100 million at the time of purchase.
Investment strategy and policy
The Company’s investment strategy is to take advantage of the illiquidity
risk premium inherent in UK micro-cap companies and exploit fully the
underlying investment opportunities in that area of the market to deliver
high and sustainable returns to Shareholders, in the form of capital gains.
It is expected that the majority of the Company’s investible universe will
comprise companies whose securities are admitted to trading on the
Alternative Investment Market of the London Stock Exchange. While it
is intended that the Company will be fully invested in normal market
conditions, the Company may hold cash or similar instruments.
About the Alternative Investment Fund Manager (“AIFM”)
The AIFM of the Company, for the purposes of the AIFM Directive, is
Carne Global AIFM Solutions (C.I.) Limited (“Carne” or the AIFM) which is
authorised and regulated by the Jersey Financial Services Commission.
The AIFM provides an oversight and risk management function but
delegates portfolio management to River Global Investors LLP (formerly
“River and Mercantile Asset Management LLP”). The AIFM is independent
and has no legal ownership connection with River Global Investors LLP.
Contents
Financial highlights and
performance summary 3
Chairman’s statement 5
Portfolio Manager’s report 7
Investment portfolio 23
Strategic report 25
Statement of principal risks
and uncertainties 29
Section 172 statement and
principal decisions 33
Board members 35
Directors’ report 37
Directors’ statement of
responsibilities 41
Board and committees 42
AIFMD report 47
Report of the Audit Committee 48
Directors’ remuneration report 51
Independent auditor’s report 53
Statement of comprehensive
income 57
Statement of financial position 58
Statement of changes in
shareholders’ equity 59
Statement of cash flows 60
Notes to the financial statements 62
Useful information for
shareholders (unaudited) 79
Company information 81
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Annual Report and Financial Statements 30 September 2024
This year sees the tenth
anniversary of River UK Micro
Cap and as we enter our second
decade, we expect to see a
sustained recovery in smaller
companies in the UK. Our
portfolio companies stand to
benefit from their own growth
stories, plus an additional boost
as valuations normalise.
About River Global Investors LLP
(formerly River & Mercantile Asset
Management LLP) (the “Portfolio
Manager”)
The Portfolio Manager is an active
equity manager, specialising in
UK and global equity strategies
since its launch in 2006. Since
2014, it has been part of River and
Mercantile Group Limited (formerly
River and Mercantile Group PLC)
(the “Group”). The Group is a
subsidiary of AssetCo PLC. The
Portfolio Manager is authorised and
regulated by the Financial Conduct
Authority.
George Ensor, the appointed fund
manager, has been responsible
for the Company’s portfolio since
February 2018. Please refer to page
8 for George’s biography.
Capital redemptions and
dividend policy
The Company is committed to
achieving long term capital growth
and, where possible, returning
such growth to Shareholders
throughout the life of the Company.
Furthermore, the Board believes
that a Net Asset Value (“NAV”) in
the region of £100 million will best
position the Company to maximise
returns from a portfolio of micro-
cap companies. Accordingly,
the Directors operate a Capital
Redemption Mechanism under
which a portion of the Company’s
share capital is redeemed
compulsorily at the discretion of the
Company to return the NAV back to
around £100 million in order to:
• enable the Company to exploit
fully the underlying investment
opportunity and to deliver high
and sustainable returns to
Shareholders, principally in the
form of capital gains;
• enable portfolio holdings to
have a meaningful impact on the
Company’s performance, which
might otherwise be marginal
within the context of a larger
fund; and
• ensure that the Company can
continually take advantage of the
illiquidity risk premium inherent in
micro-cap companies.
The Company does not expect to
pay dividends.
Management of your Company
The Board of the Company
comprises a majority of independent
non-executive Directors with
extensive knowledge of investment
matters, the regulatory and legal
framework within which the
Company operates, as well as the
various roles played by investment
companies in Shareholders’
portfolios. The Board provides
oversight of the Company’s activities
and ensures that the appropriate
financial resources and controls are
in place to deliver the investment
strategy and manage the risks
associated with such activities. The
Board actively supervises both the
AIFM and the Portfolio Manager in
the performance of their respective
functions.
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Annual Report and Financial Statements 30 September 2024
Performance during the year
In the year ended 30 September 2024, the NAV total return
1
of
the Company outperformed the Numis Smaller Companies plus
Alternative Investment Market (“AIM”) (excluding Investment
Companies) Index (the “Comparative Index”) by 0.78%, delivering
a NAV total return
1
of 14.87%, compared to 14.10% posted by
the Comparative Index (30 September 2023: outperformed the
Comparative Index by 0.54%).
NAV and share price
30 September
2024
30 September
2023
NAV per Ordinary Share
1
£2.0348 £1.7714
Ordinary Share price (bid price)
2
£1.7400 £1.4200
Share price discount to NAV
1
(14.49)% (19.84)%
2023
2024
HIGH
LOW
£2.2494
£1.6185
HIGH
LOW
£1.9226
£1.6836
NAV per Ordinary share
1
Year ended 30 September
2023
2024
HIGH
LOW
£1.8200
£1.3100
HIGH
LOW
£1.5900
£1.3200
Ordinary share price (bid price)
2
Year ended 30 September
Ongoing charges
1
The ongoing charges
for the year ended 30
September 2024 were
1.72% (30 September
2023: 1.71%), reflecting
rising operational costs
offset by rising average
NAV of the Company
compared to the prior
year.
Financial highlights
and performance
summary
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Annual Report and Financial Statements 30 September 2024 4
1 These are Alternative Performance Measures. Refer to pages
79 to 80 for further details.
2 Source: Bloomberg.
3 Source: Numis Securities Limited.
4 Excludes the cost of each redemption; amounting to a total
of £33,008 across all redemptions.
NAV per Ordinary
share
1
+14.9%
30 Sept 2024: £2.0348
30 Sept 2023: £1.7714
Ordinary share
bid price
2
+22.5%
30 Sept 2024: £1.7400
30 Sept 2023: £1.4200
Share price
discount to NAV
1
-27%
30 Sept 2024: (14.49)%
30 Sept 2023: (19.84)%
Performance since inception
NAV total return versus the Comparative Index from inception
NAV total return
1
from inception (net of all fees) was 7.71% on an annualised basis, outperforming
the Comparative Index total return
3
of 5.38% (30 September 2023: outperformed the Comparative
Index by 4.44%).
Capital redemptions
Since inception to 30 September 2024, the Company has exercised its Capital Redemption
Mechanism on five separate occasions, as detailed below, redeeming a total of 34,609,615 Ordinary
Shares and returning a total of £76,924,351 to Shareholders.
Redemption
date
Redemption
price per
Ordinary Share
4
Number of
Ordinary shares
redeemed
Amount
returned to
shareholders
9 June 2017 £1.7217 8,712,240 £14,999,864
1 December 2017 £1.9124 7,843,469 £14,999,850
27 July 2018 £2.1659 5,506,817 £11,927,215
29 January 2021 £2.5335 5,921,631 £15,002,452
7 May 2021 £3.0179 6,625,458 £19,994,970
Please refer to note 11 for full details of the Company’s redemption mechanism, including the
conditions required for the Company to be able to operate the Capital Redemption Mechanism.
-50
0
50
10
0
15
0
20
0
250
Sept
24
Sept
23
Sept
22
Sept
21
Sept
20
Sept
19
Sept
18
Sept
17
Sept
16
Sept
15
Dec
14
Total return per share
Total return per index
5River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Chairman’s statement
The UK is still dogged by confidence issues
that are holding back valuations, particularly
in the small and micro-cap markets. There
are ongoing questions around the efficacy of
the AIM market, which is so important as the
venue to much of the Company’s investment
strategy.
In many ways, it seems perverse that the
UK’s high-growth economy is struggling to
be recognised for what it is. As a nation, we
are market leaders in Fintech and building a
strong reputation in emerging technologies
such as artificial intelligence (“AI”) and
HealthTech as well as other high-growth
sectors.
These types of companies typically need
strong incentives to locate and grow in the
UK and various attractive tax breaks have
been introduced to both entrepreneurs and
investors via the AIM market.
The rumours that some of these tax breaks
were to be removed or diluted by the
incoming Government proved mostly true in
the recent Budget statement, and this affected
market sentiment in the latter months of this
reporting period, flattening performance.
Although the new Labour Government was
elected with a growth-led economic agenda,
there are still questions about some of
the unintended consequences of the new,
proposed tax raising initiatives.
The recent Autumn budget from Chancellor
Rachel Reeves has at least clarified the
economic landscape going forward, as has
the US election. These outcomes might be
unpopular, but the markets now have clarity.
Overall, the last 12 months have been satisfying for the Company on
a number of levels. Although not fulfilling some of the more bullish
expectations from earlier in the year, I am pleased to report that
the Company showed a share price performance of 23% and a NAV
performance of 14.9%, outperforming our Comparative Index.
RMMC share price up 23% over the period
Chart showing share price and trading volumes over this reporting period (1 October 2023 - 30 September 2024).
Source: River Global Investors.
120
140
160
180
200
Oct 24Sep 24Aug 24Jul 24Jun 24May 24Apr 24Mar 24Feb 24Jan 24Dec 23Nov 23Oct 23
Share price (GBX)
Trade volume (k)
250
200
150
100
50
0
6River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Putting all this together, the Board believes
that there is a burgeoning opportunity to
invest in a portfolio of Britain’s brightest
growth stories.
The unprecedented low valuations of micro
and small cap firms are seen as a bargain
for our Portfolio Manager and for investors
looking to get on board the next growth cycle.
With a new Government, positive labour
market, inflation back at planned levels and
interest rates reducing, there are few reasons
to argue that smaller UK company valuations
shouldn’t rise strongly from their current
depressed values.
George Ensor, our Fund Manager at River
Global Investors LLP, highlights in much more
detail his approach to the market from pages
7 to 22 of this newly designed report.
Which brings us neatly to some of the efforts
we have been making with shareholder
communications.
You will see from this document that we
have been working to make our writing more
concise, engaging and well-presented. This
improvement will be reflected in everything
we do, including Regulatory News Service
announcements, monthly updates and
reports, and financial statements.
We want to be evangelists for the great
investment case offered by this Company and
that starts with us telling a strong story.
Back in January 2024, when the share price
was low and the share price discount was
wide, we were one of a number of investment
companies attracting the attention of activist
investment firms.
The Board decided that we were going to
tell our story to the market through our
first ever marketing campaign, ahead of the
Continuation Vote in March of this year.
The campaign helped to rally both the share
price, and a narrowing of the discount to NAV.
The vote to continue the Company’s unique
positioning was backed by over 99% of voters
– a resounding endorsement of the strategy
and achievements to date.
Anthony Leatham, Head of Investment Company Research at
Peel Hunt presents the Association of Investment Companies
Marketing Campaign of the Year to Lucy Draper of River
Global and John Blowers, Chairman.
We will continue to focus on marketing, in
order to increase the understanding of the
Company’s benefits for investors, both existing
and new, with a remit to increase demand for
the Ordinary Shares of the Company.
This drives liquidity, narrows share price
discounts and drives share price growth.
The efforts of the Company were rewarded in
September 2024 when the AIC awarded us the
Marketing Campaign of the Year award.
As the Company enters its 11th year in
December 2024, I believe that we have ridden
the worst of the low company valuations that
have beset UK markets recently and we now
look more clearly at a route to growth and
further capital redemptions.
John Blowers
Chairman
20 December 2024
Chairman’s statement (continued)
7River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
UK Small Cap relative to Large Cap, September 1990 to September 2024
Source: River Global investors LLP, Bloomberg, Deutsche Numis. Data from 31 August 1990 to 30 September 2024. Chart shows
Numis Small Cap plus AIM ex Investment Trusts relative to UK All Share (both total return).
This Portfolio Manager Report is compiled with reference to the investment portfolio.
Therefore, all positions are calculated by reference to their official closing prices (as
opposed to the closing bid prices basis within the financial statements). The estimated
unaudited NAV is calculated on a daily basis utilising closing bid prices and is inclusive of
all estimated charges and accruals.
50
60
70
80
90
100
110
120
130
140
2423222120191817161514131211100908070605040302010099989796959493929190
Portfolio Manager’s report
The chart below illustrates the size of the opportunity if the rotation into smaller companies
is sustained. In this environment, we would expect to deliver strong absolute and relative
performance over the next few years.
We believe the opportunity for this strategy is excellent. After a
prolonged period of subdued performance for UK financial markets,
large and small, and the UK economy, there is a breadth of data that
supports fiscal and monetary easing and an improvement in economic
growth. This is a great backdrop for small, and therefore micro-cap,
future equity performance. Indeed, following a period of extreme
underperformance over the last three years, smaller companies have
started to outperform – a critical lead indicator for our own performance.
8River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
We believe, particularly given the
depressed state of the UK equity
and small-cap market, that an IRR of
12.4% confirms that the approach
we are taking is absolutely in the
interest of our shareholders.
Fund manager:
George Ensor
George Ensor graduated from Bristol
University with an Upper Second-Class
degree in Chemistry in 2008 before
joining Smith & Williamson Investment
Management as a graduate trainee
where he worked for five years as an
analyst and Private Client Investment
Manager.
George joined River Global Investors LLP
in March 2014 as a UK equity analyst and
is currently Portfolio Manager of the ES
R&M UK Listed Smaller Companies Fund
and River UK Micro Cap Limited. George
is a CFA charter holder.
Portfolio Manager’s report (continued)
9River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
UK economy outperforming
expectations and setting up
strong case for micro-cap
performance
In our 2023 report, we made the case that the UK
economy was outperforming expectations and that this
positive momentum, alongside cheap starting valuations,
could support attractive future equity returns. Whilst
equity returns have improved – the UK equity market,
UK smaller companies and our net asset value increased
by 13%, 14% and 15%
1
respectively – we are surprised
that the continuing recovery of the UK economy has
not led to a more sustained recovery in UK smaller
companies’ performance.
We believe there is a strong case for a broadening out of
equity market performance and a rotation from mega-
cap to small and micro-cap companies. The cycle of
underperformance of small and micro-cap companies
that we have experienced as interest rates increased
from record low levels has not been specific to the UK
and is not unusual. Below we justify our confidence in
the UK economy and explain why we believe this should
contribute to the outperformance of smaller companies
looking forward. Our performance data, as illustrated in
the section below on long term performance, continues
to support the case for excellent absolute and relative
returns in environments where there is a positive “small
cap premium” (i.e. small companies outperforming large).
Evidence of improvement in the UK domestic economy:
• Mortgage approvals (65.6k in September) are in-line
with the 10-year average and up 49% compared to
September 2023 (44.0k)
2
.
• UK consumer confidence has been on an upward
trend over the last 12 months to a 23-month high
of -13 in August. The 10-year average is -15 and
the 5-year average is -25. Sentiment declined
in September to -20 ahead of the new Labour
Government’s budget
3
.
• The UK labour market is easing, unemployment
remains low. Recent data from the KPMG/Recruitment
and Employment Confederation survey, which is
a measure of demand relative to the availability of
workers, points to a “significant softening in wage
growth”
4
. Three-month average regular earnings
growth dropped below 5% (4.9%) for the first time
since June 2022. This is important given the impact of
wage growth in services inflation. Vacancies, at 841k,
have just dropped below the pre-Covid peak (862k
as at October 2018). The data also shows a trend of
declining working age inactivity
5
.
• UK real wage growth remains positive at close to
+2% year on year (“YoY”), as has been the case since
mid-2023
4
.
1 UK equity return is for the MSCI UK IMI Index in total return.
UK small cap is the Numis Smaller Companies Index incl AIM
excl Investment Trust in total return. Time period is the twelve
months to the end of September 2024.
2 Bank of England
3 Growth from Knowledge (GfK)
4 Barclays UK Labour Market 7 October 2024.
5 Office for National Statistics , October Labour Market Review
Portfolio Manager’s report (continued)
Source: Panmure Liberum, ONS. 15 October 2024.
Working age inactivity, 000s
8,000
8,400
8,800
9,200
9,600
Jun-Aug 2024Jul-Sep 2023Aug-Oct 2022Sep-Nov 2021Oct-Dec 2020Nov-Jan 2020
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Annual Report and Financial Statements 30 September 2024
• Peak gas prices expected for this winter are currently
104 pence, down 30% on the peak price expected for
this winter in September 2023. Lower gas prices are
akin to fiscal easing.
6
• Monetary policy is easing. UK interest rates were 5.25%
in September 2023 but were expected to increase
(peak expectations of 5.4% in February 2024) and to be
5.1% in September 2024. UK rates fell to 5% in August
2024 and are expected to be 3.5% in twelve months.
6
• Sterling has gained 11% against the US dollar over
the last year and is sitting above the 5-year average of
$1.28 and in-line with the 10-year average of $1.33.
6
• UK Services, Manufacturing and Construction project
management information systems for September
2024 of 52.4, 51.5 and 57.2, respectively, are all
indicative of expansion.
7
• UK was the fastest growing G7 economy in the first
six-months of 2024 and forecasts for 2025 exceed
both the US and the Eurozone
8
.
The most important driver of long-term equity
performance is earnings. It therefore stands to reason
that the growth rate of smaller company earnings
relative to large companies should correlate to relative
performance. We should expect to see a positive
small cap premium when smaller company earnings
outperform larger company earnings. Sentiment –
expressed through flows and demonstrated in valuation
multiples – exaggerates the delta in relative earnings
over the short-term, as equities are priced by the
marginal buyer or seller. As we will come back to discuss
in the section on long term performance, our micro-cap
strategy is geared to the small cap premium.
UK smaller companies are more exposed to the
domestic economy (and therefore GBP and gas prices)
and typically more cyclical. They are more geared to
central bank base rates and, we would argue, longer
duration (given the reason to own small caps is for
higher growth). We therefore acknowledge some of the
drivers of smaller companies’ underperformance over
the last three years. We struggle to see that the same
reasons hold true today. With fundamentals that are
improving, the reverse of these factors should drive
future earnings growth at a higher rate for domestics,
cyclicals, and small caps. Despite this and an attractive
valuation starting point, outperformance over the last
twelve months has been less than 1%.
Using FTSE 250 forecast earnings as a proxy for small
cap, the data below shows that the relative earnings
argument should be a positive driver from today (even
if 18% earnings growth three years out is improbable).
This would be a much more positive backdrop for both
our absolute and relative performance.
6 Bloomberg, Data as of early October 2024
7 Bloomberg, S&P, October 2024
8 Berenberg Equity Strategy, 2 October 2024
Portfolio Manager’s report (continued)
Earnings growth: global
Source: Bloomberg
Earnings growth: UK
Source: Bloomberg
Source of charts: Numis Why Smaller Companies, Why Now? 17 September 2024.
0%
4%
8%
12%
16%
20%
Y+2Y+1NTM
MSCI ACWI MSCI World SmCap
12.0%
15.6%
11.6%
17.2%
7.5%
10.3%
0%
4%
8%
12%
16%
20%
Y+2Y+1NTM
FTSE All Share FTSE 250 ex ICs
4.7%
6.2%
7.5%
13.7%
9.4%
18.3%
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Annual Report and Financial Statements 30 September 2024
Comments follow for each position that impacted
relative performance by at least one percentage
point (“ppt”):
Renold (+2.4 ppts)
Renold is a manufacturer of highly engineered industrial
chains typically used in demanding environments in a
broad range of end markets. Renold reported strong
results through the period that raised market confidence
in the group’s ability to achieve sustainable double-digit
margins underpinned by a highly engineered, relatively
low cost but performance critical chain product and
strong operating efficiencies. Robust cash conversion
and deleveraging provides a solid foundation for
inorganic growth which is key to driving the group’s
ambitions to consolidate a highly fragmented industry
with high switching costs. With margins having recovered
compared to the long-term track record and supported
by both the organic and inorganic opportunity on which
the company has begun to execute, we transitioned the
investment case from Recovery to Growth in the period.
Science in Sport (+1.5ppts)
Science in Sport is a manufacturer and distributor of
performance nutrition products for athletes through
their SiS and PhD brands. Whilst the industry is growing,
it is highly competitive, which is a particularly relevant
comment for direct-to-consumer (“DTC”) ecommerce
operations. Science in Sport distribute through DTC and
via both online and offline retailers. The strategy under
the prior management team was to invest in marketing
to drive aggressive topline growth and, like many DTC
businesses, acquiring users online became unprofitable
which, alongside required capex investments, left the
balance sheet overleveraged. The new management
team reset commercial relationships, exiting unprofitable
revenues and focussed on cash generation and profit.
The balance sheet has been recapitalised through an
equity raise in which we participated. Whilst we maintain
our Growth investment case, these are key catalysts for
improved operating and share price momentum that we
look for in Recovery investment cases.
NAV per share at the end of September 2024 was 203.5 pence, a gain of 14.9% from
the NAV per share of 177.1 pence at the end of September 2023. Our Numis Smaller
Companies plus AIM ex Investment Trusts benchmark returned a gain of 14.1%, leaving
relative performance for the year of +0.8%.
NAV per
share
2024: 203.5 pence 2023: 1771.pence
Relative
performance
Fund: +14.9% Benchmark: +14.1%
+14.9%
+0.8%
One year
performance
Portfolio Manager’s report (continued)
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Annual Report and Financial Statements 30 September 2024
Serabi Gold (+1.3ppts)
Serabi Gold is a Brazilian gold exploration and
production business which has struggled over the
last few years given increasing costs and inconsistent
operational performance. The acquisition of a second
asset, Coringa, also put significant pressure on the
balance sheet. Operational performance has improved
as Coringa has contributed to gold production and
we expect this contribution to accelerate over the
next two years. A combination of strong gold prices
and weakness in the Brazilian Real has delivered a
substantial turnaround in financial performance and
free cash generation.
Venture Life (+1.2 ppts)
Venture Life has executed a value accretive buy-and-
build strategy of self-care brands. Acquisitive strategies
have had a tough time over the last few years as they
are dependent on both a sensible market valuation
for their equity and, typically, demand for equity that
can be tapped to fund acquisitions. These two aspects
have been absent for the last three years and so
Venture Life sensibly focussed on organic growth and
cash generation to pay down debt. Whilst not without
challenge, the higher margin Brands division is delivering
good organic growth which we do not believe is
recognised in the valuation.
Windward’s (+1.1 ppts)
Windward’s software-as-a-service solution (“SaaS”),
underpinned by a unique and defensible AI based
process provides high payback maritime data insights
primarily to government and commercial customers.
Post our initial purchase, Windward has issued several
strong market updates which have driven mid-to-high
teens consensus sales upgrades over the period.
This accelerates the group’s path to breakeven, with
sustained profitability expected from next year which de-
risks our investment case. We share further comments
on the investment case in the section on activity below.
Supreme (+1.0 ppts)
Supreme outperformed consensus expectations driven
primarily by its core vaping business. Although the
UK government announced a proposed disposable
vape ban during the period, we believe the group is
well prepared with its alternative forms of vaping (e.g.
refillable pod system). Supreme deployed its strong
balance sheet to acquire Clearly Drinks, a brand owner
and manufacturer of specialised canned and bottled-
at-source spring water, which was well received by
the market. We think it is an attractive deal from both
a strategic and financial perspective. It helps diversify
the group’s revenues with pro-forma non-vaping
sales accounting for 40% of group sales. Supreme
paid an attractive multiple of earnings and the deal
is earnings enhancing before any potential synergies
are considered. Clearly Drinks’ manufacturing capacity
appears to be well invested with significant free capacity.
We expect strong synergy potential; for example, selling
Clearly Drinks products to Supreme’s already established
customer relationships or developing Supreme’s
emergent activity in wellness and energy drinks.
Mergers and acquisitions (“M&A”) were also a
driver of performance with both City Pub Group
(+1.4 ppts) and Shanta Gold (+1.1 ppts) being
acquired in the period.
Mind Gym (-1.1 ppts)
Mind Gym provides behavioural science solutions
to corporates that are proven to deliver business
improvements through a focus on addressing a number
of universal human capital challenges. Mind Gym
issued a profit warning at its interim trading update in
October 2023 and fell short of market expectations
at its subsequent trading update in April 2024 which
was primarily due to a weaker than expected macro
environment. Balance sheet and liquidity constraints
resulted in the company paring back selected long-
term growth investments. Given depressed margins, a
depressed share price and a change of chief executive
officer (“CEO”), we transitioned the position to a
Recovery investment case (versus Growth previously).
The valuation opportunity is compelling at 0.3x sales
versus a 5-year average of 1.8x and a mid-term 15-20%
margin target; however, we reduced our holding in
the period to less than 0.5% of NAV at the period end,
indicative of our concerns about the achievability of the
company’s medium-term targets.
Portfolio Manager’s report (continued)
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Annual Report and Financial Statements 30 September 2024
Manolete (-1.2 ppts)
Manolete is a litigation funding business which acquires
cases from insolvency practitioners in return for a
share of any profitable outcome. Manolete moved
back into profits in their full year results to March 2024
and reported progress for the first five months of their
current financial year that show net cash receipts are
tracking ahead again. This reported progress is at odds
with the share price performance which has been poor.
The shares trade at a small premium to book value
which is a significant discount to the long-term price-
to-book multiple and an attractive opportunity if the
company returns to historic levels of growth and return-
on-equity. We have a small position (1.2% of NAV) at the
end of the period and will wait for a clear improvement
in momentum before looking to add to our position.
Ten Lifestyle (-1.6 ppts)
Ten Lifestyle’s technology enabled concierge proposition
aids their corporate customer, typically financial services,
with retention – and therefore lifetime value – of high
value customers. The company – which prides itself on
an exceptional track record of contract retention – lost
a large (c.5.5% of revenue) long-standing contract with
Coutts following the leadership changes at the private
bank. The company has since been awarded a new
contract with an American financial services firm which
is larger than the lost contract but did come with a need
to raise capital to fund the working capital requirements
as this contract ramps up. We participated in the fund
raise and we believe our Growth investment case
remains intact.
Inspecs (-1.8 ppts)
Inspecs is a vertically integrated eyewear solutions
provider with a focus on mid-market brands that offers
its customers unrivalled supply chain transparency and
product quality underpinned by its own manufacturing.
Inspecs issued a full-year trading update in January 2024
that confirmed the group’s focus on margin recovery
through extracting operational efficiencies is driving
margins in the right direction, however earnings were
below expectations due to weaker than expected sales
growth. Soft European consumer demand notably in
Germany and the loss of sales to GrandVision following
its acquisition by Essilor Luxottica were key factors. At
interim results, the company revealed that revenue and
earnings – which were lower YOY – had benefited from
elevated levels of ordering in the comparable period
as retailers secured inventory post-Covid, which was
not flagged in the prior year. Despite this, management
held guidance, implying a stronger than usual second
half weighting. Valuation remains compelling at seven-
times 2025 consensus earnings, on margins well below
management’s long-term target.
Portfolio Manager’s report (continued)
14River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Positive absolute and relative
performance in eight out of
ten financial periods.
Total return after all fees
107.6%
Outperformance
40.3%
Long term
performance
review
We’ve extended the analysis that we shared with shareholders last year in the table
overleaf which shows the annual NAV performance for each financial year since the
Company’s initial public offering (“IPO”) in December 2014
9
.
The penultimate row of the table shows our performance
relative to our benchmark on the same basis while the
last row shows our performance relative to the AIM All
Share index which is a point we will come back to. The
three middle rows provide context for the investment
backdrop in the period.
For example, for the 10-month period to the end
of September 2015, we delivered absolute NAV
growth of 13% and we outperformed our benchmark
by 5%. There was a growth style bias
10
in the market,
UK interest rates were unchanged and Smaller
Companies
11
outperformed.
9 Period to September 2015 is from IPO on 2 December 2014 and is therefore approximate a 10 month not 12-month period.
10 Measured as a composite of MSCI UK Value vs. MSCI UK Growth and Numis Small Cap Ex-Investment Trusts plus AIM vs AIM All Share.
11 Measured as Numis Smaller Companies Ex-Investment Trusts plus AIM vs UK All Share. Double signal means equal or greater than 10%.
Portfolio Manager’s report (continued)
15River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
The final row on the table above shows our performance
relative to the AIM All Share index. AIM is seen as the key
small company market in the UK with 610 companies on
AIM with a total market capitalisation of £68 billion and
an average of £111 million
12
.
At the end of the year, all but three of our investments
were AIM listed which represented 88% of the NAV. We
would consider the performance of AIM to be a better
measure of the performance of the smallest UK listed
companies particularly as the FTSE Small Cap index
(excluding Investment Trusts) has just 107 constituents
with a total market cap of £27.7 billion and an average
market capitalisation of £259 million
13
. For reference, our
benchmark has 1,006 constituents with a total market
value of £222.1 billion and an average of £222 million
13
.
We have delivered strong outperformance relative
to AIM both since inception and particularly over the
last two years where our performance relative to our
benchmark has been harder.
Portfolio Manager’s report (continued)
12 Peel Hunt Strategy, AIMing higher, 17 September 2024
13 Bloomberg, 25 October 2024
Sept
15*
Sept
16
Sept
17
Sept
18
Sept
19
Sept
20
Sept
21
Sept
22
Sept
23
Sept
24
NAV
performance
13% 14% 45% 25% -17% 9% 59% -48% 4% 15%
Style bias Growth Growth Value Growth None Growth Value Value Value Value
Interest
rates
Neutral – Neutral + + – Neutral + ++ –
Small cap
premium
++ – + – – – ++ ++ – – – – =
Relative
performance
5% 4% 24% 22% -10% 12% 14% -21% 1% 1%
AIM relative
performance
10% 0% 21% 14% 2% -2% 29% -14% 12% 11%
*10 months.
Source: River Global Investors LLP, BNP Paribas, Bloomberg.
The intention of the data is to illustrate that the
Company has delivered strong absolute and relative
performance in a range of macro environments. We
would highlight the following:
• Positive absolute and relative performance in eight
out of ten financial periods.
• Total return after all fees of 107.6%.
• Outperformance of 40.3%.
• We have delivered positive absolute and relative
returns in years with both Growth and Value style
leadership and rising and falling interest rates.
• Unsurprisingly, positive absolute and relative
performance has been most correlated with a positive
smaller companies’ premium. The smaller companies’
premium was +0.7% for the most recent period.
16River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Portfolio Manager’s report (continued)
Source: River Global Investors LLP, BNP Paribas, Bloomberg. Performance to 30 September 2024. Since inception is 02 December
2014. Note: NAV data is based on daily unaudited estimations
Our NAV performance and performance relative to our
Numis Smaller Companies (including AIM and excluding
investment trusts (NSCI AIM ex ICs)) is shown below.
We also include performance figures for AIM and the
broader UK market (MSCI United Kingdom IMI).
-60
-40
-20
0
20
40
60
80
100
120
Since inception5 years3 years1 year
River UK Micro Cap
NSCI AIM ex ICs
MSCI United Kingdom IMI
AIM All Share
1 year 3 years 5 years Since inception
River UK Micro Cap 14.9% -38.0% 7.6% 107.6%
Numis Smaller Companies plus AIM ex ICs 14.1% -13.9% 22.0% 67.4%
MSCI United Kingdom IMI 13.2% 25.7% 30.6% 75.3%
AIM All Share 3.9% -37.4% -9.1% 19.3%
Date
Cash flow
(£mn) Comment
02/12/2014 -50.6 Initial Public Offer (IPO)
29/10/2015 -19.5 Additional equity offering
09/06/2017 15.0 Shareholder capital return
01/12/2017 15.0 Shareholder capital return
27/07/2018 11.9 Shareholder capital return
29/01/2021 15.0 Shareholder capital return
07/05/2021 20.0 Shareholder capital return
30/09/2024 69.0 NAV
IRR 12.4%
Source: River Global Investors LLP, BNP Paribas
We intend to return excess capital to shareholders
when the Company’s assets are in excess of £110
million. The last two capital returns were in 2021 with
a total of £35 million returned.
The details to the right allow us to calculate a
money-weighted return (or internal rate of return
(“IRR”)) which differs from the NAV performance
calculations shown above as it incorporates the timings
of the capital returns.
We believe, particularly given the depressed state of
the UK equity and small-cap market, that an IRR of
12.4% confirms that the approach we are taking is
absolutely in the interest of our shareholders.
17River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Seven new positions were initiated in the period:
Windward
Windward’s SaaS solution underpinned by a unique
and defensible AI based process provides high return
on investment (“ROI”) insights on the maritime sector
primarily to government and commercial customers.
With an R&D budget that we believe is three to four
times the size of its nearest competitor, Windward is
well positioned to capitalise on secular industry growth
drivers – notably digital immaturity, the growing desire
to automate increasingly complex compliance and
regulatory requirements and demand for improved
supply-chain visibility – and is on a clear path to
profitability. Valuation at purchase was compelling with
the company trading on an undemanding multiple of
sales. The holding has performed well since acquisition
as per the comments in the performance section above.
Marwyn Acquisition Company II
Marwyn Acquisition Company II – which post period end
has been renamed InvestAcc Group – is a buy and build
of self-invested personal pensions (“SIPP”) administration
businesses, specifically complex (or full) SIPPs for
which there is a higher administrative burden given the
inclusion of private company shares and commercial
property within the wrapper. Whilst these complex SIPPs
are a smaller part of the market – ~£100 billion of assets
versus the total SIPP market at ~£500 billion
14
– they are
deemed non-core by many existing administrators which
the company believes enables a value accretive buy and
build strategy. We participated in the fund raise for the
first acquisition, InvestAcc, which will be the platform
that will host SIPPs acquired in future deals. Whilst the
InvestAcc purchase was completed at 10x earnings,
future deals will be cheaper (management are targeting
5-8x) and have meaningful cost synergies to further
reduce the multiple paid.
MPAC Group
MPAC Group is a capital light assembler and servicing
provider for packaging and automation equipment with
a sticky blue-chip customer base primarily in the food &
beverage and healthcare sectors. It was purchased on
a self-help Recovery thesis – as there was evidence of
margin recovery and improving cash conversion with a
net cash balance sheet providing downside protection
– with scope for it to successfully transition to a Growth
thesis. Results post purchase were slightly above
expectations with a particularly strong performance in
the second half of the last year which showed margins
are no longer depressed versus history. As a result, we
have reclassified MPAC as Growth given the compelling
14 Company pathfinder
Activity
Portfolio Manager’s report (continued)
18River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
organic growth opportunity from retaining and growing
business with existing blue-chip clients, where MPAC is
today only selling part of its capability into a few divisions,
broadening the customer base and new product
innovations. With a strong net cash balance sheet and a
fragmented competitive landscape, there is also potential
for inorganic growth to create a turn-key solution which
would increase scale, margins and returns.
AOTI
AOTI develops medical devices for patients with chronic
wounds. The statistics around diabetic foot ulcers are
alarming – one third of diabetics will develop a diabetic
foot ulcer in their lifetime, 50% of these will become
infected and there is a c20% chance of amputation
once infected. Treatment is a huge financial burden on
society; in the US, the annual cost is equivalent to the
cost of treating all cancer, with similar 5-year mortality
rates. AOTI’s at-home topical oxygen therapy has a
strong value proposition, supported by a body of clinical
and real-world data, as it significantly improves both
patient outcomes and economics for payers relative
to existing treatments. This has supported revenue
growth in excess of 30% in the last two years. We
expect rollout across the US, which is mix-accretive
relative to the majority of historic sales into the Veterans
Administration channel, to drive strong top line growth
and margin expansion. We participated in the company’s
IPO as we felt the valuation offers attractive risk/reward
if the company can scale effectively.
Gear4Music
After tracking the shares for more than a year, we
bought an initial position in Gear4Music in January
2024. The online retailer of musical instruments and
equipment has delivered consistent market share gains
since IPO, benefitting from channel shift from high
street to online; however, the combination of a post-
Covid normalisation and a series of strategic mishaps
resulted in the shares falling from their peak of £10 in
mid-2021 to below £1 by late 2022. Questions over the
level of sustainable profitability – which is meaningful for
assessing the business’ ability to generate cash and de-
lever – kept us on the sidelines, with weak revenues and
margin disappointments driving the recent downgrade
cycle. There is now evidence of an inflection point – the
business’ ability to generate an improvement in gross
profit margins whilst destocking during a tough trading
environment over their peak Christmas period helps to
build confidence in the medium-term margin recovery
opportunity (from 4.6% towards management’s 8%
EBITDA margin target) and deleveraging pathway. Whilst
there is still some macro uncertainty, we believe this is
discounted in the cheap valuation at which we initiated
the position.
Pebble Group
Pebble Group is a company we have followed since
their IPO in December 2019 given our holding in our
open-ended small cap fund. The company has two
distinct divisions – albeit both are exposed to the use
of promotional products. Brand Addition provides
promotional products to large enterprise companies
and is therefore geared into their marketing spend,
which has disappointed largely due to the exposure to
consumer and technology companies. Facilisgroup is a
platform for small US promotional product distributors
with a two-sided revenue model whereby customers pay
a SaaS license fee to use the software and Pebble also
receives a commission from a preferred list of suppliers
that those same customers order products through. We
purchased the shares at more than a 50% discount to
their December 2019 IPO price despite a higher level of
profits for either 2023 or forecast for 2024 than for 2019
and a stronger (net cash) balance sheet.
Eagle Eye Solutions
The final position we added to the portfolio was Eagle
Eye Solutions, omnichannel digital marketing platform
which enables grocery and food retailers to offer
personalised promotions. The company is building a
track record of profitable and cash generative growth
serving an impressive list of clients which include
Morrisons, John Lewis and Pret A Manger. Organic
growth has averaged +25% over the last five years
and the outlook is strong, supported by the structural
shift to personalisation (which generates a +200% ROI
improvement versus mass promotion spend according
to a BCG study)
15
and expansion into the US, the largest
promotions market globally. A growing sales pipeline
and a conservative expectation set supports continued
upgrade momentum, underpinning the current valuation
which is attractive relative to SaaS peers.
Portfolio Manager’s report (continued)
15 https://www.bcg.com/publications/2021/personalized-offers-have-a-potential-70-billion-dollar-growth-opportunity
19River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
When compared to the end of September 2023, we
have added 7ppts to Growth at the expense of Recovery
which is down 8ppts. The move is largely a reversal of
the movement into Recovery in the prior year where
Recovery gained 7ppts at the expense of Growth. With
the exception of Gear4Music (Recovery) and Marwyn
Acquisition Company II (Quality), all of our new holdings
were held as Growth investments at the end of the
period (as discussed, MPAC was acquired as Recovery
and transitioned to Growth).
Source: River Global Investors LLP
Portfolio
positioning
We are looking to build a portfolio of companies that have a clear opportunity to
create shareholder value in one of three phases of the company lifecycle – Growth,
Quality and Recovery.
0%
10%
20%
30%
40%
50%
60%
RecoveryQualityGrowth
30/09/2023
30/09/2024
53%
46%
28%
27%
19%
27%
Portfolio Manager’s report (continued)
20River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
On one-year forward consensus forecast, 90% of the
portfolio is forecast to be free-cash flow profitable. If
we exclude our litigation funding businesses, Litigation
Capital Management and Manolete, and LendInvest for
which free-cash flow is a result of investments (legal
cases and mortgages), then that number increases to
96% with just three free-cash consumptive holdings;
MaxCyte, MindGym and GetBusy.
We have always been cautious of leverage. Approximately
75% of the portfolio is net cash and of the remaining
25%, 10% has strong asset backing to support leverage.
For example, SigmaRoc has significant mineral reserves
and Capital has a fleet of almost 130 drilling rigs.
Our latest Sustainability and Stewardship Policy is
available on our website (www.river.global/what-we-do/
sustainable-investing/stewardship).
Our approach to integrating sustainability analysis into
our fundamental research process is unchanged. We
believe that businesses that are managed with the
interest of all stakeholders in mind will compound higher
returns for shareholders over the medium term.
The portfolio allocation across the four different
categories was similar to the previous year with 27% in
S1 rated companies, 62% in S2 rated companies, 11%
in S3 rated companies and no S4 rated positions (2023:
22% S1, 71% S2 and 7% S3).
Across the seven new positions, AOTI and Windward
are S1 rated, Gear4Music is S3 rated and the others are
S2 rated.
A sustainable leader in its field and/or clear beneficiary of sustainability trends
Solid sustainability characteristics, with no clear impediment to value creation or share
price performance
Sustainability improvement required. Evidence of progress and/or engagement potential
Sustainability a clear barrier to value creation. No evidence of progress and/or low
likelihood of engagement success, including failed attempts.
S1
S2
S3
S4
Portfolio Manager’s report (continued)
21River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
As noted above and counter to the prevailing negative
sentiment, data suggest UK economic fundamentals
are improving and we are convinced in the logic that
this should support the leadership of smaller company
earnings over the next cycle.
The upcoming Budget and subsequent Mansion House
speech will set the agenda for the new Labour Government.
Perhaps naïvely, we believe that this government has
recognised that growth is the only answer to our debt and
public services dilemma and revitalised domestic capital
markets have a key role to play.
The rewards to be realised on a rotation in market
leadership from defensive to cyclical, from international
to domestic and from large-to-small are exciting and
worth positioning for today. Prior cycles, as illustrated
in the chart below, are as good an indicator as any
of the scale of the opportunity. Even excluding the
exceptional period of performance from December 2008
to March 2018, the average outperformance of smaller
companies in the UK over the last five cycles has been
in excess of 50%
16
. For context, smaller companies have
outperformed by just 5.6%
17
since the low in October
2023, which itself follows a remarkable 38% of relative
underperformance.
After several months of uncertainty, the changes to
inheritance tax and capital gains tax announced at
the Budget were not as bad as feared. In fact, given
the various other inheritance tax changes, there is an
argument that the 50% relief that prevails on qualifying
AIM listed companies is just as valuable as the prior
100% relief. Moreover, we now have certainty on a tax
relief that many investors have been concerned about
since well before the most recent election. Whilst we
are now in a higher capital gains tax regime which does
little to encourage equity investment, there is no longer
a motivation to accelerate the recognition of gains
16 Analysis of performance in 1992-1994, 1999-2000, 2001-2007, 2008 to 2018 and 2019 to 2021 and excluding the outperformance of
more than 150% for the 2008 to 2018 cycle. Source: River Global Investors LLP.
17 Bloomberg, 28 October 2024
The market is being priced on flows instead of fundamentals and the only capital owners
that are currently taking advantage of this at any scale are the corporates buying back
their own shares and private equity vehicles, which are on a M&A bonanza. There are
exceptions, but it is hard to make the case that most acquisitions of UK listed companies
are being completed at generous prices.
Outlook
Portfolio Manager’s report (continued)
22River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Portfolio Manager’s report (continued)
UK Small Cap flows, open-end funds % AuM
Source: River Global Investors LLP, The IA.
Numis SC + AIM ex IT TR relative to All-Share TR: September 1990 to September 2024
Source: River Global investors LLP, Bloomberg, Deutsche Numis. Data from 31 August 1990 to 30 September 2024.
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
AJJMAMFJDNOSAJJMAMFJDNOSAJJMAMFJDNOSAJJMAMFJ
2021 2022 2023 2024
50
60
70
80
90
100
110
120
130
140
2423222120191817161514131211100908070605040302010099989796959493929190
-12.3%
-15.5%
-15.5%
-16.0%
-14.6%
Sep 21 to Oct 23
All-Share TR +6%
Small Cap TR -32.1%
-38.1% relative
underperformance
Mar 07 to Dec 08
All-Share TR -25.6%
Small Cap TR -52.4%
-26.4% relative
underperformance
-19.0%
Jun 94 to Jan 99
All-Share TR +122.1%
Small Cap TR +33.8%
-88.3% relative
underperformance
Sep 90 to Nov 92
All-Share TR +44%
Small Cap TR +5.6%
-38.4% relative
underperformance
which was a feature of the market prior to the Budget.
Finally, there was little encouragement for listed equities
in Rachel Reeves’ maiden Mansion House Speech but
the Interim Report of the Pensions Investment Review,
which was published on the same day, illustrates that
the Government is concerned by the lack of domestic
investment by UK pension funds. The Government is
using the next stage of the review to consider whether
further intervention – which would likely be a mandatory
minimum domestic equity allocation – may be needed.
The final report is due in 2025 and any positive signal
around this could be significant for inflows into UK
equities.
George Ensor
Fund Manager
River Global Investors LLP
23River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Investment portfolio
The Investment Portfolio below details the Company’s holdings as at 30 September 2024, exclusive of cash and cash
equivalents (portfolio weightings are based on mid-prices).
Name Description
Weight
(% of portfolio)
DF Capital Financials 6.9%
ActiveOps Information Technology 5.2%
Sigmaroc Materials 4.9%
Supreme Consumer Discretionary 4.9%
Kooth Health Care 4.7%
Windward Information Technology 4.3%
Venture Life Consumer Staples 4.0%
Litigation Capital Mgmt Financials 3.9%
Renold Industrials 3.9%
Science In Sport Consumer Staples 3.8%
Keystone Law Industrials 3.7%
Capital Limited Materials 3.7%
Marwyn Acquisition Financials 3.2%
1Spatial Information Technology 2.8%
Diaceutics Health Care 2.6%
Cake Box Holdings Consumer Staples 2.5%
Ten Lifestyle Industrials 2.4%
Inspecs Health Care 2.4%
HVIVO Health Care 2.3%
IG Design Group Consumer Discretionary 2.1%
Serabi Gold Materials 2.1%
GetBusy Information Technology 2.0%
Aquis Exchange Financials 1.9%
Netcall Information Technology 1.8%
Aoti Health Care 1.8%
Pebble Group Communication Services 1.7%
Gear4Music Consumer Discretionary 1.6%
Boku Information Technology 1.6%
Alpha Group Int’l Financials 1.3%
MaxCyte Health Care 1.2%
Manolete Partners Financials 1.2%
MPAC Group Industrials 1.2%
Flowtech Fluidpower Industrials 0.9%
Eagle Eye Solutions Communication Services 0.7%
LendInvest Financials 0.6%
Mind Gym Industrials 0.4%
Virgin Wines UK Consumer Staples 0.4%
Source: River Global Investors LLP
24River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
DF Capital
ActiveOps
Sigmaroc
Supreme
Kooth
Windward
Venture Life
Litigation Cap Mgt
Renold
Science in Sport
6.9%
5.2%
4.9%
4.9%
4.7%
4.3%
4.0%
3.9%
3.9%
3.8%
Communication services 2.4%
Top ten holdings
as at 30 September 2024
Sector breakdown
as at 30 September 2024
Total of
portfolio
46.5%
Financials 19.0%
IT 17.7%
Health care 15.0%
Industrials 12.5%
Materials 10.7%
Consumer staples 10.7%
Consumer discretionary 8.6%
Investment portfolio (continued)
25River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Strategic report
This Strategic Report is designed to provide information
about the Company’s operation and results for the
year ended 30 September 2024. It should be read in
conjunction with the Chairman’s Statement and the
Portfolio Manager’s Report which provides a detailed
review of investment activities for the year and an
outlook for the future.
Corporate summary
The Company was incorporated in Guernsey on 2
October 2014, with registered number 59106, as a
non-cellular company with liability limited by shares.
The Company is regulated by the Guernsey Financial
Services Commission (“GFSC”) as a registered closed-
ended collective investment scheme pursuant to the
Protection of Investors (Bailiwick of Guernsey) Law, 2020,
as amended, and the Registered Collective Investment
Scheme Rules and Guidance, 2021 (“RCIS Rules”).
The Company’s share capital is denominated in Sterling
and each share carries equal voting rights.
The Company’s Ordinary Shares are listed on the Equity
Share (Commercial Companies) (ESCC) segment of the
Official List as maintained by the Financial Conduct
Authority (“FCA”) and admitted to trading on the Main
Market of the London Stock Exchange.
The Company changed its name from River and
Mercantile UK Micro Cap Investment Company Limited
to River UK Micro Cap Limited, to align with that of its
Portfolio Manager, with effect from 19 June 2024.
Significant events during the year
ended 30 September 2024
Annual General Meeting held on 12 March 2024
On 12 March 2024, the Annual General Meeting was
held. All resolutions proposed at the meeting were duly
passed. This included the five-year Continuation Vote
and appointment of Grant Thornton Limited as the
Company’s auditor.
Board and Committee changes
On 11 March 2024, Andrew Chapman retired from the
Board and John Blowers assumed the role of Chairman
of the Board.
On 1 May 2024, Charlotte Denton resigned from
the Board and was replaced by Ted Holmes as Audit
Committee Chair. Also on 1 May 2024, Serena Tremlett
was appointed to the Board and took over the roles of
Remuneration and Nomination Committee Chair and
Management Engagement Committee Chair from
John Blowers.
Company investment objective
The Company aims to achieve long term capital growth
from investment in a diversified portfolio of UK micro-
cap companies, typically comprising companies with a
free float market capitalisation of less than £100 million
at the time of purchase.
Company investment policy
The Company invests in a diversified portfolio of UK micro-
cap companies. It is expected that the majority of the
Company’s investible universe will comprise companies
whose securities are admitted to trading on AIM.
While it is intended that the Company will be fully
invested in normal market conditions, the Company may
hold cash on deposit or invest on a temporary basis in a
range of high quality debt securities and cash equivalent
instruments. There is no restriction on the amount of
cash or cash equivalent instruments that the Company
may hold and there may be times when it is appropriate
for the Company to have a significant cash position
instead of being fully or near fully invested.
The Company is not benchmark-driven in its asset
allocation.
Diversification
The number of holdings in the portfolio will usually range
between 30 and 50. The portfolio is expected to be
broadly diversified across sectors and, while there are
no specific limits placed on exposure to any sector, the
Company will at all times invest and manage the portfolio
in a manner consistent with spreading investment risk.
Investment restrictions
No exposure to any investee company will exceed 10%
of NAV at the time of investment.
The Company may from time to time take sizeable
positions in portfolio companies. However, in such
circumstances, the Company would not normally intend
to hold more than 25% of the capital of a single investee
company at the time of investment.
26River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Although the Company would not normally expect to
hold investments in securities that are unquoted, it may
do so from time to time but such investments will be
limited in aggregate to 10% of NAV.
The Company may invest in other investment funds,
including listed closed-ended investment funds, to gain
investment exposure to UK micro-cap companies but
such exposure will be limited, in aggregate, to 10% of
NAV at the time of investment.
The Board reviews the industry and asset diversification
of the investment portfolio to ensure that holdings are in
line with the investment restrictions and to monitor the
concentration risk of the investment portfolio. Refer to
note 9 for further details regarding investment limits and
risk diversification policies.
As at 30 September 2024, the Company held 37
(30 September 2023: 41) investment holdings of which
none exceeded 10% of NAV at the time of investment.
A portfolio listing is shown on page 23 which
demonstrates the spread of investment risk in
accordance with the investment policy.
Borrowing and gearing policy
The Company does not normally intend to employ
gearing but at certain times it may be opportune to do
so, for both investment and working capital purposes.
Accordingly, the Company may employ gearing up to a
maximum of 20% of NAV at the time of borrowing. As at
30 September 2024, the Company had no borrowings.
Derivatives
The Company may use derivatives (both long and short)
for the purposes of efficient portfolio management
only. The Company will not enter into uncovered short
positions.
Further information can be found in the Portfolio
Manager’s Report which is incorporated within this
Annual Report on pages 7 to 22 for informational
purposes only.
Investment strategy and approach
The Company’s investment strategy is to take advantage
of the illiquidity risk premium inherent in UK micro-cap
companies and exploit fully the underlying investment
opportunity in the UK micro-cap market to deliver high
and sustainable returns to Shareholders, principally
in the form of capital gains in line with the Company
investment objective and policy.
The Company pursues its investment strategy through
the appointment of Carne as AIFM, whereby the AIFM
has been given responsibility, subject to the supervision
of the Board, for the management of the Company in
accordance with the Company’s investment objective
and policy. In conjunction with the Board, the AIFM has
engaged the Portfolio Manager to manage the portfolio.
The Company depends on the diligence, skill, judgement
and business contacts of the Portfolio Manager’s
investment professionals, in particular George Ensor, in
identifying investment opportunities which are in line
with the investment objective and policy of the Company.
The Portfolio Manager attends all Board meetings at
which the investment strategy and performance of the
Company are discussed.
Key Performance Indicators (KPIs)
The Directors meet regularly to review performance and
risk against a number of key measures. The Directors
considers the KPIs to be NAV total return and capital
returns. The KPIs are considered to be APMs, refer to
the Financial Highlights and Performance Summary on
pages 3 to 4 and the Alternative Performance Measures
on pages 79 to 80 for further details.
Our approach to ESG
Our own direct environmental and social impact
is minimal. The Company relies substantially on
outsourced service providers to carry out our business
activities. On an annual basis, we monitor the actions
taken by our service providers regarding environmental
and social issues. This is monitored by the Management
Engagement Committee through an annual evaluation
questionnaire completed by each service provider or
on-site visits. This process is used to identify any areas
of concern which may expose the Company to risks,
principally the ability of each service provider to properly
execute services to the Company and its shareholders.
A primary ESG impact area for the Company is its
portfolio holdings. The Company does not exclude
any type of business from its universe of potential
investments; however the Portfolio Manager uses an
ESG lens on all potential investments (https://river.
global/what-we-do/sustainable-investing/stewardship).
This lens is part of the S-PVT internal scoring used by
Strategic report (continued)
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Annual Report and Financial Statements 30 September 2024
the Portfolio Manager when selecting investments for
the portfolio. The Board regularly receives reports and
interrogates the Portfolio Manager on how the portfolio
is split between each sustainability category, focusing
specifically on how investments rated poorly (S3 and
S4) under the Portfolio Manager’s classification system
are being evaluated and engaged with to improve the
Board’s assessment.
Voting and engagement
The Directors believe that it is important to monitor and
encourage improvement in the management practices
of the companies we invest in for all stakeholders whilst
not compromising our objective of achieving strong
financial returns. The best way to create wealth for
our Shareholders is to invest in companies that are
well managed and optimise returns to shareholders.
The Board delegates responsibility for this objective to
the Portfolio Manager and has approved the Portfolio
Manager’s approach to Voting and Engagement, details
of which can be found at https://river.global/what-we-do/
sustainable-investing/stewardship.
Future strategy
The Board continues to believe that the investment
strategy and policies adopted are appropriate for and
are capable of meeting the Company’s purpose and
investment objective.
The overall strategy remains unchanged and it is
the Board’s assessment that the AIFM and Portfolio
Manager’s resources are appropriate to properly
manage the Company’s investment portfolio in the
current and anticipated investment environment.
Please refer to the Portfolio Manager’s Report for
details regarding performance to date of the investment
portfolio and the main trends and factors likely to affect
those investments.
Going concern
The Directors are required to satisfy themselves that
it is reasonable to assume that the Company is a going
concern and to identify any material uncertainties to
the Company’s ability to continue as a going concern
for at least 12 months from the date of approving the
financial statements.
The Board is satisfied that, at the time of approving the
financial statements, no material uncertainties exist that
may cast significant doubt concerning the Company’s
ability to continue for the foreseeable future, being
12 months after the date of approval of the financial
statements. In addition, the Company’s holdings of cash
and cash equivalents, the liquidity of investments and
the income deriving from those investments, means the
Company has adequate financial resources to meet its
liabilities as they fall due.
At the 2024 Annual General Meeting, the Continuation
Vote was passed, approving the continuation of the
Company for another five years. The Board also
considered the continuing impact of the current macro-
economic environment and the impact that ongoing
geopolitical tensions may have on the Company, which
it believes have a minimal risk at this stage on the going
concern of the Company.
Therefore, the Board consider it appropriate to adopt
the going concern basis in preparing the financial
statements.
Viability statement
The Board carries out an annual assessment of the
Company’s current position and principal risks and
uncertainties, as detailed on pages 29 to 32, combined
with an assessment of the prospects of the Company to
state that they have a reasonable expectation that the
Company will be able to continue in operation over the
period of their assessment.
The Company has no fixed life. The Directors shall
propose one or more ordinary resolutions at every fifth
AGM that the Company continues as a closed-ended
investment company (the “Continuation Resolution”). The
last Continuation Resolution was proposed at the AGM
on 12 March 2024 and was passed by the Company’s
Shareholders. The next Continuation Resolution will be
proposed at the AGM in 2029.
The Company is intended to be a long-term investment
vehicle, however, having considered the inherent
limitations of estimating the impact of future political
and macro-economic conditions on the Company, the
Directors have decided to assess the viability of the
Company over a period of five years that aligns with the
next Continuation Vote.
Strategic report (continued)
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Annual Report and Financial Statements 30 September 2024
The Company’s prospects are driven by its business
model and strategy. The Company’s aim is to achieve
long term capital growth from investment in a
diversified portfolio of UK micro-cap companies,
typically comprising companies with a free float market
capitalisation of less than £100 million at the time of
purchase. The Board, advised by the Portfolio Manager,
believes that the impact on micro-cap companies when
the general economy returns to economic growth is
particularly high and therefore based on a five-year
time horizon, the Board would expect rising valuation
metrics and enhanced returns. The Board acknowledges
that due to the global economic situation, the value of
the Company’s investments is depressed, but draws
attention to the fact that the Company has no gearing
and has appropriate cash levels to meet expenditure.
The Company’s investments are held on a recognised
stock exchange and the portfolio is well diversified.
The Board is mindful of the current political and
economic environment and continues to monitor its
impact on the Company. In this context, the Board’s
central case is that the prospects for economic activity
in the UK will remain such that the investment objective,
policy and strategy of the Company will be viable for the
foreseeable future through a period of at least five years
from the balance sheet date.
In making this judgement, the Board has assessed that
the main risks to the long-term viability of the investment
strategy of the Company are key global and market
uncertainties driven by factors external to the Company,
which in turn can impact on the liquidity and NAV of the
investment portfolio, and therefore risk the viability of
the Company itself. A simulation has been designed to
estimate the impact of these uncertainties on the NAV
of the Company at times of stress based on historical
performance data of the Company’s Comparative Index,
using techniques similar to the sensitivity analysis
performed in note 9 – financial risk management.
Taking account of the Company’s current position,
principal risks and results of the simulation noted
above, the Board has a reasonable expectation that
the Company will be able to continue in operation and
meet its liabilities as they fall due over the period of
assessment.
The Strategic Report was approved by the Board
of Directors on 20 December 2024 and signed on its
behalf by:
John Blowers Ted Holmes
Chairman Audit Committee Chair
Strategic report (continued)
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Annual Report and Financial Statements 30 September 2024
1 2 3 4
Impact
Major
4
Moderate
3
Low
2
Not
significant
1
Rare Low Medium High
Probability
Statement of principal risks and uncertainties
1.
Investment
(macroeconomic
factors)
Risk profile
unchanged
Probability
medium
Impact: moderate
The Company is exposed to market factors. The unrealised performance can be
affected by the sentiment of the market, supply/demand of asset types, expectations on
unemployment, and Gross Domestic Product growth.
High interest rates, an inflationary macroeconomic environment and the threat of global
recession may drive down growth stocks especially, which would adversely affect the
underlying value of the Company’s investment portfolio, leading to an adverse impact on
the Company’s NAV.
Mitigation
The Company is closed ended and has no leverage. It is well set up to ride out any
short-term dislocations in pricing without being forced to liquidate investments at
technically distressed prices.
The skill and expertise of the Portfolio Manager allows the Company to be positioned
effectively in the event of macro events which impact the value of the Fund assets.
The table shows the post mitigation principal risks and uncertainties facing the Company and explains how we
mitigate them. Information on our risk management framework can be found on pages 48 to 50.
Investment (macroeconomic factors)
Geopolitical tensions
Liquidity
Share price discount
Reliance on the Portfolio Manager
Cyber security
Sustainable investment
1
2
3
4
5
6
7
Principal risk
Movement from last year
3
7
6
4
5
1 2
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Annual Report and Financial Statements 30 September 2024
2.
Geopolitical
tensions
Risk profile
increasing
Probability
medium
Impact: moderate
Along with other investment companies, the Company faces an increased and emerging
risk from the impact of global political unrest and rising geopolitical tensions, which
potentially impacts the Company’s investment portfolio and the general sentiment towards
capital markets.
Mitigation
The Portfolio Manager will analyse stress scenarios and reposition the portfolio
accordingly.
3.
Liquidity
Risk profile
unchanged
Probability
medium
Impact: moderate
The Company invests in a diversified portfolio of UK micro cap companies, typically
comprising companies with a free float market capitalisation of less than £100 million at
the time of purchase. The relatively small market capitalisation of micro cap companies
can make the market in their shares illiquid. As a result of lower liquidity, prices of micro
cap companies tend to stick at one level, but can be at risk of sudden jumps in price
when momentum of sentiment is strong enough and certain pools of investors are forced
to liquidate. As a consequence, the Company may not necessarily be able to realise its
investments within a reasonable period.
Both the liquidity and valuation issues highlighted above may be totally out of sync with the
underlying investee company fundamentals. There can therefore be no guarantee that any
realisation of an investment will be on a basis which necessarily reflects the valuation of
that investment.
Mitigation
Risks within the portfolio are monitored by the AIFM, which holds monthly AIFM Risk
Committee meetings with the Portfolio Manager. Portfolio liquidity forms a key part
of these monthly discussions. The AIFM provides an update of the Risk Committee
meetings to the Board and the risks are discussed accordingly. The Portfolio Manager
also undertakes ongoing reviews of the underlying investee companies particularly those
whose businesses are impacted by the current macro environment.
Statement of principal risks and uncertainties (continued)
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Annual Report and Financial Statements 30 September 2024
4.
Share price
discount
Risk profile
unchanged
Probability
high
Impact: low
The price of the Company’s shares may trade at a discount or premium relative to the
underlying NAV of the Ordinary Shares.
There is a risk that shareholders become dissatisfied with a continuing discount to NAV
and seek further action.
The Directors note that, in an environment where investment companies are trading at a
discount, there has been a growing trend towards activism.
Mitigation
The Board monitors the Company’s share price discount or premium to the published
NAV and regularly consults with the Company’s brokers regarding share trading volumes,
significant buyers and sellers, and comparative data from the Company’s peer group.
In order to further manage the discount, the Board has developed a marketing plan to
broaden interest in the company’s Ordinary shares.
Since its inception the Company has operated the Redemption Mechanism to return
capital to investors which the Board understands Shareholders are still supportive of.
Further, the Board considers that in the current environment, selling portfolio investments
at depressed values in order to raise funds to buy back the Company’s own shares is not in
the best interests of investors and that the Redemption Mechanism remains the best tool
to manage the discount in the longer term.
5.
Reliance on
the Portfolio
Manager
Risk profile
unchanged
Probability
high
Impact: low
The Company is dependent on the expertise of a small team led by George Ensor to
evaluate investment opportunities and to implement the Company’s investment objective
and investment policy.
Mitigation
The Portfolio Manager has experienced investment professionals ready and available to
step in if required in the short term, should the lead manager be unavailable, and would
hire a full time experienced and proven replacement lead manager, if necessary.
The Board and the AIFM continue to monitor and review the service and performance of
the Portfolio Manager.
6.
Cyber security
Risk profile
unchanged
Probability
low
Impact: moderate
The incidence of cyber related events and attacks heightens the risk of inappropriate
access to data leading to loss of sensitive information which may have a material adverse
effect on the Company’s financial condition, reputation and investor confidence.
Mitigation
The Company’s service providers maintain cyber security policies. These are reviewed by
the AIFM as part of its oversight responsibilities and reported to the Board, including any
breaches of information security. Service providers perform regular testing of their cyber
security controls to ensure that they remain robust.
Statement of principal risks and uncertainties (continued)
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Annual Report and Financial Statements 30 September 2024
7.
Sustainable
investment
Risk profile
decreasing
Probability
low
Impact: low
Investors are placing increased emphasis on ESG, including climate change, and the
Board sees any failure by the Portfolio Manager to identify future potential issues within
the underlying portfolio in this area as a key risk which may lead to the Company’s shares
becoming less attractive to investors.
A failure to adopt a sustainable approach to environmental and social matters, or a failure
of governance is likely to adversely impact the Company’s performance.
Mitigation
The Board believes that the adoption by the Portfolio Manager of a comprehensive
sustainable investment policy, in combination with the development of regular reporting to
the Board, allows the Company to mitigate this risk.
The Board has developed a strategy to engage with service providers across ESG matters
more generally.
The Company is a closed-ended investment entity and so its own direct environmental
and social impact is minimal. The Company does not exclude any types of business from
its universe of potential investments. However, the Portfolio Manager does deploy an
ESG lens on all potential investments and adopts a rigorous corporate ESG policy. The
Company, in common with most investment companies, relies substantially on outsourced
providers, including the Portfolio Manager. The Board believes therefore its focus should
be centred around governance, ensuring that appropriate ESG policies and a sustainable
investing approach is followed as well as monitoring and measuring the Company’s service
providers’ future progress towards ESG objectives. The Company also wants to ensure it
has a positive impact, for example minimising its carbon footprint. Both the Company and
its service providers are evolving their approach.
Refer to pages 26 to 27 for “ Our approach to ESG”.
Other risks
Risk
Taxation
Description
The Company invests in AIM listed shares. Any change to the tax status of those
shares, such as the reduction of inheritance tax (IHT) relief announced by the
Chancellor in the Autumn Budget, could reduce investor appetite for AIM listed shares
and make it harder to achieve the Company’s investment objectives.
Statement of principal risks and uncertainties (continued)
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Annual Report and Financial Statements 30 September 2024
Section 172 statement and principal decisions
Through adopting the AIC Code, the Board acknowledges its duty to comply with section 172 of the UK Companies
Act 2006 to act in a way that promotes the success of the Company for the benefit of its members as a whole, having
regard to (amongst other things):
a) consequences of any decision in the long-term;
b) the interests of the Company’s employees;
c) need to foster business relationships with suppliers, customers and others;
d) impact on community and environment;
e) maintaining reputation; and
f) act fairly between members of the Company.
The Board recognises its role in promoting the Company’s purpose of delivering on the investment strategy and in
promoting its core values of openness, challenge and respect in its interactions with all stakeholders.
Information on how the Board has engaged with its stakeholders and promoted the success of the Company in
regard to the above, is outlined below. The Company has no employees.
Stakeholder How the Board engages
Shareholders The Company would not exist without the capital of its Shareholders and its ongoing success
is dependent on their continued support. The Board therefore ensures that multiple lines
of communication with Shareholders are actively promoted. The Annual General Meeting
(“AGM”) ensures a forum in which the views of all Shareholders are sought by the Board
through the resolutions proposed and it is also an opportunity for Shareholders to question
the members of the Board face to face.
In addition, the Board requires Singer Capital Markets Advisory LLP as the Company’s
corporate broker (the “Corporate Broker”) to maintain communication with major
Shareholders and report back to the Board at quarterly meetings on the tenor and substance
of such communication. Since the Company’s inception, the Board has encouraged both the
Corporate Broker and the Portfolio Manager to meet directly with Shareholders both for the
purposes of communicating the Company’s strategy and performance as well as to listen
to the views of Shareholders. These views are reported back to the Board at their regular
meetings.
The Board has developed a multi-channel marketing strategy alongside the Broker and the
Portfolio Manager to target retail, adviser and institutional investors with a series of messages
suitable across all points on the investment cycle, at an affordable cost to the Company. The
Company has noted the positive effects of this marketing strategy during the year and is
pleased to note that the Company was awarded the ‘Best Marketing Campaign (Continuation
Vote)’ at the AIC Shareholder 2024 Communication Awards. Furthermore, the Chairman and
other Directors are available to meet with major Shareholders where such meetings would be
welcomed. The Company provides regular information updates to Shareholders, including the
daily NAV announcement to the markets and monthly portfolio updates.
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Annual Report and Financial Statements 30 September 2024
Section 172 statement and principal decisions (continued)
Stakeholder How the Board engages
Service
providers
All key service providers report to the Board at every quarterly Board meeting, with
representatives of the service providers present to answer questions from Directors. In
accordance with the Company’s culture of openness, challenge and respect, the Chairman
actively encourages feedback from the Company’s service providers as appropriate to their
field of expertise. The Board, through its Management Engagement Committee, also seeks to
ensure that the terms of engagement are commercially equitable for each service provider.
The success of the Company is encouraged by forming stable partnerships with successful
and motivated advisers.
The wider
community and
the environment
The Board has developed a strategy to embed a responsible and realistic approach to ESG
related issues into its engagements with stakeholders, including how it delivers value to
Shareholders. The Board continues to discuss with the Portfolio Manager how a responsible
sustainable investment approach integrates with the Company’s overall investment
philosophy and objective which is described in greater detail in the Portfolio Manager’s
Report. The Board engages with all its service provider stakeholders, on an annual basis,
to assess their impact on society and the environment. On the latest engagement with the
Company’s main service providers through questionnaires, which included ESG related
questions, there was no issues noted by the Board when reviewing responses.
Principal decisions
The table below sets out principal decisions taken by the Board during the year which have the greatest impact
on the Company’s long-term success. The Board considers the factors outlined under section 172 and the wider
interests of stakeholders as a whole in all decisions it takes on behalf of the Company.
Principal decision Stakeholder interests
Discount
management
The Board regularly monitors the level of the discount of the share price to NAV per Ordinary
Share, especially in relation to its peer group. However, the Board continues to believe that
the Capital Redemption Mechanism provides the most effective buyback mechanism in
the longer term. Notwithstanding this view, the Board continues to look for effective ways
to improve demand for and liquidity in the Company’s shares. To that end, the Board has
ensured that the Company had a marketing presence in a number of consumer-facing media,
including Trustnet and The Armchair Trader, with dedicated advertising, video and podcast
content to attract new investors. Given the trend for investment trusts to be attractive to UK
private investors, the Board are focusing their marketing and PR efforts at consumers in order
to boost liquidity.
Appointment of
Serena Tremlett
Following the resignation of Charlotte Denton, the Company recruited Serena Tremlett, a
Guernsey based Director, with the necessary skills and expertise.
Serena Tremlett was appointed as a Director on 1 May 2024. (Refer to page 36 for her
biography).
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Annual Report and Financial Statements 30 September 2024
Board members
John Blowers
Non-executive Chairman (Independent)
Chairman of the Board (from 11 March 2024) .
Appointed 1 August 2022.
John has been instrumental in the digital
revolution in financial services for 34 years, with a
series of key achievements. He was involved with
the UK’s first digital fund platform at Interactive
Investor and went on to design, build and run
several digital investment offerings for AMP, UBS
and latterly for FE fundinfo.
His skills revolve around strategic proposition
development and has a successful track record
in sales & marketing roles in the investment
industry. Over the years, he has held a range of
CEO, MD and senior management roles in both
multi-national and start-up businesses and is
well-known in the UK investment and financial
media community.
He is now managing director of financial
information company Stockomendation Limited,
which operates three websites including
Investegate.co.uk.
Key relevant skills
• Marketing
• Retail distribution
• Product design
Ted Holmes
Non-executive Director (Independent)
Audit Committee Chair (from 1 May 2024).
Appointed 26 September 2023.
Ted is currently on the board of the City of London
Investment Trust and a Director for Blue Ocean
Investment Partners.
Ted had a twenty-year career at UBS Asset
Management. During that time, he worked as
a managing director in both the Chicago office
(previously Brinson Partners) and London office
(previously Phillips and Drew) in a variety of positions,
from analyst to European Head of Equities.
Prior to UBS, he worked for Ernst & Young where he
earned his Certified Public Accountant license. He
has an MBA from the University of Chicago Booth
School of Business and is a qualified Chartered
Financial Analyst.
Key relevant skills
• 27 years of experience in investment management
(Chartered Financial Analyst)
• Investment oversight
• Investment trust oversight and governance
• Qualified accountant, Certified Public Accountant
(US CPA)
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Annual Report and Financial Statements 30 September 2024
Mark Hodgson
Non-executive Director (Independent)
Appointed 2 October 2014.
Mark Hodgson is a Channel Islands fund director
based in Jersey, with considerable experience in
the funds industry. He has a broad fund expertise
covering a wide range of differing asset classes,
including real estate, infrastructure, credit and
private equity.
Mark joined Carne in April 2014 and is Head of the
Channel Islands Fund business. He has over 25 years
of financial services experience, with an extensive
banking background. Mark spent over 20 years
with HSBC Global Bank where he gained in depth
knowledge of credit, financial markets and complex
Real Estate structures.
Mark moved to Jersey in 2006 to head up HSBC’s
Commercial Centre having full operational
responsibility for credit and lending within the
jurisdiction, later moving to Capita Fiduciary Group in
2008 as Managing Director, acting as non-executive
director on a number of fund boards.
Mark acts as a Non-Executive Director on a number
of high-profile fund boards based in Jersey, Guernsey
and Luxembourg. Mark is also a Fellow of the
Institute of Directors and a qualified Chartered
Director.
Key relevant skills
• 28 years financial services experience, 20 years of
being the member of various boards
• Extensive fund risk management experience
across multiple asset classes
Serena Tremlett
Non-executive Director (Independent)
Remuneration and Nomination Committee Chair
and Management Engagement Committee Chair
(from 1 May 2024). Appointed 1 May 2024.
Serena is a Guernsey-based company director and
consultant with over 25 years of experience in funds,
listed companies, company secretarial and regulatory
matters.
Serena was a co-founder and managing director of
Morgan Sharpe Administration Limited, a Guernsey
fund and corporate services administrator which
was established in April 2008 and then sold to Estera
Group in 2017. Morgan Sharpe’s clients included
listed companies and some of the biggest names in
private equity and real estate.
Prior to Morgan Sharpe, Serena was managing
director of Assura Group’s Guernsey office and
company secretary to what was a FTSE 250 listed
company at that time from 2006 to 2008. From 1996
to 2006, she developed her funds career at Mourant
(Guernsey) Limited and Guernsey International Fund
Managers Limited.
Serena also holds the Institute of Directors Diploma
in Company Direction.
Key relevant skills
• Over 25 years of financial services experience,
primarily in Guernsey
• Since 2001, has been a director of listed,
unlisted, and general partner companies in many
jurisdictions
• Strength in corporate governance and Guernsey
regulation
Board members (continued)
The Directors present their annual report and the audited financial statements for the
year ended 30 September 2024. The results for the year are set out in these accounts.
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Annual Report and Financial Statements 30 September 2024
Dividend policy
Details of the Company’s capital redemptions are
shown on page 4. The Company does not expect to pay
dividends and no dividends have been declared or paid
during the year (30 September 2023: none).
Share capital
As at 30 September 2024, the Company had 33,897,954
(30 September 2023: 33,897,954) Ordinary Shares in
issue.
Borrowing limits
The Directors may, if they feel it is in the best interests
of the Company, borrow funds up to a maximum of 20%
of NAV at the time of borrowing. No borrowing facility is
currently in place.
Acquisition of own shares
To assist the Company in addressing any imbalance
between the supply of and demand for Ordinary Shares
and thereby assist in controlling the discount to NAV at
which the Ordinary Shares may be trading, on
7 March 2024, the Company renewed general authority
to purchase in the market up to 14.99% of the Ordinary
Shares in issue as at 7 March 2024. This authority
expires on the date of the 2025 AGM. The Company did
not purchase any shares in the market during the year.
The Directors will seek a renewal of this authority from
Shareholders at the Company’s AGM on 12 March 2025.
Directors’ shareholdings
As at 30 September 2024, the Directors held the
following Ordinary Shares in the Company:
Director
Ordinary Shares
held
John Blowers 14,559
Mark Hodgson 7,721
Ted Holmes 22,970
Serena Tremlett 3,432
Between 1 October 2024 and 20 December 2024,
there were no shares purchased or sold by Directors.
Directors’
report
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Annual Report and Financial Statements 30 September 2024
Directors’ report (continued)
Shareholders’ interests
In accordance with Chapter 5 of the Disclosure
Guidance and Transparency Rules (which covers
acquisition and disposal of major shareholdings and
voting rights), the following Shareholders had an interest
in the Company’s issued share capital of more than 5%
as at 30 September 2024.
Percentage of
total voting
rights (%)
West Yorkshire PF 9.81
River Global Investors LLP 9.17
Hargreaves Lansdown Asset
Management
1
8.59
Evelyn Partners Investment
Management LLP
6.99
JP Morgan Securities plc 6.21
Investec Wealth & Investment Ltd 6.08
CG Asset Management 5.58
Interactive Investor Services Ltd
1
5.53
Asset Value Investors 5.02
Between 1 October 2024 and 20 December 2024,
the Company received two additional notifications for
JP Morgan Securities plc, one on 27 November 2024
reducing its percentage of total voting rights to 5.99%
and one on 13 December 2024 increasing its percentage
of total voting rights to 6.46%.
Audit tender
The Company underwent a full and robust audit tender
process between March and September 2023, the
result of which saw Grant Thornton Limited awarded the
mandate to provide comprehensive audit and associated
services commencing with the review of the Half Yearly
Financial Report for the period ended 31 March 2024.
The appointment of Grant Thornton Limited as Auditors
to the Company, along with a resolution to authorise the
Directors to determine their remuneration, was tabled
and approved at the AGM held on 12 March 2024.
Matters reserved for the Board
The Directors have adopted a set of reserved powers,
which establish the key purpose of the Board and detail
its major duties. These duties cover the following areas
of responsibility:
• statutory obligations and public disclosure;
• approval of the investment policy;
• strategic matters and financial reporting;
• Board composition and accountability to
Shareholders;
• risk assessment and management, including
reporting, compliance, monitoring, governance and
control;
• responsible for financial statements; and
• other matters having material effects on the Company
These reserved powers of the Board have been adopted
by the Directors to demonstrate clearly the importance
with which the Board takes its fiduciary responsibilities
and as an ongoing means of measuring and monitoring
the effectiveness of its actions.
The Portfolio Manager has the delegated power to
make investment decisions on behalf of the Company
within the framework of the investment objective
and investment policy. The Board exerts oversight of
the decisions of the Portfolio Manager both through
the AIFM and by direct reporting at quarterly Board
meetings. The Portfolio Manager provides written
reports to the Board and a representative of the
Portfolio Manager is present at every quarterly Board
meeting to present the report and answer questions
from the Board. In addition, the AIFM provides regular
risk reporting on the Company’s investment portfolio
and the Portfolio Manager at each quarterly Board
meeting.
1 These are investment platforms and do not control the voting rights.
39River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Directors’ report (continued)
Voting policy on portfolio investments
The Portfolio Manager, in the absence of explicit
instructions from the Board, is empowered to exercise
discretion in the use of the Company’s voting rights in
relation to investee company meetings. Voting on the
Company’s behalf is undertaken where practicable in
accordance with corporate governance policies, which
seek to maximise shareholder value by constructive
use of votes at investee company meetings and by
endeavouring to use the Company’s influence as
an investor with a principled approach to corporate
governance.
Disclosures required under LR 9.8.4R
The FCA’s Listing Rule 9.8.4R requires that the Company
includes certain information relating to arrangements
made between a controlling shareholder and the
Company, waivers of Directors’ fees, and long-term
incentive schemes in force. The Directors confirm that
there are no disclosures to be made in this regard.
Events after the Reporting Date
The increase in Director fees detailed in the Directors’
Remuneration Report was formally approved by the
Board on 3 October 2024.
Disclosure of Information to the Auditor
Each of the Directors who were members of the Board
at the time of approving this Report confirms that:
• to the best of their knowledge and belief, there is no
information relevant to the preparation of their report
of which the Auditor was unaware; and
• they have taken all steps a Director might reasonably
be expected to have taken to be aware of relevant
audit information and to establish that the Auditor
was aware of that information.
Fair, balanced and understandable
In assessing the overall fairness, balance and
understandability of the Annual Report the Board
has performed a comprehensive review to ensure
consistency and overall balance.
40River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Corporate governance statement
Introduction
The Company is listed on the London Stock
Exchange and is therefore required to report
on how the principles of the UK Corporate
Governance Code (the “UK Code”) have been
applied. Being an investment company, a
number of the provisions of the UK Code are
not applicable as the Company has no executive
Directors or internal operations.
The Board considers that reporting against the
principles and provisions of the AIC Code, which
has been endorsed by the Financial Reporting
Council and the GFSC, provides more relevant
information to stakeholders. The AIC Code is
available on the AIC website www.theaic.co.uk.
It includes an explanation of how the AIC Code
adapts the principles and provisions set out in the
UK Code to make them relevant to investment
companies.
The Company has complied with all the principles
and provisions of the AIC Code during the year
ended 30 September 2024, with the exception
to appoint a senior independent director. It was
decided not to appoint a senior independent
director given the small size of the Board and
because all Directors have different qualities
and areas of expertise on which they lead. Any
concerns can be conveyed to the Chairman, or
another Director if Shareholders do not wish to
raise concerns with the Chairman.
Set out to the right is where stakeholders can
find further information within the Annual Report
about how the Company has complied with the
various Principles and Provisions of the AIC Code.
1. Board leadership and purpose
Purpose 1
Strategy 1
Values and culture 42
Shareholder and Stakeholder engagement 33-34
2. Division of responsibilities
Director independence 42
Board meetings 44
Relationship with the Portfolio Manager 45
Management Engagement Committee 43
3. Composition, succession and evaluation
Remuneration and Nomination Committee 43
Directors’ re-election 42
Board and Committee evaluation 43
4. Audit, risk and internal control
Audit Committee 43
Emerging and principal risks 29-32
Risk management and internal control systems 48-49
Going concern statement 27
Viability statement 27-28
5. Directors’ remuneration report
Directors’ remuneration report 51-52
41River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Directors’ statement of responsibilities
The Directors are responsible for preparing the Annual
Report and Financial Statements in accordance with the
applicable laws and regulations.
The Companies (Guernsey) Law, 2008 (the “Company
Law”) requires the Directors to prepare Financial
Statements for each financial year. The Directors
are required to prepare the Financial Statements in
accordance with IFRS Accounting Standards as issued by
the IASB and applicable law.
Under the Company Law, the Directors must not
approve the Financial Statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Company and its profit or loss for that year.
In preparing those financial statements, the Directors
are required to:
• select suitable accounting policies and apply them
consistently;
• make judgements and estimates that are reasonable
and prudent;
• state whether applicable accounting standards have
been followed, subject to any material departures
disclosed and explained in the financial statements;
• assess the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern; and
• use the going concern basis of accounting unless
they either intend to liquidate the Company or to
cease operations or have no realistic alternative but
to do so.
The Directors are responsible for keeping proper
accounting records, which disclose with reasonable
accuracy at any time the financial position of the
Company and to enable them to ensure that the
financial statements comply with Companies Law.
The Directors are also responsible for safeguarding
the assets of the Company and hence for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.
So far as the Directors are aware, there is no relevant
audit information of which the Auditor is unaware,
having taken all the steps they ought to have taken
to make themselves aware of any relevant audit
information and to establish that the Auditor is aware of
that information.
Each of the Directors who served during the year, who
are listed on pages 35 and 36, confirms to the best of
their knowledge and belief that:
• the financial statements, which have been prepared in
accordance with IFRS Accounting Standards as issued
by the IASB, give a true and fair view of the assets,
liabilities, financial position and profit of the Company
as required by DTR 4.1.22R; and
• the Annual Report (comprising the reports from pages
5 to 52) includes a fair review of the development and
performance of the business during the year, and
the position of the Company at the end of the year,
together with a description of the principal risks and
uncertainties that the Company faces, as required by
DTR 4.1.8R and DTR 4.1.9R.
The Annual Report and financial statements, taken as
a whole, are fair, balanced and understandable and
provide the information necessary for Shareholders to
assess the Company’s performance, position, business
model and strategy.
The Directors’ Report was approved by the Board of
Directors on 20 December 2024 and signed on its
behalf by:
John Blowers Ted Holmes
Chairman Audit Committee Chair
20 December 2024 20 December 2024
42River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Board and committees
Values and culture
The Directors recognise the purpose of the Company
to deliver high and sustainable returns to Shareholders.
Delivery of the investment objective has been achieved
throughout its history through both investment
capability and long held values of diversification,
innovation, adaptation and integrity.
These values are underpinned by the culture the
Board demonstrates in the way in which the Directors
interact with each other and with the Company’s
service providers. Openness, challenge and respect are
encouraged as key to developing and implementing the
strategies that will deliver the Company’s objective.
The Board
As at 30 September 2024, the Board consisted of the
following non-executive Directors:
• John Blowers, (Independent) – Chairman of the Board
(from 11 March 2024). Appointed 1 August 2022.
• Mark Hodgson. Appointed 2 October 2014.
• Ted Holmes, (Independent) - Audit Committee Chair
(from 1 May 2024). Appointed 26 September 2023.
• Serena Tremlett, (Independent) - Remuneration
and Nomination Committee Chair and Management
Engagement Committee Chair. Appointed 1 May
2024.
The Board is chaired by John Blowers, who is
independent of the AIFM and the Portfolio Manager
and has been since the time of his appointment. The
Chairman is responsible for the leadership of the Board
and for ensuring its effectiveness in fulfilling its role.
All Directors are deemed independent, except for Mark
Hodgson, who whilst independent of the Portfolio
Manager, is the Managing Director of the AIFM and is
therefore not regarded as independent. The opinion
of the other Directors is that Mark Hodgson provides
considerable and complementary expertise to the
Board, particularly in the area of risk management, in
which the AIFM has a significant presence.
The Board reviews the independence of all Directors
annually.
Directors have agreed letters of appointment with the
Company. No Director has a service contract with
the Company and Directors’ appointments may be
terminated at any time by one month’s written notice
with no compensation payable at termination upon
leaving office for whatever reason.
Directors’ re-election
As required by the AIC Code, all Directors stand for
re-election by Shareholders annually, the next occasion
being at the AGM to be held on 12 March 2025.
Refer to pages 35 and 36 for biographies of each Director
which demonstrates their professional knowledge
and breadth of investment, accounting, banking and
professional experience. The Board considers that there
is a balance of skills and experience within the Board and
each of the Directors contributes effectively.
Board diversity
The Board is currently made up of one female Director
and three male Directors. The Board has due regard
for the benefits of experience and diversity in its
membership, including gender, and strives to achieve
the right balance of individuals who have the knowledge
and skill set to maximise Shareholder return while
mitigating the risk exposure of the Company.
The below table sets out the Board’s current
composition. The below text compares this against the
targets prescribed by Listing Rule 9.8.6R (9)(a).
Director
Number
of Board
Members
Percentage
of the
Board
Number
of senior
positions
on the
Board
1
Men 3 75% 2
Women 1 25% 0
White British or
other White (incl.
minority-white groups)
4 100% 2
It is noted that at present 25% of the individuals on
the Board are women, which is below the target of
40% prescribed by Listing Rule 9.8.6R (9)(a). At present,
none of the Board members are from minority
ethnic backgrounds, which is below the target of one,
prescribed by Listing Rule 9.8.6R (9)(a).
1 Senior positions are CEO, CFO, SID and Chair. The Company does not have executive management, nor a Senior Independent Director
and considers the Chair of the Board or the Audit Committee Chair to be senior roles.
43River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Board and committees (continued)
During the year, the Board appointed Serena Tremlett as
a Director. The Board noted the diversity requirements,
but in such a small Board, the Company considers the
diversity of skill sets and experience to be of the utmost
importance. After reviewing a number of different
applicants, it was decided that Serena Tremlett had the
best skill set to complement the Board.
The Board are mindful of these requirements and
alongside knowledge and expertise, they will be
considered when the Board next recruits.
Tenure policy
The Board has adopted a policy on the tenure of its
independent Directors that aligns with the AIC Code
of Corporate Governance and none of the three
independent Directors, including the Chairman of
the Board, will serve for more than nine years. The
Board has thus adopted a staged succession plan
that maintains a balance between the strength added
through continuity and experience as well as the
benefits of new members bringing fresh perspectives.
The Board will continue to assess annually each Board
member’s independence.
The Board considers that boards of investment
companies are more likely to benefit from a long
association with a company in that they will experience a
number of investment cycles.
Committees
The Board has established three committees, the Audit
Committee, the Management Engagement Committee
and the Remuneration and Nomination Committee.
All the independent Directors, namely, John Blowers,
Ted Holmes and Serena Tremlett (appointed 1 May
2024) have been appointed to all Committees.
Each committee operates within clearly defined terms
of reference and duties. The terms of reference for each
Committee have been approved by the Board and are
available in full on the Company’s website,
https://river.global/our-funds/fund-centre.
Audit Committee
The Audit Committee membership comprises all the
independent Directors and has been chaired by Ted
Holmes since 1 May 2024. His position is considered
appropriate given his recent and relevant financial
and industry experience. Mark Hodgson attends at
the invitation of the Audit Committee but does not
actively participate in the meetings. The Chairman of
the Board is also a member of the Audit Committee.
His membership of the Audit Committee is considered
appropriate given the size of the Board.
The report on the role and activities of this Committee
and its relationship with the external auditors is set out
in the Report of the Audit Committee on pages 48 to 50.
Management Engagement Committee
The Management Engagement Committee membership
comprises all the independent Directors and has been
chaired by Serena Tremlett since 1 May 2024.
The Management Engagement Committee carries out its
review of the Company’s advisers through consideration
of a number of objective and subjective criteria and
through a review of the terms and conditions of the
advisers’ appointments with the aim of evaluating
performance, identifying any weaknesses and ensuring
value for money for the Company’s Shareholders.
On 3 October 2024, the Management Engagement
Committee formally reviewed the performance of the
Portfolio Manager and other key service providers to the
Company. During this review, no material weaknesses
were identified. Overall, the Management Engagement
Committee confirmed its satisfaction with the services
and advice received. The next review is expected be held
in September 2025.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee
membership comprises all the independent Directors
and has been chaired by Serena Tremlett since 1 May
2024.
Board and Committee evaluation
The Remuneration and Nomination Committee
performs an annual internal evaluation of the Board, its
Committees and each Director. Due to diary conflicts of
new Directors, this was last undertaken on 3 October
2024.
The annual internal evaluation carried out by the
Remuneration and Nomination Committee for the year
ended 30 September 2024 covered the performance
of the Chairman and other Directors, their knowledge
and understanding of the Company, its investments and
markets and confirmed that the Board and its individual
members had a good range of skills and competency.
The Directors were determined to have had effective
and comprehensive Board meetings and to have had
sufficient time to devote to matters relating to the
Company and its operations.
44River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Succession plan
The Board’s succession plan seeks to ensure that no
independent non-executive Director serves on the
Board for longer than nine years and that the Board
is well balanced and refreshed from time to time by
the appointment of new directors with the skills and
experience necessary to replace those lost by Directors’
retirements and to meet future requirements.
The Remuneration and Nomination Committee is com-
mitted to ensuring that any vacancies arising are filled by
the most qualified candidates who have complementary
skills or who possess the skills and experience which fill
any gaps in the Board’s knowledge or experience.
Following the resignation of Charlotte Denton on 1 May
2024, the Board sought to recruit a Guernsey-resident
Director to the Board. On 1 May 2024, the Board
announced the appointment of Serena Tremlett to the
Board as a new independent non-executive Director.
Board meetings
The Board meets regularly throughout the year
and a representative of the AIFM and the Portfolio
Manager attends when the Board meets to review the
performance of the Company’s investments.
The Portfolio Manager and AIFM, together with the
Company Secretary, ensure that all Directors receive, in
a timely manner, all relevant management, regulatory
and financial information relating to the Company and
its portfolio of investments. The Chairman encourages
open debate to foster a supportive and co-operative
approach for all participants.
The Board applies its primary focus on the following:
• investment performance, ensuring that investment
objectives and strategy of the Company are met;
• ensuring investment holdings are in line with the
Company’s investment restrictions;
• review and monitoring financial risk management,
operating cash flows and budgets of the Company;
and
• review and monitoring of the key risks to which
the Company is exposed as set out in the Strategic
Report.
At each relevant meeting the Board undertakes reviews
of key investment and financial data, transactions and
performance comparisons, share price and NAV
performance, marketing and Shareholder communication
strategies, peer group information and industry issues.
The Board considers the Company’s investment
objectives, their continuing relevance and whether the
investment policy continues to meet those Company’s
investment objectives. The Board believes that the
overall strategy of the Company remains appropriate.
Board and committees (continued)
Attendance at scheduled meetings of the Board and its committees
Board
Audit
Committee
Management
Engagement
Committee
6
Remuneration
and Nomination
Committee
6
Number of meetings during the
year ended 30 September 2024
2
3 4 - -
John Blowers 3/3 4/4 - -
Andrew Chapman
3
1/1 1/2 - -
Charlotte Denton
4
1/2 2/2 - -
Mark Hodgson 3/3 n/a n/a n/a
Ted Holmes 3/3 4/4 - -
Serena Tremlett
5
1/1 2/2 - -
There was one ad-hoc board meeting held during the year.
2 Attendance presented in the table is based on the number of
Board meetings held when a Director was part of the Board
based on their date of retirement, resignation or appointment.
3 Andrew Chapman retired on 11 March 2024.
4 Charlotte Denton resigned on 1 May 2024.
5 Serena Tremlett was appointed on 1 May 2024.
6 Due to diary conflicts for new directors, the Board and
committee meetings were moved from the year ended
30 September 2024 to 3 October 2024 which is outside of the
reporting period.
45River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Board and committees (continued)
Service providers
The AIFM has delegated portfolio management of
the Company’s investment portfolio to the Portfolio
Manager. The Board actively and continuously
supervises both the AIFM and the Portfolio Manager in
the performance of their respective functions.
The Company has appointed BNP Paribas S.A., Guernsey
Branch (the “Administrator” and/or the “Company
Secretary”) to provide administration, custodian and
company secretarial services.
Each of these contracts was entered into after full and
proper consideration by the Board of the quality and
cost of services offered, including the control systems
in operation in so far as they relate to the affairs of
the Company. Fees in relation to service providers are
considered on a regular basis.
The Board receives and considers reports regularly
from both the Portfolio Manager and the AIFM, with
ad hoc reports and information supplied to the Board
as required. The Portfolio Manager complies with the
Company investment limits and risk diversification
policies and has systems in place to monitor cash
flow and the liquidity risk of the Company. The AIFM,
Portfolio Manager and the Administrator also ensure
that all Directors receive, in a timely manner, all relevant
management, regulatory and financial information.
Representatives of the AIFM, Portfolio Manager and
Administrator attend each Board meeting as required,
enabling the Directors to probe further on matters of
concern.
The Directors have access to the advice and service of
the corporate Company Secretary through its appointed
representative who is responsible to the Board for
ensuring that Board procedures and applicable rules
and regulations are followed. The Board, the AIFM,
Portfolio Manager and the Administrator operate in a
supportive, co-operative and open environment and
the Board will actively and continuously supervise both
the AIFM, Portfolio Manager and Administrator in the
performance of their respective functions.
Performance of the Portfolio Manager
The Board reviews on an ongoing basis the performance
of the Portfolio Manager and considers whether the
investment strategy adopted is likely to achieve the
Company’s investment objective.
Having formally appraised the performance, investment
strategy and resources of the Portfolio Manager, the
Board has unanimously agreed that the interests of
the Shareholders are best served by the continuing
appointment of the Portfolio Manager on the terms
agreed.
The Board believes that the portfolio management
fees are competitive with other investment companies
with similar investment mandates. The key terms of the
Investment Management agreement and the portfolio
management fee charged by the Portfolio Manager are
set out in note 4.
Shareholder communications
The main method of communication with Shareholders
is through the Half-Yearly and Annual Report which
aims to give Shareholders a clear and transparent
understanding of the Company’s objectives, strategy
and results. This information is supplemented by the
publication of the daily NAVs of the Company’s Ordinary
Shares on the London Stock Exchange via a Regulatory
Information Service.
The Company’s website, https://river.global/our-
funds/fund-centre is regularly updated with monthly
factsheets and provides further information about the
Company, including the Company’s financial reports and
announcements. The maintenance and integrity of the
Company’s website is the responsibility of the Directors,
which has been delegated to the Portfolio Manager;
the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the
auditors accept no responsibility for any changes that
may have occurred to the financial statements since they
were initially presented on the website. Legislation in
Guernsey governing the preparation and dissemination
of financial statements may differ from legislation in
other jurisdictions.
Information published on the internet is accessible
in many countries with different legal requirements
relating to the preparation and dissemination of financial
statements and users of the Company’s website are
responsible for informing themselves of how the
requirements in their own countries may differ from
those of Guernsey.
46River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Board and committees (continued)
The Board believes that the AGM provides an
appropriate forum for investors to communicate with
the Board and encourages participation. The AGM will
be attended by members of the Board. There is an
opportunity for individual Shareholders to question the
Directors at the AGM. The Directors welcome the views
of all Shareholders and place considerable importance
upon them.
In addition to the AGM and the monthly publication of
factsheets, the Board requires its Corporate Broker to
maintain regular contact with Shareholders, to co-
ordinate and facilitate meetings between Shareholders
and the Portfolio Manager and to report back to
the Board the views of investors expressed at those
meetings. The Chairman is always willing to meet with
Shareholders to discuss any questions or issues they
might have about the Company.
The Board have additionally committed to uprating
the information on the Company by contracting with
Trustnet, one of the UK’s premier fund data companies,
serving the private investor and professional adviser
markets. The live share price and discount information
is provided, plus ratings, historic performance data and
fund manager profiles.
This information can be found here: https://www.
trustnet.com/factsheets/T/KZFC/river-and-mercantile-uk-
micro-cap-red-ord-npv.
Other communications
All substantive communications regarding any major
corporate issues are discussed by the Board taking
into account representations from the AIFM, Portfolio
Manager, Grant Thornton Limited (the “Auditor”), legal
advisers, Corporate Brokers and the Company Secretary.
47River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
AIFMD report
Alternative Investment Fund Manager Directive
(“AIFMD”)
The Company (which is a non-EU AIF for the purposes of
the AIFM Directive and related regimes in EEA member
states) has appointed the AIFM. The AIFM is authorised
by the Jersey Financial Services Commission to act as an
AIFM on behalf of alternative investment funds (“AIFs”) in
accordance with the Financial Services (Jersey) Law 1998.
The Company is registered with the GFSC, being the
Company’s competent regulatory authority, as a non-EU
Alternative Investment Fund (“AIF”), and the AIFM has
registered with the UK FCA, under their relevant national
private placement regime.
The AIFM has delegated portfolio management of the
Company’s investment portfolio to the Portfolio Manager
and the Board actively and continuously supervises both
the AIFM and the Portfolio Manager in the performance
of their respective functions.
As the Company and the AIFM are non-EU domiciled,
no depositary has been appointed in line with AIFMD.
However, BNP Paribas S.A., Guernsey Branch has been
appointed to act as custodian.
The current risk profile of the Company and the
risk management systems employed by the AIFM to
manage those risks
Information relating to the current risk profile of the
Company and the risk management systems employed
by the AIFM to manage those risks, as required under
paragraph 4(c) of Article 23 of the AIFMD, is set out in
note 9 – Financial Risk Management. Refer to pages 29
to 32 for the Board’s assessment of the principal risks
and uncertainties facing the Company.
Leverage
The Company may employ gearing up to a maximum of
20% of NAV at the time of borrowing. The actual level of
gearing at 30 September 2024 was nil% (30 September
2023: nil%).
Material changes to information
Article 23 of AIFMD requires certain information to
be made available to investors before they invest and
requires material changes to this information to be
disclosed in the annual report. There have been no
material changes to the information requiring disclosure.
AIFM remuneration
The total fee paid to the AIFM by the Company for the
year ended 30 September 2024 is disclosed in note 5.
The AIFM is not subject to the provisions of Article
13 of the AIFMD, which require the AIFM to adopt
remuneration policies and practices in line with the
principles detailed in Annex II of the Directive. However,
in accordance with Article 22 of the AIFM Directive and
Article 107 of the AIFM Regulations, the AIFM must make
certain disclosures in respect of the remuneration paid
to its staff.
The AIFM has identified six staff as falling within the
scope of the disclosure requirements (the “Identified
Staff”). These Identified Staff are senior management,
named as Designated Persons of the AIFM’s managerial
functions and members of the Board of Directors, risk
and investment committees of the AIFM. All Identified
Staff of the AIFM are employees of the Carne Group
and as such receive no separate remuneration for their
role within the AIFM. Instead, they are remunerated
as employees of other Carne group companies, with
a combination of fixed and variable discretionary
remuneration, where the latter is assessed based on
their overall individual contribution in their role, with
reference to both financial and non-financial criteria
and not directly linked to the performance of the staff
of specific business units or targets reached. The total
remuneration of the Identified Staff, in respect of AIFs
under management, for the year ended 31 March 2024
was £198,033 (31 March 2023: £238,250) . Based on
the net asset value of the Company relative to the total
assets under management of the AIFM, the portion of
this figure attributable to the Company was £6,614.
There was no variable component to this remuneration
that is based on the performance of the Company and
none of the AIFM’s Identified Staff can materially impact
the risk profile of the Company. The AIFM manages other
funds and has no staff other than the Identified Staff.
48River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Report of the Audit Committee
The Board has appointed an Audit Committee which
operates within clearly defined Terms of Reference,
which are available on the Company’s website.
The Audit Committee includes all the Directors except
for Mark Hodgson, who attends at the invitation of the
Audit Committee but does not actively participate in the
meetings. Ted Holmes is the Audit Committee Chair, he
is independent of the AIFM and Portfolio Manager as
are all the other Directors that comprise the committee.
All the Audit Committee’s members have recent and
relevant financial and industry experience and the Audit
Committee Chair is a qualified accountant and chartered
financial analyst. The Audit Committee has competence
relevant to the sector in which the Company operates.
Biographical information pertaining to the members
of the Audit Committee can be found in the Board
Members section of this Annual Report.
Role of the Committee
The Audit Committee assists the Board in carrying
out its responsibilities in relation to financial reporting
requirements, risk management and the assessment of
internal financial and operating controls. It also manages
the Company’s relationship with the external Auditor.
The Audit Committee’s main functions are:
• to review and monitor the integrity, fairness, and
balance of the financial statements of the Company
including its Half-Yearly Report and Annual Report
to Shareholders and any formal announcements
regarding its financial performance, together with
any significant financial reporting issues and areas of
judgement contained within them;
• to advise the Board on whether the Annual
Report, taken as a whole, is fair, balanced, and
understandable and provides the information
necessary for Shareholders to assess the Company’s
performance, position, business model and strategy;
• to review the adequacy and effectiveness of the
Company’s financial reporting and internal control
policies and procedures with respect to the
Company’s record keeping, asset management and
operations for the identification, assessment and
reporting of risks;
• to consider and make recommendations to the
Board, to be put to Shareholders for approval at the
AGM, in relation to the appointment, re-appointment
and removal and the provisions of non-audit services
of the external Auditor and to negotiate their
remuneration and terms of engagement on audit and
non-audit work;
• to meet regularly with the external Auditor to review
their proposed audit program and remit of work
and the subsequent Audit Report and to assess the
effectiveness of the audit process; any issues arising
from the audit with respect to accounting or internal
controls systems and the level of fees paid in respect
of audit and non-audit work; and
• to annually assess the external Auditor’s
independence, objectivity, effectiveness, resources,
and expertise.
Internal controls and risk management systems
The Board is responsible for ensuring that suitable
systems of risk management and internal control are
implemented, including systems that include financial
controls to address financial risks, by the third-party
service providers and keeping these systems under
review to ensure their continuing adequacy.
The Directors have reviewed the BNP Paribas ISAE
3402 report (on the description of controls placed in
operation, their design and operating effectiveness for
the period from 1 April 2023 to 31 March 2024 on Fund
Administration and the corresponding Bridging Letter up
to 30 September 2024 and are pleased to note that no
significant issues were identified.
In accordance with the FRC’s Internal Control: Guidance
on Risk Management, Internal Control and Related
Financial and Business Reporting, and the FRC’s
Guidance on Audit Committees, the Board confirms that
there is an on-going process for identifying, evaluating
and managing the significant internal control risks faced
by the Company.
As the Company does not have any employees it does
not have a ‘whistleblowing’ policy in place, however the
Board has reviewed the whistleblowing procedures
of the Portfolio Manager with no issues noted. The
Company delegates its main administrative functions to
third-party providers who report on their policies and
procedures to the Board.
The Board believes that as the Company delegates its
day-to-day administrative operations to third parties
(which are monitored by the Board), it does not require
an internal audit function.
49River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
The Audit Committee met on four occasions in the year
under review and the members’ attendance record can
be found on page 44 of this Annual Report.
Significant risks in relation to the financial
statements
The Audit Committee views the valuation of the
Company’s investments as a significant risk.
There is a risk that the AIM listed investments are
not valued appropriately in accordance with the
requirements set out in IFRS 13 due to the nature of the
AIM market and the listed stocks not being highly liquid,
or heavily traded.
The Audit Committee reviews the regular reports from
the Portfolio Manager and Administrator regarding the
valuation of the investments and the Board reviews
the NAV of the Company, together with the value and
trading volumes of investments on a regular basis.
The Committee also considered the implications of
the current geopolitical tensions and the economic
environment, on both the valuation and liquidity of the
investment portfolio and concluded that it remained
appropriate to estimate the fair value of the Company’s
financial assets based on quoted prices (refer to note
2.3(c) for further details).
In addition to the above, the AIFM holds monthly
risk committee meetings, where the Company’s risk
measurement framework is discussed, including market
risk, credit risk, counterparty risk, operational risk and
liquidity risk, in reference to the investment portfolio
and the Company performance thereof. The AIFM
provides regular updates and risk meeting minutes to
the Board and is also asked to attend Audit Committee
meetings by the Audit Committee Chair to assist the
Audit Committee in evaluating the appropriateness and
robustness of the valuation methodology applied to the
investment portfolio.
External audit process
Following a full and robust audit tender process in
2023, the Auditor was appointed at the AGM held on 12
March 2024 . The Audit Committee has direct access to
the Company’s external auditor and provides a forum
through which the external auditor reports to the Board.
Representatives of the Auditor attend meetings of the
Audit Committee at least twice each year.
The Audit Committee met with the Auditor prior to
the commencement of the audit and agreed an audit
plan that would adopt a risk based approach. The
Audit Committee and the Auditor agreed that audit
procedures would be performed over the title to and
the existence of the Company’s investments and the
procedures in place at the Administrator and the
Portfolio Manager in respect of the valuation of the
Company’s investment portfolio would be understood
and evaluated.
Upon completion of the audit, the Audit Committee
discussed with the Auditor the effectiveness of the audit
and considered the Auditor’s independence from the
Company since their appointment and throughout the
audit process.
The significant risks regarding both fraud risk -
management override of controls and valuation of
the investment portfolio, were tracked through the
period and the Audit Committee challenged the work
performed by the Auditor to test management override
of controls and in addition the audit work undertaken in
respect of valuations of investments held.
The Audit Committee was satisfied that during the audit
of the Annual Report for the year ended 30 September
2024, there had been appropriate focus and challenge
on the significant and other key areas of audit risk and
the Audit Committee assessed the quality of the audit
process to be good.
During the year ended 30 September 2024, in addition
to the audit services in respect to the audit of the
Company’s Annual Report, the Auditor provided non-
audit services in respect of the review of the Company’s
Half-Year Report for the six months ended 31 March
2024. No other non-audit services were provided during
the year ended 30 September 2024.
To safeguard the objectivity and independence of
the external Auditor from becoming compromised,
the Audit Committee has a formal policy governing
the engagement of the Auditor to provide non-audit
services. The Auditor and the Directors have agreed that
all non-audit services require the pre-approval of the
Audit Committee prior to commencing any work. Fees
for non-audit services will be tabled annually so that
the Audit Committee can consider the impact on the
Auditor’s objectivity.
Report of the Audit Committee (continued)
50River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Report of the Audit Committee (continued)
The fees for the audit services were: £53,000 for
the audit for the year ended 30 September 2024
(30 September 2023: £64,550) and the fees for non-
audit services were £17,000 (30 September 2023:
£23,000) for the review of the Company’s Half-Yearly
Report for the six months ended 31 March 2024.
The Audit Committee has discussed the report provided
by the Auditor and the Audit Committee is satisfied as to
the independence of the Auditor.
The Committee has reviewed the Auditor’s
independence policies and procedures and considers
that they are fit for purpose.
Appointment and independence
The Audit Committee considers the reappointment
of the Auditor, including the rotation of the audit
engagement leader, and assesses their independence
on an annual basis. The external Auditor is required
to rotate the engagement leader responsible for the
Company’s audit every seven years. Michael Carpenter
is the engagement leader and this is his first year
overseeing the audit of the Company.
The Committee reviews the objectivity and effectiveness
of the audit process on an annual basis and considers
whether the Company should put the audit engagement
out to tender.
This Report of the Audit Committee was approved by the
Board of Directors on 20 December 2024 and signed on
its behalf by:
Ted Holmes
Audit Committee Chair
51River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Directors’ remuneration report
This report describes how the Board has applied the principles of the AIC Code relating to Directors’
remuneration. An ordinary resolution to approve the Directors’ remuneration report will be proposed at the
AGM on 12 March 2025.
Table of Directors’ remuneration
The fees paid to each director are detailed in the table below:
Director Role(s)
Year ended
30 September
2024
Year ended
30 September
2023
Andrew Chapman
1
Chairman £20,324 £43,838
John Blowers Chairman (from 11 March 2024) £37,984 £27,787
Charlotte Denton
2
Audit Committee Chair £20,288 £32,865
Ted Holmes Audit Committee Chair (from 1 May 2024) £31,535 £nil
Mark Hodgson Director £30,794 £28,181
Serena Tremlett
3
Remuneration and Nomination Committee Chair
and Management Engagement Committee Chair
(from 1 May 2024)
£13,754 n/a
No other remuneration or compensation was paid or is payable by the Company during the year to any of the
Directors and there has been no change to the Company’s remuneration policy as detailed below during the course
of the year.
No Director is entitled to receive any remuneration which is performance related.
Remuneration policy
The determination of the Directors’ fees is a matter for the Remuneration and Nomination Committee.
The Remuneration and Nomination Committee considers the remuneration policy annually to ensure that it
remains appropriately positioned. Members of this Committee will review the fees paid to the boards of Directors
of similar companies.
The Company’s policy is for the Directors to be remunerated in the form of fees, payable quarterly in arrears.
No Director has any entitlement to a pension, and the Company has not awarded any share options or long-term
performance incentives to any of the Directors.
Directors are authorised to claim reasonable expenses from the Company in relation to the performance of
their duties.
The Company’s policy is that the fees payable to the Directors should reflect the time spent by the Board on the
Company’s affairs and the responsibilities borne by the Directors and should be sufficient to enable high calibre
candidates to be recruited. The policy is for the Chairman and Audit Committee Chair to be paid a higher fee than the
other Directors in recognition of their more onerous roles and more time spent. The Remuneration and Nomination
Committee may recommend the amendments to the level of remuneration paid within the limits of the Company’s
Articles of Incorporation.
1 Andrew Chapman retired from the Board on 11 March 2024.
2 Charlotte Denton resigned from the Board on 1 May 2024.
3 Serena Tremlett was appointed to the Board on 1 May 2024.
52River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
On 12 October 2023, the Board approved an increase in the annual basic Director fees of 2.5% effective
1 January 2023.
In June 2024, a comprehensive review of annual Director fees against similar sized listed companies was performed
for consideration by the Remuneration and Nomination Committee. It was proposed to revise annual Director fees
with effect from 1 July 2024 as listed below:
Director Role(s)
Effective
1 July 2024
John Blowers Chairman (from 11 March 2024) £49,000
Ted Holmes Audit Committee Chair (from 1 May 2024) £41,000
Mark Hodgson Director £36,000
Serena Tremlett Remuneration and Nomination Committee Chair and Management
Engagement Committee Chair (from 1 May 2024)
£36,000
On 3 October 2024, the above proposal was approved by the Board effective 1 July 2024.
The Company’s Articles of Incorporation limits the aggregate fees payable to the Board of Directors to a total of
£165,000 per annum. The Company did not breach this limit for the year ended 30 September 2024.
Advisers to the Remuneration and Nomination Committee
The Board has not sought the advice or services by any outside person, in respect of its consideration of the
Directors’ remuneration, although the Board reviews Directors’ compensation in line with market trends. Ensuring
Directors fees remain in line with the market is important during this period of Board refreshment to ensure that the
Company continues to attract the most talented individuals
Serena Tremlett
Remuneration and Nomination Committee Chair
20 December 2024
Directors’ remuneration report (continued)
53River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Independent auditor’s report
to the members of River UK Micro Cap Limited
Opinion
We have audited the financial statements of River
UK Micro Cap Limited, formerly known as River and
Mercantile UK Micro Cap Investment Company Limited,
(the “Company”) for the year ended 30 September
2024, which comprise the Statement of Comprehensive
Income, the Statement of Financial Position, the
Statement of Changes in Shareholders’ Equity, the
Statement of Cash Flows and notes to the financial
statements, including material accounting policy
information.
In our opinion the Company’s financial statements
• give a true and fair view of the financial position of the
Company as at 30 September 2024 and of its financial
performance and its cash flows for the year then
ended;
• are in accordance with IFRS Accounting Standards
as issued by the International Accounting Standards
Board; and
• Comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs) and applicable law. Our
responsibilities under those standards are further
described in the ‘Auditor’s Responsibilities for the Audit
of the Financial Statements’ section of our report. We
are independent of the Company in accordance with the
International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants
(including International Independence Standards)
(IESBA Code), together with the ethical requirements
that are relevant to our audit of the financial statements
in Guernsey, and we have fulfilled our other ethical
responsibilities in accordance with these requirements
and the IESBA Code. We believe that the audit evidence
we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
The key audit matter How the matter was addressed in our audit
Valuation of financial assets held at fair
value through profit or loss (“investments”)
The entity’s investments are all Level
1 investments. Per IFRS 13 Fair Value
Measurement (“IFRS 13”), the fair value of Level
1 investments, such as those in micro-cap
companies, is derived from quoted prices in
active markets.
The valuation of Level 1 quoted investments is
relatively straightforward. However, there is a
likelihood of errors in determining the quoted
prices for these investments, particularly those
involving micro-cap companies. This could
result from the use of outdated quoted prices
or inappropriate quoted prices, e.g., the offer
price or mid-price, to determine the valuation
of the investments.
Our procedures consisted of:
• We obtained an understanding of the processes, policies and
methodologies, and controls concerning the valuation of quoted
investments and confirmed our understanding by performing
tests of the design and implementation of relevant controls
concerning the valuation.
• We assessed whether the fair value disclosures in the financial
statements are appropriate, complete and in accordance with
the requirements of IFRS 13.
• We independently obtained an investment confirmation for all
investments from The Bank of New York Mellon (International)
Limited (BNY Mellon) and compared the stated quantities and
values to the Company’s accounting records.
• We verified the quoted prices used by management against
independent sources, such as reputable stock exchanges or
financial data providers.
54River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Independent auditor’s report (continued)
The key audit matter How the matter was addressed in our audit
As such, we identified the valuation of quoted
investments as one of the most significant
assessed risks of material misstatement due
to error, with these being measured using
the quoted price at year-end and there is
a high risk that using the incorrect quoted
price to value these investments at year-end
could result in a material misstatement of the
financial statements and requires significant
audit attention.
Refer to the Audit Committee Report (pages
48-50); Accounting policies in pages 64-65, and
Note 8, Financial assets held at fair value through
profit or loss, to the Financial Statements.
• We assessed whether the listed shares are actively trading
and have correctly been classified as Level 1. This included
considering trading volumes, bid-ask spreads, and the frequency
of transactions.
• We analysed historical price volatility for each investment to
assess the risk of significant fluctuations that could impact the
fair value and considered whether the valuation date price
reflected an outlier due to temporary market conditions.
Our result:
Based on results obtained from procedures performed, we did not
identify any material misstatements concerning the valuation of the
Investments in the period.
Other matters
We draw attention to the fact that the financial
statements of River UK Micro Cap Limited for the year
ended 30 September 2023 were audited by another
auditor who expressed an unmodified opinion on those
financial statements on 5 December 2023.
Other information
The Directors are responsible for the other information.
The other information comprises the information
included in the Annual Report but does not include the
financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover
the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements,
or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a
material misstatement of this other information, we are
required to report that fact. We have nothing to report in
this regard.
Responsibilities of the directors for the financial
statements
The Directors are responsible for the preparation of
the financial statements that give a true and fair view in
accordance with IFRS Accounting Standards as issued
by the International Accounting Standards Board, and
for such internal control as the Directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors
are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless the Directors either
intend to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a
material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional
scepticism throughout the audit.
55River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Independent auditor’s report (continued)
We also:
• Identify and assess the risks of material misstatement
of the financial statements, whether due to fraud
or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness
of the Company’s internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report.
However, future events or conditions may cause the
Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the directors regarding, among
other matters, the planned scope and timing of the audit
and significant audit findings, including any significant
deficiencies in internal control that we identify during
our audit.
We also provide the directors with a statement that
we have complied with relevant ethical requirements
regarding independence, and to communicate with
them all relationships and other matters that may
reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the directors, we
determine those matters that were of most significance
in the audit of the financial statements of the current
period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in
our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.
Use of our report
This report is made solely to the Company’s members,
as a body, in accordance with section 262 of the
Companies (Guernsey) Law, 2008. Our audit work
has been undertaken so that we might state to the
Company’s members those matters we are required
to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other
than the Company and the Company’s members as
a body, for our audit work, for this report, or for the
opinions we have formed.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following
matters in relation to which the Companies (Guernsey)
Law, 2008 requires us to report to you if, in our opinion:
• proper accounting records have not been kept by the
Company; or
• the Company’s financial statements are not in
agreement with the accounting records; or
• we have not obtained all the information and
explanations, which to the best of our knowledge and
belief, are necessary for the purposes of our audit.
Michael Carpenter
For and on behalf of Grant Thornton Limited
Chartered Accountants
St Peter Port
Guernsey
Date: 20 December 2024
56River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
We intend to return excess
capital to shareholders when
the Company’s assets are in
excess of £110 million.
The last two capital returns
were in 2021 with a total of
£35 million returned.
57River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Statement of comprehensive income
For the year ended 30 September 2024
Notes
Year ended
30 September
2024
Year ended
30 September
2023
£ £
Income
Investment income 3 624,554 818,176
Net gain on financial assets held at fair value through
profit or loss
8 9,473,024 2,468,544
Total income 10,097,578 3,286,720
Expenses
Portfolio management fees 4 (498,783) (458,720)
Operating expenses 5 (660,495) (625,709)
Foreign exchange (losses)/gains (8,240) 3,157
Total expenses (1,167,518) (1,081,272)
Profit before taxation 8,930,060 2,205,448
Taxation 2.9 - -
Profit after taxation and total comprehensive income 8,930,060 2,205,448
Basic and diluted profit per Ordinary Share 12 0.2634 0.0651
The Company has no items of other comprehensive income, and therefore the profit after taxation for the year is
also the total comprehensive income.
All items in the above statement are derived from continuing operations. No operations were acquired or
discontinued during the year.
The notes on pages 62 to 78 form an integral part of these financial statements.
58River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Statement of financial position
As at 30 September 2024
Notes
30 September
2024
30 September
2023
£ £
Non-current assets 8 66,668,888 59,625,665
Financial assets held at fair value through profit or loss
Current assets
Cash and cash equivalents 1,769,894 415,330
Trade receivables – securities sold awaiting settlement 680,187 -
Prepayments 8,073 8,234
Other receivables 7 61,484 252,169
Total current assets 2,519,638 675,733
Total assets 69,188,526 60,301,398
Current liabilities
Trade payables – securities purchased awaiting
settlement
- (52,843)
Other payables 10 (213,277) (203,366)
Total current liabilities (213,277) (256,209)
Net assets 68,975,249 60,045,189
Capital and reserves
Stated capital 11 - -
Retained earnings 68,975,249 60,045,189
Equity Shareholders’ funds 68,975,249 60,045,189
The financial statements on pages 57 to 78 were approved and authorised for issue by the Board of Directors on
20 December 2024 and signed on its behalf by:
John Blowers Serena Tremlett
Chairman Director
The notes on pages 62 to 78 form an integral part of these financial statements.
59River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Statement of changes in shareholders’ equity
For the year ended 30 September 2024
Stated
capital
Retained
earnings Total
£ £ £
Opening equity Shareholders’ funds at 1 October 2023 - 60,045,189 60,045,189
Total comprehensive income for the year - 8,930,060 8,930,060
Closing equity Shareholders’ funds at 30 September 2024 - 68,975,249 68,975,249
For the year ended 30 September 2023
Stated
capital
Retained
earnings Total
£ £ £
Opening equity Shareholders’ funds at 1 October 2022 - 57,839,741 57,839,741
Total comprehensive income for the year - 2,205,448 2,205,448
Closing equity Shareholders’ funds at 30 September 2023 - 60,045,189 60,045,189
The notes on pages 62 to 78 form an integral part of these financial statements.
60River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Statement of cash flows
For the year ended 30 September 2024
Notes
Year ended
30 September
2024
Year ended
30 September
2023
£ £
Cash flow from operating activities
Profit after taxation and total comprehensive income 8,930,060 2,205,448
Adjustments to reconcile profit after taxation to
net cash flows:
Realised loss on financial assets held at fair value
through profit or loss
8 4,030,780 7,993,136
Unrealised gain on financial assets held at fair value
through profit or loss
8 (13,503,804) (10,461,680)
Purchase of financial assets held at fair value through
profit or loss
1
8 (16,110,533) (11,959,171)
Proceeds from sale of financial assets held at fair value
through profit or loss
2
8 17,807,304 10,448,555
Changes in working capital
Decrease/(increase) in other receivables and prepayments 7 190,846 (167,722)
Increase in other payables 10 9,911 67,147
Net cash generated from/(used in) operating activities 1,354,564 (1,874,287)
Net increase/(decrease) in cash and cash equivalents in
the year
1,354,564 (1,874,287)
Cash and cash equivalents at the beginning of the year 415,330 2,289,617
Cash and cash equivalents at the end of the year 1,769,894 415,330
1 Payables outstanding at 30 September 2024 relating to purchases of financial assets held at fair value through profit or loss amounted
to £nil (30 September 2023: £52,843).
2 Receivables as at 30 September 2024 relating to proceeds from sale of financial assets held at fair value through profit or loss
amounted to £680,187 (30 September 2023: £nil).
The notes on pages 62 to 78 form an integral part of these financial statements.
61River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
62River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Notes to the financial statements
1 General information
The Company was incorporated as a non-cellular company with liability limited by shares in Guernsey under The
Companies (Guernsey) Law, 2008 (the “Companies Law”) on 2 October 2014. It listed its Ordinary Shares on the
Equity Shares (Commercial Companies) (ESCC) segment (previously the ‘Premium segment’) of the Official List
as maintained by the FCA and was admitted to trading on the Main Market of the London Stock Exchange on 2
December 2014.
The Company has been regulated by the GFSC as a registered closed-ended collective investment scheme pursuant
to the Protection of Investors (Bailiwick of Guernsey) Law, 2020, as amended, and the RCIS Rules. The Company
registered number is 59106.
The Company’s registered address is BNP Paribas House, St Julian’s Avenue, St Peter Port, Guernsey, GY1 1WA
2 Material accounting polices
The material accounting policies applied in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation
a) Statement of Compliance
The financial statements have been prepared in accordance with the Companies Law and with IFRS Accounting
Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). The financial statements give
a true and fair view of the Company’s affairs and comply with the requirements of the Companies Law.
The financial statements have been prepared under a going concern basis. The Directors are satisfied that, at
the time of approving the financial statements, no material uncertainties exist that may cast significant doubt
concerning the Company’s ability to continue for the foreseeable future. The Directors consider it appropriate to
adopt the going concern basis in preparing the financial statements.
b) Basis of measurement
These financial statements have been prepared on a historical cost basis adjusted to take account of the
revaluation of financial assets held at fair value through profit or loss.
c) Functional and presentation currency
The Company’s functional currency is Pound Sterling, which is the currency of the primary economic environment
in which it operates. The Company’s performance is evaluated and its liquidity is managed in Pound Sterling.
Pound Sterling is therefore considered as the currency that most faithfully represents the economic effects of the
underlying transactions, events and conditions. The financial statements are presented in Pound Sterling.
d) Significant accounting assumptions, estimates and judgements
The preparation of the financial statements in conformity with IFRS, requires the Company to make judgements,
estimates and assumptions that affect items reported in the Statement of Financial Position and Statement
of Comprehensive Income and the disclosure of contingent assets and liabilities at the date of the financial
statements. It also requires management to exercise its judgement in the process of applying the Company’s
accounting policies. Uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities affected in future periods.
The Directors have used their judgement to determine that all financial assets held at fair value through profit or
loss are traded within an active market (note 2.3(c) below).
The Directors have determined that an active market exists for the Company’s financial assets, as all the
Company’s financial assets are quoted securities which are traded in active markets as at 30 September 2024. In
the opinion of the Directors, the quoted price for the financial assets as at 30 September 2024 is representative
of fair value.
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e) New standards, amendments and interpretations
Standards and amendments to existing standards that became effective during the year are detailed below.
Effective for periods
beginning on or after
IAS 1 - Classification of liabilities as current or non-current and non-current liabilities
with covenants
1 January 2024
Amendments to IFRS 16 - Lease liability in a sale and leaseback 1 January 2024
Amendments to IAS 7 and IFRS 7- Supplier finance arrangements 1 January 2024
The amendments to IAS 1 in relation to classification of liabilities as current or non-current clarify how an entity
classifies debt and other financial liabilities as current or non-current in particular circumstances. The Directors
do not believe that the application of these amendments will have any impact on the Company’s audited financial
statements as not applicable to the Company.
The IFRS 16 amendments clarify how a seller-lessee subsequently measures sale and leaseback transactions
that satisfy the requirements in IFRS 15 to be accounted for as a sale. The Directors do not believe that the
application of these amendments will have any impact on the Company’s audited financial statements as not
applicable to the Company.
The amendments to IAS 7 and IFRS 7 add disclosure requirements, and signposts within existing disclosure
requirements, that ask entities to provide qualitative and quantitative information about supplier finance
arrangements. The Directors do not believe that the application of these amendments will have a material impact
on the Company’s audited financial statements.
During the year, a number of other amendments and interpretations became applicable for the current reporting
period, which are not relevant to the Company’s operations.
f) Standards, amendments and interpretations issued but not yet effective
Detailed below are new standards, amendments and interpretations to existing standards that have been issued
but are not yet mandatorily effective for the reporting period. They have not been early adopted by the Company:
Effective for periods
beginning on or after
Amendments to IAS 21 - Lack of exchangeability 1 January 2025
IFRS S1 General requirements for disclosure of sustainability-related financial
information and IFRS S2 climate-related disclosures
To be determined
Amendments to the Classification and Measurement of Financial Instruments -
Amendments to IFRS 9 and 7
1 January 2026
IFRS 18 - Presentation and disclosure in financial statements 1 January 2027
Amendments to IFRS 10 and IAS 28 - Sale or contribution of assets between an
Investor and its Associate or Joint Venture
Optional
The amendments to IAS 21 contain guidance to specify when a currency is exchangeable and how to determine
the exchange rate when it is not. The Directors do not believe that the application of these amendments will have
a material impact on the Company’s audited financial statements.
The amendments to the classification and measurement of financial instruments (Amendments to IFRS 9 and
IFRS 7) aimed to address matters identified during the post-implementation review of the classification and
measurement requirements of IFRS 9 - Financial Instruments. The Directors do not believe that the application of
these amendments will have a material impact on the Company’s audited financial statements.
Notes to the financial statements (continued)
2. Material accounting policies (continued)
2.1 Basis of preparation (continued)
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f) Standards, amendments and interpretations issued but not yet effective (continued)
IFRS 18 includes requirements for all entities applying IFRS Accounting Standards for the presentation and
disclosure of information in financial statements. The Directors do not believe that the application of this
amendment will have a material impact on the Company’s audited financial statements.
IFRS S1 and S2 sets out overall requirements with the objective to require an entity to disclose information about
its sustainability-related risks and opportunities that is useful to the primary users of general purpose financial
reports in making decisions relating to providing resources to the entity. The Directors will monitor the adoption
of these standards in the UK which is expected during 2025.
The amendments to IFRS 10 and IAS 28 seek to address an acknowledged inconsistency between the
requirements in IFRS 10 and those in IAS 28 (of 2011), in dealing with the sale or contribution of assets between
an investor and its associate or joint venture. The Directors do not believe that the application of these
amendments will have a material impact on the Company’s audited financial statements.
2.2 Foreign currency translations
Foreign exchange gains and losses resulting from the settlement of transactions in foreign currencies and from
the translation of monetary assets and liabilities at year end exchange rates to Pound Sterling are recognised in
the Statement of Comprehensive Income as foreign exchange gains or losses.
Non-monetary items such as financial assets held at fair value through profit or loss measured at fair value in a
foreign currency, are translated using exchange rates at the Statement of Financial Position date when the fair
value was determined. Effects of exchange rate changes on non-monetary items measured at fair value on a
foreign currency are recorded as part of the fair value gain or loss.
As at 30 September 2024, all financial assets held at fair value through profit or loss are held in Pound Sterling.
2.3 Financial instruments
Financial Assets
a) Classification
The Company classifies its investments in equity securities as financial assets held at fair value through profit
or loss as they are held for investment purposes. These financial assets are managed, and their performance is
evaluated on a fair value basis in accordance with the Company’s documented investment strategy.
The Company’s policy requires the Portfolio Manager and the Board of Directors to evaluate the information
about these financial assets on a fair value basis together with other related financial information. Furthermore,
these financial assets do not possess contractual cash flows. Financial assets also include cash and cash
equivalents as well as trade receivables and other receivables which are classified at amortised cost using the
effective interest rate method.
b) Recognition, measurement and derecognition
Purchases and sales of investments are recognised on the trade date – the date on which the Company commits
to purchase or sell the investment. Financial assets held at fair value through profit or loss are measured
initially at fair value. Transaction costs are expensed as incurred and movements in fair value are recorded in
the Statement of Comprehensive Income. Subsequent to initial recognition, all financial assets held at fair value
through profit or loss are measured at fair value.
Notes to the financial statements (continued)
2. Material accounting policies (continued)
2.1 Basis of preparation (continued)
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b) Recognition, measurement and derecognition (continued)
Cash and cash equivalents, trade receivables, other receivables and prepayments are classified at amortised cost.
These financial assets are initially recognised at fair value plus transaction costs and subsequently measured at
amortised cost.
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the
Company has transferred substantially all risks and rewards of ownership.
c) Fair value estimation
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
As at 30 September 2024, the Company held investments in a diversified portfolio of UK micro-cap companies,
typically comprising companies with a free float market capitalisation of less than £100 million at the time of
purchase, whose securities are admitted to trading on AIM or the main market of the London Stock Exchange.
Investments are valued at fair value, which are quoted bid prices for investments traded in active markets.
Financial liabilities
a) Classification
Securities purchased awaiting settlement represent payables for investments that have been contracted for but
not yet settled or delivered on 30 September 2024. Financial liabilities include amounts due to brokers and other
payables which are held at amortised cost using the effective interest rate method.
b) Recognition, measurement and derecognition
Financial liabilities are recognised initially at fair value, net of transaction costs incurred and are subsequently
carried at amortised cost using the effective interest rate method. Financial liabilities are derecognised when the
obligation specified in the contract is discharged, cancelled or expires.
2.4 Investment income
Dividends receivable on equity shares are recognised as revenue for the period on an ex-dividend basis and net of
withholding taxes, as the withholding taxes are deducted at source and are not a tax on profits. Interest income and
expenses are recognised in the Statement of Comprehensive Income using the effective interest rate method.
2.5 Expenses
Expenses are recognised on an accruals basis and are recognised in the Statement of Comprehensive Income.
2.6 Cash and cash equivalents
Cash includes cash at bank. Cash equivalents are short term, highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and are subject to an insignificant risk of
changes in value.
2. Material accounting policies (continued)
2.3 Financial instruments (continued)
Notes to the financial statements (continued)
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2.7 Trade receivables and trade payables
Trade receivables and payables represent securities sold and securities purchased, respectively, that have been
contracted for but not yet settled or delivered on the Statement of Financial Position date.
These amounts are recognised initially at fair value and subsequently measured at amortised cost. At each period
end, the Company measures the loss allowance on trade receivables at an amount equal to the lifetime expected
credit losses if the credit risk has increased significantly since initial recognition. If, the credit risk has not increased
significantly since initial recognition, the Company will measure the loss allowance at an amount equal to 12-month
expected credit losses.
Significant financial difficulties of the broker, probability that the broker will enter bankruptcy or financial
reorganisation and default in payments are all considered indicators that a loss allowance may be required. A
significant increase in credit risk is defined by the Directors as any contractual payment which is more than 30 days
past due.
2.8 Segmental reporting
The chief operating decision maker, which is the Board, is of the opinion that the Company is engaged in a single
segment being investment in UK micro-cap companies. The financial information used by the chief operating decision
maker to manage the Company presents the business as a single segment. Segment information is measured on the
same basis as that used in the preparation of the Company’s financial statements. The Company receives revenues
from the UK. The Company holds no non-current assets not listed in the UK.
2.9 Taxation
The Company has applied for and been granted exemption from liability to income tax in Guernsey under the
Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 as amended by the Director of Income Tax in Guernsey for
the current period. Exemption must be applied for annually and will be granted, subject to the payment of an annual
fee, which is currently fixed at £1,600 per applicant, provided the Company qualifies under the applicable legislation
for exemption.
It is the intention of the Directors to conduct the affairs of the Company so as to ensure that it continues to qualify
for exempt company status for the purposes of Guernsey taxation.
2.10 Share capital
Ordinary Shares are classified as equity in accordance with IAS 32 – “Financial Instruments: Presentation” as these
instruments include no contractual obligation to deliver cash and the Company is not obligated to apply the
redemption mechanism.
Costs directly attributable to the issue of new Ordinary Shares and redemption of existing Ordinary Shares are
shown in equity as a deduction from the proceeds.
Refer to note 11 for details regarding the redemption mechanism of Ordinary Shares.
2. Material accounting policies (continued)
Notes to the financial statements (continued)
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2.11 Capital risk management
The Board only considers retained earnings as capital, which in turn, are the financial resources available to the
Company. The Company’s capital as at 30 September 2024 was £68,975,249 (30 September 2023: £60,045,189).
The Company’s objectives when managing capital are to:
• safeguard the Company’s ability to continue as a going concern;
• provide returns for Shareholders; and
• maintain an optimal capital structure to minimise the cost of capital.
The Board monitors the capital adequacy of the Company on an on-going basis and all three of the Company’s
objectives regarding capital management have been met. The Company has no imposed capital requirements.
3. Investment income
Year ended
30 September
2024
Year ended
30 September
2023
£ £
Dividend income
1
587,561 780,431
Bank interest 36,993 37,745
Total investment income 624,554 818,176
1 Net of withholding taxes of £19,366 (30 September 2023: £74,111).
4. Portfolio management and performance fees
On 3 November 2014, the Company signed an Investment Management Agreement (the “IMA”) with the AIFM and the
Portfolio Manager, whereby the AIFM delegated to the Portfolio Manager overall responsibility for the discretionary
management of the Company assets in accordance with the Company’s investment objective and policy.
The AIFM or the Portfolio Manager may voluntarily terminate the IMA by providing six months’ notice in writing. The
AIFM’s power to terminate the appointment of the Portfolio Manager under the IMA may only be exercised under
the direction of the Board and the AIFM has agreed to comply with the instructions of the Board as regards to any
proposed termination of the Portfolio Manager’s appointment.
Under the IMA, the Portfolio Manager is entitled to receive a base fee and performance fee. The Portfolio Manager
base fee is payable monthly in arrears at a rate of one-twelfth of 0.75% of NAV. During the year ended 30 September
2024, the Company incurred management fees expense of £498,783 (30 September 2023: £458,720).
A performance fee equal to 15% of the amount by which the Company’s NAV outperforms the total return on the
Comparative Index over a performance period will be payable to the Portfolio Manager upon a redemption.
The performance period is the period between two redemptions, being the first business day after the calculation
date, (referable to the earlier redemption (opening date)), and the end day of the calculation date (referable to the
later redemption (closing date)). The first opening date was the date of admission and in circumstances in which a
performance fee may be payable upon termination of this Agreement, the final closing date shall be the date in which
the agreement is terminated. The calculation date is the date determined by the Board for the calculation of the price
to be paid on any particular exercise of the redemption mechanism.
The performance fee is only paid when the Company implements the redemption mechanism as detailed in note 11.
During the year ended 30 September 2024, no performance fees were accrued or paid by the Company
(30 September 2023: nil).
Notes to the financial statements (continued)
2. Material accounting policies (continued)
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5. Operating expenses
Year ended
30 September
2024
Year ended
30 September
2023
£ £
Administration fees 162,384 134,565
Directors’ fees 157,838 144,687
AIFM fees 58,000 58,000
Audit fees 53,000 64,550
Non-audit fees 17,000 23,000
Transaction fees 30,571 17,988
Broker fees 40,000 40,000
Custody fees 14,072 13,418
Registrar fees 27,236 27,882
Legal and professional fees 8,101 6,218
Listing fees 20,793 23,558
Regulatory fees 13,640 11,951
Insurance fees 6,265 6,390
Marketing fees 11,593 -
Sundry expenses 40,002 53,502
Total operating expenses 660,495 625,709
Non-audit fees
Non-audit fees incurred during the years ended 30 September 2024 and 30 September 2023 related to interim
review services performed by Grant Thornton Limited in the current year and PricewaterhouseCoopers CI LLP in the
prior year.
AIFM fee
The AIFM is entitled to an annual fixed fee of £58,000 per annum payable quarterly in arrears.
Custody fee
In its role as custodian, the Administrator is entitled to a fee payable by the Company on a transaction by transaction
and ad-valorem fee basis.
Registrar fee
The Company’s registrar is Computershare Investor Services (Guernsey) Limited. The registrar is entitled to an annual
maintenance fee plus disbursements.
Administration fee
The Administrator provides administrative, compliance oversight and company secretarial services to the Company.
Effective 1 July 2024, an updated fee schedule was implemented whereby the Administrator is entitled to an annual
fixed fee. Ad hoc services are chargeable for an agreed fee or on a time cost basis.
Broker fee
Singer Capital Markets Advisory LLP (“Singer”) provide corporate stockbroker and financial adviser services to the
Company, as the Company’s sole broker. Singer is entitled to a fee payable by the Company of £40,000 per annum.
Notes to the financial statements (continued)
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6. Directors’ fees and interests
Directors’ fees are listed in the Directors’ Remuneration Report on pages 51 and 52.
No pension contributions were payable in respect of the Directors. Directors’ fees were increased post year end,
refer to note 15 for further details.
The Directors held the following number of Ordinary Shares in the Company:
30 September
2024
30 September
2023
Ordinary
Shares held
Ordinary
Shares held
Andrew Chapman
1
n/a 15,009
John Blowers 14,559 5,653
Charlotte Denton
2
n/a 15,350
Ted Holmes 22,970 12,970
Mark Hodgson 7,721 7,721
Serena Tremlett
3
3,432 n/a
1 Andrew Chapman retired as a Director on 11 March 2024.
2 Charlotte Denton resigned as a Director on 1 May 2024.
3 Serena Tremlett was appointed as a Director on 1 May 2024.
7. Other receivables
30 September
2024
30 September
2023
£ £
Dividend receivable 61,422 252,144
Interest and other receivable 62 25
Total other receivable 61,484 252,169
The Directors believe that these balances are fully recoverable and therefore have not recognised any loss allowance
on 12-month expected credit losses.
Notes to the financial statements (continued)
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8. Financial assets held at fair value through profit or loss
The Company has invested in a portfolio of UK micro-cap companies in line with its investment strategy. These
investments are comprised of companies whose securities are admitted to trading on the AIM, with a free float
market capitalisation of less than £100 million at the time of purchase.
Fair value hierarchy
IFRS 13 ‘Fair Value Measurement’ requires an analysis of investments valued at fair value based on the reliability and
significance of information used to measure their fair value.
The Company categorises its financial assets according to the following fair value hierarchy detailed in IFRS 13 that
reflects the significance of the inputs used in determining their fair values:
Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived
from prices). This category includes instruments valued using: quoted market prices in active markets for similar
instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or
other valuation techniques where all significant inputs are directly or indirectly observable from market data.
Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where
the valuation technique includes inputs not based on observable data and the unobservable variable inputs have a
significant effect on the instruments valuation. This category includes instruments that are valued based on quoted
prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect
differences between the instruments.
Financial assets Level 1 Level 2 Level 3 Total
£ £ £ £
30 September 2024
Financial assets held at fair value through profit
or loss
66,668,888 - - 66,668,888
30 September 2023
Financial assets held at fair value through profit
or loss
59,625,665 - - 59,625,665
Notes to the financial statements (continued)
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Financial assets held at fair value through profit or loss reconciliation
The following table shows a reconciliation of all movements in the fair value of financial assets capitalised within Level
1 to 3 between the beginning and the end of the reporting period:
30 September 2024 Level 1 Level 2 Level 3 Total
£ £ £ £
Opening valuation 59,625,665 - - 59,625,665
Purchases during the year 16,057,690 - - 16,057,690
Sales proceeds during the year (18,487,491) - - (18,487,491)
Realised loss on financial assets held at fair value
through profit or loss
1
(4,030,780) - - (4,030,780)
Unrealised gain on financial assets held at fair value
through profit or loss
2
13,503,804 - - 13,503,804
Closing valuation 66,668,888 - - 66,668,888
Total net gain on financial assets for the year
ended 30 September 2024
9,473,024 - - 9,473,024
During the year ended 30 September 2024, there were no reclassifications between levels of the fair value hierarchy.
30 September 2023 Level 1 Level 2 Level 3 Total
£ £ £ £
Opening valuation 56,027,223 - - 56,027,223
Purchases during the year 11,578,453 - - 11,578,453
Sales proceeds during the year (10,448,555) - - (10,448,555)
Realised loss on financial assets held at fair value
through profit or loss
3
(7,993,136) - - (7,993,136)
Unrealised gain on financial assets held at fair value
through profit or loss
4
10,461,680 - - 10,461,680
Closing valuation 59,625,665 - - 59,625,665
Total net gain on financial assets for the year
ended 30 September 2023
2,468,544 - - 2,468,544
During the year ended 30 September 2023, there were no reclassifications between levels of the fair value hierarchy.
Please refer to note 2.3 for valuation methodology of financial assets held at fair value through profit or loss.
As at 30 September 2024 and 30 September 2023, none of the investments held are illiquid in nature and on this
basis are not subject to any special arrangements.
The carrying amount of the trade and other receivables/payables is a reasonable approximation of fair value because
of its short-term nature.
1 Realised loss on financial assets held at fair value through profit or loss is made up of £6,487,854 gain and £(10,518,634) loss.
2 Unrealised gain on financial assets held at fair value through profit or loss is made up of £19,391,473 gain and £(5,887,669) loss.
3 Realised loss on financial assets held at fair value through profit or loss is made up of £2,586,526 gain and £(10,579,662) loss.
4 Unrealised gain on financial assets held at fair value through profit or loss is made up of £16,414,946 gain and £(5,953,266) loss.
8. Financial assets designated at fair value through profit or loss (continued)
Notes to the financial statements (continued)
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Annual Report and Financial Statements 30 September 2024
9. Financial risk management
The Company’s activities expose it to a variety of financial risks; market risk (including price risk, interest rate risk and
foreign currency risk), credit risk and liquidity risk.
9.1 Market risk
a) Price risk
Price risk is the risk that the Company’s performance will be adversely affected by changes in the markets in
which it invests.
As at 30 September 2024, the Company held investments in a diversified portfolio of UK micro-cap companies,
comprising companies with a free float market capitalisation of less than £100 million at the time of purchase.
The relatively small market capitalisation of micro-cap companies can make the market in their shares illiquid.
Therefore, prices of UK micro-cap companies are often more volatile than prices of larger capitalisation stocks,
and even small cap companies.
While the Company does not include any specific limits placed on exposures to any industry sector, the Company
does have investment limits and risk diversification policies in place to mitigate market and concentration risk.
Investments limits in place include:
• the number of holdings in the investment portfolio will usually range from 30 to 50.
• no exposure in any investee company will exceed 10% of NAV at the time of the investment.
However, any significant event which affects a specific industry sector in which the investment portfolio has a
significant holding could materially and adversely affect the performance of the Company. To mitigate market
risk, the Board and Portfolio Manager actively monitor market prices throughout the financial period and meet
regularly to consider investment strategy.
Please refer below for sensitivity analysis on the impact on the Statement of Comprehensive Income and NAV of
the Company, if the fair value of the investments held at fair value through profit or loss at the year end increased
or decreased by 25% (30 September 2023: 25%):
30 September 2024
Financial assets
Increase
by 25%
Decrease
by 25%
£ £ £
Financial assets held at fair value through profit or loss 66,668,888 16,667,222 (16,667,222)
30 September 2023
Financial assets
Increase
by 25%
Decrease
by 25%
£ £ £
Financial assets held at fair value through profit or loss 59,625,665 14,906,416 (14,906,416)
The Directors consider a 25% (30 September 2023: 25%) movement to be reasonable given their assessment of
the volatility of the AIM market during the year ended 30 September 2024. The above calculations are based on
the investment valuation at the Statement of Financial Position date and are not representative of the period as a
whole and may not be reflective of future market conditions.
The Investment Manager’s S-PVT scoring for sustainability is used to rate all the Company’s investments from
S1 to S4. Investments categorised S1 and S2 have solid sustainability characteristics, investments categorised
S3 require sustainability improvement and investments categorised S4 would represent a sustainability barrier
to value creation. The ESG risk for the Company is currently evaluated to be minimal from a financial materiality
perspective. As at 30 September 2024, investments categorised S1 represent 26.9%, S2 represent 62.0% and S3
represent 11.1% of the Company’s NAV. The Company does not hold any investments in the S4 category. Further
details on the S-PVT scoring for sustainability can be found in the Portfolio Managers Report.
Notes to the financial statements (continued)
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b) Interest rate risk
Interest rate risk is the risk that the fair value of financial instruments and related income from cash and cash
equivalents will fluctuate due to changes in market interest rates. The majority of the Company’s interest rate
exposure arises on the level of interest income receivable on cash deposits. As at 30 September 2024, the
Company’s cash and cash equivalents were £1,769,894 (30 September 2023: £415,330).
The Company did not have any borrowings during the year (30 September 2023: £nil).
Financial assets held at fair value through profit or loss are equity investments and therefore the valuation of
these investments and income receivable is not directly exposed to interest rate risk.
Interest rate sensitivity analysis
If interest rates had changed by 100 basis points (“BP”) (30 September 2023: 100 BP), considered to be a
reasonable illustration based on observation of current market conditions, with all other variables remaining
constant, the effect on the net profit for the year would be as detailed below:
30 September
2024
30 September
2023
£ £
Increase of 100 BP (30 September 2023: 100 BP) 17,699 4,153
Decrease of 100 BP (30 September 2023: 100 BP) (17,699) (4,153)
c) Foreign currency risk
Foreign currency risk is the risk that the values of the Company’s assets and liabilities are adversely affected by
changes in the values of foreign currencies by reference to the Company’s functional currency, being Pound
Sterling.
The Company has not been exposed to any material foreign currency risk during the year.
During the years ended 30 September 2024 and 30 September 2023, all transactions were in Pound Sterling,
with the exception of several dividend income and cash transactions which were in USD. Although the Company
does not pursue a policy of hedging such currencies back to Pound Sterling, it may do so from time to time,
depending on market conditions. During the years ended 30 September 2024 and 30 September 2023 the
Company did not enter into currency purchase spot contracts to mitigate the foreign currency exposure.
As at 30 September 2024, USD cash in the sum of $149,451 (30 September 2023: $230,412) was held and
income receivable was $40,300 (30 September 2023: $37,050). Any reasonable change in foreign exchange rates
will have an immaterial impact and therefore no sensitivity analysis has been provided.
9.2 Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or
commitment that it has entered into with the Company. The Board of Directors has in place monitoring
procedures in respect of counterparty risk which is reviewed on an ongoing basis.
The Company’s credit risk is attributable to its cash and cash equivalents, trade receivables – securities sold
awaiting settlement and other receivables.
9. Financial risk management (continued)
9.1 Market risk (continued)
Notes to the financial statements (continued)
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Annual Report and Financial Statements 30 September 2024
The Company’s financial assets exposed to credit risk amounted to the following:
30 September
2024
30 September
2023
£ £
Cash and cash equivalents 1,769,894 415,330
Trade receivables – securities sold awaiting settlement 680,187 -
Other receivables (excluding prepayments) 61,484 252,169
Total assets 2,511,565 667,499
All cash is placed with BNP Paribas S.A., Guernsey Branch. BNP Paribas S.A. is publicly traded with a credit rating
of A+ (30 September 2023: A+) from S&P Global Ratings (formerly Standard & Poor’s).
Credit risk of cash and custodian is mitigated by the Company’s policy to only undertake significant transactions
with leading commercial counterparties.
All transactions in listed securities are settled for upon delivery using approved brokers. The risk of default is
considered minimal, as delivery of securities sold is only made once the broker has received payment. Payment is
made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to
meet its obligation.
The financial assets held at fair value through profit or loss are held by BNP Paribas S.A., Guernsey Branch, the
Company’s custodian, in a segregated account. In the event of bankruptcy or insolvency of the Administrator, in
its role as the Company’s custodian, the Company’s rights with respect to the securities held by the custodian
may be delayed or limited. The Company did not participate in stock lending during the year.
The Company measures credit risk and expected credit losses using probability of default, exposure at default
and loss given default. Management considers both historical analysis and forward looking information in
determining any expected credit loss. At 30 September 2024 and 30 September 2023, management consider the
probability of default to be close to zero as the counterparties have a strong capacity to meet their contractual
obligations in the near term. As a result, no loss allowance has been recognised based on 12-month expected
credit losses as any such impairment would be wholly insignificant to the Company.
9.3 Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulties in realising assets or otherwise raising funds
to meet financial commitments as and when these fall due for payment. Liquidity risk is monitored on an ongoing
basis by the Board of Directors and Portfolio Manager to ensure that the Company maintains sufficient working
capital in cash or near cash form to be able to meet the Company’s ongoing requirements to pay accounts
payable and accrued expenses.
In addition, the Company’s liquidity management policy involves projecting cash flows and considering the level
of liquid assets necessary to ensure the Company remains a going concern. The Company’s investments all
comprise of investments in companies whose securities are admitted to trading on AIM. The Company would
expect to be able to liquidate a sufficient number of investments within 7 days or less in the event cash was
required to cover expenses.
9. Financial risk management (continued)
9.2 Credit risk (continued)
Notes to the financial statements (continued)
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Annual Report and Financial Statements 30 September 2024
The tables below show the residual contractual maturity of the financial liabilities:
Maturity analysis of financial liabilities
30 September 2024
Less than
3 months
3 to 12
months
More than
1 year Total
£ £ £ £
Financial liabilities
Other payables and accruals (213,277) - - (213,277)
Total undiscounted financial liabilities (213,277) - - (213,277)
Maturity analysis of financial liabilities
30 September 2023
Less than
3 months
3 to 12
months
More than
1 year Total
£ £ £ £
Financial liabilities
Trade payables – securities purchased awaiting
settlement
(52,843) - - (52,843)
Other payables and accruals (203,366) - - (203,366)
Total undiscounted financial liabilities (256,209) - - (256,209)
In accordance with Article 23(4) (a) and (b) of AIFMD Directive, the AIFM has assessed that the financial assets
held at fair value through profit or loss held by the Company are not deemed to be illiquid in nature, and as such,
are not subject to any special liquidity arrangements and that the AIF has no new arrangements in place for
managing liquidity.
10. Other payables
30 September
2024
30 September
2023
£ £
Portfolio management fees 42,429 35,802
AIFM fees 14,624 30,352
Audit fees 44,500 64,550
Non-audit fees 17,000 23,000
Directors’ fees 40,950 32,369
Administration fees 48,459 10,000
Registrar fees 1,000 967
Custody fees 1,658 676
Sundry expenses 2,657 5,650
Total other payables 213,277 203,366
9. Financial risk management (continued)
9.3 Liquidity risk (continued)
Notes to the financial statements (continued)
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Annual Report and Financial Statements 30 September 2024
11. Share capital
Authorised
The authorised share capital of the Company is represented by an unlimited number of redeemable Ordinary Shares
at no par value.
Allotted, called up and fully paid
30 September 2024 30 September 2023
Number of
Ordinary
Shares
Stated
capital
Number of
Ordinary
Shares
Stated
capital
£ £
Balance as the start of the year 33,897,954 - 33,897,954 -
Balance as the end of the year 33,897,954 - 33,897,954 -
Each holder of Ordinary Shares is entitled to attend and vote at all general meetings that are held by the Company.
Each holder is also entitled to receive payment of a dividend should the Company declare such a dividend payment.
Any dividends payable by the Company will be distributed to the holders of the Company’s Ordinary Shares, and
on the winding-up of the Company or other return of capital (other than by way of a repurchase or redemption of
shares in accordance with the provisions of the Articles and the Companies Law), the Company’s surplus assets, after
payment of all creditors, will be distributed among the holders of the Company’s Ordinary Shares.
The Board anticipates that returns to Shareholders will be made through the Company’s redemption mechanism and
therefore does not expect that the Company will pay any dividends.
No dividends have been declared or paid during the year (30 September 2023: nil).
Issuance of Ordinary Shares
No Ordinary Shares were issued during the year ended 30 September 2024 (30 September 2023: no Ordinary
Shares issued).
Redemption mechanism
As the Company has been established as a closed-ended collective investment scheme, there is no right or
entitlement attaching to the Ordinary Shares that allows them to be redeemed or repurchased by the Company at
the option of the Shareholder.
The redemption mechanism allows the Board to redeem any number of shares at the prevailing NAV per share at the
calculation date, (being the date determined by the Board for the calculation of the price to be paid on any particular
exercise of the redemption mechanism), less the cost of redemption. This right will only be exercised in specific
circumstances and for the purpose of returning capital growth.
Accordingly, assuming the NAV exceeds £100 million, the Directors intend to operate the redemption mechanism to
return the NAV back to around £100 million in order to:
• enable the Company to exploit fully the underlying investment opportunity and to deliver high and sustainable
returns to Shareholders, principally in the form of capital gains;
• enable portfolio holdings to have a meaningful impact on the Company’s performance, which might otherwise be
marginal within the context of a larger fund; and
• ensure that the Company can continually take advantage of the illiquidity risk premium inherent in micro-cap
companies.
Notes to the financial statements (continued)
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Annual Report and Financial Statements 30 September 2024
Notes to the financial statements (continued)
The Directors are not obliged to operate the redemption mechanism and will not do so if:
• calculation and publication of the NAV has been suspended; or
• the Directors are unable to make the solvency statement required by Guernsey law; or
• other circumstances exist that the Board believes make the operation of the redemption mechanism undesirable
or impracticable.
Redemptions will, subject to compliance with all applicable law and regulation, be carried out pro rata to a
Shareholder’s holding of Ordinary Shares, but all redemptions will normally be subject to a de minimis value to be
returned of approximately £10 million (before costs). The Company will not redeem fractions of shares.
Redemptions will be recognised against the retained earnings of the Company.
The price at which any Ordinary Shares are redeemed under the redemption mechanism will be calculated by
reference to unaudited NAV calculations. To the extent that any redemption takes place at a time when the Ordinary
Shares are trading at a significant premium to the prevailing unaudited NAV, Shareholders may receive an amount
in respect of their redeemed Ordinary Shares that is materially below the market value of those shares prior to
redemption.
In order to facilitate any redemptions, the Company may be required to dispose of assets within the investment
portfolio. There is no certainty of the price that can be achieved on such sales and any sale price could be materially
different from the carrying value of those assets. Consequently, the value received in respect of redeemed Ordinary
Shares may be adversely affected where the Company is not able to realise assets at their carrying values. In addition,
during any period when the Company is undertaking investment portfolio realisations, it may hold the sale proceeds
(which could, in aggregate, be a material amount) in cash, which could impact the Company’s returns, until the
redemption is implemented, and the cash is distributed to Shareholders.
Investors should note that the redemption mechanism has a specific and limited purpose, and no expectation or
reliance should be placed on the redemption mechanism being operated on any one or more occasions or as to
the proportion of Ordinary Shares that may be redeemed or as to the price at which they will be redeemed. The
redemption mechanism may also lead to a more concentrated and less liquid portfolio, which may adversely affect
the Company’s performance and value.
In the absence of the availability of the redemption mechanism, Shareholders wishing to realise their investment in
the Company will be required to dispose of their shares on the stock market. Accordingly, Shareholders’ ability to
realise their investment at any particular price and/or time may be dependent on the existence of a liquid market in
the shares.
12. Basic and diluted profit per Ordinary Share
Year ended
30 September
2024
Year ended
30 September
2023
£ £
Total comprehensive income for the year 8,930,060 2,205,448
Weighted average number of Ordinary Shares during the year 33,897,954 33,897,954
Basic and diluted earnings per Ordinary Share 0.2634 0.0651
11. Share capital (continued)
Redemption mechanism (continued)
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Annual Report and Financial Statements 30 September 2024
Notes to the financial statements (continued)
13. NAV per Ordinary share
30 September
2024
30 September
2023
£ £
NAV 68,975,249 60,045,189
Number of Ordinary Shares at year end 33,897,954 33,897,954
NAV per Ordinary Share 2.0348 1.7714
14. Related party disclosure
The AIFM
The AIFM is a related party and is entitled to an annual fixed fee as disclosed in note 5. Mark Hodgson is the
Managing Director of the AIFM.
The Portfolio Manager
The Portfolio Manager is a related party and is entitled to management and performance fees as disclosed in note 4.
The Portfolio Manager and George Ensor held the following Ordinary Shares in the Company:
30 September
2024
30 September
2023
£ £
Portfolio Manager 3,109,578 3,140,230
George Ensor 90,194 90,194
The Directors
The Directors are entitled to remuneration for their services and hold Ordinary Shares in the Company as disclosed
in note 6.
All transactions between these related parties and the Company were conducted on terms equivalent to those
prevailing in an arm’s length transaction.
15. Material events after the Statement of Financial Position date
There were no events which occurred subsequent to the year end until the date of approval of the annual financial
statements, which would have a material impact on the annual financial statements of the Company as at 30
September 2024.
The increase in Director fees detailed in the Directors’ Remuneration Report was formally approved by the Board on
3 October 2024.
16. Controlling party
In the Directors’ opinion, the Company has no ultimate controlling party.
79River UK Micro Cap Limited
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Annual Report and Financial Statements 30 September 2024
Useful information for shareholders
(unaudited)
Alternative performance measures
In accordance with the European Securities and Markets Authority Guidelines on Alternative Performance Measures
(“APMs”) the Board has considered what APMs are included in the Annual Report and financial statements which
require further clarification. APMs are defined as a financial measure of historical or future financial performance,
financial position, or cash flows, other than a financial measure defined or specified in the applicable financial
reporting framework. APMs included in the financial statements, which are unaudited and outside the scope of IFRS
Accounting Standards, are deemed to be as follows:
NAV per Ordinary share
The NAV per Ordinary Share is the value of all the Company’s assets, less any liabilities it has, divided by the total
number of Ordinary Shares.
Performance since inception
The NAV total return measures how the NAV per Ordinary Share has performed on an annualised basis from the
original issuance of Ordinary Shares to 30 September 2024, taking into account capital returns. The Company has
not declared a dividend since inception.
The Board monitors the Company NAV total return against the Numis Smaller Companies plus AIM (excluding
Investment Companies) Index. Refer to page 4 for NAV total return vs Index total return analysis.
Share price premium or discount to NAV
The NAV per share is the value of all the Company’s assets, less any payables it has, divided by the total number
of Ordinary Shares. The Company’s share price may be higher or lower than the NAV, the difference is known as
a premium or discount. The Company’s premium or discount to NAV is calculated by expressing the difference
between the Ordinary Share bid price
1
and the NAV per share as a percentage of the NAV per share.
30 September
2024
30 September
2023
Ordinary
shares
Ordinary
shares
NAV per share (A) £2.0348 £1.7714
Closing share price
1
(B) £1.7400 £1.4200
Discount to NAV per share ((B-A)/A) (14.49)% (19.84)%
Capital returns
The Board is committed to achieving long term capital growth and, where possible, returning such growth to
Shareholders throughout the life of the Company. Furthermore, the Portfolio Manager has advised the Board that it
believes that a NAV of £100 million (at current market levels although this may change over time) would best position
the Company to take advantage of a portfolio of micro-cap companies and the Capital Redemption Mechanism
is in place to prevent the NAV significantly exceeding this figure. Refer to note 11 for further details regarding the
redemption mechanism.
1 Source Bloomberg
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Annual Report and Financial Statements 30 September 2024
Ongoing charges
Ongoing charges are calculated based on actual costs incurred in the year excluding any non-recurring fees in
accordance with the AIC methodology. Expense items have been excluded in the calculation of the ongoing charges
figure when they are not deemed to meet the following AIC definition:
“Ongoing charges are those expenses of a type which are likely to recur in the foreseeable future, whether
charged to capital or revenue, and which relate to the operation of the investment company as a collective
fund, excluding the costs of acquisition/disposal of investments, financing charges and gains/losses arising on
investments. Ongoing charges are based on costs incurred in the year as being the best estimate of future costs.”
Please refer below for a breakdown of the ongoing charges:
30 September
2024
30 September
2023
£ £
Total expenses for the year: 1,167,518 1,081,270
Expenses excluded from the calculation:
Sundry expenses (13,420) (15,000)
Transaction fees (30,571) (17,988)
Foreign exchange gains 8,240 3,157
Total ongoing charges for the year 1,131,767 1,051,439
The AIC’s methodology for calculating an ongoing charges figure is based on annualised ongoing charges of
£1,131,767 (30 September 2023: £1,051,439) divided by average NAV in the period of £65,956,099 (30 September
2023: £61,456,997).
The AIC’s methodology for calculating average NAV for the purposes of the ongoing charges figure is to use the
average of NAV at each NAV calculation date. On this basis the average NAV figure has been calculated using the daily
NAVs over the years ended 30 September 2024 and 30 September 2023.
The ongoing charges ratio for the year ended 30 September 2024 was 1.72% (30 September 2023: 1.71%).
Useful information for shareholders (unaudited) (continued)
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Annual Report and Financial Statements 30 September 2024
Company information
1 Formerly River and Mercantile Asset Management LLP.
2 BNP Paribas S.A., Guernsey Branch is regulated by the GFSC.
3 Appointed 12 March 2024.
Registered office
BNP Paribas House, St Julian’s Avenue, St Peter Port, Guernsey GY1 1WA
Portfolio Manager
River Global Investors LLP
1
, 30 Coleman Street, London EC2R 5AL
AIFM
Carne Global AIFM Solutions (C.I.) Limited, Channel House, Green Street, St Helier, Jersey JE2 4UH
Corporate Broker
Singer Capital Markets Advisory LLP, One Bartholomew Lane, London EC2N 2AX
Solicitors to the Company (as to English law)
CMS Cameron McKenna Nabarro Olswang LLP, Cannon Place, 78 Cannon Street, London EC4N 6AF
Advocates to the Company (as to Guernsey law)
Carey Olsen, P.O. Box 98, Carey House, Les Banques, St Peter Port, Guernsey GY1 4BZ
Custodian
BNP Paribas S.A., Guernsey Branch
2
, BNP Paribas House, St Julian’s Avenue, St Peter Port, Guernsey GY1 1WA
Independent Auditor
Grant Thornton Limited
3
, St James Place, St James Street, St Peter Port, Guernsey GY1 2NZ
Administrator and Company Secretary
BNP Paribas S.A., Guernsey Branch
1
, BNP Paribas House, St Julian’s Avenue, St Peter Port, Guernsey GY1 1WA
Registrar
Computershare Investor Services (Guernsey) Limited, 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port,
Guernsey GY1 2JP
Board members
John Blowers Chairman
Mark Hodgson
Ted Holmes Audit Committee Chair, effective 1 May 2024
Serena Tremlett Remuneration and Nomination Committee Chair and Management
Engagement Committee Chair, effective 1 May 2024
River UK Micro Cap Limited
BNP Paribas
St. Julians House
St. Julians Avenue
St Peter Port
Guernsey GY1 1WA
T: +44 1481 750850
E: rmmccosec@bnpparibas.com
www.river.global