GLIF.L Regulatory News (GLIF)

28 September 2015

GLI Finance Limited

(the "Company" or "GLI")

Audited Interim Results for the six month period ended 30 June 2015

Financial Highlights

· NAV growth of 2.9% during the period with NAV per share of 52.48p as at 30 June 2015 (31 December 2014: 51.00p).

· Annualised ROE of 16.26% at the top end of GLI's 10-15% target range.

· The value of new loans originated through GLI's platforms increased by 120% in the twelve months ended 30 June 2015 compared to the twelve months ended 30 June 2014.

· The GLI portfolio has increased by 35% between 31 December 2014 and 30 June 2015 from £106.9 to £144.6m. The increase is made up of a 24% increase in equity values held in SME platforms and a 139% increase in loans made to SMEs.

· 2.5p dividend paid (2.5p paid for the comparable period last year)

Operational and investment highlights

· In the period GLI made four new investments in SME finance companies, in accordance with its stated strategy. These were:

o Trade River USA, a non-bank online funding solution which finances trade, both cross-border and in the US

o MytripleA, a Spanish business finance platform meeting both the short-term and long-term financing needs of Spanish SMEs

o Open Energy Group, a financing platform for US commercial and small utility-scale solar projects.

o Funding Options, a UK on-line credit broker that matches lenders with borrowers and acts as a one-stop-shop for business finance

· On 30 June 2015, the 100% GLI owned subsidiary, GLI Asset Management Ltd ("GLIAM") secured its Protection of Investors ("POI") asset management license from the Guernsey Financial Services Commission ("GFSC") enabling GLIAM to manage collective investment schemes and general securities and derivatives. 'GLI Alternative Finance plc' (GLIAF), a closed end fund, was launched on 23 September 2015.

· GLI changed its regulatory status with the GFSC in the period from Authorised Collective Investment Scheme, re-registering as a Non-regulated Financial Services Business in March 2015.

· The Company headcount including the executive team has increased from seven employees at 31 December 2014 to nine at 30 June 2015. This increase and further additions since June 2015 are due to more resources being brought in-house and the expansion of the asset management business.

Geoff Miller, CEO said:

"GLI has continued its rapid transformation into a leading player within the SME finance sector globally. As a unique listed business we are the diversified play in a sector, which is beginning to attract a great deal of attention.

The focus for GLI for the remainder of 2015 is on completing the balance sheet transition, to better underpin and at least maintain the dividend, and on growing the existing platforms organically and potentially by acquisition.

We now have very significant origination potential, and this provides the wherewithal to potentially build a significant asset management business, that would be immediately accretive to shareholders.

In summary, we have spent the past three years positioning the business to take advantage of the alternative finance sector's growth dynamics and we should see real progress over the coming months, as we continue to capitalise on the growth opportunities in our markets.

GLI has a unique range of 19 SME finance platforms that span asset class and geography. We are now entering a phase of scaling these platforms significantly so that they can lend to a greater number of businesses and help GLI deliver enhanced returns for its shareholders."

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Please note that the Chief Financial Officer's Review is supplemented by charts in a document (the "Supplementary Document") which can be found at the following location: http://www.rns-pdf.londonstockexchange.com/rns/3114A_-2015-9-25.pdf

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Contact

GLI Finance Limited

Geoffrey Miller

+1 203 916 0003

+44 7408 830719

Panmure Gordon

Dominic Morley +44 (0)20 7886 2500

Peter Steel +44 (0)113 357 1152

Tom Salvesen

+44 (0)20 7886 2904

Camarco

Ed Gascoigne-Pees

+44 (0)203 757 4984

+44 (0)788 400 1949

Hazel Stevenson

+44 (0)203 757 4989

+44 (0)798 600 9720

GLI Finance Limited

For the period ended 30 June 2015

CHAIRMAN'S STATEMENT

I am pleased to report the results of GLI Finance Limited ("GLI" or the "Company") for the six months ended 30 June 2015.

Since the 2014 Annual Report the Company has continued to make significant progress in the transition away from US middle market lending, either directly or through collateralised loan obligations ("CLOs"), to providing SME lending through a range of alternative finance platforms in which the Company holds significant stakes.

It has been a busy six months and a significant amount of corporate activity has been going on, but the core activity of the business remains, as it always has, the provision of finance to the SME sector. The geographic focus has broadened, as envisaged in the amended investing policy approved by shareholders in December 2013, and the range of businesses financed has widened, but we remain a SME lender.

In the first half of the year we disposed of our remaining CLO Investment in Fair Oaks Income Fund "FOIF" for USD32.3m (GBP20.4m) and raised a further GBP20m in ordinary share capital in March 2015. The funds were subsequently used to fund the growth of loan origination within our family of platforms as well as funding the acquisition of four new platforms, taking the total to nineteen. The platforms which make up the GLI family provide lending diversity by duration, geography and asset type and also provide highly differentiated origination strategies. With our new expanded executive team, the platforms are able to benefit from the shared learning, common services and availability of capital from GLI.

Details of the platforms held by the Company are included in the report but the four new SME finance platform investments made in the first half of the year are as below.

· Trade River USA, a non-bank online funding solution which finances trade, both cross-border and in the US.

· MytripleA, a Spanish business finance platform meeting both the short-term and long-term financing needs of Spanish SMEs.

· Open Energy Group, a financing platform for US commercial and small utility-scale solar projects.

· Funding Options, a UK online credit broker that matches lenders with borrowers and acts as a one-stop-shop for business finance.

As with all of the platforms in which we have invested, these companies are seeking to provide an offering that is complementary to the mainstream banking sector, rather than attempting to compete directly with the banks. This is important, as we believe that this will ensure our businesses can maintain a strong market position across economic cycles, rather than being just a cyclical play due to the weakness of the banks after the financial crisis. We will continue to look at more opportunities as they arise and consider how they fit in our current portfolio, but it is not the intention to increase our portfolio of platforms significantly, as the focus will be on growing these companies and increasing their value.

Each quarter the Board reviews the valuation of the platforms on a fair value basis. We have independent valuations carried out which are also referred to. This period we have increased the valuations of a number of our platforms following significant progress in those businesses. As we have increased some, we also decrease in value those where we deem it appropriate in order to ensure we hold our assets at a fair value and on a conservative basis, as we have done with Raiseworks this period.

The Company has seen regulatory changes in the period which we view as an important step in GLI's progress, these changes are noted below:

- With effect from 27 March 2015, GLI ceased to be authorised by the Guernsey Financial Services Commission ("GFSC") as an Authorised Collective Investment Scheme and has been registered with the GFSC as a Non-regulated Financial Services Business. Although this includes the word 'non-regulated' we are actually more regulated than we have ever been and we aim to filter this regulation down to our platforms to ensure that we not only lead the way in regulatory strength within the alternative finance space, but also at the same time provide comfort to our shareholders.

- On 30 June 2015, our 100% owned subsidiary, GLI Asset Management Ltd ("GLIAM") secured its 'Protection of Investors ("POI") asset management licence from the GFSC, thereby enabling GLIAM to manage collective investment schemes and general securities and derivatives. GLI is currently progressing GLIAM's launch of 'GLI Alternative Finance plc' ("GLIAF"), a closed end fund focusing on a loan portfolio diversified by geography, size of loan, type of lending and duration which has been launched very recently, as announced on 21 September 2015.

Performance and Dividend

We are pleased to report that the Company continued to deliver a stable capital performance in the first half of 2015. During the sixth month period the Company paid 2.5p per share in dividends (vs 2.5p for the same period in 2014). Although in the future we will no longer be receiving the CLO investment income, it is expected in time that the newer investments will provide at least as high a total cash return as has been provided by the CLO portfolio, and hence the Board has maintained the dividend throughout the Company's period of transition. Our strategy to increase dividend cover is to increase the proportion of assets funded by Zero Dividend Preference Shares and to develop the asset management business. As both of these are delivered, so dividend cover will rise.

GLI Finance Limited

For the period ended 30 June 2015

CHAIRMAN'S STATEMENT (continued)

Performance and Dividend (continued)

Existing platforms continue to grow their businesses, deploying increasing amounts of GLI's capital across a wide range of maturities. Over the twelve months to the end of June 2015, the volume of loans originated through GLI's platforms totalled GBP227.4m, an increase of 120% compared to the twelve months ended June 2014.

Financials

As at 30 June 2015, the Company had net assets of GBP112.5m or 52.48p per ordinary share compared with net assets of GBP88.2m, or 51.00p per ordinary share at 31 December 2014, which represents a 2.9% increase in NAV per share in the first half of 2015.

The comparative Group numbers show net assets attributable to equity holders increasing from GBP73.4m as at 31 December 2014 to GBP92.9m as at 30 June 2015. The difference in the net assets at a Group and Company level represents the difference in accounting treatment of our subsidiaries and associates in the Group accounts versus fair value treatment of assets held in the Company's financial statements. The Board continues to believe that, at present, the performance of the net asset value at the Company level, as opposed to the Group consolidated level, is the more appropriate measure for the assessment of performance of the underlying business.

At the Company level, for the six months ended 30 June 2015, GLI received interest income, dividends and other income totalling GBP3.4m, compared to GBP5.6m for the comparable period. The decline can be attributed to the final exit from our CLO investments which, in the past, had generated returns in the high teens. The returns we now see are a combination of interest earned on loans to SMEs, which currently average around 10%, and changes to the value of our equity stakes in loan origination platforms, recognised in unrealised gains of GBP4.5m for the period. In the Chief Financial Officer's Report there is a reanalysed Company Statement of Comprehensive Income which provides a detailed breakdown and further insight into our costs and explains the variance against previous periods.

As the Company is classified as an investing company under the AIM Rules, we are required to have an investing policy. This is included at the end of the document after the financial statements.

The board is considering a proposal to issue, subject to market conditions, an additional line of zero dividend preference shares, which would rank behind the existing zero dividend preference shares. If such an issue were to proceed, a further announcement would be made in due course.

Public Affairs

Since October 2014, on behalf of the platforms, GLI has been working closely with HM Government in the UK to establish a clear route through which SMEs are referred, by banks, to alternative finance lenders and, more generally, raise awareness of alternative finance.

Significant progress has been made since initial meetings with Number 10 Downing Street in Autumn 2013 in which we were asked for answers to solve the SME finance crisis in the UK. Since then, legislation has been brought forward on the referral scheme, passed successfully through Parliament, and is in the process of being implemented by the British Business Bank, under the auspices of HM Treasury. We have been involved at every stage of the process, pulling together a wide range of stakeholders to ensure that alternative finance platforms are able to make the most of this opportunity.

At the same time as increasing Government support of efforts to improve access to alternative finance, representing the platforms, GLI has been successful at garnering and coordinating voices across the alternative finance sector to provide a challenge to a hugely well established and connected competitor in the form of mainstream banking sector. We also continue to lead the way in representing the voice of SME lenders across a broad spectrum of issues SMEs themselves are affected by (from late payments to retail banking competition). Such efforts extend from working closely with relevant civil servants to meeting Members of Parliament influential in the space.

We are also engaged with regard to significant developments in Europe and the US that may impact the environment within which our platforms operate. In the EU, the Capital Markets Union is a strong signal of the extent to which Brussels wants to see alternative finance play a bigger role in SME finance, and in the US, the Department of the Treasury has issued a request for information on expanding access to credit through online marketplace lending. 

Executive Team and Company Headcount

The Executive Team remained unchanged in the period with Geoff Miller (Chief Executive Officer), Emma Stubbs (Chief Financial Officer), Marc Krombach (Managing Director), Louise Beaumont (Head of Public Affairs and Marketing) and Andrew Whelan (Director of Lending).

The Company headcount, including its Executive Team, has increased from six employees at 31 December 2014 to nine at 30 June 2015. This increase and further additions since June 2015 are due to more resources being brought in-house, in particular within Finance, Compliance and Risk as well as due to the expansion of the asset management business. This is not only to meet the regulatory requirements of the many regulators with whom we now work globally, but also to put our platforms in a market-leading position in terms of risk assessment, mitigation and management.

GLI Finance Limited

For the six months ended 30 June 2015

CHAIRMAN'S STATEMENT (continued)

Corporate Strategy

Since the Company was founded in 2005, the objective has always been to provide a 10-15% return from the provision of SME finance and that remains the case. To achieve this, the corporate strategy has evolved over time, from an externally managed investment into third party originated loans and then to an internally managed finance company with the appointment of Geoff Miller as an Executive Director in April 2011. GLI is now a leading player in the alternative finance sector, managing a unique range of financing solutions for SMEs globally.

Sancus

In December 2014, we acquired 100% of Sancus Group Limited and I am pleased to report it has continued to see strong growth in its loan origination, having completed in excess of GBP135m of loans since inception. All loans are fully secured and the future pipeline is strong with the business on target to meet its budget for 2015. Sancus (Guernsey) Limited has received its Non-regulated Financial Services Business licence from the GFSC and we expect this business to start to contribute to Group and hopefully follow the Jersey operation's success to date. Sancus (Gibraltar) Limited became operational in June 2015 and has already completed three loans and a solid pipeline is developing; we expect this business to be profitable within its first year of trading. Sancus is also exploring the option of expanding into the Isle of Man, which could potentially be followed by the establishment of additional operations in other offshore jurisdictions such as Cayman and Malta.

Outlook

Whilst the majority of platforms are yet to reach profitability, we are confident as to the trajectory each is following and would expect most to be profitable this time next year. The next twelve months and beyond will be a period in which we begin the process of building each of these businesses to operate on a significantly larger scale. As the businesses grow, so there will be further opportunities to develop revenue streams to capture more of the value chain, such as the potential for GLI to manage third party funds to invest through our family of platforms. There will be further examples of potential areas we can exploit over time, but we will only do so where there is a manifest, relatively short term and measurable benefit to our own shareholders. Strategic expansion for its own sake could have proved a temptation in a fast growing market such as the alternative finance sector. However, recognising the danger of this, the Board linked the management remuneration policy to long-term returns for shareholders. We now think much of the hard work of assembling a coherent group of businesses with effective management teams is behind us. The future looks promising and, although there are bound to be challenges along the way, the potential for GLI Finance is considerable.

I would like to thank shareholders for their continued support and enthusiasm for the changes we have made over the past few years. We endeavour to run our Company in a manner which embraces shareholders of all sizes, and I am always grateful for any feedback that anyone wishes to provide.

Patrick Firth

Non-Executive Chairman

Date: 25 September 2015

GLI Finance Limited

For the period ended 30 June 2015

CHIEF EXECUTIVE OFFICER'S REVIEW

As we expected, 2015 has so far been a transformative and breakthrough year in many respects for our business and we continue to push ahead on many fronts to achieve our goal of being a leading player in SME finance globally. The business is much more than an entrepreneurially-driven company with ambitions of transformation into an SME finance company, we are now a well-resourced finance business lending to SMEs across three continents.

At the heart of the business is our partnership with the nineteen finance platforms in which we have equity stakes. In aggregate these platforms are beginning to originate substantial deal flow. Not all have developed at the same pace, of course, but we made the range of investments that we have in order that the resulting returns are at least as good as the industry, and we would hope better, for reasons that I will cover in my review.

As the origination increases within our platforms, one of the key objectives for the business is to ensure that we can still support our platforms through the provision of lending capacity. Until recently this has been through lending from our own balance sheet. However, with our asset management business receiving regulatory approval in the period, and subsequent to the period end our first closed end fund being launched, we can now provide lending capacity to the platforms through the funds managed by GLI Asset Management.

We have sought to target the institutional market rather than the retail market, since we believe that this money will be committed to SME finance as an asset class, rather than a shorter term yield play. For institutions wishing to access a broadly based SME finance portfolio, or indeed wishing to invest in particular areas of SME finance, our unique positioning in the market offers an ability to access finance platforms globally in a way that would be uneconomic to replicate within an institution. We are excited about the potential for the asset management business and, as the personnel within the asset management business begin to bring together the demand for SME finance asset exposure and our unique IP in the sector, the potential is substantial.

The period saw us increase our exposure to the "neutral platform" sector through the acquisition of a stake in Funding Options. The neutral platforms aggregate potential supply of lending from across banks and alternative finance providers and give SMEs and their advisers the ability to assess all available options across the market easily and quickly. Both Funding Options and Finpoint, our other neutral platform, will find out by the end of the year whether or not they have been designated by HM Treasury to receive the rejected applications for SME finance from the banks. This would be excellent news for either if achieved but, if not, both have robust business models as standalone businesses in any case.

During the period we completed our exit from exposure to CLOs through the sale of our holding in Fair Oaks Income Fund. Also in the period the final payment in respect of the termination of our contract with the managers of our original CLO holding, T2 CLO 1 Ltd, crystallised when Fair Oaks Income Fund called the structure. Whilst fund management fees have been a drag on performance until now, in the second half of 2015 we will see the first fund management fees accreting return to the business, as we build the asset management capability.

Our family of platforms has been built to be both complementary to one another, rather than directly competing, and each of the businesses operate in areas that are complementary to, rather than competing with, the existing financial ecosystem.

In the UK we can provide a wide variety of working capital and term lending solutions through our nine platforms. The increasing acceptance by SMEs of the use of non-bank lending has seen volumes begin to accelerate this year and there is very significant potential. In the offshore market, Sancus is also seeing very significant opportunities to accelerate its growth even further from the exceptional start it has made in its first eighteen months.

In the US, our five platforms focus mainly in asset backed lending, and are finding huge opportunities. Many of the businesses being financed were previously using Merchant Cash Advance (MCA) loans to fund their businesses. These loans can carry interest rates in excess of 50%, reflecting the lack of credit available to SMEs within the US. The MCA business has grown enormously in recent years and the reason for the growth is that many smaller banks that were once the mainstay of SME lending in the US have pulled out completely. This leaves a void that our platforms are seeking to fill, at rates significantly lower than what an MCA business would charge.

Within Europe, our businesses have enormous opportunities to exploit. Each of the businesses have been building their infrastructure to ensure it is not capacity constrained and although all three are already seeing significant growth, we see early 2016 as the point at which the exponential growth of these businesses will become apparent.

Ovamba, our sub-Saharan African business, is planning to develop its business from its original country, Cameroon, into neighbouring Francophone countries before moving into Anglophone West Africa. The opportunity available to the business far outstrips its potential to fulfil it, and the secret for success will be to pick and choose the very best opportunities.

To manage our global business requires a significant staffing up, although much less expensive than the management fees previously charged by external managers. We now have a staff of 23 in Guernsey and Jersey, between GLI and Sancus. Over the first six months of 2015 we have, in particular, added resources in Finance, Compliance and Risk. This is not only to meet the regulatory requirements of the many regulators with whom we now work globally, but also to put our platforms in a market-leading position in terms of risk assessment, mitigation and management.

GLI Finance Limited

For the period ended 30 June 2015

CHIEF EXECUTIVE OFFICER'S REVIEW (continued)

Risk is a critically important area for any finance business, and is one that I believe is often overlooked within the more technologically focused platforms that are emerging. We do not see risk as merely performing sound underwriting, providing transparency to investors and undertaking anti-money laundering checks, but a far more wide ranging topic that covers areas of the platform operations, as well as the borrower/lender interfaces. Whilst no business can eliminate risks completely, these can be mitigated, with any remaining risk monitored and managed. Some actions that we take, in cooperation with the platforms, include the following:

· Ethical Hacking - we have an ongoing programme of ethical hacking, with the permission of our platforms, to ensure that vulnerabilities are identified and addressed;

· Internal Audit - we monitor the compliance with each platforms' written underwriting policies and procedures, Anti-Money Laundering, Countering the Finance of Terrorism, Anti-Bribery policy;

· Segregation of client money - whilst our platforms ensure that client monies and corporate working capital is segregated and client monies ring-fenced, this is not universal in the industry; and

· Treating customers equally - it is a central tenet of our philosophy that all customers are equal, therefore we will not expect to have better access to loan assets than other investors seeking the same terms, we will not seek information that is not available to other investors to make a decision on a loan, we will not seek preferential treatment for one of our platforms on a neutral platform, and we will never seek as a corporate to buy assets ahead of a customer of our asset management business seeking the same asset.

The other area in which we have made significant progress this year is within the management of our balance sheet. We have stated that our intention would be to have a balance sheet that was 30% Zero Dividend Preference Shares (ZDPs) and 70% Ordinary Shares, and that this funds 30% equity holdings in platforms and 70% loans made through the platforms. Given the return received from the loans are expected to exceed the cost of our dividend, and the capital invested in zero yielding platform investments would be approximately equal to the capital raised from issuance of the ZDPs, our desired dividend cover should be achieved under the anticipated capital structure. We expect our first ZDP issue to be listed shortly and the Board is also considering a proposal to issue, subject to market conditions, an additional line of zero dividend preference shares, which would rank behind the existing zero dividend preference shares. If such an issue were to proceed, a further announcement would be made in due course. This will reduce the Company's cost of capital and will help underpin maintenance of the dividend.

In the longer term, there is the potential for the revenues from the asset management business to further supplement dividend cover. Given our desire for a sustainable dividend for the longer term, rather than the highest possible dividend in any one period, it is likely in that instance that dividend cover would be allowed to rise significantly before an increase in dividend is considered.

Outlook

The alternative finance market has comfortably grown by more than 100% in each of the last few years, but still represents a single digit percentage of the overall SME finance sector in the UK. Elsewhere in Europe and in the US, the opportunities are greater as the areas in which SMEs now struggle to obtain finance are larger. We expect continued rapid growth for the foreseeable future across all of our geographies.

The growth in the UK has been greatly assisted by the British Business Bank and, where it has led the way, other jurisdictions are now looking to follow. With the possible exception of the US, governments are seeking greater ways to facilitate SME lending, reflecting the fact that SMEs underpin economic prosperity in almost every country in the world.

As the industry begins to become a meaningful part of the overall financial ecosystem, so banks and other larger financial institutions are beginning to look at how they might participate in the sector. In certain areas it would make sense for the banks to outsource funding of loans to platforms. Our experience to date has been of many conversations and little actually happening, but this reflects the relatively slow pace of decision making within larger financial organisations.

We expect the impact of the designation of neutral platforms to receive rejected loan applications from the banks will be significant, both in terms of revolutionising the process of accessing credit but also it will begin to change the culture within banks themselves, that if rejected applications can be funded elsewhere they will need to consider the implications in terms of the opportunity cost of losing that customer.

Outside of our core jurisdictions there are still many areas in which SMEs struggle to get access to finance. We have ongoing dialogue with a number of jurisdictions on how they might work with GLI itself, with GLIAM or with our underlying platforms. As a result we would expect the geographical spread of our assets to diversify over time.

Globally, institutional interest in SME finance and in investing in platforms will grow but, in both cases, institutions struggle to find opportunities to invest a meaningful amount of capital. Given the wide range of businesses and loan assets to which we have access we believe GLI is ideally placed to build a successful asset management business.

GLI Finance Limited

For the period ended 30 June 2015

CHIEF EXECUTIVE OFFICER'S REVIEW (continued)

Turning to the outlook for the industry over the next twelve months, I see five key themes:

1. Origination becoming mainstream - although the levels of origination have been growing rapidly, they are only just beginning to become large enough to be considered any more than a rounding error in SME finance. Over the next twelve months that will no longer be the case and every SME lender will need to regard their newer competitors as just that.

2. Casualties likely to emerge - there are platforms that have little in the way of future funding, there are platforms co-mingling client monies with their own, there are platforms with poor underwriting. As the industry grows, this will cause a degree of fall-out in terms of some of the early entrants into the sector.

3. Mergers and Acquisitions - partly as a result of the fact that there are some stresses within some businesses, but also as importantly, because platforms are now able to see who is doing relatively well or badly and can better assess relative value, it is likely that M & A activity starts to kick off in the sector in a meaningful way. We are likely to be an active participant in this consolidation, where we feel a deal can add significant value. We have twice grown our own business significantly through acquisition, and hence we are well placed to guide our family of platforms through such transactions.

4. Profitable growth, not just growth - as the sector matures we will expect much more focus on profitable growth for the platforms, as opposed to growth for its own sake. By the end of next year we will expect to be judged not by the growth potential of our platforms but by their profit potential. Finance businesses should be inherently cash generative, and our platforms are no exception.

5. Major financial institutions will enter the space - there is no doubt that all major finance institutions are looking at what they should be doing in this space and whether through partnerships, start-ups or acquisitions, it is likely that the bigger finance institutions will be part of the sector by the second half of 2016.

As explained above and elsewhere in my review, I believe that GLI is well-positioned to benefit from these key themes and take advantage of the opportunities presented as the industry continues to grow and reach maturity.

Conclusion

GLI Finance has continued its rapid transformation into a leading player within the SME finance sector globally. As a unique listed business we are the diversified play in a sector, which is beginning to attract a great deal of attention.

The focus for GLI for the remainder of 2015 is on completing the balance sheet transition, to better underpin and at least maintain the dividend, and on growing the existing platforms organically and potentially by acquisition.

We now have very significant origination potential, and this provides the wherewithal to potentially build a significant asset management business, that would be immediately accretive to shareholders.

In summary, we have spent the past three years positioning the business to take advantage of the alternative finance sector's growth dynamics and we should see real progress over the coming months, as we continue to capitalise on the growth opportunities in our markets.

Geoffrey Miller

Chief Executive Officer

Date: 25 September 2015

GLI Finance Limited

For the period ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW

The first half of 2015 saw exciting developments with a number of corporate transactions completed and a change in the Group's regulatory status from an Authorised Collective Investment Scheme to a Non-regulated Financial Services Business. We also established a 100% owned subsidiary, GLI Asset Management ("GLIAM") in the period which obtained its POI (Protection of Investors) licence on 30 June 2015, thereby paving the way for us to proceed as planned with our asset management business. As indicated in prior reports, our wish has been to fully exit our CLO holdings and this was completed in March 2015 following the sale of our holding in FOIF. This sale, generating GBP13.525m was put to work in acquiring four new complementary SME platforms resulting in a total of 19 platforms. A GBP20m placing, also in March 2015, provided further funding for our portfolio where we are seeing an increase in loan origination.

This takes us onto GLIAM, which will become an integral part of GLI's business model. This will enable us to support and grow our family of SME platforms by providing funding via managed funds as well as fund manager expertise in the alternative finance space. Already revenue generating, with the launch of our first closed end fund on 23 September, the asset management business provides GLI with a non-interest income stream to complement our interest income from our loan portfolio, and a third leg of return, in addition to the uplift in the valuation of our equity holdings in SME platforms.

With the introduction of GLIAM and the increasing number of platforms within our portfolio, we have increased the Company's headcount and as noted in the Chairman's Statement, the staff number for GLI excluding the subsidiaries has risen from six in December 2014 to nine in June 2015 and this currently stands at eleven at the date of this report.

Income

In the first six months of 2015, higher interest on lending activity in the period was offset by a reduction in CLO income compared to the same period in 2014. With the loan book currently seeing significant growth coupled with robust average interest rates charged on those loans, we expect interest income to quickly substitute and outstrip the levels of CLO income that came to an end following the disposal of the CLO portfolio.

(Please see Figure 1 in the Supplementary Document)

Company Summarised Results

As noted in the Chairman's Statement, we look at Company results as opposed to Group results to get a good understanding of how GLI is performing. A full reanalysed comprehensive income statement is included on page 25 which strips out the effects of movements in foreign exchange and unrealised and realised gains and losses.

The Company operating income and reanalysed profit numbers of GBP3.9m and GBP0.3m respectively are shown above. In the first six months of 2015, in light of the lower income levels and higher financing costs, reanalysed profit in the period decreased - we refer to page 25 for detailed consideration of the development of this number. Reported profit however showed an increase, primarily due to the impact of revaluations on the realised/unrealised gains/losses account, further information on the platforms valuations is discussed later in this report.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Portfolio update

At 30 June 2015, GLI's investment portfolio was valued at GBP144.6m, compared to GBP106.9m at 31 December 2014, representing a 35.3% increase. Below and on the following pages, the portfolio is analysed by investment type and geographical split.

Asset Class

Following the FOIF disposal in March 2015, the Company no longer held any CLO assets at 30 June 2015. The investment portfolio consisted as at 30 June 2015, entirely of equity holdings of ordinary and preference shares in SME Platforms (GBP61.3m) and loans to SMEs (GBP83.3m). We refer to the following pages for detailed consideration of how platform loans and holdings have developed over the period.

(Please see Figures 2 and 3 in the Supplementary Document)

Geographical Split

From December 2014 to June 2015, a higher asset weighting towards UK assets can be observed. This is attributable to the disposal of the CLO assets (US based) over the past six months, however, we expect the US weighting to increase in the future due to anticipated strong growth by the US platforms.

(Please see Figures 4 and 5 in the Supplementary Document)

SME Platforms

The total value held in SME Platforms has increased from GBP49.3m at 31 December 2014 to GBP61.3m at 30 June 2015. This upwards movement is due to the investment in four further platforms since the year-end, increasing our stakes in some of our existing platforms and the overall rise in the valuation of the platforms that were revalued in the period.

As has been the case in prior years, the Board, informed by valuations carried out on its behalf by independent accountants, has considered the fair value of selected platforms and where applicable has adjusted the valuation of the platforms.

Loan activity

As can be seen below, the loan activity in our family of platforms has increased significantly in the 12 months to 30 June 2015. The number of loans completed in the period increased by 44.9% from 2014 to 2015 while the average loan size increased by 51.9% over the same period.

(Please see Figures 6 and 7 in the Supplementary Document)

The increases in loan volumes and average loan values resulted in a 120% increase in the value of new loans made by the platforms when comparing the twelve months to 30 June 2015 to the equivalent period ending 30 June 2014.

(Please see Figure 8 in the Supplementary Document)

Below and on the following pages, in alphabetical order, we have included a short summary and performance overview for each of the 19 platforms within the GLI Family.

BMS Finance

The Company has a 66.7% equity stake in GBHL which at 30 June 2015 had an equity value of GBP1.8m (30 June 2014 GBP1.2m).

GBHL comprises a 100% interest in BMS Finance AB Ltd ("BMS") the UK operating business, a 100% interest in Noble Venture II Nominees Ltd ("NV2N") which is dormant, and a 95% interest in NVF Tech Ltd (previously named HiWave UK) ("NVF").

BMS Finance provides senior secured lending between GBP0.5m and GBP5m to predominantly UK SMEs at or approaching profitability.

The growth in the ordinary shares with BMS from GBP1.6m in December 2014 to GBP1.8m at 30 June 2015 reflects an increase in the NAV of BMS.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

The funding for the BMS Finance loan portfolio is derived partly from the BMS Finance balance sheet, partly from GLI and partly through an institution, under a matched funding agreement. Towards the end of 2013, BMS agreed a GBP15m matched funding facility with this institution, this GBP15m was matched by GBP7.6m from BMS Finance and GBP7.5m from GLI of which, at the end of June 2015, GBP0.7m remains undrawn. In addition, GLI has a GBP18.1m loan note with GLI BMS Holdings that is repayable in November 2018 by GLI BMS Holdings.

The growth in the GLI loan book from December 2014 to June 2015 is a result of GBP3.7m of drawdowns on this facility in order to support BMS's growing loan book.

Loan activity

As at 30 June 2015, total BMS Finance lending was circa GBP66 million to approximately 46 borrowers.

Outlook

The loan book for BMS continues to develop, primarily in the UK although the company does now have some exposure to Ireland, and this may increase over time. Having originally been a pure balance sheet lender, when GLI funded the management buyout in 2012, the company has built up third party capital through its matched funding arrangements. As the proportion of third party capital managed grows, the profitability of the core business will increase.

Crowdshed

GLI acquired an initial 46.8% equity stake in Crowdshed (expected to reduce to 25% over time) for GBP0.6m in February 2014, giving GLI exposure to the fast growing financial crowd funding industry. This equity stake reduced in July 2014 to 32.51%. CrowdShed will also provide opportunities for GLI to participate in a variety of assets as different products and funding campaigns are launched on the platform. 

CrowdShed is an online funding platform enabling UK entrepreneurs, social enterprises, creatives and good causes to raise funding for specific projects from donors, in return for rewards. CrowdShed has an orientation to SMEs with the rewards and donation platform providing a space for market validation. It is intended that Crowdshed develops both equity crowd funding and crowd lending products to facilitate growth.

Outlook

At present Crowdshed has mainly been operating in the rewards and donations space, but we are examining options for developing the business within our core loan business for the future.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Dansk Faktura Børs

European Receivables

GLI has a 5% equity stake (as at 30 June 2015) in Dansk Faktura Bors (DFB). This stake was purchased in February 2014 in exchange for DKK4.5m (GBP0.5m). At 30 June 2015, the valuation remained at cost, but the adverse FX fluctuation resulted in the carrying value reducing to GBP0.4m.

DFB is an invoice discounting business, currently operating principally in Denmark but also with the potential to broaden its reach across Europe.

Loan activity

As at 30 June 2015, DFB had processed over 1,550 auctions, over 2,290 invoices, resulting in a total aggregate value over 155 million DKK (circa 20.5 million Euros).

Outlook

According to DFB management, traction is increasing as Denmark starts to embrace invoice finance and as a result June and July 2015 were the platform's best months to date. Looking at the pipeline, management considers it to be highly promising. Currently all of the investors on the platform are fully invested, as such, management are working hard to secure more money on the platform in order to take on this additional flow.

Dansk is expecting to reach break-even point in the coming months and are optimistic that profitability will then increase as higher volume come on to the exchange.

Finexkap

In July 2014 the Company acquired an initial 36.6% equity stake in Finexkap for EUR3.0m of ordinary shares. As planned, the equity stake was reduced to 26.4% through share dilution in November 2014.

Finexkap offers a short-term funding solution with no volume or timeframe conditions. The service focuses on easy-to-use features - in just a few clicks, French SMEs can sell their receivables and gain access to working capital financing with competitive advantages compared to traditional factoring services. Finexkap is based on an innovative financial securitisation structure. In practice, this issuance of securitized paper is carried out by Finexkap's subsidiary, Finexkap AM, which holds an alternative investment fund manager licence from the French Financial Markets Authority.

The Board increased the valuation of the 26.4% equity stake as at 30 June 2015 due to the significant progress in Finexkap's business as a result of accelerated origination growth.

Loan activity

Since Finexkap launched its activities in January 2015, the platform has received more than 3,000 applications from small to mid-sized companies leading to EUR6m worth of receivables purchased from eligible companies. With Q1-Q2 2015 compound growth of approx. 250% and 97% of clients returning and using the services on average every 18 days, Finexkap aims at becoming the leading alternative French Fintech platform for short-term financing. As at 30 June 2015, 582 receivables had been purchased amounting to circa 5.8 million Euros in total volume.

Outlook

Following a ramp-up phase, the management team expects a strong pipeline of strategic partnerships to be announced in the near future.

Finexkap is focusing on market penetration, risk management and technological integration with its partners in the coming months. Management are confident profitability will be reached upon achieving these mid-term objectives.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Finpoint UK

GLI has a 75% equity stake in Finpoint UK (as at 30 June 2015). Finpoint UK is a venture between CRX (the German company that owns Finpoint) and GLI.

Finpoint connects SME business owners, finance directors and intermediaries with a network of 60+ banks and alternative lenders in the UK. Finpoint's free-to-use online lending platform lets SMEs and intermediaries post their business finance requirements anonymously, helping small companies to get finance offers from multiple lenders through a single application process.

Finpoint is currently responding to the British Business Bank's Request for proposals to become a designated Neutral Finance Platform, having successfully passed the Expression of Interest stage. Companies which become designated as Neutral Finance Platforms by HM Treasury, on the recommendation of the British Business Bank, will receive referrals from the ten banks designated to refer businesses that they decline for finance under the Small Business, Enterprise and Employment Act 2015. Current published guidance indicates that the British Business Bank expects, by December 2015, to submit advice to HM Treasury on which platforms should be designated.

Loan activity

As at 30 June 2015, Finpoint had processed loans with an aggregate volume of GBP14.5m.

Outlook

In association with PwC, the UK's largest accounting and advisory practice, Finpoint is offering a 'Readiness Assessment' at no cost to the borrower. This service, in cooperation with the Leeds City Local Enterprise Partnership, helps to streamline the loan application and contribute to a higher acceptance rate from lenders.

Additionally, together with the NACFB - The National Association of Commercial Finance Brokers, based in London, Finpoint will be offering a white label platform solution to the Association's 1,500 members (and customers), and through them thousands of underlying SMEs by the end of the year.

Finpoint's business plan indicates positive cashflow for the last quarter of 2016.

FundingKnight

GLI has a 24.81 per cent equity stake in FundingKnight (as at 30 June 2015). GLI initially invested GBP1.5 million in July 2013 for a 20 per cent stake. An additional 4.8 per cent was purchased in February 2015 for GBP0.74m, as a result of GLI's participation in a rights issue.

FundingKnight provides SME finance through crowd lending from a broad base of investors. As well as business loans, FundingKnight provides finance for property bridging and green energy projects.

The introduction of two new products, a bridging loan and the funding of small scale wind turbine projects, as well as an increase in the maximum loan size, has accelerated origination growth. As such, to support growth, GLI has significantly expanded its loan book over the past six months, increasing from GBP4.6m at 31 December 2014 to GBP12.3m at 30 June 2015.

Also, in light of FundingKnight's progress, the Board reviewed the fair value of the holding at 30 June 2015 and this led to a higher valuation of GBP3.7m.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Loan activity

In late 2014 FundingKnight decided to diversify its product range to introduce green energy projects and property bridging alongside business lending. This widened FundingKnight's appeal to investors, borrowers and introducers, and has strengthened origination growth. As such, to support growth, GLI has significantly expanded its loan book over the past six months, increasing from GBP4.6m at 31 December 2014 to GBP12.3m at 30 June 2015.

As at 30 June 2015, total FundingKnight lending was circa GBP18m across 170 loans.

Outlook

Throughout 2015, business volumes have been growing at nearly 300%, outstripping the P2B lending market which is growing at 125%. In the current financial year (ending 31 March 2016) net revenues to date are up by over 300%. With an exceptionally strong and diversified pipeline, management expect to maintain or increase the current rate of growth.

Funding Options

In May 2015, GLI invested GBP1.25m in return for a 28.9% equity stake in Funding Options Ltd. In addition, GBP0.7m of preference shares were purchased.

Funding Options uses proprietary online technology to scan the alternative finance market for the most suitable funding options available. Mixing sophisticated matchmaking tools, accessible expert support and practical education materials, Funding Options has helped UK SMEs to access the borrowers they seek.

As for Finpoint (see above), Funding Options is currently responding to the British Business Bank's Request for proposals to become a designated Neutral Finance Platform, having successfully passed the Expression of Interest stage.

Loan activity

As at 30 June 2015, Funding Options' total lending was circa GBP10.8m.

Outlook

Following investment from GLI Finance in April 2015, Funding Options has grown its lead generation significantly, which is now beginning to show in deal volumes; the management team intend to broadly maintain current activity levels through 2015. 

Funding Options is, on the basis of its current business, on target to deliver breakeven on existing momentum by the end of 2016. Achieving Neutral Finance Platform designation would provide Funding Options with an opportunity to exceed this target by a significant margin.

LiftForward

GLI has a 20.9% equity stake in LiftForward as at 30 June 2015.

LiftForward operates marketplace loan platforms which provide loans to small businesses and high-yielding debt products to investors. It partners with suppliers, retailers and manufacturers in order to provide financing to their small business customers in the US. Its most important partnership currently is that with Microsoft Stores, although there is a strong pipeline of other large potential partners, and the model is very scaleable.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

The Board increased the valuation of the 20.9% equity stake as at 30 June 2015 due to the significant progress in LiftForward as a result of accelerated origination growth.

Loan activity

As at 30 June 2015, LiftForward's total lending was circa USD8m across 339 loans.

Outlook

To the end of the third quarter, actuals plus pipeline stands at USD7-8m. Fourth quarter pipeline is trending to USD10-12m on current performance and LiftForward expects to achieve profitability by the end of November 2015. To reflect the scale of the potential size of the opportunity that the company has available, it has agreed USD250m of lending capacity with Varadero and GLI.

MytripleA

On 31 March 2015, GLI held a convertible loan note with MytripleA for EUR0.7m. On 5 May 2015, this was converted to a 9.9% equity stake resulting in a EUR0.4m (GBP0.3m) equity holding.

MytripleA is a Spanish business finance platform meeting both the short-term and long-term financing needs of Spanish SMEs. MytripleA offers investors three products; 1) insurance-guaranteed loans for more conservative investors, 2) non-guaranteed loans offering investors higher risk and higher return, and 3) receivables finance.

Loan activity

MytripleA, has a GBP0.5m loan book, represented by a loan with the Company of GBP162k, and GBP354k of loans through the platform.

Outlook

MytripleA has seen a 132% increase in the number of financing applications from Spanish SMEs over the last 6 months. This increase has been driven by 24 origination partnership agreements and another 15 agreements currently being negotiated. MytripleA expects to continue to grow during 2015 and 2016 while keeping a robust underwriting process and reach profitability during 2017.

Open Energy Group

GLI has a 21.6% equity stake (as at 30 June 2015) in The Open Energy Group following its investment of USD1.25m in March 2015.

The Open Energy Group is a financing platform for US commercial and small utility-scale solar projects. It provides financing solutions to support the growth of commercial and utility-scale solar infrastructure, using a market place to direct investment from institutional and accredited investors to borrowers based on a foundation of technology-driven underwriting processes.

Loans are typically USD0.5m - USD5m and the terms range from 7 to 15 years.

The investors earn attractive yields on a risk-return basis from OEG Green Notes that are backed by cashflows from high quality solar power generation assets with strong long term power contracts. Accredited and Institutional investors choose their investments from a marketplace, and investments start from USD5k.

OEG has a revolving loan facility with the company of USD5.0m with USD0.5m drawn as at 30 June 2015.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Loan activity

As at 30 June 2015, OEG's total lending was circa USD1.9 million across four loans.

Outlook

OEG is on target to fund USD10m of loans in the next couple of months and has a 2015 year-end aggregate funding target of USD15m. The pipeline currently stands at USD50m. OEG's target for profitability is in Q1/Q2 2016.

Ovamba

GLI has a 20.48% equity stake (as at 30 June 2015) in Ovamba.

Ovamba matches investors who want to provide fully secured short term operational and purchase order finance to qualified African SMEs.

At 30 June 2015, of the EUR3.0m revolving loan facility available to Ovamba, EUR0.9m has been drawn down.

Loan activity

Ovamba began writing modest amounts of business in 2014. After gaining greater comfort with its systems and processes, the business has deployed GBP0.6m of capital throughout the half year period with the majority of that occurring in the latter months.

Outlook

Following a significant step up in growth since the period end, Ovamba's October pipeline shows sustained demand of approximately EUR10m per month - which spikes to EUR20m during key shopping / trade seasons. Ovamba was profitable on a local country operations basis in July 2015 and enterprise-wide profitability is expected to be reached within the next 12-18 months.

Platform Black

GLI has a 31.9% equity stake in Platform Black (at 30 June 2015) following its initial GBP2.0m investment in September 2013 for a 20% equity stake and following a share swap arrangement in March 2015, a further 11.9% of equity was added.

Platform Black is an innovative online trading platform that matches owners of invoices for which they need immediate payment to holders of funds looking to invest. It enables UK businesses to auction their invoices to the best funder - the owner of the invoice sets the maximum cost of finance, and funders bid the price down to give the business the lowest cost of finance, meaning access to funds at really competitive costs. In addition to Invoice Trading and Instant Funding, Platform Black also offers Supply Chain Finance - which allows suppliers to finance customer-validated invoices on attractive terms.

The Company's decision to increase GLI's stake in Platform Black, along with other changes to its share register, reflects the significant recent operational and personnel changes made by the company's management. We believe that Platform Black today is a much stronger business than it was a year or so ago, with the resilient processes and procedures that give it the potential to accelerate profitable growth, through its supply chain finance and partnerships businesses. The fact that we are happy to increase our stake in Platform Black, in exchange for new shares in GLI, reflects the confidence we have in the business.

More recent growth has come from supply chain finance, and we would expect this, and strategic partnerships with organisations that could provide multiple invoices for auction as being key to the acceleration of growth in 2015. A number of such relationships are being discussed.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

At 30 June 2015, the Board increased the valuation of the Ordinary Shares to GBP1.6m from GBP1.0m at 31 December 2014 after consideration of the independent report and reflecting the growth within the business.

The amount of loans held by GLI at 30 June 2015 totalled GBP2.3m, representing GBP1.2m of Platform Loans and a further GBP1.1m of convertible loan notes.

Loan activity

As at 30 June 2015, total Platform Black invoice value was GBP91.8m with GBP81.9m advance amount across 198 auctions.

Outlook

Platform Black has a strong pipeline of strategic partnerships and supply chain finance relationships, which should both drive volumes significantly higher and take the business into profitability in 2016.

Proplend 

GLI has a 22.5% equity stake (as at 30 June 2015) in Proplend which was acquired in March 2014 for GBP0.5m ordinary shares and with the option of acquiring up to GBP0.5m of preference shares.

Proplend is a Peer-to-Peer lending platform that connects investors directly to borrowers with loans secured against UK income producing Commercial Property. Proplend specialises in meeting the loan requirements of the underbanked sub GBP5m loan market. All loans are supported by a 1st legal charge. Lenders are given the ability to select multiple loans based on the property, the LTV, the loan term and their risk and return appetite.

Loan activity

As at 30 June 2015, Proplend's total lending was circa GBP2.9 million across six loans.

Outlook

Proplend is currently working through a very strong deal pipeline of over GBP10m originated from its team.

Based on current performance, Proplend management projects that the business will achieve profitability in the next 12-18 months.

Raiseworks

GLI has a 62.5% equity stake (as at 30 June 2015) in Raiseworks following its initial USD1.5m investment in December 2013 in exchange for 50% and a top-up investment in October 2014 for a further 12.5%.

Raiseworks provides loans to small businesses in the US. The Platform aims to improve small business access to capital and leverages technology to lower the cost of loan application processing. The typical size of a loan/financial package is between USD25k and USD75k, but can be from USD10k up to USD250k.

In December 2014, the equity valuation was increased to reflect the valuation implied by the equity investment in the company. As progress subsequently has not been as fast as we would have hoped, the Board has since reviewed the valuation and considered it prudent to reduce it to cost value of USD4m.

Loan activity

As at 30 June 2015, total lending was circa USD0.6m across five loans.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Outlook

GLI is currently reviewing strategic options for Raiseworks, in order to ensure that the business returns to the growth trajectory expected a year ago. The US remains a key market for GLI and Raiseworks is an ideal platform from which to exploit the opportunity.

Sancus

Sancus has been a wholly-owned subsidiary of GLI since December 2014.

Sancus provides secured lending to asset rich, cash constrained borrowers. It also provides co-lending opportunities to high value clients. The average loan is GBP2.1m. Activities are focused on offshore jurisdictions.

The valuation of the 100% equity stake was increased from GBP17.75m at 31 December 2014 to GBP20.6m at 30 June 2015 following the Director's revaluation in the period. This was based on the growth in the loan book since acquisition and the progress made in establishing operations at the Gibraltar subsidiary.

GLI's loan book with SGL, consists of a GBP22.8m inter-company loan and GBP3.0m of loans through the platform.

Loan activity

As at 30 June 2015, total SGL lending was circa GBP115 million across 45 transactions.

Outlook

Sancus is confident of reaching and potentially exceeding its profitability target for the full year period.

The Credit Junction

GLI invested USD1.5 million in The Credit Junction ("TCJ") in September 2014 for a 23.1% equity stake (which remained unchanged as at 30 June 2015). The higher current equity valuation of GBP2.2m (USD3.5m) from December 2014 onwards reflects an additional equity transaction agreed with a third party.

TCJ is a technology-enabled, online lending platform focused on providing working capital and supply chain financing solutions to small and mid-size US businesses. The company employs an asset-based lending credit evaluation model, and by doing so, can now offer businesses up to USD2m in capital availability.

TCJ completed its first transactions in the first quarter of 2015 and GLI entered into a Promissory Note Agreement to the value of USD0.75m (GBP0.5m), repayable by February 2017.

Outlook

TCJ launched its platform in April 2015 and began making its first loans during the second quarter of 2015. The company continues to see tremendous demand for its product and is highly encouraged by the growth trajectory of its loan pipeline. As TCJ looks to 2016, the company believes it is well positioned to capitalize on the changing financial services landscape and execute on its growth and business objectives.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

TradeRiver

GLI has a stake of 46.7% (as at 30 June 2015) in the equity of TradeRiver and it has also provided TradeRiver with debt finance.

TradeRiver is a non-bank online funding platform which finances trade, both cross-border and in the UK. It provides businesses with finance to purchase goods and services through an online platform. Borrowers are typically SMEs with turnover between GBP5 - 200m, with the majority funding imports to the UK.

During the first half of 2015, GLI increased its equity stake holding in TradeRiver Finance from the initial 9% up to 43.9% in a share swap agreement, and an issuance of GBP0.7m of preference shares.

Loan activity

As at 30 June 2015, TradeRiver had processed over 800 transactions with an aggregate volume of over GBP59m.

Outlook

With GBP7.5m of visible pipeline business expected to convert to tradeable facilities in the last quarter (as at 1 September 2015), the engagement of new business development managers, and recent partnerships with two FX brokers are bearing fruit and book growth is accelerating. September has already seen, amongst others, two new large buyers enrolled and, together with the expansion of an existing buyer's facility, GBP2.75m of additional tradeable facilities by mid-month.

TradeRiver USA

GLI has a 30.25% equity stake (as at 30 June 2015) in TradeRiver USA Inc. following investment in January 2015. Total investment of USD2m included USD1.5m for a 30.25% equity stake and USD0.5m for preference shares with an 8% dividend per annum.

TradeRiver USA is a non-bank online funding solution which finances trade, both cross-border and in the US. It utilises the same software solution as TradeRiver Finance Limited.

Loan activity

As at 30 June 2015, TradeRiver USA had processed approximately 44 transactions for a total turnover amount of over USD1.5 million. Looking beyond June, credit limits have since doubled to USD2.9m and the loan book for the end of September is anticipated to be USD1.8m.

Outlook

TradeRiver USA's pipeline has been growing steadily, and now stands at USD8m of qualified leads, with a weighted closing amount for September of USD1.7m. With the onboarding of three new strong partners, TradeRiver USA believe qualified lead generation will double within the next 60 days, reaching USD16m by the end of October.

The TradeRiver USA's management anticipate break even for the business by the end of June 2016.

UK Bond Network

GLI has a 15.84% equity stake (as at 30 June 2015) in UK Bond Network. In October 2014 GLI invested GBP1.0m for a 13.99% equity stake in UK Bond Network. Then in June 2015, the Company purchased further Ordinary Shares and warrants, increasing the equity stake to 15.8%.

UK Bond Network is a peer to business platform that functions as a marketplace for private SMEs and small public companies seeking between GBP0.5m and GBP4m of debt finance. Bonds are made accessible to a variety of different types of investors via an online auction.

Due to the recent additional ordinary share purchase in the first half of 2015, the valuation has increased to GBP2.0m at 30 June from a cost of GBP1.0m at 31 December 2014.

Loan activity

As at 30 June 2015, UK Bond Network's total lending was circa GBP4.5m , having completed seven auctions.

Outlook

The pipeline is continuing to evolve, both in terms of numbers, but also in terms of the maturity of the issuers and the size of deals. Management has visibility over up to GBP10m in bonds potentially being issued between now and the end of the year.

Longer term, UK Bond Network remains confident that it is well positioned to capitalise on the growing number of UK SMEs seeking finance. Furthermore, the recent increased volatility in equity markets, particularly for smaller cap public companies, has resulted in a rise in the number of enquiries from this source due to either a lack of liquidity and/or lower valuations, making the UK Bond Network offering an appealing alternative in some cases.

Given the company's strong capitalisation and encouraging growth over the past 18 months, UK Bond Network expects to achieve cash flow positive results within the next 12 months.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Company Statement of Comprehensive Income - Reanalysed

The below table reanalyses the Company's Statement of Comprehensive Income to show a like for like comparison of income earned by separating out; realised gains/losses, unrealised gains/losses and gains/losses on currency transactions.

Reanalysed profit for the six months ended June 2015 was significantly lower at GBP0.3m than the equivalent 2014 period. One key driver for the decrease in reanalysed profit in the period was the continuation in the phasing out of CLO income in line with the Company's strategy to exit this area. The GBP1.1m dividend received in the period relates entirely to FOIF and following the disposal of this position in March 2015, this income will not recur in future periods. This movement was partially offset by an expansion in the loan book for both BMS and platform loans which drove higher interest income levels for the first six months of 2015. This effect was further supplemented by a slight increase in the average interest rate achieved on the loan book in the period.

Expenses in the first six months of 2015 were approximately GBP0.5m lower than the equivalent period in 2014. We note the following developments with the primary expense categories:

- Legal and professional fees at GBP0.7m rose significantly in the six months to June 2015 following a busy start to the year in terms of platform acquisitions and investments. Approximately GBP0.4m of the fees can be attributed to acquisitions with the bulk of the corresponding services relating to due diligence work and drafting purchase contracts.

- Marketing and PR expenses at approximately GBP0.4m were higher in the first six months of 2015 than in the equivalent period in 2014 (approximately GBP0.1m). These are considered to be ongoing costs and GLI expects this expense to remain at the new higher levels due to increased activity at trade fairs and greater involvement of two PR firms.

- CLO management fees amounted to approximately GBP0.9m in the first six months of 2014 and in the same period of 2015, the amount was negative GBP0.5m. This credit position is a one-off item and was the outcome of final negotiations with our former CLO partners.

- Staff and Director costs remained stable in the period. We anticipate an increase in staff costs in the remainder of 2015 in line with the strengthening of several GLI functions with new team members.

Finance costs at GBP1.9m in the first six months of 2015 comprise:

- Loan interest and facility fees due to Sancus of approximately GBP1.2m; and

- Zero dividend preference share payments amounting to approximately GBP0.7m.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Company Statement of Comprehensive Income - Reanalysed (continued)

Change in Net Asset Value

During the period, the Company NAV has increased from GBP88.2m as at 31 December 2014 to GBP112.5m as at 30 June 2015, representing a 27.6% increase. This comprises net proceeds from the issue of new shares of GBP23.5m, profits of GBP5.3m and dividends paid of GBP4.4m.

During the period the number of shares in issue increased by 23.98% from 172,960,021 Shares (31 December 2014) to 214,431,843 Shares (30 June 2015). The Company NAV per share went from 51.00p at the end of December 2014, to 52.48p at the end of June 2015 being an increase 2.9% for the period.

Net Asset Value Summary

Investment Portfolio

The investment portfolio of GBP144.6m is split between GBP83.3m of loans and GBP61.3m of equity positions in platforms.

The loans include loans to both platforms in which GLI holds an investment and third party platforms. Based on the June platform loans balance, the weighted average return on loans is 9.4%, which is slightly higher than the equivalent figure for December 2014 (9.1%) and partly reflects the expansion of the FundingKnight loan book (typically yields in excess of 11%) and an increase in the US loan book which on average, contributes a higher interest rate.

As discussed earlier, the increase in equity positions mainly reflects the four acquisitions made in the period, which was supplemented by several top-up investments and upwards revaluations for the existing family of platforms.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Loan Payable

The loan facility of GBP30m with Sancus Limited remains in place and at the period end was GBP16.5m. This loan facility is due to expire on 15 March 2017 (see note 22 of the financial statements).

ZDP Payable

The balance of GBP21.5m includes:

- 20,000,000 GBP1 zero dividend preference (ZDP) shares issued in December 2014 for the Sancus acquisition;

- 791,418 GBP1 ZDPs issued in March 2015 for the investment in Trade River Finance;

- GBP0.7m of entitlement accrued to date on the ZDPs.

Please refer to note 14 of the financial statements for details.

Other Net Assets

The other net assets balance of GBP5.9m is largely in line with levels in prior periods and as at 30 June 2015 comprises:

- GBP4.2m of trade and other receivables chiefly relate to interest receivable on platform loans, other loans and platform shares. The remainder relates to GBP1.25m held in an escrow account which was returned to the Company shortly after the period end and GBP0.3m of prepayments.

- GBP2.6m of cash at bank

- GBP(0.8m) of trade payables which include amounts owed for legal and professional fees, valuation fees, audit fees, administration fees and other expenses.

FX Rates

The Company has transactions in a number of currencies. The table below lists out the rates used for the years/periods ended 30 June 2015, 31 December 2014, 30 June 2014, and 31 December 2013:

Rate of exchange vs. GBP1:00

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Principal Risks and Uncertainties

There are a number of risks and uncertainties that can impact the performance of the Company. Some of these are beyond the control of the Company and its Board. However the Board and Executive Team do closely monitor market trends and risks on an on-going basis and a review of risks forms part of the quarterly board meetings. The main risks identified by the Board that could affect the Company's performance are as follows:

Business risk:

The Company faces risks from a rapidly changing industry landscape and increased competition. The Executive Team monitor current trends and forecasts on a regular basis.

Interest rate risk

A shift in interest rates is a risk during the current environment of changing economic conditions and volatility in global financial markets. The portfolio is diversified in fixed and floating rate assets to reduce risk and the Board and Executive team also monitor data from advisors on a regular basis in order to ensure a balance between funding and returns.

Portfolio Management risk:

There is a risk of underperformance of the underlying investments.

There is Company representation on the portfolio company boards with the Chief Executive Officer being involved with portfolio companies' management. The Company closely monitors developments within portfolio companies.

The Company also has a currency risk in that it has transactions in non-GBP currencies. The financial statements are prepared in GBP. The Board monitors the foreign exchange fluctuations and considers using a hedging programme to mitigate loss against foreign exchange. After consideration it was deemed that a hedging programme was not necessary.

Operational risk:

The Company performs ongoing internal monitoring of operational processes and controls and receives regular reports from the administrators of the Company on operational breaches and errors, adherence to policies and procedures and compliance reporting to reduce risk of fraud and bribery. The Board is aware of the UK Bribery Act 2010 and has adopted an anti-bribery policy relevant to the nature of the Company and its business activities. The Board has also adopted a succession plan to mitigate the risk of disruption from the loss of key individuals.

Default Risk:

The Company is exposed to default risk from the loans made on the underlying platforms. The Executive Team closely monitors the loans made and is confident in the management skills in assessing risk, origination and recovery. The CEO is on the board of these platforms and is kept informed of procedures around risk and is also alerted to any possible defaults early on.

Compliance/Regulatory risk:

As a Guernsey Investment Company traded on the AIM market, the Company is required to comply with the AIM Rules. In conjunction with the Nomad, the Company Secretary monitors statutory requirements to ensure compliance with AIM Rules. As a Guernsey incorporated company under the AIM Rules for Companies, the Company is not required to comply with the UK Corporate Governance Code issued by the Financial Reporting Council (formerly the Combined Code on Corporate Governance) and applicable for accounting periods beginning on or after 1 October 2012 (the "UK Code"). However, the Directors place a high importance on ensuring that high standards of corporate governance are maintained and have considered the principles and recommendations of the UK Code. The compliance monitoring policies and procedures operated by the administrator and adopted by the Company provide compliance oversight and regular reporting of the Company's adherence with the Law, applicable legislation issued by the GFSC and provide the Company with reporting channels under anti-money laundering legislation.

During last year, the Company and the relevant financial entities within the Group completed registration with the IRS in order to receive their Global Intermediary Identification Numbers. By 30 June 2015, management confirmed that GLI Finance was fully compliant with the requirements of FATCA. The Foreign Account Tax Compliance Act (FATCA) is a United States federal law that requires United States persons, including individuals who live outside the United States, to report their financial accounts held outside of the United States, and requires foreign financial institutions to report to the Internal Revenue Service about their U.S. clients. Inter-Governmental Agreements are in place with various Governments around the world, including all of the jurisdictions in which our platforms are incorporated, which allows Foreign Financial Institutions (as defined by FATCA) to report to their local tax authorities, who then report the data to the Internal Revenue Service in the US.

GLI Finance Limited

For the year ended 30 June 2015

CHIEF FINANCIAL OFFICER'S REVIEW (continued)

Principal Risks and Uncertainties (continued)

Compliance/Regulatory risk (continued):

GLI Finance Ltd - FATCA compliance

In order that GLI Finance is fully compliant with the requirements of FATCA, the Company and its relevant subsidiary companies, as well as the platforms in which GLI Finance has a stake, are all registered and are in possession of their Global Intermediary Identification Number (GIIN), which is an essential part in proceeding towards reporting status.

Conflicts risk:

The Company now invests in a number of platforms and whilst no platform is in direct competition with any other, this is a consideration when looking at potential new platforms and one which the Company looks to avoid. The Chief Executive Officer is a board member on all the platforms in which the Company invests. There are service agreements in place to confirm that any information acquired as a result of being a Director of each platform remains confidential to that platform. No information is shared without the knowledge and consent of the relevant platform.

Emma Stubbs

Chief Financial Officer

Date: 25 March 2015

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF

GLI Finance Limited

We have audited the condensed consolidated and Company financial statements (the "financial statements") of GLI Finance Limited (the "Company") for the six months ended 30 June 2015 which comprise the Condensed Consolidated and Condensed Company Statements of Comprehensive Income, Condensed Consolidated and Condensed Company Statements of Financial Position, Condensed Consolidated and Condensed Company Statements of Changes in Equity, Condensed Consolidated and Condensed Company Statements of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Accounting Standard ("IAS") 34, "Interim Financial Reporting" as adopted by the European Union.

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 auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and Auditors

The Directors are responsible for the preparation of the financial statements which give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable legal and regulatory requirements and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Interim Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on the financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the Company's and Group's affairs as at 30 June 2015 and of the Company's profit and Group's profit for the period then ended;

• have been properly prepared in accordance with IAS 34 as adopted by the European Union; and

• comply with The Companies (Guernsey) Law, 2008.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under The Companies (Guernsey) Law, 2008 we are required to report to you, if in our opinion:

• proper accounting records have not been kept by the Company; or

• the 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.

Grant Thornton Limited

Chartered Accountants

St Peter Port, Guernsey, Channel Islands

Date: 25 September 2015

GLI Finance Limited

For the six month period ended 30 June 2015

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

The accompanying notes on pages 40 to 67 form an integral part of these financial statements.

GLI Finance Limited

For the period ended 30 June 2015

CONDENSED COMPANY STATEMENT OF COMPREHENSIVE INCOME

All of the profit for the current and prior periods/year is attributable to the equity holders of the parent.

The accompanying notes on pages 40 to 67 form an integral part of these financial statements.

GLI Finance Limited

As at 30 June 2015

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The financial statements were approved by the Board of Directors on 25 September 2015 and were signed on its behalf by:

The accompanying notes on pages 40 to 67 form an integral part of these financial statements.

GLI Finance Limited

As at 30 June 2015

CONDENSED COMPANY STATEMENT OF FINANCIAL POSITION

The financial statements were approved by the Board of Directors on 25 September 2015 and were signed on its behalf by:

The accompanying notes on pages 40 to 67 form an integral part of these financial statements.

GLI Finance Limited

For the period ended 30 June 2015

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY