Aug 17, 2022

08/17/2022 | 02:14am EDT Message : for the six months ended 30 June 2022 Powering a shift toward energy transition Riverstone Commitments increased by a net total of $71 million ($71 million pursuant to decarbonisation strategy): (i) $20 million in Anuvia Plant Nutrients, Inc. (ii) $17.5 million in T-Rex Group, Inc. (iii) $17.5million in Infinitum Electric Inc. (iv) $15 million in Tritium DCFC Limited. (v) $4 million in Group14 Technologies Inc. (vi) ($3 million) in Enviva, Inc. (in connection with overall approved commitment reduction) Remaining potential unfunded commitments at 30 June 2022 $10 million(2)(3) ($6 million pursuant to legacy conventional strategy and $4 million pursuant to decarbonisation strategy): (i) $6 million in Onyx Power (ii) $4 million in Enviva Inc. Investments during the period ended 30 June 2022 Invested a total of $74 million(4) ($74 million pursuant to decarbonisation strategy): (i) $20 million in Anuvia Plant Nutrients Inc. (ii) $17.5 million in T-Rex Group, Inc. (iii) $17.5 million in Infinitum Electric Inc. (iv) $15 million in Tritium DCFC Limited. (v) $4 million in Group14 Technologies Inc. Realisations during the period ended 30 June 2022 Realised a total of $68 million(4): (i) $42 million from Pipestone Energy Corp. (formerly Canadian Non-Operated Resources LP) (ii) $22 million from Centennial Resource Development, Inc. (iii) $2 million from Meritage Midstream Services III, L.P. (iv) $2 million in aggregate from ILX Holdings III, LLC, GoodLeap, LLC and Rock Oil Holdings, LLC. Key Financials (2) Amounts may vary due to rounding. (3) Excludes the remaining unfunded commitments for Carrier II and Hammerhead of $36 million, in aggregate, which are not expected to be funded. The expected funding of the remaining unfunded commitments at 30 June 2022 are nil for the remainder of 2022, nil in 2023, and the residual amounts to be funded in 2024 and later years, if needed. (4) Based on exchange rate of 1.2119$/£ at 30 June 2022 (1.3503 $/£ at 31 December 2021, 1.386 $/£ at 30 June 2021 and 1.606 $/£ at IPO on 29 October 2013). (5) At 30 June 2022, 31 December 2021 and 30 June 2021, respectively, amounts are comprised of $6.4 million, $7.3 million and $5.7 million held at the Company, $14.9 million, $4.1 million and $38.8 million held at the Partnership and $51.0 million, $94.4 million and $8.2 million held at REL US Corp. (6) At 30 June 2022, unrestricted marketable securities held by the Partnership consist of publicly-traded shares of Enviva, Solid Power, Tritium and Hyzon for which the aggregate fair value was $90 million (31 December 2021: Centennial, Pipestone, Enviva, Solid Power, Hyzon and Talos and 30 June 2021: Centennial, Pipestone and Talos). (7) At 30 June 2022, restricted marketable securities held by the Partnership consist of publicly-traded shares of Centennial (lock-up expiration in 3Q2022), Solid Power (lock-up expiration in 4Q2022), Tritium (lock-up expiration in 1Q2023) and DCRD (lock-up expiration is one year post future business combination) for which the aggregate fair value was $81 million (31 December 2021: Solid Power, Tritium and DCRD and 30 June 2021: DCRN and DCRC). (8) Inception to date total number of shares repurchased were 27,182,444 at an average price per share of £3.70 ($4.82). Chairman's Statement Geopolitical factors drive energy prices higher The start of 2022 saw global economies continue their recovery from the COVID-19 pandemic. The gradual re-opening of borders around the world and a slow return towards travel and higher levels of consumption meant that oil demand for 2022 was expected to recover towards pre-pandemic levels of 100 million barrels per day. This was despite ongoing lockdowns in China and global supply chain disruptions which threatened global growth. However, alongside this recovery in demand we have seen a new geo-political crisis which has had significant impacts on energy markets and the world economy. The war in Ukraine has brought not only suffering and tragedy for the people of that country but also a new supply-side constraint. The ongoing conflict has affected European and US relations with Russia and profoundly changed the world's energy supply and demand dynamics. The world, and Europe in particular, has almost overnight been forced to try to reverse years of policy development to re-balance energy supply chains, with countries scrambling for new sources of energy away from Russia. Almost overnight we have seen a change in priorities and policies that had previously received long-term support and investment. Most notably in evidence has been the exit of western companies from Russia across multiple sectors including energy and the banning of non-pipeline oil imports to the EU from Russia. This has exacerbated what were already higher levels of price volatility and has resulted in price increases in all areas of the energy market, which in turn has contributed to the return of inflation in the world's major economies. This has happened at a time when the supply of oil and gas is already tight following years of underinvestment by the industry. Organization of Economic Cooperation and Development (OECD) and US crude inventories were low going into the year and as we come to the mid-point of 2022 are looking tighter still. Spare OPEC capacity is reportedly limited and the ability to increase and transport production from other sources and countries remains marginal in the near-term. So how has this impacted commodity prices year to date? For the year so far, we have seen oil spot prices at eight-year highs and wholesale gas prices approximately doubling. Despite this dramatic increase, we expect continued price volatility as we see a steady increase in demand and global markets are likely to remain under-supplied in both oil and gas. While oil and gas are at multi-months lows due to recession fears and economic slowdown in China, overall prices are still materially up from last year. Higher energy prices are partly fuelling rapid inflation and a cost-of-living crisis which is particularly pronounced in Europe. Recent forecasts from the OECD estimated that average inflation in its 38 member countries rose to 10.3% in June of this year - more than double its previous forecast. Rising interest rates by central banks to rein in inflation may only exacerbate market volatility. Due to recession fears, natural gas and oil prices are all up materially over the last 12 months. Energy security reinforces the case for decarbonisation The current high commodity prices will continue to benefit our legacy conventional energy investments. But these higher prices driven by scarcity concerns have also underscored the importance of energy security in today's world. Moreover, President Biden's green energy campaign reinforces clean energy and aims towards net zero emissions by 2050. The recent passing of the Inflation Reduction Act of 2022 which proposes to raise $725 billion, has earmarked $369 billion toward energy security and climate change investment. Against this dynamic and challenging backdrop, our ongoing work to reorient our investment portfolio towards renewable energy sources and the technologies that make them more efficient, has become more vital than ever. The climate imperative on emissions and the global goal of reaching net zero remains a strong tailwind for REL's investment strategy and we continue to make good progress against the five critical areas of decarbonisation we identified as the focus of our future investment plans. These are grid flexibility and resilience; the electrification of transport; agriculture; next generation liquid fuels and next horizon resource use plays. There remains huge opportunity in these areas and we are confident they will not only deliver value to shareholders but also help the world towards its decarbonisation aims while improving the security of the energy markets that we operate in. Investments and performance In the first half of 2022, we continued to strengthen our pipeline of investments that support an equitable and just transition to a low-carbon economy. During this period, the Investment Manager reviewed over 125 decarbonisation opportunities and REL committed to four exciting new investments. This takes our total active investments in decarbonisation to fifteen, strengthening the reorientation of our portfolio. In January, REL invested $17.5 million in T-REX Group, a SaaS provider supporting the asset-backed financing industry by giving institutions the modernised tools and validation they require to deploy capital. T-REX Group facilitates increased investment allocations into sustainable, decarbonisation-related assets. In February, REL announced it was making a lead investment in Infinitum Electric's $80 million in the Series D round. Founded in 2018, Infinitum Electric created the breakthrough air-core motor, which offers superior performance at half the weight and size of conventional motors, and with just a fraction of the carbon footprint of more traditional models. This technology makes them pound for pound the most efficient in the world. Infinitum Electric motors open up sustainable design possibilities for the machines we rely on to be smaller, lighter and quieter, improving our quality of life while also saving energy. Based in Austin, Texas, Infinitum Electric is led by a team of industry experts and pioneers. In March, REL invested $20 million in Anuvia Plant Nutrients' $65.5 million in Series D funding. Anuvia Plant Nutrients manufactures high-efficiency, sustainable field-ready fertilisers for the agriculture, turf, and lawncare industries. Located in Winter Garden, Florida, the company has developed and now uses a unique technology that not only optimises nutrient availability and efficiency for plants, but also improves soil health, preserves natural resources, and reduces greenhouse gas emissions. It is a really exciting example of our investment into the decarbonisation of agriculture. Finally, in April 2022, REL invested $4 million into Group14 Technologies, Inc.'s $400 million Series C funding round. The Series C round was led by Porsche AG, with participation from OMERS Capital Markets, Decarbonization Partners, Vsquared Ventures, and others. Group14 is a battery materials technology company that has developed a proprietary silicon-based anode battery material to replace graphite in conventional lithium-ion batteries. REL also realised some value in a number of its investments in legacy energy assets. In February, we announced REL was exiting from Pipestone Energy Corp, a Calgary-based oil and gas exploration company listed on the Toronto Stock Exchange. Net proceeds from the sale are $53 million CAD, representing approximately a 0.64x Gross MOIC. The sale further shifts our portfolio away from oil and gas, and provides additional funds to accelerate our investments in the energy transition. Finally, subsequent to half year end, we were pleased to see the merger of Centennial and Colgate, which will create a $7 billion Permian basin pure-play. REL has invested $268 million into Centennial since 2016, and has so far realised $194 million, or 72 per cent. of its cost basis, through proceeds from share sales. This transformational transaction will help to expand the combined businesses' shareholder base as well as reduce its GHG emissions. Moving forward, the Company will continue looking to maximise shareholder value on its conventional investments. Buyback programme increased by an additional £46 million Delivering shareholder value through strong investment performance and effective capital management remains a core priority. As such, in March, the Board sought and received shareholder permission to extend the share buyback programme. This had already increased to £90 million in 2021 and the new extension saw it further increase by an additional £46 million. As at 30 June 2022, a total of 27,182,444 ordinary shares have been bought back at an approximate cost of £101 million ($131 million) at an average price of £3.70 ($4.82) per ordinary share, leaving £35 million ($43 million) of buyback capacity outstanding. The Board has since taken a decision to limit the share buyback amount to £17 million ($21 million) of the available £35 million ($43 million) for the period to 31 December 2022. Portfolio valuation REL ended the period to 30 June 2022 with a NAV per share of $13.64 (£11.25), a 44 per cent and 65 per cent increase in USD and GBP, respectively, compared to the 30 June 2021 NAV per share of $9.46 (£6.83). This partly reflects the strengthening of the USD vs GBP in the first half of 2022 which has provided an additional uplift to performance during the period. REL ended the first half with an aggregate gross cash balance of $72 million (£60 million) across the Company, Partnership and REL US Corp. Reflecting the improved commodity price environment, the favourable outlook for decarbonisation investments and the extension of the share buyback programme, shares traded up 43 per cent during the first half of 2022. REL's largest investments by gross unrealised value either maintained or improved their marks quarter on quarter. Onyx continued to improve substantially, moving from a 1.70x to 2.50x Gross MOIC valuation over the six month period due, in part, to the company's strong H1 2022 financial performance driven by favourable conditions in European energy markets. GoodLeap, one of REL's decarbonisation investments, remained marked at 2.75x Gross MOIC. Although flat, quarter on quarter, REL's legacy oil and gas investments continued to benefit from supportive energy prices, robust demand, and improved operations. The valuation of REL's investments is conducted quarterly by the Investment Manager and is subject to approval by the independent Directors. In addition, the valuations of REL's investments are audited by Ernst & Young LLP in connection with the annual audit of the Company's Financial Statements. The Company's valuation policy is compliant with both IFRS and IPEV Valuation Guidelines and has been applied consistently from period to period since inception. Those of the Company's investments which are not publicly quoted require meaningful judgement to establish a range of values, and the ultimate value at which an investment is realised may differ from its most recent valuation and the difference may be significant. Further information on the Company's valuation policy can be found in the Investment Manager's Report. Despite the broad equity market turbulence and decline, with significant sell-offs in technology and growth sectors, energy proved to be the best performing sector in the first half of the year. REL has come through this period well, with legacy investments increasing in value and key investments continuing our diversification into decarbonisation, renewables and low carbon energy. While the economic outlook for the rest of the year is difficult to predict with any certainty, the energy price environment looks supportive. Energy security is moving up the list of priorities facing the world's major advanced economies, while the need to continue the process of decarbonising our economies has not disappeared. Consequently, I remain convinced that our decision to shift our business towards meeting the challenges and opportunities of the energy transition is the right one. I am confident that we are well positioned to continue to deliver value for shareholders through the execution of this strategy over the coming years. Recent NAV & Share Price Performance of the Company As announced on 30 October 2020, the Company's independent directors agreed to closely monitor the Investment Manager's success in repositioning the Company's existing investment policy through the modified investment strategy over the next twenty-four months following the previous quarter ended 30 September 2020. In the absence of a significant improvement in the performance of the Company, taking into account the trading price of the Ordinary Shares and portfolio performance over that period through 30 September 2022, the independent directors would release an announcement by November 2022 regarding an EGM to seek Shareholder approval before 31 December 2022 to amend the Company's investment policy to provide for the managed wind-down of the Company. At year end, the directors stated in the 2021 Annual Report that it was extremely unlikely that they would seek such approval. As at 30 June 2022, REL had a NAV per Share of $13.64 (£11.25), an increase in USD and GBP of 138 & 152 per cent., respectively, compared to $5.74 (£4.46) as at 30 September 2020, which is the most recent quarter end prior to the aforementioned announcement and being used as a proxy for comparative purposes. The period end closing trading price of the Ordinary Shares was $8.07 (£6.66), an increase of 107 & 120 per cent., respectively, compared to $3.90 (£3.03) as at 30 September 2020. Subsequently, from period-end through 15 August 2022, the Company's NAV per Share and closing trading price of the Ordinary Shares have remained relatively unchanged at $14.51 (£12.04) and $8.03 (£6.66), respectively. Based on this significant improvement in the performance of REL, and the outlook for further energy transition investment opportunities from the Investment Manager, as of the date of this report, the Company's independent Directors have decided that they will not seek Shareholder approval before 31 December 2022 to amend the Company's investment policy to provide for the managed wind-down of the Company. The Board is fully supportive of the Company's modified investment programme to continue shifting the portfolio from conventional energy to decarbonisation assets and expects that the Company will seek shareholder approval to amend its investment policy to facilitate this transition further in the coming months. Board succession Lastly, as highlighted in the 2021 Annual Report, Peter Barker, Patrick Firth and I will be reaching our ninth year as Non-Executive Directors and intend to retire from the Board either in advance of or at the Company's Annual General Meeting in 2023. We have retained major search consultants and will be taking into account current guidelines when making the appointments. We are planning for a period of overlap for the new and retiring Directors which will allow for an orderly transition in due course. Richard Hayden Investment Manager's Report The end of the second quarter marked 126 days of war in Ukraine. Russia's invasion exacerbated post-pandemic economic conditions defined by a ferocious rebound in travel and strong pent-up consumer spending. These two trends met head on with the combination of tight energy supply and creaky supply chains. We continue to feel the effects of the bullwhip as energy commodity price volatility persists into the second half of the year. Whilst WTI and Brent prices are up 42 per cent. and 45 per cent., since the beginning of the year, they have increased by only 7 per cent. and 6 per cent. over the last quarter, and declined during July 2022. Due to underinvestment in oil and natural gas production over the past few years and strong consumer demand, petrol prices had set new records globally before showing signs of stabilisation in July 2022, while power costs (especially in Europe), are crippling both businesses and individuals. We find ourselves entering the second half of the year on the brink of a global recession, the depths of which remain unknown, and an economic slowdown in China. Europe's reliance on Russian natural gas and a dearth of renewable energy has pushed global gas and power prices up without reprieve. The geopolitical aftershocks of war coupled with soaring summer temperatures and droughts have increased UK power daily average prices by 258 per cent. year-over-year. Despite record power prices, Britain has become a net exporter of power to France which has seen half of its nuclear facilities undergoing routine maintenance and periodic refueling and higher than normal river temperatures which reduce the cooling capabilities of the nuclear reactors. Germany is breaking solar power generation records amid a heat wave in Western Europe but faces shortfalls from wind production. Germany is also considering extensions for oil fuel and nuclear power stations. Compensating for this intermittency will likely exacerbate the continent's reliance on legacy coal-fired generation in the near-term as it seeks to offset reduced flows of Russian natural gas. Global commodity price volatility and tightness in supply has created distinct winners and losers in the market. We would be remiss not to acknowledge that the gains since the beginning of the year of conventional energy investments have come at the cost of tragic losses, of both human lives and economic devastation. The geopolitical turmoil impacting Europe and its allies has added urgency to the long-term trend toward decarbonisation and energy security. REL's portfolio will continue to benefit from previous cost-reduction and liquidity preservation efforts in the legacy commodity-linked portfolio. REL continues to work with its portfolio companies to navigate and improve their positioning against the valuation and perception headwinds associated with hydrocarbon production in an ESG-focused regulatory and consumer environment. This focus on ESG excellence helped facilitate a merger between REL portfolio company, Centennial Development Resources, and Colgate Energy to create the largest pure-play company in the Delaware Basin. Both companies have already, and intend to extend further, their track record in emissions footprint reduction following a combined ~43 per cent. reduction in greenhouse gas emissions for the combined company during the 2020-2021 period. While current geopolitical tensions persist and the global economy continues to recover from pandemic conditions, we expect that our energy trilemma, namely: security, affordability, and the need to decarbonise our economies, will provide continued tailwinds to the portfolio's strategy. Investment Strategy Historically, the Investment Manager's objective was to achieve superior risk adjusted after tax returns by making privately negotiated investments in the E&P, midstream, services and power (including renewable energy) sectors, which are a significant component of virtually all major economies. Long-term market drivers of economic expansion, population growth, development of markets, deregulation, and privatisation allied to near-term commodity price volatility are expected to continue to create opportunities globally for Riverstone. In the first half of 2022, the Investment Manager made further progress against the goals of its modified investment programme, which includes shifting the portfolio toward decarbonisation assets as the energy transition progresses. Early in the year, REL fully exited its position in Pipestone Energy, and partially exited from Centennial Development, both legacy commodity-linked investments, for net proceeds of CAD$53 million and $22 million, respectively. Liquidity from the sales facilitated a follow-on investment in Tritium, and four new decarbonisation investments including lead investments in funding rounds for T-REX Group, Anuvia Plant Nutrients, and Infinitum, and a minority round investment in Group14. Each fall into one of five identified proven and investable decarbonisation families, including: grid flexibility and resilience, electrification of transport, next generation liquid fuels, next horizon resource use, and agriculture and natural resource plays. We expect these will constitute a $3tn opportunity by 2030, up from $1.2tn in 2020, a circa two-and-a-half-fold increase over that timeframe. REL invested approximately $75 million in the first halves of 2021 and 2022, representing consistent progress toward supporting these decarbonisation themes. The Company's fully independent Board is supportive of the continuation of the Investment Manager's modified investment strategy for the immediate future and will continue to monitor the Investment Manager's success in repositioning the Company's existing investment policy through the modified investment strategy. At the EGMin 2020, the Board committed to review the Investment Manager's performance and, before 31 December 2022, decide whether or not it would be in the best interests of all shareholders to request an EGM to vote on a run-off of its portfolio.As noted in the Chairman's Statement, the Company's Independent Directors have decided that they will not seek Shareholder approval before 31 December 2022 to amend the Company's investment policy to provide for the managed wind-down of the Company. This is explained further in Note 3.3 of the unaudited interim condensed financial statements. Key Drivers of Investment Strategy: • Capital constraints among companies with high levels of leverage and/or limited access to public markets; • Industry distress and pressures to rationalise assets; • Increases in ability to extract hydrocarbons from oil and gas-rich shale formations; • Historical under-investment in energy infrastructure; and • Rapid growth in electricity consumption and energy transition. The Investment Manager, through its affiliates, has a strong track record of building businesses with management teams. The Company aims to capitalise on the opportunities presented by Riverstone's pipeline of investments, as well as through its modified investment strategy implemented in 2019.This can be seen through the Company's investments, through the Partnership, in Ridgebury H3 in 2019, Enviva in 2020, DCRB, DCRN, DCRC & DCRD SPAC investments in 2021 and four new decarbonisation investments in 2022. The Investment Manager, having made over 200 investments globally in the energy sector since being founded in 2000, utilises its extensive industry expertise and relationships to thoroughly evaluate investment opportunities and uses its significant experience in conducting due diligence, valuing assets and all other aspects of deal execution, including financial and legal structuring, accounting, and compensation design. The Investment Manager also draws upon its extensive network of relationships with industry-focused professional advisory firms to assist with due diligence in other areas such as accounting, tax, legal, employee benefits, environmental, engineering and insurance. Current Portfolio - Conventional $726 (1) Gross realised capital is total gross proceeds realised on invested capital. Of the $1,188 million of capital realised to date, $888 million is the return of the cost basis, and the remainder is profit. (2) Gross Unrealised Value and Gross MOIC (Gross Multiple of Invested Capital) are before transaction costs, taxes (approximately 21 to 27.5 per cent. of U.S. sourced taxable income) and 20 per cent. carried interest on applicable gross profits in accordance with the revised terms announced on 3 January 2020, but effective 30 June 2019. Since there was no netting of losses against gains before the aforementioned revised terms, the effective carried interest rate on the portfolio as a whole will be greater than 20 per cent. No further carried interest will be payable until the $138.4 million of realised and unrealised losses to date at 30 June 2022 (largest deficit of $605.5 million at 30 June 2020) are made whole with future gains, so the earned carried interest of $0.8 million at 30 June 2022 has been deferred and will expire in October 2023 if the aforementioned losses are not made whole. Since REL has not yet met the appropriate Cost Benchmark at 30 June 2022, $34.1 million in Performance Allocation was not accrued in accordance with the terms of the current agreement, which would have been accrued under the prior agreement. In addition, there is a management fee of 1.5 per cent. of net assets (including cash) per annum and other expenses. Given these costs, fees and expenses are in aggregate expected to be considerable, Total Net Value and Net MOIC will be materially less than Gross Unrealised Value and Gross MOIC. Local taxes, primarily on U.S. assets, may apply at the jurisdictional level on profits arising in operating entity investments. Further withholding taxes may apply on distributions from such operating entity investments. In the normal course of business, REL may form wholly-owned subsidiaries, to be treated as C Corporations for US tax purposes. The C Corporations serve to protect REL's public investors from incurring U.S. effectively connected income. The C Corporations file U.S. corporate tax returns with the U.S. Internal Revenue Service and pay U.S. corporate taxes on its taxable income. (3) Amounts may vary due to rounding. (4) Represents closing price per share in USD for publicly traded shares of Centennial Resource Development, Inc. (NASDAQ:CDEV - 30-06-2022: $5.98 per share / 31-03-2022: $8.07 price per share); Enviva, Inc. (NYSE:EVA - 30-06-2022: $57.22 per share / 31-03-2022: $79.15 price per share); Solid Power, Inc. (NASDAQ:SLDP - 30-06-2022: $5.38 per share / 31-03-2022: $8.67 price per share; Hyzon Motors, Inc. (NASDAQ:HYZN - 30-06-2022: $2.94 per share / 31-03-2022: $6.39 price per share); and Tritium DCFC Limited (NASDAQ:DCFC - 30-06-2022: $6.09 price per share / 31-03-2022 $10.04 price per share.) [1] Amounts vary due to rounding (5) SPAC Sponsor investment for Decarbonization Plus Acquisition Corporation IV (NASDAQ:DCRD). (6) The unrealised value of the Rock Oil investment consists of rights to mineral acres. (7) Midstream investment. (8) Credit investment. (9) Withdrawn commitments consist of Origo ($9 million) and CanEra III ($1 million), and impairments consist of Liberty II ($142 million), Fieldwood ($80 million), Eagle II ($62 million) and Castex 2005 ($48 million). (10) This figure is comprised of $6.4million held at the Company, $14.9million held at the Partnership and $51.0 millionheld at REL US Corp. Investment Portfolio Summary Onyx As of 30 June 2022, REL, through the Partnership, has invested $60 million of its $66 million commitment to Onyx. Onyx is a European-based independent power producer that was created through the successful acquisition of 2,350MW of gross installed capacity (1,941MW of net installed capacity) of five coal- and biomass-fired power plants in Germany and the Netherlands from Engie SA. Two of the facilities in the current portfolio are among Europe's most recently constructed thermal plants, which benefit from high efficiencies, substantial environmental controls, low emissions profiles and the potential use of sustainable biomass. As of 30 June 2022, REL's interest in Onyx, through the Partnership, was valued at 2.50x Gross MOIC(1) or $149 million (Realised: nil, Unrealised: $149 million).The Gross MOIC(1) increased over the prior period. Hammerhead As of 30 June 2022, REL, through the Partnership, has invested $295 million of its $307 million commitment to Hammerhead. Hammerhead is a private E&P company focused on liquids-rich unconventional resources in the Montney and Duvernay resource play in Western Canada. Since its establishment in 2010, Hammerhead has aggregated one of the largest and most advantaged land positions in the emerging Montney and Duvernay formations of Western Canada's Deep Basin. The company controls and operates 100 per cent. of this asset base, which comprises over 1,800 net drilling locations across approximately ~112,000 Montney net acres. Since Riverstone's initial investment, Hammerhead has increased production almost ten-fold and has significantly grown reserves to 309 mmboe. As of 31 December 2021, the company was producing approximately 29,500 boepd. The company continues to focus on ramping development within cash flow in the near term and paying down debt. The company elected to increase the development pace in 2H 2021 on the back of higher commodity prices, and the company will continue to ramp development in 2022. As of 31 December 2021, Hammerhead had hedged approximately 46 per cent. of forecasted 2022 oil production at a weighted average price of CAD$87/bbl. As of 30 June 2022, REL's interest in Hammerhead, through the Partnership, was valued at 0.53x Gross MOIC(1) or $156 million (Realised: $23 million, Unrealised: $133 million). The Gross MOIC(1) increased over the prior period. Centennial (CDEV) As of 30 June 2022, REL, through the Partnership, has invested in full its $268 million commitment to Centennial. Centennial, based in Denver, Colorado, is an E&P company focused on the acquisition and development of oil and liquids-rich natural gas resources in the Permian Delaware Basin, West Texas. The company has rapidly aggregated an 75,500 net acre position in its targeted basin. In Q2 2022, Centennial announced that they had entered into an agreement to combine with Colgate Energy for a total consideration of 269.3 million shares of Centennial stock, $525 million of cash and the assumption of $1.4 billion of Colgate's outstanding net debt. The company expects leverage at closing to be 1.0x. The combined company will be the largest pure-play E&P company in the Delaware Basin with approximately 180,000 net leasehold acres, 40,000 net royalty acres and total current production of 135,000 Boe/d. From an operational standpoint, Centennial continues to see strong results on the back of a highly constructive commodity environment and strong capital efficiency. In Q1 2022, Centennial generated record free cash flow of $89 million and reduced Net Debt/LTM EBITDAX to 1.1x compared to 1.4x at YE 2021. The Company expects leverage to fall to <1.0x by Q2 2022. REL, through the Partnership, owns approximately 12.5 million shares which are publicly traded (NASDAQ:CDEV) at a 60-day volume weighted average price of $7.87. As of 30 June 2022, REL's interest in Centennial, through the Partnership, was valued at 1.0x Gross MOIC(1) or $269 million (Realised: $194 million, Unrealised: $75 million). The Gross MOIC(1), which reflects the mark-to-market value of REL's shareholding, increased over the period. GoodLeap (formerly Loanpal) As of 30 June 2022, REL, through the Partnership, has invested in full its $25 million commitment to GoodLeap. The company is a technology-enabled sustainable home improvement loan originator, providing a point-of-sale lending platform used by key residential contractors. GoodLeap does not take funding risk. The company presells its originated loans via forward purchase agreements to large asset managers. The company's attractive unit economics and asset-light business model allow for rapid growth and the ability to scale faster than its competitors, while generating free cash flow by capitalising on upfront net cash payments on the flow of loan originations and avoiding costly SG&A and capital expenditures incurred by other portions of the value chain. During the second quarter of 2022, the company closed on its 13th securitisation which was oversubscribed despite volatile markets. Management continues to execute on its growth plans. On 13 October 2021, GoodLeap announced a new investment round of over $800 million, which will support the company's operational improvements, technology innovation efforts, and expansion. As of 30 June 2022, REL's interest in GoodLeap, through the Partnership, was valued at 2.75x Gross MOIC(1) or $69 million (Realised: $2 million, Unrealised: $67 million). The Gross MOIC(1) held flat during the period. Carrier II As of 30 June 2022, REL, through the Partnership, has invested $110 million of its $133 million commitment to Carrier II. Carrier II is focus ed on the acquisition and exploitation of upstream oil and gas assets by partnering with select operators that are developing both unconventional and conventional reservoirs in North America. Shortly after its establishment in May 2015, Carrier II entered into a joint venture agreement with a highly experienced operator group made up of Henry Resources, LLC and PT Petroleum, LLC, targeting 19,131 net acres for development in the southern Midland Basin (subsequently increased to 20,260 net acres). In addition, through three separate acquisitions, the company has acquired 3,892 net acres in Karnes County in the Eagle Ford basin, targeting the Sugarloaf Project and the Chisholm Project, both operated by Marathon Oil Corp. The company continues to operate prudently and remains focused on using free cash flow for high commodity prices to fund development and reduce outstanding indebtedness on the company's term loan. Carrier II has hedged approximately 50 per cent. of forecasted oil production during the remainder of 2022 at a weighted average price of $57.40 per barrel WTI. As of 30 June 2022, the company was producing approximately 2,713 boepd. Since inception, Carrier II has distributed $29 million through dividends to REL, through the Partnership, representing approximately 26 per cent. of REL's invested capital. As of 30 June 2022, REL's interest in Carrier II, through the Partnership, was valued at 0.70x Gross MOIC(1) or $77 million (Realised: $29 million, Unrealised: $48 million). The Gross MOIC(1) held flat over the period. Enviva As of 30 June 2022, REL, through the Partnership, has invested $18 million of its $22 million commitment to Enviva, which was reduced by $3.0 million this period in conjunction with an overall commitment reduction to the company by the Investment Manager. Enviva, based in Bethesda, Maryland, is the world's largest supplier of wood pellets to major utilities and heat and power generators, principally in Europe and Japan. Through its subsidiaries, Enviva owns and operates ten plants with a combined wood pellet production capacity of approximately 6.2 million MTPY. On 31 December 2021, Enviva completed its conversion from a master limited partnership to a corporation following approval by Enviva unitholders on 17 December 2021. The company continues to capitalise on the industry's growth opportunities, announcing its inaugural agreements with German customers in May and continuing to expand into heat and other industrial applications. Enviva commissioned its newly constructed Lucedale plant in March 2022 and commemorated its first shipment of pellets from the Port of Pascagoula in June 2022. As of 30 June 2022, REL's interest in Enviva, through the Partnership, was valued at 2.03x Gross MOIC(1) or $37 million (Realised: nil, Unrealised: $37 million). The Gross MOIC(1) decreased over the period. Samsung Ventures On 17 August 2021, REL announced the purchase of an interest in one of Samsung Ventures' battery technology focused venture capital portfolios (the "Samsung Portfolio") for $30.0 million. The majority of the Samsung Portfolio consists of 1.66 million shares of Solid Power, Inc., which successfully completed its business combination with DCRC on 8 December 2021. Gross proceeds to Solid Power from the transaction amounted to $542.9 million from a fully committed $195 million PIPE and $347.9 million of cash held in trust net of redemptions; only 0.6 per cent. of shares held by public stockholders of DCRC were redeemed. Of the shares voted at the special meeting of DCRC's stockholders, over 99.9 per cent. voted to approve the business combination. The remainder of the portfolio is held in shares of Ionic Materials (Ionic I & II), amaterial science company that manufactures transformative polymers for use in solid-state batteries, healthcare and 5G applications.Ionic Materials' solid polymer is believed to be the first of its kind to conduct ions at room temperature, a critical enabler of solid-state batteries. As of 30 June 2022, REL's aggregate investment in the Samsung Portfolio, through the Partnership, was marked at 0.95x Gross MOIC(1) or $29 million (Realised: nil, Unrealised: $29 million). The Gross MOIC(1) decreased over the period. DCRC/Solid Power As of 30 June 2022, REL, through the Partnership, has fully invested its$20.6 million commitment to DCRC/Solid Power. Riverstone sponsored DCRC's $350 million IPO on 23 March 2021. REL made a $0.6 million investment in DCRC at the time of the IPO, as the blank check company began to pursue merger candidates. On 15 June 2021, DCRC announced its business combination agreement with Solid Power, a Louisville, Colorado based producer of all solid-state batteries for electric vehicles, to which REL committed an additional $20 million to the $165 million PIPE that was raised. Between DCRC's IPO and announcing the business combination with Solid Power, Solid Power closed on a $130 million Series B investment raise led by BMW Group, Ford Motor Company, and Volta Energy Technologies. In conjunction with the Series B raise, BMW and Ford expanded their existing joint development agreements with the Company to secure all solid-state batteries for future electric vehicles. Both Ford and BMW will receive full-scale 100 Ah cells for automotive qualification testing and vehicle integration beginning in 2022. Solid Power's all solid-state platform technology allows for the production of unique cell designs expected to meet performance requirements for each automotive partner. The business combination between DCRC and Solid Power closed on 8 December 2021, with Solid Power beginning to trade on NASDAQ under the ticker "SLDP". Gross proceeds to Solid Power from the transaction amounted to $542.9 million from a fully committed $195 million PIPE and $347.9 million of cash held in trust net of redemptions; only 0.6 per cent. of shares held by public stockholders of DCRC were redeemed. Of the shares voted at the special meeting of DCRC's stockholders, over 99.9 per cent. voted to approve the business combination As of 30 June 2022, REL's interest in Solid Power, through the Partnership, consisted of the $0.6 million sponsor investment, which was valued at4.23xGross MOIC(1) or$2 million (Realised: $- million, Unrealised:$2 million), and the $20 million PIPE investment, which was valued at 0.54x Gross MOIC(1) or $11 million (Realised: nil, Unrealised: $11 million). FreeWire As of 30 June 2022, REL, through the Partnership, has fully invested its $10 million commitment to FreeWire. FreeWire is the leading provider of battery-integrated DC fast chargers (DCFCs) and their associated software. Riverstone led the company's $50 million Series C round in January 2021. Their primary hardware product is the Boost Charger, a unitised, turnkey DCFC that offers charging speeds of up to 120kW with only a 20kW grid connection by using a 160kWh battery. These specifications support 15-24 fast charging sessions per day. The current software platform, AMP Connect, allows for charger management and integration with existing customerplatforms with broader services in development. As of 30 June 2022, REL's interest in FreeWire, through the Partnership, was valued at 2.00x Gross MOIC(1) or $20 million (Realised: nil, Unrealised: $20 million). Anuvia Plant Nutrients As of 30 June 2022, REL, through the Partnership, has fully invested its $20 million commitment to Anuvia Plant Nutrients. Anuvia Plant Nutrients manufactures high-efficiency, sustainable field-ready fertilisers for the agriculture, turf, and lawncare industries. Located in Winter Garden, Florida, the company developed and uses a unique technology that not only optimises nutrient availability and efficiency for plants, but also improves soil health, preserves natural resources, and reduces greenhouse gas emissions. As of 30 June 2022, REL's interest in Anuvia Plant Nutrients, through the Partnership, was valued at 1.00x Gross MOIC(1) or $20 million (Realised: nil, Unrealised: $20 million). T-REX Group As of 30 June 2022, REL, through the Partnership, has fully invested its $17.5 million commitment to T-REX Group.T-REX Group, a SaaS provider supporting the asset-backed financing industry, brings together asset class expertise, critical data management capabilities, and a platform for deal structuring, cash flow modeling, scenario analysis, real-time performance tracking, and reporting. T-REX Group combines sophisticated cloud-based SaaS technology with big data and asset class expertise to drive down operating and capital expense, reduce risk exposure, and enhance performance for complex investments. As of 30 June 2022, REL's interest in T-REX Group, through the Partnership, was valued at 1.00x Gross MOIC(1) or $17.5 million (Realised: nil, Unrealised: $17.5 million). Infinitum Electric As of 30 June 2022, REL, through the Partnership, has fully invested its $17.5 million commitment to Infinitum. Infinitum Electric'spatented air-core motors offer superior performance in half the weight and size, at a fraction of the carbon footprint of traditional motors, making them pound for pound the most efficient in the world. Infinitum Electric motors open up sustainable design possibilities for the machines we rely on to be smaller, lighter and quieter, improving our quality of life while also saving energy. As of 30 June 2022, REL's interest in Infinitum Electric, through the Partnership, was valued at 1.00x Gross MOIC(1) or $17.5 million (Realised: nil, Unrealised: $17.5 million). DCRN/Tritium DCFC In February 2021, REL invested $0.6 million in the Founder Shares and Warrants of Decarbonization Plus Acquisition Corp. II (NASDAQ: DCRN) at the time of its IPO. In May 2021, DCRN announced it would combine with Tritium, a Brisbane based pioneer in e-mobility and EV charging infrastructure. On 4 January 2022, Tritium announced record breaking Q4'21 and FY'21 financial performance results. The merger vote to approve the combination of Tritium and DCRN occurred and closed on 12 January 2022. In February 2022, REL funded an additional $15 million commitment to Tritium. The funding event occurred three days after the company met with President Biden to announce the construction of the Company's Lebanon, Tennessee manufacturing plant. The plant will employ 500 over the next five years, produce over 10,000 DC fast chargers units annually, and will ultimately reach peak production capacity of 30,000 units annually. As of 30 June 2022, REL's interest in Tritium, through the Partnership, consisted of the $0.6 million sponsor investment, which was valued at5.4xGross MOIC(1) or$3 million (Realised: nil, Unrealised:$3 million), and the $15 million equity investment, which was valued at 0.88x Gross MOIC(1) or $13 million (Realised: nil, Unrealised: $13 million). Group14 In April 2022, REL, through the Partnership, invested $4 million into Group14 Technologies, Inc.'s $400 million Series C funding round. The Series C round was led by Porsche AG, with participation from OMERS Capital Markets, Decarbonization Partners, Vsquared Ventures, and others. Group14 is a battery materials technology company founded in 2015. The Company has developed a proprietary silicon-based anode battery material to replace graphite in conventional lithium-ion batteries. As of 30 June 2022, REL's interest in Group14, through the Partnership, was valued at 1.00x Gross MOIC(1) or $4 million (Realised: nil, Unrealised: $4 million). Hyzon In connection with the closing of the previously announced merger between DCRB and Hyzon Motors Inc. (NASDAQ: HYZN), REL purchased $10 million of DCRB common stock in a private placement transaction at $10 per share in July 2021. Hyzon, headquartered in Rochester, New York, is the industry-leading global supplier of zero-emissions hydrogen fuel cell powered commercial vehicles. As of 30 June 2022, REL's interest in Hyzon, through the Partnership, was valued at 0.29x Gross MOIC(1) or $3 million (Realised: nil, Unrealised: $3 million). The Gross MOIC(1) decreased over the period. DCRD In August 2021, REL announced an investment of $0.6 million in DCRD, a special purpose acquisition vehicle sponsored by an affiliate of REL's investment manager which raised over $316 million in its IPO. As of 30 June 2022, REL's interest in DCRD, through the Partnership, was valued at 1.00x Gross MOIC(1) or $0.6 million (Realised: nil, Unrealised: $0.6 million). Realised Investments Pipestone Pipestone is a Calgary-based oil and gas company focused on the Western Canadian Sedimentary Basin. CNOR had invested in a joint venture with Tourmaline Oil Corp. targeting the Peace River High area (126,000 net acres), which it sold in 3Q19 for C$175 million. Earlier in 2019, CNOR closed on a strategic combination with publicly-traded Blackbird Energy to consolidate its ~25,000 net acre Pipestone Montney position with that of Blackbird's offsetting ~73,000 acres. The pro forma company is named Pipestone Energy Corporation and trades under TSX: PIPE. During the third quarter of 2019, Pipestone completed the build-out of required infrastructure needed to expand its future operations and has since been working towards bringing incremental production online. In February 2022, REL sold its entire position in Pipestone for net proceeds of 53 million CAD (USD 41.7 million). With this transaction, REL no longer owns any interest in Pipestone. As of 30 June 2022, REL's realised position in Pipestone, through the Partnership, was valued at 0.64x Gross MOIC or $58 million (100 per cent. realised). Valuation The Investment Manager is charged with proposing the valuation of the assets held by REL through the Partnership. The Partnership has directed that securities and instruments be valued at their fair value. REL's valuation policy is compliant with IFRS and IPEV Valuation Guidelinesand has been applied consistently from period to period since inception.As the Company's investments are generally not publicly quoted, valuations require meaningful judgement to establish a range of values, and the ultimate value at which an investment is realised may differ from its most recent valuation and the difference may be significant. The Investment Manager values each underlying investment in accordance with the Riverstone valuation policy, the IFRS accounting standards and IPEV Valuation Guidelines. The value of REL's portion of that investment is derived by multiplying its ownership percentage by the value of the underlying investment. If there is any divergence between the Riverstone valuation policy and REL's valuation policy, the Partnership's proportion of the total holding will follow REL's valuation policy. Valuations of REL's investments through the Partnership are determined by the Investment Manager and disclosed quarterly to investors, subject to Board approval. Riverstone values its investments using common industry valuation techniques, including comparable public market valuation, comparable merger and acquisition transaction valuation, and discounted cash flow valuation. For development-type investments, Riverstone also considers the recognition of appreciation or depreciation of subsequent financing rounds, if any. For those early stage privately held companies where there are other indicators of a decline in the value of the investment, Riverstone will value the investment accordingly even in the absence of a subsequent financing round. Riverstone reviews the valuations on a quarterly basis with the assistance of the Riverstone Performance Review Team ("PRT") as part of the valuation process. The PRT was formed to serve as a single structure overseeing the existing Riverstone portfolio with the goal of improving operational and financial performance. The Audit Committee reviews the valuations of the Company's investments held through the Partnership and makes a recommendation to the Board for formal consideration and acceptance. Uninvested Cash As of 30 June 2022, REL had a cash balance of $6.4 million and the Partnership, including its wholly-owned subsidiaries, REL Cayman Holdings, LP, REL US Corp and REL US Centennial Holdings, LLC, had uninvested funds of over $65.9 million held as cash and money market fixed deposits, gross of the accrued Management Fee of $2.7 million. After the outstanding share buybacks at period end of $1.9 million and the accrued Management Fee, REL's aggregate cash balance is $68 million. As in prior years, in accordance with the Partnership Agreement, if the Company requires additional funds for working capital, it is entitled to receive another distribution from the Partnership. The Partnership maintains deposit accounts with several leading international banks. In addition, the Partnership invests a portion of its cash deposits in short-term money market fixed deposits. REL's treasury policy seeks to protect the principal value of cash deposits utilising low risk investments with top-tier counterparts. Uninvested cash earned approximately 5 basis points during the period ended 30 June 2022. All cash deposits referred to in this paragraph are denominated in U.S. dollars. On 4 March 2022, the Board was pleased to allocate an additional £46.0 million to the Share Buyback Programme at which time the Company had the authority to repurchase 8,062,463 shares pursuant to the authority granted at its 2022 AGM. In 2022, the Company had repurchased 2,223,312 shares, in aggregate, for £14.5 million ($18.4 million) at an average share price of £6.54 ($8.27). Since the company started the buyback programme in May 2020, the Company has purchased 27,182,444 shares, in aggregate, for £101 million ($131 million) at an average share price of £3.70 ($4.82). As of 30 June 2022, £35 million remains available for repurchasing; however, the Board has since taken a decision to limit the share buyback amount to £17 million ($21 million) of the available £35 million ($43 million) for the period to 31 December 2022. As of 30 June 2022, REL, through the Partnership, had potential unfunded commitments of $45.6 million. Additionally, REL's functional currency and Financial Statements are all presented in U.S. dollars. The Partnership's commitments are denominated in U.S. dollars, except Hammerhead which is denominated in Canadian dollars. Going Concern The Audit Committee has reviewed the appropriateness of the Company's unaudited interim condensed financial statements being prepared in accordance with "IAS 34 Interim Financial Reporting as adopted by the EU" and presented on a going concern basis, which it has recommended to the Board. The unaudited interim condensed financial statements have been prepared on a going concern basis for the reasons set out below and as the Directors, with recommendation from the Audit Committee, have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, which is defined as the period from the date of approval of the unaudited interim condensed financial statements up until 30 September 2023. In reaching this conclusion, the Directors, with recommendation from the Audit Committee, have considered the risks that could impact the Company's liquidity over the period from the date of approval of the unaudited interim condensed financial statements up until 30 September 2023, and have taken into account the following six key considerations, which are discussed further below. 1. Available liquid resources and potential proceeds from investment realisations versus current and expected liabilities of the Company over the period from the date of approval of the unaudited interim condensed financial statements up until 30 September 2023; 2. Available liquid resources and potential proceeds from investment realisations versus total potential unfunded commitments of the Partnership; 3. Recent NAV & Share Price Performance of the Company; 4. Discount to NAV of the Company; 5. Ongoing Impact of COVID-19; and 6. The Russian Invasion of Ukraine. Please see Note 3 of the unaudited interim condensed financial statements for further information. Principal Risks and Uncertainties Historically, the Company's assets have consisted of investments, through the Partnership, within the global energy industry, with a particular focus on opportunities in the global exploration and production, midstream energy and renewable energy sub-sectors. Its principal risks are therefore related to market conditions in the energy sector in general, but also the particular circumstances of the businesses in which it is invested through the Partnership. The Investment Manager to the Partnership seeks to mitigate these risks through active asset management initiatives and by carrying out due diligence work on potential targets before entering into any investments. The key areas of risk faced by the Company are the following: 1) concentration risk from historically investing only in the global energy sector, 2) Ordinary Shares trading at a Discount to NAV per Share, 3) inherent risks associated with the exploration and production and midstream energy subsectors, including the ongoing impact of the coronavirus pandemic, 4) difficulty for the Company to terminate its Investment Management Agreement, 5) vote on any discontinuation resolution that may be proposed, 6) differences in the investment time horizons and fee provisions between the Company and the private funds managed by Riverstone and 7) climate change and the transition to a lower carbon economy. The principal risks and uncertainties of REL were identified in further detail in the 2021 Annual Report and Financial Statements. The principal risks outlined above remain the most likely to affect the Company and its investments in the second half of the year. Post-Period End Updates Outlook The Investment Manager continues to work with its portfolio companies and management teams to navigate dynamic market conditions driven by geopolitical strife, the ongoing pandemic, volatility in commodity markets, and the energy transition. We believe past work with the legacy commodity linked portfolio and work to identify strong growth equity opportunities in the ever-evolving decarbonisation space, has positioned the portfolio well to capitalise on the upside of energy market volatility and the steady march toward a decarbonised economy. We expect portfolio companies to manage liquidity with discipline, and to increase strategic capital expenditure where appropriate. The Investment Manager will continue to execute on the modified investment programme, identifying new decarbonisation investments that present attractive risk-reward profiles supporting value creation for shareholders. RIGL Holdings, LP 16 August 2022 (1) Gross Unrealised Value and Gross MOIC (Gross Multiple of Invested Capital) are before transaction costs, taxes (approximately 21 to 27.5 per cent. of U.S. sourced taxable income) and 20 per cent. carried interest on applicable gross profits in accordance with the revised terms announced on 3 January 2020, but effective 30 June 2019. Since there was no netting of losses against gains before the aforementioned revised terms, the effective carried interest rate on the portfolio as a whole will be greater than 20 per cent. No further carried interest will be payable until the $138.4 million of realised and unrealised losses to date at 30 June 2022 (largest deficit of $605.5 million at 30 June 2020) are made whole with future gains, so the earned carried interest of $0.8 million at 30 June 2022 has been deferred and will expire in October 2023 if the aforementioned losses are not made whole. Since REL has not yet met the appropriate Cost Benchmark at 30 June 2022, $34.1 million in Performance Allocation was not accrued in accordance with the terms of the current agreement, which would have been accrued under the prior agreement. In addition, there is a management fee of 1.5 per cent. of net assets (including cash) per annum and other expenses. Given these costs, fees and expenses are in aggregate expected to be considerable, Total Net Value and Net MOIC will be materially less than Gross Unrealised Value and Gross MOIC. Local taxes, primarily on U.S. assets, may apply at the jurisdictional level on profits arising in operating entity investments. Further withholding taxes may apply on distributions from such operating entity investments. In the normal course of business, REL may form wholly-owned subsidiaries, to be treated as C Corporations for US tax purposes. The C Corporations serve to protect REL's public investors from incurring U.S. effectively connected income. The C Corporations file U.S. corporate tax returns with the U.S. Internal Revenue Service and pay U.S. corporate taxes on its taxable income Directors' Responsibilities Statement The Directors are responsible for preparing this Interim Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge: • The unaudited interim condensed financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; and • The Chairman's Statement and Investment Manager's Report include a fair review of the information required by: (i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the unaudited interim condensed financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and (ii) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position and performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so. On behalf of the Board Richard Hayden Conclusion We have been engaged by the Company to review the Unaudited Interim Condensed Financial Statements for the six months ended 30 June 2022 which comprise the Condensed Statement of Financial Position, the Condensed Statement of Comprehensive Income, the Condensed Statement of Changes in Equity, the Condensed Statement of Cash Flow and related Notes 1 to 10. We have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the Unaudited Interim Condensed Financial Statements. Based on our review, nothing has come to our attention that causes us to believe that the Unaudited Interim Condensed Financial Statements for the six months ended 30 June 2022 are not prepared, in all material respects, in accordance with "International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union" and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority. Basis for Conclusion We conducted our review in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with IFRS as adopted by the European Union. The Unaudited Interim Condensed Financial Statements have been prepared in accordance with "International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union". Conclusions Relating to Going Concern Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council, however future events or conditions may cause the entity to cease to continue as a going concern. Responsibilities of the Directors The Directors are responsible for preparing the Interim Report and Unaudited Interim Condensed Financial Statements in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority. In preparing the Interim Report and Unaudited Interim Condensed Financial Statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to