Annual Financial Report

P2P GLOBAL INVESTMENTS PLC

Annual Financial Report for the year ended to 31 December 2015

The Directors present the Annual Financial Report of P2P Global Investments plc (the "Company") for the year ended 31 December 2015. A copy of the Company's Annual Report will shortly be available to view and download from the Company's website, www.p2pgi.com. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this announcement.

The following text is copied from the Annual Report & Accounts:

INTRODUCTION TO THE COMPANY

P2P Global Investments plc (the "Company") is the first UK listed company dedicated to investing in credit assets originated by peer to peer platforms and other originators of alternative assets globally. At the end of 2015, after three further share issuances since the initial public offering ("IPO") the Company had 46,754,919 ordinary shares in issue at a price of 1007p and an additional 40,000,000 C shares at a price of 978p, giving a total market capitalisation in excess of £862m. The Company offers its investors the ability to gain diversified, liquid exposure to an otherwise illiquid asset class that has traditionally been the preserve of global banks.

The innovative technology and receptive government policies, combined with stricter regulations of banks, are fuelling the proliferation of online lending, the peer to peer ("P2P") lending market and the wider alternative finance market. Furthermore, big data analytics and new distribution channels have allowed P2P ("Platforms") and other technology start-ups to compete effectively with traditional banks in credit scoring and origination. These changes are likely to solidify over the next five to ten years. The Company is therefore well positioned to grow with the emerging asset class, and aims to deliver an attractive dividend income and capital growth via exposure to diversified credit assets and selective equity stakes in Platforms.

INVESTMENT OBJECTIVES

The Company's investment objectives are to:

a) Provide shareholders with an attractive level of dividend income and capital growth through exposure to investments in alternative finance and related instruments;

b) Achieve investment diversification across Platforms, geographies, asset classes and credit grades; and

c) Allow our shareholders to share the equity upside by investing (in aggregate) up to 10% of gross assets in equity or equity linked securities issued by platforms.

The Company's net asset value ("NAV") as at 31 December 2015 was £873m (cum income) and its market capitalisation was £862m

STRATEGIC REPORT

PERFORMANCE

COMMENTARY

§ The Company invested, directly and indirectly, in excess of £1bn of loans in 2015, allowing the deployment of more than £500m of new equity capital on behalf of both the ordinary and C shares as well as the deployment of more than £300m of new debt on behalf of ordinary shares.

§ The Company achieved positive Net Asset Value ("NAV") returns in every month of 2015, delivering a total NAV return of 6.56% for the ordinary shares. The capital raised for the C shares issued in late July 2015 was deployed in Q3 and Q4 2015. The total NAV return for these shares was 0.99%.

§ The Company delivered 6.12% in dividends to ordinary shareholders on the average NAV for the year.

CAPITAL STRUCTURE AS AT 31 DECEMBER 2015 ORDINARY SHARES

CAPITAL STRUCTURE AS AT 31 DECEMBER 2015 C SHARES

PORTFOLIO COMPOSITION & DEPLOYMENT

PERFORMANCE AND DIVIDEND HISTORY

TOP TEN POSITIONS

Link to graph and tables in relation to the 'Portfolio Composition & Deployment', 'Performance and Dividend History' and 'Top Ten Investment Positions':

http://www.rns-pdf.londonstockexchange.com/rns/9930V_-2016-4-21.pdf

CHAIRMAN'S STATEMENT

I am pleased to present P2P Global Investments plc's second Annual Report, for the year to 31 December 2015. The Company followed through its successful IPO and raised over £670m of additional equity capital (through three issuances) in 2015 on the back of strong investor interest in the product and robust investment opportunities in the alternative and direct lending space.

2015 has proved to be a challenging year for both equity and debt markets with the FTSE All Share Index declining by 2.5% since the start of the year and most market commentators revising downward their dividend expectations for 2016. Geopolitical tensions, an economic slowdown in emerging markets, China's devaluation of its currency, a decline in commodity prices and uncertainties over US interest rates contributed to heightened volatility in the markets.

Over the year the Company's ordinary share price declined by 14.7% closing the year at 1007p and the price for the C shares issued in July 2015 declined by 5.1% closing the year at 978p. The total NAV per share return was 6.56% for the ordinary shares and 0.99% for the C shares in 2015. The Company paid a total dividend of 59.2p per ordinary share in 2015; the average NAV of the ordinary share class during the year was £338m with £20.69m of total dividends declared for the year. The ordinary shares thus delivered a yield of 6.12% in dividends on the average NAV for the year and achieved the lower end of its target range. The Company looks forward to delivering incremental returns to its shareholders as it achieves its target gearing during 2016. The Company will continue to execute its leverage strategy with a view to diversify its sources of funding. To further its objectives, in December 2015 the Company entered into a £150,000,000 secured 3-year multicurrency corporate debt facility with a consortium of institutional lenders. This facility will add valuable diversity and flexibility to the Company's funding options in 2016.

INVESTMENTS

With increasing availability of loans from Platforms that the Company has existing relationships with, and the addition of new Platforms, the Company's monthly deployment has been increasing month on month. The Company is now in a position to comfortably deploy over £100m per month and is confident of achieving its target gearing ratio (between 90% and 110%; debt to equity) over the course of 2016. Deployment diversification continues to be at the forefront of portfolio construction decisions with current credit asset exposure being geographically split 69% US/31% Europe and other geographies for the ordinary shares and 63% US/37% Europe and other geographies for the C shares. In 2015, the Company also expanded its presence to Australasia; there, the underlying asset exposure remains predominantly geared towards consumer loans, in line with the overall market proportions. The Company is continuously looking to diversify its portfolio and seeks attractive risk adjusted returns, to that end the Company has started to deploy its capital in loans backed by real estate. The Company expects its portfolio to continue to evolve in 2016 to enhance diversification and meet the Company's strategic objectives.

COSTS

The Company's ratio of ongoing charges for the year stands at 0.30% which is largely attributable to administration, advisory, legal and other set up costs incurred in establishing new Platform partnerships, leverage facilities and investing in unlisted equities.

SIGNIFICANT POST BALANCE SHEET EVENTS

The conversion of the July 2015 C shares took place on 21 March 2016 following the announcement of the 29 February 2016 NAV. The NAVs attributable to the ordinary shares and the C shares as at the calculation date, being the close of business on 15 March 2016, were 1007.47p per ordinary share and 996.14p per C share respectively. The conversion ratio, as calculated in accordance with the Company's articles of association and the prospectus dated 12 January 2015 was 0.9888 ordinary shares for every one C share held as at close on the conversion record date of 21 March 2016. 39,551,884 new ordinary shares were admitted to the premium listing segment of the Official List of the UK Listing Authority and admitted to trading on the London Stock Exchange's main market for listed securities on 22 March 2016. The Company's issued share capital now consists of 86,306,803 ordinary shares of £0.01 each with voting rights.

OUTLOOK

The world of high street banking has awoken to the challenge posed by innovative online lenders who have started to gain a noticeable market share both in the US and the UK. Financial Institutions have reacted differently to the challenge; whilst some have chosen to deploy capital directly via Platforms, others have taken equity stakes, and some have forged distribution partnerships to securitise loans. At the same time, banks continue to re-organise their balance sheets in light of Basel III and other regulations and are only now coming to terms with higher capital requirements, lower return on equity and correspondingly lower share prices. As earnings decline, banks will continue to seek cost savings making investment in technology more challenging.

Platforms are likely to face additional regulatory scrutiny in 2016 as the FCA commences its full consumer credit licencing process for Platforms in the UK. Whilst some newer Platforms may struggle, the more established players are expected to benefit as a result of additional validation from the regulator. Increased regulatory costs may, however, prove to be a near term challenge for Platforms who typically have tight margins.

There is now significant momentum in many other countries; consequently the Company should be exposed to an increased opportunity set for investments in 2016. In addition, new lending sub-sets are opening up to the same compelling economic forces that gave rise to the sector. We are beginning to see Platforms make inroads into lending niches such as leasing, property development lending, trade finance and specialist secured lending. Leverage has evolved at a rapid pace through 2015, and rated marketplace securitisations have become commonplace. While it took some time and effort to set up the first facilities, we now see banks and insurance companies competing for our business and we are optimistic that 2016 will see us further diversify our funding sources.

More than ever before, yield opportunities are sparse in financial markets. According to Bloomberg, a record $7 trillion in government bonds are now trading at negative yields*. In non-investment grade credit, prices have declined due to investor concerns and uncertainty over credit risk. The outlook for inflation remains benign and whilst unemployment has declined, meaningful rate increases in the short-term are unlikely. Despite the financial markets backdrop, the Company feels confident of its ability to deliver a stable dividend yield over the next 12 months.

Stuart Cruickshank

Chairman

21 April 2016

* http://www.bloomberg.com/news/articles/2016-02-09/world-s-negative-yielding-bond-pile-tops-7-trillion-chart

INVESTMENT MANAGER'S REVIEW

SUMMARY

In 2015 the Company achieved the full deployment of the £250m raised in its first C share issue in January 2015, converted the C share capital into ordinary shares in July 2015, and entered into a number of debt facility agreements to enhance shareholder returns. As at 31 December 2015, the ordinary shares had a debt to equity ratio of 69% and had achieved total NAV return of 6.6% for the year. The Company raised capital in its second C share issue of £400m in July 2015 which was 67% deployed as of 31 December 2015. During the year, the number of Platform partnerships has increased to 16. The Company further broadened its funding options by signing a three-year multicurrency corporate debt facility with a consortium of global institutions in December 2015.

COMPANY PERFORMANCE

NAV per share (Cum Income) at 31 December 2015 was 1013.27p for the ordinary shares and 998.65p for the C shares. The Investment Manager has continued the implementation of the Company's strategy and was able to diversify the assets of the Company by asset class and geography. The Investment Manager continues to pursue new opportunities for achieving robust risk-adjusted returns in the marketplace and direct lending spaces.

PORTFOLIO COMPOSITION

As at 31 December 2015, the Company's exposures consisted of small and medium sized enterprises (SMEs), consumer and real estate loans, as well as equity investments in selected Platforms. Typical original loan terms are between 6 months and 5 years, shorter than the maximum terms envisaged in the prospectus. Gross rates of directly owned loans are between 3% and 36% as the Company targets a range of borrowers within the prime or near-prime segments.

The positions outside the 'Top Ten Investment Positions' are individual borrower loans and therefore a full portfolio listing is not provided. Allocation of the Company's resources is undertaken within the portfolio's limits set out in the Investment Policy on page 83 of the Annual Report.

LOAN INVESTMENTS

As of 31 December 2015, the Company had invested in fixed rate loans with current weighted average gross yield of 10.0% for the ordinary share and 11.5% for the C share. The portfolio has relatively low interest rate sensitivity compared to other credit investments in the market with a weighted average life of less than 1.8 years for the ordinary share and 1.9 years for the C share.

EQUITY INVESTMENT

The Company has a mandate to invest up to 10% of gross assets in the listed or unlisted securities issued by Platforms. As at 31 December 2015, the Company was invested in the unlisted equity of 16 Platforms representing 3.4% of ordinary share NAV and 1.0% of C share NAV. The Investment Manager intends to maintain the percentage of NAV exposed to equity of Platforms at 5% or less.

THE MARKET UPDATE

The second half of 2015 witnessed an increase in volatility with equity indices declining and risky credit spreads substantially widening. Geopolitical tensions, an economic slowdown in emerging markets, China's devaluation of its currency, a decline in commodity prices and uncertainties over US interest rates contributed to heightened volatility in the markets. The majority of global equity and fixed income indices posted negative returns for the year.

The last quarter of 2015 marked the first US Fed interest rate rise since the global financial crisis. The much anticipated decision coincided with an almost immediate reaction by the world's largest Platform (Lending Club) to increase its own borrowing rates for prime US consumers. This increase in borrowing rates by Lending Club is a first signal of marketplace lenders' willingness to align their pricing to base rates in order to compete with other fixed income opportunities. The evolution of Lending Club interest rates over time and per credit grade can be seen in the graph contained in the link given below.

The sell-off in equity markets driven by fears of a slowdown of the global economy, further reduction in oil prices and other factors may have impacted on the Company's share price. As a listed entity, the Company is subject to overall market movements in equities, and whilst the Company's NAV growth remains stable and within target, the premium to NAV that the share price had accumulated in 2015 has been fully eroded by the end of the year. A graph illustrating the movements in share price in 2015 can be seen in the link provided below.

In the credit markets, Q4 2015 was characterised by an overall widening of spreads for risky assets and high yield indices indicating investor concerns and uncertainties with respect to the stability of corporate credit. With the majority of the Company's exposure in consumer credit and small ticket SME lending, the Company's credit performance may better correlate to economic factors such as unemployment rates and wage growth rather than short term spread volatility in the credit markets.

Chart 3, provided in the link below, illustrates the current yields by various fixed income products by their respective durations (Duration measures the percentage price change of a security for a given change in yield. The higher the modified duration of a security, the higher its interest rate risk.) For example, EUR HY Corp (Bloomberg EUR High Yield Corporate Bond Index) was yielding just above 5% with a duration of around four years which means if the yield were to rise by 1%, the price would decline by about 4%.

Chart 4, provided in the link below, illustrates the yield ranges for 2015 for a number of bond indices. The line indicates the yield highest and lowest points for the year and the circle indicates the yield as of 31 December 2015 for the relevant bond index. The riskier end of the indices have widened during the year and are showing the highs for the year, which indicates price declines for these indices.

http://www.rns-pdf.londonstockexchange.com/rns/9930V_1-2016-4-21.pdf

OUTLOOK

From a fundamental point of view, the macro environment remains stable in the United Kingdom. 2015 was the most positive year for UK consumers since 1974 according to Gesellschaft für Konsumforschung (GfK) (GfK Consumer Confidence 2015). The monthly household sentiment index came in above zero in every month of the year. This positive sentiment reflects falling unemployment, increased availability of credit and greater real wage growth. These indicators are at the best levels seen for many years.

The margins on consumer loans have improved over time as write-off rates and bank funding costs reached new lows.

In the United States, consumer confidence has improved since the financial crisis of 2008, as Americans grow more optimistic about the current state of the economy and job market. The jobless rate held at 5% with 292,000 (US Labor Department) people being hired in December 2015, with the consistent reduction in unemployment witnessed since 2011, continuing in 2015.

Margins on consumer loans have been improving with charge-off and funding rates reaching their low points.

http://www.rns-pdf.londonstockexchange.com/rns/9930V_2-2016-4-21.pdf

Judging by the headline margins, shown in Chart 8 in the link provided above, consumer loans remain as an attractive asset class both in the US and UK. As the Platforms gain more market share, they are likely to offer further opportunities to an alternative asset class via investing in well-diversified loan portfolios with low duration.

Stable labour markets, low interest rates (despite a first rise) in the US, lower oil prices and increasing consumer confidence are expected to have a positive impact on the performance of the Company's loan book. As part of the investment process, the Investment Manager continuously assesses each Platform's underwriting and servicing quality and monitors loan book performance closely. Moreover, the Investment Manager periodically updates the loan selection models as it gathers more information on the drivers of loan performance.

The Investment Manager is intending to continue adding Platform partners with unique origination channels and geographies, which is likely to offer further diversification to the existing portfolio and access to attractive asset classes.

In order to enhance shareholder returns, the Investment Manager has entered into funding agreements with a number of bank and non-bank lenders, including the corporate debt facility announced in December 2015 and will continuously pursue lower funding costs where possible.

With a sizable pipeline and access to loans originated by various Platforms, the Company is ideally positioned to continue building its loan portfolio and deliver target returns to its shareholders. The Company remains on target to meet its long-term annual target of 6% to 8% dividend yield.

SUMMARY AND HIGHLIGHTS FOR THE YEAR

In the financial year ending 31 December 2015, the Company successfully placed 66,999,999 shares in three separate issues: an issue of 25,000,000 C shares at 1000p in January 2015, a Tap issue of 1,999,999 ordinary shares at 1075p in June 2015 and a further Issue of 40,000,000 C shares at 1000p in July 2015. The financial and business highlights of the Company for 2015 are as follows:

§ January 2015: The Company issues 25,000,000 shares in a C share Issue

§ January 2015: The Company enters into a £150,000,000 secured four year facility backed by UK consumer loans

§ February 2015: 12.5p dividend per ordinary share announced for the period to 31 December 2014

§ May 2015: The investment manager agreement between the Company and Marshall Wace LLP is novated to MW Eaglewood Europe LLP

§ May 2015: 16.5p dividend per ordinary share announced for the period to 31 March 2015

§ June 2015: The Company issues 1,999,999 ordinary shares via a Tap issue

§ June 2015: 10.5p dividend per ordinary share and 8.5p dividend per C share announced for the period to 31 May 2015

§ July 2015: The Company converts its C shares into ordinary at a ratio of 0.9902 ordinary shares for every C share

§ July 2015: The Company issues 40,000,000 shares in a C share issue

§ September 2015: Following approval of the Court, the Company cancels £832,647,915 of share premium, which accordingly was transferred to the distributable reserves

§ November 2015: 18.5p dividend per ordinary share announced for the period to 30 September 2015

§ December 2015: The Company enters into a £150,000,000 secured 3-year multicurrency corporate debt facility with a consortium of institutional lenders

INVESTMENT PORTFOLIO

The return for the year is in line with the Company's target return. As the gearing ratio reaches the target level, the Investment Manager expects further incremental uplift to the returns. The average NAV of the ordinary share class during the year was £338m with £20.69m of total dividends declared for the year. The Company delivered a 6.12% yield in dividends on the average NAV for the year.

At the end of 2015, the Company's ordinary share class had a leverage ratio of 69% whilst the C share class was still deploying the equity capital raised in July 2015. The Company anticipates deploying debt in Q1 2016, primarily from the corporate debt facility that it announced on 17 December 2015. Furthermore, the Company continues to pursue arrangements with debt providers in order to reduce the cost and increase the flexibility of its debt funding. The Investment Manager currently has a target gearing ratio between 90% and 110% (debt to equity) which it expects to achieve over the course of 2016.

With increasing availability of loans from Platforms the Company has existing relationships with, and the addition of new Platforms, the Company's monthly deployment has been increasing month on month, allowing the C share class to achieve 66.63% deployment at the end of 2015, five months after its launch.

.Portfolio Composition as at 31 December 2015 (Net Asset Value Basis*) Ordinary Shares

Portfolio Composition as at 31 December 2015 (Net Asset Value Basis*) C Shares

*Each asset class percentage is calculated as: (Gross Assets invested in asset class - Debt attributed to or drawn against asset class)/Net Asset Value

INVESTMENT OBJECTIVE

The Company's investment objective is to provide Shareholders with an attractive level of dividend income and capital growth through exposure to investments in alternative finance and related instruments.

INVESTMENT POLICY

The Company's investment policy was amended pursuant to a resolution passed at a general meeting held on 15 June 2015 in order to provide increased flexibility for the investment and management of the Company's assets. The new investment policy as adopted at that meeting is as follows:

The Company invests in consumer loans, SME loans, corporate loans, and advances and loans against corporate trade receivables and other assets, which have been originated via Platforms. The Company may also invest in facilities, securities or other interests backed by a portfolio of any of the aforementioned loans, assets or receivables (all of the foregoing, "Credit Assets"). The Company will typically seek to invest in Credit Assets with targeted net annualised returns of 5 to 15 per cent.

The Company purchases Credit Assets directly (via Platforms) and also invests in Credit Assets indirectly via other investment funds (including those managed by the Investment Manager, the Sub-Manager or their affiliates) that it deems suitable with a view to enhancing Shareholder returns and providing diversification of the Company's assets. The Company will generally only seek to invest via other investment funds where these enable investments in Credit Assets from Platforms that the Company either cannot gain direct access to or could only gain direct access to on less favourable terms than an investment via another investment fund. The Company's investments in Credit Assets may be made through subsidiaries of the Company.

The Company may also invest (in aggregate) up to 10 per cent. of Gross Assets (at the time of investment) in the listed or unlisted securities issued by one or more Platforms. This restriction shall not apply to any consideration paid by the Company for the issue to it of any convertible securities by a Platform. however, it will apply to any consideration payable by the Company at the time of exercise of any such convertible securities or any warrants issued by a Platform.

The Company invests across various Platforms, asset classes, geographies (primarily US and Europe) and credit risk bands in order to ensure diversification and to seek to mitigate concentration risks. The following investment limits and restrictions apply to the Company, to ensure that the diversification of the Company's portfolio is maintained and that concentration risk is limited:

PLATFORM RESTRICTIONS

The Company will not invest more than 33 per cent. of Gross Assets via any single Platform. This limit may be increased to 66 per cent. of Gross Assets via any single Platform, provided that where this limit is so increased in respect of any Platform the Company does not invest an amount which is greater than 25 per cent. (by value) of the total loan origination of the preceding calendar year through such Platform.

ASSET CLASS AND GEOGRAPHICAL RESTRICTIONS

No single loan acquired by the Company will have an Expected Average Life of greater than 5 years. No single trade receivable asset acquired by the Company will be for a term longer than 180 days.

The Company will not invest more than 20 per cent. of Gross Assets, at the time of investment, via any single investment fund investing in Credit Assets. The Company will not invest, in aggregate, more than 60 per cent. of Gross Assets, at the time of investment, in other investment funds that invest in Credit Assets.

The Company will not invest more than 10 per cent. of its Gross Assets, at the time of investment, in other listed closed-ended investment funds, whether managed by the Investment Manager or not, except that this restriction shall not apply to investments in listed closedended investment funds which themselves have stated investment policies to invest no more than 15 per cent. of their gross assets in other listed closed-ended investment funds.

The following apply, in each case at the time of investment by the Company, to both Credit Assets acquired by the Company directly and on a look-through basis to any Credit Assets held by another investment fund in which the Company invests (proportionate to the percentage interest the Company has in such investment fund). It is intended that:

No single consumer loan shall exceed 0.25 per cent. of Gross Assets.

No single SME loan shall exceed 5.0 per cent. of Gross Assets.

No single advance or loan against a trade receivable asset shall exceed 5.0 per cent. of Gross Assets.

No single corporate loan shall exceed 5 per cent. of Gross Assets.

No single facility, security or other interest backed by a portfolio of loans, assets or receivables (excluding any borrowing ring-fenced within any SPV which would be without recourse to the Company) shall exceed 20 per cent. of Gross Assets.

For illustrative purposes only, if the Company acquires a 10 per cent. interest in another investment fund which invests in Credit Assets, at the time of investment in that other investment fund, no single consumer loan held by that investment fund may exceed 2.5 per cent. of Gross Assets.

The following restrictions apply to both Credit Assets acquired by the Company directly and on a lookthrough basis to any Credit Assets held by another investment fund in which the Company invests (proportionate to the percentage interest the Company has in such investment fund):

At least 10 per cent. of Gross Assets will be maintained in consumer Credit Assets, not more than 50 per cent. of Gross Assets will be maintained in SME Credit Assets and not more than 50 per cent. of Gross Assets will be maintained in trade receivable assets.

The Company will maintain at least 10 per cent. of Gross Assets in Credit Assets in Europe and at least 10 per cent. of Gross Assets in Credit Assets in the United States.

OTHER RESTRICTIONS

The Company may invest in cash, cash equivalents and fixed income instruments for cash management purposes and with a view to enhancing returns to Shareholders or mitigating credit exposure. However, the Company will only invest in fixed income instruments of investment grade.

The Company will not invest in Collateralised Debt Obligations ("CDOs").

BORROWING POLICY

Borrowings may be employed at the level of the Company and at the level of any investee entity (including, without limitation, any other investment fund in which the Company invests or any special purpose vehicle ("SPV") that may be established by the Company in connection with obtaining leverage against any of its assets or any issuer vehicle of facilities, securities or other interests backed by a portfolio of Credit Assets).

The aggregate leverage of the Company and any investee entity (on a look-through basis, proportionate to the percentage interest the Company retains in the most junior tranche of such investee entity) shall not exceed 1.5 times Net Asset Value.

The Company may seek to securitise portfolios of Credit Assets and may establish one or more SPVs in connection with any such securitisation.

The Company may also use SPVs in connection with obtaining leverage against Credit Assets to seek to protect the levered portfolio from group level bankruptcy or financing risks. The Company may also, in connection with seeking such leverage or securitising its loans, seek to assign existing assets to one or more SPVs and/or seek to acquire loans using an SPV. The Company will ensure that any SPV used by it to acquire or receive (by way of assignment or otherwise) any loans to UK consumers shall first obtain any required authorisation from the FCA for consumer credit business.

No material change will be made to the investment policy without the approval of Shareholders by ordinary resolution.

STRATEGY & BUSINESS MODEL

FIRST MOVER ADVANTAGE

The emergence of marketplace lending, originally funded by retail capital, is rapidly attracting the interest of professionally managed capital seeking to gain exposure to attractive returns with lower correlation to traditional asset classes. The Company and the Investment Manager pioneered a number of developments within the marketplace lending industry that allowed them to capture a first mover advantage and position themselves well for the growth of the industry. Firstly, by introducing permanent, listed capital, the Company allows investors to gain instant, direct exposure to marketplace lending whilst maintaining the liquidity advantages of holding shares in a listed entity. Secondly, the Company was one of the first to pioneer a global strategy in marketplace lending spread across a number of asset classes, allowing for further diversification compared to strategies focused on single asset classes and single geographies. The Company will look to continue to stay at the forefront of the fast-growing industry with an aim to capture new Platform opportunities, where superior returns can be attained.

FOCUS ON CREDIT

Despite the market enthusiasm for the process of marketplace lending itself, and the ability of such marketplace or balance sheet operators to offer risk-based priced loans to borrowers in a quick and efficient manner, the Investment Manager remains focused on the underlying creditworthiness of the borrowers. The Investment Manager is of the belief that, irrespective of origination source or the convenience of the product to the borrower, credit performance will vary depending on the quality of verification, underwriting, servicing, and the ability to construct diversified portfolios of selective loans. Due diligence on the credit process and overall business of the Platform operators is of primary importance to the Investment Manager and its global team of credit professionals.

GLOBAL OPPORTUNITIES

To date, successful marketplace originators have based their growth and credit performance on a number of characteristics in the markets where they operate including:

§ high quality credit data to enable accurate assessment of creditworthiness and pricing;

§ focus on geographies where oligopolistic credit markets allow traditional lenders to enforce large spreads between deposit rates and borrowing rates; and

§ a focus on types of lending where the overhead cost of traditional lenders bears the biggest weight on gross margin and makes lending unprofitable, unless conducted at high interest rates.

By acknowledging these characteristics, which enable disruptive marketplace lenders to offer borrowers a high quality product and their lenders an attractive return for the level of risk they are taking, the Company is seeking opportunities to meet these criteria, in order to extract additional value for shareholders. As marketplace lending becomes more mainstream in certain geographies and asset classes, the Company

will look to position itself to take advantage of the next wave of Platforms that repeat these characteristics, in new asset classes and new geographies.

PRINCIPAL RISKS

Risk is inherent in the Company's activities but it is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. The Company currently invests via a significant number of Platforms across asset classes and geographies. The investment may take the form of individual loan purchases in a Platform's standard marketplace product; in other cases it is purchasing specific pools with bespoke criteria. The Investment Manager closely monitors performance of the Platforms and operational delivery and is making use of data delivered by the Platforms and its own proprietary systems. The Company's performance may be adversely impacted by a deterioration in the macroeconomic environment.

The Platforms the Company invests through remain subject to operational and regulatory risks, however no Platform that the Company has purchased loans through has suffered failure or materially adverse developments. The P2P and marketplace lending universe is in the early stages of high growth and therefore has to make concerted efforts to maintain high standards and conform to all applicable laws and regulation.

The key risks faced by the Company are set out below. The Board has in place a robust process to assess and monitor the principal risks of the Company. A core element of this is the Company's risk register, which identifies the risks facing the Company and assesses the likelihood and potential impact of each risk, and the quality of the controls operating to mitigate the risk.

The register, its method of preparation and the operation of the key controls in the Investment Manager's systems of internal control are reviewed, and reported to the Board, on a regular basis by the Audit and Valuation Committee. In order to gain a more comprehensive understanding of the Investment Manager's risk management processes and how these apply to the Company's business, the Audit and Valuation Committee periodically receives on-site presentations from the Investment Manager.

Some of the key risks potentially facing the Company are:

A. Investment Strategy - An inappropriate investment strategy, for example asset allocation or the level of gearing, may lead to underperformance resulting in the Company's shares trading on a narrower premium or a wider discount.

Mitigant - The Board manages these risks by diversification of investments through its investment restrictions and guidelines, which are monitored and reported on by the Investment Manager. The Investment Manager provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, liquidity reports and shareholder analyses. The Portfolio Manager also presents to the Board on a regular basis. The Portfolio Manager also employs the Company's gearing strategically, within a range set by the Board.

B. Income - Insufficient income generation leading to a cut in the dividend.

Mitigant - The Board regularly reviews the Company's income statement and receives forecasts prepared by the Investment Manager on future dividends of investments in the portfolio. The Investment Manager continuously monitors the Company's level of income.

C. Financial - The financial risks faced by the Company include credit risk, market price risk, interest rate risk, foreign currency risk and liquidity risk. Credit risk is the primary financial risk of the Company. Credit risk is the risk that borrowers do not fully repay the loans made by the Company or do so with significant delays, causing principal losses and write-offs. Further details on financial risks are disclosed in note 6 of the Financial Statements.

Mitigant - The Directors are ultimately responsible for identifying and controlling risks. Day to day management has been delegated to MW Eaglewood Europe LLP as Investment Manager and AFM to the Group. The Investment Manager and its partner Platforms strive to employ best-in-class credit underwriting processes, and engage in continuous monitoring of actual performance. The Investment Manager monitors that debt collection responsibilities are carried out in accordance with arrangements that are in place between the Investment Manager and partner Platforms. The Investment Manager may also actively pursue a sale of bad debts and/or charged off loans to third party buyers to the extent that it believes that such sale price exceeds the net present value of expected future recoveries.

D. Accounting, Legal and Regulatory - In order to qualify as an investment trust, the Company must comply with Section 1158 of the Corporation Tax Act 2010 ('Section 1158'). The Company has been approved by HM Revenue & Customs and an investment trust. Were the Company to breach Section 1158, it would lose its investment trust status and, as a consequence, gains within the Company's portfolio could be subject to Capital Gains Tax. The Section 1158 qualification criteria are continually monitored by the Investment Manager and the results reported to the Board. The Company must also comply with the provisions of the Companies Act 2006 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules and the Disclosure & Transparency Rules ('DTRs'). A breach of the Companies Act could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules or DTRs could result in the Company's shares being suspended from listing which in turn would breach Section 1158. The Board relies on the services of its Company Secretary, the Investment Manager and its professional advisers to ensure compliance with the Companies Act, the UKLA Listing Rules, DTRs and the Alternative Investment Fund Managers Directive.

VIABILITY STATEMENT

In accordance with provision C.2.2 of the UK Corporate Governance Code, published by the Financial Reporting Council in September 2014 (the "Code"), the Directors have assessed the prospects of the Company over the five year period to the Annual General Meeting ("AGM") in 2021. The Directors believe this period to be appropriate as they will be required by the Articles of Association to put a proposal for the continuation of the Company at that meeting and therefore cannot presume that it will continue as an investment trust thereafter.

In their assessment of the viability of the Company, the Directors have considered each of the Company's principal risks and uncertainties detailed above. The Directors have also considered the Company's revenue and expenditure projections, working capital requirements and the fact that the Company's investments do not comprise readily realisable securities which can be sold to meet funding requirements if necessary.

Based on the Company's current position, the principal risks that it faces and their potential impact on its future development and prospects, the Directors have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period to the AGM in 2021.

ENVIRONMENTAL, HUMAN RIGHTS, EMPLOYEE, SOCIAL AND COMMUNITY ISSUES

The Company is required, by company law, to provide details of the environmental matters (including the impact of the Company's business on the environment), employee, human rights, social and community issues; including information about any policies it has in relation to these matters and the effectiveness of those policies. The Company does not have any employees nor, as an investment trust, does it have any direct impact on the community or environment and as a result does not maintain specific policies in relation to these matters. In carrying out its investment activities and in relationships with suppliers, the Company aims to conduct itself responsibly, ethically and fairly.

GENDER DIVERSITY

The Board of Directors of the Company comprises three male Directors. Further information in relation to the Board's policy on diversity can be found on page 24 of the Annual Report.

On behalf of the Board

Stuart Cruickshank

Chairman

21 April 2016

BOARD OF DIRECTORS

Stuart Cruickshank

Simon King

Michael Cassidy

GOING CONCERN

Having assessed the principal risks and the other matters discussed in connection with the viability statement, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

The full Annual Report contains the following statements regarding responsibility for the financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITES

The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group and Parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Parent Company and of the profit or loss of the Group for that period.

In preparing these financial statements, the Directors are required to:

§ select suitable accounting policies and then apply them consistently;

§ make judgements and accounting estimates that are reasonable and prudent;

§ state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements;

§ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors consider that the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess a company's performance, business model and strategy.

Each of the Directors, confirm that, to the best of their knowledge:

§ the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

§ the Annual Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of P2P Global Investments plc

Stuart Cruickshank

Chairman

21 April 2016

NON-STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's statutory accounts for the year ended 31 December 2015 but is derived from those accounts. Statutory accounts for the year ended 31 December 2015 will be delivered to the Registrar of Companies in due course. The Auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditors' report can be found in the Company's full Annual Report and Accounts on the Company's website at www.p2pgi.com

As at 31 December 2015

Stuart Cruickshank

Chairman

21 April 2016

See notes to the consolidated financial statements

The total column of this statement represents the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards ("IFRS"). The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies ("AIC"). All items in the above Statement derive from continuing operations. There is no other comprehensive income.

See notes to the consolidated financial statements

The total column of this statement represents the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards ("IFRS"). The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies ("AIC"). All items in the above Statement derive from continuing operations. There is no other comprehensive income.

See notes to the consolidated financial statements

See notes to the consolidated financial statements

*For the period from 6 December 2013 (date of incorporation) to 31 December 2014.

See notes to the consolidated financial statements

*For the period from 6 December 2013 (date of incorporation) to 31 December 2014.

See notes to the consolidated financial statements

1. GENERAL INFORMATION

P2P Global Investments plc (the "Company") is a closed- ended investment company incorporated in England and Wales on 6 December 2013 with registered number 8805459. The Company commenced operations on 30 May 2014.

The investment objective of the Company is to provide shareholders with an attractive level of dividend income and capital growth through exposure to investments in alternative finance and related instruments.

The Company's investment manager is MW Eaglewood Europe LLP (the "Investment Manager"). The Investment Manager replaced Marshall Wace LLP as investment manager pursuant to a deed of novation on 1 May 2015. MW Eaglewood Americas LLC, an affiliate of the Investment Manager and an SEC registered investment adviser, has been appointed as sub investment manager (the "Sub-Manager") to the Company. The Investment Manager has, pursuant to the Sub-Management Agreement, delegated certain of its responsibilities and functions, including its discretionary management of the Company's portfolio of credit assets, to the Sub-Manager.

MW Eaglewood Europe LLP is authorised as an Alternative Investment Fund Manager ("AIFM") under the Alternative Investment Fund Managers Directive ("AIFMD") from 27 April 2015, replacing Marshall Wace LLP from 1 May 2015, who had acted as AIFM from 30 April 2014. The Company is defined as an Alternative Investment Fund and is subject to the relevant articles of the AIFMD.

The Company invests, directly and indirectly, in consumer loans, small and medium sized enterprises ("SME") loans, advances against corporate trade receivables and/or purchases of corporate trade receivables ("Credit Assets") which have been originated via Platforms. The Company will typically seek to invest in Credit Assets with targeted net annualised returns of 5 to 15 per cent. The Company will seek to purchase Credit Assets directly (via Platforms) and will also invest in such assets indirectly via funds, partnerships or special purpose vehicles (including those managed by the Investment Manager, the Sub-Manager or their affiliates) that it deems suitable with a view to enhancing Shareholder returns and providing diversification of the Company's assets.

As at 31 December 2015 the Company held equity in the form of 46,754,919 ordinar y shares (2014: 20,000,000) and 40,000,000 C shares (2014: None). These shares are listed on the Premium listing segment of the Official List of the UK Listing Authority and trade on the London Stock Exchange's main market for listed securities.

Citco Fund Services (Ireland) Limited has been appointed as the administrator of the Company. The Administrator is responsible for the Company's general administrative functions, such as the calculation and publication of the Net Asset Value ("NAV") and maintenance of the Company's accounting records.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation and consolidation

The consolidated financial statements for the Company are prepared in accordance with International Financial Reporting Standards ("IFRS"). They comprise standards and interpretations approved by the International Accounting Standards Board and International Financial Reporting Committee, interpretations issued by the International Accounting Standard Committee that remain in effect, to the extent they have been adopted by the European Union. The consolidated financial statements are also in compliance with relevant provisions of the Companies Act 2006 as applicable to companies reporting under IFRS.

 As disclosed in note 15 'Related Party Transactions', the Company invests in a special purpose vehicle, Eaglewood SPV I LP (the "SPV") and at 31 December is the sole Limited Partner in that SPV. The principal activity of Eaglewood SPV I LP is to invest in alternative finance investments and related instruments, including marketplace loans, with a view to achieving the Company's investment objective. The Company's position with regards to the SPV is that of an investor where its maximum loss is restricted to its investment in the vehicle and in return for this receives a quarterly income distribution. The financial statements of the Company do not consolidate Eaglewood SPV1 LP as the Company does not exercise control over its activities, which are vested in the General Partner who, subject to its powers to delegate such functions, shall have and may exercise on behalf of the SPV, all powers and right necessary, proper, convenient or advisable to effectuate and carry out the purposes, business and objectives of the SPV.

Advantage has been taken of the exemption under section 408 of the Companies Act 2006 and accordingly the Group has not presented a Statement of Comprehensive Income for the Company alone. The net return on ordinary activities after taxation of the Company for the year ended 31 December 2015 was £27,533,467 (2014: £4,462,201).

The consolidated financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the valuation of investments and derivative financial instruments at fair value. The Directors consider that the Group has adequate financial resources to enable it to continue operations for a period of no less than 12 months from the reporting date. Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Group's consolidated financial statements.

Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts issued by the Association of Investment Companies ("AIC") in January 2009 is consistent with the requirements of IFRS, the Directors have sought to prepare the consolidated financial statements on a basis compliant with the recommendations of the SORP.

The Group's presentational and functional currency is Pounds Sterling (£). Pounds Sterling reflects the currency in which funds from financing activities are generated.

Subsidiaries are investees controlled by the Company. The Company controls an investee if it is exposed to, or has the rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Company reassesses whether it has control if there are changes to one or more elements of control.

The Company controls P2PCL1 PLC (the "Subsidiary") (together "the Group"), a limited liability company incorporated in England and Wales, through its ownership of one class A Share in the Subsidiary which confers control of the voting rights in that entity. Intra-group balances and transactions, and any unrealised income and expenses (except for currency transaction gains or losses) arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Subsidiaries are valued at fair value which is deemed to be net asset value.

(b) Presentation of Statement of Comprehensive Income

In order to better reflect the activities of an investment trust company and in accordance with the guidance set out by the AIC, supplementary information which analyses the Consolidated Statement of Comprehensive Income between items of revenue and capital nature has been presented alongside the Consolidated Statement of Comprehensive Income. Net revenue is the measure the Directors believe appropriate in assessing the Group's compliance with certain requirements set out in section 1158 of the Corporation Taxes Act 2010.

In respect of the analysis between revenue and capital items presented within the Consolidated Statement of Comprehensive Income, all expenses and finance costs, which are accounted for on an accruals basis, have been presented as revenue items except those items listed below:

· Expenses are allocated to capital where a direct connection with the maintenance or enhancement of the value of the investments can be demonstrated. Investment management fees and finance costs are allocated to capital in accordance with accounting policy 2(d); and

· Expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment.

The following are presented as capital items:

· gains and losses on the realisation of investments;

· increases and decreases in the valuation of investments held at the year-end;

· realised and unrealised gains and losses on transactions undertaken to hedge an exposure of a capital nature;

· realised and unrealised exchange differences of a capital nature; and

· expenses, together with the related taxation effect, allocated to capital in accordance with the above policies.

(c) Income

For financial instruments measured at amortised cost the effective interest rate (EIR) method is used to measure the carrying value of a financial asset or liability and to allocate associated interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability.

In calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument (for example, early redemption penalty charges) but does not consider future credit losses. The calculation includes all fees received and paid and costs borne that are an integral part of the effective interest rate and all other premiums or discounts above or below market rates.

Once a financial asset or a group of similar financial assets becomes impaired, interest income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss and is recognised over the period to which the expected cash flows relate.

Dividend income from investments is taken to the revenue column of the Statement of Comprehensive Income on an ex-dividend basis.

Bank interest and other income receivable are accounted for on an accruals basis.

The increase in the Group's share of the distributable profit in SPV vehicles is treated as revenue return provided that the underlying assets of the SPV comprises solely of income generating loans, or investments in lending Platforms which themselves generate net interest income.

(d) Expenses, fees and commissions

Fees and commissions not directly attributable to generating a financial instrument are recognised as services are provided, or on the performance of a significant act which means the Group has become contractually obligated to settle those amounts.

The Group currently charges performance fees to revenue return as it is the current expectation that the majority of the Group's return will be generated through revenue rather than capital gains on investments. Investment management fees are allocated between the revenue and capital accounts based on the prospective split of the gross revenue between revenue and capital. The percentage of management expenses allocated to capital is less than 1% of the total. Refer to Note 9 for further details of the management and performance fees.

Gains and losses arising from derivative instruments are credited or charged to the Statement of Comprehensive Income. Gains and losses of a revenue nature are reflected in the revenue column and gains and losses of a capital nature are reflected in the capital column. All other expenses are accounted for on an accruals basis.

(e) Dividends payable to shareholders

Dividends to shareholders are accounted for in the period which they are paid or approved in general meetings. Dividends payable to shareholders are recognised in the Statement of Changes in Equity when they are paid, or have been approved by shareholders in the case of a final dividend and become a liability to the Group.

(f) Taxation

The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the Consolidated Statement of Financial Position date.

In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented against capital returns in the supplementary information in the Consolidated Statement of Comprehensive Income is the "marginal basis". Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of the Consolidated Statement of Comprehensive Income, then no tax relief is transferred to the capital return column.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Investment trusts which have approval as such under section 1158 of the Corporation Taxes Act 2010 are not liable for taxation on capital gains. The carrying amount of deferred tax assets is reviewed at each Consolidated Statement of Financial Position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax rates that have been enacted or substantively enacted at the Consolidated Statement of Financial Position date.

Deferred tax is charged or credited in the Consolidated Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

(g) Financial assets and financial liabilities

The Group classifies its financial assets and financial liabilities at inception into the following categories:

(i) Financial assets and financial liabilities at fair value through profit or loss

This category consists of forward foreign exchange contracts, option contracts, money market funds, unlisted equities positions, equities, fixed income securities and the investment in the SPV. Assets and liabilities in this category are carried at fair value.

The fair values of derivative instruments are estimated using discounted cash flow models using yield curves that are based on observable market data or are based on valuations obtained from counterparties.

Investments in money market funds and the SPV are carried at fair value. This is determined using the NAV for the units at the balance sheet date as provided by the relevant fund administrator.

The unlisted equities are valued at fair value. The fair value is based on primary issuance of stock, secondary market transactions or third party valuations which are considered representative of the fair value. Gains and losses arising from the changes in the fair values are recognised in the Consolidated Statement of Comprehensive Income.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The Group's loan assets are classified as loans and receivables.

Loans are recognised when the funds are advanced to borrowers. Loans and receivables are carried at amortised cost using the effective interest rate method less provisions for impairment.

(iii) Purchases and sales of financial assets

Purchases and sales of financial assets are accounted for at trade date. Financial assets are derecognised when the rights to receive cash flows have expired or where the assets have been transferred and substantially all of the risks and rewards of ownership have been transferred.

(iv) Impairment of financial assets

Assets carried at amortised cost

The Group assesses at each balance sheet date whether, as a result of one or more events that occurred after initial recognition, there is objective evidence that a financial asset or group of financial assets is impaired. Evidence of impairment may include:

· indications that the borrower or group of borrowers is experiencing significant financial difficulty;

· default or delinquency in interest or principal payments; or

· debt being restructured to reduce the burden on the borrower.

The Group assesses whether objective evidence of impairment exists either individually for assets that are separately significant or individually or collectively for assets that are not separately significant.

If there is no objective evidence of impairment for an individually assessed asset it is included in a group of assets with similar credit risk characteristics and collectively assessed for impairment.

If there is objective evidence that an impairment loss has incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate. The resultant provisions are deducted from the appropriate asset values in the Consolidated Statement of Financial Position.

The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Group to reduce any differences between loss estimates and actual loss experience.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the provision is adjusted and the amount of the reversal is recognised in the Consolidated Statement of Comprehensive Income.

Where a loan is not recoverable, it is written off against the related provision for loan impairment once all the necessary procedures have been completed and the amount of the loss has been determined. Subsequent recoveries of amounts previously written off are reflected against the impairment losses recorded in the Consolidated Statement of Comprehensive Income.

Key estimates and assumptions in impairment of financial assets

The assessment of impairment of the investments at amortised cost requires the use of accounting estimates and assumptions that could cause material adjustment to the carrying value of those investments. The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Group.

(v) Financial liabilities

Financial liabilities are derecognised when the obligation is discharged, cancelled or has expired.

(vi) Derivatives

Derivatives are entered into to reduce exposures to fluctuations in interest rates, exchange rates, market indices and credit risk and are not used for speculative purposes.

Derivatives are carried at fair value with movements in fair values recorded in the Consolidated Statement of Comprehensive Income. Derivative financial instruments are valued using discounted cash flow models using yield curves that are based on observable market data or are based on valuations obtained from counterparties.

All derivatives are classified as assets where their fair value is positive and liabilities where their fair value is negative. Where there is the legal ability and intention to settle net, then the derivative is classified as a net asset or liability, as appropriate.

(vii) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the Consolidated Statement of Financial Position if, and only if, there is a currently enforceable legal right to set off the recognised amounts and there is an intention to settle on a net basis, or to realise an asset and settle the liability simultaneously.

(h) Other receivables

Other receivables do not carry any interest and are short-term in nature and are accordingly stated at their nominal value as reduced by appropriate allowances for estimated impairment.

(i) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments with a maturity of 3 months or less that are readily convertible to known amounts of cash.

(j) Current liabilities

Current liabilities, other than derivatives, are not interest-bearing and are stated at their nominal value.

(k) Ordinary and C Shares

Ordinary and C shares are classified as equity. The costs of issuing or acquiring equity are recognised in equity (net of any related income tax benefit), as a reduction of equity on the condition that these are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

The costs of an equity transaction that is abandoned are recognised as an expense. Those costs might include registration and other regulatory fees, amounts paid to legal, accounting and other professional advisers, printing costs and stamp duties.

The Group's equity NAV per unit is calculated by dividing the equity - net assets attributable to the holder of redeemable shares divided by the total number of outstanding shares.

(l) Rates of exchange

Transactions in foreign currencies are translated into sterling at the rate of exchange ruling on the date of each transaction. Monetary assets, liabilities and equity investments in foreign currencies at the Consolidated Statement of Financial Position date are translated into sterling at the rates of exchange ruling on that date. Profits or losses on exchange, together with differences arising on the translation of foreign currency assets or liabilities, are taken to the capital return column of the Consolidated Statement of Comprehensive Income. Foreign exchange gains and losses arising on investments held at fair value are included within changes in fair value.

(m) Capital reserves

Capital reserve - arising on investments sold includes:

· gains/losses on disposal of investments;

· exchange differences on currency balances and on settlement of loan balances;

· cost of own shares bought back; and

· other capital charges and credits charged to this account in accordance with the accounting policies above.

Capital reserve - arising on investments held includes:

· increases and decreases in the valuation of investments held at the year end.

All of the above are accounted for in the Statement of Comprehensive Income except the cost of own shares bought back which is accounted for in the Statement of Changes in Shareholders' Funds.

(n) Segmental reporting

The Chief Operating Decision Maker is the Board of Directors. The Directors are of the opinion that the Group is engaged in a single segment of business, being the investment of the Group's capital in financial assets comprising consumer loans, small and medium sized enterprise ("SME") loans, corporate trade receivables and/or advances thereon.

(o) Critical accounting estimates and assumptions

Estimates and assumptions used in preparing the consolidated financial statements are reviewed on an ongoing basis and are based on historical experience and various other factors that are believed to be reasonable under the circumstances.

The results of these estimates and assumptions form the basis of making judgments about carrying values of assets and liabilities that are not readily apparent from other sources.

The Group's loans are held at amortised costs less impairments. Loans are assessed individually for impairment based on specific evidence of an impairment having occurred, for example a borrower being a certain number of days late. Through a review of the Group's own data as well as that reported by Platforms and other comparable public data, a percentage of principal is impaired at different stages of delinquency as a borrower becomes progressively later on their payment. This rate varies by geography and loan type. Recovery assumptions are made depending on any security posted against a loan, any sale agreements for charged-off loans, actual recoveries observed over time on comparable loans, or as determined by the Investment Manager and approved by the Valuation Committee. The amount of impairment loss experienced for any given loan may ultimately differ from these assumptions. As the Group records further data about impairment losses, the estimates applied to the impairment assessment continue to be refined and updated as applicable. A further breakdown of the impairments can be found in Note 8.

Estimates and assumptions made in the valuation of unquoted investments and investments for which there is an inactive market may cause material adjustment to the carrying value of those assets and liabilities. These are valued in accordance with the techniques set out in Note 2(g).

(p) New standards and amendments to existing standards

Accounting standards issued but not yet effective

At the date of this document, the following applicable standards were in issue but not yet effective:

IFRS 15, 'Revenue from contracts with customers', effective 1 January 2018. This is the converged standard on revenue recognition and replaces IAS 11, 'Construction contracts', IAS 18, 'Revenue' and related interpretations.

IFRS 11 'Accounting for Acquisitions of Interests in Joint Operations', effective 1 January 2016. The amendments to IFRS 11 clarify the accounting for the acquisition of an interest in a joint operation where the activities of the operation constitute a business. They require an investor to apply the principles of business combination accounting when it acquires an interest in a joint operation that constitutes a business.

IAS 16 and IAS 38, 'Clarification of Acceptable Methods of Depreciation and Amortisation', effective 1 January 2016. The amendments to IAS 16 and IAS 38 clarify that a revenue-based method of depreciation or amortisation is generally not appropriate.

IAS 27, 'Equity method in separate financial statements', effective 1 January 2016. The amendments to IAS 27 allow entities to use the equity method in their separate financial statements to measure investments in subsidiaries, joint ventures and associates.

IFRS 10 and IAS 28, 'Sale or contribution of assets between an investor and it's associate or joint venture', effective 1 January 2016. The amendments clarify the accounting treatment for sales or contribution of assets between an investor and its associates or joint ventures. They confirm that the accounting treatment depends on whether the non-monetary assets sold or contributed to an associate or joint venture constitute a 'business' (as defined in IFRS 3 Business Combinations).

IAS 1, 'Disclosure Initiative', effective 1 January 2016. The amendments to IAS 1 provide clarifications on a number of issues including: materiality (an entity should not aggregate or disaggregate information in a manner that obscures useful information), disaggregation and subtotals (line items specified in IAS 1 may need to be disaggregated where this is relevant to an understanding of the entity's financial position of performance), notes (notes do not need to be presented in a particular order), and OCI arising from investments accounted for under the equity method.

IFRS 10, IFRS 12 and IAS 28, 'Investment entities: Applying the consolidation exception', effective 1 January 2016. These amendments clarify that the exception from preparing consolidated financial statements is also available to intermediate parent entities which are subsidiaries of investment entities, an investment entity should consolidate a subsidiary which is not an investment entity and whose main purpose and activity is to provide services in support of the investment entity's investment activities, and entities which are not investment entities but have an interest in an associate or joint venture which is an investment entity have a policy choice when applying the equity method of accounting. The fair value measurement applied by the investment entity associate or joint venture can either be retained, or a consolidation may be performed at the level of the associate or joint venture, which would then unwind the fair value measurement.

These new standards are not expected to have a significant impact on the Group's financial statements or performance.

IFRS 9, 'Financial instruments', specifies how an entity should classify and measure financial assets and liabilities, including some hybrid contracts. The standard improves and simplifies the approach for classification and measurement of financial assets compared with the requirements of IAS 39. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged. The standard applies a consistent approach to classifying financial assets and replaces the numerous categories of financial assets in IAS 39, each of which had its own classification criteria. IFRS 9 now divides all financial assets that are under the scope of IAS 39 into two classifications - those measured at amortised cost and those measured at fair value. The determination is made at initial recognition. Specifically, under IFRS 9 loans and receivables can be measured at amortised cost only if the objective of the entity is to hold the financial asset to collect contractual cash flows and that the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. All other debt instruments will be measured at fair value through profit or loss. Also, IFRS 9 requires expected credit losses to be recognised in contrast to IAS 39 which only recognises incurred credit losses. The Directors are currently evaluating the impact of this standard upon the Group.

3. FAIR VALUE MEASUREMENT

Financial instruments measured and reported at fair value are classified and disclosed in one of the following fair value hierarchy levels based on the significance of the inputs used in measuring its fair value:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

Level 3- Pricing inputs for the asset or liability that are not based on observable market data (unobservable inputs).

An investment is always categorised as Level 1, 2 or 3 in its entirety. In certain cases, the fair value measurement for an investment may use a number of different inputs that fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgement and is specific to the investment.

Group at 31 December 2015

The following table analyses within the fair value hierarchy the Group's assets and liabilities measured at fair value at 31 December 2015:

The following table presents the movement in the Group's Level 3 positions for the year ended 31 December 2015.

The net change in realised/unrealised gains is recognised within gains on investments in the Consolidated Statement of Comprehensive Income.

Quantitative information regarding the unobservable inputs for the Group's Level 3 positions is given below:

The investment in the SPV is valued based on the NAV as calculated by the administrators at the Statement of Financial Position date. No adjustment has been determined to be necessary to the NAV as supplied by the administrator as this reflects the fair value of the underlying investments. The NAV of the other funds are sensitive to movements in interest rates due to their investment in loans.

The investments in unlisted equities are valued based on recent transactions and recent rounds of funding by the investee entities. The investments in fixed income securities included within level 3 of the above hierarchy are valued based on recent transactions.

If the price of fixed income, the investment in other funds and unlisted equities held at 31 December 2015 year end had increased/decreased by 5% it would have resulted in an increase/decrease in the total value of fixed income of £125,466, the investments in other funds of £24,201,727 and the unlisted equities of £651,677.

Assets and liabilities not carried at fair value but for which fair value is disclosed

The following table presents the fair value of the Group's assets and liabilities (by class) not measured at fair value through profit and loss at 31 December 2015 but for which fair value is disclosed:

The table below provides details of the loans at amortised cost held by the Group at31 December 2015.

Accumulated impairment included in the Consolidated Statement of Financial Position for the year is reported in impairment of loans.

Company at 31 December 2015

The following table analyses within the fair value hierarchy the Company's assets and liabilities measured at fair value at 31 December 2015:

The following table presents the movement in the Company's Level 3 positions for the year ended 31 December 2015.

The net change in realised/unrealised gains is recognised within gains on investments in the Consolidated Statement of Comprehensive Income.

Quantitative information regarding the unobservable inputs for the Group's Level 3 positions is given below:

The investment in the SPV is valued based on the NAV as calculated by the respective administrator at the Statement of Financial Position date. No adjustment have been determined to be necessary to the NAV as supplied by the administrator as this reflects the fair value of the underlying investments. The NAV of the other funds are sensitive to movements in interest rates due to their investment in loans.

The investments in unlisted equities are valued based on recent transactions and recent rounds of funding by the investee entities. The investments in fixed income securities included within level 3 of the above hierarchy are valued based on recent transactions.

If the price of fixed income, the investment in other funds and unlisted equities held at 31 December 2015 year end had increased/decreased by 5% it would have resulted in an increase/decrease in the total value of fixed income of £125,466, the investments in other funds of £24,201,727 and the unlisted equities of £651,677.

Assets and liabilities not carried at fair value but for which fair value is disclosed

The following table presents the fair value of the Company's assets and liabilities (by class) not measured at fair value through profit and loss at 31 December 2015 but for which fair value is disclosed:

The table below provides details of the loans at amortised cost held by the Company at 31 December 2015.

Group and Company at 31 December 2014

The following table analyses within the fair value hierarchy the Group and Company's assets and liabilities measured at fair value at 31 December 2014: