Final Results

RNS Number : 8151I

RM Infrastructure Income PLC

21 April 2022

RM INFRASTRUCTURE INCOME PLC

(the ''Company'' or "RMII")

FINAL RESULTS

CONTINUED DIVERSIFICATION THROUGH REFRESHED INVESTMENT FOCUS

STABLE RETURNS FOR INVESTORS ALONGSIDE TANGIBLE BENEFITS FOR PEOPLE AND PLANET

RMII, the investment trust specialising in secured debt investments, announces its results for the year ended 31 December 2021.

Operational highlights

- Diversified portfolio with gross assets of £130.8 million invested across 34 loans, 12 sectors and 16 sub-sectors

- RM Funds further accreditation by the British Business Bank as an accredited lender for the RLS with RMII as a funding partner

- Portfolio benefits from enhanced credit quality with 25.5% invested into partially government guaranteed Coronavirus Business Interruption Loan Scheme (CBILS) and Recovery Loan Scheme (RLS)

- Portfolio credit metrics improved over the year as measured by the proportion of senior loans and CBILS / RLS vs. junior debt totalling 60.2% vs. 46% as at the year ended 31 December 2020

- Exposure to target social and environmental infrastructure sectors now 50.8% of NAV

- New loans and further drawdowns from existing facilities totalled £29.7 million during the year with repayments & divestments totalling £39.7 million

- The Good Economy published its first full Impact Assessment Report for RMII. Key findings include:

o Weighted average portfolio impact score rose from 18.56 as at July 2021 to 22.4 as at March 2022

o Loans within the RMII portfolio have supported the creation of 1,115 jobs

o 99% invested outside of London compared to the industry average of 65%

Financial Highlights

- 6.5 pence dividend for full year continuing track record of having met or exceeded dividend target since IPO (total dividend distributions since IPO totalling 30.725 pence per ordinary share)

- Dividend fully covered by earnings 1.01 times

- NAV total return for the year 7.6%

	Year ended 31 December 2021	Year ended 31 December 2020
Gross asset value (£'000)	£130,821	£132,822
NAV per Ordinary Share (pence)	94.41p	93.26p
Ordinary Share price (pence)	95.00p	87.00p
Ordinary Share price premium to NAV	0.6%	(6.7%)
Total return - Ordinary Share NAV and dividends	+7.6%	+3.1%

Outlook

- Strengthened commitment to investing in Social & Environmental Infrastructure sectors with high quality pipeline transaction

- Legal claim ongoing to recover costs associated with cladding replacement and loss of income to date within wholly owned student accommodation asset in Coventry

- Ongoing reduction of watchlist through successful outcomes - releasing further valuation adjustments as those loans are marked back to par. Provisions totalling £4.3 million or c.3.6 pence per ordinary share

- Well-placed to offer fixed income returns with limited exposure to interest rate risk due to the short duration and high-yielding nature of the portfolio (weighted average life of the loan book reduced to 2.23 years vs. 3.04 years as at the year ended 31 December 2020 and weighted average yield of 8.54%)

- Enhanced partnership with The Good Economy to provide reputable third-party assurance for ESG & Impact reporting

Norman Crighton, Chairman of RMII, commented:

"The Board is pleased to report a strong performance for the year. Providing support to underserved UK companies who make positive contributions to society underpins all that we do. We are pleased with the progress made in further aligning our portfolio to our target social & environmental infrastructure sectors, which are both strongly aligned with UN SDG goals. Through our partnership with The Good Economy and our active ESG engagement with management teams, we remain confident we can deliver triple bottom line returns to our investors: stable economic returns combined with a tangible positive impact for people and planet.

The challenges facing the global environment are widely reported, particularly the crisis in Ukraine where our thoughts remain with all those impacted. Alongside having no exposure to Russia or Ukraine, we have a defensive investment focus uncorrelated to global equity markets and hold a clear focus on real assets with limited duration exposure. We therefore have every confidence the portfolio is well-positioned to navigate this uncertainty and will continue to deliver for our investors. We look forward to 2022 with optimism and remain focused on getting back to trading a premium to NAV. With a strong pipeline and through our collective expertise, we firmly believe the best days remain ahead for RMII."

Investor webinar

An investor webinar will be held this afternoon at 2.00 pm, hosted by James Robson (Chief Investment Officer, RM Funds) and Thomas Le Grix De La Salle (Co-Portfolio & Investment Manager, RM Funds). If you would like to join the webinar, please contact Tulchan for more details.

For further information, please contact:

RM Funds - Investment Manager

James Robson

Thomas Le Grix De La Salle

Pietro Nicholls

0131 603 7060

Singer Capital Markets Advisory LLP - Financial Adviser and Broker

James Maxwell

Asha Chotai

020 7496 3000

Peel Hunt LLP - Financial Adviser and Broker

Luke Simpson

Liz Yong

020 7418 8900

Tulchan Communications LLP - Financial PR

Elizabeth Snow

Oliver Norgate

0207 353 4200

RMII@tulchangroup.com

Sanne Fund Services (UK) Limited - Administrator and Company Secretary

Brian Smith

Ciara McKillop

020 3327 9720

ANNUAL REPORT AND ACCOUNTS

For the year ended 31 December 2021

About us

RM Infrastructure Income plc ("RMII" or the "Company") aims to generate attractive and regular dividends through investment in secured debt instruments of UK Small and Medium sized Enterprises ("SMEs") and mid-market corporates including any loan, promissory notes, lease, bond, or preference share (such debt instruments, as further described in the Annual Report, being "Loans") sourced or originated by RM Capital Markets Limited (the "Investment Manager") with a degree of inflation protection through index-linked returns where appropriate.

PORTFOLIO AT A GLANCE

Operational highlights

> Diversified portfolio with gross assets of £130.8 million invested across 34 loans and one wholly owned asset, across 12 sectors and 16 sub-sectors

> RM Funds further accreditation by the British Business Bank as an accredited lender for the RLS with RMII as a funding partner

> 25.5% of the portfolio invested into partially government guaranteed CBILS & RLS eligible loans

> Approximately 50.6% of the portfolio NAV is invested into Social & Environmental Infrastructure sectors with a strong pipeline and expectation that allocations to these areas in 2022 will further increase as the portfolios maturing investments are recycled within those core sectors

> The Good Economy annual impact report assessment noted that weighted average portfolio impact score rose from 18.56 as at July 2021 to 22.4 as at March 2022 and that loans within the RMII portfolio have supported the creation of 1,115 jobs

Financial highlights

> 6.5 pence dividend for full year meeting target set at IPO

> Dividend fully covered by earnings 1.01 times

> NAV total return for the year 7.6%


	Year ended	Year ended
	31 December 2021	31 December 2020
Gross asset value (£'000)¹	£130,821	£132,822
Net Asset Value ("NAV") (£'000)	£111,250	£110,384
NAV per Ordinary Share (pence)	94.41p	93.26p
Ordinary Share price (pence)	95.00p	87.00p
Ordinary Share price premium/(discount) to NAV¹	0.6%	(6.7%)
Ongoing charges¹	1.92%	1.91%
Gearing (net)¹	14.6%	18.3%
Accrued entitlement of Zero Dividend Preference ("ZDP") Share (pence)²	-	109.87

Performance Summary

	% change^3,5	% change^4,5
Total return - Ordinary Share NAV and dividends¹	+7.6%	+3.1%
Total return - Ordinary Share price and dividends¹	+16.7%	-5.3%

¹ These are Alternative Performance Measures ("APMs").

² Based on the net assets attributable to the ZDP Shares as at 31 December 2020. The Final Capital Entitlement in respect of the ZDPs was paid to ZDP Shareholders on 6 April 2021 following which the ZDPs and its listing were cancelled.

³ Total returns for the year to 31 December 2021, including dividend reinvestment.

⁴ Total returns for the year to 31 December 2020, including dividend reinvestment.

⁵ Source: Bloomberg.

Alternative Performance Measures ("APMs")

The financial information and performance summary data highlighted in the footnote to the above tables are considered to represent APMs of the Company. Definitions of these APMs together with how these measures have been calculated can be found in the Annual Report.

Portfolio (as at 31 December 2021)

Largest 10 loans by drawn amounts across the entire portfolio

Business activity	Investment type (Private/Public/Bond)	Valuation† £'000	Percentage of gross asset (%)
Asset finance	Private loans	10,194	7.80
Hotel	Private loans	8,504	6.50
Automotive parts manufacturing	Private loans	8,321	6.40
Care home	Private loans	7,788	6.00
Gym franchise	Private loans	7,215	5.50
Hotel	Private loans	6,491	5.00
Student accommodation	Private loans	5,000	3.80
Care home	Private loans	5,000	3.80
Hotel	Private loans	4,875	3.70
Healthcare	Bond	4,493	3.40
Ten largest holdings		67,881	51.90
Wholly owned asset		3,600	2.80
Other private loan investments		47,847	36.50
Bond investments		7,346	5.60
Total holdings		126,674	96.80
Other net current assets		4,147	3.20
Gross assets*		130,821	100.0

* The Company's gross assets comprise the net asset values of the Company's Ordinary Shares, accrued capital entitlement of the ZDP Shares and the Bank loan.

† Valuation conducted by external Valuation Agent.

Full portfolio (as at 31 December 2021)

Loan Ref#	Borrower Name	Deal Type	Sector	Business Description	Nominal (£)	Market Value (£)	Valuer	Payment
60	Private Loan - SPV	Bilateral Loan	Asset Backed Lending	Asset Backed Lending	10,193,916	10,193,916	V Agent	Cash
66	Private Loan - SPV	Bilateral Loan	Hotel & Leisure	Hotel	8,504,440	8,504,440	V Agent	Cash
39	Beinbauer	Syndicated Loan	Manufacturing	Auto Parts Manufacturer	8,320,583	8,320,583	V Agent	PIK/Cash
76	Gym Franchise	Bilateral Loan	Healthcare	Health and Well-being	7,799,555	7,214,588	V Agent	Cash
88	Private Loan - SPV	Bilateral Loan	Healthcare	Care home	7,787,776	7,787,776	V Agent	Cash
67	Private Loan - SPV	Bilateral Loan	Hotel & Leisure	Hotel	6,490,560	6,490,560	V Agent	Cash
80	Private Loan - SPV	Bilateral Loan	Hotel & Leisure	Hotel	5,000,000	4,450,000	V Agent	Cash
82	Private Loan - SPV	Bilateral Loan	Healthcare	Care home	5,000,000	5,000,000	V Agent	Cash
86	Private Loan - SPV	Bilateral Loan	Hotel & Leisure	Hotel	5,000,000	4,875,000	V Agent	Cash
89	Private Loan - SPV	Bilateral Loan	Accommodation	Student accommodation	5,000,000	5,000,000	V Agent	Cash
62	Trent Capital	Bilateral Loan	Manufacturing	Other Manufacturing	4,661,351	4,428,283	V Agent	PIK
6	Elysium	Syndicated Loan	Healthcare	Specialist Care	4,500,000	4,365,000	External	Cash
15	Voyage Care	Bond	Healthcare	Specialist Care	4,500,000	4,493,250	External	Cash
79	Private Loan - SPV	Bilateral Loan	Construction	Construction	4,500,000	4,005,000	V Agent	Cash
61	Private Loan - SPV	Bilateral Loan	Asset Backed Lending	Asset Backed Lending	4,469,939	4,469,939	V Agent	Cash
12	Private Loan - SPV	Bilateral Loan	Accommodation	Student accommodation	4,420,000	4,420,000	V Agent	Cash
73	Private Loan - SPV	Bilateral Loan	Hotel & Leisure	Hotel	4,000,000	4,000,000	V Agent	Cash
84	Private Loan - SPV	Bilateral Loan	Accommodation	Student accommodation	4,000,000	4,000,000	V Agent	Cash
68	Coventry Student Accommodation	Equity	Accommodation	Student accommodation	3,600,000	3,600,000	V Agent	N/A
16	Voyage Care	Bond	Healthcare	Specialist Care	3,000,000	2,852,685	External	Cash
64	Private Loan - SPV	Bilateral Loan	Asset Backed Lending	Invoice Finance	2,750,000	2,750,000	V Agent	Cash
83	Private Loan - SPV	Bilateral Loan	Healthcare	Care home	2,589,102	2,589,102	V Agent	Cash
92	Private Loan - SPV	Bilateral Loan	Hotel & Leisure	Hotel	2,458,629	2,188,180	V Agent	Cash
91	Private Loan - SPV	Bilateral Loan	Childcare & Education	School	2,000,000	2,000,000	V Agent	Cash
58	Private Loan - SPV	Bilateral Loan	Hotel & Leisure	Hotel	2,000,000	1,460,000	V Agent	PIK
71	Euroports	Syndicated Loan	Transport Assets	Ports business	1,681,661	1,679,559	External	Cash
74	Private Loan - SPV	Bilateral Loan	Accommodation	Student accommodation	1,671,038	1,671,038	V Agent	Cash
69	Private Loan - SPV	Bilateral Loan	Hotel & Leisure	Hotel	900,000	855,000	V Agent	Cash
87	Private Loan - SPV	Bilateral Loan	Commercial Property	Restaurant	782,623	782,623	V Agent	Cash
63	Trent Capital (Fusion) RF	Bilateral Loan	Manufacturing	Other Manufacturing	699,545	199,335	V Agent	PIK
76.1	Gym Franchise	Bilateral Loan	Healthcare	Health and Well-being	584,392	540,563	V Agent	PIK
78	Private Loan - SPV	Bilateral Loan	Energy Efficiency	Energy Efficiency	500,000	500,000	V Agent	Cash
81	Private Loan - SPV	Bilateral Loan	Finance	Wealth Management	500,000	500,000	V Agent	Cash
9	Private Loan - SPV	Bilateral Loan	Clean Energy	Renewable heat incentive	255,978	255,978	V Agent	Cash
52	Private Loan - SPV	Bilateral Loan	Clean Energy	Renewable heat incentive	231,429	231,429	V Agent	Cash
				Total	130,352,517	126,673,827

MARKET

Market environment

Overall credit conditions remained benign with modest volatility in the credit indices over 2021, although post year end this changed as the Russian invasion of Ukraine caused credit markets to widen dramatically. The Bank of England has signalled that over £20 billion of corporate credit will be divested over 2022 and 2023, this combined with strong inflation prints is putting pressure on government and corporate bonds. Our expectation is that yields will continue to rise, as despite their recent poor performance, the UK 10 year government bond still yields 1.65% as at the end of March 2022 which is historically very low and in our view could still move materially higher. The gilt curve remains flat in the long end and our expectation is that long end yields rising from a low level as at the end of March of 1.8% would cause material price declines in long dated corporate and government bonds and is a significant market risk.

Market opportunities

With inflation currently moving dramatically higher and yields rising, as described above, the opportunities focused on by the Investment Manager ("RM" or "RM Funds") are loans with a 3 year or less maturity. These loans suit our borrowers as typically they do not wish to fix in relatively expensive funding for long periods and it suits the Company as we wish to keep fixed rate exposures short. In addition, there are a number of opportunities where loans with coupons linked to the Bank of England base rate or Sonia linked loans can be made; these are our preference in this environment and where borrowers have the ability to pass on inflation costs within their income from fees, leases or other payment mechanisms.

The Good Economy - Impact Report

April 2022

The Good Economy ("TGE") has been engaged by the Company as the Impact Reporting and Assurance Partner since 2021. Initially TGE undertook a baseline assessment of the investment portfolio and this was communicated to investors in September 2021:

https://rm-funds.co.uk/wp-content/uploads/2021/09/RM-Infrastructure-Income-Impact-Update-Sept-2021.pdf

In April 2022, they released their first full Impact Assessment Report for the Company:

https://rm-funds.co.uk/rm-infrastructure-income/investor-relations

Results:

> In terms of impact management, RMII is fully geared towards finding investment opportunities that align with deeper focus on social and environmental infrastructure.

> RMII has seen an increase of 4% in the last 6 months in terms of alignment of the portfolio by value with RMII's target sectors and impact objectives.

> Of the investments which do not cause harm, all are classified as 'B' or 'C' investments, either benefiting stakeholders or contributing to solutions.

> RMII has seen an increase in the average portfolio impact score from 18.56 to 22.40 in the last 6 months. The average across the portfolio for only those investments which align to RMII's Impact Objectives is 43.22.

> RMII's loans are estimated to have supported approximately 1,115 jobs. The majority of these are in the construction industry with up to 390 construction jobs directly resulting from RMII's loans and a further 430 jobs generated in the supply chain (indirect jobs). The loans supporting investee's operations could support approximately 295 jobs with just over half of these supported directly and the remaining 48% supported in the supply chain.

> RMII continues to be more regionally distributed than the average private debt fund, with 99% of the value of live loans in the UK being invested outside of London compared to the industry average of 65%.

Strengths:

> RMII has a strong regional footprint providing support to SMEs across the UK, including in regions which are otherwise underserved from a 'good jobs' perspective. This has included proactive support to businesses requiring finance to survive the challenges of the coronavirus pandemic and recover afterwards.

> Half of RMII's portfolio is now aligned with the new focus on social and environmental infrastructure sectors, with a clear line of sight to contributing to Sustainable Development Goal ("SDG") achievement in the UK, monitored through an Impact Measurement and Management ("IMM") Framework which incorporates consideration of investor contribution.

> RMII has demonstrated a commitment to providing high levels of transparency in terms of reporting impact performance. Through ongoing performance reporting, RMII regularly shares information

on how the Company is meeting its stated impact objectives. RMII is transparent not only in sharing its results but also in sharing methodologies which incorporate market relevant frameworks such as the Impact Management Project's ABC spectrum which RMII use to discern and describe the full scope of its impacts.

> RMII has made good progress in formalising its approach to ESG and impact management. Processes have been put in place to translate high-level impact goals and intentions into actionable, investment specific ESG and impact activities.

Recommendations to maximise impact

> RMII should continue to build on its progression during 2021-22 to reduce exposure to 'legacy' sectors such as Hotel & Leisure and re-deploy into Healthcare, Childcare & Accommodation, along with Environmental Assets.

> RMII could consider introducing time-bound milestones against which the portfolio can be held to account in terms of the pace of this rotation. In addition, RMII should set a target date for 100% of the portfolio to be aligned with the new Impact Objectives.

> Over time, RMII should consider shifting towards assessing deals not just on their own merits, but in relation to the over-arching portfolio goals.

> RMII should be aware of potential tensions or inter-linkages between SDGs, especially those that are not directly aligned to their Impact Objectives.

> During screening, RMII should clearly articulate the way in which business activities contribute to the SDGs (whether through avoiding harmful practices, benefiting stakeholders through positive societal outcomes, or directly contributing towards addressing the most pressing social and environmental issues).

CHAIR'S STATEMENT

This year marks the fifth year since the Company's Initial Public Offering ("IPO") on the London Stock Exchange in December 2016 and it is particularly pleasing that since the IPO to 31 December 2021 the Company has generated investors a total percentage NAV total return of 30.7%, which equates to an annualised percentage NAV total return of 5.6%.

Introduction

On behalf of the Board, I am pleased to present the annual report and financial statements of the Company for the year ended 31 December 2021. The performance of the Company in 2021 has been overshadowed by subsequent events in Ukraine. I am sure that the Board, the Investment Manager, our Shareholders and all of the people involved with RMII were shocked by the Russian aggression and support the actions of the international community, aimed at bringing the occupation to an end as quickly as possible. The investment mandate of RMII is focussed on the UK and none of our investment were directly affected. However, the international sanctions are influencing global trade, and the consequences of that are now unknown. We will keep Shareholders informed of any changes to the portfolio through the usual channels.

The year saw a recovery in the NAV per Ordinary Share of the Company as valuation adjustments largely taken during March 2020 were partially released during 2021. In March 2020 the Investment Manager stated that these adjustments, they believed, would be temporary and it is pleasing to see the adjustments being partially reversed which has demonstrated the robust approach to underwriting (and valuations) taken by the Investment Manager. There are further valuation adjustments totalling £4.3 million or 3.64 pence per Ordinary Share, which are largely from the three companies within enhanced monitoring and the Investment Manager is focused on ensuring these positions satisfactorily exit enhanced monitoring, which is their base case scenario.

Furthermore, post year end there have been two valuation adjustments. The first of £1.5 million was taken to reflect the cost of cladding replacement within the wholly owned student accommodation asset in Coventry. These replacement costs were received in March 2022 and taken in the March 2022 NAV, however under accounting principles this cost is recognised as an adjusting event in the 2021 results. Further detail on this asset can be found in the Investment Manager's report under the enhanced monitoring section. The second was to an accrual taken in January 2022 that has been moved to Dec 2021 for £199,500.

During the year, the Company changed its name to reflect the narrower investment focus, and good progress has been made on rotating sector allocations into the target sectors and we look to continue this into 2022.

Income generation and NAV performance

In the five years since IPO, the Company has returned to Shareholders 30.725 pence per Ordinary Share in dividends which have been entirely covered by earnings.

On 22 February 2022, the Company declared a fourth quarterly dividend for the year of 1.625 pence per Ordinary Share, which was paid on 25 March 2022, thus total dividends of 6.5 pence per Ordinary Share were declared or paid for the year ended 31 December 2021.

At 31 December 2021, the NAV per share was 94.41 pence per Ordinary Share (2020: 93.88 pence). The NAV percentage per Ordinary Share total return for the year was 7.6% (2020: 3.1%) and annualised over 2020 and 2021 gives a 5.4% (2020: 11.6%) per annum NAV total return. Since inception the NAV percentage total return on an annualised basis has been 5.6%.

Returns to Shareholders

The closing mid-market share price on 31 December 2021 and 31 December 2020 were 95.0 pence and 87.0 pence respectively, being an 8 pence per Ordinary Share increase, which combined with dividends, means the total percentage share return for the year was 16.7% (2020: -5.3%).

Historically, the share price of the Company has traded at a premium to NAV, however as the pandemic took hold the share price fell to a significant discount to NAV. The Board and the Investment Manager have taken a number of steps to reduce this discount, one of which was share buy backs. The lowest price paid was 72.5 pence per Ordinary Share on 7 April 2020 and since the share buy backs started the Company has acquired 4,383,593 Ordinary Shares, which are held in treasury. It is our target during 2022 to regain the premium rating of the shares to NAV and then the Company will look to reissue these treasury shares into the market at a premium to NAV.

Portfolio overview

The overall portfolio size remained largely unchanged during the year, closing at £130.8 million (2020: £132.8 million) across 34 loans and one wholly owned asset (2020: 35 loans).

Eight new loans were made during the year alongside further drawdowns from existing facilities and there were repayments and divestments totalling £39.7 million. The weighted average life of the portfolio reduced from 3.04 years to 2.23 years which is reflective of the desire to keep duration relatively short as we move into a more inflationary environment.

Overall, the credit quality of the portfolio improved as the percentage of the portfolio benefiting from the Coronavirus Business Interruption Loan Scheme ("CBILS") or Recovery Loan Scheme ("RLS") increased from c.11% to c.26% and the amount invested with junior or holding company debt reduced from c.54% to c.39%. The Investment Manager's report will go into further detail, however, it is pleasing to note that the list of borrowers under enhanced monitoring reduced from four to three.

Committed to responsible investing

The Board and the Investment Manager have long been committed to high ESG standards and to responsible investing. The refreshed investment focus towards social and environmental infrastructure sectors enhances this commitment through investment in assets at the forefront of providing essential services to society. The Investment Manager's Responsible Investing Investment Policy ensures that these considerations are integrated into each individual investment process and the alignment of the portfolio to achieving contributions towards outcomes linked to UN Sustainable Development Goals 3, 4, 7, 11, 12 and 13.

The Board and the Investment Manager seek to understand and report to investors on the impact their capital has made to society and the planet and have engaged with The Good Economy ("TGE") as the impact reporting and assurance partner for RMII. During 2021, TGE undertook a baseline assessment of the portfolio which was released as an Impact Update in September 2021 and their first Impact Report will be released during the second quarter of 2022 as a follow up to this.

The Company will continue to target social good, and transactions closed during 2021 have contributed to 200 newly constructed aged care beds in the North West of England coming to the market. These beds are much needed for our growing ageing population combined with the desire to house our elderly in modern, fit for purpose accommodation. We seek to continue this in 2022 and believe that funding from the Company can continue to make positive contributions to people and the planet. I look forward to reading TGE Impact Report and seeing areas identified of strength and where we can make improvements on our journey to be the very best with regard to socially responsible investing.

Outlook

At the end of 2020 I noted that the outlook for 2021 was promising and it is pleasing to see the actual results for the year deliver on this. Many of the valuation adjustments that were taken as mark to market losses in March 2020 have now been released and it is testament to the underwriting process and ongoing loan management process of the Investment Manager that these potential losses did not materialise. It is encouraging that the outlook of the portfolio is positive and that the Investment Manager is seeking to have further credit provisions released through the successful resolution of the three loans under enhanced monitoring. Finally, it is pleasing to see the credit quality of the portfolio improve as measured by partial government guarantees and the portfolio composition of junior and holding company debt

Looking into the future we set ourselves three clear targets:

1. Return to a premium rating as measured by the share price versus the Company's NAV;

2. Seek overall NAV growth during the year after target dividend distributions; and

3. Continue to deliver on the Company's dividend target of 6.5 pence per Ordinary Share

The Company is well placed to offer investors fixed income returns with limited exposure to interest rates due to the short portfolio duration. Price rises are feeding through to everyday life with energy prices now a daily topic on news and media channels and inflation seems to be more permanent than central banks initially expected. Government bond yields still seem surprisingly low within this context and there are clear risks to fixed income prices should we see any shocks to government bond prices. How stock markets react in such an environment is not clear but one thing we can expect is an increase in volatility. The Company's strategy of focusing on real assets with limited duration exposure is one that we think should be very relevant to investors at this point in time.

I look forward to continued engagement with Shareholders; please do not hesitate to contact me through Singer Capital Markets or Peel Hunt if any additional information is required.

Norman Crighton

Chair

20 April 2022

INVESTMENT MANAGER'S REPORT

Strong and sustainable NAV & income performance

Over the course of the year, the portfolio generated a NAV total return of 7.6%, with total dividend distributions attributable to Shareholders for the year totalling 6.5 pence per Ordinary Share. Overall, the NAV per Ordinary Share increased from 93.26 pence per Ordinary Share at 31 December 2020 to 94.41 pence per Ordinary Share at 31 December 2021. In the two years from January 2020 (prior to the global pandemic lockdowns) to the year end, the Company has generated annualised NAV percentage total returns of 5.4% per annum, demonstrating the stable income and capital preservation which the Company is seeking to deliver for Investors.

Post year end and due to the necessary accounting treatment of an "adjusting event", as the costs of the cladding replacement at the Coventry Student Accommodation (Loan reference 68) became known, the value of the asset has been marked lower. Further commentary is made in the Portfolio Performance section below. In essence the inadequate nature of the cladding was deemed to have been in existence at year end so whilst the costs became known in March 2022, the year end NAV has been adjusted to reflect the position in March 2022.

Following the year end a quarterly dividend in respect of the period from 1 October 2021 to 31 December 2021 was declared on 22 February 2021 and paid to Shareholders on the 25 March 2022. These dividends totalling 6.5 pence per Ordinary Share for the year ended 31 December 2021 bring the total distributions since the Company's launch in December 2016 to 30.725 pence per Ordinary Share, exceeding the 30.0 pence per Ordinary Share targeted over the first five years by the Investment Manager.

Share price performance

The year saw a combination of strong NAV per share performance combined with the narrowing of the share price discount from 6.7% at the year ended 31 December 2020 to a premium of 0.6% at the year ended 31 December 2021. These factors generated a total percentage share return for the year of 16.1%. Since IPO the total percentage share return achieved is 29.6% which is annualised since inception at 5.5% per annum.

Market environment

Generic credit spreads were stable with the benchmark Markit ITraxx Crossover index opening and closing the year at around 240bps with relatively modest volatility seen in the credit index during the year. The year was dominated by the race between the COVID-19 variants and the vaccines, with the markets overall believing that the COVID-19 pandemic was moving into an endemic phase allowing markets to advance with most stock exchanges ending up 10% or more.

Energy costs and supply chain issues leading to very elevated inflation readings became the focus for the market. Overall, it was a weak period for fixed income with the 10-year UK government bond price falling c.10% as yields rose from the historically tight levels of 0.25% to the still historically tight level of 1% by year end. As we look into 2022 it is likely that there will be further upwards pressure on government bond yields as inflationary pressures remain and central banks move into a tightening phase. This gives an overall negative outlook for general fixed income markets as the direction of global government bond yields appears to be higher.

Credit spreads will likely move wider over the coming year largely as the Bank of England has signalled that its £20 billion of holdings in corporate bonds will be sold during 2022 and 2023. It is likely that credit spread widening will be exacerbated as these sales will be into a market that is likely itself reducing in size as investors are themselves reducing fixed income holdings. Liquid corporate bond funds are therefore likely to underperform due to a combination of credit spread widening combined with an increase in government bond yields. The Investment Manager believes RMII is well positioned with its short duration portfolio which is focused on attractive assets with higher yields than those available within the public markets.

Portfolio performance

Portfolio credit metrics improved over the year as measured by the proportion of senior loans and CBILS/RLS versus junior debt. As at the year end the portfolio was 60.2% invested within these types of loans versus 46% at the year ended 31 December 2020. The average life of the loan book reduced to 2.23 years as at the year-end (3.04 years 31 December 2020) reflecting a strategic decision for the duration of the portfolio to remain as short as practically possible. Such short duration minimises exposure to these continued inflationary pressures described above and is a key reason why RMII should offer an attractive proposition as an alternative credit investment versus more traditional corporate bond funds that typically are lower yielding with longer durations. As we move into an environment where central banks are now moving to an interest rate raising bias RMII's high yielding, short duration portfolio should outperform more liquid, lower yielding, and longer duration corporate bond alternatives.

As at 31 December 2021 the overall number of holdings within the portfolio remained relatively stable with 34 loans and one wholly owned asset (2020: 35 loans) and total invested capital of £132 million (2020: £131 million).

Total income generation for the year was £11.2 million (2020: £10.9 million) and this was split between cash interest of £9.3 million and £2 million of Payment In Kind ("PIK"), 82%/18% which was largely similar to 2020. Our expectation for 2022 is that the PIK/cash ratio will reduce, and this is largely due to loan references 39 and 76.

> Loan reference 39, the Auto Parts Manufacturer: during 2020 and 2021, this borrower elected to PIK the whole loan which was more expensive for them but within the original loan agreement. This has now returned to 50% cash / 50% PIK which was the original loan term.

> Loan reference 76, the Gym Franchise: this was allowed to PIK interest for periods during 2020 and 2021; however since September 2021 has returned to cash pay.

Total operating costs were £2.611 million; these were slightly above budget as the costs for addressing the issues of the Coventry student accommodation asset were charged to the P&L during the year.

Revolving Credit Facility ("RCF") and other finance charges were £0.797 million.

Total costs for the year were £3.408 million and when set against the income allowed for the dividend to be fully covered.

Income 11,164,361

Total expenses (£2,609,594)

Finance costs (£797,585)

Total £7,757,182

Dividends (£7,667,385)

Profit 89,797

There were four dividends paid or declared in respect of the year ended 31 December 2021 totalling 6.5 pence per Ordinary Share.

Period Payment date Dividend paid

Q1 2021 25 June 2021 £1,916,603

Q2 2021 24 September 2021 £1,916,603

Q3 2021 30 December 2021 £1,916,603

Q4 2021 25 March 2022 £1,914,916

It was an active year for the portfolio with eight new investments totalling £21.7 million, drawdowns to existing facilities and re-investments totalling £16.9 million and several repayments and divestments that totalled £39.7 million during the year. The exposure to core sectors as measured by their commitments increased to 47.5% as at 31 December 2021 vs 47% as of 31 December 2020.

Overall portfolio valuations have credit provisions worth approximately £4.3 million or 3.64 pence per Ordinary Share. There are three investments within the portfolio that have enhanced monitoring either due to having the largest provisions or due to the complex nature of the situation:

1.Trent Capital (Loan reference 62 & 63)

This loan is to a company focused on the manufacture of zero carbon home heating products: air source heat pumps and electric boilers. It is estimated that 31% of UK carbon reduction comes from domestic heating and hot water and RM sees the support of these businesses operating in this sector as key to meeting carbon reduction targets. This loan also has a property portfolio providing significant additional collateral. This loan is due for repayment post period end and RM is working with the borrower to realise asset sales to facilitate the loan repayment. Credit provisions total £1.05 million.

2. Hotel Development & Contractor Glasgow (Loan reference 58, 79, 80 & 92)

This hotel is scheduled to open in June 2022 and is to be operated by Virgin Hotels under a 35 year Hotel Management Agreement. The total market value exposure that is correlated to the outcome of this asset is currently 11% of Company net assets. Credit provisions total £1.85 million.

3. Purpose Built Student Accommodation "PBSA" Coventry (Loan reference 68)

This asset is wholly owned by RMII and has had delays to being income generative due to issues with getting the recommissioning approval from the fire department. These issues largely relate to the works conducted by the original scheme architect and main contractor and are being addressed so that students can take occupation for the 2022/2023 academic year. These costs have been substantial over the year with the total administration costs and refurbishment costs to date being circa £500,000. These costs have been charged to the P&L. Extensive work has been undertaken over the last quarter of 2021 with fire specialists to examine the costs to rectify any non-compliant building work.

There is a requirement to rectify cladding issues and stairwell issues which will require further expenditure and these contractor costs were received towards the end of March. These costs were significantly higher than expectations with the quotes received indicating that the total cost of cladding replacement and remedial works would be a further £1.5m and the accounting treatment of such costs is that they are an "adjusting event". This means that as the building was non-compliant as at the year-end and despite these costs being not known at the time, the Dec 31st NAV has been adjusted to reflect the lowering of the asset value to reflect these costs. These costs will form part of the legal claim via the original loan documentation collateral warranties. This claim is ongoing and Shareholders will be kept informed as and when the case claim progresses. The provision is £1.5m as the asset was written down to reflect these additional remedial costs and further costs have been incurred during 2021 which have been charged to the Profit and Loss Account.

Coronavirus Business Interruption Loan Scheme ("CBILS") & Recovery Loan Scheme ("RLS")

These schemes were introduced by the British Government and administered by the British Business Bank and were designed to provide support to corporates affected by the pandemic. The support is via partial loan guarantees made to accredited lenders. The key features are that the UK Government provides a maximum 80% guarantee (70% for RLS Loans originated in 2022, 80% for RLS Loans originated in 2021) to eligible loans and in addition for CBILS loans, the UK Government pays the first year's interest in the form of Business Interruption Payment ("BIP"). The Investment Manager was accredited as a funder under both CBILS & RLS and RMII was designated as a funding partner. As at the year-end, 25.5% (2020:11.4%) of the portfolio was invested into CBILS & RLS eligible loans. This is a material credit enhancement for the portfolio. The same robust credit assessment process is followed for these loans.

Responsible investing

The Investment Manager is a signatory to the Principals for Responsible Investment ("PRI"). The PRI defines responsible investment as a strategy and practice to incorporate environmental, social and governance factors in investment decisions. The Investment Manager incorporates ESG criteria early on as part of the investment process and in addition there is active engagement wherever possible with portfolio Companies to help them improve their ESG processes. In practice this is delivered by the RM Funds Responsible Investing Investment Policy which is integral to RM Fund's business philosophy as we believe we can make a difference. This policy framework applies to all investment made by the Investment Manager and is governed by our principles and our commitments:

Our principles

> Respect for the internationally proclaimed human rights principles, equal opportunity independent of gender, race or religion; freedom of association and the right to bargain collectively;

>Working conditions that surpass basic health and safety standards;

> The conduct of good governance practices, in particular in relation to bribery and conflicts of interest; and

> Environmental responsibility and responsibility to active climate change engagement.

Our commitments

> Integrate the above principles into our decision-making process, by carefully considering ESG issues associated with any potential investment during the due diligence phase;

> Encourage portfolio companies to follow the above principles by implementing governance structures that provide appropriate level of oversight and by seeking disclosure on ESG issues;

> Provide ESG training and support to RM Fund's employees involved in the investment process, so that they may perform their work in accordance with the above principles and with this policy;

> Seek to be transparent in our efforts to integrate ESG considerations in investments and annually report on progress towards implementing the above principles;

> Comply with national and other applicable laws; and

> Help promote the implementation of the above principles; consider our alignment with other related conventions and standards set by Invest Europe, the UN Global Compact Initiative and the UN Principles for Responsible Investment (PRI); continuously strive to improve ESG performance within RM Funds and our portfolio companies.

Investment Manager aligned to investor interests

At the IPO, the Investment Manager purchased 500,000 Ordinary Shares and in line with the commitment to investors made at IPO, the Investment Manager has regularly purchased Ordinary Shares directly in the secondary market. This is an ongoing commitment and by purchasing RMII shares, the Investment Manager has shown a significant alignment of its interests with Shareholders. In addition to this, the management team and parties connected to the management team own additional shares.

The Investment Manager has continued to purchase Ordinary Shares of the Company during the year and at the year-end, the Investment Manager owns 1,279,125 Ordinary Shares in RMII, which is an increase of 37,500 Ordinary Shares over the year. Following the year-end, the Investment Manager acquired 12,500 Ordinary Shares of 1 pence each in the Company and the Investment Manager's total holding of Ordinary Shares is currently 1,291,625.

Outlook for 2022

The focus for the Investment Manager is to see the watchlist reduce through successful outcomes which in turn will see the release of valuation adjustments as those loans are marked back to par. Linked to these resolutions is the further rotation of the portfolio into RMII's core sectors.

The proportion of the book with floating rate coupons linked to the underlying interest rate will be increased over 2022 thus allowing the portfolio maturity to increase without increasing its duration. Furthermore, this will provide additional income if interest rates move materially higher, which is now our base case scenario.

Overall conditions are very positive for the strategy and the portfolio, with a more supportive overall operating environment as COVID-19 restrictions are relaxed. Quantitative Tapering ("QT") will support higher margins for lending as net capital is coming out of the credit and fixed income markets as described above which signifies higher lending rates due to more competition for capital. Additionally, the short duration book will allow capital to be invested without significant risk from interest rate rises.

Finally, the Investment Manager is keen to see issuance from the portfolio of sustainability linked loans where the coupons have meaningful margin ratchets if certain pre-agreed conditions are met that contribute to improved borrower ESG and sustainability outcomes.

RM Capital Markets Limited

20 April 2022

INVESTMENT POLICY, RESULTS AND OTHER INFORMATION

Investment objective

The Company aims to generate attractive and regular dividends through investment in secured debt instruments of UK SMEs and mid-market corporates and/or individuals including any loan, promissory notes, lease, bond, or preference share (such debt instruments, as further described below, being "Loans") sourced or originated by the Investment Manager with a degree of inflation protection through index-linked returns where appropriate.

Investment policy

The Company will seek to meet its investment objective by making investments in a diversified portfolio of Loans to UK SMEs and mid- market corporates, special purpose vehicles and/or to individuals. These Loans will generally be, but not limited to, senior, subordinated, unitranche and mezzanine debt instruments, documented as loans, notes, leases, bonds or convertible bonds. Such Loans shall typically have a life of 2-10 years. In certain limited cases, Loans in which the Company invests may have equity instruments attached, ordinarily any such equity interests would come in the form of warrants or options attached to a Loan. Typically, the Loans will have coupons which may be fixed, index-linked or LIBOR linked.

For the purposes of this investment policy, UK SMEs include entities incorporated outside of the UK provided their assets and/ or principal operations are within the UK. The Company is permitted to make investments outside of the UK to mid-market corporates.

Loans will be directly originated or sourced by the Investment Manager who will not invest in Loans sourced via or participations through, peer-to-peer lending platforms.

Loans in which the Company invests will be predominantly secured against assets such as real estate or plant and machinery and/or income streams such as account receivables.

The Company will make Loans to borrowers in a range of Market Sectors within certain exposure limits which will vary from time to time, according to market conditions and as determined by the Board, subject to the Investment Restrictions set out below.

The Company will at all times invest and manage its assets in a manner which is consistent to the spreading of investment risk.

Investment restrictions

The following investment limits and restrictions will apply to the Company's Loans and business which, where appropriate, shall be measured at the time of investment or once the Company is fully invested:

> the amount of no single Loan shall exceed 10% of Gross Assets;

> exposure to a single borrower shall not exceed 10% of Gross Assets;

> loans will be made across not less than four Market Sectors;

> not less than 70% of Gross Assets will be represented by Loans denominated in sterling or hedged back to sterling;

> loans made to borrowers in any one Market Sector shall not exceed 40% of Gross Assets;

> loans with exposure to project development/construction assets shall not exceed 20% of Gross Assets;

> the Company will not provide Loans to borrowers whose principal business is defence, weapons, munitions or gambling;

> the Company will not provide Loans to borrowers which generate their annual turnover predominantly from tobacco, alcohol or pornography; and

> the Company will not invest in other listed closed-ended funds.

In the event of a breach of the investment guidelines and restrictions set out above, the Investment Manager shall inform the Board upon becoming aware of the same and if the Board considers the breach to be material, notification will be made to a Regulatory Information Service and the Investment Manager will look to resolve the breach with the agreement of the Board.

The Company intends to conduct its affairs so as to qualify as an investment trust for the purposes of section 1158 of the Corporation Tax Act 2010, and its investment activities will therefore be subject to the restrictions set out above.

Borrowing and gearing

The Company intends to utilise borrowings for investment purposes as well as for share buybacks and short-term liquidity purposes. Gearing represented by borrowings, including any obligations owed by the Company in respect of an issue of zero dividend preference shares (whether issued by the Company or any other member of its group) or any third-party borrowings, will not, in aggregate exceed 20% of Net Asset Value calculated at the time of drawdown.

Hedging and derivatives

The Company may invest in derivatives for efficient portfolio management purposes. In particular the Company can engage in interest rate hedging. Loans will primarily be denominated in sterling, however the Company may make limited Loans denominated in currencies other than sterling and the Board, at the recommendation of the Investment Manager, may look to hedge any other currency back to sterling should they see fit.

In accordance with the requirements of the UK Listing Authority, any material change to the Company's investment policy will require the approval of Shareholders by way of an ordinary resolution at a general meeting.

RM ZDP plc

RM ZDP plc ("RM ZDP"), a public limited company incorporated under the laws of England and Wales was incorporated on 21 February 2018 as a wholly owned subsidiary of the Company, established solely for the purpose of issuing ZDP Shares of GBP 0.01 each. RM ZDP raised gross proceeds of £10,869,950 through the issue of ZDP Shares.

The Company announced on 29 March 2021 that its ZDP shares would come to the end of their 3-year life on 6 April 2021, with a final capital entitlement payable of approximately £12.1 million (110.91p per ZDP Share). Subsequently, a General Meeting was held on 6 April 2021, where all resolutions were duly passed, including the special resolution to approve the voluntary winding up of the Company. The payment of the Final Capital Entitlement was made to ZDP shareholders on 6 April 2021 and the cancellation of the Company's listing took place on 7 April 2021.

Dividend policy

Dividends are expected to be declared by the Directors in May, August, November and February of each year in respect of the preceding quarter with dividends being paid in June, September, December and March.

The last dividend in respect of any financial year is declared prior to the relevant annual general meeting. Therefore, it is declared as a fourth interim dividend and no final dividend is payable. The Board understands that this means that Shareholders will not be given the opportunity to vote on the payment of a final dividend. However, the Board believe that the payment of a fourth interim dividend as opposed to a final dividend is in the best interests of Shareholders as it provides them with regularity on the frequency of dividend payments and avoids the delay to payment which would result from the declaration of a final dividend. A resolution will be put forward at the Annual General Meeting to approve the policy of declaring and paying all dividends of the Company as interim dividends.

The Company targeted an annualised dividend yield in excess of 6.5% for the financial year to 31 December 2021.

Investors should note that the targeted annualised dividend yields are targets only and not profit forecasts and there can be no assurance that either will be met or that any dividend growth will be achieved.

Results and dividend

The financial statements include the results of the Company. The Company revenue return after tax for the year ended 31 December 2021 amounted to £7,742,000 (2020: £7,216,000). The Company made a capital profit after tax of £1,263,000 (2020: capital loss of £5,355,000). Therefore, the total return after tax for the Company was £9,005,000 (2020: £1,861,000).

The first interim dividend of 1.625p per Ordinary Share was declared on 26 May 2021 in respect of the period from January to March 2021. The second interim dividend of 1.625p per Ordinary Share for the quarter ended 30 June 2021 was declared on 6 August 2021 and the third interim dividend of 1.625p per Ordinary Share for the quarter ended 30 September 2021 was declared on 2 November 2021. On 22 February 2022, the Board declared a fourth interim dividend of 1.625 pence per Ordinary Share for the quarter to 31 December 2021.

Key performance indicators ("KPIs")

The Board measures the Company's success in attaining its investment objective by reference to the following KPIs:

(i) Dividends

The Company has paid or proposed four interim dividends totalling, in aggregate, 6.5 pence per Ordinary Share, equivalent to 6.5% based on the Ordinary Share issue price of £1 per share at Admission. The targeted annualised dividend yield of 5.4% has therefore been met during the year.

(ii) Total return

The Company's total return is monitored by the Board. The Ordinary Shares generated a NAV total return of 7.6% (2020: +3.1%) in the year ended 31 December 2021.

(iii) Discount/premium to NAV

The discount/premium relative to the NAV per share represented by the share price is closely monitored by the Board. The Ordinary Share price closed at a 0.6% premium (2020: discount of 6.7%) to the NAV as at 31 December 2021. To address the discount due to the impact of COVID-19 in 2021, 523,294 Ordinary Shares were bought back during the year at prices ranging from 86.0 pence and 94.0 pence per Ordinary Share. This added 0.42 pence per Ordinary Share to the NAV.

(iv) Control of the level of ongoing charges

The Board monitors the Company's operating costs. Based on the Company's average net assets for the year ended 31 December 2021, the Company's ongoing charges figure calculated in accordance with The Association of Investment Companies ("AIC") methodology was 1.92% (2020: 1.91%).

RISKS AND RISK MANAGEMENT

Principal and emerging risks and uncertainties

The Board is responsible for the management of risks faced by the Company and delegates this role to the Audit and Management Engagement Committee (the "Committee"). The Committee periodically carries out a robust assessment of principal and emerging risks and uncertainties and monitors the risks on an ongoing basis. The Committee considers both the impact and the probability of each risk occurring and ensures appropriate controls are in place to reduce risk to an acceptable level. The experience and knowledge of the Board is invaluable to these discussions, as is advice received from the Board's service providers, specifically the Alternative Investment Fund Manager ("AIFM") who is responsible for the risk and portfolio management services and outsources the portfolio management to the Investment Manager. The Committee has a dynamic risk matrix in place to help identify key risks in the business and oversee the effectiveness of internal controls and processes.

The Committee continues to be concerned with the risks posed by the COVID-19 pandemic which has a significant impact on all risk categories. In addition to implementing more regular reviews of investment performance with the Investment Manager, the Committee has worked closely with the Company's key service providers to ensure high standards of service were maintained whilst hybrid working models were implemented. Further information on how the Committee has considered COVID-19 when assessing its effect on the Company's ability to operate as a going concern and the Company's longer-term viability can be found in the Annual Report.

The principal and emerging risks, together with a summary of the processes and internal controls used to manage and mitigate risks where possible are outlined in the following paragraphs.

(i) Market risks

Availability of appropriate investments

There is no guarantee that loans will be made in a timely manner.

Before the Company is able to make or acquire loans, the Investment Manager is required to complete necessary due diligence and enter into appropriate legal documentation. In addition, the Company may become subject to competition in sourcing and making investments. Some of the Company's competitors may have greater financial, technical and marketing resources or a lower cost of capital and the Company may not be able to compete successfully for investments. Competition for investments may lead to the available interest coupon on investments decreasing, which may further limit the Company's ability to generate its desired returns.

If the Investment Manager is not able to source a sufficient number of suitable investments within a reasonable time frame whether by reason of lack of demand, competition or otherwise, a greater proportion of the Company's assets will be held in cash for longer than anticipated and the Company's ability to achieve its investment objective will be adversely affected. To the extent that any investments to which the Company is exposed prepay, mature or are sold it will seek to reinvest such proceeds in further investments in accordance with the Company's investment policy.

Market sectors

Loans will be made to borrowers that operate in different market sectors each of which will have risks that are specific to that particular market sector.

Management of risks

The Company has appointed an experienced Investment Manager who directly sources loans. The Company is investing in a wide range of loan types and sectors and therefore benefits from diversification.

Investment restrictions are relatively flexible giving the advisor ability to take advantage of diverse loan opportunities.

The Investment Manager, AIFM, Brokers and the Board review market conditions on an ongoing basis. Geopolitical instability may threaten global economic growth and, consequently the Company's portfolio and regrettably this view has been justified following the invasion of Ukraine.

(ii) Risks associated with meeting the Company's investment objective or target dividend yield

The Company's investment objective is to generate attractive and regular dividends through investment in loans sourced or originated by the Investment Manager and to generate capital appreciation by virtue of the fact that the returns on some loans will be index-linked. The declaration, payment and amount of any future dividends by the Company will be subject to the discretion of the Directors and will depend upon, amongst other things, the Company successfully pursuing the investment policy and the Company's earnings, financial position, cash requirements, level and rate of borrowings and availability of profit, as well the provisions of relevant laws or generally accepted accounting principles from time to time.

Management of risks

The Investment Manager has a well-defined investment policy and process which is regularly and rigorously reviewed by the independent Board of Directors and performance is reviewed at quarterly Board meetings. The Investment Manager is experienced and employs its expertise in making investments in a diversified portfolio of loans. The Investment Manager has a target portfolio yield which covers the level of dividend targeted by the Company. The Board reviews the position at board meetings.

(iii) Financial risks

The Company's investment activities expose it to a variety of financial risks which include liquidity, currency, leverage, interest rate and credit risks.

Further details on financial risks and the management of those risks can be found in note • to the financial statements.

(iv) Corporate governance and internal control risks

The Company has no employees, and the Directors have all been appointed on a non-executive basis. The Company must therefore rely upon the performance of third-party service providers to perform its executive functions. In particular, the AIFM, the Investment Manager, the Administrator, the Company Secretary and the Registrar, will perform services that are integral to the Company's operations and financial performance.

Poor performance of the above service providers could lead to various consequences including the loss of the Company's assets, inadequate returns to Shareholders and loss of investment trust status. Cyber security risks could lead to breaches of confidentiality, loss of data records and inability to make investment decisions.

Management of risks

Each of the above contracts was entered into after full and proper consideration of the quality and cost of services offered, including the financial control systems in operation in so far as they relate to the affairs of the Company. All of the above services are subject to ongoing oversight of the Board and the performance of the principal service providers is reviewed on a regular basis. The Company's key service providers report periodically to the Board on their procedures to mitigate cyber security risks.

(v) Regulatory risks

The Company and its operations are subject to laws and regulations enacted by national and local governments and government policy. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Any change in the laws, regulations and/or government policy affecting the Company or any changes to current accountancy regulations and practice in the UK may have a material adverse effect on the ability of the Company to successfully pursue its investment policy and meet its investment objective and/or on the value of the Company and the shares. In such event, the performance of the Company, the NAV, the Company's earnings and returns to Shareholders may be materially adversely affected.

Management of risks

The Company has contracted out relevant services to appropriately qualified professionals. The Secretary and AIFM report on compliance matters to the Board on a quarterly basis and the Board has access to the advice of its Corporate Broker on a continuing basis. The assessment of regulatory risks forms part of the Board's risk assessment programme.

(vi) Business interruption and emerging risks

Failure in services provided by key service providers, meaning information is not processed correctly or in a timely manner, resulting in regulatory investigation or financial loss, failure of trade settlement, or potential loss of investment trust status. Failure to identify emerging risks may cause reactive actions rather than being proactive and the Company could be forced to change its structure, objective or strategy and, in worst case, could cause the Company to become unviable or otherwise fail.

The Board continued to be concerned with the risks posed by the COVID-19 pandemic during the year, with significant restrictions on movement of people and disruption to business operations impacting global portfolio company valuations and returns and potentially impacting the operational resilience of the Company's service providers. The impact of COVID-19 on the markets and the Company's financial position continue to be closely monitored by the Investment Manager and the Board. The Board and Investment Manager also continue to monitor the political situation in Ukraine, however the Company's portfolio has no direct exposure to Russia or Ukraine and the Company's cash position remains robust.

Management of risks

Each service provider has business continuity policies and procedures in place to ensure that they are able to meet the Company's needs and all breaches of any nature are reported to the Board.

The following is a description of the Company's service providers who assist in identifying the Company's emerging risks to the Board.

1. Investment Manager: the Investment Manager provides a report to the Board at least quarterly on industry trends, insight to future challenges in the sector, including the regulatory, political and economic changes likely to impact the Company. The Chair also has contact with the Investment Manager on a regular basis to discuss any pertinent issues;

2. Alternative Investment Fund Manager: the AIFM maintains a register of identified risks including emerging risks likely to impact the Company, which is updated quarterly following discussions with the Investment Manager and other service providers. The risks are documented on a risk register, Company in main categories: Market Risks; Risks associated with Investment Objective; Financial Risks; Corporate Governance Risks; Regulatory Risks and Emerging Risks. Any changes and amendments to the risk register are highlighted to the Board on a quarterly basis;

3. Brokers: provide advice periodically, specific to the Company on the Company's sector, competitors and the investment company market whilst working with the Board and Investment Manager to communicate with Shareholders;

4. Company Secretary and Auditor: briefs the Board on forthcoming legislation and regulatory change that might impact on the Company. The Auditor also has specific briefings at least annually;

5. The AIC: the Company is a member of the AIC, which provides regular technical updates as well as drawing members' attention to forthcoming industry and regulatory issues.

The Board regularly reviews the Company's risk matrix, focussing on risk mitigation and ensuring that the appropriate controls are in place. Regular review ensures that the Company operates in line with the risk management policy, prospectus and investment strategy. Emerging risks are actively discussed throughout the year to attempt to ensure that emerging (as well as known) risks are identified and managed so far as practicable. The experience and knowledge of the Board is invaluable to these discussions, as is advice received from the Board's service providers.

Due to the ongoing COVID-19 pandemic the Audit and Management Engagement Committee requested assurances from the Company's key service providers that business continuity plans and hybrid working arrangements had been enacted where necessary. This provided a satisfactory level of assurance that there had not been, and there was no expectation of any disruption to service quality.

Details of the Directors' assessment of the going concern status of the Company, which considered the adequacy of the Company's resources and the impacts of the COVID-19 pandemic, are given on page •.

(vii) ESG and Climate Change

While efforts to mitigate climate change continue, the physical impacts are already emerging in the form of changing weather patterns. Extreme weather events can result in flooding, drought, fires, storm damage, potentially impairing the operations of a portfolio company at a certain location or impacting locations of companies within their supply chain. Climate change leads to additional costs and risks for portfolio companies.

There is potential reputational damage from non-compliance with regulations or incorrect disclosures.

Management of risks

The Company's ESG Policy, which is updated annually is published on the Company's website and the AIC website.

The Company's approach to ESG, including the ESG factors that are considered in the investment process, such as climate change, where they are relevant and have a material impact on stock performance, are included in the Annual Report on page •. It also includes examples of responsible engagement.

As a signatory to the Principles of Responsible Investment Initiative ("PRI"), the Investment Manager reports annually according to the PRI reporting framework. Investment trusts are currently exempt from the Task Force on Climate-Related Financial Disclosures ("TCFD") disclosure, but the Board will continue to monitor the situation.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable United Kingdom law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the company financial statements in accordance with UK-adopted international accounting standards. 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 Company and of the profit or loss of the Company for that period.

In preparing these financial statements the Directors are required to:

> select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;

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

> present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

> provide additional disclosures when compliance with the specific requirements of UK-adopted international accounting standards is insufficient to enable users to understand the impact of particular

transactions, other events and conditions on the financial position and financial performance;

> state whether UK-adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

> 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 enable them to ensure that the financial statements comply with the Companies' Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a strategic report, Directors' report, Directors' remuneration report and corporate governance statement that comply with that law and those regulations. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.

Directors' confirmation statement

The Directors each confirm to the best of their knowledge that:

(a) the accounts, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

(b) this Annual Report includes a fair review of the development and performance of the business and position of the Company, together with a description of the principal risks and uncertainties that it faces.

The Directors consider that the financial statements are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company's performance, business model and strategy.

For and on behalf of the Board

Norman Crighton

Chair

20 April 2022

Company Statement of Comprehensive Income
For the year ended 31 December 2021
		Year ended 31 December 2021					Year ended 31 December 2020
		Revenue		Capital		Total	Revenue		Capital	Total
	NOTES	£'000		£'000		£'000	£'000		£'000	£'000
Gains/(losses) on investments	3	-		1,263		1,263	(565)		(5,210)	(5,775)
Income	4	11,164		-		11,164	10,942		-	10,942
Investment management fee	5	(1,013)		-		(1,013)	(1,088)		-	(1,088)
Other expenses	6	(1,598)		-		(1,598)	(1,192)		(145)	(1,337)
Return before finance costs and taxation		8,553		1,263		9,816	8,097		(5,355)	2,742
Finance costs	7	(797)		-		(797)	(635)		-	(635)
Return on ordinary activities before taxation		7,756		1,263		9,019	7,462		(5,355)	2,107
Taxation	8	(14)		-		(14)	(246)		-	(246)
Return on ordinary activities after taxation		7,742		1,263		9,005	7,216		(5,355)	1,861
Return per ordinary share (pence)	15	6.56p		1.07p		7.63p	5.96p		(4.43p)	1.53p

The total column of this statement is the profit and loss account of the Company.
All the revenue and capital items in the above statement derive from continuing operations.
'Return on ordinary activities after taxation' is also the Total comprehensive income for the year.
The notes form an integral part of these financial statements.
Statement of Financial Position
					As at 31 December 2021			As at 31 December 2020
			Notes		£'000			£'000
Fixed assets
Investments at fair value through profit or loss			3		126,674			122,705
Investments in subsidiary					-			50

Current assets
Cash and cash equivalents					3,310			2,218
Receivables			9		2,684			10,498
					5,994			12,716
Payables: amounts falling due within one year
Payables			10		(1,847)			(2,645)
Intercompany loan payable			11		-			(11,942)
Bank loan - Credit facility			12		(19,571)			(10,500)
					(21,418)			(25,087)
Net current liabilities					(15,424)			(12,371)

Total assets less current liabilities					111,250			110,384

Net assets					111,250			110,384

Capital and reserves: equity
Share capital			13		1,178			1,184
Share premium			14		70,168			70,168
Special reserve					44,813			45,277
Capital reserve					(8,149)			(9,412)
Revenue reserve					3,240			3,167
Total Shareholders' funds					111,250			110,384
NAV per share - Ordinary Shares (pence)			16		94.41p			93.26p

The financial statements of the Company were approved and authorised for issue by the Board of Directors on 20 April 2022 and signed on their behalf by:

Norman Crighton

Chair

Registered in England and Wales with registered number 10449530.

The notes form an integral part of these financial statements.

Statement of Changes in Equity
For the year ended 31 December 2021


		Share capital	Share premium account	Special reserve	Capital reserve	Revenue reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at beginning of the year		1,184	70,168	45,277	(9,412)	3,167	110,384
Return on ordinary activities		-	-	-	1,263	7,742	9,005
Redemption of shares	13	(6)	6	(464)	-	-	(464)
Share buy back costs		-	(6)	-	-	-	(6)
Dividend paid	17	-	-	-	-	(7,669)	(7,669)
Balance as at 31 December 2021		1,178	70,168	44,813	(8,149)	3,240	111,250

For the year ended 31 December 2020
		Share capital	Share premium account	Special reserve	Capital reserve	Revenue reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at beginning of the year		1,222	70,146	48,304	(4,057)	3,913	119,528
Return on ordinary activities		-	-	-	(5,355)	7,216	1,861
Redemption of shares	13	(38)	38	(3,027)	-	-	(3,027)
Shares buy back costs		-	(16)	-	-	-	(16)
Dividend paid	17	-	-	-	-	(7,962)	(7,962)
Balance as at 31 December 2020		1,184	70,168	45,277	(9,412)	3,167	110,384

Distributable reserves comprise: the revenue reserve; capital reserves attributable to realised profits; and the special reserve.

Share capital represents the nominal value of shares that have been issued. The share premium includes any premiums received on the issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.

The notes form an integral part of these financial statements.

Statement of Cash Flows
For the year ended 31 December 2021
		Year ended 31 December 2021	Year ended 31 December 2020
	Notes	£'000	£'000
Operating activities
Return on ordinary activities before finance costs and taxation*		9,816	2,742
Adjustment for (gains)/losses on investments		(823)	5,357
Adjustment to amortisation costs		114	-
Decrease/(increase) in receivables		484	(958)
(Decrease)/increase in payables		(812)	481
PIK adjustments to the operating cash flow		(2,539)	(2,081)
Net cash flow from operating activities		6,240	5,541
Investing activities
Private loan repayments/bonds sales proceeds		56,292	33,479
Realisation of investment in subsidiary - non cash adjustment		50	-
Private loans issued/bonds purchases		(44,582)	(44,435)
Purchase of equity investments		(5,100)	-
Net cash flow from/(used in) investing activities		6,660	(10,956)
Financing activities
Finance costs		(684)	(234)
ZDP loan principal and accumulated interest paid		(12,056)	-
Ordinary Share buy back	13	(464)	(3,027)
Ordinary Share buy back costs		(6)	(16)
OakNorth loan facility drawdown		30,071	17,800
OakNorth loan facility repaid		(21,000)	(7,300)
Equity dividends paid	17	(7,669)	(7,962)
Net cash flow used in financing activities		(11,808)	(739)
Increase/(decrease) in cash		1,092	(6,154)
Opening balance at beginning of the year		2,218	8,372
Balance as at 31 December 2021		3,310	2,218

* Cash inflow from interest on investment holdings was £9,561,000 (2020: £8,960,000).
The notes form an integral part of these financial statements.

Changes in Financing Liabilities



Movement in financial liabilities - Company	Year ended 31 December 2021		Year ended 31 December 2020
	OakNorth facility £'000	Intercompany loan £'000	OakNorth facility £'000	Intercompany loan £'000
Balance as at beginning of the year	10,500	11,942	-	11,541
Facility drawdowns during the year	30,071	-	17,800	-
Facility interest payable during the year	595	-	234	-
Facility and interest repayments during the year	(21,595)	-	(7,534)	-
Intercompany finance cost - non cash flow	-	114	-	401
Repayment of intercompany loan	-	(12,056)	-	-
Balance as at 31 December 2021	19,571	-	10,500	11,942

Notes to the Financial Statements

1. General information

RM Infrastructure Income plc (the "Company"), formerly RM Secured Direct Lending plc, was incorporated in England and Wales on 27 October 2016 with registered number 10449530, as a closed-ended investment company. The Company commenced its operations on 15 December 2016. The Company intends to carry on business as an investment trust within the meaning of Chapter 4 of Part 24 of the Corporation Tax Act 2010.

On 6 April 2021, the Company's subsidiary RM ZDP plc was placed into voluntary liquidation.

The Company's investment objective is to generate attractive and regular dividends through investment in secured debt instruments of UK SMEs and mid-market corporates including any loan, promissory notes, lease, bond or preference share sourced or originated by the Investment Manager with a degree of inflation protection through index-linked return where appropriate.

The registered office is 6^th Floor, 125 London Wall, Barbican, London EC2Y 5AS.

2. Accounting policies

The principal accounting policies followed by the Company are set out below:

(a) Basis of accounting

The financial statements have been prepared in accordance with UK-adopted international accounting standards. The financial statements have been prepared on a historical basis, except for investments measured at fair value.

In preparing these financial statements the directors have considered the impact of climate change as a risk and have concluded that there was no further impact of climate change to be taken into account. In line with IAS, investments are valued at fair value and climate change risk is taken into consideration on the investments we hold.

The Board has determined by having regard to the currency of the Company's share capital and the predominant currency in which the Company operates, that sterling is the functional and presentational currency. Where presentational recommendations set out in the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP"), issued in the UK by the AIC in April 2021, do not conflict with the requirements of UK-adopted international accounting standards ("IFRS"), the directors have prepared the financial statements on a basis consistent with the recommendations of the SORP, in the belief that this will aid comparison with similar investment companies incorporated in the United Kingdom.

In accordance with the SORP, the Statement of Comprehensive Income has been analysed between a revenue return (dealing with items of a revenue nature) and a capital return (relating to items of a capital nature). Revenue returns include, but are not limited to, investment related income, operating expenses, income related finance costs and taxation (insofar as they are not allocated to capital). Net revenue returns are allocated via the revenue return to the Revenue reserve.

Capital returns include, but are not limited to, profits and losses on the disposal and the valuation of non-current investments, derivative instruments and on cash and borrowings, operating costs and finance costs (insofar as they are not allocated to revenue). Net capital returns are allocated via the capital return to Capital reserves.

The Company is engaged in a single segment of business, being that of an investment trust company, consequently no business segmental analysis is provided.

Dividends on Ordinary Shares may be paid out of Revenue reserve, Capital reserve and Special reserve.

(b) Adoption of new IFRS standards

New standards, interpretations and amendments adopted from 1 January 2021

A number of new standards, amendments to standards and interpretations are effective for the annual periods beginning after 1 January 2021. None of these are expected to have a significant effect on the measurement of the amounts recognised in the financial statements of the Company.

New standards and amendments issued but not yet effective

The relevant new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company's financial statements are disclosed below. These standards are not expected to have a material impact on the entity in future reporting periods and on foreseeable future transactions.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments are effective for annual reporting periods beginning on or after 1 January 2023.

Reference to the Conceptual Framework - Amendments to IFRS 3

In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are effective for annual reporting periods beginning on or after 1 January 2022.

Definition of Accounting Estimates - Amendments to IAS 8

In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of 'accounting estimates'. The amendments are effective for annual reporting periods beginning on or after 1 January 2023.

Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements. The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023.

The Directors have adopted the going concern basis in preparing the financial statements. In forming this opinion, the directors continue to consider any potential impacts of the COVID-19 pandemic on the going concern and viability of the Company. In making their assessment, the Directors have reviewed income and expense projections and the liquidity of the investment portfolio, and considered the mitigation measures which key service providers, including the Investment Manager, continue to have in place to maintain operational resilience. Details of the Directors assessment of the going concern status of the Company are given in the Annual Report.

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date of the Annual Report. In reaching this conclusion, the Directors have considered the Company's portfolio of loan investments of £126.7 million (2020: £122.7 million) and the cash position of £3.3 million (2020: £2.2 million). The Company's net assets at 31 December 2021 were £111.3 million (2020: £110.4 million). The total expenses (excluding finance costs and taxation) for the year ended 31 December 2021 were £2.6 million (2020: £2.4 million), which represented approximately 1.92% (2020: 1.91%) of average net assets during the year. At the date of approval of the Annual Report, based on the aggregate of investments and cash held, the Company has substantial operating expenses cover.

The Directors have concluded that there is a reasonable expectation that the Company will have adequate liquidity and cash balances to meet its liabilities as they fall due and continue in operational existence for the foreseeable future and continue as a going concern for the period to 30 June 2023.

(d) Investment entity status

The Company meets the criteria within IFRS 10 as an investment entity and should therefore hold investments in subsidiaries at fair value rather than consolidate them, unless those subsidiaries are not themselves investment entities and their main purpose is to provide services related to the Company's investment activities.

(e) Investments

Investments consist of private loans and bonds, which are classified as fair value through profit or loss as they are included in the Company's financial assets that are managed and their performance evaluated on a fair value basis. They are initially and subsequently measured at fair value and gains and losses are attributed to the capital column of the Statement of Comprehensive Income. Investments are recognised on the date that the Company becomes a party to the contractual provisions of the instrument and are derecognised when their term expires, or on the date they are sold, repaid or transferred.

Unquoted investments are valued at fair value by the Board which is established with regard to the International Private Equity and Venture Capital Valuation Guidelines by using, where appropriate, latest dealing prices, valuations from reliable sources and other relevant factors.

(f) Foreign currency

Transactions denominated in foreign currencies are translated into sterling at actual exchange rates as at the date of the transaction. Monetary assets and liabilities and non-monetary assets held at fair value denominated in foreign currencies are translated into sterling using London closing foreign exchange rates at the year end. Any gain or loss arising from a change in exchange rates is included as an exchange gain or loss to capital or revenue in the Statement of Comprehensive Income as appropriate. Foreign exchange movements on investments are included in the Statement of Comprehensive Income within loss on investments.

(g) Income

Interest income is recognised in the revenue column of the Statement of Comprehensive Income on an effective interest rate basis. Payment-in-kind ("PIK") interest income is recognised on an accruals basis and capitalised to the principal value of the loan.

All other income including deposit interest is accounted for on an accruals basis and early settlement fees received are recognised upon the early repayment of the loan.

Arrangement fees earned on private loan investments are recognised as an income over the term of the private loans.

(h) Cash and cash equivalents

Cash and cash equivalents include deposits held at call with banks and other short-term deposits with original maturities of three months or less.

(i) Capital reserves

Realised and unrealised gains and losses on the Company's investments are recognised in the capital column of the Statement of Comprehensive Income and allocated to the capital reserve.

(j) Expenses

All expenses are accounted for on an accruals basis.

Other expenses are recognised in the revenue column of the Statement of Comprehensive Income, unless they are incurred in order to enhance or maintain capital profits.

Management fees and finance costs
The Company is expecting to derive its returns predominantly from interest income. Therefore, the Board has adopted a policy of allocating all management fees and finance costs to the revenue column of the Statement of Comprehensive Income.

ZDP Shares finance cost

The ZDP Shares are designed to provide a pre-determined capital growth from their original issue price of 100p on 3 April 2018 to a final capital entitlement of 110.91p on 6 April 2021, on which date the RM ZDP was liquidated. The provision for the capital growth entitlement of the ZDP Shares is included as a finance cost and charged to revenue within the Statement of Comprehensive Income.

(k) Taxation

The charge for taxation is based upon the net revenue for the year. The tax charge is allocated to the revenue and capital columns of the Statement of Comprehensive Income according to the marginal basis whereby revenue expenses are first matched against taxable income arising in the revenue account.

Deferred taxation will be recognised as an asset or a liability if transactions have occurred at the initial reporting date that give rise to an obligation to pay more taxation in the future, or a right to pay less taxation in the future. An asset will not be recognised to the extent that the transfer of economic benefit is uncertain.

(l) Financial liabilities

Bank loan facility and overdrafts are initially recorded at the proceeds received net of direct issue costs and subsequently measured at amortised cost using the effective interest rate. The associated costs of bank loan facility are treated as revenue and amortised over the period of the bank loan facility.

(m) Dividends

Interim dividends to the holders of shares are recorded in the Statement of Changes in Equity on the date that they are paid. Final dividends would be recorded in the Statement of Changes in Equity when they are approved by Shareholders, however the Company currently declares four interim dividends as opposed to any final dividends.

(n) Judgements, estimates and assumptions

The preparation of financial statements requires the directors to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Although these estimates are based on management's best knowledge of current facts, circumstances and, to some extent, future events and actions, the Company's actual results may ultimately differ from those estimates, possibly significantly.

The Company recognises loan investments at fair value through profit or loss and disclosed in note 3 to the financial statements. The significant assumptions made at the point of valuation of loans are the discounted cash flow analysis and/or benchmarked discount/interest rates, which are deemed appropriate to reflect the risk of the underlying loan. These assumptions are monitored to ensure their ongoing appropriateness. The sensitivity impact on the measurement of fair value of loan investments due to price is discussed in note 20.

3. INVESTMENT AT FAIR VALUE THROUGH PROFIT OR LOSS
(a) Summary of valuation
	Year ended 31 December 2021	Year ended 31 December 2020
	£'000	£'000
Financial assets held:
Equity investments	3,600	-
Bond investments	7,346	2,695
Private loan investments	115,728	120,010
	126,674	122,705

(b) Movements
	Year ended 31 December 2021	Year ended 31 December 2020
	£'000	£'000

Opening valuation	122,705	131,201
Opening losses on investments	8,276	2,919
Book cost at the beginning of the year	130,981	134,120
Private loans issued/bonds purchases at cost	44,582	35,589
Purchase in kind interest (PIK)	3,126	2,602
Purchase of equity investments	5,100	-
Sales:
- Private loans repayments/bonds sales proceeds	(48,962)	(41,067)
- Losses on investment	(1,763)	258
- Purchase in kind interest (PIK)	(587)	(521)
Unrealised losses on investments held	(5,803)	(8,276)
Closing valuation at year end	126,674	122,705

Book cost at end of the year	132,477	130,981
Unrealised losses on investment holdings at the year end	(5,803)	(8,276)
Closing valuation at year end	126,674	122,705

The Company received £49.5 million (2020: £41.5 million) from investments sold in the year. The book cost of these investments when they were purchased was £41.6 million (2020: £41.3 million). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

(c) Gains/(losses) on investments
	Year ended 31 December 2021	Year ended 31 December 2020
	£'000	£'000
Realised (losses)/gains on investments	(1,763)	258
Unrealised gains/(losses) on investments held	2,473	(5,357)
Foreign exchange gains/(losses)	553	(676)
Total gains/(losses) on investments	1,263	(5,775)

At the year end, the Company had two unquoted investments;

1. Esprit Holdco Limited (Energie Fitness). The Company participated in a management buyout during 2020 and owns 28% of the business, the registered office and principal of business of Energie Fitness is 1 Pitfield Kiln Farm, Milton Keynes, United Kingdom, MK11 3LW. The Investment Manager valued holdings in Energie Fitness at nil. The equity investment in Energie Fitness meets the criteria within IFRS 10 as an investment entity and therefore is held at fair value.

2. Trent Capital Limited. The Company structured a Loan in 2019, which also offered equity within Trent Capital Limited. The Company has a 30% net equity holding within the business which is registered at 17 Walkergate, Berwick Upon Tweed, Northumberland, TD15 1DJ and the principal business address is Unit 7 Newton Chambers Way, Thornecliffe Industrial Estate, Chapeltown, Sheffield, S35 2PH. The Investment Manager valued holdings in Trent Capital Limited at nil. The equity investment in Trent Capital Limited meets the criteria within IFRS 10 as an investment entity and therefore is held at fair value.

4. INCOME
	Year ended 31 December 2021	Year ended 31 December 2020
	£'000	£'000
Income from investments
Bond and loan - cash interest	8,581	8,817
Bond and loan - PIK interest	2,277	1,879
Arrangement fees	102	102
Delayed Compensation fees received	19	46
Prepayment fee	-	58
Other income	185	40
Total	11,164	10,942

5. INVESTMENT MANAGEMENT FEE

	Year ended 31 December 2021			Year ended 31 December 2020
	£'000			£'000
Basic fee:
100% charged to revenue	1,013			1,088
Total	1,013			1,088

The Company's Investment Manager is RM Capital Markets Limited. Under the amended Investment Management Agreement, effective 1 April 2020, the Investment Manager is entitled to receive a management fee payable monthly in arrears or as soon as practicable after the end of each calendar month an amount one-twelfth of;
(a) 0.875 per cent. of the prevailing NAV in the event that the prevailing NAV is up to or equal to £250 million; or (b) 0.800 per cent. of the prevailing NAV in the event that the prevailing NAV is above £250 million but less than £500 million; or (c) 0.750 per cent. of the prevailing NAV in the event that the prevailing NAV is above £500 million.
The management fee shall be payable in Sterling on a pro-rata basis in respect of any period which is less than a complete calendar month.
There is no performance fee payable to the Investment Manager.
6. OTHER EXPENSES
		Year ended 31 December 2021	Year ended 31 December 2020
		£'000	£'000
Basic fee charged to revenue:
Administration Fees		246	242
Auditor's remuneration:
Statutory audit fee		112	94
Broker Fees		141	106
Consultancy Fees		138	90
Directors' Fees		99	99
AIFM fees		151	160
Registrar fees		41	31
Valuation Fees		87	90
Other Expenses		583	280
Total revenue expenses		1,598	1,192
Expenses charged to capital:
Prospectus issue and capital transaction costs		-	145
Total expenses		1,598	1,337

7. FINANCE COSTS

		Year ended 31 December 2021					Year ended 31 December 2020
		Revenue	Capital			Total	Revenue				Capital	Total
		£'000	£'000			£'000	£'000				£'000	£'000
Loan arrangement fees		89	-			89	105				-	105
Loan Interest paid		595	-			595	129				-	129
ZDP Shares finance costs		113	-			113	401				-	401
Total		797	-			797	635				-	635
8. TAXATION

	Year ended 31 December 2021							Year ended 31 December 2020
	Revenue		Capital			Total		Revenue			Capital		Total
	£'000		£'000			£'000		£'000			£'000		£'000
Analysis of tax charge for the year:
Corporation tax	14		-			14		246			-		246
Total current tax charge (see note 6 (b))	14		-			14		246			-		246

(b) Factors affecting the tax charge for the year:
The effective UK corporation tax rate for the period is 19.00% (2020:19.00%). The tax charge differs from the charge resulting from applying the standard rate of UK corporation tax for an investment trust company. The differences are explained below:
	Year ended 31 December 2021							Year ended 31 December 2020
	Revenue		Capital			Total		Revenue			Capital		Total
	£'000		£'000			£'000		£'000			£'000		£'000
Return on ordinary activities before taxation	7,756		1,263			9,019		7,463			(5,355)		2,108
UK corporation tax at 19.00% (2020:19.00%)	1,474		240			1,714		1,418			(1,018)		400
Effects of:
Fair value losses not deductible	-		(240)			(240)		-			990		990
Interest distributions paid/payable	(1,460)		-			(1,460)		(1,172)			-		(1,172)
Management expenses not allowable	-		-			-		-			28		28
Total tax charge	14		-			14		246			-		246

The Company is not liable to tax on capital gains due to its status as an investment trust.
(c) Deferred tax assets/(liabilities)
The Company had no recognised or unrecognised deferred asset/liability as at the year end.
9. RECEIVABLES
					As at 31 December 2021					As at 31 December 2020
Company					£'000					£'000
Amounts falling due within one year:
Repayment of investment private loans receivable					-					7,330
Bond and loan interest receivable					1,603					1,983
Prepayments and other receivables					1,081					1,185
Total					2,684					10,498
10. PAYABLES
				Year ended 31 December 2021					Year ended 31 December 2020
				£'000					£'000
Amounts falling due within one year:
Loan reserves retained				454					595
Intercompany payable				-					157
Taxation payable				14					246
Other creditors				1,379					1,647
Total				1,847					2,645

	11. INTERCOMPANY LOAN

		As at 31 December 2021		As at 31 December 2020
		£'000		£'000
	Intercompany loan payable to RM ZDP	-		11,541
	Finance costs and capital contribution	-		401
	Total	-		11,942

	Intercompany Loan Agreement
	On 29 March 2018, the Company entered into a Loan Agreement with RM ZDP (the "ZDP Loan"). Pursuant to the Loan Agreement, RM ZDP lent the entirety of the gross proceeds of the issue of ZDP Shares on 3 April 2018 to the Company, which has been applied towards making investments in accordance with the Investment Policy and for working capital purposes.

	The Loan Agreement provides that, interest will accrue on the ZDP Loan daily at a rate of 2% per annum, compounded annually on each anniversary of Admission of the ZDP Shares and will be rolled up and paid to RM ZDP along with repayment of the principal. On 6 April 2021, the Company repaid principal and rolled up interest of £12,056,000 to RM ZDP plc.


12. BANK LOAN-CREDIT FACILITY
			Year ended 31 December 2021		Year ended 31 December 2020
			£'000		£'000
Oak North Bank-Credit facility			19,571		10,500
Total			19,571		10,500

On 26 March 2021, the Company renewed and amended its revolving credit facility with OakNorth. The Company had entered into an uncommitted 90-day notice revolving loan of £10,500,000 ("Facility A") and a committed term revolving loan of £11,942,000 ("Facility B"), together with Facility A the ("Facilities") with OakNorth for the purposes set out in the credit facility agreement.

Facility A will be provided to be applied in or towards:

· repaying all amounts due from the Company to the OakNorth under its existing loan agreement;

· funding by the Company of customer loans;

· refinancing (where applicable) any customer loans made by the Company;

· purchasing investments by the Company;

· the provision of liquidity to the Company; and

· payment of finance costs (including fees) payable under the loan.

Facility B will be provided to be applied in or towards:

· repaying sums due from the Company to RM ZDP plc;

· funding by the Company of customer loans;

· refinancing (where applicable) any customer loans made by the Company;

· purchasing investments by the Company;

· the provision of liquidity to the Company; and

· payment of finance costs (including fees) payable under the loan agreement.

The rate of interest on the facilities are the aggregate of the applicable margin and base rate (subject to a base rate floor of 0.10%). The margin is 4.65% p.a. The facilities expire on 26 March 2024.

During the year, the Company drew cumulative amount of £30.1 million (2020: £17.8 million) from the revolving credit facility and repaid cumulative amount of £20.0 million (2020: £7.3 million). The remaining balance as at 31 December 2021 amounts to £19.6 million (2020: £10.5 million).

13. SHARE CAPITAL

As at 31 December 2021

As at 31 December 2020

No. of Shares

£'000

No. of Shares

£'000

Allotted, issued & fully paid:

Ordinary shares of 1p

117,840,988

1,178

118,364,282

1,184

Share movement

The table below sets out the share movement for the year ended 31 December 2021.

Opening balance

Shares issued

Shares bought back

Shares in issue at
31 December 2021

Ordinary Shares

118,364,282

(523,294)

117,840,988

At the year end, the Company has 117,840,988 Ordinary Shares in issue with voting rights and 4,383,593 Ordinary Shares held in Treasury.

Ordinary Share buy backs

During the year, the Company bought back 523,294 Ordinary Shares for an aggregate cost of £463,838. Since the year end no further Ordinary Shares have been bought back.

14. SHARE PREMIUM

	As at 31 December 2021	As at 31 December 2020
	£'000	£'000
Balance as at beginning of the year	70,168	70,146
Share buybacks	6	38
Share buyback costs	(6)	(16)
Balance as at 31 December 2021	70,168	70,168

15. RETURN PER ORDINARY SHARE

Based on the weighted average of number of 117,976,668 (2020: 120,985,417) Ordinary Shares in issue for the year ended 31 December 2021, the returns per share were as follows:

Year ended 31 December 2021

Year ended 31 December 2020

Revenue

Capital

Total

Revenue

Capital

Total

Return per Ordinary Share

6.56p

1.07p

7.63p

5.96p

(4.43p)

1.53p

There are no dilutive shares in issue.

16. NET ASSET VALUE PER SHARE
The NAV per share is based on Company's total shareholders' funds of £112,750,000 (2020: £110,384,000), and on 117,840,988 (2020: 118,364,282) Ordinary Shares in issue at the year end.

Nav per ordinary share reconciliation

The table below is a reconciliation between the NAV per Ordinary Share of the Company as announced on the London Stock Exchange and the NAV per Ordinary Share disclosed in these financial statements.

	As at 31 December 2021		As at 31 December 2020
	Net assets (£)	NAV per Ordinary share (p)	Net assets (£)	NAV per Ordinary share (p)
NAV as published on 15 January 2022/2021	112,949,700	95.85	111,123,419	93.88
Tax liability adjustments	-	-	(246,000)	(0.20)
DAS accrual income adjustment	(199,500)	(0.17)	-	-
Equity revaluation adjustment*	(1,500,000)	(1.27)	-	-
Share buyback adjustments	-	-	(493,851)	(0.42)
NAV as disclosed in these Financial Statements	111,250,200	94.41	110,383,568	93.26

*Refer to Note 21 for a description of the equity revaluation adjustment

17. DIVIDEND
Total dividends paid in the year	Year ended 31 December 2021								Year ended 31 December 2020
	Pence per Ordinary share		Revenue £'000		Capital £'000		Total		Pence per Ordinary share			Revenue £'000	Capital £'000		Total
2020 Interim - Paid 26 Mar 2021 (2019: 27 Mar 2020)	1.6250p		1,918		-		1,918		1.7000p			2,078	-		2,078
2021 Interim - Paid 25 Jun 2021 (2020: 26 Jun 2020)	1.6250p		1,917		-		1,917		1.6250p			1,975	-		1,975
2021 Interim - Paid 24 Sep 2021 (2020: 25 Sep 2020)	1.6250p		1,917		-		1,917		1.6250p			1,967	-		1,967
2021 Interim - Paid 30 Dec 2021 (2020: 30 Dec 2020)	1.6250p		1,917		-		1,917		1.6250p			1,942	-		1,942
Total	6.5000p		7,669		-		7,669		6.5750p			7,962	-		7,962
The dividend relating to the year ended 31 December 2021, which is the basis on which the requirements of Section 1159 of the Corporation Tax Act 2010 are considered is detailed below:

Total dividends in relation to the year	Year ended 31 December 2021								Year ended 31 December 2020
	Pence per Ordinary share		Revenue £'000		Capital £'000		Total		Pence per Ordinary share			Revenue £'000	Capital £'000		Total
2021 Interim - Paid 25 Jun 2021 (2020: 26 Jun 2020)	1.6250p		1,917		-		1,917		1.6250p			1,975	-		1,975
2021 Interim - Paid 24 Sep 2021 (2020: 25 Sep 2020)	1.6250p		1,917		-		1,917		1.6250p			1,967	-		1,967
2021 Interim - Paid 30 Dec 2021 (2020: 30 Dec 2020)	1.6250p		1,917		-		1,917		1.6250p			1,942	-		1,942
2021 Interim - Payable 25 Mar 2022 (2020: 26 Mar 2021*	1.6250p		1,915		-		1,915		1.6250p			1,918	-		1,918
Total	6.5000p		7,666		-		7,666		6.5000p			7,802	-		7,802
*Not included as a liability in the year ended 31 December 2021 financial statements.
18. RELATED PARTY TRANSACTIONS

Fees are payable at an annual rate of £36,000 to the Chair, £33,000 to the Chair of the Audit and Management Engagement Committee and £30,000 to the other Director. As at 31 December 2021, there were no Directors' fees outstanding. The Directors' fees are disclosed in note 7 and the Directors' shareholdings are disclosed in the Directors Remuneration Report in the Annual Report for the year ended 31 December 2021.
Fees payable to the Investment Manager are shown in the Statement of Comprehensive Income. As at 31 December 2021 the fee outstanding to the Investment Manager was £84,000 (2020: £93,000).
Arrangement fees are paid by some borrowers to the Investment Manager. The amount the Investment Manager can retain from borrowers in most cases is capped at 1.25% and agreed with the Board. The Company receives any arrangement fees from the Investment Manager in excess of the 1.25% or otherwise agreed with the borrower. During the year to 31 December 2021, the Company received £102,000 (2020: £102,000) in arrangement fees from RM.
As at 31 December 2021, the Investment Manager held 1,279,125 (2020: 1,237,325) Ordinary Shares in the Company.

Since the year end, the Investment Manager purchased a further 12,500 Ordinary Shares in the Company, and as of the date of the Annual Report, the Investment Manager's total holding of Ordinary Shares is 1,291,625 (2020: 1,249,825). Significant Holdings Disclosure Requirements - Companies Act 2006 The Company holds an unquoted investment in Coventry Student Accommodation 1 Limited ("Coventry", the wholly owned asset). As at 31 December 2021, the Company owns 100% of the business. The registered office and principal place of business of Coventry is 1^st Floor Senator House, 85 Queen Victoria Street, London, United Kingdom, EC4V 4AB. The Investment Manager's valuation of the holdings in Coventry is £3.6 million as at 31 December 2021. The equity investment in Coventry meets the criteria within IFRS 10 as an investment entity and therefore held at fair value.
19. CLASSIFICATION OF FINANCIAL INSTRUMENTS

IFRS 13 requires the Company to classify its investments in a fair value hierarchy that reflects the significance of the inputs used in making the measurements. IFRS 13 establishes a fair value hierarchy that prioritises the inputs to valuation techniques used to measure fair value. The three levels of fair value hierarchy under IFRS 13 are as follows:
Level 1
Inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2
Inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3
Inputs are unobservable for the asset or liability.

The classification of the Company's investments held at fair value through profit or loss is detailed in the table below:

		31 December 2021								31 December 2020
		Level 1		Level 2		Level 3		Total		Level 1	Level 2			Level 3		Total
		£'000		£'000		£'000		£'000		£'000	£'000			£'000		£'000
Financial assets:
Financial assets - Private loans and bonds		-		7,346		-		7,346		-	25,013			-		25,013
Financial assets - Private loans		-		-		115,728		115,728		-	-			97,692		97,692
Financial assets - Equity investment		-		-		3,600		3,600		-	-			-		-
Forward contract unrealised gain		-		137		-		137		-	161			-		161
Net financial assets (including forwards)*		-		7,483		119,328		126,811		-	25,174			97,692		122,866
*The net unrealised gain of £136,729 (2020: £161,027) on forwards is recognised within prepayments and other debtors in the Statement of Financial Position. As at 31 December 2021, the fair value of the Company's loans is materially equal to the carrying value.
Investments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2.
Level 3 holdings are valued using a discounted cash flow analysis and benchmarked discount/interest rates appropriate to the nature of the underlying loan and the date of valuation.
Interest rates are a significant input into the Level 3 valuation methodology. Interest rates used in the valuation range from 5.88% to 20.5% (2020: 5.3% to 15.0%). Sensitivity analysis of interest rates can be found in the Annual Report.
There have been no movements between levels during the reporting period. The Company considers factors that may necessitate the transfers between levels using the definition of the levels 1, 2 and 3 above.

Reconciliation of the Level 3 classification investments during the year to 31 December 2021 is shown below:
										31 December 2021				31 December 2020
											£'000					£'000
Balance as at beginning of the year											97,692					87,878
New loans during the year											38,253					38,258
New equity investments during the year											3,600					-
Repayments during the year											(16,558)					(23,905)
Realised (losses)/gains during the year											(832)					545
Unrealised losses at the year end											(2,827)					(5,084)
Closing balance as at 31 December 2021											119,328					97,692

20. FINANCIAL INSTRUMENTS AND CAPITAL DISCLOSURES
The Company invests in private loan, bond investments and an equity investment. Financial instrument and capital disclosures are only prepared on a Company basis as this is the basis on which reports are made to the decision makers. The following describes the risks involved and the applied risk management. The Investment Manager reports regularly both verbally and formally to the Board, and its relevant committees, to allow them to monitor and review all the risks noted below. (i) Market risks
The Company is subject to a number of Market risks in relation to economic conditions and healthcare companies. Further detail on these risks and the management of these risks are included in the Annual Report.

The Company's financial assets and liabilities at 31 December 2021 comprised: Year ended 31 December 2021 Year ended 31 December 2020
	Interest bearing	Non-interest bearing	Total	Interest bearing		Non-interest bearing			Total
Investments	£'000	£'000	£'000	£'000		£'000			£'000
GB sterling	116,674	-	116,674	109,354		-			109,354
Euro	10,000	-	10,000	13,351		-			13,351
Total investment	126,674	-	126,674	122,705		-			122,705

Cash and cash equivalents	3,310	-	3,310	2,236		-			2,236
Receivables	-	2,684	2,684	-		10,515			10,515
Payables	-	(21,418)	(21,418)	(10,500)		(2,634)			(13,134)
Intercompany loan payable	-	-	-	(11,942)		-			(11,942)
Total	129,984	(18,734)	111,250	102,499		7,881			110,380

Price risk sensitivity
The effect on the portfolio of a 10.0% increase or decrease in the value of the loans and equity portfolio would have resulted in an increase or decrease of £12,667,000 (2020: £12,271,000) in the investments held at fair value through profit or loss at the period end date. This analysis assumes that all other variables remain constant. Given the portfolio has a weighted average life of circa 2.5 years, a movement of 1bp affects the Company's portfolio values by 0.02bp (£220/per £1 million). Therefore, if the discount rates were to move higher by 100bp across £131 million (gross assets as at 31 December 2021), that will result in a loss to the Company's NAV of £2.9 million.

(ii) Credit risks
The Company's investments will be predominantly in the form of private loans whose revenue streams are secured against contracted, predictable medium to long-term cash flows and/or physical assets, and whose debt service payments are dependent on such cash flows and/or the sale or refinancing of the physical assets. The key risks relating to the private loans include risks relating to counterparty default, senior debt covenant breach risk, bridge loans, adverse credit risk spread, delays in the receipt of anticipated cash flows and borrower default, and collateral risks.

The Company is also exposed to the risk of default on cash held at the bank and other trade receivables. The maximum exposure to credit risk on cash at bank and other trade receivables at 31 December 2021 was £3,310,000 and £2,684,000 respectively (2020: £2,236,000 and £10,515,000). None of these amounts are considered past due or impaired and interest is based on the prevailing money market rates.

The table below shows the Company's exposure to credit risks as the year end. As at 31 December 2021 As at 31 December 2020
			Fair value		Maximum exposure		Fair value	Maximum exposure
			£'000		£'000		£'000	£'000
Private loan investments			115,728		115,728		120,010	120,010
Equity instruments			3,600		3,600		-	-
Bond investments			7,346		7,346		2,695	2,695
Cash and cash equivalent			3,310		3,310		2,236	2,236
Receivables			2,684		2,684		10,515	10,515
Total			132,668		132,668		135,456	135,456
Management of risks
The Investment Manager reports a number of key metrics on a monthly basis to its Credit Committee including pipeline project information, outstanding loan balances, lending book performance and early warning indicators. The Investment Manager monitors ongoing credit risks in respect of the loans. Typically, the Company's loan investments are private loans and would usually exhibit credit risk classified as 'non-investment' if a public rating agency was referenced. The Company's main cash balances are held with The Royal Bank of Scotland plc ("RBS"). Bankruptcy or insolvency of the bank holding cash balances may cause the Company's rights with respect to the cash held by them to be delayed or limited. The Company manages its risk by monitoring the credit quality of RBS on an ongoing basis.
(iii) Interest rate risks
Private Loans
The Company may make loans based on estimates or projections of future interest rates because the Investment Manager expects that the underlying revenues and/or expenses of a borrower to whom the Company provides loans will be linked to interest rates, or that the Company's returns from a loan are linked to interest rates. If actual interest rates differ from such expectation, the net cash flows of the borrower or payable to the Company may be lower than anticipated.

Interest rate sensitivity
Interest Income earned by the Company is primarily derived from fixed interest rates. The interest earned from the floating element of loan and debt security investments is not significant. Based on the Company's private loan investments, bond investments, cash and cash equivalents as at 31 December 2021, a 0.50% increase/(decrease) in interest rates, all other things being equal, would lead to a corresponding increase/(decrease) in the Company's income as follows.
			As at 31 December 2021				As at 31 December 2020
			0.50% Increase		0.50% Decrease		0.50% Increase	0.50% Decrease
			£'000		£'000		£'000	£'000
Private loans investments			579		(579)		488	(488)
Bond investments			37		(37)		125	(125)
Equity investments			18		(18)		-	-
Cash and cash equivalent			17		(17)		11	(11)
Total			648		(648)		624	(624)

Management of risks
The Investment Manager's investment process takes into account interest rate risk. The investment strategy is to invest in private loans with maturities typically between 2 and 10 years. Exposure to predominantly higher yielding loans and possible floating rate investments can mitigate interest rate risk to some extent. On a monthly basis, Investment Managers review fixed/floating and weighted average life of the portfolio for interest rate risk.

(iv) Liquidity risks
Liquidity risk is defined as the risk that the Company will encounter difficulties in realising assets or otherwise raising funds to meet financial commitments. The cash and cash equivalent balance at the year-end was £3,310,000 (2020: £2,236,000).

Financial liabilities by maturity at the period end are shown below:
							31 December 2021	31 December 2020
							£'000	£'000
Within one month							-	-
Between one and three months							1,393	2,039
Between three months and one year							-	23,037
More than one year							20,025	-
Total							21,418	25,076

The Investment Manager manages the Company's liquidity risk by investing in a diverse portfolio of loans, secured debt instruments and an equity investment in line with the Investment Policy and Investment restrictions. The Investment Manager may utilise other measures such as borrowing, share issues including treasury shares for liquidity purposes.
The maturity profile of the Company's portfolio as at the year-end is as follows:
							31 December 2021	31 December 2020
							£'000	£'000
Within one month							4,628	6,625
Between one and three months							-	-
Between three months and one year							855	5,394
More than one year							121,191	110,686
Total							126,674	122,705

(v) Foreign currency risks
Foreign currency risk is the risk that the value of a financial instrument will fluctuate because of changes in foreign currency exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company's functional currency. The Company invests in debt security instruments that are denominated in currencies other than sterling.
Accordingly, the value of the Company's assets may be affected favourably or unfavourably by fluctuations in currency rates and therefore the Company will necessarily be subject to foreign exchange risks.
Based on the financial assets and liabilities at 31 December 2021 and all other things being equal, if sterling had weakened against the local currencies by 10%, the impact on the Company's net assets at 31 December 2021 would have been as follows:
							31 December 2021	31 December 2020
							£'000	£'000
Euro							167	204
US dollar							-	16
Total							167	220

Foreign currency risk profile
	31 December 2021				31 December 2020
	Investment exposure	Net monetary exposure	Total currency exposure		Investment exposure		Net monetary exposure	Total currency exposure
	£'000	£'000	£'000		£'000		£'000	£'000

Euro	1,410	262	1,672		1,726		313	2,039
US dollar	-	4	4		-		156	156
Total	1,410	266	1,676		1,726		469	2,195

Management of currency risks
The Company's Investment Manager monitors the currency risk of the Company's portfolio on a regular basis. Foreign currency exposure is regularly reported to the Board by the Investment Manager. The Investment Manager may hedge any currency back to sterling as they see fit.

Fair values of financial assets and liabilities
All financial assets and liabilities are recognised in the financial statements at fair value, with the exception of short-term assets (with a maturity profile of less than 12 months) and liabilities, which are held at amortised cost for which fair value is given in note 20. As at 31 December 2021, the fair value of the Company's loans is materially equal to the carrying value.

Capital management
The Company's share capital consists of Ordinary Shares of 1 pence each, its distributable reserves, which comprise Revenue reserve, Capital reserve and the Special reserve. In accordance with accounting standards, the Company's Ordinary Shares are considered to be equity.
The Company has a stated discount control policy. The Investment Manager and the Company's broker monitor the demand for the Company's shares and the Directors review the position at Board meetings. Further details on share issues during the year and the Company's policies for issuing further shares and buying back shares (including the Company's discount management) can be found in the Annual Report.
During the year the Company bought back 523,294 shares (2020: 3,860,299) which are held in treasury.
The Company's policy on borrowing is detailed in the Annual Report. The details of the Company's OakNorth facilities are discussed in note 12.
21. POST BALANCE SHEET EVENTS
Since 31 December 2021, markets have fallen significantly with a number of investor concerns impacting on stock market valuations. These include: the Russian invasion of Ukraine, the continuing disruption caused by Covid and the impact that rising inflation and interest rates may have on the outlook for the global economy. The Company has assessed it has no direct exposure to this.
In January 2022, RM Funds received a Fire Safety Report from Osborn Associates, relating to a property owned within the wholly owned asset, which had been commissioned during 2021 as a EWS1 form undertaken during 2021 concluded that remedial works were required due to the fire risk of the building. The Osborne Associates document focused on fire safety and compliance and principally identified deficiencies with regards to the design and construction of certain aspects to the building cladding. The project agent put out the updated design specification to tender during Q1 2022 to remediate these deficiencies. These remediation costs were received in late March 2022 and totalled approximately £1.5m including VAT. These remedial works are required to make the building complaint to allow safe occupation and it was decided to reduce the value of the asset by these costs. As the building was in this non-compliant state as at 31 December 2021 it is deemed an adjustment event. Concurrent to this workstream RM Funds are working with lawyers acting on behalf of RMII to lodge a claim against the original scheme contractors and or consultants to recover these costs.

FINANCIAL INFORMATION

This announcement does not constitute the Company's statutory accounts. The financial information is derived from the statutory accounts, which will be delivered to the registrar of companies and will be put forward for approval at the Company's Annual General Meeting. The statutory accounts for the year ended 31 December 2020 have been delivered to the registrar of companies. The auditors have reported on the accounts for the year ended 31 December 2021 and the year ended 31 December 2020, their reports were unqualified and did not include a statement under Section 498(2) or (3) of the Companies Act 2006.

The Annual Report for the year ended 31 December 2021 was approved on 20 April 2022. It will be made available on the Company's website at https://rm-funds.co.uk/rm-infrastructure-income/investor-relations/

The Annual Report will be submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism

This announcement contains regulated information under the Disclosure Rules and Transparency Rules of the FCA.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held on 31 May 2022 at 12.00 p.m. at the offices of Singer Capital Markets Advisory LLP, 1 Bartholomew Lane, London EC2N 2AX.

20 April 2022

Secretary and registered office:

Sanne Fund Services (UK) Limited

6th Floor

125 London Wall

London

EC2Y 5AS

For further information contact:

Brian Smith / Ciara McKillop

Sanne Fund Services (UK) Limited

Tel: 020 3327 9720

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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