Menhaden Resource Efficiency PLC Annual Report for the year ended 31 December 2022
Menhaden
Resource
Efficiency
Menhaden Resource Efciency PLC
Annual Report for the year ended 31 December 2022
Environment
This report is printed on Revive 100% White Silk a totally recycled paper produced using 100% recycled waste at a mill that has been awarded
the ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
Menhaden Resource Efficiency PLC
25 Southampton Buildings
London WC2A 1AL
www.menhaden.com
Tel +44(0) 203 008 4910
A member of the Association of Investment Companies
Disability Act
Copies of this annual report and other documents issued by the Company are available from the Company Secretary. If needed, copies can be
made available in a variety of formats, including Braille, audio tape or larger type as appropriate. You can contact the Registrar to the Company,
Link Asset Services, which has installed telephones to allow speech and hearing impaired people who have their own telephone to contact them directly,
without the need for an intermediate operator, for this service please call 0800 731 1888.
Specially trained operators are available during normal business hours to answer queries via this service. Alternatively, if you prefer to go through
a ‘typetalk’ operator (provided by the RNID) you should dial 18001 followed by the number you wish to dial.
Menhaden PLC – Annual Report
Company Summary
Menhaden PLC (the “Company”) is an investment trust. Its shares are listed on the premium segment of the Official
List and traded on the main market of the London Stock Exchange. The Company is a member of the Association of
Investment Companies.
Investment Objective
The Company aims to generate long-term shareholder returns, predominantly in the form of capital growth, by investing
in businesses and opportunities delivering or benefiting from the efficient use of energy and resources irrespective of
their size, location or stage of development.
Management
The Company employs Frostrow Capital LLP as its Alternative Investment Fund Manager (“AIFM”) to provide company
management, company secretarial, administrative and marketing services. Frostrow and the Company have jointly
appointed Menhaden Capital Management LLP as the Portfolio Manager. Further details of these appointments are
provided on pages 25 and 26.
Capital Structure
The Company’s capital structure is composed solely of Ordinary Shares. Details are given on page 36 and in note 12
to the financial statements on page 75.
ISA Status
The Company’s shares are eligible for Stocks and Shares ISAs.
Retail Investors advised by IFAs
The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers
(“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relation
to non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s
restrictions which apply to non-mainstream pooled investment products because they are shares in an investment
trust.
Menhaden
Menhaden are forage fish that occur in great abundance in the West Atlantic Ocean. The name, Menhaden, is derived
from the Native American expression “he fertilises” referring to the wide spread use of the fish as a fertiliser. Menhaden
filter vast quantities of water and play a key role in the food chain. It has been argued that the environmental movement
and fisheries ecology rose from the first collapse in the population of Menhaden in the 1860s as this was used as a
prominent example of mankind’s impact on the oceans and the importance of using resources sustainably.
Menhaden Capital PLC
Annual Report for the period from incorporation on
30 September 2014 to 31 December 2015
A member of the Association of Investment Companies
Disability Act
Copies of this annual report and other documents issued by the Company are available from the Company Secretary. If needed, copies can be
made available in a variety of formats, including Braille, audio tape or larger type as appropriate. You can contact the Registrar to the Company,
Link Asset Services, which has installed telephones to allow speech and hearing impaired people who have their own telephone to contact them directly,
without the need for an intermediate operator, for this service please call 0800 731 1888.
Specially trained operators are available during normal business hours to answer queries via this service. Alternatively, if you prefer to go through
a ‘typetalk’ operator (provided by the RNID) you should dial 18001 followed by the number you wish to dial.
Environment
This report is printed on Revive 100% White Silk a totally recycled paper produced using 100% recycled waste at a mill that has been awarded
the ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
Menhaden PLC
25 Southampton Buildings
London WC2A 1AL
www.menhaden.com
Tel +44(0) 203 008 4910
Perivan 257636
Perivan.com
Menhaden Resource Efciency PLC – Annual Report
Company Summary
Menhaden Resource Efficiency PLC (the “Company”) is an investment trust. Its shares are listed on the premium
segment of the Official List and traded on the main market of the London Stock Exchange. The Company is a member
of the Association of Investment Companies (“AIC”).
Investment Objective
The Company aims to generate long-term shareholder returns, predominantly in the form of capital growth, by investing
in businesses and opportunities that are demonstrably delivering or benefiting significantly from the efficient use of
energy and resources irrespective of their size, location or stage of development.
Management
The Company employs Frostrow Capital LLP (“Frostrow”) as its Alternative Investment Fund Manager (“AIFM”) to provide
company management, company secretarial, administrative and marketing services. Frostrow and the Company have
jointly appointed Menhaden Capital Management LLP as the Portfolio Manager. Further details of these appointments
are provided on page 25.
Capital Structure
The Company’s capital is composed solely of ordinary shares. Details are given on page 39 and in note 13 to the
financial statements on page 79.
ISA Status
The Company’s shares are eligible for Stocks and Shares ISAs.
Retail Investors advised by IFAs
The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers
(“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relation
to non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s
restrictions which apply to non-mainstream pooled investment products because they are shares in an investment
trust.
Menhaden
Menhaden are forage fish that occur in great abundance in the West Atlantic Ocean. The name, Menhaden, is derived
from the Native American expression “he fertilises” referring to the widespread use of the fish as a fertiliser. Menhaden
filter vast quantities of water and play a key role in the food chain. It has been argued that the environmental movement
and fisheries ecology rose from the first collapse in the population of Menhaden in the 1860s as this was used as a
prominent example of mankind’s impact on the oceans and the importance of using resources sustainably.
Menhaden Capital PLC
Annual Report for the period from incorporation on
30 September 2014 to 31 December 2015
01
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
1 2
Strategic Report
2 Company Performance
4 Portfolio Profile
5 Chairman’s Statement
8 Investment Objective and Policy
10 Investment Committee
11 Investment Process
12 Portfolio
14 Portfolio Manager’s Review
19 Environmental Impact Statement
24 Business Review
Governance
36 Board of Directors
38 Directors’ Report
42 Statement of Directors’
Responsibilities
43 Corporate Governance Statement
50 Audit Committee Report
54 Directors’ Remuneration Report
57 Directors’ Remuneration Policy
58 Independent Auditor’s Report
3 4
Financial Statements
66 Income Statement
67 Statement of Changes in Equity
68 Statement of Financial Position
69 Statement of Cash Flows
70 Notes to the Financial Statements
Further Information
86 Shareholder Information
87 Glossary
89 How to Invest
91 Notice of Annual General Meeting
96 Explanatory Notes to the
Resolutions
98 Company Information
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Company Performance
129.8p
NAV per share
2021: 155.7p
89.0p
Share price
2021: 112.0p
31.4%
Share price discount
to NAV per share*
2021: 28.1%
(16.5)%
NAV per share
(total return)*
2021: 17.3%
(20.3)%
Share price
(total return)*
2021: 13.1%
1.8%
Total ongoing charges*
2021: 1.8%
This report contains terminology that may be unfamiliar to some readers. The Glossary on pages 87 and 88 provides
definitions for frequently used terms.
*Alternative performance measures (“APMs”)
As at
31 December 2022
For the year ended
31 December 2022
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Total Return Performance – One Year
Total Return Performance – Three Years
Source: Frostrow Capital LLP, Office for National Statistics
Rebased to 100 as at 31 December 2021
Source: Frostrow Capital LLP, Office for National Statistics
Rebased to 100 as at 31 December 2019
Total Return Performance – Five Years
80.0
100.0
120.0
140.0
160.0
180.0
%
Dec 19Dec 17 Jun 18 Jun 19Dec 18 Jun 20 Dec 20 Jun 21 Dec 21 Jun 22 Dec 22
RPI+3% Share Price Total Return NAV Total Return
Source: Frostrow Capital LLP, Office for National Statistics
Rebased to 100 as at 31 December 2017
03
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
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Strategic Report
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Portfolio Distribution
Portfolio Profile
5.8%
16.9%
77.3%
Public Equities
Liquidity
Private Investments
By Asset Allocation
28.5%
5.0%
3.4%
Europe
North America
Emerging Markets
63.1%
UK
By Geography
9.5%
0.9%
41.7%
11.4%
Sustainable Infrastructure
and Transportation
Clean Energy
Digitisation
Industrial Emissions Reduction
36.5%
Water and Waste Management
By Theme
Investment Themes
Theme Description
Clean energy Companies involved in the production and transmission of power from clean
sources such as solar or wind.
Industrial emissions reduction Companies focused on improving energy efficiency (e.g. in buildings or
manufacturing processes) or creating emissions reduction products or services.
Companies in the infrastructure and transport sectors helping to reduce
harmfulemissions.
Water and waste management Companies with products or services that enable reductions in usage/volumes
and/or smarter ways to manage water and waste.
Digitisation Companies that facilitate reduced resource consumption through digital technology.
Reporting Companies providing the means for environmental reporting and evaluation.
Sustainable infrastructure and
transportation
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Introduction
This is our eighth annual report since the launch of the
Company in July 2015. It covers the year ended
31December 2022. With the Russian invasion of Ukraine
and lingering global economic impacts from the pandemic,
this year has been especially challenging. It saw very
significant market volatility, including in the UK, and a marked
rotation away from risk assets into more defensive areas.
The year started with a backdrop of increasing inflation
stemming from governments’ and central banks’ responses
to Covid-19 on top of past quantitative easing (“QE”). This
was subsequently amplified by global supply chain
disruption, oil and gas price rises and the dislocations
associated with the introduction of sanctions on Russia. This
inevitably led to central banks trying to tame inflation with
interest rate increases and reductions in QE and was
accompanied by a switch in market sentiment away from
tech and growth stocks.
In 2022 world equity markets lost almost 20% in US dollar
terms. Virtually all UK listed investment trusts’ share price
discounts to NAV widened over the year and closed-ended
investment vehicles collectively recorded their worst
calendar year performance since 2008.
Financial Performance
The Company’s net asset value (“NAV”) per share total
return* for the year was -16.5% (2021: +17.3%). This
compares to the Company's longer-term performance
benchmark, RPI+3%, which returned 13.7% (2021: 10.5%).
The share price discount* to the NAV per share widened to
31.4% (2021: 28.1%) resulting in the share price total return*
for the year being -20.3% (2021: +13.1%).
The Company has a sizable allocation to the digitisation
(decarbonisation) theme and hence a large exposure to tech
stocks, which were particularly hard hit by the global
economic headwinds. The principal contributor to the
Company’s negative return was the underperformance of
Alphabet, which was the largest position in the portfolio.
Other negative contributors were Charter Communications,
which was sold during the year, Amazon and Microsoft.
Shareholders will be aware that the Portfolio Manager may
use currency forward contracts to reduce the volatility in
returns related to currency movements arising from the
portfolio’s non-sterling denominated investments. As
explained in the Portfolio Manager's review, beginning on
page 14, for much of the year, the Company hedged
approximately 50% of the Company's US dollar and euro
exposures. As sterling weakened against the dollar and euro
during the year, these hedges produced losses which
partially offset the currency gains seen in the Company’s
non-sterling investments.
Positive performance came from the portfolio constituents
in more defensive areas, such as infrastructure: Canadian
National and Canadian Pacific Railways, and private
investments John Laing and TCI Real Estate performed well.
The largest positive contributor was X-ELIO, the Spanish
solar energy developer.
Looking over a longer period, the Company’s compound
NAV performance over the last five years was +7.3%
per annum (2021: +12.9% per annum), compared with
5.3% per annum (2021: 3.5% per annum) compound return
on our benchmark of RPI+3%. Exceeding our benchmark
is our long-term goal and we expect the Company to lead
or lag it during shorter timeframes. Notwithstanding this, our
2022 performance is disappointing.
Our Portfolio Manager remains upbeat about the portfolio’s
quality and prospects and we are hopeful that by continuing
to focus on business quality and maintaining a consistent
risk profile, over the long term we will return to the
benchmark beating trajectory we previously delivered.
Our Portfolio Manager has provided a full description of the
development and financial performance of the portfolio over
the year in their review on pages 14to18.
Environmental Performance
As in past years, we have integrated the Company’s
Environmental Impact Report within the annual report. It can
be found on pages 19 to 23.
This year, disclosures from eight of the companies held in
the portfolio showed, for the Company’s share of these
companies, a 21.2% uplift from 2021 in renewable energy
generation with 146 MWh generated.
Chairman’s Statement
Sir Ian Cheshire
*Alternative Performance Measure (see Glossary beginning on page 87)
05
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Our Portfolio Manager continued its engagement
programme during the year, seeking to move portfolio
companies forward on environmental reporting and target
setting. It identified where improvements should be
encouraged using platforms such as the Climate Disclosure
Project (“CDP”), Science Based Targets initiative (“SBTi”) and
MSCI. The Board is pleased to see that over half of the
portfolio’s listed holdings now have near-term emissions
reduction targets independently validated by SBTi, meaning
they have a clearly defined pathway to reduce their
greenhouse gas (“GHG”) emissions in line with the goals of
the Paris Agreement.
Whilst some sectors in which the Company’s portfolio is
invested, such as transport and infrastructure, are
associated with high emissions, our Portfolio Manager
chooses to invest in certain companies therein that are using
innovative, best practice solutions to become more climate
friendly. For instance, rail transportation is the most energy
efficient method for moving freight and in 2022 our Portfolio
Manager added to the Company’s existing portfolio holdings
in Canadian Pacific Railway and Canadian National Railway,
and reinvested in Union Pacific, one of America’s largest rail
freight providers and a leader in sustainable transportation.
E-commerce has been a key driver of decarbonisation and
our Portfolio Manager initiated a new position in Amazon
during the year. Amazon has become viewed as an essential
utility for consumers and businesses. Importantly, the
company’s e-commerce and cloud computing businesses
both generate significantly fewer carbon emissions than their
legacy predecessors. Amazon has an ambition to reach
100% renewable energy usage across its business by 2025
and by the end of 2021 used 85% renewable energy.
However, we recognise that Amazon needs to improve
transparency and disclosures and that packaging waste is
an issue. Our Portfolio Manager will engage on these
matters.
The Company’s Environmental Impact Report is also made
available as a separate document on our website
www.menhaden.com
, which version includes
methodological detail that is not included within this annual
report.
Board Developments
The Board announced in January 2023 the appointment of
Soraya Chabarek as a non-executive Director, with effect
from 1 March 2023. She brings leadership experience in
asset management and broad exposure to fund strategies
including global macro, equities, emerging markets, credit
and convertibles. I am confident she will be an asset to the
Board and that with her experience she will greatly assist the
Board’s engagement with the Portfolio Manager on their
investment strategy. In making this appointment the Board
took due consideration of its balance of skills, experience,
knowledge and diversity and we recommend that
shareholders support her election at the forthcoming Annual
General Meeting (“AGM”).
At the same time as the Board announced Soraya’s
appointment it was also announced that I would be stepping
aside from the role of Chairman of the Board in May,
although I will continue to serve as a non-executive Director
for the time being. I am pleased to announce that Howard
Pearce will succeed me as Chairman and that Barbara
Donoghue will become Chair of the Audit Committee, with
effect from 16 May 2023.
Duncan Budge will retire from the Board at the conclusion
of this year’s AGM. I would like to take this opportunity to
thank him for his invaluable contribution to the Board since
the Company’s launch.
The Board’s planned refreshment process will continue and
we anticipate the next rotation will occur in 2024.
Establishing an annual cycle in this way should ensure an
orderly Board succession in the future.
Share Price Discount to NAV
The Company’s share price discount continues to be a
matter that the Board monitors closely. As noted above, at
the year-end, the discount to the NAV per share at which
the Company’s shares trade had widened to 31.4% (2021:
28.1%) and it widened further subsequently.
The Board’s aim is for the Company to eventually be in a
position to grow through the issuance of new shares and
the Board is, accordingly, asking shareholders to renew the
Directors’ share issuance authorities at this year’s AGM.
Enlarging the capital base would reduce the annual ongoing
charges and enhance the secondary market liquidity of the
Company’s shares, which the Board believes is in the
interests of all shareholders. However, the Company can
only issue new shares at a price representing a premium to
the NAV per share and therefore the Board remains focused
Chairman’s Statement
continued
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
on improving the Company’s share rating through
investment performance and an effective marketing strategy.
Share Buybacks
Subsequent to the year end, with the discount widening
further, the Board decided it would be in shareholders’
interest to instigate a modest programme of share buy
backs. Doing so signals to the market the Board’s
confidence in the value of the Company’s portfolio and also
takes advantage of the accretion to NAV that buying back
shares at a discount achieves. It is hoped that, together with
the ongoing marketing strategy and the efforts of the
Portfolio Manager to generate strong portfolio performance,
this will influence investor sentiment and help to reduce the
discount to the NAV per share at which the shares trade. To
the date of this annual report 825,000 shares have been
bought back at an average price of 94.25 pence per share.
The Board has not previously favoured share buy backs as
a solution to the wide discount. The early indications are that
the buybacks to date have provided some additional liquidity
in the recent volatile market conditions. However, the Board
will continue to monitor closely the impact of any future
action bearing in mind market conditions, the Company’s
available liquid resources and the potential conflict between
value additive share buybacks and the availability of
attractive portfolio investment opportunities. Buybacks will
remain at the discretion of the Board.
The Board is asking shareholders to renew the authority to
repurchase the Company’s shares in the market at the
forthcoming Annual General Meeting (“AGM”).
Annual General Meeting
The Company’s eighth AGM will be held at the offices of
Frostrow Capital LLP, 25 Southampton Buildings, London
WC2A 1AL on Wednesday, 21 June 2023 at 12 noon. The
Notice convening the AGM together with explanations of the
proposed resolutions can be found on pages 91 to 97.
The Board strongly encourages shareholders to register their
votes online in advance of the meeting by visiting
www.signalshares.com
and following the instructions on the
site. Appointing a proxy online will not restrict shareholders
from attending the meeting in person should they wish to
do so and will ensure their votes are counted if they are not
able to attend. Shareholders are encouraged to consult the
Company’s website at www.menhaden.com
for any late
changes to the arrangements. Shareholders are invited to
send any questions they may have to the Company
Secretary by email to info@frostrow.com ahead of
themeeting.
Dividend
The Company’s dividend policy is that the Company will only
pay dividends sufficient for it to maintain investment trust
status. The revenue return for the year to
31December2022 means that a dividend must be paid to
meet this requirement. Consequently, the Board is
recommending to shareholders that a final dividend of 0.4p
per share be declared in respect of the year ended
31December 2022 and a corresponding resolution has
been included in the Notice of Meeting for the AGM. If this
resolution is passed, the dividend will be paid on 30 June
2023 to shareholders on the register on 2June2023. The
shares will be marked ex-dividend on 1June 2023.
Outlook
With no end in sight for the war in Ukraine and continued
inflation, high interest rates and global supply chain
disruption, there will likely be further market volatility in 2023.
Alphabet, Microsoft and Amazon have all announced cost
cutting moves and we believe there is further scope for
efficiency savings. With respect to inflation, pricing power is
a key attribute that our Portfolio Manager looks for in
investment propositions and our infrastructure investments,
which make up some 37% of the portfolio, have natural
defensive characteristics. In addition, our current share price
discount provides an attractive entry point for new investors.
The Board continues to believe in the validity of the premise
that the world and all businesses need to be more resource
efficient, and so the Company’s resource efficiency theme
ought to provide long-term benefits for the portfolio and the
Company.
Sir Ian Cheshire
Chairman
28 March 2023
07
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Investment Objective
The Company’s investment objective is to generate long-
term shareholder returns, predominantly in the form of
capital growth, by investing in businesses and
opportunities that are demonstrably delivering or
benefitting significantly from the efficient use of energy and
resources irrespective of their size, location or stage of
development.
To reflect its non-benchmarked total return investment
strategy, the Company uses RPI+3% as its primary long-
term financial performance comparator. In addition to this
absolute return performance measure, the Company also
uses a range of specialist, sectoral and peer group
benchmarks to assess its relative performance.
Investment Policy
The Company’s investment objective is pursued through
constructing a conviction-driven portfolio consisting
primarily of direct listed and unlisted holdings across asset
classes and geographies.
Asset Allocation
The Company invests, either directly or through external
funds, in a portfolio that is comprised predominantly of a
combination of listed equities and private equity
investments.
The flexibility to invest across asset classes affords the
Company two main benefits:
• it enables construction of a portfolio based on an
assessment of market cycles; and
• it enables investment in all opportunities which benefit
from the investment theme.
It is expected that the portfolio will comprise approximately
15 to 30 positions.
Geographic Focus
Although the portfolio is predominantly focused on
investments in developed markets, if opportunities that
present an attractive risk and reward profile are available in
emerging markets then these may also be pursued.
While many of the companies forming the portfolio are
headquartered in the UK, USA or Europe, it should be
noted that many of those companies are global in nature,
so their reporting currency may not reflect their actual
geographic or currency exposures.
Investment Restrictions
Subject to any applicable investment restrictions contained
in the Listing Rules from time to time, the Portfolio Manager
will not make an investment if it would cause the Company
to breach any of the following limits at the point of
investment:
• no more than 20% of the Company’s gross assets may
be invested, directly or indirectly through external funds,
in the securities of any single entity; and
• no more than 20% of the Company’s gross assets may
be invested in a single external fund.
Hedging
The Company may enter into any hedging or other
derivative arrangements which the Portfolio Manager
(within such parameters as are approved by the Board and
the AIFM and in accordance with the Company’s
investment policy) may from time to time consider
appropriate for the purpose of efficient portfolio
management, and the Company may for this purpose
leverage through the use of options, futures, options on
futures, swaps and other synthetic or derivative financial
instruments.
Cash Management
There is no restriction on the amount of cash or cash
equivalent instruments that the Company may hold and
there may be times when it is appropriate for the Company
to have a significant cash position instead of being fully or
near fully invested.
Investment Objective and Policy
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Borrowing and Leverage Limits
The Company may incur indebtedness for working capital
and investment purposes, up to a maximum of 20% of the
net asset value at the time of incurrence. The decision on
whether to incur indebtedness may be taken by the
Portfolio Manager within such parameters as are approved
by the AIFM and the Board from time to time. There will be
no limitations on indebtedness being incurred at the level
of the Company’s underlying investments (and measures of
indebtedness for these purposes accordingly exclude debt
in place at the underlying investment level).
At the date of this report, the Company had no borrowings.
In addition, the Alternative Investment Fund Managers
Regulations(“UK AIFMD”) require the Company, which is
an Alternative Investment Fund (“AIF”) under the regulations,
to set maximum leverage limits corresponding to the
UK AIFMD leverage definition. The UK AIFMD defines
leverage as any method by which the total exposure of an
AIF is increased and provides two calculation methods
(gross and commitment), as further explained in the
Glossary beginning on page 87 and in the separate
UK AIFMD periodic disclosures document on the
Company’s website.
Other Investment Restrictions
The Company will at all times invest and manage its assets
with the objective of spreading risk and in accordance with
its published investment policy.
The Listing Rules restrict the Company from investing more
than 10% of its total assets in other listed closed-ended
investment funds, save that this restriction does not apply
to investments in closed-ended investment funds which
themselves have published investment policies to invest no
more than 15% of their total assets in other listed closed-
ended investment funds. The Company will comply with
this investment restriction (or any variant thereof) for so long
as such restriction remains applicable.
At the date of this report, the Company was not invested
in any listed closed-ended investment funds.
In the event of any material breach of the investment
restrictions applicable to the Company, shareholders will
be informed of the actions to be taken by the AIFM through
a Regulatory Information Service announcement.
09
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
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Investment Committee
Menhaden Capital Management LLP has been appointed as the Company’s Portfolio Manager. The Portfolio Manager’s
Investment Committee, acting under delegated authority, makes all investment and disinvestment decisions in respect
of the Company.
Graham Thomas
Graham is the non-executive chairman of the Investment Committee. Before founding Menhaden
Capital Management LLP with Ben Goldsmith, Graham chaired the Executive Committee of RIT
Capital Partners plc. Prior to this, Graham was the head of the Standard Bank Group’s US$3 billion
Principal Investment Management division, which was established in 2008 under his leadership. He
joined Standard Bank from MidOcean Partners in London, where he was a founding partner. Before
MidOcean Partners, he was an Executive Director in the Investment Banking division of Goldman
Sachs & Co.
Graham is currently chief executive officer of private equity firm, Stage Capital, and on the investment
committee of Apis Partners. He is a Rhodes Scholar with degrees from Oxford and the University of
Cape Town.
Ben Goldsmith
Ben is the chief executive officer of Menhaden Capital Management LLP. Before co-founding
Menhaden, Ben co-founded WHEB Asset Management, one of Europe’s leading sustainability-
focused investment management firms. Ben is a director of Cavamont Holdings, the Goldsmith family
investment vehicle.
Ben chairs the UK Conservative Environment Network, and is a Trustee of The Children’s Investment
Fund Foundation, a globally leading climate and health focused philanthropic foundation.
Luciano Suana
Luciano is the chief investment officer at Menhaden Capital Management LLP. Before joining
Menhaden Capital Management LLP, Luciano was a Director of Barclays Capital in the Capital
Markets division where he ran the credit trading operations for Brazil out of São Paulo. Before
Barclays, Luciano was a Director of Dresdner Kleinwort in London. There he focused mainly on
Infrastructure, Utilities and Real Estate assets as head of the illiquids credit group.
Luciano holds a Licenciatura in business administration from Universitat Autònoma de Barcelona and
was granted the Premio Extraordinario de Fin de Carrera for outstanding academic performance.
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Annual Report for the year ended 31 December 2022
Investment Process
Investment Process
The portfolio management team, which has day to day
responsibility for managing the portfolio, is led by Luciano
Suana, and comprises himself, Ben Goldsmith and
EdwardPybus.
The portfolio management team presents investment
opportunities to the Investment Committee, which is
chaired by Graham Thomas.
Thematically, the team seeks to invest in opportunities,
publicly traded or private, which either demonstrably
deliver or benefit significantly from the more efficient use
of energy and resources. All investment opportunities are
assessed through a value lens, with the aim of acquiring
investments with low downside risk, backed by identifiable
assets and cash flows, at attractive valuations. The team
seeks to invest with a long-term perspective, and with high
conviction. Consequently, the portfolio usually comprises
around 20 positions and the team aims for portfolio
turnover to be low.
When identifying suitable investment opportunities, the
portfolio management team is cognisant of the UK
Stewardship Code and the UN Principles of Responsible
Investment.
Investment Risk Approach
The Portfolio Manager uses bottom-up fundamental
analysis to select companies with high quality cash flows
that demonstrate persistent and predictable performance
due to successful business models. Such companies
typically exhibit high profitability and pricing power and
have often won commanding positions in their respective
competitive landscapes. Together, these characteristics
serve to mitigate external risks such as those associated
with technological, regulatory and climate change. The
management team continuously monitors the impact of
these risks on company terminal values.
This approach precludes the Portfolio Manager from
investing in highly leveraged companies or those in the
early stage of development. It limits private equity
investments to those with experienced sponsors who
enjoy a solid track record.
Within this framework, the Portfolio Manager will run a
concentrated portfolio of 15 to 30 investments,
predominantly in developed markets. Position sizing takes
place within stated limits and is dependent on the Portfolio
Manager's level of conviction regarding the prospects of
each individual company.
Portfolio turnover is moderate, in keeping with the longer
hold periods inherent in this approach.
The Portfolio Manager uses currency forward contracts to
reduce the volatility in returns arising from currency
movements associated with the portfolio’s non-sterling
denominated investments. They typically use simple
currency forward contracts with three to six month terms
to hedge approximately one half of the Company’s US
dollar and euro exposures. These instruments are rolled on
maturity and the nominal value of the hedging program is
adjusted as required.
Investment Committee
The Investment Committee meets weekly in order to
consider the investment opportunities presented by the
portfolio management team. All investment decisions must
be made with the unanimous consent of all members of
the Investment Committee unless one of the members has
a potential conflict of interest, in which case that member
will excuse himself from that particular decision.
Investment Network
The portfolio management team has access to a
proprietary investment network, which includes a group of
investment managers of external funds and, from time to
time, external experts and advisers. The portfolio
management team believe that this is of benefit to the
investment process and helps to source opportunities that
they believe would not otherwise be available to the
Company.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Investments held as at 31 December 2022
Fair % of
Investment Country Value Total Net
£’000 Assets
Alphabet United States 22,369 21.5
Microsoft United States 11,563 11.1
X-ELIO*
1
Spain 10,672 10.3
Canadian Pacific Railway Canada 10,045 9.7
Safran France 8,921 8.6
Canadian National Railway Canada 7,308 7.0
VINCI France 6,617 6.4
John Laing Group*
2
UK 4,646 4.5
Amazon United States 3,979 3.8
Ocean Wilsons Holdings Bermuda 3,204 3.1
Ten Largest Investments 89,324 86.0
TCI Real Estate* United States 1,546 1.5
Union Pacific United States 929 0.9
Waste Management United States 822 0.8
ASML Holding Netherlands 536 0.5
KLA United States 407 0.4
Lam Research United States 245 0.2
Total Investments 93,809 90.3
Net Current Assets (including cash) 10,022 9.7
Total Net Assets 103,831 100.0
1
Investment made through Helios Co-Invest L.P.
2
Investment made through KKR Aqueduct Co-Invest L.P. * Unquoted
Portfolio
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
13
Business Description Investment Theme
Digitisation
Develops and operates solar energy assets Clean energy
Provides waste management and environmental services in North America Water and waste management
Delivers a range of internet-based products and services for users and advertisers,
powered by renewable energy, with the group being the largest corporate buyer of
renewable power worldwide
Provides cloud infrastructure and software services which deliver energy efficiency
savings for customers versus legacy solutions
Digitisation
Owns and operates fuel-efficient freight railways in Canada and the USA Sustainable infrastructure and
transportation
Designs, manufactures and services next generation aircraft engines which offer
significant fuel efficiency savings
Industrial emissions reduction
Operates rail freight services across North America, which represent the most
environmentally friendly way to transport freight over land
Sustainable infrastructure and
transportation
Builds and operates energy efficient critical infrastructure assets Sustainable infrastructure and
transportation
Portfolio of mostly renewable rail and social infrastructure assets Sustainable infrastructure and
transportation
An energy efficient ecommerce and cloud computing business aiming to use only
renewable energy by 2030
Digitisation
Operates ports and provides (lower climate impact) maritime services in Brazil Sustainable infrastructure and
transportation
Invests in energy-efficient real estate projects Sustainable infrastructure and
transportation
Provides fuel-efficient rail freight services across the USA Sustainable infrastructure and
transportation
Develops, manufactures and services advanced lithography systems used to
produce more energy efficient semiconductor chips
Digitisation
Develops, manufactures and services inspection and metrology equipment used to
increase the efficiency of semiconductor manufacturing
Digitisation
Develops, manufactures and services etching and deposition equipment used to
produce more energy efficient semiconductor chips
Digitisation
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During 2022, the Company’s NAV per share decreased from
155.7p to 129.8p. This represents a total return of -16.5%
and compares to the benchmark return of 13.7%. The
Company’s share price traded at a 31.4% discount to NAV
as at 31 December 2022, having widened from 28.1% at
the end of 2021. The contributions to the -16.5% NAV per
share total return over the period are summarised below:
31 December 2022 Contribution
Asset Category % of NAV %
Public Equities 74.1 (12.9)
Private Investments 16.2 3.4
Cash 5.9 –
Foreign Exchange Forwards 4.0 (6.4)
Performance Fee and
Other Debtors and Creditors (0.2) 1.2
Dividend Paid (0.1)
Expenses (1.8)
Net Assets 100.0
Net Return (16.6)
Reinvested Dividend 0.1
Total Return (16.5)
The spectre of inflation dominated the narrative throughout
the year, with the Federal Reserve and other central banks
progressively tightening financial conditions. Rising interest
rates and higher prices result in a decline in consumers’
discretionary incomes, raising fears that the global economy
may be on its way into a recession. Equity markets
anticipated this slowdown and declined significantly, with
major indices trading around bear market territory.
The portfolio continues to have a high weighting in quoted
equities, with Alphabet and Microsoft remaining the largest
positions. The publicly listed infrastructure holdings (including
the North American railroads, Ocean Wilsons and VINCI)
performed relatively well in the period. The essential nature
of their services, combined with a lack of alternatives and
the relevant regulatory frameworks, enable these companies
to raise prices with inflation. Within the private portfolio, the
value of John Laing was marked up in line with the latest
manager’s valuation, TCI Real Estate Partners Fund III
returned the capital from two loans, which were repaid, and
a £2 million distribution was received from X-ELIO.
Investment performance benefited from the depreciation of
sterling, although this was partly offset by our forward
currency contract hedges. Performance suffered from short
lived sterling volatility in late September when two currency
forward contracts matured, realising a significant loss.
Subsequently, there were significant unrealised gains on the
hedging program at the year end.
Key investment decisions during the period included the exit
from Charter Communications and redeploying most of the
proceeds by adding to Canadian National Railway, reopening
a position in Union Pacific and initiating a new position in
Amazon. After the year end, we opted to reduce our position
in Alphabet and reinitiate a position in European aircraft
manufacturer, Airbus, which we have owned previously.
Our private investment activity was limited, with no new
transactions in the period. However, we were pleased to
make a new commitment to the next vintage of the TCI Real
Estate Partners strategy in March, following the year end.
Quoted Equities
The portfolio of quoted equities represented 74.1% of NAV
at 31 December 2022, and delivered a total return of -17.3%
over the period, detracting 12.9% from the NAV.
Contribution
Investment Returns % to NAV %
Canadian Pacific 4.1 1.3
Safran 8.5 0.9
Canadian National (3.6) 0.6
VINCI SA 3.1 0.5
Waste Management Inc (8.1) –
Ocean Wilsons Holdings 1.4 –
KLA Corp (24.8) –
Union Pacific (22.0) (0.1)
LAM Research Corp (55.2) (0.2)
ASML Holding (38.1) (0.2)
Microsoft Corp (29.6) (2.3)
Charter Communications (16.4) (2.4)
Amazon (49.8) (2.6)
Alphabet (40.4) (8.5)
Note: Percentage increase/decrease for individual holdings is calculated
on their local currency and based over the holding period if bought or
sold during the year.
14
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Portfolio Manager’s Review
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The Canadian railroads, Canadian Pacific Railway and
Canadian National Railway, were two of the portfolio’s
best performers, with both companies’ strong competitive
positions enabling them to raise prices in order to counter
significant inflationary cost pressures. We also opted to
reopen a small position in US freight railroad peer, Union
Pacific, in April. Rail remains the most environmentally
friendly way of transporting freight over land, with current
locomotives four times more fuel efficient than trucking on a
per unit basis.
Canadian Pacific Railway expects to complete its acquisition
of Kansas City Southern in the first quarter of 2023. CEO
Keith Creel and the management team appear to be
increasingly confident about their ability to drive meaningful
synergies from the combined entity, with significant
opportunities to grow volumes by converting road freight to
new rail services between Mexico, Texas and the Upper
Midwest. Once the transaction is completed, we expect
Canadian Pacific Railway to be the fastest growing of all the
North American railroads.
Canadian National Railway CEO, Tracy Robinson, has been
at the helm for over one year now and appears to be making
progress in her turnaround efforts. She is focused on
improving profitability by raising asset utilisation through
improving the velocity of containers on the company’s
network. We continue to believe that her frequently repeated
commitment to capital efficient growth should help to drive
good returns for shareholders in the coming years.
French aircraft engine manufacturer, Safran, continues to
lead the way towards the decarbonisation of the aviation
sector and recently had its emission reduction targets
independently approved by the Science Based Targets
initiative (SBTi). These include targets to reduce Scope 1
and 2 emissions by 50% by 2030 and reduce Scope 3
emissions by 42.5% by 2035 (vs 2018). Scope 1 emissions
are released directly by a business, Scope 2 emissions are
indirectly released from energy purchased by a business and
Scope 3 are a consequence of the business’ activities,
including the use of its products by customers. Safran
benefited from the commercial aviation industry’s
accelerating recovery through the year, with China’s
reopening in January 2023 set to provide a further boost.
Flight cycles are the key driver of the company’s financial
performance, with most of its profits coming from
aftermarket sales of spare parts.
French infrastructure group, VINCI, proved resilient. The
company has a strong track record of building and
operating critical infrastructure assets around the world and
is currently transforming its business, with the aim of
achieving a 40% reduction in carbon emissions by 2030.
We believe the company is extremely well placed for an
inflationary environment, with its infrastructure concessions
being government authorised monopolies, which benefit
from inflation-linked pricing power. The management team
continues to deploy capital in a measured way, with an
increasing focus on share repurchases. Recent
investments include bolt on acquisitions to the company’s
Energies business and stakes in airport concessions in
Mexico and Cape Verde.
We believe Waste Management possesses many of the
same characteristics as the Company’s listed infrastructure
holdings, with the shares performing similarly. The company
provides an essential service and benefits from a high
proportion of annuity-like revenue streams, with the cost of
its services representing a very small portion (circa 0.5%) of
customers’ total expenses. Whilst the management team
has used pricing to mitigate inflationary pressures on costs,
it is increasingly focused on leveraging automation in order
to manage operating expenses. The company is currently
aiming to reduce its labour requirements by 5,000-7,000
roles, equivalent to more than 10% of headcount, over the
coming years. The company is also continuing its strategy
of increasingly harnessing the methane gas emitted from
its landfill facilities by transforming it into renewable natural
gas, with 11 of 17 planned new facilities expected to be
onstream in 2024.
Holding company, Ocean Wilsons, held its value in
difficult markets. The company comprises of a controlling
interest in Brazilian port operator, Wilson Sons, and a
diversified investment portfolio. Wilson Sons’ asset base
enjoys high barriers to entry and substantial operating
leverage to growth in Brazil’s international trade shipping
sector. Shipping has the lowest climate impact of any
freight method, on a per unit basis, producing between 10-
40 grams of CO
2
per metric ton of freight per km of
transportation, which is around half that even of rail freight.
We were pleased to see Wilson Sons update its capital
allocation strategy, with the announcement of a new share
repurchase facility, which should be fully used by mid-
2023. Ocean Wilsons enables us to obtain exposure to
Wilson Sons at a discount of approximately 80%, based
on the current investment portfolio valuation. This
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represents a markedly asymmetric risk-reward profile,
whilst providing a dividend yield of circa 6%.
Semiconductor capital equipment companies, ASML, Lam
Research and KLA, struggled due to fears of the full impact
of an economic slowdown and potential industry
overcapacity. Whilst it is very difficult to accurately predict
the short term, we believe the fundamental drivers of
semiconductor demand are very clear: cloud computing,
artificial intelligence, 5G, the Internet of Things (“IoT”) and
the digitisation of the automotive industry. Each company
dominates its respective niche in the value chain and plays
a critical role in helping the wider industry both maximise
semiconductor production from finite resources and develop
and produce more advanced and energy efficient chips. We
still expect them all to have very bright futures and have been
pleased to see their management teams taking advantage
of the lower share prices by accelerating their respective
share buyback programs.
Shares in Microsoft fell significantly over the year, with the
company navigating a weak PC market and Cloud growth
expected to slow in 2023. Despite the negative share price
performance, we remain optimistic about the company’s
prospects. The group remains the key technology partner
for all enterprises and its software products are ubiquitous.
The company still expects to grow revenues at a double digit
rate in its 2023 financial year, driven by its Azure Cloud
business and Office 365, which now has approximately 350
million paying users. The management team is also seeking
to improve future profitability with workforce reductions of
10,000 employees (circa 5% of total). Longer term, CEO
Satya Nadella expects IT spending to increase from 5% to
10% of GDP over the current decade, which we believe will
enable the company to generate robust earnings growth
going forwards. Importantly, Microsoft aims to operate on
carbon-free energy everywhere, at all times, by 2030.
Furthermore, the company wants to be carbon negative in
the same timeframe and to have removed all carbon dioxide
it has emitted since its founding by 2050.
Alphabet remains the Company’s largest holding and was
the most significant detractor to investment performance.
We continue to believe the shares offer exceptional value
relative to the company’s core earnings power for a business
of such quality. In our view the shares fell during the year
primarily on weaker consumer discretionary spending, which
negatively affected both the company and the wider digital
advertising industry. Fundamentally, advertising remains a
cyclical industry and Google is now so large that it cannot
offset slower market growth through market share gains. We
believe that growth rates will reaccelerate once we exit this
economic slowdown. We also believe that the company has
significant scope to improve profitability, with headcount
more than doubling to circa 187,000 over the last five years
and an average employee salary significantly above peers.
In our view the recent decision to cut 12,000 jobs is the right
way forward, but more can and should be done.
We continue to believe that the ongoing growth of digital
advertising, successful scaling of the Google Cloud business
and improving capital allocation will continue to drive
significant earnings growth in the years ahead. Importantly,
Alphabet continues to work towards its sustainability targets.
The company has pledged to operate on carbon-free
energy everywhere, at all times, by 2030 and to replenish
120% of the water it consumes across its datacentres
andoffices.
After the year end, we opted to reduce our position in
Alphabet in February. Whilst we believe that Alphabet is well
positioned to counter the rising competition in Search,
following Microsoft's launch of its new Bing search engine,
we realise that the range of outcomes has widened. We
opted to realize some profit on our original position, thereby
resulting in a reduction in the overall investment position by
approximately one half.
We fully exited our position in Charter Communications in
April before the company reported its first quarter results,
with most of the sales executed at the start of that month.
We had thought that the company’s aggressively priced
bundled broadband and mobile product would help it to
continue to raise penetration across its footprint. Whilst this
may prove correct in time, the company is undeniably facing
increasing competition from new fibre rollouts and wireless
carriers have enjoyed notable early success in their fixed
wireless efforts. Consequently, we believed the range of
outcomes had widened and decided to pursue other
opportunities that we believed offered a better balance of
risk and reward. The shares declined by 27% from the date
of our exit to year end.
We chose to redeploy most of the proceeds by incrementally
adding to our holding in Canadian National Railway,
reopening a small position in US freight railroad, Union
Pacific, as mentioned above, and initiating a new position in
Amazon. In our view Amazon has effectively become an
essential utility, on which consumers and businesses are
16
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Portfolio Manager’s Review
continued
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
increasingly dependent. Importantly, the company's
ecommerce and cloud computing businesses both
generate significantly fewer carbon emissions than their
legacy predecessors. A recent Oliver Wyman led study
concluded that ecommerce generated 40-65% fewer
emissions than physical retail stores and a study by 451
Research showed that AWS’s infrastructure was 3.6 times
more energy efficient than the median enterprise data centre
in the United States. Furthermore, Amazon is aiming to only
use renewable energy by 2030 and then operate on a net
zero carbon basis by 2040.
With the benefit of hindsight, we could have chosen a better
moment to initiate our position. The company was facing a
softening ecommerce outlook and higher costs (including
labour, fuel and freight). These cost pressures appear to be
easing and Amazon also recently announced plans to
reduce its corporate headcount by 18,000 (circa 6% of the
corporate total). We believe these measures should help the
retail business’ operating margin to recover. This, combined
with Amazon Web Services growth and falling capital
intensity should underpin strong free cash flow growth and
hopefully good returns going forwards. Fortunately, the size
of the position means that the decline in NAV was limited to
2.6% in the period.
Following the year end and the reduction of our Alphabet
holding, we chose to start a new position in Airbus, the
European aircraft manufacturer. Whilst China's reopening
removed the last hurdle to air travel's full recovery, the
industry's need to decarbonise and airlines' fleet renewal
requirements remain unchanged. By upgrading the global
fleet to Airbus' latest generation aircraft offer, the industry
could reduce carbon emissions by 20-30%. Furthermore,
Airbus' aircraft are currently certified to operate on 50%
sustainable aviation fuel (“SAF”), with a target to reach 100%
by the end of the decade. SAF offers the opportunity to
reduce emissions by up to 85%, according to the company.
Airbus recently received approval from the Science Based
Targets initiative (SBTi) for its greenhouse gas emissions
near-term reduction targets, which include plans to reduce
Scope 1 & 2 emissions by 63% by 2030 and reduce
Scope3 emissions by 46% by 2035. We previously held the
company's shares but exited in April 2021, believing that the
post Covid recovery would take significantly longer than
implied by the price.
Private Investments
The portfolio of private investments represented 16.2% of
the Company’s total NAV as at 31 December 2022, and
delivered total return of +33.2% over the period, adding
3.4% to our NAV.
Contribution
Investment Returns % to NAV %
X-ELIO 12.9 2.0
John Laing 26.5 0.8
TCI Real Estate 17.6 0.4
CGE Investments – 0.2
Note: Percentage increase/decrease for individual holdings is calculated
on their local currency and based over the holding period if bought or
sold during the year.
Spanish solar developer, X-ELIO, continues to execute on its
development pipeline with several notable milestones this year.
The company completed the Blue Grass Solar Farm
development in Australia, started several new projects in Spain
and was awarded 15MW in Japan’s first feed-in-premium
auction (renewable energy source producers receive a
premium on top of the market price of their electricity
production). We also received a £2 million cash distribution
from the company at the end of the year, which reduced the
value of our holding to 10.3% of our NAV at the year end.
John Laing continues to operate its portfolio of infrastructure
assets and deploy capital in a conservative fashion. The
company works to mitigate the environmental impact of its
operations on an asset by asset basis and is seeking to
achieve a net zero transition for its direct operations by 2050
or before. The valuation was marked up in line with the
manager’s latest valuation, with the uplift being primarily driven
by gains on currency translation. KKR continues to overhaul
the company’s management team, with a search currently
underway for a new CEO. New investments included follow
on deals in Brigid (UK retirement accommodation) and two
electric bus concessions in Bogotá, Colombia. John Laing
raised an additional £1.1 billion of equity towards the end of
the year in order to fund the purchase of three Irish
infrastructure assets from AMP Capital. We opted to not
participate because we believed other opportunities offered
a better balance between risk and reward.
17
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Strategic Report
TCI Real Estate Partners Fund III currently comprises
three loans to separate real estate developments in the
United States that possess strong resource efficiency
credentials. They are first mortgages and have low loan-to-
value ratios (<60%). Whilst the fund did not manage to
commit the level of capital we originally hoped, investment
returns have remained in line with expectations. During the
year two outstanding loans (Four Seasons, New Orleans
and Four Seasons, Nashville) were fully repaid. The Fund
has continued to draw down from its remaining commitment
(circa US$4.5 million) in line with the schedules of its existing
loans. We expect the last loan to be repaid in 2026.
Foreign Exchange (“FX”) Hedges
The sole aim of using currency forward contracts is to
reduce the volatility in returns arising from currency
movements associated with the portfolio’s non-sterling
denominated investments. We typically use simple currency
forward contracts with three to six month terms to hedge
approximately one half of the Company’s US dollar and euro
exposures. These instruments are rolled on maturity and the
nominal value of the hedging program may be adjusted
asrequired.
Whilst our portfolio benefitted from sterling depreciation over
the year, as our euro and US dollar assets increased in
sterling terms, the impact was partly offset by our currency
forward hedges. The Company suffered from sterling
volatility in late September, following the new UK
government’s mini-budget, when we had to settle two
maturing currency forward contracts at a significant loss of
£8.7 million. In total, the Company paid £12.5 million on
currency forward contracts during the year. With the nominal
value of the currency forward contracts having increased to
over 50% of euro and US dollar exposures, given the fall in
the portfolio value, we opted to reduce the nominal amount
of the new currency forward contracts in order to revert to
hedging approximately half of the currency exposure.
Following the rally in sterling, the current currency forward
contracts had an unrealised gain of £4.2 million at the year
end and this, further improved to £4.8 million as at the
approval date of this Annual Report. The next settlement
date for the current currency forward contracts is
31March2023.
Outlook
The Federal Reserve appears committed to tighter financial
conditions and higher interest rates in order to curb inflation,
although the pace of hikes has slowed markedly. Demand
appears to be weakening, with corporates attempting to
right size their businesses and announcing layoffs. We do
not attempt to try and forecast the depth of any possible
recession. We focus on investments which require us to
make as few predictions as possible. We believe our criteria
of resource efficiency, quality and value should leave the
portfolio well placed to generate persistently superior returns
for the consistent risk profile we have adopted and which is
set out in this report. The presence of better opportunities
within public markets has limited our private investment
activity over the past few years. We believe that the change
in financial conditions may be starting to change this
situation and we continue to search diligently for suitable
private investments. We will only make private investments
when they offer a more attractive balance between risk and
reward compared to public markets. In this vein, we were
pleased to make a new commitment (US$25million) to the
TCI Real Estate Partners (TCI REP) Fund IV in March, after
the year end. This fund will follow the same strategy as TCI
REP Fund III, which we previously invested in, and we would
expect our maximum cash exposure to be around 70% of
the commitment.
Following this year’s negative returns, the Company’s net
asset value has now compounded at 7.3% annually, after
fees, over the last five years. Whilst we are not satisfied with
this level of performance, we are optimistic that the current
valuations within the portfolio offer the opportunity for
improved returns going forwards. We expect the elevated
cash balance, following the reduction of our position in
Alphabet, to reduce as we gradually deploy it into
investments in the coming months.
NAV
per share
pence
31 December 2017 92.1
31 December 2022 131.1*
Annualised Net Return 7.3%
* adjusted for cumulative dividend reinvestments.
Menhaden Capital Management LLP
Portfolio Manager
28 March 2023
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Portfolio Manager’s Review
continued
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Environmental Impact Statement
Foreword
Last year the conflict in Ukraine, and the rising inflation and soaring energy prices that followed, emphasised just how
important resource efficiency – the central theme of our portfolio approach – is to the ongoing success of many businesses
and economies across the world. In 2022 we also saw an uptick in the frequency and ferocity of extreme weather events,
demonstrating the urgent need to build climate resilience within our current systems.
At Menhaden Capital Management LLP we continue to drive forward our objective to generate long-term outperformance
for the Company’s shareholders by investing in businesses that are demonstrably delivering, or benefitting significantly from,
the efficient and responsible use of energy and other resources.
The companies we invest in continue to lead in their respective fields. Examples from the past year include Amazon’s
increased investment in clean energy projects, Waste Management’s preservation of the natural environment, and Alphabet’s
initiatives to promote more circular consumption.
We also continued our engagement programme throughout 2022 and are pleased to see that over half of the listed holdings
in the portfolio now have near-term emissions reduction targets independently validated by the Science Based Targets
initiative (“SBTi”), meaning they have a clearly defined pathway to reduce their GHG emissions in line with the goals of the
Paris Agreement.
In addition to being an investor signatory to the Climate Disclosure Project (“CDP”) and other initiatives we were also proud
to become signatories to the Finance Sector Commitment to Eliminate Commodity-Driven Deforestation, cementing our
commitment to biodiversity and the protection of the Earth’s precious resources.
The portfolio continues to include three unlisted private investments, global renewable energy developer, X-ELIO, TCI Real
Estate, a fund that only invests in highly energy-efficient buildings, and responsible infrastructure investor, John Laing. The
positions in these holdings continue to help differentiate the Company from other globally invested investment companies.
The Company’s investment performance over the past year was impacted by the volatility within the markets and its net
asset value total return was -16.5% as of the end of 2022. Despite this, we still firmly believe there is value in applying an
environmental mindset to investment decision-making and will continue with this approach into the future.
Ben Goldsmith
CEO, Menhaden Capital Management LLP
About this impact statement
In this Impact Statement we attempt to show how Menhaden Resource Efficiency PLC’s holdings are acting to reduce
negative environmental impacts and generate positive ones. In particular we publish data on the amount of renewable
energy consumed, renewable energy generated and total scope 1 and scope 2 (location based) emissions. Data is
based on those companies that reported to CDP, with the addition of X-ELIO, for the time-period 1 January to
31December 2021. Exceptions and full details are available in the methodology in the Appendix to the separate version
of this Impact Statement on the Company’s website www.menhaden.com.
Disclosures from eight of the companies in the portfolio show that 146 MWh of renewable energy was generated by the
portfolio’s share of these companies, a 21.2% uplift from 2021.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
1
Environmental Impact Statement
continued
Impact Data
Our share of the portfolio companies was responsible for:
Please see appendix to the web document for data sources and methodology.
Our approach and developments in 2022
Throughout 2022 we continued to apply our fundamental,
research-oriented approach and there was relatively little
turnover in the Company’s portfolio holdings.
We sold the portfolio’s holding in Charter Communications
due to the company facing increased competition and
pursued other opportunities in the technology and
digitisation space to achieve a better balance of risk and
reward.
At Menhaden Capital Management LLP, we recognise some
sectors in which we invest the Company’s portfolio, such
as transport and infrastructure, may be considered to be
significant contributors to climate change. But rather than
avoid these sectors entirely, we choose to invest in the
companies using innovative, best practice solutions to align
their businesses with climate friendly practices. We believe
this can be both a proxy for strong overall management
performance and a way to drive wider improvements within
their respective sectors. Rail transportation is the most
energy efficient method for moving freight and in 2022 we
added to the existing holdings in Canadian Pacific Railway
and Canadian National Railway, and reinvested in Union
Pacific, one of America’s largest rail freight providers and a
leader in sustainable transportation. Union Pacific has
demonstrated a strong commitment to reaching its ESG
goals by assembling the world’s largest carrier-owned fleet
of battery electric locomotives, reducing its fuel consumption
for the third year in a row and increasing its use of bio and
renewable diesel fuel.
E-commerce has been a key driver of decarbonisation, with
research firm Oliver Wyman concluding that e-commerce
generated 40-65% fewer emissions than physical retail
stores. It is in this context that in 2022 we decided to invest
in Amazon, the world’s leading online retailer. We believe
Amazon has become an essential utility on which both
consumers and businesses rely, and its e-commerce and
cloud computing businesses generate significantly lower
carbon emissions than their legacy predecessors.
Amazon has some way to go in improving its transparency
and disclosures and we will use our stewardship programme
to engage with the company on its approach to packaging
to encourage greater re-use and recycling to reduce
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
environmental impacts. Nonetheless we admire its ambition
to use 100% renewable energy across its business by 2025
and the progress made so far. By the end of 2021, Amazon
had reached 85% renewable energy usage across its
business by using a total of 379 renewable energy projects
across 21 countries.
To manage risks associated with climate change we also
keep track of whether the portfolio companies’ emissions
reduction plans are aligned with what climate science
purports is required to fulfil the Paris Agreement. As shown
in Figure 1 we are encouraged that the majority of the listed
equity holdings are on a pathway for contributing to a 2°C
or lower limit by 2050, and we will continue to stress through
our engagement programme the importance of managing
this risk to those companies who are currently misaligned.
Figure 1: Portfolio company alignment with Paris Agreement goals
According to MSCI’s implied temperature rise data Union Pacific, Amazon, KLA and VINCI are not aligned with a 2°C
pathway and we will continue to engage with them on this in 2023.
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Engaging on nature loss
Nature loss and the preservation of the natural environment is a clear systemic financial risk and the new Global Biodiversity Framework agr
eed at
the UN-convened COP15 conference late last year was very welcome. Like many others, Menhaden Capital Management LLP believes that
biodiversity loss is becoming an increasingly important material risk and in 2022 we became a signatory to the Finance Sector Commitment to
Eliminate Commodity-Driven Deforestation, a commitment by financial institutions to eliminate agricultural commodity-driven deforestation risks in
their investment and lending portfolios by 2025.
We recently wrote to the companies in the portfolio to raise this important issue and are pleased to see on-the-ground action fr
om some investee
companies to protect and improve nature and wildlife, and the services they provide such as clean air, clean water and fertile soil.
Safran is working with its operations and supply chain to reduce impacts on natural ecosystems. This includes limiting the use of pollutants,
reducing water consumption and protecting natural spaces within its facilities. Several of Safran’s facilities have developed mor
e targeted practices,
for example Safran Aero Boosters has deployed a biodiversity plan across its Belgian facilities that focuses on the creation of ecological corridors.
The company also launched a qualitative study at the end of 2022 to assess the impact of its operations on the local environment and will use this
to inform its biodiversity strategy and plan in 2023.
Google’s real estate and ecology teams are working to re-establish critical habitats in Silicon Valley, such as oak woodlands and willow gr
oves. The
restoration of these native environments is helping build resilience against the region’s extreme climate events. For example, oak trees are drought-
tolerant, fire-resistant and efficient at removing air pollution and absorbing carbon dioxide from the atmosphere, as well as supporting thousands
of plant, insect, bird and mammal species.
Waste Management Ltd has protected thousands of acres of land for wildlife through its partnership with the Wildlife Habitat Council (“WHC”)
and has transformed landfills and smaller buffer zones at transfer stations and recycling facilities into certified wildlife habitats, curr
ently managing
over 13,700 acres for wildlife preservation. The company promotes biodiversity and environmental education at over 70 WHC-certified sites across
North America and has over 170 on-the-ground projects promoting habitat and species education.
Following the agreement of the Global Biodiversity Framework in December, we wrote to all portfolio companies requesting information on how
they assess biodiversity risks and negative impacts on nature, what practical actions they are currently taking to minimise negative impacts, their
timelines to start this process and target dates to complete these actions. We hope this will encourage them to get ahead of the curve in biodiversity
reporting as we believe failing to do so will leave them exposed to a myriad of regulatory risks in light of the new global agreement.
Active ownership: Using our influence to
manage climate and biodiversity risk
As a responsible steward of shareholders’ capital,
Menhaden Capital Management LLP is committed to using
its voice to foster best practice, both by engaging directly
with companies in the portfolio and working in collaboration
with other investors and initiatives.
Stewardship is fully integrated into our investment process
and we consider it an important aspect of risk
management. We take an active approach to voting the
shares of investee companies on behalf of the Company
and endeavour to exercise voting rights in line with our
investment objectives.
In 2022 we repeated our engagement programme to move
the portfolio’s holdings forward on environmental reporting
and target setting. Using platforms such as the CDP, SBTi
and MSCI, we identified the leaders and have focused our
attention on the laggards.
We are pleased that over half of the equity holdings have
now set near term targets independently validated by the
SBTi, meaning they have a clearly defined pathway to
reduce their GHG emissions in line with the goals of the
Paris Agreement. We were also pleased to see that two of
the investee companies, Canadian National Railway and
Microsoft, have committed to the SBTi’s net-zero standard,
the world’s first science-based certification of net-zero
targets in line with the Paris Agreement’s goal of keeping
planetary warming to 1.5°C.
In 2022 we engaged with semi-conductor producers
ASML and LAM Research as MSCI’s implied temperature
rise showed they were strongly misaligned with global
temperature goals. However, both companies’ ratings
improved and are now aligned with the goals of the Paris
Agreement. It was also encouraging to see ASML improve
its CDP score from a ‘C’ to a ‘B’ in 2022, and to see LAM
set an emissions reduction target validated by the SBTi.
Following engagement over the last few years, we were
encouraged to see that Ocean Wilsons’ main operating
subsidiary, Wilson Sons, joined CDP in 2021 and improved
its score from a ‘C’ to a ‘B’ in 2022. The company has also
invested in six new energy efficient vessels that will be
joining its fleet over the next two years. The innovative
design will reduce GHG emissions by an estimated 14%,
supporting the company’s commitment to reduce its
carbon footprint.
1
22
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Strategic Report
Environmental Impact Statement
continued
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Alignment with SDGs
Menhaden Capital Management LLP is a supporter of the UN Sustainable Development Goals (“SDGs”) and contributes
to the challenge of achieving them through investment in the portfolio companies. Below is a snapshot of how some
investees are contributing to six of the goals:
Microsoft is working to provide access to clean water around the world through its partnership with Water.org.
Microsoft’s contributions have provided 95,000 people with safe water or sanitation. Its Azure AI system is used
by UK utility company Anglian Water for smart meters in their network. These have allowed customers to spot
leaks in their homes, directly saving a massive 3 million litres of water every day.
87% of Amazon’s operations are powered by renewable energy, and the company predicts that its operations
will become entirely powered by renewable sources by 2025 at its current pace.
Global renewable energy developer X-ELIO increased its pipeline from 3.6 GW to 7.6 GW, which if delivered in
full will reduce 3,796,950 tonnes of CO2 emissions.
We are investors in Canadian National Railway and Canadian Pacific Railway, both of whom are committed
to delivering accessible infrastructure profitably and sustainably. Canadian National Railway has committed to
reduce their emission intensity by 43% by maximising the efficiency of their technology, fuel processes and
operations
1
. Canadian Pacific Railway has invested $637 million
2
to modernise its locomotive fleet.
Alphabet has diverted 78% of waste from its global data centre operations away from landfills and resold
4.9million used or obsolete components. All Nest and Pixel devices contain recycled materials - with the Pixel6’s
housing consisting entirely of recycled aluminium.
In 2021, John Laing acquired a 21.5% stake in Pacifico 2, a 96km road that links Medellin to the pacific port of
Buenaventura. As part of the project, the team launched a “bottles for life” initiative which recycled the plastic
from bottles into materials to help build animal crossings. Around 14 tons of plastic were collected and converted
into 700 posts and 8,500 metres of mesh to create 12 animal crossings.
Microsoft has made a public commitment to become a carbon negative company. It aims to cut greenhouse
gas emissions to nearly zero by 2030 and utilise carbon removal projects like reforestation and direct air capture
to remove all historical emissions.
Along with GE Aviation, Safran unveiled the Revolutionary Innovation for Sustainable Engines (“RISE”) program
that is seeking to create an engine that is 100% compatible with sustainable fuel or hydrogen.
VINCI has a stated aim to achieve no net loss of biodiversity - which is true of life on land as well as life on water.
In 2020 VINCI joined the act4nature international initiative, which sets in place firm goals on protecting biodiversity.
They also have implemented water treatment processes at the local level in their operations.
23
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
1
CN CDP climate Change Response 2022
2
Climate Change – Canadian Pacific Corporate Sustainability Report (cpr.ca)
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Business Review
The Strategic Report on pages 2 to 35 has been prepared
to provide information to enable shareholders to assess
how the Directors have performed their duty to promote
the success of the Company.
The Strategic Report contains certain forward-looking
statements. These statements are made by the Directors
in good faith based on the information available to them up
to the date of this report and such statements should be
treated with caution due to the inherent uncertainties,
including both economic and business risk factors,
underlying any such forward-looking information.
Business Model
The Company is an externally managed investment trust
and its shares are listed on the premium segment of the
Official List and traded on the main market of the London
Stock Exchange.
The purpose of the Company is to provide a vehicle for
investors to gain exposure to a portfolio of companies that
are demonstrably delivering or benefiting significantly from
the efficient use of energy or resources irrespective of their
size, location or stage of development, through a single
investment.
The Company is an Alternative Investment Fund (“AIF”)
under the UK’s Alternative Investment Fund Managers
Regulations (“UK AIFMD”) and Frostrow Capital LLP
(“Frostrow”) is the appointed Alternative Investment Fund
Manager (“AIFM”).
As an externally managed investment trust, all of the
Company’s day-to-day management and administrative
functions are outsourced to third party service providers.
As a result, the Company has no executive directors,
employees or internal operations.
The Board is responsible for all aspects of the Company’s
affairs, including setting the parameters for asset allocation,
monitoring the investment strategy and the review of
investment performance and policy. It also has
responsibility for all strategic policy issues, including share
issuance and buy backs, share price and
discount/premium monitoring, corporate governance
matters, investor relations, dividends and gearing.
Further information on the Board’s role and the topics it
discusses with the AIFM and the Portfolio Manager is
provided in the Corporate Governance Statement
beginning on page 43.
Investment Strategy
The implementation of the Company’s investment objective
has been delegated to Frostrow by the Board. Frostrow
has, in turn and jointly with the Company, appointed
Menhaden Capital Management LLP as the Portfolio
Manager.
Details of the Portfolio Manager’s approach are set out in
the Investment Process section on page 11 and in their
review beginning on page 14.
While the Board’s strategy is to allow flexibility in managing
the investments, in order to manage investment risk it has
imposed various investment, gearing and derivative
guidelines and limits, within which Frostrow and the
Portfolio Manager are required to manage the investments,
as set out on pages 8 and 9.
Any material changes to the investment objective or policy
require approval from shareholders.
Dividend Policy
The Company complies with the United Kingdom’s
investment trust rules regarding distributable income which
require investment trusts to retain no more than 15% of
their income from shares and securities each year. The
Company’s dividend policy is that the Company will only
pay dividends sufficient for it to maintain investment trust
status.
The Board
Biographical details of the Directors are set out on
pages36 and 37 and information on the workings of the
Board and its Committees is set out in the Corporate
Governance Statement on pages 43 to 49.
Duncan Budge will step down from the Board and all other
Directors will seek re-election by shareholders at the
Annual General Meeting to be held on 21 June 2023.
Principal Service Providers
The principal service providers to the Company are
Frostrow, Menhaden Capital Management LLP (“MCM” or
the “Portfolio Manager”) and J.P. Morgan Europe Limited
(the “Depositary”). Details of their key responsibilities and
their contractual arrangements with the Company follow.
1
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
AIFM
The Board has appointed Frostrow as the designated AIFM
of the Company on the terms and subject to the conditions
of the alternative investment fund management agreement
between the Company and Frostrow (the “AIFM
Agreement”). The AIFM Agreement assigns to Frostrow
overall responsibility to manage the Company, subject to
the supervision, review and control of the Board, and
ensures that the relationship between the Company and
Frostrow is compliant with the requirements of UK AIFMD.
Frostrow, under the terms of the AIFM Agreement
provides, inter alia, the following services:
• risk management services;
• marketing and shareholder services;
• administrative and secretarial services;
• advice and guidance in respect of corporate
governance requirements;
• maintenance of the Company’s accounting records;
• preparation and dispatch of the annual and half yearly
reports and monthly factsheets; and
• ensuring compliance with applicable tax, legal and
regulatory requirements.
AIFM Fee
Under the terms of the AIFM Agreement, Frostrow receives
a periodic fee equal to 0.225% per annum of the
Company’s net assets up to £100 million, 0.20% per
annum of the net assets in excess of £100 million and up
to £500 million, and 0.175% per annum of the net assets
in excess of £500 million.
The AIFM Agreement is terminable on six months’ notice
given by either party.
Portfolio Manager
MCM is responsible for the management of the Company’s
portfolio of investments under a delegation agreement
between MCM, the Company and Frostrow (the “Portfolio
Management Agreement”). Under the terms of the Portfolio
Management Agreement, MCM provides, inter alia, the
following services:
• seeking out and evaluating investment opportunities;
• recommending the manner by which cash should be
invested, divested, retained or realised;
• advising on how rights conferred by the investments
should be exercised;
• analysing the performance of investments made; and
• advising the Company in relation to trends, market
movements and other matters which may affect the
investment objective and policy of the Company.
Portfolio Management Fee
MCM receives a periodic fee equal to 1.25% per annum
of the Company’s net assets up to £100 million and 1.00%
of the Company’s net assets in excess of £100 million.
The Portfolio Management Agreement is terminable on
sixmonths’ notice given by any of the three parties.
Performance Fee
MCM is also entitled to a performance fee which is
dependent on the level of the long-term performance of
the Company.
The performance fee is calculated for discrete three year
performance periods. In respect of a given performance
period, a performance fee may be payable equal to 10%
of the amount, if any, by which the Company’s adjusted
NAV at the end of that performance period exceeds the
higher of (a) a compounding hurdle (an annualised
compound return)* on the gross proceeds of the IPO
(adjusted for any subsequent share issues and
repurchases) of 5% per annum; and (b) a high-water mark
(the highest net asset value that the Company has
reached on which a performance fee has been paid)*. The
performance fee is subject to a cap in each performance
period of an amount equal to the aggregate of 1.5% of the
weighted average NAV in each year (or part year, as
applicable) of that performance period.
*see Glossary for further details
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Strategic Report
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Strategic Report
1
Business Review
continued
Depositary
The Company has appointed J.P. Morgan Europe Limited
as its Depositary in accordance with UK AIFMD on the terms
and subject to the conditions of an agreement between the
Company, Frostrow and the Depositary (the “Depositary
Agreement”). The Depositary provides the following services,
inter alia, under its agreement with the Company:
• safekeeping and custody of the Company’s custodial
investments and cash;
• processing of transactions; and
• foreign exchange services.
The Depositary must take reasonable care to ensure that
the Company is managed in accordance with the Financial
Conduct Authority’s Investment Funds Sourcebook,
UKAIFMD and the Company’s Articles of Association.
Under the terms of the Depositary Agreement, the
Depositary is entitled to receive an annual fee of the higher
of £40,000 or 0.0175% of the net assets of the Company
up to £150 million, 0.015% of the net assets in excess of
£150 million and up to £300 million, 0.01% of the net
assets in excess of £300 million and up to £500 million and
0.005% of the net assets in excess of £500 million. In
addition, the Depositary is entitled to a variable custody fee
which depends on the type and location of the custodial
assets of the Company.
The Depositary has delegated the custody and
safekeeping of the Company’s assets to JPMorgan Chase
Bank N.A., London branch (the “Custodian”).
The notice period on the Depositary Agreement is 90 days
if terminated by the Company and 120 days if terminated
by the Depositary.
Evaluation of the AIFM and the Portfolio
Manager
The performance of the AIFM and the Portfolio Manager is
reviewed continuously by the Board and the Company’s
Management Engagement Committee (the “MEC”), with a
formal evaluation process being undertaken each year. As
part of this process, the Board monitors the services
provided by the AIFM and the Portfolio Manager and
receives regular reports from them. The MEC reviewed the
appropriateness of the appointment of the AIFM and the
Portfolio Manager in December 2022, following which it
made a recommendation for continuation to the Board.
The Board believes the continuing appointment of the
AIFM and the Portfolio Manager, under the terms
described on page 25, is in the interests of shareholders
as a whole. In coming to this decision, the MEC and the
Board took into consideration, inter alia, the following:
• the terms of the AIFM Agreement and the Portfolio
Management Agreement, in particular the level and method
of remuneration, the notice period and the comparable
arrangements of a group of the Company’s peers;
• the quality of the service provided and the quality and
depth of experience of the company management,
company secretarial, administrative and marketing teams
that the AIFM allocates to the management of the
Company; and
• the quality of service provided by the Portfolio Manager
in the management of the portfolio; and the level of
performance of the portfolio in absolute terms and by
reference to RPI+3% and other relevant indices.
Position, Performance and Future
Developments
The Statement of Financial Position on page 68 shows the
Company’s financial position at the year end. Performance
in the year relative to the Company’s key performance
indicators is set out below and further outlined, together
with investment activity and strategy, market background
and the future outlook, in the Chairman’s Statement
beginning on page 5 and the Portfolio Manager’s Review
on pages 14 to 18.
The Portfolio Manager believes that companies which
supply products and services that help to conserve scarce
resources, reduce negative environmental impacts and
improve resource efficiency are likely to enjoy faster
growing end markets. The Directors continue to believe
that environmental and resource-efficiency solutions,
together with the Portfolio Manager’s investment strategy,
should provide good returns for the long-term investor.
It is expected that the Company’s investment strategy in
the coming year will remain largely unchanged.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Key Performance Indicators (“KPIs”)
The Board of Directors reviews performance against the
following KPIs. They comprise both specific financial and
shareholder-related measures. The results for the year are
summarised in the Chairman’s Statement beginning on
page 5.
The KPIs for the Company are:
•
Net asset value (“NAV”) per share total return;
•
Share price total return;
•
Discount/premium of the share price to the
NAVpershare; and
•
Ongoing charges ratio.
These are all Alternative Performance Measures. Please
refer to the Glossary beginning on page 87 for definitions
of these terms and an explanation of how they
arecalculated.
NAV per share total return
The Directors regard the Company’s NAV per share total
return as being the overall measure of value delivered to
shareholders over the long term. This reflects both the net
asset value growth of the Company and any dividends paid
to shareholders. The Board monitors the Company’s
NAVtotal return against its benchmark and peers in the
AIC Global Sector and the AIC Environmental Sector.
TheCompany’s NAV per share total return over the year
to 31December 2022 was -16.5% (2021: +17.3%). To
reflect the Company’s total return investment strategy, the
Board uses RPI+3% as its primary long-term financial
performance benchmark. RPI+3% over the year was
13.7% (2021: 10.5%).
A full description of the portfolio and performance during
the year under review is contained in the Portfolio
Manager’s Review commencing on page 14 of this report.
Share price total return
The Directors regard the Company’s share price total return
to be a key indicator of performance and monitor this
closely. This measure reflects the return to the investor on
last traded market prices, assuming any dividends paid are
reinvested. The Company’s share price total return over
the year to 31 December 2022 was -20.3% (2021:
+13.1%).
S
hare price discount/premium to NAV per share
The share price discount/premium to the NAV per share
is considered a key indicator of performance as it impacts
the share price total return and can provide an indication
of how investors view the Company’s performance and its
investment objective. At 31 December 2022 the discount
stood at 31.4% (2021: 28.1%). The Chairman’s Statement
beginning on page 5, addresses the discount and the
approach of the Board. The discount remained stubbornly
wide throughout the year.
Ongoing charges ratio
Ongoing charges represent the costs that shareholders
can reasonably expect to pay from one year to the next,
under normal circumstances. The Board continues to be
conscious of expenses and works hard to maintain a
sensible balance between good quality services and costs.
The Board therefore considers the ongoing charges ratio
to be a KPI and reviews the figure both in absolute terms
and in comparison to the Company’s peers. The ongoing
charges ratio for the year to 31 December 2022 was 1.8%
(2021: 1.8%).
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Strategic Report
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Strategic Report
1
Business Review
continued
Investment Risks
The implementation of the investment strategy
adopted by the Portfolio Manager may be
unsuccessful and result in underperformance
against the Company’s principal performance
comparators and peer companies.
The Board regularly reviews the Company’s investment mandate
and MCM’s long-term investment strategy in relation to market
and economic conditions, and the performance of the Company’s
peers. The Portfolio Manager provides an explanation of stock
selection decisions and an overall rationale for the make-up of the
portfolio, including the resource-efficiency credentials of the
portfolio holdings. MCM discuss current and potential investment
holdings with the Board on a regular basis.
Corporate Risks
The share price may differ materially from the
NAV per share i.e. the shares may trade at a
material discount to the NAV per share. A
widening discount affects shareholder returns
and satisfaction and, as such, could influence
the outcome of the next continuation vote or, in
extremis, precipitate the requisitioning of a
general meeting to wind-up the Company.
At each meeting, the Board:
• reviews the Company’s investment objective in relation to the
market, economic conditions and the operation of the
Company’s peers;
• discusses the Company’s future development andstrategy;
• reviews an analysis of the shareholder register and reports on
investor sentiment from the Company’s corporate stockbroker
and AIFM;
• reviews the level of the share price discount to the NAV per
share and, in consultation with its advisers, considers ways in
which share price performance may be enhanced; and
• reviews the Company’s promotional activities and distribution
strategy, which have been delegated to Frostrow, to ensure the
Company is promoted to current and potential investors.
Principal Risks and Uncertainties Management and Mitigation
Risk Management
In fulfilling its oversight and risk management responsibilities, the Board maintains a framework of the key risks that
may affect the Company and the related internal controls designed to enable the Directors to manage/mitigate these
risks as appropriate. The Directors have carried out a robust assessment of the emerging and principal risks facing the
Company, including those that would threaten its business model, future performance, solvency or liquidity.
The principal risks can be categorised under the following broad headings:
• Corporate Risks
• Investment Risks
• Operational Risks
• Financial Risks
• Legal and Regulatory Risks
• Geopolitical and other Macro Risks
The following sections detail the risks the Board considers to be the most significant to the Company under these
headings. Geopolitical and other Macro Risk is a new addition to the principal risk headings this year, although elements
of it were previously recognised. The other risks are broadly unchanged from the prior year. The risks from climate
change and Paris Accord undertakings are taken into consideration but are not considered to be key risks, tending to
be offset by the Company’s positioning as a beneficiary of related resource efficiency policies.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Principal Risks and Uncertainties Management and Mitigation
The portfolio may be affected by market risk,
that is volatile market movements (in both equity
and foreign exchange markets) in the sectors
and regions in which it invests. The Company is
also exposed to concentration risk, which is the
potentially higher volatility arising from its
relatively concentrated portfolio, and sector-
specific risks such as global energy and
commodity prices or withdrawal of government
subsidies for renewable energy.
The departure of a key member of the portfolio
management team may affect the Company’s
performance.
As part of its review of the going concern and longer-term viability
of the Company, the Board also considers the sensitivity of the
Company to changes in market prices and foreign exchange rates
(see note 17 to the financial statements beginning on page80),
an analysis of how the portfolio would perform during a market
crisis, and the ability of the Company to liquidate its portfolio if
the need arose. Further details are included in the Going Concern
and Viability Statements on pages 38 and30 respectively.
Whilst market risk can be reduced through diversification,
prospects for this are limited by the requirement to comply with
the Company’s resource efficiency theme and its concentrated
portfolio strategy. To manage concentration risk, the Board has
appointed the AIFM and the Portfolio Manager to manage the
portfolio within the remit of the investment objective and policy
set out on pages 8 and 9. The investment policy limits ensure a
reasonable amount of portfolio diversification, reducing the risks
associated with individual stocks and markets. The Portfolio
Manager’s approach to investment risk is set out on page 11.
Compliance with the investment restrictions is monitored daily by
the AIFM and reported to the Board on a monthly basis.
While market risk cannot be eliminated through diversification, it
can be potentially reduced through hedging. The Board sets the
Company’s policy on hedging, which is detailed on page 8. The
Company does not speculatively seek to manage currency, but
during the year under review hedged approximately 50% of the
portfolio’s US dollar and euro exposures. Details of the foreign
exchange forwards used for this purpose are set out in the
Portfolio Manager’s Review beginning on page 14.
The Portfolio Manager reports to the Board on developments at
MCM at each Board meeting. All investment decisions are made by
an Investment Committee, reducing reliance on a single individual.
Operational Risks
As an externally managed investment trust, the
Company is reliant on the systems of its service
providers for dealing, trade processing,
administrative services, financial and other
functions. If such systems were to fail or be
disrupted (including as a result of cyber crime or
a pandemic) this could lead to a failure to comply
with applicable laws, regulations and
governance requirements and/or to a
financialloss.
The Board continuously monitors the performance of all the principal
service providers with a formal evaluation process being undertaken
each year. The Audit Committee reviews internal controls reports and
key policies put in place by its principal service providers. This
includes reports on service providers' cyber security measures and
disaster recovery procedures. Both Frostrow and MCM provide a
quarterly compliance report to the Audit Committee, which details
their compliance with applicable laws and regulations. The Audit
Committee maintains the Company’s risk matrix which details the
risks to which the Company is exposed, the approach to managing
those risks, the key controls relied upon and the frequency of their
operation. Further details are set out in the Audit Committee Report
on page 51.
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Strategic Report
30
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Longer Term Viability Statement
In accordance with the UK Corporate Governance Code,
the Directors have carefully assessed the Company’s
position and prospects as well as the principal risks and
have formed a reasonable expectation that the Company
will be able to continue in operation and meet its liabilities
as they fall due over the next five financial years. The
Board has chosen a five year horizon in view of the
long-term outlook adopted by the Portfolio Manager when
making investment decisions.
To make this assessment and in reaching this conclusion,
the Audit Committee has considered the Company’s
financial position and its ability to liquidate its portfolio and
meet its liabilities as they fall due:
• The portfolio is principally comprised of investments
traded on major international stock exchanges. Based on
the Company’s latest available financial positions, it is
estimated that 78.1% of the current portfolio could be
liquidated within seven days and there is no expectation
that the nature of the investments held within the portfolio
will be materially different in future;
• The expenses of the Company are predictable and
modest in comparison with the assets and there are no
capital commitments foreseen which would alter that
position; and
• The Company has no employees, only its non-executive
Directors. Consequently it does not have redundancy or
other employment related liabilities or responsibilities.
Strategic Report
1
Business Review
continued
Principal Risks and Uncertainties Management and Mitigation
Geopolitical and other Macro Risks
Portfolio constituents may be affected by
regional events or politics. The most prominent
recent example is the war in Ukraine and
relatedsanctions.
The Board has no control over such macro events. The vast majority
of the Company’s investments, both quoted and unquoted, are in
developed markets which are expected to be more stable. The
Company has no investments located in or significantly exposed to
Russia or Ukraine, but the Board will continue to monitor
developments closely.
Financial Risks
The Company is exposed to liquidity risk and
credit risk arising from the use of counterparties.
If a counterparty were to fail it could adversely
affect the Company through either delay in
settlement or loss of assets. The most significant
counterparty to which the Company is exposed
is the Depositary, which is responsible for the
safekeeping of the Company’s custodial assets.
The Company’s assets include liquid securities which can be sold
to meet funding requirements, if necessary. Further information on
financial instruments and risk can be found in note 17 to the financial
statements beginning on page 80.
The Board reviews the services provided by the Depositary and the
internal controls report of the Custodian to ensure that the security
of the Company’s custodial assets is maintained. The Portfolio
Manager is responsible for undertaking reviews of the credit
worthiness of the counterparties that it uses. The Board reviews the
Portfolio Manager’s approved list of counterparties and the
Company’s use of those counterparties. Appropriate due diligence
is undertaken to verify the existence and ownership of unquoted
(non-custodial) assets.
Legal and Regulatory Risks
The regulatory or political environment in which
the Company operates could change to the
extent that it affects the Company’s viability.
The Board monitors regulatory developments but relies on the
services of its external advisers to ensure compliance with applicable
law and regulations. The Board has appointed a specialist
investment trust company secretary who provides industry and
regulatory updates at each Board meeting.
265031 Menhaden 01pp-35pp.qxp 28/03/2023 10:07 Page 30
The Audit Committee, as well as considering the potential
impact of the Company’s principal risks and various severe
but plausible downside scenarios, has also made the
following assumptions in assessing the Company’s longer-
term viability:
• There will continue to be demand for investment trusts;
• The Board and the Portfolio Manager will continue to
adopt a long-term view when making investments, and
anticipated holding periods will be at least five years;
• The Company invests principally in the securities of
listed companies traded on major international stock
exchanges to which investors will wish to continue to
have exposure;
• The closed ended nature of the Company means that,
unlike open ended funds, it does not need to realise
investments when shareholders wish to sell their
shares;
• Regulation will not increase to a level that makes
running the Company uneconomical; and
• The performance of the Company will be satisfactory.
As part of its review the Board considered the impact of a
significant and prolonged decline in the Company’s
performance and prospects. This included a range of
plausible downside scenarios such as reviewing the
effects of substantial falls in investment values and the
impact on the Company’s ongoing charges.
Company Promotion
The Company has appointed Frostrow to promote the
Company’s shares to professional investors in the UK and
Ireland. As investment company specialists, the Frostrow
team provides a continuous, proactive marketing,
distribution and investor relations service that aims to grow
the Company by encouraging demand for the shares.
Frostrow actively engages with professional investors,
typically discretionary wealth managers, some institutions
and a range of execution-only platforms. Regular
engagement helps to attract new investors and retain
existing shareholders, and over time results in a stable
share register made up of diverse, long-term holders.
Frostrow, in turn, provides the Board with up-to-date and
accurate information on the latest shareholder and
marketdevelopments.
Frostrow arranges and manages a continuous programme
of one-to-one meetings with professional investors around
the UK. These include regular meetings with ‘gate
keepers’, the senior points of contact responsible for their
respective organisations’ research output and
recommended lists. Theprogramme of regular meetings
also includes autonomous decision makers within large
multi-office groups, as well as small independent
organisations. Some of these meetings involve MCM, but
most of the meetings do not, which means the Company
is being actively promoted while MCM focuses on
managing the portfolio. The Chairman is also available to
engage with shareholders.
The Company also benefits from involvement in the regular
professional investor seminars run by Frostrow in major
centres, notably London and Edinburgh, which are
focused on buyers of investment companies.
The creation and dissemination of information on the
Company is also overseen by Frostrow. Frostrow
produces all key corporate documents, monthly
factsheets, annual reports and manages the Company’s
website www.menhaden.com
. All Company information
and invitations to investor events, including updates from
MCM on the portfolio and market developments, are
regularly emailed to a growing database, overseen by
Frostrow, consisting of professional investors across the
UK and Ireland.
Frostrow maintains close contact with all the relevant
investment trust broker analysts, particularly those from
Numis Securities Limited, the Company’s corporate
broker, but also others who publish and distribute research
on the Company to their respective professional
investorclients.
31
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
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Strategic Report
32
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Strategic Report
1
Business Review
continued
32
Stakeholder group
How the Board engaged with the Company’s stakeholders
Investors The Board’s key mechanisms of engagement with investors include:
l The Annual General Meeting.
l The Company’s website which hosts reports, articles and insights, and monthly factsheets.
l One-to-one investor meetings.
l Group meetings with professional investors.
l The Annual and Half yearly Reports.
The AIFM and the Portfolio Manager, on behalf of the Board, complete a programme of investor relations
throughout the year, reporting to the Board on the feedback received. The Company’s broker also reports
to the Board on investor sentiment and industry issues. In addition, the Chairman has been available to
engage with the Company’s shareholders where required.
Portfolio Manager The Board met regularly with the Portfolio Manager throughout the year, both formally at quarterly Board
meetings and informally, as needed. The Board discussed the Company’s overall performance, including
against the benchmark and the KPIs, as well as developments in individual portfolio companies andwider
macroeconomic developments. The Board also received monthly performance and compliancereports.
Service Providers The Board met regularly with the AIFM, representatives of which attend every quarterly Board meeting to
provide updates on risk management, accounting, administration and corporate governance matters.
The Management Engagement Committee reviewed the performance of all the Company’s service providers,
receiving feedback from Frostrow in their capacity as AIFM and Company Secretary. The AIFM, which is
responsible for the day-to-day operational management of the Company, meets and interacts with the other
service providers including the Depositary, Custodian, and Registrar, on behalf of the Board, on a daily basis.
This can be through email, one-to-one meetings and/or regular written reporting.
The Audit Committee met with Mazars LLP to review the audit plan, the outcome of the annual audit
and to assess the quality and effectiveness of the audit process.
Portfolio companies The Portfolio Manager, on behalf of the Board, engaged with a number of portfolio companies on a range
of issues. Environmental issues were a key topic of engagement. The Board received a quarterly update
on the Portfolio Manager’s engagement activities.
The Directors have a statutory duty to promote the success of the Company for the benefit of its members as a whole,
whilst also having regard to certain broader matters. These include taking into consideration the likely consequences
of any decision in the long-term; the need to foster the Company’s business relationships with its Portfolio Manager
and other service providers; the impact of the Company’s operations on the community and the environment; the desire
for the Company to maintain a reputation for high standards of business conduct; and the need to act fairly between
members of the Company (s172 Companies Act 2006).
Board’s Duty to Promote the Success of the Company (s172)
265031 Menhaden 01pp-35pp.qxp 28/03/2023 10:07 Page 32
33
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Key areas of engagement Main decisions and actions taken
l Ongoing dialogue with shareholders concerning the
strategy of the Company, performance and the portfolio.
l The impact of market volatility caused by, inter alia, the
Covid-19 pandemic and Russia’s invasion of Ukraine on
the portfolio.
l Share price performance.
l The Portfolio Manager’s investment approach.
The Board and the Portfolio Manager provided updates via
RNS, the Company’s website and the usual financial reports
and monthly factsheets.
The Board continued to monitor share price movements
closely, both in absolute terms and in relation to the Company’s
peer group. The actions the Board has taken to address the
share price discount to the NAV per share are described in the
Chairman’s Statement beginning on page 5.
l Portfolio composition, performance, outlook and business
updates.
l The suitability of new investments with respect to the
Company’s resource efficiency theme.
l The integration of ESG principals into the Portfolio
Manager’s investment process and their engagement
with investee companies on ESG matters.
l The Portfolio Manager’s system of internal controls and
investment risk management.
l The Company’s management fee structure.
The Board concluded that it was in the interests of
shareholders for MCM to continue in their role as Portfolio
Manager on the same terms and conditions. Further
information is provided on page 26.
The Audit Committee concluded that the Portfolio Manager’s
internal controls were satisfactory. See the Audit Committee
Report, beginning on page 50, for further information.
l The quality of service provision and the terms and
conditions under which service providers are engaged.
l The assessment of the effectiveness of the audit and the
Auditor’s reappointment.
l The terms and conditions under which the Auditor is
engaged.
The Board concluded that it was in the interests of shareholders
for Frostrow to continue in their role as AIFM on the same terms
and conditions. See page 26 for further details.
The Board approved the Audit Committee’s recommendation
that it would be in the interests of shareholders for Mazars to
be re-appointed as the Company’s auditor for a further year.
See the Audit Committee Report beginning on page 50 and
the Notice of AGM beginning on page 91 for further
information.
l Environmental reporting and target setting.
The Board worked with the Portfolio Manager to produce the
Company’s annual environmental impact statement, which
outlines the impact the Company’s investments have delivered,
or intend to deliver. The report outlines the subjects on which
the Portfolio Manager, with the support of the Board, engaged
with portfolio companies. The report is on pages 19 to 23 and
is published as a separate document on www.menhaden.com
The Board seeks to comply with these and the followingtable sets out how the Directors have had regardto the views
of the Company’s stakeholders in their decision-making.
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Strategic Report
34
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Strategic Report
1
Social, Human Rights and
EnvironmentalMatters
The Company is an externally managed investment trust
within the AIC Environmental Sector and invests in
companies and markets that are demonstrably delivering
or benefiting significantly from the efficient use of energy
or resources. The Board is responsible for oversight of the
Portfolio Manager and consequently for the risks and
opportunities that derive from their management of the
Company’s portfolio, including any considered to be
climate related. The Company’s resource efficiency
mandate is consistent with the drive towards net zero so
the Company is well placed to benefit as investor focus
evolves. The Company does not have any employees or
premises, nor does it undertake any manufacturing or
other operations. All its functions are outsourced to third
party service providers and therefore the Company itself
does not have any employee or direct human rights
issues, nor does it have any direct, material environmental
impact. The Company therefore has no environmental,
human rights, social or community policies.
The Company notes the Task Force on Climate-Related
Financial Disclosures (“TCFD”) recommendations. As
noted above, the Company is an investment trust with no
employees, internal operations or property and, as such,
it is exempt from the Listing Rules requirement to report
against the TCFD framework. The Company recognises
risks from climate change regulation, such as potential
impacts on investee companies, portfolio construction,
marketing and reputation. It also recognises the
opportunity provided by the alignment of its investment
objective and policy with the net zero agenda.
The Board believes that the integration of financially
material environmental, social and governance (“ESG”)
factors into investment decision-making can reduce risk
and enhance returns. The Portfolio Manager uses CDP
ratings data as a basis for engagement with investee
companies on ESGissues, including any considered to
be climate related. More detail is included in the
Company’s Environmental Impact Statement set out on
pages19to23.
The ongoing engagement and dialogue with investee
companies, including through proxy voting, are key parts
of an asset stewardship role.
The Directors encourage the Portfolio Manager to ensure
the Company’s investments adhere to best practice in the
management of ESG issues and encourage them to have
due regard to the UN Global Compact and UN Principles
of Responsible Investment. The Portfolio Manager was a
signatory to the Financial Reporting Council 2012 UK
Stewardship Code. Whilst MCM is not a formal signatory
to the 2020 Stewardship Code, it adheres to the
12principles as closely as possible.
As an investment trust, the Company does not provide
goods or services in the normal course of business and
does not have customers. Accordingly, the Company falls
outside the scope of the Modern Slavery Act 2015. The
Company’s suppliers are typically professional advisers
and the Company’s supply chains are considered to be
low risk in this regard.
Business Review
continued
265031 Menhaden 01pp-35pp.qxp 28/03/2023 10:07 Page 34
35
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Anti-Bribery and Corruption Policy
The Board has adopted a zero-tolerance approach to
instances of bribery and corruption. Accordingly it
expressly prohibits anyone performing services or acting
on behalf of the Company from accepting, soliciting,
paying, offering or promising to pay or authorise any
payment, public or private, in the United Kingdom or
abroad, to secure any improper benefit for themselves or
for the Company.
A copy of the Company’s Anti Bribery and Corruption
Policy can be found on its website at
www.menhaden.com
. The policy is reviewed regularly by
the Audit Committee.
Prevention of the Facilitation of Tax
Evasion
In response to the implementation of the Criminal Finances
Act 2017, the Board has adopted a zero-tolerance
approach to the criminal facilitation of tax evasion. A copy
of the Company’s policy on preventing the facilitation of
tax evasion can be found on the Company’s website
www.menhaden.com. The policy is reviewed annually by
the Audit Committee.
This Strategic Report on pages 2 to 35 has been
approved by the Board.
Sir Ian Cheshire
Chairman
28 March 2023
265031 Menhaden 01pp-35pp.qxp 28/03/2023 10:07 Page 35
The Directors’ beneficial interests in the Company’s shares are set out in the Directors’ Remuneration Report on page 55.
Governance
2
36
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Sir Ian Cheshire (Chairman)
Sir Ian Cheshire joined the Board shortly before its IPO in
2015. He has been Chairman of the Company since
appointment, but will be stepping aside from that position,
though remaining a non-executive Director of the Company,
on 16 May 2023.
He is the chairman of Spire Healthcare Group plc and of
Channel 4. He is also a non-executive director of BT Group
plc and joined the board of Land Securities Group PLC on
23 March 2023 as a non-executive director and chair
designate. He will retire from the BT Group plc board at their
AGM in July 2023. He additionally chairs the Prince of
Wales Charitable Fund and the We Mean Business
Coalition.
Sir Ian was the chairman of Barclays UK, the ring-fenced
retail bank, until December 2020. He was the group chief
executive of Kingfisher plc from January 2008 until
February 2015 and prior to that he was chief executive of
B&Q Plc from June 2005.
Sir Ian was knighted in the 2014 New Year Honours for
services to Business, Sustainability and the Environment.
Howard Pearce
Howard Pearce has been a non-executive Director of the
Company’ and Chair of the Audit Committee since shortly
before its IPO in 2015.
He is chairman of the Columbia Threadneedle Responsible
Investment Advisory Council, and founder of HowESG Ltd,
a specialist environmental, asset stewardship, and corporate
governance consultancy business.
Previously he has been a non executive director of
Response Global Media Limited, chair of the Pension Board
of Avon and Wiltshire Pension Funds, board member and
chair of the Audit Committee of Cowes Harbour
Commission, and a trustee and chair of the Investment and
Audit Committees of the NHS ‘Above and Beyond’ charity.
Between 2003 and 2013 Howard was the head of the
Environment Agency pension fund and a member of its
Pensions and Investment Committee. Under his leadership,
the fund won over 30awards in the UK, Europe and globally
for its financially and environmentally responsible investment,
best practice fund governance, public reporting and
e-communications.
Board of Directors
265031 Menhaden 36pp-65pp.qxp 28/03/2023 10:34 Page 36
Duncan Budge
Duncan Budge has been a non-
executive Director of the Company
since shortly before its IPO in 2015.
He is chairman of Dunedin Enterprise
Investment Trust plc and Artemis
Alpha Trust plc, and a non-executive
director of Lowland Investment
Company plc, Biopharma Credit plc
and Asset Value Investors Ltd.
He was previously a director of J.
Rothschild Capital Management from
1988 to 2012 and a director and chief
operating officer of RIT Capital
Partners plc from 1995 to 2011.
Between 1979 and 1985 he was with
Lazard Brothers & Co. Ltd.
Duncan will be stepping down from
the Board at the conclusion of the
AGM on 21 June 2023.
Soraya Chabarek
Soraya Chabarek joined the Board as
a non-executive Director on 1 March
2023.
She is CEO at CQS (UK) LLP, a
London-based, credit-focused multi-
strategy asset management firm. She
joined CQS in 2013, is a Senior Partner
and serves as a director on the CQS
board.
During her career, Soraya has had
exposure to a broad range of fund
strategies including global macro,
equities, emerging markets, credit and
convertibles.
She was previously at Moore Europe
Capital Management, from 2008 to
2013, where she was head of
marketing for emerging macro
strategies. From 2004 to 2008 she
was a principal at GLG Partners and
from 2000 to 2004 she was with
HSBC Private Bank.
Barbara Donoghue
Barbara Donoghue (also known as
Barbara Donoghue Vavalidis) joined
the Board as a non-executive Director
on 1 February 2022.
She was a non-executive director of
Byredo AB, a Stockholm based luxury
fragrance company, until June 2022,
having been its chair for the six years
to 2020.
Until 2020 she was also a partner in
London based Manzanita Capital, a
private equity partnership specialising
in the beauty and personal care
industry. Other past appointments
include chair of Susanne Kaufmann
Ltd, an Austrian based beauty
company, director and audit
committee chair of Eniro AB, a
Stockholm listed media company,
member of the Competition
Commission and Competition and
Markets Authority and member of the
board of the Independent Television
Commission. She had a previous
career in finance in Toronto, New York
and London advising companies on
raising debt and equity financing and
on executing mergers and
acquisitions, during which she worked
at Bank of Nova Scotia, Bankers Trust
and NatWest Markets.
37
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
265031 Menhaden 36pp-65pp.qxp 28/03/2023 10:34 Page 37
Governance
2
38
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
The Directors present their annual report on the affairs of
the Company together with the audited financial
statements and the Independent Auditor’s Report for the
year ended 31 December 2022. Disclosures relating to
performance, future developments and risk management
can be found within the Strategic Report on pages 2 to 35.
Business and Status of the Company
The Company is registered as a public limited company
in England and Wales (registered number 09242421) and
is an investment company within the terms of Section 833
of the Companies Act 2006 (the “Act”). Its shares are
traded on the main market of the London Stock
Exchange, which is a regulated market as defined in
Section 1173 of the Act.
The Company has received approval from HM Revenue &
Customs as an investment trust under Sections 1158 and
1159 of the Corporation Tax Act 2010. In the opinion of the
Directors, the Company continues to direct its affairs so as
to qualify for such approval.
Continuation of the Company
In accordance with the Company’s Articles of Association,
a continuation vote is put to shareholders every five years.
The last such occasion was at the AGM held on 9 June
2020 and an overwhelming majority of 98% of the votes
cast were in favour of the Company’s continuation. The
next opportunity for shareholders to vote on the
continuation of the Company will be at the 2025 AGM.
Performance and Future Developments
Details of the Company’s and its Portfolio’s performance
and prospects are included in the Strategic Report, on
pages 2 to 35, and incorporated in this Directors’ Report
by reference.
Dividends
In accordance with the dividend policy set out on page 24
the Board is recommending a final dividend of 0.4p per
ordinary share in respect of the year ended 31 December
2022, to be paid on 29 June 2023 to shareholders on the
register on 2 June 2023, with the shares marked
ex-dividend on 1 June 2023. An ordinary resolution to this
effect is included in the AGM notice of meeting on page91
of this annual report.
A dividend of 0.2p per ordinary share was paid on 29 June
2022 in respect of the year ended 31 December 2021,
following approval by shareholders at the 2022 AGM.
Going Concern
The Company’s portfolio, investment activity, cash
balances, revenue forecasts, and the trends and factors
likely to affect the Company’s performance are reviewed
and discussed at each Board meeting. The Board has
considered a detailed assessment of the Company's
ability to meet its liabilities as they fall due, including stress
tests which modelled the effects of substantial falls in
portfolio valuations and liquidity constraints on the
Company’s NAV, cash flows and expenses. Based on the
information available to the Directors at the date of this
report, including the results of these stress tests, the
conclusions drawn in the Viability Statement in the
Strategic Report on pages 30 and 31, together with the
Company’s cash balances, the Directors are satisfied that
the Company has adequate financial resources to
continue in operation for at least the next 12 months and
that, accordingly, it is appropriate to continue to adopt the
going concern basis in preparing the financial statements.
Alternative Performance Measures
The Financial Statements (on pages 66 to 85) set out the
required statutory reporting measures of the Company’s
financial performance. The Board additionally assesses
the Company’s performance against a range of criteria
that are viewed as particularly relevant for investment
trusts. These are summarised on page 2, explained in
greater detail in the Strategic Report under the heading
‘Key Performance Indicators’ on page 27 and defined
more fully, including the basis of calculation, in the
Glossary on pages 87 and 88. These alternative
performance measures are widely used in reporting within
the investment company sector and the Directors believe
they enhance the comparability of information and assist
investors in understanding the Company’s performance.
Directors’ Report
265031 Menhaden 36pp-65pp.qxp 28/03/2023 10:34 Page 38
39
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Capital Structure
The Company has a single share class, being ordinary
shares of 1p nominal value each, and has not issued any
other forms of security. At 31 December 2022 the
Company had 80,000,001 ordinary shares in issue. No
shares were issued or bought back during the year. Since
the year end, the Board has initiated a limited share
buyback programme and at the date of this report, the
Company had 79,175,001 ordinary shares in issue,
825,000shares having been bought back in the market
and subsequently cancelled.
The voting rights of the ordinary shares on a poll are one
vote for each share held.
There are no:
• restrictions on transfers of the Company’s ordinary
shares, or in respect of their voting and dividend rights;
• agreements, known to the Company, between holders
regarding the transfer of ordinary shares; or
• special rights with regard to control of the Company
attaching to the ordinary shares.
At the end of the year under review, the Directors had
shareholder authority to issue a further 800,000 ordinary
shares and to repurchase no more than 14.99% of the
Company’s issued share capital. These authorities will
expire at the forthcoming Annual General Meeting.
Proposals to renew the Board’s powers to issue and buy
back shares are set out in the Notice of Annual General
Meeting beginning on page 91.
Beneficial Owners of Shares – Information
Rights
Beneficial owners of shares who have been nominated by
the registered holder of those shares to receive information
rights under section 146 of the Companies Act 2006 are
required to direct all communications to the registered
holder of their shares rather than to the Company’s
registrar or to the Company directly.
Nominee Share Code
Where the Company’s shares are held via a nominee
company name, the Company undertakes:
• to provide the nominee company with multiple copies
of shareholder communications, so long as an
indication of quantities has been provided in advance;
and
• to allow investors holding shares through a nominee
company to attend general meetings, provided the
correct authority from the nominee company is
available.
Substantial Interests in Share Capital
The Company was aware of the following substantial interests of 3% or more in the voting rights of the Company as at
31 December 2022 and 28 February 2023.
28 February 2023 31 December 2022
Number % of Number % of
of issued of issued
Ordinary share Ordinary share
Shareholder shares capital shares capital
Cavenham Private Equity 15,635,000 19.6 15,635,000 19.5
Generali Deutschland Versicherung 10,000,000 12.5 10,000,000 12.5
Ravenscroft 5,053,256 6.3 5,053,256 6.3
Charles Stanley 3,270,695 4.1 3,366,282 4.2
Armstrong Investments 2,800,000 3.5 2,600,000 3.3
Rath Dhu 2,400,000 3.0 2,475,000 3.1
The number of shares in issue on 31 December 2022 was 80,000,001. The number of shares in issue on 28 February 2023 was 79,575,001.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Directors’ Report
continued
Nominee companies are encouraged to provide the
necessary authority to underlying shareholders to attend
the Company’s general meetings.
Common Reporting Standard (“CRS”)
CRS is a global standard for the automatic exchange of
information commissioned by the Organisation for
Economic Cooperation and Development and
incorporated into UK law by the International Tax
Compliance Regulations 2015. CRS requires the
Company to provide certain additional details to HMRC in
relation to certain shareholders. The reporting obligation
began in 2016 and is an annual requirement. The
Company’s registrar, Link Group, has been engaged to
collate such information and file the reports with HMRC
on behalf of the Company.
The Board
At the date of this report, the Board of the Company
comprises Sir Ian Cheshire (Chairman), Duncan Budge,
Barbara Donoghue, Howard Pearce and Soraya
Chabarek. All of these Directors are non-executive,
independent Directors. Sir Ian Cheshire, Duncan Budge
and Howard Pearce served throughout the year. Barbara
Donoghue was appointed to the Board with effect from
1February 2022 and Soraya Chabarek was appointed to
the Board after the year end, with effect from 1 March
2023. Emma Howard Boyd served as a Director for part
of the year, retiring from the Board on 22 June 2022.
Further information on the Directors can be found on
pages 36 and 37.
Directors’ & Officers’ Liability Insurance
Cover
Directors’ and officers’ liability insurance cover was
maintained by the Company during the year ended
31 December 2022. It is intended that this cover will
continue for the year ending 31 December 2023 and
subsequent years.
Directors’ Indemnities
During the year under review and to the date of this report
indemnities were in force between the Company and each
of its Directors under which the Company has agreed to
indemnify each Director, to the extent permitted by law, in
respect of certain liabilities incurred as a result of carrying
out his or her role as a director of the Company. The
Directors are also indemnified against the costs of
defending criminal or civil proceedings or any claim by the
Company or a regulator as they are incurred provided that
where the defence is unsuccessful the Director must repay
those defence costs to the Company. The indemnities are
qualifying third party indemnity provisions for the purposes
of the Companies Act 2006.
A copy of each deed of indemnity is available for
inspection at the Company’s registered office during
normal business hours and will be available for inspection
at the Annual General Meeting.
Other Statutory Information
The following information is disclosed in accordance with
the Companies Act 2006:
• the rules on the appointment and replacement of
directors are set out in the Company’s articles of
association (the “Articles”). Any change to the Articles
is governed by the Companies Act 2006 and would be
subject to a shareholder vote.
• subject to the provisions of the Companies Act 2006,
to the Articles, and to any directions given by special
resolution, the business of the Company shall be
managed by the Directors who may exercise all the
powers of the Company. The Directors’ authorities to
issue and buy back shares in force at the end of the
year, are recorded on page 39.
• there are no agreements:
(i) to which the Company is a party that might affect its
control following a takeover bid; or
(ii) between the Company and its Directors concerning
compensation for loss of office.
Greenhouse Gas Emissions
As the Company has no executive employees or premises
and has engaged external firms to undertake investment
management, company management and custodial
activities, the Company is exempt from the requirements
to report on greenhouse gas emissions from its
operations, and it has no responsibility for any other
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
emissions-producing sources under the Companies Act
2006 (Strategic Report and Directors’ Reports)
Regulations 2013 or the Companies (Directors’ Report)
and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018.
The Company produces an annual environmental impact
statement which is included within this Annual Report on
pages 19 to 23 and also published separately on
www.menhaden.com
. The impact report provides further
detail on the environmental goals and impact of the
Company’s portfolio holdings.
Political Donations
The Company has not made, and does not intend to
make, any political donations.
Disclosure of Information to the Auditor
The Directors are listed on pages 36 and 37. Each Director
confirms that:
• to the best of each Director’s knowledge and belief,
there is no information relevant to the preparation of the
audit report of which the Company’s Auditor is
unaware; and
• each Director has taken all the steps a director might
reasonably be expected to have taken to be aware of
relevant audit information and to establish that the
Company’s Auditor is aware of that information.
This information is given and should be interpreted in
accordance with the provisions of section 418 of the
Companies Act 2006.
Corporate Governance
The Corporate Governance Statement set out on pages
43 to 49 is included in this Directors’ Report by reference.
Financial Instruments
The Company’s financial instruments comprise securities
and other investments, cash balances and certain debtors
and creditors that arise directly from its operations. The
financial risk management objectives and policies arising
from its financial instruments and the exposure of the
Company to risk are disclosed in note 17 to the financial
statements, beginning on page 80.
Annual General Meeting
The Company’s Annual General Meeting (“AGM”) will be
held at 25 Southampton Buildings, London WC2A 1AL on
21 June 2023 at 12 noon.
The business of the meeting is explained in some detail in
the Explanatory Notes to the Resolutions on pages 96 and
97 of this Annual Report.
The AGM resolutions include the following items of special
business:
Resolution 9 Authority to allot shares
Resolution 10 Authority to disapply pre-emption rights
Resolution 11 Authority to repurchase shares
Resolution 12 Authority to hold General Meetings (other
than the AGM) on at least 14 clear days’ notice.
The full text of the resolutions can be found in the Notice
of AGM beginning on page 91.
The Board considers that the proposed resolutions are in
the best interests of the shareholders as a whole.
Accordingly, the Board unanimously recommends to
shareholders that they vote in favour of the resolutions to
be proposed at the forthcoming AGM, as the Directors
intend to do in respect of their own beneficial holdings.
By order of the Board
Frostrow Capital LLP
Company Secretary
28 March 2023
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Annual Report for the year ended 31 December 2022
Company law in the United Kingdom requires the
Directors to prepare financial statements for each financial
year. The Directors are responsible for preparing the
financial statements in accordance with applicable law and
regulations. In preparing these financial statements, the
Directors have:
• selected suitable accounting policies and applied them
consistently;
• made judgements and estimates that are reasonable
and prudent;
• followed applicable UK accounting standards; and
• prepared the financial statements on a going concern
basis.
The Directors are responsible for keeping adequate
accounting records which 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.
The Directors are responsible for ensuring that the
Directors’ Report and other information included in the
Annual Report is prepared in accordance with company
law in the United Kingdom. They are also responsible for
ensuring that the Annual Report includes information
required by the Listing Rules of the FCA.
The financial statements are published on the Company’s
website www.menhaden.com
. The maintenance and
integrity of this website, is the responsibility of Frostrow.
The work carried out by the Auditor does not involve
consideration of the maintenance and integrity of this
website and, accordingly, the Auditor accepts no
responsibility for any changes that have occurred to the
financial statements since they were initially presented on
the website. Visitors to the website need to be aware that
legislation in the United Kingdom governing the
preparation and dissemination of the financial statements
may differ from legislation in their jurisdiction.
Responsibility Statement of the Directors
in respect of the Annual Report
The Directors, whose details can be found on
pages 36 and 37, confirm to the best of their
knowledgethat:
• the financial statements within this Annual Report,
prepared in accordance with applicable accounting
standards, give a true and fair view of the assets,
liabilities, financial position and the return for the year
ended 31 December 2022; and
• the Chairman’s Statement, Strategic Report and the
Directors’ Report include a fair review of the information
required by 4.1.8R to 4.1.11R of the FCA’s Disclosure
Guidance and Transparency Rules.
The Directors consider that the Annual Report taken as a
whole is fair, balanced and understandable and provides
the information necessary to assess the Company’s
position, performance, business model and strategy.
On behalf of the Board
Sir Ian Cheshire
Chairman
28 March 2023
Statement of Directors’ Responsibilities
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Corporate Governance Statement
The Board and Committees
Responsibility for effective governance lies with the Board whose role is to promote the long-term success of the
Company. The governance framework of the Company reflects the fact that as an externally managed investment
company, it has no employees and outsources portfolio management services to Menhaden Capital Management LLP
and risk management, company management, company secretarial, administrative and marketing services to Frostrow
Capital LLP. The Board generates value for shareholders through its oversight of the service providers and management
of costs associated with running the Company.
The Board
Chairman – Sir Ian Cheshire
Four additional non-executive Directors, all considered independent.
Key roles and responsibilities:
– to provide leadership and set strategy within a framework of effective controls which enable risk to be assessed
and managed;
– to ensure that a robust corporate governance framework is implemented; and
– to challenge constructively and scrutinise performance of all outsourced activities.
Management Engagement
Committee
Chairman – Sir Ian Cheshire
All Directors
Key roles and responsibilities:
– to review the contracts, the performance and the
remuneration of the Company’s principal service
providers; and
– to make recommendations to the Board regarding
the continuing appointment of the AIFM and the
Portfolio Manager.
Audit Committee
Chairman – Howard Pearce
Duncan Budge, Barbara Donoghue,
SorayaChabarek
Key roles and responsibilities:
– to review the Company’s financial reports;
– to oversee the risk and control environment; and
– to review the performance of the Company’s
external Auditor.
Copies of the full terms of reference, which clearly define the responsibilities of each committee, can be obtained from
the Company Secretary, will be available for inspection at the Annual General Meeting, and can be found on the Company’s
website www.menhaden.com.
The Directors have decided that, given the size of the Board and the fact that all Directors are considered to be
independent, it is unnecessary to form separate remuneration and nomination committees; the duties that would fall to
those committees are carried out by the Board as a whole. However, the Chairman takes no part in discussions
regarding his own remuneration and will not chair any discussions relating to the appointment of his successor.
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Annual Report for the year ended 31 December 2022
Corporate Governance Statement
continued
The Board has considered the AIC Code of Corporate
Governance (the “AIC Code”). The AIC Code addresses
all the principles set out in the UK Corporate Governance
Code (the “UK Code”), as well as setting out additional
provisions on issues that are of specific relevance to
investment companies.
The Board considers that reporting against the principles
and provisions of the AIC Code (which has been endorsed
by the Financial Reporting Council) will provide better
information to shareholders. By reporting against the AIC
Code, the Company meets its obligations under the UK
Code (and associated disclosure requirements under
paragraph 9.8.6 of the Listing Rules) and as such does
not need to report further on issues contained in the UK
Code which are irrelevant to the Company.
The AIC Code is available on the AIC’s website
www.theaic.co.uk
and the UK Code can be viewed on the
Financial Reporting Council website www.frc.org.uk.
The AIC Code includes an explanation of how the AIC
Code adapts the principles and provisions set out in the
UK Code to make them relevant for investment
companies.
The Company has complied with the principles and
provisions of the AIC Code with the exception that the
Board has not appointed a senior independent director or
established a nomination committee. The Board considers
that these are not necessary given the small size of the
Board. Further information on the latter is provided on
page 43.
Purpose and Strategy
The purpose and strategy of the Company are described
in the Strategic Report on page 24.
The Board
Board Membership
At the date of this Annual Report the Company has a
Board of five non-executive Directors, including the
Chairman. Sir Ian Cheshire (the Chairman), Duncan Budge
and Howard Pearce served throughout the financial year
and to the date of this Annual Report. Barbara Donoghue
joined the Board on 1 February 2022 and continues to
serve. Emma Howard Boyd, who was a member of the
Board from the Company’s launch, stepped down from
the Board at the Company’s AGM on 22 June 2022.
Soraya Chabarek joined the Board after the end of the
Company’s financial year, on 1 March 2023. Further
information on the Board and its operation follows:
Board Culture
The Board aims to fully enlist differences of opinion, unique
vantage points and areas of expertise. The Chairman
encourages open debate to foster a supportive and co-
operative approach for all participants. Strategic decisions
are discussed openly and constructively. The Board aims
to be open and transparent with shareholders and other
stakeholders and for the Company to conduct itself
responsibly, ethically and fairly in its relationships with
service providers.
Responsibilities of the Chairman
The Chairman’s primary role is to provide leadership to the
Board, assuming responsibility for its overall effectiveness
in directing the company. The Chairman is responsible for:
• ensuring that the Board is effective in its task of setting
and implementing the Company’s direction and
strategy;
• taking the chair at general meetings and Board
meetings, conducting meetings effectively and ensuring
all Directors are involved in discussions and decision-
making;
• setting the agenda for Board meetings and ensuring the
Directors receive accurate, timely and clear information
for decision-making;
• taking a leading role in determining the Board’s
composition and structure;
• overseeing the induction of new directors and the
development of the Board as a whole;
• leading the annual board evaluation process and
assessing the contribution of individual Directors;
• supporting and also challenging the AIFM and the
Portfolio Manager (and other suppliers where
necessary);
• ensuring effective communications with shareholders
and, where appropriate, stakeholders; and
• engaging with shareholders to ensure that the Board
has a clear understanding of shareholder views.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Director Independence
The Board is comprised of five non-executive Directors,
each of whom is independent of the AIFM and the
Portfolio Manager. Each of the Directors, including the
Chairman, was independent on appointment and
continues to be independent when assessed against the
circumstances set out in Provision 13 of the AIC Code
(and Provision 12 of the AIC Code which relates
specifically to the Chairman). Accordingly, the Board
considers that all of the Directors are independent and
there are no relationships or circumstances which are likely
to impair or could appear to impair their judgement.
Conflicts of Interest
In line with the Companies Act 2006, the Board has the
power to authorise any potential conflicts of interest that
may arise and impose such limits or conditions as it thinks
fit. A register of interests and potential conflicts is
maintained and is reviewed at every Board meeting. It was
resolved at each Board meeting during the year that there
were no direct or indirect interests of a Director that
conflicted with the interests of the Company. Appropriate
authorisation will be sought prior to the appointment of
any new director or if any new conflicts or potential
conflicts arise.
Directors’ Other Commitments
As part of the annual Board evaluation process, each of
the Directors assessed the overall time commitment of
their external appointments and it was concluded that
they all have sufficient time to discharge their duties.
Board Meetings
The primary focus at regular Board meetings is the review
of investment performance and associated matters,
including asset allocation, marketing/investor relations,
gearing, peer group information and industry issues. The
Board reviews key investment and financial data, revenue
and expenses projections, analyses of asset allocation,
transactions, performance comparisons, share price and
net asset value performance. The Board’s approach to
addressing share price performance during the year is
described in the Chairman’s Statement beginning on
page5.
Meeting Attendance
The number of scheduled meetings of the Board and its committees held during the year and each Director’s
attendance, is shown below:
Management
Engagement
Type and number of meetings Board Audit Committee Committee
held in 2022 (4) (3) (1)
Sir Ian Cheshire 4 3
1
1
Duncan Budge 4 3 1
Barbara Donoghue
2
3 2 –
Howard Pearce 4 3 1
Emma Howard Boyd
3
1 1 –
Soraya Chabarek
4
– – –
1
Sir Ian Cheshire is not a member of the Audit Committee but attended by invitation.
2
Barbara Donoghue was appointed to the Board on 1 February 2022.
3
Emma Howard Boyd retired from the Board on 22 June 2022.
4
Soraya Chabarek was appointed as a Director after the end of the financial year, on 1 March 2023.
The Board is responsible for setting the Company’s
corporate strategy and reviews the continued
appropriateness of the Company’s investment objective,
investment strategy and investment restrictions at each
meeting.
Matters Reserved for Decision by the Board
The Board has adopted a schedule of matters reserved
for its decision. This includes, inter alia, the following:
• requirements under the Companies Act 2006, including
approval of the half yearly and annual financial
statements, recommendation of the final dividend (if
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
any), declaration of any interim dividends, the
appointment or removal of the Company Secretary, and
determining the policy on share issuance and buybacks;
• matters relating to certain Stock Exchange
requirements and announcements, the Company’s
internal controls, and the Company’s corporate
governance structure, policy and procedures;
• decisions relating to the strategic objectives and overall
management of the Company, including the
appointment or removal of the AIFM and other service
providers, and review of the Investment Policy; and
• matters relating to the Board and Board committees,
including the terms of reference and membership of the
committees, the appointment of directors (including the
Chairman) and the determination of Directors’
remuneration.
Day-to-day operational and portfolio management is
delegated to Frostrow and MCM respectively.
The Board takes responsibility for the content of
communications regarding major corporate issues, even
if Frostrow or MCM act as spokesmen. The Board is kept
informed of relevant promotional material that is issued by
Frostrow.
Stewardship and the Exercise of Voting Powers
The Board has delegated authority to MCM (as Portfolio
Manager) to engage with companies held in the portfolio
and to vote the shares owned by the Company. The Board
has instructed that MCM submit votes for such shares
wherever possible. MCM may refer to the Board on any
matters of a contentious nature.
The Portfolio Manager’s approach to stewardship,
including their consideration of environmental, social
andgovernance issues, is set out in their UK Stewardship
Code (2012) Compliance Statement which can be found
on the Company’s website www.menhaden.com
.
Independent Professional Advice
The Board has formalised arrangements under which the
Directors, in the furtherance of their duties, may seek
independent professional advice at the Company’s
expense. No such advice was sought during the year.
Company Secretary
The Directors have access to the advice and services of
an investment trust specialist Company Secretary, through
its appointed representative, which is responsible for
advising the Board on all governance matters. The
Company Secretary ensures governance procedures are
followed and that the Company complies with applicable
statutory and regulatory requirements.
Board Tenure, Succession and Evaluation
Tenure
The tenure of each independent, non-executive director,
including the Chairman, is not ordinarily expected to
exceed nine years. However, the Board has agreed that
the tenure of the Chairman may be extended for a limited
time provided such an extension is conducive to the
Board’s overall orderly succession. The Board believes
that this more flexible approach to the tenure of the
Chairman is appropriate in the context of the regulatory
rules that apply to investment companies, which ensure
that the chair remains independent after appointment,
while being consistent with the need for regular
refreshment and diversity.
Notwithstanding this expectation, the Board considers
that a director’s tenure does not necessarily reduce his or
her ability to act independently and will continue to assess
each Director’s independence annually, through a formal
performance evaluation.
Board Evaluation
During the course of 2022, the performance of the Board,
its committees and the individual Directors (including each
Director’s independence and time commitments) were
evaluated through a questionnaire-based formal
assessment process led by the Chairman. Mr Pearce led
the assessment of the Chairman’s performance.
The Chairman is satisfied that the Directors are all
independent, the structure and operation of the Board
continues to be effective and that there is a satisfactory
mix of skills, experience and knowledge. The latest
evaluation did not identify any new areas to be addressed,
so no new actions were implemented as a result. As a
matter of course, the Board continues to monitor
particular areas of relevance highlighted in the evaluation
process, including the discount at which the Company’s
shares trade, the resource efficiency credentials of the
portfolio and risks to which the Company is exposed.
All Directors submit themselves for annual re-election by
shareholders. Further information on the contribution of
each individual Director can be found in the explanatory
Corporate Governance Statement
continued
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
notes to the notice of the AGM on page 96. Following the
evaluation process, the Board recommends that
shareholders vote in favour of the Directors’ re-election at
the forthcoming AGM.
Board Diversity
The Board supports the principle of Boardroom diversity,
of which gender is one important aspect. The Company’s
policy is that the Board and its Committees should be
comprised of directors who collectively display the
necessary balance of professional skills, experience, length
of service and industry knowledge and that appointments
should be made on merit, against objective criteria,
including diversity in its broadest sense.
The objective of the policy is to have a broad range of
approaches, backgrounds, skills, knowledge and
experience represented on the Board. The Board believes
that this will make the Board more effective at promoting
the long-term sustainable success of the company and
generating value for all shareholders by ensuring there is a
breadth of perspectives among the directors and the
challenge needed to support good decision-making. To
this end achieving a diversity of perspectives and
backgrounds on the Board will be a key consideration in
any Director search process.
The Board has noted the FCA’s new Listing Rules which
require companies to report against the following diversity
targets:
(a) At least 40% of individuals on the board are women;
(b) At least one of the senior board positions is held by a
woman; and
(c) At least one individual on the board is from a minority
ethnic background.
The following tables set out the information a listed
company must now include in its annual financial report
under listing rule 9.8.6R (10). The information below reflects
the Board's position as at the Company's year end. For
both tables, the right hand column is deliberately left blank.
Being an externally managed investment company, the
Company does not have the roles of CEO or CFO, nor has
the Board appointed a senior independent director, and
therefore, as allowed by the rules, it does not need to report
against the second target as it is not applicable. As shown
in the tables below, the Company had not met either of the
applicable targets at the year end. However, following
changes made to the Board after the year end, the
Company had met both of the applicable targets at the
date of this report. Each Director volunteered how they
wished to be included in the tables.
(a) Table for reporting on gender identity or sex
Number of senior
Number of positions on
board Percentage of the board (CEO,
members the board CFO, SID and Chair)
Men 3 75
Women 1 25
Not specified/prefer not to say – –
(b) Table for reporting on ethnic background
Number of senior
Number of positions on
board Percentage of the board (CEO,
members the board CFO, SID and Chair)
White British or other White (including minority-white groups) 4 100
Mixed/Multiple Ethnic Groups – –
Asian/Asian British – –
Black/African/Caribbean/Black British – –
Other ethnic group, including Arab – –
Not specified/prefer not to say – –
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Succession
The Board regularly considers its structure and recognises
the need for progressive refreshment.
The Board has an approved succession planning policy to
ensure that (i) there is a formal, rigorous and transparent
procedure for the appointment of new directors; and (ii) the
Board is comprised of members who collectively display
the necessary balance of professional skills, experience,
length of service and industry/Company knowledge.
Three of the Directors who served throughout the financial
year were appointed when the Company was established
and consequently their tenures coincide. The Board is
committed to ensuring that there is an orderly succession
with appropriate overlap of new Directors and has continued
its refreshment process with the appointment of
Soraya Chabarek as a new non-executive Director on
1March 2023. A resolution for her election will be put to
shareholders at the forthcoming AGM. Duncan Budge will
retire from the Board at that meeting. It is currently intended
that the next new appointment to the Board in connection
with the ongoing Board succession process will be in 2024.
Also in relation to succession, Howard Pearce will succeed
Sir Ian Cheshire as Chair of the Board on 16 May 2023, with
Sir Ian remaining as a Board member for the time being.
Appointments to the Board
The rules governing the appointment and replacement of
directors are set out in the Company’s articles of association
and the aforementioned succession planning policy. Where
the Board appoints a new director during the year, that
director will stand for election by shareholders at the next
AGM. Subject to there being no conflict of interest, all
Directors are entitled to vote on candidates for the
appointment of new directors and on the recommendation
for shareholders’ approval for the Directors seeking re-
election at the Annual General Meeting. When considering
new appointments, the Board endeavours to ensure that it
has the capabilities required to be effective and oversee the
Company’s strategic priorities. This will include an appropriate
range, balance and diversity of skills, experience and
knowledge. The Company is committed to ensuring that any
vacancies arising are filled by the most qualified candidates.
Following a recruitment exercise during the course of the
year, the Board appointed Soraya Chabarek as a new
non-executive Director with effect from 1 March 2023. The
Board utilised the services of an independent executive
search agency, Nurole Ltd, for the recruitment process.
Nurole has no other connection with the Company.
MsChabarek will offer herself for election by shareholders
at the forthcoming AGM.
Audit, Risk and Internal Control
The Statement of Directors’ Responsibilities on page 42
describes the Directors’ responsibility for preparing
thisreport.
The Audit Committee Report, beginning on page 50,
explains the work undertaken to allow the Directors to
make this statement and to apply the going concern basis
of accounting. It also sets out the main roles and
responsibilities and the work of the Audit Committee and
describes the Directors’ review of the Company’s risk
management and internal control systems.
A description of the principal risks facing the Company
and an explanation of how they are being managed is
provided in the Strategic Report on pages 28 to 30.
The Board’s assessment of the Company’s longer-term
viability is set out in the Strategic Report on pages
30and31.
Remuneration
The Directors’ Remuneration Report beginning on
page54 and the Directors’ Remuneration Policy on
page 57 set out the levels of remuneration for each
Director and explain how Directors’ remuneration
isdetermined.
Service Providers
Relationship with the AIFM and the Portfolio Manager
Representatives from Frostrow and MCM are in
attendance at each Board meeting to address questions
on specific matters and seek approval for specific
transactions that they are required to refer to the Board.
There is a respectful and constructive partnership between
the Board, the AIFM and the Portfolio Manager, and the
three parties worked closely together throughout the year.
The Management Engagement Committee evaluates
Frostrow and MCM’s performance and reviews the terms
of the AIFM and Portfolio Management Agreements at
least annually. The outcome of this year’s review is
described on page 26.
Corporate Governance Statement
continued
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Relationship with Other Service Providers
The Management Engagement Committee monitors and
evaluates all of the Company’s other service providers,
including the Depositary, Registrar and Broker. At the most
recent review in December 2022, the Committee concluded
that all the service providers were performing well and
should be retained on their existing terms and conditions.
Whistleblowing
The Board has gained assurance on whistleblowing
procedures at the Company’s principal service providers
to ensure employees at those companies are supported
in speaking up and raising concerns. No concerns relating
to the Company were raised during the year.
Shareholders
Shareholder Relations
During the year, representatives of Frostrow, MCM and
Numis Securities Limited (the Company’s corporate
stockbroker) regularly met with institutional shareholders
and private client asset managers to understand their
views on governance and the Company’s performance.
Reports on investor sentiment and the feedback from
investor meetings were discussed with the Directors at the
next Board meeting. The Chairman is available to meet
with investors on request.
Shareholder Communications
The Directors welcome the views of all shareholders and
place considerable importance on communications with
them. Shareholders wishing to communicate with the
Chairman, or any other member of the Board, may do so
by writing to the Company Secretary.
The Board supports the principle that the Annual General
Meeting (“AGM”) be used to communicate with private
investors. In particular, shareholders are encouraged to
attend the AGM, where they are given the opportunity to
question the Chairman, the Board and representatives of
the Portfolio Manager. In addition, the Portfolio Manager
makes a presentation to shareholders covering the
investment performance and strategy of the Company at
the AGM. Shareholders are encouraged to register their
votes on our registrar’s website (www.signalshares.com
)
ahead of the meeting and to check the Company’s
website (www.menhaden.com) near the meeting date,
where any changes to arrangements will be posted.
Details of the votes in respect of each resolution will be
announced to the market and published on the
Company’s website after the meeting.
Significant Holdings and Voting Rights
Details of the shareholders with substantial interests in the
Company’s shares, the Directors’ authorities to issue and
repurchase the Company’s shares, and the voting rights
of the shares are set out in the Directors’ Report beginning
on page38.
By order of the Board
Frostrow Capital LLP
Company Secretary
28 March 2023
49
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Statement from the Audit Committee
Chairman
I am pleased to present the Audit Committee report for
the year ended 31 December 2022. The Committee met
three times during the year under review.
The role of the Committee is to ensure that shareholder
interests are properly protected in relation to the
application of financial reporting and internal control
principles and to assess the effectiveness of the audit. The
Committee’s roles and responsibilities are set out in full in
its terms of reference which are available on request from
the Company Secretary and can be seen on the
Company’s website (www.menhaden.com
). A summary
of the Committee’s main responsibilities and how it has
fulfilled them is set out below.
Composition
The Audit Committee comprises Howard Pearce
(Chairman of the Committee), Duncan Budge, Barbara
Donoghue and Soraya Chabarek whose biographies are
set out on pages 36 and 37. Ms Chabarek joined the
Committee following her appointment to the Board, after
the year end.
The Committee as a whole has experience relevant to the
investment trust industry with Committee members having
a range of financial and investment experience. MrPearce
has extensive experience in audit, having chaired the audit
committees of numerous organisations as outlined on
page 36. MrBudge serves on the audit committees of the
three other investment trusts of which he is a
non-executive director.
Responsibilities
In summary, the Committee’s principal functions are:
• to monitor the integrity of the Company’s annual and
half-year financial statements and any announcements
relating to the Company’s financial performance and to
challenge judgements and assumptions made in their
construction;
• to review the internal controls and risk management
systems of the Company and its third-party service
providers;
• to make recommendations to the Board regarding the
appointment, re-appointment or removal of the external
Auditor, and to be responsible for leading an audit
tender process at least once every ten years;
• to have primary responsibility for the Company’s
relationship with the external Auditor, including
reviewing the external Auditor’s independence and
objectivity as well as the effectiveness of the external
audit process;
• to agree the scope of the external Auditor’s work and
to approve their remuneration; and
• to develop and implement policy on the engagement of
the external Auditor to supply non-audit services and
to review and approve any non-audit work to be carried
out by the external Auditor.
Meetings and Business
The following matters were dealt with at the Committee’s
meetings:
April 2022
•
Review of the Company’s annual results, including
review of the Auditor’s report to the Committee;
• Approval of the Annual Report, including the
Environmental Impact Statement and the unquoted
investment valuations;
• Review of risk management, internal controls and
compliance; and
• Review of the need for an internal audit function.
September 2022
• Review of the Company’s terms of reference, non-audit
services policy and audit tender guidelines;
• Review of the outcome and effectiveness of the 2021
year end audit and any matters arising;
• Review of the Company’s half year results;
• Approval of the Half Year Report and financial
statements, and the unquoted investment valuations;
• Review of risk management, internal controls and
compliance; and
• Review of the Company’s anti bribery and corruption
policy and the policy on the prevention of the facilitation
of tax evasion, and the measures put in place by the
Company’s service providers.
Audit Committee Report
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
December 2022
• Review of the Auditor’s plan and terms of engagement
for the 2022 year end audit;
• Review of new or revised reporting requirements and
audit standards;
• Review of the valuation methodology for the unquoted
investments; and
• Review of risks, internal controls and compliance.
Performance Evaluation
The Committee reviewed the results of the annual
evaluation of its performance during the year. As part of
the evaluation, the Committee reviewed the following:
• the composition of the Committee;
• the performance of the Committee Chairman;
• how the Committee had monitored compliance with
corporate governance regulations;
• how the Committee had considered the quality and
appropriateness of financial accounting and reporting
and challenged the judgements and assumptions
involved;
• the Committee’s review of significant risks and internal
controls; and
• the Committee’s assessment of the independence,
competence and effectiveness of the Company’s
external Auditor.
It was concluded that the Committee was performing
satisfactorily and there were no formal recommendations
made to the Board.
Internal Controls and Risk Management
The Board has overall responsibility for risk management
and for the review of the internal controls of the Company,
undertaken in the context of its investment objective.
The Audit Committee, on behalf of the Board, reviews the
key business, operational, compliance and financial risks
facing the Company. In arriving at its judgement of what
risks the Company faces, the Committee and the Board
have considered the Company’s operations in light of the
following factors:
• the nature of the Company, with all management
functions outsourced to third party service providers;
• the nature and extent of risks it regards as acceptable
for the Company to bear within its overall investment
objective;
• the likelihood of such risks occurring; and
• the Company’s ability to reduce the likelihood and
impact of such risks.
A summary of the principal risks facing the Company is
provided in the Strategic Report on pages 28 to 30.
Against this background, a risk matrix has been developed
which covers all key risks that the Company faces, the
likelihood of their occurrence and their potential impact,
how these risks are monitored and the mitigating controls
in place.
The Board has delegated to the Audit Committee
responsibility for the review and maintenance of the risk
matrix and it reviews, in detail, the risk matrix each time it
meets, bearing in mind emerging risks and any changes
to the Company, its environment or service providers since
the last review. Potential impacts related to climate change
are also considered in this review. Any significant changes
to the risk matrix are discussed with the whole Board.
There were no changes to the Company’s risk
management processes during the year and no significant
failings or weaknesses were identified from the
Committee’s most recent risk review.
The Committee reviews internal controls reports from its
principal service providers on an annual basis. The
Committee is satisfied that appropriate systems have
been in place for the year under review and up to the date
of approval of this report.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Audit Committee Report
continued
Significant Reporting Matters
The Committee considered the significant issues in respect of the Annual Report, including the financial statements.
The table below sets out the key areas of audit risk identified and also explains how these were addressed. The
Committee notes that these had also been identified by the Auditor as key audit risk areas and that it had discussed
with them their approach and conclusions.
Significant risk How the risk was addressed
The valuation of investments is undertaken in accordance with the accounting policies
in note 1 to the financial statements beginning on page 70. Controls are in place to
ensure that valuations are appropriate and existence is verified through reconciliations
with the Depositary. The Committee discussed with Frostrow and MCM the process
by which the unquoted investments are valued, and ownership documented, including
the reconciliation process with the Depositary. They also reviewed and challenged the
valuation of the unquoted investments as at 31 December 2022, including the level
of any discounts to net asset value applied to the unquoted valuations, to ensure that
they were carried out in accordance with the accounting policy set out in note 1(b) on
page 71. The Committee asked the Auditor to focus on this area given the judgement
involved. Having reviewed the valuations, the Committee confirmed its satisfaction
that the investments had been valued correctly.
The Committee took steps to gain an understanding of the processes in place to
record investment income and transactions and also noted that this was an area
that the Auditor had identified as a particular area of risk that they would review.
Valuation, existence and
ownership of investments, in
particular unquoted investments
Risk of revenue being misstated
due to the improper recognition
of revenue.
Financial Statements
The Board asked the Committee to confirm that in its
opinion the Board can make the required statement that
the Annual Report taken as a whole is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Company’s position,
performance, business model and strategy. The
Committee has given this confirmation on the basis of:
• the procedures followed in the production of the Annual
Report, including the processes in place to assure the
accuracy of factual content;
• the extensive levels of review that were undertaken in
the production process by Frostrow, together with the
Committee’s own review and the challenges it made
with respect to judgements and assumptions applied
and the disclosures included; and
• the internal control environment operated by Frostrow,
MCM, the Depositary and other service providers.
The Committee is satisfied that it is appropriate for the
Board to prepare the financial statements on the going
concern basis. Further detail can be found on page 38.
Thefinancial statements can be found on pages 66 to 85.
The Committee also considered the longer-term viability
of the Company in connection with the Board’s statement
in the Strategic Report on pages 30 and 31. The
Committee reviewed the Company’s financial position
(including its cash flows and liquidity position), the principal
risks and uncertainties (including any potential impacts
related to climate change) and the results of stress tests
and scenarios which considered the impact of severe
stock market volatility on shareholders’ funds. This
included modelling further substantial market falls, and
significantly reduced market liquidity, to that experienced
recently in connection with the war in Ukraine and any tail
risks from the coronavirus pandemic, as well as Brexit. The
scenarios assumed that there would be significant falls in
asset prices, that the Company’s existing capital
commitments would be drawn down rapidly and in large
instalments, that there would be no sales of or
distributions from private investments, and that listed
portfolio companies would cut their dividends.
The results illustrated the potential impact on the
Company’s NAV, expenses, cash flows and ability to meet
its liabilities and capital commitments. In even the most
stressed scenario, the Company was shown to have
sufficient cash, or to be able to liquidate a sufficient portion
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53
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
of its listed holdings, in order to be able to meet its
liabilities as they fall due. Based on the information
available to the Directors at the time, the Committee
therefore concluded it was reasonable for the Board to
expect that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
next five financial years.
Withholding Tax
The Committee monitored the reclamation of withholding
tax, receiving updates from Frostrow on the process.
Internal Audit
The Committee considered whether there was a need for
the Company to have an internal audit function. As the
Company delegates its day-to-day operations to third
parties and has no employees, the Committee concluded
that there was no such need.
External Auditor
In addition to the reviews undertaken at Committee
meetings, I met with Mazars LLP (“Mazars”) on 8 March
2023 to discuss the progress of the audit and the draft
Annual Report. During each of these meetings and in their
report to the Committee the Auditor demonstrated
professional scepticism, outlining where they had
challenged particular assumptions and judgements and
the resolutions of these.
In order to fulfil the Committee’s responsibility regarding
the independence of the Auditor, the Committee reviewed:
• the senior audit personnel in the audit plan, in order to
ensure that there were sufficient, suitably experienced
staff with knowledge of the investment trust sector
working on the audit;
• the steps the Auditor takes to ensure its independence
and objectivity;
• the statement by the Auditor that they remain
independent within the meaning of the relevant
regulations and their professional standards; and
• the need for any non-audit services to be performed by
the Auditor (there were none during the year under
review).
In order to consider the effectiveness of the audit process,
we reviewed:
• the Auditor’s execution and fulfilment of the agreed
audit plan, including their ability to communicate with
management and to resolve any issues promptly and
satisfactorily, and the audit partner’s leadership of the
audit team;
• the quality of the report arising from the audit itself; and
• feedback from the Auditor and also Frostrow as the
AIFM, both informally and via a formal questionnaire, on
the conduct of the audit and their working relationship.
The Committee is satisfied with the Auditor’s
independence and the effectiveness of the audit process,
together with the degree of diligence and professional
scepticism brought to bear.
Non-Audit Services
The Auditor did not carry out any non-audit work during
the year. The Audit Committee will monitor the need for
non-audit work to be performed by the Auditor, if any, in
accordance with the Company’s non-audit services policy.
The Audit Committee will also seek assurances from the
Auditor that they maintain suitable policies and procedures
ensuring independence, and monitor compliance with the
relevant regulatory requirements on an annual basis.
Auditor Reappointment
Stephen Eames was the audit partner for the financial year
under review and he has confirmed Mazars’ willingness to
continue to act as Auditor to the Company for the
forthcoming financial year. Mazars’ appointment is subject
to shareholder approval at the next Annual General
Meeting to be held on 21 June 2023 and the resolution
can be found in the Notice of AGM on page 91.
As a public company listed on the London Stock
Exchange, the Company is subject to mandatory auditor
rotation requirements. Based on these requirements,
another tender process will be conducted no later than
2029. The Committee will, however, continue to consider
annually the need to go to tender for audit quality,
remuneration or independence reasons.
Howard Pearce
Chairman of the Audit Committee
28 March 2023
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Changes in Directors’ Remuneration
2023 2023 2022 2022 2021 2021 2020 2020
Fee Level % Change Fee Level % Change Fee Level % Change Fee Level % Change
Director (projected)
Sir Ian Cheshire
1
£43,699 -13% £50,000 – £50,000 – £50,000 –
Duncan Budge
2
£19,000 -53% £40,000 – £40,000 – £40,000 –
Howard Pearce
3
£46,301 +16% £40,000 – £40,000 – £40,000 –
Emma Howard Boyd
4
n/a – £19,128 -52% £40,000 – £40,000 –
Barbara Donoghue
5
£40,000 +9% £36,667 – n/a – n/a –
Soraya Chabarek
6
£33,333 – n/a – n/a – n/a –
1 Sir Ian will step down as Chairman on 16 May 2023 but will continue as a non-executive director for the time being.
2 Duncan Budge will retire at the 2023 AGM.
3 Howard Pearce will succeed Sir Ian as Chairman of the Board on 16 May 2023.
4 Emma Howard Boyd retired from the Board on 22 June 2022.
5 Barbara Donoghue was appointed as a Director with effect from 1 February 2022.
6 Soraya Chabarek was appointed as a Director with effect from 1 March 2022.
Directors’ Remuneration Report
Statement from the Chairman
I am pleased to present the Directors’ Remuneration
Report to shareholders. An ordinary resolution for the
approval of this report will be put to shareholders at the
Company’s forthcoming Annual General Meeting. The law
requires the Company’s Auditor to audit certain disclosures
provided in this report. Where disclosures have been
audited, they are indicated as such and the Auditor’s
opinion is included in their report to shareholders on
pages58 to 65.
The Board considers the framework for the remuneration
of the Directors on an annual basis. It reviews the ongoing
appropriateness of the Company’s remuneration policy
and the individual remuneration of the Directors by
reference to the activities and particular complexities of
the Company and in comparison with other companies of
a similar structure and size. This is in line with the
AICCode.
Directors’ fees during the year were unchanged from the
previous year: £50,000 per annum for the Chairman and
£25,000 per annum for Directors, with Directors who
serve on the Audit Committee receiving an additional
£15,000 per annum. Directors’ fees have remained
unchanged since the Company’s launch in 2015. The
Board reviewed the fee levels at a meeting held on
6December 2022 and it was decided that they would
remain unchanged for the year ending 31 December
2023. No remuneration consultants were appointed
during the year (2021: none).
Levels of remuneration reflect both the time commitment
and responsibility of the role. The Directors are
remunerated exclusively by fixed fees in cash and do not
receive bonus payments or pension contributions from the
Company, hold options to acquire shares in the Company,
or other benefits. All Directors are entitled to the
reimbursement of reasonable out of pocket expenses
incurred by them in order to perform their duties as
directors of the Company.
The simple fee structure reflects the non-executive nature
of the Board, which itself reflects the Company’s business
model as an externally managed investment trust (please
refer to the Business Review beginning on page24 for
more information). Accordingly, statutory disclosure
requirements relating to executive directors’ and
employees’ pay do not apply.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Single Total Figure of Remuneration (audited)
2022 2021 Percentage
Taxable Taxable change in
Director Fees expenses Total Fees expenses Total fees (%)
Sir Ian Cheshire 50,000 – 50,000 50,000 – 50,000 –
Duncan Budge 40,000 – 40,000 40,000 – 40,000 –
Emma Howard Boyd
1
19,128 – 19,128 40,000 – 40,000 –
Barbara Donoghue
2
36,667 – 36,667 n/a n/a n/a n/a
Howard Pearce 40,000 2,677 42,677 40,000 2,464 42,464 –
Soraya Chabarek
3
n/a n/a n/a n/a n/a n/a n/a
TOTAL 185,795 2,677 188,472 170,000 2,464 172,464
1 Emma Howard Boyd retired from the Board on 22 June 2022.
2 Barbara Donoghue was appointed as a Director with effect from 1 February 2022.
3 Soyara Chabarek was appointed as a Director after the end of the financial year.
No payments have been made to any former directors. It is the Company’s policy not to pay compensation upon leaving
office for whatever reason. No signing-on bonuses or pay supplements are made when directors are recruited. None
of the fees referred to in the above table were paid to any third party in respect of the services provided by any of the
Directors.
Directors’ Interests in the Company’s
Shares (audited)
Ordinary Ordinary
shares shares
of 1p each of 1p each
as at as at
31 Dec 2022 31 Dec 2021
Sir Ian Cheshire 115,000 115,000
Duncan Bridge 10,000 10,000
Barbara Donoghue 216,693 n/a
Howard Pearce 40,000 40,000
Soraya Chabarek
^
n/a n/a
Total 381,693 165,000
^ Soraya Chabarek was appointed as a Director with effect from 1March
2023. She does not hold any shares in the Company.
No changes have been notified to the date of this report.
The Company does not have share options or a share
scheme, and does not operate a pension scheme.
Directors are not required to own shares in the Company.
Performance
The graph below shows the total shareholder return of the
Company since its launch on 31 July 2015 against the RPI
plus 3% over the same period.
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
%
Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 Jul 18 Jan 19 Jul 19 Jan 20 Jul 20 Jul 21Jan 21 Jul 22Jan 22
RPI+3%
Share Price Total Return
Source: Frostrow Capital LLP, Office for National Statistics
Rebased to 100 as at 31 July 2015
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Relative Cost of Directors’ Remuneration
The table below shows the comparative cost of Directors’ fees compared with the level of dividend distribution and
Company expenses for the years ended 31December 2022 and 2021.
2022
2021 Change
£’000 £’000 %
Total returns (20,540) 18,399 (211.6)
Directors’ fees 186 172 8.1
†
Dividends paid 160 – n/a
Total ongoing expenses 2,018 2,139 (5.7)
† There have been no changes in the annual fee rates payable to directors from 2021 to 2022. The change in total fees reflects the overlapping period
between the retirement date of 22 June 2022 for Emma Howard Boyd and the appointment date of 1 February 2022 for Barbara Donoghue.
Statement of Voting at the AGM
At the Annual General Meeting held on 22 June 2022 the results of voting on the resolutions to approve the Directors’
Remuneration Report and the Directors’ Remuneration Policy were as follows:
Votes cast Votes cast Votes
Resolution for against withheld*
Directors’ Remuneration Report 36,185,763 2,175 11,266
100.0% 0.0%
Directors’ Remuneration Policy 36,185,763 2,175 11,266
100.0% 0.0%
*Votes withheld are not votes by law and are therefore not counted in the calculation of votes for or against a resolution.
By order of the Board
Sir Ian Cheshire
Chairman
28 March 2023
Directors’ Remuneration Report
continued
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The Company’s remuneration policy is that the
remuneration of each Director should be commensurate
with the duties, responsibilities and time commitment of
each respective role and consistent with the requirement
to attract and retain directors of appropriate quality and
experience. The remuneration should also be comparable
to that of investment trusts of a similar size and structure.
Directors are remunerated in the form of fixed fees payable
monthly in arrears. There are no long or short-term
incentive schemes, share option schemes or pension
arrangements and the fees are not specifically related to
the Directors’ performance, either individually or
collectively.
The Directors’ remuneration is determined within the limits
set out in the Company’s Articles of Association. The
present limit is £500,000 in aggregate per annum.
It is the Board’s intention that the remuneration policy will
be considered by shareholders at the annual general
meeting at least once every three years. If, however, the
remuneration policy is varied, shareholder approval will be
sought at the AGM following such variation. The Board will
formally review the remuneration policy at least once a
year to ensure that it remains appropriate.
The above policy will also apply to new Directors.
This policy was last approved by shareholders at the
Annual General Meeting held on 22 June 2022.
No communications have been received from
shareholders regarding Directors’ remuneration. The
Board will consider any comments received from
shareholders on the remuneration policy.
All Directors are non-executive, appointed under the terms
of letters of appointment and none has a service contract.
The Directors’ letters of appointment may be inspected at
the Company’s registered office. The terms of their
appointment provide that Directors shall retire and be
subject to election at the first annual general meeting after
their appointment and to re-election every three years
thereafter. However, the Directors submit themselves for
annual re-election by shareholders, in line with the AIC
Code of Corporate Governance. The terms also provide
that a Director may be removed without notice and that
compensation will not be due on leaving office.
57
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Directors’ Remuneration Policy
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Opinion
We have audited the financial statements of Menhaden Resource Efficiency PLC (the “Company”)for the year ended
31 December 2022, which comprise the Income Statement, the Statement of Changes in Equity, the Statement of
Financial Position, the Statement of Cash Flows and notes to the financial statements, including a summary of significant
accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom
Accounting Standards, including FRS 102, “The Financial Reporting Standard applicable in the UK and Republic of
Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
• give a true and fair view of the state of the Company’s affairs as at 31 December 2022 and of its loss for the year
then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the financial
statements” section of our report. We are independent of the Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities
and public interest entities and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our audit procedures to evaluate the directors’ assessment of Company’s ability to continue to adopt the going concern
basis of accounting included but were not limited to:
• Undertaking an initial assessment at the planning stage of the audit to identify events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern.
• Reviewing the directors’ going concern assessment based on a ‘most likely’ (base case) scenario and a ‘worst case
scenario’ as approved by the board of Directors on the 16 March 2023.
• Making enquiries of the directors to understand the period of assessment considered by the Directors, the
completeness of the adjustments taken into account and implication of those when assessing the ‘most likely’
scenario and the ‘worst case scenario’. This included examining the minimum cash inflow and committed outgoings
under the ‘base case’ cash flow forecasts and evaluated whether the directors’ conclusions that liquidity headroom
remained in all events was reasonable.
• Challenging the appropriateness of the directors’ key assumptions in their cash flow forecasts, by reviewing
supporting and contradictory evidence in relation to these key assumptions and assessing the directors’ consideration
of severe but plausible scenarios.
• Testing the accuracy and functionality of the model used to prepare the directors’ forecasts.
• Evaluating the appropriateness of the directors’ disclosures in the financial statements on going concern.
Independent Auditor’s Report to the
Members of Menhaden Resource Efficiency PLC
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
In relation to the Company’s reporting on how it has applied the AIC Code, we have nothing material to add or draw
attention to in relation to the directors’ statement in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We summarise below the key audit matters in forming our opinion above, together with an overview of the principal
audit procedures performed to address each matter and our key observations arising from those procedures.
These matters, together with our findings, were communicated to those charged with governance through our Audit
Completion Report.
Key Audit Matter How our scope addressed this matter
Our audit procedures included, but were not limited to:
Quoted investments
• understanding management’s process to value quoted
investments through discussions with management and
examination of control reports on the third-party administrator;
• agreeing the valuation of quoted investments to an
independent source of market prices;
• obtaining and agreeing confirmation from the custodian of
investments held in order to obtain comfort over existence
and ownership;
• testing on a sample basis additions and disposals of
investments throughout the year back to supporting
documentation (bank statements and list of trade
confirmations); and
• reviewing the adequacy of the disclosure in the financial
statements and ensuring that the methodology applied is in
accordance with FRS 102, “The Financial Reporting
Standard applicable in the UK and Republic of Ireland”
(United Kingdom Generally Accepted Accounting Practice)
and the Statement of Recommended Practice issued by the
Association of Investment Companies.
Valuation, existence and ownership of the
investment portfolio
The Company has a significant portfolio of quoted and
unquoted investments, these are measured in
accordance with the requirements of FRS 102, “The
Financial Reporting Standard applicable in the UK and
Republic of Ireland” (United Kingdom Generally
Accepted Accounting Practice) and the Statement of
Recommended Practice issued by the Association of
Investment Companies.
The investments are made up of quoted and
unquoted investments and there are different valuation
approaches applied across the portfolio. Within these
valuations there are a significant level of judgements
made in ascertaining the fair value.
There is a risk that the judgements made in the
valuation approaches may lead to a misstatement in
the value recorded in the Statement of Financial
Position. There is also a risk that investments recorded
might not exist or might not be owned by the
Company.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Independent Auditor’s Report
continued
Key Audit Matter How our scope addressed this matter
Unquoted investments
• understanding management’s process to value unquoted
investments through discussions with management and
examination of control reports on the third-party service
organisations;
• obtaining and agreeing confirmation of investments held in
order to obtain comfort over existence and ownership;
• engaging with our valuation expert in considering whether
the methodology and assumptions applied for valuing
unquoted investments were in accordance with published
guidance, principally the International Private Equity and
Venture Capital Valuation Guidelines. This included reviewing
the investment valuation policies of the private equity funds,
reviewing the funds’ latest available audited financial
statements, reviewing the funds’ latest reports and
discussion with the fund’s management where applicable;
• reviewing whether there are any going concern issues and
uncertainties in relation to market factors for the actual
portfolio companies as well as their underlying investments
and agreeing the valuation of unquoted investments to year
end fair values as reported in valuation statements received
directly from the investee funds;
• testing on a sample basis additions and disposals of
investments throughout the year back to supporting
documentation (bank statements and notifications from the
investee funds); and
• reviewing the adequacy of the disclosure in the financial
statements including valuation methodology, assumptions
and fair value hierarchy used, taking into account market
factors. Ensuring the methodology applied is in accordance
with FRS 102, “The Financial Reporting Standard applicable
in the UK and Republic of Ireland” (United Kingdom
Generally Accepted Accounting Practice) and the Statement
of Recommended Practice issued by the Association of
Investment Companies.
Our observations
Based on the work performed and evidence obtained, we
consider the methodology and assumptions used to value the
investments are appropriate. We did not note any issues with
regard to the existence or the ownership of the investments
held as at 31 December 2022.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Our application of materiality and an overview of the scope of our audit
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and on the financial statements as a whole. Based on our
professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality £1,030,000
How we determined it This has been calculated with reference to the Company’s net assets, of which
it represents approximately 1%.
Rationale for benchmark applied Net assets has been identified as the principal benchmark within the financial
statements as it is considered to be the focus of the shareholders.
Approximately 1% of net assets has been chosen to reflect the level of
understanding of the stakeholders of the Company in relation to the inherent
uncertainties around accounting estimates and judgements.
Performance materiality Performance materiality is set to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
in the financial statements exceeds materiality for the financial statements as a
whole.
On the basis of our risk assessments, together with our assessment of the
overall control environment, our judgement was that performance materiality
was £772,000, which is approximately 75% of overall materiality.
Reporting threshold We agreed with the directors that we would report to them misstatements
identified during our audit above £30,000 as well as misstatements below that
amount that, in our view, warranted reporting for qualitative reasons.
As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due
to fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked
at where the directors made subjective judgements, such as assumptions on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the
financial statements as a whole. We used the outputs of our risk assessment, our understanding of the Company, their
environment, controls, and critical business processes, to consider qualitative factors to ensure that we obtained
sufficient coverage across all financial statement line items.
Other information
The other information comprises the information included in the annual report other than the financial statements and
our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Independent Auditor’s Report
continued
to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements and those reports have been prepared in
accordance with applicable legal requirements;
• the information about internal control and risk management systems in relation to financial reporting processes and
about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance and
Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the
financial statements and has been prepared in accordance with applicable legal requirements; and
• information about the Company’s corporate governance code and practices and about its administrative,
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA
Rules.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit,
we have not identified material misstatements in the:
• strategic report or the directors’ report; or
• information about internal control and risk management systems in relation to financial reporting processes and
about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us
to report to you if, in our opinion:
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the Company financial statements and the part of the directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit; or
• a corporate governance statement has not been prepared by the Company.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Corporate governance statement
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and
that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the AIC
Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained
during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and
any material uncertainties identified, set out on page 38;
• Directors’ explanation as to their assessment of the entity’s prospects, the period this assessment covers and why
the period is appropriate, set out on pages 30 and 31;
• Directors’ statement on fair, balanced and understandable, set out on page 42;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks, set out on
page28;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems, set out on page 51; and
• The section describing the work of the audit committee, set out on pages 50 to 53.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 42, the directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Independent Auditor’s Report
continued
Based on our understanding of the Company and its industry, we considered that non-compliance with the following
laws and regulations might have a material effect on the financial statements: HMRC Investment Trust Conditions.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the
risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
• Gaining an understanding of the legal and regulatory framework applicable to the Company, the industry in which
they operate, and considering the risk of acts by the Company which were contrary to the applicable laws and
regulations, including fraud;
• Inquiring of the directors, management and, where appropriate, those charged with governance, whether the
Company is in compliance with laws and regulations, and discussing their policies and procedures regarding
compliance with laws and regulations;
• Reviewing minutes of directors’ meetings in the year;
• Discussing amongst the engagement team the laws and regulations listed above, and remaining alert to any
indications of non-compliance;
• During the audit, focusing on areas of laws and regulations that could reasonably be expected to have a material
effect on the financial statements from our general commercial and sector experience and through discussions with
the directors (as required by auditing standards). From inspection of the Company’s regulatory and legal
correspondence and review of minutes of directors’ meetings in the year we identified that the principal risks of non-
compliance with laws and regulations related to breaches of regulatory requirements of the HMRC Investment Trust
Conditions.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements,
such as the Companies Act 2006.
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of
the financial statements, including the risk of management override of controls, and determined that the principal risks
related to posting manual journal entries to manipulate financial performance, management bias through judgements
and assumptions in significant accounting estimates, in particular in relation to unquoted investment valuation and
significant one-off or unusual transactions.
Our procedures in relation to fraud included but were not limited to:
• Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or
alleged fraud;
• Gaining an understanding of the internal controls established to mitigate risks related to fraud;
• Discussing amongst the engagement team the risks of fraud; and
• Addressing the risks of fraud through management override of controls by performing journal entry testing.
The primary responsibility for the prevention and detection of irregularities, including fraud, rests with both those charged
with governance and management. As with any audit, there remained a risk of non-detection of irregularities, as these
may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
The risks of material misstatement that had the greatest effect on our audit are discussed in the “Key audit matters”
section of this report.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
A further description of our responsibilities is available on the Financial Reporting Council’s website at
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were appointed by the audit committee on 25 November
2022 to audit the financial statements for the year ending 31 December 2022 and subsequent financial periods. The
period of total uninterrupted engagement is four years, covering the years ending 31 December 2019 to 31 December
2022.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain
independent of the Company in conducting our audit.
Our audit opinion is consistent with our additional report to the audit committee.
Use of the audit report
This report is made solely to the Company’s members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members
as a body for our audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial
statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the
Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditor’s
report provides no assurance over whether the annual financial report will be prepared using the single electronic format
specified in the ESEF RTS.
Stephen Eames (Senior Statutory Auditor) for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
MK9 1FF
28 March 2023
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Financial Statements
66
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
3
For the year ended For the year ended
31 December 2022 31 December 2021
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
(Losses)/gains on investments held at fair value
through profit or loss 8 – (21,413) (21,413) – 21,124 21,124
Income from investments held at fair value
through profit or loss 2
1,309 – 1,309 1,156 – 1,156
Investment management fees and
performance fee provisions 3
(323) 387 64 (338) (3,028) (3,366)
Other expenses 4 (404) – (404) (450) – (450)
Net income/(loss) before taxation 582 (21,026) (20,444) 368 18,096 18,464
Taxation 5 (96) – (96) (65) – (65)
Net income/(loss) after taxation 486 (21,026) (20,540) 303 18,096 18,399
Income/(loss) per ordinary share
– basic and diluted (pence) 6 0.6 (26.3) (25.7) 0.4 22.6 23.0
The “Total” column of this statement is the Income Statement of the Company. The “Revenue” and “Capital” columns
are supplementary to this and are prepared under guidance published by the AIC.
All revenue and capital items in the above statement derive from continuing operations.
The Company has no recognised gains and losses other than those shown above and therefore no separate Statement
of Total Comprehensive Income has been presented.
The accompanying notes on pages 70 to 85 are an integral part of these financial statements.
Income Statement
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
For the year ended 31 December 2022
Ordinary
share Special Capital Revenue
capital reserve reserve reserve Total
Notes £’000 £’000 £’000 £’000 £’000
At 31 December 2021 800 77,371 45,996 364 124,531
Net (loss)/income after taxation – – (21,026) 486 (20,540)
Dividends paid 7 – – (160) (160)
At 31 December 2022 800 77,371 24,970 690 103,831
For the year ended 31 December 2021
Ordinary
share Special Capital Revenue
capital reserve reserve reserve Total
Notes £’000 £’000 £’000 £’000 £’000
At 31 December 2020 800 77,371 27,900 61 106,132
Net income after taxation – – 18,096 303 18,399
At 31 December 2021 800 77,371 45,996 364 124,531
The accompanying notes on pages 70 to 85 are an integral part of these financial statements.
Statement of Changes in Equity
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Financial Statements
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
3
As at
As at
31 December 31 December
2022 2021
Notes £’000 £’000
Fixed assets
Investments 8 93,809 125,615
Current assets
Debtors 10 104 218
Derivative financial instruments 9 4,200 –
Cash 6,061 878
10,365 1,096
Current liabilities
Creditors 11 (343) (404)
Derivative financial instruments 9 – (99)
Net current assets 10,022 593
Non-current liabilities
Performance fee provisions 12 – (1,677)
Net assets 103,831 124,531
Capital and reserves
Ordinary share capital 13 800 800
Special reserve 77,371 77,371
Capital reserve 18 24,970 45,996
Revenue reserve 690 364
Total shareholders’ funds 103,831 124,531
Net asset value per share – basic and diluted (pence) 14 129.8 155.7
The financial statements on pages 66 to 85 were approved by the Board of Directors and authorised for issue on
28March2023 and were signed on its behalf by:
Sir Ian Cheshire
Chairman
The accompanying notes on pages 70 to 85 are an integral part of these financial statements.
Menhaden Resource Efficiency PLC – Company Registration Number 09242421 (Registered in England and Wales)
Statement of Financial Position
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
For the
For the
year ended year ended
31 December 31 December
2022 2021
Notes £’000 £’000
Net cash outflow from operating activities 15 (751) (1,108)
Cash flows from investing activities
Purchases of investments (10,321) (20,492)
Sales of investments 28,903 20,163
Settlement of derivatives 9 (12,488) 902
Net cash inflow from investing activities 6,094 573
Cash flows from financing activities
Dividends paid 7 (160) –
Net cash outflow from financing activities (160) –
Increase/(decrease) in cash and cash equivalents 5,183 (535)
Cash and cash equivalents at start of the year 878 1,413
Cash and cash equivalents at the end of the year 6,061 878
The accompanying notes on pages 70 to 85 are an integral part of these financial statements.
Statement of Cash Flows
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Financial Statements
3
Notes to the Financial Statements
70
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
1. ACCOUNTING POLICIES
The principal accounting policies, all of which have been applied consistently throughout the year in the
preparation of these financial statements, are set out below:
(a) Basis of Preparation
The financial statements have been prepared in accordance with United Kingdom company law, FRS 102 ‘The
Financial Reporting Standard applicable in the UK and Ireland’, the Statement of Recommended Practice
“Financial Statements of Investment Trust Companies and Venture Capital Trusts” (the “SORP”), and the historical
cost convention, as modified by the valuation of investments at fair value through profit or loss. The Board has
considered a detailed assessment of the Company’s ability to meet its liabilities as they fall due, including stress
and liquidity tests which modelled the effects of substantial falls in markets and significant reductions in market
liquidity, on the Company’s financial position and cash flows. Further information on the assumptions used in
the stress scenarios is provided in the Audit Committee report on page 52. The results of the tests showed that
the Company would have sufficient cash, or the ability to liquidate a sufficient proportion of its listed holdings, to
meet its liabilities as they fall due. Based on the information available to the Directors at the time of this report,
including the results of the stress tests, the Company’s cash balances, and the liquidity of the Company’s listed
investments, the Directors are satisfied that the Company has adequate financial resources to continue in
operation for at least the next 12 months and that, accordingly, it is appropriate to adopt the going concern
basis in preparing these financial statements.
The Company’s financial statements are presented in sterling, being the functional and presentational currency
of the Company. All values are rounded to the nearest thousand pounds (£’000) except where otherwise
indicated.
Fair value measurements are categorised into a fair value hierarchy based on the degree to which the inputs to
the fair value measurements are observable and the significance of the inputs to the fair value measurement in
its entirety, which are described as follows:
• Level 1 – fair values measured using quoted prices (unadjusted) in active markets for identical assets or
liabilities;
• Level 2 – fair values measured using valuation techniques for all inputs significant to the measurement other
than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices);
• Level 3 – fair values measured using valuation techniques for which any significant input to the valuation is
not based on observable market data (unobservable inputs).
Details in respect of the fair value of the Company's financial assets and liabilities are disclosed in note 17 to the
Financial Statements.
Presentation of the Income Statement
In order to reflect better the activities of an investment trust company and in accordance with the SORP,
supplementary information which analyses the Income Statement between items of a revenue and capital nature
has been presented alongside the Income Statement. The net revenue return is the measure the Directors believe
appropriate in assessing the Company’s compliance with certain requirements set out in Sections 1158 and
1159 of the Corporation Tax Act 2010. Refer to 1(d) for details on how expenses are allocated to revenue and
capital.
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
1. ACCOUNTING POLICIES continued
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
Critical accounting judgements and key sources of estimation uncertainty used in preparing the financial
information are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable. The resulting estimates will, by definition, seldom
equal the related actual results.
The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities relate to the valuation of the Company’s unquoted (Level 3) investments.
£16,864,000 or 18.0% (2021: £15,776,000 or 12.6%) of the Company’s portfolio is comprised of unquoted
investments. These are all valued in line with accounting policy 1(b) below. Under the accounting policy the
reported net asset value or price of recent transactions methodologies have been adopted in valuing those
investments, as set out on page 83.
As the Company has judged that it is appropriate to use reported NAVs in valuing unquoted investments as set
out in note 17 (vi), the Company does not have any key assumptions concerning the future, or other key sources
of estimation uncertainty in the reporting period, which may have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year.
Whilst the Board considers the methodologies and assumptions adopted in the valuation of unquoted
investments to be supportable, reasonable and robust, because of the inherent uncertainty of valuation, the
values used may differ significantly from the values that would have been used had a ready market for the
investment existed. These values may need to be revised as circumstances change and material adjustments
may still arise as a result of a reappraisal of the unquoted investments’ fair value within the next year.
In using a figure of 25% in the disclosures, set out on page 84, in relation to unquoted investments the Directors
had regard to the nature of the investments, the wide range of possible outcomes, and public information on
secondary market transactions in private equity funds.
Segmental Analysis
The Board is of the opinion that the Company is engaged in a single segment of business, namely investing in
accordance with the Company’s Investment Objective, and consequently no segmental analysis is provided.
(b) Financial Instruments
The Company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.
Basic financial assets:
The Company’s basic financial assets include cash at bank and debtors. These financial assets are initially
recognised at fair value and subsequently measured at amortised costs using the effective interest method.
Investment held at fair value through profit or loss:
Investments are initially measured at fair value, being the transaction price less associated transaction costs,
and are subsequently remeasured at fair value as at the reporting dates.
Purchases and sales of quoted investments are recognised on the trade date where a contract exists whose
terms require delivery within a time frame determined by the relevant market. Purchases and sales of unlisted
investments are recognised when the contract for acquisition or sale becomes unconditional.
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Financial Statements
3
Notes to the Financial Statements
continued
72
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
1. ACCOUNTING POLICIES continued
(b) Financial Instruments continued
Changes in the fair value of investments and gains and losses on disposal are recognised under the capital
column in the Income Statement as ‘gains or losses on investments’. The fair value of the different types of
investment held by the Company is determined as follows:
• Quoted Investments
Fair value is deemed to be bid or last trade price depending on the convention of the exchange on which it
is quoted.
• Unquoted Investments
Fair value is determined using recognised valuation methodologies in accordance with the International
Private Equity and Venture Capital Association valuation guidelines (“IPEVCA Guidelines”).
Where an investment has been made recently, or there has been a transaction in an investment, the Company
may use the transaction price as the best indicator of fair value. In such a case changes or events subsequent
to the relevant transaction date would be assessed to ascertain if they imply a change in the investment’s fair
value.
The Company’s unquoted investments comprise of limited partnerships or other entities set up by third parties
to invest in a wider range of investments, or to participate in a larger investment opportunity than would be
feasible for an individual investor, and to share the costs and benefits of such investment.
For these investments, in line with the IPEVCA Guidelines, and in the absence of transactions in the investments,
the fair value estimate is based on the attributable proportion of the reported net asset value of the unquoted
investment derived from the fair value of underlying investments. Valuation reports provided by the manager or
general partner of the unquoted investments are used to calculate fair value where there is evidence that the
valuation is derived using fair value principles that are consistent with the Company’s accounting policies and
valuation methods. Such valuation reports may be adjusted to take account of changes or events to the reporting
date, or other facts and circumstances which might impact the underlying value.
If a decision to sell an unquoted investment or portion thereof has been made then the fair value would be the
expected sales price where this is known or can be reliably estimated.
Where a portion of an unquoted investment has been sold the level of any discount implicit in the sale price will
be reviewed at each measurement date for that unquoted investment, taking account of the performance of the
unquoted investment and any other factors relevant to the value of the unquoted investment.
Derivatives
Derivatives comprise foreign currency forwards used to hedge the Company’s foreign currency exposure. The
forwards comprise sterling receivable and a foreign currency deliverable. Derivatives are classified as financial
assets or financial liabilities at fair value through profit or loss, initially recognised at fair value on the date derivative
contracts are entered into and are subsequently remeasured at their fair value as at the reporting date. Changes
in the fair value of derivative contracts are recognised as capital income or expense in the Income Statement.
(c) Investment Income
Dividends receivable are recognised on the ex-dividend date. Where no ex-dividend date is quoted, dividends
are recognised when the Company’s right to receive payment is established. UK dividends are shown net of tax
credits and foreign dividends are gross of the appropriate rate of withholding tax.
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Annual Report for the year ended 31 December 2022
1. ACCOUNTING POLICIES continued
(c) Investment Income continued
Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis so as to
reflect the effective yield when it is probable that economic benefit will flow to the Company. Where income
accruals previously recognised, but not received, are no longer considered to be reasonably expected to be
received, due to doubt over their receipt, then these amounts are reversed through expenses.
Income distributions from limited partnership funds are recognised when the right to the distribution is established.
(d) Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the revenue column of the
Income Statement except as follows:
• expenses which are incidental to the acquisition or disposal of an investment are charged to the capital
column of the Income Statement; and
• expenses are charged to the capital column of the Income Statement where a connection with the
maintenance or enhancement of the value of the investments can be demonstrated. In this respect the
portfolio management and AIFM fees have been charged to the Income Statement in line with the Board’s
expected long-term split of returns, in the form of capital gains and income, from the Company’s portfolio.
As a result 20% of the portfolio management and AIFM fees are charged to the revenue column of the Income
Statement and 80% are charged to the capital column of the Income Statement.
Any performance fee accrued or paid is charged in full to the capital column of the Income Statement.
(e) Taxation
The tax effect of different items of expenditure is allocated between capital and revenue using the marginal basis.
Deferred taxation is provided on all timing differences that have originated but not been reversed by the Statement
of Financial Position date other than those differences regarded as permanent. This is subject to deferred tax
assets only being recognised if it is considered more likely than not that there will be suitable profits from which
the reversal of timing differences can be deducted. Any liability to deferred tax is provided for at the rate of tax
enacted or substantively enacted.
(f) Foreign Currency
Transactions recorded in overseas currencies during the year are translated into sterling at the exchange rate
ruling on the date of the transaction. Assets and liabilities denominated in overseas currencies are translated into
sterling at the exchange rates ruling at the date of the Statement of Financial Position.
Any gains or losses on the translation of foreign currency balances, whether realised or unrealised, are taken to
the capital or the revenue column of the Income Statement, depending on whether the gain or loss is of a capital
or revenue nature.
(g) Cash and Cash Equivalents
Cash and cash equivalents are defined as cash and demand deposits readily convertible to known amounts of
cash and subject to insignificant risk of changes in value.
(h) Share Capital
Ordinary shares issued by the Company are recognised at the proceeds or fair value received with the excess
of the amount received over nominal value being credited to the share premium account. Direct issue costs net
of tax are deducted from equity.
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Financial Statements
3
Notes to the Financial Statements
continued
74
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
1. ACCOUNTING POLICIES continued
(i) Capital Reserves
The following are transferred to this reserve: gains and losses on the realisation of investments; changes in the
fair values of investments; and expenses, together with the related taxation effect, charged to capital in
accordance with the Company's accounting policy on expenses in 1(d).
Any gains in the fair value of investments that are not readily convertible to cash are treated as unrealised gains
in the capital reserve. The amounts within capital reserve less unrealised gains are available for distribution.
(j) Special Reserve
The special reserve arose following court approval in 2016 to cancel the share premium account. This reserve
is distributable and can be used to fund share repurchases.
(k) Revenue Reserve
The revenue reserve represents the surplus of accumulated revenue profits being the excess of income derived
from holding investments less the costs associated with running the Company. This reserve may be distributed
by way of dividends, when positive.
2. INCOME FROM INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
2022
2021
£’000 £’000
Income from investments
Unquoted distributions 419 550
Dividends from quoted investments 883 606
1,302 1,156
Bank interest 7 –
Total income 1,309 1,156
3. INVESTMENT MANAGEMENT FEES AND PERFORMANCE FEE PROVISIONS
2022
2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
AIFM fee 50 198 248 52 208 260
Portfolio management fee 273 1,092 1,365 286 1,143 1,429
Performance fee provisions – (1,677) (1,677) – 1,677 1,677
323 (387) (64) 338 3,028 3,366
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Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
4. OTHER EXPENSES
2022
2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Directors’ remuneration 186 – 186 176 – 176
Employers NIC on directors’ remuneration 18 – 18 18 – 18
Auditor’s remuneration for the audit of
the Company’s financial statements 41 – 41 44 – 44
Registrar fee 18 – 18 17 – 17
Broker retainer 30 – 30 30 – 30
Custody and depositary fees 47 – 47 47 – 47
Other expenses 64 – 64 118 – 118
Total expenses 404 – 404 450 – 450
The Company has no employees and details of the amounts paid to Directors are included in the Directors’
Remuneration Report beginning on page 54.
5. TAXATION ON NET RETURN
(a) Analysis of charge in period
2022
2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
UK corporation tax – – – – – –
Overseas withholding taxation 96 – 96 65 – 65
(b) Factors affecting current tax charge for the year
Approved investment trusts are exempt from tax on capital gains made within the Company.
The tax charged for the period is lower than the standard rate of corporation tax in the UK of 25% (2021:19%).
The difference is explained below.
2022
2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Net income/(loss) before taxation 582 (21,026) (20,444) 368 18,096 18,464
Corporation tax at 19% (2021: 19%) 110 (3,995) (3,885) 70 3,438 3,508
Non-taxable gains on investments held
at fair value through profit or loss – 4,068 4,068 – (4,013) (4,013)
Overseas withholding taxation 96 – 96 65 – 65
Non-taxable overseas dividends (247) – (247) (220) – (220)
Excess management expenses* 137 (73) 64 150 575 725
Tax charge for the year 96 – 96 65 – 65
*Excess management expenses are expenses that are not relieved in full against income generated by the Company.
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Financial Statements
3
Notes to the Financial Statements
continued
76
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
5. TAXATION ON NET RETURN continued
(c) Provision for deferred tax
No provision for deferred taxation has been made in the current period. The Company has not provided for
deferred tax on capital profits and losses arising on the revaluation or disposal of investments, as it is exempt
from tax on these items because of its status as an investment trust company.
The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the
United Kingdom would increase from 19% to 25% for companies with taxable profits between £50,000 and
£250,000, but with a marginal relief applying as profits increase. The Company has not recognised a deferred
tax asset of £3,042,000 (25% tax rate) (2021: £2,950,000, 25% tax rate) as a result of excess management
expenses. It is not anticipated that these excess expenses will be utilised in the foreseeable future.
6. INCOME/(LOSS) PER SHARE
The capital, revenue and total return per ordinary share are based on the net income/(loss) shown in the
IncomeStatement on page 66 and the weighted average number of ordinary shares in issue 80,000,001
(2021:80,000,001).
There are no dilutive instruments issued by the Company.
7. DIVIDENDS PAID
Under UK GAAP, final dividends are not recognised until they are approved by shareholders and interim dividends
are not recognised until they are paid. They are also debited directly from reserves. Amounts recognised as
distributable in these financial statements were as follows:
2022
2021
£’000 £’000
2021 final dividend of 0.2p per share 160 –
In respect of the year ended 31 December 2022, a final dividend of 0.4p per share or £320,000 (2021: 0.2p per
share or £160,000) in total has been recommended to shareholders and, if the resolution is passed at the AGM,
will be reflected in the Annual Report for the year ending 31 December 2023. Details of the ex-dividend and
payment dates are shown on page 38.
The Board’s current policy is to only pay dividends out of revenue reserves if the need arises in order to maintain
investment trust status. The amount of revenue reserve available for distribution as at 31December 2022 is £690,000
(2021: £364,000). The Company generated a revenue profit in the year ended 31 December 2022 of
£486,000(2021:£303,000).
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8. INVESTMENTS
2022 2021
Quoted Unquoted Quoted Unquoted
Investments Investments Total Investments Investments Total
£’000 £’000 £’000 £’000 £’000 £’000
Opening balance
Cost at 1 January 68,965 17,901 86,866 60,672 18,758 79,430
Investment holdings gains/(losses)
at 1 January 40,874 (2,125) 38,749 22,963 642 23,605
Valuation at 1 January 109,839 15,776 125,615 83,635 19,400 103,035
Movement in the year:
Purchases at cost 9,669 652 10,321 15,503 4,989 20,492
Sales – proceeds received (13,197) (3,218) (16,415) (11,579) (9,486) (21,065)
Net movement in investment
holdings (losses)/gains (29,366) 3,654 (25,712) 22,280 873 23,153
Valuation at 31 December 76,945 16,864 93,809 109,839 15,776 125,615
Closing balance
Cost at 31 December 58,985 9,132 68,117 68,965 17,901 86,866
Investment holding gains/(losses)
at 31 December 17,960 7,732 25,692 40,874 (2,125) 38,749
Valuation at 31 December 76,945 16,864 93,809 109,839 15,776 125,615
The Company received £16,415,000 (2021: £21,065,000), net of the £12,488,000 payment (2021: £902,000
receipt) on currency forward contracts (Note 9) from investments sold in the year. The book cost of these
investments was £29,070,000 (2021: £13,056,000). 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.
Gains on investments
2022
2021
£’000 £’000
Net movement in investment holding (losses)/gains in the year (25,712) 23,153
Net movement in derivative holding gains/(losses) in the year 4,299 (2,029)
(Losses)/gains on investments (21,413) 21,124
Total unrealised gains, including transfers, during the year were £13,057,000 (2021: £15,144,000).
Purchase transaction costs were £3,000 (2021: £28,000). These comprise mainly commission and stamp duty.
Sales transaction costs were £3,000 (2021: £5,000). These comprise mainly commission.
77
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
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Financial Statements
3
Notes to the Financial Statements
continued
78
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
9. DERIVATIVES
2022
2021
£’000 £’000
Fair value of FX forwards 4,200 (99)
FX forwards are currently used to hedge the Company’s exposure to the euro and US dollar. See note 17(ii) for
further details. The Company paid £12,488,000 (2021: received £902,000) on FX forwards closed during the
year. The FX forwards are revalued over time and any gains or losses (both realised and unrealised) are included
in gains/(losses) on investments in the capital column of the Income Statement.
The current currency forward contracts had an unrealised gain of £4,200,000 at the year end and the unrealised
gains further improved to £4.8 million as at the approval date of this Annual Report. The next settlement date for
the current currency forwards contract is 31 March 2023.
10. DEBTORS
2022
2021
£’000 £’000
VAT recoverable 3 2
Withholding tax recoverable 68 49
Prepayments and accrued income 33 167
104 218
11. CREDITORS
2022
2021
£’000 £’000
Other creditors and accruals 343 404
343 404
12. PERFORMANCE FEE PROVISIONS
Performance fee provisions are recognised when a present obligation arises from past events, it is probable that
the obligation will materialise and it is possible for a reliable estimate to be made, but the timing of settlement or
the exact amount is uncertain.
As at 31 December 2022, no performance fee is expected to be payable in relation to the Portfolio Manager’s
cumulative performance during 2021 and 2022, being the first two years of the thee-year performance period
that commenced on 1January 2021. The £1,677,000 performance fee provisions provided for on 31December
2021 have been fully reversed during the year ended 31December 2022. This represents the Directors’ best
estimate of the obligation based on the NAV as at 31 December 2022 and has been charged to the capital
column of the Income Statement.
If crystalised, settlement of performance fee provisions will take place following approval of the annual results for
the year ended 31 December 2023. Incremental changes to the provision will be recognised in each subsequent
period until crystallisation.
Full details of the performance fee arrangement can be found in the Performance Fee section in the
StrategicReport.
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Annual Report for the year ended 31 December 2022
13. SHARE CAPITAL
2022
2021
£’000 £’000
Issued and fully paid:
80,000,001 ordinary shares of 1p per share 800 800
There is a single class of ordinary shares. The voting rights of the ordinary shares on a poll are one vote for each
share held. There are no:
• restrictions on transfer of, or in respect of the voting or dividend rights of, the Company’s ordinary shares;
• agreements, known to the Company, between holders of securities regarding the transfer of ordinary shares;
or
• special rights with regard to control of the Company attaching to the ordinary shares
14. NET ASSET VALUE PER SHARE
2022 2021
Net asset value per share 129.8p 155.7p
The net asset value per share is based on the assets attributable to equity shareholders of £103,831,000
(2021:£124,531,000) and on the number of ordinary shares in issue at the year end of 80,000,001.
There are no dilutive instruments issued by the Company.
15. RECONCILIATION OF NET CASH OUTFLOW FROM OPERATING ACTIVITIES
2022
2021
£’000 £’000
(Losses)/gains before taxation (20,444) 18,464
Losses/(gains) made on investments 21,413 (21,124)
969 (2,660)
Decrease/(increase) in other debtors 133 (134)
(Decrease)/increase in creditors, accruals and performance fee provisions (1,738) 1,730
Net taxation suffered on investment income (115) (44)
Net cash outflow from operating activities (751) (1,108)
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Financial Statements
3
Notes to the Financial Statements
continued
80
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
16. RELATED PARTIES
The following are considered to be related parties:
• Frostrow Capital LLP
• The Directors of the Company
Details of the relationship between the Company and the Company’s AIFM are disclosed in the Strategic Report
on page 25. Details of fees paid to Frostrow by the Company can be found in note 3 on page 74. All material
related party transactions have been disclosed in note 3 on page 74. Details of the remuneration of the Directors
can be found in note 4 and in the Directors’ Remuneration Report starting on page 54. Details of the Directors’
interests in the capital of the Company can be found on page 55.
The balance outstanding to Frostrow at the year end was £20,000 (2021: £23,000). No balances were due to
the Directors (2021: nil).
17. FINANCIAL INSTRUMENTS
Risk management policies and procedures
The Company’s financial instruments comprise securities and other investments, cash balances and certain
debtors and creditors that arise directly from its operations.
As an investment trust, the Company invests in equities and other investments for the long term so as to achieve
its Investment Objective as stated on page 8. In pursuing its Investment Objective, the Company is exposed to
a variety of risks that could result in a reduction in the Company’s net assets.
The main risks that the Company faces arising from its use of financial instruments are:
(i) market risk (including foreign currency risk, interest rate risk and other price risk)
(ii) liquidity risk
(iii) credit risk
These risks and the Directors’ approach to the management of them, are set out in the Strategic Report on
pages 28 to 30. The AIFM, in close co-operation with the Board and the Portfolio Manager, co-ordinates the
Company’s risk management.
(i) Other price risk
In pursuance of the Investment Objective, the Company’s portfolio is exposed to the risk of fluctuations in market
prices and foreign exchange rates.
The Board manages these risks through the use of investment limits and guidelines as set out on pages 8 and 9,
and monitors the risks through monthly compliance reports from Frostrow, with reports from Frostrow and the
Portfolio Manager also presented at each Board meeting. In addition, Frostrow monitors the exposure of the
Company and compliance with the investment limits and guidelines on a daily basis.
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Annual Report for the year ended 31 December 2022
17. FINANCIAL INSTRUMENTS continued
Other price risk sensitivity
Other price risk may affect the value of the quoted investments.
If market prices at the date of the Statement of Financial Position had been 25% higher or lower while all other
variables had remained constant: the revenue return would have decreased/increased by £46,000 and £57,000
respectively (2021: £66,000 and £81,000 respectively); the capital return would have increased/decreased by
£18,199,000 and £19,009,000 respectively (2021: £24,450,000 and £24,389,000 respectively); and, the return
on equity would have increased/decreased by £18,152,000 and £18,953,000 respectively (2021: £24,384,000
and £24,309,000 respectively). The calculations are based on the portfolio as at the respective dates of the
Statement of Financial Position and are not representative of the year as a whole.
(ii) Foreign currency risk
A significant proportion of the Company’s portfolio positions are denominated in currencies other than sterling
(the Company’s functional currency, and the currency in which it reports its results). As a result, movements in
exchange rates can significantly affect the sterling value of those items.
Foreign currency risk is monitored in conjunction with other price risk as described above. The Portfolio Manager
uses foreign currency forwards to hedge the foreign currency risk. As at 31 December 2022, approximately 50%
of the Company’s euro and US dollar exposures were hedged.
Foreign currency exposure
The fair values of the Company’s assets and liabilities that are denominated in foreign currencies are shown
below:
2022 2021
Current Current
Investments Derivatives* assets Net Investments Derivatives assets Net
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
U.S. dollar 69,885 (37,329) 2,003 34,560 102,158 (48,015) 1 54,144
Euro 16,074 (6,680) 68 9,462 15,806 (8,400) 49 7,455
Other – – 44 44 – – 38 38
85,959 (44,009) 2,115 44,066 117,964 (56,415) 88 61,637
*Derivatives comprise foreign currency forwards used to partially hedge the Company’s exposure to overseas currencies.
Foreign currency sensitivity
The following table details the sensitivity of the Company’s net return for the year and shareholders’ funds to a
10% increase and decrease in sterling on the Company's net currency exposures after hedging.
These percentages have been determined based on market volatility in exchange rates over the period since
launch. The sensitivity analysis is based on the Company’s significant foreign currency exposures at each
Statement of Financial Position date.
2022 2021
USD EUR Other Impact on NAV USD EUR Other Impact on NAV
£’000 £’000 £’000 £’000 % £’000 £’000 £’000 £’000 %
Sterling depreciates 3,840 1,051 5 4,896 5% 6,016 828 4 6,848 5%
Sterling appreciates (3,142) (860) (4) (4,006) (4%) (4,922) (678) (3) (5,603) (4%)
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Financial Statements
3
Notes to the Financial Statements
continued
82
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
17. FINANCIAL INSTRUMENTS continued
(iii) Interest rate risk
Interest rate changes may affect:
– the level of income receivable from floating and fixed rate securities and cash at bank and on deposit; and
– the fair value of investments in fixed interest securities.
Interest rate exposure
The exposure of financial assets and liabilities to fixed and floating interest rates, is shown below.
2022
2021
Fixed Floating Fixed Floating
rate rate rate rate
£’000 £’000 £’000 £’000
Cash – 6,061 – 878
– 6,061 – 878
Interest rate sensitivity
If interest rates had been 1% higher or lower and all other variables were held constant, the Company’s netreturn
for the year ended 31 December 2022 and the net assets would increase/decrease by £61,000 (2021: £9,000).
(iv) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
The main liquidity requirements the Company may face are its commitments to the investments in limited
partnership funds, as set out in note 19 on page 85. These commitments can be drawn down on 3 or 10 days
notice. Having reviewed the nature of the investment and the track record of the underlying mandate for the
most significant commitment, to TCI Real Estate Fund III Limited, the Board consider that it will be drawn down
gradually over the life of the investment and as such poses a low risk to the liquidity of the Company. Frostrow
and/or the Portfolio Manager are in regular contact with the managers of the limited partnership funds, as a part
of which they would be made aware of, and plan accordingly for any drawdowns under those commitments.
The Company’s assets comprise quoted securities (equity shares, fixed income and fund investments), cash,
and unquoted limited partnership funds and investments. Whilst the unquoted investments are illiquid, short-
term flexibility is achieved through the quoted securities, which are liquid, and cash which is available on demand.
The liquidity of the quoted securities is monitored on at least a monthly basis to ensure that there is sufficient
liquidity to meet the company’s liabilities and any forthcoming drawdowns.
(v) Credit risk
Credit risk is the risk of failure of a counterparty to discharge its obligations resulting in the Company suffering a
financial loss. The quoted debt investments are managed as part of an investment portfolio, and their credit risk
is considered in the context of their overall investment risk.
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Annual Report for the year ended 31 December 2022
17. FINANCIAL INSTRUMENTS continued
Credit risk exposure
2022
2021
£’000 £’000
Derivative financial instruments 4,200 224
Current assets:
Other receivables 104 218
Cash 6,061 878
(vi) Hierarchy of investments
The Company’s investments are valued within a fair value hierarchy that reflects the significance of the inputs
used in making the fair value measurements as described in the accounting policies beginning on page 70.
Level 1 Level 2 Level 3 Total
At 31 December 2022 £’000 £’000 £’000 £’000
Investments 76,945 – 16,864 93,809
Derivatives – 4,200 – 4,200
Level 1 Level 2 Level 3 Total
At 31 December 2021 £’000 £’000 £’000 £’000
Investments 109,839 – 15,776 125,615
Derivatives – (99) – (99)
Level 3 investments at 31 December 2022
Cost Value
’000 £’000 Ownership Valuation basis
Helios Co-Invest LP
1
US$4,458 10,672 4.73% NAV
KKR Aqueduct Co-Invest LP
2
£4,000 4,646 1.15% NAV
TCI Real Estate Partners Fund III Ltd US$1,715 1,546 1.18% NAV
1
Described as X-ELIO in the portfolio statement
2
Described as John Laing in the portfolio statement
Level 3 investments at 31 December 2021
Cost Value
’000 £’000 Ownership Valuation basis
Helios Co-Invest LP
1
US$6,084 10,174 4.73% NAV
KKR Aqueduct Co-Invest LP
2
£4,000 4,000 1.23% Price of recent transactions
TCI Real Estate Partners Fund III Ltd US$2,169 1,602 1.18% NAV
WCP Growth Fund LP £7,447 – 10.30% Discount to adjusted NAV
1
Described as X-ELIO in the portfolio statement
2
Described as John Laing in the portfolio statement
During the year, the Company realised a gain of £1,023,000 (2021: £996,000) on Helios Co-Invest LP after
receiving a distribution of £2,003,000 (2021: £2,034,000) in relation to the disposal of a portfolio of X-ELIO's
operating assets in Mexico (2021: Spain). Helios Co-Invest LP remained the largest unquoted investment of the
Company as at 31 December 2022.
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Financial Statements
3
17. FINANCIAL INSTRUMENTS continued
The Company’s co-investment with KKR in John Laing was completed in December 2021 with an initial
investment of £4 million. It is expected that the development pipeline of infrastructure assets developed by John
Laing will provide the Company with opportunities to commit additional capital over time.
WCP Growth Fund LP has been dissolved during the year and no distributions were received by the Company.
If a 25% discount to NAV was applied to the NAV of the level 3 investments as at 31 December 2022, the impact
would have been a decrease of £4,154,000 (2021:£3,512,000) in net assets and the net return for the year.
(vii) Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to continue as a going concern
and to maximise the income and capital return to its equity shareholders through an appropriate level of gearing.
The Board’s policy is to limit gearing to a maximum of 20% of the Company’s net assets. Currently the Company
does not have any gearing and there are no facilities in place.
The capital structure of the Company comprises the equity share capital (ordinary shares), retained earnings and
other reserves as disclosed on the Statement of Financial Position on page 68.
The Board, with the assistance of the AIFM and the Portfolio Manager, monitors and reviews the broad structure
of the Company’s capital on an ongoing basis. This includes a review of:
– the planned level of gearing, which takes into account the Portfolio Manager’s view of the market;
– whether to buy back equity shares, either for cancellation or to hold in treasury, in light of any share price
discount to net asset value per share;
– whether to issue new equity shares; and,
– the extent to which revenue in excess of that required for distributions should be retained.
18. CAPITAL RESERVE
2022 2021
Capital Reserve Capital Reserve
Investment
Investment Holding
Other Holding (Losses)
Gains Total Other /Gains Total
£’000 £’000 £’000 £’000 £’000 £’000
At 1 January 7,347 38,649 45,996 2,366 25,534 27,900
Net (losses)/gains on investments (12,655) (8,758) (21,413) 8,009 13,115 21,124
Expenses charged to capital 387 – 387 (3,028) – (3,028)
At 31 December (4,921) 29,891 24,970 7,347 38,649 45,996
Sums within the Total Capital Reserve less unrealised gains (those on investments not readily convertible to cash)
are available for distribution. In addition, the Revenue Reserve is available for distribution.
Notes to the Financial Statements
continued
84
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
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19. FINANCIAL COMMITMENT
The Company has made commitments to provide additional funds to the following investments:
Sterling Local currency Notice of
Commitment Commitment drawdown
Helios Co-Invest LP £52,000 US$62,000 3 business days
TCI Real Estate Partners Fund III Limited £2,855,000 US$3,434,000 10 business days
20. THE COMPANY
The Company is a public limited company (PLC) incorporated in England and Wales. Its principal activity is that
of an investment trust company within the meaning of sections 1158/1159 of the Corporation Tax Act 2010 and
its registered office and principal place of business is 25 Southampton Buildings, London, WC2A 1AL.
21. POST BALANCE SHEET EVENT
As shown on page 12, the Company has a co-investment with KKR in X-ELIO, held through Helios Co-Invest
LP (“Helios”). As at 31 December 2022, the Company had a 4.73% holding in Helios (Note 17), which translates
into an effective holding of 0.97% in X-ELIO. On 21 March 2023, KKR announced that it had reached an
agreement to sell its 50% stake in X-ELIO to Brookfield Renewable, which owns the remaining 50%. As at the
approval date of this Annual Report, the exact deal terms are yet to be confirmed but once finalised the impact
will be reflected in the Company’s daily NAV announcements to the stock exchange.
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Annual Report for the year ended 31 December 2022
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Financial Calendar
31 December Financial Year End
March/April Final Results Announced
June Annual General Meeting, Dividend Payable (if any)
30 June Half Year End
September Half Year Results Announced
Annual General Meeting
The Annual General Meeting of Menhaden Resource Efficiency PLC will be held at the offices of Frostrow Capital LLP,
25 Southampton Buildings, London WC2A 1AL on 21 June 2023 at 12 noon.
Share Prices
The Company’s ordinary shares are listed on the London Stock Exchange under ‘Investment Companies’. The price is
given daily in the Financial Times and other newspapers.
Change of Address
Communications with shareholders are mailed to the address held on the share register. In the event of a change of
address or other amendment this should be notified to the Company’s Registrar, Link Group (contact details on
page98), under the signature of the registered holder.
Net Asset Value
The net asset value of the Company’s shares can be obtained on the Company’s website at www.menhaden.com and
is published daily via the London Stock Exchange.
Profile of the Company’s Ownership
% of ordinary shares held at:
31 December 2022 31 December 2021
19.9%
13.0%
33.1%
34.0%
Institutions
Wealth Managers & Private Banks
Family Offices
Retail Platforms
19.4%
15.2%
34.9%
30.5%
Institutions
Wealth Managers & Private Banks
Family Offices
Retail Platforms
Shareholder Information
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Alternative Investment Fund Managers Regulations (“UK AIFMD”)
Agreed by the European Parliament and the Council of the European Union and transposed into UK legislation, the UK
AIFMD classifies certain investment vehicles, including investment companies, as Alternative Investment Funds (“AIFs”)
and requires them to appoint an Alternative Investment Fund Manager (“AIFM”) and depositary to manage and
oversee the operations of the investment vehicle. The Board of the Company retains responsibility for strategy,
operations and compliance and the Directors retain a fiduciary duty to shareholders.
Compounding Hurdle
The payment of a performance fee is conditional on the Company’s NAV being above the high-water mark and the
return on the gross proceeds from the IPO of the Company exceeding an annualised compound return of 5%.
Discount or Premium
A description of the difference between the share price and the net asset value per share. The size of the discount or
premium is calculated by subtracting the share price from the net asset value per share and is usually expressed as a
percentage (%) of the net asset value per share. If the share price is higher than the net asset value per share the result
is a premium. If the share price is lower than the net asset value per share, the shares are trading at a discount.
Gearing
In simple terms gearing is borrowing. An investment trust can borrow money to invest in additional investments for its
portfolio. The effect of the borrowing on shareholders’ funds is called ‘gearing’. If the Company’s assets grow,
shareholders’ funds grow proportionately more because the debt remains the same. But if the value of the Company’s
assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely
impact performance in falling markets.
Gearing represents borrowings at par less cash and cash equivalents expressed as a percentage of shareholders’
funds. Potential gearing is the company’s borrowings expressed as a percentage of shareholders’ funds.
High Watermark
The high watermark is the highest net asset value that the Company has reached on which a performance fee has
been paid. Its initial level was set at 100p on the launch of the Company.
Leverage
For the purposes of the UK AIFMD, leverage is any method which increases the Company’s exposure, including the
borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company’s exposure and its net
asset value and can be calculated using gross and commitment methods. Under the gross method, exposure
represents the sum of the Company’s positions after the deduction of sterling cash balances, without taking into account
any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction
of sterling cash balances and after certain hedging and netting positions (as detailed in the UK AIFMD) are offset against
each other.
Net Asset Value (“NAV”)
The value of the Company’s assets, principally investments made in other companies and cash being held, minus any
liabilities. The NAV per share is also described as ‘shareholders’ funds’ per share. The NAV is often expressed in pence
per share after being divided by the number of shares in issue. The NAV per share is unlikely to be the same as the
share price which is the price at which the Company’s shares can be bought or sold by an investor. The share price is
determined principally by the relationship between the demand for and supply of the shares.
Glossary
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Annual Report for the year ended 31 December 2022
NAV Total Return (APM)
The theoretical total return on shareholders’ funds per share, reflecting the change in NAV assuming that any dividends
paid to shareholders were reinvested at NAV at the time the shares were quoted ex-dividend. A way of measuring
investment management performance of investment trusts which is not affected by movements in the share price.
31 December 31 December
2022 2021
Opening NAV 155.7p 132.7p
(Decrease)/increase in NAV
(25.9)p 23.0p
Closing NAV
129.8p 155.7p
% (decrease)/increase in NAV (16.6%) 17.3%
Impact of dividend reinvested
0.1% –
NAV total (loss)/return (16.5%) 17.3%
Share Price Total Return (APM)
The return to the investor, on a last traded price to a last traded price basis, assuming that all dividends paid were
reinvested, without transaction costs, into the shares of the Company at the time the shares were quoted ex-dividend.
31 December 31 December
2022 2021
Opening share price 112.0p 99.0p
(Decrease)/increase in share price (23.0)p 13.0p
Closing share price 89.0p 112.0p
% (decrease)/increase in share price (20.5%) 13.1%
Impact of dividend reinvested 0.2% –
Share price total (loss)/return (20.3%) 13.1%
Ongoing Charges (APM)
Ongoing charges are calculated by taking the Company’s annualised operating expenses and expressing them as a
percentage of the average daily net asset value of the Company over the year. The costs of buying and selling
investments are excluded, as are interest costs, taxation, costs of buying back or issuing shares and other non-recurring
costs. These items are excluded because if included, they could distort the understanding of the Company’s
performance for the year and the comparability between periods.
31 December 31 December
2022 2021
£’000 £’000
Total Expenses 2,018 2,138
Average NAVs 111,560 117,721
Ongoing charge ratio 1.8% 1.8%
Glossary
continued
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Retail Investors Advised by IFAs
The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers
(IFAs) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (FCA) rules in relation to
non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s
restrictions which apply to non-mainstream investment products because they are shares in an investment trust.
Investment Platforms
The Company’s shares are traded openly on the London Stock Exchange and can be purchased through a stock-
broker or other financial intermediary. The shares are available through savings plans (including Investment Dealing
Accounts, ISAs, Junior ISAs and SIPPs) which facilitate both regular monthly investments and lump sum investments
in the Company’s shares. There are a number of investment platforms that offer these facilities. A list of some of them,
that is not comprehensive nor constitutes any form of recommendation, can be found below:
AJ Bell Youinvest http://www.youinvest.co.uk
Barclays Stockbrokers https://www.barclays.co.uk/smart-investor
Bestinvest http://www.bestinvest.co.uk
Charles Stanley Direct https://www.charles-stanley-direct.co.uk
EQi https://www.eqi.co.uk
FundsDirect http://www.fundsdirect.co.uk
Halifax Investing http://www.halifax.co.uk/investing
Hargreaves Lansdown http://www.hl.co.uk
HSBC https://hsbc.co.uk/investments
iDealing http://www.idealing.com
interactive investor http://www.ii.co.uk
IWEB http://www.iweb-sharedealing.co.uk
Saga Share Dealing https://www.saga.co.uk/money/share-dealing
Saxo Markets https://www.home.saxo
Wealth Club https://www.wealthclub.co.uk
How to Invest
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Risk warnings
– Past performance is no guarantee of future performance.
– The value of your investment and any income from it may go down as well as up and you may not get back the
amount invested. This is because the share price is determined by the changing conditions in the relevant stock
markets in which the Company invests and by the supply and demand for the Company’s shares.
– As the shares in an investment trust are traded on a stock market, the share price will fluctuate in accordance with
supply and demand and may not reflect the underlying net asset value of the shares; where the share price is less
than the underlying value of the assets, the difference is known as the ‘discount’. For these reasons, investors may
not get back the original amount invested.
– Although the Company’s financial statements are denominated in sterling, it may invest in stocks and shares that
are denominated in currencies other than sterling and to the extent they do so, they may be affected by movements
in exchange rates. As a result, the value of your investment may rise or fall with movements in exchange rates.
– Investors should note that tax rates and reliefs may change at any time in the future.
– The value of ISA and Junior ISA tax advantages will depend on personal circumstances. The favourable tax treatment
of ISAs and Junior ISAs may not be maintained.
How to Invest
continued
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Annual Report for the year ended 31 December 2022
Notice is hereby given that the Annual General Meeting of Menhaden Resource Efficiency PLC will be held at the offices
of Frostrow Capital LLP, 25 Southampton Buildings, London WC2A 1AL on Wednesday, 21 June 2023 at 12 noon for
the following purposes:
Ordinary Business
To consider and, if thought fit, pass the following as ordinary resolutions:
1. To receive and accept the Annual Report for the year ended 31 December 2022, including the financial statements
and the directors’ and auditor’s reports thereon.
2. To receive and approve the Directors’ Remuneration Report for the year ended 31 December 2022.
3. To declare a final dividend of 0.4p per ordinary share for the year ended 31 December 2022.
4. To elect Soraya Chabarek as a Director of the Company.
5. To re-elect Sir Ian Cheshire as a Director of the Company.
6. To re-elect Barbara Donoghue as a Director of the Company.
7. To re-elect Howard Pearce as a Director of the Company.
8. To re-appoint Mazars LLP as the Company’s Auditor to hold office from the conclusion of the meeting to the
conclusion of the next Annual General Meeting at which accounts are laid, and to authorise the Audit Committee
to determine their remuneration.
Special Business
To consider and, if thought fit, pass the following resolutions of which resolutions 10, 11 and 12 will be proposed as
special resolutions:
Authority to Issue Shares
9. THAT, in substitution for all existing authorities, the Directors be and are hereby generally and unconditionally
authorised in accordance with Section 551 of the Companies Act 2006 (the “Act”) to exercise all powers of the
Company to allot relevant securities (within the meaning of section 551 of the Act) up to a maximum aggregate
nominal amount of £79,175 (or if changed, the number representing 10% of the issued share capital of the
Company at the date of the meeting at which this resolution is proposed) provided that this authority shall expire
at the conclusion of the Annual General Meeting of the Company to be held in 2024 or 15 months from the date
of passing this resolution, whichever is the earlier, unless previously revoked, varied or renewed by the Company
in general meeting and provided that the Company shall be entitled to make, prior to the expiry of such authority,
an offer or agreement which would or might require relevant securities to be allotted after such expiry and the
Directors may allot relevant securities pursuant to such offer or agreement as if the authority conferred hereby
had not expired.
Disapplication of Pre-emption Rights
10. THAT, in substitution of all existing powers, the Directors be and are hereby generally empowered pursuant to
sections 570 and 573 of the Companies Act 2006 (the “Act”) to allot equity securities (within the meaning of
section 560 of the Act) for cash pursuant to the authority conferred on them by resolution 9 set out in the notice
Notice of the Annual General Meeting
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Notice of the Annual General Meeting
continued
convening the Annual General Meeting at which this resolution is proposed or otherwise as if section 561(1) of
the Act did not apply to any such allotment and to sell relevant shares (within the meaning of section 560 of the
Act, which includes the sale of relevant shares which, immediately before the sale, were held by the Company as
treasury shares) for cash as if section 561(1) of the Act did not apply to any such sale, provided that this power
shall be limited to the allotment of equity securities pursuant to:
(a) an offer of equity securities open for acceptance for a period fixed by the Directors where the equity securities
respectively attributable to the interests of holders of shares of 1 penny each in the Company (“Shares”) are
proportionate (as nearly as may be) to the respective numbers of Shares held by them but subject to such
exclusions or other arrangements in connection with the issue as the Directors may consider necessary,
appropriate, or expedient to deal with equity securities representing fractional entitlements or to deal with legal
or practical problems arising in any overseas territory, the requirements of any regulatory body or stock
exchange, or any other matter whatsoever; and
(b) (otherwise than pursuant to sub-paragraph (a) above) an offer or offers of equity securities of up to an
aggregate nominal value of £79,175 (or if changed, the number representing 10% of the issued share capital
of the Company at the date of the meeting at which this resolution is proposed) and expires at the conclusion
of the next Annual General Meeting of the Company after the passing of this resolution or 15 months from the
date of passing this resolution, whichever is the earlier, unless previously revoked, varied or renewed by the
Company in general meeting and provided that the Company shall be entitled to make, prior to the expiry of
such authority, an offer or agreement which would or might require equity securities to be allotted after such
expiry and the Directors may allot equity securities pursuant to such offer or agreement as if the power
conferred hereby had not expired.
Authority to Repurchase ordinary shares
11. THAT the Company be and is hereby generally and unconditionally authorised in accordance with section 701 of
the Companies Act 2006 (the “Act”) to make one or more market purchases (within the meaning of section 693(4)
of the Act) of ordinary shares of 1 penny each in the capital of the Company (“Shares”) (either for cancellation or
to be held, sold or otherwise dealt with as treasury shares in accordance with the Act) provided that:
(a) the maximum aggregate number of Shares authorised to be purchased is 11,868,332 or, if changed, the
number representing approximately 14.99% of the issued share capital of the Company at the date of the
meeting at which this resolution is proposed;
(b) the minimum price (exclusive of expenses) which may be paid for a Share is 1 penny;
(c) the maximum price (exclusive of expenses) which may be paid for a Share is an amount equal to the greater
of (i) 105% of the average of the middle market quotations for a Share as derived from the Daily Official List
of the London Stock Exchange for the five business days immediately preceding the day on which that Share
is purchased and (ii) the higher of the price of the last independent trade in shares and the highest then current
independent bid for shares on the London Stock Exchange;
(d) the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company
to be held in 2024 or, if earlier, on the expiry of 15 months from the date of the passing of this resolution unless
such authority is renewed prior to such time; and
(e) the Company may make a contract to purchase Shares under this authority before the expiry of such authority
which will or may be executed wholly or partly after the expiration of such authority, and may make a purchase
of Shares in pursuance of any such contract.
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General Meetings
12. THAT the Directors be authorised to call general meetings (other than the Annual General Meeting of the Company)
on not less than 14 clear days’ notice, such authority to expire on the conclusion of the next Annual General
Meeting of the Company or if earlier, on the expiry 15 months from the date of the passing of the resolution.
By order of the Board Registered Office:
25 Southampton Buildings
London WC2A 1AL
Frostrow Capital LLP
Company Secretary
28 March 2023
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Notes
1. Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the
meeting. A shareholder may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise
the rights attached to a different share or shares held by that shareholder. A proxy need not be a shareholder of the Company, butmust
attend the meeting for your votes to be counted. Appointing the Chairman of the AGM as your proxy will ensure that your votes are
cast in accordance with your wishes.
2. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the r
esolutions.
If no voting indication is given, a proxy may vote or abstain from voting at his/her discretion. A proxy may vote (or abstain from voting)
as he or she thinks fit in relation to any other matter which is put before the meeting.
3. Hard copy forms of proxy have not been included with this notice. Members can vote by: logging onto www.signalshares.com
and following
instructions, requesting a hard copy form of proxy directly from the registrars, Link Group, via telephone on +44 (0) 371 664 0300 or by
emailing shareholderenquiries@linkgroup.co.uk or, in the case of CREST members, utilising the CREST electronic proxy appointment
service in accordance with the procedures set out below. To be valid any appointment of a proxy must be completed, signed and received
at Link Group, PXS1, Central Square, 29 Wellington Street, Leeds LS1 4DL no later than 12 noon on 19 June 2023.
4. In the case of a member which is a company, the instrument appointing a proxy must be executed under its seal or signed on its behalf
by a duly authorised officer or attorney or other person authorised to sign. Any power of attorney or other authority under which the
instrument is signed (or a certified copy of it) must be included with the instrument.
5. If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform, a process which has
been agreed by the Company and approved by Link. For further information regarding Proxymity, please go to www.proxymity.io. Your
proxy must be lodged by the latest time(s) for receipt of proxy appointments specified in this Notice in order to be considered valid or
,
if the meeting is adjourned, by the time which is 48 hours before the time of the adjourned meeting. Before you can appoint a pr
oxy
via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is important that you read these carefully
as you will be bound by them and they will govern the electronic appointment of your proxy. An electronic proxy appointment via the
Proxymity platform may be revoked completely by sending an authenticated message via the platform instructing the removal of your
proxy vote.
6. The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described below) will not prevent a
shareholder attending the meeting and voting in person if he/she wishes to do so.
7. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information
rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have
a right to be appointed (or have someone else appointed) as a proxy for the meeting. If a Nominated Person has no such proxy
appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the
shareholder as to the exercise of voting rights.
8. The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1 and 3 above does not apply to
Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of the Company.
9. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, only shareholders registered on the register of members
of the Company (the “Register of Members”) at close of business on 19 June 2023 (or, in the event of any adjournment, on the date
which is two business days before the time of the adjourned meeting) will be entitled to attend and vote or be represented at the
meeting in respect of shares registered in their name at that time. Changes to the Register of Members after that time will be disr
egarded
in determining the rights of any person to attend and vote at the meeting.
10. As at 27 March 2023 (being the last business day prior to the publication of this notice) the Company’s issued share capital consists of
79,175,001 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at 27 March 2023 are 79,175,001.
11. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using
the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST
members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able
to take the appropriate action on their behalf.
12. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a“CREST
Proxy Instruction”) must be properly authenticated in accordance with the specifications of Euroclear UK and International Limited
(“CRESTCo”), and must contain the information required for such instruction, as described in the CREST Manual. The message,
regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed
proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA10) no later than 48 hours befor
e the
time appointed for holding the meeting, excluding non-business days. For this purpose, the time of receipt will be taken to be the time
(as determined by the timestamp applied to the message by the CREST Application Host) from which the issuer’s agent is able to r
etrieve
the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed
through CREST should be communicated to the appointee through other means.
Notice of the Annual General Meeting
continued
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Annual Report for the year ended 31 December 2022
13. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that CRESTCo does not make
available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in r
elation
to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a
CREST personal member, or sponsored member, or has appointed a voting service provider, to procure that his CREST sponsor or voting
service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by
any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are
referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
14. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.
15. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the
most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Register
of Members in respect of the joint holding (the first named being the most senior).
16. Members who wish to change their proxy instructions should submit a new proxy appointment using the methods set out above. Note
that the cut-off time for receipt of proxy appointments (see above) also applies in relation to amended instructions; any amended pr
oxy
appointment received after the relevant cut-off time will be disregarded. If a member submits more than one valid proxy appointment,
the appointment received last before the latest time for the receipt of proxies will take precedence.
17. In order to revoke a proxy instruction, members will need to inform the Company. Members should send a signed hard copy notice
clearly stating their intention to revoke a proxy appointment to Link Group, PXS1, Central Square, 29 Wellington Street, Leeds LS1 4DL.
In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by
an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice
is signed (or a duly certified copy of such power of attorney) must be included with the revocation notice. If a member attempts to r
evoke
their proxy appointment but the revocation is received after the time for receipt of proxy appointments then, subject to paragraph 4, the
proxy appointment will remain valid.
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Annual Report for the year ended 31 December 2022
Resolution 1 – To receive the Annual Report
The Annual Report for the year ended 31 December 2022,
incorporating the financial statements and this Notice of
Meeting, will be presented to the Annual General
Meeting(AGM).
Resolution 2 – Directors’ Remuneration Report
It is mandatory for listed companies to put their report on
Directors’ remuneration to an advisory shareholder vote
every year. The Directors’ Remuneration Report is set out
on pages 54 to 56 of this Annual Report.
Resolution 3 – Dividend
It is necessary for the Company to pay a dividend in
respect of the year ended 31 December 2022 in order for
it to retain investment trust status. Accordingly, the Board
is recommending the declaration of a dividend of 0.4p per
ordinary share, payment of which will afford compliance
with the requirement for the Company to retain no more
than 15% of the income from shares and securities in the
year.
Resolutions 4 to 7 – Re-election and Election of Directors
Resolutions 4 to 7 deal with the re-election and election
of the Directors. Biographies of each of the Directors can
be found on pages 36 and 37 of this Annual Report.
Specific reasons why (in the Board’s opinion) each
Directors’ contribution is, and continues to be, important
to the Company’s long-term sustainable success are as
follows:
Soraya Chabarek
Soraya brings leadership experience in asset management
and broad exposure to fund strategies including global
macro, equities, emerging markets, credit and
convertibles, providing a strong basis for portfolio
management challenge.
Sir Ian Cheshire
Sir Ian draws on more than 30years’ experience in the
retail, charity, and banking sectors. His focus is on long-
term strategic issues, including the sustainability and
environmental impact of the portfolio.
Barbara Donoghue
Barbara has a wealth of experience gained over more than
30 years to contribute to Board and Committee decision
making, including from past board room appointments,
corporate finance and private equity.
Howard Pearce
Howard has over 30 years’ experience advising at Board
level on green investment and significant expertise of audit
committee chairmanship which aids the Company’s
financial and environmental impact reporting.
Resolution 8 – Re-appointment of Auditor and the
determination of their remuneration
Resolution 8 is for the re-appointment of Mazars LLP as
the Company’s independent Auditor to hold office until the
next AGM of the Company and also authorises the Audit
Committee to set their remuneration. Following the
implementation of the Competition and Markets Authority
order on Statutory Audit Services, only the Audit
Committee may negotiate and agree the terms of the
Auditor’s service agreement.
Resolutions 9 and 10 – Issue of Shares
Ordinary Resolution 9 in the Notice of Annual General
Meeting is to renew the authority to allot new ordinary
shares up to an aggregate of 10% of the Company’s
existing issued share capital at the date of the Annual
General Meeting). This authority (if granted) will expire on
the date of the next Annual General Meeting or after a
period of 15months from the date of the passing of the
resolution, whichever is earlier. This means that the
authority will have to be renewed at the next Annual
General Meeting unless previously renewed.
When shares are to be allotted, Section 551 of the
Companies Act 2006 (the “Act”) provides that existing
shareholders have pre-emption rights and that the new
shares must be offered first to such shareholders in
proportion to their existing holding of shares. However,
shareholders can, by special resolution, authorise the
Directors to allot shares otherwise than by a pro rata issue
to existing shareholders. Special Resolution 10 will, if
passed, give the Directors power to allot (and/ or sell from
treasury) for cash equity securities up to the equivalent of
Explanatory Notes to the Resolutions
265031 Menhaden 86pp-end.qxp 28/03/2023 10:36 Page 96
97
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
10% of the Company’s existing share capital, as if
Section551 of the Act does not apply. This is the same
nominal amount of share capital that the Directors are
seeking the authority to allot pursuant to Resolution 9. This
authority will also expire on the date of the next Annual
General Meeting or after a period of 15months, whichever
is earlier. This authority will not be used in connection with
a rights issue by the Company.
The Directors intend to use the authority given by
Resolutions 9 and 10 to allot shares and disapply pre-
emption rights only in circumstances where this will be
clearly beneficial to shareholders as a whole. The issue
proceeds would be available for investment in line with the
Company’s investment policy. No issue of shares will be
made which would effectively alter the control of the
Company without the prior approval of shareholders in
general meeting.
Resolution 11 – Share Repurchases
The principal aim of a share buy-back facility is to enhance
shareholder value by acquiring shares at a discount to net
asset value, as and when the Directors consider this to be
appropriate. The purchase of shares, when they are trading
at a discount to net asset value per share, should result in
an increase in the net asset value per share for the
remaining shareholders. This authority, if conferred, will only
be exercised if to do so would result in an increase in the
net asset value per share for the remaining shareholders
and if it is considered to be in the best interests of
shareholders generally. Any purchase of shares will be
made within guidelines established from time to time by
the Board.
Under the current Listing Rules, the maximum price that
may be paid on the exercise of this authority must not
exceed the higher of (i) 105% of the average of the middle
market quotations for the shares over the five business
days immediately preceding the date of purchase and (ii)
the higher of the last independent trade and the highest
current independent bid on the trading venue where the
purchase is carried out. The minimum price which may be
paid is 1 penny per share.
Special Resolution 11 in the Notice of Annual General
Meeting seeks to renew the authority to purchase in the
market a maximum of 14.99% of shares in issue
(amounting to 11,868,332 shares at the date of this
Annual Report). Theauthority (if granted) will expire on the
date of the next Annual General Meeting or after a period
of 15 months from the date of passing of the resolution,
whichever is earlier. This means in effect that the authority
will have to be renewed at the next Annual General
Meeting or earlier if the authority has been exhausted.
Resolution 12 – General Meetings
Special Resolution 12 seeks shareholder approval for the
Company to hold General Meetings (other than the AGM)
on 14 clear days’ notice, which is the minimum notice
period permitted by the Companies Act 2006. This is a
routine resolution necessitated by the EU Shareholder
Rights Directive, which has been transcribed into UK law.
The Company will only use this shorter notice period
where it is merited by the purpose of the meeting and will
endeavour to give at least 14 working days’ notice if
possible.
Recommendation
The Board considers that the resolutions relating to the
above items are in the best interests of shareholders as a
whole. Accordingly, the Board unanimously recommends
to shareholders that they vote in favour of the above
resolutions, as the Directors intend to do in respect of their
own beneficial holdings totalling 381,693 shares.
265031 Menhaden 86pp-end.qxp 28/03/2023 10:36 Page 97
Further Information
4
98
Menhaden Resource Efficiency PLC
Annual Report for the year ended 31 December 2022
Directors
Sir Ian Cheshire (Chairman)
Duncan Budge
Barbara Donoghue
Soraya Chabarek (with effect from 1 March 2023)
Howard Pearce
Company Registration Number
09242421 (Registered in England and Wales)
The Company is an investment company as defined under
Section 833 of the Companies Act 2006
The Company was incorporated on 30 September 2014. The
Company was incorporated as BGT Capital PLC.
Website
Website: www.menhaden.com
Registered Office
25 Southampton Buildings
London WC2A 1AL
Alternative Investment Fund Manager,
Company Secretary and Administrator
Frostrow Capital LLP
25 Southampton Buildings, London WC2A 1AL
Telephone: 0203 008 4910
E-mail: info@frostrow.com
Website: www.frostrow.com
Authorised and regulated by the Financial Conduct Authority
If you have an enquiry about the Company or if you would like
to receive a copy of the Company’s monthly fact sheet by e-
mail, please contact Frostrow Capital using the above e-mail
address.
Portfolio Manager
Menhaden Capital Management LLP
2nd Floor
Heathmans House
19 Heathmans Road
London
SW6 4TJ
Authorised and regulated by the Financial Conduct Authority
Depositary
J.P. Morgan Europe Limited
25 Bank Street
London E14 5JP
Auditor
Mazars LLP
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
MK9 1FF
Corporate Broker
Numis Securities Limited
45 Gresham St
London
EC2V 7BF
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
Telephone: + 44 371 664 0300
E-mail: shareholderenquiries@linkgroup.co.uk
Shareholder Portal: www.signalshares.com
Website: www.linkgroup.eu
Please contact the Registrars if you have a query about a
certificated holding in the Company’s shares.
†Calls are charged at the standard geographic rate and will vary by provider. Calls
outside the UK will be charged at the applicable international rate. Lines are open
from 9.00 a.m. to 5.30 p.m. Monday to Friday excluding public holidays in England
and Wales.
Share Price Listings
The price of your shares can be found in various publications
including the Financial Times, The Daily Telegraph, The Times
and The Scotsman.
The Company’s net asset value per share is announced daily
and is available, together with the share price, on the TrustNet
website at www.trustnet.com
.
Identification Codes
Shares: SEDOL : BZ0XWD0
ISIN : GB00BZ0XWD04
BLOOMBERG : MHN LN
EPIC : MHN
Legal Entity Identifier
2138004NTCUZTHFWXS17
Company Information
265031 Menhaden 86pp-end.qxp 28/03/2023 10:36 Page 98
Environment
This report is printed on Revive 100% White Silk a totally recycled paper produced using 100% recycled waste at a mill that has been awarded
the ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
Menhaden Resource Efficiency PLC
25 Southampton Buildings
London WC2A 1AL
www.menhaden.com
Tel +44(0) 203 008 4910
A member of the Association of Investment Companies
Disability Act
Copies of this annual report and other documents issued by the Company are available from the Company Secretary. If needed, copies can be
made available in a variety of formats, including Braille, audio tape or larger type as appropriate. You can contact the Registrar to the Company,
Link Asset Services, which has installed telephones to allow speech and hearing impaired people who have their own telephone to contact them directly,
without the need for an intermediate operator, for this service please call 0800 731 1888.
Specially trained operators are available during normal business hours to answer queries via this service. Alternatively, if you prefer to go through
a ‘typetalk’ operator (provided by the RNID) you should dial 18001 followed by the number you wish to dial.
Menhaden PLC – Annual Report
Company Summary
Menhaden PLC (the “Company”) is an investment trust. Its shares are listed on the premium segment of the Official
List and traded on the main market of the London Stock Exchange. The Company is a member of the Association of
Investment Companies.
Investment Objective
The Company aims to generate long-term shareholder returns, predominantly in the form of capital growth, by investing
in businesses and opportunities delivering or benefiting from the efficient use of energy and resources irrespective of
their size, location or stage of development.
Management
The Company employs Frostrow Capital LLP as its Alternative Investment Fund Manager (“AIFM”) to provide company
management, company secretarial, administrative and marketing services. Frostrow and the Company have jointly
appointed Menhaden Capital Management LLP as the Portfolio Manager. Further details of these appointments are
provided on pages 25 and 26.
Capital Structure
The Company’s capital structure is composed solely of Ordinary Shares. Details are given on page 36 and in note 12
to the financial statements on page 75.
ISA Status
The Company’s shares are eligible for Stocks and Shares ISAs.
Retail Investors advised by IFAs
The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers
(“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relation
to non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s
restrictions which apply to non-mainstream pooled investment products because they are shares in an investment
trust.
Menhaden
Menhaden are forage fish that occur in great abundance in the West Atlantic Ocean. The name, Menhaden, is derived
from the Native American expression “he fertilises” referring to the wide spread use of the fish as a fertiliser. Menhaden
filter vast quantities of water and play a key role in the food chain. It has been argued that the environmental movement
and fisheries ecology rose from the first collapse in the population of Menhaden in the 1860s as this was used as a
prominent example of mankind’s impact on the oceans and the importance of using resources sustainably.
Menhaden Capital PLC
Annual Report for the period from incorporation on
30 September 2014 to 31 December 2015
A member of the Association of Investment Companies
Disability Act
Copies of this annual report and other documents issued by the Company are available from the Company Secretary. If needed, copies can be
made available in a variety of formats, including Braille, audio tape or larger type as appropriate. You can contact the Registrar to the Company,
Link Asset Services, which has installed telephones to allow speech and hearing impaired people who have their own telephone to contact them directly,
without the need for an intermediate operator, for this service please call 0800 731 1888.
Specially trained operators are available during normal business hours to answer queries via this service. Alternatively, if you prefer to go through
a ‘typetalk’ operator (provided by the RNID) you should dial 18001 followed by the number you wish to dial.
Environment
This report is printed on Revive 100% White Silk a totally recycled paper produced using 100% recycled waste at a mill that has been awarded
the ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
Menhaden PLC
25 Southampton Buildings
London WC2A 1AL
www.menhaden.com
Tel +44(0) 203 008 4910
Perivan 257636
Perivan.com
Menhaden Resource Efciency PLC – Annual Report
Company Summary
Menhaden Resource Efficiency PLC (the “Company”) is an investment trust. Its shares are listed on the premium
segment of the Official List and traded on the main market of the London Stock Exchange. The Company is a member
of the Association of Investment Companies (“AIC”).
Investment Objective
The Company aims to generate long-term shareholder returns, predominantly in the form of capital growth, by investing
in businesses and opportunities that are demonstrably delivering or benefiting significantly from the efficient use of
energy and resources irrespective of their size, location or stage of development.
Management
The Company employs Frostrow Capital LLP (“Frostrow”) as its Alternative Investment Fund Manager (“AIFM”) to provide
company management, company secretarial, administrative and marketing services. Frostrow and the Company have
jointly appointed Menhaden Capital Management LLP as the Portfolio Manager. Further details of these appointments
are provided on page 25.
Capital Structure
The Company’s capital is composed solely of ordinary shares. Details are given on page 39 and in note 13 to the
financial statements on page 79.
ISA Status
The Company’s shares are eligible for Stocks and Shares ISAs.
Retail Investors advised by IFAs
The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers
(“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relation
to non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s
restrictions which apply to non-mainstream pooled investment products because they are shares in an investment
trust.
Menhaden
Menhaden are forage fish that occur in great abundance in the West Atlantic Ocean. The name, Menhaden, is derived
from the Native American expression “he fertilises” referring to the widespread use of the fish as a fertiliser. Menhaden
filter vast quantities of water and play a key role in the food chain. It has been argued that the environmental movement
and fisheries ecology rose from the first collapse in the population of Menhaden in the 1860s as this was used as a
prominent example of mankind’s impact on the oceans and the importance of using resources sustainably.
Menhaden Capital PLC
Annual Report for the period from incorporation on
30 September 2014 to 31 December 2015
Menhaden Resource Efficiency PLC Annual Report for the year ended 31 December 2022
Menhaden
Resource
Efficiency
Menhaden Resource Efciency PLC
Annual Report for the year ended 31 December 2022