Menhaden Resource Efficiency PLC Annual Report for the year ended 31 December 2023

Menhaden

Resource

Efficiency

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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.

Perivan.com

Menhaden Resource Efficiency 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 26.

Capital Structure

The Company’s capital is composed solely of ordinary shares. Details are given on page 40 and in note 13 to the

financial statements on page 81.

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.

Resource Efficiency

Resource efficiency means using the Earth’s limited resources in a sustainable manner, whilst minimising impacts on

the environment. The resources we rely on are finite, meaning they will eventually run out, or can only be replenished at

a certain rate. If we exceed this rate the resource becomes depleted. Resource efficiency is a way to deliver more with

less.

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 2023

1 2

Strategic Report

2 Company Performance

4 Chairman’s Statement

8 Investment Objective and Policy

10 Investment Committee

11 Investment Process

12 Portfolio

14 Portfolio Profile

15 Portfolio Manager’s Review

20 Environmental Impact Statement

25 Business Review

Governance

37 Board of Directors

39 Directors’ Report

43 Statement of Directors’

Responsibilities

44 Corporate Governance Statement

51 Audit Committee Report

56 Directors’ Remuneration Report

59 Directors’ Remuneration Policy

60 Independent Auditor’s Report

3 4

Financial Statements

68 Income Statement

69 Statement of Changes in Equity

70 Statement of Financial Position

71 Statement of Cash Flows

72 Notes to the Financial Statements

Further Information

88 Shareholder Information

90 Glossary

92 How to Invest

94 Notice of Annual General Meeting

99 Explanatory Notes to the

Resolutions

101 Company Information

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Company Performance

£126.7m

Net asset value (“NAV”)

2022: £103.8 million

160.3p

NAV per share

2022: 129.8p

100.8p

Share price

2022: 89.0p

37.2%

Share price discount

to NAV per share*

2022: 31.4%

23.8%

NAV per share

total return*

2022: (16.5%)

13.6%

Share price

total return*

2022: (20.3%)

0.9p

Dividend

2022: 0.4p

1.7%

Ongoing charges ratio*

2022: 1.8%

This report contains terminology that may be unfamiliar to some readers. The Glossary on pages 90 and 91 provides

definitions for frequently used terms.

*Alternative performance measures (“APMs”)

**Subject to shareholder approval

As at

31 December 2023

For the year ended

31 December 2023

Total Return Performance – One Year

Total Return Performance – Three Years

70.0

80.0

90.0

100.0

110.0

120.0

130.0

140.0

Dec 22 Mar 23 June 23 Sep 23 Dec 23

RPI +3% Share Price Total Return NAV Total Return

Dec 20 Jun 21 Dec 21 Jun 22 Dec 22 Jun 23 Dec 23

RPI +3% Share Price Total Return NAV Total Return

60.0

80.0

100.0

120.0

140.0

Source: Frostrow Capital LLP, Office for National Statistics

Rebased to 100 as at 31 December 2022

Source: Frostrow Capital LLP, Office for National Statistics

Rebased to 100 as at 31 December 2020

Total Return Performance – Five Years

Dec 20Dec 18 Jun 19 Jun 20Dec 19 Jun 21 Dec 21 Jun 22 Dec 22 Jun 23 Dec 23

RPI +3% Share Price Total Return NAV Total Return

80.0

100.0

120.0

140.0

160.0

180.0

200.0

Source: Frostrow Capital LLP, Office for National Statistics

Rebased to 100 as at 31 December 2018

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Introduction

After becoming Chair in May 2023, I am pleased to present

our ninth annual report since our launch in July 2015. It

covers the calendar year ended 31 December 2023. By way

of reminder, 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 benefitting significantly from

the efficient use of energy and natural resources, irrespective

of their size, location or stage of development. We are a high

conviction long term patient capital investment.

Financial performance

Short term

The overall performance in 2023 has been encouraging, and

it was pleasing to be short listed for specialist investment

company of 2023 by ‘Investment Week’.

The Company’s total net asset value (“NAV”) increased

21.9% from £103.8 million to £126.7 million, and the

Company’s share price increased 13.2% from 89.0p per

share to 100.8p.

The NAV per share increased by 16.6% from 129.8p to

160.3p in 2023 giving a NAV per share total return* of 23.8%

(2022: -16.5%). This is a 15.6% outperformance over the

Company’s performance benchmark, RPI+3% (compound),

which returned 8.4%, and a 15.0% outperformance over

the AIC environmental sector which returned 8.8%.

Although the Company’s share price discount to NAV

increased to -37.2% (2022: -31.4%), the share price total

return* was a respectable 13.6% (compared to 2022: -0.3%).

Notwithstanding this, the Board continues to try to reduce the

discount and actions it is taking are outlined below.

Longer term

In line with our aim to generate long term shareholder

returns, predominantly in the form of capital growth, the

Company’s compound NAV performance over the last

5 years of 12.3% per annum in 2023 (2022: 7.3% per

annum) outperformed by 5.6%, the compound return for

our RPI +3% benchmark of 6.7% per annum (2022: 5.3%

per annum).

Moreover, the Company’s NAV performance has been

ranked 1st in the AIC environmental sector over the last 1,

3, and 5 years. The Company aims, wherever it can to

reduce on-going charges, and over the last 5 years they

have reduced by nearly 20% from 2.1% to 1.7% in 2023

(2022:1.8%). A small shareholder dividend has been paid

annually since 2018, the exception being 2020 during the

global pandemic.

Further information and performance metrics that describe

the development of the Company over the last 9 years

between 2015 and 2023 is presented on page 89.

Investment strategy

2023 saw the global demand for energy and resources

continue to rise. The World Meteorological Association

stated that 2023 was the hottest year ever recorded and

the International Monetary Fund reported that ﬁnancial

markets were underpricing climate related risk. The need

for businesses to progressively reduce their use of fossil

fuels and greenhouse gas emissions has never been so

critical as part of the green industrial shift mega trend.

We have continued to invest in a concentrated portfolio of

high quality largely global businesses, the majority of which

have a key role in enabling the transition to a lower-carbon

future. 2023 saw a moderate reweighting towards

sustainable infrastructure and transportation, leading to a

commensurate decrease towards our digitalisation,

industrial emissions reduction, water and waste

management, and clean energy themes.

Our public equity investments, comprising 77.2% of our

portfolio, performed well during the year delivering a total

return of 29.0%, and adding 21.6% to the NAV per share.

The largest contributions came from our digitalisation

themed investments (Alphabet, Microsoft, Amazon) and

sustainable transport companies (VINCI, Safran and

Airbus). The weakest contributors were our investments

in North American railway companies.

Our unique private equity co-investments, which at the

end of 2023 comprised 9.7% of our portfolio, also

performed well in 2023 delivering a total return of 32.3%,

adding 2.9% to the NAV per share. We made a successful

exit from our largest ever co-investment (£9.1 million) in a

clean energy developer, X-ELIO with Kohlberg Kravis

Roberts (KKR). It delivered a 2.6x return (in sterling terms)

following its acquisition in November 2023 by Brookﬁeld

Renewables. Following on from our US$15 million

commitment to The Children’s Investment Trust (TCI) Real

Estate Partners Fund III, which finances the development

of best in class energy efﬁcient buildings, during 2023 we

made a further US$25 million commitment to TCI Real

Estate Partners FundIV.

In addition to the investments, our net assets as at

31December 2023 predominantly comprised 1.5% FX

hedge and 11.8% cash. In early 2024 FX hedging was

discontinued and a proportion of the cash proceeds

deployed to increase our public equity positions. In March

2024 we have made a new US$17.5 million clean energy

Chairman’s Statement

Howard Pearce

*Alternative Performance Measure (see Glossary)

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

co-investment commitment with KKR in Avantus (a USA

solar and energy storage developer), further increasing our

strategic asset allocation to private equity. Further details

and commentary about the performance and

development of the Company’s investment portfolio can

be found in the Portfolio Manager’s report (pages 15 to 19).

Environmental performance

In 2023, the energy use disclosures from our listed equities

reported a 7% uplift in the renewable energy they generated

and 36% increase in renewable energy consumed, so

reducing emissions from their use of fossil fuel energy. Some

75% of our listed equities have committed to, or set science-

based targets for emissions reductions in line with the goals

of the Paris global climate agreement.

Whilst some companies in which the Company’s portfolio is

invested, such as in transport infrastructure, use fossil fuels,

our Portfolio Manager only invests in those that are using

innovative, best practice technological solutions to

significantly reduce their emissions and become more

climate friendly. For example, Airbus is global leader in

decarbonising and improving the efficiency of aircraft with a

target that 50% will use sustainable aviation fuel by 2030.

E-commerce is also a key driver of decarbonisation and

companies like Microsoft and Amazon are essential utilities

for millions of businesses and consumers. Microsoft is

committed to be carbon negative by 2030. Amazon has an

ambition to reach 100% renewable energy usage across its

business by 2025 and at the end of 2022 used 85%

renewable energy.

The Company is a supporter of the UN Sustainable

Development Goals (SDGs) and a snapshot of how our

portfolio companies contribute to seven key goals can be

found within the Company’s Environmental Impact Report

on pages 20 to 24. It is also made available as a separate

document on our website www.menhaden.com, including

methodological details that are not included within this

annual report.

Share price discount to NAV per share

At the end of 2023 the shares of over 90% of the London

Stock Exchange listed investment company sector were

trading at a discount, including this Company. It is the

Board’s view that this metric is not necessarily a fair reflection

of the value of our assets and overall financial performance.

However, the Company’s share price discount continues to

be a metric that concerns the Board and which it monitors

extremely closely. The Board has not previously favoured

share buy backs as a means for mitigation of the share price

discount. It remains our view that share buybacks are not

usually in the best long-term interest of shareholders taken a

whole as they reduce the size of the Company and increase

the ongoing charges ratio.

However, after a step-down in the share price in January

2023 the Board decided it would undertake a modest

programme of share buybacks. We considered that this

might reduce the volatility of the share price at that time, take

advantage of the accretion to NAV that buying back shares

at a discount achieves, and provide a signal to the market of

our conﬁdence in the inherent value of the

Company’sportfolio. 975,000 shares (1.2% of total issuance)

were bought back between February and April 2023. While

this provided some additional share liquidity in the volatile

market conditions at that time, the buybacks resulted in no

discernible short-term or longer-term impact on the discount.

For small investment companies, there is scant published

evidence that share buybacks can deliver any sustainable

discount reduction.

During late 2023 the Board approved an enhanced

marketing and communications plan which is being

implemented by our AIFM and Portfolio Manager with the

aim to influence investor sentiment and develop new demand

for our shares to try and reduce the discount. The efficacy of

these actions, which together with the relentless efforts of the

Portfolio Manager to continue to generate strong investment

returns should help to narrow the share price discount over

time, will be continuously assessed during2024.

While further buybacks to help stabilise a falling share price

are not ruled out, any future decision will be dependent on

the prevailing market conditions, the Company’s available

liquid resources, and the potential conﬂict between accretive

share buybacks and the availability of more attractive portfolio

investment opportunities offering a greater return on capital.

Additionally, in the course of the Board’s considerations of

the impact of any such further action, the Company, in

consultation with the Takeover Panel, identified that in the

context of any such buybacks Ben Goldsmith, the CEO of

the Portfolio Manager (Menhaden Capital Management

LLP), together with persons who are, or may be presumed

to be, acting in concert with him, hold a significant

percentage of the voting rights of the Company (27.9% of

the Company’s issued share capital as at 31 March 2024).

Under Rule 37 of the Takeover Code, any increase in the

percentage of shares carrying voting rights held by a

shareholder or group of persons acting in concert with that

shareholder resulting from the purchase by a company of its

own shares will be treated as an acquisition for the purpose

of Rule 9 of the Takeover Code.

The identification of this concert party and the level of its

aggregate interests in the Company’s shares is likely to

have the effect of limiting any share buybacks. The

Company and the members of the concert party are keen

to avoid inadvertently triggering Rule 9.1(a) of the Takeover

Code, which requires a mandatory offer to be made for the

entire issued share capital of the Company in the event that

any person acquires an interest (taken together with shares

in which other persons deemed to be acting in concert are

interested) of 30% or more of the voting rights of the

Company.

The Board has instructed the Company Secretary to monitor

the interests and dealings of the members of the concert

party and has requested that the Portfolio Manager keep the

Board and the Company Secretary updated with the details

of any changes to the composition of the concert party and

its interests in the Company in order for the Board to be

informed of the concert party’s position prior to considering

any future share buybacks.

The Board is asking shareholders to renew the authority to

repurchase the Company’s shares in the market at the

forthcoming AGM. Buybacks will remain at the discretion of

the Board.

It remains our aim for the Company to be in a position to

enlarge its capital base through the issuance of new shares.

This would reduce the annual ongoing charges and enhance

the secondary market liquidity of the Company’s shares,

which the Board believes is in the best interest of all

shareholders. As the Company can only issue new shares

when the share price is at a premium to NAV, our

fundamental aim is to improve the share price through

enhanced investment performance supported by effective

marketing strategies and informative communications to

potential new investors who are attracted by our investment

thesis and track record.

Shareholder dividend

While income generation, via the payment of annual

shareholder dividends, is not one of our primary investment

aims, such payments are an important shareholder benefit.

The Company’s dividend policy is to pay a dividend sufficient

for it to maintain compliance with its investment trust legal

status. The revenue return for the year to 31 December

2023 of £894,000 means that the legal threshold requiring

a dividend payment has been exceeded and so, subject to

shareholder approval, a dividend will be paid for 2023, as it

has been four times previously. The Board is recommending

to shareholders that a final dividend of 0.9p per share (0.4p

in 2022) be declared in respect of the year ended

31December 2023 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 5July 2024

to shareholders on the register on 7June 2024. The shares

will be marked ex-dividend on 6June 2024.

Board developments

There have been a number of changes to the Board during

2023. In May 2023 Ian Cheshire stepped down as Chair

and became an independent non-executive Director and

Barbara Donoghue became Chair of the Audit Committee.

Later, in December, Barbara succeeded Ian Cheshire as

Chair of the Management Engagement Committee and

was also appointed as Senior Independent Director.

Following a competitive recruitment process, I am

delighted that Soraya Charabak joined the Board in March

2023. Duncan Budge retired from the Board at our last

AGM. We are exceedingly grateful for his valuable

contributions to ourBoard and Committee meetings.

Strategic outlook

Looking ahead further, continued geo-political tensions

and economic uncertainties, with potential disruption to

global supply chains, are quite likely. For example, arising

from the continuing conflicts in the Ukraine and Gaza;

tensions between America and China over trade; and

volatility in the price of energy and natural resources. Also

the impact of climate change, and increasing incidence of

extreme weather events, has increasing financially material

consequences. All these macro-factors have significant

impacts on millions of people, financial markets and on

investor sentiment.

Notwithstanding these challenges, the Board considers

the Company’s unique strategy and high conviction

portfolio to be well placed for further capital growth

because of the high quality and the defensive and inﬂation

resistant properties of our investment holdings. Moreover,

the Board remains convinced all businesses must respond

to climate change by navigating the energy transition from

fossil fuels to more renewable sources and the need to be

ever more energy and resource efﬁcient becomes even

more critical to their on-going sustainability and success.

Accordingly, the Company’s investment thesis should

continue to provide long-term beneﬁts for ourinvestors.

The next five-yearly continuation vote for the Company will

be in July 2025.

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Chairman’s Statement

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Annual General Meeting

The Company’s AGM will be held at the offices of Frostrow

Capital LLP, 25 Southampton Buildings, London

WC2A1AL on Thursday, 27 June 2024 at 11.30 a.m. The

Notice convening the AGM together with explanations of

the proposed resolutions can be found on pages 94 to 99

of the Annual Report. The Board considers that all the

resolutions are in the best interests of the Company and

the shareholders taken as a whole and unanimously

recommend they be approved.

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,

especially if they are unable to attend, are invited to send

any questions they may have to the Company Secretary

by email to info@frostrow.com ahead of the meeting.

Howard Pearce

Chairman

19 April 2024

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% (compound) 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

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 has 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 on page 90 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.

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 Capital Management LLP, 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.

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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.

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.

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Investments held as at 31 December 2023

Fair % of

Investment Country Value Total Net

£’000 Assets

Airbus France 15,858 12.5

Alphabet United States 15,342 12.1

Microsoft United States 13,269 10.5

Safran France 11,329 8.9

VINCI France 10,345 8.2

Canadian Pacific Kansas City Canada 9,181 7.2

Canadian National Railway Canada 8,536 6.7

Amazon United States 6,198 4.9

TCI Real Estate Partners Fund IV* United States 6,021 4.8

John Laing Group*

UK 4,503 3.6

Ten Largest Investments 100,582 79.4

Ocean Wilsons Bermuda 4,320 3.4

TCI Real Estate Partners Fund III* United States 1,736 1.4

Waste Management United States 886 0.7

Union Pacific United States 771 0.6

ASML Netherlands 709 0.6

KLA United States 593 0.5

Lam Research United States 430 0.3

Total Investments 110,027 86.9

Net Current Assets (including cash) 16,652 13.1

Total Net Assets 126,679 100.0

Portfolio

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Investment made through KKR Aqueduct Co-Invest L.P. * Unquoted

Business Description Investment Theme

Digitalisation

Provides waste management and environmental services in North America Water and waste management

Digitalisation

Designs and manufactures next generation commercial aircraft which offer significant fuel

efficiency savings

Delivers a range of internet-based products and services for users and advertisers, which are

power worldwide

Digitalisation

Designs, manufactures and services next generation aircraft engines which offer significant

fuel efficiency savings

Industrial emissions reduction

Builds and operates energy efficient critical infrastructure assets Sustainable infrastructure and

transportation

Owns and operates fuel-efficient freight railways in Canada and the USA Sustainable infrastructure and

transportation

Operates rail freight services across North America, which represent the most environmentally

friendly way to transport freight over land

Sustainable infrastructure and

transportation

An energy efficient ecommerce and cloud computing business aiming to use only renewable

energy by 2030

Digitalisation

Portfolio of mostly renewable rail and social infrastructure assets Sustainable infrastructure and

transportation

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

Develops, manufactures and services inspection and metrology equipment used to increase

the efficiency of semiconductor manufacturing

Develops, manufactures and services etching and deposition equipment used to produce

more energy efficient semiconductor chips

Provides cloud infrastructure and software services which deliver energy efficiency savings for

customers versus legacy solutions

Sustainable infrastructure and

transportation

Invests in energy-efficient real estate projects Sustainable infrastructure and

transportation

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Portfolio Distribution

Portfolio Profile

13.1%

9.7%

77.2%

Public Equities

Liquidity

Private Investments

By Asset Allocation

34.8%

4.1%

3.9%

Europe

North America

Emerging Markets

57.2%

By Geography

10.3%

0.8%

33.2%

Sustainable Infrastructure

and Transportation

Industrial Emissions Reduction

Digitalisation

Water and Waste Management

55.7%

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.

Digitalisation Companies that facilitate reduced resource consumption through digital technology.

Reporting Companies providing the means for environmental reporting and evaluation.

Sustainable infrastructure and

transportation

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Performance

During 2023, the Company’s NAV per share increased from

129.8p to 160.3p. Together with the 0.4p per share dividend

paid in the year, this represents a total return of 23.8% and

compares to the benchmark (RPI+3%) return of 8.4%.

Importantly, this level of performance has been achieved

with no change in our appetite for, and attitude towards, risk.

The contributions to the NAV per share total return over the

period are summarised below:

31 December 2023

NAV Contribution

% %

Quoted Equities 77.2 21.6

Private Investments 9.7 2.9

FX Hedges 1.5 2.2

Cash 11.8 0.0

Other net current liabilities (0.2) (1.2)

Expenses (1.7)

Dividend Paid (0.4)

Net Assets 100.0

Net Return 23.4

Impact of dividend reinvestment 0.4

Total Return 23.8

The drive for resource efficiency continues to accelerate, with

the US and China restarting a joint effort to tackle climate

change in November 2023 and then nearly every country in

the world agreeing to transition away from fossil fuels at the

COP28 summit in December 2023. More than 100countries

also signed pledges to triple global renewable power capacity

by 2030 and double the annual rate of energy efficiency

improvements every year to 2030. Our approach of pairing

this theme with a strict focus on quality and valuation was

once again fundamental to generating good investment

returns. This preference for businesses which benefit from

barriers to entry, and which trade at reasonable valuations has

led us to invest primarily within the sustainable infrastructure

and transportation and digitalisation themes, and has mainly

been expressed in quoted equities where the return relative

to risk has been more favourable.

Investment performance was led by the portfolio’s

digitalisation holdings (Microsoft, Alphabet and Amazon), in

a reversal of their poor performance in 2022. Safran, VINCI

and Airbus performed strongly following the aviation

industry’s post Covid resurgence. Within the private portfolio,

KKR agreed a deal to sell its 50% stake (in which the

Company participated) in Spanish solar developer, X-ELIO,

to joint venture partner, Brookfield Renewable. The

transaction completed in November and crystallized an

aggregate return on invested capital of 2.15x in US dollars,

equivalent to an IRR of ~13% over 8 years. This was our

fourth successful exit from a private investment since

inception. In aggregate, these have generated realised gains

of approximately £21 million (and 2.0x cost).

Key portfolio decisions during the period included the

reduction of the Alphabet position by one half, due to

concerns over rising competition, and the partial

redeployment of the proceeds into re-establishing a position

in Airbus in February 2023. Airbus has the leading narrow

body aircraft franchise and in our view is best placed to help

airlines meet their growing needs for fleet renewals and

decarbonisation. We continued to increase the size of the

Airbus position over the subsequent months. We always

monitor valuations and adjust positions accordingly where

appropriate. In this vein, we opted to take some profits on the

Microsoft holding in June, following very strong performance.

We then added the proceeds, and some excess cash, to the

portfolio’s Airbus, Canadian National Railway and VINCI

holdings. We believed these investments offered similar

returns premised on less demanding valuations.

Within the Company’s private portfolio, we made a

US$25million commitment to the fourth vintage of the TCI

Real Estate Partners strategy in March 2023. This fund will

follow the same strategy, and offer similar environmental

benefits, as the TCI Real Estate Partners Fund III. The Fund

helps to finance developments which are best in class in

terms of energy efficiency and environmental standards. The

first drawdown was called in October 2023, which was

funded from cash on hand and by partial sales of quoted

equity holdings.

Following the year end and the settlement of outstanding

currency hedges, we decided to cease partly hedging US

dollar and Euro currency exposures due to changes in the

outlook for currencies and a new requirement to cash

collateralise forward exposures on a daily basis.

In February 2023, following a widening of the discount of the

price at which the Company’s shares traded relative to their

NAV, the Board of Directors authorised the deployment of

up to £1 million for a share buyback programme. 975,000

shares (1.2% of the total issued) were purchased between

mid-February to early April at a cost of £920,000.

Portfolio Manager’s Review

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Portfolio Manager’s Review

continued

We maintain a proactive stance on stewardship. We carefully

assess shareholder resolutions and engage with portfolio

companies on environmental issues. We seek to promote

energy transition plans to progress towards net zero targets

and greater disclosure of greenhouse gas emission

reduction and mitigation strategies. During the period we

voted against the recommendation of both Amazon’s and

Microsoft’s management on resolutions requesting

disclosure on how the company is protecting the retirement

plan’s beneficiaries from climate risk.

Quoted Equities

Quoted equities represented 77.2% of total NAV at

31December 2023, and delivered a total return of 29.0%

over the period, adding 21.6% to the NAV per share.

Increase/ Contribution

Investment (Decrease) % to NAV %

Alphabet 72.2 5.7

Microsoft 78.5 5.1

Safran 39.4 2.9

Amazon 90.1 2.7

VINCI 21.2 1.6

Airbus 11.7 1.4

Ocean Wilsons 46.3 1.3

KLA 55.6 0.2

Lam Research 89.1 0.2

ASML 36.7 0.2

Canadian National Railway 6.8 0.1

Union Pacific 20.7 0.1

Waste Management 16.0 0.1

Canadian Pacific Kansas City 6.2 0.0

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.

Alphabet is the market leader in search. The company’s

market share (>90%) has not materially changed following

the launch of Open AI’s ChatGPT and the proliferation of large

language models. Ecommerce still represents only a fraction

of total retail sales and we believe Google’s Search business

can continue to generate healthy revenue growth going

forward. The company continues to drive its sustainability

agenda with aims to achieve net-zero emissions, run on 24/7

carbon-free energy and to replenish more water than it

consumes. Progress is also being made on costs, with

management continuing to restructure business units and

reduce headcount. Core operating margins are improving.

Alphabet remains focused on using Generative AI to enhance

Google’s products and services for both users and

advertisers and launched its Gemini AI model in December

2023, followed by full release in February 2024.

That said, we reduced the position materially in February 2023

in the face of rising competition in Search, following Microsoft’s

launch of its new Bing search engine. Whilst we thought that

Alphabet was well positioned to fend off this new challenge, we

believed that the range of outcomes had widened and

associated risk increased. We sold approximately one half of

the position. We also continue to monitor the various anti-trust

actions against the company. The evidentiary phase of the US

Department of Justice’s antitrust trial against Google concluded

during 2023 and closing arguments are set for May 2024.

Microsoft is the key technology partner for enterprise and its

software products are ubiquitous. More than 95% of Fortune

500 companies are customers of the Azure cloud business

and four out of every five use Office 365. Microsoft strives to

ensure their technology infrastructure is fully sustainable,

aiming to operate on carbon-free energy everywhere, at all

times, by 2030. Azure continues to gain share, with growth

rates materially outpacing both Amazon Web Services and

Google Cloud. Microsoft’s CFO expects the growth rate to

remain in the high 20s for the first half of 2024. Office 365 is

approaching 500 million users across Commercial and

Consumer platforms and continues to grow. The company

fully launched its Microsoft 365 Copilot product at the start of

November. Whilst the rate of adoption may be gradual, we

believe that the end productivity gains will support significant

future revenue growth. We opted to take some profits in June,

with the shares then up more than 40% year-to-date in US

dollars, and reduced the position by 2.0% of NAV.

French aircraft engine manufacturer Safran continues to

lead the way towards the decarbonisation of the aviation

sector. The company has committed to reduce absolute

Scope 1 and 2 emissions (see page 20) by 50% by 2030

and reduce Scope 3 emissions by 42.5% per available seat

kilometre by 2035 (versus 2018). These targets were

independently approved by the SBTi in January 2023.

Renewal of the existing fleet with the latest generation of

aircraft powered by Safran’s LEAP engine should reduce the

carbon emissions per passenger mile by 1-2% per year over

the next 15 years. Safran and GE also launched the RISE

(Revolutionary Innovation for Sustainable Engines)

programme in 2021. This engine programme targets further

fuel efficiency improvements of more than 20% and full

compatibility with sustainable aviation fuels. The commercial

launch is scheduled for the mid-2030s.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Safran has profited from the commercial aviation industry’s

resurgence. Flight cycles are the key driver of the company’s

financial performance, with most of its earnings coming from

aftermarket sales of spare parts. We believe air travel

remains a secular growth story, with most people still never

having travelled on a plane. Growing aftermarket volumes

should be augmented by a benign pricing environment,

following difficulties encountered by engine manufacturer

rivals, Pratt & Whitney and Rolls Royce.

Amazon aims to reach net zero carbon emissions by 2040.

Progress so far includes the company’s carbon intensity

falling 7% from 2021 to 2022 and 90% of electricity

consumed attributable to renewable energy sources, with a

path to 100% by 2025. Profitability and free cash flow

generation have meaningfully recovered and we expect both

to continue growing well. The retail business’ operating

margins are benefiting from the switch to a regional fulfilment

model in the US. This translates into shorter delivery

distances and faster delivery speeds. New robotics initiatives

could further boost productivity in the coming years. Amazon

Web Services’ growth rate is picking up following a softer

Cloud environment focused on workload optimisations. CEO

Jassy is still keen to highlight the remaining opportunity, with

90% of IT spend still on-premises. Capital investment is also

moderating, following the expansion of the fulfilment network.

French infrastructure group, VINCI, aims to reduce Scope1

and 2 emissions by 40% and Scope 3 emissions by 20% by

2030. These are notable goals for a construction company

and include increasing the use of low carbon concrete for

90% of its needs. The airports segment has recovered

strongly in 2023. Traffic is now above 95% of 2019 levels but

there are considerable differences between regions. Neither

France nor the UK, two of the most important countries, have

yet returned to 2019 levels. VINCI’s management team

continues to deploy capital in a measured way and outlined

plans to build and operate a portfolio of renewable energy

assets through its Cobra IS business unit at its Investor Day

in December 2023. The team is aiming to have 5 GW of

capacity in operation or under construction by 2025 and 12

GW by 2030. The company started operating its first

renewable energy asset last year, with the commissioning of

the Brazilian Belmonte solar farm (0.6 GW) in July 2023.

We renewed a position in aircraft manufacturer Airbus in

February and repeatedly increased its size over the next

sixmonths. This was the portfolio’s largest holding at 12.5%

of NAV at the year end. The company’s shares had

previously been held in the portfolio but we exited in April

2021, believing that the post-Covid recovery would take

significantly longer than implied by the price. Now

commercial aviation’s recovery is nearly complete and the

secular growth of air travel appears set to resume. Fleet

renewal requirements and the need for the global aviation

sector to accelerate their decarbonisation are key drivers.

By upgrading to Airbus’ latest generation aircraft, customers

can reduce carbon emissions by 20-30%. Airbus’ aircraft

are also certified to operate on 50% sustainable aviation fuel

(SAF), with a target to reach 100% by the end of the decade.

Airbus plans to reduce scope 1 and 2 emissions by 63% by

2030 and reduce scope 3 emissions by 46% by 2035.

Their management team remains focused on ramping A320

production. This programme is sold out until 2029.

Personnel hiring ahead of current manufacturing needs and

the building of certain key inventories should help to ensure

a successful ramp up. Engine deliveries remain a bottleneck

but both CFM (Safran and GE) and Pratt & Whitney have

reaffirmed their commitments for 2024. Deliveries of aircraft

should increase from 735 in 2023 to more than 1,000

annually in the coming years and underpin significant

earnings growth. This profile is well supported by the current

backlog of nearly 8,600 aircraft.

Holding company, Ocean Wilsons, comprises a controlling

interest in publicly listed Brazilian port operator, Wilson Sons,

and a diversified investment portfolio. Shipping has the lowest

climate impact of any freight method, on a per unit basis,

producing between 10-40 grams of CO2 per metric ton of

freight per kilometre of transportation, which is around half

that even of rail freight. Wilson Sons’ asset base enjoys high

barriers to entry and substantial operating leverage for growth

in Brazil’s international trade shipping sector. Following a

strategic review in June, Ocean Wilsons confirmed the receipt

of several indicative non-binding offers for its investment in

Wilson Sons. The company could unlock significant value,

with the shares trading at more than a 50% discount to NAV.

The semiconductor industry appears to have passed the

bottom of its sales cycle. Whilst the profile of any recovery

is uncertain, a return to growth should translate into higher

capital spending. This should benefit the semiconductor

capital equipment companies in the portfolio, ASML,

LamResearch and KLA. 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 believe the

fundamental drivers of semiconductor demand remain as

clear as ever: cloud computing, artificial intelligence, 5G, the

Internet of Things (IoT) and the digitalisation of the

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Portfolio Manager’s Review

continued

automotive industry. Semiconductor manufacturers’ capital

intensity also continues to increase. We expect all these

companies to have very bright futures.

The Company’s North American railroad holdings, Canadian

National Railway, Canadian Pacific KansasCity and

Union Pacific, have contended with a slowing economy

and a period of inventory destocking in 2023. We view these

headwinds as only cyclical in nature. Rail retains a significant

cost advantage over trucks on longer haul routes and no one

is building railroads today. 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. Furthermore, these companies

continue to evaluate and trialnew technologies to move

beyond the internal combustion engine.

We opted to add incrementally to the portfolio’s position in

Canadian National Railway in June. We believed the shares

offered good value compared to the company’s midterm

organic growth profile. Canadian Pacific finally completed its

merger with Kansas City Southern in April 2023. The combined

entity has multiple opportunities to grow volumes, including by

converting truck traffic to rail. We believe the company can

outperform its published earnings per share guidance. New

Union Pacific CEO, Jim Vena, has embarked upon a

programme of decentralisation as he aims for the company to

grow faster than the economy with industry leading margins.

Waste Management provides essential services 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.

Solid waste pricing has now moved ahead of cost inflation

and the company should be able to regain some of the lost

ground over the past two years. Progress is also being made

on the automation programme to reduce labour

requirements by 5,000-7,000 roles, equivalent to more than

10% of headcount. Growth investments in new automated

recycling facilities and renewable natural gas plants at landfill

sites continue, although certain of the latter projects have

been hampered by interconnection and permission issues.

We believe these will ultimately be resolved and underpin

sustained double digit earnings growth going forward.

Private Investments

The Company’s portfolio of private investments represented

9.7% of the total NAV as at 31 December 2023, and

delivered a total return of 32.3% over the period, adding

2.9% to the NAV per share.

Increase/ Contribution

Investment (Decrease) % to NAV %

X-ELIO 31.3 3.0

TCI REP Fund III (1.9) (0.1)

John Laing 3.2 0.1

TCI REP Fund IV 1.6 (0.1)

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. Excludes distributions received.

As noted above, KKR completed the sale of its 50% stake

(incorporating the Company’s co-investment) in Spanish solar

energy developer, X-ELIO, in November. This crystallised an

aggregate return on invested capital of 2.6x in Sterling terms,

equivalent to an IRR of ~16% over 8 years. The increase and

contribution to NAV in the table above represent percentages

for the period until X-ELIO's disposal in November.

The remaining investments in TCI Real Estate Partners

Fund III are three loans to separate real estate

developments in the United States. They are first mortgages

and have low loan-to-value ratios (less than 60%). These

developments are best in class in terms of energy efficiency

and environmental standards. Buildings contribute more

than 30% of GHG emissions in the United States and raising

their efficiency levels is vital to reducing emissions. Whilst the

Fund did not manage to commit the level of capital we

originally hoped, investment returns have remained in line

with expectations. The Fund has continued to draw down

from its remaining commitment (circa US$3.2 million) in line

with the schedules of its existing loans. We expect two loans

to be repaid this year and the last one to be repaid in 2026.

We finalised a new US$25 million commitment to the TCI Real

Estate Partners Fund IV in March 2023. This fund will follow

the same strategy, and offer similar environmental benefits, as

the TCI Real Estate Partners Fund III. The coronavirus

epidemic provided a stress test for Fund III. We were very

pleased that while certain developments were affected by

construction delays, return expectations on the loans remained

unchanged. Each loan has several elements of downside

protection such as credit seniority, loan-to-value ratios of up

to 65% and completion and carry guarantees. The strategy

has only ever recorded one loss out of 37 loans. The manager

believes that stress is starting to permeate real estate credit

markets and that the emerging conditions should underpin

strong demand for its differentiated financing. Furthermore, the

rise in interest rates has increased the relative attractiveness of

their traditionally premium rates. The manager is targeting

gross returns of 11-14%. We believe this level of return

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

represents an exceptional balance between risk and reward.

The fund made its first drawdown in October 2023, which was

funded from cash on hand and by partial sales of quoted

equity holdings. We expect the Company’s net invested

amount, on a cost basis, to peak at approximately 70% of the

total commitment in mid-2026. This will significantly increase

the portfolio’s exposure to real estate and the sustainable

infrastructure and transportation theme.

John Laing is an active manager of public-private

partnerships and similar concession-based assets. The

company makes both green and brownfield investments. The

management team launched a new sustainability strategy in

August 2023 and is aiming to reach net zero by 2050, with an

interim target for 70% of assets to align with net zero by 2030.

John Laing completed its largest ever investment with the

purchase of three Irish infrastructure assets from AMP Capital

in 2023. These consisted of Valley Healthcare, a portfolio of

primary care centres, the Convention Centre Dublin and

Towercom, a mobile tower operator. Then the purchase of

equity interests in four UK Public-Private Partnerships and a

stake in the Hornsea II offshore transmission assets from HICL

Infrastructure PLC was agreed in September 2023. Finally, the

sale of the Clarence Correctional Centre in Australia, which

was planned as part of KKR’s acquisition, was also agreed.

FX Hedges

We first hedged currency exposure in November 2017, after

a prolonged phase of Sterling weakness. This had benefitted

the portfolio, which was heavily weighted to assets

denominated in US dollars and Euros. We sought to protect

some of these gains by hedging approximately half of the

portfolio’s currency exposures. With the benefit of hindsight,

we can see our concerns that these Sterling currency gains

might be substantially given back were unfounded. Following

the settlement of the outstanding currency forward contracts

in early January 2024 we have ceased to hedge the

Company’s currency exposures, due to a new requirement

to cash collateralise the forward exposures on a daily basis

(whereas in the past these were only cash settled, or paid

out, on expiry). Since inception, the cumulative net losses

from our hedging strategy amounted to £5.3 million. It should

be noted that, as a hedge, this loss has been more than

offset by the currency gains on non-Sterling holdings.

Outlook

We keep focusing on what we can control. Our preference

remains for investments that require us to make as few

predictions as possible. We believe our criteria of investing

in energy and resource efficiency businesses offering quality

and value results in a portfolio well placed to generate

superior returns over time relative to the level of risk taken,

in most market conditions.

The completion of the sale of X-ELIO meant we finished the

year with a high cash balance. Following the year end, we

deployed a portion of the cash, equivalent to 5.8% of NAV,

across the portfolio’s existing quoted equity holdings in January.

Since then, we were pleased to agree a new co-investment

with KKR in a solar developer in the United States, Avantus, in

March. This company has one of the largest development

pipelines across California and the Southwest. We believe the

deal is highly opportunistic and at an attractive valuation. As

always, we only make private investments when they offer a

more attractive balance between risk and reward compared to

public markets. We believe this transaction met this criterion

and we expect it to produce returns significantly in excess of

public equity markets. Our initial US$17.5 million investment

equates to ~10% of the Company’s NAV and was funded from

cash on hand and the partial sales of existing quoted equities.

We expect this transaction and further drawdowns on our

commitment to TCI Real Estate Partners Fund IV to significantly

increase the portfolio’s allocation to private investments.

Following the strong performance in 2023, the Company’s

net asset value per share has now compounded at over

12.3%, after fees, for the five years ended 31 December

2023 compared to our benchmark RPI+3% return of 6.7%.

Share price performance continues to trail the Company’s

net asset value returns, resulting in a widening discount to

net asset value. We believe this is primarily due to the size

of the Company and a corresponding lack of liquidity in the

shares. We intend to keep our relentless focus on

investment performance to deliver growth, and a reduction

in the discount, as both the performance and growth are

recognised by the market. With all members of the

PortfolioManager owning significant equity stakes in the

Company, our interests are in full alignment with

shareholders. Below is a summary of the Company’s

compound annual growth rate on total return basis:

To 31 December

2023 1 year 3 years 5 years 7 years Inception

NAV per share 23.8% 6.6% 12.3% 9.6% 6.7%

Share price 13.6% 0.7% 8.8% 6.4% 0.0%

RPI+3% 8.4% 11.2% 6.7% 7.2% 6.7%

Menhaden Capital Management LLP

Portfolio Manager

19 April 2024

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Environmental Impact Statement

Foreword

The extreme weather of 2023 was a powerful reminder of the need for capital markets, policymakers and civil society to

adapt to a changing world. The World Meteorological Organization confirmed it was the hottest year on record, with the

highest levels of carbon dioxide in the atmosphere for at least 2 million years. So it was fitting the year ended with the

landmark commitment from over 100 governments at COP28 to accelerate energy efficiency and renewable use.

That is a commitment that chimes with our core objective at Menhaden Capital Management LLP – to generate long-term

outperformance for Menhaden Resource Efficiency PLC’s shareholders by investing in businesses that deliver, or materially

benefit from, the efficient and responsible use of energy and other resources.

We can reflect on an encouraging year, where Menhaden Resource Efficiency PLC’s net asset value per share was up

23.8%, and companies in its portfolio showed leadership in developing solutions that drive value by addressing energy

efficiency and climate challenges. Alphabet continues to take major strides to reduce operational waste and promote a

more circular consumption cycle, and Waste Management is breaking new ground in the production of biogas and

renewables by repurposing closed landfill sites into solar farms. VINCI is working to reduce its emissions by replacing its

fleet of vehicles with electric, hybrid or hydrogen models, and gradually mainstreaming low-carbon concretes across all

VINCI Construction and VINCI Autoroutes worksites.

We are highly encouraged that over three quarters (11/14) of the portfolio’s listed holdings have committed to, or set,

science-based targets for emissions reductions, and that nearly all (13/14) responded to CDP’s 2023 climate questionnaire.

We continue to engage with the companies in the portfolio to encourage further disclosure including on nature, as-well as

climate risk.

In a rapidly changing world there remains enormous opportunity in applying an energy and resource-efficient mindset to

investment decision-making, and we look forward to continuing this approach to value creation in 2024 and beyond.

Ben Goldsmith

CEO, Menhaden Capital Management LLP

About this impact statement

Many of the assets in which Menhaden Resouce Efficiency PLC invests have the potential to become more sustainable

over time and in this Impact Statement we aim to provide some insight on how we monitor environmental risk and

opportunity. Data on renewable energy consumed, renewable energy generated and total scope 1 and scope 2 (location

based) emissions is based on listed equity holdings only, and is taken from each entity’s 2023 CDP disclosure and

therefore relates to 2022 data, unless otherwise stated. The status of the portfolio, and of relevant environmental targets

set, is as of 31 December 2023. A full methodology is published in the Appendix to the separate version of this Impact

Statement on the Company’s website www.menhaden.com.

Scope 1, 2 and 3 emissions:

Scope 1 emissions are direct emissions from a company's own operations.

Scope 2 emissions are indirect emissions from the generation of purchased electricity, heat, or steam that a company

uses.

Scope 3 emissions are all other indirect emissions that occur in a company's value chain, including upstream and

downstream emissions.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Impact Data

Menhaden Resource Efficiency PLC’s share of the portfolio companies contributed:

Approach and developments in 2023

Throughout 2023 Menhaden Capital Management LLP

continued to apply a fundamental, research-oriented

approach across key themes including digitalisation,

sustainable infrastructure and transportation.

The data from the listed elements of the Menhaden

Resource Efficiency PLC portfolio show there has been a

36% increase in the amount of renewable energy consumed

across the portfolio compared to last year, and a 7%

increase in the amount of renewable energy generated.

Industries such as transport and technology form the

backbone of the global economy and play a crucial role in

the transition to a low-carbon future, which is why we seek

to find companies pioneering solutions to drive

decarbonisation in their sector. This approach in 2023 saw

Menhaden Resource Efficiency PLC continue to hold several

railroad firms (including Union Pacific, Canadian National

Railway and the recently combined Canadian Pacific

Kansas City (CPKC)), as rail presents the most fuel-

efficient method for transporting freight over land. CPKC’s

new single line rail network has become the first to connect

Canada, the US and Mexico, with reported environmental

benefits of avoiding up to 1.9 million tons of GHG emissions

in improved operational efficiency over the next five years,

as the company converts truck transported freight to rail.

In the digitalisation space, the portfolio’s holdings continue

to implement reuse and recycling initiatives to reduce

operational waste and preserve resources. Alphabet has

diverted 86% of operational waste away from landfill across

Google-owned and operated data centres, reselling

37million hardware components into the secondary reuse

market. Microsoft aims to have a zero waste footprint by

2030, and in 2022 diverted 12,159 metrics tons of solid

waste from its datacenters and campuses from landfills and

incinerators. It also achieved an 82% reuse and recycle rate

of its servers and components, as well as opening four new

‘Circular Centers’ which process decommissioned cloud

servers and hardware.

A new position was opened in aircraft manufacturer Airbus

in February 2023, following the exit of an earlier position in

April 2021. Given aviation accounts for approximately 2.5%

of global CO

emissions, there is an urgent need for the

industry to decarbonise and we believe Airbus is

demonstrating a strong approach with approved science-

based targets for its plans to reduce Scope 1 & 2 emissions

by 63% by 2030 and reduce Scope 3 emissions by 46% by

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Strategic Report

Environmental Impact Statement

continued

2035. This target is in line with a 1.5°C pathway according

to the Science-Based Targets Initiative (SBTi). We will

monitor the firm’s ambition to develop its first hydrogen-

powered commercial aircraft by 2035 and to continuously

improve the efficiency of the next generation of aircraft. Also

in the aviation sector, Safran is engaged in positive recycling

and reuse practices as a founding member of TARMAC

Aerosave: a company focused on improving the process to

recondition or recycle aircraft materials and engines. For

example, non-repairable aircraft windows have been used

by the interior design industry, and plastic components are

used to create clothing or blankets. Whilst Safran’s work in

promoting resource efficiency through its recycling and reuse

programme is a positive step, it is concerning to see its

significant misalignment with a 1.5°C target as per MSCI’s

implied temperature rise, and this issue will be raised with

them through our engagement programme this year.

In April 2023, a new US$25 million commitment to the TCI

Real Estate Partners (REP) Fund IV was finalised. This

fund will follow the same strategy as the previously invested

in TCI REP Fund III, delivering asset-backed loans to real

estate development projects. Buildings contribute an

estimated 30% of GHG emissions in the United States, and

improving energy efficiency levels will be an important driver

for emissions reduction. TCI’s projects include Six Senses

Rome. This property has achieved a Gold Leadership in

Energy and Environmental Design (LEED) certification and

buys 100% renewable energy, has installed heat recovery

and rainwater harvesting systems and water efficient taps

and showers.

We track whether portfolio companies’ emission reduction

plans are aligned with a pathway to fulfil the Paris

Agreement, using MSCI data. Eleven of 14 publicly-traded

investees have now committed to or been approved for

science-based targets (see Figure 2), and as shown in Figure

1 we are encouraged by MSCI data that shows 10/14 listed

equity holdings are aligned with a pathway to 2°C or lower

by 2050. We will continue to raise the importance of

managing this risk through our engagement programme

with companies currently misaligned.

Figure 1: Portfolio company alignment with Paris Agreement goals

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Exit from X-ELIO leaves bright prospects for clean energy growth

Menhaden Resource Efficiency PLC has held a position in global renewables leader X-ELIO since 2015 via a co-investment with KKR, with the

decision to invest driven by strong policy support at the time to reduce emissions and reductions in the manufacturing costs of solar photovoltaic

panels.

Since KKR’s investment in 2015, and new owner Brookfield’s acquisition of the remaining 50% stake in 2019, X-ELIO has benefited from over

US$2billion of investment, enabling the company to increase its development pace and expand its project pipeline. X-ELIO now operates across five

continents and has built or developed nearly 3 GW of renewables projects, avoiding over 600,000 tons of CO2. This is equivalent to avoiding emissions

from over 1.2 million barrels of oil. The company has also continued to seize new business opportunities in addition to solar energy through the

development of hydr

ogen plants, batteries and energy storage.

Menhaden Resource Efficiency PLC no longer holds a position in X-ELIO following KKR’s exit in March 2023, but the Company is delighted to have

played a part in its growth, with over 10 GW of projects now in X-ELIO’s advanced near-term pipeline.

Active ownership: Leveraging our voice on

climate and nature

As a responsible steward of Menhaden Resource Efficiency

PLC shareholders’ capital, Menhaden Capital Management

LLP is committed to engaging directly with portfolio

companies to encourage them to manage climate risks and

take sustainability opportunities. We engage both directly

and in collaboration with other investors and initiatives, and

endeavour to exercise voting rights in line with our

investment objectives.

As part of this we want to ensure all the portfolio holdings

report on their climate risk management and it is

encouraging that 90% of the companies held responded to

the 2023 CDP climate questionnaire. In 2023 we also

participated in CDP’s ‘non-disclosure campaign’, writing to

Safran to encourage them to disclose to the CDP water

request.

We are also encouraged by the number of individual

holdings that have set or committed to emissions reduction

targets verified by the highly respected SBTi. This trend has

continued to increase over the past five years as

demonstrated in Figure 2, rising from one company in 2019

to eleven in 2023. As of 31 December 2023, 78% of the

portfolio’s listed holdings (11 firms) have committed to or set

targets verified by the SBTi. This does not include Amazon

which was removed from the SBTi list of companies acting

on climate goals in August 2023 due to the company’s

‘expired commitment’. Amazon stated on its website that

it is continuing to work with the SBTi to establish a path

forward, and we will continue to monitor this situation.

Figure 2: Listed portfolio companies

setting science-based targets

We believe that the degradation of global biodiversity poses

a long-term financial risk, and are concerned by research

showing six of the nine ‘planetary boundaries’ – which are

critical to sustain the planet’s resilience – have been

breached. That is why in 2023, we wrote to all listed portfolio

companies requesting information on how they assess

biodiversity risk and what practical actions they are taking

to minimise negative impacts. Some positive responses

were received, and where a weak or no response was

received further follow-up engagement is planned. Union

Pacific shared details of its habitat conservation plan to

protect ecosystems and endangered species including a

partnership with The Nature Conservancy to support nature-

based solutions such as restored grasslands and wetlands.

Safran also shared information on several initiatives

including the creation of ecological corridors in Belgium and

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

a qualitative study the company has carried out to assess

the main impacts of its activities on biodiversity to identify

priority areas.

Menhaden Capital Management LLP is a signatory to the

Finance Sector Commitment to Eliminate Commodity-

Driven Deforestation. In line with this commitment, we can

confirm that Menhaden Resource Efficiency PLC’s portfolio

(as of 31 December 2023), does not include investment in

any holdings that focus on forest risk commodities (FRCs)

such as palm oil, soy or beef. We are committed to the

consideration of deforestation risk in our due diligence and

pre-investment processes, and to engagement to mitigate

deforestation should a relevant investment take place.

Alignment with SDGs

Menhaden Capital Management LLP is a supporter of the UN Sustainable Development Goals (SDGs), and a snapshot of

how portfolio companies contribute to seven of the goals is included here:

Microsoft’s partnership with Water.org is helping more than 550,000 people in Brazil, India, Indonesia and Mexico

to access clean water and sanitation

solutions; and Alphabet is finding ways to use reclaimed wastewater and seawater in its data centres rather than freshwater – with almost a quarter (23%) of

the firm’s total data centre water withdrawal (excluding seawater) now from non-potable water

. Amazon has announced a US$10 million planned contribution

to help launch the Water.org ‘Water & Climate Fund’ to empower a million people with water access by 2025 and provide 3 billion litres of water per year in

areas facing water scarcity

Amazon is on track to power operations with 100% renewable energy by 2025, five years ahead of its original 2030 target. In 2022, 90% of electricity consumed

by Amazon was attributable to renewable energy sources, up from 85% in 2021

. John Laing is investing in a wide range of renewable energy projects, such

as the Klettwitz wind farm in Germany – a large project transforming a former open cast lignite mine into a site with 27 wind turbines on the farm, which produce

up to 89 MWh of clean electricity on peak days. Enough to power thousands of homes

In total, 36% of John Laing’s portfolio value

is currently in low-carbon investments such as renewable infrastructure, electric buses and electric rail transport.

LAM research is developing smarter, more efficient products and processes to measure and reduce the GHG emissions footprint of its products. In the

maritime sector, Ocean Wilsons has replaced diesel operated cranes with electric cranes and has created a towage operations centre to optimise navigation

routes and reduce the use of maritime fuel. Wilson Sons, the subsidiary company of Ocean Wilsons, monitors tide and metocean data to manage the long

term sustainability of port infrastructure.

Alphabet continues to take major strides to prevent operational waste and has diverted 86% of operational waste away from landfill across Google-owned

and – operated data centres – reselling 37 million hardware components into the secondary reuse market

. Similarly, Amazon has reported a 41% reduction

in per-shipment packaging weight on average since 2015, representing more than 2million tons of packaging materials avoided

. Safran utilises ecodesign

and Technology Readiness Level (TRL) standards to ensure compliance with regulation, customer needs and to mitigate lifecycle impacts as its technology

advances. Safran's TRL standard was awarded Best Business Practice at the 2022 International Conference on EcoBalance

Microsoft has robust programmes to meet its commitment to be carbon negative by 2030, utilising carbon removal projects like reforestation and direct air

capture to remove all historical emissions by 2050. In the transport sector, Canadian Pacific Kansas City has made significant strides to increase fuel

efficiency and reduce GHG emissions by investing in new technology to modernise 450locomotives, representing 46% of its active line-haul fleet

. These

upgrades are expected to improve fuel economy by a minimum of 2.7%

Founded by Alphabet, X is a diverse group of inventors and entrepreneurs who built and launched ‘Tidal’ to protect the ocean with underwater sensory

technology systems and machine perception tools. Tidal’s first product monitors fish and environmental conditions underwater to detect and interpr

et fish

behaviour

, feeding and health. These insights help fish farmers make more sustainable and cost-effective decisions whilst reducing their impact on life below

water. Since 2002, Ocean Wilsons’ maritime services company, Wilson Sons, has donated deactivated tugboats to the award-winning Pernambuco Artificial

Reefs Project, which seeks to help the recovery of damaged marine ecosystems and serves as a living laboratory for studies on marine biology

VINCI applies its engineering expertise to design and build structures to maintain or restore ecological connectivity, re-naturalise habitats, and manage plant

species. For example, the western Strasbourg bypass project encourages wildlife crossings every 200 metres

. Microsoft is contracted to protect 17,268

acres of land, and made an additional contribution to the TNC Belize Maya Forest Project to protect 236,000 acres in a global biodiversity hotspot

. Safran

is developing a global biodiversity strategy, integrating the various challenges faced by its business and value chain, and launched a study to examine its main

biodviersity impacts and dependencies. As part of this plan, its Milmort site in Belgium was awarded a Nature Network label in 2021.

Microsoft 2022 Environmental Sustainability Report

Google Environmental Report 2023

Building a Better Future Together 2022 Amazon Sustainability Report

Investing in tomorrow sustainability report 2022

Google Environmental Report 2023

Building a Better Future Together 2022 Amazon Sustainability Report

Safran 2022 Integrated Report

CP Climate Action

VINCI Preserving Natural Environments

Microsoft 2022 Environmental Sustainability Report

Environmental Impact Statement

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Business Review

The Strategic Report on pages 2 to 36 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 44.

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 15.

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 pay a

dividend as a minimum to maintain investment trust status.

The Board

Biographical details of the Directors are set out on

pages37 and 38 and information on the workings of the

Board and its Committees is set out in the Corporate

Governance Statement on pages 44 to 50.

All of the Directors will seek re-election by shareholders at

the Annual General Meeting to be held on 27 June 2024.

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.

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Strategic Report

Business Review

continued

AIFM

The Board has appointed Frostrow as the designated AIFM

of the Company on the terms and subject to the conditions

of an 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

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 2023, 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 26, 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.

Foreign Exchange Exposure

As explained in the Portfolio Manager's Review on

page19, the Portfolio Manager has sought to reduce the

volatility in returns caused by currency movements in

respect of the portfolio’s non-sterling denominated

investments through the use of currency forward

contracts. For much of the year approximately 50% of the

Company’s US dollar and euro exposures were hedged in

this manner using 3-month contracts. However, following

a review near the year end it was concluded that the

combination of exchange rate volatility and the relatively

short forward contract periods not matching the longer

term nature of the portfolio created a non-correlated risk

of crystallising currency losses on the rollover of the

contracts. Additionally, it has become necessary for the

Company to lodge cash collateral for such contracts,

making them less economic, and the decision has been

taken to discontinue such hedging transactions for the

foreseeable future.

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Strategic Report

Business Review

continued

Position, Performance and Future

Developments

The Statement of Financial Position on page 70 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 4 and the Portfolio Manager’s Review

on pages 15 to 19.

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 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.

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 4.

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 90 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.

TheCompany’s NAV per share total return over the year to

31December 2023 was 23.8% (2022: -16.5%). 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 8.4%

(2022: 16.4%).

A full description of the portfolio and performance during

the year under review is contained in the Portfolio

Manager’s Review commencing on page 15 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 2023 was 13.6% (2022: -20.3%).

Share 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 2023 the discount

stood at 37.2% (2022: 31.4%). The Chairman’s Statement

beginning on page 4, addresses the discount and the

approach of the Board. The discount continued to remain

disappointingly 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 2023 was 1.7%

(2022: 1.8%).

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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.

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 key risks are registered in the Company's risk matrix, which the Audit Committee has been

delegated to maintain and review at regular intervals. The risk matrix covers all key risks the Directors believe the

Company faces, the likelihood of their occurrence and their potential impact, how these risks are monitored and the

mitigating controls in place. 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:

• Legal and Regulatory Risks

• Investment Risks

• Geopolitical and other Macro Risks

• Corporate Risks

• Operational Risks

• Financial Risks

The following sections detail the risks the Board considers to be the most significant to the Company under these

headings.

The main change from last year is an acceptance, and hence reduced risk rating, that investment risks are largely

inherent in the investment strategy, and investing generally, and that these have been mitigated so far as practical.

It is considered that potential impacts from regulation, including on portfolio companies, related to climate change and

Paris Accord undertakings are tangible and this is recognised below, albeit that the Company’s resource efficiency

theme ought to position it as a beneficiary of related policies.

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.

Climate change regulations could affect portfolio

companies and portfolio construction.

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.

Generally, the Company's resource efficiency theme should tend to

align with climate change regulation. The Portfolio Manager also

corresponds with portfolio companies on environmental matters.

Principal Risks and Uncertainties Management and Mitigation

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Strategic Report

Business Review

continued

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 page82),

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 39 and31 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.

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.

Geopolitical and other Macro Risks

Portfolio constituents may be affected by

regional events or politics. Examples are the

conflicts in Ukraine, and related sanctions, and

the Middle East, with their potential impacts on

supply chains.

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 exposed to Russia or

Ukraine, but the Board continues to monitor developments.

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.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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, including unfunded commitments on

unquoted investments, 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 86% 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.

Principal Risks and Uncertainties Management and Mitigation

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 82.

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.

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 also 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 considered to be 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 52.

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Strategic Report

Business Review

continued

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

improve the share price and 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

Deutsche Numis, the Company’s corporate broker, but

also others who publish and distribute research on the

Company to their respective professional investorclients.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 andwider

macroeconomic developments. The Board also received monthly performance and compliancereports.

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)

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Strategic Report

Business Review

continued

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 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 4.

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 Portfolio Manager’s 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 27.

The Audit Committee concluded that the Portfolio Manager’s

internal controls were satisfactory. See the Audit Committee

Report, beginning on page 51, 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 27 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 51 and

the Notice of AGM beginning on page 94 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 20 to 24 and

is published as a separate document on www.menhaden.com

The Board seeks to comply with these and the followingtable sets out how the Directors have had regardto the views

of the Company’s stakeholders in their decision-making.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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20to24.

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.

Strategic Report

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Business Review

continued

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 36 has been

approved by the Board.

Howard Pearce

Chairman

19 April 2024

The Directors’ beneficial interests in the Company’s shares are set out in the Directors’ Remuneration Report on page 57.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Howard Pearce (Chairman)

Howard Pearce was appointed as Chairman of the

Company on 16th May 2023, having previously been

Chairman of the Audit Committee, a position he had held

since joining the Board as a non-executive Director shortly

before the Company’s IPO in 2015.

In 2023 he also became a non-executive director and chair

of the audit committee of Ashoka White Oak Emerging

Markets PLC.

Previous roles include being a non executive director of

Response Global Media Limited, chair of the Pension Board

of Avon, Berkshire, and Wiltshire Pension Funds, board

member and chair of the audit committee of a UK Port

Authority, and a trustee and chair of the Investment and

Audit Committees of an NHS charity. He is the founder of

HowESG Ltd, a specialist environmental, asset stewardship,

and corporate governance consultancy business. 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 30 awards in the UK, Europe and globally for its

financially and environmentally responsible investment, best

practice fund governance, public reporting and e-

communications.

Barbara Donoghue

Barbara Donoghue (also known as Barbara Donoghue

Vavalidis) joined the Board as a non-executive Director on

1 February 2022. She became Chair of the Audit

Committee on 16 May 2023 and on 12 December 2023

was appointed as Chair of the Management Engagement

Committee and Senior Independent Director.

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.

Board of Directors

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Sir Ian Cheshire

Sir Ian Cheshire joined the Board shortly before its IPO in

2015. He was Chairman of the Company from

appointment, but stepped 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, Land

Securities Group PLC and Channel 4. He additionally chairs

the King Charles III Charitable Fund and the We Mean

BusinessCoalition.

Sir Ian was the chairman of Barclays UK, the ring-fenced

retail bank from 2017 to 2020 and of BT Group PLC from

2020 until May 2023. 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 2014 for services to Business,

Sustainability and the Environment.

Soraya Chabarek

Soraya Chabarek joined the Board as a non-executive

Director on 1 March 2023.

She is CEO at Manulife | CQS Investment Management. She

is also a senior partner, chair of the board of CQS

Management Limited, a member of the board of Manulife

Investment Management (Europe) Limited and a member of

the Asset Advisory Committee for Multi Asset Credit.

Since joining CQS in 2013, Soraya has been instrumental in

the firm’s transformation from a hedge fund manager into a

multi-sector alternative credit platform, leading the growth of

the Firm’s core credit strategies to reach a broader client base

of institutional investors and private wealth channels globally.

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 and a partner. From 2004 to

2008 she was a principal and partner at GLG Partners and

from 2000 to 2004 was with Permal Investment

Management, having previously started her career at HSBC

Private Bank.

Board of Directors

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 2023. Disclosures relating to

performance, future developments and risk management

can be found within the Strategic Report on pages 2 to 36.

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 36, and incorporated in this Directors’ Report

by reference.

Dividends

In accordance with the dividend policy set out on page 25

the Board is recommending a final dividend of 0.9p per

ordinary share in respect of the year ended 31 December

2023, to be paid on 5July 2024 to shareholders on the

ex-dividend on 6June 2024. An ordinary resolution to this

effect is included in the AGM notice of meeting on page94

of this annualreport.

A dividend of 0.4p per ordinary share was paid on 30 June

2023 in respect of the year ended 31 December 2022,

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 31 and 32, 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 68 to 87) 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 28 and defined

more fully, including the basis of calculation, in the

Glossary on pages 90 and 91. 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

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Directors’ Report

continued

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 2023 the

Company had 79,025,001 ordinary shares in issue. During

the year the Board initiated a limited share buyback

programme and a total of 975,000 shares were bought

back in the market and subsequently cancelled. No further

shares have been bought back since the year end to the

date of this report.

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 up to 7,902,500 ordinary

shares and to repurchase 11,845,847 shares. 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 94.

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.

Nominee companies are encouraged to provide the

necessary authority to underlying shareholders to attend

the Company’s general meetings.

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 2023 and 31 March 2024.

31 March 2024 31 December 2023

Number % of Number % of

of issued of issued

Ordinary share Ordinary share

Shareholder shares capital shares capital

Cavenham Private Equity* 15,554,621 19.7 15,554,621 19.7

Generali Deutschland Versicherung 9,050,000 11.5 10,000,000 12.7

First Equity, stockbrokers 6,550,000 8.3 6,350,000 8.0

Ravenscroft 5,023,956 6.4 4,460,456 5.6

Charles Stanley 3,085,933 3.9 3,186,804 4.0

UBS Wealth Management 2,564,435 3.3 2,616,500 3.3

*Goldsmith family investment vehicle and member of the concert party referred to in the Chairman's Statement on pages 5 and 6.

The number of shares in issue on 31 December 2023 and 31 March 2024 was 79,025,001.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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.

Directors’ & Officers’ Liability Insurance

Cover

Directors’ and officers’ liability insurance cover was

maintained by the Company during the year ended

31 December 2023. It is intended that this cover will

continue for the year ending 31 December 2024 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 40.

• 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

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 20 to 24 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.

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 37 and 38. 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44 to 50 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 82.

Annual General Meeting

The Company’s Annual General Meeting (“AGM”) will be

held at 25 Southampton Buildings, London WC2A 1AL on

Thursday, 27 June 2024 at 11.30 a.m.

The business of the meeting is explained in some detail in

the Explanatory Notes to the Resolutions on pages 99

and100 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 94.

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

19 April 2024

Directors’ Report

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 37 and 38, 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 2023; 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

Howard Pearce

Chairman

19 April 2024

Statement of Directors’ Responsibilities

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 – Howard Pearce (from 16 May 2023)

Three 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

Chair – Barbara Donoghue (from 12 December 2023)

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

Chair – Barbara Donoghue (from 16 May 2023)

All Directors

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.

Barbara Donoghue is the Company’s nominated Senior Independent Director, who can be contacted through the

Company Secretary on issues for which normal communication channels are considered to be inappropriate.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

The Board has considered the AIC Code of Corporate

Governance (the “AIC Code”). The AIC Code addresses

all the principles set out in the 2018 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 established a remuneration committee or

a nomination committee. In each case the Board

considers that this is not necessary given the small size of

the Board and duties that would otherwise fall to these

committees are instead dealt with by the full Board.

Purpose and Strategy

The purpose and strategy of the Company are described

in the Strategic Report on page 25.

The Board

Board Membership

The Company has a Board of four non-executive

Directors, including the Chairman. Howard Pearce

(Chairman), Barbara Donoghue and Sir Ian Cheshire

served throughout the year. Soraya Chabarek was

appointed to the Board with effect from 1 March 2023.

The Directors’ biographies can be found on pages 37

and38. 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, other stakeholders; and

• engaging with shareholders to ensure that the Board

has a clear understanding of shareholder views.

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Corporate Governance Statement

continued

Director Independence

The Board is comprised of four 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4. Additional ad hoc Board and committee meetings

are convened from time to time to deal with certain

administrative and time sensitive matters that arise.

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

Board Engagement Ad hoc Board

Type and number of meetings (scheduled) Audit Committee Committee and Committee

held in 2023 (4) (3) (1) (4)

Howard Pearce 4 3 1 4

Sir Ian Cheshire 4 3 1 4

Barbara Donoghue 4 3 1 4

Soraya Chabarek

4 2 1 2

Duncan Budge

2 1 – 2

Soraya Chabarek was appointed as a Director on 1 March 2023.

Duncan Budge retired from the Board on 21 June 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

any), declaration of any interim dividends, the

appointment or removal of the Company Secretary, and

determining the policy on share issuance and buybacks;

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

• 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 is not a signatory to the latest

iteration of the Stewardship Code, but seeks to adhere to

the Code’s principles as closely as possible. Their

approach to stewardship, including their consideration of

environmental, social andgovernance issues, is set out in

their UK Stewardship Code 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

The 2022 Board and committees evaluation process did

not identify any new areas to be addressed, but the Board

continued to monitor particular areas of relevance that had

been highlighted during it. These included the discount at

which the Company’s shares trade, the resource efficiency

credentials of the portfolio and risks to which the

Company is exposed. As described in the Chairman’s

Statement, the Board became concerned about a further

widening of the discount in the first half of 2023 and

decided it would be in shareholders’ interest to try a

modest programme of share buy backs to signal to the

market the Board’s confidence in the value of the

Company’s portfolio and take advantage of the marginal

accretion to NAV this would garner. The Board also

challenged the resource efficiency credentials of new

additions to the portfolio in 2023 and the Audit Committee

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Corporate Governance Statement

continued

reviewed the Company’s risk matrix at each of its

meetings.

During the course of 2023, the performance of the Board,

its committees and the individual Directors (including each

Director’s independence and time commitments) were

evaluated again through a questionnaire-based internal

assessment process led by the Chairman.

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 once again did not identify any new areas to be

addressed, but the Board resolved to try to enhance

communications to shareholders and prospective

investors, this having been an avenue highlighted in the

process that might enhance interest in the Company's

shares, and it has formulated a communication plan. As a

matter of course and as set out above, the Board

continues to monitor other areas of relevance highlighted

in the evaluation process, which again included 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

notes to the notice of the AGM on page 99. 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 listing rules LR 9.8.6R(9)

to (11) 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

ethnic background.

The following tables set out the Company’s positions

against these targets in compliance with the rules. Being

an externally managed investment company, the Company

does not have any executive officers such as CEO or CFO.

However, the Board considers the non-executive position

of Audit Committee Chair to be a senior position and has

treated it as such in the tables, albeit this is inconsistent

with the mandated column headings. The Audit

Committee Chair has also been appointed as the Senior

Independent Director. Although these positions are

occupied by the same person, they have been counted

separately in the tables. Each Director volunteered how

they wished to be included in the tables. The Board has

chosen to align its diversity reporting reference date with

the Company’s financial year end and proposes to maintain

this alignment for future reporting periods.

(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 2 50 1

Women 2 50 2

Not specified/prefer not to say – – –

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

(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) 3 75 3

Mixed/Multiple Ethnic Groups – – –

Asian/Asian British – – –

Black/African/Caribbean/Black British – – –

Other ethnic group, including Arab 1 25 –

Not specified/prefer not to say – – –

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.

Two of the Directors in office at the year end 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 continued

its refreshment process with the appointment of

Soraya Chabarek as a new non-executive Director on

1 March 2023 following an externallly advertised and

competitive recruitment process in late 2022. Duncan

Budge retired from the Board on 21 June 2023. It is

currently intended that the next new appointment to the

Board in connection with the ongoing Board succession

process will be in 2025.

Also in relation to succession, Howard Pearce succeeded

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. The

Board may engage an independent search agency to

assist in the recruitment process.

Audit, Risk and Internal Control

The Statement of Directors’ Responsibilities on page 43

describes the Directors’ responsibility for preparing

thisreport.

The Audit Committee Report, beginning on page 51,

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 29 to 31.

The Board’s assessment of the Company’s longer-term

viability is set out in the Strategic Report on

pages31and32.

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Corporate Governance Statement

continued

Remuneration

The Directors’ Remuneration Report beginning on page56

and the Directors’ Remuneration Policy on page59 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 27.

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 2023, 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40.

By order of the Board

Frostrow Capital LLP

Company Secretary

19 April 2024

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Statement from the Audit Committee Chair

I am pleased to present the Audit Committee report for

the year ended 31 December 2023. 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 Barbara Donoghue

(Chair of the Committee), Howard Pearce, Sir Ian Cheshire

and Soraya Chabarek whose biographies are set out on

pages37 and 38.

The Committee as a whole has experience relevant to the

investment trust industry with Committee members having

a range of financial and investment experience. Barbara

Donoghue and Howard Pearce have previous experience

of chairing audit committees. Although he is Chairman of

the Company, Mr Pearce sits on the Committee as

permitted by the Committee's terms of reference and the

AIC Code, since he is considered to be independent, has

relevant past experience and to expand the capacity of

the Committee given the small size of the Board.

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 2023

• 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 2023

• Review of the Company’s terms of reference, non-audit

services policy and audit tender guidelines;

• Review of the outcome and effectiveness of the 2022

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

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Audit Committee Report

continued

December 2023

• Review of the Auditor’s plan and terms of engagement

for the 2023 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 Chair;

• 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 29 to 31.

Against this background, a risk matrix has been developed

which covers all key risks the Directors believe 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.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 72. 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 2023, 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 74. The Committee asked the Auditor to focus on this area (as it did last year)

given the judgement involved. Having reviewed the valuations, the Committee

confirmed its satisfaction that the investments had been valued correctly. The

Committee also noted the Auditor's report on the challenge they had applied and

their findings.

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.

This being the third year of the three year performance period, following which the

performance fee crystallises, its calculation was considered to be a particularly

sensitive area this year. The Committee highlighted to the Auditor that payment of

the performance fee was subject to completion of the audit. The Committee

reviewed the calculation and is satisfied that it is in accordance with the Investment

Management Agreement. The Committee also noted the Auditor's findings from

their testing.

Valuation, existence and

ownership of investments, in

particular unquoted investments

Risk of revenue being misstated

due to the improper recognition

of revenue

Risk of miscalculating the

performance fee

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 39.

Thefinancial statements can be found on pages 68 to 87.

The Committee also considered the longer-term viability

of the Company in connection with the Board’s statement

in the Strategic Report on pages 31 and 32. The

Committee reviewed the Company’s financial position

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Audit Committee Report

continued

(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

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 12April

2024 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,

particularly with respect to the valuations of unquoted

investments, 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.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Auditor Reappointment

Mazars LLP was appointed as the Company’s external

auditor following an audit tender process conducted in

2019. The audit of the financial statements for the year

ended 31 December 2023 is their fifth audit of the

Company since appointment. Accordingly, Stephen

Eames, who was the audit partner for all of these audits

will rotate off the assignment for the 2024 year end.

Mazars has confirmed their 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

Thursday, 27 June 2024 and the resolution can be found

in the Notice of AGM on page 94.

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.

Barbara Donoghue

Chair of the Audit Committee

19 April 2024

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Directors’ Remuneration Report

Changes in Directors’ Remuneration

2024 2024 2023 2023 2022 2022 2021 2021 2020

Fee level Change Fee level Change Fee level Change Fee level Change Fee level

Director (projected)

Howard Pearce

£50,000 +8% £46,500 +16% £40,000 – £40,000 – £40,000

Sir Ian Cheshire

£40,000 -8% £43,692 -12% £50,000 – £50,000 – £50,000

Barbara Donoghue

£40,000 – £40,000 +9% £36,667 n/a n/a n/a n/a

Soraya Chabarek

£40,000 +20% £33,333 n/a n/a n/a n/a n/a n/a

Duncan Budge

n/a n/a £18,974 -53% £40,000 – £40,000 – £40,000

Howard Pearce succeeded Sir Ian as Chairman of the Board on 16 May 2023.

Sir Ian stepped down as Chairman on 16 May 2023 but will continue as a non-executive Director for the time being.

Barbara Donoghue was appointed as a Director with effect from 1 February 2022.

Soraya Chabarek was appointed as a Director with effect from 1 March 2023.

Duncan Budge retired at the 2023 AGM.

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60 to 67.

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

12December 2023 and it was decided that they would

remain unchanged for the year ending 31 December

2024. No remuneration consultants were appointed

during the year (2022: 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 page25 for

more information). Accordingly, statutory disclosure

requirements relating to executive directors’ and

employees’ pay do not apply.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Single Total Figure of Remuneration (audited)

2023 2022

Taxable Taxable

Fees expenses Total Fees expenses Total

Director £ £ £ £ £ £

Howard Pearce 46,500 2,859 49,359 40,000 2,677 42,677

Sir Ian Cheshire 43,692 – 43,692 50,000 – 50,000

Barbara Donoghue

40,000 – 40,000 36,667 – 36,667

Soraya Chabarek

33,333 – 33,333 n/a n/a n/a

Duncan Budge

18,974 – 18,974 40,000 – 40,000

Emma Howard Boyd

n/a n/a n/a 19,128 – 19,128

TOTAL 182,499 2,859 185,358 185,795 2,677 188,472

Barbara Donoghue was appointed as a Director with effect from 1 February 2022.

Soyara Chabarek was appointed as a Director with effect from 1 March 2023.

Duncan Budge retired from the Board on 21 June 2023.

Emma Howard Boyd retired from the Board on 22 June 2022.

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 2023 31 Dec 2022

Howard Pearce 50,062 40,000

Sir Ian Cheshire 115,000 115,000

Barbara Donoghue 216,693 216,693

Soraya Chabarek 45,000 n/a

Duncan Budge

n/a 10,000

Total 426,755 381,693

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.

July

Dec

NAV Total Return

Share Price Total Return

RPI +3%

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

Source: Frostrow Capital LLP, Office for National Statistics

Rebased to 100 as at 31 July 2015

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 31December 2023 and 2022.

2023 2022 Change

£’000 £’000 %

Total returns 24,093 (20,540) 217.3

Directors’ fees 182 186 (2.2)

†

Dividends paid 316 160 97.6

Total ongoing expenses 2,040 2,018 1.1

† There have been no changes in the annual fee rates payable to directors from 2022 to 2023. The change in total fees reflects the recruitments and

retirements of Directors during 2022 and 2023.

Statement of Voting at the AGM

At the Annual General Meeting held on 21 June 2023 the results of voting on the resolution to approve the Directors’

Remuneration Report were as follows:

Votes cast Votes cast Votes

Resolution for against withheld*

Directors’ Remuneration Report 34,515,221 7,394 11,813

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

Howard Pearce

Chairman

19 April 2024

Directors’ Remuneration Report

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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. No notice

period is stipulated for resignations.

Directors’ Remuneration Policy

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Opinion

We have audited the financial statements of Menhaden Resource Efficiency PL (the ‘company’) for the year ended

31December 2023 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 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 2023 and of its profit 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 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 the 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 April 2024.

• Making enquiries of the directors to understand the period of assessment considered by the Directors, the

completeness of the adjustments taken into account and the 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

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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.

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 funds’ 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 2023.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 £1,266,000

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 £950,000, 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 £38,000 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, its

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.

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Independent Auditor’s Report

continued

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

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;

• the strategic report and the directors’ report 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 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.

• a corporate governance statement has not been prepared by the Company.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 39;

• 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 31 and 32;

• Directors’ statement on fair, balanced and understandable, set out on page 43;

• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks, set out on page 29;

• The section of the annual report that describes the review of effectiveness of risk management and internal control

systems, set out on page 52; and;

• The section describing the work of the audit committee, set out on page 51.

Responsibilities of Directors

As explained more fully in the directors’ responsibilities statement set out on page 43, 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.

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.

Governance

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Independent Auditor’s Report

continued

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 and the industry in which

it operates, 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, as to 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; and

• Discussing amongst the engagement team the laws and regulations listed above, and remaining alert to any

indications of non-compliance.

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.

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.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Other matters which we are required to address

Following the recommendation of the audit committee, we were appointed by the audit committee on 12 December 2023

to audit the financial statements for the year ending 31 December 2023 and subsequent financial periods. The period of

total uninterrupted engagement is five years, covering the years ending 31 December 2019 to 31 December 2023.

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 Rules, these financial statements

will form part of the electronic reporting format prepared annual financial report filed on the National Storage Mechanism

of the Financial Conduct Authority. This auditor’s report provides no assurance over whether the annual financial report

will be prepared using the correct electronic format.

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

19 April 2024

Financial Statements

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

For the year ended For the year ended

31 December 2023 31 December 2022

Revenue Capital Total Revenue Capital Total

Notes £’000 £’000 £’000 £’000 £’000 £’000

Gains/(losses) on investments held at

fair value through profit or loss 8 – 25,374 25,374 – (21,413) (21,413)

Income from investments held at fair

value through profit or loss 2 1,692 – 1,692 1,309 – 1,309

Investment and portfolio management

fees 3 (336) (2,175) (2,511) (323) 387 64

Other expenses 4 (319) – (319) (404) – (404)

Net income/(loss) before taxation 1,037 23,199 24,236 582 (21,026) (20,444)

Taxation 5 (143) – (143) (96) – (96)

Net income/(loss) after taxation 894 23,199 24,093 486 (21,026) (20,540)

Income/(loss) per share – basic

and diluted (pence) 6 1.1 29.3 30.4 0.6 (26.3) (25.7)

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 72 to 87 are an integral part of these financial statements.

Income Statement

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

For the year ended 31 December 2023

Ordinary Capital

share Special redemption Capital Revenue

capital reserve reserve reserve reserve Total

Notes £’000 £’000 £’000 £’000 £’000 £’000

At 31 December 2022 800 77,371 – 24,970 690 103,831

Net income after taxation – – – 23,199 894 24,093

Repurchase of ordinary shares for cancellation (10) (929) 10 – – (929)

Dividends paid 7 – – – – (316) (316)

At 31 December 2023 790 76,442 10 48,169 1,268 126,679

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

The accompanying notes on pages 72 to 87 are an integral part of these financial statements.

Statement of Changes in Equity

Financial Statements

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

As at

31 December 31 December

2023 2022

Notes £’000 £’000

Fixed assets

Investments 8 110,027 93,809

Current assets

Debtors 10 928 104

Derivative financial instruments 9 1,917 4,200

Cash 14,898 6,061

17,743 10,365

Current liabilities

Performance fee payable 12 (829) –

Creditors 11 (262) (343)

Net current assets 16,652 10,022

Net assets 126,679 103,831

Capital and reserves

Ordinary share capital 13 790 800

Special reserve 76,442 77,371

Capital redemption reserve 13 10 –

Capital reserve 18 48,169 24,970

Revenue reserve 1,268 690

Total shareholders’ funds 126,679 103,831

Net asset value per share – basic and diluted (pence) 14 160.3 129.8

The financial statements on pages 68 to 87 were approved by the Board of Directors and authorised for issue on

19April2024 and were signed on its behalf by:

Howard Pearce

Chairman

The accompanying notes on pages 72 to 87 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

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

For the

year ended year ended

31 December 31 December

2023 2022

Notes £’000 £’000

Net cash outflow from operating activities 15 (489) (751)

Cash flows from investing activities

Purchases of investments (27,624) (10,321)

Sales of investments 33,684 28,903

Settlement of derivatives 9 4,497 (12,488)

Net cash inflow from investing activities 10,557 6,094

Cash flows from financing activities

Repurchase of ordinary shares for cancellation (929) –

Dividends paid 7 (316) (160)

Net cash outflow from financing activities (1,245) (160)

Increase in cash and cash equivalents 8,823 5,183

Cash and cash equivalents at start of the year 6,061 878

Exchange rate movement 14 –

Cash and cash equivalents at the end of the year 14,898 6,061

The accompanying notes on pages 72 to 87 are an integral part of these financial statements.

Statement of Cash Flows

Financial Statements

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 pages 53 and 54. 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.

Notes to the Financial Statements

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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.

£12,260,000 or 11.1% (2022: £16,864,000 or 18.0%) 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 86.

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. As set out

on page 86, a 25% discount to NAV has been employed by the Company as a sensitivity test for the impact of

the inherent valuation risk associated with its unquoted investments.

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.

Investments held at fair value through profit or loss:

Investments are initially measured and 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. Transaction costs

associated with purchases and sales of investments are charged in the capital column in the Company’s

IncomeStatement.

Financial Statements

Notes to the Financial Statements

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

1. ACCOUNTING POLICIES continued

(b) Financial Instruments continued

Changes in the fair value of investments and gains and losses on disposal are recognised in 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 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 that were 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.

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.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

1. ACCOUNTING POLICIES 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.

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. 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.

Financial Statements

Notes to the Financial Statements

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

1. ACCOUNTING POLICIES continued

(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.

(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.

(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

2023

2022

£’000 £’000

Income from investments

Unquoted distributions 469 419

Dividends from quoted investments 1,175 883

1,644 1,302

Bank interest 48 7

Total income 1,692 1,309

3. INVESTMENT AND PORTFOLIO MANAGEMENT FEES

2023

2022

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

AIFM fee 52 208 260 50 198 248

Portfolio management fee 284 1,138 1,422 273 1,092 1,365

Performance fee provisions – 829 829 – (1,677) (1,677)

336 2,175 2,511 323 (387) (64)

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

4. OTHER EXPENSES

2023

2022

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Directors’ remuneration 182 – 182 186 – 186

Employers NIC on directors’ remuneration 14 – 14 18 – 18

Auditor’s remuneration for the audit of

the Company’s financial statements 46 – 46 41 – 41

Registrar fee 18 – 18 18 – 18

Broker retainer 30 – 30 30 – 30

Custody and depositary fees 43 – 43 47 – 47

Other expenses (14) – (14) 64 – 64

Total expenses 319 – 319 404 – 404

The Company has no employees and details of the amounts paid to Directors are included in the Directors’

Remuneration Report beginning on page 56. Other expenses balance for the year ended 31 December 2023

includes non-recurring credits of £39,000 relating to historic periods.

5. TAXATION ON NET RETURN

(a) Analysis of charge in period

2023

2022

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

UK corporation tax – – – – – –

Overseas withholding tax 143 – 143 96 – 96

(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 23.25% (2022:19%).

The difference is explained below.

2023

2022

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Net income/(loss) before taxation 1,037 23,199 24,236 582 (21,026) (20,444)

Corporation tax at 23.25% (2022: 19%) 244 5,457 5,701 110 (3,995) (3,885)

Non-taxable gains on investments held

at fair value through profit or loss – (5,969) (5,969) – 4,068 4,068

Overseas withholding tax 143 – 143 96 – 96

Non-taxable overseas dividends (387) – (387) (247) – (247)

Excess management expenses* 143 512 655 137 (73) 64

Tax charge for the year 143 – 143 96 – 96

*Excess management expenses are expenses that are not relieved in full against income generated by the Company.

Financial Statements

Notes to the Financial Statements

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

5. TAXATION ON NET RETURN continued

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 £3,725,000 (25% tax rate) (2022: £3,042,000, 25% tax rate) as a result of unutilised excess

management expenses of £14,900,000 (2022: £12,168,000). 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

IncomeStatement on page 68 and the weighted average number of ordinary shares in issue 79,199,042

(2022:80,000,001).

No dilutive instruments have been 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:

2023

2022

£’000 £’000

2022 final dividend of 0.4p per share 316 –

2021 final dividend of 0.2p per share – 160

In respect of the year ended 31 December 2023, a final dividend of 0.9p per share or £711,000 (2022: 0.4p per

share or £316,100) 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 2024. Details of the ex-dividend and

payment dates are shown on page 39.

The Board’s current policy is to only pay dividends out of revenue reserves. The amount of revenue reserve available

for distribution as at 31December 2023 is £1,268,000 (2022: £690,000). The Company generated a revenue profit

in the year ended 31December 2023 of £894,000(2022:£486,000).

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

8. INVESTMENTS

2023 2022

Quoted Unquoted Quoted Unquoted

Investments Investments Total Investments Investments Total

£’000 £’000 £’000 £’000 £’000 £’000

Opening balance

Cost at 1 January 58,985 9,132 68,117 68,965 17,901 86,866

Investment holdings gains/(losses)

at 1 January 17,960 7,732 25,692 40,874 (2,125) 38,749

Valuation at 1 January 76,945 16,864 93,809 109,839 15,776 125,615

Movement in the year:

Purchases at cost 20,084 7,540 27,624 9,669 652 10,321

Sales proceeds (20,204) (14,347) (34,551) (13,197) (3,218) (16,415)

Net movement in investment

holdings gains/(losses) 20,942 2,203 23,145 (29,366) 3,654 (25,712)

Valuation at 31 December 97,767 12,260 110,027 76,945 16,864 93,809

Closing balance

Cost at 31 December 66,263 12,088 78,351 58,985 9,132 68,117

Investment holding gains

at 31 December 31,504 172 31,676 17,960 7,732 25,692

Valuation at 31 December 97,767 12,260 110,027 76,945 16,864 93,809

Proceeds from investments sold during the year were £34,551,000 (2022: £16,415,000), of which £867,000

were receivable as at 31 December 2023 (2022: £nil). The book cost of these investments was £17,390,000

(2022: £29,070,000). 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.The Company also received £4,497,000

(2022:paid £12,488,000) in cash on currency forward contracts (Note 9) expired during the period.

Net movement in investment holding gains/(losses) on investments

2023

2022

£’000 £’000

Net movement in investment holding gains/(losses) in the year 23,145 (25,712)

Net movement in derivative holding (losses)/gains in the year 2,229 4,299

Gains/(losses) on investments 25,374 (21,413)

Total unrealised gains, including transfers, during the year were £5,984,000 (2022: £13,057,000).

Purchase transaction costs were £27,000 (2022: £3,000). These comprise mainly commission and stamp duty.

Sales transaction costs were £5,000 (2022: £3,000). These comprise mainly commission.

Financial Statements

Notes to the Financial Statements

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

9. DERIVATIVES

2023

2022

£’000 £’000

Fair value of currency forward contracts 1,917 4,200

Forward contracts were used during the year to hedge the Company’s exposure to the euro and US dollar. See

note 17(ii) for further details. The Company received £4,497,000 (2022: paid £12,488,000) on contracts closed

during the year. The forward contracts 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 currency forward contracts expired post year end and the Company received £1,614,000 in cash on expiry.

As disclosed in the Portfolio Manager’s Review and the Business Review in the Strategic Report, the Company

has discontinued hedging activities since the year end.

10. DEBTORS

2023

2022

£’000 £’000

Amounts due from brokers 867 –

Withholding tax recoverable 29 68

Prepayments and accrued income 32 36

928 104

11. CREDITORS

2023

2022

£’000 £’000

Performance fees payable 829 –

Other creditors and accruals 262 343

1,091 343

12. PERFORMANCE FEE PROVISIONS

The three-year performance period that commenced on 1 January 2021 ended on 31 December 2023 and

£829,000 has been charged in the Income Statement with a corresponding payable balance in the Statement

of Financial Position. Settlement of performance fee provisions will take place following approval of the annual

results for the year ended 31 December 2023, in April 2024.

Full details of the performance fee arrangement can be found in the Performance Fee section in the

StrategicReport.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

13. SHARE CAPITAL

2023

2022

£’000 £’000

Issued and fully paid:

79,025,001 (2022: 80,000,001) ordinary shares of 1p per share 790 800

There is a single class of shares in issue, being 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;

• special rights with regard to control of the Company attaching to the ordinary shares

The Company repurchased 975,000 ordinary shares during the year ended 31 December 2023 (2022: none)

and all repurchased ordinary shares were subsequently cancelled. The nominal amount of £9,750 related to

these cancelled shares was credited to the capital redemption reserve.

14. NET ASSET VALUE PER SHARE

2023 2022

Net asset value per share 160.3p 129.8p

The net asset value per share is based on the assets attributable to equity shareholders of £126,679,000

(2022:£103,831,000) and on the number of ordinary shares in issue at the year end of 79,025,001.

No dilutive instruments have been issued by the Company.

15. RECONCILIATION OF NET CASH OUTFLOW FROM OPERATING ACTIVITIES

2023

2022

£’000 £’000

Gains/(losses) before taxation 24,236 (20,444)

(Gains)/losses on investments (25,374) 21,413

(1,138) 969

Decrease in other debtors 5 133

Increase/(decrease) in creditors 748 (1,738)

Withholding taxation suffered on investment income (104) (115)

Net cash outflow from operating activities (489) (751)

Financial Statements

Notes to the Financial Statements

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

16. RELATED PARTIES

The following are considered to be related parties:

• Frostrow Capital LLP; and

• 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 27. Details of fees paid to Frostrow by the Company can be found in note 3 on page 76. All material

related party transactions have been disclosed in note 3 on page 76. Details of the remuneration of the Directors

can be found in note 4 and in the Directors’ Remuneration Report starting on page 56. Details of the Directors’

interests in the capital of the Company can be found on page 57.

The balance outstanding to Frostrow at the year end was £24,000 (2022: £20,000). No balances were due to

the Directors (2022: 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 29 to 31. 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.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 £59,000 and £72,000

respectively (2022: decreased/increased by £46,000 and £81,000 respectively); the capital return would have

increased/decreased by £21,763,000 and £23,324,000 respectively (2022: increased/decreased by £18,199,000

and £19,009,000 respectively); and, the return on equity would have increased/decreased by £21,704,000 and

£23,252,000 respectively (2022: increased/decreased by £18,152,000 and £18,953,000 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

used foreign currency forwards to hedge some of the foreign currency risk historically, but as disclosed in the

Manager’s Review and the Business Review in the Strategic Report hedging activities ceased post the year

ended 31 December 2023.

Foreign currency exposure

The fair values of the Company’s assets and liabilities that are denominated in foreign currencies are shown

below:

2023 2022

Current Current

Investments Derivatives* assets Net Investments Derivatives assets Net

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

US dollar 62,963 (33,339) 868 30,492 69,885 (37,329) 2,003 34,559

Euro 38,242 (17,331) 29 20,940 16,074 (6,680) 68 9,462

Other – – 49 49 – – 44 44

101,205 (50,670) 946 51,481 85,959 (44,009) 2,115 44,065

* Derivatives comprise foreign currency forward contracts used to partially hedge the Company’s exposure to the euro and US dollar. As at 31 December 2023,

the fair value of the US dollar forward contract was £1,827,000 (2022: £4,096,000) and of the Euro forward contract was £90,000 (2022: £103,000).

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.

Financial Statements

Notes to the Financial Statements

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

17. FINANCIAL INSTRUMENTS continued

2023 2022

USD EUR Other Impact on NAV USD EUR Other Impact on NAV

£’000 £’000 £’000 £’000 % £’000 £’000 £’000 £’000 %

Sterling depreciates 3,388 2,327 5 5,720 5% 3,840 1,051 5 4,896 5%

Sterling appreciates (2,772) (1,904) (4) (4,680) (4%) (3,142) (860) (4) (4,006) (4%)

(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.

2023

2022

Fixed Floating Fixed Floating

rate rate rate rate

£’000 £’000 £’000 £’000

Cash – 14,898 – 6,061

– 14,898 – 6,061

Interest rate sensitivity

If interest rates had been 1% higher or lower and all other variables were held constant, the Company’s netreturn

for the year ended 31 December 2023 and the net assets would increase/decrease by £149,000 (2022: £61,000).

(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 87. 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 and TCI Real Estate Fund IV Limited, the Board

expects 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.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

17. FINANCIAL INSTRUMENTS continued

(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 Company invests in both quoted and unquoted equities in line with its investment objective and

policy. The Company’s investments are held by J.P. Morgan Europe Limited(“the Depositary”), which is a large and

reputable international banking institution. The Depositary is liable for the loss of any financial assets under its custody,

and in accordance with its agreement with the Company, is required to segregate such assets from its own assets.

Credit risk exposure

2023

2022

£’000 £’000

Derivative financial instruments 1,917 4,200

Current assets:

Other receivables 928 104

Cash 14,898 6,061

(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 72.

Level 1 Level 2 Level 3 Total

At 31 December 2023 £’000 £’000 £’000 £’000

Investments 97,767 – 12,260 110,027

Derivatives – 1,917 – 1,917

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 3 investments at 31 December 2023

Cost Value

’000 £’000 Ownership Valuation basis

TCI Real Estate Partners Fund IV Limited US$7,849 6,021 5.72% NAV

KKR Aqueduct Co-Invest LP

£4,000 4,504 1.12% NAV

TCI Real Estate Partners Fund III Limited US$2,461 1,736 1.18% NAV

Described as John Laing Group in the portfolio statement

Level 3 investments at 31 December 2022

Cost Value

’000 £’000 Ownership Valuation basis

KKR Aqueduct Co-Invest LP

£4,000 4,646 1.15% NAV

Helios Co-Invest LP

US$4,458 10,672 4.73% NAV

TCI Real Estate Partners Fund III Ltd US$1,715 1,546 1.18% NAV

Described as John Laing Group in the portfolio statement

Described as X-ELIO in the portfolio statement

Financial Statements

Notes to the Financial Statements

continued

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

17. FINANCIAL INSTRUMENTS continued

In November 2023, the Company received a final distribution of US$16.9 million (£13.8 million) from its investment

in Helios Co-Invest LP, following the disposal of the partnership’s remaining holding in X-ELIO.

Unquoted investment valuations are provided by the underlying investment managers, who follow industry

recognised guidelines and a stringent valuation process, which includes independent review by third parties.

The Company is satisfied that the valuations received represent fair value of the investments it holds, but retains

the discretion to make adjustments if there are indicators that suggest otherwise.

If a 25% discount to NAV was applied to the NAV of the level 3 investments as at 31 December 2023, the impact

would have been a decrease of £2,191,000 (2022:£4,154,000) 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 70.

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

2023 2022

Capital Reserve Capital Reserve

Realised Unrealised Realised Unrealised

gains/ gains/ gains/ gains/

(losses) (losses) Total (losses) (losses) Total

£’000 £’000 £’000 £’000 £’000 £’000

At 1 January (4,921) 29,891 24,970 7,347 38,649 45,996

Net gains/(losses) on investments 17,161 8,213 25,374 (12,655) (8,758) (21,413)

Expenses charged to capital (2,175) – (2,175) 387 – 387

At 31 December 10,065 38,104 48,169 (4,921) 29,891 24,970

Realised capital reserve and revenue reserve are available for distribution. Unrealised gains, which are not readily

convertible to cash are not considered distributable.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

19. FINANCIAL COMMITMENT

The Company has made commitments to provide additional funds to the following investments:

Sterling Local currency Notice of

Commitment Commitment drawdown

TCI Real Estate Partners Fund IV Limited £13,664,000 US$17,419,000 10 business days

TCI Real Estate Partners Fund III Limited £2,200,000 US$2,805,000 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 disclosed in the Portfolio Manager’s Review on page 19, in January 2024 the Company ceased to hedge its

currency exposures. There are no other post balance sheet events which would require adjustment of or

disclosure in the financial statements.

Further Information

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Financial Calendar

31 December Financial Year End

March/April Final Results Announced

June/July 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 27 June 2024 at 11.30 a.m.

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101), 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 2023 31 December 2022

16.0%

15.7%

36.0%

32.3%

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

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

9 year

Annual data at 31 December (note 1) Units 2015 2016 2017 2018 2019 2020 2021 2022 2023 Trend

Share Ownership

Family ofﬁces % – – 41.6 47.1 48.6 43.5 34.0 30.5 32.3 Falling 

Wealth managers & private banks % – – 26.9 24.7 25.2 29.5 33.1 34.9 36.0 Rising 

Institutions % – – 21.3 19.5 15.3 16.8 19.9 19.4 16.0 Falling 

Retail platforms % – – 10.2 8.7 10.9 10.2 13.0 15.2 15.7 Rising 

Financial performance

Net asset value (NAV) £m 67.1 68.3 73.7 72.5 94.0 106.1 124.5 103.8 126.7 Rising 

Share price Pence 77 66.4 68.5 67.0 96.5 99.0 112.0 89.0 100.8 Rising 

NAV per share Pence 83.9 85.4 92.1 90.6 117.5 132.7 155.7 129.8 160.3 Rising 

Share price discount to NAV % -8.2 -22.2 -25.6 -26.1 -17.9 -25.4 -28.1 -31.4 -37.2 Falling 

Investment return (Nav per share total return) % -14.1 1.8 7.8 -1.6 30.5 13.2 17.3 -16.5 23.8 Rising 

Share price return % -23 -13.8 3.2 -2.2 45.3 3.0 13.1 -20.3 13.6 Rising 

Dividend per share Pence 0 0.0 0.0 0.7 0.4 0.0 0.2 0.4 0.9 Rising 

Ongoing charges % 2.1 2.1 2.1 2.1 2.0 2.0 1.8 1.8 1.7 Falling 

Relative financial performance

Absolute benchmark UK RPI+3% % 2.4 5.7 7.4 5.9 5.5 4.4 10.8 13.7 8.4

MHN NAV total return relative to UK RPI+3% % -16.5 -3.9 0.4 -7.5 25.0 8.8 6.5 -30.2 15.4 Rising 

AIC Environmental Sector benchmark return % -2.8 21.0 13.0 -8.0 33.1 23.7 16.1 -15.9 8.8

MHN NAV total return relative to AIC Environmental

Sector % -11.3 -19.2 -1.3 6.4 -2.6 -10.5 1.2 -0.6 15.0 Rising 

AIC Global sector return benchmark % 0.1 23.6 20.7 -2.8 23.8 21.0 13.8 -14.8 16.0

MHN NAV total return relative to AIC Global Sector % -14 -21.8 -12.9 1.2 6.7 -7.8 3.5 -1.7 7.8 Rising 

Portfolio size

Number of investment holdings Number 24 24 20 19 15 17 15 16 – Falling 

Top 5 investments relative % to total assets % 44.4 37.6 46.3 55.7 53.8 67.6 73.6 61.2 – Rising 

Asset Allocation

Public equity % 57.2 35.0 44.8 48.2 51.3 78.8 86.8 77.3 77.2 Rising 

Private equity % 27.1 23.3 27.8 29.1 27.3 16.2 12.5 16.9 13.1 Falling 

Cash and equivalents % 5.1 23.0 14.1 9.5 18.2 2.9 0.7 5.8 9.7 Falling 

Yield (excluded from allocation criteria from 2021) % 10.6 18.7 13.3 13.2 3.2 2.1 – – – Falling 

Geographic split

North America % 44.5 38.8 21.2 39.6 47.1 63.4 72.6 63.1 56.7 Rising 

Europe % 38.7 39 52.5 45.1 36.3 27.5 21.3 28.5 35.3 No trend –

UK (* note 2) % 8.4 * 15.8 16.2 8 7.3 5.9 3.2 5 4.1 Falling 

Emerging Markets % 8.4 6.4 10.1 7.3 9.3 3.2 2.9 3.4 3.9 Falling 

Thematic split (note 3)

Resources and energy efﬁciency (theme revised 2021) % 50.3 29.1 18.3 29.4 49.2 58.2 – – 0 Falling 

Clean energy % 34.6 43.6 44.8 38 23.1 10.8 8.1 11.4 0 Falling 

Water and waste management % 6.7 4.3 1.6 2.6 2.1 1.8 0.9 0.9 0.8 Falling 

Sustainable Infrastructure and Transportation (new 2021) % 8.4 23 35.3 30 25.6 29.2 42.4 36.5 55.7 Rising 

Digitalisation (new 2021) % _ _ _ _ _ _ 42.1 41.7 33.2 Falling 

Industrial emissions reduction (new 2021) % _ _ _ _ _ _ 6.5 9.5 10.3 Rising 

Environmental performance (note 4)

Renewable energy consumed MWh – – – – – – – 596 832 Rising 

Renewable energy generated MWh – – 69 54 47 – 94 87.6 58 No trend –

Carbon Dioxide emissions (Scope 1 and 2) tCo2e – – – – – – – 2,233 2,329 No trend –

Notes

Note 1. Data extracted from Menhaden Resource Efﬁciency PLC (“MHN”) annual reports

Note 2. In 2015 labelled global, since then UK

Note 3. Two new themes added 2021 and Resources and energy efﬁciency theme discontinued.

Note 4. New methodology adopted 2022 and 2023. Prior year data not shown as it was calculated on different methodology

Menhaden Resource Efficiency PLC trends 2015-2023

Further Information

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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.

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

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

NAV Total Return (APM)

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

2023 2022

Opening NAV 129.8p 155.7p

Increase/(decrease) in NAV 30.5p (25.9)p

Closing NAV 160.3p 129.8p

% increase/(decrease) in NAV 23.4% (16.6%)

Impact of dividend reinvested 0.4% 0.1%

NAV total return/(loss) 23.8% (16.5%)

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

2023 2022

Opening share price 89.0p 112.0p

Increase/(decrease) in share price 11.8p (23.0)p

Closing share price 100.8p 89.0p

% increase/(decrease) in share price 13.2% (20.5%)

Impact of dividend reinvested 0.4% 0.2%

Share price total return/(loss) 13.6% (20.3%)

Ongoing Charges Ratio (APM)

Ongoing charges ratio is 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. Performance fees are also excluded from the ongoing

charges ratio calculation.

31 December 31 December

2023 2022

£’000 £’000

Total Expenses 2,040 2,018

Average NAVs 117,147 111,560

Ongoing charge ratio 1.7% 1.8%

Further Information

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

How to Invest

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

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 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.

Further Information

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Notice of the Annual General Meeting

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 Thursday, 27 June 2024 at 11.30 a.m. for

the following purposes:

Ordinary Business

To consider and, if thought fit, pass the following as ordinary resolutions:

1. To receive the Annual Report for the year ended 31 December 2023, including the financial statements and the

directors’ and auditor’s reports therein.

2. To receive and approve the Directors’ Remuneration Report for the year ended 31 December 2023.

3. To declare a final dividend of 0.9p per ordinary share for the year ended 31 December 2023.

4. To re-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 £79,025 (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 2025 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

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 £79,025 (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 11,845,847 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;

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 2025 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.

Further Information

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Notice of the Annual General Meeting

continued

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

19 April 2024

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 pr

oxy 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 pr

oxy 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 11.30 a.m. on 25 June 2024.

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 proxy

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 25 June 2024 (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

egar

ded

in determining the rights of any person to attend and vote at the meeting.

10. As at 19 April 2024 (being the last business day prior to the publication of this notice) the Company’s issued share capital consists of

79,025,001 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at 19 April 2024 are 79,025,001.

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 pr

escribed by CREST. After this time any change of instructions to proxies appointed

through CREST should be communicated to the appointee through other means.

Further Information

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Notice of the Annual General Meeting

continued

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 relation

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.

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Resolution 1 – To receive the Annual Report

The Annual Report for the year ended 31 December 2023,

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 56 to 58 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 2023 in order for

it to retain investment trust status. Accordingly, the Board

is recommending the declaration of a dividend of 0.9p 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 of Directors

Resolutions 4 to 7 deal with the re-election of the

Directors. Biographies of each of the Directors can be

found on pages 37 and 38 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 30years’ 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 the 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

Further Information

100

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

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 11,845,847 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 426,755 shares.

Explanatory Notes to the Resolutions

continued

101

Menhaden Resource Efficiency PLC

Annual Report for the year ended 31 December 2023

Directors

Howard Pearce (Chairman)

Barbara Donoghue

Soraya Chabarek

Sir Ian Cheshire

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

Deutsche Numis

45 Gresham St

London

EC2V 7BF

Registrar

Link Group

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