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RMDL Rm Secured Direct Lending Plc

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Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Rm Secured Direct Lending Plc LSE:RMDL London Ordinary Share GB00BYMTBG55 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 90.00 88.00 92.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

RM Secured Direct Lending PLC Final Results (7215T)

29/03/2021 7:00am

UK Regulatory


Rm Secured Direct Lending (LSE:RMDL)
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RNS Number : 7215T

RM Secured Direct Lending PLC

29 March 2021

RM SECURED DIRECT LING PLC

(the "Company" or "RMDL")

FINAL RESULTS

RESILIENT PERFORMANCE AMID CONTINUED PORTFOLIO GROWTH

REFRESHED INVESTMENT FOCUS ON SOCIAL & ENVIRONMENTAL INFRASTRUCTURE SECTORS

RMDL, the investment trust specialising in secured debt investments, announces its results for the year ended 31 December 2020.

Operational highlights

   --    Diversified portfolio of GBP122.7 million invested across 35 loans across 14 sectors 

o Eight new investments totalling GBP26m during the year

o Close management of the portfolio throughout the pandemic

-- RM Funds was recognised by the British Business Bank as an accredited lender for the Coronavirus Business Interruption Loan Scheme ("CBILS") with RMDL as a funding partner

o 12% of portfolio NAV invested into partially government guaranteed CBILS eligible loans

-- Robust performance of portfolio sectors exposed to restrictions related to the coronavirus pandemic, including Accommodation with Hotels (27.6%) and Student Accommodation (12.3%)

Financial highlights

   --    6.5 pence dividend for full year 
   --    Dividend fully covered by earnings 1.1 times 
   --    NAV total return for the period 3.15% 
 
                                      Year ended 31 December  Year ended 31 December 
                                       2020                    2019 
 Group Net asset value ("NAV")        GBP110,380              GBP119,528 
  (GBP'000) 
                                     -----------------------  ---------------------- 
 Group NAV per Ordinary Share 
  (pence)                             93.25p                  97.79p 
                                     -----------------------  ---------------------- 
 Ordinary Share price (pence)         87.00p                  99.50p 
                                     -----------------------  ---------------------- 
 Ordinary Share (discount)/premium 
  to NAV                              (6.7%)                  1.7% 
                                     -----------------------  ---------------------- 
 Total return - Ordinary 
  Share NAV and dividends             +3.1%                   +8.2% 
                                     -----------------------  ---------------------- 
 

Outlook

-- Refreshed investment focus on lending to Social & Environmental Infrastructure sectors with high-quality pipeline transactions in its six target sectors:

o Healthcare; Childcare & Education; Accommodation; Clean Energy & Renewables; Waste Management; and Energy Efficiency & Carbon Reduction

o Aligned to Sustainable Development Goals (SDGs) where capital from RMDL can make a positive impact

o Appealing risk adjusted returns with attractive credit metrics and significantly higher yields than would be available in the public markets

-- Partnership with The Good Economy will provide reputable third-party assurance for ESG & Impact reporting

-- Vaccine roll-out and expected easing of national restrictions will allow certain portfolio companies to return to trading at full capacity

Norman Crighton, Chairman of RMDL, commented:

"The Board is pleased to report a resilient year for RMDL amid an unprecedented market environment. This has been demonstrated through our portfolio which has continued to diversify and grow, now totalling GBP123m invested in 35 loans across 14 sectors. Meanwhile, our gross portfolio yield increased to c.9.3%, from c.8.8% in 2019, and we have continued to deliver on our dividend target of 6.5 pence for the year.

Our refreshed investment strategy will focus on increasing our exposure to the social and environmental sectors. Currently comprising c.30% of the portfolio, these sectors hold clear alignment to specific SDGs and will allow RMDL to meet the funding needs of quality businesses who are making a meaningful, positive contribution to society.

In addition, our partnership with The Good Economy will provide key third-party assurance for ESG and Impact reporting, which will ensure ESG-related criteria remains an integral part of our rigorous investment process. This will allow us to achieve our company purpose of delivering positive impact outcomes linked to Sustainable Development Goals, while offering stable, risk-adjusted returns for our investors.

We have entered 2021 in a strong position and a high quality pipeline of secured lending opportunities. The Board has every confidence in the long-term future of RMDL and our ability to deliver for our shareholders."

Investor webinar

An investor webinar will be held tomorrow morning at 10.00 am, hosted by James Robson (Chief Investment Officer, RM Funds) and Pietro Nicholls (Portfolio Manager, RM Funds). If you would like to join the webinar, please follow the link here .

For further information, please contact:

 
 RM Funds - Investment Manager 
  James Robson 
  Pietro Nicholls                                        0131 603 7060 
 N+1 Singer Advisory LLP - Financial Adviser 
  and Broker 
  James Maxwell 
  Carlo Spingardi                                        020 7496 3000 
 Peel Hunt LLP - Financial Adviser and Broker 
  Luke Simpson 
  Liz Yong                                               020 7418 8900 
 Tulchan Communications LLP - Financial PR               0207 353 4200 
  Elizabeth Snow                                          rmdl@tulchangroup.com 
  Oliver Norgate 
 PraxisIFM Fund Services (UK) Limited - Administrator 
  and Company Secretary 
  Brian Smith 
  Ciara McKillop                                         020 4513 9267 
 

ANNUAL FINANCIAL REPORT

For the year ended 31 December 2020

About us

RM Secured Direct Lending Plc ("RMDL" or the "Company") aims to generate attractive and regular dividends through investment in secured debt instruments. Loans in which the Company invests will be predominantly secured against assets such as real estate or plant and machinery and/or income streams such as account receivables.

As at 31 December 2020 the portfolio was invested in 14 sectors and 19 sub-sectors of which 98% was allocated to private debt. Since inception in December 2016 to December 2020 the Company has declared or paid dividends totalling 24.225 pence and has generated a NAV total return of 21.46%.

   Portfolio   at   a   glance 
   Operational   highlights 

> Diversified portfolio of GBP122.7 million invested across 35 loans with eight new

investments   totalling GBP26m during the year 

> RM Funds was accredited by the British Business Bank as an accredited lender for the Coronavirus Business

  Interruption   Loan   Scheme   ("CBILS")   with   RMDL   as   a   funding   partner 

> 11% of the portfolio invested into partially government guaranteed CBILS eligible loans

> Approximately 30% of the portfolio invested into Social & Environmental Infrastructure sectors with

strong   pipeline   and   expectation   that   allocations   to   these   areas   in   2021   will significantly expand 

> The Good Economy engaged to provide investors with third party assurance for ESG & Impact reporting to start in 2021

> Hotel exposure representing 27% of the portfolio exposure has performed well with interest serviced throughout the lockdown

   Financial   highlights 
   >  6.5   pence   dividend   for   full   year   meeting   target   set   at   IPO 
   >  Dividend   fully   covered   by   earnings   1.1   times 
   >  NAV   total   return   for   the   year   3.15% 
 
Financial information                                         Group           Group 
                                                         Year ended      Year ended 
                                                   31 December 2020     31 December 
                                                                               2019 
================================================  =================  ============== 
Gross asset value (GBP'000) 1                            GBP132,822      GBP131,069 
Net Asset Value ("NAV") (GBP'000)                        GBP110,380      GBP119,528 
NAV per Ordinary Share (pence)                               93.25p          97.79p 
Ordinary Share price (pence)                                 87.00p          99.50p 
Ordinary Share price (discount)/premium 
 to NAV 1                                                    (6.7%)            1.7% 
Ongoing charges 1                                             1.91%           1.77% 
Gearing (net) 1                                               18.3%            2.6% 
Accrued entitlement of Zero Dividend Preference 
 ("ZDP") Share (pence) 2                                     109.87          106.18 
================================================  =================  ============== 
Performance summary 
                                                       % change 3,5    % change 4,5 
================================================  =================  ============== 
Total return - Ordinary Share NAV and dividends 
 1                                                            +3.1%           +8.2% 
================================================  =================  ============== 
Total return - Ordinary Share price and 
 dividends 1                                                  -5.3%           +4.9% 
================================================  =================  ============== 
1.These are Alternative Performance Measures 
 ("APMs"). 
2.Based on the net assets attributable 
 to the ZDP Shares as at 31 December 2019 
 and 2020. 
3.Total returns for the year to 31 December 
 2020, including dividend reinvestment. 
4.Total returns for the year to 31 December 
 2019, including dividend reinvestment. 
5.Source: Bloomberg. 
 
    Alternative   Performance   Measures   ("APMs") 

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

   Portfolio   (as   at   31   December   2020) 
   Largest   10   loans   by   drawn   amounts   across   the   entire portfolio 
 
Business activity                          Investment type          Valuation    Percentage 
                                            (Private/Public/Bond)     GBP'000            of 
                                                                                gross asset 
                                                                                        (%) 
===============================  =================================  =========  ============ 
Asset finance                              Private loans                9,990           7.5 
Hotel                                      Private loans                8,079           6.1 
Automotive parts manufacturing             Private loans                6,840           5.1 
Gym franchise                              Private loans                6,247           4.7 
Hotel                                      Private loans                6,166           4.6 
Student accommodation                      Private loans                5,782           4.4 
HR and payroll services                    Private loans                5,740           4.3 
Healthcare                                 Private loans                5,294           4.0 
Student accommodation                      Private loans                5,029           3.8 
Hotel                                      Private loans                5,000           3.8 
===============================  =================================  =========  ============ 
Ten largest holdings                                                   64,167          48.3 
Other private loan investments                                         55,843          42.0 
Bond investments                                                        2,695           2.1 
==================================================================  =========  ============ 
Total holdings                                                        122,705          92.4 
Other net current assets                                               10,117           7.6 
Gross assets*                                                         132,822         100.0 
==================================================================  =========  ============ 
 

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

     Valuation   conducted   by   external   Valuation   Agent. 

Market

   Market   environment 

The year was dominated by Covid-19 as the benign and calm credit conditions, which had persisted since the eurozone debt crisis, were replaced by large volatility within the equity and credit markets during late February and into March. As the depth of government support measures became understood by the market credit spreads stabilised and by year-end were back to near pre-Covid levels. Sectors that lagged the market were those affected specifically by the pandemic such as Travel and Leisure and Hospitality. As we look into 2021, there is optimism that those sectors which underperformed during 2020 will

perform with   the scheduled easing of restrictions and as the vaccine roll-out continues. 
   Market   opportunities 

The Investment Manager ("RM" or "RM Funds") is seeing an excellent pipeline of opportunities within the two focus investment areas and six sectors. The business targeted typically have complex lending needs, are often overlooked by their banking relationships with funding requirements that are too small for the larger direct lending businesses yet offer excellent security and return profiles.RM funds have demonstrated the ability to originate and transact in such deals over last four years and have a developed pipeline for sourcing such transactions.

In addition, there is an attractive opportunity for credit enhancements. RM Funds is an accredited lender under the Coronavirus Business Interruption Loan Scheme ("CBILS") and RMDL is the funding partner, thus giving RMDL access to high quality loans with a material credit enhancement. CBILS provides financial support to smaller businesses ("SMEs") across the UK that are losing revenue, and seeing their cash flow disrupted, as a result of the Covid-19 outbreak. The scheme is a part of a wider package of government support for UK businesses and employees and is administered by the British Business Bank. CBILS gives the lender a partially government-backed guarantee for the loan repayments in order to encourage more lending. At year-end 12% of the portfolio had been invested into CBILS eligible loans.

Looking forward to Recovery Loan Scheme will become the new government support scheme and as with CBILS each loan comes with a partial government guarantee of a minimum of 80% of the loan balance. This scheme looks set to broaden the pipeline of opportunities as the scheme eligibility is wider and the maximum loan size will increase to GBP10m.

Investment Objective, Financial Information and Performance Summary

Investment Objective

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

Financial In formation

 
                                            Group              Group 
                                            Year ended         Year ended 
                                            31 December 2020   31 December 2019 
-----------------------------------------  -----------------  ----------------- 
 Gross asset value (GBP'000)(1)             GBP132,822         GBP131,069 
 Net Asset Value ("NAV") (GBP'000)          GBP110,380         GBP119,528 
 NAV per Ordinary Share (pence)             93.25p             97.79p 
 Ordinary Share price (pence)               87.00p             99.50p 
 Ordinary Share price (discount)/premium 
  to NAV(1)                                 (6.7%)             1.7% 
 Ongoing charges(1)                         1.91%              1.77% 
 Gearing(net)(1)                            18.3%              2.6% 
 Accrued entitlement of Zero Dividend 
  Preference ("ZDP") Share (pence)(2)       109.87             106.18 
 

Performance Summary

 
                                       % change(3,5)  % change(4,5) 
-------------------------------------  -------------  ------------- 
 Total return - Ordinary Share NAV 
  and dividends(1)                     +3.1%          +8.2% 
 Total return - Ordinary Share price 
  and dividends(1)                     -5.3%          +4.9% 
 

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

(2) Based on the net assets attributable to the ZDP Shares as at 31 December 2019 and 2020.

(3) Total returns for the year to 31 December 2020, including dividend reinvestment.

(4) Total returns for the year to 31 December 2019, including dividend reinvestment.

(5) Source: Bloomberg.

Alternative Performance Measures ("APMs")

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

Chair's Statement

Introduction

On behalf of the Board, I am pleased to present RM Secured Direct Lending plc's ("RMDL" or the "Company") Annual Report and Accounts for the year ended 31 December 2020.

This year, the fourth year since the Company launched on the London Stock Exchange in December 2016, has been the most challenging yet, but I am delighted at the resilience the portfolio has shown. It is testament to RMDL's secured lending model, and the Investment Manager's ("RM" or "RM Funds") strong credit processes and actions taken during the year, and we are pleased to confirm total dividends of 6.5 pence per Ordinary Share for the year ended 31 December 2020, with the final quarterly dividend being paid in March 2021. The dividends for 2020 are in line with the target stated at the launch of the Company, an exceptional achievement in a difficult year.

RMDL has traditionally sought to invest in high quality businesses with loans supported by tangible security packages to generate attractive risk-adjusted returns for investors. We have always adhered to the highest standards of corporate governance and expect the same from the companies we lend to. During the last four years, social and environmental infrastructure projects have been a core focus, and the Company has allocated 40% of its capital to assets in these areas.

The Board and RM Funds now plan to concentrate the investment focus to Social & Environmental Infrastructure over the next three years and only allocate loans across six sectors:

Environmental Infrastructure

   --          Energy efficiency & carbon reduction 
   --          Clean energy & renewables 
   --          Waste Management 

Social Infrastructure

   --          Accommodation 
   --          Education & childcare 
   --          Healthcare 

In addition to enhancing the sustainability of the portfolio, the Board and the Investment Manager believe that this new focus will give investors further exposure to critical infrastructure assets which are not correlated to the broader economic cycle. These assets will have tangible asset backing and this focus we believe will further deliver attractive risk-adjusted returns. Our firm belief is that the Company is well placed to deliver strong income returns and steady NAV growth alongside an impact and sustainability framework. For this next 3-year period we have set an Impact Goal of seeking to meet the funding needs of quality UK businesses who make a meaningful, positive contribution towards social and environmental outcomes that are linked to specific UN Sustainable Development Goals; 3, 4, 7,11, 12 & 13.

   --    Healthcare (3) 
   --    Education & childcare (4) 
   --    Clean energy & renewables (7) 
   --    Accommodation (11) 
   --    Waste Management (12) 
   --    Energy efficiency & carbon reduction (13) 

The investment strategy and the investment policy remain unchanged with a narrower investment sector focus.

Income generation and NAV Performance

In the four years since listing, the Company has returned to Shareholders 24.225 pence per Ordinary Share in dividends which have been entirely covered by earnings. We have been pleased to continue our track record of meeting our target income distribution and the payment of a fully covered dividend for the year ended 31 December 2020, despite the disruption caused by the pandemic. The Company has paid or declared regular dividends totalling 6.5 pence per Ordinary Share during the year.

The ability of the Company to pay dividends in excess of target during a period when our peer group has struggled is testament to the ability of the Investment Manager to structure Loans for the benefit of Shareholders, whilst maintaining strict credit controls.

This was especially important for our investors, many of whom have seen a swathe of dividend cuts across their portfolios during the course of 2020.

On the 25 February 2021 the Company declared a fourth interim dividend for the year of 1.625 pence per Ordinary Share to be paid on the 26 March 2021, the 16(th) consecutive dividend paid which has met or exceeded the target set at launch.

Portfolio overview

The Board and the Investment Manager were quick to anticipate and react to the effects of the pandemic, temporarily ceasing any new lending activity and focusing on capital preservation.

However, certain investments in our portfolio were directly impacted by the lockdowns and restrictions, specifically hotel, gym and student accommodation assets, alongside childcare nurseries and healthcare businesses.

The portfolio investments are valued under IFRS 13, which adopts a "mark to market" approach, and therefore RMDL saw the NAV of the Company fall at the peak of the market sell-off in March 2020, followed by a general gradual retracement in the NAV for the final three quarters as sentiment improved and government support measures worked their way through the economy.

Importantly, the asset values were adjusted lower to reflect the increased risk and they have not affected the Company's ability to pay a dividend nor necessarily the likelihood of any loss. RM Funds believe that these value reductions are largely temporary in nature; thus, as we have seen over the last number of months, the trajectory of the NAV has been promising and the Investment Manager will report on the key areas that they believe will continue to drive performance in 2021.

During the year the Company was accredited as a funding partner for Coronavirus Business Interruption Loan Scheme "CBILS" which is administered by the British Business Bank, owned by the UK Government. This recognises the role RMDL can play in helping high quality UK based business access funding opportunities and also offers Shareholders access to Loans underwritten by 80% minimum from the UK Government. At year end 12% of the portfolio was to be underwritten by the scheme.

The Investment Manager has an attractive pipeline of loans to businesses into Social & Environmental Infrastructure which will see a relatively rapid recycling of capital into these focus sectors. There is a real opportunity to see the portfolio and the Company grow over the near to medium term as we try to match capital seeking sustainable investments delivering high impact with the borrowers seeking capital. I am delighted that we have been able to partner with the Good Economy to provide an independent reporting and assurance of the impact measurement system which the Company will be adopting.

Carefully managed credit risk and valuations

As outlined in previous years credit risk is the most important risk factor within the portfolio. This is managed carefully by the Investment Manager, the Alternative Investment Fund Manager ("AIFM") and overseen by the Board. Exposure is mitigated by having clear borrower/issuer risk limits and industry risk limits which are detailed in the Company's prospectus. These limits reflect a maximum borrower/issuer limit of 10% of the portfolio and are across a range of sectors to ensure sufficient sector diversity.

Committed to responsible investing

The Board and the Investment Manager have long been committed to high ESG standards and to responsible investing. The refreshed investment focus towards social and environmental infrastructure sectors enhances this commitment through investment in assets at the forefront of providing essential services to society. RM Funds' Responsible Investing Investment Policy ensures that these considerations are integrated into each individual investment process and the alignment of the portfolio to achieving contributions towards outcomes linked to UN Sustainable Development Goals 3,4,7,11,12&13. As we look to the future the Good Economy will assist with the ESG reporting metrics for the portfolio as we strive to improve our borrower performances across core ESG Practices.

Returns to Shareholders

As at 31 December 2020, the Company had generated a NAV total return for the year of +3.1% (dividends re-invested at NAV) and since inception the NAV total return for investors has been +21.5%. The share price total return was -5.3% for the year and +10.2% since inception.

Historically RMDL had always traded at a premium to NAV, however as the pandemic took hold the share price fell to a discount to NAV. The Board and RM Funds have taken a number of steps to reduce this discount, which has been one of the drivers of the share price total return for the year. During 2020, RMDL acquired 3.86 million shares as part of share buy backs and it has been encouraging that this discount has reduced over the year since the levels seen in March 2020. The lowest price paid was 72.5 pence per Ordinary Share on the 7 April 2020 and the highest price 85.0 pence per Ordinary Share on the 30 December 2020. Both the Investment Manager and the Board are focused on restoring the share price to NAV rating to a premium again.

ESG Leadership for the Company, as well as for the Portfolio

I have outlined above some of the changes the Investment Manager and the Board intend to make to the loan portfolio. The reasons for these changes and the greater emphasis on ESG issues are addressed in more detail in the Investment Manager's Report. However, there is no doubt that factors represented by these three letters will be playing an increasingly crucial role in all decision making, whether operational or investment, for corporates and individuals alike. In terms of corporate governance, the G in ESG, your Company has adopted the very highest standards from the start, with measures in place to prevent value destruction caused by wide discounts to NAV, and directly aligning the interests of the Investment Manager with Shareholders, among other approaches.

Going forward, the Board will be turning its attention to the E and S factors, ensuring that your Company remains at the vanguard of putting these criteria at the core of what we do. RMDL, like every other investment trust with no premises and no employees, can have a limited direct effect on E and S issues. However, your Board believes that you as Shareholders, our most important stakeholders, expect more from us as Directors. We therefore intend to take an increasingly proactive approach and encourage our stakeholders to focus on their own mitigation strategies. We will start by asking all of RMDL's counterparties - the investment manager, broker, administrator, legal team, accountants and auditors, as well as major Shareholders and others, two questions:

(1) What ESG policies are implemented within your own organisation? and

(2) What ESG policies do you expect your stakeholders to follow?

The responses are likely to range from the very straightforward, "We recycle paper in the office" or "We buy electricity from renewable sources", to the more nuanced; "We use carbon offsets to mitigate business air travel made on behalf of our clients", which might lead us to ask, "How do you calculate the most efficient offset program?" We might ask our Shareholders what additional cost they would be willing to incur to ensure RMDL's stakeholders adopt improved ESG measures, if indeed there are additional costs? The information collected will form the basis of a full understanding of these priorities within the investment trust community. Although participation will be entirely voluntary, we anticipate a high level of engagement. Your Board will review the results, share them with the respondents and with refinements over time, develop them into a comprehensive Investment Trust ESG Policy. We are very excited to be launching this initiative and hope to have the first set of responses to share with you in the next Interim Report in six months' time.

Realisation opportunity

At the launch of the Company there was a commitment made to offer Shareholders a Liquidity Opportunity prior to the 4th AGM which will be held this year. The original intention was, if the investment objective was not achievable, that Shareholders be given the opportunity to realise their investment at close to the prevailing NAV. I am very pleased that despite a difficult year, the income objectives of the Company have been exceeded. Nonetheless, we will be canvassing Shareholders in the coming weeks to talk through their liquidity needs and structure a set of proposals that is suitable and cost effective. I sincerely hope that demand will be limited given the performance of the Company over the last few years.

Outlook

The outlook is very promising, mainly due to the COVID-19 vaccine which is being rolled out at pace. Any easing of lock-down restrictions allowing portfolio companies to start trading to their full capacity is clearly good news and one which should then have positive follow-on effects with the Company NAV and the share price.

The Board and RM Funds are excited about the future and the refreshed investment focus. These sectors offer investors appealing risk adjusted returns that all have attractive credit metrics and significantly higher yields than would be available in the public markets and are especially appealing as the credit cycle becomes stretched by Government support actions which one day will end.

The Investment Manager has noted they are seeing large increases in the volume of high-quality pipeline transactions in its target sectors, ensuring the Company is in the fortunate position of being fully deployed and needing more capital to grow.

The Board is focused on continuing to grow the portfolio of investments, and with this new concentrated focus and the deep pipeline of opportunities which the Investment Manager is pursuing, this is eminently achievable. This is a key objective for the next three years as well as continuing to distribute an attractive income and maintain and grow the NAV.

Norman Crighton

Chair

26 March 2021

Investment Manager's Report

Strong and sustainable NAV & Income performance

Over the course of the year, the portfolio generated a NAV total return of +3.1%, with total dividend distributions attributable to Shareholders for the year totalling 6.5 pence per Ordinary Share. Following the year end an interim dividend relating to the final quarter of the year of 1.625p per Ordinary Share was declared on 25 February 2021 and paid to Shareholders on the 26 March 2021. These dividends totalling 6.5 pence per Ordinary Share for full year 2020 bring the total distributions since the Company's launch in December 2016 to 24.225 pence per share, exceeding the 23.5 pence targeted over the first four years by the Investment Manager.

Resilient portfolio performance

The year ended 31 December 2020 was extremely challenging for the portfolio with the COVID-19 pandemic causing disruption both to the demand and supply side of the economy.

The Investment Manager, in conjunction with the Board, made the immediate decision to cease new lending in early March 2020 with all focus from the Investment Manager on ensuring the portfolio performed through the second and third quarters whilst awaiting news on the vaccine development. It is a testament to the credit processes, the lending model and portfolio companies themselves that the main RMDL loans were serviced through this period.

Investments within Asset Finance, Healthcare and Food Sectors have delivered robust returns throughout the year however the largest portfolio exposure is to Accommodation with Hotels (27.6%) and Student Accommodation (12.3%) investments, which were adversely affected by the national restrictions during the year. Despite the significant challenges, these Loans have generally performed well.

Total income generation for the year was GBP10.9 million and this was split between cash pay and PIK 82.5%. At the year end, the loan portfolio had GBP122.7 million (2019: GBP131.2 million) of investments across 35 Loans (2019: 34) well diversified by borrower and sector with investments predominantly completed within the UK.

There were eight new investments and a number of repayments and divestments that totalled GBP34.6 million during the year, demonstrating the successful execution of the business strategy, as the Company has resumed making loans, receiving interest and has been successfully repaid by borrowers. Overall, the gross portfolio yield increased to 9.37% as of 31 December 2020 (2019: 8.84%).

The portfolio is focused on private debt which as at 31 December 2020 represented 98% of the portfolio and we favour this asset class as the Investment Manager can document investor protections in the form of loan covenants and receive an illiquidity premium offering an enhanced yield to investors than those available in the public markets.

The portfolio is focused on defensive sectors with tangible asset backing giving high levels of protection should there be an economic downturn. Loan to value ("LTV") is limited with a blended leverage averaging 68.3% across the portfolio. 46.8% of the portfolio is either senior secured or CBILS guaranteed to give enhanced downside protection. Construction risk has increased to (two) loans totalling GBP8.3 million which is within the 20% of Gross Assets construction limit.

There are four investments within the portfolio that have enhanced monitoring and have opportunity for delivering NAV growth during 2021:

1. Energie Fitness. An investment in the senior loan (and equity participation) to this gym franchise business. RMDL participated in a management buyout during 2020 and owns a net 28% of the business. This loan has been marked at 85% of nominal value and reflects at this valuation 5.85% of the Companies assets. The company is well positioned to trade strongly when the lockdowns ease. The value of the equity is marked at zero.

2. Hotel Development Glasgow. The Company has funded a hotel development in Glasgow which is now nearing completion - this borrower has a 5* operator Hotel Management Agreement "HMA" in place and the scheme is scheduled to be finished later in 2021. These two loans represent 6.7% of net Company assets at their current valuation with one loan of GBP3.35million marked at 73% of nominal value which is expected to move towards 100% of face value as the development is finished over the course of 2021.

3. Purpose Built Student Accommodation "PBSA" Coventry. An investment into a senior secured PBSA asset representing 4.53% of net Company assets valued at 81.5% of nominal value. Initially a project finance construction loan to a building completed in March 2020 at the height of the COVID-19 first wave. Post March 2020 the borrower did not provide a suitable recovery plan given the building had not been occupied and RM Funds appointed an administrator. It is expected that RMDL will own this asset after the administration process. An operator for the building has been identified with students expected to occupy the building during 2021 which will enhance the value of the asset and start generating income for the portfolio thus creating two drivers of value over the course of this year.

4. Automotive Parts. This well-managed business with a high-quality sponsor responded swiftly to the initial factory close downs and the subsequent start-ups. The loan represents 6.16% of net Company assets and at the Company's year-end was valued at 85% of par value. The loan was documented at the outset to allow flexibility between the borrower paying their interest in cash or payment in kind "PIK" for situations such as these where demand might be slower than forecast. The valuation on this loan have been lowered to reflect the increase in risk from the current operating environment, however the strong fundamentals and as the economy starts to move out of the Q1 2021 lockdowns and the business starts to function more normally this valuation will likely be revised higher.

Coronavirus Business Interruption Loan Scheme ("CBILS")

This scheme was introduced by the British Government, is administered by the British Business Bank and was designed to provide support to corporates affected by the pandemic. The support is via partial loan guarantees made to accredited lenders which assists affected corporates with obtaining debt finance. The key features are that the UK Government provides a minimum 80% guarantee to eligible loans of sizes up to GBP5 million and in addition, the UK Government pays the first year's interest in the form of Business Interruption Payment ("BIP"). RM Funds was accredited as a funder under the scheme and RMDL was designated as a funding partner. As at the year-end 12.0% of the portfolio was invested into CBILS eligible loans. This is material credit enhancement for the portfolio.

Market environment

Credit spreads dramatically increased in March 2020 meaning valuations on High Yield bonds and Leverage Loans were significantly lower at the end of the month. The external valuation agent uses these securities as pricing benchmarks for the monthly valuations of the level 2 assets(liquid) held by the Company and more widely when assessing the current value of the level 3 assets(illiquid). March 2020 saw a NAV total return of -10.5% due to this broader increase in credit spreads. This negative move was subsequently followed by month on month increases as the wider credit markets normalised leading to a +3.1% NAV total return for the full year. Whilst this NAV was more volatile than RMDL would typically expect it is important to note that it did not affect the ability of the Company to pay the planned dividends.

Responsible Investing

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

Our principles

Respect for the internationally proclaimed human rights principles, equal opportunity independent of gender, race or religion; freedom of association and the right to bargain collectively; working conditions that surpass basic health and safety standards; the conduct of good governance practices, in particular in relation to bribery and conflicts of interest; environmental responsibility and responsibility for active climate change engagement.

Our commitments

Integrate the above principles into our decision-making process, by carefully considering ESG issues associated with any potential investment during the due diligence phase; encourage portfolio companies to follow the above principles by implementing governance structures that provide appropriate level of oversight and by seeking disclosure on ESG issues; provide ESG training and support to RM employees involved in the investment process, so that they may perform their work in accordance with the above principles and with this policy; seek to be transparent in its efforts to integrate ESG considerations in investments and annually report on its progress towards implementing the above principles, comply with national and other applicable laws; help promote the implementation of the above principles; consider our alignment with other related conventions and standards set by Invest Europe, the UN Global Compact Initiative and the UN Principles for Responsible Investment); continuously strive to improve ESG performance within RM Funds and our portfolio companies.

Investment Manager aligned to investor interests

In line with the commitment to investors made at the IPO, RM Funds has continued to purchase shares of the Company during the year. The Investment Manager now owns 1,249,825 Ordinary Shares which is an increase of 50,000 shares over the year; the management team and related parties' own additional shares. Since IPO the Investment Manager has purchased 749,825 shares directly in the secondary market. This is an ongoing commitment and by purchasing RMDL shares, the Investment Manager has shown a significant alignment of its interests with Shareholders.

Share price performance

The share price performance of the Company over the year has been disappointing which was principally driven by the share price discount to NAV widening during the March COVID-19 related sell-off. This discount remained above the target level of 6.0% for much of the year. The Board and the Investment Manager are focused on reducing the discount to below the target level and took steps to make selective share purchases in order to provide liquidity into the market and assist Shareholders who were seeking to sell. At the year end the share price to NAV discount was at 6.9% and post year-end it reduced below the target 6.0% level.

Robust outlook for 2021

In the annual report for the year ended 31 December 2019, RM noted that opportunities supported by major structural or socio-demographic drivers will be the most significant areas of opportunity for RMDL.

We still believe this to be the case and over the short and medium term we will further focus our efforts on capital deployment to the key areas of Social & Environmental Infrastructure. Historically approximately 40% of RMDL's capital has been allocated to these two areas. In addition, these areas align to sustainable development goals where capital from RMDL can make an impact. RM Funds has been working with The Good Economy, a leading social advisory firm, who have helped design an impact measurement and management framework.

The Investment Objective and the Investment Policy will remain the same however going forward all new capital will be allocated to the following six sectors:

Social Infrastructure

   --             Healthcare 
   --             Childcare and Education 
   --             Accommodation 

Environmental Infrastructure

   --             Clean Energy & Renewables 
   --             Waste Management 
   --             Energy Efficiency & Carbon reduction 

The Good Economy will be retained to provide an annual external ESG & Impact report for investors.

RM Capital Markets Limited

26 March 2021

Investment Policy, Results and Other Information

Investment objective

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

Investment policy

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

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

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

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

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

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

Investment restrictions

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

   --             the amount of no single Loan shall exceed 10% of Gross Assets; 
   --             exposure to a single borrower shall not exceed 10% of Gross Assets; 
   --             loans will be made across not less than four Market Sectors; 

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

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

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

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

   --             the Company will not provide Loans to borrowers which generate their annual turnover predominantly from tobacco, alcohol or pornography; and 
   --             the Company will not invest in other listed closed-ended funds. 

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

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

Borrowing and gearing

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

Hedging and derivatives

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

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

RM ZDP plc

RM ZDP plc ("RM ZDP"), a public limited company incorporated under the laws of England and Wales was incorporated on 21 February 2018. RM ZDP is a wholly owned subsidiary of the Company. RM ZDP was established solely for the purpose of issuing zero dividend preference shares of GBP 0.01 each ("ZDP Shares").

On 3 April 2018, RM ZDP was admitted to the standard segment of the Official List of the UK Listing Authority and its ZDP Shares were admitted to trading on the London Stock Exchange's main market for listed securities. The proceeds from the issuance of the ZDP Shares have been loaned to the Company by way of an intercompany loan agreement (the "Loan Agreement"). The Company also granted RM ZDP an undertaking to ensure that RM ZDP has sufficient assets to satisfy its obligations to the ZDP Shareholders and pay any operational costs incurred by RM ZDP.

RM ZDP raised gross proceeds of GBP10,869,950 through the issue of ZDP Shares.

The Board intend that RM ZDP plc be put into voluntarily liquidation through a General Meeting on 6 April 2021, for the purpose of proposing a resolution to wind up the ZDP Subsidiary voluntarily, with the assets of the RM ZDP then available for distribution.

Dividend policy

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

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

The Company targeted an annualised dividend yield in excess of 6.5% for the financial year to 31 December 2020.

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

Results and dividend

The consolidated financial statements include the results of the Company and its subsidiary RM ZDP plc (the "Group"). The Group revenue return after tax for the year ended 31 December 2020 amounted to GBP7,108,000 (2019: GBP9,816,000). The Group made a capital loss after tax of GBP5,251,000 (2019: capital loss of GBP1,288,000). Therefore, the total return after tax for the Group was GBP1,857,000 (2019: GBP8,528,000).

The first interim dividend of 1.625p per Ordinary Share was declared on 20 April 2020 in respect of the period from January to March 2020. The second interim dividend of 1.625p per Ordinary Share for the quarter ended 30 June 2020 was declared on 5 August 2020 and the third interim dividend of 1.625p per Ordinary Share for the quarter ended 30 September 2020 was declared on 2 November 2020. On 25 February 2021, the Board declared a fourth interim dividend of 1.625 pence per Ordinary Share for the quarter to 31 December 2020.

Key performance indicators ("KPIs")

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

(i) Dividends

The Group has paid or proposed four interim dividends totalling, in aggregate, 6.5 pence per Ordinary Share, equivalent to 6.5% based on the Ordinary Share issue price of GBP1 per share at Admission. The targeted annualised dividend yield of 6.5% has therefore been met during the year.

(ii) Total return

The Group's total return is monitored by the Board. The Ordinary Shares generated a NAV total return of +3.1% (2019: +8.2%) in the year ended 31 December 2020.

(iii) Discount/premium to NAV

The discount/premium relative to the NAV per share represented by the share price is closely monitored by the Board. The Ordinary Share price closed at a 6.7% discount (2019: premium of 1.7%) to the NAV as at 31 December 2020. To address the abnormally wide discount due to the impact of COVID-19 in 2020, 3.86 million shares were bought back during the year at prices ranging from 72.5 pence and 85 pence per shares. This added 0.422 pence per Ordinary Share to the NAV.

(iv) Control of the level of ongoing charges

The Board monitors the Group's operating costs. Based on the Group's average net assets for the year ended 31 December 2020, the Group's ongoing charges figure calculated in accordance with the AIC methodology was 1.91% (2019: 1.77%).

Risks and Risk Management

The Board is responsible for the management of risks faced by the Company and delegates this role to the Audit and Management Engagement Committee (the "Committee"). The Committee periodically carries out a robust assessment of principal and emerging risks and uncertainties and monitors the risks on an ongoing basis. The experience and knowledge of the Board is invaluable to these discussions, as is advice received from the Board's service providers, specifically the AIFM who is responsible for the risk and portfolio management services and outsources the portfolio management to the Investment Manager. The Committee has a dynamic risk assessment programme in place to help identify key risks in the business and oversee the effectiveness of internal controls and processes, providing a visual reflection of the Company's identified principal and emerging risks.

During the year, the Committee were particularly concerned with the risks posed by the COVID-19 pandemic which has had a significant impact in all risk categories. In addition to implementing more regular reviews of investment performance with the Investment Manager, the Committee requested and received assurances from its key service providers that they would be able to maintain high standards of service whilst working remotely. Further information on how the Committee has considered COVID-19 when assessing its effect on the Company's ability to operate as a going concern and the Company's longer-term viability.

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

(i) Market risks

Availability of appropriate investments

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

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

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

Market sectors

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

Management of risks

The Group has appointed an experienced Investment Manager who directly sources loans. The Group is investing in a wide range of loan types and sectors and therefore benefits from diversification. Investment restrictions are relatively flexible giving the advisor ability to take advantage of diverse loan opportunities.

The Investment Manager, AIFM, Brokers and the Board review market conditions on an ongoing basis.

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

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

Management of risks

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

(iii) Financial risks

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

Further details on financial risks and the management of those risks can be found in note 21 to the financial statements.

(iv) Corporate governance and internal control risks (including cyber security)

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

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

Management of risks

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

(v) Regulatory risks

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

Management of risks

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

(vi) Business interruption, repayment of RM ZDP loan and the Shareholders liquidity opportunity -emerging risks

Failure in services provided by key service providers, meaning information is not processed correctly or in a timely manner, resulting in regulatory investigation or financial loss, failure of trade settlement, or potential loss of investment trust status.

The following is a description of the emerging risks that each service provider highlights to the Board on a regular basis to aid in the identification of emerging risks for the Company.

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

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

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

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

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

The COVID-19 pandemic was identified as a risk early in the year. Its impact has been significant with restrictions to movement of people and disruption to business operations impacting global portfolio company valuations and returns and potentially impacting the operational resilience of the Company's service providers. The impact of COVID-19 on the markets and the Company's financial position are closely monitored by the Investment Manager's report and the Board. Please refer to the Chair's statements and Investment Manager for their assessment and effects it had on valuations, performance and the Company's plans going forward.

The Board intend that RM ZDP plc be put into voluntarily liquidation through a General Meeting on 6 April 2021, for the purpose of proposing a resolution to wind up the ZDP Subsidiary voluntarily, with the assets of the RM ZDP then available for distribution.

On a winding up of the ZDP Subsidiary voluntarily, the assets of the ZDP Subsidiary are available for distribution to ZDP Shareholders, in accordance with the Companies Act and shall be applied as follows:

-- There shall be payment to holders of the ZDP Shares an amount equal to the initial capital entitlement of 100 pence as increased at such rate as accrues daily and compounds annually to give an entitlement to 110.91 pence on the ZDP repayment date of 6 April 2021; and

-- There shall be payment to the holders of the Ordinary Shares the balance of the assets of the ZDP Subsidiary available for distribution in accordance with the Companies Act and the Articles of Association. With the entitlements of holders of ZDP Shares being rounded down to the nearest whole penny.

The Company will put forward proposals to Shareholders before the Company's fourth Annual General Meeting to realise the value of their Ordinary Shares at or near the prevailing Net Asset Value per Ordinary Share less costs before the Company's fourth Annual General Meeting on 8 June 2021. Shareholders should note that due to the nature of the assets held by the Company, any realisation is expected to take an extended period of time. The risk is that this liquidity opportunity to the Shareholders will reduce the Company to a size whereby it is not viable to operate.

Management of risks

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

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

Due to the COVID-19 pandemic and the restrictions on gatherings and travel introduced by the UK Government, the Audit and Management Engagement Committee requested assurances from the Company's key service providers that business continuity plans had been enacted where necessary, with service providers enabling remote working arrangements. This provided a satisfactory level of assurance that there had not been, and there was no anticipation of any disruption to service quality.

Details of the Directors' assessment of repayment of the RM ZDP Loan, the liquidity opportunity of Shareholders and the adequacy of the Company's resources are disclosed in the Annual Report.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the consolidated financial statements in accordance with applicable laws and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the group and parent company financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.

Under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, group financial statements are required to be prepared in accordance with international financial reporting standards (IFRSs) adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group during and as at the end of the year. In preparing these financial statements, the Directors are required to:

   --             select suitable accounting policies and then apply them consistently; 
   --             make judgements and estimates, which are reasonable and prudent; 

-- present information including accounting policies and additional disclosures as required to ensure the report is presented in a manner that provides relevant, reliable, comparable and understandable information;

-- state whether international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; and

-- prepare the consolidated financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and which disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the accounts comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The accounts are published on the Group's website at https://rmdl.co.uk/ which is maintained by the Group's Investment Manager. The work carried out by the auditors does not involve consideration of the maintenance and integrity of these websites and, accordingly, the auditors accept no responsibility for the website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' confirmation statement

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

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

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

The Directors consider that the consolidated financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Group's performance, business model and strategy.

For and on behalf of the Board

Norman Crighton

Chair

26 March 2021

 
 
   Consolidated Statement of Comprehensive Income 
 For the year ended 31 December 
  2020 
                                                Year ended 31 December        Year ended 31 December 
                                                                  2020                          2019 
                                           Revenue   Capital     Total   Revenue   Capital     Total 
                                   Notes   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
 Losses on investments               3       (565)   (5,106)   (5,671)         -   (1,161)   (1,161) 
 Income                              5      10,942         -    10,942    12,541         -    12,541 
 Investment management fee           6     (1,088)         -   (1,088)   (1,062)         -   (1,062) 
 Other expenses                      7     (1,267)     (145)   (1,412)   (1,080)     (145)   (1,225) 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 Return before finance costs 
  and taxation                               8,022   (5,251)     2,771    10,399   (1,306)     9,093 
 Finance costs                       8       (635)         -     (635)     (541)         -     (541) 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 Return on ordinary activities 
  before taxation                            7,387   (5,251)     2,136     9,858   (1,306)     8,552 
 Taxation                            9       (279)         -     (279)      (42)        18      (24) 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 Return on ordinary activities 
  after taxation                             7,108   (5,251)     1,857     9,816   (1,288)     8,528 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 Return per Ordinary Share 
  (pence)                           16       5.88p   (4.34p)     1.54p     8.85p   (1.16p)     7.69p 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 
 The total column of this statement is the profit and loss account of the 
  Group. 
 
   All the revenue and capital items in the above statement derive from continuing 
   operations. 
 
   'Return on ordinary activities after taxation' is also the 'Total comprehensive 
   income for the year'. 
 
 
 
 Company Statement of Comprehensive Income 
 For the year ended 31 December 
  2020 
                                             Year ended 31 December        Year ended 31 December 
                                                       2020                          2019 
                                           Revenue   Capital     Total   Revenue   Capital     Total 
                                   Notes   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
 Losses on investments               3       (565)   (5,210)   (5,775)         -   (1,264)   (1,264) 
 Income                              5      10,942         -    10,942    12,541         -    12,541 
 Investment management fee           6     (1,088)         -   (1,088)   (1,062)         -   (1,062) 
 Other expenses                      7     (1,192)     (145)   (1,337)   (1,002)     (164)   (1,166) 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 Return before finance costs 
  and taxation                               8,097   (5,355)     2,742    10,477   (1,428)     9,049 
 Finance costs                       8       (635)         -     (635)     (541)         -     (541) 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 Return on ordinary activities before 
  taxation                                   7,462   (5,355)     2,107     9,936   (1,428)     8,508 
 Taxation                            9       (246)         -     (246)      (15)        15         - 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 Return on ordinary activities 
  after taxation                             7,216   (5,355)     1,861     9,921   (1,413)     8,508 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 Return per Ordinary Share 
  (pence)                           16       5.96p   (4.43p)     1.53p     8.94p   (1.27p)     7.67p 
--------------------------------  ------  --------  --------  --------  --------  --------  -------- 
 
 The total column of this statement is the profit and loss account of the 
  Company. 
 
   All the revenue and capital items in the above statement derive from continuing 
   operations. 
 
   'Return on ordinary activities after taxation' is also the 'Total comprehensive 
   income for the year'. 
 
 
 
 Consolidated Statement of Financial Position 
                                                    As at 31 December   As at 31 December 
                                                                 2020                2019 
                                            Notes             GBP'000             GBP'000 
-----------------------------------------  ------  ------------------  ------------------ 
 Fixed assets 
 Investments at fair value through 
  profit or loss                              3               122,705             131,201 
 
 Current assets 
 Cash and cash equivalents                                      2,236               8,390 
 Receivables                                 10                10,515               2,266 
-----------------------------------------  ------  ------------------  ------------------ 
                                                               12,751              10,656 
 Payables: amounts falling due within 
  one year 
 Payables                                    11               (2,634)            (10,788) 
 Zero Dividend Preference Shares             12              (11,942)                   - 
 Bank loan - Credit facility                  8              (10,500)                   - 
                                                             (25,076)            (10,788) 
-----------------------------------------  ------  ------------------  ------------------ 
 Net current liabilities                                     (12,325)               (132) 
-----------------------------------------  ------  ------------------  ------------------ 
 
 Non-current liabilities 
 Zero Dividend Preference Shares             12                     -            (11,541) 
 Total assets less current liabilities                        110,380             119,528 
-----------------------------------------  ------  ------------------  ------------------ 
 
 Net assets                                                   110,380             119,528 
-----------------------------------------  ------  ------------------  ------------------ 
 
 Capital and reserves: equity 
 Share capital                               14                 1,184               1,222 
 Share premium                               15                70,168              70,146 
 Special reserve                                               45,277              48,304 
 Capital reserve                                              (9,125)             (3,874) 
 Revenue reserve                                                2,876               3,730 
 Total Shareholders' funds                                    110,380             119,528 
-----------------------------------------  ------  ------------------  ------------------ 
 NAV per share - Ordinary Shares (pence)     17                93.25p              97.79p 
-----------------------------------------  ------  ------------------  ------------------ 
 
 

The financial statements of the Group were approved and authorised for issue by the Board of Directors on 26 March 2021 and signed on their behalf by:

Norman Crighton

Chair

 
 Company Statement of Financial Position 
                                                    As at 31 December   As at 31 December 
                                                                 2020                2019 
                                            Notes             GBP'000             GBP'000 
-----------------------------------------  ------  ------------------  ------------------ 
 Fixed assets 
 Investments at fair value through 
  profit or loss                              3               122,705             131,201 
 Investments in subsidiary                    4                    50                  50 
 
 Current assets 
 Cash and cash equivalents                                      2,218               8,372 
 Receivables                                 10                10,498               2,210 
-----------------------------------------  ------  ------------------  ------------------ 
                                                               12,716              10,582 
 Payables: amounts falling due within 
  one year 
 Payables                                    11               (2,645)            (10,764) 
 Intercompany loan payable                   13              (11,942)                   - 
 Bank loan - Credit facility                                 (10,500)                   - 
                                                             (25,087)            (10,764) 
-----------------------------------------  ------  ------------------  ------------------ 
 Net current liabilities                                     (12,371)               (182) 
-----------------------------------------  ------  ------------------  ------------------ 
 
 Non-current liabilities 
 Intercompany loan payable                   13                     -            (11,541) 
 Total assets less current liabilities                        110,384             119,528 
-----------------------------------------  ------  ------------------  ------------------ 
 
 Net assets                                                   110,384             119,528 
-----------------------------------------  ------  ------------------  ------------------ 
 
 Capital and reserves: equity 
 Share capital                               14                 1,184               1,222 
 Share premium                               15                70,168              70,146 
 Special reserve                                               45,277              48,304 
 Capital reserve                                              (9,412)             (4,057) 
 Revenue reserve                                                3,167               3,913 
 Total Shareholders' funds                                    110,384             119,528 
-----------------------------------------  ------  ------------------  ------------------ 
 NAV per share - Ordinary Shares (pence)     17                93.26p              97.79p 
-----------------------------------------  ------  ------------------  ------------------ 
 
 

The financial statements of the Company were approved and authorised for issue by the Board of Directors on 26 March 2021 and signed on their behalf by:

Norman Crighton

Chair

 
 Consolidated Statement of Changes in Equity 
 For the year ended 31 
 December 
 2020 
 
                                        Share        Share   Special    Capital    Revenue 
                                      capital      premium   reserve    reserve    reserve          Total 
                         Notes        GBP'000      GBP'000   GBP'000    GBP'000    GBP'000        GBP'000 
----------------------  ------  -------------  -----------  --------  ---------  ---------  ------------- 
 Balance as at 
  beginning 
  of the year                           1,222       70,146    48,304    (3,874)      3,730        119,528 
 Return on ordinary 
  activities                                -            -         -    (5,251)      7,108          1,857 
 Redemption of shares     14             (38)           38   (3,027)          -          -        (3,027) 
 Share buyback costs                        -         (16)         -          -          -           (16) 
 Dividend paid            18                -            -         -          -    (7,962)        (7,962) 
 Balance as at 31 
  December 
  2020                                  1,184       70,168    45,277    (9,125)      2,876        110,380 
----------------------  ------  -------------  -----------  --------  ---------  ---------  ------------- 
 
 For the year ended 31 December 2019 
                                                     Share 
                                        Share      premium   Special    Capital    Revenue 
                                      capital      account   reserve   reserves   reserves          Total 
                                      GBP'000      GBP'000   GBP'000    GBP'000    GBP'000        GBP'000 
----------------------  ------  -------------  -----------  --------  ---------  ---------  ------------- 
 Balance as at beginning of 
  the year                                987       47,351    48,304    (2,586)      1,664         95,720 
 Return on ordinary 
  activities                                -            -         -    (1,288)      9,816          8,528 
 Issue of shares          14              235       23,265         -          -          -         23,500 
 Share issue costs                          -        (470)         -          -          -          (470) 
 Dividend paid            18                -            -         -          -    (7,750)        (7,750) 
 Balance as at 31 
  December 
  2019                                  1,222       70,146    48,304    (3,874)      3,730        119,528 
----------------------  ------  -------------  -----------  --------  ---------  ---------  ------------- 
 
 Distributable reserves comprise: the revenue reserve; capital reserves 
  attributable to realised profits; and the special reserve. 
 
 Share capital represents the nominal value of shares that have been issued. 
  The share premium includes any premiums received on the issue of share 
  capital. Any transaction costs associated with the issuing of shares 
  are deducted from share premium. 
 
 
 Company Statement of Changes in Equity 
 For the year ended 31 
 December 
 2020 
 
                                 Share               Share   Special    Capital    Revenue 
                                  capital          premium   reserve    reserve    reserve            Total 
                         Notes        GBP'000      GBP'000   GBP'000    GBP'000    GBP'000          GBP'000 
----------------------  ------  -------------  -----------  --------  ---------  ---------  --------------- 
 Balance as at 
  beginning 
  of the year                           1,222       70,146    48,304    (4,057)      3,913          119,528 
 Return on ordinary 
  activities                                -            -         -    (5,355)      7,216            1,861 
 Redemption of shares     14             (38)           38   (3,027)          -          -          (3,027) 
 Share buyback costs                        -         (16)         -          -          -             (16) 
 Dividend paid            18                -            -         -          -    (7,962)          (7,962) 
 Balance as at 31 
  December 
  2020                                  1,184       70,168    45,277    (9,412)      3,167          110,384 
----------------------  ------  -------------  -----------  --------  ---------  ---------  --------------- 
 
 
 For the year ended 31 December 2019 
                                                     Share 
                                 Share             premium   Special    Capital    Revenue 
                                  capital          account   reserve   reserves   reserves            Total 
                                      GBP'000      GBP'000   GBP'000    GBP'000    GBP'000          GBP'000 
----------------------  ------  -------------  -----------  --------  ---------  ---------  --------------- 
 Balance as at beginning of 
  the year                                987       47,351    48,304    (2,644)      1,742           95,740 
 Return on ordinary 
  activities                                -            -         -    (1,413)      9,921            8,508 
 Issue of shares          14              235       23,265         -          -          -           23,500 
 Share issue costs                          -        (470)         -          -          -            (470) 
 Dividend paid            18                -            -         -          -    (7,750)          (7,750) 
 Balance as at 31 
  December 
  2019                                  1,222       70,146    48,304    (4,057)      3,913          119,528 
----------------------  ------  -------------  -----------  --------  ---------  ---------  --------------- 
 
 Distributable reserves comprise: the revenue reserve; capital reserves 
  attributable to realised profits; and the special reserve. 
 
 Share capital represents the nominal value of shares that have been issued. 
  The share premium includes any premiums received on the issue of share 
  capital. Any transaction costs associated with the issuing of shares 
  are deducted from share premium. 
 
 
 Consolidated Statement of Cash Flows 
 For the year ended 31 December 
  2020 
                                                                  Year ended 31        Year ended 31 
                                                                  December 2020        December 2019 
                                          Notes                         GBP'000              GBP'000 
--------------------------------------  ---------  ----------------------------  ------------------- 
 Operating activities 
 Return on ordinary activities 
  before finance costs and taxation*                                      2,771                9,093 
 Adjustment for losses on investments                                     5,357                1,161 
 Increase in receivables                                                  (919)              (1,189) 
 Increase in payables                                                       414                  247 
 PIK income adjustment to the 
  operating 
  cash flow                                                             (2,081)              (1,129) 
 Net cash flow from operating 
  activities                                                              5,542                8,183 
--------------------------------------  ---------  ----------------------------  ------------------- 
 Investing activities 
 Private loan repayments/ bonds 
  sales proceeds                                                         33,478               56,335 
 Private loans issued/ bonds purchases                                 (44,435)             (79,392) 
 Net cash flow used in investing 
  activities                                                           (10,957)             (23,057) 
--------------------------------------  ---------  ----------------------------  ------------------- 
 Financing activities 
 Finance costs                                                            (234)                (154) 
 Ordinary Share issue proceeds                                                -               23,500 
 Ordinary Share issue costs                                                   -                (470) 
 Ordinary Share bought back                 14                          (3,027)                    - 
 Ordinary Share buyback costs                                              (16)                    - 
 Oaknorth loan facility drawdown                                         17,800               16,900 
 Oaknorth loan facility repaid                                          (7,300)             (16,900) 
 Equity dividends paid                      18                          (7,962)              (7,750) 
 Net cash (used in)/flow from 
  financing 
  activities                                                              (739)               15,126 
--------------------------------------  ---------  ----------------------------  ------------------- 
 (Decrease)/increase in cash                                            (6,154)                  252 
 Opening balance at beginning of 
  the year                                                                8,390                8,138 
--------------------------------------  ---------  ----------------------------  ------------------- 
 Balance as at 31 December 2020                                           2,236                8,390 
--------------------------------------  ---------  ----------------------------  ------------------- 
 
 * Cash inflow from interest on investment holdings was GBP8,960,000 
  (2019: GBP10,680,000). 
 
 
 Company Statement of Cash Flows 
 For the year ended 31 December 
  2020 
                                                                  Year ended 31        Year ended 31 
                                                                  December 2020        December 2019 
                                         Notes                          GBP'000              GBP'000 
--------------------------------------  ---------  ----------------------------  ------------------- 
 Operating activities 
 Return on ordinary activities 
  before finance costs and taxation*                                      2,742                9,049 
 Adjustment for losses on investments                                     5,357                1,239 
 Increase in receivables                                                  (958)              (1,192) 
 Increase in payables                                                       481                  216 
 PIK income adjustment to the 
  operating 
  cash flow                                                             (2,081)              (1,129) 
 Net cash flow from operating 
  activities                                                              5,541                8,183 
--------------------------------------  ---------  ----------------------------  ------------------- 
 Investing activities 
 Private loan repayments/ bonds 
  sales proceeds                                                         33,479               56,335 
 Private loans issued/ bonds purchases                                 (44,435)             (79,392) 
 Net cash flow used in investing 
  activities                                                           (10,956)             (23,057) 
--------------------------------------  ---------  ----------------------------  ------------------- 
 Financing activities 
 Finance costs                                                            (234)                (154) 
 Ordinary Share issue proceeds                                                -               23,500 
 Ordinary Share issue costs                                                   -                (470) 
 Ordinary Share bought back                    14                       (3,027)                    - 
 Ordinary Share buyback costs                                              (16)                    - 
 Oaknorth loan facility drawdown                                         17,800               16,900 
 Oaknorth loan facility repaid                                          (7,300)             (16,900) 
 Equity dividends paid                         18                       (7,962)              (7,750) 
 Net cash flow (used in)/ from 
  financing activities                                                    (739)               15,126 
--------------------------------------  ---------  ----------------------------  ------------------- 
 (Decrease)/increase in cash                                            (6,154)                  252 
 Opening balance at beginning of 
  the year                                                                8,372                8,120 
--------------------------------------  ---------  ----------------------------  ------------------- 
 Balance as at 31 December 2020                                           2,218                8,372 
--------------------------------------  ---------  ----------------------------  ------------------- 
 
 * Cash inflow from interest on investment holdings was GBP8,960,000 
  (2019: GBP10,680,000). 
 
 
 
 

Changes in financing liabilities

 
                                                Year ended 31 December        Year ended 31 December 
 Movement in financial liabilities-Group                 2020                          2019 
                                             ---------------------------  ----------------------------- 
                                                OakNorth                     OakNorth 
                                                facility      ZDP Shares     facility        ZDP Shares 
                                                 GBP'000         GBP'000      GBP'000           GBP'000 
-------------------------------------------  -----------  --------------  -----------  ---------------- 
  Balance as at beginning of the 
   year                                                -          11,541            -            11,155 
  Facility drawdowns during the 
   year                                           17,800               -       16,900                 - 
  Facility interest payable during 
   the year                                          234               -          106                 - 
  Facility and interest repayments 
   during the year                               (7,534)               -     (17,006)                 - 
  Return on ZDP Shares during 
   the year-non cash flow                              -             401            -               386 
-------------------------------------------  -----------  --------------  -----------  ---------------- 
  Balance as at 31 December 2020                  10,500          11,942            -            11,541 
-------------------------------------------  -----------  --------------  -----------  ---------------- 
 
 
                                                Year ended 31 December        Year ended 31 December 
 Movement in financial liabilities-Company               2020                          2019 
                                             ---------------------------  ----------------------------- 
                                                OakNorth    Intercompany     OakNorth      Intercompany 
                                                facility            loan     facility              loan 
                                                 GBP'000         GBP'000      GBP'000           GBP'000 
-------------------------------------------  -----------  --------------  -----------  ---------------- 
 Balance as at beginning of the 
  year                                                 -          11,541            -            11,155 
 Facility drawdowns during the 
  year                                            17,800               -       16,900                 - 
 Facility interest payable during 
  the year                                           234               -          106                 - 
 Facility and interest repayments 
  during the year                                (7,534)               -     (17,006)                 - 
 Intercompany finance cost-non 
  cash flow                                            -             401            -               386 
 Balance as at 31 December 2020                   10,500          11,942            -            11,541 
-------------------------------------------  -----------  --------------  -----------  ---------------- 
 
   Notes to the Financial Statements 
 
 1. General information 
 
 RM Secured Direct Lending plc (the "Company") was incorporated in England 
  and Wales on 27 October 2016 with registered number 10449530, as a 
  closed-ended investment company. The Company commenced its operations 
  on 15 December 2016. The Company intends to carry on business as an 
  investment trust within the meaning of Chapter 4 of Part 24 of the 
  Corporation Tax Act 2010. 
 
 The consolidated financial information of the Company comprises that 
  of the Company and its subsidiary RM ZDP Plc (together referred to 
  as the "Group") for the year ended 31 December 2020. RM ZDP was incorporated 
  in England and Wales on 21 February 2018, with registered number 11217952 
  as a public company limited by shares under the Companies Act. 
 The Company's investment objective is to generate attractive and regular 
  dividends through investment in secured debt instruments of UK SMEs 
  and mid-market corporates including any loan, promissory notes, lease, 
  bond or preference share sourced or originated by the Investment Manager 
  with a degree of inflation protection through index-linked return where 
  appropriate. 
 The registered office is 1st Floor, Senator House, 85 Queen Victoria 
  Street, London, EC4V 4AB. 
 2. Accounting policies 
 
 The principal accounting policies followed by the Group and the Company 
  are set out below: 
 
 (a) Basis of accounting 
 These financial statements have been prepared in accordance with international 
  accounting standards in conformity with the requirements of the Companies 
  Act 2006 and the applicable legal requirements of the Companies Act 
  2006. In addition to complying with international accounting standards 
  in conformity with the requirements of the Companies Act 2006, the 
  consolidated financial statements also comply with international financial 
  reporting standards adopted pursuant to Regulation (EC) No 1606/2002 
  as it applies in the European Union.The financial statements have been 
  prepared on a historical cost basis, except for the measurement at 
  fair value of investments. 
  The Board has determined by having regard to the currency of the Company's 
  share capital and the predominant currency in which its shareholders 
  operate, that sterling is the functional and reporting currency. Where 
  presentational recommendations set out in the Statement of Recommended 
  Practice "Financial Statements of Investment Trust Companies and Venture 
  Capital Trusts" ("SORP"), issued in the UK by the AIC in October 2019, 
  do not conflict with the requirements of IFRS, the directors have prepared 
  the financial statements on a basis consistent with the recommendations 
  of the SORP, in the belief that this will aid comparison with similar 
  investment companies incorporated in the United Kingdom. 
  In accordance with the SORP, the Statement of Comprehensive Income 
  has been analysed between a revenue return (dealing with items of a 
  revenue nature) and a capital return (relating to items of a capital 
  nature). Revenue returns include, but are not limited to, investment 
  related income, operating expenses, income related finance costs and 
  taxation (insofar as they are not allocated to capital). Net revenue 
  returns are allocated via the revenue return to the Revenue reserve. 
  Capital returns include, but are not limited to, profits and losses 
  on the disposal and the valuation of non-current investments, derivative 
  instruments and on cash and borrowings, operating costs and finance 
  costs (insofar as they are not allocated to revenue). Net capital returns 
  are allocated via the capital return to Capital reserves. 
 
  Dividends on Ordinary Shares may be paid out of Revenue reserve, Capital 
  reserve and Special reserve. 
  (b) Adoption of new IFRS standards 
  A number of new standards, amendments to standards and interpretations 
  are effective for the annual periods beginning after 1 January 2020. 
  None of these are expected to have a significant effect on the measurement 
  of the amounts recognised in the financial statements of the Group. 
 
  IFRS 9 Financial Instruments - Fees in the '10 per cent' test for derecognition 
  of financial liabilities 
  As part of its 2018-2020 Annual Improvements to IFRS standards process, 
  the IASB issued an amendment to IFRS 9. The amendment clarifies the 
  fees that an entity includes when assessing whether the terms of a 
  new or modified financial liability are substantially different from 
  the terms of the original financial liability. The amendment is effective 
  for annual reporting periods beginning on or after 1 January 2022 with 
  earlier adoption permitted. This amendment is unlikely to have any 
  impact on the financial statements of the Group. 
 
  Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate Benchmark Reform 
 
  The amendments to IFRS 7, IFRS 9 and IAS 39 Financial Instruments: 
  Recognition and Measurement provide a number of reliefs, which apply 
  to all hedging relationships that are directly affected by interest 
  rate benchmark reform. These amendments have no impact on the financial 
  statements of the Group. 
 
  A number of new standards, amendments to standards and interpretations 
  are not effective for the annual periods beginning after 1 January 
  2020 and have not been applied in preparing these financial statements 
  and not expected to have a significant effect on the financial statements 
  of the Group. 
 (c) Basis of consolidation 
 The consolidated financial statements comprise the financial information 
  of the Group as at the year end date. A Subsidiary is an entity over 
  which the Company has control. The Group controls an entity when the 
  Group is exposed to, or has rights to, variable returns from its involvement 
  with the entity and has the ability to affect those returns through 
  its power to direct the activities of the entity. The financial information 
  of the subsidiary is included in the consolidated financial statements 
  from the date that control commences until the date that control ceases. 
  Accounting policies of the subsidiary are consistent with the policies 
  adopted by the Company. All intra-group transactions, balances, income 
  and expenses are eliminated on consolidation. 
 (d) Going concern 
 The Directors have adopted the going concern basis in preparing the 
  financial statements. In forming this opinion, the directors have considered 
  any potential impact of the COVID-19 pandemic on the going concern 
  and viability of the Group. In making their assessment, the Directors 
  have reviewed income and expense projections and the liquidity of the 
  investment portfolio, and considered the mitigation measures which 
  key service providers, including the Investment Manager, have in place 
  to maintain operational resilience particularly in light of COVID-19. 
  Details of the Directors assessment of the going concern status of 
  the Group, which considered repayment of the RM ZDP loan and the Shareholders 
  liquidity opportunity are disclosed in the Annual Report. 
 
  The Directors have a reasonable expectation that the Group has adequate 
   resources to continue in operational existence for at least twelve 
   months from the date of this document. In reaching this conclusion, 
   the Directors have considered the Group's portfolio of loan investments 
   of GBP122.7 million (2019: GBP131.2 million) as well as its income 
   and expense flows and the cash position of GBP1.4 million (2019: GBP8.4 
   million). The Group's net assets at 31 December 2020 were GBP110.4 
   million (2019: GBP119.5 million). The total expenses (excluding finance 
   costs and taxation) for the year ended 31 December 2020 were GBP2.5 
   million (2019: GBP2.3 million), which represented approximately 1.91% 
   (2019: 1.77%) of average net assets during the year. At the date of 
   approval of this document, based on the aggregate of investments and 
   cash held, the Group has substantial operating expenses cover. 
   The RM ZDP loan final capital entitlement amount of GBP12,055,000 is 
   payable to RM ZDP on 6 April 2021, upon passing of the resolution for 
   voluntary liquidation of the ZDP Subsidiary. At the date of approval 
   of this document, it is estimated that approximately 16% of the value 
   of the investments held at the year-end could be realised in two months 
   as these are traded. Based on the expected realised value of investments 
   and cash held, the Directors are comfortable that the Group is able 
   to meet its final capital entitlement amount. The Directors also considered 
   the Group's RCF of GBP10.5million to meet this obligation. As at the 
   date of approval of this document, the undrawn amount of this facility 
   was GBP9.4 million. 
   Prior to the Company's fourth Annual General Meeting on 8 June 2021, 
   the Company's Shareholders will have an opportunity to realise the 
   value of their shares at or near the prevailing NAV per Share. The 
   Directors have also considered the liquidity opportunity and confirm 
   that the proposals submitted to Shareholders will take into consideration 
   the requirement to manage the Company's ability to repay existing liabilities 
   as they fall due. 
   Based on the above, there are no material uncertainties that call into 
   question the Company's ability to continue to be a going concern from 
   the date of approval of these financial statements to 30 June 2022 
   and the Board is confident that the Company will be able to continue 
   in operation and meet its liabilities as they fall due. 
   (e) Investment entity status 
   The Company meets the criteria within IFRS 10 as an investment entity 
   and should therefore hold investments in subsidiaries at fair value 
   rather than consolidate them, unless those subsidiaries are not themselves 
   investment entities and their main purpose is to provide services related 
   to the group's investment activities. The Group's subsidiary, RM ZDP 
   is not an investment entity and its main purpose is to provide finance 
   for the group through the issue of zero dividend preference shares 
   and therefore this subsidiary has been consolidated. 
 
 (f) Investments 
  Investments consist of private loans and bonds, which are classified 
  as fair value through profit or loss as they are included in a group 
  of financial assets that are managed and their performance evaluated 
  on a fair value basis. They are initially and subsequently measured 
  at fair value and gains and losses are attributed to the capital column 
  of the Statement of Comprehensive Income. Investments are recognised 
  on the date that the Group becomes a party to the contractual provisions 
  of the instrument and are derecognised when their term expires, or 
  on the date they are sold, repaid or transferred. 
 
  Unquoted investments are valued at fair value by the Board which is 
  established with regard to the International Private Equity and Venture 
  Capital Valuation Guidelines by using, where appropriate, latest dealing 
  prices, valuations from reliable sources and other relevant factors. 
 
 (g) Foreign currency 
  Transactions denominated in foreign currencies are translated into 
  sterling at actual exchange rates as at the date of the transaction. 
  Monetary assets and liabilities and non-monetary assets held at fair 
  value denominated in foreign currencies are translated into sterling 
  using London closing foreign exchange rates at the year end. Any gain 
  or loss arising from a change in exchange rates is included as an exchange 
  gain or loss to capital or revenue in the Statement of Comprehensive 
  Income as appropriate. Foreign exchange movements on investments are 
  included in the Statement of Comprehensive Income within loss on investments. 
 
 (h) Income 
  Interest income is recognised in the revenue column of the Statement 
  of Comprehensive Income on a time-apportioned basis. Payment-in-kind 
  (PIK) interest income is accounted on an accrual basis and capitalised 
  to the principal value of the loan. 
 
  All other income including deposit interest is accounted on an accrual 
  basis and early settlement fees received are recognised upon the early 
  repayment of the loan. 
 
  Arrangement fees earned on private loan investments are recognised 
  as an income over the term of the private loans. 
 (i) Capital reserves 
  Realised and unrealised gains and losses on the Group's investments 
  are recognised in the capital column of the Statement of Comprehensive 
  Income and allocated to the capital reserve. 
 
 (j) Expenses 
  All expenses are accounted for on an accruals basis. 
 
  Other expenses are recognised in the revenue column of the Statement 
  of Comprehensive Income, unless they are incurred in order to enhance 
  or maintain capital profits. 
 
 Management fees and finance costs 
  The Group is expecting to derive its returns predominantly from interest 
  income. Therefore, the Board has adopted a policy of allocating all 
  management fees and finance costs to the revenue column of the Statement 
  of Comprehensive Income. 
 
  ZDP Shares finance cost 
  The ZDP Shares are designed to provide a pre-determined capital growth 
  from their original issue price of 100p on 3 April 2018 to a final 
  capital entitlement of 110.91p on 6 April 2021, on which date the RM 
  ZDP is planned to be wound up. The provision for the capital growth 
  entitlement of the ZDP Shares is included as a finance cost and charged 
  to revenue within the Statement of Comprehensive Income. 
 (k) Taxation 
  The charge for taxation is based upon the net revenue for the year. 
  The tax charge is allocated to the revenue and capital columns of the 
  Statement of Comprehensive Income according to the marginal basis whereby 
  revenue expenses are first matched against taxable income arising in 
  the revenue account. 
 
  Deferred taxation will be recognised as an asset or a liability if 
  transactions have occurred at the initial reporting date that give 
  rise to an obligation to pay more taxation in the future, or a right 
  to pay less taxation in the future. An asset will not be recognised 
  to the extent that the transfer of economic benefit is uncertain. 
 
 (l) Financial liabilities 
  Bank loan facility and overdrafts are initially recorded at the proceeds 
  received net of direct issue costs and subsequently measured at amortised 
  cost using the effective interest rate.. The associated costs of bank 
  loan facility are treated as revenue and amortised over the period 
  of the bank loan facility. 
 
  Financial liabilities at amortised cost - Zero Dividend Preference 
  Shares 
  These are initially recognised at cost, being the fair value of the 
  consideration received associated with the borrowing net of direct 
  issue costs. ZDP Shares are subsequently measured at amortised cost 
  using the effective interest method. Direct issue costs are amortised 
  using the effective interest method and are added to the carrying amount 
  of the ZDP Shares. The final capital entitlement to ZDP shareholders 
  will rank in priority to the capital entitlement of the Ordinary Shares 
  of RM ZDP as such ZDP Shares are treated as debt. 
 
 (m) Dividends 
  Interim dividends to the Shareholders are recorded in the Statement 
  of Changes in Equity on the date that they are paid. Final dividends 
  are recorded in the Statement of Changes in Equity when they are approved 
  by Shareholders. 
 
 (n) Judgements, estimates and assumptions 
  The preparation of financial statements requires the directors to 
  make estimates and assumptions that affect the application of accounting 
  policies and the reported amounts of assets, liabilities, income and 
  expenses. Although these estimates are based on management's best knowledge 
  of current facts, circumstances and, to some extent, future events 
  and actions, the Group's actual results may ultimately differ from 
  those estimates, possibly significantly. 
 
  The Group recognises loan investments at fair value through profit 
  or loss and disclosed in note 3 to the financial statements. The significant 
  assumptions made at the point of valuation of loans are the discounted 
  cash flow analysis and/or benchmarked discount/interest rates, which 
  are deemed appropriate to reflect the risk of the underlying loan. 
  These assumptions are monitored to ensure their ongoing appropriateness. 
  The sensitivity impact on the measurement of fair value of loan investments 
  due to price is discussed in note 21. 
 
  (o) Investments in subsidiary 
  The investments in subsidiary company is included in the Company's 
  Statement of Financial Position 
  at cost less provision for impairment. 
 
 
 
 3. INVESTMENT AT FAIR VALUE THROUGH PROFIT OR 
  LOSS 
 Group 
 (a) Summary of valuation 
                                              Year ended     Year ended 
                                             31 December    31 December 
                                                    2020           2019 
                                                 GBP'000        GBP'000 
-----------------------------------------  -------------  ------------- 
 Financial assets held: 
 Bond investments                                  2,695          6,322 
 Private loan investments                        120,010        124,879 
                                                 122,705        131,201 
-----------------------------------------  -------------  ------------- 
 
 (b) Movements 
                                              Year ended     Year ended 
                                             31 December    31 December 
                                                    2020           2019 
                                                 GBP'000        GBP'000 
-----------------------------------------  -------------  ------------- 
 
 Opening valuation                               131,201        102,581 
 Opening unrealised losses on investment 
  holdings                                         2,919            438 
-----------------------------------------  -------------  ------------- 
 Book cost at the beginning of the 
  year                                           134,120        103,019 
 Private loans issued/bonds purchases 
  at cost                                         35,589         84,785 
 Payment in kind interest (PIK)                    2,602          1,244 
 Sales: 
   - Private loans repayments/bonds 
    sales proceeds                              (41,067)       (55,511) 
   - gains on investment                             258            698 
   - Payment in kind interest (PIK)                (521)          (115) 
 Unrealised losses on investments 
  held                                           (8,276)        (2,919) 
 Closing valuation at year end                   122,705        131,201 
-----------------------------------------  -------------  ------------- 
 
 Book cost at end of the year                    130,981        134,120 
 Unrealised losses on investment 
  holdings at the year end                       (8,276)        (2,919) 
 Closing valuation at year end                   122,705        131,201 
-----------------------------------------  -------------  ------------- 
 
 (c) Losses on investments 
                                              Year ended     Year ended 
                                             31 December    31 December 
                                                    2020           2019 
                                                 GBP'000        GBP'000 
-----------------------------------------  -------------  ------------- 
 Realised gains on investments                       362            698 
 Unrealised losses on investments 
  held                                           (5,357)        (2,481) 
 Foreign exchange (losses)/gains                   (676)            622 
 Total losses on investments                     (5,671)        (1,161) 
-----------------------------------------  -------------  ------------- 
 
 
 3. INVESTMENT AT FAIR VALUE THROUGH PROFIT OR 
  LOSS 
 Company 
 (a) Summary of valuation 
                                              Year ended     Year ended 
                                             31 December    31 December 
                                                    2020           2019 
                                                 GBP'000        GBP'000 
-----------------------------------------  -------------  ------------- 
 Financial assets held: 
 Bond investments                                  2,695          6,322 
 Private loan investments                        120,010        124,879 
                                                 122,705        131,201 
-----------------------------------------  -------------  ------------- 
 
 (b) Movements 
                                              Year ended     Year ended 
                                             31 December    31 December 
                                                    2020           2019 
                                                 GBP'000        GBP'000 
-----------------------------------------  -------------  ------------- 
 
 Opening valuation                               131,201        102,581 
 Opening unrealised losses on investment 
  holding                                          2,919            438 
-----------------------------------------  -------------  ------------- 
 Book cost at the beginning of the 
  year                                           134,120        103,019 
 Private loans issued/bonds purchases 
  at cost                                         35,589         84,785 
 Payment in kind interest (PIK)                    2,602          1,244 
 Sales: 
   - Private loans repayments/bonds 
    sales proceeds                              (41,067)       (55,408) 
   - gains on investment                             258            595 
   - Payment in kind interest (PIK)                (521)          (115) 
 Unrealised losses on investments 
  held                                           (8,276)        (2,919) 
 Closing valuation at year end                   122,705        131,201 
-----------------------------------------  -------------  ------------- 
 
 Book cost at end of the year                    130,981        134,120 
 Unrealised losses on investment 
  holdings at the year end                       (8,276)        (2,919) 
 Closing valuation at year end                   122,705        131,201 
-----------------------------------------  -------------  ------------- 
 
 (c) Losses on investments 
                                              Year ended     Year ended 
                                             31 December    31 December 
                                                    2020           2019 
                                                 GBP'000        GBP'000 
-----------------------------------------  -------------  ------------- 
 Realised gains on investments                       258            595 
 Unrealised losses on investments 
  held                                           (5,357)        (2,481) 
 Foreign exchange (losses)/gains                   (676)            622 
 Total losses on investments                     (5,775)        (1,264) 
-----------------------------------------  -------------  ------------- 
 

At the year end, the Company had one unquoted investment in Esprit Holdco Limited (Energie Fitness). The Company participated in a management buyout during 2020 and owns 28% of the business, the registered office and principal of business of Energie Fitness is 1 Pitfield Kiln Farm, Milton Keynes, United Kingdom, MK11 3LW. The Investment Manager valued holdings in Energie Fitness at nil.

The equity investment in Energie Fitness meets the criteria within IFRS 10 as an investment entity and therefore held at fair value.

 
 4. INVESTMENT IN SUBSIDIARY 
                                                                                      Company 
                                                                       Year ended 31 December 
                                                                                         2020 
                                                                                      GBP'000 
------------  ---------------------  ----------------------------  -------------------------- 
 Investment in subsidiary                                                                  50 
----------------------------------------------------------------- 
 Total                                                                                     50 
-----------------------------------------------------------------  -------------------------- 
 
 Subsidiary    Effective ownership 
  name                   %            Country of incorporation             Principal activity 
------------  ---------------------  ----------------------------  -------------------------- 
                                      1st Floor, Senator House, 
                                       85 Queen Victoria Street, 
                                       London, EC4V 4AB, United     Issuance of zero dividend 
 RM ZDP plc            100             Kingdom                       preference shares 
 
 
 5. INCOME-GROUP AND COMPANY 
                                                     Year ended 31        Year ended 31 
                                                     December 2020        December 2019 
                                                           GBP'000              GBP'000 
-----------------------------------------------  -----------------  ------------------- 
 Income from investments 
 Bond and loan-cash interest                                 8,817               10,215 
 Bond and loan-PIK interest                                  1,879                1,314 
 Bank interest                                                   -                    4 
 Arrangement fees                                              102                  190 
 Loan redemption fees                                            -                  451 
 Delayed Compensation fees received                             46                  148 
 Prepayment fee                                                 58                    - 
 Other income                                                   40                  219 
                                                 -----------------  ------------------- 
 Total                                                      10,942               12,541 
-----------------------------------------------  -----------------  ------------------- 
 
   6. INVESTMENT MANAGEMENT FEE 
                                                                       Year ended 31 
                                       Year ended 31 December 2020     December 2019 
  GROUP AND COMPANY                                        GBP'000           GBP'000 
---------------------------------  -------------------------------  ---------------- 
 Basic fee: 
 100% charged to revenue                                     1,088             1,062 
 Total                                                       1,088             1,062 
---------------------------------  -------------------------------  ---------------- 
 The Company's Investment Manager is RM Capital Markets Limited. Under 
  the amended Investment Management Agreement, effective 1 April 2020, 
  the Investment Manager is entitled to receive a management fee payable 
  monthly in arrears or as soon as practicable after the end of each calendar 
  month an amount one-twelfth of: 
 
  (a) 0.875 per cent. of the prevailing NAV in the event that the prevailing 
  NAV is up to or equal to GBP250 million; or 
 
  (b) 0.800 per cent. Of the prevailing NAV in the event that the prevailing 
  NAV is above GBP250 million but less than GBP500 million; or 
 
  (c) 0.750 per cent. of the prevailing NAV in the event that the prevailing 
  NAV is above GBP500 million. 
 
  In calculating Net Asset Value for these purposes all assets referable 
  to the issue of ZDP Shares shall be counted as though they were assets 
  of the Company but, for the avoidance of doubt, no liabilities referable 
  to the issue of any ZDP Shares shall be deducted. 
 
  The management fee shall be payable in Sterling on a pro-rata basis 
  in respect of any period which is less than a complete calendar month. 
 There is no performance fee payable to the Investment Manager. 
 
 
 
 7. OTHER EXPENSES 
                                              Year ended 31    Year ended 31 
                                              December 2020    December 2019 
  GROUP                                             GBP'000          GBP'000 
------------------------------------------  ---------------  --------------- 
 Basic fee charged to revenue: 
 Administration Fees                                    284              263 
 Auditor's remuneration: 
       Statutory audit fee                              102               75 
 Broker Fees                                            106               90 
 Consultancy Fees                                        90              100 
 Directors' Fees                                         99               99 
 AIFM fees                                              160              164 
 Registrars fees                                         43               46 
 Valuation Fees                                          90              118 
 Other Expenses                                         293              125 
                                                             --------------- 
 Total revenue expenses                               1,267            1,080 
 Expenses charged to capital: 
 Prospectus issue and capital transaction 
  costs                                                 145              145 
                                            --------------- 
 Total other expenses                                 1,412            1,225 
------------------------------------------  ---------------  --------------- 
 
 
                                                     Year ended 31              Year ended 31 
                                                     December 2020              December 2019 
  Company                                                  GBP'000                    GBP'000 
----------------------------------------------  ------------------  ------------------------- 
 Basic fee charged to revenue: 
 Administration Fees                                           242                        221 
 Auditor's remuneration: 
       Statutory audit fee                                      94                         64 
 Broker Fees                                                   106                         90 
 Consultancy Fees                                               90                        100 
 Directors' Fees                                                99                         99 
 AIFM fees                                                     160                        164 
 Registrars fees                                                31                         34 
 Valuation Fees                                                 90                        118 
 Other Expenses                                                280                        112 
                                                                    ------------------------- 
 Total revenue expenses                                      1,192                      1,002 
 Expenses charged to capital: 
 Prospectus issue and capital transaction 
  costs                                                        145                        164 
 Total expenses                                              1,337                      1,166 
----------------------------------------------  ------------------  ------------------------- 
 
 8. FINANCE COSTS 
                               Year ended 31 December         Year ended 31 December 
                                         2020                          2019 
                             Revenue   Capital     Total    Revenue   Capital     Total 
  Group                      GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000 
--------------------------  --------  --------  --------  ---------  --------  -------- 
 Loan arrangement fees           105         -       105         48         -        48 
 Loan Interest paid              129         -       129        107         -       107 
 ZDP Shares finance costs        401         -       401        386         -       386 
                                 635         -       635        541         -       541 
--------------------------  --------  --------  --------  ---------  --------  -------- 
 
 
 
                                     Year ended 31 December        Year ended 31 December 
                                               2020                          2019 
                                   Revenue   Capital     Total   Revenue   Capital     Total 
  Company                          GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
--------------------------------  --------  --------  --------  --------  --------  -------- 
 Loan arrangement fees                 105         -       105        48         -        48 
 Loan Interest paid                    129         -       129       107         -       107 
 ZDP inter-company loan finance 
  costs                                401         -       401       386         -       386 
                                       635         -       635       541         -       541 
--------------------------------  --------  --------  --------  --------  --------  -------- 
 
 The Company has a GBP10.5 million revolving credit facility with OakNorth 
  Bank. On 5 November 2020, the Company renewed and amended its revolving 
  credit facility with Oak North Bank. Under the terms of the amended 
  revolving credit facility, the Company may draw down loans up to an 
  aggregate value of GBP10.5 million, on materially similar terms as the 
  Company's previous revolving credit facility. The revolving credit facility 
  expires on 5 November 2021. 
  This will facilitate the tactical use of borrowings ahead of any known 
  investment redemptions or capital raises. Aside from setup costs and 
  an arrangement fee, there is no additional cost to maintaining the facility. 
  Interest will accrue on each Loan at the annual percentage of which 
  is the aggregate of three-month LIBOR and 3.65% per annum. 
  During the year, the Company drew cumulative amount of GBP17.8million 
  (2019: GBP16.9 million) from the revolving credit facility and repaid 
  cumulative amount of GBP 7.3 million (2019: GBP16.9 million). The remaining 
  balance as at 31 December 2020 amounts to GBP10.5 million (2019: nil). 
 
 
 9. TAXATION 
                                        Year ended 31 December        Year ended 31 December 
                                                  2020                          2019 
                                      Revenue   Capital     Total   Revenue   Capital     Total 
  Group                               GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
-----------------------------------  --------  --------  --------  --------  --------  -------- 
 Analysis of tax charge / (credit) the 
  year: 
 Corporation tax-current year             276         -       276        42      (18)        24 
 Corporation tax-prior year                 3         -         3         -         -         - 
-----------------------------------  --------  --------  --------  --------  --------  -------- 
 Total current tax charge/(credit) 
  (see note 9 (b))                        279         -       279        42      (18)        24 
-----------------------------------  --------  --------  --------  --------  --------  -------- 
 
 
                                        Year ended 31 December        Year ended 31 December 
                                                  2020                          2019 
                                      Revenue   Capital     Total   Revenue   Capital     Total 
  Company                             GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
-----------------------------------  --------  --------  --------  --------  --------  -------- 
 Analysis of tax charge / (credit) 
  the year: 
 Corporation tax                          246         -       246        15      (15)         - 
-----------------------------------  --------  --------  --------  --------  --------  -------- 
 Total current tax charge/(credit) 
  (see note 9 (b))                        246         -       246        15      (15)         - 
-----------------------------------  --------  --------  --------  --------  --------  -------- 
 
 
 (b) Factors Affecting the tax charge 
  for the year: 
 The effective UK corporation tax rate for the year is 19.00% (2019:19.00%). 
  The tax charge differs from the charge resulting from applying the standard 
  rate of UK corporation tax for an investment trust company. The differences 
  are explained below: 
                                          Year ended 31 December        Year ended 31 December 
                                                    2020                          2019 
                                        Revenue   Capital     Total   Revenue   Capital     Total 
  Group                                 GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
-------------------------------------  --------  --------  --------  --------  --------  -------- 
 Return on ordinary activities 
  before taxation                         7,387   (5,251)     2,136     9,858   (1,306)     8,552 
-------------------------------------  --------  --------  --------  --------  --------  -------- 
 UK corporation tax at 19.00% 
  (2019:19.00%)                           1,404     (998)       406     1,873     (248)     1,625 
 Effects of: 
 Intercompany income not deductible        (32)         -      (32)        31         -        31 
 Fair value losses not deductible             -       970       970         -       221       221 
 Effect of management expenses 
  not utilised                                                    -         -      (15)      (15) 
 Interest distributions paid/payable    (1,172)         -   (1,172)   (1,908)         -   (1,908) 
 Finance costs not allowable                 76         -        76        42         -        42 
 Management expenses not allowable            -        28        28         4        24        28 
 Prior year adjustment                        3         -         3 
 Total tax charge/(credit)                  279         -       279        42      (18)        24 
-------------------------------------  --------  --------  --------  --------  --------  -------- 
 

The Group is not liable to tax on capital gains due to its status as an investment trust.

 
                                          Year ended 31 December        Year ended 31 December 
                                                    2020                          2019 
                                        Revenue   Capital     Total   Revenue   Capital     Total 
  Company                               GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
-------------------------------------  --------  --------  --------  --------  --------  -------- 
 Return on ordinary activities 
  before taxation                         7,463   (5,355)     2,108     9,936   (1,428)     8,508 
-------------------------------------  --------  --------  --------  --------  --------  -------- 
 UK corporation tax at 19.00% 
  (2019:19.00%)                           1,418   (1,018)       400     1,888     (271)     1,617 
 Effects of: 
 Intercompany income not deductible           -         -         -        31         -        31 
 Fair value losses not deductible             -       990       990         -       221       221 
 Effect of management expenses 
  not utilised                                -         -         -         -      (15)      (15) 
 Interest distributions paid/payable    (1,172)         -   (1,172)   (1,908)         -   (1,908) 
 Management expenses not allowable            -        28        28         4        50        54 
 Total tax charge/(credit)                  246         -       246        15      (15)         - 
-------------------------------------  --------  --------  --------  --------  --------  -------- 
 

The Company is not liable to tax on capital gains due to its status as an investment trust.

 
 (c) Deferred tax assets/(liabilities) 
 The Company had no recognised or unrecognised deferred asset/liability 
  as at the year end. 
 
 
 10. RECEIVABLES 
                                          As at 31 December   As at 31 December 
                                                       2020                2019 
 Group                                              GBP'000             GBP'000 
---------------------------------------  ------------------  ------------------ 
 Amounts falling due within one year: 
 Repayment of investment private loans 
  receivable                                          7,330                   - 
 Bond and loan interest receivable                    1,983               1,861 
 Prepayments and other receivables                    1,202                 405 
                                                             ------------------ 
                                                     10,515               2,266 
---------------------------------------  ------------------  ------------------ 
 
 
                                            As at 31 December     As at 31 December 
                                                         2020                  2019 
 Company                                              GBP'000               GBP'000 
-----------------------------------------  ------------------  -------------------- 
 Amounts falling due within one year: 
 Repayment of investment private loans 
  receivable                                            7,330                     - 
 Bond and loan interest receivable                      1,983                 1,861 
 Prepayments and other receivables                      1,185                   349 
                                                               -------------------- 
                                                       10,498                 2,210 
-----------------------------------------  ------------------  -------------------- 
 11. PAYABLES 
                                                Year ended 31       Year ended 31 
                                                December 2020       December 2019 
  Group                                               GBP'000             GBP'000 
-----------------------------------------  ------------------  ------------------ 
 Amounts falling due within one year: 
 Unsettled investments purchases                            -               8,846 
 Loan reserves retained                                   595                   - 
 Taxation payable                                         303                  24 
 Other payables                                         1,736               1,918 
                                           ------------------ 
                                                        2,634              10,788 
-----------------------------------------  ------------------  ------------------ 
 
 
 
                                          Year ended 31    Year ended 31 
                                          December 2020    December 2019 
  Company                                       GBP'000          GBP'000 
--------------------------------------  ---------------  --------------- 
 Amounts falling due within one year: 
 Unsettled investments purchases                      -            8,846 
 Loan reserves retained                             595                - 
 Inter company payable                              157               50 
 Taxation payable                                   246                - 
 Other payables                                   1,647            1,868 
                                        --------------- 
                                                  2,645           10,764 
--------------------------------------  ---------------  --------------- 
 
 
 12. ZERO DIVID PREFERENCE SHARES-GROUP 
                                                       Group                 Group 
                                           As at 31 December     As at 31 December 
                                                        2020                  2019 
                                                     GBP'000               GBP'000 
--------------------------------------  --------------------  -------------------- 
 Zero Dividend Preference Shares                      11,541                11,155 
 ZDP Shares finance costs                                401                   386 
                                                      11,942                11,541 
--------------------------------------  --------------------  -------------------- 
 
   Authorised 
 The maximum number of ZDP Shares to be issued pursuant to the Initial 
  ZDP Placing, as disclosed in the Prospectus dated 12 March 2018, has 
  been set at 20 million. At a general meeting of the RM ZDP held on 
  7 March 2018, a special resolution was passed to issue up to 60 million 
  ZDP Shares. On 3 April 2018, the Group issued 10,869,950 ZDP Shares 
  of a nominal value of 1 pence each at a placing price of 100 pence 
  each to raise gross proceeds of GBP10,869,950, which were allotted 
  and fully paid up. 
 The Parent Company incurred ZDP Share issue costs of GBP129,000, which 
  has been amortised over the life of ZDP Shares. Amortised cost for 
  this year amounts to GBP43,000 (2019: GBP43,000) and is included under 
  other expenses in note 7. 
 
 Rights attaching to the ZDP Shares 
 The ZDP Shares carry no right to receive dividends or other distributions 
  out of revenue or any other profits of the Group. The ZDP Shares will 
  have a life of 3 years and, on that basis, a Final Capital Entitlement 
  of GBP12,055,000 (110.91 pence per ZDP Share) on the ZDP Repayment 
  Date of 6 April 2021, equivalent to a Redemption Yield of 3.5% per 
  annum (compounded annually) on the Issue Price. Under the obligations 
  of Loan Agreement, the Ordinary Shares and the C Shares of the Parent 
  rank behind the ZDP Shares. 
 
 Voting rights of ZDP Shares 
 The ZDP Shareholders shall have the right to receive notice of all 
  general meetings of RM ZDP for information purposes but shall have 
  no right to attend or vote at any such meeting of RM ZDP. For the 
  avoidance of doubt: 
 -- any resolution to alter, modify or abrogate the special rights 
  or privileges attached to the ZDP Shares shall require separate class 
  consent (by special resolution) at a class meeting of ZDP Shareholders 
  convened and held in accordance with the ZDP Articles; and 
 -- any ZDP Recommended Resolution or any resolution to approve a ZDP 
  Reconstruction Proposal (if required) shall only be approved by RM 
  ZDP Ordinary Shareholders provided they have first been approved by 
  way of a ZDP Class Consent. 
 
 Variation of rights and Distribution on winding up 
 Subject to the Companies Act, on a return of capital, on a winding-up 
  or otherwise, ZDP Shareholders will be entitled to receive an amount 
  equal to the Initial Capital Entitlement of 100 pence per ZDP Share, 
  increased at such daily accrual rate as compounds annually to give 
  a Final Capital Entitlement of 110.91 pence per ZDP Shares at the 
  ZDP Repayment Date of 6 April 2021, which is equivalent to a Redemption 
  Yield of 3.5% per annum (compounded annually). 
 The Final Capital Entitlement will rank behind any liabilities of 
  the Group. The ZDP Shares carry no entitlement to income and the whole 
  of their return accordingly takes the form of capital. The ZDP Shareholders 
  are not entitled to receive any part of the revenue profits (including 
  any accumulated revenue reserves) of the Company on a winding-up, 
  even if the accrued capital entitlement of the ZDP Shares will not 
  be met in full. 
 
 
 13. INTERCOMPANY LOAN 
                                                  COMPANY                   COMPANY 
                                   As at 31 December 2020    As at 31 December 2019 
                                                  GBP'000                   GBP'000 
-------------------------------  ------------------------  ------------------------ 
 Intercompany loan payable 
  to RM ZDP                                        11,541                    11,155 
 Finance costs and capital 
  contribution                                        401                       386 
                                                           ------------------------ 
                                                   11,942                    11,541 
-------------------------------  ------------------------  ------------------------ 
 
 Intercompany Loan Agreement 
 On 29 March 2018, the Company entered into a Loan Agreement with RM ZDP 
  (the "ZDP Loan"). Pursuant to the Loan Agreement, RM ZDP lent the entirety 
  of the gross proceeds of the issue of ZDP Shares on 3 April 2018 to the 
  Company, which has been applied towards making investments in accordance 
  with the Investment Policy and for working capital purposes. 
 
 The Loan Agreement provides that, interest will accrue on the ZDP Loan 
  daily at a rate of 2% per annum, compounded annually on each anniversary 
  of Admission of the ZDP Shares and will be rolled up and paid to RM ZDP 
  along with repayment of the principal amount of the ZDP Loan on the date 
  falling 2 Business Days before the ZDP Repayment Date of 6 April 2021, 
  provided that the ZDP Loan shall become repayable by the Company immediately 
  upon the passing of a winding-up resolution of RM ZDP. 
 
 Deed of Undertaking 
 The Company also entered into an undertaking with RM ZDP, pursuant to which, 
  to the extent that the Final Capital Entitlement multiplied by the number 
  of outstanding ZDP Shares as at the ZDP Repayment Date exceeds the aggregate 
  principal amount and accrued interest due from the Company to RM ZDP as 
  at the Repayment Date, the Company shall: (i) subscribe an amount equal 
  to or greater than the additional funding requirement for RM ZDP Ordinary 
  Shares or (ii) make a capital contribution or gift or otherwise pay an 
  amount equal to or greater than the additional funding requirement. 
 
 Further details in relation to the ZDP Shares can be found in note 12. 
 
 Finance costs comprises GBP230,000 (2019: GBP221,000) interest pursuant 
  to the loan agreement between the Company and RM ZDP and GBP171,000 (2019: 
  GBP165,000) other finance costs in connection with the intercompany loan. 
 
 
 14. SHARE CAPITAL (GROUP AND COMPANY) 
                                 As at 31 December 2020           As at 31 December 2019 
                            --------------------------------  ----------------------------- 
                               No. of Shares         GBP'000   No. of Shares        GBP'000 
--------------------------  ----------------  --------------  --------------  ------------- 
 Allotted, issued & fully 
  paid: 
 Ordinary Shares of 1p           118,364,282           1,184     122,224,581          1,222 
--------------------------  ----------------  --------------  --------------  ------------- 
 
 Share movement 
 The table below sets out the share movement for the year ended 31 December 
  2020. 
------------------------------------------------------------------------------------------- 
                                                                                  Shares in 
                                                                                   issue at 
                                                               Shares bought    31 December 
                             Opening balance   Shares issued            back           2020 
--------------------------  ----------------  --------------  --------------  ------------- 
 Ordinary Shares                 122,224,581               -     (3,860,299)    118,364,282 
--------------------------  ----------------  --------------  --------------  ------------- 
 
 At the yearend 3,860,299 of the above Ordinary Shares were held in Treasury. 
 
  Ordinary Share buy backs 
  During the year, the Company bought back 3,860,299 Ordinary Shares for 
  an aggregate cost of GBP3,027,000. Since the year end a further 419,500 
  Ordinary Shares have been bought back for an aggregate cost of GBP366,000. 
 
 
 15. SHARE PREMIUM (GROUP AND COMPANY) 
 
                                          As at 31 December   As at 31 December 
                                                       2020                2019 
                                                    GBP'000             GBP'000 
---------------------------------------  ------------------  ------------------ 
 Balance as at beginning of the year                 70,146              47,351 
 Share buybacks                                          38                   - 
 Issue Ordinary Shares                                    -              23,265 
 Share buyback costs                                   (16)               (470) 
 Balance as at 31 December 2020                      70,168              70,146 
---------------------------------------  ------------------  ------------------ 
 
 
 16. RETURN PER ORDINARY SHARE 
 Based on the weighted average of number of 120,985,417 (2019: 110,960,198) 
  Ordinary Shares in issue for the year ended 31 December 2020, the 
  returns per share were as follows: 
 
                                                                     Year ended 31 December 
                                  Year ended 31 December 2020                          2019 
  Group                           Revenue     Capital   Total    Revenue    Capital   Total 
---------------------------  ------------  ----------  ------  ---------  ---------  ------ 
 Return per Ordinary 
  Share                             5.88p     (4.34p)   1.54p      8.85p    (1.16p)   7.69p 
---------------------------  ------------  ----------  ------  ---------  ---------  ------ 
 
                                                                     Year ended 31 December 
                                  Year ended 31 December 2020                          2019 
  Company                         Revenue     Capital   Total    Revenue    Capital   Total 
---------------------------  ------------  ----------  ------  ---------  ---------  ------ 
 Return per Ordinary 
  Share                             5.96p     (4.43p)   1.53p      8.94p    (1.27p)   7.67p 
---------------------------  ------------  ----------  ------  ---------  ---------  ------ 
 

17. NET ASSET VALUE PER SHARE- (GROUP AND COMPANY)

The net asset value per share is based on total Group and Company Shareholders' funds of GBP110,380,000 (2019: GBP119,528,000), and on 118,364,282 (2019: 122,224,581) Ordinary Shares in issue at the year end.

 
 18. DIVID 
 
 Total dividends paid                                                                   Year ended 31 December 
  in the year                         Year ended 31 December 2020                                 2019 
                        ------------------------------------------------------  -------------------------------------- 
                         Pence per                                           Pence 
                          Ordinary    Revenue    Capital              per Ordinary    Revenue    Capital 
                             share    GBP'000    GBP'000   Total             share    GBP'000    GBP'000   Total 
----------------------  ----------  ---------  ---------  ------  ----------------  ---------  ---------  ------ 
 2019 Interim - Paid 
  27 Mar 2020 (2019: 
  29 March 2019)           1.7000p      2,078          -   2,078           1.6250p      1,604          -   1,604 
 2020 Interim - Paid 
  26 Jun 2020 (2019: 
  25 Jun 2019)             1.6250p      1,975          -   1,975           2.0000p      2,244          -   2,244 
 2020 Interim - Paid 
  25 Sep 2020 (2019: 
  26 Sep 2019)*            1.6250p      1,967          -   1,967           1.6250p      1,824          -   1,824 
 2020 Interim - Paid 
  30 Dec 2020 (2019: 
  24 Dec 2019)             1.6250p      1,942          -   1,942           1.7000p      2,078          -   2,078 
----------------------  ----------  ---------  ---------  ------  ----------------  ---------  ---------  ------ 
 Total                     6.5750p      7,962          -   7,962           6.9500p      7,750          -   7,750 
----------------------  ----------  ---------  ---------  ------  ----------------  ---------  ---------  ------ 
 
 
 
 
 The dividend relating to the year ended 31 December 2020, which is the basis 
  on which the requirements of Section 1159 of the Corporation Tax Act 2010 
  are considered is detailed below: 
 
 Total dividends in               Year ended 31 December 2020           Year ended 31 December 
  relation to the year                                                   2019 
------------------------  -------------------------------------------  ----------------------------------------------- 
                           Pence per                                    Pence 
                            Ordinary    Revenue     Capital              per Ordinary    Revenue     Capital 
                            share        GBP'000     GBP'000    Total    share            GBP'000     GBP'000    Total 
------------------------  ----------  ----------  ----------  -------  --------------  ----------  ----------  ------- 
 2020 Interim - Paid 
  26 Jun 2020 (2019: 
  25 Jun 2019)             1.6250p     1,975       -           1,975    2.0000p         2,244       -           2,244 
 2020 Interim - Paid 
  25 Sep 2020 (2019: 
  26 Sep 2019)             1.6250p     1,967       -           1,967    1.6250p         1,824       -           1,824 
 2020 Interim - Paid 
  30 Dec 2020 (2019: 
  24 Dec 2019)*            1.6250p     1,942       -           1,942    1.7000p         2,078       -           2,078 
 2020 Interim - Payable 
  31 Mar 2021** (2019: 
  27 Mar 2020)             1.6250p     1,918       -           1,918    1.7000p         2,078       -           2,078 
 Total                     6.5000p     7,802       -           7,802    7.0250p         8,224       -           8,224 
------------------------  ----------  ----------  ----------  -------  --------------  ----------  ----------  ------- 
 
   * An interim dividend of 1.625 pence per Ordinary Share was declared 
   by the Board on 2 November 2020. The dividend was paid 1.367p per 
   share (GBP1,630,000) in respect of the period to 31 December 2019 
   and 0.258p per share (GBP312,000) in respect of the period to 31 
   December 2020. 
 
   ** Not included as a liability in the year ended 31 December 2020 
   financial statements. 
 
   On the 25 February 2021, the Directors approved the payment of an interim 
   dividend for year ended 31 December 2020 to ordinary Shareholders at the rate 
   of 1.625 pence per Ordinary Share. The dividend had a record date of 5 March 
   2021 and was paid on 26 March 2021. The dividend was funded from the Company's 
   revenue reserve. 
 
 
 19. RELATED PARTY TRANSACTION 
 
 Fees are payable at an annual rate of GBP36,000 to the Chair of the Board, 
  GBP33,000 to the Chair of the Audit and Management Engagement Committee 
  and GBP30,000 to the other Director. As at 31 December 2020, there were 
  no Directors' fees outstanding. The Directors' fees are disclosed in 
  Note 7 and the Directors' shareholdings are disclosed in the Directors 
  Remuneration Report in the Annual Report for the year ended 31 December 
  2020. 
 
  Fees payable to the Investment Manager are shown in the Statement of 
  Comprehensive Income. As at 31 December 2020 the fee outstanding to the 
  Investment Manager was GBP93,000 (2019: GBP96,000). 
 
 
 Arrangement fees are paid by some borrowers to the Investment Manager. 
  The amount the Investment Manager can retain from borrowers in most cases 
  is capped at 1.25% and agreed with the Board. The Company receives any 
  arrangement fees from the Investment Manager in excess of the 1.25% or 
  otherwise agreed with the borrower. During the year to 31 December 2020, 
  the Company received GBP102,000 (2019: GBP190,000) in arrangement fees. 
 
 As at 31 December 2020, the Investment Manager held 1,237,325 (2019: 
  1,199,825) Ordinary Shares in the Company. 
 
 Since the year end, the Investment Manager purchased further 12,500 Ordinary 
  Shares in the Company, and as of the date of this report, the Investment 
  Manager's total holding of Ordinary Shares is 1,249,825 (2019: 1,199,825). 
 
  Details with intercompany transactions can be found in note 13. 
 20. CLASSIFICATION OF FINANCIAL INSTRUMENTS 
 
 IFRS 13 requires the Company to classify its investments in a fair value 
  hierarchy that reflects the significance of the inputs used in making 
  the measurements. IFRS 13 establishes a fair value hierarchy that prioritises 
  the inputs to valuation techniques used to measure fair value. The three 
  levels of fair value hierarchy under IFRS 13 are as follows: 
 Level 1 
 Inputs are quoted prices in active markets for identical assets or liabilities 
  that the entity can access at the measurement date. 
 
 Level 2 
 Inputs other than quoted market prices included within Level 1 that are 
  observable for the asset or liability, either directly or indirectly. 
 
 Level 3 
 Inputs are unobservable for the asset or liability. 
 
 The classification of the Company's investments held at fair value through 
  profit or loss is detailed in the table below: 
 
 
 
                              31 December 2020                                     31 December 2019 
                              Level      Level      Level                Level     Level      Level 
                               1          2          3        Total       1         2          3        Total 
 GROUP                        GBP'000    GBP'000    GBP'000   GBP'000    GBP'000   GBP'000    GBP'000   GBP'000 
---------------------------  ---------  ---------  --------  ---------  --------  ---------  --------  ------------- 
 Financial assets: 
 Financial assets - Private 
  loans and bonds             -          25,013     -         25,013     -         43,323     -         43,323 
 Financial assets - Private 
  loans                       -          -          97,692    97,692     -         -          87,878    87,878 
 Forward contract 
  receivable                  -          12,795     -         12,795     -         12,056     -         12,056 
 Financial liabilities: 
 Forward contract payable     -          (12,795)   -         (12,795)   -         (12,056)   -         (12,056) 
 Total                        -          25,013     97,692    122,705    -         43,323     87,878    131,201 
---------------------------  ---------  ---------  --------  ---------  --------  ---------  --------  ------------- 
 
 
 
                         31 December 2020                                31 December 2019 
                         Level       Level      Level                    Level       Level      Level 
                          1           2          3           Total        1           2          3          Total 
 COMPANY                 GBP'000     GBP'000    GBP'000      GBP'000     GBP'000     GBP'000    GBP'000     GBP'000 
----------------------  ----------  ---------  -----------  ----------  ----------  ---------  ----------  ---------- 
 Financial assets: 
 Financial assets - 
  Private 
  loans and bonds        -           25,013     -        25,013          -           43,323     -           43,323 
 Financial assets - 
  Private 
  loans                  -           -          97,692   97,692          -           -          87,878      87,878 
 Forward contract 
  receivable             -           12,795     -        12,795          -           12,056     -           12,056 
 Financial 
 liabilities: 
 Forward contract 
  payable                -           (12,795)   -        (12,795)        -           (12,056)   -           (12,056) 
 Total                   -           25,013     97,692   122,705         -           43,323     87,878      131,201 
----------------------  ----------  ---------  -------  --------------  ----------  ---------  ----------  ---------- 
 
   The forward exchange contract has been presented in the fair value hierarchy 
   at gross exposure with the net unrealised gain of GBP161,027 (2019: GBP93,635) 
   recognised within prepayments and other debtors in the Statement of Financial 
   Position. 
   The Zero Dividend Preference Shares have a fair value of GBP11.7 million 
   which has been measured using the closing stock exchange price. The Intercompany 
   loan payable between the Parent and its Subsidiary is financed by the ZDP 
   shares and as such has been valued using the ZDP price. The Directors consider 
   that the carrying amounts of the Zero Dividend Preference Shares and Intercompany 
   Loan Payable are approximates to their fair value. 
 
   Investments that trade in markets that are not considered to be active but 
   are valued based on quoted market prices, dealer quotations or alternative 
   pricing sources supported by observable inputs are classified within Level 
   2. 
 Level 3 holdings are valued using a discounted cash flow analysis and benchmarked 
  discount/interest rates appropriate to the nature of the underlying loan 
  and the date of valuation. 
 Interest rates are a significant input into the Level 3 valuation methodology. 
  Interest rates used in the valuation range from 5.3% to 15.0% (2019: 5.9% 
  to 24.0%). Sensitivity analysis of interest rates can be found below. 
 There have been no movements between levels during the reporting year. The 
  Company considers factors that may necessitate the transfers between levels 
  using the definition of the levels 1, 2 and 3 above. 
 
 Reconciliation of the Level 3 classification investments during the year 
  to 31 December 2020 is shown below: 
                                                                    31 December                31 December 
                                                                     2020                       2019 
                                                                                     GBP'000                  GBP'000 
----------------------  ---------  ----------  -----------  -----  -------  ----------------  -------  -------------- 
 Balance as at beginning of the year                                                  87,878                   58,013 
 New loans during the year                                                            38,258                   68,906 
 Repayments during the year                                                         (23,905)                 (37,359) 
 Realised gains during the year                                                          545                      195 
 Unrealised losses at the year end                                                   (5,084)                  (1,877) 
--------------------------------------------- 
 Closing balance as at 31 December                                                    97,692                   87,878 
---------------------------------------------  -----------  -----  -------  ----------------  -------  -------------- 
 
 
 
 21. FINANCIAL INSTRUMENT AND CAPITAL 
  DISCLOSURES 
 The Group invests in private loan and bond investments. Financial instrument 
  and capital disclosures are only prepared on a Group basis as this is 
  the basis on which reports are made to the decision makers. The following 
  describes the risks involved and the applied risk management. The Investment 
  Manager reports regularly both verbally and formally to the Board, and 
  its relevant committees, to allow them to monitor and review all the 
  risks noted below. 
 (i) Market risks 
 The Group is subject to a number of Market risks in relation to economic 
  conditions of the investee companies. Further detail on these risks and 
  the management of these risks are included in the Directors' report. 
 
The Group's financial assets and liabilities at the year end 
 comprised: 
 31 December 2020 31 December 2019 
                       Interest        Non-interest                            Interest                    Non-interest 
                        bearing             bearing           Total             bearing                         bearing                      Total 
Investments             GBP'000             GBP'000         GBP'000             GBP'000                         GBP'000                    GBP'000 
 GB sterling            109,354                   -         109,354             118,293                               -                    118,293 
 Euro                    13,351                   -          13,351              12,908                               -                     12,908 
 Total investment       122,705                   -         122,705             131,201                               -                    131,201 
 
 Cash and cash 
  equivalents             2,236                   -           2,236               8,390                               -                      8,390 
 Receivables                  -              10,515          10,515                   -                           2,266                      2,266 
 Payables              (10,500)             (2,634)        (13,134)                   -                        (10,788)                   (10,788) 
 Zero Dividend 
  Preference 
  Shares               (11,942)                   -        (11,942)            (11,541)                               -                   (11,541) 
 Total                  102,499               7,881         110,380             128,050                         (8,522)                    119,528 
 
Price risk sensitivity 
The effect on the portfolio of a 10.0% increase or decrease in the value 
 of the loans would have resulted in an increase or decrease of GBP12,271,000 
 (2019: GBP13,120,000) in the investments held at fair value through profit 
 or loss at the period end date. This analysis assumes that all other 
 variables remain constant. 
 
(ii) Credit risks 
The Group's investments will be predominantly in the form of private 
 loans whose revenue streams are secured against contracted, predictable 
 medium to long-term cash flows and/or physical assets, and whose debt 
 service payments are dependent on such cash flows and/or the sale or 
 refinancing of the physical assets. The key risks relating to the private 
 loans include risks relating to counterparty default, senior debt covenant 
 breach risk, bridge loans, delays in the receipt of anticipated cash 
 flows and borrower default, and collateral risks. 
 
The Group is also exposed to the risk of default on cash held at the 
 bank and other trade receivables. The maximum exposure to credit risk 
 on cash at bank and other trade receivables at 31 December 2020 was GBP2,236,000 
 and GBP10,515,000 respectively (2019: GBP8,390,000 and GBP2,266,000). 
 Impairment incurred on the balances is not considered material to the 
 Group and Company. 
 
  The table below shows the Group's exposure to credit risks at 
  the year end. 
                                                                   31 December                                                         31 December 
                                                                          2020                                                                2019 
                                                                       Maximum                                                             Maximum 
                                                 Fair value           exposure                       Fair value                           exposure 
                                                    GBP'000            GBP'000                          GBP'000                            GBP'000 
Private loan 
 investments                                        120,010            120,010                          124,879                            124,879 
Bond investments                                      2,695              2,695                            6,322                              6,322 
Cash and cash 
 equivalent                                           2,236              2,236                            8,390                              8,390 
Receivables                                          10,515             10,515                            2,266                              2,266 
Total                                               135,456            135,456                          141,857                            141,857 
                                         ------------------  ----------------- 
 
Management of risks 
The Investment Manager reports a number of key metrics on a monthly basis 
 to its Credit Committee including pipeline project information, outstanding 
 loan balances, lending book performance and early warning indicators. 
 The Investment Manager monitors ongoing credit risks in respect of the 
 loans. Typically, the Company's loan investments are private loans and 
 would usually exhibit credit risk classified as "non-investment" if a 
 public rating agency was referenced. 
 
The Group's main cash balances are held with The Royal Bank of Scotland 
 plc ("RBS"). Bankruptcy or insolvency of the bank holding cash balances 
 may cause the Group's rights with respect to the cash held by them to 
 be delayed or limited. The Group manages its risk by monitoring the credit 
 quality of RBS on an ongoing basis. 
 
(iii) Interest rate risks 
Private Loans 
The Group may make private loans based on estimates or projections of 
 future interest rates because the Investment Manager expects that the 
 underlying revenues and/or expenses of a borrower to whom the Group provides 
 loans will be linked to interest rates, or that the Group's returns from 
 a private loan are linked to interest rates. If actual interest rates 
 differ from such expectation, the net cash flows of the borrower or payable 
 to the Group may be lower than anticipated. 
 
Interest rate 
sensitivity 
Interest Income earned by the Group is primarily derived from fixed interest 
 rates. The interest earned from the floating element of loan and debt 
 security investments is not significant. Based on the Group's private 
 loan investments, bond investments, cash and cash equivalents as at 31 
 December 2020, a 0.50% increase/(decrease) in interest rates, all other 
 things being equal, would lead to a corresponding increase/(decrease) 
 in the Group's income as follows. 
                                                31 December                                                                            31 December 
                                                       2020                                                                                   2019 
                                             0.50% Increase     0.50% Decrease                   0.50% Increase                     0.50% Decrease 
                                                    GBP'000            GBP'000                          GBP'000                            GBP'000 
Private loans 
 investments                                            488              (488)                              439                              (439) 
Bond investments                                        125              (125)                              217                              (217) 
Cash and cash 
 equivalent                                              11               (11)                               42                               (42) 
Total                                                   624              (624)                              698                              (698) 
                                         ------------------  ----------------- 
Management of risks 
The Investment Manager's investment process takes into account interest 
 rate risk. The investment strategy is to invest in private loans with maturities 
 typically between 2 and 10 years. Exposure to predominantly higher yielding 
 loans and possible floating rate investments can mitigate interest rate 
 risk to some extent. On a monthly basis, Investment Managers review fixed/floating 
 and weighted average life of the portfolio for interest rate risk. 
 
  (iv) Liquidity risks 
Liquidity risk is defined as the risk that the Group will encounter difficulties 
 in realising assets or otherwise raising funds to meet financial commitments. 
 The cash and cash equivalent balance at the year end was GBP2,236,000 
 (2019: GBP8,390,000). 
 
Financial liabilities by maturity at the period end are shown 
 below: 
                                                                                                    31 December                        31 December 
                                                                                                           2020                               2019 
                                                                                                        GBP'000                            GBP'000 
Within one month                                                                                              -                              9,052 
Between one and three months                                                                              2,039                                349 
Between three months and one 
 year                                                                                                    23,037                                869 
More than one year                                                                                            -                             12,059 
Total                                                                                                    25,076                             22,329 
 
The Investment Manager manages the Group's liquidity risk by investing 
 in a diverse portfolio of private loans and bonds in line with the Investment 
 Policy and Investment restrictions. The Investment Manager may utilise 
 other measures such as borrowing, share issues including treasury shares 
 for liquidity purposes. 
 
 The maturity profile of the Group's portfolio as at the year end is as 
  follows: 
                                                                                                    31 December                        31 December 
                                                                                                           2020                               2019 
                                                                                                        GBP'000                            GBP'000 
Within one month                                                                                          6,625                             10,833 
Between one and three months                                                                                  -                                  - 
Between three months and one 
 year                                                                                                     5,394                             15,626 
More than one year                                                                                      110,686                            104,742 
Total                                                                                                   122,705                            131,201 
 
(v) Foreign currency risks 
 Foreign currency risk is the risk that the value of a financial instrument 
 will fluctuate because of changes in foreign currency exchange rates. 
 Currency risk arises when future commercial transactions and recognised 
 assets and liabilities are denominated in a currency that is not the Group's 
 functional currency. The Group invests in bond investments that are denominated 
 in currencies other than sterling. 
 
 Accordingly, the value of the Group's assets may be affected favourably 
 or unfavourably by fluctuations in currency rates and therefore the Group 
 will necessarily be subject to foreign exchange risks. 
 
Based on the financial assets and liabilities at 31 December 2020 and 
 all other things being equal, if sterling had weakened against the local 
 currencies by 10%, the impact on the Group's net assets at 31 December 
 2020 would have been as follows: 
                                                                                                    31 December                        31 December 
                                                                                                           2020                               2019 
                                                                                                        GBP'000                            GBP'000 
Euro                                                                                                        204                                211 
US dollar                                                                                                    16                                 16 
Total                                                                                                       220                                227 
 
 
 
Foreign 
currency 
risk 
profile 
                              31 December 2020                                      31 December 2019 
                                Investment        Net      Total                     Investment         Net      Total 
                                  exposure   monetary   currency                       exposure    monetary   currency 
                                             exposure   exposure                                   exposure   exposure 
                                   GBP'000    GBP'000    GBP'000                        GBP'000     GBP'000    GBP'000 
 
Euro                                 1,726        313      2,039                          1,443         667      2,110 
US dollar                                -        156        156                              -         158        158 
Total                                1,726        469      2,195                          1,443         825      2,268 
 
  As at the year end, the Group held forward instruments, which has reduced 
  the foreign exchange exposure to investment in euros by the equivalent 
  of GBP12,794,000 (2019: GBP12,055,000). 
Management of currency risks 
The Group's Investment Manager monitors the currency risk of the Group's 
 portfolio on a regular basis. Foreign currency exposure is regularly reported 
 to the Board by the Investment Manager. The Investment Manager may hedge 
 any currency back to sterling as they see fit. 
 
Fair values of financial assets and liabilities 
All financial assets and liabilities are recognised in the financial statements 
 at fair value, with the exception of short-term assets, liabilities and 
 Zero Dividend Preference Shares, which are held at amortised cost for 
 which fair value is given in note 20. 
 
Capital 
 management 
The Group considers its capital to consist of its share capital of Ordinary 
 Shares of 1 pence each and Zero Dividend Preference Shares of GBP1.00, 
 its distributable reserves, which comprise Revenue reserve, Capital reserve 
 and the Special reserve. In accordance with IFRS, the Group's Ordinary 
 Shares are considered to be equity and ZDP Shares are considered to financial 
 liability. 
 The Group has a stated discount control policy. The Investment Manager 
  and the Group's broker monitor the demand for the Group's shares and the 
  Directors review the position at Board meetings. Further details on share 
  issues during the year and the Group's policies for issuing further shares 
  and buying back shares (including the Group's discount management) can 
  be found in the Directors' Report in the Annual Report. 
During the year the Group bought back 3,860,299 shares (2019: nil) which 
 are held in treasury. 
The Group's policy on borrowing. 
 
  The Group has entered into a GBP10.5 million revolving credit facility 
  with OakNorth Bank. On 5 November 2020, the Group renewed and amended 
  its Revolving Credit Facility with Oak North Bank. In particular, the 
  loan to net asset value ratio must not exceed 20% of the Group's calculated 
  at the time of draw down. During the year, the Company drew cumulative 
  amount of GBP17.8million (2019: GBP16.9 million) from the revolving credit 
  facility and repaid cumulative amount of GBP 7.3 million (2019: GBP16.9 
  million). The remaining balance as at 31 December 2020 amounts to GBP10.5 
  million (2019: nil). The facility expires on 5 November 2021. 
 

22. NAV PER ORDINARY SHARE RECONCILIATION

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

 
                                                                  As at 31 December 
                                       As at 31 December 2020            2019 
                                                       NAV per                 NAV per 
                                        Net assets    Ordinary  Net assets    Ordinary 
                                             (GBP)   share (p)       (GBP)   share (p) 
NAV as published on 15 January 
 2021                                  111,123,419       93.88           -           - 
Tax liability adjustments                (246,000)      (0.20)           -           - 
Share buy back adjustments               (493,851)      (0.42)           -           - 
NAV as disclosed in these Financial 
 Statements                            110,383,568       93.26           -           - 
 

23. POST BALANCE SHEET EVENTS

Since 31 December 2020, a further 419,500 Ordinary Shares have been bought back for an aggregate cost of 366,000.

ALTERNATIVE PERFORMANCE MEASURES ('APMS')

APMs are often used to describe the performance of investment companies although they are not specifically defined under IFRS. APM calculations for the Company are shown below.

 
 
 Gearing 
  Net gearing is calculated as total debt, net of cash and cash equivalents, 
  as a percentage of the total shareholders' funds. 
                                                                31 December    31 December 
                                                                       2020           2019 
                                                                    GBP'000        GBP'000 
Zero Dividend Preference Shares                                      11,942         11,541 
Bank loan - Credit facility                                          10,500              - 
Total borrowings                                                     22,442         11,541 
Cash and cash equivalents                                             2,236          8,390 
Total borrowings less cash and 
 cash equivalents                             a                      20,206          3,151 
Net assets                                    b                     110,380        119,528 
Gearing(net)                            (a÷b)*100                18.3%           2.6% 
 
 

Gross asset

The Group's gross assets comprise the net asset values of the Group's Ordinary Shares, accrued capital entitlement of the ZDP Shares and the Bank loan breakdown as follows:

 
                                                     Per Share 
As at 31 December 2020                      GBP'000    (Pence) 
Ordinary Shares - NAV                 a     110,380      93.25 
RM ZDP plc - accrued entitlement      b      11,942     109.87 
Bank Loan-Credit facility             c      10,500          - 
Gross asset value                   a+b+c   132,822        n/a 
 
 
                                                      Per Share 
As at 31 December 2019                       GBP'000    (Pence) 
Ordinary Shares - NAV                 A      119,528      97.79 
RM ZDP plc - accrued entitlement      b       11,541     106.18 
Bank Loan-Credit facility             c            -          - 
Gross asset value                   a+b+c    131,069        n/a 
 

Ongoing charges

A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running an investment company.

 
                                                            31 December  31 December 
                                                                   2020         2019 
Average NAV (GBP'000)                              a            123,526      121,302 
Annualised recurring expenses*                     b              2,355        2,142 
                         b÷a                                 1.91%        1.77% 
 
 
 

*Consists of investment management fees of GBP1,088,000(2019: GBP1,062,000) and other recurring expenses of GBP1,267,000 (2019: GBP1,080,000) Prospectus issue and capital transactions are not considered to be recurring costs and therefore have not been included.

(Discount)/premium

The amount, expressed as a percentage, by which the share price is (less)/more than the Net Asset Value per share.

 
                                        31 December  31 December 
                                               2020         2019 
NAV per Ordinary Share (p)     a              93.26        97.79 
Share price (p)                b              87.00        99.50 
(Discount)/premium             (b/a)-1       (6.7%)         1.7% 
 

Total return

A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment of dividends paid out by the Company into its Ordinary Shares on the ex-dividend date.

 
As at 31 December 2020                          NAV  Share Price 
Opening at 1 January 2020 (p)         a       97.79        99.50 
Closing at 31 December 2020 (p)       b       93.26        87.00 
Dividend adjustment factor            c      1.0811       1.0831 
Adjusted closing (d = b x c)          d      100.82        94.23 
Total return                       (d/a)-1     3.1%        -5.3% 
 
 
 
As at 31 December 2019                          NAV  Share Price 
Opening at 1 January 2019 (p)         A       96.96       101.50 
Closing at 31 December 2019 (p)       b       97.79        99.50 
Dividend adjustment factor            c      1.0728       1.0701 
Adjusted closing (d = b x c)          d      104.91       106.47 
Total return                       (d/a)-1     8.2%         4.9% 
 

FINANCIAL INFORMATION

This announcement does not constitute the Company's statutory accounts. The financial information is derived from the statutory accounts, which will be delivered to the registrar of companies and will be put forward for approval at the Company's Annual General Meeting. The statutory accounts for the year ended 31 December 2019 have been delivered to the registrar of companies. The auditors have reported on the accounts for the year ended 31 December 2020 and the year ended 31 December 2019, their reports were unqualified and did not include a statement under Section 498(2) or (3) of the Companies Act 2006.

The Annual Report for the year ended 31 December 2020 was approved on 26 March 2021. It will be made available on the Company's website at https://rmdl.co.uk/investor-centre/investor-relations/

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

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

ANNUAL GENERAL MEETING

The Annual General Meeting will be held on 8 June 2021 at 11.00 a.m. at the offices of PraxisIFM, 1st Floor, Senator House, 85 Queen Victoria Street, London, EC4V 4AB.

29 March 2021

Secretary and registered office:

PraxisIFM Fund Services (UK) Limited

1st Floor, Senator House,

85 Queen Victoria Street,

London,

EC4V 4AB

For further information contact:

Brian Smith / Ciara McKillop

PraxisIFM Fund Services (UK) Limited

Tel: 020 4513 9260

END

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