Report & Accounts

for the year ended 31 December 2023

RIT Capital Partners plc

Report & Accounts for the year ended 31 December 2023

27 St. James’s Place London SW1A 1NR

Company Highlights

Strategic Report

Chairman’s Statement 3

Our Purpose, Strategy and Business Model 6

Manager’s Report 11

Investment Portfolio 21

Principal Risks and Viability 24

Sustainability Report 31

Governance

Board of Directors 37

J. Rothschild Capital Management 39

Corporate Governance Report 40

Audit and Risk Committee Report 52

Directors’ Remuneration Report 56

Directors’ Report 60

Financial Statements

Consolidated Income Statement and Consolidated Statement of Comprehensive Income 64

Consolidated Balance Sheet 65

Parent Company Balance Sheet 66

Consolidated Statement of Changes in Equity 67

Parent Company Statement of Changes in Equity 68

Consolidated and Parent Company Cash Flow Statement 69

Notes to the Financial Statements 70

Independent Auditor’s Report 95

Other Information

Investment Portfolio Reconciliation 106

Glossary and Alternative Performance Measures 107

Historical Information and Financial Calendar 109

Investor Information 110

Directory 111

Contents

Notes

Nothing in this Annual Report & Accounts should be construed as advice to buy or sell a particular investment.

RIT Capital Partners plc (RIT or the Company) is a UK public listed company, and as such complies with the UK Financial

Conduct Authority’s (FCA) Listing Rules. The Company conducts its affairs so as to qualify for approval as an investment trust,

and has been accepted as an approved investment trust by HM Revenue & Customs (HMRC), subject to continuing to meet

the eligibility conditions. As an investment trust, it is not authorised or regulated by the FCA. RIT is classified as an Alternative

Investment Fund (AIF) in accordance with the UK Alternative Investment Fund Managers Directive (AIFMD).

The investment manager, administrator, and company secretary is J. Rothschild Capital Management Limited (JRCM or the

Manager), a subsidiary of RIT. JRCM is authorised and regulated by the FCA and is classified as an Alternative Investment Fund

Manager (AIFM) in accordance with AIFMD.

This report is printed on Revive 100% White Silk a totally recycled paper produced

using 100% recycled waste at a mill that has been awarded the ISO 14001

certificate for environmental management.

The pulp is bleached using a totally chlorine free (TCF) process.

This report has been produced using vegetable based inks.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 1

Company Highlights

Corporate Objective

To deliver long-term capital growth, while preserving

shareholders’ capital; to invest without the constraints of a

formal benchmark, but to deliver for shareholders increases in

capital value in excess of the relevant indices over time.

Investment Policy

To invest in a widely diversified, international portfolio across a

range of asset classes, both quoted and unquoted; to allocate

part of the portfolio to exceptional managers in order to ensure

access to the best external talent available.

Performance for the year 2023

RIT NAV per share total return

3.2%

CPI plus 3.0% 7.0%

MSCI All Country World Index (ACWI) 18.4%

RIT share price total return

-9.6%

FTSE 250 Index

8.0%

Key data 2023 2022 Change

NAV per share 2,426 pence 2,388 pence 1. 6 %

Share price 1,882 pence 2,125 pence -11.4%

Premium/(discount) -22.4% -11.0% -11.4% pts

Net assets £3,573 million £3,722 million -4.0%

Gearing

3.5% 6.2% -2.7% pts

Average net quoted equity exposure 39% 38% 1% pts

Ongoing Charges Figure for the year

0.77% 0.89% -0.12% pts

First interim dividend (April) 19.0 pence 18.5 pence 2.7%

Second interim dividend (October) 19.0 pence 18.5 pence 2.7%

Total dividend in year

38.0 pence 37.0 pence 2.7%

Performance history 3 Years 5 Years 10 Years

Since

inception

RIT NAV per share total return

10.6% 44.2% 108.8% 3,343%

CPI plus 3.0% per annum

31.7% 42.2% 77.0% 637%

MSCI All Country World Index 23.5% 71.0% 147.4% 1,126%

RIT share price total return

-4.1% 7.5% 78.7% 3,407%

FTSE 250 Index

4.3% 28.3% 61.2% 1,607%

Performance since inception

NAV per share total return

ACWI

CPI plus 3.0%

1988

1993

1998

2003

2008

2013

2018

500%

000%

1,50

4,000%

2,50

000%

3,50

2023

A description of the terms used in this report, including further information on the calculation of Alternative Performance Measures (APMs), is set

out in the Glossary and APMs section on page 107.

The Group’s designated APMs are the NAV per share total return, share price total return, gearing and the ongoing charges figure.

RIT’s shares are a constituent of the FTSE 250 Index, which is not considered a Key Performance Indicator (KPI).

RIT Capital Partners plc

Strategic Report

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 3

Chairman’s Statement

In the first half of 2023, most major indices traded in

a relatively narrow range, punctuated by periods of

weakness and recovery. As the year progressed, a belief

that interest rates may have peaked led to a rebound in

developed world equity markets, which was particularly

marked in the fourth quarter. US equity markets finished

the year strongly, buoyed by a small number of very large

technology companies. These so-called ‘magnificent

seven’ tech stocks accounted for the majority of the S&P

500’s gains. Excluding these few companies, the overall

market returns were more modest.

Our net asset value per share finished the year at 2,426

pence, representing a total return (including dividends)

of 3.2%, lagging our investment hurdles of CPI+3%,

which was up 7.0%, and the MSCI ACWI (50% sterling)

which rose 18.4%. This brings our 10-year performance to

109%, a more than doubling of shareholders’ capital over

the period. Our investment portfolio is structured around

three core pillars of quoted equities, private investments,

and uncorrelated strategies. During 2023, the portfolio

saw good performance from quoted equities, driven

primarily by our successful single stock selection and

exposure to Japan. Uncorrelated strategies also made a

positive contribution, helped by the outperformance of

our credit managers, as well as our investments in carbon

credits. However, the value of our private investments

softened, reflecting lower valuations of external funds

carried over from the fourth quarter of 2022 and our

carefully considered revaluation of our direct investments.

Currency was also a headwind; the pound’s appreciation

of some 5% against the US dollar over the year impacting

the translated value of our global investments.

Our portfolio is made up of high-conviction investments

with differing characteristics and return drivers. While

there will be times when not all asset classes meet our

long-term expectations, we remain committed to our

diversified approach. Our belief is that utilising a carefully

constructed blend of different assets, overlaid with a top-

down risk management function, remains the best way

to manage our investments for the long-term benefit of

shareholders. Our Manager’s Report from J. Rothschild

Capital Management (JRCM or the Manager) provides a

detailed review of investment performance, attribution,

positioning and risk management.

While the most important driver of our share price

performance over the long term is our NAV, the Board is

also intensely focused on the rating of our shares, and

in this regard 2023 was a difficult year. Discounts for

investment trusts widened considerably, and our discount

was no exception ending the year at -22%, resulting

in a total shareholder return (including dividends) of

-9.6%. This is a source of frustration to our shareholders,

as well as to the Board and our Manager. Directors’

shareholdings are disclosed in this Report and our

colleagues in our Manager also have significant ‘skin in

the game’, with interests in approximately £18million RIT

shares at the year end, reinforcing the close alignment

with shareholders’ interests. The Board and our Manager

have been, and continue to be, acutely focused on

closing the discount.

During 2023, we increased the level of our interactions

with shareholders, and I am very grateful for their candid

and thoughtful feedback in these discussions, which

has been very helpful in guiding our plans to reduce

the discount. I address below four core topics: private

investments, capital allocation, costs and marketing.

Private investments are currently out of favour with

investors, and discounts for trusts exposed to these

assets have widened significantly in 2023. RIT has

always had private investments as a core part of its

approach, and despite mark-to-market volatility in the

short term, over the long term the success of these

investments has been a strong contributor to our returns.

Our earlier successes have, in part, placed us in a

challenging position; healthy capital growth is one of the

main reasons why, over the past five years, our private

investments had come to represent a higher proportion

of the portfolio than in the past. We are committed to this

asset class and continue to believe that our long-standing

relationships are a source of competitive advantage and

attractive returns to shareholders. This is reflected in

our portfolio, which in aggregate is sitting on sizeable

profits, over and above the capital we invested. The

returns generated by our private portfolio are set out in

more detail in the Manager’s Report. Most of our largest

direct investments are profitable companies with growing

revenues and earnings. Our close manager relationships

Sir James Leigh-Pemberton

his brings our 10-year performance

to 109%, a more than doubling of

shareholders’ capital over the period.

4 Report and Accounts December 2023 RIT Capital Partners plc

and brand strength, often enable us to access a preferred

position in the capital structure of a company, with the

majority of our direct investments having some element

of downside protection.

Nevertheless, over the next two years we will look

to reduce the proportion of the portfolio represented

by private investments to a level of between around

a quarter and a third of NAV. This will be achieved by

organic exits and the continuation of a very high return

bar for any new investments. Where we see realisations

from this portfolio, we expect to deploy the capital to

buy back our shares or to make new investments in the

liquid portfolio, depending on the level of discount, the

opportunity set and general portfolio management needs.

What we will not do is accelerate exits or engage in sales

at discounts to fair value to the detriment of long-term

shareholder value.

During 2023, we undertook one of the largest buybacks

in the investment trust industry, acquiring some 8.6

million shares at a cost of £163 million, our largest single

allocation of capital in the year. This generated a strong

return on investment, increasing the NAV per share

return for shareholders; the buyback also reinforced

the confidence that we have both in our NAV and our

approach. If compelling returns from allocating our capital

in this way continue to be available, we will retain the

flexibility to act.

Over the year, we also paid dividends of 38 pence per

share, an increase of almost 3% over 2022, and totalling

£57 million. Our approach remains to maintain or increase

the dividend, subject to the overriding capital preservation

objective. In 2024, we intend to pay a dividend of 39

pence per share, an increase of 2.6% over 2023. The

dividend will be paid as normal in equal instalments in

April and October, funded from our significant reserves.

Our long-standing investment approach covers multiple

asset classes, sectors and geographies, and provides

shareholders with access to investments, including

specialist funds, which are not typically accessible to

individual shareholders. This approach is in line with our

Investment Policy and has been deployed consistently

year on year. It is a key driver of RIT’s strong long-term

performance. By design, it will not be the cheapest

approach to managing investments, but whenever we

allocate capital, we do so only if the anticipated risk-

adjusted return, net of all costs (both internal costs and

any fees paid to external managers) delivers value to

shareholders.

We continue to look for ways to reduce costs, and

enhance our communications, with a portion of the

savings made over the year reinvested into improving our

marketing and investor relations efforts. We will continue

to invest in more regular and informative direct contact

with shareholders.

Our environmental, social, and governance (ESG)

initiatives remain an area of particular focus, with our

Manager, JRCM, submitting its first report during the

year as a signatory of the UN Principles for Responsible

Investment (UN PRI). We also include our first

Sustainability Report within this Annual Report, where

we have collated in one location, all of the activities

we undertake in respect of our wider commitments to

society and the environment.

Governance and employees

Following an extensive international search process,

Maggie Fanari retired from the Board on 29 February,

joining JRCM on 1March as its CEO. Maggie has an

outstanding track record of successfully leading teams

investing across different asset classes and geographies

at one of the largest and most respected investment

companies in the world – Ontario Teachers’ Pension

Plan – where she was the Senior Managing Director and

Global Group Head High Conviction Equities. We are

delighted that Maggie has joined the exceptional team at

JRCM, and we look forward to working closely with her in

the execution of the important initiatives outlined above.

Maggie succeeds Francesco Goedhuis, who retired as

JRCM’s CEO in December as a result of an illness in his

immediate family. Francesco joined JRCM in 2010 and

was appointed CEO in 2014. During his 13 years with the

Manager, Francesco has provided outstanding leadership,

continuously strengthening both the team in JRCM and

our exceptional network of investment partners. The

Board was very pleased to announce recently that he

will continue his association with RIT in his new role as

Senior Adviser to JRCM.

After 11 years, Ron Tabbouche (latterly the co-CIO at

JRCM) retired to join his family in Israel, with Nick Khuu

appointed to the role of CIO. Nick is a very experienced

investor across multiple asset classes, having worked at

leading investment firms in New York and San Francisco.

He has been with JRCM for over four years operating in

senior investment roles, and we are delighted with his

appointment.

On behalf of the Board, I would like to express our

gratitude to Francesco and Ron for their very significant

contributions to the Manager and to your Company’s

performance over more than a decade.

At the end of September, after more than three years as

a Director of RIT, Maxim Parr retired from the Board to

take on the position of Chair of JRCM, providing valuable

leadership and additional resources during a period of

transition of its senior leadership team.

Chairman’s Statement

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 5

Chairman’s Statement

I would like to thank my colleagues on the Board, and

our talented and dedicated employees for their hard

work and commitment throughout the year. This diverse

group shares a single aim – creating long-term value for

RIT’s shareholders. At a time when the outlook for global

economies and markets and the geopolitical environment

are particularly complicated, these colleagues, together

with our investment partners and advisers, are the key

to our future success. We have the flexibility to select

the best investments across any asset class, sector or

geography, coupled with the strength of our network

which opens doors to opportunities that others cannot

access. These remain important differentiators on which

we will continue to build for the future.

Nathaniel Charles Jacob Rothschild 1936 – 2024

Finally, it is with great sadness that we mourn the

recent death of our founder and former chairman, Lord

Jacob Rothschild. Jacob was chairman of the Rothschild

Investment Trust, subsequently renamed RIT Capital

Partners plc, from 1971 to 2019. He devised, developed,

and led the growth of the Company, including its listing

on the London Stock Exchange in 1988. During his

tenure, the net asset value increased from £5 million to

over £3billion by the time he retired from the Board in

September 2019 and was granted the title of Honorary

President. Our thoughts and condolences are with

Hannah Rothschild, his daughter and current Director, and

the rest of the Rothschild family at this time. He will be

missed.

Sir James Leigh-Pemberton

Chairman

6 Report and Accounts December 2023 RIT Capital Partners plc

Our Purpose, Strategy and Business Model

Purpose and strategic aims

Since your Company’s inception, our purpose has been

consistent, namely to protect and enhance shareholders’

wealth over time by providing diversified portfolio

management. This is set out in our Corporate Objective:

“to deliver long-term capital growth, while preserving

shareholders’ capital; to invest without the constraints

of a formal benchmark, but to deliver for shareholders

increases in capital value in excess of the relevant indices

over time.”

The origins of the business can be traced back to the

earlier Rothschild Investment Trust, chaired by LordJacob

Rothschild from 1971, when it had a value of £5 million.

In its current form, your Company was listed on the

London Stock Exchange in 1988, and has followed a

constant and unique approach to this day. Our multi-

asset, flexible investment strategy differentiates us from

other conventional investment trusts. Our access and

expertise enable us to build a flexible, diversified portfolio

that delivers through different economic cycles. We invest

for the long term in the most compelling opportunities

across asset classes, geographies and capital structures,

applying careful risk management, all designed to support

our most important objective: long-term capital growth.

There may be periods when we will try to place a

degree of protection of shareholders’ funds ahead of

growth, but we believe that active management of our

portfolio exposures is more likely to lead to long-term

outperformance. We do not target absolute returns and

therefore, ensuring we have sufficient capital deployed to

generate long-term growth will naturally result in us being

exposed to market risk.

Over time, we believe that a combination of healthy

participation in up markets, and reasonable protection

in down markets, should help us to compound ahead

of markets through the cycles. Indeed, since your

Company’s listing in 1988, we have participated in 74% of

the monthly market increases but only 41% of the market

declines. This has resulted in our NAV per share total

return compounding at 10.5% per annum, a meaningful

outperformance of global equity markets at 7. 3%. Over

the same period the total return to shareholders was

10.6% per annum.

Investment approach

Our Investment Policy guides our Manager and

subsidiary, J. Rothschild Capital Management Limited

(JRCM) as it manages your portfolio:

“to invest in a widely diversified, international portfolio

across a range of asset classes, both quoted and unquoted;

to allocate part of the portfolio to exceptional managers in

order to ensure access to the best external talent available.”

We typically invest your portfolio across multiple

asset classes, geographies, industries and currencies

diversified across three investment pillars: quoted

equities, private investments and uncorrelated strategies.

This has been the basis of our approach over many years

and the long-term success of your Company has been

the result of combining thematic investing with active

management of a distinctive blend of investments, all

overlaid with currency positioning and macro exposure

management. Using our unique access and expertise, we

create a distinctive blend of high-conviction investments

of differing profiles and varying underlying return drivers.

This targets long-term performance with a balance of risk

and reward that is superior to the wider equity markets.

Our respected name is a hallmark of quality, affording

us unrivalled access to world-leading investment

opportunities, allowing us to maximise our ability to

deploy capital effectively. We have a highly skilled

investment team with significant depth and breadth of

experience across different asset classes and we are also

able to draw on our network to broaden our intellectual

bandwidth by leveraging specialist insight from our

Manager’s network of exceptional manager partners. The

strength of these relationships enables us to invest in

sectors and geographies which may be inaccessible to

many investors.

bove all, our approach is long term …

Our access and expertise enable us to

build a flexible, diversified portfolio that

delivers through different economic cycles.

Access

global network & heritage

Flexibility

permanent capital & no benchmark

Expertise

team & specialist partners

Capital growth

Superior risk/reward

Disciplined

investing

through RIT’s

diversified,

global portfolio

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 7

Our Purpose, Strategy and Business Model

This aspect of our model is key to our ability to identify

and deliver value from differing sectors, markets and

assets. And while access to such specialist managers

involves paying fees, the level of these fees is an

important and integral part of the investment decision.

Our focus is solely on the net returns, and therefore

if the returns, net of all fees, meet our target, we are

comfortable paying them. Our reported net asset value is,

of course, net of all management and performance fees.

Above all, our approach is long term. The permanent

capital structure of an investment trust, compared to an

open-ended fund, means we do not suffer from liquidity-

driven pressures to fund investors’ redemptions. We can

therefore hold our investments in both public and private

markets over an extended period and choose to realise

them at the optimal time.

Another key facet of our investment approach is risk

management. The Board establishes and oversees

the risk appetite through regular monitoring of asset

allocation and security limits. These are intended to allow

JRCM to efficiently and effectively manage the portfolio in

line with the Corporate Objective.

The Manager has developed a sophisticated risk

management approach, on which it reports regularly to

the Board. This incorporates quantitative and qualitative

measures, as well as the careful use of hedging. The risk

management tools assist in the construction of a portfolio

designed to provide diversified sources of return and to

monitor closely the performance of individual assets and

the portfolio composition. Further information on risk

management is set out on pages 24 to 30.

In summary, our flexible and distinctive model, with the

freedom to utilise multiple asset classes and different

investment structures, allows our Manager to deploy

capital and manage risks as effectively as possible.

Further information in relation to the investment approach

as well as portfolio attribution and returns is set out in the

Manager’s Report on pages 11 to 20.

Business model, culture and values

RIT Capital Partners plc is a listed investment company,

approved by HM Revenue and Customs (HMRC) as an

investment trust. It is a UK Alternative Investment Fund (AIF)

in accordance with UK legislation effective from 1 January

2021 which replicated the European Union’s Alternative

Investment Fund Managers Directive (AIFMD).

Investment management, as well as administration and

company secretarial, is delegated under a formal agreement

to our Manager, JRCM, a subsidiary of the Company. JRCM

is separately regulated by the Financial Conduct Authority

(FCA) as the UK Alternative Investment Fund Manager (AIFM)

under the same UK rules. JRCM has a separate Board of

Directors and is governed by its Executive Committee.

Board of

Directors

RIT Capital Partners

plc

J. Rothschild Capital

Management Limited

Executive

Committee

Investment management,

administration and company

secretarial

Alternative

Investment

Fund

Alternative

Investment

Fund Manager

In addition, the Manager is also responsible for our

subsidiary, Spencer House Limited (SHL). This company

provides premises management for Spencer House and

our other investment properties in St. James’s. It also

operates a profitable events business.

I am responsible for the leadership of the Board, which

is ultimately tasked with ensuring that we both meet

our Corporate Objective and maintain high standards of

corporate governance.

The main focus of the Board is to ensure that the investment

approach is suitable for achieving our Corporate Objective, and

to monitor the performance of the Manager. In order to do this,

we receive regular and detailed reports covering investment

performance, risk, finance and operational matters.

The employees of our Manager and SHL are critical to

our ability to meet all of our objectives. A key part of the

monitoring of the Group is ensuring that the Manager is

appropriately incentivised to deliver sustained, risk-adjusted

returns and is able to attract, retain and develop a top-quality

team. This team is expected to operate in accordance with

our core values, and within a culture of high performance.

Our core values of respect, dignity and integrity are

evidenced by the Group’s five business principles

of collaboration, enterprise, efficiency, effective

communication and professional ethics, which are

regularly communicated and reinforced through the

Group’s recruitment and appraisal processes. JRCM

monitors the health of its culture by assessing regularly

how well these principles are being applied, and the

Board receives regular reports on this topic.

The Group has a clear and proactive approach to regular

employee engagement. The Sustainability Report on

pages 31 to 35 provides more detail of these interactions.

We are firm believers in the benefits that cognitive

diversity as well as diversity more generally, brings to

decision-making, and seek to ensure this is reflected in

our recruitment processes, both at Board level and within

our subsidiaries. At the year end the Board comprised

eight Directors, of which four were men and four women.

8 Report and Accounts December 2023 RIT Capital Partners plc

Our Purpose, Strategy and Business Model

Within our subsidiaries, the employee base comprised 43

men and 19 women.

Corporate governance

The Directors are responsible for compliance with applicable

rules, regulations and guidance in relation to governance, in

particular taking into account the matters set out in Section

172(1) of the Companies Act 2006, which guides our

approach to strategy and decision making (see pages 33, 34

and 62). The Board recognises that its actions have lasting

impacts and consequences for the future of the Company,

its shareholders and other stakeholders, and approaches its

responsibilities accordingly.

The Board has a responsibility for ensuring that there

are strong and healthy ties with all of our stakeholders,

making sure that we consider their interests and

acknowledge that the Group’s interaction with them is

fundamental to the long-term success of the business.

The Directors receive regular feedback and reports from

the Manager on its investor relations activity, as well

as from brokers and analysts, and undertake their own

shareholder interactions, to ensure that shareholders’

views are well understood by the Board.

When it comes to our Corporate Objective, shareholders

understandably focus on our investment performance.

This informs the Board’s desire to seek healthy, risk-

adjusted returns over the long term and through the

cycles, with careful attention to capital preservation, and

mindful of the Company’s reputation as a responsible

fiduciary of shareholder capital. In assessing the right

strategy to achieve these aims, the Board considers

the ongoing suitability of the Investment Policy and the

approach taken by the Manager to execute on the policy.

Other areas considered by the Board where shareholder

views were taken into account included discount

management, the dividend, buybacks, capital allocation,

and ESG integration. Our current Board composition

complies with the recommendations of both the

Parker Review and the FTSE Woman Leaders Review

(previously the Hampton-Alexander Review), and also

meets the requirements of the FCA’s listing rules in

relation to diversity. ESG and sustainability will continue

to help inform our approach to this area. Please refer

to our Sustainability Report on pages 31 to 35 for more

information.

The Group has relationships with a number of suppliers

and service providers which play an important role

in enabling us to operate our business efficiently.

The Groups’ overarching policy with respect to these

relationships is that they should be managed so that

they are both sustainable and mutually beneficial over

the medium term, and deliver value for money for our

shareholders (see page 34).

ESG and sustainability

We recognise that our purpose to protect and enhance

our shareholders’ wealth must combine with a

commitment to reflecting ESG factors in our investment

approach. The application of an ESG lens offers us a

comprehensive understanding of both financial and non-

financial risks, which ultimately contributes to improved

decision-making. As a result, we have a more complete

view of any given opportunity, supporting the delivery

of risk-adjusted returns and aligning with shareholder

expectations. ESG factors are integrated across our

investment management and internal operations, and

we aim to be good corporate citizens, applying robust

governance and minimising our environmental impact.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 9

ur Corporate Objective...informs

the Board’s desire to seek healthy,

risk-adjusted returns over the long term

and through the cycles... mindful of the

Company’s reputation as a responsible

fiduciary of shareholder capital.

Our Purpose, Strategy and Business Model

Our Manager is a signatory of the UN PRI, and has in

place a Responsible Investment Framework & Policy,

which is disclosed to shareholders via the Company

website. This policy ensures that ESG factors are firmly

integrated across our investment management and

internal operations. We believe that this policy aligns the

Corporate Objective with a commitment to principles

for responsible investment. ESG factors form part of the

due diligence undertaken by JRCM prior to selecting

investments and continue to be monitored throughout

our holding of the investment. Further information is set

out in our Sustainability Report on pages 31 to 35.

Measuring performance and KPIs

While we believe our success can only truly be assessed

over the long term, we also recognise that providing

shareholders with a comparator against which to

measure our performance over shorter periods is helpful.

The strategic aims highlighted on this and earlier pages,

reflect the desire to produce real capital growth with

capital preservation and to exceed markets over time.

These are reflected in the following targets or key

performance indicators (KPIs):

1. Absolute outperformance: NAV total return in excess of

CPI plus 3.0% per annum;

2. Relative outperformance: NAV total return in excess of

the MSCI All Country World Index (ACWI); and

3. Share price total return or total shareholder return (TSR).

The first two of these relate to our Manager’s investment

performance. CPI plus 3.0% per annum represents the

desire to grow the real value of our portfolio over time, with

a meaningful premium above inflation. The second reflects

our unconstrained global investment approach and the

desire to outperform markets over the long term. Consistent

with many investment companies, we currently use the

ACWI, which we believe is an appropriate comparator for

our global, unconstrained approach although it does not

drive our Manager’s portfolio construction. More specifically,

we use a blended index consisting of 50% of the ACWI

measured in sterling (and exposed to currency risk) and

50% of the sterling-hedged ACWI.

While our Manager is tasked with managing the portfolio

to deliver a NAV return, ultimately, the return to our

shareholders is through share price growth and dividends.

We therefore also consider the TSR as our third KPI.

Incentive structure

Our approach to remuneration incorporates the Directors’

Remuneration Policy as well as specific structures within

JRCM and SHL designed to attract, motivate and retain

the high-quality individuals we need to deliver our long-

term strategic aims and sustainable success.

The remuneration approach is designed to align with,

and reinforce, these strategic aims. The Group operates

an Annual Incentive Scheme (AIS) for employees as well

as longer-term share-based awards. The cap for total

payments under the AIS is 0.75% of net assets. This

approach is designed to measure and reward the Group’s

performance, and seek to provide an appropriate balance

between shorter-term awards and longer-term incentives,

as well as the need for robust risk management.

The AIS rewards investment outperformance as measured

against two KPIs: CPI plus 3.0% and the ACWI. It also

rewards wider achievements linked not to the NAV return,

but to the Group’s business principles and culture. The

scheme is measured annually and includes longer-term

features such as a three-year absolute outperformance

‘high water mark’ as well as significant deferral into the

Company’s shares, which vest over three years.

The second component of the remuneration approach

is a long-term incentive plan (LTIP) designed to reinforce

the alignment with shareholders. Restricted share units

(RSUs) may be awarded to employees of JRCM and SHL

under the LTIP. RSUs vest after three years, with typically

a further two-year holding period or lock-up before they

can be sold.

All of the awards follow a careful appraisal of

performance, and the high proportion of shares is

designed to reinforce the alignment with our long-term

investment performance and shareholder value creation.

Further details of remuneration are provided in the

Directors’ Remuneration Report on pages 56 to 59.

Shareholder communication and AGM

While this report forms a core part of the annual

communication to shareholders, there are many

additional ways to remain informed. Reflecting the nature

of our portfolio, including the allocations to external

managers (many of whom report monthly performance),

we publish a monthly NAV as soon as reasonably

practicable following the month end. Shareholders are

encouraged to visit our website, www.ritcap.com, which

10 Report and Accounts December 2023 RIT Capital Partners plc

provides regular updates of performance and exposure

including our monthly factsheets. I look forward to

meeting as many of you as possible at our AGM on 2 May

2024. As normal, there will also be an opportunity on that

occasion to hear directly from our Manager.

I would like to once again thank shareholders for their

continuing loyalty and support over many years.

Sir James Leigh-Pemberton

Chairman

Our Purpose, Strategy and Business Model

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 11

Manager’s Report

Summary

In the face of challenges posed by rising interest rates

early in the year, geopolitical unrest, and bank collapses,

major indices recorded robust gains in 2023. A substantial

portion of these gains was attributable to a select

few mega-cap technology companies, overshadowing

more modest returns in other sectors. November

and December saw substantial market returns, when

indications by the US Federal Reserve of a path to lower

rates, together with falling inflation over the course of the

year, caused 10-year US treasury yields to tighten from

4.9% to 3.9%. The majority of annual returns for indices

globally came during this end of year rally, including our

reference hurdle, ACWI (50% £). Our portfolio produced

positive returns and trailed just behind this index for most

of the year, but lagged strongly rising markets in the last

two months of the year.

Despite the headwinds faced in 2022 and 2023, we

remain confident in our long-term investment approach.

Our careful portfolio construction is disciplined,

diversified, and carefully risk managed such that, over

time, we believe we can deliver capital appreciation to

shareholders with attractive risk-reward characteristics.

Portfolio positioning

Within a tried and tested investment risk framework, our

investment “reach” is unconstrained. Having a flexible

investment mandate enables us to invest across capital

structures, asset classes and geographies. Nevertheless,

our portfolio has historically maintained a core equity bias

and will continue to do so.

Group NAV £3,573m

(31 December 2022: £3,722m)

Private investments,

£1,285m, 35.9% NAV

Other, £3m, 0.1% NAV

Uncorrelated strategies,

£914m, 25.6% NAV

Quoted equities,

£1,371m, 38.4% NAV

Decision-making starts with a considered, top-down

macro-economic view. We allocate capital to take

advantage of identified structural themes and market

dislocations, drawing upon our seasoned internal

resources and very often leveraging our extensive global

network of managers and partners.

We structure our investment portfolio by allocating capital

across three pillars:

• quoted equities;

• private investments; and

• uncorrelated strategies.

By design, each pillar serves a distinct purpose within

the portfolio, with investments of differing profiles

and return drivers allowing us to benefit from this

broad diversification. Additionally, we make use of risk

management tools and hedging strategies to manage

risk, including currency translation risk.

Quoted equities Private investments Uncorrelated strategies

The quoted equities portfolio

includes diversified, global high

conviction strategies held directly

through stocks, as well as long-

only funds, and equity hedge

funds. We achieve this through a

combination of our own in-house

expertise and carefully selected

external managers, capitalising on

their specialist expertise in sectors

and geographies where we see the

most potential.

Private investments comprise

high quality investments, sourced

directly via our own extensive

global network and through

commitments to exceptional fund

managers in specialist strategies.

Our direct investments are

typically structured to provide

some downside protection, with

the potential to generate attractive

returns over time.

Our uncorrelated strategies aim to

generate consistent returns with

lower correlation to equity markets

across the cycle. It includes, but

is not limited to, absolute return,

credit, real assets, government

bonds and interest rate positions.

For absolute return and credit

strategies, we often collaborate

with specialist external managers

to access relevant opportunities.

30-60% NAV

long-term allocation range

20-40% NAV

long-term allocation range

20-40% NAV

long-term allocation range

12 Report and Accounts December 2023 RIT Capital Partners plc

Manager’s Report

Performance highlights

Our results for the year produced a NAV per share total

return of 3.2%. Comparatively, our two reference hurdles,

ACWI (50% £) and the ‘inflation plus’ hurdle CPI+3%

returned 18.4% and 7.0%.

Two noteworthy aspects underscored the strength

observed in the market-capitalised weighted indices.

First, the market rally exhibited an unusual narrowness,

primarily propelled by a select group of stocks termed

the ‘magnificent seven’ (Alphabet, Amazon, Apple,

Meta, Microsoft, Nvidia, and Tesla), which accounted

for approximately 20% of the MSCI World index and

demonstrated a remarkable 74% increase, while the

remaining 1,473 stocks collectively experienced a more

modest gain of 12%. Second, a substantial portion of

returns across various asset classes materialised during

the liquidity-fueled surge in November and December. For

instance, the Bloomberg Aggregate Bond index posted

-0.6% returns through October 31 and +9.9% over

November and December. Similarly, the ACWI exhibited

+7.0% returns through October 31, and then +10.6%

over November and December.

Asset allocation and portfolio contribution

Asset category % NAV % Contribution

Quoted equities 38.4% 6.8%

Private investments 35.9% -2.7%

Uncorrelated strategies 25.6% 2.1%

Currency 0.9% -2.9%

Total investments 100.8% 3.3%

Liquidity, borrowings

and other -0.8%

-0.1%

Total 100.0% 3.2%

Including accretion benefit of 1.2% from share buybacks.

Positive drivers of portfolio performance for the year

were:

• high quality stock picking, driven by fundamentals;

• Japan exposure, which outperformed all other

developed markets. This involved utilising our

network and working closely with specialist

managers who focus on value equities and engage

directly with management teams of Japanese

companies;

• the performance of our credit managers, who were

able to profitably capitalise on dislocations in the

market;

Negative drivers were:

• moderate quoted equities exposure throughout the

year, which meant that our portfolio as a whole,

lagged behind the equity rally;

• our exposure to China, which has had a disappointing

recovery following its post-Covid reopening. The lack

of stimulus and global outflows weighed on shares

here;

• currency translation effects from our meaningful US

dollar position, as sterling continued to gain strength

against the dollar; and

• a decline in the valuation of our private investments,

mostly due to the funds, where the lagged Q4 2022

valuations impacted our returns this year.

A more detailed analysis on the performance and

positioning of each pillar, can be found in the following

pages.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 13

Manager’s Report

Quoted equities

31 December 2023: 38.4% NAV

This pillar includes directly-held stocks, long-only funds,

equity hedge funds and our quoted equity derivatives,

used predominantly to manage exposures. We express

our conviction views through our own stock picking and

through allocation to exceptional managers where we can

capitalise on their specialist expertise.

The average net quoted equities exposure (which

incorporates notional exposure from derivatives) for

the year was 39%, which is towards the lower end of

the 10-year historical range. The low level reflects the

defensive positioning of this book during the year, when

we favoured an increased allocation to uncorrelated

strategies, prioritising greater protection against market

volatility. Towards the end of the year, we increased our

net exposure to 45% as our stance on markets shifted.

Our quoted equities portfolio generated local currency

returns of 18.1% for the year and contributed 6.8% to the

overall NAV, despite our minimal exposure to technology

stocks in this pillar. This substantially outperformed the

ACWI Equal Weighted Index, which grew only 9.4%, and

was in line with our ACWI (50% £) reference hurdle of

18.4% – despite the fact that we didn’t own meaningful

positions in the ‘magnificent seven’ tech stocks, which

had an outsized impact on equity markets in 2023.

The key drivers of our performance were:

• investments in Japan, for example 3D Investment

Partners, continued to perform well reflecting

a mixture of corporate governance reforms and

investor-led activism, helping to unlock value;

• healthcare stocks performed well as ‘big pharma’

deployed capital to acquire innovative biotech

companies;

• good exposure to global value stocks, accessed via

specialist managers, such as Discerene Group;

• astute stock selection, including investments

focused on areas of mispricing such as Builders

FirstSource and Talen Energy; and

• headwinds from fund investments with China

exposure, as a result of a lacklustre post-Covid

reopening, lack of stimulus, and global outflows.

With robust valuation levels prevailing in the market,

alongside elevated real interest rates and nominal growth

rates, we believe that engaging in bottom-up fundamental

analysis can unveil appealing opportunities, especially in

the context of market inefficiencies, or where investors

prioritised simpler narratives, such as money market

funds in the US, which attracted $1.3 trillion of inflows,

or mega-cap technology stocks. In the short to medium

term, we see compelling opportunities in single stock

investments and themes, where there is substantial

long-term return potential coupled with a lower risk of

permanent capital loss.

One fertile area for exploring market inefficiencies

is event-driven stocks, exemplified by our recent

investment in Talen Energy, a US power utility company.

We initiated this investment after the company emerged

from bankruptcy in 2023, driven by our belief in the

substantial unrecognised value of its nuclear power plant,

conventional gas power plants, and datacentre assets,

that together provide a significant margin of safety for our

investment. The company is a major beneficiary of the

US government’s decision to endorse the role of nuclear

energy in supplying carbon-free baseload power. The US

Inflation Reduction Act, enacted while Talen Energy was

in bankruptcy, provides a floor to revenues for nuclear

power plants, which means we have high conviction in

the minimal downside risk for Talen Energy from our point

of entry. Moreover, the management team is well aligned

with shareholder interests in optimising the value of the

investment.

Investing in companies with small and medium-sized

market capitalisations is a segment of the market that

has been overlooked by investors, creating substantial

valuation inefficiencies. At the beginning of the year,

we entered a position in Tempur Sealy, a prominent

manufacturer, distributor, and retailer of mattresses,

benefiting from the rising consumer demand for

premium mattresses. We invested in this high-quality

business at a valuation of less than 14 times earnings.

Quoted equities £1,371m

(31 December 2022: £1,307m)

Funds, £887m, 24.8% NAV

Other, £12m, 0.4% NAV

Stocks, £472m, 13.2% NAV

Note: Included in stocks is an adjustment of +£90.2m representing

the latest estimate of publicly-traded quoted equities held indirectly

in private investment funds. An offsetting adjustment of -£90.2m is

included in private funds.

14 Report and Accounts December 2023 RIT Capital Partners plc

Manager’s Report

Tempur Sealy operates in a fragmented industry, where

its market share is nearly twice the size of its closest

competitor, and where it holds the majority of the profit

pool. This dominant position allows the company to

make aggressive investments in defending its barriers

to entry, including scale, vertical integration, and brand

recognition, facilitating growth beyond industry peers.

Notably, its major competitor, Serta Simmons, underwent

Chapter 11 restructuring in 2023, and a substantial portion

of the industry is grappling with cash flow issues. The

combination of these factors, along with robust cash

flow generation and a management team aligned with

shareholders, provides a solid margin of safety for our

investment.

In short, the ‘value’ sector remains a fertile environment

for stock picking. We express this perspective not

only through individual stock positions but also via our

partnership with Discerene Group. This fund emphasises

businesses exhibiting strong defensive moats, robust

cash flows, and attractive valuations. Notably, over the

past two years, three of the fund’s top five positions have

been subject to acquisition.

In terms of global exposure, despite recent challenges

in Chinese public markets, we believe China remains

a crucial market for capital deployment due to its

status as the second-largest global economy, structural

policy tailwinds (such as self-sufficiency initiatives) and

historically low valuations. Given the cultural nuances

and language barriers, we believe engaging a dedicated

specialist manager is paramount. We have partnered

with Springs Capital given their consistent generation

of significant alpha over extended time periods and the

quality of their investment team.

Quoted equity portfolio by region

Japan, 19%

Asia, 13%

Europe, 9%

Other, 2%

US, 57%

Elsewhere, a compelling opportunity for outperformance

persists in Japan, where we maintain exposure through

two specialist Japan value-oriented managers: Morant

Wright Management and 3D Investment Partners. The

combination of attractive valuations, improving corporate

governance, a rise in activism, and secular changes such

as labour and capital mobility provide a backdrop for

compelling returns.

Finally, in the healthcare sector, our positive long-term

perspective remains grounded in ongoing innovation,

scientific and technological breakthroughs, a generally

favourable regulatory environment in the US, and the

imperative for large pharmaceutical companies to

offset substantial revenue losses resulting from patent

cliffs through mergers and acquisitions with biotech

firms. Recognising the specialised nature of the sector,

which demands a blend of scientific expertise and

commercial insight, the significance of having the right

partners cannot be overstated. Consequently, we have

strategically invested alongside best-in-class healthcare

managers.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 15

Manager’s Report

Private investments

31 December 2023: 35.9% NAV

Private investments remain a key element of our long-

term investment strategy and have been an important

contributor to our track record of outperformance.

The private investment portfolio represented 35.9%

of NAV at year end, divided between 11.0% in direct

investments, including co-investments alongside specialist

partners, and 24.9% in third-party funds. This is in line

with our strategy to allocate capital to this asset class

both through fund managers with specialist expertise

and outstanding track records, as well as directly, often in

co-investment structures. Our relationships with top-tier

partners worldwide, developed over many years, have

been crucial for generating significant returns over the long

term. The direct private investments made in the last 10

years have delivered a compound return of approximately

29% per annum, representing an exceptionally strong

return on our capital.

In 2023 the private investments book declined by

-6.0% and detracted -2.7% to the overall NAV. Private

investments are by their nature, long term and if we look

over the last five years, this book has seen a cumulative

145.7% return and a 28.8% contribution to NAV.

Dec 2023

% NAV

2023 %

return

2023

contribution

Private direct

11.0% -3.8% -0.5%

Private funds 24.9% -7.0% -2.2%

Total

35.9% -6.0% -2.7%

Note: returns are in local currency.

Key positive contributors to 2023 performance included:

• strong revenue growth in many direct holdings,

as well as underlying holdings in funds, and a

continuation of a focus on profitability; and

• upward multiple re-rating of the listed technology

sector, driving some valuation uplifts of private

companies.

These were offset by:

• challenges in certain private investments, including

those exposed to reductions in discretionary

spending and investment by small-and-medium sized

businesses; and

• the volatile macro landscape, which discouraged

further listings, impacted a traditional route to

valuation uplift and liquidity for private investors.

Private investments £1,285m

(31 December 2022: £1,516m)

Funds, £893m, 24.9% NAV

Direct, £392m, 11.0% NAV

Note: Included in the funds number is an adjustment of -£90.2m

representing the publicly-traded quoted equities held indirectly in

private investment funds.

During 2023, in the same way that public market issuance

was inconsistent, private financings and transactions

were also subdued. We sold one investment (Infinity) and

the majority of two other positions (Paxos and Animoca),

all at or above their most recent valuations. Despite these

broader market challenges, there were a number of very

positive developments in our direct private investments

as a result of strong operational performance and the

investment structure of the existing portfolio.

One company we are optimistic about is Scale AI, which

specialises in labelling objects in photos and videos

serving the requirements of self-driving cars, virtual/

augmented reality, and U.S. Department of Defense

applications. It has expanded its product offerings to

assist in teaching computers how to generate content

using AI. This company is a good example of the type

of “picks-and-shovels” opportunities RIT pursues;

companies which are positioned to thrive as a result of

a broader trend rather than a particular outcome. We

believe that Scale AI is well-placed to benefit from AI

breakthroughs without the necessity of committing to a

specific foundational model, whether from OpenAI, Meta

or Google.

RIT also holds a stake in Epic Systems, a leading U.S.

electronic health records provider founded by Judith

Faulkner in 1979 with $70k of investment, and which

delivered $4.6 billion of revenue in its recent reporting.

In 2023, management continued to invest in Epic’s cloud

products, which are seeing strong traction – investments

which we believe hold the promise to compound

shareholders capital at attractive rates over the long term,

as Judith has achieved since the company’s founding.

Private investments NAV bridge

£ million

Dec 2022

Additions/

(disposals) Value change

Currency

translation

Quoted equity

adjustment Dec 2023

Private direct

442.7 -12.5 -16.4 -22.1 –- 391.7

Private funds 1,073.1 39.0 -75.3 -53.8 -90.2 892.8

Total

1,515.8 26.5 -91.7 -75.9 -90.2 1,284.5

16 Report and Accounts December 2023 RIT Capital Partners plc

Manager’s Report

The current weighting of private investments remains

relatively high in comparison to historical levels. This is

primarily a result of performance driving growth within

the portfolio and the relatively inactive IPO market.

Companies like Motive and Brex, for example, have

become significant holdings in the portfolio because their

current valuations are several times higher than RIT’s

initial investment in them.

In the longer list of smaller private direct investments,

there are numerous examples of high potential companies

that have shown early promise which could have

meaningful NAV contribution in the months and years

ahead. Examples of this diversified group of early-stage

investments include: Relativity Space, a next-generation

rocket company relying on market-leading 3D-printing

technology to compete in the lucrative launch market;

Digits, an accounting and financial reporting solution

disrupting an industry reliant on 20th century software;

and Perfect Day, a company innovating in the global dairy

industry with precision fermentation to produce animal-

free milk proteins.

RIT is a sought-after investment partner for the most

attractive private investments worldwide. This means

that not only can we access opportunities otherwise

inaccessible; it also means that we can structure deals on

attractive terms with a measure of downside protection.

The majority by value of our underlying direct private

investments benefit from some form of structural

protection for our capital. This can be in the form of

capped downside, or in preference ranking to ordinary

shareholders while also retaining equity upside. For

example, our investment in Motive, made alongside our

investment partner Greenoaks, benefits from uncapped

upside as well as a set of protections similar to those we

secured for RIT shareholders in our Coupang investment.

While the private funds 2023 performance was impacted

by the receipt of lagged Q4 2022 valuations, we also saw

positives across the book. We believe the private funds

portfolio, which includes a number of the best performing

private investment fund vehicles worldwide, is well

positioned to benefit when the window for technology

IPOs returns. Through our private funds investments we

have meaningful exposure to many of the most promising

later-stage private technology businesses globally;

companies such as ServiceTitan, Stripe, Databricks, and

Rippling.

Monzo, one such larger indirect position closer to

home, saw net operating income grow 88% in its 2023

financials, driven by increased customer deposits and

card spending in a higher interest rate environment. Only

founded in 2015, the bank grew total customers by 28%

and now serves 7.4 million, or more than 10% of the

UK population. Having proven its customer model, and

continuing to attract new customers to its digital-first

offering, we believe Monzo can take a substantial share

of the UK retail banking profit pool.

If we look at the returns from the private funds, new

commitments made in the last 10 years have delivered

a compound return of approximately 18% per annum,

representing a very strong return and a healthy profit

over our capital deployed. As of the reporting date, 99%

of our private fund positions were held at September

valuations. This is consistent with the industry, which as

standard reports on a quarter’s lag. The impact of updated

valuations on NAV are published on a monthly basis.

We expect to see the weighting of private investments

reduce as the IPO market reopens and our private

funds continue to make distributions. In the meantime,

we continue to take an active approach to portfolio

management, realising value where opportunities

arise. In February 2024, for example, we received final

distributions from the earlier sale of our holding in Infinity,

a UK data-centre operator, at a price above our December

carrying value and have other potential realisations in

progress.

As we have observed throughout RIT’s history, private

investments appreciate idiosyncratically and show little

correlation to calendar year market moves. However, they

are a substantial contributor to our returns over the long

term. In total, new direct private investments and fund

commitments made in the last 10 years, have delivered a

compound return of approximately 20% per annum due

to this strategy – compared to 9.5% for our MSCI ACWI

hurdle and 12% for the S&P 500.

We hold a deep belief in many of the internet-enabled

technology businesses we hold directly and indirectly.

In line with our patient approach and permanent capital

vehicle, we believe that over the long term, these

opportunities are best accessed through our private

investments and although IPO markets and valuations

remain challenging in the near term, these businesses

should be beneficiaries of what we expect to be

improving market conditions. Historically our realised

investments have been sold at an average 24% increase

from their most recent holding values as determined by

RIT’s independent Valuation Committee.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 17

Manager’s Report

Uncorrelated strategies

31 December 2023: 25.6% NAV

Our uncorrelated strategies pillar contains a mix of

strategies with a lower correlation to equity markets that

aim to generate consistent returns across the economic

cycle. The uncorrelated strategies book returned 6.8%

and contributed 2.1% to the overall NAV.

In this pillar, we aim for a diverse mix of investments,

incorporating credit, ‘market neutral’ and macro

strategies. Additionally, we include investments in

interest rates, government bonds and real assets, such as

investment properties and gold. This diversified approach

serves to protect the overall portfolio from volatility, acting

as a crucial driver of returns during periods of market

stress. For absolute return and credit strategies, we often

work with specialist external managers to access the

opportunities.

Key drivers of this performance were:

• strong performance of our credit funds, utilising our

strong network of specialist external managers;

• positive contributions from gold, as market volatility

favoured safe-haven assets; and

• our new investment in carbon credits.

Absolute return & credit strategies

In terms of credit strategies, market volatility has

increased materially due to sharply higher interest rates,

retrenchment of banks from lending beyond their core

client base, and large volumes of debt which are maturing

over the coming years. Opportunities in this market exist

in all major regions, particularly Europe and the US. When

borrowing becomes more expensive, due to a rapid

increase in credit spreads, markets can undergo a broad

sell-off. This presents opportunities for experienced credit

investors to source investments with strong risk-adjusted

return potential given the levels of asset coverage and

security available to lenders.

In 2023, credit markets saw significant volatility, with

spreads widening into the US banking crisis in March,

then tightening into the summer given the liquidity

injections by the Federal Reserve. The roller coaster

continued with a widening into late-summer alongside

the narrative of ‘higher-for-longer’ rates, before materially

tightening in November and December as the narrative

of ‘peak’ rates and hopes of future central bank rate cuts

took hold.

Uncorrelated strategies £914m

(31 December 2022: £812m)

Government bonds & rates,

£114m, 3.2% NAV

Real assets, £60m, 1.7% NA

Absolute return & credit,

£740m, 20.7% NAV

Through close partnerships, we have taken advantage

of this pattern of volatility to build our core exposure

using idiosyncratic opportunities. We have privileged

access to specialists who have expertise in specific sub-

categories of credit markets. During the year, we added

to existing managers in European and emerging market

credit, such as Tresidor Investment Management and

ARCM, as attractive risk-reward asymmetry was present

in these markets. Our credit funds as a group delivered

double digit returns for the year. As a result, credit

strategies drove the majority of the contribution under the

uncorrelated strategies pillar.

Our macro managers focus on absolute return. These

managers had a challenging first half of the year with

most central banks moving in sync on the fight against

inflation. A more varied monetary policy in the second

half of the year provided more opportunities for our

managers, who as a group finished in positive territory

and returned mid-single-digits for the year.

Looking to take advantage of the resurgence of inflation,

and the significant alpha-generating opportunities it

presented, we invested with an experienced inflation

manager with over two decades of expertise and a

remarkable track record. This partnership enables us

to gain unique insights into emerging trends and the

repercussions for a broader range of assets, positioning

us to navigate and capitalise on the dynamic financial

landscape around inflation.

18 Report and Accounts December 2023 RIT Capital Partners plc

Our equity market neutral managers also focus on

absolute return. They seek to protect against market

exposure risks by taking long and short positions in

related but different securities, in order to extract the

idiosyncratic return component of a stock’s share price

change. This strategy enables the manager to generate

consistent absolute returns with low correlation to equity

markets and limited risk of loss. During the year, we

made a new investment in Ilex Capital, an equity market

neutral manager who we believe to be of similar calibre

to our existing manager, Woodline, albeit complementary

with different focus markets. The launch was highly

sought after and we were able to secure an allocation

through our network and reputation.

Government bonds and rates

2023 has been another tough year for government

bonds, especially for UK gilts. Stickier inflation in the UK

compared to other developed countries in the first half

of the year, pushed short-dated gilt yields to their highest

level in 15 years. We purchased longer-dated gilts in the

first half when yields were attractive and, thereafter,

benefitted from core inflation’s sharp decline in October.

Real assets

This category holds our property investments as well

as positions in commodities. The former were down

slightly as real estate values softened over the year.

Within commodities, we held some hedges as well as

gold. Gold futures hit a record high of $2,135 per ounce

in December after another volatile year. Our position

in gold, held through derivatives, contributed 0.4% to

NAV as gold performed strongly during this period. This

was driven by geopolitical tensions and central bank

purchases, as well as a decline in real yields in the second

half of the year. Gold continues to play an important role

in our portfolio, serving as an asymmetric hedge to a

central bank ‘pivot’, a reversal of the strong US dollar, or

more generally against the increasing possibility of broad-

based market dislocation.

Uncorrelated strategies

Dec 2023

% NAV

2023 %

return

2023

contribution

Absolute return &

credit 20.7% 9.2% 2.0%

Government

bonds and rates 3.2% 3.9% 0.1%

Real assets 1. 7% -0.1% -0.0%

Total

25.6% 6.8% 2.1%

Note: returns are in local currency

Manager’s Report

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 19

Currency

Currency is an important part of our portfolio construction

as an asset class and to manage risk. Given the global

nature of our portfolio, we use currency hedging to

reduce currency translation risk, typically by increasing

our levels of sterling to hedge our significant US Dollar

denominated investment book. We use hedges to limit

potential downside and to protect unrealised gains made

on profitable investments. The use of derivatives also

allows us to enhance returns through efficient structuring.

We also invest in currencies from time-to-time through

the use of currency derivatives. Our approach to

managing currency exposures can have a meaningful

impact on our overall performance.

Given sterling was the best performing currency in the

G7, having appreciated by 5.4% against the US dollar in

2023 and 19.1% since its historical lows in September

2022, our diversified global portfolio was impacted by

foreign currency translation. Our active hedging efforts

softened the impact of currency fluctuations, but

sterling’s strength was the largest detractor from our

absolute performance this year, detracting 2.9% from

N AV. We will continue to closely monitor and actively

manage our currency exposures.

Currency exposure (% of NAV)

47.9%

30%

53.0%

32.7%

24.5%

6.5%

6.4%

4.4%

8.1%

11.7%

Sterling

US dollar

Euro

Japanese yen

Other

31 December 2023

31 December 2022

0% 10% 20% 30% 40% 50% 60%

4.8%

Note: The chart excludes exposure from currency options. Where

available, the exposures in this chart are estimated by

considering the underlying currency exposure of third-party funds

rather than by the fund’s currency of denomination.

Buybacks

Our conviction in the RIT portfolio remains high, and

as such, we have continued to execute on the Board’s

policy to buyback shares at a significant discount to the

underlying net asset value. This has been accretive for

shareholders, and added an estimated 1.2% to the NAV

per share return.

Debt and leverage

Maintaining a healthy balance sheet and ensuring we have

appropriate liquidity and access to leverage to enhance

shareholder returns is a core priority. During the year, we

paid back our £150 million facility with Commonwealth

Bank of Australia (CBA), reducing our debt in an

environment of higher interest rates. At the year end, we

held £281 million in drawn facilities and loan notes, with

£40 million in committed but undrawn facilities – more

information on our borrowings can be found on pages 88

and 89. Taking into consideration our cash balances, this

represented gearing of 3.5% calculated using guidance

from the Association of Investment Companies (AIC).

Operations and costs

JRCM manages the Group on a day-to-day basis on

behalf of the Board, providing investment management,

administration and company secretarial services. The

Manager is also responsible for our subsidiary, Spencer

House Limited (SHL) which maintains and manages the

investment property portfolio, including Spencer House

and other properties in St. James’s, and also operates a

profitable events business.

Careful management of costs is an ongoing priority for

our business. Where we can identify savings, without

impacting the ability to generate investment returns or

ensuring compliance with regulations, we will do so.

During 2023, we invested in building our marketing and

investor relations capabilities, conscious of the desire

from shareholders for greater disclosures and more

regular updates.

In order to provide investors with information on the

costs of RIT’s own investment business, we calculate an

ongoing charges figure (OCF) based on recommendations

from the AIC. The OCF assumes a static portfolio, with

therefore no transaction costs or direct performance-

related compensation. It also excludes the costs of

borrowings deployed to enhance returns. For 2023, RIT’s

own OCF was 0.77% (2022: 0.89%); the reduction over

the year reflects lower costs, as well as a reclassification

of performance-linked LTIP costs in line with the AIC

guidance. Further information on the calculation is

provided on page 107.

Manager’s Report

20 Report and Accounts December 2023 RIT Capital Partners plc

In addition to our Group costs, RIT’s Investment Policy

includes the allocation of part of the portfolio to third-

party managers, which have their own fees. These include

long-only equity and hedge fund managers, private equity

and funds that sit within our uncorrelated strategies pillar.

We estimate that the average annual management fees

for external managers represent an additional 0.94%

of average net assets (2022: 0.88%). This excludes

performance fees/carried interest which are typically

paid for outperformance against an index or an absolute

hurdle, and deducted from the valuations we receive.

Further information on fees is provided on page 61.

The managers’ fee structure is always a key consideration

in our due diligence. They are necessary costs in investing

in many difficult to access, high-quality managers or

unique deals, and are only paid for good performance. The

final investment decision is always made on the basis of

expected returns, net of all fees.

Outlook

In 2024, we are navigating a landscape characterised by

a balance of conflicting macro indicators. While US GDP

estimates are trending upward, certain credit indicators

are exhibiting signs of decline. Significant geopolitical

risks, such as conflicts in Ukraine and the Middle East,

coupled with the potential repercussions of the USA

elections in November, cast a shadow over the horizon.

The market’s late upturn in 2023 was driven by the

perception that interest rates may have reached their

peak, and that a soft landing is becoming more probable.

This has led to a scenario where many assets are

perceived to be fully valued.

The above notwithstanding, we believe there are

individual assets that currently trade at appealing price

points, and therefore provide attractive opportunities

for capital deployment. As investors who integrate a

top-down and bottom-up approach, we would highlight

the confidence we have in our own investment portfolio.

Within our private investments book, we see some

strong underlying operating performance, a shift towards

prioritising profit over pure growth, and broader tailwinds

driven by digital transition. These factors underpin our

confidence in the long-term intrinsic value of our private

investments. The reopening of the IPO markets may

also serve as a near-term catalyst for validating their

valuations.

We are also excited about quoted equities, where the

environment is particularly conducive for bottom-up,

fundamental stock picking. We think there are a multitude

of areas to deploy long-term capital with attractive return

potential in areas such as the often overlooked small

to medium-capitalisation stocks, or in ‘event-driven’

stocks. As such, we will lean more into stocks that we

directly own, with this proportion of the portfolio set to

increase. At the same time, we continue to be excited

by themes such as healthcare and Japan, where our

network of specialist external managers means we are

well-positioned to identify and take advantage of these

opportunities.

In uncorrelated strategies, we are enthusiastic about

current opportunities in the corporate credit markets,

driven by factors such as the increase in interest rates,

reluctance by traditional banks to lend to mid-sized

businesses, and the maturing of around $0.6 trillion

in loans over the next two years, which were issued

at lower rates. Where there is a dislocation in credit

markets, our partnerships with specialist managers

provides us with the potential to generate returns of

mid-teens or greater, in quality credits, with limited risk to

our capital due to robust creditor protections. And, even

where there isn’t a dislocation, the managers can still

earn high single digit to low double digit returns on quality

credits.

The positive drivers of our portfolio’s performance in

2023, including high-quality stock picking, strategic

geographic exposure, and the agility of our credit

managers, is illustrative of how our portfolio can perform.

Whatever the market challenges, our proactive approach

to navigate these complexities sets the stage for

continued thoughtful and resilient portfolio management

in the coming period.

Although the percentage allocation across our three

pillars may see modest variations over shorter periods

of time, our portfolio construction and risk management

principles aim to provide shareholders with a diversified

portfolio that delivers long-term capital appreciation on an

attractive risk-adjusted basis.

To conclude, we believe RIT’s competitive edge is derived

from our in-house expertise, our capital structure –

enabling a nimble and flexible investment approach – as

well as our unique access and ability to foster deep,

long-term specialist partnerships. As the market enters a

more idiosyncratic phase, we recognise that careful stock

picking and asset selection exercised within our robust

risk management framework, will be key to delivering

performance.

J. Rothschild Capital Management Limited

Manager’s Report

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 21

Investment Portfolio

Investment portfolio as at 31 December 2023

Investment holdings Country/region Industry/description

Value of

investments

£ million

% of

NAV

Quoted equities

1, 2

Stocks:

Talen Energy United States Power utility 48.8 1.4%

Mastercard United States Software & services 45.1 1.3%

Intercontinental Exchange United States Diversified financial services 39.6 1.1%

Canadian Pacific Kansas City Canada Rail transportation 35.7 1.0%

Thermo Fisher Scientific United States Life science tools & services 30.2 0.8%

Tempur Sealy United States Home furnishings; 1.2% notional 26.4 0.7%

Helios Towers Africa Telecommunication services 25.6 0.7%

Vistry United Kingdom Homebuilding; 1.0% notional 22.3 0.6%

Barry Callebaut Switzerland Consumer staples 21.8 0.6%

Coupang South Korea Retailing

21.5 0.6%

Golar LNG

United States Energy 19.5 0.5%

Builders FirstSource United States Building products; 1.0% notional 7. 0 0.2%

Lennar United States Homebuilding; 1.3% notional 6.8 0.2%

Keurig Dr Pepper United States Consumer staples; 1.1% notional 1. 3 0.0%

Visa United States Software & services; 0.6% notional 0.1 0.0%

Other direct stocks – – 29.9 1.0%

Quoted stocks held within private investment funds

90.2 2.5%

Total stocks 471.8 13.2%

Funds:

3D Opportunity Japan All‐cap, diversified 182.2 5.1%

HCIF Offshore United States All‐cap, healthcare 156.8 4.4%

Discerene Global

All‐cap, value bias 112.3 3.1%

Blackrock Strategic Equity Global All‐cap, diversified 112.3 3.1%

Morant Wright Japan Small/mid‐cap, value bias 100.2 2.8%

Springs Opportunities China All‐cap, diversified 70.7 2.0%

Ward Ferry Asian Smaller Co.’s Asia Small/mid‐cap, diversified 64.3 1.8%

DG Offshore Global Mid/large‐cap, healthcare 1 7. 9 0.5%

Other funds – – 70.5 2.0%

Total funds 887.2 24.8%

Other:

S&P call options United States Diversified; 4.5% notional 9.6 0.3%

Diversified basket Global Long; 0.9% notional 1. 1 0.0%

Other – – 1. 2 0.1%

Total other 11. 9 0.4%

Total quoted equities 1,370.9 38.4%

The quoted equity category includes stocks (held directly and via co‐investment vehicles), funds and derivatives. As a result, the liquidity of the

individual positions may be influenced by market volumes as well as the redemption terms of the specific funds or co‐investment vehicles.

Where positions are held, or partially held, via total return swaps or options, the total delta‐adjusted notional exposure is also disclosed in the

table.

Adjustment made for the latest estimate of publicly‐traded quoted equities held indirectly in private investment funds. These positions are

valued based on their most recent traded price at the statement date of the fund in which they are held.

22 Report and Accounts December 2023 RIT Capital Partners plc

Investment Portfolio

Investment holdings Country/region Industry/description

Value of

investments

£ million

% of

NAV

Private investments

Private investments – direct

Motive United States Cargo ground transportation 78.0 2.2%

Webull United States Investment banking & brokerage 50.8 1.4%

Epic Systems United States Health care technology 23.4 0.7%

Kraken

United States Diversified financial services 1 7. 9 0.5%

Lede United States Media & entertainment 1 7. 6 0.5%

Blueground United States Real estate operating company 14.7 0.4%

Infinity

United Kingdom Real estate operating company 13.3 0.4%

Airtable United States Software & services 12.8 0.4%

Brex United States Diversified financial services 12.3 0.3%

Age of Learning United States Education services 10.4 0.3%

Anchorage Digital United States Software & services 7. 8 0.2%

Bolt Financial United States Software & services 7. 8 0.2%

Scale AI United States Application software 7. 8 0.2%

Paxos United States Software & services 7. 5 0.2%

Puck United States Publishing 7. 1 0.2%

Everest Global Software & services 6.7 0.2%

Xapo Global Diversified financial services 6.7 0.2%

Dandy United States Health care technology 6.0 0.2%

Other private investments – direct – – 83.1 2.3%

Total private investments – direct 391.7 11.0%

Private investments – funds:

Thrive funds United States Growth equity 147.2 4.1%

Iconiq funds United States Growth equity 121.6 3.4%

BDT Capital funds United States Private equity 85.4 2.4%

Greenoaks Capital funds United States Growth equity 77.1 2.2%

Ribbit Capital funds United States Growth equity 72.1 2.0%

Hillhouse funds China Private equity 55.8 1.6%

Arch Venture funds United States Life sciences 45.7 1.3%

Lindenwood United States Growth equity 29.2 0.8%

LCV funds United States Early stage 26.6 0.7%

Biomatics funds United States Life sciences 1 7. 8 0.5%

Westcap funds United States Growth equity 16.4 0.5%

Sound Ventures funds United States Early stage 14.9 0.4%

Eight Partners funds United Kingdom Early stage 14.3 0.4%

Firstminute Capital funds United States Early stage 13.9 0.4%

Mithril funds United States Growth equity 13.3 0.4%

LionTree Investment fund United States Private equity 13.2 0.4%

Expa Capital United States Early stage 11. 8 0.3%

K2 funds China Early stage 8.8 0.2%

Corsair funds United States Private equity 8.7 0.2%

Blackstone Tactical Opps United States Private equity 8.6 0.2%

Other private investments – funds – – 180.6 5.0%

Quoted stocks held within private investment funds

(90.2) (2.5)%

Total private investments – funds 892.8 24.9%

Total private investments 1,284.5 35.9%

The private direct book includes investments held through co‐investment vehicles managed by a general partner (GP).

Balance represents the estimated cash proceeds from the business sale post liquidation of the holding company.

Adjustment made for the latest estimate of publicly‐traded quoted equities held indirectly in private investment funds. These positions are

valued based on their most recent traded price at the statement date of the fund in which they are held.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 23

Investment Portfolio

Investment holdings Country/region Industry/description

Value of

investments

£ million

% of

NAV

Uncorrelated strategies

Absolute return and credit funds:

Tresidor funds Global Credit and special situations 130.8 3.7%

Attestor Value Global Credit and special situations 97.5 2.7%

ARCM Asia Credit and special situations 96.9 2.7%

RIT US Value Partnership

Global Multi‐strategy 77.8 2.2%

Caxton Global Macro‐strategy 68.5 1.9%

Woodline Global Equity market neutral 58.5 1.6%

JJJ Feeder Global Macro‐strategy 44.4 1.2%

Liontree Advisory United States Corporate loan note 37.0 1.0%

ILEX Europe Equity market neutral 32.8 0.9%

Highbridge Global Multi‐strategy 30.1 0.8%

Charter Oak United States Credit and special situations 26.7 0.7%

Other absolute return and credit funds – – 38.8 1. 3 %

Total absolute return and credit funds 739.8 20.7%

Real assets:

St. James’s properties United Kingdom Investment property 26.5 0.7%

Spencer House United Kingdom Investment property 26.3 0.7%

Gold futures Global Long; 4.2% notional 4.0 0.1%

Oil futures Global Long; 1.5% notional (1.8) (0.1)%

Other real assets – – 4.9 0.3%

Total real assets 59.9 1. 7%

Government bonds and rates:

UK treasury gilts 2027 and 2033 United Kingdom Government bonds 114.4 3.2%

Total government bonds and rates 114.4 3.2%

Total uncorrelated strategies 914.1 25.6%

Currency

Currency forward contracts Various – 26.8 0.8%

Currency options Various – 5.0 0.1%

Total currency 31.8 0.9%

Total investments 3,601.3 100.8%

Liquidity, borrowings and other

Liquidity:

Liquidity

– Cash at bank 202.0 5.7%

Total liquidity 202.0 5.7%

Borrowings:

Short‐term bank borrowings

– Revolving credit facilities (142.9) (4.0)%

RIT senior loan notes – Fixed interest loan notes (137.9) (3.9)%

Total borrowings (280.8) (7.9)%

Other assets/(liabilities):

Margin – – 3 7. 8 1.1%

Trades awaiting settlement – – 25.3 0.7%

Other assets/(liabilities) – – (12.3) (0.4)%

Total other assets/(liabilities) 50.8 1. 4%

Total liquidity, borrowings and other (28.0) (0.8)%

Total net asset value 3,573.3 100.0%

The liquidity balance excludes £2.3 million of cash held within segregated accounts managed externally.

The Group has two revolving credit facilities with Industrial and Commercial Bank of China and BNP Paribas SA.

24 Report and Accounts December 2023 RIT Capital Partners plc

Principal Risks and Viability

Risk management and internal control

The principal risks facing RIT are both financial and

operational. The ongoing process for identifying,

evaluating and managing these risks, as well as any

emerging risks, is the responsibility of the Board and the

Audit and Risk Committee.

The Board sets the portfolio risk parameters within

which JRCM operates. This involves an assessment

of the nature and level of risk within the portfolio

using qualitative and quantitative methods. Additional

information in relation to the quantum and associated

sensitivity of market risk, credit risk and liquidity risk

in accordance with IFRS 7 Financial Instruments:

Disclosures is shown in Note 13 on pages78 to 87.

The Board is ultimately responsible for the Group’s

system of internal controls, and has delegated the

supervision of the internal control system to the Audit

and Risk Committee. Such systems are designed to

manage, rather than eliminate, the risk of failure to

achieve business objectives and, as such, can provide

only reasonable and not absolute assurance against

any material misstatement or loss. Further information

is provided in the Audit and Risk Committee Report on

pages 52 to 55.

As an investment company, RIT is exposed to financial

risks inherent in its portfolio, which are primarily market-

related and common to any portfolio with significant

exposure to equities and other financial assets. The

ongoing portfolio and risk management includes an

assessment of the macroeconomic and geopolitical

factors that can influence market risk, as well as

consideration of investment-specific risk factors.

Your Company’s broad and flexible investment mandate

allows the Manager to take a relatively unconstrained

approach to asset allocation and utilise whatever action is

considered appropriate in mitigating any attendant risks

to the portfolio.

With a high degree of volatility in markets and continued

geopolitical tensions, risk management remains critical.

The portfolio risk management approach undertaken by

the Manager, and considered regularly by the Board, is

designed to produce a healthy risk-adjusted return over

the long term, through careful portfolio construction,

security selection and the considered use of hedging.

As an investment business, the vast majority of

the day-to-day activities involve the measurement,

evaluation and management of risk and reward. With

a corporate objective which includes an element of

capital preservation, the culture and practice of seeking

to protect the NAV from undue participation in down

markets through the cycles is well established. However,

it is important to recognise that a carefully designed risk

management and internal control system can only aim to

reduce the probability or mitigate the impact; it cannot

remove the risk. With a global investment portfolio having

meaningful exposure to equities, rather than a pure

absolute return mandate, RIT’s NAV will not be immune

to either falling markets and/or volatility in currency

markets. Equally, with a diversified set of individual and

typically uncorrelated, high return-seeking drivers, the

portfolio could encounter occasions when the level of

volatility results in negative alpha in the short term.

As a permanent capital vehicle, and unlike open-ended

funds, we do not need to manage the portfolio to

meet redemptions. With sizeable assets relative to our

modest borrowings and ongoing liabilities, as confirmed

later in this section, we do not consider the Company’s

viability or going concern to represent principal risks.

Nevertheless, and in particular at times of market stress,

the Manager utilises a detailed, day-to-day liquidity risk

management framework to help effectively manage the

balance sheet, including careful monitoring of the banking

covenants.

Operational and other risks include those related to the

legal environment, regulation, taxation, cyber security,

climate and other areas where internal or external factors

could result in financial or reputational loss. These are

also managed by JRCM with regular reporting to, and

review by, the Audit and Risk Committee and the Board.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 25

Principal Risks and Viability

Principal risks

The Board has carried out a robust assessment of the emerging and principal risks facing the Company, with input

from the Audit and Risk Committee, as well as the Manager. Following this assessment, the Board has concluded that

there are no material emerging risks, and it is appropriate to reclassify two risks as separate principal risks. The material

widening of the discount at which the shares trade relative to the NAV, has led us to establish a new principal risk –

Discount risk. In addition, the ongoing developments in cyber risk, coupled with the potential that AI could enhance

fraud attempts, means we have also reclassified Cyber security as a new principal risk. The resulting principal risks are

as described below:

Risk Mitigation

Investment strategy risk

As an investment company, a key risk is that the investment

strategy, guided by the Investment Policy:

“To invest in a widely diversified, international portfolio

across a range of asset classes, both quoted and unquoted;

to allocate part of the portfolio to exceptional managers in

order to ensure access to the best external talent available.”

Does not deliver the Corporate Objective:

“To deliver long-term capital growth, while preserving

shareholders’ capital; to invest without the constraints of a

formal benchmark, but to deliver for shareholders increases

in capital value in excess of the relevant indices over time.”

The Board is responsible for monitoring the investment

strategy to ensure it is consistent with the Investment

Policy and appropriate to meet the Corporate Objective.

The Directors receive a detailed monthly report from the

Manager to enable them to monitor investment performance,

attribution, and exposure. They also receive a comprehensive

investment report from the JRCM CIO in advance of the

quarterly Board meetings.

The overall risk appetite is set by the Board, with portfolio

risk managed by JRCM within prescribed limits. This involves

careful assessment of the nature and level of risk within the

portfolio using qualitative and quantitative methods.

The JRCM Investment Committee meets regularly to review

overall investment performance, portfolio exposure and

significant new investments.

Discount risk

Investment trust shares trade at a price which can be at

a discount or premium relative to their net asset value. If

trading at a discount, there is a risk that a widening of the

discount may result in shareholders achieving a return which

does not reflect the underlying investment performance of

the Company.

To manage this risk, and to reduce the volatility for

shareholders, the Board monitors the level of discount/

premium at which the shares trade and the Group has

authority to buy back its existing shares when deemed

to be in the best interest of the Company and its

shareholders. Buying back shares at a discount signals the

Board’s confidence in the overall approach and the NAV to

shareholders and is accretive to the NAV per share return.

In addition, the Group is investing in developing its investor

relations activity and overall approach to communications to

help ensure that shareholders have the best understanding of

the strategy and approach to investing.

26 Report and Accounts December 2023 RIT Capital Partners plc

Principal Risks and Viability

Risk Mitigation

Market risk

Price risk

RIT invests in a number of asset categories including stocks,

equity funds, private investments, absolute return and credit,

real assets, government bonds and derivatives. The portfolio

is therefore exposed to the risk that the fair value of these

investments will fluctuate because of changes in market

prices.

Currency risk

Consistent with the Investment Policy, the Group invests

globally in assets denominated in currencies other than

sterling as well as adjusting currency exposure to either seek

to hedge and/or enhance returns. This approach exposes the

portfolio to currency risk as a result of changes in exchange

rates.

Interest rate risk

In addition, the Group is exposed to the direct and indirect

impact of changes in interest rates.

The Group has a widely diversified investment portfolio

which significantly reduces the exposure to individual asset

price risk. Detailed portfolio valuations and exposure analysis

are prepared regularly and form the basis for the ongoing risk

management and investment decisions. In addition, regular

scenario analysis is undertaken to assess likely downside

risks and sensitivity to broad market changes, as well as

assessing the underlying correlations amongst the separate

asset classes.

Currency exposure is managed via an overlay strategy,

typically using a combination of currency forwards and/or

options to adjust the natural currency of the investments

in order to achieve a desired net exposure. The geographic

revenue breakdown for stocks as well as correlations with

other asset classes are also considered as part of our

hedging strategy.

Exposure management is undertaken with a variety of

techniques including using equity index and interest rate

futures and options to hedge or to increase equity and

interest rate exposure depending on overall macroeconomic

and market views.

Liquidity risk

Liquidity risk is the risk that the Group will have difficulty in

meeting its obligations in respect of financial liabilities as they

fall due.

The Group has significant investments in and commitments

to direct private investments and funds which are inherently

illiquid. In addition, the Group holds investments with other

third-party organisations which may require notice periods in

order to be realised. Capital commitments could, in theory,

be drawn with minimal notice. In addition, the Group may be

required to provide additional margin to support derivative

financial instruments.

The Group manages its liquid resources to ensure sufficient

cash is available to meet its expected needs. It monitors the

level of short-term funding and balances the need for access

to such funding and liquidity, with the long-term funding

needs of the Group, and the desire to achieve investment

returns. Covenants embedded within the banking facilities

and long-term notes are monitored on an ongoing basis for

compliance, and form part of the regular stress tests.

In addition, existing cash reserves, as well as the significant

liquidity that could be realised from the sale or redemption

of portfolio investments and undrawn, committed

borrowings, could all be utilised to meet short-term funding

requirements if necessary. As a closed-ended company,

there is no requirement to maintain liquidity to service

investor redemptions. The Depositary, BNP Paribas (BNP) has

separate responsibilities in monitoring the Company’s cash

flow.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 27

Principal Risks and Viability

Risk Mitigation

Credit risk

Credit risk is the risk that a counterparty to a financial

instrument held by the Group will fail to meet an obligation

which could result in a loss to the Group.

Certain investments held within the absolute return and

credit portfolio are exposed to credit risk, including in relation

to underlying positions held by funds.

Substantially all of the listed portfolio investments capable of

being held in safe custody, are held by BNP as custodian and

depositary. Bankruptcy or insolvency of BNP may cause the

Group’s rights with respect to securities held by BNP to be

delayed.

Unrealised profit on derivative financial instruments held

by counterparties is potentially exposed to credit risk in the

event of the insolvency of a broker counterparty.

The majority of the exposure to credit risk within the absolute

return and credit portfolio is indirect exposure as a result of

positions held within funds managed externally. These are

typically diversified portfolios monitored by the third-party

managers themselves, as well as through JRCM’s ongoing

portfolio management oversight.

Listed transactions are settled on a delivery versus payment

basis using a wide pool of brokers. Cash holdings and margin

balances are also divided between a number of different

financial institutions, whose credit ratings are regularly

monitored.

All assets held directly by the custodian are in fully

segregated client accounts. Other than where local market

regulations do not permit it, these accounts are designated in

RIT’s name. The custodian’s most recent credit rating was A+

from Standard & Poor’s (S&P).

Key person dependency

In common with other investment trusts, investment

decisions are the responsibility of a small number of key

individuals within the Manager. If for any reason the services

of these individuals were to become unavailable, there could

be a significant impact on our business.

This risk is closely monitored by the Board, through its

oversight of the Manager’s incentive schemes (on which

it has received external advice) as well as the succession

plans for key individuals. The potential impact is also reduced

by an experienced Board of Directors, with distinguished

backgrounds in financial services and business.

28 Report and Accounts December 2023 RIT Capital Partners plc

Risk Mitigation

Climate-related risks

Ongoing climate changes may impact either our own

business, the external managers with whom we invest, and/

or the underlying portfolio investments. For our own business

this could result in increased costs of complying with new

regulations and/or changes to the way we operate. Portfolio

companies could see demand pressures, an increased

cost of capital, tighter regulation or increased taxation, all

impacting profitability.

Our ability to make climate-change disclosures may be

impacted by our investment approach if the external fund

managers with whom we invest do not provide the desired

information.

More frequent extreme weather could disrupt businesses,

travel, global supply chains and profitability.

We do not consider climate-related risks to have material,

specific impacts on our own asset management businesses

as distinct from the investment portfolio. Our Manager

continues to monitor, and minimise, the climate-related

impacts of our internal operations; we offset the carbon

emissions of this business – categorised as Scope 1 and

Scope 2 emissions by the Greenhouse Gas (GHG) Protocol

– through participation in an accredited scheme and we

are taking steps to further develop our understanding of

our indirect emissions impact (categorised as Scope 3

emissions).

JRCM is a signatory to the UN PRI, and the Board has

worked with our Manager to develop JRCM’s Responsible

Investment Framework & Policy, which incorporates

environmental factors into our investment approach. This

allows us to consider the potential wider impacts of climate

change risks to our investments.

JRCM is working with an external adviser to consider our

ability to make additional climate disclosures in relation to

our investment portfolio, while acknowledging the likely

challenges caused by having investments in external funds.

We monitor developments in regulation and disclosures and

seek as far as possible to prepare for future changes.

The Group’s adoption of fair value in relation to its

investments means that the climate-related risks recognised

by market participants are incorporated in the valuations (see

Note 1, Accounting Policies).

Legal and regulatory risk

As an investment trust, RIT’s operations are subject to

wide-ranging laws and regulations including in relation to the

Listing Rules and Disclosure, Guidance and Transparency

Rules of the FCA’s Primary Markets function, the Companies

Act 2006, corporate governance codes, as well as continued

compliance with relevant tax legislation, including ongoing

compliance with the rules for investment trusts. JRCM is

authorised and regulated by the FCA and acts as Alternative

Investment Fund Manager.

The financial services sector continues to experience

regulatory change at national and international levels,

including in relation to climate change. Failure to act in

accordance with these laws and regulations could result

in fines, censure or other losses including taxation or

reputational loss.

Co-investments and other arrangements with related parties

may result in conflicts of interest.

The Operational Risk Committee of JRCM provides oversight

of all legal, regulatory and other operational risks across the

Group. This Committee reports key findings to the JRCM

Executive Committee and the Audit and Risk Committee.

JRCM employs a general counsel and a compliance officer as

well as other personnel with experience of legal, regulatory,

disclosure and taxation matters. In addition, specialist

external advisers are engaged in relation to complex,

sensitive or emerging matters. For example, during 2023 the

Group has again engaged external advisers in supporting its

consideration of ESG matters.

Where necessary, co-investments and other transactions are

subject to review by the Conflicts Committee.

Principal Risks and Viability

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 29

Principal Risks and Viability

Risk Mitigation

Operational risk

Operational risks are those arising from inadequate or failed

processes, people and systems or other external factors.

Key operational risks include reliance on third-party managers

and suppliers, dealing errors, processing failures, pricing or

valuation errors, fraud and reliability of core systems.

Systems and control procedures are the subject of continued

development and regular review. During the year the Audit

and Risk Committee reviewed, and satisfied itself with, the

Manager’s approach to due diligence as part of its investment

decision making. Further details on this and internal controls

more generally can be found in the Committee’s Report on

pages 52 to 55.

Processes are in place to ensure the recruitment and ongoing

training of appropriately skilled staff within key operational

functions. Suitable remuneration policies are in place to

encourage staff retention and the delivery of the Group’s

objectives over the medium term. Independent pricing

sources are used where available, and performance is subject

to regular monitoring. In relation to more subjective areas

such as private investments and property, the valuations

are estimated by experienced staff and specialist external

managers and valuers using industry standard approaches,

with the final decisions taken by the independent Valuation

Committee, and subject to external audit as part of the year-

end financial statements.

A business continuity and disaster recovery plan is

maintained and includes the ability to use a combination of

an offsite facility and cloud resources to mirror our production

systems in the event of any business disruption. This was

satisfactorily tested during the year.

Cyber security risk

RIT is dependent on technology to support key business

functions and the safeguarding of sensitive information. As a

result, RIT is exposed to the increasingly sophisticated nature

of cyber attacks, and given the growth in AI and the ability to

utilise this for attempts at fraud and data breaches.

RIT is therefore at risk of potential loss or harm as a result

of significant disruption to information technology systems,

including from a potential cyber attack, which may result

in financial losses, the inability to perform business-critical

functions, loss or theft of confidential data, and resulting legal

or reputational damage.

Cyber security continues to receive an enhanced focus, with

policies, systems and processes designed to combat the

ongoing risk developments in this area. Such processes are

kept under regular review including multi-factor authorisation,

ensuring effective firewalls, internet and email gateway

security and anti-virus software.

This is complemented with staff awareness programmes

(including periodic mock-phishing exercises) which monitor

and test both the robustness of our systems as well as the

effectiveness of our staff at identifying potential risks. We

also test our IT business continuity plan at least once every

year. The process for assessing, identifying and managing

cybersecurity risks is managed on a day-to-day by the

Manager’s IT team and overseen by the JRCM Operational

Risk Committee. Any material risks are reported to the Audit

and Risk Committee.

The Manager maintains the ‘Cyber Essentials Plus’ security

certification, the highest level of certification offered by

the National Cyber Security Centre, the UK Government’s

technical authority for cyber threats. This review is performed

on an annual basis, the most recent completed in November

2023. Additionally, the Group has specific insurance cover

in place to cover information security and cyber risks. The

Manager periodically also engages external consultants to

assess the robustness of its IT systems.

30 Report and Accounts December 2023 RIT Capital Partners plc

Viability statement

In accordance with provision 36 of the AIC Code and as

part of an ongoing programme of risk assessment, the

Directors have assessed the prospects of the Group, to

the extent that they are able, over a five-year period. As

the Company is a long-term investor, the Directors have

chosen a five-year period as this is viewed as sufficiently

long term to provide shareholders with a meaningful

view, without extending the period so far into the future

as to undermine the exercise.

The Directors confirm that they have a reasonable

expectation that the Group will continue to operate and

meet its liabilities as they fall due for the next five years.

In making this assessment, the Directors have taken into

consideration the principal risks and mitigants set out on

the preceding pages and the impact these might have on

the business model, future performance, solvency and

liquidity. In addition, the Directors reviewed the following:

• the Group’s current financial position (with total

assets at the year end of approximately £3.6 billion);

• the nature, composition and liquidity profile of

the investment portfolio (including the significant

holdings of liquidity and the value of assets that

could be realised within a relatively short time frame

as well as over longer periods);

• the term structure and availability of borrowings (of

which drawn borrowings at the year end totalled

£281 million, with committed and undrawn facilities

totalling £40 million);

• the ability to satisfy the associated loan covenants,

meet the ongoing costs of the business and fund

dividends;

• the level of outstanding capital commitments

(primarily to long-term private funds) and the ongoing

distributions from this part of the portfolio; and

• the continued attractiveness to shareholders of

the Group’s corporate objective and investment

approach.

As part of the approach, due consideration has been

given to the uncertainty inherent in financial forecasts

and, where applicable, reasonable sensitivities have

been applied to the investment portfolio in moderate and

severe stress situations, including in relation to equity

market declines, currency movements, the imposition of

restrictions on redemptions from external funds, and the

level of capital calls in respect of existing commitments.

The stress scenarios under which the borrowing

covenants would be breached involve severe equity

market declines as well as historically high levels of

capital calls. This theoretical outcome also does not

take into account the Company’s ability to adjust the

portfolio composition to avoid a breach, and to work with

its lenders in order to either avert a breach or minimise

the consequences. With current gearing of 3.5%, and

in the absence of either a significant adverse change to

the regulatory or taxation environment, it is difficult to

reasonably envisage a situation which would threaten the

ongoing viability of the Company over the five-year time

frame.

Going concern

Having assessed the emerging and principal risks and the

other matters considered in connection with the Viability

Statement, and in particular the liquidity balances totalling

£204 million and committed but undrawn borrowings

of £40million, and cash flow forecasts for the period to

30 June 2025, as well as what the Group considers its

readily realisable securities of £445 million, transactions

awaiting settlement of £25 million at year end, and the

amounts that could be realised from the remainder of

the portfolio, the Directors consider it appropriate to

adopt the going concern basis in preparing the financial

statements.

The Strategic Report on pages 3 to 35 and the s172(1)

statement on page 62 have been approved by the Board

and signed on its behalf by:

Sir James Leigh-Pemberton

Chairman

Principal Risks and Viability

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 31

Sustainability Report

Introduction

Our commitment to sustainability and ESG is a core

objective of the Board. It is based on a dual approach: (i)

incorporation of principles of responsible investment into

our investment processes for the delivery of sustainable

financial returns from our portfolio; and (ii) in respect of

our internal operations, we aim to be good corporate

citizens, engaging regularly with our stakeholders and

minimising our environmental impact.

Responsible investment

Our Manager is a signatory of the UN PRI, and has in

place a Responsible Investment Framework & Policy,

which is disclosed to shareholders via the Company

website. This policy sets out practical parameters against

which investments are considered and applies across

asset classes. We believe that this policy aligns our

Corporate Objective with our commitment to responsible

investment. ESG factors form a key part of the due

diligence undertaken by the Manager prior to selecting

investments and are monitored throughout our holding of

the investment.

In Q3 2023, the Manager submitted its first report under

UN PRI on a voluntary basis and we will continue to build

on our reporting capabilities for future submissions.

Responsible investment approach

Investment due diligence

The Manager continues to strengthen the integration

of sustainable investment principles into its decision-

making processes. Due diligence prior to making new

investments always includes the evaluation of key ESG

risks in addition to the traditional process of financial

analysis associated with the asset class or investment.

This applies across the investment universe of directly-

held quoted equity and private equity positions, as well as

investments in uncorrelated strategies.

Voting policy and escalation

We endeavor to be active owners of companies in which

we invest. Save for voting rights on the Company’s

investments held in segregated accounts managed by

external managers, who have control of the voting of

those shares, the Manager’s investment department

determines voting on all the resolutions of directly held

investee companies and maintains close and ongoing

scrutiny of all aspects of company performance including

ESG-related factors.

The Company’s aim is to invest in assets with good

corporate governance and robust leadership, such that,

more often than not, we anticipate aligning our votes with

management recommendations. However, we are ready

to oppose or abstain from voting on issues or measures

that we feel either fail to adequately meet our principles

of responsible investing and/or do not serve the best

interests of the Company and our shareholders. We do

not use proxy advisors.

In 2023, resolutions at 51 shareholder meetings were

voted on in respect of our directly held quoted equities.

We voted against management recommendations on one

occasion as a result of governance issues.

32 Report and Accounts December 2023 RIT Capital Partners plc

Engagement and active ownership

Reflecting our Corporate Objective, many of our investments

are for the long term, and the ongoing relationship with our

external managers and investee companies, as well as our

regular evaluation of their approach, is crucially important

to maintaining active ownership of that investment over

time. Stewardship activities are key tools to address any

ESG concerns, and we maintain a regular dialogue with

external managers and companies alike, intervening where

we consider it to be in the Company’s and our shareholder’s

best interest. We also seek full portfolio transparency and

request detailed reporting from our external managers,

where possible.

In respect of private fund investments, we may have a

position on the fund’s limited partner advisory board which

gives us further opportunity to shape ESG and broader risk

management considerations.

Sustainability Report

vesting through

RIT’s diversified,

global portfolio

Our commitment

Our commitment to sustainability through ongoing ESG integration

is based on a dual approach.

A responsible investor

Incorporation of principles

of responsible investment into our

processes for the delivery of sustainable

financial returns, while preserving

shareholders’ capital.

A good corporate citizen

Engagement with all our stakeholders

and minimise our environmental

impact.

Our dual approach to sustainability

Respect Dignity Integrity

Our core values

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 33

Sustainability Report

Stakeholder engagement

The Board recognises the benefits of engaging with its

stakeholders in order to ensure that it is aware, and can

take account of, their views during Board discussions and

decision making. As a result, the processes and initiatives

below are in place.

People

There is a focus on having a working environment where

there is engagement and communication between

employees at all levels. Throughout the year, ‘town hall’

meetings for all Group employees are held and chaired

by the Chairman (who is designated as the Director

responsible for engagement with employees). More

generally, regular internal communication is encouraged

through team meetings, training sessions, presentations

and also social and team-building events.

We aim to foster a supportive and inclusive working

environment where all our employees are treated with

dignity and respect, regardless of their gender, age,

ethnicity, disability, sexual orientation or background.

Aspart of the Group’s diversity and inclusion policies,

we incorporate ‘blind’ recruitment practices where a job

applicant’s personally identifiable information, such as

name, gender and age is omitted from their CVs to avoid

unconscious bias.

At the year end, our Board composition complied with

the recommendations of the Parker Review, the FTSE

Women Leaders Review (previously the Hampton-

Alexander Review) and the FCA’s Listing Rules reporting

requirements on diversity. The overall employee

composition consisted of 43 men and 19 women.

The Manager continues to participate in the ‘10,000 Black

Interns Foundation’ which aims to attract more diverse

and under-represented talent to the asset management

sector, as well as the ‘Girls Are INvestors’ (GAIN)

programme, which aims to improve gender diversity in

the investment sector.

We are committed to the professional development

of our employees and we encourage open and honest

communication across the firm. We operate a formal

annual appraisal process, designed to reinforce the

Group’s overall strategy and culture, and to ensure

that employees have a clear understanding of their

performance and can discuss their goals in order to reach

their full potential. We deem learning required to fulfil

an employee’s current role crucial and also encourage

the development of skills and knowledge beyond that.

Accordingly, all staff were required to complete various

training modules during the year, including in respect of

diversity and inclusion in the workplace.

We take all our employees’ wellbeing seriously and have

maintained flexible hybrid and remote working policies,

as well as offering confidential mental health support and

a wide range of health and wellbeing benefits. Further

initiatives we have in place include an enhanced maternity

leave programme as well as adoption and shared parental

leave.

In addition, there is a clear and independent

whistleblowing process for employees to raise any

concerns.

Society and communities

The society and communities in which we operate are

important to us and employees have been engaged in

activities to help support our community with various

charitable initiatives to support good causes during the

year. We also facilitate employees taking advantage of the

‘Give As You Earn’ initiative through which employees can

make personal charitable contributions.

Shareholders

In 2023, resources have been allocated to strengthen

our marketing and investor relations capabilities leading

to enhanced communication and engagement with

shareholders, proxy advisors, corporate governance

specialists and analysts, through numerous shareholder

meetings, webinars and investor presentations. The

Manager regularly reports to the Board on its shareholder

and analyst meetings to ensure they understand

shareholders’ views of the Company. The Chairman also

maintains regular contact with major shareholders and

will continue to do so. In addition, our monthly NAV

announcements now contain commentary from the

Manager on investment performance during the relevant

month, including in respect of each of the core pillars in

our portfolio, and also provides broader macroeconomic

observations.

The Board recognises the importance shareholders place

on ESG considerations and is committed to advancing

the ESG agenda. JRCM receives advice from a leading

international sustainability consultancy to assist in this

area.

We conduct a regular review of the composition of our

share register and receive feedback from our brokers,

including in the form of an independent survey of

shareholder views conducted by the brokers. We also

have a designated email account (investorrelations@

ritcap.co.uk) to enable shareholders to communicate

directly with the Group.

All shareholders have the opportunity to cast their votes

in respect of proposed resolutions at the AGM by proxy,

either electronically or by post and are encouraged to

34 Report and Accounts December 2023 RIT Capital Partners plc

Sustainability Report

attend the AGM and ask questions of the Directors and

the Manager directly.

Suppliers

We place a high value on our relationships with a broad

group of key suppliers and service providers including

fund managers, our auditor and professional advisers,

our custodian/depositary, bankers, information providers,

trading counterparties, and brokers, and continue to be

committed to developing and maintaining sustainable and

transparent working relationships over the long term. We

do not tolerate slavery or human trafficking and we are

committed to acting ethically and with integrity in all our

business dealings and relationships. In accordance with

the Modern Slavery Act 2015, JRCM publishes a Modern

Slavery Statement annually which may be viewed on the

Company’s website: www.ritcap.com.

We ensure these relationships with suppliers, some of

whom we have worked with for many years, are subject

to regular review and are refreshed where necessary.

Effective management of our supplier relationships is

critical to our ability to deliver on our broad mandate, and

we utilise a combination of formal and informal feedback.

As part of JRCM’s Responsible Investment Framework

& Policy, ascertaining our fund managers’ approach to

ESG is an important part of the due diligence undertaken

during the investment selection process, and post

investment it is a key part of our ongoing monitoring

and engagement. Reports on the Manager’s responsible

investment activities are submitted to the Board quarterly.

Environment and climate change

Climate change has a significant impact on our societies

and economies. We recognise the part that we have

to play in supporting a sustainable future and reducing

GHG emissions, both as good corporate citizens and also

delivering long-term returns for our shareholders.

Our commitment to sustainability encompasses various

areas of our operations. At our main office site, we

procure 100% of our electricity from renewable sources

and we have installed low emission LED lighting across

all of our buildings. We have adopted a ‘zero-to-landfill’

waste and recycling policy as part of our efforts to

responsibly manage waste. Additionally, we favour

sustainable commuting practices by encouraging our

employees to participate in the Cycle to Work scheme.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 35

Climate-related risks and opportunities

As a closed-ended investment fund, the Company is

currently exempt from complying with the Task Force on

Climate-related Financial Disclosures (TCFD). However,

the Board is aware that climate change is a systemic

issue which is likely to have a broad impact on the wider

economy and therefore on our portfolio. In recognition of

this, we are working with a sustainability consultancy to

put in place a reporting framework to voluntarily disclose

against the TCFD in 2025.

The assessment and management of climate-related

risks and opportunities forms part of the Group’s general

risk management process, which is the responsibility

of both the Board and the Audit and Risk Committee.

This includes reviewing the Manager’s approach to ESG

and climate-related risks and opportunities, scrutiny of

the responsible investment practices and processes,

discussion of emerging best practices, changing

stakeholder demands, and the latest sustainability-

related regulations that affect the business. Day-to-day

management of climate-related risk is delegated to the

Executive Committee of the Manager.

Metrics and targets

As an investment company based in a single office

and with 62 employees, we recognise that the Group’s

climate impact predominantly relates to our investment

portfolio. As with many other investment companies, we

are cognisant that there is currently insufficient data to

quantify Scope 3 emissions for parts of our investment

portfolio and we will continue to work with our external

managers, investee companies and other relevant

counterparties to facilitate data collection in line with

appropriate global standards, to enable us to report these

emissions in the future. Notwithstanding this, we will

begin to calculate our indirect GHG emissions (Scope

3) from parts of our portfolio (in addition to our internal

operations) over the course of 2024, in preparation for

TCFD reporting in 2025.

Outside of our investment portfolio, our environmental

impact comes from GHG emissions generated from

employee commuting, business travel, and from our

premises. Our focus on reducing business travel has led

to a marked decrease in travel-related emissions. Where

possible, executives will only travel where alternatives

such as video conference facilities are not practical. To

further mitigate our carbon footprint, we actively engage

in an accredited scheme with Carbon Neutral Britain,

effectively offsetting our Scope 1 and 2 GHG emissions

through the Woodland Fund portfolio, a verified carbon

offsetting project. In 2023, the Group received a Carbon

Neutral Britain Certification and is currently certified as

carbon neutral with regards to its Scope 1 and 2 GHG

emissions.

Total energy consumption for the year ended 31

December 2023 was 479,139 kWh compared to 452,923

kWh for 31December 2022 with the increase attributed

to the Group directly occupying a greater proportion of its

property portfolio during 2023.

2023 CO₂ (tonnes)

Intensity ratio: CO₂

(tonnes) per FTO

Scope 1 Gas 27 0.4

Scope 2 Electricity 67 0.9

Total 94 1.3

2022 CO₂ (tonnes)

Intensity ratio: CO₂

(tonnes) per FTO

Scope 1 Gas 26 0.4

Scope 2 Electricity 59 0.8

Total 85 1.2

Full-time occupant

Our GHG emissions are calculated for the Group under the financial

control approach and in accordance with ISO 14064-1: 2018 standard

using the 2023 GHG conversion factors developed by the Department

for Environment, Food & Rural Affairs.

The Group supports the ambitions of the 2015 Paris

Agreement and keeps opportunities to reduce emissions

under constant review.

Sustainability Report

Governance

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 37

Board of Directors

Sir James Leigh-Pemberton is non-executive Chairman having joined

the Board of the Company as a non-executive Director in April 2019.

He is Chairman of the Nominations Committee and a member of the

Conflicts, Remuneration and Valuation Committees. He previously

served as an independent non-executive Director of the Company

from 2004 to 2013.

Sir James joined UK Financial Investments (UKFI) in October 2013

as Chief Executive and in January 2014 was appointed Executive

Chairman. On 1 April 2016 he became Non-Executive Chairman

of UKFI. Following the merger of UKFI and UK Government

Investments (UKGI), he became Deputy Chairman of UKGI, a

position he held until September 2022.

Before joining UKFI, Sir James was Managing Director and Chief

Executive Officer of Credit Suisse in the UK, based in London. In this

role, he was responsible for developing the Bank’s client relationships

in Private Banking, Investment Banking and Asset Management in

the UK. He was also a member of the Credit Suisse Europe, Middle

East & Africa (EMEA) Operating Committee. He joined Credit Suisse

First Boston (CSFB) in 1994. Prior to joining CSFB, he was a Director

of SG Warburg Securities, where he worked for 15years.

In the 2019 New Year Honours List, Sir James received a knighthood

for services to financial services, British industry andgovernment.

Philippe Costeletos joined the Board as a non-executive Director

in July 2017 and became its Senior Independent Director in April

2019. He is Chair of the Conflicts and Remuneration Committees

and a member of the Audit and Risk, Nominations, and Valuation

Committees.

He has over 30 years’ of private investment and board governance

experience and is Founder of Stemar Capital Partners (SCP), a private

investment firm focused on building long-term investment platforms.

Philippe was formerly Chair of International of Colony Capital, and a

Senior Advisor of the Blackstone Group. Previously, he was Head

of Europe at TPG and a member of TPG’s Global Management and

Investment Committees. Prior to that, Philippe was a Member of

the Management Committee at Investcorp. Previously, Philippe held

positions at JP Morgan Capital, JP Morgan’s Private Equity Group and

Morgan Stanley.

Philippe is Chair of Clinica Tambre and Zeno Partners and a board

member of AutoHellas, Colosseum Dental Group, Vangest Group

and Generation Home. Philippe serves as a member of the Yale

University Council and the President’s Council on International

Activities. He graduated magna cum laude with a BA with distinction

in Mathematics from Yale University and received an MBA from

Columbia University.

Senior Independent Director

Philippe Costeletos

Non-Executive Directors

I C N R V I C N R V A

Vikas Karlekar joined the Board as a non-executive Director in

August 2022 and is a member of the Audit and Risk Committee.

He is a qualified chartered accountant, and a graduate of the London

School of Economics specialising in Management Sciences and has

held a number of senior finance roles across the financial services

industry. Vikas is currently Managing Director of Group Finance

at Intermediate Capital Group PLC, a UK listed asset manager

specialising in private markets, covering all aspects of financial

and regulatory reporting, valuation governance, key accounting

judgments, financial planning and analysis, and platform and operating

model transformation. In addition, he is a member of the Board of

Trustees, and Treasurer, of the Pepal Foundation, a charity focused on

bringing together NGOs and global corporations to develop leaders

and find practical solutions to challenging social issues.

Vikas previously spent 10 years at Barclays in a series of pan

finance leadership roles, including Global Finance Controller for

Barclays International Division, managing all aspects of financials,

key accounting decisions, valuations, driving technology and

process improvements, and leading key regulatory relationships.

He also spent 13 years at UBS Investment Bank, in both London

and New York in various finance leadership roles. Vikas qualified as

a chartered accountant with KPMG.

Vikas Karlekar

Non-Executive Chairman

Sir James Leigh-Pemberton

Cecilia joined the board as a non-executive director in August

2022. She was appointed as Chair of the Valuation Committee in

September 2023.

She has held senior investment roles for banks and hedge funds

including Centaurus Capital, Barclays Capital and Royal Bank

of Scotland. Her investment experience encompasses several

alternative asset classes including distressed debt, private equity

and credit.

Cecilia holds a number of non-executive roles including Senior

Independent Director of Northern 2 VCT plc, Audit Chair of Polar

Capital Global Financials Trust plc, and Independent Non-Executive

Director (INED) of Eurobank Cyprus.

Her former non-executive roles include INED of Alcentra Limited,

an asset manager specialising in sub investment grade credit, a

member of the Industrial Development Advisory Board, advising

on grants to UK businesses and Chair of the Finance and General

Purposes Committee for English National Ballet.

She qualified as a chartered accountant with Peat Marwick (now

KPMG) in Glasgow.

Cecilia McAnulty

38 Report and Accounts December 2023 RIT Capital Partners plc

Non-Executive Directors

André Perold joined the Board of the Company as a non-executive

Director in April 2018 and is a member of the Audit and

RiskCommittee.

André is Co-Founder, Partner and Chief Investment Officer of

HighVista Strategies, a Boston based investment firm. He is a

board member of the Vanguard Group, the global investment

company. He was previously the George Gund Professor of

Finance and Banking at the Harvard Business School where he also

held senior roles including Chair of the Finance Faculty and Senior

Associate Dean.

André Perold

I A

Board of Directors

Conflicts Committee member

Independent Director

Non-Independent Director

Audit and Risk Committee member

Nominations Committee member

Remuneration Committee member

Valuation Committee member

Committee Chair

Jutta af Rosenborg joined the Board as a non-executive Director in

May 2022. She is Chair of the Audit and Risk Committee, and is a

member of the Valuation Committee.

She is a qualified accountant and holds a Master’s degree in

Business Economics and Auditing from Copenhagen Business

School and has held a number of senior roles in group finance,

auditing and risk management.

Jutta is a non-executive director of JPMorgan European Growth

& Income plc and Chair of its audit committee. In addition, she is

a non-executive director of Nilfisk Holding A/S and chairs its audit

committee. She is also a member of the supervisory board of BBGI

Global Infrastructure S.A., where she chairs the audit committee.

She was previously a non-executive director at abrdn plc (formerly

Standard Life Aberdeen plc) and NKT A/S, and was also executive

vice president, chief financial officer of ALK Abelló A/S and Chair of

Det Danske Klasselotteri A/S.

I A V

Jutta af Rosenborg

Hannah Rothschild joined the Board of the Company as a non-

independent non-executive Director in August 2013 and is a

member of the Nominations Committee.

In addition, she is a non-executive director of WHAM, a Director

of Five Arrows Limited and serves as a Trustee of the Rothschild

Foundation.

Hannah is an award-winning writer and filmmaker with a long

standing career in the media.

She was the first woman to Chair the Trustees of the National

Gallery.

In the 2018 Queen’s Birthday Honours, Hannah was appointed

Commander of the Order of the British Empire (CBE) for services

to the arts and to philanthropy.

Hannah Rothschild CBE

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 39

J. Rothschild Capital Management

Executive Committee

JRCM is a wholly-owned subsidiary of RIT and acts as RIT’s

Manager. The Executive Committee of JRCM is responsible

for the day-to-day management of the business and its

members are listed below:

Maggie Fanari (Chief Executive Officer)

Maxim Parr (Chair)

Nick Khuu (Chief Investment Officer)

Aron Balas (Chief Strategy Officer)

Andrew Jones (Chief Financial & Operating Officer)

Maxim Parr is the Chair at J. Rothschild Capital Management Limited.

He started his career at Jardine Matheson and has extensive

experience working in cross-border investment between the USA,

Asia and Europe. Maxim was previously Founder and CEO of Atlas

Capital Group, where he worked alongside FTSE 100 and European

corporates on their investment strategy in start-ups, growth capital

and buyouts. Maxim was previously a non-executive director on the

Board of RIT Capital Partners from May 2020 to September 2023.

Maxim Parr

Andrew Jones is the Chief Financial & Operating Officer at

J.Rothschild Capital Management Limited.

He is responsible for the Group’s financial activities and its

operations. Prior to joining JRCM in 2008, he spent three years in

venture capital and four years at Nomura, advising on its private

equity investments as well as risk, global corporate development

and strategy.

A Fellow of the ICAEW, he qualified as a chartered accountant

with Deloitte where he spent time in audit before specialising in

corporate finance and valuation advice. Andrew was previously a

member of the ICAEW’s Valuation Advisory Group and is a member

of the audit committee of the British Academy.

Andrew Jones

Aron Balas is the Chief Strategy Officer at J. Rothschild Capital

Management Limited.

He joined the company in 2012 having previously worked in the

Financial Institutions Group within the Investment Banking Division

at Morgan Stanley, where he advised major financial institutions

across Europe with a focus on banks and asset managers. He

started his career at Oliver Wyman in their financial services

practice.

Aron Balas

Nick Khuu is the Chief Investment Officer at J. Rothschild Capital

Management Limited.

Prior to joining JRCM in 2020, Nick was a Managing Director at

Adi Capital Management, where he oversaw investments across

a broad range of industries and geographies. From 2008 to 2013,

he was a senior professional at Knighthead Capital Management,

where he invested in bonds, bank loans and special situation

credits and equities.

Prior to this, he worked at Dune Capital Management, a multi-

strategy investment firm, and at IFL, a strategic advisory firm. Nick

began his career in the Investment Banking Division at J.P. Morgan.

Nick Khuu

Maggie Fanari is the Chief Executive Officer at J. Rothschild Capital

Management Limited.

Maggie was previously Senior Managing Director, Global Group

Head High Conviction Equities at Ontario Teachers’ Pension

Plan which has a global mandate to invest in public and private

companies.

She started her career as an auditor at KPMG and previously

worked in equity research at Scotia Capital.

Maggie is a chartered accountant and a CFA charterholder.

Shealso holds a BBA from the Schulich School of Business at

YorkUniversity and ICD.D certification from the Institute of

Corporate Directors.

Maggie was previously a non-executive director on the Board of

RIT Capital Partners plc from April 2019 to February 2024.

Maggie Fanari

40 Report and Accounts December 2023 RIT Capital Partners plc

Corporate Governance Report

Introduction

The Directors present the Company’s Corporate

Governance Report. This describes our principal

governance bodies, their composition, purpose and

operation within the context of the Principles and

Provisions of the Association of Investment Companies

(AIC) Code of Corporate Governance (AIC Code) and the

2018 UK Corporate Governance Code (UK Code) of the

Financial Reporting Council (FRC), which can be viewed

at www.theaic.co.uk and www.frc.org.uk respectively.

The AIC Code, which has been endorsed by the FRC,

adapts the Principles and Provisions of the UK Code

to make them relevant for investment companies. The

Board of Directors therefore considers the AIC Code to

represent the most appropriate governance framework

for the Company, while recognising that as a self-

managed investment trust, aspects of the UK Code

remain relevant. This report sets out how the Company

has applied the relevant principles and provisions of the

Codes during the financial year ending 31 December

2023.

The FRC published an updated UK Code in 2024. The

Company will report on how it applies the updated UK

Code, and any consequential changes made to the

AIC Code, when it takes effect for the financial year

commencing 1 January 2025.

Leadership

The Company has a non-executive Board, chaired by

Sir James Leigh-Pemberton. The Board is collectively

responsible for setting the Company’s long-term strategic

aims, and its ongoing business and investment strategies.

The schedule of matters reserved for the Board may be

viewed on the website, www.ritcap.com.

The day-to-day management of the business is delegated

under a formal agreement to JRCM, the Company’s

subsidiary and Manager. JRCM is managed by its

Executive Committee, who attend the regular Board

meetings and provide detailed reports on investment

performance as well as all operational and financial

matters of the Group. JRCM also attends and reports to

Board Committee meetings. As our Manager is a wholly-

owned subsidiary of the Company, the Board considers

that this approach provides the most effective means

to constructively challenge and scrutinise all aspects of

the Manager’s performance. It ensures all Directors are

regularly involved in the process, rather than delegating

this responsibility to a selection of Directors through a

separate management engagement committee.

As at the date of this Report, the Board comprised

seven non-executive Directors, of which six have been

determined by the Board to be independent, with one,

Hannah Rothschild, designated as non-independent.

The Company has in place a structure of five Board

Committees, with clearly defined responsibilities set

out in their respective terms of reference, and which

may all be viewed on the Company’s website. This is

intended to limit the scope for an individual, or a small

group of individuals, to dominate the Board’s decision

making. The structure of permanent Board Committees,

together with the delegation of investment management,

administration and company secretarial matters to the

Manager, is considered by the Board as appropriate for a

self-managed investment trust on an ongoing basis.

As Chairman of the Board, Sir James Leigh-Pemberton

is responsible for its leadership and effectiveness in

dealing with the matters reserved for its decision with

adequate time for consideration. This includes ensuring

a culture of openness and debate and that Directors are

properly briefed on issues arising at Board meetings.

The Chairman is also responsible for ensuring effective

communication with shareholders, making Directors

aware of any concerns raised by shareholders and for

facilitating the contribution of the Directors.

The current members of the five Board Committees are as follows:

Audit and Risk Committee

Jutta af Rosenborg (Chair)

Philippe Costeletos

Vikas Karlekar

André Perold

Remuneration Committee

Philippe Costeletos (Chair)

Sir James Leigh-Pemberton

Conflicts Committee

Philippe Costeletos (Chair)

Sir James Leigh-Pemberton

Valuation Committee

Cecilia McAnulty (Chair)

Philippe Costeletos

Sir James Leigh-Pemberton

Jutta af Rosenborg

Nominations Committee

Sir James Leigh-Pemberton (Chair)

Philippe Costeletos

Hannah Rothschild

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 41

Corporate Governance Report

The Audit and Risk Committee

The Audit and Risk Committee Report is shown on

pages52 to 55.

The Committee has four members, all of whom are

viewed by the Board as having recent and relevant

financial experience. Vikas Karlekar was appointed to the

Committee on 26 April 2023.

The main features of the Group’s internal controls and

risk management are described in the Audit and Risk

Committee Report on pages 52 to 55 and in Principal

Risks and Viability on pages 24 to 30.

The Conflicts Committee

The Conflicts Committee meets at least once a year

on a formal, scheduled basis and on other occasions

as and when required. The Committee is chaired by

the Senior Independent Director, Philippe Costeletos,

and is comprised solely of independent Directors.

The Committee’s principal responsibility is to monitor

transactions with related parties (as described in Note17)

and to ensure that potential conflicts of interest are

avoided, or managed appropriately.

Board and Committee attendance

The Board and Committee attendance of the Directors at meetings in 2023 is shown below. In each case the

number of meetings attended is shown first, followed by the number of meetings that the Director was eligible

to attend. All Directors receive papers and agendas before Board and Committee meetings they are eligible to

attend. Where a Director is unable to attend a meeting, they are encouraged to give the Chairman or relevant

Committee Chair their views in advance.

Board Audit and Risk Conflicts Nominations Remuneration Valuation

Number of meetings held during the year 8 4 1 2 3 3

Chairman

Sir James Leigh-Pemberton 8/8 – 1/1 2/2 3/3 3/3

Non-executive Directors

Philippe Costeletos 8/8 4/4 1/1 2/2 3/3 3/3

Vikas Karlekar

8/8 3/3 – – – –

Cecilia McAnulty

8/8 – – – – 2/2

Maggie Fanari

6/7 – 1/1 1/1 3/3 –

Maxim Parr

7/7 – – – 1/1 2/2

André Perold 7/8 3/4 – – – –

Mike Power

2/2 1/1 – – – 1/1

Hannah Rothschild

7/8 – – 1/1 – –

Jutta af Rosenborg 8/8 4/4 – – – 3/3

Appointed to the Audit and Risk Committee on 26 April 2023.

Appointed to the Valuation Committee on 26 April 2023.

Retired as a Director on 29 February 2024.

Retired as a Director on 28 September 2023.

Retired as a Director on 26 April 2023.

Appointed to the Nominations Committee on 6 November 2023.

42 Report and Accounts December 2023 RIT Capital Partners plc

The Nominations Committee

The Nominations Committee meets at least once

each year and on additional occasions as required. The

Committee is chaired by Sir James Leigh-Pemberton.

In accordance with the AIC Code, a majority of its

members are independent non-executive Directors.

Hannah Rothschild was appointed to the Committee on

6November 2023.

Its responsibilities include overseeing the process of the

appointment of new Directors to the Board, overall Board

composition, succession planning, monitoring progress

on diversity and other matters set out in its terms of

reference. The search process for the new CEO for JRCM

(who’s appointment was announced in early January

2024), was led by the Nominations Committee, which

met upon completion of the search process to formulate

the recommendation for the Board’s approval.

The Committee is mindful of Board balance, experience

and diversity when considering appointments to the

Board and is responsible for identifying suitable Board

candidates, including considering candidates from a

wide range of backgrounds and experiences. In terms of

succession planning, the Committee acknowledges the

importance and benefits of diversity, especially in respect

of gender and ethnicity and the Committee is responsible

for the implementation of the Board’s Diversity and

Inclusion Policy, which may be viewed on the Company’s

website.

The Nominations Committee is responsible for

implementing the Board’s succession planning. Following

Mike Power’s retirement on 26 April 2023, Jutta af

Rosenborg and Maxim Parr replaced him as Chairs of the

Audit and Risk, and Valuation Committees respectively.

In addition, following Maxim Parr retiring as a Director,

in order to become Chair of JRCM on 28 September

2023, Cecilia McAnulty replaced him as Chair of the

Valuation Committee. Each appointment was made

from current members of the relevant committee and

it was determined that they had the requisite skills and

experience to chair these committees.

The Committee continuously monitors Board composition

to ensure it has the right skillset and breadth of

experience with which to function as an effective

Board. The current composition of the Board complies

with its own Diversity and Inclusion Policy, which

includes meeting the gender and/or ethnic diversity

recommendations of both the Parker Review and FTSE

Women Leaders (previously the Hampton-Alexander

Review). Furthermore, in accordance with Listing Rule

9.8.6R(9)(a), as at the date of this report 43% of our

Board are women and one Director is from an ethnic

minority background. The Chairs of the Audit and Risk,

and Valuation Committees are held by women. The

Company considers being Chair of a Board Committee to

be a senior Board position for a Board comprising non-

executive Directors. Data for the following tables was

obtained on a voluntary self-reporting basis.

Gender identity reporting under LR9.8.6R(10)

Number of board

members

Percentage of the

Board

Number of senior

positions on the

Board

(CEO, CFO, SID

and Chair)

Men

4 57%

Not applicableWomen 3 43%

Not specified/prefer

not to say – – see note

Ethnic background reporting under LR9.8.6R(10)

Number of board

members

Percentage of the

Board

Number of senior

positions on the

Board

(CEO, CFO, SID

and Chair)

White British

or other White

(including minority-

white groups) 6 86%

Not applicable

see note

Mixed/Multiple

Ethnic Groups – –

Asian/Asian British 1 14%

Black/African/

Caribbean/Black

British – –

Other ethnic group,

including Arab – –

As a Board comprising non-executive Directors, it does not

have executive management functions, specifically a CEO or

CFO. The Chairman and the SID are both men. However, the

Company considers the Chairs of Board Committees to be senior

board positions. The Chairs of the Audit and Risk, and Valuation

Committees are held by women.

Corporate Governance Report

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 43

Corporate Governance Report

The Remuneration Committee

The Directors’ Remuneration Report is shown on

pages56 to 59.

The Valuation Committee

The Valuation Committee comprises four Directors, all of

whom are independent, and with appropriate experience.

The Committee plays a key role in providing the Board

with assurance that the valuation process is rigorous and

independently challenged.

The Committee is chaired by Cecilia McAnulty. It meets at

least twice each year and additionally as may be required.

In 2023, it met on three occasions. The Committee’s

principal responsibility is to review the Company’s direct

private and other investments to ensure that they are

presented in the annual and half-yearly accounts at fair

value. As a result of the inherent subjectivity of the

valuation of private investments, these form a key area of

focus for the Committee.

At each meeting, the Committee reviews a detailed

report from the Manager which includes: a valuation

report on each of the largest directly-held private

investments, including information on the companies’

performance and valuation and/or the GP’s valuation

where relevant; a sample and overall summary of the

valuation of the smaller directly-held private investments;

a valuation report from Jones Lang LaSalle (JLL) in

relation to the Company’s investment properties; the

valuation approach for the remainder of the portfolio,

including an analysis of the Company’s investments in

private funds; and a valuation of the Company’s loan

notes.

As part of its review and challenge, the Committee

considers: the consistency of the Manager’s approach

over time; the relevance and appropriateness of the

valuation techniques adopted; and a review of the

differences between the price achieved at a liquidity

event and the most recent valuation prior to the event.

Effectiveness and evaluation

Many of the Directors have held or hold senior positions

in the financial services industry, including at prominent

investment banks or asset management companies. In

addition, there are Directors with considerable experience

beyond these areas. The biographies of the Directors

and the JRCM Executive Committee on pages 37 to

39 demonstrate a strength of experience in the areas

required to oversee and implement the Company’s

strategic, investment and operational aims.

44 Report and Accounts December 2023 RIT Capital Partners plc

Corporate Governance Report

The process for the appointment of new Directors

to the Board is the responsibility of the Nominations

Committee, as is their induction and ensuring, on an

ongoing basis, that each Director is able to allocate

sufficient time to the Company to discharge their

responsibilities effectively.

JRCM provided relevant and timely information on the

financial, legal and regulatory developments during

2023, including in the papers and presentations provided

at Board and Committee meetings. The Manager also

facilitates an annual ‘away day’ for the Board, where

a number of ‘deep dive’ sessions are held on Group

strategic issues and opportunities. This year they included

sessions on shareholder engagement and investment

strategy.

The Board undertakes a formal and rigorous annual

review of its performance, its committees and each

individual Director (including the Chairman) in accordance

with the requirements of the AIC Code. The 2023 annual

performance evaluation was led by Philippe Costeletos,

the Senior Independent Director. The evaluation included

Directors completing questionnaires which assessed

the performance and effectiveness of each Director,

the Board collectively and each of its committees. The

results were evaluated and considered by the Board as

a whole. The overall conclusion of the evaluation was

that the Board and its committees operate effectively

and that each Director continues to make constructive

contributions and demonstrates commitment to the role.

The evaluation noted that the areas of focus

recommended in the previous 2022 Board evaluation

had been addressed throughout the year, including

ESG integration and investment strategy. It also set

out the Board’s areas of focus for 2024, including the

discount at which our shares are trading relative to NAV

and shareholder/wider stakeholder engagement. In

accordance with the AIC Code, there will be an externally

facilitated Board evaluation in 2024.

All Directors (other than those retiring or standing for their

first election, if applicable) stand for re-election annually,

subject to continued satisfactory performance. The Board

recommends shareholders approve the election of all

Directors standing at the forthcoming AGM.

Subject to his continued annual re-election, the

Chairman’s tenure is not intended to exceed nine years, in

line with the relevant corporate governance expectations.

Moreover, as part of the wider annual evaluation of the

Board, length of service is a key consideration when

assessing the general requirements to regularly refresh

the membership, diversity and overall composition of the

Board.

Accountability

The Board, acting where appropriate through the Audit

and Risk Committee, is responsible for determining

the nature and extent of the principal risks it is willing

to take in achieving its strategic objectives. It is also

responsible for maintaining sound risk management and

internal control systems, for setting corporate reporting,

risk management and internal control principles and

for maintaining an appropriate relationship with the

Company’s auditor. These areas are further described in

the Audit and Risk Committee Report on pages 52 to 55.

Engaging with stakeholders

Details of our engagement with our shareholders and

other stakeholders are set out in the Sustainability Report

on pages 31 to 35.

Compliance with the Codes

It is the Board’s view that the Company has complied

with both the principles and the relevant provisions of the

Codes during the year.

The following table describes how the Board has applied

the 17 principles of the AIC Code, and the one relevant

principle of the UK Code, in practice.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 45

Corporate Governance Report

AIC Code Principle Application

A. A successful Company is led by an effective Board, whose

role is to promote the long-term sustainable success of the

Company, generating value for shareholders and contributing

to wider society.

The 2023 Board evaluation (see page 43 and 44), concluded

that the Board and its Committees continue to operate

effectively, with the recommendations of the prior year’s

evaluation, addressed during the year.

As part of its role to promote the long-term sustainable

success of the Group, the Board is tasked with meeting

the Company’s Corporate Objective of delivering long-term

capital growth while preserving shareholders’ capital and it

keeps the strategy to achieve this under review.

During 2023, the Company undertook a series of buybacks,

acquiring approximately 8.6 million of its shares, which

is designed to provide an accretive return on investment,

resulting in an increase in the NAV per share return for

shareholders. Moreover, the Board acknowledges the value

to shareholders of a modest income yield and the Board’s

policy is to maintain or increase the dividend, subject to the

overriding capital preservation objective.

The Board is mindful of its contribution to wider society and

strives to meet its obligations through ensuring effective

stakeholder engagement by the Group. Our Sustainability

Report on pages 31 to 35 illustrates initiatives contributing to

the environment and wider society.

B. The Board should establish the Company’s purpose, values

and strategy, and satisfy itself that these and its culture are

aligned. All Directors must act with integrity, lead by example

and promote the desired culture.

The Directors consider that the purpose and strategy

are enshrined in the Company’s Corporate Objective and

Investment Policy, as described in the Strategic Report

(pages 3 to 35). Our values underpin and govern our Group’s

operations and are based on integrity and respect for all our

stakeholders. Together, our purpose, values and strategy

foster a strong and healthy culture of honest and open

communication and engagement between Directors and

within the wider workforce of the Group, promoting fairness,

equality and professional development. The Directors

recognise the importance of their role in monitoring and

assessing the Company’s purpose, values and strategy,

which are reinforced in meetings between the Directors and

the Manager. Furthermore, the Manager provides quarterly

and also ad hoc updates to the Directors on how the

Company’s values and culture are being applied throughout

the Group’s operations and in the implementation of its

strategy. The application of the Manager’s Responsible

Investment Framework & Policy, with its central principles

of ESG and continual engagement with counterparties, is

an example of the Company’s purpose, values and culture

working in practice.

46 Report and Accounts December 2023 RIT Capital Partners plc

Note: the AIC Code does not include a Provision E.

Corporate Governance Report

AIC Code Principle Application

C. The Board should ensure that the necessary resources are

in place for the Company to meet its objectives and measure

performance against them. The Board should also establish

a framework of prudent and effective controls, which enable

risk to be assessed and managed.

The Board receives from the Manager regular and detailed

information in relation to the Company’s investment

performance as well as in relation to its finance and operational

capability, including the annual budget. Performance is

measured against, the published KPIs, as well as wider

qualitative criteria including in relation to ESG integration, risk

management, compliance, internal controls and promotion of

the Group’s values and business principles.

D. In order for the Company to meet its responsibilities to

shareholders and stakeholders, the Board should ensure

effective engagement with, and encourage participation from,

these parties.

The Board receives regular reports from the Manager in

relation to shareholder engagement as part of an extensive

investor relations programme. The Chairman also meets and

communicates directly with shareholders and shares these

insights with the Board. Shareholders are encouraged to

attend the AGM, where the Manager presents on investment

performance and strategy and there is an opportunity for

shareholders to ask questions to the Board and the Manager.

During the course of 2023, we have allocated resources to

enhance our marketing and investor relations capabilities,

with the objective to effectively communicate and engage

with all areas of our shareholder register and other key

stakeholders.

Stakeholders are also able to access and review all key

Company literature on its website (www.ritcap.com).

Questions may be directed to the Board or the Manager,

via the registered office or a dedicated email address

(investorrelations@ritcap.co.uk) and throughout the year, the

Manager’s investor relations function has responded to a

range of enquiries raised by shareholders.

The Group also engaged with leading proxy advisors

during the year as part of its ongoing monitoring of wider

shareholder expectations on ESG matters.

The Manager reports to the Board regularly on its broader

stakeholder engagement, as set out on pages 33 and 34.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 47

Corporate Governance Report

AIC Code Principle Application

F. The Chairman leads the Board and is responsible for its

overall effectiveness in directing the Company. They should

demonstrate objective judgement throughout their tenure

and promote a culture of openness and debate. In addition,

the Chairman facilitates constructive Board relations and

the effective contribution of all non-executive Directors, and

ensures that Directors receive accurate, timely and clear

information.

The Chairman encourages active participation at Board

meetings, including setting the agenda items for discussion.

The Board receives a comprehensive suite of regular

information, including in-depth reports from the Manager

on performance, attribution, transactions and exposures

on a monthly and quarterly basis. The scheduled quarterly

Board meetings include detailed reports on the finance and

operational activities of the Manager and Group, including

costs, liquidity, risk, investor relations, PR, IT, regulatory, legal

and compliance matters and HR. At these meetings, the

Manager also provides a quarterly update on ESG which is a

standing agenda item. The Board can also request updates

from the Manager on any matters at the various ad hoc

meetings that are held, when required.

Furthermore, Board meetings provide the opportunity for

the chairs of each Committee to present a summary of

the activities of their Committee, with minutes from the

Committee meetings included in the Board papers.

G. The Board should consist of an appropriate combination

of Directors (and, in particular, independent non-executive

Directors) such that no one individual or small group of

individuals dominates the Board’s decision making.

The Board has delegated responsibility to key Committees,

as well as engaging the Manager under a formal investment

management and services agreement. At 31 December

2023, the Board comprised an independent non-executive

Chairman and seven non-executive Directors. Seven

Directors (including the Chairman) were independent and all

were independent of the Manager, with a clear division of

responsibilities between the Board and the Manager.

As such, the Board considers that its decision making is not

dominated by an individual or small group of individuals.

H. Non-executive Directors should have sufficient time

to meet their Board responsibilities. They should provide

constructive challenge, strategic guidance, offer specialist

advice and hold third party service providers to account.

The Directors consider they have sufficient time to meet

Board responsibilities. While there is a standing meeting

timetable for the Board and Committees, the Directors

participate in additional Board and Committee meetings

as necessary. The Board and Committee meetings provide

opportunities for detailed assessment of both the Manager’s

performance as well as reviewing performance of other key

service providers (see page 34).

I. The Board, supported by the company secretary, should

ensure that it has the policies, processes, information, time

and resources it needs in order to function effectively and

efficiently.

The Manager provides company secretarial services to the

Company and, together with external specialist advisors,

ensures that Board procedures and applicable rules and

regulations are observed. Such services also include advice

and support to the Board on all governance matters and on

the discharge of Directors’ duties. Directors are able to take

independent external professional advice to assist with the

performance of their duties at the Company’s expense.

48 Report and Accounts December 2023 RIT Capital Partners plc

Corporate Governance Report

AIC Code Principle Application

J. Appointments to the Board should be subject to a formal,

rigorous and transparent procedure, and an effective

succession plan should be maintained. Both appointments

and succession plans should be based on merit and objective

criteria and, within this context, should promote diversity

of gender, social and ethnic backgrounds, cognitive and

personal strengths.

Appointments to the Board follow a careful process, led

by the Nominations Committee who identify candidates to

complement and enhance the collective skills, knowledge

and experience of the Board. The Board’s Diversity and

Inclusion Policy acknowledges the benefits of diversity of

gender, social and ethnic backgrounds on the Board and

these are key considerations for the Board’s succession

planning. The current composition of the Board complies

with the recommendations of the Parker Review, the FTSE

Women Leaders Review and the FCA’s listing rules reporting

requirements on diversity.

K. The Board and its Committees should have a combination

of skills, experience and knowledge. Consideration should

be given to the length of service of the Board as a whole and

membership regularly refreshed.

Directors’ varying backgrounds and wide-ranging experience,

including in the investing world and financial services

generally ensures broad cognitive diversity, which is viewed

as key in assisting effective challenge and discipline.

Biographies of the Board are set out on pages 37 and 38 and

demonstrate the strength of experience in the areas required

to provide effective strategic leadership and appropriate

governance of the Company.

The Board seeks to ensure an appropriate balance between

continuity and experience, and the positive benefits from

refreshing membership and the development of a diverse

Board.

L. Annual evaluation of the Board should consider its

composition, diversity and how effectively members work

together to achieve objectives. Individual evaluation should

demonstrate whether each director continues to contribute

effectively.

The Senior Independent Director led a formal and rigorous

internal evaluation of the Board in 2023. As part of the

evaluation, each Director completed a questionnaire which

evaluated the performance of the Chairman, each Director,

the Board as a whole and its Committees. The evaluation

concluded that the Board and its Committees continue to

operate effectively.

In respect of its evaluation of its composition and diversity,

the Board’s current composition complies with its own

Diversity and Inclusion Policy, which includes meeting the

gender and/or ethnic diversity recommendations of the

Parker Review, the FTSE Women Leaders Review and the

FCA’s listing rules reporting requirements.

M. The Board should establish formal and transparent

policies and procedures to ensure the independence and

effectiveness of external audit functions and satisfy itself on

the integrity of financial and narrative statements.

The Board has delegated the assessment of the external

audit function and the review of the integrity of the Annual

Report and Accounts (ARA) and Half-Yearly Financial Report

to the Audit and Risk Committee. EY has been auditor of

the Group since 2018 and the Committee undertook an

assessment of EY’s performance in respect of the annual

statutory audit of the Group for the year ended 31 December

2023, concluding that EY had performed satisfactorily (see

page 55). The Audit and Risk Committee also performed

a detailed review of the 2022 ARA, the 2023 Half-Yearly

Financial Report and this 2023 ARA, as well as reviewing

supporting papers from the Manager, in order to ensure the

integrity of the statements (see page 52).

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 49

Corporate Governance Report

AIC Code Principle Application

N. The Board should present a fair, balanced and

understandable assessment of the Company’s position and

prospects.

The Audit and Risk Committee reviewed the financial and

narrative statements within the 2023 ARA and 2023 Half-

Yearly Financial Report, as well as supporting papers and

evidence from the Manager in relation to this area. The

Committee concluded that these reports were consistent

with the fair, balanced and understandable requirement and

advised the Board accordingly. The Board considered the

Committee’s advice and its own review, before reaching the

same conclusion.

O. The Board should establish procedures to manage risk,

oversee the internal control framework, and determine the

nature and extent of the principal risks the Company is willing

to take in order to achieve its long-term strategic objectives.

Day-to-day risk management is undertaken by the

Manager and overseen by the Audit and Risk Committee

which receives detailed reports twice a year on the risk

management and internal control functions. The Group’s

system of internal controls is administered by the Manager,

and designed to manage as far as possible the principal

risks of the Company. Further information can be found in

the Principal Risks and Viability section of the Report on

pages 24 to 30 and the Audit and Risk Committee Report

on pages 52 to 55.

P. Remuneration policies and practices should be designed to

support strategy and promote long-term sustainable success.

The Directors’ remuneration policy was approved by

shareholders at the 2023 AGM and is in accordance with

the provisions of the Codes for non-executive Directors’

remuneration. Directors receive fixed fees without any

performance-related elements. The Remuneration Committee

also has oversight of the remuneration policies and practices

within JRCM and SHL, and seeks to ensure these are tied

to the strategy and long-term sustainable success of the

Company.

Q. A formal and transparent procedure for developing

remuneration policy should be established. No director

should be involved in deciding their own remuneration

outcome.

As set out in the Directors’ Remuneration Report on

pages 56 to 59, Directors are paid on a fixed-fee basis,

as recommended by the Remuneration Committee and

approved by the Board. Such fees take account of the

fees paid by other investment trusts and the advice of its

independent remuneration consultant, Alvarez & Marsal.

R. Directors should exercise independent judgement and

discretion when authorising remuneration outcomes, taking

account of Company and individual performance, and wider

circumstances.

Directors are remunerated on the basis of a flat standard

fee supplemented by additional Committee membership

and Chair fees. There are no performance-related aspects to

Directors’ remuneration.

In the oversight of JRCM and SHL’s remuneration, Directors

ensure that it is set by reference to the performance of the

Company and individuals, relative to KPIs and individual

objectives.

50 Report and Accounts December 2023 RIT Capital Partners plc

In addition, as a self-managed investment trust, the Board has also considered the following principle from the UK Code:

UK Code Principle Application

E. The Board should ensure that workforce policies and

practices are consistent with the Company’s values and

support its long-term sustainable success. The workforce

should be able to raise any matters of concern.

The Group’s workforce, who are employed by JRCM and SHL,

are subject to consistent standards of behaviour set out in an

employee handbook and monitored by the Manager.

All employees are expected to adhere to a standard of

conduct based on respect, courtesy and dignity, adhering

to the highest ethical standards. The employee handbook

also contains policies on inclusion and equal opportunities,

anti-harassment/discrimination/bullying, dignity at work,

anti-corruption, whistleblowing, conflict management and the

environment.

Well-established whistleblowing procedures are in place in

which employees have available direct lines of communication

to the Chair of the Audit and Risk Committee. More

generally, our culture seeks to encourage honest and open

communication across the Group.

Corporate Governance Report

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 51

Corporate Governance Report

Statement of Directors’ responsibilities

The Directors are responsible for preparing the Annual

Report and Accounts in accordance with applicable

United Kingdom law and regulations.

Company law requires the Directors to prepare financial

statements for each financial year. Under that law the

Directors have elected to prepare the Group and Parent

Company financial statements in accordance with UK

adopted international accounting standards (UK adopted

IAS). Under company law the Directors must not approve

the financial statements unless they are satisfied that

they give a true and fair view of the state of affairs of the

Group and the Parent Company and of the profit or loss of

the Group and the Parent Company for that period.

In preparing these financial statements the directors are

required to:

• select suitable accounting policies in accordance

with IAS 8 Accounting Policies, Changes in

Accounting Estimates and Errors and then apply

them consistently;

• make judgements and accounting estimates that are

reasonable and prudent;

• present information, including accounting policies, in

a manner that provides relevant, reliable, comparable

and understandable information;

• provide additional disclosures when compliance

with the specific requirements in UK adopted IAS is

insufficient to enable users to understand the impact

of particular transactions, other events and conditions

on the Group and Parent Company financial position

and financial performance;

• in respect of the Group financial statements, state

whether UK adopted IAS have been followed,

subject to any material departures disclosed and

explained in the financial statements;

• in respect of the Parent Company financial

statements, state whether UK adopted IAS have

been followed, subject to any material departures

disclosed and explained in the financial statements;

and

• prepare the financial statements on the going

concern basis unless it is inappropriate to presume

that the Parent Company and the Group will continue

in business.

The Directors are responsible for keeping adequate

accounting records that are sufficient to show and

explain the Parent Company’s and Group’s transactions

and disclose with reasonable accuracy at any time the

financial position of the Parent Company and the Group

and enable them to ensure that the Parent Company

and the Group financial statements comply with the

Companies Act 2006. They are also responsible for

safeguarding the assets of the Group and Parent

Company and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors

are also responsible for preparing a Strategic Report,

Directors’ Report, Directors’ Remuneration Report and

corporate governance statement that comply with that

law and those regulations. The Directors are responsible

for the maintenance and integrity of the corporate and

financial information included on the Parent Company’s

website.

The Directors confirm, to the best of their knowledge:

• that the consolidated financial statements, prepared

in accordance with UK adopted IAS give a true and

fair view of the assets, liabilities, financial position

and profit or loss of the Parent Company and

undertakings included in the consolidation taken as a

whole;

• that the Annual Report, including the Strategic

Report, includes a fair review of the development

and performance of the business and the position

of the Parent Company and undertakings included

in the consolidation taken as a whole, together with

a description of the principal risks and uncertainties

that they face; and

• that they consider the Annual Report and

Accounts, taken as a whole, is fair, balanced and

understandable and provides the information

necessary for shareholders to assess the Parent

Company’s position, performance, business model

and strategy.

The Corporate Governance Report was approved by the

Board and signed on its behalf by:

Sir James Leigh-Pemberton

Chairman

52 Report and Accounts December 2023 RIT Capital Partners plc

Audit and Risk Committee Report

Introduction

I am pleased to present my first Audit and Risk

Committee Report since being appointed as Chair of the

Committee in May 2023, following the retirement of Mike

Power. On behalf of the Committee, I would like to thank

Mike for his significant contribution and valuable input

over the years.

As highlighted by our Chairman and Manager, we operate

in an environment of increased geopolitical uncertainty,

and with a complicated market outlook. We have also

seen further regulatory changes, although the sizeable

amendments to the UK Corporate Governance Code (the

Code) initially planned did not ultimately take place, with

the new Code published in January this year, reflecting

slightly more modest changes.

Within this context, I would therefore like to thank the

governance functions of the Manager for their continued

professionalism, consistency in the quality of their output,

and for ensuring high standards of reporting and control

across the operations of the Group during the year.

Committee responsibility and composition

This Committee has oversight responsibilities delegated

to it by the Board in three principal areas:

• financial reporting and audit;

• risk management and internal controls; and

• the external auditor.

These responsibilities are set out in more detail in the

Committee’s terms of reference, which may be viewed

on the Company’s website at www.ritcap.com.

The Committee currently comprises four Directors,

each of whom is non-executive and independent of the

Company and the Manager.

The Board is satisfied that I have the requisite experience

to chair the Committee: I joined the Board as a non-

executive Director in May 2022 and am also a member

of the Valuation Committee. I am a qualified accountant,

hold a Master’s degree in Business Economics and

Auditing from Copenhagen Business School, have held

senior roles in finance, audit, risk management and have

significant experience in non-executive capacities.

The other three members of the Committee at the year

end were Philippe Costeletos, André Perold, and Vikas

Karlekar. Philippe, who joined the Committee in February

2023, is our Senior Independent Director. He is a Senior

Advisor to the Blackstone Group and a member of the

President’s Council on International Activities at Yale

University, with widespread experience in senior roles

in private equity, banking and investment firms. André is

Chief Investment Officer of an investment management

firm and a board member of the Vanguard Group, having

previously been a professor of Finance and Banking at

Harvard Business School. Vikas, who also joined the

Committee in February 2023, is currently Managing

Director of Group Finance of a UK listed asset manager

and has held various senior financial leadership roles.

Our individual biographies are shown on pages 37 and

38. I can confirm that the Board considers all members

of the Committee to have sufficient recent and relevant

financial as well as accounting and/or auditing experience

to comply with the requirements of the Codes.

Committee meetings and activity during the year

We met four times in 2023, and once so far in 2024.

Committee meetings were held to review the Group’s

2022 Annual Report and Accounts and the June 2023

Half-Yearly Financial Report. A review of the Group’s 2023

Annual Report and Accounts was undertaken in February

2024.

Our reviews included the assessment and assurance

that the annual reports, taken as a whole, are fair,

balanced and understandable and provide the information

necessary for shareholders to assess the Group’s

position, performance, business model and strategy.

In addition, the Committee considered the evidence

supporting the Group’s going concern and ongoing

viability, including cash flow forecasts as well as levels

of available liquidity. For both the 2022 and 2023 Annual

Report and Accounts, we were satisfied with our reviews

and advised the Board accordingly.

We also considered the year-end reports from the external

auditor, Ernst & Young LLP (EY), and discussed matters

arising with the Manager. The adequacy of the Group’s

accounting policies and financial reporting procedures

are discussed with the external auditor at least annually.

Following these discussions and our review of the annual

reports, we concluded that the accounting policies are

appropriate for the Company and take into account,

where necessary, new accounting standards.

We held two further meetings, in May and November

2023, reviewing the effectiveness of the Group’s risk

management and internal control, with reference to

reports prepared by the Manager, including from its risk,

compliance and internal audit function.

During 2023 a migration to a new accounting system

was commenced. The Committee was updated on the

progress of the transition during the year, including

parallel running, reconciliations and various other checks.

The Company is expected to benefit from the full

functionality of the new system in 2024.

In addition to the activities described above, significant

matters we considered during the year are set out below:

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 53

Audit and Risk Committee Report

Environmental, social and governance

During 2023, the Group continued to strengthen its

approach to integrating ESG considerations into the

strategy, operations and investment process. The

Manager also made its first submission under the UN

Principles for Responsible Investment (UN PRI).

We recognise the importance of climate-related risks to

the Company across our operations and our portfolio.

During 2024, we are planning to initiate a reporting

framework to enable us to voluntarily report against

the Task Force on Climate related Financial Disclosures

(TCFD) in 2025. Further information is set out on

pages31 to 35 in our new Sustainability Report.

Consumer Duty

The FCA’s Consumer Duty regulation came into effect

on 31 July 2023, introduced to create a new standard of

care that firms are expected to provide to customers and

applies to our regulated Manager. In advance of the Duty

coming into effect, firms, including JRCM, were required

to complete a Fair Value Assessment, demonstrating,

by way of provision of information, whether the price

a consumer pays for a product or service is reasonable

compared to the benefits they can expect to receive.

The valuation of private investments and other assets

Private investments represent 35.9% of net assets and

comprise direct investments, direct co-investments

and diversified funds managed by external managers

(or GPs). By their very nature such investments merit

careful attention when considering their fair value. As

these are unlisted investments, without a public share

price, the estimation of fair value requires the exercise

of considerable judgement. This subjectivity means that

there is a higher degree of uncertainty in such valuations

compared with those of other assets. In assessing the

fair values, there is, by necessity, a degree of reliance on

the GPs, with co-investments and funds representing the

majority of the private investments’ portfolio. The GPs will

typically have access to confidential information about

the underlying companies and are required to report

fair values in accordance with internationally recognised

accounting standards.

The GP’s valuations are usually prepared on a quarterly

basis, albeit with a time lag which may be up to three

months, as is the industry norm. The Manager reviews

these valuations and, where possible, the justification for

the valuation and for any changes, as well as considering

any additional supporting information. In addition,

where the Manager has direct access to the underlying

companies, it prepares its own valuations using industry-

standard approaches.

The results of this analysis are reported in detail on a six-

monthly basis to the independent Valuation Committee,

which is responsible for the final decision on valuation.

We have therefore considered the work of the Valuation

Committee, the results of their discussions with

the Manager and the external auditor. The Valuation

Committee comprises four Directors, all of whom

are independent, and with appropriate experience.

The Committee plays a key role in providing the Board

with assurance that the valuation process is rigorous

and independent. Two members of this Committee,

myself included, also sit on the Valuation Committee.

We view the work as detailed and comprehensive, and

are confident that the persons preparing the reports

have sufficient and appropriate expertise through their

experience, skills and qualifications.

Furthermore, we believe that the process is planned

and managed to devote adequate time and resource to

preparation and review, both by the Manager and also by

the members of the Valuation Committee.

We also considered the work of the Valuation Committee

as it relates to other assets in the portfolio, including but

not limited to the Company’s loan notes and real estate

holdings. Here, the combination of detailed processes,

rigorous analysis and, where relevant, external advice has

provided comfort over the portfolio valuations. The Audit

and Risk Committee also receives an executive summary

of the Manager’s main valuation report as well as the

minutes from the Valuation Committee.

Principal risks

As part of its ongoing review of the risks facing the

Group, the Committee has made changes to the way

we classify our principal risks. In recognition of the

increased focus in these areas, we have reclassified two

new principal risks: Discount risk and Cyber security

risk. The former reflects the long-standing risk facing

shareholders in investment trusts, namely that the

share price performance does not match the underlying

investment performance. In relation to the latter, while

we have historically focused on cyber security risks, the

growth in AI and the ability to utilise this for increasingly

sophisticated attempts at fraud, means that we have

also reclassified cyber security as its own, new principal

risk. The efforts taken by the Board and the Manager

in relation to the discount volatility are set out in the

Chairman’s Statement. In relation to cyber security, the

Committee carefully considered the measures in place

across the Group to mitigate these risks. The Manager

has successfully maintained its external classifications,

meeting the National Cyber Security Centre requirements

to hold ‘Cyber Essentials’ and ‘Cyber Essential Plus’

certifications. The Committee was satisfied that sufficient

54 Report and Accounts December 2023 RIT Capital Partners plc

Audit and Risk Committee Report

and ongoing measures are in place to address this risk as

far as is reasonably practicable.

Related party disclosures

Related party transactions are a common feature

of commerce and business. The Group often takes

advantage of opportunities offered to it, or services

provided to it via many relationships built up over time

(including those arising from Board members). Disclosure

of such transactions is a requirement in order to allow

shareholders and other users of the financial statements

to assess the risks and opportunities facing the Group.

We consider the work of the Conflicts Committee in

reviewing advisory services, co-investment transactions

and any other similar arrangements with any related party,

and have discussed with the Manager the systems and

processes in place to identify, review, record and disclose

such transactions. We note the importance that the Board

and the Manager place upon the work of the Conflicts

Committee. We have reviewed the disclosures made in

the financial statements regarding such transactions and

consider that the necessary disclosures have been made.

Internal control

The Board of Directors is responsible for the Group’s

system of internal control, and it has delegated the

supervision of the system to this Committee. The system

is designed to manage, rather than eliminate, the risk

of failure to achieve business objectives and, as such,

can provide only reasonable and not absolute assurance

against any material misstatement or loss.

The Board, who are ultimately responsible for risk

management, has delegated to the Manager the

implementation and day-to-day management of the

system of internal control within an established

framework applicable throughout the Group. A standard

‘three lines of defence’ approach is used to ensure

robust risk management, encompassing: day-to-day

risk management; risk oversight and guidance; and risk

assurance as provided by the external and internal audit

functions, both of which report to this Committee.

The system of internal control is reviewed twice each

year by the Committee, using a comprehensive report

prepared by the Manager. The report outlines each of the

principal risks and their management, covering all aspects

of financial and operational risk as summarised in the

Principal Risks and Viability section on pages 24 to 30. The

relative importance of each principal risk is assessed by

reference to the possible impact on the Group’s net asset

value or share price should a loss occur, alongside the

likelihood of that loss occurring, taking into consideration

the existing control environment.

The review further included consideration of the five-year

cash flow forecasts and a liquidity summary, the main

portfolio exposures, as well as the results of the quarterly

portfolio stress tests. In addition, the Committee

reviewed the log of operational risk incidents during the

year, noting that none had a significant impact on the

business.

The Committee considers that the procedures in place

are consistent with the most recent Guidance on Risk

Management, Internal Control and Related Financial and

Business Reporting published by the FRC.

Internal audit and compliance

As part of the review of the control environment, the

Manager, through its Compliance Officer, undertakes

an internal audit of selected areas agreed with the

Committee. The 2023 internal audits included the

governance and internal control processes associated

with investment decision making, as well as the key

control procedures employed by the Manager, to ensure

the accuracy of information for regular NAV reporting.

No material weaknesses were identified through the

course of these audits and the Committee considers the

resource devoted to internal audit to be appropriate to the

size and complexity of the Company’s operations.

As part of their duties as depository, BNP undertook a

review of our Manager’s arrangements under AIFMD

and the relevant UK legislation and regulations. This

involved reviewing processes, systems and controls for

organisational structure, compliance, risk management,

fund administration and business continuity, with no

concerns noted.

EY separately audited the Manager’s client asset

procedures in relation to a very small amount of legacy

client money held prior to this being distributed to charity

(while retaining the liability in case any future claimants

arise).

The Manager also reports to the Committee the results

of its monitoring of external fund managers’ compliance

with the terms of their investment management

arrangements, as well as periodically reviewing their own

control procedures.

The Board has reviewed the effectiveness of the system

of internal control in operation during the financial year,

and up to the date of this report, through the Committee.

During the reviews conducted, the Committee has not

identified or been informed of any failings or weaknesses

representing a significant business risk.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 55

External auditor

The external auditor, EY, has completed its sixth annual

audit following its appointment as a result of a tender

process in 2017. Consistent with its own procedures in

relation to independence and rotation, the previous audit

partner retired from the audit having completed five

years, and was replaced by a new audit partner during the

year.

EY attended all meetings of the Committee and provided

reports on: its audit approach and work undertaken;

the quality and effectiveness of the Group’s accounting

records; and its findings in connection with the Group’s

annual statutory audit for the year ended 31 December

2023. I have also had regular contact with the new audit

partner during the year.

The level of non-audit services provided to the Group by

the auditor is subject to pre-approval in accordance with

our policy on non-audit services and is monitored, as

is the auditor’s objectivity in providing such service, to

ensure that the independence of the audit team from the

Group is not compromised. Non-audit services provided

by EY in 2023 totalled £8,650 for audit-related assurance

work (regarding the Manager’s regulated activities). Their

selection for this work was based on cost efficiency,

synergies with the audit process, and the fact that these

services are permitted by the FRC’s revised Ethical

Standard. Further information on fees paid to the auditor

is set out in Note 5 to the financial statements.

The Committee considered EY’s independence,

objectivity, and the effectiveness of the audit process

with the benefit of formal and informal feedback from the

Manager and concluded satisfactorily on each of these

points.

Finally, I would like to thank my colleagues on the

Committee for their support and wise counsel during the

year, and the team at the Manager for their dedication

and professionalism.

Jutta af Rosenborg

Chair, Audit and Risk Committee

Audit and Risk Committee Report

56 Report and Accounts December 2023 RIT Capital Partners plc

Directors’ Remuneration Report

Introduction

On behalf of the Board, I am pleased to present the

Directors’ Remuneration Report for the year ended

31December 2023.

The current Directors’ Remuneration Policy was approved

by shareholders with 99% of the vote at the 2023 AGM.

As well as the remuneration of RIT Directors, the

Committee is also responsible for oversight of the

remuneration policies associated with our operating

subsidiaries: JRCM, a regulated entity whose

remuneration arrangements are governed by the FCA’s

applicable Remuneration Codes, and SHL, our events and

property subsidiary. Here, incentive schemes are in place,

tailored to the respective businesses and appropriately

structured and aligned with shareholders’ interests.

The Directors’ Remuneration Policy and Remuneration

Report have been prepared in accordance with the Listing

Rules of the FCA, the relevant sections of the Companies

Act 2006 and The Large and Medium-sized Companies

and Groups (Accounts and Reports) Regulations 2008

(as amended). It also sets out how it has applied the

principles of the Codes relevant to the Company.

Directors’ Remuneration Policy

In accordance with the provisions of the AIC Code and

the UK Code, non-executive Directors’ remuneration

reflects their duties and time commitments and is set at a

reasonable level which is consistent with the requirement

to attract and retain Directors of the appropriate quality

and experience. The Board’s policy is that the fees paid to

the non-executive Directors should reflect the experience

of the Board as a whole, be fair and should take account

of the level of fees paid by other investment trusts. Any

views expressed by shareholders on the fees being paid

to Directors will be taken into consideration by the Board

when reviewing the Directors’ Remuneration Policy.

Furthermore, the Company’s Articles of Association

currently limit the aggregate base fees of the non-

executive Directors (excluding the Chairman) to £400,000

per annum. The non-executive Directors receive base fees

and Committee Chair and membership fees. They are not

eligible for any other remuneration or benefits apart from

the reimbursement of allowable expenses. There are no

performance conditions relating to Directors’ fees and

they are not entitled to any long-term incentive or pension

schemes. No compensation is payable on loss of office.

Committee structure and responsibilities

I have chaired the Committee since 22 July 2019,

having previously served on it since 26 April 2018. As at

31December 2023, the Committee included two further

independent non-executive Directors: Sir James Leigh-

Pemberton and Maggie Fanari. Maxim Parr stepped down

from the Committee when he retired from the Board

on 28 September 2023. The Committee meets at least

twice a year on a scheduled basis and additionally as

may be required. In 2023, the Committee met on three

occasions.

The Committee is responsible for recommending the

fees paid to the non-executive Chairman and Directors,

by reference to the roles and time commitment of each

individual concerned. The final determination of the fees

payable to non-executive Directors is a matter for the

Board of Directors as a whole.

The overall fee structure is assessed in part by reference

to other investment trusts. The Committee seeks

information from JRCM management and advice from an

independent advisor, as required.

The Remuneration Committee has appointed a

remuneration specialist from Alvarez & Marsal, to

provide the Committee with advice. In 2023, fees of

approximately £12,675 (2022: £11,519) were paid to

Alvarez & Marsal in respect of their advice. Alvarez &

Marsal abides by the Remuneration Consultant’s Code

of Conduct which requires it to provide objective and

impartial advice. It has no other relationships with the

Group and is therefore independent.

In accordance with Part 15, Chapter 6 of the Companies

Act 2006, the Directors’ Remuneration Policy applies to

the Directors of the Company, all of whom are non-

executives.

Incentive structures

In accordance with the relevant principles of the Codes,

the Remuneration Committee has sought to ensure that

there is an appropriate Group-wide incentive structure

to attract, motivate and retain the high-quality individuals

we need to deliver our long-term strategic aims and

sustainable success. The remuneration approach is

designed to align with and reinforce these strategic aims,

while promoting responsible risk management.

Fixed remuneration for the Group’s employees

comprises a base salary, which reflects their talent, skills,

competencies and contributions to the Group. Each

employee’s salary is reviewed on an annual basis, and

considers such factors as market levels of remuneration

and individual performance. During 2023, salary increases

were implemented on a tiered basis, targeted towards

more junior employees who were most susceptible to

the financial pressures brought about by higher inflation

and the rising cost of living. Employees are also eligible to

receive various benefits, including pension contributions

and private medical insurance.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 57

Directors’ Remuneration Report

The Group operates an Annual Incentive Scheme (AIS) for

employees as well as longer-term share-based awards.

The annual cap for total awards under the AIS is limited

to 0.75% of net assets. Our approach is designed to

measure and reward performance, and seeks to provide

an appropriate balance between shorter-term awards and

longer-term incentives, as well as the need for robust risk

management. We remain satisfied with the suitability of

the AIS in order to meet our objectives.

The performance assessment for awards under the

AIS reflect quantitative investment outperformance

(as measured by the NAV per share total return versus

two KPIs: CPI plus 3.0% and the ACWI) as well as

discretionary awards for wider achievements not directly

linked to the overall NAV return. This may include prudent

risk controls, deal origination, efficient regulation and

initiatives which support and enhance our values and

culture. Any such qualitative rewards are measured

against rigorous performance metrics through a Group-

wide annual appraisal process.

The AIS is measured annually and includes longer-term

features such as a three-year, ‘high water mark’ in relation

to absolute outperformance. In addition, and in particular

for management and senior employees, AIS awards

include significant deferrals into RIT shares. Forawards

above £250,000, 60% of these awards are made in

deferred RIT shares. These vest over the subsequent

three years, reinforcing the alignment with shareholders’

interests.

Decisions made by the Committee have followed a

careful appraisal of performance and at all times aim to

reinforce shareholder alignment, both through the link to

our objectives and also the payment via shares.

AIS awards are subject to malus conditions and the

Committee retains the ability to clawback previous

awards if necessary.

The second main aspect of the remuneration approach is

a long-term incentive plan which is structured as awards

of restricted share units (RSUs). RSUs are increasingly

being adopted by listed companies and they form an

important part of aligning awards with our long-term

investment performance and shareholder value creation.

They vest after three years and then have a further two-

year lock-up before the underlying RIT shares can be

sold. The vesting of an RSU is ordinarily subject to the

participant’s continued service over the vesting period.

Following the two-year lock-up, the RSUs are transferred

directly to participants who are then free to sell them

if they so choose. RSUs also incorporate qualitative

performance standards, as well as malus and clawback

features.

Ordinary shares of the Company are used to settle the

share components of existing and future awards granted.

The Group seeks to hedge its exposure to RSUs by using

an employee benefit trust to acquire shares to meet the

estimated future liability.

Consulting with shareholders

Where appropriate, the Committee is responsible

for ensuring that there is pro-active engagement and

consultation with major shareholders and shareholder

representatives in respect of remuneration.

Non-executive Directors’ remuneration

The remuneration of the non-executive Chairman and

Directors is determined by the Board as a whole. Non-

executive fees are reviewed periodically by the Board

with reference to market levels in other investment

trusts. The Board has discretion to periodically review and

amend fee rates. The current fee rates are listed below:

Base fee:

Non-executive Chairman

£150,000

Non-executive Director £35,000

Additional fees:

Senior Independent Director fee £7,500

Committee membership fees:

Audit and Risk Committee £6,000

Conflicts Committee £3,000

Nominations Committee £4,000

Remuneration Committee £4,000

Valuation Committee £6,000

Audit and Risk Committee Chairmanship

£10,000

All other Committee Chairmanship fees

(per committee)

£7,500

The non-executive Chairman fee is inclusive of membership of Board

Committees.

The Committee Chairmanship fees are in addition to the Committee

membership fees.

The non-executive Directors each have letters of

appointment that are subject to termination upon one

month’s written notice on either side. The non-executive

Chairman’s letter of appointment provides for six months’

notice on either side.

The letters of appointment for the non-executive

Directors are available for inspection at the Company’s

registered office.

Annual report on remuneration

The annual report on remuneration will be put to

an advisory shareholder vote at the 2024 AGM. The

information on pages 58 and 59 has been audited where

required under the regulations and is indicated as audited

information where applicable.

58 Report and Accounts December 2023 RIT Capital Partners plc

Directors’ Remuneration Report

Directors’ remuneration – audited

Directors’ remuneration is in the form of fees and, if applicable, taxable benefits comprising of travel and subsistence

expenses incurred by or on behalf of Directors in the course of travel to attend Board or Committee meetings.

The following table sets out the total remuneration for each Director:

Year ended 31December

Non-executive Director

2021

Total

remuneration

2022

Total

remuneration

2023

Total

remuneration

% Change

in total

remuneration

between 2020

and 2021

% Change

in total

remuneration

between 2021

and 2022

% Change

in total

remuneration

between 2022

and 2023

Chairman

Sir James Leigh-Pemberton 150,000 150,000 150,000 – – -

Directors

Philippe Costeletos 69,500 74,500 79,823 2.4 7. 2 7. 1

Maggie Fanari

37,000 44,667 46,000 – 20.7 3.0

Vikas Karlekar – 13,731 39,069 n/a n/a 184.5

Cecilia McAnulty – 13,731 40,973 n/a n/a 198.4

Maxim Parr

41,774 48,000 38,856 78.9 14.9 (19.1)

André Perold

36,000 52,228 44,791 (17.6) 45.1 (14.2)

Mike Power

49,500 61,167 21,500 – 23.6 (64.9)

Jutta af Rosenborg

– 31,962 57,882 n/a n/a 81.1

Hannah Rothschild 30,000 35,000 35,626 – 16.7 1. 8

Unless taxable benefits are specifically outlined below for each Director, total remuneration above constitutes fees only.

With effect from 1 January 2022 the annual base fee for each non-executive Director (excluding the non-executive Chairman) was increased

from £30,000 to £35,000. This was the ﬁrst such increase since 2016 and followed advice from Alvarez & Marsal on the level of fees paid to non-

executive directors of other investment trusts.

The year-on-year percentage changes in total remuneration are inﬂuenced by a number of factors including where Directors have completed part-

year service and/or being appointed to Board Committees during the relevant periods.

Maggie Fanari retired as a Director on 29 February 2024.

Maxim Parr retired as a Director on 28 September 2023.

André Perold total remuneration for the relevant periods comprises the following:

Year Directors fee

Taxable

benefits

2023 41,000 3,791

2022 41,000 11,228

2021 36,000 –

Mike Power retired as a Director of the Company on 26 April 2023

Jutta af Rosenborg total remuneration for the relevant periods

comprises the following:

Year Directors fee

Taxable

benefits

2023 53,782 4,100

2022 29,044 2,918

2021 – –

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 59

Directors’ Remuneration Report

Fees

The total fees payable to Directors for the year was

£546,629 (compared to £530,498 in the year ended

31December 2022). This includes the Directors’ base

fees as well as committee fees.

The aggregate base fees of the non-executive Directors

(excluding the Chairman) for the year was £282,692,

which was within the £400,000 limit for such fees under

the Company’s Articles of Association.

Statement of Directors’ shareholdings – audited

The interests of the Directors holding office at

31December 2023 in the ordinary shares of the

Company are shown below:

Ordinary shares

of £1 each Beneficial

Non-

beneficial

% of voting

rights

Sir James Leigh-

Pemberton 11,055 – <0.1

Philippe Costeletos 72,710 – <0.1

Maggie Fanari – – –

Vikas Karlekar 993 – <0.1

Cecilia McAnulty – – –

André Perold – – –

Jutta af Rosenborg 8,400 – <0.1

Hannah Rothschild

14,358,443 15,402,708 20.2

The majority of the beneﬁcial interests shown in the table above

for Hannah Rothschild are in respect of shares held via trusts or

companies where she is either one of the beneﬁciaries or one of

the individuals able to exert signiﬁcant inﬂuence. Similarly, the non-

beneﬁcial interests are held through a charitable foundation where

Hannah is one of the controlling trustees.

Between the end of the year and the date of this report,

there were no changes in the Directors’ interests.

Requests from the Chairman for permission to deal

in the ordinary shares of the Company are considered

by the Senior Independent Director. Requests from

other Directors are referred to the Chairman or Senior

Independent Director. Employees of the Group are

subject to approval by the JRCM Executive Committee

and/or JRCM’s Compliance Officer.

Except as stated in Note 17 to the financial statements no

Director has, or has had during the year under review, any

beneficial interest in any contract or arrangement with the

Company or any of its subsidiaries within the terms set

out in the FCA Listing Rules.

Relative importance of spend on pay

The following table shows the year-on-year movement

in total remuneration of all employees, compared to the

dividends paid and share buybacks.

£ million

Year ended

31 December

2022

Year ended

31 December

2023 Change

Total staff costs 35.6 33.4 (2.2)

Dividends 57.6 56.7 (0.9)

Share buybacks 11. 0 163.1 152.1

Statement of shareholder voting

Votes in respect of the resolution to approve the

Directors’ Remuneration Report at the Company’s AGM

in April 2023 were cast as follows:

Number of

% of

votes cast

Votes cast in favour 71,100,118 99.8

Votes cast against 159,223 0.2

Total votes cast 71,259,341 100.0

Votes withheld 67,172 –

Votes in respect of the resolution to approve the

Directors’ Remuneration Policy at the Company’s AGM in

April 2023 were cast as follows:

Number of

% of

votes cast

Votes cast in favour 71,085,685 99.8

Votes cast against 160,895 0.2

Total votes cast 71,246,580 100.0

Votes withheld 82,201 –

Performance graph

In accordance with the Directors’ Remuneration Report

regulations, a performance graph which measures the

Company’s TSR over the period from 31 December 2013

against that of a broad equity market index is shown

below. This is calculated by reference to the Company’s

share price including dividend reinvestment. The

Committee considers the ACWI to be the most suitable

index for this purpose, being a KPI. In addition, the graph

includes the Company’s absolute return hurdle of CPI plus

3.0%. Further information can be found in the Company’s

Strategic Report.

RIT Total Shareholder Return

ACWI

Dec

2015

Dec

2017

Dec

2019

Dec

2021

Dec

2023

Dec

2013

CPI plus 3.0%

100

140

180

220

260

300

Audit

The tables in this report on pages 58 and 59, audited by

Ernst & Young LLP, have been marked as such.

The Directors’ Remuneration Report on pages 56 to 59

was approved by the Board and signed on its behalf by:

Philippe Costeletos

Chair, Remuneration Committee

60 Report and Accounts December 2023 RIT Capital Partners plc

Directors’ Report

Directors’ Report: statutory and other disclosures

The Directors present their report and audited financial statements for the year ended 31 December 2023.

Business review and future

developments ...................... page 3

Greenhouse gas

emissions, energy

consumption and energy

efficiency action .................. page 35

Corporate governance ........page 40

Directors’ remuneration ..... page 56

Directors’ shareholdings .... page 59

Dividend ............................... page 4

Risk management and

internal control .................... page 24

The section above identifies where certain information required to be disclosed in the Directors’ Report is shown within

other sections of the Report and Accounts (and forms part of the Directors’ Report) starting on the page indicated.

Additional statutory disclosures are set out below.

Status of Company

The Company is registered as a public company and is

incorporated in the UK and registered in England and

Wales (Company Registration Number 2129188). It

conducts its affairs so as to qualify for approval as an

investment trust for tax purposes, and has been accepted

as an approved investment trust by HMRC, subject to

continuing to meet eligibility conditions. The Directors

are of the opinion that the Company has conducted its

affairs in a manner which will satisfy the conditions for

continued approval as an investment trust under Section

1158 of the Corporation Tax Act 2010.

The Company’s subsidiaries are mainly engaged in

investment activities and the activities of the Group are

principally undertaken in the UK.

Directors

The Directors at the date of this report are listed on pages

37 and 38.

During the year ended 31 December 2023:

Directorate changes

• Mike Power retired as a Director on 26 April 2023;

• Maxim Parr retired as a Director on 28 September

2023;

Committee composition

• Vikas Karlekar was appointed to the Audit and Risk

Committee on 26 April 2023;

• Cecilia McAnulty was appointed to the Valuation

Committee on 26 April 2023 and was subsequently

appointed as Chair of this committee on

28September 2023; and

• Hannah Rothschild was appointed as a member of

the Nominations Committee on 6 November 2023.

Corporate Objective

The Company’s Corporate Objective is: “to deliver long-

term capital growth, while preserving shareholders’

capital; to invest without the constraints of a formal

benchmark, but to deliver for shareholders increases in

capital value in excess of the relevant indices over time.”

Investment Policy

The Company’s Investment Policy is: “to invest in a

widely diversiﬁed, international portfolio across a range

of asset classes, both quoted and unquoted; to allocate

part of the portfolio to exceptional managers in order to

ensure access to the best external talent available.”

Asset allocation and risk diversiﬁcation

The Group’s assets continue to be allocated across a

diversified range of asset classes, geographies, industries

and currencies. There are no external restrictions on the

allocation of assets. The portfolio is further diversified

through the use of external managers with different

mandates. Exposures are monitored and managed by

JRCM under the supervision of the Board.

Gearing

The Company maintains structural gearing principally

through fixed-rate private placement notes and revolving

credit facilities. At 31 December 2023, the drawn

indebtedness was £281 million with debt held at fair

value, or £294 million with debt held at par value. This

represented net gearing calculated in accordance with

AIC guidance of 3.5%.

The maximum indebtedness that the Company is

empowered to incur under its Articles of Association is

five times its adjusted capital and reserves.

Further information is shown under debt and leverage on

page 19.

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 61

Directors’ Report

Direct and indirect investment management fees

Consistent with the Investment Policy, the Company

invests a significant proportion of the portfolio with

external managers. The majority of the management and

performance fees charged by such managers are incurred

indirectly by the Company. They are included within the

fund investment valuations and therefore form part of the

investment return. Three fund investments are structured

as segregated accounts. Here, the fees are incurred

directly by the Company (see Note 3 on page 74).

Fees within the long-only equity funds, whether

structured as segregated accounts or otherwise, typically

incur a management fee of 0.5% to 1.0% per annum and

in some cases a performance fee for outperformance

relative to a benchmark. The hedge funds and absolute

return and credit funds are slightly higher – typically a

1% to 2% management fee and typically a 10% to 20%

performance fee. Fees for investments into private funds

are structured differently and will usually have a 1% to

2.5% annual charge (often based on commitments in

early years and declining over time with realisations),

as well as a 20% to 30% carried interest. This may be

above an 8% per annum hurdle and/or with the higher

rates often earned when investors have received back a

minimum multiple of their invested capital (e.g. 3x).

Aggregate management fees (excluding performance

fees and net of fee rebates) for the external funds for

2023 have been estimated at 0.94% of RIT’s total average

net assets (2022: 0.88%).

Share capital

At 31 December 2023, the issued share capital

comprised 156,848,065 £1 ordinary shares, of which

9,307,817 were held by the Company in treasury as a

result of a series of share buybacks. Further details are

shown in Note 21 on page 89.

No £1 ordinary shares were issued during the year and

the existing shareholder authorities given to the Company

at the last AGM to allot and purchase shares will expire

at the conclusion of the Company’s forthcoming AGM

scheduled for 2 May 2024. At the AGM, shareholders

shall be asked to renew these authorities, as will be

explained in the separate Notice of the meeting.

Major holders of voting rights

As at 31 December 2023, the following notifications

had been received from the holders of 3% or more of

the voting rights conferred through the direct or indirect

holding of the Company’s ordinary shares of £1 each.

31 December 2023

Major holders of

voting rights

Total number

of shares

% of

voting rights

Direct or

indirect

Lord Rothschild

2,3

19,291,497 13.1 Indirect

Hannah Rothschild

15,402,708 10.4 Indirect

The Rothschild

Foundation

15,390,848 10.4 Direct

Evelyn Partners Inv.

Mgt. LLP Limited 7,880,671 5.3 Indirect

Five Arrows Limited

6,757,835 4.6 Direct

The above table does not include Lord Rothschild’s or Hannah

Rothschild’s direct voting rights in shares in the Company which

were below the notiﬁable threshold.

As Lord Rothschild and Hannah Rothschild were both members and

trustees of the Rothschild Foundation, the above notiﬁable interests

include the same 15,390,848 shares held by this charity (which also

represent Hannah Rothschild’s non-beneﬁcial interests on page 59

under Directors’ shareholdings).

Part of Lord Rothschild’s holdings included entities where Hannah

Rothschild is one of the beneﬁciaries, and therefore the relevant

shares also form part of her beneﬁcial interests on page 59.

Lord Rothschild and Hannah Rothschild had an indirect beneﬁcial

interest in the shares of the Company held by Five Arrows Limited.

The total interests notiﬁed to the Company that directly related

to, and was overseen by, the family offices of Lord Rothschild and

Hannah Rothschild (including shares in which Lord Rothschild and

Hannah Rothschild did not have voting rights conferred through a

direct or indirect holding) was 22.2%.

62 Report and Accounts December 2023 RIT Capital Partners plc

Directors’ Report

As at 14 February 2024, the voting rights in the above

table remained unchanged.

There are no restrictions or significant agreements that

may restrict, on a change of control, transfer of securities

in the Company or the voting rights attached to those

securities.

The shares of the Company qualify for inclusion within an

Individual Savings Account.

Cross holdings

The FCA Listing Rules also require closed-ended

investment companies to disclose quarterly all of their

investments in “other listed closed-ended investment

funds ... which themselves do not have stated investment

policies to invest no more than 15% of their total assets

in other listed closed-ended investment funds.”

The Group discloses such investments when necessary,

but does not restrict its own investment policies in this

manner. There were no such investments held by the

Group as at 31 December 2023 and 31 December 2022.

Annual General Meeting

The Company’s 2024 AGM is scheduled to be held on

2 May at 12:00. Further details will be sent out in the

notice of AGM to be circulated to shareholders and made

available on the Company’s website: www.ritcap.com, in

due course.

Auditor

EY has expressed its willingness to continue in office

as the Company’s external auditor. Resolutions to

reappoint EY and to authorise the Directors to set their

remuneration will be proposed at the forthcoming AGM.

Other

The Company seeks to agree the best possible terms on

which business will take place with its suppliers. It is the

Company’s policy to abide by such terms.

The Company maintained a qualifying third-party liability

insurance for its Directors and Officers throughout the

year and up to the date of approval of the Report and

Accounts.

Statement by the Directors in performance of

their statutory duties in accordance with s172(1)

Companies Act 2006

The Directors consider, both individually and together,

that they have acted in a way they consider, in good faith,

is most likely to promote the success of the Company for

the benefits of its members as a whole (having regard to

the stakeholders and matters set out in s172(1)(a-f) of the

Companies Act 2006 in the decisions taken during the

year ended 31 December 2023 (see pages 8, 9, 33 and 34).

Disclosure of information to the auditor

With regard to the preparation of the Report and

Accounts of the Company for the year ended

31December 2023, the Directors have confirmed to the

auditor that:

• so far as they are aware, there is no relevant audit

information of which the auditor is unaware; and

• they have taken the steps that they ought to have

taken as Directors in order to make themselves

aware of any relevant audit information and to

establish that the auditor is aware of that information.

This confirmation is given and should be interpreted in

accordance with the provisions of Section 418 of the

Companies Act 2006.

Listing Rules disclosures

There are no disclosures required under Listing

Rule9.8.4.

The Companies, Partnerships and Groups (Accounts

and Reports) Regulations 2015

Information on subsidiaries that is required to be

disclosed under the above regulations is disclosed in

Note 30.

Disclosable information in respect of other investments is

contained in Note 33.

The Directors’ Report on pages 60 to 62 was approved by

the Board and signed on its behalf by:

Sir James Leigh-Pemberton Chairman

RIT Capital Partners plc

Financial Statements

for the year ended 31 December 2023

64 Report and Accounts December 2023 RIT Capital Partners plc

The Notes on pages 70 to 93 form part of these financial statements.

Consolidated income statement

Year ended 31 December				2023			2022
£ million	Notes	Revenue	Capital	Total	Revenue	Capital	Total
Investment income	2	29.3	–	29.3	1 9.1	–	19.1
Other income		3.2	–	3.2	7. 6	–	7. 6
Gains/(losses) on fair value investments	3, 5	–	1 09.9	1 09.9	–	(555.5)	(555.5)
Gains/(losses) on monetary items and borrowings		–	0.8	0.8	–	20.2	20.2
		32.5	1 1 0.7	1 43.2	26.7	(535.3)	(508.6)
Expenses
Operating expenses	4, 5	(28.5)	(14.2)	(42.7)	(36.0)	(7 .6)	(43.6)
Profit/(loss) before finance costs and taxation	6	4.0	96.5	1 00.5	(9.3)	(542.9)	(552.2)
Finance costs	7	(6.9)	(27 .5)	(34.4)	(5.0)	(20.0)	(25.0)
Profit/(loss) before taxation		(2.9)	69.0	66.1	(14.3)	(562.9)	(577 .2)
Taxation	8	–	–	–	–	–	–
Profit/(loss) for the year		(2.9)	69.0	66.1	(14.3)	(562.9)	(577 .2)
Earnings/(loss) per ordinary share – basic	9	(1. 9 p)	46.1p	44.2p	(9.2p)	(362.1p)	(371 .3p)
Earnings/(loss) per ordinary share – diluted	9	(1. 9 p)	45.7p	43.8p	(9.2p)	(362.1p)	(371 .3p)

The total column of this statement represents the Group’s consolidated income statement, prepared in accordance with UK adopted

international accounting standards (UK adopted IAS). The supplementary revenue and capital columns are both prepared under

guidance published by the Association of Investment Companies (AIC). All items in the above statement derive from continuing

operations.

Consolidated statement of comprehensive income

Year ended 31 December				2023			2022
£ million	Notes	Revenue	Capital	Total	Revenue	Capital	Total
Profit/(loss) for the year		(2.9)	69.0	66.1	(14.3)	(562.9)	(577 .2)
Revaluation gain/(loss) on property, plant and equipment	10	–	0.9	0.9	–	(2.1)	(2.1)
Actuarial gain/(loss) in defined benefit pension plan	11	(0.4)	–	(0.4)	(4.5)	–	(4.5)
Deferred tax (charge)/credit allocated
to actuarial gain/(loss)	12	0.2	–	0.2	1. 1	–	1. 1
Total comprehensive income/(expense) for the year		(3.1)	69.9	66.8	(17 .7)	(565.0)	(582.7)

Consolidated Income Statement and Consolidated Statement

of Comprehensive Income

64 Report and Accounts December 2023 RIT Capital Partners plc

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 65

The Notes on pages 70 to 93 form part of these financial statements.

At 31 December
£ million	Notes	2023	2022
Non-current assets
Investments held at fair value	13	3,499.4	3,586.3
Investment property	13, 15	34.1	37 .9
Property, plant and equipment	10	21 .6	20.7
Retirement benefit asset	11	0.1	0.5
Derivative financial instruments	13	5.9	1. 0
		3,561 .1	3,646.4
Current assets
Derivative financial instruments	13	65.4	57 .3
Other receivables	16	7 1. 2	245.3
Amounts owed by group undertakings	17	0.1	4.5
Cash at bank		204.3	21 8.0
		341 .0	525.1
Total assets		3,902.1	4,1 7 1 .5
Current liabilities
Borrowings	18	(142.9)	(236.2)
Derivative financial instruments	13	(2.8)	(1 0.4)
Other payables	19	(39.2)	(63.5)
Amounts owed to group undertakings	17	(0.1)	(0.1)
		(1 85.0)	(31 0.2)
Net current assets/(liabilities)		156.0	21 4.9
Total assets less current liabilities		3,71 7 .1	3,861 .3
Non-current liabilities
Borrowings	18	(137 .9)	(1 34.4)
Derivative financial instruments	13	(0.0)	–
Deferred tax liability	12	(0.0)	(0.2)
Provisions	20	(3.0)	(1 .8)
Lease liability		(2.9)	(3.2)
		(1 43.8)	(139.6)
Net assets		3,573.3	3,721 .7
Equity attributable to owners of the Company
Share capital	21	1 56.8	156.8
Share premium	22	45.7	45.7
Capital redemption reserve	23	36.3	36.3
Own shares reserve	24	(36.7)	(46.3)
Capital reserve	26	3,393.1	3,548.9
Revenue reserve	27	(32.2)	(29.1)
Revaluation reserve	28	1 0.3	9.4
Total equity		3,573.3	3,721 .7
Net asset value per ordinary share – basic	29	2,449p	2,41 4p
Net asset value per ordinary share – diluted	29	2,426p	2,388p

The financial statements on pages 64 to 69 were approved by the Board and authorised for issue on 4 March 2024.

Sir James Leigh-Pemberton

Chairman

Consolidated Balance Sheet

RIT Capital Partners plc Report and Accounts December 2023 65

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

66 Report and Accounts December 2023 RIT Capital Partners plc

The Notes on pages 70 to 93 form part of these financial statements.

At 31 December

£ million Notes 2023 2022

Non-current assets

Investments held at fair value 13 3,362.3 3,485.2

Investment property 13, 15 34.1 37.9

Property, plant and equipment 10 21.5 20.6

Investments in subsidiary undertakings 30 143.2 107.2

Derivative financial instruments 13 5.9 1. 0

3,567.0 3,651.9

Current assets

Derivative financial instruments 13 65.4 57.3

Other receivables 16 70.6 244.9

Cash at bank 196.7 193.9

332.7 496.1

Total assets 3,899.7 4,148.0

Current liabilities

Borrowings 18 (142.9) (236.2)

Derivative financial instruments 13 (2.8) (10.4)

Other payables 19 (31.9) (54.1)

Amounts owed to group undertakings 17 (119.6) (90.2)

(297.2) (390.9)

Net current assets/(liabilities) 35.5 105.2

Total assets less current liabilities 3,602.5 3,757.1

Non-current liabilities

Borrowings 18 (137.9) (134.4)

Derivative financial instruments 13 (0.0) –

Provisions 20 (3.0) (2.2)

Lease liability (2.9) (3.2)

(143.8) (139.8)

Net assets 3,458.7 3,617.3

Equity

Share capital 21 156.8 156.8

Share premium 22 45.7 45.7

Capital redemption reserve 23 36.3 36.3

Capital reserve:

At 1 January 3,578.6 4,203.4

Profit for the year 77.0 (556.2)

Treasury shares purchase 21 (163.1) (11.0)

Dividends paid 31 (56.7) (57.6)

Capital reserve at 31 December 26 3,435.8 3,578.6

Revenue reserve:

At 1 January (209.5) (176.1)

Loss for the year (16.7) (33.4)

Revenue reserve at 31 December 27 (226.2) (209.5)

Revaluation reserve 28 10.3 9.4

Total equity

3,458.7 3,617.3

The Company’s total comprehensive income for the year was £61. 2 million (2022: expense of £591.7 million).

The financial statements on pages 64 to 69 were approved by the Board and authorised for issue on 4 March 2024.

Sir James Leigh-Pemberton

Chairman

Parent Company Balance Sheet

66 Report and Accounts December 2023 RIT Capital Partners plc

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 67

The Notes on pages 70 to 93 form part of these financial statements.

			Capital	Own
	Share	Share	redemption	shares	Capital	Revenue	Revaluation	Total
£ million	capital	premium	reserve	reserve	reserve	reserve	reserve	equity
Balance at 1 January 2022	1 56.8	45.7	36.3	(23.0)	4,1 7 4.4	(1 1 .4)	11. 5	4,390.3
Profit/(loss) for the year	–	–	–	–	(562.9)	(1 4.3)	–	(577 .2)
Revaluation gain/(loss) on property, plant and equipment	–	–	–	–	–	–	(2.1)	(2.1)
Actuarial gain/(loss) in defined benefit plan	–	–	–	–	–	(4.5)	–	(4.5)
Deferred tax (charge)/credit allocated to actuarial gain/(loss)	–	–	–	–	–	1. 1	–	1. 1
Total comprehensive income/(expense) for the year	–	–	–	–	(562.9)	(17 .7)	(2.1)	(582.7)
Dividends paid	–	–	–	–	(57 .6)	–	–	(57 .6)
Purchase of treasury shares	–	–	–	–	(1 1 .0)	–	–	(1 1 .0)
Movement in own shares reserve	–	–	–	(23.3)	–	–	–	(23.3)
Movement in share-based payments	–	–	–	–	6.0	–	–	6.0
Balance at 31 December 2022	156.8	45.7	36.3	(46.3)	3,548.9	(29.1)	9.4	3,721 .7
Balance at 1 January 2023	1 56.8	45.7	36.3	(46.3)	3,548.9	(29.1)	9.4	3,721 .7
Profit/(loss) for the year	–	–	–	–	69.0	(2.9)	–	66.1
Revaluation gain/(loss) on property, plant and equipment	–	–	–	–	–	–	0.9	0.9
Actuarial gain/(loss) in defined benefit plan	–	–	–	–	–	(0.4)	–	(0.4)
Deferred tax (charge)/credit allocated to actuarial gain/(loss)	–	–	–	–	–	0.2	–	0.2
Total comprehensive income/(expense) for the year	–	–	–	–	69.0	(3.1)	0.9	66.8
Dividends paid	–	–	–	–	(56.7)	–	–	(56.7)
Purchase of treasury shares	–	–	–	–	( 16 3.1)	–	–	( 16 3.1)
Movement in own shares reserve	–	–	–	9.6	–	–	–	9.6
Movement in share-based payments	–	–	–	–	(5.0)	–	–	(5.0)
Balance at 31 December 2023	156.8	45.7	36.3	(36.7)	3,393.1	(32.2)	10.3	3,573.3

Consolidated Statement of Changes in Equity

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 67

68 Report and Accounts December 2023 RIT Capital Partners plc

The Notes on pages 70 to 93 form part of these financial statements.

£ million

capital

premium

Capital

redemption

reserve

Capital

reserve

Revenue

reserve

Revaluation

reserve

Total

equity

Balance at 1 January 2022 156.8 45.7 36.3 4,203.4 (176.1) 11. 5 4,277.6

Profit/(loss) for the year – – – (556.2) (33.4) – (589.6)

Revaluation gain/(loss) on property, plant and equipment – – – – – (2.1) (2.1)

Total comprehensive income/(expense) for the year – – – (556.2) (33.4) (2.1) (591.7)

Dividends paid – – – (57.6) – – (57.6)

Purchase of treasury shares – – – (11.0) – – (11.0)

Balance at 31 December 2022

156.8 45.7 36.3 3,578.6 (209.5) 9.4 3,617.3

Balance at 1 January 2023 156.8 45.7 36.3 3,578.6 (209.5) 9.4 3,617.3

Profit/(loss) for the year – – – 77.0 (16.7) – 60.3

Revaluation gain/(loss) on property, plant and equipment – – – – – 0.9 0.9

Total comprehensive income/(expense) for the year – – – 77.0 (16.7) 0.9 61. 2

Dividends paid – – – (56.7) – – (56.7)

Purchase of treasury shares

– – – (163.1) – – (163.1)

Balance at 31 December 2023

156.8 45.7 36.3 3,435.8 (226.2) 10.3 3,458.7

Parent Company Statement of Changes in Equity

68 Report and Accounts December 2023 RIT Capital Partners plc

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 69

The Notes on pages 70 to 93 form part of these financial statements.

Year ended 31 December			Consolidated cash flow		Parent Company cash flow
£ million	Notes	2023	2022	2023	2022
Cash flows from operating activities:
Cash inflow/(outflow) before taxation and interest	32	328.6	57 .7	331. 1	7. 7
Interest paid		(34.4)	(25.0)	(34.4)	(25.0)
Net cash inflow/(outflow) from operating activities		294.2	32.7	296.7	(17.3)
Cash flows from investing activities:
Sale/(purchase) of property, plant and equipment		(0.3)	(0.1)	(0.3)	(0.1)
Investments in subsidiary undertakings		–	–	(21.0)	(2.5)
Divestments of subsidiary undertakings		–	–	25.2	–
Net cash inflow/(outflow) from investing activities		(0.3)	(0.1)	3.9	(2.6)
Cash flows from financing activities:
Repayment of borrowings		(699.9)	(591 .6)	(699.9)	(591.6)
Drawing of borrowings		61 8.6	555.4	618.6	555.4
Purchase of ordinary shares by EBT	24	(9.8)	(40.4)	–	–
Purchase of ordinary shares into treasury	21	( 16 3.1)	(1 1 .0)	(163.1)	(11.0)
Dividends paid	31	(56.7)	(57 .6)	(56.7)	(57.6)
Net cash inflow/(outflow) from financing activities		(310 .9)	(1 45.2)	(301. 1 )	(104.8)
Increase/(decrease) in cash in the year		(17 .0)	(1 12.6)	(0.5)	(124.7)
Cash at the start of the year		21 8.0	325.9	193.9	313.9
Effect of foreign exchange rate changes on cash		3.3	4.7	3.3	4.7
Cash at the year end		204.3	21 8.0	196.7	193.9

Shares are disclosed in the own shares reserve on the consolidated balance sheet.

Consolidated and Parent Company Cash Flow Statement

Company Highlights

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Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 69

Notes to the Financial Statements

70 Report and Accounts December 2023 RIT Capital Partners plc

1. Accounting Policies

The consolidated financial statements of the Group and Company are

prepared in accordance with UK adopted IAS and the requirements

of the Companies Act 2006. The Company has taken advantage of

section 408 of the Companies Act 2006 not to present the parent

company profit and loss account. The Company is domiciled in the

United Kingdom.

The financial statements have been prepared on a going concern

basis and under the historical cost convention except for the

revaluation of financial instruments (including derivatives),

investment properties held at fair value through profit or loss (FVPL),

associates held at FVPL, certain non-consolidated subsidiaries held

at FVPL, and property, plant and equipment held at fair value. In

making this going concern assumption, the Directors have taken

into account the closed-ended nature of the Group; its existing

cash balances (£204.3 million) and monitoring procedures; its

borrowing capacity (£40 million facilities committed and undrawn);

the value of investments which could be realised to fund liabilities;

loan covenants as well as cash flow forecasts for the period to

30 June 2025; and uncalled commitments (£307.1 million). Further

details can be found on page 30.

The principal accounting policies adopted are set out below.

Where the presentational guidance set out in the Statement of

Recommended Practice: Financial Statements of Investment Trust

Companies (the SORP) issued by the Association of Investment

Companies (AIC) in July 2022 is consistent with the requirements of

UK adopted IAS, the Directors have sought to prepare the financial

statements on a basis which complies with the recommendations of

the SORP.

Climate change

In preparing the financial statements, the Directors have considered

the impact of climate change insofar as they are reasonably able,

particularly in the context of the climate-related risks identified

in the principal risks and viability section of the Strategic Report.

These considerations did not have a material impact on the financial

reporting judgements and estimates in the current year, nor were

they expected to have a significant impact on the Group’s going

concern or viability.

Basis of consolidation

The consolidated financial statements incorporate the financial

statements of the Company and entities controlled by the Company

(its subsidiaries) made up to 31 December each year. The Board has

concluded that the Company, being the parent entity of the Group,

continues to meet the particular characteristics of an ‘Investment

Entity’. The ‘Investment Entity’ amendment to IFRS 10 Consolidated

Financial Statements requires that:

(i) the single subsidiary J.Rothschild Capital Management Limited

(JRCM), that is not itself an investment entity, which provides

investment management services to the Group, is consolidated

on a line-by-line basis with balances between the parent and this

subsidiary eliminated; and

(ii) all other subsidiaries, including Spencer House Limited (SHL),

RIT Investments US, Inc and RIT Investments GP Limited, are

accounted for as investments held at FVPL.

In the financial statements of the Company investments in

non-consolidated subsidiaries are carried at fair value and the

consolidated subsidiary is carried at cost less any provision for

impairment made in accordance with IAS 36 Impairment of Assets.

Impairment tests are carried out twice each year concurrent with the

Group’s principal reporting dates.

The financial statements of the subsidiaries are prepared at the

same reporting date using consistent accounting policies. Control is

achieved where the Company has all of the following;

(i) power over the investee;

(ii) exposure, or rights, to variable returns from its involvement with

the investee; and

(iii) the ability to use its power over the investee to affect the amount

of the Company’s returns.

Both the Group and Company hold investments in associates and

joint ventures at fair value as allowed by IAS 28 Investments in

Associates and Joint Ventures and IFRS 9 Financial Instruments.

Presentation of income statement

In order to better reflect the activities of an investment trust

company, and in accordance with guidance issued by the AIC,

supplementary information which analyses the consolidated income

statement between items of a revenue and capital nature has

been presented within the consolidated income statement and the

consolidated statement of comprehensive income (SOCI).

Income

Dividend income from investments is recognised when the right

to receive payment has been established and this is normally the

ex-dividend date.

UK dividend income is recorded at the amount receivable. Overseas

dividend income is shown net of withholding tax under investment

income.

Interest and other income is accrued on a time basis.

Rental income from investment properties under short-term leases

is accounted for on a straight-line basis, over the lease term.

Allocation between capital and revenue

In respect of the analysis between capital and revenue items

presented within the consolidated income statement, the SOCI and

the statement of changes in equity, all expenses and finance costs,

which are accounted for on an accruals basis, have been presented

as revenue items except those items listed below:

• expenses are allocated to capital where a direct connection with

the maintenance or enhancement of the value of the investments

can be demonstrated. Expenses are allocated to revenue where

there is an indirect connection;

• all segregated account fees are considered to be a cost of

achieving a capital return for those external managers operating

segregated accounts. This ensures consistency with the

treatment of all other investment management fees within our

fund investments, which are automatically included in capital and

reflected in the investment gain/loss;

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 71

1. Accounting Policies (continued)

• the Group has in place certain incentive arrangements whereby

individuals receive share awards based on investment performance

and/or share price growth. The cost of these arrangements derives

principally from the capital performance and therefore the Directors

consider it appropriate to allocate such costs to capital;

• expenses which are incidental to the purchase or disposal of an

investment are deducted from the initial fair value or disposal

proceeds of the investment; and

• costs incurred in connection with aborted portfolio investment

transactions are also allocated to capital.

The following are also presented as capital items:

• gains and losses on the realisation of investments, including

foreign exchange differences;

• increases and decreases in the valuation of investments held at

the year end, including foreign exchange differences;

• realised and unrealised gains and losses on derivatives

transactions of a capital nature; and

• expenses, together with the related taxation effect, allocated to

capital in accordance with the above policies.

Finance costs

Finance costs on borrowings are accounted for on an accruals basis

and are settled at the end of each contractual period. Finance costs

on derivatives are settled in line with the underlying contract.

Finance costs are allocated in the ratio 20:80 to the revenue and

capital columns of the income statement.

Foreign currencies

The individual financial statements of each Group entity are

presented in the currency of the primary economic environment

in which the entity operates, i.e. its functional currency. For the

purpose of the consolidated financial statements, the results and

financial position of each entity are expressed in sterling which is

the functional currency of the Company, and the presentational

currency of the Group. Transactions in currencies other than sterling

are recorded at the rate of exchange prevailing on the dates of

the transactions. At each balance sheet date, monetary items

and non-monetary assets and liabilities that are fair valued and

are denominated in foreign currencies are translated at the rates

prevailing on the balance sheet date. All foreign exchange gains and

losses are recognised in the consolidated income statement.

Taxation

The tax expense represents the sum of the tax currently payable and

deferred tax.

The tax currently payable is based on taxable profit for the year.

Taxable profit differs from profit before tax as reported in the

consolidated income statement because it excludes items of income

or expense that are taxable or deductible in other years and it further

excludes items that are not subject to tax or are not deductible for

tax purposes. The Group’s liability for current tax is calculated using

tax rates that have been enacted or substantively enacted by the

balance sheet date.

Investment trusts which have approval under Section 1158 of the

Corporation Tax Act 2010 are not subject to tax on capital gains.

In view of the Company’s status as an investment trust, and its

intention to continue meeting the conditions required to maintain

approval for the foreseeable future, the Company has not provided

current or deferred tax on any capital gains or losses arising on the

revaluation or disposal of investments.

The carrying amount of the deferred tax asset is reviewed at each

balance sheet date and reduced to the extent that it is no longer

probable that sufficient taxable profits will be available to allow all or

part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply

in the period when the liability is settled or the asset is realised.

Deferred tax is charged or credited to the consolidated income

statement or SOCI, except when it relates to items charged or

credited directly to equity, in which case the deferred tax is also dealt

with in equity.

Investments

Investments are recognised and derecognised on the trade date

where a purchase or sale is made under a contract whose terms

require delivery within the timeframe established by the market

concerned. All investments are measured initially and at subsequent

reporting dates at fair value and classified in accordance with IFRS as

‘fair value through profit or loss’. Unrealised changes in the fair value

of these investments are recognised in the consolidated income

statement as capital items. The gain or loss arising on the disposal

of investments is determined as the difference between the sale

proceeds and the carrying amount of the asset at the beginning of

the year and is recognised in the consolidated income statement as

capital items. Transaction costs are included within gains or losses on

these investments.

Fair value, for quoted investments, is either the bid price or the

last traded price, depending on the convention of the exchange on

which the investment is quoted. Investments in externally-managed

funds are valued at the closing price, the bid price or the single

price as appropriate, released by the relevant fund administrator or

investment manager.

In respect of private investments, or where the market for a financial

instrument is not active, fair value is estimated by using appropriate

valuation techniques and often involves significant judgement and

estimation uncertainty. For direct private investments held through

co-investment vehicles managed by a General Partner (GP), as well

as private funds managed by a GP, the estimated fair value is based

on the most recent valuation provided by the GP. These valuations

are normally prepared quarterly and usually received within three

months of the relevant valuation date. Depending on the timing of

the finalisation of the half-year and year-end report and accounts, it

is likely that the majority of these assets are valued at the previous

quarter end. Where this is the case, the valuations of private funds

are adjusted for subsequent investments, distributions and currency

moves. In relation to direct co-investments, the valuations will also

be adjusted for subsequent investments, distributions and currency

moves, as well as pricing events where there is sufficient information

to suggest the period-end valuation should be adjusted. Further,

in light of the intrinsic valuation uncertainty, where information is

Notes to the Financial Statements

72 Report and Accounts December 2023 RIT Capital Partners plc

received after the year end which relates to conditions present at

the year end, an adjustment will be considered if it would be likely to

have a material impact on the net assets. Ultimately these valuations

are dependent on the reasonableness of the fair value estimation by

the GP. The valuations are reviewed periodically by the Manager, and

in the absence of contrary information, are assumed to be reliable. A

review is also conducted annually in respect of the valuation bases of

the investee funds to confirm these are in accordance with fair value

standards.

Where the Manager has sufficient information to undertake

its own valuations, these will be prepared having regard to the

International Private Equity and Venture Capital Valuation Guidelines

as recommended by the British Private Equity and Venture Capital

Association. The inputs into the valuation methodologies adopted

include observable data such as historical earnings or cash flows as

well as more subjective data such as earnings forecasts or discount

rates. At period ends, all of the valuations are subject to review,

adjustment as appropriate and ultimately approval by the Company’s

Valuation Committee that operates as a sub-committee of the Board

comprised entirely of independent non-executive Directors.

The gains and losses on financial assets classified at FVPL exclude

any related interest income, dividend income and finance costs

where these items are separately identifiable. These items are

disclosed separately in the financial statements.

Leasehold and freehold investment properties are measured initially

at cost, including related transaction costs. After initial recognition at

cost, investment properties are carried at their fair values based on

the external professional valuation made as of each reporting date.

Valuation surpluses and deficits arising in the year are included in the

consolidated income statement.

Derivative financial instruments, including futures, options and

other derivatives, are stated in the balance sheet at fair value. For

derivatives that are capital in nature, the associated change in value

is presented as a capital item in the income statement. The Group

has adopted trade date accounting. Accordingly, derivative financial

instruments are recognised on the date the Group enters into the

relevant contract, and are derecognised on the date on which it

commits to their sale or they expire. All derivatives are classified as

FVPL and are presented as assets when their fair value is positive,

and as liabilities when their fair value is negative .

Cash at bank

Cash at bank in the balance sheet comprises cash balances and

deposits.

Provisions

A provision is recognised in the balance sheet when the Group or

Company has a constructive or legal obligation as a result of a past

event and it is probable that an outflow of economic benefits will be

required to settle the obligation.

Share-based payment

In accordance with IFRS 2 Share-based Payment (IFRS 2), the Group

is required to reflect in its income statement and balance sheet the

effects of share-based payment transactions. The Group’s share-

settled incentive schemes include the Annual Incentive Scheme

(AIS) (in part), share appreciation rights (SARs) and restricted share

units (RSUs).

AIS awards are structured such that 60% of individual amounts in

excess of £250,000 are paid in deferred shares of the Company

which vest equally over the three years following the award. Deferred

shares are valued using the prevailing market price at award. The

expense is recognised over the year the award relates to and the

following three years.

Historically, long-term incentive plan (LTIP) awards were made via

SARs and performance shares. SARs were measured at the fair

value at grant date using a trinomial option valuation model. The

cost is then recognised through the capital column of the income

statement over the three-year vest period.

Performance shares were conditional awards of shares subject to

performance conditions. They were accounted for as equity settled

in accordance with IFRS 2. The awards were fair valued at grant

using a Monte Carlo model and the resulting cost of an award is then

recognised through the capital column of the income statement over

the vest period particular to that award.

Following a review by the Remuneration Committee, it was decided

that from 2021, future LTIP awards would be made using restricted

share units (RSUs), with the first such award in March 2021.

RSUs are equity-settled awards accounted for in accordance with

IFRS 2 and are measured at fair value using the share price at the

grant date, adjusted for a two year post-vesting sale restriction.

The cost is recognised through the capital column of the income

statement over the three-year vest period.

On 31 March 2021, staff members were given the option to convert

their existing SARs and performance shares at fair value into RSUs,

with the vast majority subsequently converted. This conversion was

accounted for in accordance with IFRS 2.

Shares required to meet the estimated future requirements

from grants or exercises under all schemes, are purchased by an

Employee Benefit Trust (EBT), which is consolidated by the Group.

The cost of own shares held at the end of the year by the EBT is

reflected in the Group’s own shares reserve on the consolidated

balance sheet.

The movement in equity arising under IFRS 2 is applied to the capital

reserve.

Property, plant and equipment

Property, plant and equipment is shown at cost less accumulated

depreciation, save as detailed below. Depreciation is calculated

by the Group on a straight-line basis by reference to original cost,

estimated useful life and residual value. Cost includes the original

purchase price of the asset and the costs attributable to bringing

the asset to its working condition for its intended use. The period

of estimated useful life for this purpose is between three and five

years for the majority of assets except for the Company’s leasehold

interest in 27 St. James’s Place for which the estimated useful life is

60 years, which is also the period remaining on the property lease.

The proportion of this asset occupied by the Group is accounted

for at fair value under the revaluation model allowed by IAS 16

1. Accounting Policies (continued)

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 73

Property, Plant and Equipment, which is intended to ensure that the

carrying value of the asset is never substantially different to its fair

value. Changes in fair value are reflected in the SOCI and a separate

revaluation reserve. The proportion of property assets not occupied

by the Group is accounted for as investment properties at fair value.

Determination of fair value requires significant judgement and

external advisers are used.

Pensions

JRCM is a participating employer in the Group’s non-contributory,

funded, defined benefit retirement scheme which is closed to new

members and the assets of which are held in a trustee-administered

fund. There are no longer any active members of this scheme.

The Group accounts for this defined benefit retirement scheme

by reference to IAS 19 Employee Benefits. The cost of benefits

accruing during the year in respect of past service is charged to the

income statement and allocated to revenue. The net interest on

the net defined benefit liability or asset is recognised in the income

statement. Actuarial gains and losses and the return on plan assets,

excluding amounts included in the net interest on the net defined

benefit liability or asset, are recognised in the SOCI. An actuarial

valuation of the defined benefit retirement scheme is undertaken

every three years as at 1 January and is updated as at each principal

reporting date. The valuation is carried out using the projected

unit credit method of funding basis. The income statement also

includes costs incurred in respect of defined contribution schemes,

comprising the contributions payable in the year.

Other receivables/other payables

Other receivables/other payables do not carry any interest, are

short-term in nature and are carried at amortised cost. Application of

the expected credit loss model to receivables has had an immaterial

impact on their carrying value. The carrying value of receivables and

payables approximates to their fair value.

Amounts owed to/by Group undertakings

Amounts owed to/by Group undertakings do not carry any interest

and are carried at amortised cost. Application of the expected credit

loss model to these items has had an immaterial impact on their

carrying value. The carrying value of amounts owed to/by Group

undertakings approximates to their fair value.

Bank borrowings

Interest-bearing bank loans are recorded initially at the proceeds

received and subsequently at FVPL, on the basis that the Group and

its performance is evaluated on a fair value basis, in line with IFRS 9,

paragraph 4.2.2. The fair value is calculated as the amount to replace

the facility which is equal to par.

Loan notes

Loan notes are classified as a financial liability at FVPL and are

measured initially and subsequently at fair value with movements

in fair value taken to the income statement as a capital item. The

fair value is calculated with a discounted cash flow model using the

fixed interest and redemption payments based on the underlying

contractual cash flows. The discount rate adopted reflects the

prevailing market rate for similar instruments. As a result, the

determination of fair value requires management judgement. Further

details of the loan notes are provided on pages 88 and 89.

Dividends

The Company recognises interim dividends in the year in which they

are paid.

Share capital and share premium

Share capital is classified as equity. Share premium reflects the

excess of the consideration received on issuing shares over the

nominal value of those shares, net of issue costs.

Treasury shares

The cost of repurchasing shares into treasury, including all related

costs, is dealt with in the Statement of Changes in Equity and

deducted from the Capital Reserve.

New and amended standards and interpretations not applied

There are no new standards and interpretations that are relevant

to RIT and effective up to the date of issuance of the financial

statements that require disclosure in the Financial Statements.

Critical accounting estimates and judgements

The preparation of financial statements in conformity with UK

adopted IAS requires the use of certain critical accounting estimates.

It also requires the Manager and Board to exercise judgement in

the process of applying the Group’s accounting policies. The areas

requiring a higher degree of judgement or complexity and where

assumptions and estimates are significant to the consolidated

financial statements, are in relation to the valuation of private

investments (see pages 71 and 72 and Note 13) and property

(see pages 72 and 73 and Notes 10 and 15).

1. Accounting Policies (continued)

Notes to the Financial Statements

74 Report and Accounts December 2023 RIT Capital Partners plc

2. Investment income

£ million	2023	2022
Income from listed investments:
Dividends	10.1	7. 2
Income from unlisted investments:
Interest	3.9	4.3
Interest income on cash balances	13.5	5.5
Income from investment properties	1. 8	2.1
Total investment income	29.3	19.1

3. Gains/(losses) on fair value investments

£ million	2023	2022
Gains/(losses) on fair value investments
excluding segregated accounts	70.8	(579.2)
Gains/(losses) on segregated accounts	47.1	28.0
Segregated account fees - annual	(1. 9 )	(1.7)
Segregated account fees - performance	(6.1)	(2.6)
Net gains/(losses) on fair value investments
held in segregated accounts	39.1	23.7
Gains/(losses) on fair value investments	109.9	(555.5)

The Company’s Investment Policy involves the allocation of part of

the portfolio to external fund managers. The vast majority of these

managers operate funds where the fees are charged within the

fund. These ‘indirect’ investment management and performance

fees are therefore automatically reflected within the valuations

received from the administrators or managers, and form part of

the investment gains/(losses). At 31 December 2023, three funds

(31 December 2022: three) were structured as segregated accounts,

where the managers separately invoice the Company for investment

management fees. In order to provide a consistent presentation for

all external fees, these are included within the gains/(losses) on fair

value investments as shown above. Further details on the typical fee

structures for the external funds are set out in the Directors’ Report

on page 61.

4. Operating expenses

£ million	2023	2022
Staff costs:
Wages and salaries	14.3	13.3
Share-based payment costs (Note 25)	14.7	1 7. 6
Social security costs	3.9	4.4
Pension costs (Note 11)	0.5	0.3
Total staff costs	33.4	35.6
Auditor’s remuneration (Note 5)	0.4	0.3
Depreciation	0.3	0.4
Lease payments	0.5	0.4
Other operating expenses	8.1	6.9
Total operating expenses	42.7	43.6

Operating expenses include costs incurred by JRCM in managing

the Group's assets and property costs from the Group’s property

portfolio. Further information is provided in Note 6.

The figures include Directors’ emoluments, details of which are

shown in the Directors’ Remuneration Report on pages 56 to 59.

The average monthly number of employees during the year was

65 (2022: 59) of which 52 (2022: 47) were employed by JRCM and

13 (2022: 12) were employed by SHL.

5. Other disclosable expenses

During the year the Group obtained the following services from the

Company’s auditor and its associates:

£ thousand	2023	2022
Fees payable to the Company’s auditor and
its associates for the audit of the Parent
Company and consolidated financial
statements	278	228
Fees payable to the Company’s auditor and its associates for other services:
Audit of the Company’s subsidiaries	95	94
Audit-related assurance services	9	12
Total	382	334

Transaction costs

The following transaction costs represent commissions paid on the

purchase and sale of listed investments and are included within

gains/(losses) on fair value investments:

£ million	2023	2022
Purchases	0.7	1. 5
Sales	0.6	1. 2
Transaction costs	1.3	2.7

Furthermore £0.02 million of professional fees (2022: £0.02 million)

incurred on purchases of investments are included within gains/

(losses) on fair value investments.

6. Business and geographical segments

For 2023 and 2022, the Group is considered to have three principal

operating segments, all based in the UK, as follows:

		2023		2022
		AUM	2023	AUM	2022
Segment	Business	£ million	Employees	£ million	Employees
RIT	Investment trust	–	–	–	–
JRCM	Investment
	management/
	administration	3,573	50	3,722	49
SHL	Events/premises
	management	–	12	–	13

At 31 December 2023.

At 31 December 2022.

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 75

Key financial information for 2023 is as follows:

	Net	Income/	Operating
£ million	assets	gains	expenses	Profit
RIT	3,458.7	143.0	(45.3)	97. 7
JRCM	120.6	39.0	(36.5)	2.5
SHL	1. 3	4.1	(3.8)	0.3
Adjustments	( 7. 3)	(42.9)	42.9	–
Total	3,573.3	143.2	(42.7)	100.5

Key financial information for 2022 is as follows:

	Net	Income/	Operating
£ million	assets	gains	expenses	Profit
RIT	3,617.3	(511.6)	(52.7)	(564.3)
JRCM	110.3	50.3	(38.4)	11. 9
SHL	0.9	3.7	(3.5)	0.2
Adjustments	(6.8)	(51.0)	51.0	–
Total	3,721.7	(508.6)	(43.6)	(552.2)

Includes intra-group income and expenses.

Profit before finance costs and taxation.

Consolidation adjustments in accordance with IFRS 10 Consolidated

Financial Statements.

7. Finance costs

£ million	2023	2022
Interest on borrowings	23.1	14.3
Interest on swaps	11. 3	10.4
Other finance costs	0.0	0.3
Finance costs	34.4	25.0

8. Taxation

	Year ended 31 December 2023
£ million	Revenue	Capital	Total
UK corporation tax charge/(credit)	–	–	–
Current tax charge/(credit)	–	–	–
Deferred tax charge/(credit)	–	–	–
Taxation charge/(credit)	–	–	–

	Year ended 31 December 2022
£ million	Revenue	Capital	Total
UK corporation tax charge/(credit)	–	–	–
Current tax charge/(credit)	–	–	–
Deferred tax charge/(credit)	–	–	–
Taxation charge/(credit)	–	–	–

The main corporation tax rate increased from 19% to 25% with

effect from 1 April 2023. The tax charge for the year differs from the

effective rate of corporation tax in the UK for 2023 of 23.5% (2022:

19%). The differences are explained as follows:

	Year ended 31 December 2023
£ million	Revenue	Capital	Total
Profit/(loss) before taxation	(2.9)	69.0	66.1
Tax at the standard
UK corporation tax rate of 23.5%	(0.7)	16.2	15.5
Effect of:
Capital items exempt from corporation tax	–	(25.9)	(25.9)
Dividend income not taxable	(1.7)	–	(1.7)
Expenses not deductible
for tax purposes	0.1	–	0.1
Tax losses not recognised	2.3	10.0	12.3
Other items	–	(0.3)	(0.3)
Total taxation charge/(credit)	–	–	–

	Year ended 31 December 2022
£ million	Revenue	Capital	Total
Profit/(loss) before taxation	(14.3)	(562.9)	(577.2)
Tax at the standard
UK corporation tax rate of 19%	(2.7)	(107.0)	(109.7)
Effect of:
Capital items exempt from corporation tax	–	102.9	102.9
Dividend income not taxable	(1.2)	–	(1.2)
Expenses not deductible
for tax purposes	0.1	–	0.1
Tax losses not recognised	3.8	4.8	8.6
Other items	–	(0.7)	(0.7)
Total taxation charge/(credit)	–	–	–

Refer to Note 12 on page 78 for the explanation of carried forward

tax losses.

9. Earnings per ordinary share –

basic and diluted

The basic earnings per ordinary share for 2023 is based on the profit

of £66.1 million (2022: loss of £577.2 million) and the weighted

average number of ordinary shares in issue during the period of

149.5 million (2022: 155.5 million). The weighted average number

of shares is adjusted for shares held in the EBT and in treasury in

accordance with IAS 33 – Earnings per share.

£ million	2023	2022
Net revenue profit/(loss)	(2.9)	(14.3)
Net capital profit/(loss)	69.0	(562.9)
Total profit/(loss) for the year	66.1	(577.2)

Weighted average (million)	2023	2022
Number of shares in issue	156.8	156.8
Shares held in EBT	(1.8)	(1.0)
Shares held in treasury	(5.5)	(0.3)
Basic shares	149.5	155.5

6. Business and geographical segments (continued)

Notes to the Financial Statements

76 Report and Accounts December 2023 RIT Capital Partners plc

pence	2023	2022
Revenue earnings/(loss)
per ordinary share – basic	(1. 9 )	(9.2)
Capital earnings/(loss)
per ordinary share – basic	46.1	(362.1)
Total earnings per share – basic	44.2	(371.3)

The diluted earnings per ordinary share for the period is based on the

basic shares (above) adjusted for the effect of share-based payments

awards for the period.

This adjustment was not required for 2022 as an increase in the

shares in issue would have reduced the basic loss per ordinary

share. As a result, there was no difference between the basic and

diluted loss per ordinary share in the prior year.

Weighted average (million)	2023	2022
Basic shares	149.5	155.5
Effect of share-based payment awards	1. 4	–
Diluted shares	150.9	155.5

pence	2023	2022
Revenue earnings/(loss)
per ordinary share – diluted	(1. 9 )	(9.2)
Capital earnings/(loss)
per ordinary share – diluted	45.7	(362.1)
Total earnings per ordinary share – diluted	43.8	(371.3)

10. Property, plant and equipment

The Group’s property, plant and equipment as at 31 December 2023

was £21.6 million (2022: £20.7 million).

Group		Accumulated		Net book/fair
£ million	Cost	depreciation	Revaluation	value
At 1 January 2023	1 7. 5	(6.2)	9.4	20.7
Additions	0.3	–	–	0.3
Charge for depreciation	–	(0.3)	–	(0.3)
Revaluation gain/(loss)	–	–	0.9	0.9
Fair value at 31 December 2023	1 7. 8	(6.5)	10.3	21.6
Of which:
Property – leasehold	14.1	(4.9)	10.3	19.5

Group		Accumulated		Net book/fair
£ million	Cost	depreciation	Revaluation	value
At 1 January 2022	1 7. 4	(5.8)	11. 5	23.1
Additions	0.1	–	–	0.1
Charge for depreciation	–	(0.4)	–	(0.4)
Revaluation gain/(loss)	–	–	(2.1)	(2.1)
Fair value at 31 December 2022	1 7. 5	(6.2)	9.4	20.7
Of which:
Property – leasehold	14.2	(4.6)	9.4	19.0

The Company’s property, plant and equipment as at 31 December

2023 was £21.5 million (2022: £20.6 million).

Company		Accumulated		Net book/fair
£ million	Cost	depreciation	Revaluation	value
At 1 January 2023	15.8	(4.6)	9.4	20.6
Additions	0.3	–	–	0.3
Charge for depreciation	–	(0.3)	–	(0.3)
Revaluation gain/(loss)	–	–	0.9	0.9
Fair value at 31 December 2023	16.1	(4.9)	10.3	21.5
Of which:
Property – leasehold	14.1	(4.9)	10.3	19.5

Company		Accumulated		Net book/fair
£ million	Cost	depreciation	Revaluation	value
At 1 January 2022	15.7	(4.2)	11. 5	23.0
Additions	0.1	–	–	0.1
Charge for depreciation	–	(0.4)	–	(0.4)
Revaluation gain/(loss)	–	–	(2.1)	(2.1)
Fair value at 31 December 2022	15.8	(4.6)	9.4	20.6
Of which:
Property – leasehold	14.2	(4.6)	9.4	18.9

The fair value at both year ends predominantly relates to the

proportion of the leasehold interest in 27 St. James’s Place occupied

by the Group. The property valuations are based on Jones Lang

LaSalle’s (JLL) valuations at the respective year ends.

11. Pension commitments

The Group has pension commitments in respect of its participation

in the RITCP Pension and Life Assurance Scheme (the Scheme). The

Scheme consists of a defined benefit plan which is closed to new

members. The Scheme is administered under a Trust Deed and Rules

and a corporate trustee, Law Debenture Pension Trust Corporation plc,

who is independent of the Group and was appointed in May 2019.

In December 2022, the Group de-risked its retirement benefit

obligations by supporting the trustees of the Scheme in completing a

£20 million bulk annuity insurance policy ‘buy-in’. The ‘buy-in’ secured

an insurance asset that fully matches almost all the remaining

pension liabilities of the Scheme, with the result that the Group no

longer bears material investment, longevity, interest rate or inflation

risk. The annuity policy is held in the name of the Trustee.

As a result of the ‘buy-in’, current cash contributions into the Scheme

have ceased. In addition, the Group will no longer record non-cash

interest income on the accounting surplus.

It is expected that a full buy-out of the Scheme will complete in

2024, during which individual insurance policies will be purchased for

the beneficiaries of the scheme. After the ‘buy-out’ has completed,

the Group will no longer have any liabilities against the Scheme.

9. Earnings per ordinary share –

basic and diluted (continued)

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 77

The costs associated with the Scheme, their recognition in the

financial statements, the assumptions underlying the calculation

of those costs and their disclosure in the consolidated income

statement or SOCI are set out below.

Defined benefit cost
£ millions	2023	2022
Net interest on defined benefit asset	(0.0)	(0.1)
Remeasurement effects recognised in the SOCI	0.4	4.5
Total cost/(credit)	0.4	4.4

Recognised in the consolidated income statement
£ millions	2023	2022
Defined contribution schemes	0.5	0.4
Defined benefit scheme:
Net interest on defined benefit liability	0.0	(0.1)
Total pension cost recognised in the consolidated income statement	0.5	0.3

Recognised in the SOCI
£ millions	2023	2022
Defined benefit scheme:
Actuarial loss due to liability experience	0.0	0.4
Actuarial (gain)/loss due to liability
assumption changes	0.5	(9.6)
Actuarial gain due to demographic
assumption changes in defined benefit
obligation (DBO)	(0.3)	(0.1)
Return on Scheme assets greater than discount rate	0.2	13.8
Remeasurement effects recognised in the SOCI	0.4	4.5
Total (credit)/expense	0.9	4.8

The Scheme’s assets and liabilities are shown below together with

the actuarial assumptions used.

Changes in the DBO
£ millions	2023	2022
DBO at end of prior year	1 7. 1	26.7
Interest cost on the DBO	0.9	0.5
Actuarial loss - demographic experience	0.0	0.3
Actuarial gain - demographic assumptions	(0.3)	–
Actuarial gain - financial assumptions	0.5	(9.6)
Benefits paid from scheme assets	(0.9)	(0.8)
Total DBO	1 7. 3	1 7. 1

Changes in Scheme assets
£ millions	2023	2022
Opening fair value of the Scheme assets	1 7. 6	30.5
Interest income on Scheme assets	0.9	0.6
Return on Scheme assets greater than discount rate	(0.2)	(13.8)
Employer contributions	–	1. 1
Benefits paid	(0.9)	(0.8)
Total Scheme assets	1 7. 4	1 7. 6

The Company has unrestricted rights to any surplus in the Scheme

upon wind-up. As such there is no irrecoverable surplus for either the

current year or prior year.

Development of the net balance sheet position
£ millions	2023	2022
Net defined benefit asset at end of prior
year	0.5	3.8
Net interest on defined benefit asset at end
of prior year	0.0	0.1
Remeasurement effects recognised in the SOCI	(0.4)	(4.5)
Employer contributions	0.0	1. 1
Net defined benefit asset	0.1	0.5

The assumptions used to determine the measurements at the

reporting dates are shown below:

	2023	2022
Discount rate	4.65%	4.95%
Price inflation (RPI)	3.30%	3.35%
Rate of salary increase	n/a	n/a
Pension increases for pre 6 April 1997
pension	4.00%	4.00%
Pension increases for post 6 April 1997
pension	4.20%	4.25%
Pension increases for deferred benefits
(non Guaranteed Minimum Pension)	3.30%	3.35%
Scheme participant census date	31 December	31 December
	2023	2022
Post retirement mortality assumption- source	SAPS	SAPS

Self-administered Pension Scheme light series year of birth tables allowing

for Continuous Mortality Investigation projections and a 1.5% per annum

long-term trend.

Sensitivity analysis

In accordance with IAS 19 (revised), the sensitivity of the DBO to

the relevant actuarial assumptions is shown below. In each case the

changed assumption has been considered in isolation (i.e. all other

factors remain constant).

£ millions	2023	2022
DBO	1 7. 3	1 7. 1

Significant actuarial assumptions at 31 December 2023:

	Assumptions
	used for		Revised DBO
	sensitivity	Sensitivity	for each
£ millions	analysis	analysis	sensitivity
Discount rate	4.15%	0.5% point decrease	18.5
Price inflation (RPI)	3.80%	0.5% point increase	1 7. 6
Life expectancy	–	Increase of 1 year	18.0

11. Pension commitments (continued)

Notes to the Financial Statements

78 Report and Accounts December 2023 RIT Capital Partners plc

11. Pension commitments (continued)

Significant actuarial assumptions at 31 December 2022:

	Assumptions
	used for		Revised DBO
	sensitivity	Sensitivity	for each
£ millions	analysis	analysis	sensitivity
Discount rate	4.45%	0.5% point decrease	18.3
Price inflation (RPI)	3.85%	0.5% point increase	1 7. 2
Life expectancy	–	Increase of 1 year	1 7. 7

The weighted average duration of the DBO is 13 years. Further

Scheme analysis is shown below.

Analysis of DBO by participant category
£ millions	2023	2022
Deferred participants	1. 8	2.2
Pensioners	15.5	14.9
DBO	1 7. 3	1 7. 1

The fair value of Scheme assets of £1 7. 4 million is analysed in the

table below (2022: £17.6 million).

	31 December	31 December
Scheme asset breakdown	2023	2022
Bulk insurance policy	98%	96%
Cash and liquidity/other	2%	4%
Total	100%	100%

12. Deferred taxation

The gross movement on deferred tax during the year is shown

below:

£ million	2023	2022
Balance at start of year	(0.2)	(1.3)
(Debit)/credit to consolidated income
statement	–	–
(Debit)/credit to SOCI	0.2	1. 1
Balance at end of year	(0.0)	(0.2)

The deferred tax asset/(liability) is analysed below:

£ million	2023	2022
Retirement benefit asset	(0.0)	(0.2)
Balance at end of year	(0.0)	(0.2)

The Group had carried forward tax losses of £521 million at

31 December 2023 (2022: £453 million) that have not been

recognised as a deferred tax asset, as it is considered unlikely that the

unrecognised asset will be utilised in the foreseeable future.

13. Financial instruments

As an investment company, financial instruments make up the

vast majority of the Group’s assets and liabilities and generate

its performance.

Financial instruments comprise securities, derivatives and other

investments, cash, short-term receivables and payables, and short

and long-term borrowings.

The nature and extent of the financial instruments outstanding can

be seen on the face of the balance sheet and the risk management

policies employed by the Group and Company are set out below.

The Group’s policy for determining the fair value of investments

(including private investments) is set out on pages 71 and 72. In relation

to receivables, payables and short-term borrowings, the carrying amount

is viewed as being a reasonable approximation of fair value.

13.1 Financial risk management

The main risks arising from the Group’s financial instruments are

market risk (including price risk, interest rate risk and currency risk),

credit risk and liquidity risk. The day-to-day identification, mitigation

and monitoring of these risks is undertaken by the Manager under

the authority of the Board and the Audit and Risk Committee, and is

described in more detail below.

The objectives, policies and processes for managing risks have not

changed since the previous accounting year. The risk management

processes of the Company are aligned with those of the Group

as a whole and it is at the Group level that the majority of the

risk management procedures are performed. Where relevant and

materially different from the Group position, Company-specific risk

exposures are explained alongside those of the Group.

13.1.1 Market risk

The fair value or future cash flows of a financial instrument or

investment property held by the Group may fluctuate as a result

of changes in market prices. Market risk can be summarised as

comprising three types of risk:

• Price risk

The risk that the fair value or future cash flows of financial

instruments and investment properties will fluctuate because of

changes in market prices (other than those arising from interest

rate risk or currency risk).

• Interest rate risk

The risk that the fair value or future cash flows of financial

instruments and investment properties will fluctuate because of

changes in interest rates.

• Currency risk

The risk that the fair value or future cash flows of financial

instruments will fluctuate because of changes in foreign

exchange rates.

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 79

13. Financial instruments (continued)

The Group’s exposure to, sensitivity to and management of each of

these risks are described in further detail below.

Management of market risk is fundamental to the Group’s

investment objective. The investment portfolio is continually

monitored to target an appropriate balance of risk and reward.

The Manager may seek to reduce or increase the portfolio’s

exposure to stock markets, interest rates and currencies by utilising

derivatives such as index futures, options, swaps and currency

forward contracts. These instruments are used for the purpose of

hedging some or all of the existing exposure within the portfolio to

those currencies or particular markets, as well as to enable increased

exposure when deemed appropriate. With respect to equity, foreign

exchange and interest rate options, the notional exposure presented

in this note is adjusted to reflect the estimated sensitivity of the

option to movements in the underlying security.

13.1.2 Price risk

Price risk may affect the value of the quoted, private and other

investments held by the Group.

The Group has a widely diversified investment portfolio which

significantly reduces the exposure to individual asset price risk.

The performance of third-party investment managers is regularly

reviewed and assessed to ensure compliance with their mandates

and that their performance is compatible with the Group’s

investment objective.

The Group’s exposure to price risk is monitored and managed by

analysing the levels of direct exposure from quoted equity price risk

and the exposure from other price risk.

The Group’s exposure to quoted equity price risk (also described as

net quoted equity exposure) can be assumed to be equivalent to the

quoted equity investments in the investment portfolio adjusted for:

• Notional exposure from quoted equity derivatives;

• Estimated cash balances held by external managers; and

• Estimated net equity exposure from hedge fund managers.

Other price risk exposure relates to investments in private

investments, absolute return and credit, and real assets, adjusted for

the notional exposure from commodity and credit derivatives.

	31 December	31 December
£ million	2023	2022
Exposure to quoted equity price risk	1,594.5	1,361.1
Exposure to other price risk	2,332.2	2,394.5
Total exposure to price risk	3,926.7	3,755.6

Quoted equity price risk represented 45% of year-end net assets

(2022: 37%).

Price risk sensitivity analysis

The sensitivity of the Group’s net assets and profit with regards to

changes in market prices is illustrated below. This is estimated using

an assumed 10% increase in general market prices with all other

variables held constant. A 10% decrease is assumed to produce an

equal and opposite effect.

The sensitivity analysis takes account of the relevant derivative

transactions the Group has entered into including those designed to

provide a hedge against such movements.

	2023	2022
	Impact on profit	Impact on profit
£ million	and net assets	and net assets
Quoted equity	230.2	137.4
Other	260.4	239.4
Total	490.6	376.8

The Group is exposed to market risk in respect to the fair value of

the investment properties. The investment properties are valued by

JLL using a market valuation approach and as such, the valuation

will be influenced by trends experienced in the property market and

also the wider economic environment. In particular, the valuation will

be dependent on rental income yields, demand and supply for office

space in London and comparable transactions completed in the

marketplace. Fluctuations in any of the inputs used by the valuers to

value the investment properties may increase or decrease the fair

value of the properties.

13.1.3 Interest rate risk

The Group finances its operations mainly through its share capital

and reserves, including realised gains on investments. In addition,

financing has been obtained through bank borrowings and fixed rate

loan notes. Changes in interest rates have a direct or indirect impact

on the fair value or future cash flows of the following financial assets

and liabilities:

• Gilts and other government securities;

• Money market funds;

• Credit funds;

• Cash and cash equivalents;

• Group borrowings; and

• Certain derivative contracts.

Changes in interest rates indirectly affect the fair value of the Group’s

other investments including those in quoted equity securities, private

investments or property.

Notes to the Financial Statements

80 Report and Accounts December 2023 RIT Capital Partners plc

13. Financial instruments (continued)

Interest rate risk is managed by taking into account the possible

effects on fair value and cash flows that could arise as a result of

changes in interest rates when making decisions on investments

and borrowings.

Exposure of the Group’s financial assets and liabilities to floating

interest rates (giving cash flow interest rate risk when rates are

reset) and fixed interest rates (giving fair value risk), is shown below.

		31 December 2023
	Floating	Fixed
£ million	rate	rate	Total
Portfolio investments –
debt securities	–	154.0	154.0
Cash	204.3	–	204.3
Borrowings	(142.9)	(137.9)	(280.8)
Total	61.4	16.1	77.5

		31 December 2022
	Floating	Fixed
£ million	rate	rate	Total
Portfolio investments –
debt securities	–	40.7	40.7
Cash	218.0	–	218.0
Borrowings	(236.2)	(134.4)	(370.6)
Total	(18.2)	(93.7)	(111.9)

In addition, the Group holds £739.8 million (2022: £746.8 million) invested in

absolute return and credit, of which £394.5 million (2022: £443.7 million) is in

funds that predominantly invest in credit instruments. These provide indirect

exposure to interest rate risk.

Exposures vary throughout the year as a consequence of changes

in the composition of the net assets of the Group arising out of

investment, borrowing and risk management processes.

Portfolio investments include direct and indirect (via externally-

managed funds) investments in government securities, money

markets, as well as quoted and unquoted debt securities issued by

companies.

Interest received on cash and cash equivalents is at prevailing market

rates.

The Group has total borrowings with a fair value of £280.8 million

outstanding at the year end (2022: £370.6 million). The revolving

credit facilities comprising £142.9 million of this total incur floating

interest payments (2022: £236.2 million). The loan notes with a fair

value of £137.9 million (par value of £151.0 million) have fixed interest

payments (2022: fair value £134.4 million; par value £151.0 million).

Further details are provided in Note 18.

Interest rate risk sensitivity analysis

The approximate sensitivity of the Group’s net assets and profit in

regard to changes in interest rates is illustrated below. This is based

on an assumed 50 basis point annualised increase in prevailing

interest rates at the balance sheet date applied to the floating rate

and fixed rate assets and liabilities and the following assumptions:

• the fair values of all other assets and liabilities are not affected by

a change in interest rates;

• funds will be reinvested in similar interest-bearing securities on

maturity; and

• all other variables are held constant.

A 50 basis point decrease is assumed to produce an equal and

opposite impact.

	2023	2022
	Impact on profit	Impact on profit
£ million	and net assets	and net assets
Total	2.7	6.1

The Group has direct exposure to the effect of interest rate changes

on the valuation and cash flows of its interest-bearing assets and

liabilities. However, it may also be indirectly affected by the impact of

interest rate changes on the earnings of certain companies in which

the Group invests, and the impact on valuations that use interest

rates as an input, including valuation models for private investments.

Therefore, the sensitivity analysis may not reflect the full effect on

the Group’s net assets.

13.1.4 Currency risk

Consistent with its Investment Policy, the Group invests in financial

instruments and transactions denominated in currencies other

than sterling. As such, the Group’s profit and net assets could be

significantly affected by currency movements.

Currency risk is managed by the Group by entering into currency

options or forward currency contracts as a means of limiting or

increasing its exposure to particular currencies. These contracts are

used for the purpose of hedging part of the existing currency exposure

of the Group’s portfolio (as a means of reducing risk) or to enable

increased exposure when this is deemed appropriate by the Manager.

Foreign currency exposure

	2023	2022
	Net exposure	Net exposure
Currency	% of NAV	% of NAV
US dollar	39.6	32.5
Euro	6.0	7. 5
Japanese yen	4.4	4.2
Other non-sterling	2.6	2.9
Total	52.6	47.1

Amounts in the above table are based on the carrying value of all foreign

currency denominated assets and liabilities and the underlying notional

amounts of forward currency contracts. It does not take into account any

estimates of ‘look-through’ exposure from our fund investments.

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 81

13. Financial instruments (continued)

Currency risk sensitivity analysis

The sensitivity of the Group’s net assets and profit in regard to

changes in key currencies is illustrated below. This is based on

an assumed 10% strengthening of sterling relative to the foreign

currencies as at 31 December 2023, and assumes all other variables

are held constant. A 10% weakening is assumed to produce an equal

and opposite effect.

The sensitivity analysis is based on the net foreign currency assets

held at the balance sheet dates and takes account of currency

forwards and options that adjust the effects of changes in currency

exchange rates.

	2023	2022
	Impact on profit	Impact on profit
£ million	and net assets	and net assets
US dollar	(104.8)	(120.8)
Japanese yen	(15.9)	(15.6)
Euro	(21.5)	(27.8)
Other non-sterling	(8.9)	(11.2)
Total	(151.1)	(175.4)

13.1.5 Credit risk

Credit risk is the risk that a counterparty to a financial instrument

held by the Group will fail to discharge an obligation or commitment

that it has entered into with the Group, which could result in a loss

to the Group.

This risk is not considered significant and is managed as follows:

• the vast majority of the Group’s listed transactions are settled

on a delivery versus payment basis and are held directly by the

custodian in fully segregated client accounts;

• use of a range of brokers and counterparties with their credit

quality monitored regularly;

• cash balances are predominantly held with our custodian, whose

credit worthiness is regularly monitored;

• cash margin is held by a range of approved counterparties, with

both margin balances and counterparties’ creditworthiness

monitored regularly; and

• careful selection of a diversified portfolio of credit managers.

A credit exposure could arise in respect of derivative contracts

entered into by the Group if a counterparty was unable to fulfil its

contractual obligations.

The Group has exposure to certain debt instruments acquired as

part of its private equity investments. The credit risk associated with

these instruments is managed as part of the overall investment risk

in the relevant portfolio companies and is not considered separately.

The Group’s maximum credit exposure is limited to the carrying

amount of financial assets recognised at the reporting date,

as summarised below.

Credit risk exposure

£ million	2023	2022
Portfolio investments – debt securities	154.0	40.7
Derivative financial instruments	71.3	58.3
Cash margin	37.8	85.4
Other receivables	33.4	159.9
Cash at bank	204.3	218.0
Total	500.8	562.3

Debt securities held within portfolio investments include a private loan note

issued by LionTree Advisory Holdings LLC.

Represents the fair value of assets held by counterparties.

The credit quality of certain financial assets that are not past due,

where the risk of loss is primarily that a counterparty fails to meet an

obligation, can be assessed by reference to external credit ratings.

The Manager has a review process in place that includes an

evaluation of a potential counterparty’s ability to service and repay its

debt. This is considered on a regular basis. Cash margins and other

receivables comprise mainly balances with counterparties which are

investment grade financial institutions with a short-term credit rating

by S&P of A-2 or higher (2022: A-2).

BNP is the custodian and depositary to the Company under the

Alternative Investment Fund Managers Directive (AIFMD). Under

the UK equivalent regulations, the Company is the Alternative

Investment Fund (AIF) and JRCM is the Alternative Investment Fund

Manager (AIFM). As custodian, substantially all of the Company’s

directly-held listed portfolio investments and cash at bank are held

by BNP. Bankruptcy or insolvency of the custodian may cause the

Group’s rights with respect to securities held by the custodian to

be delayed; however, the custodian’s local long-term rating from

S&P was A+ in the most recent rating prior to 31 December 2023

(2022: A+).

As depositary under AIFMD, the main obligation of BNP is the

safeguarding of those custodied assets on behalf of the RIT

shareholder. The depositary is liable for the loss of financial

instruments held in custody, other than under limited circumstances.

As a result of this obligation, the depositary maintains oversight of

all transactions undertaken by the AIFM (JRCM) on behalf of the AIF

(RIT). This includes reviewing all cash movements, receiving copies

of internal sign‐off documentation and key legal agreements, and

oversight and review of key procedures and controls .

Notes to the Financial Statements

82 Report and Accounts December 2023 RIT Capital Partners plc

13. Financial instruments (continued)

13.1.6 Liquidity risk

Liquidity risk is the risk that the Group will have difficulty in meeting

its obligations in respect of financial liabilities as they fall due.

In addition to the Group’s liquidity balances and committed but

undrawn borrowings, the investment portfolio includes a substantial

amount of assets which would be expected to be realised within

a relatively short time frame, depending on market conditions.

This might include stocks (unless held via a co-investment fund

or subject to a lock-up), government bonds and derivatives. Other

investments can be realised over varying timeframes depending

on the nature of the investment and/or the legal terms governing

disposal. Investments in externally-managed equity and hedge

funds have redemption periods which typically range from daily to

quarterly and longer, depending in part on the underlying nature of

the portfolio holdings. There is also a risk in stress situations of the

funds imposing additional restrictions or ‘gates’ on redemptions (as

happened in particular to hedge funds during the global financial

crisis). Direct private and private fund investments are inherently less

liquid, and while there is a secondary market, participants will often

experience discounts to fair value, in particular at times of stress.

JRCM manages the Group’s liquid resources in line with a

liquidity risk framework overseen by the Board. This establishes a

minimum level of liquidity available to meet expected contractual

commitments, including ongoing costs, margin calls and capital calls

(from funds with a commitment/drawdown structure - see Note 14).

The Manager monitors the level of short-term funding, and balances

the need for access to short-term funding, with the long-term

funding needs of the Group.

The Group has two revolving credit facilities with a total capacity of

£185 million (of which £40 million was committed and undrawn at

the year end) and £151 million par value long-term loan notes (details

of which are disclosed in Note 18).

The remaining contractual maturities of the Group’s financial liabilities

at the year end, based on the earliest date on which payment could

be required are as follows:

			31 December 2023
	3 months	3-12
£ million	or less	months	>1 year	Total
Current liabilities:
Bank loan/overdraft	142.9	–	–	142.9
Derivative financial
instruments	2.5	0.3	–	2.8
Amounts owed to group
undertakings	0.1	–	–	0.1
Non-current liabilities:
Derivative financial
instruments	0.0	–	–	0.0
Borrowings	–	5.6	189.3	194.9
Lease liability	0.1	0.3	8.0	8.4
Financial liabilities	145.6	6.2	197. 3	349.1
Other non-financial liabilities	39.2	–	3.0	42.2
Total	184.8	6.2	200.3	391.3

			31 December 2022
	3 months	3-12
£ million	or less	months	>1 year	Total
Current liabilities:
Bank loan/overdraft	236.2	–	–	236.2
Derivative financial
instruments	7. 0	3.4	–	10.4
Non-current liabilities:
Derivative financial
instruments	–	–	–	–
Borrowings	–	5.6	189.3	194.9
Lease liability	–	0.4	5.9	6.3
Financial liabilities	243.2	9.4	195.2	447.8
Other non-financial liabilities	63.5	–	1. 8	65.3
Total	306.7	9.4	197.0	513.1

In addition, the Company has contingent liabilities in the form of

commitments amounting to £307 million (2022: £385 million) as set

out in Note 14.

13.2 Collateral

Collateral in the form of cash margin is posted by the Group in

relation to certain derivative transactions, transacted under the

auspices of the International Swaps and Derivatives Association.

The Group does not hold collateral from other counterparties.

Set out below is the amount of financial assets pledged as collateral

at the year end.

£ million	2023	2022
Cash margin	37.8	85.4

13.3 Derivative financial instruments

The Group typically uses the following types of derivative

instruments in the portfolio:

• futures and forward contracts relating to market indices, foreign

currencies and government bonds;

• options relating to foreign currencies, market indices, stocks and

interest rates; and

• swaps relating to interest rates, bonds, credit spreads, equity

indices and stocks.

As explained above, the Manager uses derivatives to hedge various

exposures and also selectively to increase or decrease exposure

where desired. The notional amount of certain types of derivatives

provides a basis for comparison with instruments recognised on

the balance sheet, but does not necessarily indicate the amount of

future cash flows involved or the current fair value of the derivatives.

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 83

13. Financial instruments (continued)

The derivative instruments become favourable (assets) or

unfavourable (liabilities) as a result of fluctuations in indices, security

prices, market interest rates or foreign exchange rates relevant to

the terms of the derivative instrument. The aggregate contractual or

notional amount of derivative financial instruments held, the extent

to which instruments are favourable or unfavourable and thus the

aggregate fair values of derivative financial assets and liabilities can

fluctuate significantly from time to time.

Details of the unsettled derivatives at 31 December 2023 and

31 December 2022 are:

			Group and Company
		Assets	Liabilities
As at 31 December 2023	Notional 1	(positive	(negative	Total
£ million	amount	fair value)	fair value)	fair value
Commodity derivatives	233.5	6.0	(1.8)	4.2
Currency derivatives	1,406.8	32.6	(0.7)	31.9
Equity derivatives	415.9	32.7	(0.3)	32.4
Total		71.3	(2.8)	68.5

			Group and Company
		Assets	Liabilities
As at 31 December 2022	Notional 1	(positive	(negative	Total
£ million	amount	fair value)	fair value)	fair value
Commodity derivatives	169.1	6.4	–	6.4
Currency derivatives	1,815.1	49.6	(7.0)	42.6
Equity derivatives	253.2	2.3	(3.4)	(1.1)
Total		58.3	(10.4)	47.9

Long and short notional exposure has been netted.

13.4 IFRS 13 fair value measurement classification

IFRS 13 requires the Group to classify its financial instruments held

at fair value using a hierarchy that reflects the significance of the

inputs used in the valuation methodologies. These are as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical

assets or liabilities;

• Level 2: Inputs other than quoted prices included within level 1

that are observable for the asset or liability, either directly (i.e. as

prices) or indirectly (i.e. derived from prices); and

• Level 3: Inputs for the asset or liability that are not based on

observable market data (i.e. unobservable inputs).

The vast majority of the Group’s financial assets and liabilities,

investment properties and property, plant and equipment are

measured at fair value on a recurring basis.

The Group’s policy is to recognise transfers into and transfers out of

fair value hierarchy levels at the end of the reporting year when they

are deemed to occur.

A description of the valuation techniques used by the Group with

regards to investments categorised in each level of the fair value

hierarchy is detailed below. Where the Group invests in a fund or

a partnership, which is not itself listed on an active market, the

categorisation of such investments between levels 2 and 3 is

determined by reference to the nature of the fund or partnership’s

underlying investments. If such investments are categorised across

different levels, the lowest level of the hierarchy that forms a

significant proportion of the fund or partnership exposure is used to

determine the reporting disclosure.

If the proportion of the underlying investments categorised between

levels changes during the period, these will be reclassified to the

most appropriate level.

Level 1

The fair value of financial instruments traded in active markets is

based on quoted market prices at the balance sheet date. A market

is regarded as active if quoted prices are readily and regularly

available from an exchange, dealer, broker, industry group, pricing

service, or regulatory agency, and those prices represent actual and

regularly occurring market transactions on an arm’s length basis.

The quoted market price used for financial assets held by the Group

is the current bid price or the last traded price, depending on the

convention of the exchange on which the investment is quoted.

Where a market price is available but the market is not considered

active, the Group has classified these investments as level 2.

Level 2

The fair value of financial instruments that are not traded in an active

market is determined by using valuation techniques which maximise

the use of observable market data where it is available. Specific

valuation techniques used to value OTC derivatives include quoted

market prices for similar instruments, counterparty quotes and the

use of forward exchange rates to estimate the fair value of forward

foreign exchange contracts at the balance sheet date. Investments

in externally-managed funds which themselves invest primarily in

listed securities are valued at the price or net asset value released

by the investment manager or fund administrator as at the balance

sheet date.

Level 3

The Group considers all private investments, whether direct or funds,

(as described in the Investment Portfolio on page 22) as level 3

assets, as the valuations of these assets are not typically based on

observable market data. Where other funds invest into illiquid stocks,

these are also considered by the Group to be level 3 assets.

Private fund investments are held at the most recent fair values

provided by the GPs managing those funds, adjusted for subsequent

investments, distributions, and currency movements up to the period

end, and are subject to periodic review by the Manager.

Direct co-investments are also held at the most recent fair values

provided by the GPs managing those co-investments, adjusted for

subsequent investments, distributions, currency moves, as well

as pricing events where the Manager has sufficient information to

suggest the period-end valuation should be adjusted. The remaining

directly-held private investments are valued on a semi-annual basis

using techniques including a market approach, income approach

and/or cost approach. The valuation process involves the investment

functions of the Manager who prepare the initial valuations, which

are then subject to review by the finance function, with the final

valuations being determined by the Valuation Committee, comprised

of independent non-executive Directors, of which the Audit and Risk

Committee Chair is also a member.

Notes to the Financial Statements

84 Report and Accounts December 2023 RIT Capital Partners plc

13. Financial instruments (continued)

Specific valuation techniques used will typically include the value

of recent transactions, earnings multiples, discounted cash flow

analysis, and, where appropriate, industry specific methodologies.

The acquisition cost, if determined to be fair value, may be used

to calibrate inputs to the valuation. The valuations will often reflect

a synthesis of a number of distinct approaches in determining the

final fair value estimate. The individual approach for each investment

will vary depending on relevant factors that a market participant

would take into account in pricing the asset. These might include the

specific industry dynamics, the company’s stage of development,

profitability, growth prospects or risk as well as the rights associated

with the particular security.

Borrowings at 31 December 2023 comprise bank loans and senior

loan notes. The bank loans are revolving credit facilities paying

floating interest, and are typically drawn in tranches with a duration

of three or six months. The loans are therefore short-term in nature,

and their fair value approximates their nominal value. The loan

notes were issued in 2015 with tenors of between 10 and 20 years

with a weighted average of 16 years. They are valued on a monthly

basis using a discounted cash flow model where the discount rate

is derived from the yield of similar tenor UK Government bonds,

adjusted for any significant changes in either credit spreads or the

perceived credit risk of the Company.

The fair value of investments in non-consolidated subsidiaries is

considered to be the net asset value of the individual subsidiary as

at the balance sheet date. The net asset value comprises various

assets and liabilities which are fair valued on a recurring basis and is

considered to be level 3.

On a semi-annual basis, the Group engages external, independent

and qualified valuers to determine the fair value of the Group’s

investment properties and property, plant and equipment held at fair

value. Further information is shown in Notes 10 and 15.

The following table analyses the Group’s assets and liabilities within

the fair value hierarchy, at 31 December 2023:

As at 31 December 2023

£ million	Level 1	Level 2	Level 3	Total
Financial assets at fair value
through profit or loss (FVPL):
Portfolio investments	668.4	1,065.8	1,628.1	3,362.3
Non-consolidated subsidiaries	–	–	137.1	137.1
Investments held at fair value	668.4	1,065.8	1,765.2	3,499.4
Derivative financial instruments	8.7	62.6	–	71.3
Total financial assets at FVPL	677.1	1,128.4	1,765.2	3,570.7
Non-financial assets measured
at fair value:
Investment property	–	–	34.1	34.1
Property, plant and equipment	–	–	21.6	21.6
Total non-financial assets
measured at fair value	–	–	55.7	55.7
Financial liabilities at FVPL:
Borrowings	–	–	(280.8)	(280.8)
Derivative financial
instruments	(1.8)	(1.0)	–	(2.8)
Total financial liabilities at FVPL	(1.8)	(1.0)	(280.8)	(283.6)
Total net assets measured at fair value	675.3	1,127.4	1,540.1	3,342.8
Other non-current assets				0.1
Cash at bank				204.3
Other current assets				7 1. 3
Other current liabilities				(39.3)
Other non-current liabilities				(5.9)
Net assets				3,573.3

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 85

13. Financial instruments (continued)

Movements in level 3 assets

	Investments
Year ended 31 December 2023	held at fair
£ million	value	Properties	Total
Opening balance	1,875.3	58.6	1,933.9
Purchases	187.2	–	187.2
Sales	(159.0)	–	(159.0)
Gains/(losses) through profit or loss	(143.2)	(2.9)	(146.1)
Unrealised gains/(losses) through other comprehensive income	–	0.3	0.3
Other	4.9	(0.3)	4.6
Closing balance	1,765.2	55.7	1,820.9

Included within gains/(losses) through profit or loss is £23.3 million (2022:

£60.1 million loss) of unrealised losses, including currency translation, relating

to those level 3 assets held at the end of the reporting period.

During the year no investments were reclassified between level 2

and level 3.

Level 3 assets

Further information in relation to the directly-held private investments

is set out in the following table. This summarises the portfolio by the

primary method used in estimating the fair value of the investment.

As a range of valuation methods and inputs may be used in the

valuation process, selection of a primary method is subjective, and

designed primarily to assist the subsequent sensitivity analysis.

Primary valuation method/approach
£ million	2023	2022
Third-party valuations	259.7	246.3
Recent transaction	60.0	23.6
Other industry metrics	28.9	21.7
Discount to recent transaction	22.3	90.5
Discount to sale proceeds	13.3	10.8
Earnings multiple	7. 5	49.8
Total	391.7	442.7

Included in this method are directly-held private investments within

the non-consolidated subsidiaries with a total of £25.1 million (2022:

£24.5 million).

Included in this method are direct private investments which have been

discounted due to a decline in public comparables or a general decline in

markets related to or impacting the businesses.

The majority of the direct private investments are structured

as co-investments, managed by a GP. For these investments,

the valuation approach is to typically use the latest quarterly

fair valuations provided by the GP, adjusted for any subsequent

investments/distributions and currency moves as well as pricing

events, where there is sufficient information to suggest the period-

end valuation should be adjusted.

Where the Manager has sufficient information to undertake its own

valuation, a range of methods will typically be used. For companies

with positive earnings, this will usually involve an earnings multiple

approach, typically using EBITDA or similar. The earnings multiple is

assessed by reference to similar listed companies or transactions

involving similar companies. When an asset is undergoing a sale

and the price has been agreed but not yet completed or an offer has

been submitted, the agreed or offered price will be used, often with

a discount as appropriate to reflect the risks associated with the

transaction completing or any price adjustments. Where a company

has been the subject of a recent financing round which is viewed as

representative of fair value, this transaction price will be used. Other

methods employed include discounted cash flow analysis and industry

metrics such as multiples of assets under management or revenue,

where market participants use these approaches in pricing assets.

The following table provides a sensitivity analysis of the valuation of

directly-held private investments, and the impact on net assets:

Valuation method/approach	Sensitivity analysis
Third-party valuations	A 5% change in the value of these
	assets would result in a £13.0 million or
	0.4% (2022: £12.3 million, 0.3%) change
	in net assets.
Recent transaction	A 5% change in the value of these
	assets would result in a £3.0 million
	or 0.08% (2022: £1. 2 million, 0.03%)
	change in net assets.
Other industry metrics	A 5% change in the value of these
	assets would result in a £1. 4 million
	or 0.04% (2022: £1. 1 million, 0.03%)
	change in net assets.
Discount to recent transaction	Assets in this category are valued
	using a discount applied to a recent
	financing round or secondary transaction.
	Discounts range between 9% and 67%,
	reflecting factors such as the elapsed
	time since the transaction and the
	movement in prices of broadly similar
	listed companies. A 5% change to the
	discount would result in a £1. 1 million
	or 0.03% (2022: £4.5 million, 0.12%)
	change in net assets.
Discount to sale proceeds	The asset in this category is valued using
	a 15% discount to an agreed offer. A 5%
	change in the discount would result in
	a £0.03 million or <0.001% (2022: £0.1
	million, <0.01%) change in net assets.
Earnings multiple	Assets in this category are valued
	using EV/sales multiples in the range
	of 2.0x to 5.2x.If the multiple used
	for valuation purposes is increased or
	decreased by 5% then the net assets
	would increase/decrease by £0.5 million or
	0.02% (2022: £2.5 million, 0.07%).

Notes to the Financial Statements

86 Report and Accounts December 2023 RIT Capital Partners plc

13. Financial instruments (continued)

The investment property and property, plant and equipment with

an aggregate fair value of £55.7 million (2022: £58.6 million) were

valued using a third-party valuation provided by JLL. The properties

were valued using weighted average capital values of £1,499 per

square foot (2022: £1,580) developed from rental yields and

supported by market transactions. A £25 per square foot increase/

decrease in capital values would result in a £0.8 million increase/

decrease in fair value (2022: £0.8 million increase/decrease).

The non-consolidated subsidiaries are held at their fair value of

£137.1 million (2022: £101.1 million) representing £138.1 million

of portfolio investments (2022: £104.7 million) and £1. 0 million

of remaining liabilities (2022: £3.3 million of remaining liabilities).

A 5% change in the value of these assets would result in £6.9 million

or 0.2% (2022: £5.1 million, 0.1%) change in total net assets.

The remaining investments held at fair value and classified as level 3 of

£1,261.5 million (2022: £1,355.7 million) were valued using third-party

valuations from a GP, administrator or fund manager. A 5% change

in the value of these assets would result in a £63.1 million or 1.77%

(2022: £6 7. 8 million, 1. 8 2%) change in net assets.

In aggregate, the sum of the direct private investments, investment

property, property, plant and equipment, non-consolidated

subsidiaries and the remaining fund investments represents the total

level 3 assets of £1,820.9 million (2022: £1,933.9 million).

The following table analyses the Group’s assets and liabilities within

the fair value hierarchy, at 31 December 2022:

As at 31 December 2022

£ million	Level 1	Level 2	Level 3	Total
Financial assets at fair value
through profit or loss (FVPL):
Portfolio investments	506.8	1,204.2	1,774.2	3,485.2
Non-consolidated subsidiaries	–	–	101.1	101.1
Investments held at fair value	506.8	1,204.2	1,875.3	3,586.3
Derivative financial instruments	6.4	51.9	–	58.3
Total financial assets at FVPL	513.2	1,256.1	1,875.3	3,644.6
Non-financial assets measured
at fair value:
Investment property	–	–	37.9	37.9
Property, plant and equipment	–	–	20.7	20.7
Total non-financial assets
measured at fair value	–	–	58.6	58.6
Financial liabilities at FVPL:
Borrowings	–	–	(370.6)	(370.6)
Derivative financial
instruments	–	(10.4)	–	(10.4)
Total financial liabilities at FVPL	–	(10.4)	(370.6)	(381.0)
Total net assets measured at fair value	513.2	1,245.7	1,563.3	3,322.2
Other non-current assets				0.5
Cash at bank				218.0
Other current assets				249.8
Other current liabilities				(63.6)
Other non-current liabilities				(5.2)
Net assets				3,721.7

Movements in level 3 assets

	Investments
Year ended 31 December 2022	held at fair
£ million	value	Properties	Total
Opening balance	1,914.3	61.4	1,975.7
Purchases	222.2	0.1	222.3
Sales	(210.3)	–	(210.3)
Gains/(losses) through profit or loss	(51.0)	(0.4)	(51.4)
Unrealised gains/(losses) through other comprehensive income	–	(2.1)	(2.1)
Transfer in to level 3	–	–	–
Transfer out of level 3	–	–	–
Other	0.1	(0.4)	(0.3)
Closing balance	1,875.3	58.6	1,933.9

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 87

13. Financial instruments (continued)

13.5 Capital management

The Group’s primary objectives in relation to the management of

capital are:

• to deliver long-term capital growth for its shareholders, while

preserving shareholders’ capital;

• to deliver for shareholders increases in capital value in excess of

the relevant indices over time through an appropriate balance of

equity capital and gearing; and

• to ensure the Group’s ability to continue as a going concern.

The Company is subject to externally imposed capital requirements:

• the Company’s Articles of Association restrict borrowings to a

maximum of five times share capital and reserves; and

• the Company’s borrowings are subject to covenants limiting

the total exposure based on a minimum net assets and a cap of

borrowings as a percentage of adjusted net assets.

All these conditions were met during this year and the previous

financial year.

In addition, JRCM is subject to capital requirements imposed by

the FCA and must ensure that it has sufficient capital to meet these

requirements. JRCM was compliant with those capital requirements

throughout the year.

The Group’s capital at 31 December 2023 and 31 December 2022

comprised:

£ million	2023	2022
Equity share capital	156.8	156.8
Retained earnings and other reserves	3,416.5	3,564.9
Net asset value	3,573.3	3,721.7
Borrowings	280.8	370.6
Total capital	3,854.1	4,092.3

There have been no significant changes to the Group’s capital

management objectives, policies and processes in the year, nor has

there been any change in what the Group considers to be its capital.

14. Financial commitments

Financial commitments to invest additional funds which have not

been provided for are as follows:

		31 December 2023	31 December 2022
£ million	Group	Company	Group	Company
Commitments	307.1	307.1	385.0	385.0

The financial commitments are principally uncalled commitments to

private funds, typically established as 10-year funds with a five-year

investment period, are diversified across multiple funds and vintage

years, and may be called, with customary notice, at any time during

the investment period. The majority are denominated in US dollars

and therefore subject to currency fluctuation.

15. Investment property

The Group and Company’s investment property as at 31 December

2023 was £34.1 million (2022: £37.9 million).

£ million	2023	2022
Rental income from investment
properties	1. 8	2.1
Direct operating expenses arising from investment properties that generated
rental income during the year	(1.5)	(1.4)
Cash outflow from leases	(0.5)	(0.4)

The Group and Company is committed to making the following

payments under non-cancellable leases over the periods described.

£ million	2023	2022
Within one year	0.4	0.4

Under non-cancellable leases the Group and Company will receive

the following:

£ million	2023	2022
Within one year	0.6	1. 1
Between one and two years	0.3	0.6
Between two and three years	0.1	0.1
Between three and four years	0.0	0.1
Between four and five years	–	–
Over five years	–	–

All investment properties held by the Group during the year

generated rental income.

The Company leases Spencer House from the Spencer Trustees (the

Trustees). The terms of this lease include provisions such that: any

assignment or sale of the lease can occur only with the consent

of the Trustees, there are limits on event frequency and that the

Trustees retain certain (de minimis) usage rights over the ‘fine rooms’.

The Company is required to externally redecorate every three years

and to internally redecorate every seven years. The property is typically

open to the public for viewing every Sunday, except during August.

The investment property portfolio is valued by JLL on a six-monthly

basis in accordance with current RICS Valuation – Global Standards,

published by the Royal Institution of Chartered Surveyors, on the basis

of open market value. The most recent valuation, which reflects the

factors highlighted above, was undertaken as at 31 December 2023.

Notes to the Financial Statements

88 Report and Accounts December 2023 RIT Capital Partners plc

16. Other receivables

		31 December 2023		31 December 2022
£ million	Group	Company	Group	Company
Cash margin	37.8	37.8	85.4	85.4
Amounts receivable	1.2	1. 2	0.6	0.6
Prepayments and accrued
income	4.2	3.6	7. 0	6.6
Sales for future settlement	28.0	28.0	152.3	152.3
Total	71.2	70.6	245.3	244.9

The carrying amount of other receivables approximates their fair

value, due to their short-term nature.

17. Related party transactions

In the normal course of its business, the Group has entered into a

number of transactions with related parties. All arrangements with

related parties are monitored by the Conflicts Committee, which is

comprised solely of independent non-executive Directors.

Transactions with Hannah Rothschild or parties related to her

During the current and prior year the Group transacted with entities

classified as related to Hannah Rothschild as a result of her having

significant influence over them, a beneficial interest in them,

or otherwise in accordance with IAS 24 – Related Party Disclosures

(IAS 24).

The Group had arrangements with these related parties covering the

provision and receipt of administrative, support and supply services.

Under these arrangements the Group received £72,193 (2022:

£61,757) and paid £94,257 (2022: £74,077).

Certain of these related parties occupy office space in St. James’s

Place which is owned or leased by the Group. The rent, rates and

services charged by the Group for the year ended 31 December

2023 amounted to £186,232 (2022: £203,539).

Nothing was owed by the Group to the parties related to Hannah

Rothschild at either 31 December 2023 or 31 December 2022.

The balance due to the Group from these related parties at

31 December 2023 was £12,303 (2022: £11,693).

Other

No subscriptions were made to its associate, JRCM (London) LLP

in the year (2022: Company £nil; JRCM management £nil) and the

Company has a remaining commitment of £50,000 (2022: £50,000).

Group undertakings

JRCM acts as the Company’s manager, administrator and corporate

secretary. During the year ended 31 December 2023, the charge

for these services from JRCM to the Company amounted to

£42.6 million (2022: £49.7 million). JRCM incurred rent charges of

£580,000 (2022: £580,000) from the Company. During the year SHL

(also a wholly-owned subsidiary of the Company) earned property

management revenues of £89,191 from JRCM (2022: £98,827) and

£1,830,681 from the Company (2022: £1,597,394).

Amounts due from subsidiaries and to subsidiaries are disclosed on

the face of the Group’s balance sheet. The balances outstanding at

the year ends are show below:

		Amounts owed by/(to)
		Group undertakings
£ million	2023	2022
RIT Investments US, Inc	0.0	4.5
RIT Investments GP Limited	(0.1)	(0.1)
J. Rothschild Capital Management US, Inc	0.1	0.0
Total	0.0	4.4

		Amounts owed by/(to)
		Company undertakings
£ million	2023	2022
RIT Investments US, Inc	0.0	4.5
JRCM	(119.7)	(94.7)
J. Rothschild Capital Management US, Inc	0.1	0.0
Total	(119.6)	(90.2)

RITCP Pension and Life Assurance Scheme

The Group’s pension scheme is deemed to be a related party of the

Company pursuant to IAS 24. Details of the pension contributions

made during the year are disclosed in Note 11. There was £48,894

owing to the pension scheme by the Company at 31 December 2023

(31 December 2022: £nil). Nothing was owed by the Group’s pension

scheme to the Company at 31 December 2023 (31 December 2022:

£nil).

Directors and key management personnel

Details of the remuneration and benefits attributable to Directors and

key management personnel are set out below.

£ million	2023	2022
Short-term employee benefits	4.2	3.6
Share-based payment	11. 5	14.0
Social security costs	2.3	2.5
Total	18.0	20.1

The Group has no ultimate controlling party .

18. Borrowings

		Group and Company
£ million	2023	2022
Unsecured loans payable within one year:
Revolving credit facilities	142.9	236.2
Unsecured loans payable in more than one year:
Fixed rate loan notes	137.9	134.4
Total borrowings	280.8	370.6

At 31 December 2023 the Company had two revolving credit facilities

(RCFs): an £85 million, three-year facility with BNP Paribas SA agreed

in December 2022 and a £100 million three-year facility with Industrial

and Commercial Bank of China agreed in December 2022. These

are flexible as to currency, duration and number of drawdowns, and

pay floating interest linked to SONIA, SOFR or equivalent relevant to

the period and currency drawn. As they are drawn in tranches with

tenors less than one year they are classified as current liabilities. The

fair value and par value of the drawn borrowings at the year end was

£142.9 million (2022: £236.2 million). A change in interest rates is not

expected to have a significant impact on the fair value of the RCFs. No

bank loans are held within subsidiaries. The weighted average interest

rate on drawn down RCFs at the year end was 7.28% (2022: 5.85%).

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 89

18. Borrowings (continued)

On 1 June 2015 the Company issued £151.0 million of fixed rate

loan notes with tenors between 10 and 20 years and coupons from

3.00% to 3.56%. These Notes are held at fair value and pay interest

on a semi-annual basis. The fair value of this debt at the end of the

year was £137.9 million (2022: £134.4 million) calculated using a

discount rate of 5.13% (2022: 5.24%). A 5% increase/decrease in

the underlying discount rate would result in an increase/decrease

in net assets of approximately £2.0 million (2022: £2.3 million) or

0.06% (2022: 0.06%). The weighted average interest rate payable on

these Notes is 3.45% and their remaining weighted average tenor is

7. 2 years (2022: 8.2 years).

The overall weighted average interest rate on drawn borrowings at

the year end was 5.32% (2022: 4.93%).

19. Other payables

	31 December 2023		31 December 2022
£ million	Group	Company	Group	Company
Accruals	15.2	8.3	14.5	5.3
Other creditors	21.3	20.9	24.9	24.7
Purchases for future
settlement	2.7	2.7	24.1	24.1
Total	39.2	31.9	63.5	54.1

The carrying value of the Group’s other payables approximates their

fair value, due to their short-term nature.

20. Provisions

	31 December 2023		31 December 2022
£ million	Group	Company	Group	Company
Opening balance	1. 8	2.2	1. 1	1. 1
Additional provision	1. 7	1. 3	1. 0	1. 4
Amounts utilised	(0.4)	(0.4)	(0.4)	(0.4)
Foreign exchange
movements	(0.1)	(0.1)	0.1	0.1
Total	3.0	3.0	1.8	2.2

As at 31 December 2023 there are no provisions in respect of

investments which are expected to settle within the next 12 months (as

at 31 December 2022: £nil). It is anticipated that provisions noted above

will be settled more than 12 months after the balance sheet date.

Indemnity provision

The provision above relates to an indemnity provided by the

Company in 1991 when it profitably disposed its indirect interest in

Cavenham Forest Industries (CFI). The sellers (including the Company)

indemnified the purchasers of CFI against certain ongoing costs being

incurred by CFI. The indemnity provision has been estimated based

on the net present value of the Company’s share of the projected

indemnified costs.

21. Share capital

		2023	2022
		Nominal	Nominal
		value of	value of
	Shares in	total shares	total shares
£ million	issue	in issue	in issue
Allotted, issued and fully paid:
At 1 January	156,848,065	156.8	156.8
At 31 December	156,848,065	156.8	156.8

The Company has one class of ordinary shares which carry no right

to fixed income. The share capital is not distributable.

In 2023, 8,617,954 shares were bought back at a cost of £163.1 million

and held in treasury (2022: 514,634 shares at a cost of £11. 0 million)

meaning at 31 December 2023, 9,307,817 shares were held in treasury

(2022: 689,863 shares).

22. Share premium

£ million	2023	2022
At 1 January	45.7	45.7
At 31 December	45.7	45.7

The share premium is not distributable.

23. Capital redemption reserve

£ million	2023	2022
Balance at start of year	36.3	36.3
At 31 December	36.3	36.3

The capital redemption reserve is not distributable and represents

the cumulative nominal value of shares cancelled.

24. Own shares reserve

£ million	2023	2022
Opening cost	(46.3)	(23.0)
Own shares acquired	(9.8)	(40.4)
Own shares transferred	19.4	1 7. 1
Closing cost	(36.7)	(46.3)

The Group has established an Employee Benefit Trust (EBT)

which purchases shares in order to meet the anticipated value of

equity-settled, share-based awards. At the year end, the EBT held

1,611,339 shares with a cost of £36.7 million and market value of

£30.3 million (2022: 1,988,580 shares, cost £46.3 million, market

value £42.3 million). The own shares reserve is not distributable.

Notes to the Financial Statements

90 Report and Accounts December 2023 RIT Capital Partners plc

25. Share-based payments

The Group utilises share-based awards for employees, the vast majority of

which are equity-settled, and designed to align the interests of employees

with those of shareholders.

Restricted share units (RSUs) were awarded to employees during the

year. These are widely used long-term incentive awards that comprise

awards of shares made to employees that will vest after a three-year

service period and then are typically subject to a further two-year

holding period or lock-up. There are also a small number of legacy share

appreciation rights (SARs) remaining. These are no longer awarded to

employees since the conversion to RSUs was made in 2021.

In addition, 60% of annual bonuses over £250,000 are made in deferred

shares which vest over three years (based on a service condition).

The total expense for share-based awards is based on the fixed, initial fair

value at the time the award is made. The ultimate impact on the net asset

value is the cost of the shares acquired by the EBT and then transferred

to employees if and when they vest. For 2023, the cost recognised in the

income statement (excluding national insurance) for share-based awards

was £14.7 million (2022: £17.6 million) of which £8.7 million relates to

RSUs and £6.0 million to deferred shares.

The movement in share-based awards is as follows:

Number (thousand)	2023	2022
Outstanding at the start of the year:
SARs	315	342
RSUs	1,483	1,397
Deferred shares	988	841
Total	2,786	2,580
Granted during the year:
RSUs	424	352
Deferred shares	91	553
Total	515	905
Exercised/vested during the year:
SARs	–	(3)
RSUs	(377)	(256)
Deferred shares	(452)	(406)
Total	(829)	(665)
Lapsed/forfeited during the year:
SARs	(206)	(24)
RSUs	(330)	(10)
Deferred shares	–	–
Total	(536)	(34)
Outstanding at the end of the year:
SARs	109	315
RSUs	1,200	1,483
Deferred shares	627	988
Total	1,936	2,786
SARs exercisable at year end	109	122
Intrinsic value of SARs exercisable at year end
(£million)	0.0	0.1

For share-based awards granted during the year, the weighted average

fair value of each award was 1,770 pence (2022: 2,470 pence).

Share-based awards with service conditions attached (deferred

shares and RSUs) were valued using the prevailing market price and

a lock-up discount factor as applicable.

26. Capital reserve

		31 December 2023		31 December 2022
£ million	Group	Company	Group	Company
Balance at start of year	3,548.9	3,578.6	4,174.4	4,203.4
Gains/(loss) for the year	110.7	110.7	(535.3)	(535.3)
Dividend paid	(56.7)	(56.7)	(57.6)	(57.6)
Other capital items	(209.8)	(196.8)	(32.6)	(31.9)
Taxation	–	–	–	–
Total capital return	(155.8)	(142.8)	(625.5)	(624.8)
Balance at end of year	3,393.1	3,435.8	3,548.9	3,578.6

The Company’s Articles of Association allow distribution by dividends

of realised capital reserves.

£ million	2023	2022
Capital reserve:
in respect of investments realised	2,557.3	2,542.3
in respect of investments held	878.5	1,036.3
Balance at end of year	3,435.8	3,578.6

27. Revenue reserve

		31 December 2023		31 December 2022
£ million	Group	Company	Group	Company
Balance at start of year	(29.1)	(209.5)	(11.4)	(176.1)
Loss for the year	(2.9)	(16.7)	(14.3)	(33.4)
Actuarial gain/(loss)	(0.4)	–	(4.5)	–
Deferred tax (charge)/credit	0.2	–	1. 1	–
Balance at end of year	(32.2)	(226.2)	(29.1)	(209.5)

As permitted by Section 408 of the Companies Act 2006, the

Company has not published a separate income statement or

statement of comprehensive income. The Company’s revenue

loss after tax amounted to £16.7 million (2022: loss £33.4 million).

The Company’s total comprehensive income for the year was

£61. 2 million (2022: expense of £591.7 million).

28. Revaluation reserve

		31 December 2023		31 December 2022
£ million	Group	Company	Group	Company
Balance at start of year	9.4	9.4	11. 5	11. 5
Revaluation gain/(loss)
on property, plant and equipment	0.9	0.9	(2.1)	(2.1)
Balance at end of year	10.3	10.3	9.4	9.4

The revaluation reserve is not distributable.

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 91

29. Net asset value per ordinary share –

basic and diluted

Net asset value per ordinary share is based on the following data:

31 December	2023	2022
Net assets (£ million)	3,573.3	3,721.7
Number of shares in issue (million)	156.8	156.8
Shares held in EBT (million)	(1.6)	(2.0)
Shares held in treasury (million)	(9.3)	(0.7)
Basic shares (million)	145.9	154.1
Effect of share-based payment awards (million)	1. 4	1. 7
Diluted shares (million)	147.3	155.8

		2023	2022
31 December		pence	pence
Net asset value per ordinary share –	basic	2,449	2,414
Net asset value per ordinary share – diluted		2,426	2,388

30. Investments in subsidiary undertakings

£ million
Carrying value at 1 January 2023	107.2
Additions	2 1. 0
Disposals	(25.2)
Fair value movements in year	40.2
Carrying value at 31 December 2023	143.2

£ million
Carrying value at 1 January 2022	107.5
Additions	2.5
Disposals	–
Fair value movements in year	(2.8)
Carrying value at 31 December 2022	107.2

Investments in subsidiary undertakings are stated at cost or fair

value where appropriate.

At 31 December 2023 the Company held investments in the

following subsidiaries, which, unless otherwise stated, are

wholly-owned, share the same accounting reference date as the

Company and operate principally in their country of incorporation.

The voting share capital, unless otherwise stated, is held directly by

the Company.

In accordance with IFRS 10 the subsidiary below is consolidated by

the Group and held by the Company at cost:

Name	Issued share capital
JRCM	£6,250,001 divided into 6,250,000 ordinary shares of
	£1 each and one special share of £1 which provides
	rights over the use of the “J. Rothschild” name.

Registered office and principal place of business: 27 St. James’s Place,

London SW1A 1NR .

In accordance with IFRS 10 the Company and Group holds the

following subsidiaries at fair value at 31 December 2023:

	Principal place of	Ownership
Name	business	interest
Spencer House Limited	England	100%
RIT US Value Partnership LP	England	100%
RIT Investments GP Limited	Scotland	100%
J. Rothschild Capital Management US Inc	United States	100%
RIT Investments US Inc	United States	100%
RIT US Holdings LLP	United States	100%

1,5

1,6

2,3,5

4,5

3,4,5

3,4,6

Registered office and principal place of business: 27 St. James’s Place,

London SW1A 1NR.

Registered office and principal place of business: 50 Lothian Road, Edinburgh

EH3 9WJ.

Held indirectly.

Registered office: 251 Little Falls Drive, Wilmington, Delaware 19808, USA.

Ownership interest is ordinary shares.

Ownership interest is partnership capital.

For all of the above the proportion of voting rights held is equivalent

to the ownership interest.

There are no significant restrictions arising from any contractual

arrangements or regulatory requirements that would affect the ability

of any of the above entities to transfer funds to or repay loans made

by the Company.

There are no other current commitments or contractual

arrangements to provide financial support to any of the entities

above other than in the normal course of business (e.g. funding of

investment transactions/capital calls). The Company has not assisted

any of the above entities in obtaining financial support in any way

over the year.

31. Dividends

	2023	2022
	Pence	Pence	2023	2022
	per share	per share	£ million	£ million
Dividends paid in year	38.0	37 .0	56.7	57.6

The above amounts were paid as distributions to equity holders of

the Company in the relevant year from accumulated capital profits.

Dividends are not paid on shares held in treasury and the EBT waives

its rights to all dividends.

On 27 February 2023 the Board declared a first interim dividend of

19.0 pence per share in respect of the year ended 31 December

2023 that was paid on 28 April 2023. A second interim dividend of

19.0 pence per share was declared by the Board on 31 July 2023 and

paid on 27 October 2023.

The Board declares the payment of a first interim dividend of

19.5 pence per share in respect of the year ending 31 December

2024. This will be paid on 26 April 2024 to shareholders on the

profits.

Notes to the Financial Statements

92 Report and Accounts December 2023 RIT Capital Partners plc

32. Reconciliation of profit/(loss) before finance costs

and taxation to net cash inflow/(outflow) from

operating activities before taxation and interest

	Group
£ million	2023	2022
Profit/(loss) before dividend and interest income, finance costs and taxation	73.0	(569.2)
Dividend income	10.1	7. 2
Interest income	1 7. 4	9.8
Profit/(loss) before finance costs and taxation	100.5	(552.2)
(Increase)/decrease in other receivables	174.1	1 7. 5
Increase/(decrease) in other payables	(24.3)	(105.3)
Other movements	20.0	30.1
(Gains)/losses on borrowings	3.6	(34.5)
Realised foreign exchange (gains)/losses on repayments and drawings of borrowings 1	(15.3)	29.1
Unrealised foreign exchange (gains)/losses on repayments and drawings of borrowings	3.3	(5.2)
Purchase of investments held at fair value	(853.4)	(886.3)
Sale of investments held at fair value	951.9	1,395.6
(Gains)/losses on fair value investments	(11.2)	192.4
(Increase)/decrease in derivatives	(20.6)	(23.5)
Net cash inflow/(outflow) from operating
activities before taxation and interest	328.6	57.7

These line items have been disaggregated from ‘other movements’ in the

current year. The 2022 comparative figures have been re-presented to align

with this updated format.

	Company
£ million	2023	2022
Profit/(loss) before dividend and interest income, finance costs and taxation	67.2	(581.6)
Dividend income	10.1	7. 2
Interest income	1 7. 4	9.8
Profit/(loss) before finance costs and taxation	94.7	(564.6)
(Increase)/decrease in other receivables	174.3	1 7. 5
Increase/(decrease) in other payables	(22.2)	(89.7)
Other movements	1. 2	9.0
(Gains)/losses on borrowings	3.6	(34.5)
Realised foreign exchange (gains)/losses on repayments and drawings of borrowings 1	(15.3)	29.1
Unrealised foreign exchange (gains)/losses on repayments and drawings of borrowings	3.3	(5.2)
(Increase)/decrease in investments in subsidiary undertakings	(40.2)	0.3
Increase/(decrease) in amounts owed to group undertakings	29.5	(34.9)
Purchase of investments held at fair value	(832.5)	(883.8)
Sale of investments held at fair value	926.7	1,395.6
(Gains)/losses on fair value investments	28.6	192.4
(Increase)/decrease in derivatives	(20.6)	(23.5)
Net cash inflow/(outflow) from operating
activities before taxation and interest	331.1	7. 7

These line items have been disaggregated from ‘other movements’ in the

current year. The 2022 comparative figures have been re-presented to align

with this updated format.

Reconciliation of liabilities arising from financing activities:

		Non-cash	Net
		changes in	(drawdowns)/
£ million	2022	fair value	repayments	2023
Borrowings – current	(236.2)	12.0	8 1. 3	(142.9)
Borrowings – non-current	(134.4)	(3.5)	–	(137.9)
Total	(370.6)	8.5	81.3	(280.8)

Including currency translation.

33. Material investments and related undertakings

Further information regarding investments is shown here.

Disclosed below are the ten largest investments in the portfolio (excluding

investments in non-consolidated subsidiaries) shown at fair value:

As at 31 December 2023	£ million
3D Opportunities	182.2
HCIF Offshore	156.8
BlackRock Strategic Equity	112.3
Attestor Value	97.5
ARCM IV	96.9
Tresidor Credit Opportunities	89.9
Motive	78.0
RIT US Value Partnership	77.8
Springs Opportunities	70.7
Caxton Dynamis	68.5
Total	1,030.6

As at 31 December 2022	£ million
Attestor Value	148.6
HCIF Offshore	131.0
3D Opportunities	130.1
Tresidor Credit Opportunities	108.0
BlackRock Strategic Equity	97.1
ARCM IV	95.6
Springs Opportunities	92.7
Motive	76.2
RIT US Value Partnership	72.4
Caxton Dynamis	71.8
Total	1,023.5

Further to the disclosures in Note 30 (Investments in subsidiary

undertakings), the table on the following page shows a list of

significant related undertakings of the Group as at 31 December

2023. For the investments shown the principal place of business

is considered to be the place of registration and the proportion of

voting rights held is considered to be the ownership interest.

The Directors do not consider that any of the portfolio investments

shown in the table on the following page fall within the definition

of an associated company (aside from the entities noted below the

table) as the Group does not exercise significant influence over their

operating and financial policies as it is a passive investor.

Notes to the Financial Statements

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 93

33. Material investments and related undertakings

(continued)

In a number of cases the Group owns more than 50% of a particular

class of shares or partnership interest. The Group does not consider

these holdings, although greater than 50%, provide control of the

investee entities concerned as firstly the Group’s position as a

passive investor in these entities acts as a substantive barrier to its

exercising any power over the investee and secondly the nature of

the Group’s holding does not give it the ability to direct the relevant

activities of the investee because it does not control or participate in

the governing bodies of these entities.

Unconsolidated structured entities

The Group holds interests in closed-ended limited partnerships

which invest in underlying companies or securities for the purpose of

capital appreciation. The Group, alongside the other limited partners,

makes commitments to finance the investment programme of

the relevant GP or manager, who may draw down this committed

amount either upfront or over a period of years.

The table below shows the Group’s carrying value of such

investments and represents the maximum exposure to loss based

on the Group’s contributions to date.

£ million	2023	2022
Total	1,729	2,034

Included within Investments held at fair value.

The list of significant related undertakings below is pursuant to the

requirements of Companies Act 2006, Statutory Instrument 2015

No. 980 The Companies, Partnerships and Groups (Accounts and

Reports) Regulations 2015, IFRS and the SORP.

Disclosed below for the year ended 31 December 2023 are:

• Entities classified as significant holdings (20% or greater interest

in a class of shares or partnership);

• Material investee undertakings in which the Group had an interest

of over 3% of the allotted shares of any class; and

• Material investment funds in which the Group had an interest of

10% or more in any class of share or unit.

All the investments in the table below are held at FVPL.

The Directors consider these entities, in which the Group holds ordinary shares, or limited partnership interests, as associated companies as the Group has

significant influence due to circumstances particular to the investment. The Group has chosen to account for associated companies held for investment

purposes at FVPL in accordance with IAS 28 Investments in Associates and Joint Ventures and IFRS 9 Financial Instruments.

					Fair value	%
Investment name		Place of registration		Registered address	£ million	interest
1992	Co-Invest (Offshore) LP	Cayman Islands		PO Box 309, Ugland House, Grand Cayman, KY1-1104	30.1	55.4%
3D Opportunities		Cayman Islands		Maples Corporate Services Limited, PO Box 309, Ugland House,	182.2	18.2%
				Grand Cayman, KY1-1104, Cayman Islands
Browning West Cayman SPV 2 LP		Cayman Islands		Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital	22.5	20.7%
				Road, George Town, Grand Cayman KY1-9008, Cayman Islands
Darwin Private Equity I LP		Scotland		50 Lothian Road, Festival Square, Edinburgh EH3 9WJ	0.6	23.9%
Firebird New Russia Fund Ltd, Class A1		Cayman Islands		PO Box 897, Windward 1, Grand Cayman KY1-1103	1. 3	25.0%
Fortress Credit Opportunities Fund (C) LP		Cayman Islands		Maples Corporate Services Limited, P.O. Box 309, Ugland House,	0.7	33.3%
				Grand Cayman, KY1-1104, Cayman Islands
ICQ Holdings 6 LLC		Delaware, USA	2711	Centerville Road, Suite 400, Wilmington, Delaware 19808	25.6	100.0%
Infinity SDC Ltd		England & Wales		500-600 Witan Gate West, Milton Keynes MK9 1SH	13.3	23.9%
JRCM (London) LLP		England & Wales		27 St James’s Place, London SW1A 1NR	0.0	50.0%
LCV Fund III LP		Delaware, USA	3500	South Dupont Highway, Dover, Kent, Delaware, 19901	1 7. 2	31.3%
Media Technology Ventures IV LP		California, USA	185	Berry Street, Suite 3600, San Francisco, California 94107	1. 6	38.5%
RR Capital Partners LP		Delaware, USA		One Maritime Plaza, Suite 2100, San Francisco, California 94111	0.3	20.5%
Sand Grove Tactical Fund LP		Cayman Islands		PO Box 309, Ugland House, Grand Cayman, KY1-1104	20.6	100.0%
Springs Global Strategic Partners Fund – Anchor		Ireland		2nd Floor, 2 Custom House Plaza, Harbourmaster Place, Dublin 1	0.4	30.2%
Class
Springs Opportunities Fund LP, Series A		Cayman Islands		4th Floor, Willow House, Cricket Square, Grand Cayman KY1-9010	70.7	58.2%
Tresidor Credit Opportunities Fund		Ireland		2nd Floor, 2 Custom House Plaza, Harbourmaster Place, Dublin 1	89.9	100.0%
Xander Seleucus II LP		Cayman Islands		PO Box 309, Ugland House, Grand Cayman KY1-1104	0.2	41.9%
Xander Seleucus LP		Cayman Islands		PO Box 309, Ugland House, Grand Cayman KY1-1104	0.0	43.3%
Xander Seleucus Retail LP		Cayman Islands		PO Box 309, Ugland House, Grand Cayman KY1-1104	1. 3	48.8%

94 Report and Accounts December 2023 RIT Capital Partners plc

Independent Auditor’s Report

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 95

Report on the audit of the Financial Statements

Opinion

In our opinion:

RIT Capital Partners plc’s Group financial statements and Parent Company financial statements (the ‘financial statements’) give a true

and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2023 and of the Group’s profit for the

year then ended;

the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;

the Parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting

standards as applied in accordance with section 408 of the Companies Act 2006; and

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of RIT Capital Partners plc (the ‘Parent Company’) and its subsidiaries (collectively the ‘Group’) for

the year ended 31 December 2023 which comprise:

Group Parent Company

Consolidated Income Statement and Consolidated Statement of

Comprehensive Income for the year to 31 December 2023

Parent Company Balance Sheet as at 31 December 2023

Consolidated Balance Sheet as at 31 December 2023 Parent Company Statement of Changes in Equity for the year to

31December 2023

Consolidated Statement of Changes in Equity for the year to

31December 2023

Consolidated and Parent Company Cash Flow Statement for the year

to 31 December 2023

Consolidated and Parent Company Cash Flow Statement for the year

to 31 December 2023

Related notes 1 to 33 to the financial statements, including a

summary of significant accounting policies

Related notes 1 to 33 to the financial statements, including a

summary of significant accounting policies

The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting

standards and as regards the Parent Company financial statements, as applied in accordance with section 408 of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our responsibilities

under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We

believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the

financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our

other ethical responsibilities in accordance with these requirements.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we remain

independent of the Group and the Parent Company in conducting the audit.

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

96 Report and Accounts December 2023 RIT Capital Partners plc

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of

the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and Parent Company’s ability to continue to

adopt the going concern basis of accounting included:

Obtaining an understanding of the Directors’ processes and controls for determining the appropriateness of the use of the going

concern basis. This included discussions with J. Rothschild Capital Management Limited (the ‘Manager’) on the governance structure,

corroborating our understanding with the Audit and Risk Committee and obtaining the Directors’ going concern assessment, including

cashflow forecasts, stress tests and covenant calculations, covering the period to 30 June 2025, which is 16 months from the date

these financial statements were authorised for issue;

Reviewing the Group’s cashflow forecasts and stress tests, assessing the completeness of the severe scenarios that consider the key

risks identified by the Group. We considered the appropriateness of the methods used to calculate the cashflow forecasts, stress tests

and covenant calculations and determined through inspection and review of the methodology and calculations that the methods utilised

were appropriate to be able to make an assessment for the entity;

Obtaining the Group’s reverse stress tests and identifying the factors that would lead to the Group utilising all liquidity or breaching

financial covenants during the going concern period;

Considering the actions the Group can take to mitigate the impact of the reverse stress test scenarios. This included evaluating the

Parent Company’s ability to prevent a breach of financial covenants using mitigating actions if required, such as the repayment of

borrowings. We also verified credit facilities available to the Parent Company by obtaining third party confirmations;

Reviewing the liquidity and regulatory capital position of the Group, including an assessment of the liquidity profile of the

Group’s portfolio;

Making enquiries of the Manager and reviewing board minutes and key regulatory documents for risks, events or contrary evidence that

may impact the Group’s ability to continue as a going concern; and

Reviewing the Group’s going concern disclosures included in the Report & Accounts in order to assess that the disclosures were

appropriate and in conformity with the reporting standards.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or

collectively, may cast significant doubt on the Group and Parent Company’s ability to continue as a going concern for a period assessed by

the Directors, being the period to 30 June 2025, which is 16 months from the date these financial statements were authorised forissue.

In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing

material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors

considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this

report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s ability to

continue as a going concern.

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 97

Overview of our audit approach

Key audit matters

Risk of inaccurate recognition of investment income and gains/(losses) on investments held at fair value.

Risk of incorrect valuation of investments held at fair value.

Audit scope

The Group is principally managed from one location in London. All core functions are located

in London.

The Group comprises one consolidated subsidiary and six subsidiaries held at fair value. Monitoring

and control over the operations of these subsidiaries, including those located overseas, is centralised

in London.

The London based Group audit team directly performed audit procedures on all items material to the

Group and Parent Company financial statements.

Materiality

Overall Group materiality of £35.7m which represents 1% of net assets.

An overview of the scope of the Parent Company and Group audits

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for each

entity within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements. We take into account

size, risk profile, the organisation of the Group and effectiveness of Group-wide controls, changes in the business environment and other

factors when assessing the level of work to be performed at each entity.

The investment portfolio balance is the most material part of the Consolidated Balance Sheet. Monitoring and control over the valuation

of investments is exercised by the Manager centrally in London, and as such is audited wholly by the London based Group audit team.

Monitoring and control over the operations of the subsidiaries within the Group is also centralised in London. The Group audit team

performed all the work necessary to issue the Group and Parent Company audit opinion, including undertaking all of the audit work on the

risks of material misstatement identified above. There were no component audit teams.

In establishing our audit approach, we considered the type of audit procedures required to be performed and the audit evidence required

to obtain sufficient and appropriate audit evidence as a basis of our opinion on the Group. All audit evidence was received electronically and

there were regular on-site visits to the Manager’s offices. Meetings with the Manager and the Directors were conducted in person or over

video conferencing. The audit team encountered no difficulties in connecting with the Manager or the Directors and were able to execute the

audit fieldwork effectively.

Climate change

There has been increasing interest from stakeholders as to how climate change will impact companies. The Group has determined that

the most significant future impacts from climate change on its operations may be from environmental exposure, and existing or proposed

regulation that may adversely affect their underlying portfolio investments. This is explained on page 28 in the Principal Risks and Viability

section of the Strategic Report, which forms part of the “Other information”, rather than the audited financial statements. Our procedures

on these disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements or our

knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on

“Other information”.

In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and any consequential

material impact on its financial statements.

Our audit effort in considering climate change was focused on the adequacy of the Group’s disclosures in the financial statements as set

out in Note 1 and concluded that there was no material impact from climate change on the financial statements. We also challenged the

Directors’ considerations of climate change in their assessment of viability and associated disclosures.

Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter or to impact a

key audit matter.

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

98 Report and Accounts December 2023 RIT Capital Partners plc

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of

the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified.

These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and

directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a

whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.

Risk Our response to the risk

Risk of inaccurate recognition of investment income

and gains/(losses) on investments held at fair value

(2023:£139.2m, 2022: £(536.4)m)

Refer to the Audit and Risk Committee Report (pages 52

to55); Accounting policies (pages 70 to 73); and Notes 2

and 3 of the Consolidated Financial Statements (page 74)

The Group’s revenue consists of investment income and

gains/(losses) on investments held at fair value.

The accuracy of recognition and measurement of revenue is

material to the Group’s financial statements.

Shareholder expectations may place pressure on the

Manager to influence the recognition of revenue. This may

result in overstatement or deferral of revenues to assist in

meeting current or future targets or expectations.

We obtained an understanding of the Manager’s processes and controls

around the investment income process and valuation process to ascertain

whether realised and unrealised gains/(losses) and investment income are

appropriately calculated by performing walkthroughs.

For gains/(losses) on investments held at fair value, on a sample basis,

we have:

recalculated the unrealised gains/(losses), considering the procedures

performed on the valuations where relevant;

agreed purchases and sales of investments during the year to trade

tickets, sales agreements, call and distributions notices, and to the

corresponding cash movements in bank statements; and

recalculated realised gains/(losses) from disposals in the year.

For investment income, on a sample basis, we have:

agreed dividend income to an independent source and to corresponding

receipts in bank statements;

agreed distributions received to the notices from the fund managers and

to bank statements;

recalculated interest income based on the terms of underlying

agreements;

agreed accrued dividends at the period end to an external source and

post year end bank statements, where received as at the date of this

report, for occurrence and measurement;

tested the completeness of income receipts by verifying that income

declared during the period, per an independent source, has been

correctly recorded as an income receipt; and

recalculated income from investment properties based on the terms of

the underlying agreements.

We have also performed journal entry testing and made enquiries of

management in order to address the residual risk of management override.

Key observations communicated to the Audit and Risk Committee

The results of our procedures identified no material misstatements in relation to the risk of inaccurate recognition of investment income

and gains/(losses) on investments held at fair value.

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 99

Risk Our response to the risk

Risk of incorrect valuation of investments held at fair value

(2023: £3,602.0m, 2022: £3,672.1m)

Refer to the Audit and Risk Committee Report (pages 52 to

55); Accounting policies (pages 70 to 73); and Note 13 of

the Consolidated Financial Statements (pages 78 to 87).

Investments held at fair value are material, and are

the primary driver of the Group’s net asset value and

total profit.

The Group’s investment portfolio is diverse and includes

both listed and unlisted investments. Unlisted investments

are held in the form of both direct private and illiquid fund

investments. There is also exposure to investment property

and derivative financial instruments.

The Group’s investments are held at fair value through profit

and loss.

Fair value is determined using prices readily available on an

exchange where the investments are listed.

Investments in illiquid funds are valued based on latest

information provided by the relevant fund administrator or

investment manager.

The valuation of direct private investments are either

prepared by the Manager or General Partner (‘GP’) (and

assessed by the Manager), and ultimately determined by

the independent Valuation Committee, and are complex

and include estimates and significant judgements. Where

the Manager has sufficient information to undertake its

own valuations, these are prepared in accordance with

International Private Equity and Venture Capital Valuation

(‘IPEV’) guidelines.

The Manager has engaged a specialist to prepare valuations

of their investment property, in accordance with Royal

Institution of Chartered Surveyors (‘RICS’) guidelines.

There is the risk that inaccurate judgements made in

the assessment of fair value could lead to the incorrect

valuation of investments. In turn, this could materially

misstate the Financial assets at fair value in the

Consolidated and Parent Company Balance Sheet, and the

Gains/(losses) on fair value investments in the Consolidated

Income Statement. There is also a risk that the Manager

may influence the judgements and estimations in respect of

unlisted investments in order to meet market expectations.

We obtained an understanding of the Manager’s processes and controls for

determining the fair valuation of investments by performing walkthroughs.

Our procedures also included reviewing the governance structure and

protocols around oversight of the valuation process, including their

oversight of the valuations performed by the underlying GPs and funds and

corroborating our understanding by attending Valuation Committee meetings

in an observational capacity.

We assessed the Manager’s valuation methodology against applicable

reporting frameworks, including UK-adopted international accounting

standards and the IPEV and RICS Guidelines. We sought explanations from

the Manager where there were judgements applied in its application of the

guidelines and assessed their appropriateness.

For listed investments, we verified market prices and exchange rates applied

by the Manager to an independent pricing vendor and recalculated the

investment valuations as at the year end.

For a sample of illiquid fund investments, we:

confirmed the most recently available fund valuation to third party

statements, including from the GP, fund manager or fund administrator;

where the most recently available fund valuation was not at the year end

date, reviewed the Manager’s approach to address the timing difference

and challenged any adjustments made to the last valuation received.

Where applicable, we corroborated these adjustments by agreeing any

cash flows between the date of the fund valuation and the Group’s year

end valuation date to supporting documentation; and

challenged the Manager on the IFRS 13 levelling classification of

the illiquid fund portfolio, focusing on those which are considered to

be subjective.

For the valuation of a sample of direct private investments determined by the

Manager, we:

challenged the appropriateness of assumptions made in the underlying

valuation models;

verified inputs to the valuation models to source data;

tested the mathematical accuracy of the valuation models;

assessed the impact of contradictory evidence, to ensure an appropriate

valuation was determined;

for a sub-set of our sample, engaged our valuation specialists to form an

independent range for the key assumptions used in the valuation, with

reference to relevant industry and market valuation considerations; and

considered the impact of the current macroeconomic climate throughout

the procedures performed on the valuation of direct private investments,

by challenging whether the valuation methodologies and assumptions

used remained appropriate.

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

100 Report and Accounts December 2023 RIT Capital Partners plc

Risk Our response to the risk

For a sample of illiquid fund and direct private investments we:

assessed prior year valuations which were based on unaudited net asset

statements by reference to their respective audited financial statements,

and obtained explanations for all material movements;

discussed with the Manager the rationale for any differences between

the exit prices of investments realised during the year and the prior

year fair value, to further verify the reasonableness of the current year

valuation models and methodology adopted by the Manager.

obtained and assessed the due diligence performed by the Manager for

new investments made in the year.

With the assistance of our valuation specialists, we formed an independent

range for the fair value of the Group’s investment properties and a sample of

unquoted derivative instruments.

During the post year end period, we monitored the receipt by the Manager

of updated valuation statements and other financial information relevant to

the valuation of the illiquid fund investments in order to assess whether any

material differences arose.

We have also performed journal entry testing and made enquiries of

management in order to address the residual risk of management override.

Key observations communicated to the Audit and Risk Committee

The results of our procedures identified no material misstatements in relation to the risk of incorrect valuation of investments held at

fairvalue.

In the prior year, our auditor’s report included a key audit matter in relation to the ‘Risk of incorrect valuation of direct private and illiquid fund

investments’. This key audit matter was expanded in the year to cover the risk of incorrect valuation of the entire investment portfolio and our

procedures performed are reported above in the ‘Risk of incorrect valuation of investments held at fair value’.

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 101

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit

and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the

economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our

auditprocedures.

We determined materiality for the Group to be £35.7m (2022: £37.2m), which is 1% (2022: 1%) of net assets. We believe that net assets

provides us with a consistent year on year basis for determining materiality, and is the most relevant measure to the stakeholders of

theentity.

We determined materiality for the Parent Company to be £34.6m (2022: £36.2m), which is 1% (2022: 1%) of net assets.

We calculated materiality during the planning stage of the audit and then during the course of our audit, we reassessed materiality based on

31 December 2023 net assets, and adjusted our audit procedures accordingly.

Performance materiality

The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the

probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgment was that

performance materiality was 75% (2022: 75%) of our planning materiality, namely £26.8m (2022: £27.9m). We have set performance

materiality at this percentage based on the fact that there were no material prior year misstatements, that the internal control environment is

consistent with the prior year and there have been no significant changes in circumstances.

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of £1.8m (2022: £1.9m),

which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative

grounds. We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of

other relevant qualitative considerations in forming our opinion.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor’s report

thereon. The Directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this

report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with

the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify

such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material

misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material

misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

102 Report and Accounts December 2023 RIT Capital Partners plc

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies

Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Strategic Report and the Directors’ report for the financial year for which the financial statements are

prepared is consistent with the financial statements; and

the Strategic Report and the Directors’ report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the

audit, we have not identified material misstatements in the Strategic Report or the Directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in

our opinion:

adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from

branches not visited by us; or

the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with

the accounting records and returns; or

certain disclosures of Directors’ remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Corporate Governance Statement

We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance

Statement relating to the Group and Parent Company’s compliance with the provisions of the UK Corporate Governance Code specified for

our review by the Listing Rules.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance

Statement is materially consistent with the financial statements or our knowledge obtained during the audit:

Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material

uncertainties identified set out on page 30;

Directors’ explanation as to its assessment of the Parent Company’s prospects, the period this assessment covers and why the period

is appropriate set out on page 30;

Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets its

liabilities set out on page 30;

Directors’ statement on fair, balanced and understandable set out on page 51;

Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 25;

The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on

page 24; and

The section describing the work of the audit committee set out on page 52.

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 103

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement set out on page 51, the Directors are responsible for the preparation of

the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is

necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group and Parent Company’s ability to continue as

a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the

Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud

is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or

intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including

fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the Parent

Company and the Manager.

Our approach was as follows:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most

significant are those that relate to the reporting framework (UK-adopted international accounting standards, the Companies Act 2006,

the AIC code, the 2018 UK Corporate Governance Code and the Companies (Miscellaneous Reporting) Regulations 2018) and relevant

tax compliance regulations. In addition, we concluded that there are certain significant laws and regulations which may influence the

determination of the amounts and disclosures in the financial statements including the Listing Rules of the UK Listing Authority.

We understood how RIT Capital Partners plc is complying with those frameworks by making enquiries of the Manager, including

the General Counsel and Company Secretary, Chief Financial and Operating Officer, Head of Compliance and Internal Audit and

also the Non-Executive Directors including the Chairs of the Audit and Risk Committee, and Valuation Committee. We corroborated

our understanding through our review of Board minutes, Remuneration Committee minutes, papers provided to the Audit and Risk

Committee, including Valuation Committee packs, minutes of the Board’s Conflicts Committee and correspondence received from

regulatory bodies.

We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur by

meeting with Directors and the Manager to understand where they considered there was susceptibility to fraud. We also considered

performance targets and their potential influence on efforts made by Directors and the Manager to manage the net asset value (‘NAV’)

per share or the NAV per share total return. We identified a fraud risk with respect to management override in relation to the risk of

inaccurate recognition of investment income and gains/(losses) on unquoted investments held at fair value and the risk of incorrect

valuation of direct private investments. Our audit procedures stated above in the ‘Key audit matters section’ of this Auditor’s report

were performed to address each identified fraud risk. In order to address the residual risk of management override we have performed

journal entry testing and enquiries of senior management as detailed below.

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our

procedures involved; journal entry testing, with a focus on manual journals and journals indicating large or unusual transactions based

on our understanding of the business; enquiries of the directors of the Manager and of the Audit and Risk Committee at the planning

and completion stages of the audit; and focused testing, as referred to in the key audit matters section above.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at

https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Independent Auditor’s Report to the Members of

RIT Capital Partners plc

104 Report and Accounts December 2023 RIT Capital Partners plc

Other matters we are required to address

We were appointed by the Parent Company on 26 April 2018 to audit the financial statements for the year ending 31 December 2018

and subsequent financial periods.

The period of total uninterrupted engagement including previous renewals and reappointments is six years, covering the years ending

31December 2018 to 31 December 2023.

The audit opinion is consistent with the additional report to the Audit and Risk Committee.

Use of our report

This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required

to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the Group and Parent Company’s members as a body, for our audit work, for this report, or for the

opinions we have formed.

Mike Gaylor (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor, London

4 March 2024

Notes:

1. The maintenance and integrity of the RIT Capital Partners plc web site is the responsibility of the Directors; the work carried out by the auditors does

not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial

statements since they were initially presented on the web site.

2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

RIT Capital Partners plc Report and Accounts December 2023 105

Other Information

31 December 2023

(Unaudited)

RIT Capital Partners plc

106 Report and Accounts December 2023 RIT Capital Partners plc

Investment portfolio reconciliation

The following table shows a summary reconciliation between the amounts reported within the Investment Portfolio, as shown on pages 21

to 23, and the 31 December 2023 consolidated balance sheet, as shown on page 65:

31 December 2023

£ million

Quoted

equity

Private

investments

Uncorrelated

strategies

Net liquidity/

borrowing/

other

Consolidated

balance

sheet

Non-current assets

Portfolio investments at fair value 1,357.1 1,251.0 754.2 – 3,362.3

Non-consolidated subsidiaries 0.1 33.5 104.5 (1.0) 137.1

Investments held at fair value 1,357.2 1,284.5 858.7 (1.0) 3,499.4

Investment property – – 34.1 – 34.1

Property, plant and equipment – – 21.6 – 21.6

Retirement benefit asset – – – 0.1 0.1

Derivative financial instruments 5.9 – – – 5.9

1,363.1 1,284.5 914.4 (0.9) 3,561.1

Current assets

Derivative financial instruments

26.8 – 6.0 32.6 65.4

Other receivables

– – 0.5 70.7 71. 2

Amounts owed by group undertakings – – – 0.1 0.1

Cash at bank 2.3 – – 202.0 204.3

29.1 – 6.5 305.4 341.0

Total assets 1,392.2 1,284.5 920.9 304.5 3,902.1

Current liabilities

Borrowings – – – (142.9) (142.9)

Derivative financial instruments (0.3) – (1.8) (0.7) (2.8)

Other payables

(21.0) – (2.1) (16.1) (39.2)

Amounts owed to group undertakings

– – – (0.1) (0.1)

(21.3) – (3.9) (159.8) (185.0)

Net current assets/(liabilities) 7. 8 – 2.6 145.6 156.0

Total assets less current liabilities 1,370.9 1,284.5 917.0 144.7 3,717.1

Non-current liabilities

Borrowings – – – (137.9) (137.9)

Provisions – – – (3.0) (3.0)

Finance lease liability – – (2.9) – (2.9)

– – (2.9) (140.9) (143.8)

Net assets

1,370.9 1,284.5 914.1 3.8 3,573.3

Investment Portfolio Reconciliation

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 107

Glossary

Within this Annual Report and Accounts, we publish certain

financial measures common to investment trusts. Where relevant,

these are prepared in accordance with guidance from the AIC, and

this glossary provides additional information in relation to them.

Alternative performance measures (APMs): APMs are numerical

measures of the Company’s current, historical or future financial

performance, financial position or cash flows, other than financial

measures defined or specified in the Company’s applicable financial

framework – namely UK adopted IAS and the AIC SORP. They are

denoted with an * in this section.

CPI: The CPI refers to the United Kingdom Consumer Price Index

as calculated by the Office for National Statistics and published

monthly. It is the UK Government’s target measure of inflation and,

from 1 January 2022, is used as a measure of inflation in one of the

Company’s KPIs, CPI plus 3.0% per annum.

Gearing*: Gearing is a measure of the level of debt deployed within

the portfolio. The ratio is calculated in accordance with AIC guidance

as total assets, net of cash, divided by net assets and expressed as

a ‘net’ percentage, e.g. 110% would be shown as 10%.

£ million 2023 2022

Total assets

3,902.1 4,171.5

Less: cash

(204.3) (218.0)

Sub total

3,697.8 3,953.5

Net assets

3,573.3 3,721.7

Gearing

3.5% 6.2%

Leverage: Leverage, as defined by the UK Alternative Investment

Fund Managers Directive (AIFMD), is any method which increases

the exposure of the portfolio, whether through borrowings or

leverage embedded in derivative positions or by any other means.

MSCI All Country World Index: The MSCI All Country World

Index is a total return, market capitalisation-weighted equity index

covering major developed and emerging markets. Described in

this report as the ACWI or the ACWI (50% £), this is one of the

Company’s KPIs or reference hurdles and, since its introduction in

2013, has incorporated a 50% sterling measure. This is calculated

using 50% of the ACWI measured in sterling and therefore

exposed to translation risk from the underlying foreign currencies.

The remaining 50% uses a sterling-hedged ACWI from 1 January

2015 (from when this is readily available). This incorporates hedging

costs, which the portfolio also incurs, to protect against currency

risk and is an investable index. Prior to this date it uses the index

measured in local currencies. Before December 1998, when total

return indices were introduced, the index is measured using a

capital-only version.

Net asset value (NAV) per share: The NAV per share is calculated

by dividing the total value of all the assets of the trust less its

liabilities (net assets) by the number of shares outstanding. Unless

otherwise stated, this refers to the diluted NAV per share, with

debt held at fair value.

NAV total return*: The NAV total return for a period represents the

change in NAV per share, adjusted to reflect dividends paid during

the period. The calculation assumes that dividends are reinvested in

the NAV at the month end following the NAV going ex-dividend. The

NAV per share at 31 December 2023 was 2,426 pence, an increase

of 38 pence, or 1. 6 %, from 2,388 pence at the previous year end.

As dividends totalling 38 pence per share were paid during the year,

the effect of reinvesting the dividends in the NAV is 1. 6 %, which

results in a NAV total return of +3.2%.

Net quoted equity exposure: This is the estimated level of

exposure that the trust has to listed equity markets. It includes the

assets held in the quoted equity category of the portfolio adjusted

for the notional exposure from quoted equity derivatives, as well

as estimated cash balances held by externally-managed funds and

estimated exposure levels from hedge fund managers.

Notional: In relation to derivatives, this represents the estimated

exposure that is equivalent to holding the same underlying position

through a cash security.

Ongoing charges figure (OCF): As a self-managed investment

trust with operating subsidiaries, the calculation of the Company’s

OCF requires adjustments to the total operating expenses.

Inaccordance with AIC guidance, the main adjustments are to

remove non-recurring costs as well as direct performance-related

compensation from JRCM, as this is analogous to a performance

fee for an externally-managed trust.

£ million 2023 2022

Operating expenses 42.7 43.6

Adjustments (15.0) (7.6)

Ongoing charges 27.7 36.0

Average net assets 3,614 4,045

OCF 0.77% 0.89%

In addition to the above, managers charge fees within the

external funds (and in a few instances directly to RIT in relation to

segregated accounts). We have estimated that, based on average

net assets across the year and annual management fee rates per

fund (excluding performance fees), these represent an additional

0.94% of average net assets (2022: 0.88%).

Glossary and Alternative Performance Measures

108 Report and Accounts December 2023 RIT Capital Partners plc

Premium/discount: The premium or discount (or rating) is

calculated by taking the closing share price on 31 December

2023 and dividing it by the NAV per share at 31 December 2023,

expressed as a net percentage. If the share price is above/below

the NAV per share, the shares are said to be trading at a premium/

discount.

Share price total return or total shareholder return (TSR)*: The

TSR for a period represents the change in the share price adjusted

to reflect dividends paid during the period. Similar to calculating

a NAV total return, the calculation assumes the dividends are

notionally reinvested at the daily closing share price following the

shares going ex-dividend. The share price on 31 December 2023

closed at 1,882 pence, a decrease of 243 pence, or 11. 4 %, from

2,125 pence at the previous year end. Dividends totalling

38 pence per share were paid during the year, and the effect of

reinvesting the dividends in the share price is 1. 8 %, which results

in a TSR of -9.6%. The TSR is one of the Company’s KPIs.

Glossary and Alternative Performance Measures

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 109

Historical information

Diluted

net assets

£ million

Diluted

NAV

per share

pence

Closing

share price

pence

Premium/

(discount)

Diluted

earnings

per share

pence

Dividend

per share

pence

02 August 1988 280.5 105.9 81.5 (23.0) n/a n/a

31 March 1989 344.4 134.2 114.0 (15.1) 29.3 1. 7

31 March 1990 334.0 131.0 97.0 (26.0) (2.5) 2.6

31 March 1991 318.0 131.7 92.0 (30.1) 0.7 2.4

31 March 1992 305.5 140.7 85.2 (39.4) 6.6 1. 1

31 March 1993 385.9 181.1 11 7. 0 (35.4) 40.5 1. 1

31 March 1994 468.6 221.6 17 1. 0 (22.8) 41.5 1. 6

31 March 1995 450.2 213.4 174.0 (18.5) (8.1) 1. 7

31 March 1996 560.8 283.2 223.0 (21.3) 63.3 1. 6

31 March 1997 586.1 303.5 242.5 (20.1) 1 7. 2 1. 8

31 March 1998 737.5 384.1 327.0 (14.9) 81.5 2.0

31 March 1999 759.7 398.6 341.0 (14.5) 14.6 2.2

31 March 2000 811.4 509.0 439.0 (13.8) 100.2 3.1

31 March 2001 759.8 484.3 436.5 (9.9) (28.8) 3.1

31 March 2002 758.3 483.4 424.5 (12.2) 2.2 3.1

31 March 2003 674.7 430.2 371.5 (13.6) (50.2) 3.1

31 March 2004 981.1 628.2 577.5 (8.1) 195.9 3.1

31 March 2005 1,113.1 712.7 694 (2.6) 90.0 3.1

31 March 2006 1,534.7 982.7 1,020 3.8 270.3 3.1

31 March 2007 1,635.6 1,047.3 1,000 (4.5) 67.0 3.1

31 March 2008 1,690.0 1,091.6 1,147 5.1 50.6 4.0

31 March 2009 1,350.5 874.3 831 (5.0) (205.2) 7.5

31 March 2010 1,815.7 1,180.1 1,082 (8.3) 306.3 4.0

31 March 2011 1,984.0 1,289.4 1,307 1. 4 111.7 4.0

31 March 2012 1,920.0 1,249.3 1,220 (2.3) (35.7) 4.0

31 December 2012 1,847.2 1,191.4 1,131 (5.1) (29.6) 28.0

31 December 2013 2,146.0 1,383.6 1,260 (8.9) 215.7 28.0

31 December 2014 2,299.6 1,483.0 1,397 (5.8) 129.8 29.4

31 December 2015 2,441.3 1,572.5 1,681 6.9 121.4 30.0

31 December 2016 2,692.1 1,730 1,885 9.0 195.0 31.0

31 December 2017 2,858.3 1,839 1,962 6.7 142.4 32.0

31 December 2018 2,830.2 1,821 1,910 4.9 1 7. 5 33.0

31 December 2019 3,145.6 2,004 2,115 5.5 220.8 34.0

31 December 2020 3,590.4 2,292 2,065 (9.9) 321.0 35.0

31 December 2021 4,390.3 2,794 2,750 (1.6) 545.5 35.25

31 December 2022 3,721.7 2,388 2,125 (11.0) (371.3) 37.0

31 December 2023

3,573.3 2,426 1,882 (22.4) 43.8 38.0

Notes:

1. The Company commenced its business as an approved investment trust on 3 August 1988, following the listing of its share capital on the London Stock

Exchange.

2. Prior to 31 March 2000, the diluted net assets were measured on the assumption that all convertible stock was converted at the balance sheet date.

By 31March 2000, all convertible stock had been converted or redeemed.

3. Dividends per share represent the amounts paid in the relevant financial year or period.

4. Since 31 March 2005 the closing share price has been displayed to the nearest pence and from 31 December 2016 the diluted net assets per share has been

disclosed to the nearest pence.

Financial calendar:

2 May 2024, 12:00pm: Annual General Meeting.

26 April 2024: Payment of interim dividend.

Historical Information and Financial Calendar

110 Report and Accounts December 2023 RIT Capital Partners plc

Share price information

The Company’s £1 ordinary shares are listed on the London Stock Exchange and may be identified using the following codes:

TIDM: RCP LN

SEDOL: 0736639 GB

ISIN: GB0007366395

Daily and 15 minute delay share price information is displayed on the Company’s website: www.ritcap.com, as well as numerous

online platforms.

Registrar

The Company’s registrar may be contacted as follows:

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

Tel: 0370 703 6307

Overseas: +44 370 703 6307

Shareholders may contact the registrar should they need to notify a change of name or address, or have a query regarding the

registration of their holding or the payment of a dividend. Shareholders who wish to have dividends credited directly to their bank

account rather than paid by cheque may do so by arrangement with the registrar. Shareholders may also arrange with the registrar

to have their dividend payment invested in additional RIT Capital Partners plc ordinary shares purchased in the market.

Registered holders of ordinary shares of RIT Capital Partners plc may elect to receive communications from the Company

electronically as an alternative to receiving hard copy accounts and circulars. This facility is provided by the registrar and shareholders

will need to go online at www.investorcentre.co.uk and select the ‘eComms’ signup section to participate. To complete the

registration process shareholders will need their postcode or country of residence, along with their shareholder reference number

(as shown on their share certificates or dividend advices). Shareholders will also be asked to agree to the terms and conditions for

electronic communication.

Registered shareholders also have the facility to check their shareholding, change their address or update their bank mandate

instruction by registering to become a member of ‘Investorcentre’.

Regardless of whether shareholders sign up for ‘eComms’ or become a member of ‘Investorcentre’, they are able to cast proxy

votes in respect of general meetings electronically if they wish by using the link provided on their proxy form or in their email

notification.

Investor Information

Company Highlights

Strategic Report

Governance

Financial Statements

Other Information

RIT Capital Partners plc Report and Accounts December 2023 111

MANAGER, ADMINISTRATOR, COMPANY SECRETARY AND REGISTERED OFFICE

J. Rothschild Capital Management Limited

27 St. James’s Place

London SW1A 1NR

INDEPENDENT AUDITOR

Ernst & Young LLP

25 Churchill Place

London E14 5EY

SOLICITOR

Linklaters LLP

One Silk Street

London EC2Y 8HQ

BROKERS

JP Morgan Cazenove Limited

25 Bank Street

London E14 5JP

Numis Securities Limited

45 Gresham Street

London EC2V 7BF

ADVISER TO THE REMUNERATION COMMITTEE

Alvarez & Marsal

Park House

16-18 Finsbury Circus

London EC2M 7EB

CUSTODIAN

BNP Paribas S.A., London Branch

10 Harewood Avenue

London NW1 6AA

DEPOSITARY

BNP Paribas Trust Corporation UK Limited

10 Harewood Avenue

London NW1 6AA

AIC

The Company is a member of the Association of Investment Companies

www.theaic.co.uk

FOR INFORMATION

27 St. James’s Place

London SW1A 1NR

Tel: 020 7647 8565

Email: investorrelations@ritcap.co.uk

Website: www.ritcap.com

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