Ruffer Investment

Company Limited

Annual report

for the year ended

30 June 2022

Key performance indicators 3

Financial highlights 3

Chairman’s statement

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Strategic report 12

Investment Manager’s report 19

Responsible investment report 30

Top ten holdings 37

Directors 38

Report of the Directors 40

Corporate governance statement 46

Directors’ remuneration report 60

Audit and Risk Committee report 63

Management Engagement Committee report 69

Report of the depositary 71

Independent Auditor’s report to the members of the Company 73

Statement of financial position 84

Statement of comprehensive income 85

Statement of changes in equity 86

Statement of cash flows 87

Notes to the Financial Statements 88

Portfolio statement 123

General information 127

Management and administration 129

Appendix (unaudited) 130

Contents

Key performance indicators

30 June 22 % 30 June 21 %

Share price total return over 12 months

5.6 19.5

NAV total return per share over 12 months

6.0 15.3

Premium of share price to NAV 1.7 2.0

Dividends per share over 12 months

3.05p 1.90p

Annualised dividend yield

1.0 0.7

Annualised total return per share since launch

7.7 7.9

Ongoing charges ratio

1.07 1.08

Financial highlights

30 June 22 30 June 21

Share price 300.00p 287.00p

NAV at year end as calculated on an IFRS basis

£952,784,773 £575,851,333

NAV at year end as reported to the LSE £947,554,437 £575,913,008

Market capitalisation

£969,008,292 £587,541,854

Number of shares in issue 323,002,764 204,718,416

NAV per share at year end as calculated on an IFRS basis

294.98p 281.29p

NAV per share at year end as reported to the LSE 293.36p 281.32p

Ruffer Investment Company Limited

1 Assumes reinvestment of dividends. See appendix for Alternative Performance Measures (APMs)

2 Dividends declared during the year

3 Annual dividend yield is calculated using share price at the year end and dividends declared during the year

4 See note 9

5 This is the NAV/NAV per share as per the Financial Statements. Refer to note 14 on page 102 for a reconciliation between this figure and the NAV/NAV per

share as reported to the LSE. See appendix for Alternative Performance Measures (APMs)

6 See appendix for Alternative Performance Measures (APMs)

Source: RAIFM Ltd, FTSE International (FTSE). Data to 30 June 2022. All figures include reinvested income. RICL performance is shown after deduction of all fees and

management charges. Performance data is included in the appendix.

120

160

200

240

280

320

360

400

2004 2006 2008 2010 2012 2014 2016 2018 2020

RIC total return NAV

FTSE All-Share TR

Twice Bank Rate

The year to end-June 2022 has been another excellent year for Ruffer Investment Company

Limited (RICL or ‘the Company’) in a challenging environment but one which has demonstrated

the value of the Company’s investment approach. The net asset value (NAV) total return over this

period was 6.0%, the NAV per share rising from 281p to 295p. The share price total return was

5.6%, reflecting a modest fall in the premium of share price to NAV.

This performance was achieved despite substantial falls in financial markets in the second half of the

Company’s financial year, including a halving in the value of long-dated Index-Linked stocks between

November 2021 and 30 June 2022. Index-Linked stocks have long been a significant percentage of the

assets of RICL, so RICL’s positive performance demonstrates the continuing effectiveness of the

Investment Manager’s active management of duration risk through offsetting derivative strategies.

Performance and share issuance increased the market capitalisation of the Company to nearly £1 billion,

leading to entry in March 2022 to the FTSE 250 Index. This development reflects a broadening of the

shareholder base and an improvement in the liquidity of RICL shares which, together with issuance at a

premium being accretive to NAV, has been to the advantage of shareholders.

The compound annualised NAV total return to 30 June 2022 since the Company’s launch in July

2004 was 7.7%. The chart below shows the annual total return and volatility of the Company’s

NAV since launch against: (a) the Company’s objective; (b) the FTSE All Share Index and (c) four

of the most comparable investment companies.

NAV TOTAL RETURN VERSUS VOLATILITY, JULY 2004 – 30 JUNE 2022

Source: Ruffer, Morningstar, Bloomberg. Constituents: Personal Assets, Capital Gearing, Aberdeen Diversified Income & Growth, RIT Capital Partners, BH Macro

NAV TR (annualised)

Volatility (annualised)

Twice Bank

Rate

Ruffer Investment

Company

FTSE

All-Share

46 81012141618

Chairman’s statement

Ruffer Investment Company Limited

RICL has continued to provide one of the highest returns per unit of risk of all the comparators.

Relative to a risk-free investment (the Sharpe ratio), the return has been over twice that of the

FTSE All-Share Index since the launch of RICL. In terms of the Sortino Ratio, which only measures

the downside element of volatility, the Company has generated over three times more excess

return per unit of risk than an investment in the UK stock market.

To 30 June 22 Sharpe ratio Sortino ratio

Ruffer Investment Company since inception (July 2004) 1.06 2.39

FTSE All-Share Total Return Index since July 2004 0.46 0.74

Earnings and Dividends

During the year the Company generated 3.67p per share of revenue and 8.16p per share of capital

gain. The Company has always invested for total return which gives flexibility to the Investment

Manager to pursue the optimal investment strategy for the long-term generation of return and the

preservation of capital.

The Board is committed to retaining no more than 15% of the Company’s income in any given year

to allow the Company to remain able to be marketed to a UK retail client base. Having paid out an

interim dividend in March 2022, amounting to 1.50p per share, the Company has declared a

second interim dividend for this financial year of 1.25p per share. The remaining balance of

revenue earned has been retained to add to the revenue reserve which may be used to help protect

dividends against future fluctuations in revenue.

Diversification

RICL is one of a small number of London-listed closed-ended funds which aim for positive

nominal or real returns rather than returns relative to a benchmark. Some of these ‘absolute

return’ funds, including RICL, are classified as ‘Protective’ or ‘Portfolio’ Diversifiers. In the interim

Chairman’s statement in February 2022, I wrote that the Board remained confident that RICL

would provide shareholders with a core diversifying component of their portfolios as well as

protection of wealth.

Portfolio diversification is more than avoiding all eggs in one basket, which simply averages the

risk that any one specific investment might go wrong. Such a policy can in fact lead to

‘diworsification’ – a term coined by the legendary fund manager Peter Lynch to describe assets

moving together (positively correlated) which adds unnecessary risk to a portfolio without the

benefit of higher returns.

It was Nobel Laureate Harry Markowitz who in the 1950s demonstrated that in markets where

prices zig-zag over time, if one asset zigs while the other zags, yet each has exactly the same

prospective total long term return, then combining the two assets in one portfolio can reduce

portfolio risk without sacrificing expected return. Furthermore, of two portfolios which have

exactly the same annual arithmetic return as each other, that which zig-zags less than the other

(has lower volatility) will compound more wealth over time than the other.

The ‘all-weather’ RICL portfolio reflects the reality that more things can happen than will happen

and, when the unexpected does happen, the Manager plans to have protected the portfolio by true

diversification. Furthermore, what is true within the Company’s portfolio is equally the case when

shareholders combine their holding in RICL with other assets which comprise their overall wealth.

The Investment Manager demonstrated last year that the correlations of asset classes in the future

may not reflect those of the past. How right they were. The classic 60/40 equity/bond portfolio has

proved to be diworsification. The return on a 60/40 model portfolio was 17% negative in the

second half of the Company’s financial year to 30 June 2022, which compares to RICL’s positive

return of 2.9% over that same period.

After forty years of declining bond yields, it is easily forgotten that in the previous sixteen year

period, from 1966 to 1981, a systematic rise in inflation, interest rates and bond yields meant that

the best performing asset class over this period out of US bonds, equities and cash was not equities

or bonds – it was cash.

Share issuance

During the year, the Company gradually issued a total of 118,284,348 shares, including an offering

to both retail and institutional shareholders.

The reasons for seeking shareholder authority to issue shares were stated in the Circulars asking

for shareholder authority as follows –

1 maintenance of the Company’s ability to issue shares to meet ongoing demand in the market,

in order to provide effective management of the premium to Net Asset Value per Share at

which the shares may trade, so as to help to ensure that long-term investors who regularly

acquire shares are not disadvantaged

2 an increase in the size of the Company, thereby spreading operating costs, other than

management, administration and depositary fees, which are charged by reference to the Net

Asset Value, over a larger capital base which should reduce the ongoing charges ratio

Ruffer Investment Company Limited

3 enhancement of the Net Asset Value per share of existing shares through share issuance at a

premium to the last published Net Asset Value per share plus the costs of the issue and

4 improvement of liquidity in the market for the shares enabling easy purchase and sale

providing shareholders with flexibility in the management of their own wealth without

impacting the investment decisions of the Company.

Shareholders voted overwhelmingly in favour of Board authority to issue shares on a non-pre-

emptive basis on five separate occasions during the financial year. This required five circulars and

two prospectuses, and the authority given enabled the Board to contain the premium of share price

to NAV to within 5% over the period.

The process by which the Company’s Broker issues shares into the market to satisfy demand is

known as ‘tapping’. The tap issuance by the Company’s Broker is controlled by the Board.

However, the rate of issuance necessary to contain the premium has averaged c. two million shares

a week in financial year 2022 compared to an average weekly issuance of less than 500,000 shares

over the 2021 financial year.

Apart from managing the premium, one benefit of the closed-ended structure of the Company and

the gradualist approach to issuing shares is that it enables the Investment Manager to control the

cash raised and to absorb it easily in to the RICL portfolio. Another is that this helps to avoid ‘cash

drag’ – the impact of holding a quantity of uninvested nil-returning cash before it can be invested.

Responsible investing

Ruffer LLP (Ruffer) is a signatory to the six UN Principles for Responsible Investment (PRI), to

Climate Action 100+, to the Transition Pathway Initiative and the Institutional Investors Group on

Climate Change (IIGCC).

At the macro level, ESG considerations enable Ruffer to assess systemic risk across markets and

asset classes, such as sovereign bonds and listed equities. This level of analysis includes

sector-specific trends or themes.

At the micro level, fundamental analysis of the securities RICL buys, sells and holds is embedded

into the Ruffer ESG framework. The Responsible investment report on pages 30 to 36 of this

Annual Report elaborates on RICL’s approach to ESG policy and its implementation.

The portfolio has had no exposure to any sanctioned assets, in particular in relation to Russia.

Board matters

After the year-end, and following 20 years with the Ruffer Partnership, Hamish Baillie announced

that he had decided to step down from the Partnership and as co-manager of RICL. Hamish has

been a manager of RICL since 2011, when he took over responsibility for RICL from Jonathan

Ruffer. Hamish has overseen the Company’s excellent performance and growth over these years

and, together with Duncan MacInnes as co-manager, developed a strong relationship between the

Company and its shareholders, helped by other Ruffer communications such as webinars, Ruffer

Radio and The Green Line. Hamish has left with the Board’s admiration and gratitude for all that

he has contributed.

Duncan MacInnes continues as manager and is supported by the same underlying investment

team. We welcome Jasmine Yeo, who has been appointed co-investment manager with Duncan.

Bertie Dannatt has taken on the operational aspects of Hamish’s role which, as the Company and

regulation have both grown, has become more time-demanding.

As I flagged in the interim report, Jill May and David Staples have decided to step down from the

Board at the AGM in December 2022. We shall miss them. Both have made a significantly

pro-active and positive contribution to the Company as Directors and in their respective roles as

Senior Independent Director and Chair of the Audit and Risk Committee. This has been

particularly evident during a pandemic period which has seen a high level of Company activity that

has demanded much of their time. We thank them for their contribution.

As I also mentioned in the interim report, Nicholas Pink and Shelagh Mason have agreed to take

up the roles of Senior Independent Director and chair of the Management Engagement Committee

respectively with effect from the AGM in December 2022.

In January 2022 the Board engaged OSA recruitment consultants to identify a Guernsey director

to succeed David Staples as Chair of the Audit and Risk Committee. We are delighted that Susie

Farnon became free to join RICL in this role after she retired in July 2022 as audit chair of

FTSE 250 HICL Infrastructure Ltd.

Following her retirement as Head of Audit for KPMG Channel Islands, Susie became a non-

executive director and audit chair of a number of investment companies. She has been Vice-

Chairman of the Guernsey Financial Services Commission and is a non-executive director of the

Association of Investment Companies, the UK trade body. By joining the RICL board on

1 September 2022, Susie has been able to parallel run with David through the 2022 annual report

preparation and audit process.

Ruffer Investment Company Limited

Having decided that five remains the appropriate number of non-executive directors, the Board

engaged Longwater Partners in London in February to help identify a second new Director to

succeed Jill May. Longwater provided a strong slate of candidates and we look forward to

welcoming Solomon Soquar to the board in December when he will succeed Jill May on her

retirement at the AGM.

Solomon holds a BA/MA in Politics, Philosophy and Economics and M.Phil in Economics from

Balliol College, Oxford, where he studied and taught. He has had a long and deep practical

experience of over 30 years across Investment Banking and Capital Markets with leading US and

UK financial institutions. His particular focus has been in structuring risk management solutions

for Wealth Management and his most recent executive role was as CEO of Barclays Investments

Solutions Limited.

Solomon brings skills, experience and a perspective which are particularly relevant to the

protection strategies that are a critical part of RICL’s investment strategy. His knowledge and

experience in this area is complementary to the other skills and experience on the Board.

In the interim report, I also mentioned that we had engaged a third party, Trust Associates, to

evaluate Board remuneration, following last year’s external Board evaluation. This was especially

necessary given the prospect of finding two new directors and our recent experience that at least

one potential candidate declined to continue discussion in the light of the level of directors’

remuneration at the time. The outcome of this review is explained in detail in the Directors’

Remuneration Report on pages 60 to 62 of this annual report.

Outlook

In the ‘Economic Consequences of the Peace’, Keynes commented: ‘By a continuing process of

inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of

their citizens.’ He went on to comment that the confiscation is arbitrary and strikes at the security

and confidence in the equity of the existing distribution of wealth.

The current level of inflation is clearly no longer unobserved and was unanticipated, as the Bank of

England forecast chart in the Investment Manager’s report on page 25 demonstrates all too clearly.

Confidence in the equity of wealth distribution is fraying the edges of political concern. Like Hans

Christian Andersen’s Emperor, Central Banks are seen to have been short on clothes for the

current economic and financial environment and have at last begun to tighten policy.

The Company’s principal objective is to provide shareholders with a positive total net annual

return of at least twice the Bank of England Base Rate. This objective has become more

challenging. If it is true that markets are barometers rather than thermometers, reflecting how

investors feel about the future rather than the present, then the financial weather outlook seems to

be set fairer than might yet prove to be the case. The Board therefore endorses the Investment

Manager’s observation: ‘There are times for a get rich quick portfolio and times for a stay rich

portfolio. This is definitely the latter sort of time’.

Christopher Russell

4 October 2022

Ruffer Investment Company Limited

The Company carries on business as a closed-ended investment company. Its shares are traded on

the Main Market of the London Stock Exchange (LSE) and it was admitted to the premium

segment of the Official List of the UK Listing Authority on 20 December 2005. The Company is

externally managed by Ruffer AIFM Limited, a UK investment manager authorised and regulated

in the conduct of investment business in the United Kingdom by the Financial Conduct Authority

(FCA). Ruffer AIFM Limited is also the Alternative Investment Fund Manager (AIFM) of the

Company.

Board

The Board of Directors is responsible for the overall stewardship of the Company, including

general management, structure, finance, corporate governance, marketing, risk management,

compliance, gearing, contracts and performance. Biographical details of the Directors, all of whom

are non-executive, are listed on pages 38 and 39 and in the Management and Administration

summary on page 129. The Company has no executive directors or employees.

The Board has contractually delegated to external parties various functions as disclosed in the

Corporate Governance Statement on pages 46 to 59.

Investment objective

The principal objective of the Company is to achieve a positive total annual return, after all

expenses, of at least twice the Bank of England Bank Rate.

The weighted average Bank of England rate throughout the year ended 30 June 2022 was 0.40%

(2021: 0.10%).

The Company predominantly invests in internationally listed or quoted equities or equity related

securities (including convertibles) or bonds which are issued by corporate issuers, supra-nationals

or government organisations.

Investment strategy

The Company’s strategy is to create a balanced portfolio of offsetting assets which in aggregate are

intended to enable the Company to meet its investment objective. The aspiration remains to

produce consistent positive returns, regardless of the performance of financial markets. Over

shorter periods this is likely to result in the Company lagging sharply-rising equity markets, but

outperforming falling equity markets. This strategy will be implemented predominantly through

investments in listed securities, collective investment schemes and currencies but the Investment

Manager has the flexibility to use other asset classes should it be necessary to do so.

Strategic report

The investment strategy has been tested in the last 12 months as conditions in markets have

changed quickly, but the portfolio has stood up to this test. In order to achieve the Company’s

investment objective we need to be able to perform in both rising and falling asset markets. This

means that we maintain a balance of investments with a small but potent book of cyclical equities

to perform should economic and financial conditions improve, index-linked bonds and gold to

benefit from sustained higher inflation and financial repression, and credit protection and options

to protect the Company should there be a shock to financial markets.

Investment policy

In selecting investments, the Company adopts a stock picking approach and does not adopt any

investment weightings by reference to any benchmark. Both the Board and the Investment

Manager believe that the adoption of any index related investment style would inhibit the ability of

the Company to deliver its objective.

The Company invests across a broad range of assets, geographies and sectors to achieve its

objective. This allocation will change over time to reflect the risks and opportunities identified by

the Investment Manager across global financial markets, with an underlying focus on capital

preservation. The allocation of the portfolio between different asset classes will vary from time to

time so as to enable the Company to achieve its objective. There are no restrictions on the

geographical or sectoral exposure of the portfolio (except those restrictions noted below).

The universe of equity, equity related securities or bonds in which the Company may invest is wide

and may include companies domiciled in, and bonds issued by entities based in, non-European

countries, including countries that are classed as emerging or developing. This may result in a

significant exposure to currencies other than pound sterling. Where appropriate, the Investment

Manager will also use in-house funds to gain exposure to certain asset classes.

The Company may use derivatives, including (but not limited to) futures, options, swap

agreements, structured products, warrants and forward currency contracts, for efficient portfolio

management purposes only.

Investment restrictions and guidelines

It is not intended for the Company to have any structural gearing. The Company has the ability to

borrow up to 30% of the NAV at any time for short term or temporary purposes, as may be

necessary for settlement of transactions, to facilitate share redemption or to meet ongoing

expenses.

Ruffer Investment Company Limited

The proportion of the portfolio invested into companies based in emerging or developing countries

will be limited, at the time of any investment, to below 15% of the Company’s gross assets.

The Directors have determined that the Company will not engage in currency hedging except

where the Investment Manager considers such hedging to be in the interests of efficient portfolio

management.

The Directors have determined that no more than 15% in aggregate of the Company’s gross assets

at the time of acquisition will be invested in listed investment companies (including investment

trusts), with a maximum of 10% of gross assets invested in investment companies not having

stated investment policies allowing them to invest no more than 15% of their own gross assets in

other UK listed investment companies (including investment trusts).

General

In accordance with the requirements of the FCA, any material changes in the Investment Policies

and Objectives of the Company may only be made with the approval of shareholders.

Investment of assets

At each quarterly Board meeting, the Board receives a detailed presentation from the Company’s

Investment Manager which includes a review of investment performance, recent portfolio activity

and a market outlook. It also considers compliance with the investment policy and other

investment restrictions during the reporting year. The Company’s Top Ten holdings and Portfolio

Statement are on page 37 and pages 123 to 126 respectively.

Environmental policy

Whilst the Company has a limited carbon footprint in respect of its day to day activities, the Board

notes that the Investment Manager recognises that environmental responsibility is core to its

longer term business success, and actively integrates environmental, social and corporate

governance (ESG) issues into its investment process. The Investment Manager’s ESG policy is

available upon request. For more detail, please see the Responsible investment report on

pages 30 to 36.

A number of environmental initiatives have been introduced by the Board and the Administrator,

as follows –

– minimising printing of Board materials

– deemed consent from shareholders to accept electronic copies of documents

– use of recycled paper for Annual and Interim Reports for shareholders requiring hard copies

– use of recycled Woodland Trust printer paper by the Administrator, which funds new UK

woodland and

– Fairtrade tea and coffee and tap water, rather than bottled water, served at all Board meetings.

In addition, the Board intends to carbon balance Directors’ and Investment Manager’s flights and

is currently considering the merits of various carbon offsetting schemes.

Shareholder value

The Board reviews on an ongoing basis the performance of the Investment Manager and considers

whether the investment strategy utilised is likely to achieve the Company’s investment objective of

realising a positive total annual return, after all expenses, of at least twice the return of the Bank of

England Bank Rate. Having considered the portfolio performance and investment strategy, the

Board has unanimously agreed that the interests of the shareholders as a whole are best served by

the continuing appointment of the Investment Manager on the terms agreed.

Dividend policy

The Board’s policy is to pay dividends semi-annually, which are typically declared in September

and March, with an objective of retaining no more than 15% of the Company’s income each year.

Dividends will only be paid from the Company’s revenue account and not from capital. Dividend

payments by the Company will depend on the net income stream generated by the underlying

investments in the Company’s investment portfolio and therefore no assurance can be given that

dividends will continue to be paid.

The payment of any dividend by the Company is subject to the satisfaction of a solvency test as

required by the Companies (Guernsey) Law, 2008, whereby the Board must be satisfied on

reasonable grounds that the Company will, immediately after payment of any dividend, be able to

pay its debts as they become due and that the value of the Company’s assets would be greater than

the value of its liabilities.

The Board has the discretion to increase or reduce the dividend, or not to declare a dividend, as

appropriate in consideration of the financial position of the Company.

Details of the dividends paid during the year are set out in note 5 to the Financial Statements on

page 95.

Ruffer Investment Company Limited

Principal risks and uncertainties and their management

The Board has undertaken a robust assessment of the principal risks facing the Company and has

undertaken a detailed review of the effectiveness of the risk management and internal control

systems. As stated within the Report of the Audit and Risk Committee on page 65, the Board, with

the assistance of the Administrator and the Investment Manager, has drawn up a risk assessment

matrix, which identifies the key risks to the Company, and which is reviewed and updated by the

Audit and Risk Committee on a quarterly basis. The principal risks and uncertainties faced by the

Company, and the mitigating factors adopted by the Company, are summarised below. The Board,

together with the Investment Manager, regularly monitors relevant risks in relation to the ones

mentioned below. During the year, these have included potential geopolitical and economic

impacts, including those arising from the war in Ukraine, and current and potential interest rate

rises and increases in inflation.

Investment risks – the Company is exposed to the risk that its portfolio fails to perform in line with

the Company’s objectives. The Board reviews reports from the Investment Manager at each

quarterly Board meeting and at other times when expedient, paying particular attention to the

diversification of the portfolio and to the performance and volatility of underlying investments.

Operational risks – the Company is exposed to the risks arising from any failure of systems and

controls in the operations of its service providers, principally the Investment Manager or the

Administrator. The Board receives reports annually from the Investment Manager and

Administrator on their internal controls and reviews pricing reports covering the valuations of

underlying investments at each quarterly Board meeting. The Board can and does receive

explanations and assurances from its key suppliers as to their own operational resilience and plans

and ability to respond during times of crisis.

Accounting, legal and regulatory risks – the Company is exposed to the risk of action or sanction

by shareholders, counterparties or regulators if it fails to comply with the regulations of the UK

Listing Authority or the Guernsey Financial Services Commission or if it fails to maintain accurate

accounting records. The Administrator provides the Board with regular reports on changes in

regulations and accounting requirements, including increased regulation relating to ESG and

climate change.

Financial risks – the financial risks faced by the Company include market risk (comprising interest

rate, foreign currency and price risk), credit risk and liquidity risk. These risks and the controls in

place to mitigate them are reviewed at each quarterly Board meeting. Further details on financial

risks are discussed in note 19 of the Financial Statements on pages 106 to 119.

Emerging risks – the Board is constantly alert to the identification of any new or emerging risks

through the monitoring of the Company’s investment portfolio and by conducting regular reviews

of the Company’s risk assessment matrix. When an emerging risk is identified, the risk assessment

matrix is updated and appropriate mitigating measures are agreed.

The Board seeks to mitigate and manage these risks through continual review, policy-setting,

enforcement of contractual obligations and monitoring of the Company’s investment portfolio. The

Board, Investment Manager and the Company’s Broker also regularly monitor the investment

environment in order to identify any new or emerging risks.

Going concern

The Directors believe that it is appropriate to continue to adopt the going concern basis in

preparing the Financial Statements since the assets of the Company consist mainly of cash and

cash equivalents and securities which are readily realisable. The Directors also note that overall,

due to the nature of the Company’s portfolio, which – as discussed in more detail in the

Performance section of the Chairman’s Review and in the Investment Manager’s report –

comprises both equities and other more defensive assets, it has not been affected significantly in

terms of value or cashflows by the effects of the covid-19 pandemic or the Russian invasion of

Ukraine. Accordingly, in the Directors’ opinion, the Company has adequate financial resources to

continue in operational existence for the foreseeable future. Matters relating to the going concern

basis are also discussed in the Long Term Viability Statement below and note 2(c) on page 88.

Long term viability statement

The Directors have assessed the prospects of the Company over a longer period than the 12 months

minimum required by the ‘going concern’ provision. For the purposes of this statement, having

regard to the economic planning cycle and the Company’s strategy review period, the Board has

adopted a three year viability period.

In its assessment of the Company’s viability over the three year period the Board has considered

each of the Company’s principal risks as detailed above and any emerging risks, and in particular

the impact of a significant fall in the value of the Company’s investment portfolio.

The Directors consider that a 30% fall in the value of the Company’s portfolio would be significant

but would have little impact on the Company’s ability to continue in operation over the next three

years. In reaching this conclusion, the Directors considered the Company’s expenditure

projections, the fact that the Company currently has no borrowing, but has the ability to borrow up

to 30% of its NAV and that the Company’s investments comprise predominantly readily realisable

Ruffer Investment Company Limited

securities which can be expected to be sold to meet funding requirements if necessary, assuming

market liquidity continues.

Also, the Board has assumed that the regulatory and fiscal regimes under which the Company

operates will continue in broadly the same form during the viability period. The Board speaks with

its Broker and legal advisers on a regular basis to understand issues impacting on the Company’s

regulatory and fiscal structure. The Administrator also monitors changes to regulations and

advises the Board as necessary. The Board also has access to the Administrator’s compliance

resources as well as the compliance department of the AIFM.

Based on the Company’s processes for monitoring operating costs, share discount, internal

controls, the Investment Manager’s performance in relation to the investment objective, the

portfolio risk profile, liquidity risk and the robust assessment of the principal risks and

uncertainties facing the Company, the Board has concluded that there is a reasonable expectation

that the Company will be able to continue in operation and meet its liabilities as they fall due over

the three year period.

Key performance indicators

The Board uses a number of performance measures to assess the Company’s success in meeting its

objectives. The key performance indicators are disclosed in detail on page 3.

For the year to 30 June 2022 the Company had a share price total return of 5.6% and the NAV

total return of 6.0%. The Company has achieved its objective of preserving and growing

shareholder capital.

The annualised NAV total return since inception of the Company in 2004 is 7.7%, which is ahead

of UK equities with a much lower level of volatility and drawdowns.

The period has been unusually challenging for investors. The below shows the returns an investor

would have earned each quarter if they had had perfect foresight and could choose in advance to be

in the best asset class. The remarkable thing about Q1 2022 is that the best-case non-cash scenario

was a loss of 4.5% offered by US high yield bonds. History shows how rare it is that there was

nowhere to hide. However, this wasn’t an anomaly – the second quarter was worse. The 60/40

portfolio is down 17% so far in 2022, a clear indicator that balanced, multi-asset portfolios are

struggling.

BEST QUARTERLY TOTAL RETURN ACROSS ASSET CLASSES

Source: Bianco Research, FactSet, Reuters Datastream

Given all that has happened year to date, we have presented contributions for the full year to

30 June 2022 and also for the six months to 30 June 2022.

Performance contributions for six months to 30 June 2022

With nowhere to hide in conventional assets, it is no surprise that it was the portfolio’s

unconventional protective assets that drove performance in the first six months of calendar year

2022. Option protection via the Ruffer Protection Strategies Fund added 4.4%, driven mostly by

Q2 2022 total return %

-5%

10%

15%

20%

25%

30%

35%

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

Bloomberg US Aggregate -4.7

Bloomberg Global Aggregate -8.3

10 year Treasury -8.3

Bloomberg EM Bond (USD) -8.7

ICE BofA US High Yield -10.0

MSCI EM (USD) -11.3

SP500 Composite -13.7

MSCI World (USD) -14.2

MSCI EAFE (USD) -14.3

Russell 2000 -17.2

30 year Treasury -17.6

Investment Manager’s report

Ruffer Investment Company Limited

interest rate options and equity puts. Credit protection continued to be an essential hedge

contributing 3.6% via the Ruffer Illiquid Multi-Strategies Fund.

Within equities, energy stocks were the strongest contributors, adding 2.0% to performance.

Individual stock performance of note came from value cyclicals – for instance Chesapeake Energy

(+31%) and Mitsubishi UFJ Finance (+19%). The decision to rotate into defence and healthcare

stocks was also rewarded as Northrop Grumman (+29%) and Bristol Myers Squibb (+27%)

performed well.

Towards the end of the period, as fears of recession grew, exposure to the auto manufacturing

sector was hit hard with Volkswagen (-25%) and General Motors (-45%) together costing the

portfolio -0.5%. In the UK, exposure to domestic value stocks via Ruffer UK Mid & Smaller

Companies Fund (-14%) was hurt by the political omnishambles, inflation and recession risk,

detracting -0.4% from the portfolio. Both cases provided a stark reminder that cheap stocks can

get cheaper in the short term.

The carnage in the long-dated inflation-linked bond market should not be understated. These

assets cost the portfolio -6.0%. The 2073 index-linked bond was down as much as 54% from its

November 2021 all-time high – further commentary below.

-5.5

-0.9

0.6

0.7

3.6

4.4

Index-linked

bonds

Gold equities and

gold exposure

Equities

Equity downside

protection

Credit/volatility

protection

Interest rate

options

-3.5

-0.9

0.1

2.7

3.3

4.6

Index-linked

bonds

Gold equities and

gold exposure

Equity downside

protection

Equities

Credit/volatility

protection

Interest rate

options

30 JUNE 2021 – 30 JUNE 2022 (12M) 31 DECEMBER 2021 – 30 JUNE 2022 (6M)

Performance contributions for 12 months to 30 June 2022

The drivers of performance over 12 months were similar to those that shaped the first half of 2022.

The toolkit of unconventional protections performed exactly as desired. Options added 3.7% and

Ruffer Illiquid Multi-Strategies Fund added 3.3%. These protections provided both negative

correlation and duration at a time of market stress and high cross-asset correlation in conventional

markets.

Energy equities added 2.8% to performance and we took significant profits during the period. In

the summer of 2021, we had a 7% allocation to these stocks at the end of the period this was closer

to 4%.

Gold exposure and gold equities cost the portfolio 0.9% during the period. The largest individual

pain came from Kinross Gold (-0.4%), which was impacted by the Russian invasion of Ukraine.

Gold is a prime example of the failure of conventional safe havens in recent times. Despite inflation

and war being front page news, gold has misfired. We still think it has a valuable role to play, but

this greater correlation with risk assets is a consequence of gold’s increased financialisation.

In the period, inflation-linked bonds cost the portfolio 3.5%, with the longest dated 2073 issue

down 51%. We have long called these assets the ‘crown jewels’ in our portfolio due to our

conviction that they should provide the perfect protection in the world of financial repression we

are entering. We are still of this view. But the sensitivity to rising rates we have warned about, has

now been felt. This illustrates a distinction we have been labouring; investing for inflation and

investing for inflation volatility are not the same thing and conflating the two will be costly.

Mr Market will make us crawl through fire for the gift of redemption, and derivative protection via

the unconventional toolkit remains essential to safely navigating choppy and dangerous markets.

Inflation-linked bonds are now back to pre-Brexit prices – and yet in our assessment the likelihood

and proximity of the inflationary denouement is much greater.

Portfolio changes

In the last few months of the period, we reduced the risk in the portfolio, moving into what we call

‘crouch mode’ for what we believe will be a particularly dangerous period in the second half of this

year. This de-risking included

1 Reducing equities to a 25% weighting with relevant hedges on top for good measure – this is

the lowest weighting for Ruffer portfolios since 2003.

2 Increasing portfolio duration as the rise in bond yields has increased its potential effectiveness

as a hedge

3 Rotating gold exposure from equities to bullion.

Ruffer Investment Company Limited

Investment outlook

Summary

1 The long term – an era of inflation volatility

2 The short term – the impossible tightrope walk

3 The bear is mid-grizzle

4 Hard hats on

There’s an old Charlie Munger quote: ‘If you’re not a little confused about what’s going on, you

don’t understand it’.

That sums up the fog of war, literal and metaphorical, we find the global economy immersed in.

We have never had higher conviction on the long term – that we have moved into a new regime of

inflation volatility and those conventional portfolios are not going to fare well. In the short term –

the outlook is far murkier and path-dependent as policymakers try to navigate a narrow path

without either tipping the economy into a wage-price spiral or over the other side into recession. In

the meantime, liquidity continues to drain from the system.

The long term – an era of inflation volatility

So what does the new regime look like? We think we return to spasmodic bouts of inflation

volatility like we saw after the World War 2 period or indeed again in the 1970s. This long-term

chart of UK and US inflation makes it clear that the last 30-40 years has been something of an

aberration.

We expect an extended period of accelerating financial repression – where interest rates are below

the rate of inflation, forcing negative real returns upon savers. ‘Stealing money from old people,

slowly’ as Russell Napier has memorably described it. We believe we are evolving into a staccato,

stop-start world of higher inflation and faster economic growth. This will be driven by targeted

government stimulus to tackle the big societal issues of the day; inequality, climate change and

now the containment of the geopolitical aspirations of China and Russia.

Source: Bank of England, ASR Ltd/Refinitiv, data to March 2022

‘Ketchup inflation’

With these trends will come much greater economic and market volatility – the great moderation

of inflation, growth and geopolitics enjoyed over the last 40 years is over. Having spent a decade

trying in vain to create inflation, like an impatient child slapping on a ketchup bottle, central

bankers have now got too much, all at once, in an uncontrolled splat. Inflation was desired as a

palliative treatment for the system, the least painful method of debt default and wealth

redistribution from old to young and rich to poor – but this ketchup inflation is too hot to handle.

The political imperative is that something must be done.

The short term – the impossible tightrope walk

Given that some inflation is desirable but too much is political suicide, perhaps the critical

question is: how hard will central bankers fight inflation?

Monetary tightening is a little like going on a diet; easy to talk about and make detailed plans for,

but difficult when it comes to the reality of the hard choices and abstinence.

-15

-10

-5

1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1991 1996 2001 2006 2011 2016 2021

12 month

% change

US inﬂation

UK inﬂation

Ruffer Investment Company Limited

From the current starting point of inflation at 40-year highs in both Europe and the US and a

surging, fizzing jobs market – there are no good choices. Central bankers resemble quivering

funambulists facing an impossible tightrope walk as they try to meet their objectives – full

employment alongside low and stable inflation. Complicating matters further they have politicians

breathing down their necks as inflation has spurred a cost of living crisis which now dominates the

headlines. On one side, tighten conditions too much and unemployment will surge, probably

tipping the economy into recession and crushing asset markets. On the other side, do not tighten

enough and risk inflation getting embedded into wages, beginning the dreaded wage-price spiral of

previous inflationary episodes.

To make an impossible situation worse the tightrope walker appears a little short-sighted. This

chart shows the Bank of England’s inflation forecasts and then the actual outturn (continuous

green line) over the last year or so. In May 2021 the Bank of England thought inflation in summer

2022 would be around 2.5%. The actual result? 9.2%.

BANK OF ENGLAND MPC’S MODAL (BASELINE) CPI INFLATION FORECAST

Source: Bank of England, modal projections based on market pricing for Bank Rate over the forecast horizon

So, we must conclude that nobody has a clue – particularly not academic economists. Despite their

recent mistakes they remain highly confident that inflation will drop back to around 2% by 2024

and stay there.

By June 2022, central bankers began the gradual process of rate rises in the UK and US. Indeed

the Federal Reserve (Fed) is engaging in the multi-variate experiment of simultaneous rate hikes

and quantitative tightening.

We are now starting to see what happens when more than a decade of easy money is removed from

the system. As ex-Federal Reserve Governor Jeremy Stein said, ‘the thing about monetary policy is

that it gets in all the cracks’. There is no hiding from the reality of higher interest rates. Every

tightening cycle throughout history has ended with a recession, a market crisis or both. ‘The Fed

hikes until something breaks’ as the old adage goes.

10%

2017 2019 2020 2021 2022 2024 2025

Published data

Aug 21

Nov 21

Feb 22

May 22

Ruffer Investment Company Limited

Source: FactSet

The punchbowl is being taken away. Quantitative easing is melting away and quantitative

tightening is beginning. Combined with rapid-fire rate hikes, it’s a recipe for financial market

sobriety.

It IS different this time

The policy reaction function has changed. For the last decade or so, downside risk was limited

because investors knew that once equity markets declined 20% the Fed put would kick in and there

would be policy easing. Today, given the need to dampen demand to tame inflation, the market

upside is capped; rise too much and it will be met with more hikes and tighter financial conditions.

The Fed wants higher risk premiums, and that means a lower market.

If it were to come, another Fed U-turn, similar to 2018’s Powell Pivot or last November’s

abandoning the word “transitory”, would be confirmation central bankers have lost control and

America has entered an era of structurally high inflation.

The Bezzle

The economist John Kenneth Galbraith coined the idea of ‘The Bezzle’, a form of psychic wealth

that can be created by mistake or self-delusion. The theory goes that if a collector has a Picasso

painting (or should it be an NFT these days?) worth US$10 million and someone steals it, there is a

1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 2022

US 10 year yield

Franklin Natl

First

Penn

Mexico/

Penn

Square

Cont

Illinois

Black

Monday

S&L

crisis

Mexico/

Orange

Asia

ﬁnancial

crisis

dot.com

crisis

Housing

bubble

Great

ﬁnancial

crisis

Energy

market

collapse

Equity

turmoil

(SPX -20%)

Pandemic

period of time, potentially years, where both the collector and the thief believe they have a US$10

million asset and act accordingly. The effective wealth in their micro economy is US$20 million.

Half of the wealth that exists in this moment is illusory and will be destroyed only when the

collector identifies the crime. Today’s bezzle is the trillions of dollars of assets held in crypto,

profitless technology and venture capital funds globally. Although these sectors have felt

significant pain already, we believe there is potentially much more to come as opacity, illiquidity

and discretion around asset pricing allows the bezzle to be revealed slowly rather than with a bang.

The bear is only mid grizzle

How does an asset fall 95% in value? First it falls by 90% and then it halves!

Investors under the age of 60 have been conditioned to buy the dip. Central bank easing has always

been just around the corner and the market recoveries are swift and steep. A look further back in

history shows that the pattern many bear markets take is a steep drop, followed by a more

prolonged, grind lower over a number of years. In these scenarios, buying the first downward lurch

leaves your capital almost as impaired as buying at the top. Let me explain why we have high

conviction that the bear market is not over, and stocks are not (yet) a buying opportunity.

The Fed is tightening into an economic slowdown.

Valuations have come down to something more reasonable but are based on earnings estimates

that remain too optimistic, still forecasting growth when flat would be a good result.

Valuations have fallen because bond yields have risen, not because the equity risk premium has

widened.

Earnings reflect record high margins at a time of rising debt service, labour and energy costs and

supply chain disruptions.

Consumer and CEO confidence is at multi year lows, suggesting demand reduction and recession.

So far we have seen limited signs of capitulation. In fact, flows have remained strongly positive into

equity and credit throughout the sell-off. As the chart shows, ARK Innovation ETF has suffered no

net redemptions despite declining 71% in price since the peak. The ‘buy the dip’ mentality is alive

and well.

Ruffer Investment Company Limited

Source: Bloomberg, data to 30 June 2022

But the old rules no longer apply. Now that the cost of living crisis is front page news, the political

imperative is to bring down inflation, not to support asset prices as in previous market sell-offs.

Rather, we are in a negative feedback-loop, where any bear market rally sows the seeds of its own

demise by loosening financial conditions, which in turn forces Central Banks to counteract.

Lastly, liquidity is the driver of market prices at the margin and this is likely to evaporate in

coming months –as quantitative tightening takes hold, while rising short term rates creates a

legitimate alternative to risky assets. The plumbing of the financial system exacerbates this

liquidity squeeze by steering cash from banks to money market funds, which have less of a money

multiplier effect in the economy. Banks, though not in danger, want to shed deposits and are not

keen to expand their balance sheets, while money market funds reflect rate rises quickly and will

attract flows.

Hard hats on!

In an episode of surprisingly and persistently high inflation, no allocation to risk escapes repricing.

Investors in the Company delegate to Ruffer the task of assessing the economic and market

landscape, evaluating the opportunity set and then deciding about how much risk to take.

We do not think this is a good environment to be risking our shareholders’ capital.

120

145

170

195

220

Jul 19 Oct 19 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21 Apr 21 Jul 21 Oct 21 Jan 22 Apr 22

ARKK Share Price

ARKK Shares Out (m)

Rather, we see the coming months as a period to survive, given the extent of the uncertainty

around the Ukraine war, central bank policy, inflation, corporate earnings and the consequences of

rising interest rates.

This is all happening as the tide of easy money recedes, and we strongly suspect that some people

will be found to have been swimming naked.

In this environment, an allocation to cash is an underrated decision – it provides the certainty of a

slow erosion by inflation, but it also gives you the option value of being able to move quickly. This

is clearly reflected in our portfolio construction.

As our CIO Henry Maxey wrote in the Ruffer Review at the turn of the year: ‘Winter is coming for

liquidity, it’s coming for narcissism, it’s coming for crypto, it’s coming for retail punting, and it is

definitely coming for businesses which depend on any of these things’.

There are times for a get rich portfolio and times for a stay rich portfolio. We believe this is the

latter. There will be better moments and better prices in the future.

In The Science of Hitting by legendary baseball slugger Ted Williams, the key observation was that

you don’t have to swing your bat at every pitch, only at the ones which look sufficiently attractive.

That insight applies in spades to investing in risky assets at this juncture. We would rather lose half

of our clients, than half of our client’s money.

ASSET ALLOCATION AS AT 30 JUNE 2022

As at 30 June 2022.

Source: Ruffer LLP

Ruffer AIFM Limited

4 October 2022

Protection %

Illiquid strategies and options 18.0

Short-dated bonds 12.8

Cash 10.5

Index-linked gilts 8.9

Long-dated index-linked gilts 8.8

Gold exposure and gold equities 8.2

Non-UK index-linked 6.2

Global funds 1.2

Growth %

UK equities 11.3

North America equities 5.4

Japan equities 5.3

Europe equities 3.0

Asia ex-Japan equities 0.4

Ruffer Investment Company Limited

Ruffer LLP (“Ruffer”) is committed to the effective stewardship of our investors’ assets. We

incorporate environmental, social and governance (ESG) considerations into our investment

approach – both at an asset allocation level and in the selection of individual securities.

Responsible investment requires thoughtful consideration of the economy, environment, and

society. It also means taking action. Primarily, we do this by systematically engaging with the

companies in which we invest and exercising our voting rights to improve ESG outcomes.

This report outlines the principles and processes which define our approach to responsible

investment and provides detail on the practical application thereof.

How we do it

Integration

At the macro level, ESG considerations enable us to assess systemic risk across markets and asset

classes, such as sovereign bonds and listed equities. This level of analysis includes sector-specific

trends or themes.

At the micro level, fundamental analysis of the securities we buy, sell and hold is embedded into

our ESG framework. This allows us to identify opportunities for engaging with management, proxy

voting and to collaborate with other shareholders or industry-level initiatives. Our framework

affords a degree of flexibility, reflective of the fact that our investment conviction or stewardship

activities (including our journey to Net Zero) may change in response to new information.

Responsible investment report

Application and resources

ESG considerations represent sources of both value and risk in the relatively concentrated

portfolio of equity holdings in RICL. We first explore industry and sector-specific trends or

themes, such as potential regulatory headwinds or industry best practices. The framework is then

applied to individual securities to examine ESG related risks and opportunities.

Our ESG analysis incorporates a range of qualitative and quantitative considerations. These are

drawn from internal and external research and from formal and informal data sources.

This includes:

– In-house ESG specialists working with Research Analysts to provide subject matter expertise

both during the due diligence phase and throughout the holding period of the security

Ruffer Investment Company Limited

– Company statements including annual accounting and sustainability reports

– Data and research insights from MSCI ESG Research, Bloomberg and FactSet

– The Sustainability Accounting Standards Board (SASB) framework

– Insights from the Transition Pathway Initiative (TPI) and CDP (previously, the Carbon

Disclosure Project) in the assessment of carbon risk management and the transition to Net

Zero

– Institutional Shareholder Services (ISS) – providing proxy voting research and the voting

platform to exercise our votes

Our ESG analysis extends to fixed income investments. For RICL, this applies primarily to

sovereign debt. We have developed a proprietary tool to analyse sovereign ESG risks, consisting of

country-level indicators to gauge each sovereign issuer’s exposure. Specifically, we analyse

environmental inputs ranging from renewable energy usage to waste recycling, and population

studies assessing physical climate risk in low-lying areas. From a social and governance

perspective, indicators are equally broad, touching on health and education, female labour force

participation and measures of political stability and corruption.

Stewardship

Engagement

Engagement increases our understanding of the nature and significance of the various ESG risks

facing investee companies. We engage independently and through collaborative initiatives, such as

the Institutional Investors Group on Climate Change (IIGCC), Climate Action 100+ and the

Investor Mining and Tailings Safety Initiative.

Effective engagement is focused 0n improving outcomes – for the environment and society, as well

as for investors and other stakeholders.

Voting policy

It is Ruffer’s policy to vote on Annual General Meeting and Extraordinary General Meeting

resolutions, including shareholder resolutions and corporate actions, and we vote on all

shareholdings in the companies held within RICL.

We have access to proxy voting research, currently from Institutional Shareholder Services, to

assist our decision making. However, whilst we take note of proxy advisers’ voting

recommendations, we do not delegate or outsource our stewardship activities when deciding how

to vote on our shareholdings.

Voting can also be seen as an escalation method, especially if the outcome of engagement with

management has been unsatisfactory. In 2021, we voted against management predominantly on

issues relating to the independence and effectiveness of directors, audit related resolutions and

executive pay. We consider the effective governance of RICL’s investee companies of paramount

importance. Specifically, we use our voting rights to ensure the independence and effectiveness of

board members. Governance concerns ranged from tenure and non-independence to attendance

and remuneration. This has involved voting against the management of several investee companies

including a US financial services firm, a UK bank, a US energy firm, a US healthcare business and a

Japanese media group.

Climate change

Our commitment to reducing carbon emissions applies to Ruffer, RICL, and to RICL’s investee

companies.

Businesses increasingly face two sorts of risk: physical risks from the increased incidence and

severity of climatic events; and transition risks from the policy and technological changes

necessary to move to a Net Zero economy. These risks, if poorly managed, could harm our

shareholders’ investments.

The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) help us

determine the nature, scale and management of climate-related risks and opportunities across

sectors and regions.

We published our inaugural TCFD report in 2021. It introduced Ruffer’s Climate Change

Framework and directly responds to the recommendations of the TCFD. The report also exhibits

our climate-related activities over the past few years and provides an insight into how our

understanding of the risks facing our investee companies has evolved.

In March 2022, Ruffer committed to the Net Zero Asset Managers initiative, and we will disclose

more information about how we will meet the requirements by March 2023.

We disclose details of our voting, engagement activity and progress towards Net Zero in our

quarterly Responsible Investment Reports and annual Stewardship Report – published on Ruffer’s

website and distributed to clients and investors.

Ruffer Investment Company Limited

ESG disclosures

Ruffer has been a signatory to the Principles for Responsible Investment (PRI) since 2016, and we

have had A+ scores for strategy and governance and A scores in listed equity incorporation and

active ownership since 2018.

In 2021 we were confirmed as a signatory to the revised UK Stewardship Code.

We are members of Climate Action 100+ and the IIGCC as well as supporters of the TPI. In 2021,

we also supported the launch of the Association of Investment Companies (AIC) initiative for

disclosure of the ESG policies of all investment companies, full details of which are on the AIC

website.

Case studies

Pfizer

Pfizer develops, manufactures and distributes biopharmaceutical products worldwide.

Our engagement with Pfizer has focused on four fronts:

– Climate strategy

– Lobbying transparency

– Access to medicine

– Management alignment to ESG initiatives

1. Climate Strategy: Pfizer is targeting Net Zero across scope 1 and 2 emissions by 2030. For

scope 3 emissions, Pfizer has a team which engages with suppliers to encourage them to meet

carbon neutrality pledges and adopt science-based targets. However, pressed on the level of

current ambition and capability, the company admitted it is unlikely to match pledges made by

peers in the pharmaceutical industry, including AstraZeneca.

2. Lobbying transparency: Following the ISS recommendation that shareholders vote against

management on lobbying resolutions, we sought deeper and more detailed disclosure on the

role of lobbying at a company and sector level. Management provided assurance that the level

of disclosure was in line with peers.

3. Access to medicine: The experience of the coronavirus pandemic has sharpened investor focus

on the role of pharmaceutical companies in equalising access to medicine. On our request for

evidence of practical efforts, the company pointed to its work with the Global Alliance for

Vaccines and Immunization (GAVI) in lower and middle income countries. Pfizer decided not

to license out production of its covid-19 vaccine, because of supply chain constraints which the

company felt best placed to manage in these circumstances. It has licensed out production of

its new covid-19 pill and will not be collecting royalties on this.

4. Management alignment to ESG initiatives: Our queries centred on how the governance

structure supports ESG initiatives. We received reassurance that the introduction of ESG

metrics into remuneration policies is being considered.

Shell

Shell is a global energy and petrochemicals company involved in exploration, refining and

marketing in more than 70 countries.

Our engagement with Shell has focused on the company’s climate transition strategy. This

included:

– Target setting and approach

– The role of ‘offsets’

– Operations in Nigeria

1. Target setting and approach: In addition to its existing carbon intensity reduction targets

(covering scope 1, 2 and 3 emissions), Shell has announced absolute reduction targets of 50%

compared with 2016 levels across its scope 1 and 2 emissions by 2030. We encouraged the

company to also consider setting interim absolute reduction targets whilst acknowledging the

constraints of current consumer behaviour.

2. The role of ‘offsets’: We sought to better understand the role of ‘offsets’ in the transition to Net

Zero, primarily carbon capture utilisation and storage (CCUS) and nature-based solutions

(NBS). The company confirmed that these initiatives command only a minimal part of its

capital expenditure. Shell has set ambitious targets, notably the capture of 25 million tonnes of

carbon per annum (mtpa) by 2035. We pushed the company on the credibility of this target,

given the average CCUS plant captures around 1.5 mtpa and currently Shell only has two

operating plants. In addition, Shell confirmed that current projects are dependent on both

government and corporate partner support. Developments in the pricing of carbon will have a

significant bearing on the company’s progress on this front and we anticipate greater and

continued involvement in the coming months and years.

3. Operations in Nigeria: We requested further details regarding Shell’s plans to exit its onshore

oil operations in Nigeria. Concurrently, we pushed the company to specify a timeline and

publish findings on what this meant for the ongoing controversies with local communities. The

company has attempted multiple unsuccessful initiatives (Nigeria represents Shell’s largest

Ruffer Investment Company Limited

social investment spend) and confirmed that disinvestment was the last resort. We received

reassurance Shell was not relinquishing its commitment to help communities affected by past

controversies.

Climate risk data

In our 2021 Stewardship Report, we highlighted how we are engaging on climate risk with our

third party data provider.

One of the key advantages of Ruffer’s approach to integrating ESG factors into our investment

process is the ability to pair top-down data from third party ESG providers with bottom-up

analysis conducted by our dedicated team of research and responsible investment analysts.

Because we have one investment approach with a concentrated portfolio, our analysts aim to

devote the necessary time and resources to developing a deep and holistic understanding of each

security and the associated ESG risks and opportunities. This enables us to evaluate the output of

the climate scenario analysis and integrate it into our investment approach.

As detailed in our Stewardship Report, we are comfortable with the climate modelling that informs

much of the climate risk data generated by our third party provider. However, we have had

difficulty reconciling how the provider’s macro analysis matches with the more granular, company

specific detail. Where the provider’s outputs are not aligned with our Research Analysts’

understanding of the businesses in question, we have entered into discourse with the provider.

This was especially evident with regards to the way the provider calculates technology

opportunities and attributes physical risks. This remains the subject of ongoing engagement, more

details of which can be found in Ruffer’s Q2 2022 Responsible Investment report.

Holding at % of total

Investments Currency 30 June 22 Fair value £ net assets

Ruffer Illiquid Multi Strategies Fund 2015* GBP 80,339,911 102,059,244 10.71

Ruffer Protection Strategies International* GBP 13,264,859 69,339,398 7.28

US Treasury inflation indexed bond 0.625% 15/04/2023 USD 50,000,000 48,578,000 5.10

Ishares Physical Gold USD 1,620,000 46,878,634 4.92

US Treasury floating rate bond 31/01/2024 USD 50,000,000 41,144,576 4.32

UK index-linked gilt 0.125% 22/03/2024 GBP 24,000,000 35,000,109 3.67

UK index-linked gilt 1.875% 22/11/2022 GBP 20,000,000 33,647,195 3.53

US Treasury floating rate bond 31/10/2023 USD 35,000,000 28,786,336 3.02

UK index-linked gilt 0.125% 22/03/2068 GBP 12,907,220 25,128,271 2.64

LF Ruffer Gold Fund* GBP 9,579,120 23,966,709 2.52

* Ruffer Illiquid Multi Strategies Fund 2015 Ltd and Ruffer Protection Strategies International are classed as related parties as they share the same Investment

Manager (Ruffer AIFM Limited) as the Company. LF Ruffer Gold Fund and Ruffer SICAV UK Mid & Smaller Companies Fund are also classed as related parties as

their investment manager (Ruffer LLP) is the parent of the Company’s Investment Manager.

Top ten holdings

Ruffer Investment Company Limited

At the date of this report, the Company has six non-executive Directors, all of whom are

independent.

Christopher Russell, a resident of Guernsey, is a non-executive director of investment and financial

companies. These include Hanseatic Asset Management Ltd, a family office in Guernsey, and

JPMorgan Global Core Real Estate Assets Ltd, a vehicle which invests in unlisted global JPMorgan

real estate and infrastructure funds. Prior to a non-executive career, Chris was a director of

Gartmore Investment Management plc, where he was Head of Gartmore’s businesses in the US

and Japan. Before that he was a holding board director of the Jardine Fleming Group in Asia,

resident in Japan then Hong Kong. Prior to joining Flemings in London, he was with Phillips &

Drew Asset Management. He is a Fellow of the UK Society of Investment Professionals and a

Fellow of the Institute of Chartered Accountants in England and Wales. He was commissioned by

John Wiley to publish in 2006 ‘Trustee Investment Strategy for Endowments and Foundations’.

Mr. Russell was appointed to the Board on 1 December 2016 and became Chairman of the Board

on 4 December 2020.

Shelagh Mason, a resident of Guernsey, is a solicitor specialising in English commercial property.

She retired as a consultant with Collas Crill LLP in October 2020. She is also non-executive

Chairman of the Channel Islands Property Fund Limited, sits on the Board of Riverside Capital

PCC and Skipton International Limited, a Guernsey Licensed bank, and until 28 February 2022

was a non-executive director of The Renewables Infrastructure Group Limited, a FTSE 250

company, when she retired after 9 years on the board. Shelagh also sits on the board of Starwood

European Real Estate Finance Limited, a London-listed company. Previously Shelagh was a

member of the board of directors of Standard Life Investments Property Income Trust Limited, a

property fund listed on the London Stock Exchange, for 10 years until December 2014. She retired

from the board of MedicX Fund Limited, a main market listed investment company investing in

primary healthcare facilities in 2017 after 10 years on the board. She is a past Chairman of the

Guernsey Branch of the Institute of Directors, a member of the Chamber of Commerce and the

Guernsey International Legal Association, and she also holds the IOD Company Direction

Certificate and Diploma with distinction. Mrs Mason was appointed to the Board on 1 June 2020.

Jill May, a resident of the United Kingdom, has 25 years’ experience in investment banking,

13 years in M&A with S.G. Warburg & Co. Ltd. and 12 years as a Managing Director at UBS,

focused on group strategy and organisational change. She has broad knowledge of investment

banking, asset management and private banking in the UK and EMEA. She is an External Member

of the Prudential Regulation Committee of the Bank of England and was a non-executive director

of the CMA from its inception in 2013 until October 2016, and a Panel Member of the CMA until

Directors

2018. She is a non-executive director of JPMorgan Claverhouse, a UK listed investment trust,

abrdn Property Income Trust, a UK-listed REIT, and of AlphaFMC, a UK-listed financial

consulting company. Ms. May was appointed to the Board on 17 March 2017, became Senior

Independent Director on 4 December 2020 and will retire on 2 December 2022.

David Staples, a resident of Guernsey, is a fellow of the Institute of Chartered Accountants in

England and Wales and an associate of the Chartered Institute of Taxation. He also holds the

Institute of Directors’ Diploma in Company Direction. For thirteen years until 2003, Mr Staples

was a partner with PricewaterhouseCoopers (PwC) and led the tax practice in the South East of

England advising several large family and owner-managed businesses. He was also a member of

the management board of the firm’s London and South East Middle Markets Tax Practice. Since

leaving PwC, Mr Staples has joined the boards of several listed companies as a non-executive

director. He has served as chairman of MedicX Fund Limited and chairman of the audit

committees of Henderson Far East Income Limited and Aberdeen Private Equity Fund Limited.

He is currently a director of NB Global Monthly Income Fund Limited and Baker Steel Resources

Trust Limited, both of which are listed on the London Stock Exchange. He is also a director and

chairman of the general partners of several private equity funds advised by Apax Partners.

Mr Staples was appointed to the Board on 2 March 2018 and will retire on 2 December 2022.

Nicholas Pink, a resident of the United Kingdom, has extensive senior management experience in

financial services with previous roles at UBS Investment Bank, including Global Head of Research,

Head of European Research, Head of Asia Research and Head of European Equities. Prior to this

he was Head of European Utilities Research at UBS Investment Bank. He is a non-executive

director of JP Morgan Russian Securities plc, a UK-listed investment trust, and of Redburn Europe

Limited, an independent provider of research and execution services to institutional investors.

Mr Pink was appointed to the Board on 1 September 2020.

Susie Farnon, a resident of Guernsey, is a Fellow of the Institute of Chartered Accountants in

England and Wales and a non- executive director of a number of property and investment

companies (as further detailed below). Susie was a Banking and Finance Partner with KPMG

Channel Islands from 1990 until 2001 and Head of Audit KPMG Channel Islands from 1999. She

has served as President of the Guernsey Society of Chartered and Certified Accountants and as a

member of the States of Guernsey Audit Commission and Vice-Chairman of the Guernsey

Financial Services Commission. Susie was appointed as a non-executive director of the Association

of Investment Companies, the UK Investment Companies’ trade body, on 1 April 2018. Susie was

appointed to the Board on 1 September 2022.

Ruffer Investment Company Limited

The Directors of the Company present the audited Financial Statements and their report for the

year ended 30 June 2022 which have been prepared in accordance with the Companies (Guernsey)

Law, 2008 (‘company law’).

Registration

The Company was incorporated with limited liability in Guernsey on 1 June 2004 as a company

limited by shares and as an authorised closed-ended investment company. As an existing closed-

ended fund the Company is deemed to be granted an authorised declaration in accordance with

section 8 of the Protection of Investors (Bailiwick of Guernsey) Law, 2020, as amended and rule

6.02 of the Authorised Closed-ended Investment Schemes Rules and Guidance 2021.

Principal activity and investment objective

The Company is a Guernsey authorised closed-ended investment company with a premium listing

on the London Stock Exchange (LSE). The principal objective of the Company is detailed in the

strategic report on page 10 of the Financial Statements.

Share issuance

During the year, 104,497,127 new redeemable participating preference shares were allotted or

issued under the block listing facility (30 June 2021: 23,930,000 redeemable participating

preference shares issued). Details of the block listing facility are set out in note 13 on pages 100

and 101.

In addition, in December 2021 the Company issued 13,787,221 new redeemable participating

preference shares by way of an Open Offer, Offer for Subscription and Intermediaries Offer as set

out in a prospectus published in November 2021.

Purchase of own shares by the Company

The Company may purchase, subject to various terms as set out in its Articles and in accordance

with the Companies (Guernsey) Law, 2008, up to 14.99%. of the Company’s shares in issue

following the admission of shares trading on the LSE’s market for listed securities. For additional

information refer to note 20 on pages 119 to 121.

The Company did not buy back any shares during the year (30 June 2021: Nil).

The Board also has the discretion to operate the Redemption Facility, offering shareholders the

possibility of redeeming all or part of their shareholding for cash at NAV, if it appears appropriate

to do so.

Report of the Directors

Results and dividends

The results for the year are set out in the Statement of Comprehensive Income on page 85. Details

of dividends paid and proposed are set out in note 5 on page 95.

Subsequent events

Events occurring after the balance sheet date are disclosed in note 21 on pages 121 and 122 in the

Financial Statements.

Shareholder information

The Company announces its unaudited NAV on a weekly basis and at the month end. A monthly

report on investment performance is published by the Company’s Investment Manager, on the

Company’s website, ruffer.co.uk/ric.

Investment management

The key terms of the Investment Management Agreement and specifically the fee charged by the

Investment Manager are set out in notes 8 and 16 of the Financial Statements.

The Board reviews on an ongoing basis the performance of the Investment Manager and considers

whether the investment strategy utilised is likely to achieve the Company’s investment objective of

realising a positive total annual return, after all expenses, of at least twice the return of the Bank of

England Bank Rate.

In accordance with Listing Rule 15.6.2 (2) R and having formally appraised the performance,

investment strategy and resources of the Investment Manager, the Board has unanimously agreed

that the interests of the shareholders as a whole are best served by the continuing appointment of

the Investment Manager on the terms agreed.

The Investment Management Agreement will continue in force until terminated by the Investment

Manager or the Company giving to the other party thereto not less than 12 months’ notice in

writing.

Directors

The details of the Directors of the Company during the year and at the date of this report are set

out on pages 38 and 39 and in the Management and Administration summary on page 129.

Ruffer Investment Company Limited

Directors’ interests

The details of the number of redeemable participating preference shares held beneficially by the

Directors who held office at 30 June 2022 and up to the date of this report are set out on in note 16

on pages 103 and 104.

Substantial share interests

As at 31 August 2022*, the Company has received notifications in accordance with the FCA’s

Disclosure and Transparency Rule 5.1.2 R of the following interests in 3% or more of the voting

rights attaching to the Company’s issued shares.

% of issued

Investor Shares held share capital

Brewin Dolphin, stockbrokers 50,258,143 14.82

Hargreaves Lansdown, stockbrokers 31,276,370 9.22

Rathbones 30,464,974 8.98

Interactive Investor 27,013,473 7.96

Evelyn Partners 18,881,288 5.57

Charles Stanley 17,577,863 5.18

AJ Bell, stockbrokers 15,608,260 4.60

*Data is taken from the latest available Share Register Analysis produced by Richard Davies Investor Relations Limited

International tax reporting

For the purposes of the US Foreign Accounts Tax Compliance Act (FATCA), the Company

registered with the US Internal Revenue Service (IRS) as a Guernsey reporting Foreign Financial

Institution (FFI) in June 2014, received a Global Intermediary Identification Number

(99DLPF.99999.SL.831), and can be found on the IRS FFI list.

The Common Reporting Standard (CRS) is a standard developed by the Organisation for Economic

Co-operation and Development (OECD) and is a global approach to the automatic exchange of tax

information, to counter tax evasion and to build upon other information-sharing legislation, such

as FATCA. Guernsey has adopted the CRS, which came into effect on 1 January 2016.

The Board confirms that the Company’s FATCA and CRS submissions for 2021 were submitted by

the deadline of 30 June 2022.

The Company is committed to zero tolerance towards the facilitation of tax evasion.

Alternative Investment Fund Managers Directive

The Company is categorised as a non-EU Alternative Investment Fund (AIF). The AIFMD seeks to

regulate managers of AIFs, such as the Company. It imposes obligations on AIFMs who manage

AIFs in a member state of the European Economic Area (EEA state), or who market shares in AIFs

to investors who are domiciled, or with a registered office, in an EEA state. Under the AIFMD, an

AIFM must be appointed and must comply with various organisational, operational and

transparency requirements.

The Company has appointed the Investment Manager to act as AIFM on behalf of the Company.

The Investment Manager is responsible for fulfilling the role of the AIFM and ensuring the

Company complies with the AIFMD requirements. The AIFM has no direct employees as it

delegates its duties to Ruffer LLP. Ruffer LLP’s employee remuneration disclosure requirements

under the AIFMD are included in its Pillar III remuneration disclosure statement.

Non-mainstream Pooled Investments

The Company intends to be operated in such a manner that its shares are not categorised as non-

mainstream pooled investments. Among other things, this requires the Company to pay dividends

such that it retains no more than 15% of the income that it receives or is deemed to receive for UK

tax purposes on an annual basis so that it would qualify as an investment trust if it were UK tax-

resident.

Disclosure of information to the Independent Auditor (“the Auditor”)

Each of the persons who is a Director at the date of approval of the Financial Statements confirms

that

1 so far as each Director is aware, there is no relevant audit information of which the Company’s

Auditor is unaware and

2 each Director has taken all steps he ought to have taken as a Director to make himself aware of

any relevant audit information and to establish that the Company’s Auditor is aware of that

information.

This confirmation is given and should be interpreted in accordance with the provisions of

Section 249 of the Companies (Guernsey) Law, 2008.

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the Annual Report and Financial Statements in

accordance with applicable Guernsey law and regulations.

Ruffer Investment Company Limited

Guernsey company law requires the Directors to prepare Financial Statements for each financial

year. Under that law they have elected to prepare the Financial Statements in accordance with

International Financial Reporting Standards (IFRSs) as adopted by the European Union and

applicable law.

Under company law, the Directors must not approve the Financial Statements unless they are

satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or

loss of the Company for that period.

In preparing the Financial Statements, International Accounting Standard 1 requires that

directors –

– select suitable accounting policies and apply them consistently

– make judgements and estimates that are reasonable, relevant and reliable

– state whether applicable accounting standards have been followed, subject to any material

departures disclosed and explained in the Financial Statements

– assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters

related to going concern and

– use the going concern basis of accounting, unless they either intend to liquidate the Company

or cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping proper accounting records that are sufficient to show

and explain the Company’s transactions and disclose with reasonable accuracy at any time the

financial position of the Company and enable them to ensure that the Financial Statements comply

with company law. They are also responsible for safeguarding the assets of the Company and hence

for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the oversight of the maintenance and integrity of the corporate

and financial information included on the Company’s website, ruffer.co.uk/ric. Legislation in

Guernsey governing the preparation and dissemination of Financial Statements may differ from

legislation in other jurisdictions.

Responsibility statement

We confirm that to the best of our knowledge –

– the Financial Statements have been prepared in conformity with IFRS as issued by the IASB

and adopted by the European Union, give a true and fair view of the assets, liabilities, financial

position and profit or loss of the Company as required by DTR 4.1.12

– the Annual Financial Report, taken as a whole, is fair, balanced and understandable and

provide the information necessary for the shareholders to assess the Company’s performance,

business model and strategy and

– the Annual Financial Report including information detailed in the Chairman’s review, the

Report of the Directors, the Investment Manager’s report, the Report of the Depositary and the

notes to the Financial Statements, includes a fair review of the development and performance

of the business and the position of the Company together with a description of the principal

risks and uncertainties that it faces, as required by

a DTR 4.1.8 and DTR 4.1.9 of the Disclosure and Transparency Rules, being a fair review of

the Company business and a description of the principal risks and uncertainties facing the

Company and

b DTR 4.1.11 of the Disclosure and Transparency Rules, being an indication of important

events that have occurred since the end of the financial year and the likely future

development of the Company.

On behalf of the Board

David Staples

Director

4 October 2022

Ruffer Investment Company Limited

Corporate governance statement

Corporate governance

On 1 January 2016, the Company became a member of the Association of Investment Companies

(AIC) and complies with the 2019 AIC Code of Corporate Governance issued in February 2019 (‘the

AIC Code’), effective for accounting periods commencing on or after 1 January 2019. By complying

with the AIC Code, the Company is deemed to comply with both the UK Corporate Governance

Code 2018 (‘the UK Code’) and the Guernsey Financial Services Commission (GFSC) Finance

Sector Code of Corporate Governance (as amended in June 2021) (‘the GFSC Code’).

To ensure ongoing compliance with these principles the Board receives a report from the Company

Secretary on an annual basis identifying how the Company is in compliance and identifying any

areas of non-compliance. The Company has complied with the principles and provisions of the UK

Code throughout the year, with the following exceptions –

– the Company has no chief executive, as envisaged by principle G and provision 9 of the UK

Code. See the Composition and independence of the Board section on pages 50 to 52 below

– the Company has no internal audit function, as envisaged by principle M and provision 25 of

the UK Code. See the Internal control section on pages 57 and 58 below

– the Company does not have a remuneration committee, as required by principle Q and

provision 32 of the UK Code. See the Remuneration Committee section on page 56 below.

The AIC Code is available on the AIC’s website, theaic.co.uk.

The Board, having reviewed the AIC Code, considers that it has maintained procedures during the

year ended 30 June 2022 and up to the date of this report to ensure that it complies with the AIC

Code except as detailed above.

Guernsey regulatory environment

The GFSC Code comprises Principles and Guidance, and provides a formal expression of good

corporate practice against which shareholders, boards and the GFSC can better assess the

governance exercised over companies in Guernsey’s finance sector. The GFSC recognises that the

different nature, scale and complexity of business will lead to differing approaches to meeting the

GFSC Code.

Purpose of the Company

The purpose of the Company is to provide its shareholders with access to a portfolio of equity,

equity-related and debt investments that will produce a positive return of at least twice the Bank of

England bank rate. For further details, see the strategic report section on pages 12 to 18.

Role of the Board

The Board is the Company’s governing body and has overall responsibility for ensuring the

Company’s success by directing and supervising the affairs of the business and meeting the

appropriate interests of shareholders and relevant stakeholders, while enhancing the value of the

Company and also ensuring protection of investors. A summary of the Board’s responsibilities is as

follows –

– statutory obligations and public disclosure

– strategic matters and financial reporting

– capital management, including gearing and dividend policy

– review of investment performance and associated matters

– risk assessment and management including reporting compliance, governance, monitoring and

control and

– other matters having a material effect on the Company.

The Board’s responsibilities for the Annual Report are set out in the Statement of Directors’

Responsibilities on pages 43 to 45.

The Board has contractually delegated responsibility for the management of its investment

portfolio, the arrangement of custodial and depositary services and the provision of accounting

and company secretarial services. The Board has adopted a schedule of matters specifically

reserved for its decision-making and distinguishing these from matters it has delegated to the

Company’s key service providers. This schedule is available on the Company’s website,

ruffer.co.uk/ric.

The Board needs to ensure that the Financial Statements, taken as a whole, are fair, balanced and

understandable and provide the information necessary for shareholders to assess the Company’s

performance, business model and strategy.

In seeking to achieve this, the Directors have set out the Company’s investment objective and

strategy (see pages 12 and 13) and have explained how the Board and its delegated Committees

operate and how the Directors review the risk environment within which the Company operates

and set appropriate risk controls. Furthermore, throughout the Financial Statements the Board

has sought to provide further information to give shareholders a fair, balanced and understandable

view.

Ruffer Investment Company Limited

Relations with shareholders

The Board welcomes shareholders’ views and places great importance on communication with its

shareholders. The Board receives regular reports on the views of its shareholders from the

Company’s Broker and Investment Manager which are taken into consideration as part of the

Board’s decision-making process.

The Chairman and other Directors are available to meet shareholders if required and the AGM of

the Company provides a forum for shareholders to meet and discuss issues with the Directors of

the Company.

The Chairman and Directors offer to meet with shareholders at regular investor presentations co-

ordinated by the Investment Manager to discuss key strategic matters and any issues raised by

shareholders.

In addition, the Investment Manager maintains a website which contains comprehensive

information, including financial reports, prospectus and monthly reports on investment

performance which contains share price information, investment objectives, investment reports

and investor contacts.

Stakeholders and Section 172

Whilst directly applicable to companies incorporated in the UK, the Board recognises the intention

of the AIC Code that matters set out in section 172 of the Companies Act, 2006 are reported. The

Board strives to understand the views of the Company’s key stakeholders and to take these into

consideration as part of its discussions and decision-making process. As an investment company

the Company does not have any employees and conducts its core activities through third-party

service providers. Each service provider has an established track record and is required to have in

place suitable policies and procedures to ensure it maintains high standards of business conduct,

treats customers fairly, and employs corporate governance best practice.

The Board’s commitment to maintaining high-standards of corporate governance, combined with

the Directors’ duties incorporated in the Companies (Guernsey) Law, 2008, the Company’s

constitutive documents, the Disclosure Guidance and Transparency Rules and the Market Abuse

Regulation, ensure that shareholders are provided with frequent and comprehensive information

concerning the Company and its activities.

Whilst the primary duty of the Directors is owed to the Company as a whole, all Board discussions

involve careful consideration of the longer-term consequences of any decision and their

implications for stakeholders. Particular consideration is given to the continued alignment

between the activities of the Company and those that contribute to delivering the Board’s strategy,

which include the Company’s Investment Manager, the AIFM, the Administrator, the Broker and

the Custodian.

Through the Board’s ongoing programme of shareholder engagement (see ‘Relations with

shareholders’ above) and the reports produced by each key service provider at quarterly Board

meetings, the Directors are satisfied that sufficient information is provided so as to ensure the

matters set out in section 172 of the Companies Act are taken into consideration as part of the

Board’s decision-making process.

The Board respects and welcomes the views of all stakeholders. Any queries or areas of concern

regarding the Company’s operations can be raised with the Company Secretary.

Section 172 statement

Although the Company is not domiciled in the UK, through adopting and reporting against the best

practice principles set out in the AIC Code, the Company is voluntarily meeting any obligations

under the UK Corporate Governance Code, including section 172 of the Companies Act 2006.

The Board of Directors recognise their individual and collective duty to act in good faith and in a

way that is most likely to promote the success of the Company for the benefit of its members as a

whole, whilst also having regard, amongst other matters, to the Company’s key stakeholders and

the likely consequences of any decisions taken during the year, as set out below.

– The interests of the Company’s employees: the Company has no direct employees and

maintains close working relationships with the employees of the Investment Manager and the

Administrator, who undertake the Company’s main functions. Refer to the report of the

Management Engagement Committee on pages 69 and 70.

– The impact of the Company’s operations on the community and the environment: whilst the

Company has a limited impact on the community and environment in respect of its day to day

activities, the Board notes that the Investment Manager recognises that environmental

responsibility is core to its longer term business success, and actively integrates environmental,

social and corporate governance (ESG) issues into its investment process. The Investment

Manager’s ESG policy is available upon request. For more detail, please see the Responsible

investment report on pages 30 to 36.

– The need to foster the Company’s business relationships with suppliers and others: the Board

maintains close working relationships with all key suppliers and those responsible for

delivering the Company’s strategy. The contractual relationship with each supplier and their

Ruffer Investment Company Limited

performance is formally reviewed each year. Refer to the report of the Management

Engagement Committee on pages 69 and 70.

– The desirability of the Company maintaining a reputation for high standards of business

conduct: the Chair is responsible for setting expectations concerning the Company’s culture

and the Board ensures that its core values of integrity and accountability are demonstrated in

all areas of the Company’s operation.

– The need to act fairly between Shareholders of the Company: the Board, in conjunction with

the Investment Manager and Broker, engages actively with Shareholders to understand their

views and to ensure their interests are taken into consideration when determining the

Company’s strategic direction. Refer to the section on ‘Relations with shareholders’ above.

The Company engaged with shareholders on a number of occasions throughout the financial year,

with the issue of five shareholder circulars and two prospectuses. Shareholders voted

overwhelmingly in favour on each occasion to provide the Board with authority to issue shares on a

non-pre-emptive basis, and at an EGM held in April 2022, to increase the cap on the ordinary

remuneration of the Directors from £200,000 to £300,000 per annum.

During the year, the Company issued a total of 118,284,348 shares, including an offering to both

retail and institutional shareholders. The increase in market capitalisation of the Company to

nearly £1 billion led to the Company’s entry into the FTSE 250 Index in March 2022. This

significant growth has been to the advantage of all shareholders leading to the broadening of the

shareholder base, accretion to NAV and an improvement in the liquidity of the Company’s shares.

The reasons for seeking shareholder authority to issue shares were stated in the Circulars and are

detailed by the Chairman in the Share issuance section of his statement.

Composition and independence of the Board

The Board currently comprises six non-executive Directors, all of whom are considered to be

independent. The current size of the Board reflects parallel running of the current and prospective

Audit chairs for three months, before reverting to five Directors, which the Board considers to be

its optimal size for the time being, after the 2022 AGM. The Board considers that it has a good

balance of skills and experience to ensure it operates effectively. The Directors of the Company are

listed on pages 38 and 39 and in the Management and Administration summary on page 129.

The Company has no employees and therefore there is no requirement for a chief executive. None

of the Directors has a contract of service with the Company.

The current Chairman of the Board is Mr Christopher Russell. Mr Russell was appointed as

Chairman of the Board on 4 December 2020.

The Chairman of the Board must be independent for the purposes of Chapter 15 of the Listing

Rules. Mr Russell is considered independent because he –

– has no current or historical employment with the Investment Manager

– has not provided any professional advisory services to the Investment Manager and

– has no current directorships in any other investment funds managed by the Investment

Manager.

As Chairman, Mr Russell is responsible for leading the Board of Directors and for ensuring its

effectiveness in all aspects of its role. The key responsibilities of the Chairman are as follows –

– meeting with major shareholders to obtain a balanced understanding of any issues, concerns,

and providing feedback to the Board

– demonstrating ethical leadership and promoting the highest standards of integrity, probity and

corporate governance throughout the Company

– setting the Board’s agenda and ensuring the Board has in place effective decision-making

processes which are supported by accurate and high-quality information and

– leading the annual performance evaluation of the Board and taking all appropriate actions

based on the results of the evaluation.

In accordance with the AIC Code and in recognition of the Board’s desire to maintain high

standards of corporate governance, the Board appointed Mrs Jill May as the Company’s Senior

Independent Director (SID) with effect from 4 December 2020.

The key roles and responsibilities of the SID are as follows –

– providing support to the Chairman in relation to matters of Board effectiveness and

governance

– being available to shareholders and the other Directors as an additional point of contact or to

communicate any concerns to the Board

– leading the annual performance evaluation of the Chairman of the Board and succession

planning for the Chairman’s role and

– attending meetings with major shareholders alongside the Chairman, as required.

The Board has engaged external companies to undertake the investment management,

administrative and custodial activities of the Company. Documented contractual arrangements are

Ruffer Investment Company Limited

in place with these companies which define the areas where the Board has delegated responsibility

to them. For additional information refer to page 47.

The Company holds a minimum of four Board meetings per year to discuss strategy, general

management, structure, finance, dividend payments, capital management, corporate governance,

ESG matters, marketing, risk management, compliance and gearing, contracts and performance.

The quarterly Board meetings are the principal source of regular information for the Board,

enabling it to determine policy and to monitor performance, compliance and controls but these

meetings are supplemented by communication and discussions throughout the year.

Representatives of the Investment Manager, Administrator and Company Secretary attend each

Board meeting either in person or by videoconference, thus enabling the Board to fully discuss and

review the Company’s operations and performance. In addition, representatives from the

Company’s Broker attend at least two Board meetings a year. Each Director has direct access to the

Investment Manager and Company Secretary and may at the expense of the Company seek

independent professional advice on any matter.

Attendance at the Board and other meetings during the year was as follows –

Management

Audit & Risk Engagement

Board Committee Committee

Meetings Scheduled Attended Scheduled Attended Scheduled Attended

Christopher Russell 443311

Jill May 443311

David Staples 443311

Shelagh Mason 443311

Nicholas Pink 443311

Susie Farnon was appointed subsequent to the year end, and therefore did not attend any meetings

during the year. In addition to the above meetings, a number of ad-hoc meetings of an

administrative nature were held during the year.

Conflicts of interest

Directors are required to disclose all actual and potential conflicts of interest as they arise for

approval by the Board, who may impose restrictions or refuse to authorise conflicts. The process of

consideration and, if appropriate, approval will be conducted only by those Directors with no

material interest in the matter being considered. The Board maintains a Conflicts of Interest policy

which is reviewed periodically and a Business Interests and Potential Conflicts of Interest Register

which is reviewed by the Board at each quarterly Board meeting.

Directors’ indemnity

Directors’ and Officers’ liability insurance cover is maintained by the Company on behalf of the

Directors.

Re-election

The Company’s Articles prescribe that, at each AGM, one-third of the Directors shall retire from

office and may offer themselves for re-election. However, in line with best practice, the Board has

determined that all of the Directors should stand for re-election at each AGM.

Accordingly, on 3 December 2021 at the 16th AGM of the Company, Nicholas Pink, Shelagh

Mason, Jill May, Christopher Russell and David Staples retired as Directors of the Company and,

being eligible, offered themselves for re-election, and were re-elected as Directors of the Company

by the Shareholders.

On 16 June 2022, the Company announced that David Staples and Jill May have confirmed that

they will retire from the Board on 2 December 2022, and that they would be replaced as Directors

by Susie Farnon (with effect from 1 September 2022) and Solomon Soquar (with effect from

2 December 2022). The Board remains satisfied that the individual contributions of each Director

are, and will continue to be, important to the Company’s long-term sustainable success.

Accordingly, at the 17th AGM of the Company to be held on 2 December 2022, Susie Farnon and

Solomon Soquar will be proposed for election, and Christopher Russell, Nicholas Pink and Shelagh

Mason will be proposed for re-election. Further details regarding the experience of each of the

Directors are set out on pages 38 and 39.

The Directors may at any time appoint any person to be a Director either to fill a vacancy or as an

addition to the existing Directors. Any Director so appointed shall hold office only until, and shall

be eligible for election at, the next general meeting following their appointment but shall not be

taken into account in determining the Directors or the number of Directors who are to retire by

rotation at that meeting if it is an AGM.

Board evaluation

Towards the end of the prior financial year, the Board engaged Lintstock, a firm highly experienced

in conducting board evaluations, to facilitate an external evaluation of the Board, the Chairman

and the Investment Manager. The Board evaluation considered a broad range of areas including;

Ruffer Investment Company Limited

Board composition and expertise, Board dynamics, the structure of the Board and its Committees,

Board oversight of investment strategy and performance, relations with shareholders, oversight of

risk management, succession planning and priorities for change during the forthcoming financial

year.

The Investment Manager evaluation considered the success of the Company’s investment policy,

benchmarking against a peer group, the Investment Manager’s communication of strategy and

performance to the Board, shareholder perception of the Investment Manager and priorities for

change during the forthcoming financial year.

The external evaluation identified the Board as a well-functioning body, with areas identified for

further consideration including: seeking deeper engagement with shareholders following the

change of Chair and SID; and ensuring effective face-to-face meetings between the Board and

Investment Manager in the post-covid-19 environment. In November 2021, the Chairman and one

Director attended an investment meeting arranged by Ruffer with a number of shareholders. Face-

to-face meetings between the Board and the Investment Manager have resumed since the end of

covid-19-related lock-downs.

The next externally facilitated Board evaluation will be conducted in relation to the financial year

ending 30 June 2024.

During the financial years where an external evaluation is not conducted, the Board conducts an

annual self-evaluation of its performance and that of the Company’s individual Directors, which is

led by the Chairman and, as regards the Chairman’s performance evaluation, by the Senior

Independent Director. The annual self-evaluation considers how the Board functions as a whole,

taking into account the balance of skills, experience and length of service of each Director, and also

reviews the individual performance of its members.

To facilitate the self-evaluation, the Company Secretary circulates a detailed questionnaire to each

Director and a separate questionnaire for the evaluation of the Chairman. The questionnaires, once

completed, are returned to the Company Secretary who collates responses, prepares a summary

and discusses the Board evaluation with the Chairman prior to circulation to the remaining Board

members. The performance of the Chairman is evaluated by the other Directors, led by the Senior

Independent Director.

The Board considers the annual self-evaluation process to be appropriate having regard to the non-

executive role of the Directors and the significant outsourcing of services by the Company to

external providers.

Board succession planning

The Board considers it has a breadth of experience relevant to the Company, and the Directors

believe that any changes to the Board’s composition can be managed without undue disruption. An

induction programme is in place for all Director appointees. Any proposals for a new Director are

discussed and approved by the Board.

The Board’s succession planning policy seeks to ensure that the Board remains well balanced and

that the Directors have a sufficient level of skills, knowledge and experience to meet the needs of

the Company. The Directors are ever-cognisant of the need for the Board to have a balance of

gender and other attributes, including the requirement to appoint a majority of non-UK resident

Directors.

The Board’s policy is that a Director of the Company, who subsequently becomes Chairman,

should serve for no more than a total of 12 years.

Board diversity

The Board supports the recommendations of the Davies Report and notes the recommendations of

the Parker review into ethnic diversity and the Hampton-Alexander review on gender balance in

FTSE leadership. The Board supports the widening of its diversity, whilst ensuring the capabilities,

experience and background of each member remain appropriate to the Company and continue to

contribute to overall Board effectiveness.

The Board is currently 50% female, reducing to 40% on the retirement of Jill May on 2 December

2022. The diversity requirements announced by the FCA for premium-listed companies for

accounting periods commencing after 1 April 2022 will be met by RICL in its accounting period

commencing 1 July 2022.

Committees of the Board

The Board has established an Audit and Risk Committee and a Management Engagement

Committee and approved their terms of reference, copies of which can be obtained from the

Company Secretary upon request and on the Company’s website at ruffer.co.uk/ric.

The table on page 52 sets out the number of Committee meetings held during the year ended 30

June 2022 and the number of such meetings attended by each Committee member.

Audit and Risk Committee

The Company has established an Audit and Risk Committee, with formally delegated duties and

responsibilities within written terms of reference. The Audit and Risk Committee is comprised of

Ruffer Investment Company Limited

the entire Board and has been chaired by David Staples since 1 July 2018. The Audit and Risk

Committee meets formally at least three times a year and each meeting is attended by the Auditor

and Administrator.

A report of the Audit and Risk Committee detailing responsibilities and activities is presented on

pages 63 to 68.

Management Engagement Committee

The Company has established a Management Engagement Committee, with formally delegated

duties and responsibilities within written terms of reference. The Management Engagement

Committee is comprised of the entire Board, with Jill May appointed as Chairman. The

Management Engagement Committee meets annually in June each year and holds ad hoc meetings

to address any arising issues as required.

The principal duties of the Committee are to review the performance of and contractual

arrangements with the Investment Manager and all other service providers to the Company (other

than the Auditor).

During the year the Committee has reviewed the services provided by its service providers, and

recommended that the continuing appointments of the Company’s Investment Manager and other

service providers was in the best interests of the Company. The last meeting was held on 16 June

2022.

A report of the Management Engagement Committee detailing responsibilities and activities

during the year is presented on pages 69 and 70.

Nomination Committee

The Board does not have a separate Nomination Committee, the functions of which are fulfilled by

the Board. Any proposals for a new Director are discussed and approved by the Board. The Board

will determine whether an external search consultancy or open advertising is used in the

appointments of future non-executive Directors.

Remuneration Committee

In view of its non-executive and independent nature, the Board considers that it is not appropriate

to have a Remuneration Committee as anticipated by the UK Code because this function is carried

out as part of the regular Board business. A Remuneration report prepared by the Board is on

pages 60 to 62.

Internal control

The Company’s risk exposure and the effectiveness of its risk management and internal control

systems are reviewed by the Audit and Risk Committee at its meetings and annually by the Board.

The Board is responsible for establishing and maintaining the Company’s system of internal

controls and for maintaining and reviewing its effectiveness. The system of internal controls is

designed to manage rather than to eliminate the risk of failure to achieve business objectives and

as such can only provide reasonable, but not absolute, assurance against material misstatement or

loss. These controls aim to ensure that assets of the Company are safeguarded, proper accounting

records are maintained and the financial information for publication is reliable. The Board uses a

formal risk assessment matrix to identify and monitor business risks.

The Board has contractually delegated to external parties various functions as listed below. The

duties of investment management, administration and custody are segregated. Each of the

contracts entered into with the parties was entered into after full and proper consideration by the

Board of the quality and cost of services offered, including the control systems in operation as far

as they relate to the affairs of the Company.

The Board considers on an ongoing basis the process for identifying, evaluating and managing any

significant risks faced by the Company. The process includes reviewing reports from the Company

Secretary on risk control and compliance, in conjunction with the Investment Manager’s regular

reports which cover investment performance.

Investment and portfolio risk management is provided by Ruffer AIFM Limited, a company

authorised by the FCA.

Administration, accounting, registrar, and company secretarial duties are performed by Sanne

Fund Services (Guernsey) Limited (formerly Praxis Fund Services Limited), a company licensed

and regulated by the Guernsey Financial Services Commission.

CREST agency functions are performed by Computershare Investor Services (Jersey) Limited, a

company licensed and regulated by the Jersey Financial Services Commission.

Depositary services performed by Northern Trust (Guernsey) Limited, a company licensed and

regulated by the Guernsey Financial Services Commission.

Custodial services are provided by Northern Trust (Guernsey) Limited, a company licensed and

regulated by the Guernsey Financial Services Commission.

Sponsorship and brokering services are provided by Investec Bank plc (Investec), a firm which is

authorised and regulated by the FCA.

Ruffer Investment Company Limited

The Board reviews regularly the performance of the service companies. The Auditor is reviewed by

the Audit Committee and the other service providers by the Management Engagement Committee

(MEC) as described in the MEC report on pages 69 and 70.

The Board meets formally with the Investment Manager quarterly to review the performance of the

investments in the light of the Company’s investment objectives, and the Investment Manager’s

position against its peers. The Board also conducts an annual visit to the offices of Ruffer LLP to

meet with certain of the senior executives in the firm and to review such matters as its internal

control procedures; Ruffer’s business, product, marketing and personnel strategies, so far as they

affect the Company; portfolio risk analysis; integration of ESG into portfolio construction; and

cyber vulnerability. This visit took place during the financial year on 4 October 2021 and again

more recently on 28 September 2022.

The Board receives and reviews quarterly reports from the Investment Manager, the AIFM and the

Administrator. In May 2021, the Audit and Risk Committee conducted a review of the internal

controls of the Administrator, which was reported to the Board in June 2021. This included

meeting with key staff from each relevant department and confirmation from the Administrator of

its capability under its ISAE 3402 Type II audit report, as further disclosed in the report of the

Audit and Risk Committee on page 67. The Management Engagement Committee conducted an

annual review of all key service providers in June 2022, which was communicated to the Board,

and included a detailed assessment of their performance along with completion of a questionnaires

by each service provider regarding key areas including their control environment, business

continuity and the impact of covid-19, cyber security arrangements and response to ESG, as

further disclosed in the Management Engagement Committee report on pages 69 and 70.

In common with most investment companies, the Company does not have an internal audit

function. All of the Company’s management functions are delegated to the Investment Manager

and Administrator which have their own internal compliance and risk assessment functions. As

such, an internal audit function specific to the Company is therefore considered unnecessary, as

explained on page 67.

Principal risks and uncertainties

Principal risks and uncertainties are disclosed on pages 16 and 17.

Anti-bribery and corruption

The Board acknowledges that the Company’s international operations may give rise to possible

claims of bribery and corruption. In consideration of The Bribery Act 2010, enacted in the UK, at

the date of this report the Board had conducted a review of the perceived risks to the Company

arising from bribery and corruption to identify aspects of business which may be improved to

mitigate such risks. The Board has adopted a zero tolerance policy towards bribery and has

reiterated its commitment to carry out business fairly, honestly and openly.

Criminal Finances Act

The Board has a zero tolerance commitment to preventing persons associated with it from

engaging in criminal facilitation of tax evasion and will not work with any service provider who

does not demonstrate the same commitment. The Board has satisfied itself in relation to its key

service providers that they have reasonable provisions in place to prevent the criminal facilitation

of tax evasion by their own staff or any associated persons.

UK Modern Slavery Act

The Board acknowledges the requirement to provide information about human rights in

accordance with the UK Modern Slavery Act. The Board conducts the business of the Company

ethically and with integrity, and has a zero tolerance policy towards modern slavery in all its forms.

As the Company has no employees, all its Directors are non-executive and all its functions are

outsourced, there are no further disclosures to be made in respect of employees and human rights.

Ruffer Investment Company Limited

Directors’ remuneration report

Introduction

An ordinary resolution for the approval of the annual remuneration report was passed by

shareholders at the AGM held on 3 December 2021.

Remuneration policy

All Directors are non-executive and a Remuneration Committee has not been established. The

Board as a whole considers matters relating to the Directors’ remuneration. No advice or services

were provided by any external person in respect of its consideration of the Directors’

remuneration.

The Company’s policy is that the fees payable to the Directors should reflect the time spent by the

Directors on the Company’s affairs and the responsibilities borne by the Directors and be sufficient

to attract, retain and motivate directors of a quality required to run the Company successfully. The

Chairs of the Board and the Audit and Risk Committee and the SID are paid a higher fee in

recognition of their additional responsibilities. The policy is to review fee rates periodically,

although such a review will not necessarily result in any changes to the rates, and account is taken

of fees paid to directors of comparable companies.

There are no long term incentive schemes provided by the Company and no performance fees are

paid to Directors.

No Director has a service contract with the Company but each of the Directors is appointed by a

letter of appointment which sets out the main terms of their appointment. Directors hold office

until they retire or cease to be a director in accordance with the Articles of Incorporation or by

operation of law.

Remuneration

The Directors of the Company are remunerated for their services at such a rate as the Directors

determine provided that the aggregate amount of such fees does not exceed £300,000 (30 June

2021: £200,000) per annum.

Directors are remunerated in the form of fees, payable quarterly in arrears, to the Director

personally. The annual fees payable to each Director as at 30 June 2022 and 30 June 2021 are

shown below –

30 June 22 £ 30 June 21 £

Christopher Russell (Chairman) 48,800 44,550

Jill May (Senior Independent Director and Chair of Management

Engagement Committee) 36,850 33,650

David Staples (Chair of Audit and Risk Committee) 39,700 36,250

Shelagh Mason 34,500 31,500

Nicholas Pink 34,500 31,500

194,350 177,450

During the year ended 30 June 2022, Directors’ fees of £185,900 (30 June 2021: £178,702) were

charged to the Company of which £nil remained payable at the year end (30 June 2021: £nil).

No additional remuneration has been paid to Directors outside their normal fees and expenses.

In February 2021, the Board reviewed the Directors’ fees against the Trust Associates NED fee

review and noted that the fees paid to the Directors were below the average for all UK investment

companies with market capitalisations over £500 million, and well below the equivalent fees paid

to directors of Channel Island companies. It was noted that during the Board recruitment process

conducted in the previous calendar year, at least one potential candidate had declined to

participate due to the level of directors’ fees being insufficient by market standards.

As a result, the Board resolved in December 2021 that the basic fee be increased by 9.5% in

nominal terms, from £31,500 to £34,500 per annum, effective 1 January 2022 (2021: 6.8% in

nominal terms effective 1 January 2021), with a view to further gradual increases towards the

industry average. Additional fees were also increased as follows –

– serving as Chairman: fee increased from £13,050 to £14,300

– serving as Chair of the Audit Committee: fee increased from £4,750 to £5,200

– serving as Senior Independent Director and Chair of Management Engagement Committee: fee

increased from £2,150 to £2,350.

At an EGM held on 21 April 2022, Shareholders voted overwhelmingly in favour of a resolution to

increase the cap on the ordinary remuneration of the Directors from £200,000 to £300,000 per

annum.

Ruffer Investment Company Limited

In June 2022, the Board resolved that, effective 1 July 2022, the basic fee be further increased

from £34,500 to £39,000. Additional fees were also increased as follows –

– serving as Chairman: fee increased from £14,300 to £19,000

– serving as Chair of the Audit Committee: fee increased from £5,200 to £9,000

– serving as Senior Independent Director and Chair of Management Engagement Committee: fee

increased from £2,350 to £2,500.

The Audit and Risk Committee presents here its report for the year ended 30 June 2022, setting

out the responsibilities of the Committee and its key activities for the year from 1 July 2021 to

30 June 2022. As in previous years, the Committee has reviewed the Company’s financial

reporting, the independence and effectiveness of the Auditor and the internal control and risk

management systems of service providers. In order to assist the Committee in discharging these

responsibilities, regular reports are received from the Investment Manager, Administrator and

Auditor.

Members of the Committee will continue to be available at each AGM to respond to any

shareholder questions on its activities and reports.

Responsibilities

The Committee reviews and recommends to the Board the Financial Statements of the Company

and is the forum through which the Auditor reports to the Board of Directors.

The role of the Committee includes

– monitoring and reporting to the Board on such matters as the integrity of the Financial

Statements of the Company and any formal announcements relating to the Company’s

financial performance, and any significant financial reporting judgements

– providing advice to the Board on whether the Financial Statements of the Company are fair,

balanced and understandable, and provide the information necessary for shareholders to

assess the Company’s position and performance

– considering the appropriateness of accounting policies and practices including critical

estimates and judgement areas

– reviewing and considering the AIC Code, the UK Code and FRC Guidance on Audit

Committees

– monitoring and reviewing the quality, effectiveness and independence of the Auditor and the

effectiveness of the audit process, considering and making recommendations to the Board on

the appointment, re-appointment, replacement and remuneration of the Company’s Auditor

– developing and implementing policy on the engagement of the Auditor to provide non-audit

services

– reviewing the Company’s procedures for prevention, detection and reporting of fraud, bribery

and corruption

Ruffer Investment Company Limited

Audit and Risk Committee report

– monitoring and reviewing the internal control and risk management systems of the Company

and its service providers

– considering the need for an internal audit function and

– reporting to the Board on how it has discharged its responsibilities.

The Committee’s full terms of reference are available on the Company’s website, ruffer.co.uk/ric.

Key activities

The following sections discuss the assessments made by the Committee during the year.

Financial reporting – the Committee’s review of the Unaudited Half Yearly Financial Report,

Unaudited Investment Manager’s Year End Review and the Annual Report and Audited Financial

Statements focused on the significant risk relating to the valuation and ownership of investments.

The investments comprise the majority of the Company’s NAV and hence form part of the Key

Performance Indicator (KPI) NAV per share. Hence any significant error in valuation or

misstatement of holdings could materially impact the NAV and hence the reported NAV per share

of the Company.

Valuation of investments – the Company’s investments had a fair value of £852,380,832 as at

30 June 2022 (30 June 2021: £516,760,500) and represented the majority of the net assets of the

Company. The investments are predominantly listed except for investments in unlisted investment

funds.

The valuation of investments as at 30 June 2022 is in accordance with the requirements of IFRS.

The Committee considered the fair value of the investments held by the Company as at 30 June

2022 to be reasonable based on information provided by the Investment Manager and

Administrator. All prices are confirmed to independent pricing sources as at 30 June 2022 by the

Administrator and are subject to a review process at the Administrator and oversight at the

Investment Manager. We also note the work of the Auditor on these balances as set out in their

report on pages 75 and 76.

The Committee considered the classification of the Company’s investments within the levels of the

fair value hierarchy in accordance with the requirements of IFRS 9, most notably the classification

of the Company’s holding in the Ruffer Illiquid Multi-Strategies Fund, which represents

approximately 10.7% of the Company’s NAV. The Committee was comfortable that this investment

should be classified within Level 2 of the hierarchy, as the Investment Manager creates a sufficient

market for the shares.

Ownership of investments – the Company’s investment holdings are reconciled to independent

reports from the Custodian by the Administrator with any discrepancies being fully investigated

and reconciled by the Administrator. The Committee satisfied itself, based on reviews of

information provided by the Custodian, Depositary and Administrator, that the holdings of

investments are correctly recorded.

Investment income and realised and unrealised gains and losses on investments – the Committee

has considered the risk that these items may be materially mis-stated, which could impact the

reporting of the performance of the Company in any accounting period. The Committee is satisfied

that the controls around the recording and calculations for these items and the reconciliation of

cash and investment holdings are sufficiently robust to satisfactorily mitigate this risk.

Risk management – the Committee considered the process for managing the risk of the Company

and its service providers. Risk management procedures for the Company, as detailed in the

Company’s risk assessment matrix, were reviewed and approved by the Committee. Regular

reports are received from the Investment Manager and Administrator on the Company’s risk

evaluation process and reviews. Refer to the strategic report on pages 16 and 17 for details on

principal risks and uncertainties and their management. Financial risks faced by the Company are

discussed in note 19 of the Financial Statements on pages 106 to 119.

The Company’s AIFM, Ruffer AIFM Limited has responsibilities in law in relation to risk

management under the AIFMD.

Fraud, bribery and corruption – the Committee continues to monitor the fraud, bribery and

corruption policies of the Company. The Board receives a confirmation from all service providers

that there have been no instances of fraud, bribery or corruption.

The Auditor – in March 2015 the Board entered into a competitive audit tender process and

Deloitte LLP was appointed as the Company’s Auditor. The Company intends to conduct a tender

process at least every 10 years and to rotate auditors at least every 20 years, as recommended by

the UK Statutory Auditors and Third Country Auditors Regulations 2016. Nicola Sarah Paul, the

signing individual for Deloitte, has served in that role for three years.

Independence, objectivity and fees – the independence and objectivity of the Auditor is reviewed

by the Committee which also reviews the terms under which the Auditor is appointed to perform

non-audit services. The Committee has established pre-approval policies and procedures for the

engagement of Deloitte LLP to provide audit, assurance and tax services. The Auditor may not

provide a service which

– places them in a position to audit their own work

Ruffer Investment Company Limited

– creates a mutuality of interest

– results in the Auditor developing close relationships with service providers of the Company

– results in the Auditor functioning as a manager or employee of the Company or

– puts the Auditor in the role of advocate of the Company.

The Committee takes into account relevant ethical and regulatory guidance regarding the provision

of non-audit services by the Auditor, and will report to the Board to identify any matters in respect

of which it considers that action or improvement is needed, and to make recommendations as to

the steps to be taken. The Board maintains a non-audit services policy which is reviewed

periodically and is available on the Company’s website, ruffer.co.uk/ric.

The following table summarises the remuneration paid to the Auditor for audit and non-audit

services during the years ended 30 June 2022 and 2021.

30 June 22 £ 30 June 21 £

Statutory audit 50,000 37,500

Total audit fees 50,000 37,500

Interim review 9,000 8,500

Total non-audit related fees 9,000 8,500

No tax or other services were provided during the year.

Deloitte LLP also has safeguards in place to ensure objectivity and independence.

When considering the effectiveness and independence of the Auditor, and the effectiveness of the

audit process, the Committee meets regularly with the Auditor to discuss the audit plan and the

scope of the audit. The Committee also takes account of factors such as

– the audit plan presented to them before each audit

– the post audit report including variations from the original plan

– changes in audit personnel

– the Auditor’s own internal procedures to identify threats to independence and

– feedback from both the Investment Manager and Administrator evaluating the performance of

the team.

The Committee has examined the scope and results of the audit, its cost effectiveness and the

independence and objectivity of the Auditor, with particular regard to non-audit fees, and is

satisfied that an effective audit has been completed with diligence and professional scepticism, that

the scope of the audit was appropriate and significant judgements have been challenged robustly.

It also considers Deloitte LLP, as Auditor, to be independent of the Company.

Re-appointment of the Auditor – At the AGM held on 3 December 2021, Deloitte LLP was re-

appointed as the Company’s Auditor.

Internal control and risk management systems

The Committee discussed with the Auditor the risk of misstatement in the Financial Statements

arising from the potential for the Company’s key service providers, the Investment Manager and

Administrator, to override controls.

At each quarterly Board meeting, compliance reports are provided by the Administrator, Company

Secretary and Investment Manager. The Board also receives confirmation from the Administrator

of its capability under its ISAE 3402 Type II audit report. No significant failings or weaknesses

were identified in these reports.

During May 2021, members of the Committee visited the offices of the Administrator to conduct a

review of their internal control procedures, a report on which was provided to the Board in June

2021. During the visit, the Committee met with key staff from the Administrator to discuss the

internal controls in place within each of the departments which provides services to the Company

including; company secretarial, compliance, administration/valuation and financial reporting. No

significant issues were identified during the visit and the Committee confirmed that the

Administrator continues to have effective systems in place to control the risk associated with the

services that they are contracted to provide to the Company. The Committee has also reviewed the

need for an internal audit function. The Committee is satisfied that the systems and procedures

employed by the Investment Manager and the Administrator, including where relevant their

internal audit functions, provide sufficient assurance that a sound system of internal control is

maintained. An internal audit function specific to the Company is therefore considered

unnecessary.

For any questions on the activities of the Committee not addressed in the foregoing, members of

the Committee will attend each AGM to respond to such questions.

Ruffer Investment Company Limited

In finalising the Financial Statements for recommendation to the Board for approval, the

Committee has satisfied itself that the Financial Statements taken as a whole are fair, balanced and

understandable, and provide the information necessary for shareholders to assess the Company’s

performance, business model and strategy.

David Staples

Chairman, Audit and Risk Committee

4 October 2022

The Management Engagement Committee presents here its report for the year ended 30 June

2022, setting out the responsibilities of the Committee and its key activities for the year from 1 July

2021 to 30 June 2022. The Committee meets annually in June each year and holds ad hoc

meetings to address any arising issues as required.

Responsibilities

The formally delegated duties and responsibilities of the Management Engagement Committee are

set out in written terms of reference which are available from the Company Secretary upon request

and published on the Company’s website, ruffer.co.uk/ric. The Committee’s terms of reference are

reviewed on an annual basis.

The principal duties of the Management Engagement Committee are to review the performance of

and contractual arrangements with the Investment Manager and all other key service providers to

the Company, other than the Auditor which is reviewed by the Audit and Risk Committee. In

addition, the Management Engagement Committee is involved in monitoring and reviewing the

level of remuneration of the Investment Manager to ensure that it is appropriate, competitive and

sufficient to incentivise the Investment Manager.

Key activities

The Management Engagement Committee conducts an annual review of the performance of, and

contractual relationships with, the Company’s key service providers, including the Investment

Manager. To facilitate this review, the Company Secretary circulates two detailed questionnaires to

each service provider: one relating to an assessment of the services provided during the year, any

issues encountered and feedback on other service providers; and a second requesting details of the

service provider’s internal control systems, business continuity plans, impact of covid-19 on

business operations, succession planning and any key staff changes, ESG policies and cyber

security arrangements. In addition, qualitative feedback on the performance and operations of

each service provider is obtained from each of the Directors, the Investment Manager, the Broker

and the Company Secretary. The Company Secretary prepares a summary of responses received

which is presented to the Management Engagement Committee for its review.

The last Management Engagement Committee meeting was held on 16 June 2022 and no material

issues were identified as a result of the annual service provider review. Accordingly, the

Management Engagement Committee recommended to the Board that the retention of the

Company’s service providers was in the best interests of the Company and its shareholders.

Ruffer Investment Company Limited

Management Engagement Committee

report

No material issues were identified during the Committee’s review of the Investment Manager and

the Board concluded that the Investment Manager had deep industry experience, an appropriate

investment strategy for the investment objectives of the Company and that the continued

appointment of the Investment Manager on the terms agreed, including management fees, was in

the best interests of the Company and its shareholders.

Jill May

Chairman, Management Engagement Committee

4 October 2022

Northern Trust (Guernsey) Limited has been appointed as Depositary to Ruffer Investment

Company Limited (the ‘Company’) in accordance with the requirements of Article 36 and Articles

21(7), (8) and (9) of the Directive 2011/61/EU of the European Parliament and of the Council of

8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and

2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (the ‘AIFM Directive’).

We have enquired into the conduct of Ruffer AIFM Limited (the ‘AIFM’) and the Company for the

year ended 30 June 2022, in our capacity as Depositary to the Company.

This report including the review provided below has been prepared for and solely for the

Shareholders in the Company. We do not, in giving this report, accept or assume responsibility for

any other purpose or to any other person to whom this report is shown.

Our obligations as Depositary are stipulated in the relevant provisions of the AIFM Directive and

the relevant sections of Commission Delegated Regulation (EU) No 231/2013 (collectively the

‘AIFMD legislation’) and the Authorised Closed-ended Investment Schemes Rules and Guidance

2021.

Amongst these obligations is the requirement to enquire into the conduct of the AIFM and the

Company and their delegates in each annual accounting period.

Our report shall state whether, in our view, the Company has been managed in that period in

accordance with the AIFMD legislation. It is the overall responsibility of the AIFM and the

Company to comply with these provisions. If the AIFM, the Company or their delegates have not so

complied, we as the Depositary will state why this is the case and outline the steps which we have

taken to rectify the situation.

The Depositary and its affiliates are or may be involved in other financial and professional

activities which may on occasion cause a conflict of interest with its roles with respect to the

Company. The Depositary will take reasonable care to ensure that the performance of its duties

will not be impaired by any such involvement and that any conflicts which may arise will be

resolved fairly and any transactions between the Depositary and its affiliates and the Company

shall be carried out as if effected on normal commercial terms negotiated at arm’s length and in

the best interests of Shareholders.

Basis of Depositary Review

The Depositary conducts such reviews as it, in its reasonable discretion, considers necessary in

order to comply with its obligations and to ensure that, in all material respects, the Company has

been managed (i) in accordance with the limitations imposed on its investment and borrowing

Ruffer Investment Company Limited

Report of the depositary to the shareholders of

Ruffer Investment Company Limited

powers by the provisions of its constitutional documentation and the appropriate regulations and

(ii) otherwise in accordance with the constitutional documentation and the appropriate

regulations. Such reviews vary based on the type of Fund, the assets in which a Fund invests and

the processes used, or experts required, in order to value such assets.

Review

In our view, the Company has been managed during the period, in all material respects

i in accordance with the limitations imposed on the investment and borrowing powers of the

Company by the constitutional documents; and by the AIFMD legislation; and

ii otherwise in accordance with the provisions of the constitutional documents; and the AIFMD

legislation.

Northern Trust (Guernsey) Limited

4 October 2022

Report on the audit of the financial statements

1. Opinion

In our opinion the financial statements of Ruffer Investment Company Limited (the ‘Company’) –

– give a true and fair view of the state of the Company’s affairs as at 30 June 2022 and of its

profit for the year then ended;

– have been properly prepared in accordance with International Financial Reporting Standards

(IFRSs) as adopted by the European Union; and

– have been prepared in accordance with the requirements of the Companies (Guernsey) Law,

2008.

We have audited the financial statements which comprise –

– the Statement of Financial Position;

– the Statement of Comprehensive Income;

– the Statement of Changes in Equity;

– the Statement of Cash Flows;

– the related notes 1 to 21; and

– the Portfolio statement.

The financial reporting framework that has been applied in their preparation is applicable law and

IFRSs as adopted by European Union.

2 Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))

and applicable law. Our responsibilities under those standards are further described in the

auditor’s responsibilities for the audit of the financial statements section of our report.

We are independent of the Company in accordance with the ethical requirements that are relevant

to our audit of the financial statements in the UK, including the Financial Reporting Council’s (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

provided to the Company for the year are disclosed in note 9 to the financial statements. We

confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical

Standard to the Company.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

Ruffer Investment Company Limited

Independent auditor’s report to the Members of

Ruffer Investment Company Limited

3 Summary of our audit approach

Key audit matters The key audit matter that we identified in the current year (and

which was consistent with the prior year) was –

– Valuation and ownership of investments

Materiality The materiality that we used in the current year was £9.527m which

was determined on the basis of 1% of Net Asset Value (NAV) of the

Company as at 30 June 2022.

Scoping The Company was audited as a single component. Balances were

scoped in for testing based on our assessment of risk of material

misstatement. As part of our risk assessment process, we considered

the impact of relevant controls implemented at the service provider.

There are no significant changes in our audit approach in the current

year audit.

4 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 Company’s ability to continue to adopt the going

concern basis of accounting included –

– evaluating the judgements and decisions with regards to key forecasting assumptions used in

the going concern assessment;

– assessing reasonableness of assumptions on cash flow forecasts for the next three years, used

in supporting the use of the going concern assumption; and

– assessing the relevant disclosures in the financial statements.

Based on the work we have performed, we have not identified any material uncertainties relating

to events or conditions that, individually or collectively, may cast significant doubt on the

Company’s ability to continue as a going concern for a period of at least twelve months from when

the financial statements are authorised for issue.

In relation to the reporting on how the Company has 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.

Significant changes in

our approach

Our responsibilities and the responsibilities of the Directors with respect to going concern are

described in the relevant sections of this report.

5 Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance

in our audit of the financial statements of the current period and include the most significant

assessed risks of material misstatement (whether or not due to fraud) 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 forming our opinion thereon, and we do not provide a separate opinion on these matters.

5.1 Valuation and ownership of investments

Included in the Company’s Statement of Financial Position as at

30 June 2022 are investments with a fair value of £852 million

(2021: £517 million) as disclosed in Note 10 to the financial

statements. The Company’s portfolio primarily comprises equity

investments, government bonds and investment funds. Investments

are key area of focus to the users of the financial statements given

that they are the most quantitatively significant balance and main

driver of the Company’s performance and Net Asset Value. As

explained in Note 2 (e), the Company’s accounting policy is to

measure its investment at fair value through profit and loss. Refer to

consideration made by the audit committee on valuation of

investments discussed on page 64.

The identified risks were –

– There might be errors or fraudulent manipulation of valuation in

order to report favourable key performance indicators;

– Inappropriate exchange rates might be used to convert foreign

currency denominated investment to the Company’s reporting

currency;

– Trades made immediately before year-end might be excluded

from the valuation or conversely, trades made immediately after

the year end might be included in the valuation in error; and

Key audit matter

description

Ruffer Investment Company Limited

– The Company might not have legal title to the investment held at

year end.

To respond to the key audit matter, we have performed the following

audit procedures –

– Obtained an understanding and tested relevant controls around

the valuation and ownership of investments and NAV

preparation process by the administrator;

– Agreed investments held as at year end to independently

obtained custodian confirmation;

– Assessed the reasonableness of exchange rates used in converting

investments denominated in currencies other than the Pound

Sterling (GBP) by comparing rates used to independent sources;

– Performed detailed testing on purchases and sales made around

year end to assess whether transactions had been recorded in the

correct period;

– Performed detailed testing through inspection of custodian trade

report for the year to assess the accuracy of investment purchases

and sales transactions; and

– Agreed the unit prices of all investments to independent pricing

sources.

Key observations Based on the results of procedures, we concluded that –

– the prices applied by management in the valuation of

investments are reasonable;

– investment denominated in currencies other that Pound Sterling

(GBP) have been appropriately converted at appropriate spot rate

at year end;

– the Company had proper legal title to the investments held at

year end; and

– the investment transactions have been accounted for in the

correct accounting period.

How the scope of our

audit responded to the

key audit matter

6 Our application of materiality

6.1 Materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it

probable that the economic decisions of a reasonably knowledgeable person would be changed or

influenced. We use materiality both in planning the scope of our audit work and in evaluating the

results of our work.

Based on our professional judgement, we determined materiality for the financial statements as a

whole as follows –

Materiality

£9,527,000 (2021: £5,758,000)

Basis for determining materiality

1% (2021: 1%) of Net Asset Value

Rationale for the benchmark applied

Net Asset Value is the most appropriate benchmark as it is considered one of the principal drivers

for members of the Company in assessing financial performance and represents total shareholders’

interest.

6.2 Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that, in

aggregate, uncorrected and undetected misstatements exceed the materiality for the financial

Ruffer Investment Company Limited

statements as a whole. Performance materiality was set at 70% of materiality for the 2022 audit

(2021: 70%). In determining performance materiality, we considered the following factors –

a. the quality of the control environment and whether we were able to rely on controls,

b. our risk assessment, including our assessment of the Company’s overall control environment;

and

c. our past experience of the audit, which has indicated a low number of corrected and

uncorrected misstatements identified in prior periods.

6.3 Error reporting threshold

We agreed with the Audit Committee that we would report to the Committee all audit differences

in excess of £476,000 (2021: £287,900), as well as differences below that threshold that, in our

view, warranted reporting on qualitative grounds. We also report to the Audit Committee on

disclosure matters that we identified when assessing the overall presentation of the financial

statements.

7 An overview of the scope of our audit

7.1 Scoping

Our audit was scoped by obtaining an understanding of the Company and its environment,

including internal control, and assessing the risks of material misstatement. Audit work to respond

to the risks of material misstatement was performed directly by the audit engagement team.

7.2 Our consideration of the control environment

The Company is administered by a third party Guernsey regulated service provider. As part of our

audit, we obtained an understanding and tested relevant controls around the valuation and

ownership of investments and NAV preparation process established at the service provider. We

inspected weekly and monthly NAV checklists and accompanying reports on a sample basis.

8 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 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 this other information, we are required to report that fact.

We have nothing to report in this regard.

9 Responsibilities of Directors

As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible

for the preparation of the financial statements and for being satisfied that they give a true and fair

view, and for such internal control as the directors determine is necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to fraud

or error.

In preparing the financial statements, the directors are responsible for assessing the Company’s

ability to continue as a going concern, disclosing as applicable, matters related to going concern

and using the going concern basis of accounting unless the directors either intend to liquidate the

Company or to cease operations, or have no realistic alternative but to do so.

10 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.

A further description of our responsibilities for the audit of the financial statements is located on

the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our

auditor’s report.

Ruffer Investment Company Limited

11 Extent to which 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 material

misstatements in respect of irregularities, including fraud. The extent to which our procedures are

capable of detecting irregularities, including fraud is detailed below.

11.1 Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including

fraud and non-compliance with laws and regulations, we considered the following –

– the nature of the industry and sector, control environment and business performance

including the design of the Company’s remuneration policies;

– results of our enquiries of management and the Audit Committee about their own

identification and assessment of the risks of irregularities;

– any matters we identified having obtained and reviewed the Company’s documentation of their

policies and procedures relating to –

– identifying, evaluating and complying with laws and regulations and whether they were

aware of any instances of non-compliance;

– detecting and responding to the risks of fraud and whether they have knowledge of any

actual, suspected or alleged fraud;

– the internal controls established to mitigate risks of fraud or non-compliance with laws and

regulations;

– the matters discussed among the audit engagement team including our financial instruments

specialists regarding how and where fraud might occur in the financial statements and any

potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist

within the organisation for fraud and identified the greatest potential for fraud in the valuation and

ownership of investments. In common with all audits under ISAs (UK), we are also required to

perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory framework that the Company

operates in, focusing on provisions of those laws and regulations that had a direct effect on the

determination of material amounts and disclosures in the financial statements. The key laws and

regulations we considered in this context included the Companies (Guernsey) Law, 2008, the

Listing Rules and relevant tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect

on the financial statements but compliance with which may be fundamental to the Company’s

ability to operate or to avoid a material penalty.

11.2 Audit response to risks identified

As a result of performing the above, we identified valuation and ownership of investments as a key

audit matter related to the potential risk of fraud. The key audit matters section of our report

explains the matter in more detail and also describes the specific procedures we performed in

response to that key audit matter.

In addition to the above, our procedures to respond to risks identified included the following –

– reviewing the financial statement disclosures and testing to supporting documentation to

assess compliance with provisions of relevant laws and regulations described as having a direct

effect on the financial statements;

– enquiring of management, the Audit Committee concerning actual and potential litigation and

claims;

– performing analytical procedures to identify any unusual or unexpected relationships that may

indicate risks of material misstatement due to fraud;

– reading minutes of meetings of the Board and the Audit Committee and reviewing

correspondence with Guernsey Financial Services Commission; and

– in addressing the risk of fraud through management override of controls, testing the

appropriateness of journal entries and other adjustments; assessing whether the judgements

made in making accounting estimates are indicative of a potential bias; and evaluating the

business rationale of any significant transactions that are unusual or outside the normal course

of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all

engagement team members including financial instrument specialists, and remained alert to any

indications of fraud or non-compliance with laws and regulations throughout the audit.

Ruffer Investment Company Limited

Report on other legal and regulatory requirements

12 Corporate Governance Statement

The Listing Rules require us to review the Directors’ statement in relation to going concern,

longer-term viability and that part of the Corporate Governance Statement relating to the

Company’s compliance with the provisions of the UK Corporate Governance Code specified for our

review.

Based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the Corporate Governance Statement is materially consistent with the financial

statements and our knowledge obtained during the audit –

– the Directors’ statement with regards to the appropriateness of adopting the going concern

basis of accounting and any material uncertainties identified set out on page 17;

– the Directors’ explanation as to its assessment of the Company’s prospects, the period this

assessment covers and why the period is appropriate set out on pages 17 and 18;

– the Directors’ statement on fair, balanced and understandable Annual Financial Report set out

on pages 44 and 45;

– the Board’s confirmation that it has carried out a robust assessment of the emerging and

principal risks set out on page 16;

– the section of the annual report that describes the review of effectiveness of risk management

and internal control systems set out on pages 57 and 58; and

– the section describing the work of the Audit Committee set out on pages 55 and 56.

13 Matters on which we are required to report by exception

13.1 Adequacy of explanations received and accounting records

Under the Companies (Guernsey) Law, 2008 we are required to report to you if, in our opinion –

– we have not received all the information and explanations we require for our audit; or

– proper accounting records have not been kept; or

– the financial statements are not in agreement with the accounting records.

We have nothing to report in respect of these matters.

14 Other matters which we are required to address

14.1 Auditor tenure

Following the recommendation of the Audit Committee, we were appointed by the Board on

19 March 2015 to audit the financial statements for the year ending 30 June 2015 and subsequent

financial periods. The period of total uninterrupted engagement including previous renewals and

reappointments of the firm is 8 years, covering the years ending 30 June 2015 to 30 June 2022.

14.2 Consistency of the audit report with the additional report to the Audit Committee

Our audit opinion is consistent with the additional report to the audit committee we are required

to provide in accordance with ISAs (UK).

15 Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Section 262 of

the Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state

to the Company’s members those matters we are required to state to them in an auditor’s report

and for no other purpose. To the fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the Company and the Company’s members as a body, for our

audit work, for this report, or for the opinions we have formed.

Nicola Sarah Paul FCA

For and on behalf of Deloitte LLP

Recognised Auditor

St Peter Port, Guernsey

4 October 2022

Ruffer Investment Company Limited

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Ruffer Investment Company Limited

Year ended Year ended

Notes Revenue £ Capital £ 30 June 22 £ 30 June 21 £

Fixed interest income 1,524,401 – 1,524,401 1,234,890

Dividend income 9,375,207 – 9,375,207 5,971,289

Net changes in fair value of financial

assets at fair value through profit or loss 6 – 42,910,229 42,910,229 50,578,046

Other gains/(losses) 7 – (15,411,877) (15,411,877) 15,755,244

Total income 10,899,608 27,498,352 38,397,960 73,539,469

Management fees 8 – (7,077,617) (7,077,617) (4,693,521)

Expenses 9 (853,105) – (853,105) (632,121)

Total expenses (853,105) (7,077,617) (7,930,722) (5,325,642)

Profit for the year before tax 10,046,503 20,420,735 30,467,238 68,213,827

Withholding tax (856,738) – (856,738) (424,880)

Profit for the year after tax 9,189,765 20,420,735 29,610,500 67,788,947

Total comprehensive income for the year 9,189,765 20,420,735 29,610,500 67,788,947

Basic and diluted earnings per share 3.67p 8.16p 11.83p 36.43p

The ‘Total’ columns of this statement represent the Company’s condensed statement of

comprehensive income, prepared in accordance with International Financial Reporting Standards

as adopted by the European Union.

The revenue and capital return columns are prepared under guidance published by the Association

of Investment Companies. All revenue and capital items in the above statement derive from

continuing operations.

Basic and diluted earnings per share are calculated by dividing the profit after taxation by the

weighted average number of redeemable participating preference shares in issue during the year.

The weighted average number of shares for the year was 250,324,202 (30 June 2021: 186,055,211).

As there are no items which would cause a dilution to occur, the basic and diluted earnings per

share are the same.

Statement of comprehensive income

for the year ended 30 June 2022

The notes on pages 88 to 122 form an integral part of these Financial Statements.

Retained Total year

Share Capital revenue Other ended

Notes capital £ reserve £ reserve* £ Reserves* £ 30 June 22 £

Balance at 1 July 2021 253,904,821 220,493,564 6,403,389 95,049,559 575,851,333

Total comprehensive income

for the year – 20,420,735 9,189,765 – 29,610,500

Transactions with shareholders

Share capital issued 13 357,810,233–––357,810,233

Share issue costs 13 (3,060,751)–––(3,060,751)

Distributions during the year 5 – – (7,426,542) – (7,426,542)

Balance at 30 June 2022 608,654,303 240,914,299 8,166,612 95,049,559 952,784,773

Retained Total year

Share Capital revenue Other ended

Notes capital £ reserve £ reserve* £ Reserves* £ 30 June 21 £

Balance at 1 July 2020 186,459,986 158,853,795 3,749,041 95,049,559 444,112,381

Total comprehensive income

for the year – 61,639,769 6,149,178 – 67,788,947

Transactions with shareholders

Share capital issued 13 67,934,025–––67,934,025

Share issue costs 13 (489,190)–––(489,190)

Distributions during the year 5 – – (3,494,830) – (3,494,830)

Balance at 30 June 2021 253,904,821 220,493,564 6,403,389 95,049,559 575,851,333

* Under The Companies (Guernsey) Law, 2008, the Company can distribute dividends from share capital and reserves, subject to satisfying a solvency test. However,

the Company’s dividend policy is that dividends will only be paid from accumulated revenue reserves. In order to provide clearer information relating to reserves

available for distribution, the Company has separately identified this reserve in these financial statements as a ‘Retained revenue reserve’ in the Statement of

Financial Position and the Statement of Changes in Equity. ‘Other reserves’ represents amounts converted from share premium in 2004 and 2008.

Statement of changes in equity

for the year ended 30 June 2022

The notes on pages 88 to 122 form an integral part of these Financial Statements.

Ruffer Investment Company Limited

Year ended Year ended

Notes 30 June 22 £ 30 June 21 £

Cash flows from operating activities

Profit for the year after tax 29,610,500 67,788,947

Adjustments for

Net realised gains on investments 6 (40,408,074) (38,668,618)

Unrealised gains on investments 6 (2,502,155) (11,909,428)

Realised losses/(gains) on forward foreign exchange contracts 7 17,727,792 (14,377,597)

Unrealised gains on forward foreign exchange contracts 7 (2,644,151) (1,383,577)

Foreign exchange losses on cash and cash equivalents 7 328,236 5,930

(Increase)/decrease in trade and other receivables (excluding

amounts due in respect of sales of investments) (628,286) 105,021

Increase in trade and other payables (excluding amounts due in

respect of purchases of investments) 282,338 108,137

1,766,200 1,668,815

Net cash (paid)/received on closure of forward foreign exchange

contracts 7 (17,727,792) 14,377,597

Purchases of investments (810,785,573) (404,105,845)

Sales of investments 514,371,720 338,567,277

Net cash used in operating activities (312,375,445) (49,492,156)

Cash flow from financing activities

Dividends paid 5 (7,426,542) (3,494,830)

Proceeds from issue of redeemable participating preference shares 359,096,108 66,648,150

Share issue costs (2,916,684) (489,190)

Net cash generated from financing activities 348,752,882 62,664,130

Net increase in cash and cash equivalents 36,377,437 13,171,974

Cash and cash equivalents at the beginning of the year 55,833,380 42,667,336

Foreign exchange losses on cash and cash equivalents 7 (328,236) (5,930)

Cash and cash equivalents at the end of the year 91,882,581 55,833,380

Statement of cash flows

for the year ended 30 June 2022

The notes on pages 88 to 122 form an integral part of these Financial Statements.

1 The Company

The Company was incorporated with limited liability in Guernsey on 1 June 2004 as a company

limited by shares and as an authorised closed-ended investment company. As an existing closed-

ended fund the Company is deemed to be granted an authorised declaration in accordance with

section 8 of the Protection of Investors (Bailiwick of Guernsey) Law, 2020, as amended and rule

6.02 of the Authorised Closed-ended Investment Schemes Rules and Guidance 2021. The

Company is listed on the Main Market of the London Stock Exchange (LSE) and was admitted to

the premium segment of the Official List of the UK Listing Authority on 20 December 2005.

The Company’s registered office is shown on page 129 and details of its investment objective and

strategy are shown on pages 12 and 13.

2 Significant accounting policies

a Statement of compliance

The Financial Statements of the Company for the year ended 30 June 2022 have been prepared in

accordance with International Financial Reporting Standards (IFRS) as adopted by the European

Union and the Listing Rules of the London Stock Exchange in compliance with the Companies

(Guernsey) Law, 2008.

b Basis of preparation

The Financial Statements are prepared in pound sterling (£), which is the Company’s functional

and presentation currency. The Financial Statements have been prepared on a going concern basis

under the historical cost convention, as modified by the revaluation of financial assets and

financial liabilities at fair value through profit or loss.

c Going concern

The Directors believe that it is appropriate to continue to adopt the going concern basis in

preparing the Financial Statements since the assets of the Company consist mainly of cash and

cash equivalents and securities which are readily realisable. The Directors also note that overall,

due to the nature of the Company’s portfolio, which comprises both equities and other more

defensive assets, it has not been affected significantly in terms of value or cashflows by the effects

of the covid-19 pandemic or the Russian invasion of Ukraine. Accordingly, in the Directors’

opinion, the Company has adequate financial resources to continue in operational existence for the

foreseeable future. Matters relating to the going concern status of the Company are also discussed

in the long-term viability statement on pages 17 and 18.

Notes to the Financial Statements

for the year ended 30 June 2022

d New accounting standards and amendments effective and adopted

In August 2020, the IASB completed its ‘Replacement issues in the context of the IBOR reform’

project, which amended certain existing standards effective for periods commencing on or after

1 January 2021.

In the opinion of the Directors, the adoption of these new and amended standards has had no

material impact on the Financial Statements of the Company.

Standards and amendments in issue but not yet effective

The following relevant standards, which have not been applied in these Financial Statements, were

in issue at the reporting date but not yet effective –

– IAS 1 (amended), ‘Presentation of Financial Statements’ – (effective for accounting periods

commencing on or after 1 January 2023)

– IAS 8 (amended), ‘Accounting Policies, Changes in Accounting Estimates and Errors’ –

(effective for accounting periods commencing on or after 1 January 2023)

– IAS 37 (amended), ‘Provisions, Contingent Liabilities and Contingent Assets’ – (effective for

accounting periods commencing on or after 1 January 2022)

The amendments to IAS 1 were published in January 2020 and February 2021 and relate to the

classification of liabilities and disclosure of accounting policies respectively.

The amendments to IAS 8 were published in February 2021 and clarify how companies should

distinguish changes in accounting policies from changes in accounting estimates.

The amendments to IAS 37 were published in May 2020 and relate to the costs to include when

assessing whether a contract is onerous.

In addition, the IASB has issued the following publication –

‘Annual Improvements to IFRS Standards 2018-2020’, published in May 2020, which has

amended certain existing standards, effective for accounting periods commencing on or after

1 January 2022.

The changes arising from the amendments to these standards are either presentational and/or

minor in nature. It is therefore anticipated that the adoption of these amended standards will have

no material impact on the Financial Statements of the Company.

Ruffer Investment Company Limited

e Financial instruments

i Classification

Financial assets are classified into the following categories: financial assets at fair value through

profit or loss and financial assets at amortised cost.

The classification depends on the nature and purpose of the financial assets and is determined at

the time of initial recognition.

The Company’s financial assets at fair value through profit or loss comprise investment assets and

derivative assets in the form of forward foreign currency exchange contracts.

The Company’s financial assets at amortised cost comprise trade and other receivables and cash

and cash equivalents.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or

financial liabilities at amortised cost.

The Company’s financial liabilities at fair value through profit or loss comprise derivative liabilities

in the form of forward foreign currency exchange contracts.

The Company’s financial liabilities at amortised cost comprise trade and other payables.

ii Investments at fair value through profit or loss (‘investments’)

Recognition

Investments are recognised in the Company’s Statement of Financial Position when the Company

becomes a party to the contractual provisions of the instrument.

Purchases and sales of investments are recognised on the trade date (the date on which the

Company commits to purchase or sell the investment). Investments purchased are initially

recorded at fair value, being the consideration given. Transaction or other dealing costs associated

with purchases and sales of investments are recognised through profit or loss in the Statement of

Comprehensive Income.

Measurement

Subsequent to initial recognition, investments are measured at fair value. Gains and losses arising

from changes in the fair value of investments and gains and losses on investments that are sold are

recognised through profit or loss in the Statement of Comprehensive Income within net changes in

fair value of financial assets at fair value through profit or loss.

Investments traded in active markets are valued at the latest available bid prices ruling at midnight

on the reporting date. The Directors are of the opinion that the bid-market prices are the best

estimate of fair value. Investments consist of listed or quoted equities or equity-related securities,

options and bonds which are issued by corporate issuers, supra-nationals or government

organisations, and investment in funds.

Shares in some investment funds are not listed on an actively traded exchange and these are

valued on the reporting date at the latest NAV from the administrator of the respective investment

funds as the most recent price is the best estimate of the amount for which holdings could have

been disposed of at the reporting date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date. Gains and losses arising

from changes in the fair value of financial assets/(liabilities) are shown as net gains or losses on

financial assets through profit or loss (see note 10) and recognised in the Statement of

Comprehensive Income in capital in the period in which they arise.

Realised gains and losses arising on disposal of investments are calculated by reference to the

proceeds received on disposal and the average cost attributable to those investments, and are

recognised in the Statement of Comprehensive Income in capital. Unrealised gains and losses on

investments are recognised in the Statement of Comprehensive Income in capital.

iii Derivatives

Forward foreign currency contracts are treated as derivative contracts and as such are recognised

at fair value on the date on which they are entered into and subsequently remeasured at their fair

value. Fair value is determined by rates in active currency markets. All derivatives are carried as

assets when fair value is positive and as liabilities when fair value is negative. The gain or loss on

remeasurement to fair value is recognised immediately through profit or loss in the Statement of

Comprehensive Income within other gains in the period in which they arise.

iv Financial instruments at amortised cost

Trade and other receivables

Trade and other receivables are amounts due in the ordinary course of business and are classified

as current assets if collection is expected in one year or less. If not, they are presented as non-

current assets. Trade and other receivables are recognised initially at fair value and subsequently

measured at amortised cost using the effective interest method, less provision for impairment,

such impairment to be determined using the simplified expected credit losses approach in

accordance with IFRS 9.

At each reporting date, the Company measures the loss allowance on its trade and other

receivables at an amount equal to the lifetime expected credit losses. Expected credit losses are

Ruffer Investment Company Limited

estimated based on the Company’s historical credit loss experience, adjusted for factors that are

specific to the financial asset, general economic conditions and an assessment of both the current

as well as the forecast direction of conditions at the reporting date, including the time value of

money where appropriate.

Cash and cash equivalents

Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid

investments with original maturities of three months or less and bank overdrafts.

Trade and other payables

Trade and other payables are obligations to pay for services that have been acquired in the

ordinary course of business and are classified as current liabilities if payment is due within one

year or less. If not, they are presented as non-current liabilities. Trade and other payables are

recognised initially at fair value plus any directly attributable incremental costs of acquisition or

issue and subsequently measured at amortised cost using the effective interest rate method.

v Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the Statement of

Financial Position if, and only if, there is a currently enforceable legal right to offset the recognised

amounts and there is an intention to settle on a net basis, or to realise assets and settle the

liabilities simultaneously.

vi Derecognition of financial instruments

A financial asset is derecognised when: (a) the rights to receive cash flows from the asset have

expired, (b) the Company retains the right to receive cash flows from the asset, but has assumed an

obligation to pay them in full without material delay to a third party under a ‘pass through

arrangement’; or (c) the Company has transferred substantially all the risks and rewards of the

asset, or has neither transferred nor retained substantially all the risks and rewards of the asset,

but has transferred control of the asset. A financial liability is derecognised when the obligation

under the liability is discharged, cancelled or expired.

f Income

The Company has no income that falls within the scope of IFRS 15, therefore all income is

recognised in accordance with IFRS 9. Dividend income from equity investments is recognised

when the relevant investment is quoted ex-dividend, and is included gross of withholding tax.

Interest income is recognised for all debt instruments using the effective interest rate method.

Dividend and interest income are recognised through profit or loss in the Statement of

Comprehensive Income in revenue.

g Expenses

Expenses are accounted for on an accruals basis and are recognised through profit or loss in the

Statement of Comprehensive Income in either capital or revenue reserves. The Company’s

management fees are allocated between capital and revenue in a ratio determined by the Board at

its sole discretion. Currently 100% of the management fees are charged to capital. All other

expenses of the Company are recognised in revenue.

Transaction costs on the purchases of investments are capitalised to the cost of the investments,

and transaction costs on the sales of investments are recognised in gains/(losses) on disposal of

investments.

h Translation of foreign currency

Functional and presentation currency

The Financial Statements of the Company are presented in the currency of the primary economic

environment in which the Company operates (its ‘functional currency’). The Directors have

considered the currency in which the original capital was raised, distributions will be made and

ultimately the currency in which capital would be returned in a liquidation. On balance, the

Directors believe that pound sterling best represents the functional currency of the Company. For

the purpose of the Financial Statements, the results and financial position of the Company are

expressed in pound sterling, which is the presentation currency of the Company.

Foreign currency transactions are translated into the functional currency using the exchange rate

prevailing at the transaction date. Foreign exchange gains and losses resulting from the settlement

of such transactions and those from the translation at period end exchange rates of monetary

assets and liabilities denominated in foreign currencies are recognised in the Statement of

Comprehensive Income.

Translation differences on non-monetary items such as financial assets held at fair value through

profit or loss are reported as part of net changes in fair value on financial assets through profit or

loss in the Statement of Comprehensive Income.

i Share issue costs

Share issue costs are fully written off against the share capital account in the period of the share

issue in accordance with Guernsey company law.

Ruffer Investment Company Limited

j Redeemable participating preference shares

As the Company’s redeemable participating preference shares are redeemable at the sole option of

the Directors, they are required to be classified as equity instruments. Please refer to note 13 for

further details.

3 Significant accounting judgements, estimates and assumptions

The preparation of the Financial Statements in conformity with IFRS requires management to

make judgements, estimates and assumptions that affect the application of policies and the

reported amounts of assets and liabilities, income and expense and the accompanying disclosures.

Uncertainty about these assumptions and estimates could result in outcomes that require a

material adjustment to the carrying amount of assets or liabilities affected in future periods.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognised in the period in which the estimate is revised if the revision

affects only that period, or in the period of revision and future periods if the revision affects both

current and future periods.

Judgements

In the opinion of the Directors, there are no significant judgements made that have had a material

effect on the Financial Statements.

Estimates

The Company records its investments and derivatives at fair value. Investments classified in level 1

of the fair value hierarchy (see note 19) are measured at fair value based on a quoted price in an

active market. However the fair value of investments classified in level 2 and level 3 of the fair

value hierarchy and of forward foreign exchange contracts are determined at the valuation date on

the basis of estimates based on the reported NAVs of the investments and prevailing exchange

rates respectively. The Directors consider that these valuations represent the best estimate of the

fair values of the Company’s level 2 and level 3 investments and derivatives. Details of the

valuation methodologies applied in determining the fair value of the Company’s investments are

disclosed in note 19.

4 Taxation

The Company has been granted Exempt Status under the terms of The Income Tax (Exempt

Bodies) (Guernsey) Ordinance, 1989 to income tax in Guernsey. Its liability is an annual fee of

£1,200 (30 June 2021: £1,200).

The amounts disclosed as taxation in the Statement of Comprehensive Income relate solely to

withholding tax deducted at source on income.

5 Dividends to shareholders

Dividends, if any, are declared semi-annually, usually in October and March each year. The

Company paid and declared the following dividends during the year –

Year ended Year ended

30 June 22 £ 30 June 21 £

2021 Second interim dividend of 1.55p (2020: 0.95p) 3,424,158 1,717,491

2022 First interim dividend of 1.50p (2021: 0.95p) 4,002,384 1,777,339

7,426,542 3,494,830

A second interim dividend of 1.25p per share in respect of the year ended 30 June 2022 was

declared on 4 October 2022. The dividend is payable on 28 October 2022 to shareholders on

record at 14 October 2022.

6 Net changes in financial assets at fair value through profit or loss

Year ended Year ended

30 June 22 £ 30 June 21 £

Gains realised on investments sold during the year 56,835,062 46,640,900

Losses realised on investments sold during the year (16,426,988) (7,972,282)

Net realised gains on investments sold during the year (see note 10) 40,408,074 38,668,618

Movement in unrealised gains arising from changes in fair value 2,502,155 11,909,428

Net changes in fair value on financial assets at fair value through profit or loss 42,910,229 50,578,046

7 Other gains/(losses)

Year ended Year ended

30 June 22 £ 30 June 21 £

Movement in unrealised gains on spot and forward foreign exchange

currency contracts 2,644,151 1,383,577

Realised (losses)/gains on spot and forward foreign currency contracts (17,727,792) 14,377,597

Other realised and unrealised foreign exchange losses (328,236) (5,930)

(15,411,877) 15,755,244

Ruffer Investment Company Limited

8 Management fees

The management fees were charged to the capital reserves of the Company. The management fees

for the year, including outstanding balances at end of the year, are detailed below.

Year ended Year ended

30 June 22 £ 30 June 21 £

Management fees for the year 7,077,617 4,693,521

Management fees payable at the end of the year 750,697 502,316

The basis for calculating the management fees is set out in the General Information on page 127.

9 Expenses

Year ended Year ended

30 June 22 £ 30 June 21 £

Administration fee* 206,167 174,428

Directors’ fees 185,900 178,702

Custodian and Depositary fees* 135,383 84,922

Broker’s fees 34,856 35,632

Audit fee 50,000 37,500

Auditor’s remuneration for interim review 9,000 8,500

Legal and professional fees 79,717 32,500

Registrar fees 61,494 39,568

General expenses 90,588 40,369

853,105 632,121

* The basis for calculating the Administration fees, Custodian and Depositary fees is set out in the General Information on pages 127 and 128.

All expenses were charged to revenue.

Ongoing charges ratio

The ongoing charges ratio (OCR) of an investment company is the annual percentage reduction in

shareholder returns as a result of recurring operational expenditure. Ongoing charges are

classified as those expenses which are likely to recur in the foreseeable future, and which relate to

the operation of the company, excluding investment transaction costs, financing charges and gains

or losses on investments. The OCR is calculated as the total ongoing charges for a period divided

by the average net asset value over that period.

Year ended Year ended

30 June 22 £ 30 June 21 £

Management fee (see note 8) 7,077,617 4,693,521

Other expenses (see above) 853,105 632,121

7,930,722 5,325,642

Excluded expenses* (58,300) (18,794)

Total ongoing expenses 7,872,422 5,306,848

Average NAV** 735,348,568 493,858,553

Ongoing charges ratio (using AIC methodology) 1.07% 1.08%

* Current year excluded expenses principally comprises fees relating to board recruitment and evaluation. Prior year excluded expenses comprised fees relating to an

EGM of the Company held during the year.

**Average NAV is calculated as the average of all the NAVs published on the LSE during the year

10 Investment assets at fair value through profit or loss

Year ended Year ended

30 June 22 £ 30 June 21 £

Cost of investments at the start of the year 453,896,021 350,041,991

Acquisitions at cost during the year 831,430,861 399,705,845

Disposals during the year (538,720,758) (334,520,433)

Gains on disposals during the year 40,408,074 38,668,618

Cost of investments held at the end of the year 787,014,198 453,896,021

Fair value above cost 65,366,634 62,864,479

Fair value of investments held at the end of the year 852,380,832 516,760,500

Ruffer Investment Company Limited

11 Trade and other receivables

30 June 22 £ 30 June 21 £

Amounts receivable within one year

Investment income receivable 469,656 271,410

Fixed interest income receivable 843,086 419,384

Sales of investments awaiting settlement 28,375,591 4,026,553

Proceeds receivable from the issue of redeemable participating

preference shares – 1,285,875

Other receivables 7,276 1,016

Prepayments 7,057 6,979

29,702,666 6,011,217

The Directors consider that the carrying amounts of trade and other receivables approximate to

their fair value. All receivables are short-term, with settlement due within a few days or months of

the year end, as a result of which the Company’s exposure to default risk is negligible and no credit

losses are expected.

12 Trade and other payables

30 June 22 £ 30 June 21 £

Amounts falling due within one year

Purchases of investments awaiting settlement 20,645,288 –

Management fees payable 750,697 502,316

Other payables 271,330 93,306

21,667,315 595,622

The Directors consider that the carrying amounts of trade and other payables approximate to their

fair value.

13 Share capital

30 June 22 £ 30 June 21 £

Authorised share capital

Unlimited unclassified shares of 0.01p each Unlimited Unlimited

75,000,000 C shares of 0.1p each 75,000 75,000

Unlimited Unlimited

The Company’s share capital comprises 75,000,000 C shares of 0.1p each, and an unlimited

number of unclassified shares of 0.01p each.

Number of shares Share capital

–––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––

Year ended Year ended Year ended Year ended

30 June 22 £ 30 June 21 £ 30 June 22 £ 30 June 21 £

Issued share capital

Redeemable participating preference

shares of 0.01p each

Balance at the start of the year 204,718,416 180,788,416 253,904,821 186,459,986

Issued and fully paid during the year 118,284,348 23,930,000 357,810,233 67,934,025

Share issue costs – – (3,060,751) (489,190)

Balance at the end of the year 323,002,764 204,718,416 608,654,303 253,904,821

Unclassified shares

Unclassified shares can be issued as nominal shares or redeemable participating preference shares.

Nominal shares can only be issued at par to the Administrator. The Administrator is obliged to

subscribe for nominal shares for cash at par when redeemable participating preference shares are

redeemed to ensure that funds are available to redeem the nominal amount paid up on redeemable

participating preference shares. The holder or holders of nominal shares shall have the right to

receive notice of and to attend general meetings of the Company but shall not be entitled to vote

thereat. Nominal shares shall carry no right to dividends. In a winding-up, holders of nominal

shares shall be entitled to be repaid an amount equal to their nominal value out of the assets of the

Company.

The holders of fully paid redeemable participating preference shares are entitled to one vote at all

meetings of the relevant class of shareholders. Participating preference shares carry the right to

Ruffer Investment Company Limited

receive dividends or other distributions declared by the Company. In a winding-up, participating

preference shareholders shall be entitled, firstly, to an amount equal to the nominal value of their

shareholding, and, secondly, to a proportionate share of the balance of assets remaining in the

Company after settlement of amounts due to nominal shareholders.

C shares

There were no C Shares in issue at year end (30 June 2021: Nil).

Block listing and additional shares issued

As at 30 June 2021, the Company had the ability to issue 13,695,682 redeemable participating

preference shares under a block listing facility.

– On 27 September 2021, the Company announced that an application had been made for the

block listing of an additional 6,350,000 redeemable participating preference shares, with an

admission date of 28 September 2021.

– On 17 November 2021, the Company announced that an application had been made for the

block listing of an additional 15,300,000 redeemable participating preference shares, with

an admission date of 18 November 2021.

– On 18 January 2022, the Company announced that an application had been made for the

block listing of an additional 9,653,159 redeemable participating preference shares, with an

admission date of 19 January 2022.

– At an EGM held on 25 February 2022, a resolution was approved by shareholders

empowering the Directors to issue an additional 26,312,563 redeemable participating

preference shares – being 10% of the equity securities in issue at the latest practicable date

prior to the EGM notice, excluding shares held in treasury for cash and pursuant to

Article 7(2)(G) of the Articles – with an admission date of 1 March 2022. The rights under

Article 7 (2) (B) were thereby excluded.

– On 21 April 2022, the Company announced that an application had been made for the block

listing of an additional 6,688,723 redeemable participating preference shares, with an

admission date of 22 April 2022.

– On 16 May 2022, the Company announced that an application had been made for the block

listing of an additional 22,247,436 redeemable participating preference shares, with an

admission date of 18 May 2022.

100

– At an EGM held on 16 June 2022, a resolution was approved by shareholders empowering

the Directors to issue an additional 39,999,564 redeemable participating preference shares-

being 10% of the equity securities in issue at the latest practicable date prior to the EGM

notice, excluding shares held in treasury for cash and pursuant to Article 7(2)(G) of the

Articles – with an admission date of 20 June 2022. The rights under Article 7 (2) (B) were

thereby excluded.

During the year, 104,497,127 new redeemable participating preference shares were allotted or

issued under the block listing facility (30 June 2021: 23,930,000 redeemable participating

preference shares issued). As at 30 June 2022, the Company had the ability to issue 35,750,000

redeemable participating preference shares under the block listing facility.

In addition, on 2 December 2021, the Company announced the issue of 13,787,221 new redeemable

participating preference shares by way of an Open Offer, Offer for Subscription and Intermediaries

Offer as set out in the Company’s prospectus published on 15 November 2021. These shares were

admitted for trading on 6 December 2021.

New redeemable participating preference shares rank pari passu with the existing shares in issue.

Redeemable participating preference shares in issue

As at 30 June 2022, the Company had 323,002,764 (30 June 2021: 204,718,416) redeemable

participating preference shares of 0.01p each in issue. Therefore, the total voting rights in the

Company at 30 June 2022 were 323,002,764 (30 June 2021: 204,718,416). Subsequent to the year

end, the Company has issued a further 21,465,000 redeemable participating preference shares at

an average issue price of £2.9735.

Purchase of own shares by the Company

A special resolution was passed on 3 December 2021 which authorised the Company in accordance

with The Companies (Guernsey) Law, 2008 to make purchases of its own shares as defined in that

Ordinance of its Participating Shares of 0.01p each, provided that

a the maximum number of shares the Company can purchase is no more than 14.99% of the

Company’s issued share capital

b the minimum price (exclusive of expenses) which may be paid for a share is 0.01p, being the

nominal value per share

c the maximum price (exclusive of expenses) which may be paid for the share is an amount

equal to the higher of (i) 105% of the average of the middle market quotations for a share

101

Ruffer Investment Company Limited

taken from the LSE Daily Official List for the 5 business days immediately preceding the day

on which the Share is purchased and (ii) the price stipulated in Article 5(i) of the Buy-back

and Stabilisation Regulation (No 2237 of 2003)

d purchases may only be made pursuant to this authority if the shares are (at the date of the

proposed purchase) trading on the LSE at a discount to the lower of the undiluted or diluted

NAV

e the authority conferred shall expire at the conclusion of the Annual General Meeting of the

Company in 2021 or, if earlier, on the expiry of 15 months from the passing of this

resolution, unless such authority is renewed prior to such time and

f the Company may make a contract to purchase shares under the authority hereby conferred

prior to the expiry of such authority which will or may be executed wholly or partly after the

expiration of such authority and may make an acquisition of shares pursuant to any such

contract.

14 NAV reconciliation

The Company announces its NAV, based on bid value, to the LSE after each weekly and month end

valuation point. At the time of releasing the year end NAV to the LSE, not all 30 June prices of the

Company’s investments may be available. Adjustments are made to the NAV in the Financial

Statements once these prices become available. The following is a reconciliation of the NAV and

NAV per share attributable to redeemable participating preference shareholders as presented in

these Financial Statements to the NAV and NAV per share reported to the LSE.

30 June 22 30 June 21

–––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––

NAV per NAV per

NAV £ share £ NAV £ share £

NAV published on the LSE as at the year end 947,554,437 2.9336 575,913,008 2.8132

Adjustments to valuations 5,230,336 0.0162 (61,675) (0.0003)

Net assets attributable to holders of

redeemable participating preference shares 952,784,773 2.9498 575,851,333 2.8129

15 Contingent liabilities

There were no contingent liabilities as at 30 June 2022 (30 June 2021: £Nil).

102

16 Related party transactions

The Directors are responsible for the determination of the investment policy of the Company and

have overall responsibility for the Company’s activities, and are therefore regarded as related

parties.

Investment Management Agreement

The Company is managed by Ruffer AIFM Ltd, a subsidiary of Ruffer LLP, a privately owned

business registered in England and Wales as a limited liability partnership. The Company and the

Investment Manager have entered into an Investment Management Agreement under which the

Investment Manager has been given responsibility for the day-to-day discretionary management of

the Company’s assets (including uninvested cash) in accordance with the Company’s investment

objective and policy, subject to the overall supervision of the Directors and in accordance with the

investment restrictions in the Investment Management Agreement and the Articles.

The market value of LF Ruffer Gold is deducted from the NAV of the Company before the

calculation of management fees on a monthly basis, as the Investment Manager separately earns a

management fee from that entity. For additional information, refer to the Portfolio Statement on

pages 123 to 126. Management fees for the year and payable at the end of the year are disclosed in

note 8.

Directors’ remuneration

Directors’ remuneration is set out in the Directors’ Remuneration Report on page 61 of the

Financial Statements.

Shares held by related parties

As at 30 June 2022, Directors of the Company held the following numbers of shares beneficially –

Shares 30 June 22 30 June 21

Christopher Russell 125,000 100,000

David Staples* 500,000 80,000

Jill May 13,750 11,000

Shelagh Mason 14,698 11,325

Nicholas Pink 45,027 36,023

698,475 238,348

* Includes 250,000 shares beneficially owned by a party related to Mr Staples.

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Ruffer Investment Company Limited

As at 30 June 2022, Susie Farnon, who was appointed a Director of the Company on 1 September

2022, owned 16,200 shares in the Company.

As at 30 June 2022, Hamish Baillie, Investment Director of the Investment Manager owned

205,000 (30 June 2021: 205,000) shares in the Company. On 12 July 2022, the Company

announced that Mr Baillie had stepped down from his role as co-manager of the Company.

As at 30 June 2022, Duncan MacInnes, Investment Manager of the Investment Manager owned

43,100 (30 June 2021: 43,100) shares in the Company.

As at 30 June 2022, Jonathan Ruffer, chairman of Ruffer LLP (the parent entity of the Company’s

Investment Manager), owned 499,335 (30 June 2021: 1,039,335) shares in the Company.

As at 30 June 2022, Ruffer LLP and other entities within the Ruffer Group held 3,066,348 (30

June 2021: 5,633,800) shares in the Company on behalf of its discretionary clients.

Investments in related funds

As at 30 June 2022, the Company held investments in four (30 June 2021: four) related

investment funds valued at £217,280,776 (30 June 2021: £86,021,056). Refer to the Portfolio

Statement on pages 123 to 126 for details.

17 Operating segment reporting

The Chief Operating Decision Maker, which is the Board, is of the opinion that the Company is

engaged in a single segment of business in a single geographical area, Guernsey, being investment

in a portfolio of equity, equity-related and debt assets, in order to provide a return for

shareholders. The financial information used by the Chief Operating Decision Maker to manage

the Company presents the business as a single segment.

Segment information is measured on the same basis as that used in the preparation of the

Company’s Financial Statements.

The Company receives no revenues from external customers. The Company holds no non-current

assets in any geographical area other than Guernsey.

18 Financial instruments

In accordance with its investment objectives and policies, the Company holds financial

instruments which at any one time may comprise the following

– securities held in accordance with the investment objectives and policies

– cash and short-term receivables and payables arising directly from operations

104

– derivative transactions including investment in forward foreign currency contracts and

– borrowing up to a maximum of 30% of the NAV of the Company.

Terms, conditions and accounting policies

The financial instruments held by the Company comprise principally internationally listed or

quoted equities or equity related securities (including convertibles), and/or bonds which are issued

by corporate issuers, supra-nationals or government organisations.

Details of the significant accounting policies and methods adopted, including the criteria for

recognition, the basis of measurement and the basis on which income and expenses are

recognised, in respect of its financial assets and liabilities are disclosed in note 2. The following

table analyses the carrying amounts of the financial assets and liabilities by category as defined in

IFRS 9.

The following are the categories of financial instruments held by the Company at the reporting

date.

30 June 22 30 June 21

fair value £ fair value £

Financial assets

Financial assets at fair value through profit or loss

Listed securities 806,498,698 473,671,640

Unlisted securities ––

UCITS funds 45,882,134 43,088,860

Derivative financial assets 989,682 270,023

Financial assets at amortised cost

Cash and cash equivalents 91,882,581 55,833,380

Trade and other receivables (excluding prepayments) 29,695,609 6,004,238

974,948,704 578,868,141

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Ruffer Investment Company Limited

30 June 22 30 June 21

fair value £ fair value £

Financial liabilities

Financial liabilities at fair value through profit or loss

Derivative financial liabilities 503,673 2,428,165

Financial liabilities at amortised cost

Trade and other payables 21,667,315 595,622

22,170,988 3,023,787

19 Financial risk management and associated risks

The Company is exposed to a variety of financial risks as a result of its activities. These risks

include market risk (including price risk, foreign currency risk and interest rate risk), credit risk

and liquidity risk. These risks, which have applied throughout the year and the Investment

Manager’s policies for managing them are summarised as follows:

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will

fluctuate because of changes in market prices. The Company’s activities expose it primarily to the

market risks of changes in market prices, interest rates and foreign currency exchange rates.

Market price risk

Market price risk arises mainly from the uncertainty about future prices of the financial

instruments held by the Company. It represents the potential loss the Company may suffer

through holding market positions in the face of price movements.

The Company’s investment portfolio is exposed to market price fluctuations which are monitored

by the Investment Manager in pursuance of the investment objectives and policies. Adherence to

investment guidelines and to investment and borrowing powers set out in the Placing and Offer for

Subscription document mitigates the risk of excessive exposure to any particular type of security or

issuer.

Market price sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to equity, investment

funds and bond price risks at the reporting date. The 20% reasonably possible price movement for

equity-related securities and investment funds (30 June 2021: 20%) is based on the Investment

106

Manager’s best estimates. The sensitivity rate for equity-related investments of 20% is regarded as

reasonable, as in the Investment Manager’s view there continues to be potential for volatility in

equity markets in the coming year.

A 20% (30 June 2021: 20%) increase in the market prices of equity-related investments as at

30 June 2022 would have increased the net assets attributable to holders of redeemable

participating preference shares by £56,315,585 (30 June 2021: £63,896,286) and a 20% change in

the opposite direction would have decreased the net assets attributable to holders of redeemable

participating preference shares by an equal opposite amount.

A sensitivity analysis based on the interest rates of bond-related investments as at 30 June 2022

has been considered under Interest rate risk on pages 110 to 113.

Actual trading results may differ from the above sensitivity analysis and these differences could be

material.

Foreign currency risk

Foreign currency risk arises from fluctuations in the value of a foreign currency. It represents the

potential loss the Company may suffer though holding foreign currency assets in the face of foreign

exchange movements.

As a portion of the Company’s investment portfolio is invested in securities denominated in

currencies other than pound sterling (the functional and presentation currency of the Company),

the Statement of Financial Position may be significantly affected by movements in the exchange

rates of such currencies against pound sterling. The Investment Manager has the power to manage

exposure to currency movements by using options, warrants and/or forward foreign currency

contracts and details of the holdings of such instruments at the date of these Financial Statements

is set out below and on the following page. In the event that the base currency weakens during the

course of the contract, the contract will expire at a loss that will be offset by a corresponding gain

in the underlying assets. The opposite would be true when the base currency strengthens during

the course of the contract.

As at 30 June 2022, the Company had eight (30 June 2021: seven) open forward foreign currency

contracts.

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Ruffer Investment Company Limited

Forward foreign exchange contracts at 30 June 2022

Notional amounts

of contracts Fair value

Expiry date Underlying outstanding assets/(liabilities) £

16 Sept 2022 Foreign currency (sale of USD) US$146,005,720 726,278

16 Sept 2022 Foreign currency (sale of USD) US$55,000,000 (284,261)

16 Sept 2022 Foreign currency (sale of USD) US$40,000,000 (71,845)

16 Sept 2022 Foreign currency (sale of USD) US$30,000,000 (137,510)

16 Sept 2022 Foreign currency (sale of USD) US$30,000,000 –

16 Sept 2022 Foreign currency (sale of EUR) €6,273,099 12,531

16 Sept 2022 Foreign currency (purchase of USD) US$30,740,233 250,873

16 Sept 2022 Foreign currency (purchase of EUR) €6,273,099 (10,057)

486,009

Forward foreign exchange contracts at 30 June 2021

Notional amounts

of contracts Fair value

Expiry date Underlying outstanding assets/(liabilities) £

16 July 2021 Foreign currency (sale of USD) US$142,401,785 (1,923,429)

16 July 2021 Foreign currency (sale of JPY) ¥7,652,532,853 (493,080)

16 July 2021 Foreign currency (sale of EUR) €8,261,673 30,532

16 July 2021 Foreign currency (sale of EUR) €2,692,488 (486)

16 July 2021 Foreign currency (purchase of USD) US$13,994,613 54,922

16 July 2021 Foreign currency (purchase of USD) US$48,407,172 184,569

16 July 2021 Foreign currency (purchase of JPY) ¥524,690,140 (11,170)

(2,158,142)

The Company’s treatment of currency transactions other than in pound sterling is set out in note 2

to the Financial Statements under ‘Translation of foreign currency.’

108

As at 30 June 2022 and 30 June 2021, the Company held the following assets and liabilities in

currencies other than the functional currency, excluding the impact of forward foreign exchange

contracts disclosed above.

30 June 22 30 June 22 30 June 21 30 June 21

assets £ liabilities £ assets £ liabilities £

Australian dollar 50,495,812–––

Euro 34,901,475 – 26,126,214 –

Hong Kong dollar – – 2,622,878 –

Yen 75,269,855 – 50,120,395 –

Norwegian krone – – 6,835,006 –

Singapore dollar – – 1,451,223 –

Swedish krone 4,062,345–––

Swiss franc 893,279–––

US dollar 237,701,191 20,625,044 105,514,558 –

Total 403,323,957 20,625,044 192,710,274 –

Foreign currency sensitivity

As at 30 June 2022, if foreign exchange rates had weakened 10% (30 June 2021: 10%) against

pound sterling with all other variables held constant, net assets attributable to holders of

redeemable participating preference shares would be £16,080,712 (30 June 2021: £7,909,284)

lower, net of open forward foreign currency contracts and due mainly as a result of foreign

currency losses on translation of these financial assets and liabilities to pound sterling; and a 10%

strengthening of foreign exchange rates against pound sterling would have resulted in an equal but

opposite effect on the net assets attributable to holders of redeemable participating preference

shares. The sensitivity rate of 10% is regarded as reasonable as this approximates to the weighted

average volatility over the last two years of the principal foreign currencies to which the Company

is exposed against Pound Sterling. Any changes in the foreign exchange rate will directly affect the

profit and loss, allocated to the capital column of the Statement of Comprehensive Income.

Actual trading results may differ from the above sensitivity analysis and these differences could be

material.

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Ruffer Investment Company Limited

As has been seen in previous years currencies can fluctuate by more or less than this indicative

amount. The Investment Manager incorporates this variable into risk analysis when managing the

investments.

Interest rate risk

Interest rate risk represents the uncertainty of investment return due to changes in the market

rates of interest.

The Company invests in fixed and floating rate securities. The income of the Company may be

affected by changes to interest rates relevant to particular securities or as a result of the

Investment Manager being unable to secure similar returns on the expiry of contracts or sale of

securities. Interest receivable on bank deposits and floating rate securities or payable on bank

overdraft positions will be affected by fluctuations in interest rates (cash flow interest rate risk).

The Investment Manager actively manages the Company’s exposure to interest rate risk, paying

heed to prevailing interest rates and economic conditions, market expectations and their own

opinions of likely movements in interest rates. Currently the vast majority of the exposure of the

Company to fixed interest securities is in the form of index-linked bonds. The value of these

investments is determined by current and expected inflation and interest rates.

The value of fixed interest securities will be affected by general changes in interest rates that will in

turn result in increases or decreases in the market value of those instruments. When interest rates

decline, the value of the Company’s investments in fixed rate debt obligations can be expected to

rise, and when interest rates rise, the value of those investments may decline (fair value interest

rate risk).

The investment portfolio details the security type, issuer, interest rate, and maturity date of all of

the Company’s fixed and floating rate securities as at 30 June 2022.

The following tables summarise the Company’s exposure to interest rate risk. It includes the

Company’s financial assets and liabilities at fair values, categorised by underlying interest rate

type.

110

As at 30 June 2022

Non-interest

Floating rate £ Fixed rate £ bearing £ Total £

Financial assets

Investments at fair value through

profit or loss 69,930,912 279,155,729 503,294,191 852,380,832

Cash and cash equivalents 91,882,581 – – 91,882,581

Derivative financial assets – – 989,682 989,682

Trade and other receivables – – 29,695,609 29,695,609

161,813,493 279,155,729 533,979,482 974,948,704

Financial liabilities

Derivative financial liabilities – – 503,673 503,673

Trade and other payables – – 21,667,315 21,667,315

– – 22,170,988 22,170,988

As at 30 June 2021

Non-interest

Floating rate £ Fixed rate £ bearing £ Total £

Financial assets

Investments at fair value through

profit or loss 7,960,943 189,318,128 319,481,429 516,760,500

Cash and cash equivalents 55,833,380 – – 55,833,380

Derivative financial assets – – 270,023 270,023

Trade and other receivables – – 6,004,238 6,004,238

63,794,323 189,318,128 325,755,690 578,868,141

Financial liabilities

Derivative financial liabilities – – 2,428,165 2,428,165

Trade and other payables – – 595,622 595,622

– – 3,023,787 3,023,787

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Ruffer Investment Company Limited

The table below summarises weighted average effective (real) interest rates for fixed rate financial

instruments.

Weighted Weighted

average period average period

for which rate/ for which rate/

yield is fixed yield is fixed

30 June 22 % (years) 30 June 21 % (years)

UK government bonds -0.6526 23.11 -2.1118 22.76

US government bonds 3.0709 1.20 -2.4929 1.37

US corporate bonds 17.9583 4.38 – –

Australian government bonds 4.7100 0.75 – –

Japanese government bonds -1.0928 4.70 -0.2894 5.69

Interest rate sensitivity analysis

Key determinants of interest rates include economic growth prospects, inflation, governments’

fiscal positions and rates on nominal bonds of similar maturities. This sensitivity analysis assumes

a 100 basis point increase or a 50 basis point decrease in interest rates (30 June 2021: 50 basis

point increase or 10 basis point decrease), with all other variables unchanged. This would be the

equivalent of a 100 basis point increase or a 50 basis point decrease in ‘real’ interest rates, and as

such is likely to overstate the actual impact of such a move in nominal rates. The increased interest

sensitivity rates in the current year are regarded as reasonable due to the current high inflation

environment.

As most of the Company’s fixed rate securities are index-linked bonds, their yields, and as a

consequence their prices, are determined by market perception as to the appropriate level of yields

given the economic background.

This analysis does not allow for the impact of investments held within Ruffer Protection Strategies

which may reduce the sensitivity to changes in interest rates. Please refer to the Derivatives section

below.

112

Fair value interest rate sensitivity

In respect of the Company’s holdings of fixed rate bonds, an increase of 100 basis points (30 June

2021: 50 basis points) in interest rates as at the reporting date would have decreased the net assets

attributable to holders of redeemable participating preference shares by £36,018,623 (30 June

2021: £17,823,385) and a decrease of 50 basis points (30 June 2021: 10 basis points) in interest

rates would have increased the net assets attributable to holders of redeemable participating

preference shares by £18,009,311 (30 June 2021: £3,564,677).

Cash flow interest rate sensitivity

In respect of the Company’s holdings of floating rate bonds and cash and cash equivalents, an

increase of 100 basis points (30 June 2021: 50 basis points) in interest rates as at the reporting

date would have increased the net assets attributable to holders of redeemable participating

preference shares by £1,618,135 (30 June 2021: £318,972) and a decrease of 50 basis points

(30 June 2021: 10 basis points) in interest rates would have decreased the net assets attributable to

holders of redeemable participating preference shares by £809,063 (30 June 2021: £63,794).

Credit risk

Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a

commitment that it has entered into with the Company. Failure of any relevant counterparty to

perform its obligations in respect of these items may lead to a financial loss.

The Company is exposed to credit risk in respect of cash and cash equivalents and trade and other

receivables. The credit risk associated with debtors is limited to the unrealised gains on open

derivative contracts such as forward foreign currency contracts, as detailed above and trade and

other receivables. It is the opinion of the Board of Directors that the carrying amounts of these

financial assets represent the maximum credit risk exposure as at the reporting date.

The Company will not invest in the securities of any company that is not quoted or does not have a

listing on a market specified in the Financial Services and Markets Act 2000 (Financial

Promotions) Order 2001 except for investments in investment funds and such other financial

markets as may be specifically agreed from time to time between the Board and the Investment

Manager.

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Ruffer Investment Company Limited

All transactions in listed securities are settled/paid upon delivery using approved brokers. The risk

of default is considered minimal, as delivery of securities sold is only made once the broker has

received payment. Payment is made on a purchase once the securities have been received by the

broker. The trade will fail if either party fails to meet their obligation. All amounts outstanding at

the year end on the purchases of securities were settled within a few days of the year end, therefore

there are no expected credit losses on these amounts.

The Company’s most recent prospectus, published on 16 May 2022, allows investment in a wide

universe of equity related securities and bonds, including those in countries that may be classed as

emerging or developing. In adhering to investment restrictions set out within the document, the

Company mitigates the risk of any significant concentration of credit risk.

Credit risk analysis

The Company’s maximum credit exposure is limited to the carrying amount of financial assets

recognised at the reporting date, as summarised below.

30 June 22 £ 30 June 21 £

Financial assets at fair value through profit or loss 852,380,832 516,760,500

Derivative assets at fair value through profit or loss 989,682 270,023

Cash and cash equivalents 91,882,581 55,833,380

Trade and other receivables 29,695,609 6,004,238

974,948,704 578,868,141

The Company is exposed to a potentially material credit risk in respect of cash and cash

equivalents, which is mitigated by the use of institutions with a high credit rating. As at 30 June

2022, approximately 58% (30 June 2021: 55%) of cash is placed with Northern Trust (Guernsey)

Limited (NTGL), and the remainder with Royal Bank of Scotland International Limited (RBSI).

NTGL is a wholly owned subsidiary of The Northern Trust Corporation (TNTC). TNTC is publicly

traded and a constituent of the S&P 500. TNTC has a long-term credit rating of AA- (30 June 2021:

A+) from Standard & Poor’s and A2 (30 June 2021: A2) from Moody’s. RBSI has a long-term credit

rating of A- (30 June 2021: A-) from Standard & Poor’s and A2 (30 June 2021: A3) from Moody’s.

114

The Moody’s credit ratings of the issuers of Bonds held by the Company as at 30 June 2022 and

30 June 2021 were as follows.

30 June 22 30 June 21

UK gilt 3.75% 07/09/2021 – Aa3

UK index-linked gilt 1.875% 22/11/2022 Aa3 Aa3

UK gilt 0.125% 31/01/2023 – Aa3

UK index-linked gilt 0.125% 22/03/2024 Aa3 –

UK index-linked gilt 0.125% 22/03/2026 Aa3 –

UK index-linked gilt 0.375% 22/03/2062 Aa3 Aa3

UK index-linked gilt 0.125% 22/11/2065 Aa3 Aa3

UK index-linked gilt 0.125% 22/03/2068 Aa3 Aa3

UK index-linked gilt 0.125% 22/03/2073 Aa3 –

US Treasury floating rate bond 31/10/2021 – Aaa

US Treasury inflation indexed bond 0.125% 15/04/2022 – Aaa

US Treasury inflation indexed bond 0.625% 15/04/2023 Aa3 Aaa–

US Treasury floating rate bond 31/10/2023 Aaa –

US Treasury floating rate bond 31/01/2024 Aaa –

PFCLN 9.75% 15/11/2026 *BB– –

Australia 5.75% 15/07/2022 Aaa –

Australia 2.25% 21/11/2022 Aaa –

Australia 5.5% 21/04/2023 Aaa –

Australia 2.75% 21/04/2024 Aaa –

Japanese government index-linked bond 0.10% 10/03/2026 A1 A1

Japanese government index-linked bond 0.10% 10/03/2027 A1 A1

Japanese government index-linked bond 0.10% 10/03/2028 A1 A1

* Standard & Poors rating

None of the Company’s financial assets is secured by collateral or other credit enhancements.

Derivatives

The Company has gained exposure to derivative contracts (predominantly options and forward

currency contracts) as a risk management tool. The intention of using such derivative contracts has

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Ruffer Investment Company Limited

been primarily to minimise the exposure of the Company to the negative impact of changes to

foreign exchange rates, interest rates, market volatility and to protect the portfolio from a

correlated fall in bonds and equities. At the year end, all such instruments (except forward foreign

exchange contracts) were held indirectly within the Ruffer Protection Strategies International

vehicle as detailed in the Portfolio Statement on page 126.

Fair value

Financial assets at fair value through profit or loss are carried at fair value. Other assets and

liabilities are carried at cost which approximates fair value.

IFRS 13 requires the Company to classify a fair value hierarchy that reflects the significance of the

inputs used in making the measurements. IFRS 13 establishes a fair value hierarchy that prioritises

the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest

priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1

measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three

levels of the fair value hierarchy under IFRS 13 are as follows –

Level 1: Quoted prices, based on bid 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 (that is, as prices) or indirectly (that is, derived from prices) and

Level 3: Inputs for the asset or liability that are not based on observable market data (that is,

unobservable inputs).

The level in the fair value hierarchy within which the fair value measurement is categorised in its

entirety is determined on the basis of the lowest level input that is significant to the fair value

measurement in its entirety. For this purpose, the significance of an input is assessed against the

fair value measurement in its entirety. If a fair value measurement uses observable inputs that

require significant adjustment based on unobservable inputs, that measurement is a Level 3

measurement. Assessing the significance of a particular input to the fair value measurement in its

entirety requires judgment, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgment by the Company.

The Company considers observable data to be that market data that is readily available, regularly

distributed or updated, reliable and verifiable, not proprietary, and provided by independent

sources that are actively involved in the relevant market.

Assets classified in Level 1 consist of listed or quoted equities or equity related securities, options

and bonds which are issued by corporate issuers, supra-nationals or government organisations.

116

Assets classified in Level 2 are investments in funds fair-valued using the official NAV of each fund

as reported by each fund’s independent administrator at the reporting date. Where these funds are

invested in equity type products, they are classified as equity in the table above. Options and

foreign exchange forward contracts are fair valued using publicly available data. Foreign exchange

forward contracts are shown as derivative financial assets and liabilities in the above table.

Assets classified in Level 3 consist of investments for which no market exists for trading, for

example investments in liquidating or illiquid funds, and are reported using the latest available

official NAV less dividends declared to date of each fund as reported by each fund’s independent

administrator at the last reporting date. Where a market exists for trading in illiquid funds, these

are classified in Level 2.

The following table presents the Company’s financial assets and liabilities at fair value through

profit or loss by level within the valuation hierarchy at 30 June 2022.

30 June 22

Level 1 £ Level 2 £ Level 3 £ Total £

Financial assets at fair value through

profit or loss

Non-UK index-linked bonds 58,562,473 – – 58,562,473

Long-dated index-linked gilts 83,617,453 – – 83,617,453

Short-dated index-linked gilts 84,948,751 – – 84,948,751

Short-dated bonds 121,957,964 – – 121,957,964

Illiquid strategies and options – 171,398,642 – 171,398,642

Gold exposure and gold equities 53,835,441 23,966,709 – 77,802,150

Equities 221,209,427 21,915,425 – 243,124,852

Global funds 10,968,547 – – 10,968,547

Derivative financial assets – 989,682 – 989,682

Total assets 635,100,056 218,270,458 853,370,514

Financial liabilities at fair value through

profit or loss

Derivative financial liabilities – 503,673 – 503,673

Total liabilities – 503,673 – 503,673

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Ruffer Investment Company Limited

The following table presents the Company’s financial assets and liabilities at fair value through

profit or loss by level within the valuation hierarchy at 30 June 2021.

30 June 21

Level 1 £ Level 2 £ Level 3 £ Total £

Financial assets at fair value

through profit or loss

Non-UK index-linked bonds 41,542,448 – – 41,542,448

Long-dated index-linked gilts 74,198,934 – – 74,198,934

Short-dated index-linked gilts 32,385,876 – – 32,385,876

Short-dated bonds 49,151,813 – – 49,151,813

Illiquid strategies and options – 42,932,196 – 42,932,196

Gold and gold equities 16,580,977 21,602,768 – 38,183,745

Equities 211,383,526 21,486,092 – 232,869,618

Global funds 5,495,870 – – 5,495,870

Derivative financial assets – 270,023 – 270,023

Total assets 430,739,444 86,291,079 – 517,030,523

Financial liabilities at fair value

through profit or loss

Derivative financial liabilities – 2,428,165 – 2,428,165

Total liabilities – 2,428,165 – 2,428,165

The Company recognises transfers between levels of fair value hierarchy as of the end of the

reporting year during which the transfer has occurred. During the years ended 30 June 2022 and

30 June 2021, there were no transfers between levels of fair value hierarchy.

118

The movements in Level 3 investments during the year were as follows.

Year ended Year ended

30 June 22 £ 30 June 21 £

Opening valuation – 1,593,750

Liquidation distribution received – (1,809,375)

Realised gain – 215,625

Closing valuation ––

During the prior year, the liquidators of Renn Universal Growth Investment Trust, the Company’s

sole Level 3 investment, made a third liquidation distribution to shareholders of £1.93 per share.

No further distributions have been received during the current year. There is a chance of a further

small residual payment, but of an unknown amount at an unknown date in the future, as a result of

which no value has been ascribed to this investment at 30 June 2022 or 30 June 2021.

Liquidity risk

Liquidity risk is the risk that the Company will find it difficult or impossible to realise assets or

otherwise raising funds to meet financial commitments. The Company’s liquidity risk is managed

by the Investment Manager who monitors the cash positions on a regular basis. The Company’s

overall liquidity risks are monitored on a regular basis by the Board of Directors and a formal

report is made by the Investment Manager to the Directors at each Board Meeting.

As at 30 June 2022 and 30 June 2021, the Company had no significant financial liabilities other

than short-term payables arising directly from investing activity and derivative financial liabilities

used to minimise the Company’s foreign currency exposure.

20 Capital risk management

The fair value of the Company’s financial assets and liabilities approximate to their carrying

amounts at the reporting date. For the purposes of this disclosure, redeemable participating

preference shares are considered to be capital.

The Company’s objectives when managing capital are to safeguard the Company’s ability to

continue as a going concern and be viable in order to pursue its investment objectives. The Board

regularly reviews the Company’s capital structure, including gearing levels. It also decides the

extent to which any return of capital or income may be made to shareholders by way of dividends

or share repurchases. It is the Board’s intention to increase the market capitalisation of the

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Ruffer Investment Company Limited

Company not only through capital gain on the portfolio but also through further issuance of shares

when demand permits and the shares are trading at a sufficient premium to NAV per share.

To assist with the marketing of the Company’s shares, the Company intends to operate in such a

manner that its shares are not categorised as non-mainstream pooled investments. This requires

the Company to act so that it would qualify as an investment trust if it were UK tax-resident.

Among other things, this requires the Company to pay dividends such that it retains no more than

15% of the income that it receives or is deemed to receive on an annual basis.

The Company has the ability to borrow up to 30% of its NAV at any time for short-term or

temporary purposes as is necessary for the settlement of transactions, to facilitate redemption

(where applicable) or to meet ongoing expenses. At the year end the Company had no borrowings

(30 June 2021: Nil). The Company does not have, nor does it intend to adopt, any structural

gearing. The gearing ratio below is calculated as total liabilities divided by total equity.

30 June 22 £ 30 June 21 £

Total assets 974,955,761 578,875,120

Less: total liabilities (22,170,988) (3,023,787)

Total equity 952,784,773 575,851,333

Gearing ratio 2.33% 0.53%

The Board considers this gearing ratio to be adequate since total liabilities, which relates only to

trade and other payables and unrealised losses on open forward foreign currency contracts,

represents a very small proportion of the Company’s total assets.

The Company has no externally imposed capital requirements.

Redemption Facility

In addition to the Company having the authority to purchase shares when deemed appropriate by

the Directors, the Company has a Redemption Facility (which takes the form of a tender offer to all

holders of redeemable participating preference shares). This facility may operate annually, in

November each year, at the discretion of the Directors. Redemptions on any Redemption Date may

be restricted to a maximum of 25% in aggregate of the Shares then in issue, with any tender

requests from shareholders in excess of this being scaled back pro rata.

The facility is intended, together with share buybacks, to address any imbalance in the supply and

demand for the shares and to assist in maintaining a narrow discount to the NAV per Share at

which the shares may be trading.

120

Purchase of own shares by the Company

A special resolution was passed on 3 December 2021 which authorised the Company, in

accordance with The Companies (Guernsey) Law, 2008, to make purchases of its own shares as

defined in that Ordinance of its redeemable participating preference shares of 0.01p each,

provided that

i the maximum number of shares the Company can purchase is no more than 14.99% of the

Company’s issued share capital

ii the minimum price (exclusive of expenses) which may be paid for a share is 0.01p, being the

nominal value per share

iii the maximum price (exclusive of expenses) which may be paid for the share is an amount

equal to the higher of (i) 105% of the average of the middle market quotations for a share

taken from the London Stock Exchange Daily Official List for the 5 business days

immediately preceding the day on which the Share is purchased and (ii) the price stipulated

in Article 5(i) of the Buy back and Stabilisation Regulation (No 2237 of 2003)

iv acquisitions may only be made pursuant to this authority if the shares are (at the date of the

proposed purchase) trading on the London Stock Exchange at a discount to the lower of the

undiluted or diluted NAV

v the authority conferred shall expire at the conclusion of the AGM of the Company in 2022

or, if earlier, on the expiry of 15 months from the passing of this resolution, unless such

authority is renewed prior to such time and

vi the Company may make a contract to purchase shares under the authority hereby conferred

prior to the expiry of such authority which will or may be executed wholly or partly after the

expiration of such authority and may make a purchase of Shares pursuant to any such

contract. No such repurchases of shares were made during the year (30 June 2021: Nil).

21 Subsequent events

These Financial Statements were approved for issuance by the Board on 4 October 2022.

Subsequent events have been evaluated up until this date.

Subsequent to the year end, the Company has announced tap issues totalling 21,465,000

redeemable participating preference shares at an average issue price of £2.9735 per share.

121

Ruffer Investment Company Limited

A second interim dividend of 1.25p per share in respect of the year ended 30 June 2022 was

declared on 4 October 2022. The dividend is payable on 28 October 2022 to shareholders on

record at 14 October 2022.

122

Holding at % of total

Currency 30 June 22 Fair value £ net assets

Government bonds 36.42%

(30 Jun 21: 34.27%)

Non-UK index-linked bonds

Japanese index linked bond 0.10% 10/03/2026 JPY 511,000,000 3,348,828 0.35

Japanese index linked bond 0.10% 10/03/2027 JPY 481,900,000 3,222,241 0.34

Japanese index linked bond 0.10% 10/03/2028 JPY 521,900,000 3,413,404 0.36

US Treasury inflation indexed bond 0.625% 15/04/2023 USD 50,000,000 48,578,000 5.10

Total non-UK index-linked bonds 58,562,473 6.15

Long-dated index-linked gilts

UK index-linked gilt 0.375% 22/03/2062 GBP 9,280,400 19,212,470 2.02

UK index-linked gilt 0.125% 22/11/2065 GBP 10,856,980 19,546,768 2.05

UK index-linked gilt 0.125% 22/03/2068 GBP 12,907,220 25,128,271 2.64

UK index-linked gilt 0.125% 22/03/2073 GBP 11,512,745 19,729,944 2.07

Total long-dated index-linked gilts 83,617,453 8.78

Short-dated index-linked gilts

UK index-linked gilt 1.875% 22/11/2022 GBP 20,000,000 33,647,195 3.53

UK index-linked gilt 0.125% 22/03/2024 GBP 24,000,000 35,000,109 3.67

UK index-linked gilt 0.125% 22/03/2026 GBP 11,688,600 16,301,447 1.71

Total short-dated index-linked gilts 84,948,751 8.91

Short-dated bonds

Australia 5.75% 15/07/2022 AUD 21,000,000 11,924,252 1.25

Australia 2.25% 21/11/2022 AUD 24,000,000 13,624,994 1.43

Australia 5.5% 21/04/2023 AUD 21,500,000 12,486,116 1.31

Australia 2.75% 21/04/2024 AUD 21,000,000 11,922,227 1.25

US Treasury floating rate bond 31/10/2023 USD 35,000,000 28,786,336 3.02

US Treasury floating rate bond 31/01/2024 USD 50,000,000 41,144,576 4.32

Total short-dated bonds 119,888,501 12.58

Total government bonds 347,017,178 36.42

Corporate bonds 0.22%

(30 Jun 21: 0.00%)

PFCLN 9.75% 15/11/2026 USD 3,200,000 2,069,463 0.22

Total corporate bonds 2,069,463 0.22

Portfolio statement

as at 30 June 2022

123

Ruffer Investment Company Limited

Holding at % of total

Currency 30 June 22 Fair value £ net assets

Equities 25.51%

(30 Jun 21: 40.64%)

Europe

Aena EUR 2,510 261,760 0.03

Arcelormittal EUR 150,000 2,776,749 0.29

Bank of Ireland EUR 627,958 3,260,603 0.34

Bayer EUR 55,500 2,708,832 0.28

Dassault Aviation EUR 10,007 1,281,778 0.13

Groupe Danone EUR 15,100 692,154 0.07

Koninkliijke Vopak EUR 160,056 3,316,302 0.35

Novartis CHF 12,850 893,279 0.09

Prosegur Cash EUR 720,973 386,025 0.04

Swedish Match SEK 135,780 1,135,018 0.12

Unicredito EUR 620,000 4,837,996 0.52

Vallourec EUR 136,742 1,340,112 0.14

Vivendi EUR 105,834 882,967 0.09

Volkswagen EUR 45,122 4,970,140 0.52

Total Europe equities 28,743,715 3.01

United Kingdom

Ashmore GBP 397,131 880,837 0.09

Associated British Foods GBP 265,000 4,181,700 0.44

BAE Systems GBP 118,610 984,700 0.10

Balfour Beatty GBP 484,089 1,230,554 0.13

Beazley GBP 344,796 1,719,842 0.18

Belvoir Lettings GBP 390,000 877,500 0.09

BP GBP 5,900,000 22,909,700 2.41

Conduit GBP 263,583 886,957 0.09

Countryside Properties GBP 93,381 231,585 0.02

Glaxosmithkline GBP 260,000 4,590,040 0.48

Glencore GBP 900,000 4,005,900 0.42

Grit Real Estate GBP 3,743,544 1,123,063 0.12

Hipgnosis Songs Fund GBP 4,500,000 4,941,000 0.52

Jet2 GBP 132,666 1,201,689 0.13

Lloyds Banking Group GBP 10,000,000 4,231,000 0.44

Marks & Spencer GBP 2,253,000 3,052,815 0.32

Melrose Industries GBP 2,400,000 3,591,600 0.38

Natwest GBP 2,000,000 4,366,000 0.46

Petrofac GBP 1,500,000 1,681,500 0.18

Rolls-Royce Holdings GBP 1,374,345 1,139,882 0.12

124

Holding at % of total

Currency 30 June 22 Fair value £ net assets

Ruffer SICAV UK Mid & Smaller Companies Fund* GBP 92,260 21,915,425 2.30

Science Group GBP 174,218 665,513 0.07

Serco GBP 273,830 477,012 0.05

Shell GBP 320,000 6,828,800 0.72

Trident Royalties GBP 7,557,947 3,249,917 0.34

Unilever GBP 47,844 1,780,275 0.19

Vodafone Group GBP 4,000,000 5,065,600 0.53

Total UK equities 107,810,406 11.32

North America

American Express USD 39,429 4,490,723 0.47

Bristol Myers Squibb USD 55,000 3,480,744 0.37

Charles Schwab USD 75,530 3,924,732 0.41

Chesapeake Energy USD 74,080 4,926,703 0.52

Cigna USD 47,000 10,171,112 1.06

Coty A USD 310,520 2,042,425 0.21

Exxon Mobil USD 21,600 1,520,762 0.16

General Electric USD 23,352 1,221,675 0.13

General Motors USD 147,000 3,836,147 0.40

Godaddy A USD 27,663 1,580,094 0.17

Hertz USD 63,453 825,337 0.09

II-VI USD 31,152 1,303,329 0.14

Jackson Financial USD 64,309 1,412,073 0.15

Meta Platforms USD 32,206 4,264,690 0.45

Northrop Grumman USD 8,300 3,262,749 0.34

Pfizer USD 27,500 1,185,540 0.12

Sciplay USD 46,097 528,423 0.06

Southwest Airlines USD 48,739 1,446,401 0.15

Total North America equities 51,423,659 5.40

Japan

Fuji Electric JPY 74,400 2,520,706 0.26

Fujitsu JPY 35,000 3,586,035 0.38

Mitsubishi Electric JPY 541,300 4,750,257 0.50

Mitsubishi UFJ Financial JPY 2,226,700 9,808,759 1.03

NEC JPY 136,000 4,311,531 0.45

Orix JPY 581,000 7,996,848 0.84

Rakuten JPY 1,051,300 3,886,236 0.41

125

Ruffer Investment Company Limited

Holding at % of total

Currency 30 June 22 Fair value £ net assets

Rohm JPY 58,800 3,365,346 0.35

Sony JPY 62,000 4,150,538 0.44

Sumitomo Mitsui Financial Group JPY 150,000 3,659,090 0.38

Tokio Marine JPY 60,000 2,863,020 0.30

Total Japan equities 50,898,366 5.34

Asia (ex-Japan)

Alibaba Group USD 30,000 2,800,706 0.29

Weiss Korea Opportunity Fund GBP 800,000 1,448,000 0.15

Total Asia (ex-Japan) equities 4,248,706 0.44

Total equities 243,124,852 25.51

Global funds 1.15%

(30 Jun 21: 0.75%)

Renn Universal Growth Trust GBP 937,500 0 0.00

Taylor Maritime Investments GBP 4,519,208 4,745,168 0.50

Tufton Oceanic Assets USD 2,562,500 2,567,129 0.27

Yellow Cake GBP 1,125,000 3,656,250 0.38

Total global funds 10,968,547 1.15

Gold and gold equities 8.17%

(30 Jun 21: 6.62%)

Ishares Physical Gold USD 1,620,000 46,878,634 4.92

Kinross Gold USD 1,200,000 3,517,819 0.37

LF Ruffer Gold Fund* GBP 9,579,120 23,966,709 2.52

X IE Physical Gold USD 150,000 3,438,988 0.36

Total gold and gold equities 77,802,150 8.17

Credit protection and options 17.99%

(30 Jun 21: 7.46%)

Ruffer Illiquid Multi Strategies Fund 2015* GBP 80,339,911 102,059,244 10.71

Ruffer Protection Strategies International* GBP 13,264,859 69,339,398 7.28

Total credit protection and options 171,398,642 17.99

Total investments 852,380,832 89.46

Cash and other net current assets 100,403,941 10.54

952,784,773 100.00

* Ruffer Protection Strategies International and Ruffer Illiquid Multi Strategies Fund 2015 Ltd are classed as related parties as they share the same Investment

Manager (Ruffer AIFM Limited) as the Company. LF Ruffer Gold Fund and Ruffer SICAV UK Mid and Smaller Companies Fund are also classed as related parties as

their investment manager (Ruffer LLP) is the parent of the Company’s Investment Manager.

126

Ruffer Investment Company Limited was incorporated in Guernsey as a company limited by

shares and as an authorised closed-ended investment company on 1 June 2004. The Company

launched on the London Stock Exchange on 8 July 2004, with a launch price of 100p per share and

an initial net asset value of 98p per share. The principal objective of the Company is to achieve a

positive total annual return, after all expenses, of at least twice the Bank of England base rate. The

Company invests predominantly in internationally listed or quoted equities or equity related

securities (including convertibles) and/or bonds which are issued by corporate issuers, supra-

nationals or government organisations.

The Company’s redeemable participating preference shares are listed on the London Stock

Exchange.

The Company reports its audited annual results each year for the year ended 30 June, and its

unaudited interim results for the six months ended 31 December. These Financial Statements were

authorised for issue on 4 October 2022 by the Directors.

The Investment Manager is authorised and regulated by the United Kingdom Financial Conduct

Authority as a full-scope Alternative Investment Fund Manager (AIFM). The Investment Manager

is entitled to an investment management fee payable to the AIFM monthly in arrears at a rate of

1% of the Net Asset Value per annum.

The Investment Manager and the Board intend to conduct the affairs of the Company so as to

ensure that it will not become tax resident in the United Kingdom. Accordingly, and provided that

the Company does not carry on a trade in the United Kingdom through a branch or agency situated

therein, the Company will not be subject to United Kingdom Corporation Tax or Income Tax.

The Company intends to be operated in such a manner that its shares are not categorised as non-

mainstream pooled investments. Among other things, this requires the Company to pay dividends

such that it retains no more than 15% of the income that it receives or is deemed to receive for UK

tax purposes on an annual basis.

Sanne Fund Services (Guernsey) Limited (formerly Praxis Fund Services Limited) (the

‘Administrator’) is entitled to receive an annual fee equal to 0.08%. per annum on the first £100

million; 0.04%. per annum between £100 million and £200 million; 0.02%. per annum between

£200 million and £300 million; and 0.015%. per annum thereafter; based on the NAV of the

Company on a mid-market basis, subject to a minimum fee of £100,000 per annum.

Northern Trust (Guernsey) Limited (the ‘Custodian’) is entitled to receive from the Company a fee

of £2,000 per annum. The Custodian is also entitled to charge for certain expenses incurred by it

in connection with its duties.

General information

127

Ruffer Investment Company Limited

Northern Trust (Guernsey) Limited (the ‘Depositary’) is entitled to an annual Depositary fee

payable monthly in arrears at a rate of 0.01% of the Net Asset Value of the Company up to

£100 million, 0.008% on the next £100 million and 0.006% thereafter as at the last business day

of the month subject to a minimum fee of £20,000 per annum.

128

Directors

Christopher Russell

Jill May

David Staples

Shelagh Mason

Nicholas Pink

Susie Farnon (appointed 1 September 2022)

Registered Office

Sarnia House

Le Truchot

St Peter Port

Guernsey GY1 1GR

Independent Auditor

Deloitte LLP

Regency Court

Glategny Esplanade

St Peter Port

Guernsey GY1 3HW

Investment Manager and Alternative

Investment Fund Manager

Ruffer AIFM Limited

80 Victoria Street

London SW1E 5JL

Solicitors to the Company as to UK law

Gowling WLG

4 More London Riverside

London SE1 2AU

CREST Agent

Computershare Investor Services (Jersey)

Limited

Queensway House

Hilgrove Street

St Helier

Jersey JE1 1ES

Company Secretary and Administrator

Sanne Fund Services (Guernsey) Limited

(formerly Praxis Fund Services Limited)

Sarnia House

Le Truchot

St Peter Port

Guernsey GY1 1GR

Sponsor and broker

Investec Bank plc

30 Gresham Street

London EC2V 7QP

Custodian

Northern Trust (Guernsey) Limited

Trafalgar Court, Les Banques

St Peter Port

Guernsey GY1 3DA

Depositary

Northern Trust (Guernsey) Limited

Trafalgar Court, Les Banques

St Peter Port

Guernsey GY1 3DA

Advocates to the Company as to Guernsey law

Mourant Ozannes (Guernsey) LLP

Royal Chambers

St Julian’s Avenue

St Peter Port

Guernsey GY1 4HP

Management and administration

129

Ruffer Investment Company Limited

Regulatory performance data

To 31 Dec % †2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

RIC NAV TR 8.9 14.0 0.1 6.0 23.8 15.1 16.5 0.7 3.4 9.5

FTSE All-Share TR 12.3 22.0 16.8 5.3 -29.9 30.1 14.5 -3.5 12.3 20.8

Twice UK Bank Rate 9.9 9.4 11.0 11.2 3.4 1.0 1.0 1.0 1.0 1.0

2014 2015 2016 2017 2018 2019 2020 2021 ‡2022 Annualised

1.8 -1.0 12.4 1.6 -6.0 8.4 13.5 11.4 3.0 7.7

1.2 1.0 16.8 13.1 -9.5 19.2 -9.8 18.3 -4.6 7.1

1.0 1.0 1.0 0.5 1.0 1.5 0.5 0.2 0.7 3.2

† From July 2004

‡ To June 2022

Source: Ruffer, Bloomberg, FTSE International (FTSE)†. Please note that past performance is not a reliable indicator of future performance. The value of the shares and

the income from them can go down as well as up and you may not get back the full amount originally invested. The value of overseas investments will be influenced

by the rate of exchange. Calendar quarter data has been used up to the latest quarter end.

The portfolio data displayed is designed only to provide summary information and the report does not explain the risks involved in investing in this product. Any

decision to invest must be based solely on the information contained in the prospectus and the latest report and accounts. The Key Information document is

provided in English and available on request or from ruffer.co.uk.

FTSE International Limited (FTSE) © FTSE 20221. FTSE® is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited

under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or

omissions in the FTSE indices and/or FTSE ratings or underlying data and no party may rely on any FTSE indices, ratings and/or data/underlying data contained in

this communication. No further distribution of FTSE Data is permitted without FTSE’s express written consent. FTSE does not promote, sponsor or endorse the

content of this communication.

Appendix (unaudited)

130

Alternative performance measures used in the Annual Report

Total NAV/Share price return

Total NAV return and total share price return are calculations showing how the NAV/share price

per share has performed over a period of time, taking into account dividends paid to shareholders.

It is calculated on the assumption that dividends are reinvested at the prevailing NAV/share price

on the last day of the month that the shares first trade ex-dividend. This provides a useful measure

to allow shareholders to compare performances between investment funds where the dividend

paid may differ.

Total NAV Total share

Year ended 30 June 2022 return price return

Opening IFRS NAV/share price per share 281.29p 287.00p

Closing IFRS NAV/share price per share (a) 294.98p 300.00p

Dividends paid (b) 3.05p 3.05p

Weighted average IFRS NAV/share price per share on

ex-dividend date (c) 291.53p 297.17p

Dividend adjustment factor (d = b/c + 1) (d) 1.0105 1.0103

Adjusted closing NAV/share price per share (e = a x d) (e) 298.07p 303.08p

Total NAV/share price return 6.0% 5.6%

Share premium/(discount) to NAV

Share premium or (discount) to NAV is the amount by which the share price is higher/lower than

the NAV per share, expressed as a percentage of the NAV per share, and provides a measure of the

Company’s share price relative to the NAV.

NAV per share

NAV per share is a calculation of the Company’s NAV divided by the number of shares in issue at

the NAV date and provides a measure of the value of each share in issue.

Market capitalisation

Market capitalisation is the value of a company that is traded on the stock market, calculated by

multiplying the total number of shares by the share price on the reference date.

131

Ruffer Investment Company Limited

sterling 176228