REG - Mobius Inv.Trust PLC - Annual Financial Report
10/03/2025 12:45
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RNS Number : 0417A Mobius Investment Trust PLC 10 March 2025
MOBIUS INVESTMENT TRUST
ANNUAL REPORT OF MOBIUS INVESTMENT TRUST PLC
FOR THE YEAR ENDED 30 NOVEMBER 2024
Mobius Investment Trust plc (the "Company" or "MMIT") today announces audited
results
for the year ended 30 November 2024
FINANCIAL HIGHLIGHTS
As at As at
30 November 30 November
2024 2023 % change
Net Asset Value per Ordinary share† 150.4p 144.3p +4.2%
Share price 138.0p 132.5p +4.2%
Discount to Net Asset Value per share^ 8.2% 8.2% -
† UK GAAP measure
^ Alternative performance measure, see Glossary.
Year ended Year ended
30 November 30 November
2024 2023
Net Asset Value per Ordinary share total return*^ +5.2% +8.5%
Share price total return*^ +5.1% +2.1%
Ongoing charges^ 1.4% 1.5%
Dividend per share - final 1.7p 1.25p
* Source: Frostrow Capital LLP.
^ Alternative performance measure, see Glossary.
CHAIRMAN'S STATEMENT
Introduction
Dear Shareholders,
This annual report of Mobius Investment Trust plc ("MMIT") covers the period
from 1 December 2023 to 30 November 2024.
Looking back on 2024, we reflect on a year shaped by market volatility,
geopolitical tensions, elections in more than 50 countries with over 1.5
billion people going to the polls and notably in the USA, interest rate
uncertainty, structural challenges and stimulus measures in China, and
tech-driven volatility spikes. However, 2024 was not solely defined by
uncertainty - it also brought encouraging signs, including the global trend of
slowing inflation and the beginning of interest rate cutting cycles,
developments which are expected to boost consumer demand and support economic
recovery.
On behalf of the MMIT Board, I would like to extend our heartfelt gratitude to
all our investors for your steadfast support and trust in our strategy during
these dynamic times. The Board is pleased to see that the MCP team has
consistently maintained their disciplined approach to stock selection,
focusing on uncovering under-researched small-and mid-cap companies with
strong competitive advantages, little to no debt, and solid governance
frameworks. We believe these companies are strategically positioned to
capitalise on emerging trends, including innovations in critical technologies
such as AI and the recovery of consumer demand. As the Investment Manager
continues to expand, the Board is pleased to note the addition of new team
members across Marketing, Operations, and the Investment Team, ensuring robust
support for growth and strategy implementation.
Over the reporting period, the net asset value per share and share price of
MMIT on a total return basis increased by 5.2% and 5.1% respectively, and the
discount averaged 8.0% over the year.
The MSCI EM Mid Cap Index Net Total Return (GBP) in turn, posted a return of
7.0%, partly driven by a year-end rally in Chinese equities. This rally was
fuelled by monetary policy adjustments and stimulus measures introduced by the
Chinese government in September and November 2024. With MMIT's exposure to
China at c.5% (compared to c.18% for the MSCI EM Mid Cap Index), the team
maintains a cautious investment approach in the region. China continues to
face structural challenges, including ongoing issues in its property sector,
sluggish consumer demand, and governance concerns. While recent stimulus
efforts have offered some short-term relief, the Board supports the team's
prudent decision to limit exposure, recognising that these deeper issues will
likely require time and long-term government interventions.
During the period, the MCP team travelled extensively and added several
high-conviction ideas to the portfolio. Asia and the technology sector remain
key areas of focus, underpinned by the team's research trips in 2024.
Conversations with experts and companies on-the-ground have strengthened the
team's conviction in ASEAN(1) markets, leading to new investments in Vietnam
and Malaysia. Southeast Asia, as a whole, is gaining momentum due to
favourable demographics, a surge in tourism, and a growing consumer base. The
region is also benefiting from the global shift in supply chains, driven by
low-cost labour and efforts to diversify away from China.
(1) Association of Southeast Asian Nations.
Additionally, company visits have strengthened the team's engagement efforts,
which the Board closely monitors, and have led to continued progress on
several key portfolio factors. MMIT has published its first Stewardship Report
for 2024, containing further details about engagement efforts and proxy
voting. This is available on the Company's website
www.mobiusinvestmenttrust.com. For more detailed insights into the portfolio,
strategy, and engagement activities, please refer to the Investment Manager's
Review below.
The Board sees MMIT's differentiated active management approach as a key
strength in an era dominated by passive investing and herd behaviour. In 2024,
for the first time, total assets in U.S. passive mutual funds and ETFs
exceeded those in active funds, with a record $450 billion withdrawn from
actively managed stock funds. ETFs, known for their high liquidity, frequent
intraday trading, and tendency to amplify herd behaviour, contribute
significantly to market volatility.
Against this backdrop, MMIT's active approach stands out, particularly in
emerging markets where research coverage is more limited, and opportunities
off the beaten track might be overlooked. By focusing on small- and mid-cap
companies with strong fundamentals - many of which are excluded from passive
strategies - MMIT's investors gain access to
well-researched businesses with minimal overlap with benchmarks and peers.
This approach not only provides a compelling diversification opportunity but
has also consistently delivered long-term sustainable returns, generating a
NAV and share price return of 57.3% and 41.6% respectively since inception (as
of 31 December 2024).
We remain confident that active strategies like MMIT's will continue to
deliver superior returns and generate alpha in a dynamic and evolving
investment landscape.
Performance
The NAV per share and share price of MMIT increased by 5.2% and 5.1%
respectively on a total return basis over the 12‑month period to 30 November
2024, with the NAV per share reaching a high of 154.8p on 17 October 2024 and
closing at 150.4p. The Investment Manager's Review provides further details on
portfolio and performance. MMIT traded at an average discount to NAV of 8.0%
during the period under review, closing at a discount of 8.2% on 30 November
2024. Since inception, more than 186 engagement points have been raised with
companies, with governance being the most focused on area. This engagement by
the Investment Manager with portfolio companies contributes to a considerable
extent to the good performance of MMIT.
The Board
I would like to thank my fellow Board members for their continued hard and
diligent work in supporting the effective governance oversight which is vital
for the delivery of results and the best interests of shareholders. Whilst the
Board's tenure policy does not limit the overall length of service of any of
the Directors, including the Chairman, in order to guarantee continuity and
experience, it is envisaged that each Board member will serve a maximum term
of nine years. Having had the privilege of serving on MMIT's Board since its
inception six years ago, alongside my two fellow Board members, we have
increasingly focused on succession planning over the past year. As a result we
have appointed Diana Dyer Bartlett who has many years of experience in the
private and listed companies sector as auditor and financial professional.
This addition will ensure a smooth transition in the Board and a phased
succession of members who will eventually step down to maintain our Board
composition with full independence and the right mix of competencies and
diversity.
Diana is expected to join the Board of MMIT with effect from 17 March 2025 and
will succeed as the Chair of the Audit Committee following the Company's
Annual General Meeting (AGM), at the end of which Christopher Casey will
retire.
After qualifying as a chartered accountant with Deloitte Haskins & Sells,
Diana spent five years in investment banking with Hill Samuel. Since then, she
has held a number of executive roles including as finance director of various
venture capital and private equity backed businesses and listed companies
involved in software, financial services, renewable energy and coal mining.
She was also Company Secretary of Tullett Prebon plc and Collins Stewart
Tullett plc. She is currently also a non-executive director and audit
committee chair of Smithson Investment Trust plc and Mid Wynd International
Investment Trust plc as well as senior independent non-executive director and
audit and risk committee chairman of Schroder British Opportunities Trust plc.
As part of the transition process, Gyula Schuch has kindly taken over from
Christopher Casey as Senior Independent Director. This was announced on 13
January 2025 and I thank Christopher for his support as Senior Independent
Director during the past years.
Another key priority for the Board is to maintain a close communication with
all our investors and I have enjoyed meeting many of our shareholders at the
MMIT Investor Day and AGM. I hope this dialogue can continue and please do
not hesitate to reach out anytime if you have questions or concerns.
Dividend
The Company made a revenue profit during the year and, as a result, the Board
recommends to shareholders the payment of a final dividend which allows MMIT
to comply with the investment trust rules regarding distributable income.
Subject to these rules, any dividends and distributions will continue to be at
the discretion of the Board from time to time.
Furthermore, one of MMIT's investee companies has paid a special dividend,
making up c.26.0% of MMIT's revenue profits, which will be paid out as part of
the final dividend under investment trust rules. Also in coming years, the
Board will seek to continue to pass on to shareholders any similar exceptional
or one-off revenue gains as dividends.
At the forthcoming AGM the Board proposes a final dividend of 1.7 pence per
ordinary share which will be paid on 28 May 2025 to shareholders on the
register as of 2 May 2025. The associated ex-dividend date will be 1 May 2025.
Discount Management
The Board continues to closely monitor the discount to ensure it remains
aligned with shareholders' best interests.
The discount has averaged 8.0% over the year under review, and in accordance
with the Company's prospectus the Board continually reviews buying back the
Company's shares. No shares were bought back during the period. In terms of
other discount controls, the Company operates a redemption option every three
years where shareholders can redeem shares at NAV minus costs, which few other
trusts in the Emerging Markets sector offer, further details of which are
provided below.
Based on feedback from both the team and portfolio companies, we are
optimistic about the Trust's prospects for the coming year given the solid
performance forecast of the companies in the portfolio.
Change of Auditor
During the year the Audit Committee led a competitive audit tender process,
which resulted in the appointment of Johnston Carmichael LLP as the Company's
new auditor. This was announced on 8 August 2024 and shareholders also
received notification in writing. Shareholders will be asked to confirm this
appointment at the forthcoming AGM. Further information on the audit tender
process can be found in the Directors' Report and in the Audit Committee
Report below.
Annual General Meeting
The sixth AGM of the Company will take place at 12.00 noon on Thursday, 15 May
2025 at 25 Southampton Buildings, London WC2A 1AL. The Notice convening the
AGM together with explanations of the proposed resolutions can be found at the
end of this document. My fellow Directors and I are looking forward to meeting
shareholders at the AGM.
Redemption Facility
As Shareholders may be aware, the Company operates a redemption facility
through which Shareholders are entitled to request the redemption of all or
part of their holding of ordinary shares on a periodic basis. The second
redemption point for the ordinary shares will be 30 November 2025 - or, as
this date falls on a Sunday, 1 December 2025. Each subsequent redemption point
falls on 30 November every third year thereafter, with the next redemption
point falling on 30 November 2028. The terms of the redemption facility are
set out in the Company's Articles of Association and were summarised in the
Company's IPO prospectus.
In early October 2025, and roughly four weeks ahead of the deadline for
submitting redemption requests, the Company expects to issue a regulatory
announcement reminding shareholders of the upcoming redemption point and
setting out the process for redemption.
As noted above, the Company's returns have been excellent, and since the last
redemption facility on 30 November 2022, the Company's share price and NAV per
share total return increased by 11.6% and 19.1% respectively, with the MSCI
Emerging Markets Mid Cap net total return Index increasing 9.6% (as of 31
December 2024). Furthermore, the Company's shares are trading at the top of
the peer group since launch. We believe that the Company's investment case
remains highly compelling. Therefore, the Directors and the Investment
Managers do not intend to redeem their shares.
Outlook
As we look ahead to 2025, uncertainty remains a key theme, presenting both
challenges and opportunities. Global trade dynamics are evolving, and policy
shifts in the U.S. may have ripple effects across developed and emerging
markets alike. Recent tariff measures have the potential to impact supply
chains and consumer prices, with trade relations between the U.S., Canada,
Mexico, and China remaining a focal point. While these developments create
short-term volatility, they also open doors for regional trade realignments
and new economic partnerships.
For emerging markets, one key consideration is the potential impact of a
stronger U.S. dollar. Factors such as proposed tax reforms, deregulation, and
tariff policies could contribute to inflationary pressures, prompting the
Federal Reserve to maintain higher interest rates. In turn, a strong dollar
increases the burden of dollar-denominated debt in emerging markets and
heightens currency volatility. Exporting economies may respond by adjusting
currency valuations to maintain competitiveness, a strategy previously seen
during trade tensions with China. While such adjustments could mitigate
inflationary pressures in the U.S., prolonged dollar strength may pose
challenges for emerging markets, particularly those with high external
financing needs.
On a more positive note, the U.S. policy shifts seem to be fostering stronger
economic cooperation in Europe and among emerging economies. Trade flows are
being redirected, and some countries stand to benefit as China continues to
diversify its investments and production footprint, particularly in South
Asia, the Middle East, and South America. Additionally, local products could
become more competitive vs imports under a strong US dollar. The global
momentum toward technological innovation remains strong, with rapid advances
in artificial intelligence and digitalization expected to drive productivity
gains across industries. We anticipate that all sectors will benefit from
continued technological advancements, particularly in healthcare, green
energy, energy transition, and manufacturing.
On the geopolitical front, the U.S. administration appears to be taking a more
inward-focused approach, recalibrating its global engagement while emphasizing
its leadership in North America. This has led to a shift in transatlantic
relations, prompting Europe to assume a more proactive role in global
diplomacy. At the same time, changing power dynamics are influencing
international alliances, with countries such as Iran and Russia strengthening
their positions in key geopolitical regions. The outlook for peace and
stability in the Middle East remains uncertain, and evolving global alignments
will play a crucial role in shaping future developments. Given these factors,
Europe is likely to step up its role in defending democratic values, securing
its borders, and supporting the self-determination of its allies.
Consequently, defense spending is expected to continue its upward trajectory.
Amidst these uncertainties, the MMIT team remains focused on identifying
emerging opportunities across industries. We are confident that even in times
of volatility, there will be sectors and companies poised for long-term
success. Now more than ever, deep research and a thorough understanding of
businesses and sectors will be essential in identifying resilient investment
opportunities. Unlike developed markets with efficient information flows,
smaller companies in emerging markets require direct knowledge and rigorous
company-level research to uncover value. Our strategy remains centered on
high-conviction, non-index mid-cap companies with strong management and
robust, deleveraged business models-opportunities that passive strategies may
overlook. We reaffirm our commitment to delivering sustainable, outsized
returns to investors, and as the saying goes, "If you focus on change, you
will get results."
Maria Luisa Cicognani
Chairman
10 March 2025
INVESTMENT OBJECTIVE AND POLICY
Investment objective
The Company's investment objective is to achieve long-term capital growth and
income returns predominantly through investment in a diversified portfolio of
companies exposed directly or indirectly to emerging or frontier markets.
Investment policy
Asset allocation
The Company seeks to meet its investment objective by investing in a
diversified portfolio of companies exposed directly or indirectly to emerging
or frontier markets. The Company invests predominantly in:
· companies incorporated in and/or traded on stock exchanges
located in emerging or frontier markets; or
· companies which have the majority of their operations, or earn a
significant amount of their revenues in, emerging or frontier markets but are
traded on stock exchanges located in developed countries.
The Company focuses on small to mid-cap companies. The Company may invest in
pre-IPO and unlisted companies subject to the investment restrictions detailed
below.
In pursuing its investment objective, the Company may:
· invest in equity or equity related securities (including
preference shares, convertible unsecured loan stock, warrants and other
similar securities);
· hedge against directional risk using index futures and/or cash;
· hold bonds and warrants on transferable securities;
· utilise options and futures for hedging purposes and for
efficient portfolio management;
· enter into contracts for differences;
· hold participation notes;
· use forward currency contracts; and
· hold liquid assets.
Notwithstanding the above, the Company does not intend to utilise derivatives
or other financial instruments to take short positions, nor to increase the
Company's leverage in excess of the limit set out in the borrowing policy.
The Company does not track or mirror any index or benchmark and, accordingly,
the Company is frequently overweight or underweight in certain investments, or
concentrated in a more limited number of sectors, geographical areas or
countries, when compared with a particular index or benchmark.
The Company focuses on companies that have:
· a resilient business model and sound management;
· the possibility for operational and environmental, social and
governance ("ESG") improvements;
· the potential to improve competitive advantages and cash flow
generation; and
· stakeholders that are open to, and have an interest in, positive
change.
The Company, through its Investment Manager, seeks to unlock value in investee
companies by actively partnering with them through a governance-oriented
approach, seeking to act as a catalyst for broader ESG improvements.
The Company does not expect to take controlling interests in investee
companies.
The Company seeks to provide shareholders with exposure to a portfolio which
is appropriately diversified by geography and sector to achieve an appropriate
balance of risk over the long term. The Company's portfolio typically
comprises approximately 20 to 30 investments. The Company at all times invests
and manages its assets in a manner which is consistent with the objective of
spreading and mitigating investment risk.
Investment restrictions
The Company observes the following investment restrictions, each calculated at
the time of investment:
· no more than 10 per cent of Gross Assets are invested in a single
company;
· no more than 35 per cent of Gross Assets are invested in
companies incorporated in or traded on an exchange in or otherwise primarily
exposed to a single emerging or frontier market; and
· no more than 15 per cent of Gross Assets are invested in
companies that are not traded on a stock exchange.
In compliance with the Listing Rules, no more than 10 per cent, in aggregate,
of Gross Assets may be invested in other investment companies which are listed
on the Official List.
Borrowing
The Company may deploy leverage of up to 20 per cent of Net Asset Value
(calculated at the time of borrowing) to seek to enhance long-term capital
growth and income returns and for the purpose of capital flexibility. The
Company's leverage is expected to primarily comprise bank borrowings but may
include the use of derivative instruments and such other methods as the Board
may determine.
Hedging
The Company's reporting currency and share price quotation is Sterling.
However, the Company makes investments denominated in currencies other than
Sterling. In addition, the majority of the income from the Company's
investments is generated in currencies other than Sterling.
The Company does not intend to hedge currency risk in respect of the capital
value of its portfolio or in respect of its Sterling distributions. However,
the Company reviews its hedging strategy on a regular basis. The Company does
not engage in currency trading for speculative purposes.
Cash management
Whilst it is the intention of the Company to be fully or near fully invested
in normal market conditions, the Company may hold cash on deposit and may
invest in cash equivalent investments, which may include short-term
investments in money market type funds and tradeable debt securities ("Cash
and Cash Equivalents").
There is no restriction on the amount of Cash and Cash Equivalents that the
Company may hold and there may be times when it is appropriate for the Company
to have a significant cash or cash equivalent position instead of being fully
or near fully invested.
Investment policy commentary
Borrowing
There was no borrowing during the year under review or after the year end, nor
have any derivatives been used.
Hedging
The Investment Manager does not use currency hedging products in the portfolio
but manages currency risk through "natural hedging" by maintaining a
geographically diversified portfolio. The Investment Manager closely monitors
all portfolio companies on a daily basis and is in a regular dialogue with
portfolio companies on a range of issues, including currency hedging.
Analysing currency risk is an integral part of the Investment Manager's
macroeconomic framework and is fully integrated throughout the investment
process.
Breaches
In the event of a breach of the investment policy set out above and the
investment and leverage restrictions set out therein, the Investment Manager
shall inform the Board upon becoming aware of the same and if the Board
considers the breach to be material, notification will be made to the London
Stock Exchange via a Regulatory Information Service.
During the year under review, no breaches of the investment policy occurred.
Changes to the investment policy
No material change will be made to the investment policy without the approval
of shareholders by ordinary resolution.
COMPANY PERFORMANCE
During the five years to 30 November 2024
Historic performance for the years ended 30 November
2020 2021 2022 2023 2024
Net asset value per share total return*^ +16.3% +44.9% (12.3)% +8.5% +5.2%
Share price total return*^ +24.7% +50.0% (15.0)% +2.1% +5.1%
Shareholder funds (£'000) 111,237 166,502 144,294 166,529 173,584
Net asset value per share 105.9p 153.4p 134.2p 144.3p 150.4p
Share price 103.0p 154.5p 131.0p 132.5p 138.0p
(Discount)/premium of share price to net asset value per share*^ (2.7)% 0.7% (2.4)% (8.2)% (8.2%)
Ongoing charges^ 1.5% 1.5% 1.5% 1.5% 1.4%
* Source: Frostrow Capital LLP
^ Alternative Performance Measure (see Glossary).
Performance Summary
2020 2021 2022 2023 2024
Year to 30 November % % % % %
Net Asset Value per share total return^ 16.3 44.9 (12.3) 8.5 5.2
Management fees and other expenses Incurred (1.5) (1.5) (1.5) (1.5) (1.4)
Gross total return / (loss) 17.8 46.4 (10.8) 10.0 6.6
Comparator Benchmark return / (loss)(#) 5.9 14.4 (4.2) 2.1 6.6
Excess return / (loss) 11.9 32.0 (6.6) 7.9 0.0
^ Alternative performance measure, see Glossary.
(#) MSCI Emerging Markets Mid Cap net total return in sterling.
INVESTMENT PORTFOLIO
as at 30 November 2024
Fair value % of net
Company Sector Country £'000 assets
E Ink Holdings Technology Taiwan 9,188 5.3
EPAM Systems Technology USA 8,489 4.9
Park Systems Technology South Korea 8,372 4.8
Classys Health Care South Korea 8,257 4.8
Persistent Systems Technology India 7,882 4.5
Elite Material Technology Taiwan 7,797 4.5
360 ONE WAM Financials India 6,925 4.0
TOTVS Technology Brazil 6,738 3.9
Hitit Bilgisayar Technology Turkiye 6,455 3.7
APL Apollo Tubes Industrials India 6,220 3.6
Top 10 Investments 76,323 44.0
Chroma ATE Technology Taiwan 5,947 3.4
Clicks Group Consumer Staples South Africa 5,840 3.4
LOTES Technology Taiwan 5,610 3.2
Vivara Participacoes Consumer Discretionary Brazil 5,380 3.1
Bluebik Group Technology Thailand 4,893 2.8
Sinbon Electronics Technology Taiwan 4,785 2.8
Metropolis Healthcare Health Care India 4,489 2.6
CE Info Systems Technology India 4,482 2.6
eMemory Technology Technology Taiwan 4,432 2.5
Vietnam Dairy Products Consumer Staples Vietnam 4,323 2.5
Top 20 Investments 126,504 72.9
Safaricom Communications Kenya 4,237 2.4
Mavi Giyim Sanayi Ve Ticaret Consumer Discretionary Turkiye 4,041 2.3
Logo Technology Turkiye 3,985 2.3
Trip.com Group Consumer Discretionary China 3,695 2.1
Zilltek Technologies Technology Taiwan 3,604 2.1
LEENO Industrial Technology South Korea 3,458 2.0
Parade Technologies Technology Taiwan 3,332 1.9
Kangji Medical Holdings Health Care China 3,170 1.8
Dreamfolks Service Industrials India 3,164 1.8
FPT Technology Vietnam 2,854 1.7
CTOS Digital Berhad Industrials Malaysia 1,881 1.1
Smartfit Escola Consumer Discretionary Brazil 1,804 1.1
EC Healthcare Health Care China 898 0.5
Total Investments 166,627 96.0
Other Net Assets 6,957 4.0
Total Net Assets 173,584 100.0
Portfolio Distribution
Sector Breakdown, 30 November 2024
Technology 58.9%
Health Care 9.7%
Consumer Discretionary 8.6%
Industrials 6.5%
Consumer Staples 5.9%
Financials 4.0%
Communications 2.4%
Cash 4.0%
Sector Breakdown, 30 November 2023
Technology 60.8%
Health Care 12.6%
Industrials 6.8%
Consumer Staples 5.4%
Consumer Discretionary 4.0%
Financials 2.5%
Communications 2.0%
Cash 5.9%
Geographical Breakdown, 30 November 2024
Taiwan 25.7%
India 19.1%
South Korea 11.6%
Turkiye 8.3%
Brazil 8.1%
United States 4.9%
China 4.4%
Vietnam 4.2%
South Africa 3.4%
Thailand 2.8%
Kenya 2.4%
Malaysia 1.1%
UK* 4.0%
* includes uninvested cash
Geographical Breakdown, 30 November 2023
Taiwan 24.0%
India 19.7%
South Korea 15.7%
Brazil 7.5%
Turkiye 7.3%
United States 5.4%
China 4.4%
Vietnam 2.8%
Thailand 2.8%
South Africa 2.5%
Kenya 2.0%
UK* 5.9%
* includes uninvested cash
MMIT employs a flexible cash management policy. The aim is to be fully
invested while ensuring patient purchases and sales. This can lead to
temporarily higher cash levels.
INVESTMENT MANAGER'S REVIEW
Introduction
Since our inception, there has rarely been a dull moment, and 2024 was no
exception. While a global election year would naturally bring a degree of
unpredictability, many of the year's most significant surprises and sources of
volatility stemmed elsewhere, ranging from speculation around rate cuts and
tech-driven market movements to Chinese stimulus measures.
Amidst the turbulence, one of the more encouraging developments has been the
ability of several developed and emerging markets to navigate challenging
economic conditions, with some showing signs of steering towards what could
resemble a soft landing, driven by proactive policies and gradual (albeit
uneven) normalisation of global inflation. While some fluctuations may still
occur, the overall trend of easing inflation pressures, with only a few
exceptions, seems clear.
For the MMIT team, 2024 has been a productive year, marked by extensive
research trips to key markets, resulting in several new additions to our
portfolio, see Portfolio Overview below. In-person meetings with companies,
local experts, politicians and competitors, informs our deep understanding of
companies, and is an invaluable tool for conducting due diligence on
companies.
The NAV per share and share price of MMIT returned 5.2% and 5.1% respectively
on a total return basis over the 12‑month period to 30 November 2024 while
the MSCI EM Mid Cap Index Net Total Return returned 7.0% in GBP terms. During
the calendar year to 31 December 2024, MMIT's NAV per share delivered 7.4%,
outperforming the index by 3.6% over the year.
Several external factors added to volatility and influenced the Trust's
performance: as mentioned above, 2024 was an election year and the elections
in countries like Taiwan, India, South Africa, and Mexico were monitored
closely by the team. Taiwan's election marked the start of the 2024 election
cycle, but surprisingly for some, the victory of the
'pro-Taiwanese' DPP did not elicit a major reaction from Beijing. This set the
tone for many other EM elections, where the results largely maintained the
status quo in government policies and did not cause longer term volatility.
The final quarter of 2024 has largely been defined by Donald Trump's election
victory in the US, prompting businesses and governments worldwide to prepare
for the implications of his second presidency.
Interest rates were another key theme, with expectations around monetary
policy continually readjusted. Optimism for significant rate cuts in early
2024 was tempered as rates stayed higher for longer. Finally, the Federal
Reserve initiated cuts in September, totalling 75 basis points by year-end,
signalling positive momentum for emerging markets. However, the strength of
the U.S. economy may slow the pace of future reductions. Lower rates provide
emerging market (EM) central banks with room to ease monetary policy, enabling
cheaper borrowing, improved consumer sentiment, and increased corporate
investment. At the same time, local conditions remain pivotal. For example,
Brazil has resumed raising interest rates to combat inflationary pressures.
Nevertheless, we believe the country still holds attractive long-term
opportunities, particularly in quality companies with strong fundamentals.
In the technology sector, Nvidia and the 'Magnificent 7' U.S. tech stocks
dominated headlines, fuelled by excitement around AI and cutting-edge
semiconductors. Some emerging market companies, crucial to semiconductor
supply chains, stand to benefit from this trend. However, the sector saw
volatility, particularly in August, driven by weaker U.S. employment data and
scepticism around the potential of AI to deliver. Despite this, big tech
remained a key driver of market returns.
China, in stark contrast, faced persistent economic challenges, including its
property sector crisis, weak consumer sentiment, and risks of deflation.
Limited government interventions early in the year left growth subdued, but
September and November brought monetary easing and a $1.4 trillion stimulus
package targeting local government debt. While these measures spurred a brief
market rally, they fell short of addressing China's deep structural issues.
Currently, our cautious stance on China remains, as we believe there is a
pressing need for more robust, long-term reforms, particularly in the property
sector.
MMIT Research Trips
During 2024, the team conducted visits to India, Taiwan, China, and other key
regions as part of their comprehensive 360‑degree due diligence process.
These efforts resulted in the addition of several high-conviction ideas to the
portfolio, deepened the team's understanding of the challenges and
opportunities facing portfolio companies, and enhanced engagement strategies.
Research trips to East Asia during Q1 and Q2 included on-the-ground analysis
in Taiwan. Leveraging the local semiconductor ecosystem, the team performed
channel checks on investment ideas including new portfolio additions Lotes, a
CPU sockets supplier, and Chroma, a specialist in system-level testing
solutions.
MCP engaged with Chroma's leadership and department heads through formal
meetings and campus tours, gaining valuable insights into the company's
second-line management and corporate culture. Additionally, MMIT met with
technical experts to better understand the demand dynamics for Chroma's
system-level testing equipment. Discussions with equipment providers within
the TSMC ecosystem further clarified Chroma's capacity expansion plans for
advanced packaging fabs, critical for AI and HPC chips in the coming years.
We believe these channel checks provide a significant information advantage,
particularly for smaller companies with limited sell-side coverage. This
approach also enables the team to map the competitive landscape, assess total
addressable market (TAM) opportunities, and stay attuned to sector innovation
and R&D trends.
Additionally, research trips provide invaluable macro insights into the
regions we visit. As a result, we enter 2025 with a strengthened bullish
conviction in ASEAN following trips to Vietnam, Malaysia, Thailand, and
Singapore.
Nonetheless, our core convictions remain in India, Taiwan, and South Korea.
India's well educated, youthful population supports long-term growth, while
Taiwan and South Korea lead in innovation, particularly in tech sectors such
as AI, 5G, and renewable energy, where we favour asset-light, IP based
businesses. Although South Korean President Yoon Suk Yeol shocked the nation
and global investors with his failed attempt to impose martial law in
December, we believe the Constitutional Court's decision to impeach Yoon,
leading to his arrest in January 2025, highlights the strength of the
country's democratic framework which will allow the country to focus on its
economic potential. Fundamentally, we remain confident in the country's
stability and its promising investment opportunities, particularly in the
export market. Furthermore, recent first hand observations from trips to
Greater China suggest that the likelihood of a Chinese invasion of Taiwan in
the short term remains low. This assessment is based on China's pressing
domestic economic challenges, which likely take precedence over military
escalation. However, we remain vigilant and continue to closely monitor the
evolving situation. The team looks forward to continuing research trips next
year and uncovering new exciting investment opportunities.
Performance
The NAV per share and share price of MMIT returned 5.2% and 5.1% respectively
on a total return basis over the 12‑month period to 30 November 2024, with
the NAV per share reaching a high of 154.8p on 17 October 2024 and closing at
150.4p. MMIT traded at an average discount to NAV of 8.0% during the year
ended 30 November 2024, closing at a discount of 8.2%.
Over the reporting period, the top three contributors to performance were
Indian software provider Persistent Systems (+2.6%), Indian wealth manager 360
One (+2.4%), and Taiwanese electronic ink manufacturer E Ink (+2.2%). The main
detractors to performance were Brazilian software provider TOTVS (-2.0%),
Brazilian jewellery brand VIVARA (-1.4%), and Hong Kong healthcare provider EC
Healthcare (-1.2%).
Portfolio Overview
As of 30 November 2024, MMIT has invested 96.0% of capital with 33 holdings
across 12 countries. The largest geographic exposure was Taiwan (25.7%),
followed by India (19.1%) and South Korea (11.6%). The team continues to find
the most high-conviction ideas in Asia. The region accounts for over 60% in
the portfolio. The largest sector exposure was in technology (58.9%), which we
believe is well diversified across various segments. This was followed by
health care (9.7%) and consumer discretionary (8.6%).
During the reporting period MMIT added 7 new companies: VIVARA, Chroma ATE,
Lotes, Smart Fit, CTOS, Trip.com, and FPT. The first four companies were
discussed in more detail in the interim report.
CTOS: In Q3 2024, MMIT added CTOS to the portfolio, Malaysia's leading credit
reporting agency. Since 1990, CTOS has provided credit information, analytics,
digital solutions and credit scoring services to businesses, financial
institutions and consumers. We believe the company is well-positioned for
future growth, offering a comprehensive digital portfolio and leveraging
strategic partnerships, such as its exclusive rights to use the American FICO
scoring system in the ASEAN region. Additionally, investments in Indonesia,
Thailand and other ASEAN markets enhance its regional growth prospects.
Trip.com: In Q3 2024, MMIT added Trip.com which is China's leading online
travel platform, offering a comprehensive range of travel services, including
transport bookings, hotel accommodations, and in-destination activities.
Founded in 1999 and listed on NASDAQ in 2003 and HKEX in 2021, the company
operates globally under brands such as Ctrip, Qunar, Trip.com and Skyscanner.
It provides access to over 1.2 million accommodation options, flights from
680+ airlines. Additionally, Trip.com is leveraging AI technology to improve
customer experience and retention via their chatbot, TripGenie, which offers
personalised travel recommendations and support.
FPT: Another addition to MCP's portfolio in Q3 2024 was FTP, Vietnam's largest
technology company, which has a strong market position in technology, telecoms
and education sectors. FPT's group synergies help secure lower labour costs
than its competitors, which together with its growing international contracts,
are expected to boost margins. With a strong management track record and
future catalysts like strategic acquisitions in Europe and Australia and new
technologies penetrating the local market, FPT is well-positioned for
continued growth.
Engagement
Many of our portfolio companies' achievements were highlighted in the interim
report; however, numerous additional accomplishments have been realised since
then, and further information on engagement and proxy voting can be found in
MMIT's 2024 Stewardship Report.
In terms of governance, Chroma enhanced transparency and addressed
greenwashing concerns by engaging Bureau Veritas, a leading certification
firm, to independently verify its sustainability report. At the 2024 Korea IR
Awards, Sang-il Park, CEO of Park Systems, was honoured with the Chairman of
Financial Supervisory Service Award, the highest accolade in the KOSDAQ
category. Meanwhile, Sandeep Kalra, CEO of Persistent Systems, was named the
IT industry's Best CEO by Fortune India. The publication praised Kalra for
"putting the IT services industry on steroids". Persistent Systems was further
recognised for its strong governance and executive leadership by winning the
prestigious "2024 Asia (ex-Japan) Executive Team" survey conducted by top
portfolio managers.
In terms of environmental, social and cultural factors, Vinamilk received
certification from the British Standards Institute for its third
carbon-neutral factory unit. Meanwhile, Kangji achieved an AA score for the
first time in the MSCI ESG Rating, the highest rating among medical device
peers listed in Hong Kong. Sinbon highlighted several ESG milestones in its
latest sustainability report, including an 11% reduction in Scope 1 and 2
emissions, the launch of solar power installations, and increased revenue from
sustainable industries.
Sinbon also reported social and cultural advancements in its sustainability
report, including increasing the percentage of female managers to 47% and
being one of only 16 companies from Taiwan included in the Bloomberg Gender
Equality Index. FPT received recognition for its commitment to gender
equality, with women making up nearly 40% of its workforce and holding 33% of
managerial roles, contributing to the company's Job Creation Award at the 2024
ESG Business Awards.
Furthermore, FPT demonstrated a strong commitment to environmental and social
responsibility with the launch of the 'Happy Giga Run 2024' campaign in honour
of its 25th anniversary. This initiative aims to engage FPT's global workforce
and their families in sustainability-focused activities, including beach
cleanups, blood donation drives, and tree planting.
MMIT continues to develop and implement tailored engagement plans for
portfolio companies, addressing their unique country and sector-specific
challenges.
2025 Outlook
Heading into 2025, we remain focused on our long-term strategy and the core
fundamentals of our portfolio companies. Conversations with our portfolio
companies in recent months have reinforced our cautiously optimistic outlook
for 2025 and beyond as we believe that several of our portfolio companies have
potential for revenue growth and margin improvements in 2025. For example,
Elite Material, a leading producer of semiconductor materials, is preparing to
supply its upgraded M8 material for a US cloud service provider's ASIC
(Application-Specific Integrated Circuit) in 2025, addressing the growing
demand for AI processing and the need for customised solutions over NVIDIA's
GPUs (Graphics Processing Unit). Similarly, Chroma has developed a unique
device for its foundry client's advanced packaging processes, ensuring precise
alignment of stacked chip components-an essential capability for manufacturing
next-generation AI chips.
But no doubt uncertainties remain. Trump's expanded political power raises the
possibility of bold policy shifts that may reshape global trade dynamics in
the years to come. While U.S. equities and the dollar have strengthened in
response to Trump's election, emerging markets face a more uncertain outlook
due to the President's aggressive tariff rhetoric. Yet, within challenges lie
opportunities. Countries like India, Indonesia and Vietnam, for example, are
already benefiting from the "China+1" strategy and appear well-positioned to
attract new manufacturing investments. Their competitive labour markets,
improving infrastructure, and supportive government policies make them
increasingly appealing as companies seek to diversify supply chains and reduce
dependency on China. At the same time, the U.S.'s heavy reliance on imports,
particularly from China, reduces the likelihood of sweeping tariffs, which
could risk significant domestic disruption.
Emerging markets have previously responded to the above dynamics with
increased trade diversification and reduced reliance on the dollar. During the
2018 trade war, for example, China shifted imports like soybeans to Brazil, a
move that fuelled record bilateral trade. This pattern could reemerge under
Trump's renewed tariff threats.
Additionally, nations such as India are advancing local currency trade
agreements, fostering resilience against external shocks. Intra-EM trade,
particularly within Asia set to rise from $4.3 trillion in 2023 to $7.1
trillion in 2030, has also grown significantly and is poised to accelerate
further, offering emerging markets the chance to deepen their autonomy and
global influence.
Geopolitics remain an ongoing risk, with tensions in the Middle East, the
Russia-Ukraine war, and China-Taiwan relations posing significant challenges.
Our disciplined macro-overlay has been instrumental in navigating these
complexities. This approach will remain central as we navigate 2025.
Taken together, these interconnected factors paint a complex picture for 2025.
While risks are evident, emerging markets could leverage this period of
transition to strengthen resilience, diversify trade, and attract investment,
positioning themselves as key drivers of global growth in the years ahead.
Furthermore, emerging markets are essential for diversification, offering
strong growth potential, attractive valuations, and innovative companies that
play a key role in global supply chains. This is particularly important as the
U.S. market, with the S&P 500 heavily concentrated in just seven
companies accounting for. around 28% of its market capitalisation at the end
of 2024 and contributed over 50% of its returns during the year, poses
significant concentration risks. Diversification into emerging markets
provides investors access to a broader array of opportunities and mitigates
the risks associated with over-reliance on a single, concentrated market.
Furthermore, active investing in emerging markets allows for the discovery of
lesser-known, quality companies that are often overlooked by the broader
market, creating unique opportunities for long-term growth and value creation.
We remain committed to seeking these companies in emerging markets-innovative
leaders and unique opportunities. By focusing on these hidden gems, we aim to
provide our investors with access to diverse growth prospects and long-term
value in an evolving global landscape.
Carlos Hardenberg
MCP Emerging Markets LLP
Investment Manager
10 March 2025
BUSINESS REVIEW
Business Review
The Strategic Report contains a review of the Company's business model and
strategy, an analysis of its performance during the financial year ended 30
November 2024, future developments and details of the principal risks and
challenges it faces. The Strategic Report has been prepared solely to provide
information to shareholders to enable them to assess how the Directors have
performed their duty to promote the success of the Company.
The Strategic Report contains certain forward-looking statements. These
statements are made by the Directors in good faith based on the information
available to them up to the date of this report and such statements should be
treated with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such forward‑looking
information.
Further information on how the Directors have discharged their duty under
Section 172 of the Companies Act 2006 can be found below.
Business Model
The Company is an externally managed investment trust and its ordinary shares
are admitted to the closed-ended investment funds category of the Official
List of the FCA and traded on the main market of the London Stock Exchange.
The Company carries on its business as an investment trust within the meaning
of Chapter 4 of Part 24 of the Corporation Tax Act 2010.
As an externally managed investment trust all of the Company's day to day
management and administrative functions are outsourced to third party service
providers. As a result, the Company has no executive Directors, employees or
internal operations.
The Board has appointed MCP Emerging Markets LLP (previously: Mobius Capital
Partners LLP) ("MCP") to manage its investment portfolio. Company secretarial
and administrative services are provided by Frostrow Capital LLP ("Frostrow")
who engage Northern Trust Global Services plc to provide certain
administrative functions. In addition, Frostrow provides the AIFM Directive
risk management function on behalf of the AIFM (see below for further
details). The Northern Trust Company and Northern Trust Investor Services
Limited are the Company's Custodian and Depositary, respectively.
Further information, including the remuneration and contractual terms of
appointment, of these principal service providers to the Company is set out
below.
Strategy for the Year ended 30 November 2024 and Strategic Review
Throughout the year ended 30 November 2024, the Company continued to operate
as an approved investment trust, following its investment objective and
policy.
During the year, the Board made all strategic decisions for the Company. MCP
and Frostrow undertook all strategic and administrative activities on behalf
of the Board, which retained overall responsibility.
The Board is aware of the continued emphasis on environmental, social and
governance ("ESG") matters in recent years. The Investment Manager engages
regularly with all portfolio companies to understand and improve their
approach to ESG, based on strong evidence that ESG leaders tend to outperform
their peers. In addition, the Investment Manager believes that companies with
strong corporate cultures provide an additional driver of outperformance in
the long term. Details of the Investment Manager's "ESG+C(®)" approach can
be found in the Investment Manager's Review.
Investment Objective and Policy
The Company's investment objective and policy are set out above.
Dividend Policy
It is the Company's policy to pursue capital growth for shareholders as well
as income. The Company's Investment Manager is drawn to companies with
excellent returns on capital with the ability to expand as well as generate
dividends.
The Company will comply with the investment trust rules regarding
distributable income, which require investment trusts to retain no more than
15% of their income each year. The Company will normally only pay the minimum
dividend required to maintain investment trust status. Please refer to the
Chairman's Statement for further information.
Results and Dividend
The results attributable to shareholders for the year are shown in the Income
Statement below. In the year ended 30 November 2024, the Company made a
revenue profit. Under investment trust rules regarding distributable income, a
final dividend must be paid to allow the Company to comply with those rules.
Subject to shareholders' approval at the forthcoming Annual General Meeting, a
final dividend of 1.7p per share will be paid on 28 May 2025 to shareholders
on the register as of 2 May 2025. The associated ex-dividend date will be 1
May 2025.
The Board
The Board of the Company currently comprises Maria Luisa Cicognani (Chairman),
Christopher Casey and Gyula Schuch, all of whom are independent non-executive
directors.
All Directors served during the whole year under review and up to the date of
signing this report, and with the exception of Mr Casey, they will stand for
re-election at the forthcoming Annual General Meeting ("AGM").
Further information on the current Directors can be found in the Governance
section.
In addition to the current Directors, Diana Dyer Bartlett will join the Board
with effect from 17 March 2025 as a
non-executive Director. A chartered accountant and an experienced Audit
Committee Chair, she will take over from Christopher Casey as Chair of MMIT's
Audit Committee following the Company's AGM on 15 May, at the end of which
Christopher will retire.
Diana will stand for election at the forthcoming AGM and further information
on her can be found in the Governance section.
Information in respect of the Board's diversity policy and Board diversity can
be found in the Governance section.
Board Focus and Responsibilities
With the day to day management of the Company outsourced to service providers
the Board's primary focus at each Board meeting is reviewing the investment
performance and associated matters, such as, inter alia, future outlook and
strategy, gearing, asset allocation, investor relations, marketing, and
industry issues.
In line with its primary focus, the Board retains responsibility for all the
key elements of the Company's strategy and business model, including:
· Investment Objective and Policy, incorporating the investment
guidelines and limits, and changes to these;
· whether the Manager should be authorised to gear the portfolio up
to a pre-determined limit;
· review of performance against the Company's KPIs;
· review of the performance and continuing appointment of service
providers; and
· maintenance of an effective system of oversight, risk management
and corporate governance.
Details of the principal KPIs, along with details of the principal risks, and
how they are managed, follow within this Business Review.
The Corporate Governance report includes a statement of compliance with
corporate governance codes, together with the outline of the internal control
and risk management framework within which the Board operates.
Information on the Company's social, community, employee or environmental
responsibilities can be found in the Business Review.
Key Performance Indicators ("KPIs")
The Board uses certain financial and non-financial KPIs to monitor and assess
the performance of the Company in achieving its strategic aims.
The Board reviews the performance of the portfolio in detail and hears the
views of the Investment Manager at each meeting.
Information on the Company's performance is provided in the Chairman's
Statement and the Investment Manager's Review.
This performance is assessed against the following KPIs:
· Net asset value per share total return^
· Average discount/premium of share price to net asset value per
share over the year^
· Ongoing charges ratio^
· Return/(loss) per share†
^ Alternative Performance Measure (see Glossary)
† UK GAAP Measure
Alternative Performance Measures ("APM")
The Board believes that each of the APMs, which are typically used within the
investment company sector, provides additional useful information to
Shareholders in order to assess the Company's performance between reporting
periods and against its peer group. The APMs used for the year under review
are unchanged from last year. Further information on each of the APMs can be
found in the Glossary.
Net asset value per share total return^
The Company is committed to building a long-term investment record and will
assess itself by reference to its peers.
The Company's peer group has been defined as a selection of investment
companies from the AIC's Global Emerging Markets Sector, that have a similar
investment objective to the Company and they are set out in the Glossary.
Over the year ended 30 November 2024, the Company ranked 8 out of 9 in its
peer group with a net asset value per share total return performance of +5.2%
against a peer group average of 12.9%. The Board continues to monitor this
closely.
^ Alternative Performance Measure (see Glossary)
Discount/premium of share price to net asset value per share^
The Board believes that an important driver of an investment trust's discount
or premium over the long term is investment performance together with a
proactive marketing strategy. However, there can be volatility in the discount
or premium during the year. Therefore, the Board takes powers each year to buy
back and issue shares with a view to limiting the volatility of the share
price discount or premium.
New shares will only be issued at a premium to the Company's cum income net
asset value ("NAV") per share at the time of issuance. During the year, the
Company's shares traded at an average discount of 8.0% (2023: 2.0%). Since the
year-end, no further ordinary shares were issued.
The Directors will consider repurchasing ordinary shares when the average
one-month discount at which the Ordinary Shares have traded exceeds 5% of the
net asset value per ordinary share. To date, however, feedback from
shareholders has continued to indicate a preference for narrowing the discount
through generating natural demand. The Board also takes into consideration the
interest of shareholders to have liquidity in the shares when evaluating
strategies on discount management. As at 28 February 2025, the Company's
shares traded at a discount of 6.0% to the net asset value per Ordinary Share
and no shares have been bought back.
Average discount of share price to net asset value per Ordinary Share^ during
the year
30 November 2024 30 November 2023
8.0% 2.0%
Peer group average discount 11.8%
Peer group average discount 12.5%
^ Alternative Performance Measure (see Glossary)
Ongoing charges ratio^
The Board continues to be conscious of expenses and works hard to maintain a
sensible balance between high quality service and costs.
Over the year ended 30 November 2024 the ongoing charges ratio was 1.4%. This
ongoing charges ratio compares with the average of the Company's peer group of
1.3%. One of the main reasons for MMIT's higher than average ongoing charges
ratio is the fact that most companies in the peer group are larger than MMIT,
so that expenses will be paid out of larger total assets, making them seem
smaller in comparison.
^ Alternative Performance Measure (see Glossary)
Ongoing charges ratio^
Year ended Year ended
30 November 2024
30 November 2023
1.4% 1.5%
Peer group average 1.3%
Peer group average 1.1%
Return per share†
The total return per share for the year was 7.36p (2023: of 11.79p).
† UK GAAP measure
Prospects
The Board continues to support the Investment Manager's strategy of investing
in a high conviction portfolio across emerging and frontier markets with an
active ownership approach. The Board believes that this strategy will continue
to deliver strong investment returns over the long term. This is supported by
the Company's performance which, since launch to 30 November 2024, has
provided a NAV total return of 57.3% and a share price total return of 41.6%,
compared with average peer group returns of 33.5% and 29.7% respectively.
Principal Risks, Emerging Risks and Risk Management
The Board considers that the risks detailed within this report are the
principal risks to the delivery of its strategy that are currently facing the
Company.
The Board is responsible for the ongoing identification, evaluation and
management of the principal risks faced by the Company. The Audit Committee on
behalf of the Board, has established a process for the regular review of these
risks and their mitigation. This process accords with the UK Corporate
Governance Code and the FRC's Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting.
During the year ended 30 November 2024, the Audit Committee, on behalf of the
Board, has again carried out a robust assessment of the emerging and principal
risks facing the Company, including those that would threaten its business
model, future performance, solvency and liquidity. The Committee also
considered the controls available to mitigate the inherent risks and whether
additional controls or actions were required to bring the residual risk down
to an acceptable level. The Committee was largely satisfied with the controls
that are in place for the Company, although it is important to note that the
systems in place cannot eliminate the risk of failure to achieve the Company's
investment objective. Further details are given in the Audit Committee Report
below.
All of the potential principal risks, should they occur, have controls in
place whereby a review is undertaken regularly by the Board, the Administrator
and the AIFM.
Further details as well as a summary of the Company's approach to risk and how
principal risks and uncertainties were dealt with during the year under
review, are set out below. In addition, information about the Company's risk
assessment and internal control procedures is provided in the Audit Committee
Report.
In discussing the risk register of the Company during the year, the Audit
Committee assessed the inherent threat of each identified risk (i.e. if no
controls or mitigating factors were in place) and the residual risk (i.e. the
risk remaining after controls are taken into consideration).
The principal risk categories reviewed by the Audit Committee during the year
were:
· Strategic and Business Risks;
· Investment Risks;
· Legal, Regulatory and Taxation Risks;
· Operational and Financial Risks; and
· Emerging Risks.
Out of these categories, the risks set out below are considered by the Board
to be the principal risks and uncertainties faced by the Company.
Risk Trends
↑ = increased risk ↓ = decreased risk ↔ = no change
Principal Risks and Uncertainties Mitigation Trend
Strategic and Business Risks In managing this risk the Board reviews the Company's investment objective in ↔
relation to market and economic conditions and the performance of its peers
Investment and strategic risk and discusses at each Board meeting the Company's future development and
strategy.
Poor performance against the Company's peer group makes the Company
unattractive to investors. The Board also:
This could result in a widening of the share price discount to NAV per share · monitors the resources of the Investment Manager that are
and a significant redemption at the triennial liquidity events. deployed to manage the Company's assets to ensure they are appropriate;
· reviews the performance of the peer group to better understand
relative performance;
· considers the leverage of the Company and discusses with the
Investment Manager the appropriateness of such leverage if needed and
competitive; and
· can consider an alternative Investment Manager to manage the
Company if poor performance against peers becomes a constant.
The Investment Manager monitors the volatility in the market and the quality
of the portfolio holdings and new potential investments. The results of this
feed into the stock selection process and consideration of the portfolio
constituents. In addition, the Investment Manager reports at each Board
meeting on the performance of the portfolio, encompassing, inter alia, the
rationale for stock selection decisions, the
make-up of the portfolio, and portfolio company updates.
Geopolitical and consequent global economic risks Political and economic developments both in the UK and world-wide are being ↔
monitored and discussed, where relevant, between the Board and the Investment
Significant political and economic change in the UK and globally might lead to Manager as part of the portfolio review at every Board meeting. Due to the
volatile markets impacting the Company's performance and reduced investor nature of the Company, any investment decisions can only, at best, have a
appetite for the Company's shares. limited effect on climate change and related issues. Risk is managed by
diversification of investments.
Risks related to the environment and climate change also fall under this
category, as they could have an adverse impact on operational performance of The Board:
both MMIT and its service providers and may lead to a reduction in the demand
for the Company's shares. · seeks to manage this risk through selecting an experienced
competent Investment Manager and regularly monitoring performance, awareness
of emerging geopolitical and global economic risks and the robustness of the
investment processes implemented by the Investment Manager for taking account
of those risks;
· reviews the macro risks the Company and its assets are exposed to
at Board meetings and receives updates as required from the Investment
Manager; and
· discusses these risks with the Investment Manager as part of the
portfolio review at each Board meeting.
Reporting by service providers and controls relied upon by the Board:
· Risks considered by the Investment Manager as part of its
investment process;
· Reports by the Investment Manager on political and regulatory
changes affecting portfolio companies, where relevant;
· Monitoring whether currency hedging would be an appropriate
strategy to protect the Company from the risk of capital losses; and
· Compliance reports by the Administrator on the implementation of
the investment policy at each Board meeting.
Investment Risks The Board considers the make-up of the team supporting the Investment Manager ↔
as part of a continuous review:
Key person risk
· The Board has a constant dialogue with the Investment Manager and
Individuals responsible for managing the Company's investment portfolio become meets the wider MCP team on a regular basis.
incapacitated and are unable to manage the investments. This could cause a
drop in performance and lead to shareholders selling off the Company's shares. · The Investment Manager constantly seeks to maintain a highly
qualified team, that collectively will ensure continuity of management.
· The Board can consider corporate actions to be proposed to
shareholders to merge the Company with other similar companies or change the
Investment Manager if the risk materialises.
Foreign currency risk The Investment Manager does not hedge currency risk. ↔
The Company's shareholders are exposed to movements in exchange rates as the The Board:
Company does not hedge its portfolio currency exposure.
· oversees the process by which the Investment Manager considers
currency exposure as part of its investment process;
· ensures that the currency risks are communicated to shareholders
through the annual and half-yearly reports and the Company's monthly
factsheets; and
· relies on the fact that for the Investment Manager, currency is
an integral part of making investment decisions.
The Investment Manager keeps all currencies under review and monitors them
continuously.
Operational and Financial Risks ↔
Performance of service providers
The Board is reliant on the systems of the Company's service providers and as To manage these risks the Board:
such a disruption to, or a failure of, those systems could lead to a failure
to comply with law and regulations leading to reputational damage to the · keeps the situation under close review both at Board meetings and
Company - either directly or by association with the service provider in in between;
question - and/or financial loss.
· relies on regular updates by key service providers in respect of
Global events such as the wars in Ukraine and the Middle East or technical their business continuity processes;
failure such as the recent CrowdStrike disruption, and the application of
sanctions could disrupt the services of key service providers resulting in · relies on Frostrow monitoring sanctions applications as part of
them being unable to undertake their respective roles. its control function on service providers;
· receives reports from MCP and Frostrow on compliance with
applicable laws and regulations;
· reviews internal control reports and key policies of the
Investment Manager, the Custodian and Depositary and Frostrow; and
· receives updates on pending changes to the legal and regulatory
environment and progress towards the Company's compliance with any relevant
future changes.
The service providers of the Company have again confirmed that they have all
necessary business continuity procedures in place, including increased IT and
cyber security awareness. The Board continues to monitor the performance of
all service providers.
Failure of the Investment Manager to comply with FCA regulations or meet its The Board monitors regulatory change with the assistance of Frostrow and its ↔
governance objectives external professional advisers to ensure compliance with applicable laws and
regulations. The Board and the Audit Committee also discuss the structure of
MCP's compliance function at each meeting.
MCP's registered Compliance Officer during the year was Carlos Hardenberg who
is also the Portfolio Manager of the Investment Manager, MCP. With effect from
1 March 2025, MCP has appointed a Compliance Officer who is independent of the
investment and management functions of MCP.
MCP:
· is also supported by COSEGIC, a reputable compliance consultancy
firm, and the Audit Committee reviews the findings of COSEGIC's compliance
reports at each meeting; and
· provides an annual report on internal governance and senior
management arrangements, systems and controls for review by the Audit
Committee.
Emerging Risks
The Company has carried out a detailed assessment of its emerging and
principal risks. The International Risk Governance Council's definition of an
"emerging" risk is one that is new, or is a familiar risk in a new or
unfamiliar context or under new context conditions (re-emerging). Failure to
identify emerging risks may cause reactive actions rather than being proactive
and, in a worst case scenario, could cause the Company to become unviable or
otherwise fail or force the Company to change its structure, objective or
strategy.
The Audit Committee reviews a risk register at every meeting. Emerging risks
are discussed in detail as part of this process to try to ensure that emerging
as well as well-known risks are identified and mitigated as far as possible.
Any emerging risks and mitigations are added to the risk register.
The experience and knowledge of the Directors are useful in these discussions,
as are update papers and advice received from the Board's key service
providers such as the AIFM and Investment Manager and the Company's Broker. In
addition, the Company is a member of the AIC, which provides regular technical
updates, draws members' attention to forthcoming industry and regulatory
issues and advises on compliance obligations.
During the year, artificial intelligence ("AI") was identified as both an
opportunity and a possible risk in the absence of robust regulation, as IA and
the development of technological breakthroughs generally, might challenge the
markets, revenue and operations of portfolio companies to the extent that they
no longer offer the promise of returns consistent with the Company's
investment objective.
The Board works with the Investment Manager and other key service providers to
monitor developments concerning AI as its use evolves and to consider how it
might threaten the Company's activities, including a heightened threat to
cyber security. The Investment Manager's investment process includes
consideration of technological advancements and the resultant potential to
disrupt both individual companies and the wider markets.
Whilst it is not possible to mitigate all risks directly, the Board regularly
reviews the premium and discount levels and considers ways in which share
price performance may be enhanced to prevent MMIT becoming unattractive to
shareholders. The Investment Managers, Frostrow and the Brokers are in regular
contact with larger investors to ensure that MMIT's objective is still in line
with shareholders' objectives. There are also regular updates for all
shareholders by way of factsheets, annual and half-yearly reports and other
documentation on the Company's website.
Long-Term Viability Statement
In accordance with the UK Corporate Governance Code, the Directors have
carefully assessed the Company's position and prospects as well as the
principal risks stated abve and have formed a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities as they
fall due over the next three financial years. The Board has previously chosen
a five-year horizon in view of the long-term nature and outlook adopted by the
Investment Manager when making investment decisions. However, during the year
under review, the Board decided that a three-year horizon would be more
realistic in view of the three-yearly redemption option given to shareholders
which will be offered later in 2025 and again in 2028.
To make this assessment and in reaching this conclusion, the Audit Committee
has considered the Company's financial position and its ability to liquidate
its portfolio and meet its liabilities as they fall due:
· the portfolio is principally comprised of investments traded on
major international stock exchanges. Based on current trading volumes, 100% of
the current portfolio could be liquidated within 30 trading days with 96.1% in
seven days or less under normal market conditions and there is no expectation
that the nature of the investments held within the portfolio will be
materially different in future;
· the expenses of the Company are predictable and modest in
comparison with the assets and there are no capital commitments foreseen which
would alter that position; and
· the Company has no employees, only its non-executive Directors.
Consequently, it does not have redundancy or other employment related
liabilities or responsibilities.
The Audit Committee, as well as considering the potential impact of the
Company's principal risks above and various severe but plausible downside
scenarios, has also considered the following assumptions in considering the
Company's longer-term viability:
· there will continue to be demand for investment trusts;
· the Board and the Investment Manager will continue to adopt a
long-term view when making investments;
· the Company invests principally in the securities of listed
companies in emerging markets to which investors will wish to continue to have
exposure;
· regulation will not increase to a level that makes running the
Company uneconomical; and
· the performance of the Company will continue to be satisfactory.
The continuing uncertainty in the global economy, the ongoing wars in Ukraine
and Gaza, have contributed to supply chain disruption and ongoing inflationary
pressures worldwide. These were factored into the key assumptions made by
assessing their impact on the Company's key risks and whether the key risks
had increased in their potential to affect the normal, favourable and stressed
market conditions. As part of this review the Board considered the impact of a
significant and prolonged decline in the Company's performance and prospects.
This included a range of plausible downside scenarios such as reviewing the
effects of substantial falls in investment values and the impact of the
Company's ongoing charges ratio, which were the subject of stress testing and
reverse stress testing.
Furthermore, the Audit Committee again considered the operational resilience
of the Company's service providers, and thereby the operational viability of
the Company. During the year under review, and all key service providers were
contacted with regard to their business continuity systems as well as their IT
and cyber security systems to prevent fraudulent activity of any kind. Only
minor issues were raised and the Audit Committee was reassured that all key
service providers were operating well and to their normal high service
standards.
The Board has noted the upcoming redemption exercise with the redemption point
of 1 December 2025, which falls within the viability assessment period. The
Directors believe that this does not raise a material uncertainty on the going
concern or viability of the Company, having given consideration to the factors
below. The majority of shareholders decided to hold on to their shares
following the redemption exercise in November 2022, when redemption requests
had been received in respect of 2,767,334 ordinary shares or 2.54% of issued
share capital of these redemption requests, 1,356,317 ordinary shares were
matched with buyers and 1,411,017 ordinary shares were redeemed and cancelled
by the Company. Together with good investment performance since inception, the
Directors consider this to give a positive outlook towards this year's
redemption exercise as well as the one following in 2028. In addition, during
numerous shareholder meetings held by Frostrow and the Company's Brokers no
indication was given that investors might wish to turn away from MMIT and
disinvest.
The Directors confirm, therefore, that they have a reasonable expectation that
the Company will be able to continue in operation and meet its liabilities in
full over the coming three years.
Principal Service Providers
Investment Manager
MCP Emerging Markets LLP ("MCP") is the Alternative Investment Fund Manager
("AIFM") for the Company pursuant to an Investment Management Agreement dated
10 September 2018 (the "IMA"). The investment management fee payable to the
AIFM is calculated at an annual rate of 1.0% of the lower of (i) Net Asset
Value; and (ii) Market Capitalisation (the "Fund Value") up to and including
£500 million; of 0.85% of the Fund Value over £500 million and up to and
including £1 billion; and of 0.75% of the Fund Value over £1 billion. The
management fee is payable in arrears monthly. There are no provisions for the
payment of a performance fee.
The IMA may be terminated by either party by giving to the other not less than
12 months' notice in writing.
Manager, Company Secretary and Administrator
Frostrow Capital LLP ("Frostrow") acts as the Company's Operational Manager,
Company Secretary and Administrator. It is an independent provider of
services to the investment companies sector and currently has 15 investment
company clients of which eight are AIFM clients.
Company secretarial, marketing, and administrative services are provided by
Frostrow under an Administration and Management Services Agreement dated 10
September 2018.
A management service fee of 0.225% of the lower of (i) Net Asset Value and
(ii) Market Capitalisation (= the Fund Value) of the Company, charged monthly
in arrears, is payable, up to a Fund Value of £250 million. Frostrow's fees
will reduce from 0.225% to 0.20% on Fund Value of the Company in the range of
£250 million to £500 million, and to 0.175% on that part of the Fund Value
in excess of £500 million. The agreement may be terminated by either the
Company or Frostrow on six months' written notice.
Furthermore, Frostrow provides the AIFM Directive risk management function on
behalf of the AIFM under a delegation agreement with MCP. This delegation of
the risk management function may be terminated by either Frostrow or the AIFM,
MCP, on two months' written notice.
Further details of the fees payable to MCP and Frostrow are set out in note 3
to the Financial Statements.
Depositary and Custodian
Northern Trust Investor Services Limited is the Company's Depositary, having
been appointed by the Board and MCP with effect from 1 October 2021, taking
over from Northern Trust Global Services SE following the UK's departure from
the EU and an internal reorganisation within Northern Trust.
Under the Depositary Agreement, an annual fee of 0.015% per annum charged on
the Net Asset Value is payable, subject to a minimum annual fee of £25,000.
The Depositary Agreement may be terminated upon six months' written notice
from the Company or the Investment Manager to the Depositary or the Depositary
to the Company and the Investment Manager.
The Northern Trust Company provides global custody services to Mobius
Investment Trust plc.
Investment Manager and Administration Manager Evaluation and Re-Appointment
The review of the performance of MCP as Investment Manager and Frostrow as
Company Secretary and Administration Manager is a continuous process carried
out by the Board with a formal evaluation being undertaken each year by the
Management Engagement and Remuneration Committee, chaired by Gyula Schuch,
which makes a recommendation to the Board. As part of this process the Board
monitors the services provided by the Investment Manager and the Manager and
receives regular reports and views from them. The Board also receives
comprehensive performance measurement reports to enable it to determine
whether or not the performance objective set by the Board is being met.
The Board believes the continuing appointment of MCP and Frostrow, under the
terms described above, is in the interests of shareholders. In coming to this
decision, the Board also took into consideration the following additional
reasons:
· the quality and depth of experience of MCP and the level of
performance of the portfolio in absolute terms and relative to the Company's
peer group since launch; and
· the quality and depth of experience of the management,
administrative and company secretarial team that Frostrow allocates to the
Company.
Company Promotion
The Company has appointed Frostrow to promote the Company's shares to
professional investors in the UK. As investment company specialists, the
Frostrow team provides a continuous, pro-active marketing, distribution and
investor relations service that aims to promote the Company by encouraging
demand for the shares.
Frostrow actively engages with professional investors, typically discretionary
wealth managers, some institutions and a range of execution-only platforms.
Regular engagement helps to attract new investors and retain existing
shareholders and, over time, results in a stable share register made up of
diverse, long-term holders.
In this work, Frostrow is supported by Peel Hunt LLP, the Company's Brokers,
who also engage with investors via roadshows and meetings.
Frostrow arranges and manages a continuous programme of one-to-one meetings
with professional investors around the UK. These include regular meetings
with, the senior points of contact responsible for their respective
organisations' research output and recommended lists. The programme of regular
meetings also includes autonomous decision makers within large multi-office
groups, as well as small independent organisations. Some of these meetings
involve MCP, but most of the meetings do not, which means the Company is being
actively promoted while the Investment Manager concentrates on the portfolio.
The Company also benefits from involvement in the regular professional
investor seminars run by Frostrow in major centres, notably London and
Edinburgh, or webinars which are focused on buyers of investment companies.
During the year under review, a total of 219 meetings were held by Frostrow
without the manager, during which MMIT was discussed and a total of 25
investor meetings were held with the Investment Manager present. One investor
seminar was held in London during the year ended 30 November 2024, and for the
current year three investor seminars are being planned to be held in London,
Edinburgh and Dublin.
Additional investor meetings were also held through the Company's Broker, Peel
Hunt, throughout the year. The Board met with investors at the Investor Day
and at the Company's AGM.
Frostrow produces many key corporate documents including annual and
half-yearly reports. Company information and invitations to investor events,
including updates from the Investment Manager on portfolio and market
developments, are regularly emailed to a growing database, overseen by
Frostrow, consisting of professional investors across the UK.
Frostrow maintains close contact with all the relevant investment trust broker
analysts who publish and distribute research on the Company to their
respective professional investor clients and, during the year under review,
particularly those from Peel Hunt.
The Company continues to benefit from regular press coverage, with articles
appearing in respected publications that are widely read by both professional
and self-directed private investors. The latter typically buy their shares via
retail platforms, which account for a significant proportion of the Company's
share register.
Stakeholder Interests and Board Decision-Making (Section 172 Statement)
Under reporting regulations and the AIC Code, the Directors are required to
explain how they have discharged their duties under Section 172 of the
Companies Act 2006 in promoting the success of the Company for the benefit of
the members as a whole. This includes the likely consequences of the
Directors' decisions in the long term and how they have taken wider
stakeholders' needs into account.
The Directors aim to act fairly as between the Company's shareholders. The
Board's approach to shareholder relations is summarised in the Corporate
Governance Report. The Chairman's Statement provides an explanation of actions
taken by the Directors during the year to achieve the Board's long-term aim of
ensuring capital growth and income returns predominantly through investment in
a diversified portfolio of companies operating in emerging or frontier
markets.
As an externally managed investment trust, the Company has no employees,
customers, operations, or premises. Therefore, the Company's key stakeholders
(other than its shareholders) are considered to be its service providers. The
need to foster business relationships with the service providers and maintain
a reputation for high standards of business conduct are central to the
Directors' decision-making as the Board of an externally managed investment
trust. The Directors believe that fostering constructive and collaborative
relationships with the Company's service providers will assist in their
promotion of the success of the Company for the benefit of all shareholders.
The Board engages with representatives from its service providers throughout
the year. Representatives from MCP and Frostrow are in attendance at each
Board meeting. As the Investment Manager and the Company Secretary and
Administrator respectively, the services they provide are essential to the
long-term success of the Company.
Further details are set out overleaf:
Who? Why? How?
STAKEHOLDER
THE BENEFITS OF ENGAGING WITH
HOW THE BOARD, THE INVESTMENT MANAGER AND ADMINISTRATOR HAVE ENGAGED WITH THE
GROUP
THE COMPANY'S STAKEHOLDERS COMPANY'S STAKEHOLDERS
Investors Clear communication of the Company's strategy and the performance against the The Investment Manager, Frostrow and the Company's Broker, on behalf of the
Company's objective informs shareholders and the market in general and may Board, complete a programme of investor relations throughout the year.
raise new interest from potential investors, thereby increasing the liquidity
of MMIT's shares. An analysis of the Company's shareholder register is provided to the Directors
at each Board meeting along with marketing reports from Frostrow. The Board
New shares can be issued to meet demand without net asset value per share reviews and considers the marketing plans on a regular basis. Reports from the
dilution to existing shareholders. Increasing the size of the Company can Company's Broker are submitted to the Board on investor sentiment and industry
benefit liquidity as well as spread costs. issues.
In an effort to control the discount at which shares trade to their net asset Key mechanisms of engagement include:
value per share, the Company can buy back shares if the Board considers this
to be in the best interest of the Company and shareholders as a whole. Shares · the Annual General Meeting;
can either be held in "treasury" or cancelled. Any shares held in treasury can
later be sold back to the market if conditions permit. The Company does not · the Company's website which hosts reports, video interviews with
currently hold any shares in treasury nor has it undertaken any buybacks. the Investment Managers and monthly factsheets;
Once every three years, the Company also offers a redemption facility through · one-on-one investor meetings and online webinars;
which shareholders may request the redemption of all or part of their holding
of redeemable ordinary shares ("Ordinary Shares") for cash. · should any significant votes be cast against a resolution,
proposed at the Annual General Meeting, the Board will engage with
The next redemption point will be on 1 December 2025, with more information to Shareholders in order to understand the reasons behind the votes against;
be issued by the Board in due course.
· the Board will explain in its AGM results announcement the
actions it intends to take to consult with shareholders in order to understand
the reasons behind any significant votes against resolutions; and
· following the consultation, an update will be published no later
than six months after the AGM and the Annual Report will detail the impact the
Shareholder feedback has had on any decisions the Board has taken and any
actions or resolutions proposed.
At each meeting the Board reviews movements in the Company's shareholder
register. There are regular interactions and engagement with shareholders,
including at the AGM. Regular feedback from shareholders is received from
Frostrow and the Company's Broker.
Investment Manager Engagement with the Company's Investment Manager is essential to assess its The Board meets regularly with the Company's Investment Manager throughout the
performance against the Company's stated strategy and to understand any risks year both formally at the scheduled Board meetings and informally as needed.
or opportunities that may arise. Through regular reviews with the Investment The Board also receives monthly performance and compliance reporting.
Manager, the Board ensures that the portfolio companies remain financially
sound and have strong growth prospects. These reviews also enable the Board to The Board further receives regular updates from the Investment Manager
verify that MCP's environmental, social and governance ("ESG") practices are concerning engagement on ESG+C(®) matters with the companies within the
in line with industry standards and meet the Board's expectations. It also portfolio.
serves to closely monitor investment management costs to ensure they remain
competitive. The Investment Manager's attendance at each Board meeting provides the
opportunity for the Investment Manager and Board to further reinforce their
mutual understanding of what is expected from both parties.
Service Providers The Company contracts with third parties for other services including: The Board and Frostrow engage regularly with other service providers both in
depositary, investment accounting & administration as well as company one-to-one meetings and via regular written reporting. Representatives from
secretarial and registrars. The Company ensures that the third parties to whom service providers are asked to attend Board and Audit Committee meetings when
the services have been outsourced complete their roles in line with their deemed appropriate. This regular interaction provides an environment where
service level agreements, thereby supporting the Company in its success and topics, issues and business development needs can be dealt with efficiently.
ensuring compliance with its obligations.
Portfolio Companies Engagement with portfolio companies enables a comprehensive understanding of Active engagement on ESG+Culture issues with the aim of improving operations,
their business models, financial strengths and strategic objectives. Close ESG-standards and performance, and thereby catalysing a re-rating of the
interaction with management over time fosters a strong stakeholder investee's stock price, lies at the heart of the Investment Manager's
relationship that serves as an effective risk management tool. In addition, strategy. The Investment Manager individually tailors engagement on ESG+C(®)
integrating environmental, social and governance (ESG) considerations into the issues to the portfolio company and its respective sector. In addition to ESG
investment process provides invaluable insights for risk assessment and factors, MCP places a high emphasis on understanding a company's corporate
mitigation. culture. The Board strongly supports the team in this undertaking and has been
keeping in close and regular contact with the Investment Manager to understand
the progress portfolio holdings are making along their individual action
plans.
Regular visits or video calls are being undertaken between the Investment
Managers and portfolio companies.
On the occasion of the 2024 Investor Day, two portfolio companies - Classys
and 360 One Wam - were invited to present their respective businesses to
shareholders, and talk about their experience of working with the MCP team on
improving ESG+C(®) issues.
What? Outcomes and actions
WHAT WERE THE KEY TOPICS
WHAT ACTIONS WERE TAKEN, INCLUDING PRINCIPAL DECISIONS?
OF ENGAGEMENT?
Key topics of engagement with investors
· Ongoing dialogue with shareholders concerning the strategy of the · The Investment Managers, Frostrow and the Broker meet regularly
Company, performance, the portfolio and ESG issues. with shareholders and potential investors to discuss the Company's strategy,
performance, the portfolio and any ESG+Culture issues which might be raised.
· Impact of market volatility on the performance of the Company.
· Shareholders are provided with performance updates via the
· Share price performance and the widening of investment company Company's website as well as the usual financial reports and monthly
sector discounts. factsheets.
· The Board reviews the Company's share price discount/premium on a
regular basis and has share buy-back and issuance policies as well as a
redemption facility by which investors may redeem their shares every three
years. The next redemption opportunity will be offered to shareholders later
in the year.
Key topics of engagement with the Investment Manager on an ongoing basis
· Portfolio composition, performance, outlook and business updates · Updates are received by the Board at every Board meeting.
as well as ESG engagement with portfolio companies.
· The Board is kept well informed about the team composition at MCP
· Team composition. and the Investment Manager gives regular updates on new team members.
· The impact of market volatility upon the portfolio. · The unique network of external experts and consultants in
Emerging Markets built over decades of investing in this space enables the
Investment Manager to buy in project-specific, high-quality know-how while
allowing the core team to remain lean, agile and highly motivated.
· The Board has received regular updates from the Investment
Manager throughout the year.
Key topics of engagement with
Other Service Providers
· The Directors have frequent engagement with the Company's other · During the year, the service providers' business resilience was
service providers through the annual cycle of reporting and due diligence discussed as well as service levels.
meetings or site visits by Frostrow. This engagement is completed with the aim
of maintaining an effective working relationship and oversight of the services · Reviews of the Company's service providers during the year have
provided. been positive and the Directors believe that their continued appointment is in
the best interests of the Company.
· Following a competitive tender, Johnston Carmichael LLP was
appointed as MMIT's new Auditor. · During the year the Audit Committee led a competitive audit
tender process, which resulted in the recommendation that Johnston Carmichael
LLP be appointed as the Company's new auditor.
· The Audit Committee met with Johnston Carmichael LLP to review
the audit plan for the year, agree its remuneration, review the outcome of the
annual audit and to assess the quality and effectiveness of the audit process.
Further information can be found in the Audit Committee Report.
Key topics of engagement with
Portfolio Companies
The Investment Managers, on behalf of the Board, have engaged with a number of · The Investment Managers are aware that trusts perceived to be
portfolio companies: falling behind in ESG and climate change concerns will be downrated by
investors. This issue therefore makes up an important part of the risk
· in order to address business matters and to understand the risks assessment when looking at possible investments.
faced by portfolio companies and how they can be addressed.
· For the Investment Managers good governance is the best way to
· in order to achieve good governance overall, as good governance ensure best value for shareholders. To this end, environmental and social
means that board and management of portfolio companies are aware and proactive factors as well as governance are discussed in meetings with managements.
in their approach to all environmental and social issues.
Responsible and Sustainable Investing
The Board recognises that the most direct way for the Company to have an
impact on Environmental, Social and Governance ("ESG") issues is through the
responsible ownership of its investments.
It has delegated authority to its Investment Manager to engage actively with
the management of investee companies and encourage that high standards of ESG
practice are adopted and that high standards of corporate governance and
corporate responsibility are maintained. More information is given in the
Investment Manager's Review.
The Investment Manager's customised engagement acts as one of the key features
in the investment process and includes an Action Plan targeted at ESG and
operational issues identified in the individual holdings. The Investment
Manager believes this customised engagement will lead to an enhancement in
ESG+C(®) positioning, operational improvements, and attractive returns to
investors following a stock rerating. Throughout the year, the Board followed
the progress on engagement closely.
The Investment Manager's ESG+C(®) Policy
The Investment Manager's ESG Policy can be found on their website at
https://mcp-em.com/en and it explains how ESG and corporate culture factors
are being assessed all through the investment process as follows:
· an initial recommendation by the Investment Committee;
· establishment of an ESG+C(®) action plan and engagement with
companies;
· monitoring, measuring and reporting ESG+C(®) improvement; and
· exercising voting rights.
In particular, the ESG Policy states that MCP are strongly convinced that
companies with higher ESG standards generally have a lower cost of capital,
more efficient operational performance, greater protection of minority
investors' interests, lower business risk and higher shareholder
distributions, all of which positively influence a company's valuation. The
Investment Manager's 2024 Stewardship Report can be found on
https://www.mobiusinvestmenttrust.com which provides a detailed overview of
the Manager's:
· engagement policy and breakdown;
· ESG monitoring, measuring and reporting; and
· voting policy, activity and outcomes.
Quarterly ESG factsheets can also be found on the Investment Managers'
website, giving a breakdown of investment companies' disclosure of
· environmental targets such as environmental reporting,
quantitative environmental targets and Carbon Disclosure Project Portfolio
Company scores. The Carbon Disclosure Project increases environmental
transparency and accountability of companies and enables progress tracking.
The scoring ranges from A, A-to B, B-to C, C-to D,
D-and F.
· social targets such as employee training initiatives and
reporting on Sustainable Development Goals in the fields of Industry,
Innovation and Infrastructure, Good Health and Wellbeing, and Decent Work and
Economic Growth.
· governance targets such as gender equality and female directors,
Board independence, sustainability reporting, Global Reporting Initiative
Compliant reporting, dedicated Investor Relations professionals and others.
· corporate culture targets such as a Code of Conduct, share option
schemes, non-financial employee benefits,
anti-corruption and whistleblower policies, dedicated sustainability
professionals and gender equality among C-level executives.
Taskforce for Climate-Related Financial Disclosures ("TCFD")
The Company notes the TCFD recommendations on climate-related financial
disclosures. The Company is an investment trust with no employees, internal
operations or property and, as such, it is exempt from the Listing Rules
requirement to report against the TCFD framework.
The Investment Manager reports on portfolio companies' Carbon Disclosure
Project (CDP) Scores as part of their quarterly ESG+C reporting. CDP's
disclosure platform provides the mechanism and a first step towards reporting
in line with the TCFD recommendations. In addition, the team engages with
every portfolio holding on the adoption of the TCFD recommendations.
The risks associated with climate change represent an increasingly important
issue and the Board and the Investment Manager is aware the transition to a
low-carbon economy will affect all businesses, irrespective of their size,
sector or geographic location. Therefore, no company's revenues are immune and
the assessment of such risks must be considered within any effective
investment approach.
Integrity and Business Ethics
The Company is committed to carrying out business in an honest and fair
manner. In carrying out its activities, the Company aims to conduct itself
responsibly, ethically and fairly, including in relation to social and human
rights issues.
The Board has adopted a zero-tolerance approach to instances of bribery and
corruption. Accordingly, it expressly prohibits any Director or associated
persons when acting on behalf of the Company from accepting, soliciting,
paying, offering or promising to pay or authorise any payment, public or
private, in the United Kingdom or abroad to secure any improper benefit from
themselves or for the Company.
The Board applies the same standards to its service providers in their
activities for the Company.
A copy of the Company's Anti Bribery and Corruption Policy can be found in the
Corporate Information section of the Company's website on
www.mobiusinvestmenttrust.com. The policy is reviewed annually by the Audit
Committee.
In response to the implementation of the Criminal Finances Act 2017, the Board
also adopted a zero-tolerance approach to the criminal facilitation of tax
evasion. A copy of the Company's policy on preventing the facilitation of tax
evasion can be found in the Corporate Information section of the Company's
website www.mobiusinvestmenttrust.com. The policy is reviewed annually by the
Audit Committee.
The Board's expectations are that its principal service providers have
appropriate governance policies in place.
Modern Slavery Act 2015
The Company does not provide goods or services in the normal course of
business, and as a financial investment vehicle does not have customers. The
Directors do not therefore consider that the Company is required to make a
statement under the Modern Slavery Act 2015 in relation to slavery or human
trafficking.
The Company's suppliers are typically professional advisers and the Company's
supply chains are considered to be low risk in this regard.
In light of the nature of the Company's business there are no relevant human
rights issues and the Company does not have a human rights policy.
Looking to the Future
The Board concentrates its attention on the Company's investment performance
and MCP's investment approach and on factors that may have an effect on this
approach.
The Board monitors the performance of the Company's net asset value compared
with its peer group.
The Board is regularly updated by Frostrow Capital LLP and Peel Hunt LLP on
wider investment trust industry issues and regular discussions are held
concerning the Company's future development and strategy.
A review of the Company's year ended 30 November 2024, its performance and the
outlook for the Company can be found in the Chairman's Statement and in the
Investment Manager's Review.
The Company's overall strategy remains unchanged.
For and on behalf of the Board of Directors
Maria Luisa Cicognani
Chairman
10 March 2025
Governance
BOARD OF DIRECTORS
Maria Luisa Cicognani
Independent Non-Executive Chairman
Appointed to the Board on 5 September 2018
Remuneration per annum: £40,000 (Information as at 30 November 2024)
Shareholding in the Company: 72,927*
Skills and Experience:
Maria Luisa has over 30 years' experience with significant knowledge of the
banking sector, emerging markets and corporate governance issues. Between 1993
and 2005, she worked at the European Bank for Reconstruction and Development,
ultimately as Head of the Bank Equity group, before holding senior positions
with Merrill Lynch and Renaissance Capital, Mediobanca, Azimut Global
Counselling in Italy and Azimut International Holding in Luxembourg. Since
2016 she has been senior adviser to a number of financial institutions and
investors as well as non-executive director in listed companies.
Maria Luisa holds a magna cum laude Bachelor's degree in Business and
Administration from Bocconi University in Italy and a Master's degree in
Japanese Economy and Business from the International University of Japan.
Other Appointments:
Maria Luisa is non-executive chairman of Concrete Fashion Group listed on the
Egyptian Stock Exchange in Cairo and a non-executive director of Eurizon
Capital SgR, and of Intesa San Paolo Holding S.A. Luxembourg.
Standing for re-election:
Yes
Christopher Casey
Independent Non-Executive Director and Chairman of the Audit Committee
Appointed to the Board on 5 September 2018
Remuneration per annum: £35,000 (Information as at 30 November 2024)
Shareholding in the Company: 10,000*
Skills and Experience:
Christopher has extensive experience as a non-executive director and audit
committee chairman of public companies, in particular investment trusts.
Previously he was chairman (formerly audit committee chairman) of China
Polymetallic Mining Limited until 2016, audit committee chairman of Latchways
plc until 2015, audit committee chairman of Eddie Stobart Logistics plc until
August 2020, audit committee chairman of BlackRock Sustainable American
Investment Trust plc until March 2023 and chairman of The European Smaller
Companies Trust plc until November 2024.
Christopher's career spans over 40 years and he was previously an audit
partner at KPMG. He graduated from Oxford University in 1977 with a degree in
Politics, Philosophy and Economics.
Other Appointments:
Christopher is also a non-executive director and audit committee chairman of
Life Settlements Assets plc, non-executive director and chairman of CQS
Natural Resources Growth and Income PLC and non-executive director of Fidelity
Special Values plc.
Standing for re-election:
No
Gyula Schuch
Independent Non-Executive Director, Chairman of the Management Engagement and
Remuneration Committee and Senior Independent Director
Appointed to the Board on 1 June 2022
Remuneration per annum: £30,000 (Information as at 30 November 2024)
Shareholding in the Company: none*
Skills and Experience:
Gyula has over 25 years' experience in investment banking. Formerly, he was
Managing Director of EEMEA and LATAM Equities at HSBC Bank plc, Global Banking
and Markets in London and Managing Director and Co-Head of EEMEA and LATAM
Equities at HSBC Securities (USA) Inc in New York. Previously, he worked for
HVB Capital Markets New York and CA-IB Securities New York Inc. as well as
being Equity Partner at Ithuba Capital, a management-owned investment bank and
regional advisory firm with headquarters in Vienna.
He holds a Master of Business Administration degree from the University of
Business Administration and Economics in Vienna.
Other Appointments:
Gyula is a partner of Vienna Capital Partners and a member of the investment
advisory board of Rubellius Capital AG in Zurich.
He is also a director of Pomega Inc. in the US.
Standing for re-election:
Yes
Diana Dyer Bartlett
Independent Non-Executive Director
Appointed to the Board with effect from 17 March 2025 Remuneration per annum:
£30,000 (For the year ending 30 November 2025. This will rise to £36,050 per
annum once Diana becomes Chair of the Audit Committee.)
Shareholding in the Company: none
Skills and Experience:
After qualifying as a chartered accountant with Deloitte Haskins & Sells,
Diana spent five years in investment banking with Hill Samuel. Since then, she
has held a number of executive roles including as finance director of various
venture capital and private equity backed businesses and listed companies
involved in software, financial services, renewable energy and coal mining.
She was also Company Secretary of Tullett Prebon plc and Collins Stewart
Tullett plc. She previously also held positions as non-executive director and
chair of the audit committee at SmartSpace Software plc (2013-2021) and
Rutherford Health plc (2019-2020).
Other Appointments:
Diana is a non-executive director and audit committee chairman of Smithson
Investment Trust plc and Mid Wynd International Investment Trust plc as well
as a senior non-executive director and audit and risk committee chairman of
Schroder British Opportunities Trust plc. She is also audit committee chairman
(but not a director) of Castle Water Limited.
Standing for election:
Yes
REPORT OF THE DIRECTORS
The Directors present this Annual Report on the affairs of the Company
together with the audited financial statements and the Independent Auditor's
Report for the year ended 30 November 2024.
In accordance with the requirement for the Directors to prepare a Strategic
Report and an enhanced Directors' Remuneration Report for the year ended 30
November 2024, the following information is set out in the Strategic Report: a
review of the business of the Company including details of its objective,
strategy and business model, future developments, details of the principal
risks and uncertainties associated with the Company's activities (including
the Company's financial risk management objectives and policies), information
regarding community, social, employee and human rights and environmental
issues.
Information about Directors' interests in the Company's ordinary shares is
included within the Annual Report in the Remuneration section of the
Directors' Remuneration Report.
The Corporate Governance Statement forms part of this Directors' Report.
Business and Status of the Company
The Company is registered as a public limited company in England and Wales
(Registered Number: 11504912) and is an investment company within the terms of
Section 833 of the Companies Act 2006 (the "Act"). Its ordinary shares are
admitted to the closed-ended investment funds category of the Official List of
the FCA and traded on the main market of the London Stock Exchange.
The principal activity of the Company is to carry on business as an investment
trust. The Company has been granted approval from HM Revenue & Customs as
an investment trust under sections 1158 and 1159 of the Corporation Taxes Act
2010. The Company will be treated as an investment trust company subject to
the Company's continued compliance with applicable laws and regulations. The
Directors do not envisage any change in this activity in the future.
The Company is a member of the Association of Investment Companies ("AIC").
Alternative Performance Measures
The Financial Statements set out the required statutory reporting measures of
the Company's financial performance. In addition, the Board assesses the
Company's performance against a range of criteria which are viewed as
particularly relevant for investment trusts, which are summarised and
explained in greater detail in the Strategic Report, under the heading 'Key
Performance Indicators'.
The Directors believe that these measures enhance the comparability of
information between reporting periods and aid investors in understanding the
Company's performance. The measures used for the year under review have
remained consistent with the prior period.
Definitions of the terms used and the basis of calculation adopted are set out
in the Glossary.
Annual General Meeting ("AGM")
THE FOLLOWING INFORMATION TO BE DISCUSSED AT THE FORTHCOMING ANNUAL GENERAL
MEETING IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt about the action you should take, you should seek
advice from your stockbroker, bank manager, solicitor, accountant or other
financial adviser authorised under the Financial Services and Markets Act 2000
(as amended). If you have sold or transferred all of your ordinary shares in
the Company, you should pass this document, together with any other
accompanying documents, including the form of proxy, at once to the purchaser
or transferee, or to the stockbroker, bank or other agent through whom the
sale or transfer was effected, for onward transmission to the purchaser or
transferee.
The following Special Resolutions will be proposed at the forthcoming AGM.
Resolution 9: Authority to allot shares up to approximately 20% of the
ordinary shares in issue.
Resolution 10: Authority to issue new shares or sell shares from Treasury for
cash, up to approximately 20% of the Company's issued ordinary shares at a
price per share not less than the net asset value per share, and to disapply
pre-emption rights in respect of those shares.
Resolution 11: Authority to buy back up to 14.99% of shares in issue at the
time of the AGM, either for cancellation or for placing into Treasury.
Resolution 12: Authority to hold general meetings (other than AGMs) on at
least 14 days' notice.
The full text of the resolutions can be found in the Notice of Annual General
Meeting at the end of this document. Explanatory notes regarding the
resolutions can be found following the Notice of Annual General Meeting.
Ordinary resolutions require that more than 50% of the votes cast at the
relevant meeting be in favour of the resolution for it to be passed. Special
resolutions require that at least 75% of the votes cast be in favour of the
resolution for it to be passed.
Recommendation
The Directors consider that all the resolutions to be proposed at the AGM are
in the best interests of the Company and its members as a whole. The Directors
unanimously recommend that shareholders vote in favour of all the resolutions,
as they intend to do in respect of their own beneficial holdings, details of
which are set out in the Directors' Remuneration Report.
AGM Arrangements
The AGM will be held on Thursday, 15 May 2025. In case of any problems,
arrangements will be made for shareholders to attend via a webinar, view the
Investment Manager's presentation online and ask questions in advance.
Shareholders are encouraged to view the Company's website,
www.mobiusinvestmenttrust.com for further information nearer the time.
Questions can be submitted to the Company Secretary at info@frostrow.com.
Shareholders are strongly encouraged to exercise their votes in respect of the
meeting in advance by returning their forms of proxy. This will ensure that
all shareholders' votes are registered in the event that attendance is not
possible or restricted or if the meeting is postponed. Further details about
the voting process can be found in the Notice of Meeting.
Articles of Association
Amendment of the Company's Articles of Association requires a special
resolution to be passed by shareholders.
Directors
The current Directors of the Company are Maria Luisa Cicognani, Christopher
Casey and Gyula Schuch. All Directors served as Directors throughout the year
to 30 November 2024 and up to the date of this report.
No other person was a director during any part of the year or up to the
approval of this report.
With effect from 17 March 2025, Diana Bartlett will join the Board as an
independent non-executive Director.
Directors' Conflicts of Interest
Directors report on actual or potential conflicts of interest at each Board
meeting. Any Director with a potential conflict would be excluded from any
related discussion.
Directors' and Officers' Liability Insurance Cover
Directors' and Officers' liability insurance cover was maintained by the Board
during the year ended 30 November 2024. It is intended that this policy will
continue for the year ending 30 November 2025 and subsequent years.
Directors' Indemnities
Subject to the provisions of applicable UK legislation, the Company provides
an indemnity for Directors in respect of costs incurred in the defence of any
proceedings brought against them and also liabilities owed to third parties,
in either case arising out of their positions as Directors of the Company.
This was in place throughout the financial year under review and up to the
date of the approval of this report. The indemnities are qualifying third
party provisions for the purposes of the Companies Act 2006.
A copy of each deed of indemnity is available for inspection at the Registered
Office of the Company during normal business hours and will be available for
inspection at the Annual General Meeting.
Directors' Fees
Reports on Directors' Remuneration and also the Directors' Remuneration Policy
are set out below.
Appointment and Replacement of Directors
Unless otherwise determined by the Company by ordinary resolution, the number
of Directors shall not be less than two.
Directors' Interests
The beneficial interests in the Company of the Directors, and of the persons
closely associated with them, are set out in the Directors' Remuneration
Report.
Capital Structure
As at 30 November 2024 there were 115,420,336 redeemable ordinary shares of 1p
each (2023: 115,420,336 ordinary shares) and 50,000 management shares of £1
each in issue.
All ordinary shares rank equally for dividends and distributions. Each
shareholder is entitled to one vote on a show of hands and, on a poll, to one
vote for every ordinary share held. Details of the substantial holders of
ordinary shares in the Company are listed below.
The management shares do not carry a right to receive notice of, or attend or
vote at, any general meeting of the Company unless no other shares are in
issue at that time. The management shares are entitled to receive, in priority
to any payment of a dividend on any other class of share, a fixed cumulative
dividend of 0.01% per annum on their nominal amount. On a return of capital
(including on a winding up) the holders of the management shares shall only
receive an amount up to the capital paid up on such management shares. The
management shares are not redeemable.
There are no restrictions concerning the transfer of ordinary shares in the
Company; no special rights with regard to control attached to ordinary shares;
no restrictions on voting rights; no agreements between holders of ordinary
shares regarding their transfer known to the Company; and no agreements which
the Company is party to that might affect its control following a successful
takeover bid.
Details of the voting rights in the Company's shares at the date of this
Annual Report are given in Note 2 to the Notice of the Annual General Meeting.
Share Issues and Buybacks
The Directors currently have the authority to issue shares up to an aggregate
nominal amount equal to 20% of the issued share capital of the Company. They
also have the authority to issue shares, or sell Treasury shares, up to an
aggregate nominal amount equal to 20% of the issued share capital for cash,
without pre-emption rights applying. These authorities will expire at the AGM
to be held on 15 May 2025, when resolutions to renew them will be proposed.
Furthermore, at the last AGM held on 23 April 2024, the Directors were granted
authority to repurchase up to 17,031,508 Ordinary shares, being 14.99% of the
Company's issued share capital. This authority will also expire at the
forthcoming AGM, when a resolution to renew it will be proposed.
As set out in MMIT's prospectus, the Company may buy back shares when the
share price discount to the net asset value per share rises above 5%, at the
Board's discretion. The Company's share issuance policy allows the issuance of
new shares at a small premium to the net asset value per share on a regular
basis acting as a premium management tool.
As at 30 November 2024, the number of ordinary shares in issue was
115,420,336. No ordinary shares were issued during the year and no shares were
bought back.
Since the year-end no further Ordinary Shares were issued and no shares were
bought back.
Treasury Shares
The Company may make market purchases of its own shares for cancellation or
for holding in Treasury where it is considered by the Board to be cost
effective and positive for the management of the Company's capital base to do
so. During the year, and since the year end, no shares were purchased for, or
held in, Treasury.
Shares would only be re-issued from Treasury at a price representing a premium
to net asset value per share.
Redemption Facility
As set out in the prospectus, the Company has a redemption facility through
which shareholders are entitled to request the redemption of all or part of
their holding of ordinary shares on a periodic basis. The first redemption
point for the ordinary shares was on 30 November 2022 and each subsequent
redemption point will fall on 30 November every third year thereafter. In
2025, as the 30 November falls on a Sunday, the redemption point will be on 1
December 2025. Shareholders submitting valid requests for the redemption of
Ordinary Shares will have their shares redeemed at the Redemption Price. The
Company may, prior to the Redemption Point, in its sole discretion, invite
investors to purchase Ordinary Shares which are the subject of Redemption
Requests pursuant to a matched bargain facility. In addition, the Company may,
subject to law and regulation, purchase Ordinary Shares which are the subject
of Redemption Requests on-market via an intermediary pursuant to an existing
shareholder authority. The price at which such transfers or purchases will be
made will not be less than the Redemption Price which the Shareholder
requesting redemption would have received if the Redemption Price had been
determined by reference to the Dealing Value per Ordinary Share applicable on
the relevant Redemption Point. Shareholders will be notified after the
Redemption Point whether their Ordinary Shares have been redeemed by the
Company under the redemption facility at the Redemption Price or sold to
incoming investors under the matched bargain facility or purchased by the
Company. The Directors have absolute discretion to operate the periodic
redemption facility on any given Redemption Point and to accept or decline in
whole or part any redemption request.
During the redemption exercise in 2022, redemption requests in respect of a
total of 2,767,334 ordinary shares were received, representing 2.54% of issued
share capital at the time. Of these redemption requests, 1,356,317 ordinary
shares were matched with buyers and sold at the redemption price and 1,411,017
ordinary shares were redeemed and cancelled by the Company.
The terms of the redemption facility are set out in the Company's Articles of
Association and were summarised in the Company's IPO prospectus.
In early October 2025, and roughly four weeks ahead of the deadline for
submitting redemption requests, the Company expects to issue a regulatory
announcement reminding shareholders of the upcoming redemption point and
setting out the process for redemption.
The Board and the Investment Managers believe that the Company's investment
case remains highly compelling and therefore will not redeem their shares.
Substantial Interests in Share Capital
As at 30 November 2024 and 28 February 2025, being the latest practicable date
before publication of the Annual Report, the Company was aware of the
following substantial interests in the voting rights of the Company:
30 November 2024*
Number of % of issued
ordinary share
Shareholder shares held capital
City of London Investment
Management 13,170,400 11.41
1607 Capital Partners 10,197,123 8.84
Interactive Investor (EO) 7,753,650 6.71
Hargreaves Lansdown,
stockbrokers (EO) 7,573,784 6.57
CG Asset Management 6,924,485 5.99
Joseph Bernhard
Mark Mobius 6,531,382 5.66
Connor Broadley 4,778,235 4.14
Columbia Threadneedle
Investments 4,600,000 3.99
A.I.M Overseas PTC 3,918,249 3.39
JM Finn, stockbrokers 3,709,268 3.22
EO = Execution only
*Source: RD:IR Investor Relations Services
28 February 2025*
Number of % of issued
ordinary share
Shareholder shares held capital
City of London Investment
Management 15,089,279 13.07
1607 Capital Partners 8,886,743 7.70
CG Asset Management 7,709,485
6.68
CG Asset Management 7,709,485
Interactive Investor (EO) 7.489,208 6.49
Hargreaves Lansdown,
stockbrokers (EO) 7,355,883 6.37
Joseph Bernhard Mark Mobius 6,531,382 5.66
Columbia Threadneedle
Investments 4,300,000 3.73
A.I.M Overseas PTC 3,914,369 3.39
JM Finn, stockbrokers 3,643,724 3.16
EO = Execution only
*Source: RD:IR Investor Relations Services
Interest of the lead investment manager in the shares of the Company as at 30
November 2024:
Carlos Hardenberg 1,193,450 1.03%
Beneficial Owners of Ordinary Shares - Information Rights
The beneficial owners of ordinary shares who have been nominated by the
registered holder of those shares to receive information rights under Section
146 of the Companies Act 2006 are required to direct all communications to the
registered holder of their shares rather than to the Company's registrar,
Computershare, or to the Company directly.
Political Donations
The Company has not made any political donations in the past, nor does it
intend to do so in the future.
Corporate Governance
The Corporate Governance report, which includes the Company's Corporate
Governance policies is set out below.
Global Greenhouse Gas Emissions for the Year ended 30 November 2024
The Company is an investment trust, with neither employees nor premises, nor
has it any financial or operational control of the assets which it owns. It
has no greenhouse gas emissions to report from its operations nor does it have
responsibility for any other emissions producing sources under the Companies
Act 2006 (Strategic Report and Directors' Report) Regulations 2013, including
those within the Company's underlying investment portfolio. Consequently, the
Company consumed less than 40,000 kWh of energy during the year in respect of
which the Directors' Report is prepared and therefore is exempt from the
disclosures required under the Streamlined Energy and Carbon Reporting
criteria.
Common Reporting Standard ("CRS")
CRS is a global standard for the automatic exchange of information
commissioned by the Organisation for Economic Cooperation and Development and
incorporated into UK law by the International Tax Compliance Regulations 2015.
CRS requires the Company to provide certain additional details to HMRC in
relation to certain shareholders. The reporting obligation began in 2016 and
will be an annual requirement going forward. The Registrars, Computershare
Investor Services, have been engaged to collate such information and file the
reports with HMRC on behalf of the Company.
UK Listing Rule 6.6.6
UK Listing Rule 6.6.6 requires the Company to include certain information,
more applicable to traditional trading companies, in a single identifiable
section of the Annual Report or a cross reference table indicating where the
information is set out. The Directors confirm that there are no disclosures to
be made in this regard.
Going Concern
The content of the Company's portfolio, trading activity, the Company's cash
balances and revenue forecasts, and the trends and factors likely to affect
the Company's performance are reviewed and discussed at each Board meeting.
The Board has considered a detailed assessment of the Company's ability to
meet its liabilities as they fall due, including stress tests and reverse
stress tests which modelled the effects of substantial falls in markets and
significant reductions in market liquidity on the Company's NAV, its cash
flows and its expenses. Further information is provided in the Audit Committee
report.
Based on the information available to the Directors at the date of this
report, including the results of these stress tests, the conclusions drawn in
the Viability Statement, the Company's cash balances, and the liquidity of the
Company's listed investments, the Directors are satisfied that the Company has
adequate financial resources to continue in operation for a period of at least
the next 12 months from when the Financial Statements are authorised for issue
and that, accordingly, it is appropriate to continue to adopt the going
concern basis in preparing the financial statements.
The Directors have also considered the fact that shareholders will again be
offered a redemption facility later this year, with the option to either
retain or redeem their investment. However, in view of the solid performance
of the Company since inception, it is the Board's view that the redemption
does not create a material uncertainty on going concern. In addition, during
numerous shareholder meetings held by Frostrow and the Company's Brokers
during the year, no indication was given that shareholders might wish to turn
away from MMIT.
In reaching these conclusions and those in the Viability Statement, the stress
testing conducted also featured consideration of the long-term effects of the
continuing uncertainty created by the increase in global inflation and higher
interest rates, together with the consequences of the wars in Ukraine and Gaza
and the subsequent long-term effects on economies and international relations.
UK Sanctions
The Board has made due diligence enquiries of the service providers that
process the Company's shareholder data to ensure the Company's compliance with
the UK sanctions regime. The relevant service providers have confirmed that
they check the Company's shareholder data against the UK sanctions list on a
regular basis. At the date of this report, no sanctioned individuals had been
identified on the Company's shareholder register. The Board notes that
stockbrokers and execution-only platforms also carry out their own due
diligence.
Independent Auditor
Following an audit tender undertaken between May and August 2024,
PricewaterhouseCoopers LLP tendered its resignation under Sections 516 and 519
of the Companies Act 2006 and confirmed that there were no reasons for its
resignation other than the Company wishing to appoint a different auditor. On
the recommendation from the Audit Committee, the Board of MMIT appointed
Johnston Carmichael LLP as the Company's new Auditor with effect from
20 August 2024. This appointment was announced on 8 August 2024. Resolutions
to confirm Johnston Carmichael LLP as the Company's auditor and authorise the
Audit Committee to determine its remuneration will be proposed at the
forthcoming Annual General Meeting. Further details of the audit tender are
included in the Chairman's Statement and the Report of the Audit Committee.
Statement of Disclosure of Information to the Auditor
As far as the Directors are aware, there is no relevant information (as
defined in the Companies Act 2006) of which the Company's auditor is unaware.
The Directors have taken all steps they ought to have taken to make themselves
aware of any relevant audit information and to establish that the auditor is
aware of such information.
Other Statutory Information
The following information is disclosed in accordance with the Companies Act
2006:
· The rules on the appointment and replacement of directors are set
out in the Company's Articles of Association (the "Articles"). A change to
the Articles would be governed by the Companies Act 2006.
· Subject to the provisions of the Companies Act 2006, to the
Articles, and to any directions given by special resolution, the business of
the Company shall be managed by the Directors who may exercise all the powers
of the Company. The powers shall not be limited by any special powers given to
the Directors by the Articles and a meeting of the Directors at which a quorum
is present may exercise all the powers exercisable by the Directors. The
Directors' powers to buy back and issue shares, in force at the end of the
year, are recorded in the Directors' Report.
There are no agreements:
(i) to which the Company is a party that might affect its control
following a takeover bid; and/or
(ii) between the Company and its Directors concerning compensation for
loss of office.
By order of the Board
Frostrow Capital LLP
Company Secretary
10 March 2025
CORPORATE GOVERNANCE
The Board and Committees
Responsibility for effective governance lies with the Board. The governance
framework of the Company reflects the fact that as an investment company it
has no employees and outsources portfolio management to MCP Emerging Markets
LLP and Company management, company secretarial, marketing and administrative
services to Frostrow Capital LLP.
The Board
Independent Chairman - Maria Luisa Cicognani
Two additional non-executive Directors, all considered independent.
The Board has appointed Gyula Schuch as Senior Independent Director.
Key responsibilities:
· to provide leadership and set strategy, values and standards
within a framework of prudent effective controls which enable risk to be
assessed and managed;
· to ensure that a robust corporate governance framework is
implemented; and
· to challenge constructively and scrutinise the performance of all
outsourced activities.
Management Engagement and Remuneration Audit Committee
Committee
Chairman
Chairman
Christopher Casey*(#)
Gyula Schuch
All Independent Directors
All Independent Directors
(The Chairman of the Board is also a member of the Committee)
Key responsibilities:
Key responsibilities:
· to review regularly the contracts, performance and remuneration
of the Company's principal service providers; · to monitor the integrity of the Company's Annual Report and
financial statements and of the half-yearly report;
· to set the remuneration policy of the Company; and
· to oversee the risk and control environment and financial
· to determine and agree with the Board the remuneration of the reporting; and
Directors. Where appropriate, the Committee will consider both the need to
judge the position of the Company relative to other companies regarding the · to review the performance of the Company's external Auditor and
remuneration of Directors and the need to appoint external remuneration to set its remuneration.
consultants.
* The Directors believe that Christopher Casey has the necessary
recent and relevant financial experience to chair the Company's Audit
Committee.
(#) With effect from 17 March 2025, Diana Bartlett will join the
Board as an independent non-executive Director. Following Christopher Casey's
retirement at the end of the AGM on 15 May 2025, Diana will take over as Chair
of the Audit Committee. The Directors believe that Diana Bartlett has the
necessary recent and relevant financial experience to chair the Company's
Audit committee.
Copies of the full terms of reference, which clearly define the
responsibilities of each Committee, can be found on the Company's website at
www.mobiusinvestmenttrust.com. They can also be obtained from the Company
Secretary and will be available for inspection at the AGM.
Given the small size of the Board, the Company does not have a Nomination
Committee. Instead, all duties of a Nomination Committee such as the annual
consideration of Directors' performance and the skills possessed collectively
by the Board as well as the consideration of new appointments, are performed
by the Board as a whole.
Corporate Governance Report
The Company is committed to the highest standards of corporate governance and
the Board is accountable to shareholders for the governance of the Company's
affairs.
The Board of Mobius Investment Trust plc has considered the principles and
recommendations of the AIC Code of Corporate Governance published in February
2019 (the "AIC Code"). The AIC Code addresses all the principles set out in
the UK Corporate Governance Code (the "UK Code") published in 2018, as well as
setting out additional provisions on issues that are of specific relevance to
the Company.
The Board considers that reporting against the principles and provisions of
the AIC Code (which has been endorsed by the Financial Reporting Council) will
provide better information to shareholders. By reporting against the AIC Code,
the Company meets its obligations under the UK Code (and associated disclosure
requirements under paragraph 6.6.6 of the UK Listing Rules) and as such does
not need to report further on issues contained in the UK Code that are
irrelevant to the Company as an externally-managed investment company,
including the provisions relating to the role of the chief executive,
executive directors' remuneration and the internal audit function.
The AIC Code is available on the AIC's website www.theaic.co.uk and the UK
Code can be viewed on the Financial Reporting Council's website
www.frc.org.uk. The AIC Code includes an explanation of how the AIC Code
adapts the principles and provisions set out in the UK Code to make them
relevant for investment companies.
The Company has complied with the principles and provisions of the AIC Code.
The Chairman of the Board is also a member of the Audit Committee, but this is
considered acceptable due to the small number of Directors. However, under the
terms of reference of the Audit Committee, the Chairman of the Board may not
act as the Chairman of the Audit Committee.
The Corporate Governance Statement forms part of the Report of the Directors.
In addition to the above, the Board also notes the publication of the new UK
Corporate Governance Code 2024 ("new UK Code"), which applies to financial
years beginning on or after 1 January 2025. The AIC has also provided a new
AIC Code of Corporate Governance ("new AIC Code") which addresses the
principles set out in the new UK Code and which also applies to financial
years beginning on or after 1 January 2025. In due course, the Company will
report against the new AIC Code.
The Board
The Board is responsible for the effective governance and the overall
management of the Company's affairs. The governance framework of the Company
reflects the fact that as an investment company it outsources portfolio
management services to MCP and company secretarial, administration, marketing
and risk management services to Frostrow.
The Board's key responsibilities are to set the strategy, values and
standards; to provide leadership within a controls framework which enable
risks to be assessed and managed; to challenge constructively and scrutinise
performance of all outsourced activities; and to review regularly the
contracts, performance and remuneration of the Company's principal service
providers and Investment Manager. The Board is responsible for all matters of
direction and control of the Company, including its investment policy, and no
one individual has unfettered powers of decision.
The role of the Board is to promote the long-term sustainable success of the
Company, generating value for shareholders and contributing to wider society.
Board Leadership and Purpose
Purpose and Strategy
The Board assesses the basis on which the Company generates and preserves
value over the long term. The Strategic Report describes how opportunities and
risks to the future success of the business have been considered and
addressed, the sustainability of the Company's business model and how its
governance contributes to the delivery of its strategy.
The Company's Objective and Investment Policy are set out above.
The purpose and strategy of the Company are described in the Strategic Report
above.
Strategy issues and all material operational matters are considered at Board
meetings.
Culture
The Board seeks to establish and maintain a corporate culture characterised by
fairness in its treatment of the Company's service providers, whose efforts
are collectively directed towards delivering returns to shareholders in line
with the Company's purpose and objectives. It is the Board's belief that this
contributes to the greater success of the Company as well as being an
appropriate way to conduct relations between parties engaged in a common
purpose.
Diversity Policy
The Board supports the principle of Boardroom diversity. The Company's policy
is that the Board and its committees should be comprised of directors who
collectively display the necessary balance of professional skills, experience,
length of service and industry knowledge and that appointments to the Board
and its committees should be made on merit, against objective criteria,
including diversity in its broadest sense.
The objective of the policy is to have a broad range of approaches,
backgrounds, skills, knowledge and experience represented on the Board. The
Board believes that this will make the Board and its committees more effective
at promoting the long-term sustainable success of the Company and generating
value for shareholders by ensuring there is a breadth of perspective among the
Directors and the challenge needed to support good decision making. To this
end, achieving a diversity of perspectives and backgrounds on the Board and
its committees will be a key consideration in any director search process.
The gender balance of two men and one woman, as at the date of this report, is
in line with the recommendations of Lord Davies' reports on Women on Boards.
The Board is aware that gender representation objectives have been set for
FTSE 350 companies and that targets concerning ethnic diversity have been
recommended for each FTSE 100 board to have at least one director of colour by
2021 and for each FTSE 250 board to have the same by 2024.
When appointing new Board members, the Directors will consider knowledge,
skills and experience. However, the Board will not display any bias for age,
gender, race, sexual orientation, religion, ethnic or national origins,
disability, or educational, professional or socio-economic background in
considering the appointment of its Directors.
Board Diversity
The Board is supportive of the FCA's UK Listing Rules (UKLR6.6.6(9)) to
encourage greater diversity on listed company boards to the effect that:
(i) at least 40% of the individuals on its board are women;
(ii) at least one of the senior board positions (Chair or SID) is held by
a woman; and
(iii) at least one individual on the board is from a minority ethnic
background.
The Board has chosen to align its diversity reporting reference date with the
Company's financial year end and proposes to maintain this alignment for
future reporting periods. The Company has met one of the three targets on
board diversity as at its chosen reference date, 30 November 2024: the senior
position of Chairman of the Board is held by a woman.
The relatively small size of the Company's Board, and therefore more
infrequent vacancies and opportunities for recruitment, make achieving
diversity on the Board a more challenging, but ongoing process. As succession
planning of the Board progresses over future years, the Company will continue
to strive for increased diversity on its Board through its Diversity Policy.
Further details on the Company's appointment process can be found under Board
Composition and Succession.
As required under UKLR6.6.6(10), further details in respect of the three
targets outlined above as at 30 November 2024 are disclosed below. Each
Director volunteered how they wished to be included in the tables.
(a) Table for reporting on gender identity or sex
As at 30 November 2024 No. of Percentage Number of senior
Board positions on the Board*
members
Men 2 66.6 1 (SID)
Women 1 33.3 1 (Chair of the Board)
Not specified/ prefer not to say - - -
(b) Table for reporting on ethnic background
As at 30 November 2024 No. of Percentage Number of senior
Board positions on the Board*
members
White British or other White (including minority-white groups) 3 100 2
Mixed/Multiple ethnic groups - - -
Asian/Asian British - - -
Black/African/
Caribbean/Black British - - -
Other ethnic group - - -
Not specified/prefer not to say - - -
* As an externally managed investment company, the Company has no
executive directors, employees or internal operations. The Board has therefore
excluded the columns relating to executive management from the table above. In
addition, the senior positions on the Company's Board of the chief executive
and the chief financial officer are not applicable to the Company. In the
absence of the aforementioned roles, the Board considers the Chair of the
Audit Committee to also be a senior position in an investment company context.
During the year. Christopher Casey served as both Senior Independent Director
("SID") and Chair of the Audit Committee. On 13 January 2025, Gyula Schuch was
appointed as the new SID.
It should be noted that, although all current Board members are "White British
or other White", diversity is provided through different nationalities, with
one Board member being Italian, one British and one Austrian.
Another female director has been appointed with effect from 17 March 2025,
allowing the Company to meet the first two of the three diversity targets of
the FCA's UK Listing Rules going forward.
Directors' Independence
The Board currently consists of three non-executive Directors, each of whom is
independent of the Investment Manager and the Company's other service
providers. No member of the Board is a Director of another investment company
managed by MCP, nor has any Board member been an employee of the Company, MCP
or any of the Company's service providers. Maria Luisa Cicognani and
Christopher Casey were appointed on 5 September 2018 and Gyula Schuch was
appointed on 1 June 2022. All current Directors with the exception of
Christopher Casey will retire at the Company's AGM and seek to be re-elected
by shareholders. Diana Bartlett, who will join the Board as an independent
non-executive director with effect from 17 March 2025, will also retire at the
Company's AGM and seek to be elected by shareholders. Further details
regarding the Directors can be found above.
The Board carefully considers the various guidelines for determining the
independence of non-executive Directors, placing particular weight on the view
that independence is evidenced by an individual being independent of mind,
character and judgement. All Directors are presently considered to be
independent. Each Director has signed a letter of appointment to formalise the
terms of their engagement as a non-executive Director, copies of which are
available on request from the Company Secretary and at the AGM.
Directors' Other Commitments
During the year, none of the current Directors took on an increase in total
commitments. Brief biographical details of the Directors, including details of
their significant commitments, can be found above. All of the Directors
consider that they have sufficient time to discharge their duties. When
appointing new Directors, the Board takes into account other demands on the
Directors' time. Any additional external appointments are not undertaken
without prior approval of the Board.
Directors' Interests
The beneficial interests of the Directors in the Company are set out in the
Directors' Remuneration Report.
Meetings
The Board meets formally at least five times each year. Representatives of MCP
attend all meetings at which investment matters are discussed; representatives
from Frostrow are in attendance at each Board meeting. The Chairman encourages
open debate to foster a supportive and co-operative approach for all
participants.
The Board has agreed a schedule of matters specifically reserved for decision
by the Board. This includes establishing the investment objectives, strategy,
the permitted types or categories of investments, the markets in which
transactions may be undertaken, the amount or proportion of the assets that
may be invested in any category of investment or in any one investment, and
the Company's share issuance and share buyback policies.
The Board, at its regular meetings, undertakes reviews of key investment and
financial data, revenue projections and expenses, analyses of asset
allocation, transactions and performance comparisons, share price and net
asset value performance, marketing and shareholder communication strategies,
the risks associated with pursuing the investment strategy, peer group
information and industry issues.
The Chairman is responsible for ensuring that the Board receives accurate,
timely and clear information. Representatives of MCP and Frostrow report
regularly to the Board on issues affecting the Company.
The Board is responsible for strategy and has established an annual programme
of agenda items under which it reviews the objectives and strategy for the
Company at each meeting.
Meeting Attendance
The table below sets out the number of scheduled Board and Committee meetings
held during the year ended 30 November 2024 and the number of meetings
attended by each Director.
Number of meetings Board Audit Management
(5) Committee Engagement &
(3) Remuneration
Committee
(1)
Maria Luisa Cicognani 5 3 1
Christopher Casey 5 3 1
Gyula Schuch 5 3 1
In addition to the scheduled Board and Committee meetings, Directors attended
a number of ad hoc Board and Committee meetings to consider matters such as
the approval of regulatory announcements and the appointment of a new auditor.
Board Composition and Succession
The Directors have performed a full skills review during the year and have
decided that currently, all skills and experience necessary to run the Company
effectively are represented on the Board.
The Board seeks to ensure that it is well-balanced and refreshed regularly by
the appointment of new directors with the skills and experience necessary, in
particular, to replace those lost by directors' retirements. To this end, a
composition and succession plan has been approved to ensure that the Board is
comprised of members who collectively:
i. display the necessary balance of professional skills, experience,
length of service and industry/Company knowledge; and
ii. are fit and proper to direct the Company's business with prudence
and integrity; and provide policy guidance on the structure, size and
composition of the Board (and its Committees) and the identification and
selection of suitable candidates for appointment to the Board (and its
Committees).
The composition and skills of the Board are reviewed annually and at such
other times as circumstances may require in order to fill any possible gaps in
skills and experience. Selecting the best candidates, irrespective of
background, is paramount.
The Board will ensure that a robust recruitment process is undertaken for all
director appointments to deliver fair and effective selection outcomes.
Independent advisors may be appointed to aid directors' recruitment and to
help mitigate the risk of self-selection from a narrow pool of candidates. The
Board will ensure that any search agency used has no connection with the
Company or any of the Board members and that the appropriate disclosure is
made in the next annual report.
Where the Board appoints a new Director during the year or after the year-end
and before the Notice of Annual General Meeting has been published, that
Director will stand for election by shareholders at the next Annual General
Meeting.
Subject to there being no conflict of interest, all Directors are entitled to
vote on candidates for the appointment of new Directors and to recommend to
shareholders the election or re-election of Directors at the Annual General
Meeting.
Appointment to the Board
In respect of the search for a new independent non-executive director,
Sapphire Partners were engaged to ensure a rigorous search and vetting process
in order to find the best possible fit for the Company. Sapphire Partners
worked closely with the Board and presented a long list and a short list of
suitable candidates, who were then interviewed by the Chairman and the SID.
Following final interviews, the Board decided that Diana Bartlett was an
exceptional candidate and had a lot to offer MMIT so that her appointment as a
non-executive director and future chair of the Audit Committee would be in
shareholders' interest. Diana will stand for election by shareholders at the
forthcoming AGM.
Chairman and Senior Independent Director ("SID")
The current Chairman, Mrs Cicognani, is deemed by her fellow independent Board
members to be independent and to have no conflicting relationships. Her
biography and other appointments are detailed above and the Board considers
that she has sufficient time to commit to the Company's affairs as necessary.
Mr Casey was the Senior Independent Director during the year under review and
up to 13 January 2025, when Mr Schuch took over as SID. Both their biographies
and other appointments are detailed above and the Board considers that both
Directors have sufficient time to commit to the Company's affairs as
necessary.
Responsibilities of the Chairman and the SID
The Chairman's primary role is to provide leadership to the Board, assuming
responsibility for its overall effectiveness in directing the Company. The
Chairman is responsible for:
· taking the chair at general meetings and Board meetings,
conducting meetings effectively and ensuring that all Directors are involved
in discussions and decision making;
· setting the agenda for Board meetings and ensuring the Directors
receive accurate, timely and clear information for decision-making;
· taking a leading role in determining the Board's composition and
structure;
· overseeing the induction of new directors and the development of
the Board as a whole;
· leading the annual board evaluation process and assessing the
contribution of individual directors;
· supporting and also challenging the Investment Manager (and other
suppliers where necessary);
· ensuring effective communications with shareholders and, where
appropriate, stakeholders; and
· engaging with shareholders to ensure that the Board has a clear
understanding of shareholders' views.
The SID serves as a sounding board for the Chairman and acts as an
intermediary for other Directors and shareholders. The SID is responsible for:
· working closely with the Chairman and providing support;
· leading the annual assessment of the performance of the Chairman;
· holding meetings with the other non-executive Directors without
the Chairman being present, on such occasions as necessary;
· carrying out succession planning for the Chairman's role;
· working with the Chairman, other Directors and shareholders to
resolve major issues; and
· being available to shareholders and other Directors to address
any concerns or issues they feel have not been adequately dealt with through
the usual channels of communication (i.e. through the Chairman or the
Investment Manager).
Policy on Director Tenure
The Board subscribes to the view that long-serving Directors should not be
prevented from forming part of an independent majority. It does not consider
that a Director's tenure necessarily reduces his or her ability to act
independently and, following formal performance evaluations, believes that
each of the Directors is independent in character and judgement and that there
are no relationships or circumstances which are likely to affect their
judgement.
The Board's policy on tenure is that continuity and experience are considered
to add significantly to the strength of the Board and, as such, no limit on
the overall length of service of any of the Company's Directors, including the
Chairman, has been imposed. However, the Board notes that best practice
guidance suggests a maximum tenure of nine years. When considering the length
of an individual Director's service, the Board will do so in the context of
the average length of tenure of the Board as a whole. In view of its
non-executive nature, the Board considers that it is not appropriate for the
Directors to be appointed for a specific term, although new Directors are
appointed with the expectation that they will serve for a minimum period of
three years subject to shareholder approval.
All of the Company's Directors usually seek re-election at each Annual General
Meeting, regardless of their length of tenure.
Board Evaluation
An evaluation of the Board and its Committees as well as the Chairman and the
individual Directors is carried out annually. In addition to evaluations
carried out by the Board collectively, the Management Engagement and
Remuneration Committee on behalf of the Board considers annually whether an
external evaluation should be undertaken by an independent agency.
The Chairman acts on the results of the Board's evaluation by recognising the
strengths and addressing the weaknesses of the Board and recommending any
areas for development. If appropriate, the Chairman will propose that new
members are appointed to the Board or will seek the resignation of Board
Directors.
During the year ended 30 November 2024, a formal Board evaluation was
conducted by Stogdale St James, an external independent agency with extensive
experience in the field of investment trusts. This involved the circulation of
questionnaires about the work and performance of the Board and its committees
as well as the Chairman, tailored to suit the nature of the Company, followed
by discussions with each of the Directors as well as representatives of MCP,
Frostrow and Peel Hunt. The discussion of the performance of the Chairman was
held with the support of the Senior Independent Director.
As part of the Board evaluation discussions, each of the Directors also
assessed the overall time commitment of their external appointments and it was
concluded that all Directors have sufficient time to discharge their duties.
This conclusion was reached on the basis that most external appointments are
non-executive roles which are far less time-consuming than full-time executive
positions in a trading company would be.
The Chairman is satisfied that the structure and operation of the Board
continues to be effective and relevant and that there is a satisfactory mix of
skills, experience and knowledge. To facilitate succession planning and
improve compliance with the UK Code of Corporate Governance, Ms Diana Dyer
Bartlett was appointed as an independent non-executive Director with effect
from 17 March 2025. She will, after an initial induction period as a
non-executive director, assume the role of Chair of the Audit Committee
following the retirement of Christopher Casey at the end of the Company's AGM
on 15 May, thereby ensuring a smooth transition and supporting continuity.
Training and Advice
New appointees to the Board are provided with a full induction programme. The
programme covers the Company's investment strategy, policies and practices.
The Directors are also given key information on the Company's regulatory and
statutory requirements as they arise including information on the role of the
Board, matters reserved for its decision, the terms of reference of the Board
Committees, the Company's corporate governance practices and procedures and
the latest financial information. It is the Chairman's responsibility to
ensure that the Directors have sufficient knowledge to fulfil their role.
On an ongoing basis, and further to the annual evaluation process, the Company
Secretary will make arrangements for Directors to develop and refresh their
skills and knowledge in areas which are mutually identified as being likely to
be required, or of benefit to them, in carrying out their duties effectively.
Directors will endeavour to make themselves available for any relevant
training sessions which may be organised for the Board.
The AIC holds regular Director Roundtable events throughout the year, which
are designed to cover the latest issues and regulatory developments affecting
the investment company sector. The Director Roundtables are open to all member
investment company directors.
Conflicts of Interest
Company Directors have a statutory obligation to avoid a situation in which
they (and connected persons) have, or can have, a direct or indirect interest
that conflicts, or may possibly conflict, with the interests of the Company.
In line with the Companies Act 2006, the Board has the power to sanction any
potential conflicts of interest that may arise and impose such limits or
conditions that it thinks fit. A register of interests and external
appointments is maintained and is reviewed at every Board meeting to ensure
that all details are kept up to date. Should a conflict arise, the Board has
the authority to request that the Director concerned abstains from any
relevant discussion, or vote. Appropriate authorisation will be sought prior
to the appointment of any new directors or if any new conflicts or potential
conflicts arise.
No conflicts of interest arose during the year under review.
Matters Reserved for Decision by the Board
The Board has adopted a schedule of matters reserved for its decision. This
includes, inter alia, the following:
· Decisions relating to the strategic objectives and overall
management of the Company, including the appointment or removal of the
Investment Manager and other service providers, establishing the investment
objectives, strategy and performance comparators, the permitted types or
categories of investments and the proportion of assets that may be invested in
them.
· Requirements under the Companies Act 2006, including the approval
of the half-year and annual financial statements, the recommendation of the
final dividend (if any), the appointment or removal of the Company Secretary
and determining the policy on share issuance and buybacks.
· Matters relating to certain Stock Exchange requirements and
announcements, the Company's internal controls, and the Company's corporate
governance structure, policies and procedures.
· Matters relating to the Board and its Committees, including the
terms of reference and membership of the committees, and the appointment of
directors (including the Chairman and the SID).
Day-to-day investment management is delegated to MCP and operational
management is delegated to Frostrow.
The Board takes responsibility for the content of communications regarding
major corporate issues even if MCP and Frostrow act as spokesman. The Board is
kept informed of relevant promotional material that is issued by MCP.
Risk Management and Internal Controls
The Board has overall responsibility for the Company's risk management and
internal control systems and for reviewing their effectiveness. The Company
applies the guidance published by the Financial Reporting Council on internal
controls. Internal control systems are designed to manage, rather than
eliminate, the risk of failure to achieve the business objective and can
provide only reasonable and not absolute assurance against material
misstatement or loss. These controls aim to ensure that the assets of the
Company are safeguarded, that proper accounting records are maintained and
that the Company's financial information is reliable. The Directors have a
robust process for identifying, evaluating and managing the significant risks
faced by the Company, which are recorded in a risk matrix. The Audit
Committee, on behalf of the Board, considers each risk as well as reviewing
the mitigating controls in place. Each risk is rated for its "likelihood" and
"impact" and the resultant numerical rating determines its ranking into
'Principal/Key', 'Significant' or 'Minor'. This process was in operation
during the year and continues in place up to the date of this report. The
process also involves the Audit Committee receiving and examining regular
reports from the Company's principal service providers. The Board then
receives a detailed report from the Audit Committee on its findings. The
Directors have not identified any significant failures or weaknesses in
respect of the Company's internal control systems.
Information on the Company's risk management can be found in the Strategic
Report.
An overview of the Internal Controls structure of the Company and its service
providers is shown in the full annual report.
[Graph in the annual report.]
Engagement with Stakeholders
As an externally managed investment trust, the Company does not have
employees. Its main stakeholders therefore comprise a small number of service
providers and its shareholders.
The AIC Code requires the Directors to explain their statutory duties as
stated in sections 171-177 of the Companies Act 2006. Under section 172,
directors have a duty to promote the success of the Company for the benefit of
its members as a whole and, in doing so, have regard to the consequences of
any decisions in the long term, as well as having regard to the Company's
stakeholders amongst other considerations. The Board's report on its
compliance with section 172 of the Companies Act 2006 is contained within the
Strategic Report.
Relationship with the Investment Manager
At each Board meeting, representatives from the Investment Manager are in
attendance to present verbal and written reports covering their activity,
portfolio and investment performance over the preceding period, and compliance
with the applicable rules and guidance of the FCA. The Investment Managers
also seek approval for specific transactions which they are required to refer
to the Board.
Ongoing communication with the Board is maintained between formal meetings.
The Board and the Investment Manager operate in a supportive, co-operative and
open environment.
The Management Engagement and Remuneration Committee evaluates the Investment
Manager's performance and reviews the terms of the Investment Management
Agreement at least annually. The outcome of this year's review is described in
the Business Review above.
Relationship with Other Service Providers
Representatives from Frostrow are in attendance at each Board meeting to
address questions on the Company's operations, administration and governance
requirements.
The Management Engagement and Remuneration Committee monitors and evaluates
all of the Company's other service providers, including Frostrow, and also the
Custodian, the Registrars and the Brokers.
At its most recent review, in September 2024, the Committee concluded that all
service providers were performing well and should be retained on their
existing terms and conditions.
Relations with Shareholders
A detailed analysis of the substantial shareholders in the Company is provided
to the Directors at each Board meeting. Representatives of MCP and Frostrow
regularly meet with institutional shareholders and private client asset
managers to discuss strategy and to understand their issues and concerns and,
if applicable, to discuss corporate governance issues. The results of such
meetings are reported at the following Board meeting.
Regular reports from the Company's Corporate Stockbroker are submitted to the
Board on investor sentiment, industry issues and trends.
The Company aims to provide shareholders with a full understanding of the
Company's investment objective, policy and activities, its performance and the
principal investment risks by means of informative annual and half-yearly
reports. This is supplemented by the daily publication of the net asset value
of the Company's shares through the London Stock Exchange. The Company's
website, www.mobiusinvestmenttrust.com is regularly updated and provides
useful information about the Company, including the Company's financial
reports, monthly factsheets, quarterly Manager's commentaries and
announcements. The Company also held several seminars for investors.
Shareholders wishing to communicate with the Chairman, or any other member of
the Board, may do so by writing to the Company, for the attention of the
Company Secretary at the offices of Frostrow Capital LLP. All shareholders are
encouraged to attend the Annual General Meeting and Investor Day, where they
are given the opportunity to question the Chairman, the Board and
representatives of MCP. The Directors welcome the views of all shareholders
and place considerable importance on communications with them.
Stewardship and Exercise of Voting Powers
The Company's investment portfolio is managed by MCP who have extensive
experience with emerging markets and who have a strong commitment to effective
stewardship.
The Board has delegated discretion to MCP to exercise voting powers on its
behalf in respect of shares owned by the Company.
Proxy Voting
The MCP team carefully evaluates companies in global markets, taking into
account different governance frameworks and market dynamics. Beyond voting,
they proactively engage with all stakeholders, fostering dialogue on
governance best practices and long-term value creation. During the reporting
period, 272 proxies were voted, with 258 in favour, demonstrating support for
growth strategies and governance initiatives. Where appropriate, 14 votes were
cast against proposals, demonstrating a commitment to challenging practices
that are not in the best interests of shareholders. The team abstained on
three votes.
This approach underlines the company's commitment to responsible investment,
sustainable value creation and strong governance practices as highlighted in
MCP's Stewardship Report which can be found on the Company's website
www.mobiusinvestmenttrust.com (http://www.mobiusinvestmenttrust.com) .
Nominee Share Code
Where the Company's shares are held via a nominee company name, the Company
undertakes:
· to provide the nominee company with multiple copies of
shareholder communications, so long as an indication of quantities has been
provided in advance; and
· to allow investors holding shares through a nominee company to
attend general meetings, provided the correct authority from the nominee
company is available.
Nominee companies are encouraged to provide the necessary authority to
underlying shareholders to attend, speak and vote at the Company's general
meetings.
Significant Holdings and Voting Rights
Details of the shareholders with substantial interests in the Company's
shares, the Directors' authorities to issue and repurchase the Company's
shares, and the voting rights of the shares are set out in the Report of the
Directors.
Company Secretary
The Board has direct access to the advice and services of the Company
Secretary, Frostrow, which is responsible for ensuring that the Board and
Committee procedures are followed and that the Company complies with
applicable regulations. The Company Secretary is also responsible to the Board
for ensuring timely delivery of information and reports and that statutory
obligations of the Company are met.
Independent Professional Advice
The Board has formalised arrangements under which the Directors, in the
furtherance of their duties, may seek independent professional advice at the
Company's expense.
Legal advice was sought during the year in respect of the correct accounting
treatment of the Company's Management Shares.
Audit, Risk and Internal Control
The Statement of Directors' Responsibilities below describes the Directors'
responsibility for preparing this annual report.
The Audit Committee Report explains the work undertaken to allow the Directors
to make this statement and to apply the going concern basis of accounting. It
also sets out the main roles and responsibilities and the work of the Audit
Committee throughout the year, and describes the Directors' review of the
Company's risk management and internal control systems.
A description of the principal risks facing the Company and an explanation of
how they are being managed is provided in the Strategic Report.
The Board's assessment of the Company's longer-term viability is set out in
the Business Review.
Remuneration
The Directors' Remuneration Report sets out the levels of remuneration for
each Director and explains how Directors' remuneration is determined.
Frostrow Capital LLP
Company Secretary
10 March 2025
STATEMENT OF DIRECTORS' RESPONSIBILITIES
In respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have prepared the financial
statements in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 102 "The
Financial Reporting Standard applicable in the UK and Republic of Ireland",
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, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· state whether applicable United Kingdom Accounting Standards,
comprising FRS 102 have been followed, subject to any material departures
disclosed and explained in the financial statements;
· make judgements and accounting estimates that are reasonable and
prudent; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business.
The Directors 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 keeping adequate 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 and the Directors'
Remuneration Report comply with the Companies Act 2006.
The Directors are also responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions.
Directors' Confirmations
The Directors consider that the Annual Report and Financial Statements, taken
as a whole, are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's position, performance,
business model and strategy.
Each of the current Directors, whose names and functions are listed in the
'Board of Directors' above confirm that, to the best of their knowledge:
· the Company's Financial Statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising FRS 102, give
a true and fair view of the assets, liabilities, financial position and profit
of the Company; and
· the Strategic Report 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.
In the case of each Director in office at the date the Report of the Directors
is approved:
· so far as the Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
· they have taken all the steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit information
and to establish that the Company's auditor is aware of that information.
Approved by the Board of Directors and signed on its behalf by
Maria Luisa Cicognani
Chairman
10 March 2025
AUDIT COMMITTEE REPORT
for the year ended 30 November 2024
Introduction from the Chairman
I am pleased to present my sixth and final formal report to shareholders as
Chairman of the Audit Committee, for the year ended 30 November 2024.
Role, Composition and Meetings
The role of the Committee is to ensure that shareholder interests are properly
protected in relation to the application of financial reporting and internal
control principles, risk management and to assess the effectiveness of the
audit. The Committee's role and responsibilities are set out in full in its
terms of reference which are available for review on the Company's website at
www.mobiusinvestmenttrust.com.
Due to the small size of the Board, the Audit Committee comprises the whole
Board (all Directors are independent and non-executive), including the
Chairman of the Company. In accordance with the terms of reference of the
Committee, the Chairman of the Board may be a member of the Committee, but may
not act as the Committee Chairman.
The Committee has sufficient recent and relevant financial experience and, as
a whole, has competence relevant to the sector in which the Company operates.
I am also the audit committee chairman of various other listed companies and
was, previously, an audit partner at KPMG LLP.
The other Committee members have a combination of financial, investment and
other relevant experience gained throughout their careers. The experience of
the members of the Committee can be assessed from the Directors' biographies
set out above.
The Committee met three times during the year under review and once more since
the year-end. Attendance by each Director during the year is shown in the
table in the Corporate Governance section.
Responsibilities of the Audit Committee
As Chairman of the Committee I can confirm that the Committee's main
responsibilities during the year are set out below, together with brief
descriptions of how these responsibilities are being discharged.
1. To review the Company's half-year and annual financial statements
together with announcements and other filings relating to the financial
performance of the Company. In particular, the Committee assesses whether the
financial statements are fair, balanced and understandable, allowing
shareholders to assess the Company's strategy, investment policy, business
model, financial performance e and financial position at each period-end.
2. To review the risk management and internal control processes of the
Company and its key service providers. As part of this review the Committee
assesses the appropriateness of the Company's anti-bribery and corruption
policy and also its policy on the prevention of the facilitation of tax
evasion. The Committee also reviews the internal controls in place at the
Company's AIFM and Investment Manager, its Registrar and its Depositary and
undertakes a full review of the Company's risk register.
3. To recommend the appointment of the external Auditor, and agreeing the
scope of its work and its remuneration, reviewing its independence and the
effectiveness of the audit process. Also, to be responsible for the selection
process of the external Auditor.
4. To consider any non-audit work to be carried out by the Auditor. The
Audit Committee reviews the need for non-audit services to be performed by the
Auditor in accordance with the Company's non-audit services policy, and
authorises such on a case-by-case basis having given consideration to the cost
effectiveness of the services and the objectivity of the Auditor.
5. To consider the need for an internal audit function. The Company keeps
under review the need for an internal audit function, but since the Company
delegates its day-to-day operations to third parties and has no employees, the
Committee has determined there is no requirement for such a function.
6. To ensure compliance with Section 1158 of the Corporation Tax Act 2010,
by obtaining confirmation that the Company continues to meet the regulatory
requirements.
Significant Issues Considered by the Audit Committee during the Year
In summary, additional to the Committee's core responsibilities, the main
matters arising in relation to 2024 were:
Risk Assessment of Fraudulent Activity
· The Committee is aware of the increase in fraudulent activity
over the past years exploiting organisations. Following an assessment and
identification of types of fraud that the Company could be exposed to, it was
believed that the Company's key service providers had adequate, robust
controls in place to mitigate the event of any fraudulent activity.
Audit Regulation
· The Audit Committee has taken note of reporting guidance and
thematic reviews published by the FRC in order to determine relevant best
practice for the Company's reporting. In particular, the FRC's publication of
the Minimum Standard for Audit Committees was noted as well as the revised UK
Corporate Governance Code and the new AIC Corporate Governance Code which will
come into effect for financial years beginning on or after 1 January 2025.
The Company's Audit Tender
· The Committee led the competitive audit tender and recommended to
the Board the appointment of Johnston Carmichael LLP as the new auditor of the
Company.
These matters were discussed by the Committee and any recommendations were
fully considered and recommendations were then made to the Board.
Internal Controls and Risk Management
The Directors have identified main areas of risk as described in the Strategic
Report. They have set out the actions taken to evaluate and manage these
risks. The Committee reviews the various actions taken and satisfies itself
that they are sufficient: in particular the Committee reviews the Company's
schedule of key risks at each meeting and requires amendments to both risks
and mitigating actions if necessary.
The Board has overall responsibility for the Company's risk management and
systems of internal controls and for reviewing their effectiveness. In common
with the majority of investment trusts, investment management, accounting,
company secretarial and custodial services have been delegated to third
parties. The effectiveness of the internal controls is assessed on a
continuing basis by the Company Secretary, the Investment Manager and the
Depositary. Each maintains its own systems and the Committee receives regular
reports from them. The Committee is satisfied that effective systems have been
in place for the year under review.
However, it should be noted that the Compliance Officer at MCP Emerging
Markets LLP during the year under review was Carlos von Hardenberg who is also
that company's Chief Investment Officer and Chief Operating Officer.
Consequently, the requirement for the Compliance Officer to be independent of
the investment and management functions was not met. However, with effect from
1 March 2025 MCP hired a Compliance Officer who is independent of the
investment and management functions.
Meetings and Business
Representatives of Frostrow and the Investment Manager attended each of the
Committee's meetings and reported as to the proper conduct of business in
accordance with the regulatory environment in which the Company and the
Investment Manager operate. The Committee also met with the auditor during the
year: once with PricewaterhouseCoopers LLP ("PwC") in February 2024, to
consider the annual results, and once with the new auditor Johnston Carmichael
LLP in September 2024 in a special Audit Committee meeting during which
Johnston Carmichael presented its audit plan for the Company.
In addition to the formal Audit Committee meetings as Audit Committee
Chairman, I maintain ongoing, less formal communications with the Investment
Manager, Frostrow and the Company's auditor as need dictates. Additionally, I
had regular calls with MCP's Compliance Consultant, Cosegic.
The following matters were dealt with at the meetings:
February 2024
· Consideration and review of the annual results and PwC's report
to the Committee;
· Approval of the Annual Report and Financial Statements;
· Review of the Depositary's Report for the period ended 30
November 2023;
· Review of the Investment Manager's internal controls;
· Review of the relevant internal controls reports of Frostrow, the
Depositary and the Registrar;
· Review of the policies and procedures for the detection of fraud
and cyber security and the measures for these put in place by the key service
providers;
· Review of the key service providers' ongoing business resilience,
in particular in respect of financial crime, cyber crime and information
security;
· Review of the Company's risk matrix;
· Review of the Company's policies in respect of anti-bribery and
corruption as well as anti-tax evasion;
· Review of the Company's Non-Audit Services Policy;
· Evaluation of the Committee's effectiveness.
July 2024
· Consideration and review of the half-yearly report and financial
statements;
· Approval of the half-yearly report;
· Review of the Committee's terms of reference;
· Review of the Investment Manager's Systems and Controls Report as
well as the Investment Manager's Compliance Monitoring Review;
· Review of the Depositary's Report for the six months ended 31 May
2024;
· Review of the Company's risk matrix;
· Review and evaluation of presentations by audit firms as part of
the audit tender process.
September 2024
· Formal approval of Johnston Carmichael LLP's engagement letter
and review of their plan for the audit of the financial year ended 30 November
2024.
Annual Report
The Annual Report is the responsibility of the Board. The Directors'
Responsibility Statement is shown above. The Board looks to the Committee for
advice in relation to the Financial Statements both as to their form and
content, and on any specific areas requiring judgement.
Although the Committee did not identify any significant issues as part of its
review of the Annual Report and Financial Statements, it paid particular
attention to:
Accounting Policies
The Accounting policies, as set out in the Financial Statements, have been
applied throughout the year. In light of there being no unusual transactions
during the year or other possible reasons, the Committee found no reason to
change any of the policies.
Existence and Ownership of Investments
Reassurance was sought from the Depositary concerning the safekeeping of the
Company's investments.
Valuation of Investments
The Committee reviewed the robustness of the Administrator's processes in
place for recording investment transactions as well as ensuring the valuation
of investments is in accordance with adopted accounting policies.
Recognition of Revenue from Investments
The Committee has reviewed all dividends receivable, including special
dividends, and satisfied itself that all dividends had been accounted for
appropriately.
Going Concern
Having considered the Company's financial position and the upcoming redemption
event, the Committee satisfied itself that it is appropriate for the Board to
present the Financial Statements on the going concern basis. Please also see
the Report of the Directors.
Long-term Viability
The Committee satisfied itself that it is appropriate for the Board to make
the statement in the Business Review, that they have a reasonable expectation
that the Company will be able to continue its operations over the next three
years.
Taxation
The Committee confirmed the position of the Company in respect of compliance
with investment trust status and satisfied itself that the Company continues
to meet the eligibility conditions.
The Committee also monitored closely the position with regard to the
reclamation of withholding tax and the payment of other capital taxes. The
Company employs a number of specialist local agents (in jurisdictions such as
Taiwan and India) to assist in the process.
Internal Audit
Since the Company delegates its day-to-day operations to third parties and has
no employees, the Committee again determined that there is no requirement for
such a function.
Half-year Financial Statements
The Committee reviewed the half-year financial statements of the Company as
well as the half-year results announcement before recommending their approval
to the Board.
External Auditor
The Audit
The nature and scope of the audit for the year, together with Johnston
Carmichael LLP's audit plan, were considered by the Committee on 24 September
2024. The Committee then met Johnston Carmichael LLP on 24 February 2025 to
formally review the outcome of the audit and to discuss the limited issues
that arose. The Committee also discussed the presentation of the Annual Report
with the Auditor and sought its perspective.
Independence and Effectiveness
In order to fulfil the Committee's responsibility regarding the independence
of the Auditor, the Committee reviewed:
- the senior audit personnel in the audit plan for the year,
- the Auditor's arrangements concerning any potential conflicts of
interest,
- the extent of any non-audit services, and
- the statement by the Auditor that it remains independent within the
meaning of the regulations and their professional standards.
In order to consider the effectiveness of the audit process, the Committee
reviewed:
- the Auditor's fulfilment of the agreed audit plan,
- the report arising from the audit itself, and
- feedback from the Company's Manager.
A summary of the Company's policy on the provision of non-audit services by
the Auditor to the Company can be found below.
The Committee is satisfied with the Auditor's independence and the
effectiveness of the audit process, together with the degree of diligence and
professional scepticism brought to bear.
Appointment and Tenure
Following a competitive tender process during the year, Johnston Carmichael
LLP was appointed as the auditor of the Company's financial year ended 30
November 2024 with effect from 20 August 2024. The appointment was announced
on 8 August 2024. The main criteria leading to the choice of Johnston
Carmichael LLP as the new auditor were the experience of the audit partner and
his audit management team, as well as the impressive resources available for
audits, both in terms of personnel and technology. In addition, the
flexibility of the whole audit team in working with the Company and its
service providers together with a responsive and client-focused management,
convinced the Audit Committee and the Board that Johnston Carmichael LLP as
new auditor would add value to the Company. The audit team is also able to
provide the Directors with industry insights as well as technical and
regulatory updates as they arise. Johnston Carmichael LLP's appointment as
auditor to the Company for the current financial year will be proposed to
shareholders for ongoing approval at the Company's forthcoming AGM in May. The
Audit Partner is Richard Sutherland.
PricewaterhouseCoopers LLP has ceased to be the Company's auditor and has
confirmed to the Company that there are no matters connected with its ceasing
to hold office that need to be brought to the attention of the members or
creditors of the Company for the purposes of section 519 of the Companies Act
2006. A copy of PricewaterhouseCoopers LLP's resignation letter and Statement
of Reasons connected with ceasing to hold office as Auditor was circulated to
shareholders.
In accordance with the current legislation, the Company is required to
instigate a tender process for Auditors at least every 10 years and will have
to change its auditor after a maximum of 20 years. In addition, the nominated
Audit Partner will be required to rotate after serving a maximum of 5 years
with the Company; it is therefore anticipated that Mr Sutherland will serve
as Audit Partner until completion of the audit process of the year ended 30
November 2028. The Company has complied throughout the year ended 30 November
2024 with the provisions of the Statutory Audit Services Order 2014, issued by
the Competition and Markets Authority ("CMA Order").
The appointment of Johnston Carmichael LLP as Auditor to the Company will be
submitted for ongoing shareholder approval, together with a separate
Resolution to authorise the Committee to determine the remuneration of the
Auditors, at the AGM to be held on 15 May 2025.
Non-Audit Services
The Company operates on the basis whereby the provision of all non-audit
services by the Auditor has to be pre-approved by the Audit Committee, in
accordance with MMIT's Non-Audit Services Policy. Such services are only
permissible where no conflicts of interest arise, the service is not expressly
prohibited by audit legislation, where the independence of the Auditor is not
likely to be impinged by undertaking the work and the quality and the
objectivity of both the non-audit work and audit work will not be compromised.
In particular, non-audit services may be provided by the Auditor if it is
inconsequential or would have no direct effect on the Company's financial
statements and the audit firm would not place significant reliance on the work
for the purposes of the statutory audit.
During the year under review, neither PricewaterhouseCoopers LLP nor Johnston
Carmichael LLP have carried out non‑audit work.
Effectiveness of the Committee
A formal internal Board review which included reference to the Audit
Committee's effectiveness, was undertaken by the Chairman of the Company
during the year. As part of the evaluation, the Committee reviewed the
following:
- the composition of the Committee;
- the leadership of the Committee Chairman;
- the Committee's monitoring of compliance with corporate governance
requirements;
- the Committee's review of the quality and appropriateness of financial
accounting and reporting;
- the Committee's review of significant risks and internal controls; and
- the Committee's assessment of the independence, competence and
effectiveness of the Company's external auditors.
It was concluded that the Committee was performing satisfactorily and there
were no formal recommendations made to the Board.
Christopher Casey
Chairman of the Audit Committee
10 March 2025
DIRECTORS' REMUNERATION REPORT
for the year ended 30 November 2024
Statement from the Chairman of the Management Engagement and Remuneration
Committee
I am pleased to present the Directors' Remuneration Report to shareholders.
This report has been prepared in accordance with the requirements of the
Companies Act 2006.
The Directors' Remuneration Report is subject to an annual advisory vote and
therefore an Ordinary Resolution for the approval of this report will be put
to shareholders at the Company's forthcoming Annual General Meeting ("AGM").
The law requires the Company's Auditor to audit certain disclosures provided
in this report. Where disclosures have been audited, they are indicated as
such and the Auditor's audit opinion is included in its report to
shareholders.
As noted in the Strategic Report, all of the Directors are non-executive and
therefore there is no Chief Executive Officer. The Company does not have any
employees. There is therefore no CEO or employee information to disclose.
The Management Engagement and Remuneration Committee considers the framework
for the remuneration of the Directors. It reviews the ongoing appropriateness
of the Company's remuneration policy and the individual remuneration of
Directors by reference to the activities of the Company and comparison with
other companies of a similar structure and size. This is in-line with the AIC
Code.
The Directors exercise independent judgement and discretion when authorising
remuneration outcomes, taking into account the Company's performance together
with wider circumstances.
At the most recent review, held in September 2024, it was agreed that for the
year ending 30 November 2025, the Directors' fees will be raised as follows:
The Chairman - £41,200
The Chairman of the Audit Committee - 36,050
Non-executive Directors - £30,900
As noted in previous annual reports, Directors' fees should be reviewed
annually and increased as necessary in line with the peer group and the
market.
No advice from remuneration consultants was received during the year under
review although a review of remuneration of the Company's peer group of
investment companies was undertaken along with research by Trust Associates
Limited which indicated that the Company's remuneration levels were roughly in
line with market averages.
Directors' Fees
The Directors, as at the date of this report, and who have all served during
the year, received the fees listed in the table below. These exclude any
employer's national insurance contributions, if applicable. No other forms of
remuneration were received by the Directors and so fees represent the total
remuneration of each Director.
No communications have been received from shareholders regarding Directors'
remuneration.
Articles 126 and 127 of the Articles of Association provide that Directors are
entitled to be reimbursed for reasonable expenses incurred by them in
connection with the performance of their duties and attendance at Board and
General Meetings.
Under HMRC guidance, travel expenses and other out of pocket expenses may be
considered as taxable benefits for the Directors. Where expenses reimbursed to
the Directors are classed as taxable under HMRC guidance, they are shown in
the taxable expenses column of the Directors' remuneration table along with
the associated tax liability which is settled by the Company.
Approval
A resolution to approve the Remuneration Report will be put to shareholders at
the AGM of the Company to be held on 15 May 2025.
The Remuneration Policy will apply until it is next put to shareholders for
renewed approval, which must be at intervals of not more than three years or
when the Directors' Remuneration Policy is varied, in which case shareholder
approval for the new Directors' Remuneration Policy will be sought. Following
approval of the Directors' Remuneration Policy at the AGM in 2023, it is
expected that the policy will next be put to shareholders at the AGM in 2026.
Date of Fixed Taxable Total
Appointment Fees Expenses Remuneration
to the Board 2024 2024 2024
(audited) (audited) £
£ £
Maria Luisa Cicognani 5 September 2018 £40,000 - £40,000
Christopher Casey 5 September 2018 £35,000 £1,137 £36,137
Gyula Schuch 1 June 2022 £30,000 - £30,000
£105,000 £1,137 £106,137
Directors' Remuneration history
The table below contains the annual percentage change in remuneration over the
five years prior to 30 November 2024 and the proposed fees for the year ending
30 November 2025 in respect of the various director roles:
Annualised Year to Year to Year to Year to Year to Year to
fees to
30 November 30 November 30 November 30 November 30 November 30 November 30 November
Fee Rates 2019 2020 2021 2022 2023 2024 2025
Maria Luisa Cicognani
Chairman of the Board £35,000 £35,000 £35,700 £37,000 £40,000 £40,000 £41,200
0% +2.0% +3.6% +8.1% +0.0% +3.0%
Christopher Casey#
Chair of Audit Committee £30,000 £30,000 £30,600 £32,000 £35,000 £35,000 £36,050
0% +2.0% +4.6% +9.4% 0.0% +3.0%
Gyula Schuch
Non-executive Director £25,000 £25,000 £25,500 £27,000 £30,000 £30,000 £30,900
0% +2.0% +5.9% +11.1% +0.0% +3.0%
Additional fees - - - - - - -
# Christopher Casey retires at the AGM on 15 May 2025. Diana Dyer
Bartlett will succeed Mr Casey as Chair of the Audit Committee.
Relative Cost of Directors' Remuneration
The bar chart below shows the comparative cost of the Company's Directors'
fees compared with the level of dividend distribution for the years ended 30
November 2024 and 30 November 2023.
[Graphic appears here in the full annual report]
This disclosure is a statutory requirement. The Directors, however, do not
consider that the comparison of Directors' remuneration with distribution to
shareholders is a meaningful measure of the Company's overall performance.
Directors' Interests in Shares
(audited information)
The Directors' interests in the share capital of the Company are shown in the
table below:
Number of Number of
shares held shares held
30 November 30 November
2024 2023
Maria Luisa Cicognani Beneficial 72,927 72,927
Christopher Casey Beneficial 10,000 10,000
Gyula Schuch - - -
Since the year end there have not been any changes in the Directors'
interests.
There are no provisions included within the Company's Articles of Association
which require Directors to hold shares in the Company.
Loss of Office
Directors do not have service contracts with the Company but are engaged under
Letters of Engagement. These specifically exclude any entitlement to
compensation upon leaving office for whatever reason.
Share Price Total Return
The chart illustrates the shareholder return for a holding in the Company's
Shares compared with the MSCI Emerging Markets - Mid Cap net total return
(Index) (comparator index) from launch to 30 November 2024.
Total Shareholder Return for the Period from inception to 30 November 2024^
[Graphic appears here in the full annual report]
Statement of Voting at Annual General Meeting
The Directors' Remuneration Report for the period ended 30 November 2023 was
approved by shareholders at the Annual General Meeting held on 23 April 2024.
32,231,100 votes (99.69%) were in favour, with 100,524 votes (0.31%) against
and no votes withheld. Any proxy votes which were at the discretion of the
Chairman were included in the "for" total.
The Directors' Remuneration Policy was last approved by shareholders at the
Annual General Meeting held on 26 April 2023.
26,960,104 votes (99.65%) were in favour, with 93,651 votes (0.35%) against
and 34,992 votes withheld. Any proxy votes which were at the discretion of the
Chairman were included in the "for" total.
Current and projected Directors' fees
Projected fees Current fees
year ending year ended
30 November 2025 30 November 2024
Maria Luisa Cicognani (Chairman) £41,200 £40,000
Christopher Casey (Audit Committee Chairman) £16,546 £35,000
Gyula Schuch (Non-executive Director/Senior Independent Director) £30,900 £30,000
Diana Dyer Bartlett(#) £24,740 -
Total £113,386 £105,000
(#) Appointed with effect from 17 March 2025.
Directors' Remuneration Policy
The Company's Remuneration Policy provides that fees payable to the Directors
should reflect the time spent by the Board on the Company's affairs and the
responsibilities borne by the Directors. The level of remuneration is set with
reference to comparable organisations and appointments, in order to attract
individuals of a high calibre.
The remuneration of the Directors is determined within the limits set out in
the Company's Articles of Association, which state that the aggregate amount
of Directors' fees shall not exceed £300,000 in any financial year or such
larger amount as the Company may by ordinary resolution decide. Directors'
remuneration comprises solely Directors' fees. The Directors are not eligible
for bonuses, pension benefits, share options, long-term incentive schemes or
other benefits.
None of the Directors has a service contract. The terms of their appointment
provide that Directors shall retire and be subject to election at the first
Annual General Meeting ("AGM") of the Company after their appointment and to
re-election annually thereafter. The terms also provide that a Director may be
removed without notice and that compensation will not be due on leaving
office.
In accordance with the Company's Articles of Association, Directors are
entitled to be paid all reasonable travel, hotel or other expenses incurred in
the performance of their duties, including expenses incurred in attending
Board or shareholder meetings. Directors are also entitled to be paid
additional remuneration for rendering or performing extra or special services
of any kind, requiring them to commit significant extra time to the Company.
The current and projected Directors' fees for 2024 and 2025 are shown in the
table above.
Fees for any new Director appointed will be on the above basis. Fees payable
in respect of subsequent years will be determined following an annual review,
with any increases to be in line with the peer group and the market. Any views
expressed by shareholders with regards to fees paid to Directors will be taken
into consideration by the Management Engagement and Remuneration Committee and
the Board.
In accordance with the regulations, an ordinary resolution to approve the
Directors' Remuneration Policy will be put to shareholders at least once every
three years. The policy was approved by shareholders at the AGM held on 26
April 2023 and thereafter is expected to be next on the AGM agenda in 2026.
Annual Statement
On behalf of the Board, I confirm that the Remuneration Policy, set out above,
and this Remuneration Report summarise, as applicable, for the year ended 30
November 2024:
(a) the major decisions on Directors' remuneration;
(b) any substantial changes relating to Directors' remuneration made during
the year; and
(c) the context in which the changes occurred and decisions have been taken.
Gyula Schuch
Chairman of the Management Engagement and
Remuneration Committee
10 March 2025
INDEPENDENT AUDITOR'S REPORT
to the members of Mobius Investment Trust plc
Report on the audit of the financial statements
Opinion
We have audited the Financial Statements of Mobius Investment Trust plc ("the
Company"), for the year ended 30 November 2024, which comprise the Income
Statement, the Statement of Changes in Equity, the Statement of Financial
Position, and the related notes, including significant accounting policies.
The financial reporting framework that has been applied in their preparation
is applicable law and United Kingdom Accounting Standards, including Financial
Reporting Standard 102 The Financial Reporting Standard applicable in the UK
and Republic of Ireland (United Kingdom Generally Accepted Accounting
Practice).
In our opinion the Financial Statements:
● Give a true and fair view of the state of the Company's affairs as
at 30 November 2024 and of its return for the year then ended;
● Have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
● Have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor responsibilities for the audit
of the Financial Statements section of our report. We are independent of the
Company in accordance with the ethical requirements that are relevant to our
audit of the Financial Statements in the UK, including the FRC's Ethical
Standard, as applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Our approach to the audit
We planned our audit by first obtaining an understanding of the Company and
its environment, including its key activities delegated by the Board to
relevant approved third-party service providers and the controls over
provision of those services.
We conducted our audit using information maintained and provided by MCP
Emerging Markets LLP (the 'Investment Manager and AIFM'), Frostrow Capital LLP
(the 'Company Secretary, Administrator and Management Services Provider'),
Northern Trust Investor Services Limited (the 'Depositary) and The Northern
Trust Company (the 'Custodian') to whom the Company has delegated the
provision of services.
We tailored the scope of our audit to reflect our risk assessment, taking into
account such factors as the types of investments within the Company, the
involvement of the Administrator, the accounting processes and controls, and
the industry in which the Company operates.
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
Financial Statement line items and disclosures and in the evaluation of the
effect of misstatements, both individually and in aggregate on the Financial
Statements as a whole.
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,
we do not provide a separate opinion on these matters.
We summarise below the key audit matters in arriving at our audit opinion
above, together with how our audit addressed these matters and the results of
our audit work in relation to these matters.
Key audit matter How our audit addressed the key audit matter and our conclusions
Valuation of investments
(as described on page 54 in the Audit Committee Report and as per the We obtained and assessed controls reports provided by Frostrow Capital LLP (as
accounting policy on page 71 and Note 8). (All page numbers refer to the full Administrator) to evaluate the design of the process and implementation of key
annual report.) controls.
The valuation of the portfolio as at 30 November 2024 was £166.6m (2023: We compared market prices and exchange rates applied to all listed equity
£156.7m) and was comprised of listed equity investments. investments held at 30 November 2024 to an independent third-party source and
recalculated the investment valuations.
As this is the largest component of the Company's Statement of Financial
Position and a key driver of the Company's total return, this has been We obtained average trading volumes from an independent third-party source for
designated a key audit matter, being one of the most significant assessed all listed equity investments held at year end and have assessed their
risks of material misstatement due to error. liquidity. We have also assessed trading activity for evidence of an active
market.
There is a further risk that the investments held at fair value may not be
actively traded and the quoted prices may not be reflective of their fair From our completion of these procedures, we identified no material
value. misstatements in relation to the valuation of the investments.
Revenue recognition, including allocation of special dividends as revenue or
capital returns
(as described on page 54 in the Audit Committee Report and as per the We obtained and assessed controls reports provided by Frostrow Capital LLP (as
accounting policy on page 72 and Note 2). (All page numbers refer to the full Administrator) to evaluate the design of the process and implementation of key
annual report.) controls.
The income from investments for the year to 30 November 2024 was £3.5m We assessed whether income was recognised and disclosed in accordance with the
(2023: £2.8m) consisting primarily of £3.3m (2023: £2.5m) of financial reporting framework, including the AIC SORP and the Company's
overseas dividend income. accounting policies.
Revenue-based performance metrics are often one of the key performance We recalculated 100% of dividends due to the Company from equity holdings,
indicators for stakeholders. The income from investments received by the based on investment holdings throughout the year and announcements made by
Company during the year directly impacts these metrics and the minimum investee companies.
dividend required to be paid by the Company.
We have agreed the foreign exchange rates used to independent third-party
There is a risk that revenue is incomplete, did not occur or is inaccurate sources and agreed a sample of investment income recognised to bank
through failure to recognise income entitlements or failure to appropriately statements.
account for their treatment. It has therefore been designated a key audit
matter, being one of the most significant assessed risks of material We obtained management's list of all special dividends received by the Company
misstatement due to error. and their allocation as revenue or capital returns, and used a third-party
independent data source to assess the completeness of the special dividend
Additionally, judgement is required in determining the allocation of special population and evaluate management's conclusions as to whether special
dividends as revenue or capital returns in the Income Statement and the dividends recognised were revenue or capital in nature, with reference to the
process for allocation is manual. It has therefore been designated a key underlying circumstances of the investee companies' dividend payments.
audit matter, being one of the most significant assessed risks of material
misstatement due to fraud or error. From our completion of these procedures, we identified no material
misstatements in relation to revenue recognition, including allocation of
special dividends as revenue or capital returns.
Our application of 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 in
determining the nature and extent of our work and in evaluating the results of
that work.
Materiality measure Value
Materiality for the Financial Statements as a whole £1.74m
We have set materiality as 1% of net assets as we believe that net assets is
the primary performance measure used by investors and is the key driver of
shareholder value. We determined the measurement percentage to be commensurate
with the risk and complexity of the audit and the Company's listed status.
Performance materiality £0.87m
Performance materiality represents amounts set by the auditor at less than
materiality for the Financial Statements as a whole, to reduce to an
appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality for the Financial Statements as a
whole.
In setting this we consider the Company's overall control environment and any
experience of the audit that indicates a lower risk of material misstatements.
We have set performance materiality at 50% of our overall financial statement
materiality as this is our first year as auditor.
Specific materiality £0.12m
Recognising that there are transactions and balances of a lesser amount which
could influence the understanding of users of the Financial Statements we
calculate a lower level of materiality for testing such areas.
Specifically, given the importance of the distinction between revenue and
capital for the Company, we also applied a separate testing threshold for the
revenue column of the Income Statement, set at the higher of 5% of the revenue
return before taxation and our Audit Committee Reporting Threshold.
We have also set a separate specific materiality in respect of related party
transactions and Directors' remuneration.
We used our judgement in setting these thresholds and considered our
experience and industry benchmarks for specific materiality.
Audit Committee Reporting Threshold £0.09m
We agreed with the Audit Committee that we would report to them all
differences in excess of 5% of overall materiality in addition to other
identified misstatements that warranted reporting on qualitative grounds, in
our view. For example, an immaterial misstatement as a result of fraud.
During the course of the audit, we reassessed initial materiality and found no
reason to alter the basis of calculation used at year-end.
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 management's method of assessing going concern, including
consideration of the redemption facility and market conditions and
macro-economic uncertainties;
● Assessing and challenging the forecast cashflows and associated
sensitivity modelling used by the Directors in support of their going concern
assessment by reference to supporting documentation, Board approved budgets,
our own understanding of the Company and the economic environment in which it
operates, and the results of other audit work;
● Assessing the plausibility of mitigating actions identified by
management as available to them to continue as a going concern if downside
uncertainties were to crystallise;
● Performing arithmetical and consistency checks on management's base
forecast;
● Obtaining and recalculating management's assessment of the Company's
ongoing maintenance of investment trust status;
● Evaluating management's assessment of the business continuity plans
of the Company's main service providers; and
● Assessing the adequacy of the Company's going concern disclosures
included in the Annual Report.
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 Company's reporting on how it 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.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report
other than the Financial Statements and our auditor's report thereon. The
Directors are responsible for the other information contained within the
Annual Report. Our opinion on the Financial Statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the Financial
Statements, or our knowledge obtained in the course of 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors' Remuneration Report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
● The information given in the Strategic Report and the Directors'
Report for the financial year for which the Financial Statements are prepared
is consistent with the Financial Statements; and
● The Strategic Report and the Directors' Report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
● Adequate accounting records have not been kept by the Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
● The Financial Statements and the part of the Directors' Remuneration
Report to be audited are not in agreement with the accounting records and
returns; or
● Certain disclosures of Directors' remuneration specified by law are
not made; or
● We have not received all the information and explanations we require
for our audit; or
● A corporate governance statement has not been prepared by the
Company.
Corporate governance statement
We have reviewed the Directors' statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement
relating to the entity's compliance with the provisions of the UK Corporate
Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the Financial Statements or our knowledge obtained during the
audit:
● 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 40;
● 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 25 and 26;
● The Directors' statement on fair, balanced and understandable set
out on page 51;
● The Directors' statement on whether it has a reasonable expectation
that the Company will be able to continue in operation and meets its
liabilities set out on page 40;
● The Directors' confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on pages 22 to 25;
● The section of the annual report that describes the review of the
effectiveness of risk management and internal control systems set out on pages
47 and 48; and
● The section describing the work of the Audit Committee set out on
pages 53 and 54.
(All page numbers refer to the full annual report.)
Responsibilities of Directors
As explained more fully in the Statement of Directors' Responsibilities set
out on page 51, the Directors are responsible for the preparation of the
Financial Statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine is necessary to
enable the preparation of Financial Statements that are free from material
misstatement, whether due to fraud or error. In preparing the Financial
Statements, the Directors are responsible for assessing the Company's ability
to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Company or to cease operations, or
have no realistic alternative but to do so.
Auditor 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 Financial Reporting Council's website at:
http://www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor's report.
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.
We assessed whether the engagement team collectively had the appropriate
competence and capabilities to identify or recognise non-compliance with laws
and regulations by considering their experience, past performance and support
available.
All engagement team members were briefed on relevant identified laws and
regulations and potential fraud risks at the planning stage of the audit.
Engagement team members were reminded to remain alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are
applicable to the Company and the sector in which it operates, focusing on
those provisions that had a direct effect on the determination of material
amounts and disclosures in the Financial Statements. The most relevant
frameworks we identified include:
● Companies Act 2006;
● FCA listing and DTR rules;
● The principles of the UK Corporate Governance Code applied by the
AIC Code of Corporate Governance (the "AIC Code");
● Industry practice represented by the Statement of Recommended
Practice: Financial Statements of Investment Trust Companies and Venture
Capital Trusts ("the SORP") issued in July 2022;
● Financial Reporting Standard 102; and
● The Company's qualification as an investment trust under section
1158 of the Corporation Tax Act 2010.
We gained an understanding of how the Company is complying with these laws and
regulations by making enquiries of management and those charged with
governance. We corroborated these enquiries through our review of relevant
correspondence with regulatory bodies and board meeting minutes.
We assessed the susceptibility of the financial statements to material
misstatement, including how fraud might occur, by meeting with management and
those charged with governance to understand where it was considered there was
susceptibility to fraud. This evaluation also considered how management and
those charged with governance were remunerated and whether this provided an
incentive for fraudulent activity. We considered the overall control
environment and how management and those charged with governance oversee the
implementation and operation of controls. In areas of the financial statements
where the risks were considered to be higher, we performed procedures to
address each identified risk. We identified a heightened fraud risk in
relation to:
● management override of controls; and
● allocation of special dividends (revenue recognition).
Audit procedures performed in response to the risk relating to the
completeness and allocation of special dividends are set out in the section on
key audit matters above, and audit procedures performed in response to the
risk of management override of controls are included below.
In addition to the above, the following procedures were performed to provide
reasonable assurance that the Financial Statements were free of material fraud
or error:
● Reviewing minutes of meetings of those charged with governance for
reference to: breaches of laws and regulation or for any indication of any
potential litigation and claims; and events or conditions that could indicate
an incentive or pressure to commit fraud or provide an opportunity to commit
fraud;
● Performing audit work procedures over the risk of management
override of controls, including unpredictability testing, testing of journal
entries and other adjustments for appropriateness, evaluating the business
rationale of significant transactions outside the normal course of business
and reviewing judgements made by management in their calculation of accounting
estimates for potential management bias;
● Completion of appropriate checklists and use of our experience to
assess the Company's compliance with the Companies Act 2006 and the Listing
Rules; and
● Agreement of the Financial Statement disclosures to supporting
documentation.
Our audit procedures were designed to respond to the risk of material
misstatements in the Financial Statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve intentional
concealment, forgery, collusion, omission, or misrepresentation. There are
inherent limitations in the audit procedures described above and the further
removed non-compliance with laws and regulations is from the events and
transactions reflected in the Financial Statements, the less likely we would
become aware of it.
Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed by the
Board on 20 August 2024 to audit the Financial Statements for the year ended
30 November 2024 and subsequent financial periods. The period of our total
uninterrupted engagement is one year, covering the year ended 30 November
2024.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the Company and we remain independent of the Company in conducting
our audit.
Our audit opinion is consistent with the additional report to the Audit
Committee.
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members
as a body, for our audit work, for this report, or for the opinions we have
formed.
Richard Sutherland
(Senior Statutory Auditor)
for and on behalf of Johnston Carmichael LLP
Statutory Auditor
Edinburgh, United Kingdom
10 March 2025
Financial Statements
INCOME STATEMENT
for the year ended 30 November 2024
Year ended Year ended
30 November 2024 30 November 2023
Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments held at fair value 8 - 8,696 8,696 - 14,434 14,434
Exchange losses on foreign currencies (2) (114) (116) - (210) (210)
Income 2 3,496 - 3,496 2,802 - 2,802
Investment management and management service fees 3 (576) (1,343) (1,919) (541) (1,263) (1,804)
Other expenses 4 (490) - (490) (492) - (492)
Return on ordinary activities
before taxation 2,428 7,239 9,667 1,769 12,961 14,730
Taxation on ordinary activities 5 (229) (940) (1,169) (154) (1,449) (1,603)
Return after taxation attributable to equity shareholders 2,199 6,299 8,498 1,615 11,512 13,127
Return per share basic and diluted 7 1.91p 5.45p 7.36p 1.45p 10.34p 11.79p
The "Total" column of this statement represents the Company's Income
Statement. The Revenue and Capital columns are supplementary to this and are
prepared under guidance published by the Association of Investment Companies
(AIC).
All items in the above statement derive from continuing operations.
The Company had no other comprehensive income or expenses other than those
shown above and therefore no separate Statement of Other Comprehensive Income
has been presented.
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 November 2024
Capital
Share Share Special Redemption Capital Revenue
capital premium reserve reserve reserves reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 December 2023 1,167 21,158 95,093 14 46,902 2,195 166,529
Return for the year - - - - 6,299 2,199 8,498
Ordinary Final dividend (1.25p) for the year ended 30 November 2023 - - - - - (1,443) (1,443)
Balance at 30 November 2024 1,167 21,158 95,093 14 53,201 2,951 173,584
Capital
Share Share Special Redemption Capital Revenue
capital premium reserve reserve reserves reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 December 2022 1,088 10,833 95,093 14 35,390 1,876 144,294
Issue of Ordinary shares 79 10,325 - - - - 10,404
Return for the year - - - - 11,512 1,615 13,127
Ordinary Final dividend (1.20p) for the year ended 30 November 2022 - - - - - (1,296) (1,296)
Balance at 30 November 2023 1,167 21,158 95,093 14 46,902 2,195 166,529
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
as at 30 November 2024
2024 2023
Notes £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 8 166,627 156,690
Current assets
Debtors 9 2,779 1,399
Cash at bank and in hand 14 6,618 10,722
9,397 12,121
Current liabilities
Creditors (amounts falling due within one year) 10 (262) (491)
Net current assets 9,135 11,630
Total assets less current liabilities 175,762 168,320
Non-current liabilities
Deferred tax liability 11 (2,178) (1,791)
Net assets 173,584 166,529
Capital and reserves
Called up share capital 12 1,167 1,167
Share premium 21,158 21,158
Special reserve 95,093 95,093
Capital redemption reserve 14 14
Retained Earnings:
Capital reserves 53,201 46,902
Revenue reserve 2,951 2,195
Total Shareholders' funds 173,584 166,529
Net asset value per Ordinary Share (p) 13 150.39 144.28
The Financial Statements were approved, and authorised for issue, by the Board
of Directors on 10 March 2025 and signed on its behalf by:
Maria Luisa Cicognani
Chairman
The accompanying notes are an integral part of these financial statements.
Mobius Investment Trust plc - Company Registration Number: 11504912
(Registered in England and Wales)
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting Policies
The principal accounting policies, all of which have been applied consistently
throughout the year in the preparation of these Financial Statements, are set
out below:
(a) Basis of preparation
The Financial Statements have been prepared in accordance with UK Generally
Accepted Accounting Practice ("GAAP") under UK and Republic of Ireland Company
Law, FRS 102 'The Financial Reporting Standard applicable in the UK, the
Statement of Recommended Practice ("SORP") for "Financial Statements of
Investment Trust Companies and Venture Capital Trusts" issued by the
Association of Investment Companies in July 2022 and the Companies Act 2006
under the historical cost convention as modified by the valuation of
investments at fair value through profit or loss.
The Financial Statements have been prepared on a going concern basis. The
disclosure on going concern in the Report of the Directors forms part of these
Financial Statements.
All values are rounded to the nearest thousand pounds (£'000) except where
otherwise indicated.
The Company has taken advantage of the exemption from preparing a Cash Flow
Statement under FRS 102, as it is an investment company whose investments are
substantially all highly liquid and carried at fair (market) value.
Significant Judgements
There are two significant judgements involved in the presentation of the
Company's accounts being the judgement on the functional currency of the
Company and the classification of the special dividend.
The Company's investments are made in foreign currencies, however the Board
considers the Company's functional currency to be sterling. In arriving at
this conclusion, the Board considered that the shares of the Company are
listed on the London Stock Exchange, it is regulated in the United Kingdom and
pays dividends and expenses in sterling.
The special dividend received during the year was assessed by the Board who
were satisfied that it had been accounted for appropriately.
Presentation of the Income Statement
In order to reflect better the activities of an investment trust company and
in accordance with the SORP, supplementary information which analyses the
Income Statement between items of a revenue and capital nature has been
presented alongside the Income Statement. The net revenue return is the
measure the Directors believe appropriate in assessing the Company's
compliance with certain requirements set out in Section 1158 of the
Corporation Tax Act 2010.
(b) Valuation of Investments
Investments are measured under FRS 102, sections 11 and 12 and are measured
initially, and at subsequent reporting dates, at fair value.
Changes in the fair value of investments and gains and losses on disposal are
recognised in the Income Statement as a capital item. The Company manages and
evaluates the performance of these investments on a fair value basis in
accordance with its investment strategy, and information about the investments
is provided internally on this basis to the Board. Fair value for quoted
investments is deemed to be bid market prices, or last traded price, depending
on the convention of the stock exchange on which they are quoted.
All purchases and sales of investments are accounted for on the trade date
basis.
The Company's policy is to expense transaction costs on acquisition/disposal
through the gains on investment at fair value through profit or loss. The
total of such expenses, showing the total amounts included in disposals and
acquisitions are disclosed in note 8 of the Financial Statements.
In addition, for financial reporting purposes, fair value measurements are
categorised into a fair value hierarchy based on the degree to which the
inputs to the fair value measurements are observable and the significance of
the inputs to the fair value measurement in its entirety, which are described
as follows:
· Level 1 - Quoted prices in active markets;
· Level 2 - Inputs other than quoted prices included within Level 1
that are observable (i.e. developed using market data), either directly or
indirectly; and
· Level 3 - Inputs are unobservable (i.e. for which market data is
unavailable).
(c) Investment Income
Dividends receivable from equity shares are recognised in Revenue on an
ex-dividend basis except where, in the opinion of the Board, the dividend is
capital in nature, in which case it is included in Capital.
Overseas dividends are reported gross of withholding tax.
Special dividends are looked at individually to decide the reason behind the
payment. In deciding whether a dividend should be regarded as a capital or
revenue receipt, the Company reviews all relevant information as to the
reasons for and sources of the dividend on a case by case basis. Special
dividends of a revenue nature are recognised through the revenue column of the
Income Statement. Special dividends of a capital nature are recognised through
the capital column of the Income Statement. Deposit interest receivable is
taken to the revenue account on an accruals basis.
(d) Expenses and finance costs
All the expense and finance costs are accounted for on an accruals basis.
Expenses are charged through the revenue column of the Income Statement except
as follows:
· Expenses which are incidental to the acquisition or disposal of
an investment are treated as part of the cost or proceeds of that investment;
· Expenses are taken to the Capital reserve via the capital column
of the Income Statement, where a connection with the maintenance or
enhancement of the value of investments can be demonstrated. In line with the
Board's expected long-term split of returns, in the form of capital gains and
income from the Company's portfolio, 70% of the Investment Management fees,
Administration and Management Services fees and finance costs are taken to the
Capital reserve.
(e) Taxation
In line with the recommendations of the SORP, the tax effect of different
items of expenditure is allocated between capital and revenue using the
marginal basis. Deferred taxation is provided on all timing differences that
have originated but not been reversed by the Statement of Financial Position
date other than those regarded as permanent. This is subject to deferred tax
assets only being recognised if it is considered more likely than not that
there will be suitable profits from which the reversal of timing differences
can be deducted. Any liability to deferred tax is provided for at the rate of
tax enacted or substantially enacted.
Dividend income received by the Company may be subject to withholding tax
imposed in the country of origin. The tax charges shown in the Income
Statement relates mainly to overseas withholding tax on dividend income and
Indian capital gains tax.
Indian capital gains tax is allocated to the Capital column of the Income
Statement.
(f) Foreign currency
The currency of the primary economic environment in which the Company operates
(the functional currency) is sterling, which is also the presentational
currency of the Company. Transactions recorded in overseas currencies during
the year are translated into sterling at the appropriate daily exchange rates.
Assets and liabilities denominated in overseas currencies at the Statement of
Financial Position date are translated into sterling at the exchange rate
ruling at that date.
Exchange differences are included in the Income Statement and allocated as
capital if they are of a capital nature, or as revenue if they are of a
revenue nature.
(g) Nature and purpose of reserves
Ordinary share capital
· represents the nominal value of the issued ordinary share
capital.
Share premium account
· represents the surplus of net proceeds received from the issue of
new shares over the nominal value of such shares. The share premium account is
non-distributable.
Special reserve
· this reserve is created upon the cancellation of the Share
Premium Account. This reserve is distributable by way of a dividend and can
also be used to fund any repurchases of the Company's own shares.
Capital redemption reserve
· a transfer will be made to this reserve on cancellation of the
Company's own shares purchased, equal to the nominal value of the shares. This
reserve is non-distributable.
Capital reserve
This reserve reflects any:
· gains or losses on the disposal of investments;
· exchange differences of a capital nature;
· the increases and decreases in the fair value of investments
which have been recognised in the capital column of the Income Statement; and
· expenses which are capital in nature as disclosed below.
This reserve can also be used to distribute realised capital profits by way of
a dividend and to fund any repurchases of the Company's own shares.
Any gains in the fair value of investments that are not readily convertible to
cash are treated as unrealised gains in the Capital reserve.
Revenue reserve
· reflects all income and expenditure which are recognised in the
revenue column of the Income Statement and is distributable by way of
dividend.
It is the Board's current policy to only pay dividends out of the Revenue
reserve.
(h) Dividends payable
Dividends paid by the Company are recognised in the Financial Statements and
are shown in the Statement of Changes in Equity in the period in which they
became legally binding, which in the case of an interim dividend is the point
at which it is paid and for a final dividend when it is approved by
Shareholders at the AGM, in line with the ICAEW Tech Release 02/17BL.
2. Income
Year ended Year ended
30 November 30 November
2024 2023
£'000 £'000
Income from investments
Overseas Dividends* 3,276 2,505
Other income - bank interest 220 297
3,496 2,802
* includes special dividend received from Kangji Medical
Holdings of £564,000 (2023: £nil).
3. Investment Management and Management Service Fees
Year ended Year ended
30 November 2024 30 November 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fees - MCP Emerging Markets LLP 470 1,096 1,566 442 1,031 1,473
Management service fees - Frostrow Capital LLP 106 247 353 99 232 331
576 1,343 1,919 541 1,263 1,804
Further information regarding Investment Management and Management Service
fees can be found in the Business Review.
4. Other Expenses
Year ended Year ended
30 November 30 November
2024 2023
£'000 £'000
Directors' fees 105 105
Auditor's remuneration - Statutory annual audit 41 56
Custody fees 100 92
Depositary fees 26 25
Registrar fees 19 19
Company Broker fees 45 46
Stock listing and FCA fees 23 20
Marketing and promotional costs* 28 48
Other administrative expenses 103 81
490 492
* 2023 includes extra marketing costs in relation to the 5th
anniversary of the Company.
5. Taxation
(a) Analysis of Charge in the Year
Year ended Year ended
30 November 2024 30 November 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Overseas taxation 229 - 229 154 - 154
Overseas capital gains tax - 940 940 - 1,449 1,449
229 940 1,169 154 1,449 1,603
Overseas tax arose as a result of irrecoverable withholding tax on overseas
dividends and Indian capital gains tax ("CGT").
Indian CGT arises on capital gains on the sale of Indian securities at a rate
of 15% on short-term capital gains (defined as those where the security was
left for less than a year) and 10% on long-term capital gains. The Indian
Budget in July 2024 announced an increase to the Indian capital gains tax
(CGT) rates. The short-term CGT rate was increased from 15% to 20% and the
long-term CGT rates was increased from 10% to 12.5%. The new rates were
substantially enacted on 8 August 2024 and effective retrospectively from 23
July 2024. A deferred tax liability for CGT as at 30 November 2024 is
recognised on unrealised capital gains on Indian securities, see Note 11 below
£2,178,000 (2023: £1,791,000).
(b) Reconciliation of Tax Charge
The revenue account tax charge for the year is lower than the standard rate of
corporation tax in the UK of 25% (2023: 23%).
Year ended Year ended
30 November 2024 30 November 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total return on ordinary activities before tax 2,428 7,239 9,667 1,769 12,961 14,730
Corporation tax charged at 25% (2023: 23%)(#) 607 1,810 2,417 407 2,981 3,388
Effects of:
Gains on investments not subject to UK corporation tax - (2,175) (2,175) - (3,320) (3,320)
Non-taxable foreign exchange losses - 29 29 - 48 48
Unutilised management expenses 267 336 603 238 291 529
Income not subject to corporation tax (874) - (874) (645) - (645)
Overseas taxation 229 - 229 154 - 154
Indian capital gains tax - 940 940 - 1,449 1,449
Tax charge for the year 229 940 1,169 154 1,449 1,603
# With effect from 1 April 2023, the main rate of corporation tax
increased from 19% to 25%, therefore the hybrid rate of 23% was used in 2023.
(c) Provision for UK Deferred Taxation
For the year ended 30 November 2024, the Company had cumulative unutilised
management expenses for taxation purposes of £12,520,000 (2023:
£10,111,000). It is unlikely the Company will generate sufficient taxable
income in excess of the available deductible expenses and therefore the
Company has not recognised a deferred tax asset of £3,130,000 (2023:
£2,528,000) based on a prospective corporation tax rate of 25% (2023: 23%).
Due to the Company's status as an investment company and the intention to
continue meeting the conditions required to maintain such a status in the
foreseeable future, the Company has not provided for deferred UK tax on any
capital gains or losses arising on the revaluation or disposal of investments.
Deferred tax has been provided for on capital gains arising on Indian
Securities as disclosed in note 5(a) above.
6. Dividends
In accordance with FRS 102 dividends are included in the Financial Statements
in the year in which they are paid or approved by Shareholders. Amounts
recognised as distributable to Shareholders for the year end 30 November 2024
were as follows:
Ex-Dividend Payment 2024 2023
date
date
£'000
£'000
Final dividend paid for the year ended 30 November 2023 of 11 April 2024 7 May 2024 1,443 -
1.25p per share
Final dividend paid for the year ended 30 November 2022 of 6 April 2023 5 May 2023 - 1,296
1.20p per share
The final dividend of 1.7p (2023: 1.25p) has not been included as a liability
in these Financial Statements as it is only recognised in the financial year
in which it is paid. The total dividends payable in respect of the financial
year which forms the basis of the retention test under Section 1158 of the
Corporation Tax Act 2010 are set out below:
Year ended Year ended
30 November 30 November
2024 2023
£'000 £'000
Revenue available for distribution by way of dividend for the year 2,199 1,615
Final dividend of 1.7p (2023: 1.25p) per share* (1,962) (1,443)
Revenue reserves available following distribution 237 172
* Based on the number of shares in issue as at 30 November 2024
being 115,420,336 (2023: 115,420,336 on the ex-dividend date).
7. Return per share - basic and diluted
The return per share figures are based on the following figures:
Year ended Year ended
30 November 30 November
2024 2023
£'000 £'000
Net revenue return 2,199 1,615
Net capital return 6,299 11,512
Net total return 8,498 13,127
Year ended Year ended
30 November 30 November
2024 2023
Pence Pence
Revenue return per share 1.91 1.45
Capital return per share 5.45 10.34
Total return per share 7.36 11.79
Weighted average number of Ordinary shares in issue during the year 115,420,336 111,386,397
During the year (2023: nil) there were no dilutive instruments held, therefore
the basic and diluted return per share are the same.
8. Investments held at fair value through profit or loss
30 November 30 November
2024 2023
£'000 £'000
Opening book cost 137,757 108,263
Opening investment holding gains 18,933 18,571
Opening fair value 156,690 126,834
Purchases at cost 35,467 48,876
Sales proceeds (34,226) (33,454)
Gains on investments held at fair value through profit or loss 8,696 14,434
Closing fair value 166,627 156,690
Closing book cost 152,603 137,757
Closing investment holding gains 14,024 18,933
Closing fair value 166,627 156,690
The Company received £34,226,000 (2023: £33,454,000) from investments sold
in the year. The book cost of the investments when they were purchased was
£20,621,000 (2023: £19,382,000). These investments have been revalued over
time until they were sold. Any unrealised gains/losses were included in the
fair value of the Investments.
During the year the Company incurred transaction costs on purchases of
£47,000 (2023: £61,000).
Sales transaction costs incurred during the year were £103,000 (2023:
£88,000) and comprised commission.
9. Debtors
30 November 30 November
2024 2023
£'000 £'000
Outstanding sales due for settlement 2,596 1,270
Accrued income 11 27
Overseas tax recoverable 117 71
Non-redeemable preference shares recoverable - Management Shares 13 13
Other debtors 42 18
2,779 1,399
10. Creditors: amounts falling due within one year
30 November 30 November
2024 2023
£'000 £'000
Outstanding purchases due for settlement - 222
Investment management fee - MCP Emerging Markets LLP 133 127
Management service fee - Frostrow Capital LLP 30 30
Other creditors 99 112
262 491
11. Deferred tax liability
30 November 30 November
2024 2023
£'000 £'000
Deferred taxation on unrealised capital gains on Indian securities 2,178 1,791
See note 5(a) above for further details.
12. Called up Share Capital
30 November 30 November
2024 2023
£'000 £'000
Allotted and fully paid
115,420,336 (2023: 115,420,336) Ordinary shares of 1p each 1,154 1,154
Called up Management Shares
50,000 (2023: 50,000) non-redeemable preference shares - Management Shares of 13 13
£1 each.
1,167 1,167
The capital of the Company is managed in accordance with its investment policy
which is detailed in the Strategic Report.
During the year the Company issued no new shares (2023: 7,871,353) new
ordinary shares for a consideration of £10,404,000).
The share capital includes 50,000 non-redeemable preference shares -
Management shares, of a nominal value of £1 each; of which one quarter is
called up. These are held by the Investment Manager.
The Company does not have any externally imposed capital requirements.
13. Net Asset Value Per Ordinary Share
30 November 30 November
2024 2023
Net Assets (£'000) 173,584 166,529
Number of shares in issue 115,420,336 115,420,336
Net asset value per share 150.39p 144.28p
During the year (2023: nil) there were no dilutive instruments held, therefore
the basic and dilutive net asset value per share are the same.
14. Financial Instruments
The Company's financial instruments comprise Its investment portfolio, cash
balances and debtors and creditors that arise directly from its operations. As
an investment trust the Company holds an investment portfolio of financial
assets in pursuit of its investment objective.
Fixed asset investments (see note 8 above) are valued at fair value in
accordance with the Company's accounting policies. The fair value of all other
financial assets and liabilities is represented by their carrying value in the
Statement of Financial Position.
All investments have been classified as Level 1.
The main risks that the Company faces arising from its financial instruments
are:
(i) market risk, including:
- Other price risk, being the risk that the value of investments will
fluctuate as a result of changes in market prices;
- interest rate risk, being the risk that the future cash flows of a
financial instrument will fluctuate because of changes in interest rates;
- foreign currency risk, being the risk that the value of financial
assets and liabilities will fluctuate because of movements in currency rates;
(ii) credit risk, being the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that it has
entered into with the Company; and
(iii) liquidity risk, being the risk that the Company will not be able to
meet its liabilities when they fall due. This may arise should the Company not
be able to liquidate its investments. Under normal market trading volumes the
investment portfolio could be substantially realised within a week.
Other price risk
The management of price risk is part of the Investment management process and
is typical of equity investment. The investment portfolio is managed with an
awareness of the effects of adverse price movements through detailed and
continuing analysis with an objective of maximising overall returns to
shareholders. Further information on how the investment portfolio is managed
is set out in the Investment Manager's Review. Although it is the Company's
current policy not to use derivatives they may be used from time to time, with
prior Board approval, to hedge specific market risk or gain exposure to a
specific market.
If the investment portfolio valuation rose or fell by 10% at 30 November 2024
(2023: 10%), the impact on the profit and loss and net asset value would have
been £17.0 million (2023: £16.0 million). The calculations are based on the
investment portfolio valuation as at the respective Statement of Financial
Position dates and are not necessarily representative of the year as a whole.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates.
When the Company retains cash balances the majority of the cash is held in the
custody account at The Northern Trust Company. The benchmark rate which
determines the interest payments received on cash balances is the bank base
rate for the relevant currency for each deposit.
Interest rate movements may affect the level of income receivable on cash
deposits and cash equivalents and interest payable on borrowing.
Interest rate exposure
The exposure of financial assets and financial liabilities to floating
interest rates, giving cash flow interest rate risk when rates are re-set, is
shown below:
30 November 30 November
2024 2023
£'000 £'000
Exposure to floating interest rates:
Cash at bank and in hand 6,618 10,722
Net exposure 6,618 10,722
Interest rate sensitivity
The following table illustrates the sensitivity of the return after taxation
for the year and net assets to a 5% (2023: 5%) increase or decrease in
interest rates in regards to the Company's monetary financial assets and
financial liabilities. This level of change is considered to be a reasonable
illustration based on observation of current market conditions. The
sensitivity analysis is based on the Company's monetary financial instruments
held at the accounting date with all other variables held constant.
30 November 2024 30 November 2023
5% increase 5% decrease 5% increase 5% decrease
in rate in rate in rate in rate
£'000 £'000 £'000 £'000
Income statement - return after taxation
Revenue return/(loss) 331 (331) 536 (536)
Capital return - - - -
Total return after taxation 331 (331) 536 (536)
Net assets 331 (331) 536 (536)
The Directors do not consider the exposure to interest risk as being material
to the Company.
Foreign currency risk
Foreign currency risk is the risk that fair values of future cash flows of a
financial instrument fluctuate because of changes in foreign exchange rates.
The Company Invests in overseas securities and holds foreign currency cash
balances which give rise to currency risks. Foreign currency risks are managed
alongside other market risks as part of the management of the investment
portfolio. it is currently not the Company's policy to hedge this risk on a
continuing basis but it can do so from time to time.
Foreign currency exposure:
2024 2023
Investments Cash Debtors Creditors Investments Cash Debtors Creditors
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
New Taiwanese dollar 39,294 24 931 - 39,999 25 41 -
Indian rupee 24,172 - - - 32,688 72 51 -
Turkish lira 19,427 - - - 12,155 - - (222)
Brazilian real 18,241 - 1,666 - 12,561 - 9 -
Korean won 16,140 - - - 26,182 - 1,219 -
US dollar 11,070 108 - - 9,024 - - -
Thailand baht 8,490 - - - 4,553 - - -
Vietnamese dong 8,473 557 - - 4,724 1,320 - -
Kenyan shilling 7,882 - - - 3,339 - - -
Malaysian ringgit 5,610 - - - - - - -
Hong Kong dollar 4,974 - 87 - 7,266 - - -
South African rand 2,854 - 7 - 4,199 - - -
Polish zloty - - 21 - - - 21 -
166,627 689 2,712 - 156,690 1,417 1,341 (222)
At 30 November 2024, the Company had £5,929,000 (2023: £9,305,000) of
sterling cash balances.
Foreign currency sensitivity
During the year sterling strengthened by an average of 3.3% (2023: 3.7%
strengthened) against all of the currencies in the investment portfolio
(weighted for exposure at 30 November 2024), if the value of sterling had
strengthened against each of the currencies in the portfolio by 10%, the
impact on the net asset value would have been negative £17.0 million (2023:
£16.0 million). If the value of sterling had weakened against each of the
currencies in the investment portfolio by 10%, the impact on the net asset
value would have been positive £17.0 million (2023: £16.0 million). The
calculations are based on the investment portfolio valuation and cash balances
as at the year end and are not necessarily representative of the year as a
whole.
The level of sensitivity is considered to be reasonably possible, based on
observations of current market conditions and historical trends.
Appreciation/
Foreign Exchange Rates 2024 2023% (depreciation)
New Taiwanese dollar 41.2875 39.5483 4.4
Indian rupee 107.3989 105.5723 1.7
Turkish lira 44.1048 36.5219 20.8
Brazilian real 7.5890 6.2440 21.5
Korean won 1773.1783 1633.2654 8.6
US dollar 1.2711 1.2659 0.4
Thailand baht 43.5938 44.5329 (2.1)
Vietnamese dong 32,216.67 30,711.94 4.9
Kenyan shilling 164.9187 194.0068 (15.0)
Malaysian ringgit 5.6498 5.8987 (4.2)
Hong Kong dollar 9.8907 9.8874 0.0
South African rand 22.9560 23.9897 (4.3)
Polish zloty 5.1659 5.051 2.3
Credit risk
Credit risk is the risk that a counterparty to a financial instrument will
fail to discharge an obligation or commitment that it has entered into with
the Company. The Investment Manager has in place a monitoring procedure in
respect of counterparty risk which is reviewed on an ongoing basis. The
carrying amounts of financial assets best represents the maximum credit risk
exposure at the statement of financial position date, and the main exposure to
credit risk is via the Company's Custodian who is responsible for the
safeguarding of the Company's Investments and cash balances.
At the reporting date, the Company's financial assets exposed to credit risk
amounted to the following:
2024 2023
£'000 £'000
Cash at bank and in hand 6,618 10,722
Debtors 2,779 1,399
9,397 12,121
Credit risk is the risk that the counterparty to a transaction fails to
discharge its obligations under that transaction, which could result in the
Company suffering a loss. Credit risk is managed as follows:
- All the assets of the Company which are traded on a recognised exchange
are held by The Northern Trust Company, the Company's Custodian.
- Investment transactions are carried out only with brokers which are
considered to have a high credit rating.
- Transactions are ordinarily undertaken on a delivery versus payment
basis, whereby the Company's custodian bank ensures that the counterparty to
any transactions entered into by the Company has delivered its obligation
before any transfer of cash or securities away from the Company is completed.
- Any failing trades in the market are closely monitored by both the AIFM
and the Administrator.
- Cash is only held at banks that have been identified by the Board as
reputable and of high credit quality.
The Northern Trust Company has a credit rating of Aa2 (Moody's) AA- (Standard
& Poor's) and AA (Fitch Ratings).
The Board monitors the Company's risk as described in the Strategic Report.
Liquidity risk
The Company's liquidity risk is managed on an ongoing basis by the Investment
Manager and the Administrator. The Company's overall liquidity risks are
monitored on a quarterly basis by the Board.
Based on current trading volumes, 100.0% of the current portfolio could be
liquidated within 30 trading days, with 96.1% in seven days or less, under
normal market conditions. As such, liquidity risk is not considered a material
risk.
Further details on the principal risks facing the Company, can be found in the
Business Review.
15. Transactions with the Investment Manager and Related Parties
· MCP Emerging Markets LLP (MCP) (formerly Mobius Capital Partners
LLP)
· The Directors of the Company
The Company employs MCP as its Investment Manager. During the year ended 30
November 2024, MCP earned £1,566,000 (2023: £1,473,000) in respect of
Investment Management fees, of which £133,000 (2023: £127,000) was
outstanding at the year end. Details of the fees of all Directors can be found
in the Directors' Remuneration Report and in note 4 above.
The Directors' interests in the capital of the Company can be found in the
Directors' Remuneration Report. There were no other material transactions
during the year with the Directors of the Company.
16. Contingent Liabilities
There were no contingent liabilities at 30 November 2024 (2023: none).
17. Post Balance Sheet Events
Subsequent to the Company's year end, the net asset value per share of the
Company has decreased by 4.1% from 150.4p to 144.2p and the Company's share
price has also decreased by 3.3% from 138.0p to 133.5p as at 5 March 2025.
Further Information and Notice of AGM
AIFMD RELATED DISCLOSURE
Alternative Investments Fund Managers Directive ("AIFMD") Disclosures
(Unaudited)
Investment objective and leverage
MCP Emerging Markets LLP ("MCP") and the Company are required to make certain
disclosures available to investors in accordance with the Alternative
Investment Fund Managers Directive ("AIFMD").
A description of the investment strategy and objectives of the Company, the
types of assets in which the Company may invest, the techniques it may employ,
any applicable investment restrictions, the circumstances in which it may use
leverage, the types and sources of leverage permitted and the associated
risks, any restrictions on the use of leverage and the maximum level of
leverage which the AIFM and Investment Manager are entitled to employ on
behalf of the Company and the procedures by which the Company may change its
investment strategy and/or the investment policy can be found above.
The table below sets out the current maximum permitted limit and actual level
of leverages for the Company (see Glossary further details):
As a percentage of net assets
Gross Commitment
Method Method
Maximum level of leverage 150.0% 150.0%
Actual level at 30 November 2024 96.4% 99.8%
Remuneration Disclosure of AIFM staff
As per the firm's remuneration policy and procedures, MCP seeks to avoid
creating any incentive for individuals to take inappropriate risk and, in
general, all decisions are confirmed by the investment committee(s) which has
members in common with the governing body. During the year ended 30 November
2024, MCP had nine members of personnel in total, including employees and
Partners, two of whom fall under Code Staff as per the firm's remuneration
code policy. Following completion of an assessment of the application of the
proportionality principle to the FCA's AIFM Remuneration Code, MCP has
disapplied the pay-out processed rules with respect to all Code Staff members.
This is because the AIFM considers that it carries out non-complex activities
and is operating on a small scale.
The information above relates to MCP as a whole, and it has not been broken
down by reference to the Company or the other funds that MCP manages. Nor has
the proportion of remuneration which relates to the income MCP earns from
their management of the company.
Further disclosures required under the AIFM Rules can be found within the
Investor Disclosure Document on the Company's website
www.mobiusinvestmenttrust.com
GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES ("APMs")
Alternative Investment Fund Managers Directive (AIFMD)
Agreed by the European Parliament and the Council of the European Union and
transposed into UK legislation, the AIFMD classifies certain investment
vehicles, including investment companies, as Alternative Investment Funds
(AIFs) and requires them to appoint an Alternative Investment Fund Manager
("AIFM") and depositary to manage and oversee the operations of the investment
vehicle. The Board of the Company retains responsibility for strategy,
operations and compliance and the Directors retain a fiduciary duty to
shareholders.
Discount or Premium^
A description of the difference between the share price and the net asset
value per share. The size of the discount or premium is calculated by
subtracting the share price from the net asset value per share and is usually
expressed as a percentage (%) of the net asset value per share. If the share
price is higher than the net asset value per share the result is a premium. If
the share price is lower than the net asset value per share, the shares are
trading at a discount.
30 November 30 November
Discount or Premium^ 2024 2023
Share price (p) 138.0 132.5
Net asset value per share (p) 150.4 144.3
Discount 8.2% 8.2%
ESG+C(®)
Environmental, Social, Governance and Cultural
Gearing^
The term used to describe the process of borrowing money for investment
purposes. The expectation is that the returns on the investments purchased
will exceed the finance costs associated with those borrowings.
There are several methods of calculating gearing and the following has been
selected:
Total assets, less current liabilities (before deducting any prior charges)
minus cash/cash equivalents divided by shareholders' funds, expressed as a
percentage.
The Company had no borrowings during the year (2023: nil).
IPO
An initial public offering or stock launch is a public offering in which
shares of a company are sold to institutional investors and usually also
retail investors.
Leverage
Leverage is defined in the AIFMD as any method by which the AIFM increases the
exposure of an AIF. In addition to the gearing limit the Company also has to
comply with the AIFMD leverage requirements. For these purposes the Board has
set a maximum leverage limit of 150% for both methods. This limit is expressed
as a percentage with 100% representing no leverage or gearing in the Company.
There are two methods of calculating leverage as follows:
Under the Gross Method, exposure represents the Company's position after the
deduction of sterling cash balances and without taking into account any
hedging or netting arrangements.
Under the Commitment method, exposure is calculated without the deduction of
sterling cash balances and after certain hedging and netting positions are
offset (see AIFMD Related Disclosure for further details).
^ Alternative Performance Measure
MSCI Index
Certain information contained herein (the "Information") is sourced
from/copyright of MSCI Inc., MSCI ESG Research LLC, or their affiliates
("MSCI"), or information providers (together the "MSCI Parties") and may have
been used to calculate scores, signals, or other indicators. The Information
is for internal use only and may not be reproduced or disseminated in whole or
part without prior written permission. The Information may not be used for,
nor does it constitute, an offer to buy or sell, or a promotion or
recommendation of, any security, financial instrument or product, trading
strategy, or index, nor should it be taken as an indication or guarantee of
any future performance. Some funds may be based on or linked to MSCI indexes,
and MSCI may be compensated based on the fund's assets under management or
other measures. MSCI has established an information barrier between index
research and certain Information. None of the Information in and of itself can
be used to determine which securities to buy or sell or when to buy or sell
them. The Information is provided "as is" and the user assumes the entire risk
of any use it may make or permit to be made of the Information. No MSCI Party
warrants or guarantees the originality, accuracy and/or completeness of the
Information and each expressly disclaims all express or implied warranties. No
MSCI Party shall have any liability for any errors or omissions in connection
with any Information herein, or any liability for any direct, indirect,
special, punitive, consequential or any other damages (including lost profits)
even if notified of the possibility of such damages.
Net Asset Value ("NAV")
The value of the Company's assets, principally investments made in other
companies and cash being held, minus any liabilities. The NAV is also
described as shareholders' funds. The NAV is often expressed in pence per
share after being divided by the number of shares which have been issued. The
NAV per share is unlikely to be the same as the share price which is the price
at which the Company's shares can be bought or sold by an investor. The share
price is determined by the relationship between the demand and supply of the
shares.
Net Asset Value Per Share ("NAV") Total Return^
The theoretical total return on an investment over a specified period assuming
dividends paid to shareholders were reinvested at net asset value per share at
the time the shares were quoted ex-dividend. This is a way of measuring
investment management performance of investment trusts which is not affected
by movements in discounts or premiums.
Total return statistics also enable the investors to make performance
comparisons between investment companies with different dividend polices.
Year ended Year ended
30 November 30 November
NAV Per Share Total Return 2024 2023
Opening NAV (p) 144.3 134.2
Increase in NAV (p) 6.1 10.1
Closing NAV (p) 150.4 144.3
Increase in NAV 4.2% 7.5%
Impact of reinvested dividends 1.0% 1.0%
NAV Total Return 5.2% 8.5%
Ongoing Charges^
Ongoing charges are calculated by taking the Company's annualised operating
expenses as a proportion of the average daily net asset value of the Company
over the year. The costs of buying and selling investments are excluded, as
are interest costs, taxation, cost of buying back or issuing ordinary shares
and other non-recurring costs.
Year ended Year ended
30 November 30 November
2024 2023
Ongoing Charges £'000 £'000
Investment management fees and management service fees 1,919 1,804
Operating expenses 490 492
Total expenses 2,409 2,296
Average net assets during the year 170,298 151,146
Ongoing Charges 1.4% 1.5%
Peer Group
The Company has selected the following eight companies taken from the AIC's
Global Emerging Markets sector to form the Company's peer group:
Ashoka WhiteOak Emerging Markets, Barings Emerging EMEA Opportunities,
BlackRock Frontiers Investment Trust, Fidelity Emerging Markets Limited, JP
Morgan Emerging Markets Investment Trust, JP Morgan Global Emerging Markets
Income Trust, Templeton Emerging Markets Investment Trust and Utilico Emerging
Markets Trust.
Revenue Return per Share
The revenue return per share is calculated by taking the return on ordinary
activities after taxation and dividing it by the weighted average number of
shares in issue during the year (see note 7 for further information).
Reverse Stress Test
Reverse stress tests are stress tests that identify scenarios and
circumstances which would make a business unworkable and identifies potential
business vulnerabilities.
Share Price Total Return^
The theoretical total return on an investment over a specified period assuming
dividends paid to shareholders were reinvested in shares at the share price at
the time the shares were quoted ex-dividend.
Share Price Total Return Year ended Year ended
30 November 30 November
2024 2023
p p
Opening share price (p) 132.5 131.0
Increase in share price (p) 5.5 1.5
Closing share price (p) 138.0 132.5
Increase in share price 4.2% 1.0%
Impact of reinvested dividends 0.9% 1.1%
Share price Total Return 5.1% 2.1%
Stewardship Report
Is a report produced by MCP on their stewardship of MMIT's investments and can
be found on MMIT's website www.mobiusinvestmenttrust.com
(http://www.mobiusinvestmenttrust.com) .
Stress Testing
Is a forward-looking analysis technique that considers the impact of a variety
of extreme but plausible economic scenarios on the financial position of the
Company.
^ Alternative Performance Measure
NOTICE OF THE ANNUAL GENERAL MEETING
Notice is hereby given that the sixth Annual General Meeting of Mobius
Investment Trust plc will be held at the Company's registered office address
at 25 Southampton Buildings, London WC2A 1AL on Thursday, 15 May 2025 at 12.00
noon for the following purposes:
Ordinary Business
To consider and, if thought fit, pass the following as Ordinary Resolutions:
1. That the Report of the Directors and Accounts for the year ended 30
November 2024 together with the Report of the Auditors thereon be received.
2. To receive and approve the Directors' Remuneration Report for the year
ended 30 November 2024.
3. To approve a Final Dividend of 1.7p per ordinary share.
4. That Ms M L Cicognani be re-elected as a Director.
5. That Mr G Schuch be re-elected as a Director.
6. That Ms D Dyer Bartlett be elected as a Director.
7. That Johnston Carmichael LLP be appointed as Auditor to hold office
from the conclusion of the meeting to the conclusion of the next Annual
General Meeting at which accounts are laid.
8. That the Audit Committee be authorised to determine the Auditor's
remuneration.
Special Business
To consider and, if thought fit, pass the following resolutions, of which
resolutions 10, 11 and 12 will be proposed as Special Resolutions.
Authority to Allot Shares
9. That, the Board of Directors of the Company (the "Board") be and it is
hereby generally and unconditionally authorised pursuant to and in accordance
with section 551 of the Companies Act 2006 (the "Act") to exercise all the
powers of the Company to allot shares in the Company and to grant rights to
subscribe for or to convert any security into shares in the Company up to an
aggregate nominal amount of £230,840 (or if changed, the number representing
20% of the issued Ordinary share capital of the Company immediately prior to
the passing of this resolution) provided that this authority shall expire at
the conclusion of the Annual General Meeting of the Company to be held in 2026
or 15 months from the date of passing this resolution, whichever is the
earlier, unless previously revoked, varied or renewed by the Company in
general meeting and provided that the Company may before such expiry make an
offer or enter into an agreement which would or might require shares to be
allotted, or rights to subscribe for or to convert securities into shares to
be granted, after such expiry and the Board may allot shares or grant such
rights in pursuance of such an offer or agreement as if the authority
conferred hereby had not expired.
Disapplication of Pre-emption Rights
10. That, subject to the passing of resolution 9, the Board of Directors of
the Company (the "Board") be and it is hereby generally empowered pursuant to
sections 570 and 573 of the Act to allot equity securities (within the meaning
of section 560 of the Act) (including the grant of rights to subscribe for, or
to convert any securities into, ordinary shares of 1p each in the capital of
the Company ("Ordinary Shares")) for cash pursuant to the authority conferred
on them by such Resolution 9 as if section 561(1) of the Act did not apply to
any such allotment, provided that this power shall be limited to:
the allotment of equity securities up to an aggregate nominal
amount of £230,840 (or if changed, the number representing 20% of the issued
share capital of the Company immediately prior to the passing of this
resolution) and shall expire (unless previously renewed, varied or revoked by
the Company in general meeting) at the conclusion of the Annual General
Meeting of the Company to be held in 2026 or 15 months from the date of
passing this resolution, whichever is the earlier, unless previously revoked,
varied or renewed by the Company in general meeting and provided that the
Company may before such expiry make an offer or enter into an agreement which
would or might require equity securities to be allotted after such expiry and
the Board may allot equity securities in pursuance of such an offer or
agreement as if the authority conferred hereby had not expired.
Authority to Repurchase Shares
11. That, the Company be and is hereby generally and unconditionally
authorised for the purposes of section 701 of the Act to make one or more
market purchases (as defined in section 693(4) of the Act) of ordinary shares
of 1p each in the capital of the Company for cancellation or for holding in
Treasury on such terms and in such manner as the board of directors may
determine provided that:
(i) the maximum aggregate number of Ordinary Shares which may be purchased
is 17,301,508 or, if changed, the number representing 14.99% of the issued
share capital of the Company immediately prior to the passing of this
resolution;
(ii) the minimum price which may be paid for an Ordinary Share is 1p
(exclusive of associated expenses);
(iii) the maximum price which may be paid for an Ordinary Share (exclusive
of associated expenses) shall not be more than the higher of: (a) an amount
equal to 105% of the average of the middle market quotations for an Ordinary
Share as derived from the London Stock Exchange Daily Official List for the
five dealing days immediately preceding the day on which the Ordinary Share is
purchased; and (b) the higher of the last independent trade and the highest
current independent bid on the London Stock Exchange for an Ordinary Share;
and
(iv) unless previously renewed, varied or revoked, this authority shall
expire at the conclusion of the Annual General Meeting of the Company to be
held in 2026 or 15 months from the date of passing this resolution, whichever
is the earlier, unless previously revoked, varied or renewed by the Company in
general meeting and provided that the Company may before such expiry enter
into a contract to purchase Ordinary Shares which will or may be completed
wholly or partly after such expiry and a purchase of Ordinary Shares may be
made pursuant to any such contract.
General Meetings
12. That any General Meeting of the Company (other than the Annual General
Meeting of the Company) shall be called by notice of at least 14 clear days in
accordance with the provisions of the Articles of Association of the Company
provided that the authority shall expire on the conclusion of the next Annual
General Meeting of the Company, or, if earlier, on the expiry 15 months from
the date of the passing of this resolution.
All shareholders should look on the Company's website,
www.mobiusinvestmenttrust.com, for any changes to the AGM arrangements and
whether attendance will be possible. In any case, all shareholders are
strongly advised to exercise their votes in advance of the meeting by proxy,
by following the voting instructions overleaf.
By order of the Board Registered office
Frostrow Capital LLP 25 Southampton Buildings
Company Secretary London
10 March 2025 WC2A 1AL
Notes
1. If you wish to attend the Annual General Meeting in person, you
should arrive at the venue for the Annual General Meeting in good time to
allow your attendance to be registered. It is advisable to have some form of
identification with you as you may be asked to provide evidence of your
identity to the Company's registrar, Computershare Investor Services plc (the
"Registrar"), prior to being admitted to the Annual General Meeting.
2. Members are entitled to appoint one or more proxies to exercise all
or any of their rights to attend, speak and vote at the Annual General
Meeting. A proxy need not be a member of the Company but must attend the
Annual General Meeting to represent a member. To be validly appointed a proxy
must be appointed using the procedures set out in these notes and in the notes
to the accompanying proxy form.
If members wish their proxy to speak on their behalf at the meeting, members
will need to appoint their own choice of proxy (not the chairman of the Annual
General Meeting) and give their instructions directly to them.
Members can only appoint more than one proxy where each proxy is appointed to
exercise rights attached to different shares. Members cannot appoint more than
one proxy to exercise the rights attached to the same share(s). If a member
wishes to appoint more than one proxy, they should contact the Registrar on
0370 703 6304. Lines are open between 8.30 am and 5.30 pm, Monday to Friday,
the Registrars' overseas helpline number is +44 370 703 6304.
A member may instruct their proxy to abstain from voting on any resolution to
be considered at the meeting by marking the abstain option when appointing
their proxy. It should be noted that an abstention is not a vote in law and
will not be counted in the calculation of the proportion of votes "for" or
"against" the resolution.
The appointment of a proxy will not prevent a member from attending the Annual
General Meeting and voting in person if he or she wishes.
A person who is not a member of the Company but who has been nominated by a
member to enjoy information rights does not have a right to appoint any
proxies under the procedures set out in these notes and should read note 8
overleaf.
3. A proxy form for use in connection with the Annual General Meeting
is enclosed. To be valid any proxy form or other instrument appointing a
proxy, together with any power of attorney or other authority under which it
is signed or a certified copy thereof, must be received by post or (during
normal business hours only) by hand by the Registrar at Computershare Investor
Services plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY no later than
48 hours (excluding non-working days) before the time of the Annual General
Meeting or any adjournment of that meeting.
If you do not have a proxy form and believe that you should have one, or you
require additional proxy forms, please contact the Registrar on 0370 703
6304. Lines are open between 8.30 am and 5.30 pm, Monday to Friday. The
Registrar's overseas helpline number is +44 370 703 6304.
4. CREST members who wish to appoint a proxy or proxies through the
CREST electronic proxy appointment service may do so by using the procedures
described in the CREST Manual and by logging on to the following website:
www.euroclear.com/CREST. CREST personal members or other CREST sponsored
members, and those CREST members who have appointed (a) voting service
provider(s), should refer to their CREST sponsor or voting service provider(s)
who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service
to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must
be properly authenticated in accordance with Euroclear UK & Ireland
Limited's specifications, and must contain the information required for such
instruction, as described in the CREST Manual. The message, regardless of
whether it constitutes the appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy, must in order to be valid,
be transmitted so as to be received by the Registrar (ID 3RA50) no later 48
hours (excluding non-working days) before the time of the Annual General
Meeting or any adjournment of that meeting. For this purpose, the time of
receipt will be taken to be the time (as determined by the timestamp applied
to the message by the CREST Application Host) from which the Registrar is able
to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
After this time any change of instructions to proxies appointed through CREST
should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service
provider(s) should note that Euroclear UK & Ireland Limited does not make
available special procedures in CREST for any particular message. Normal
system timings and limitations will, therefore, apply in relation to the input
of CREST Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal member, or
sponsored member, or has appointed (a) voting service provider(s), to procure
that his CREST sponsor or voting service provider(s) take(s)) such action as
shall be necessary to ensure that a message is transmitted by means of the
CREST system by any particular time. In this connection, CREST members and,
where applicable, their CREST sponsors or voting system providers are
referred, in particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
5. In the case of joint holders, where more than one of the joint
holders purports to appoint one or more proxies, only the purported
appointment submitted by the most senior holder will be accepted. Seniority is
determined by the order in which the names of the joint holders appear in the
Company's register of members in respect of the joint holding (the first named
being the most senior).
6. Any corporation which is a member can appoint one or more corporate
representatives. Members can only appoint more than one corporate
representative where each corporate representative is appointed to exercise
rights attached to different shares. Members cannot appoint more than one
corporate representative to exercise the rights attached to the same share(s).
7. To be entitled to attend and vote at the Annual General Meeting
(and for the purpose of determining the votes they may cast), members must be
registered in the Company's register of members at 6.30 p.m. on 13 May 2025
(or, if the Annual General Meeting is adjourned, at 6.30 p.m. on the day two
working days prior to the adjourned meeting). Changes to the register of
members after the relevant deadline will be disregarded in determining the
rights of any person to attend and vote at the Annual General Meeting.
8. Any person to whom this notice is sent who is a person nominated
under section 146 of the Companies Act 2006 (the "2006 Act") to enjoy
information rights (a "Nominated Person") may, under an agreement between
him/her and the member by whom he/she was nominated, have a right to be
appointed (or to have someone else appointed) as a proxy for the Annual
General Meeting. If a Nominated Person has no such proxy appointment right or
does not wish to exercise it, he/she may, under any such agreement, have a
right to give instructions to the member as to the exercise of voting rights.
9. Information regarding the Annual General Meeting, including
information required by section 311A of the 2006 Act, and a copy of this
notice of Annual General Meeting is available from
www.mobiusinvestmenttrust.com.
10. Members should note that it is possible that, pursuant to requests
made by members of the Company under section 527 of the 2006 Act, the Company
may be required to publish on a website a statement setting out any matter
relating to: (a) the audit of the Company's accounts (including the auditor's
report and the conduct of the audit) that are to be laid before the Annual
General Meeting; or (b) any circumstance connected with an auditor of the
Company ceasing to hold office since the previous meeting at which annual
accounts and reports were laid in accordance with section 437 of the 2006 Act.
The Company may not require the members requesting any such website
publication to pay its expenses in complying with sections 527 or 528 of the
2006 Act. Where the Company is required to place a statement on a website
under section 527 of the 2006 Act, it must forward the statement to the
Company's auditor not later than the time when it makes the statement
available on the website. The business which may be dealt with at the Annual
General Meeting includes any statement that the Company has been required
under section 527 of the 2006 Act to publish on a website.
11. As at 1 March 2025 (being the latest practicable date prior to the
publication of this notice) the Company's issued share capital consisted of
115,420,336 ordinary shares carrying one vote each. Accordingly, the total
voting rights in the Company at 1 March 2025 were 115,420,336 votes.
12. Any person holding 3% or more of the total voting rights of the
Company who appoints a person other than the chairman of the Annual General
Meeting as his proxy will need to ensure that both he, and his proxy, comply
with their respective disclosure obligations under the UK Disclosure Guidance
and Transparency Rules.
13. Under section 319A of the 2006 Act, the Company must cause to be
answered any question relating to the business being dealt with at the Annual
General Meeting put by a member attending the meeting unless answering the
question would interfere unduly with the preparation for the meeting or
involve the disclosure of confidential information, or the answer has already
been given on a website in the form of an answer to a question, or it is
undesirable in the interests of the Company or the good order of the meeting
that the question be answered.
Members who have any queries about the Annual General Meeting should contact
Frostrow Capital LLP, the Company Secretary, at 25 Southampton Buildings,
London WC2A 1AL.
Members may not use any electronic address provided in this notice or in any
related documents (including the accompanying proxy form) to communicate with
the Company for any purpose other than those expressly stated.
14. The following documents will be available for inspection at the
offices of Frostrow Capital LLP, the Company's Company Secretary, 25
Southampton Buildings, London WC2A 1AL during normal business hours on any
weekday (Saturdays, Sundays and English public holidays excepted) from the
date of this notice and at the venue of the Annual General Meeting from 11.45
a.m. on the day of the Annual General Meeting until the conclusion of the
Annual General Meeting:
14.1 copies of the Directors' letters of appointment; and
14.2 copies of the Directors' deeds of indemnity.
Alternatively, the above documents can be requested from the Company Secretary
via info@frostrow.com.
15. Under section 338 and section 338A of the Companies Act 2006, members
meeting the threshold requirements in those sections have the right to require
the Company (i) to give, to members of the Company entitled to receive notice
of the meeting, notice of a resolution which may properly be moved and is
intended to be moved at the meeting; and/or (ii) to include in the business to
be dealt with at the meeting any matter (other than a proposed resolution)
which may be properly included in the business. A resolution may properly be
moved or a matter may properly be included in the business unless (a) (in the
case of a resolution only) it would, if passed, be ineffective (whether by
reason of inconsistency with any enactment or the Company's constitution or
otherwise), (b) it is defamatory of any person, or (c) it is frivolous or
vexatious. Such a request may be in hard copy form or in electronic form, must
identify the resolution of which notice is to be given or the matter to be
included in the business, must be authorised by the person or persons making
it, must be received by the Company not later than 2 April 2025, being the
date six clear weeks before the meeting, and (in the case of a matter to be
included on the business only) must be accompanied by a statement setting out
the grounds for the request.
EXPLANATORY NOTES TO THE RESOLUTIONS
Resolution 1 - To receive the Report of the Directors and Accounts
The Report of the Directors and Accounts for the year ended 30 November 2024
will be presented to the AGM. These accounts accompany this Notice of Meeting
and shareholders will be given an opportunity at, or in advance of, the
meeting to ask questions.
Resolution 2 - Remuneration Report
The Directors' Remuneration Report is set out in full in the Annual Report.
Resolution 3 - To approve a Final Dividend
The rationale for the payment of a final dividend of 1.7p per ordinary share
is set out in the Chairman's Statement and in the Business Review.
Resolutions 4 to 6 - Re-election and election of Directors
Resolutions 4 to 6 deal with the re-election and election respectively of
Maria Luisa Cicognani, Gyula Schuch and Diana Dyer Bartlett. Biographies of
each of the Directors can be found above.
The Board has confirmed, following a performance review, that the Directors
standing for re-election continue to perform effectively.
Resolutions 7 and 8 - Appointment of Auditor and the determination of its
remuneration
Resolutions 7 and 8 relate to the appointment of Johnston Carmichael LLP as
the Company's independent Auditor to hold office until the next AGM of the
Company and also authorise the Audit Committee to set the Auditor's
remuneration.
Resolutions 9 and 10 - Authority to Allot Shares and Disapplication of
Pre-emption Rights
Ordinary Resolution 9 in the Notice of Annual General Meeting will renew the
authority to allot the unissued Ordinary share capital up to an aggregate
nominal amount of £230,840 (equivalent to 23,084,067 shares, or 20% of the
Company's existing issued Ordinary share capital on 1 March 2025, being the
nearest practicable date prior to the signing of this Report or, if changed,
the number representing 20% of the issued Ordinary share capital of the
Company immediately prior to the passing of this resolution). Such authority
will expire on the date of the next AGM or after a period of 15 months from
the date of the passing of the resolution, whichever is earlier. This means
that the authority will have to be renewed at the next AGM.
When shares are to be allotted for cash, Section 551 of the Companies Act 2006
(the "Act") provides that existing shareholders have pre-emption rights and
that the new shares must be offered first to such shareholders in proportion
to their existing holding of shares. However, shareholders can, by special
resolution, authorise the Directors to allot shares otherwise than by a pro
rata issue to existing shareholders. Special Resolution 10 will, if passed,
give the Directors power to allot for cash equity securities up to 20% of the
Company's existing Ordinary share capital on 1 March 2025, or, if changed, the
number representing 20% of the issued Ordinary share capital of the Company
immediately prior to the passing of this resolution as if Section 551 of the
Act does not apply. This is the same nominal amount of Ordinary share capital
which the Directors are seeking the authority to allot pursuant to Resolution
9. This authority will also expire on the date of the next AGM or after a
period of 15 months, whichever is earlier. This authority will not be used in
connection with a rights issue by the Company.
The percentage of the authority sought in Resolutions 9 and 10 is in line with
market practice. The Board firmly believes that maximum flexibility, should
conditions allow, to raise capital without incurring the cost of preparing a
prospectus, circular and related meetings and, therefore, the passing of
Resolutions 9 and 10 is in shareholders' interest.
The Directors intend to use the authority given by Resolutions 9 and 10 to
allot Ordinary shares and disapply pre-emption rights only in circumstances
where this will be clearly beneficial to shareholders as a whole. The issue
proceeds would be available for investment in line with the Company's
investment policy. No issue of shares will be made which would effectively
alter the control of the Company without the prior approval of shareholders in
general meeting.
Shares will only be issued at a premium to the Company's cum income net asset
value per share at the time of issue.
Resolution 11 - Authority to Repurchase Shares
The Directors wish to renew the authority to buy back Ordinary shares for
cancellation or for holding in Treasury. The principal aim of a share buy-back
facility is to enhance shareholder value by acquiring shares at a discount to
net asset value, as and when the Directors consider this to be appropriate.
The purchase of Ordinary shares, when they are trading at a discount to net
asset value per share, should result in an increase in the net asset value per
share for the remaining shareholders. This authority, if conferred, will only
be exercised if to do so would result in an increase in the net asset value
per share for the remaining shareholders and if it is in the best interests of
shareholders generally. Any purchase of shares will be made within guidelines
established from time to time by the Board. It is proposed to seek shareholder
authority to renew this facility for another year at the AGM.
Under the current Listing Rules, the maximum price that may be paid on the
exercise of this authority must not exceed the higher of (i) 105% of the
average of the middle market quotations for the shares over the five business
days immediately preceding the date of purchase and (ii) the higher of the
last independent trade and the highest current independent bid on the trading
venue where the purchase is carried out. The minimum price which may be paid
is 1p per share. Shares which are purchased under this authority may be
cancelled or held in Treasury.
Special Resolution 11 in the Notice of AGM will renew the authority to
purchase in the market a maximum of 14.99% of the Ordinary shares in issue on
1 March 2024, being the nearest practicable date prior to the signing of this
Report, (amounting to 17,301,508 Ordinary shares or, if changed, the number
representing 14.99% of the issued share capital of the Company immediately
prior to the passing of this resolution). Such authority will expire on the
date of the next Annual General Meeting or after a period of 15 months from
the date of passing of the resolution, whichever is earlier.
Resolution 12 - General Meetings
Special Resolution 12 seeks shareholder approval for the Company to hold
General Meetings (other than the AGM) on at least 14 clear days' notice. The
minimum notice for Annual General Meetings will remain at 21 clear days. The
approval for this resolution will be effective until the Company's Annual
General Meeting to be held in 2026, at which it is intended that renewal will
be sought. The Directors will only call a general meeting on 14 days' notice
where they consider it to be in the interests of shareholders to do so and the
relevant matter is required to be dealt with expediently.
Recommendation
The Board considers that the resolutions detailed above are in the best
interests of shareholders as a whole. Accordingly, the Board unanimously
recommends to the shareholders that they vote in favour of the above
resolutions to be proposed at the forthcoming AGM as the Directors intend to
do in respect of their own beneficial holdings totalling 82,927 shares.
The annual report will be posted to shareholders on or around 24 March 2025.
Further copies may be obtained from the Company Secretary: Frostrow Capital
LLP, at 25 Southampton Buildings, London WC2A 1AL.
A copy of the Annual Report will be submitted to the National Storage
Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The Annual Report will also be available on the Company's website at
www.mobiusinvestmenttrust.com (http://www.mobiusinvestmenttrust.com) where up
to date information on the Company, including daily NAV, share prices and fact
sheets, can also be found.
- END -
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