ANNUAL REPORT OF MOBIUS INVESTMENT TRUST PLC
FOR THE YEAR ENDED 30 NOVEMBER 2022
MOBIUS INVESTMENT TRUST PLC ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
1
2 Strategic Report
2 Financial Highlights
3 Why Invest in Emerging Markets and MMIT
6 Chairman’s Statement
9 Investment Objective and Policy
11 Investment Portfolio
13 Investment Managers’ Review
21 Business Review
36 Governance
36 Board of Directors
38 Report of the Directors
43 Corporate Governance
53 Statement of Directors’ Responsibilities
54 Audit Committee Report
58 Directors’ Remuneration Report
62 Independent Auditors’ Report
70 Financial Statements
70 Income Statement
71 Statement of Changes in Equity
72 Statement of Financial Position
73 Notes to the Financial Statements
83 Further Information and Notice of AGM
83 AIFMD Related Disclosure
84 Shareholder Information
86 Glossary of Terms and Alternative Performance
Measures (“APMs”)
88 How to Invest
89 Notice of the Annual General Meeting
93 Explanatory Notes to the Resolutions
96 Directors and other Information
CONTENTS
ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
2022 Winner of Citywire’s
Best Global Emerging Market Equities Trust
Shortlisted for Investment Week’s
Investment Company of the Year Awards 2022
in the Global Emerging Markets category
2 MOBIUS INVESTMENT TRUST PLC
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Report Governance Auditors’ Report Statements and Notice of AGM
As at As at
30 November 30 November
2022 2021 % change
Net Asset Value per Ordinary share† 134.2p 153.4p (12.5%)
Share price 131.0p 154.5p (15.2%)
(Discount)/premium to Net Asset Value per share^ (2.4%) 0.7% –
† UK GAAP measure
^ Alternative performance measure, see Glossary beginning on page 86.
Year ended Year ended
30 November 30 November
2022 2021
Net Asset Value per Ordinary share total return*^ (12.3%) +44.9%
Share price total return*^ (15.0%) +50.0%
Ongoing charges* 1.5% 1.5%
Dividend per share – final 1.20p 0.35p
* Source: Morningstar.
^ Alternative performance measure, see Glossary beginning on page 86.
Total Return Performance for the Year to 30 November 2022^
^ Alternative performance measure, see Glossary beginning on page 86.
70
75
80
85
90
95
100
105
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Net Asset Value per share -12.3%
Share Price -15.0%
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
May-22
Apr-22
Jun-22
Source: Morningstar
Figures have been rebased to 100 as at 30 November 2021
FINANCIAL HIGHLIGHTS
3ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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WHY INVEST IN EMERGING MARKETS
12.9%
11.1%
10.4%
3.5%
0%
4%
8%
12%
16%
Brazil China South
Korea
US
Morningstar: Expected equity market annual return
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
5
10
15
20
25
30
35
40
45
2006
2008
2010
2012
2014
2016
2018
2020
2022
Valuation Premium/Discount
P/E Ratios
Valuation Premium/Discount (RHS)
MSCI EM P/E (LHS)
MSCI World P/E (LHS)
EM equities are trading at a record discount
compared to developed markets
Morningstar: EM equity markets expected to
deliver the highest returns in the next 10 years
Economic growth in emerging markets is
expected to rebound, as DM GDP is declining
Emerging markets’ share of the global GDP is
expected to increase
6.0
3.2
2.7
5.2
2.4
1.1
6.6
3.7 3.7
7.2
4.4
4.9
0
2
4
6
8
2021 2022* 2023*
GDP Forecast (%)
World DM EM EM Asia
35%
40%
45%
50%
55%
60%
65%
2020 2022 2024* 2026*
% Share of global GDP, by region
EM DM
Following past crises, emerging market equities have delivered strong returns
200
300
400
500
600
1997 1998 1999 200
0
1997: Asian Financial Crisis
400
600
800
1000
1200
1400
2007 2008 2009 20
1
2008: Global Financial Crisis
+75%
700
900
1100
1300
1500
2018 2019 2020
2020: Covid-19 Pandemic
85%
800
900
1000
1100
1200
1300
1400
1500
2020 2021 2022
2022: Russia’s Invasion of Ukraine
+64%
Source: Bloomberg, Morningstar, FT, Data as of 14 February 2023
Source: IMF, Statista Data as of 11 October 2022 (latest WEO Database Update)
Source: Bloomberg, MSCI EM Index data as of 03 January 2023
4 MOBIUS INVESTMENT TRUST PLC
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WHY INVEST IN EMERGING MARKETS continued
Emerging markets currencies strengthening as the USD rally is losing steam
90
95
100
105
110
115
120
Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23
USD Index EM Currency Basket
Inflation across emerging market economies has peaked
0
5
10
15
20
25
30
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023*
2024*
2025*
2026*
2027*
YoY CPI Change (%)
EM EM Asia
EM Europe EM LatAm
EM Middle East EM Africa
Forecast
The Asian middle class on the rise: Increased domestic demand and spending power in the long run
1,380
2,023
2,784
3,492
724
736
738
733
335
344
350
354
0
500
1000
1500
2000
2500
3000
3500
4000
2015 2020 2025* 2030*
Population in millions
Forecast of the middle class population, by region
Asia-Pacific
Europe
North America
+153%
Source: Bloomberg, Data as of 05 January 2023
Source: IMF, Data as of October 11 (latest WEO Database Update)
Source: Statista, Data as of 11 August 2022
5ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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Strong Performance
+44.1% return since inception
#1 in the Peer Group
LSE-listed EM equity trusts
Concentrated Portfolio
22 high-conviction ideas
High Active Share
97% against MSCI EM Index
Vast Network in EM
Curated over 40+ years
Profitability Leaders
14.9% profit margin
Quality companies
-0.8% net debt/EBITDA
ESG+C® Engagement
Tailored to every holding
Unique Strategy With a Focus on Quality and Engagement
Well Positioned for the Recovery
China-reopening: Boosting economic
activity throughout Asia
Recovery in Asia vs. slowing growth
in developed markets
Record low valuations, especially
relative to developed markets
EM ahead of DM in the hiking cycle
– ripe for cuts in 2023
We continue to discover unique,
innovative businesses in EM
Portfolio well-positioned to benefit
from the upcoming recovery
Strong earnings potential for 2023
and beyond
Portfolio companies: Highly
profitable, no leverage, top managers
WHY INVEST IN MMIT
Source: Mobius Capital Partners LLP, Data as of 31 January 2023, all figures in GBP
6 MOBIUS INVESTMENT TRUST PLC
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Introduction
As we present to you the Annual Report of Mobius
Investment Trust plc (“MMIT”, the “Company” or the “Trust”)
for the period from 1 December 2021 to 30 November 2022,
I would like to highlight how unprecedented the year has been
in terms of political and economic events. At the time of
writing, the tragic earthquake in Turkiye and Syria has
resulted in over 30,000 dead and many more injured. As of
7 February 2023, MMIT had three Turkish listed holdings. The
investment team has been in touch with these companies.
They are not located in an area affected by the earthquake
and have confirmed that their staff are safe and their
operations unaffected.
The MCP Team visited the country recently and remains in
close contact with the investees’ managements to receive
regular updates on the unfolding of the situation.
In such eventful times shareholders’ support has been
outstanding and allowed the Trust to continue to deliver
successfully on its strategy of obtaining remarkable results
compared with its peers. On behalf of the MMIT Board,
I would like to thank all our shareholders for the continuous
appreciation and commitment to our strategy and
our results.
Since MMIT was launched in October 2018, we have seen a
series of global events which have started to change many
aspects of our societies. The Covid-19 pandemic was about
to turn to a close and the world had a glimpse of return to
normality when the war in Ukraine started in February
2022. The year 2022 saw global GDP surpassing
US$103 trillion and global population exceeding 8 billion
with India overtaking China as the most populous country
in the world. The ample liquidity provided by central banks
during Covid, accompanied by a re-opening of production
facilities hampered by restrictions to the supply-chain
linked to China together with the commodities shock from
the Ukraine war pushed inflation above target levels. This
brought central banks across the globe (with just few
exceptions) to rapidly raise interest rates and stop any
quantitative easing to tighten monetary policy. Investors’
sentiment fell to its lowest in 30 years to levels last seen
only during the financial crisis of 2008.
The resulting world-wide risk-averse attitudes hit
developed and emerging markets alike and MMIT was not
spared. The net asset value and share price of MMIT on a
total return basis decreased by 12.3% and 15.0%
respectively over the 12-month period to 30 November
2022. Investors’ interest in the strategy remained strong,
and the discount averaged only 2.3% over the year. During
the period, the Trust operated its first voluntary
redemption facility (please see section below) which saw
2.5% of issued share capital redeemed. I would like to
thank all our shareholders for this support.
The Board has remained very close to the team at Mobius
Capital Partners throughout the year. We have been
encouraged by the way they have managed the multiple
macro-economic challenges. We have seen them taking,
what we believe, were the right decisions for MMIT’s
investors. They revisited every business case and
capitalised on opportunities to add highly innovative
companies to the portfolio. Their conservative approach to
investing with a focus on fundamental quality — looking for
companies with sound balance sheets, little to no debt,
strong brands, pricing power and experienced
management teams — has meant that companies were
generally well positioned to deal with rising interest rates
and spiralling inflation. In fact, for some of the companies
with substantial exports in US$ but with expenses in local
currencies, the year-end results have been surprisingly
positive as the overall cost-base did not catch-up with
inflation as fast as the US$ appreciated against the
local currencies.
Furthermore, the diligent focus on governance and the
close and regular exchange with management teams as
part of the active engagement have saved the Mobius
Investment Trust from the big disasters that have hit many
of its competitors. MMIT was not exposed to the regulatory
crackdown by the Chinese government on the technology
and education sectors, it had no exposure to Russia at the
time of the Russian invasion and most recently, the team
sold one of their Brazilian holdings over strategy and
governance concerns months before that company filed for
bankruptcy in the wake of an accounting scandal.
I believe it is in times of crisis that one can truly separate
the wheat from the chaff. Driven by the team’s cautious
and differentiated investment approach, MMIT continues to
lead the peer group* since inception and over three years,
in terms of share price as well as NAV performance.
CHAIRMAN’S STATEMENT
* Please see Glossary beginning on page 86
7ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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We are now seeing the first signs that last year’s
headwinds might be turning to tailwinds in 2023. MMIT’s
portfolio of innovative, quality companies catering to
growing trends such as AI, digitisation and renewable
energy is already benefitting from the reopening in Asia.
During the month of November 2022, the NAV and share
price were up by 9.1% and 10.3% respectively. I am cautiously
optimistic that we will see this recovery continuing in 2023.
Performance
The NAV and share price of MMIT on a total return basis
decreased by 12.3% and 15.0% respectively over the
12-month period to 30 November 2022, reaching a high of
155.9p on 13 December 2021 and closing at 134.2p. The
Investment Manager’s Report will provide further details
on portfolio and performance. MMIT traded at an average
discount to NAV of 2.3% during the period under review,
closing at a discount of 2.4% on 30 November 2022. As at
the close of business on 24 February 2023, being the latest
practical date, the premium of share price to NAV per
share stood at0.25%.
In a challenging year, MMIT has won Citywire’s award for
Best Global Emerging Market Equities Trust and was
shortlisted for Investment Week’s Investment Company of
the Year Awards 2022 in the Global Emerging Markets
category. This recognition reflects the hard work and
dedication of the investment management team.
Dividend
The Company made a revenue profit during the year and,
as a result, the Board recommends to shareholders the
payment of a dividend which allows the Company to
comply with the investment trust rules regarding
distributable income. Subject to the investment trust rules,
any dividends and distributions will continue to be at the
discretion of the Board from time to time.
Subject to shareholders’ approval at the forthcoming
Annual General Meeting, a final dividend of 1.20p per
Ordinary share will be paid on 5 May 2023 to shareholders
on the register as of 11 April 2023. The associated
ex-dividend date will be 6 April 2023.
The Board
The governance of the Company remains crucial for
effective oversight on the delivery of results. I would like to
thank my fellow Board members for their continued
support and contributions during the last twelve months.
As already noted in the half-year report, Gyula Schuch was
appointed with effect from 1 June 2022 as independent
non-executive director of the Company, as a member of the
Company’s Audit Committee and as Chairman of the
Company’s Management Engagement and Remuneration
Committee.
Also on 1 June 2022, Dr Sophie Robé resigned from the
Board with immediate effect in order to focus on her other
business interests. The Board thanks Dr Robé for her
support and contribution during the years since launch of
MMIT and wishes her well for the future.
Following Dr Robé’s resignation, Christopher Casey was
appointed as Senior Independent Director on 26 July 2022.
Management Team and Service
Providers
As always, MMIT’s successful performance is due to the
competence of the Mobius Capital Partners (“MCP”) team.
We are grateful to Mark and Carlos for their leadership and
dedication to the success of MMIT: without their vision and
experience we could not achieve the results the Company
has delivered. Both Mark and Carlos work closely with
more junior colleagues who have been with the Trust and
working together as a team now for several years and
bring competence, knowledge and diversity of views and
opinions to the Trust. The enthusiasm of our younger
colleagues and their dedication to the work and to the
Trust is something that inspires us every day and we are
thankful for all their work. They are growing in their roles
and bring valuable contributions to the collegial investment
process and decision making.
The Trust is also very keen to leverage all the resources it
has to stay close to our investors and the Board
appreciates the work that Frostrow has done to keep our
shareholders updated on performance since inception.
Frostrow’s work is instrumental in maintaining a close
dialogue with investors and hearing their views on our
strategy and markets.
As already noted a year ago, Peel Hunt LLP (“Peel Hunt”)
were appointed as the Company’s new Broker on
11 January 2022 following a competitive tender. Peel Hunt
are working well with the teams at MCP and Frostrow, as
has been shown in the outcome of the redemption exercise
which took place in November 2022.
CHAIRMAN’S STATEMENT continued
8
Redemption Facility
The Company operates a voluntary redemption facility
which, from now onward, will take place every three years,
with the first redemption exercise having taken place in
November 2022 for the first time since our 2018 IPO.
Through the redemption facility shareholders were able to
request the redemption of all or part of their holding of
redeemable ordinary shares of nominal value £0.01 each
(“Ordinary Shares”) for cash.
For the 30 November 2022 Redemption Point, valid
redemption requests in respect of 2,767,334 Ordinary
Shares had been received, this being 2.5% of the issued
share capital, an excellent result which showed that
shareholders continue to believe in the ongoing positive
outlook for the Company. The Board of Directors approved
a calculated Redemption Price of 130.36 pence per
Ordinary Share, which was based on the un-audited net
asset value at close of business on 29 November 2022,
being the most recent net asset value available on
30November 2022. All shareholders who validly applied to
have shares redeemed received this Redemption Price per
Ordinary Share.
1,356,317 Ordinary Shares were matched with buyers and
sold at the Redemption Price and 1,411,017 Ordinary Shares
have been redeemed and cancelled by the Company, and at
close of business on 30 November 2022, the Company had
107,548,983 Ordinary Shares in issue. None of the
Directors of the Company have redeemed any of their
Ordinary Shares under the redemption facility.
Since the Redemption Point on 30 November 2022, as at
20February 2023, MMIT’s net asset value and share price
increased by 6% and 7% respectively. Since the year-end,
the Company issued 150,000 new Ordinary Shares, bringing
the total number of Ordinary Shares to 107,698,983.
Annual General Meeting
In the year under review we were able to hold our third
Annual General Meeting (“AGM”) in person for the first
time after two years of virtual meetings. Mark Mobius and
Carlos Hardenberg presented on the performance of the
Company on the occasion. Many shareholders who were
not able to attend made use of their voting rights to let us
know their agreement with the AGM resolutions. We hope
that attendance numbers will go up this year to allow more
investors to meet with the Board and the Investment
Managers.
The fourth AGM of the Company will take place at 12.00 noon
on Wednesday, 26 April 2023 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.
Outlook
2022 turned out differently from what many economists
had projected. The war in Ukraine and China’s hard stance
on Covid-19 pushed the recovery back, when it had been
expected to pick up pace in the second half of 2022.
However, a number of indicators are now pointing towards
an improved outlook for 2023, especially for Emerging
Asia.
1) inflation in the US has slowly been coming down — while
it is not yet at desired levels, the fact that it peaked is a
signal that
2) monetary policy will start to ease;
3) China has moved away from zero-Covid with surprising
swiftness and determination, and this will spur the
recovery, especially in Asia;
4) accordingly, growth in emerging Asia is expected to pick
up driven by local demand, while growth in Europe and
the US is forecast to slow down this year;
5) the USD rally has come to a halt amid easing inflation
and with the end of the aggressive tightening cycle
looming on the horizon.
All of the above, I believe, will benefit emerging markets. In
addition, unfavourable sentiment towards the asset class
during 2022 has left EM companies trading at record-low
valuations compared with developed market peers as well
as their own history, offering an attractive entry point.
We are already seeing a reversal in sentiment. After net
inflows into the asset class in October, November and
December of last year, during January 2023, emerging
markets saw the largest monthly inflows in two years.
Challenges remain, with the war in Ukraine not nearing an
end, a potential recession looming in the US and Europe,
US-China tensions continuing and China struggling with
the resurgence of Covid-19 cases. However, given the
above-mentioned tailwinds, I believe, emerging markets
have the potential to outperform after a long stretch of
underperformance. Mobius Investment Trust plc, with its
differentiated, active engagement approach and its
portfolio of innovative, quality companies catering to
growing trends, is well positioned to benefit.
Maria Luisa Cicognani
Chairman
28 February 2023
MOBIUS INVESTMENT TRUST PLC
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CHAIRMAN’S STATEMENT continued
9ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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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:
l companies incorporated in and/or traded on stock
exchanges located in emerging or frontier markets; or
l 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:
l invest in equity or equity related securities (including
preference shares, convertible unsecured loan stock,
warrants and other similar securities);
l hedge against directional risk using index futures
and/or cash;
l hold bonds and warrants on transferable securities;
l utilise options and futures for hedging purposes and
for efficient portfolio management;
l enter into contracts for differences;
l hold participation notes;
l use forward currency contracts; and
l 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:
l a resilient business model and sound management;
l the possibility for operational and environmental,
social and governance (“ESG”) improvements;
l the potential to improve competitive advantages and
cash flow generation; and
l 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:
l no more than 10 per cent of Gross Assets are invested
in a single company;
l 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
l 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.
10 MOBIUS INVESTMENT TRUST PLC
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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 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 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.
INVESTMENT OBJECTIVE AND POLICY continued
11ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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Fair value % of net
Company Country £’000 assets
EPAM Systems USA 11,870 8.2
Persistent Systems India 8,815 6.1
EC Healthcare China 8,556 5.9
APL Apollo Tubes India 8,219 5.7
LEENO Industrial South Korea 8,189 5.7
TOTVS Brazil 7,967 5.5
eMemory Technology Taiwan 7,207 5.0
Classys South Korea 7,100 4.9
Safaricom Kenya 6,978 4.8
Vietnam Dairy Products Vietnam 6,023 4.2
Sinbon Electronics Taiwan 5,975 4.1
Elite Material Taiwan 5,350 3.7
Zilltek Technologies Taiwan 4,611 3.2
Mavi Giyim Sanayi Ve Ticaret Turkiye 4,499 3.1
Logo Turkiye 4,384 3.1
E Ink Holdings Taiwan 4,237 2.9
Kangji Medical Holdings China 3,206 2.2
Clicks Group South Africa 3,119 2.2
Parade Technologies Taiwan 3,016 2.1
Metropolis Healthcare India 2,966 2.1
WIN Semiconductors Taiwan 2,730 1.9
Pentamaster Malaysia 1,817 1.3
Total Investments 126,834 87.9
Other Net Assets 17,460 12.1
Total Net Assets 144,294 100.0
INVESTMENT PORTFOLIO
as at 30 November 2022
12 MOBIUS INVESTMENT TRUST PLC
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Portfolio Distribution
Sector Breakdown
30 November 2022 30 November 2021
Geographical Breakdown
30 November 2022 30 November 2021
INVESTMENT PORTFOLIO continued
Technology
Health Care
Consumer Staples
Industrials
Communications
Consumer Discretionary
Cash
35.5%
12.6%
8.4%
18.1%
3.4%
9.0%
13.0%
India
Taiwan
China
Brazil
South Korea
Egypt
UK*
24.3%
19.9%
12.7%
8.3%
4.8%
0.3%
13.0%
Vietnam
Turkiye
Kenya
South Africa
Malaysia
4.1%
3.4%
3.4%
4.2%
1.6%
*includes uninvested cash
Technology
Health Care
Consumer Staples
Industrials
Communications
Consumer Discretionary
Cash
52.8%
15.1%
6.3%
5.7%
4.9%
3.1%
12.1%
Taiwan
India
South Korea
United States
China
Turkiye
UK*
22.9%
13.9%
10.6%
8.2%
8.1%
6.2%
12.1%
Brazil
Kenya
Vietnam
South Africa
Malaysia
5.5%
4.8%
4.2%
2.2%
1.3%
*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. At the time of writing, MMIT has started adding two additional high-conviction ideas to the portfolio. These will be
disclosed once they have reached target weight.
13ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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Introduction of the Management Team
Investment Committee
Mobius Capital Partners LLP has been appointed as the Company’s Investment Manager. The Investment Manager’s
Investment Committee makes all investment and disinvestment decisions in respect of the Company.
Dr Mark Mobius is a pioneering investor and has actively managed emerging market funds
since 1987. Prior to launching Mobius Capital Partners, Dr Mobius was at Franklin Templeton
Investments for more than 30 years, most recently as Executive Chairman of the Templeton
Emerging Markets Group. During his tenure, the group expanded assets under management
from US$100 million to over US$40 billion and launched a number of emerging market and
frontier funds focusing on Asia, Latin America, Africa and Eastern Europe. His career and
influence have earned him numerous industry awards. Dr Mobius has also been a key figure
in developing the international policy for emerging markets.
Carlos Hardenberg has invested in emerging markets for over 20 years, having lived in
Warsaw, Singapore, Istanbul and London. He spends significant time in Asia, Latin America,
Central and Eastern Europe and Africa. For a decade he managed Templeton Frontier Markets
Fund, one of the largest frontier markets funds in the industry, as well as a number of global
emerging markets funds, including Templeton Emerging Markets Investment Trust (“TEMIT”),
a £2.2 billion London listed investment trust.
The Investment Managers’ strategy for Mobius Investment Trust plc is supported by a talented team of analysts as well as
marketing and operational professionals. The diverse team consists of six nationalities, speaks ten different languages
and is 50% female.
All investment team members were either born and raised, or have lived in emerging markets. Their previous experience
stretches from venture capital to private and public equity. They have been working together as a team for several
years now.
Together the investment team has more than 70 years experience investing in emerging markets. Throughout this time
they have built a unique and extensive on-the-ground network of experts which provides an edge during the 360-degree
due diligence process.
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14 MOBIUS INVESTMENT TRUST PLC
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INVESTMENT MANAGERS’ REVIEW continued
Introduction
After an optimistic start, 2022 turned out to be a tumultuous year for investors. Many short-term predictions were proven
wrong. Russia invaded Ukraine against the odds, global growth predictions had to be downgraded significantly, inflation
forecasts were completely off target, the Fed changed gear on monetary policy faster and more resolutely than anyone
had expected, and the US dollar continued its rally against expectations.
All of the above led to significant corrections in emerging and developed markets. The MSCI World was down -10% in
2022, the S&P500 had one of its worst years in history with -10% and tech stocks took an even bigger hit with the
NASDAQ tumbling 25%. Emerging markets didn’t fare much better. The MSCI EM Index lost 13%. This broad ’risk-off’
environment has left EM valuations trading at a multi-decade low, and according to our assessment, a very attractive
entry point.
Source: Bloomberg, as of 03 January 2023
The NAV and share price of Mobius Investment Trust plc (MMIT) decreased by 12.3% and 15.0% on a total return basis
respectively over the 12-month period to 30 November 2022. This was driven by the unfavourable sentiment towards
equities and emerging markets, rather than company fundamentals. NAV performance continues to be strong compared
with the peer group. Over three years, MMIT is the best-performing EM Equity Investment Trust listed on the London
Stock Exchange.
Source: AIC
3-year period to 30 November 2022
* Peer group consists of 8 investment trusts (incl. MMIT) – please see Glossary beginning on page 86.
MMIT – 3Y Performance vs. Peers
-10
-6
-2
2
6
10
14
3Y Annualised Performance (%)
MMIT
*
15ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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It is important not to lose sight of the long term, especially in volatile times like these. We did not deviate from our
strategy to follow short-term trends. We did not jump on the commodity bandwagon, nor did we rotate into value stocks,
but we continued to focus on fundamental quality and on sectors that we believe will deliver sustainable growth not only
in the short term, but for decades to come.
At the same time, we carefully monitored macro developments and the potential impact on our holdings. Throughout
2022, we revisited each portfolio company in view of the changing macro conditions. In many cases, we were able to visit
companies in person again to get an in-depth understanding of the challenges management were facing. During 2022,
the team met with the management of MMIT’s holdings in Brazil and Turkey. At the time of writing, they have just
returned from visiting companies in India and China. What we found is that our focus on fundamental quality — companies
with pricing power, strong balance sheets, little to no debt and leading brands and with strong management teams — has
meant that companies were generally coping well in an environment of rising interest rates and higher input prices, and
are now, we believe, in a strong position to benefit from the recovery once it sets in.
In addition, we used the recent downturn to add some highly innovative businesses to the portfolio. Please see section
“Portfolio Overview” below. These companies had been on our watchlist for some time and when valuations reached
attractive entry levels during last year’s sell-off, we started to buy.
Once again, our focus on improving ESG+ C®* factors (please see section on Engagement below) and the regular
exchange with management teams that comes with it has served as an effective risk management tool. It meant that we
had no exposure to Russia or any ex- Soviet states nor eastern Europe when Russia invaded Ukraine. It had also led us to
invest very conservatively in China at a time when many of our competitors were hit by the Chinese government’s
regulatory crackdown. Finally, we recently sold one of our Brazilian holdings, Americanas S.A., over governance and
strategy concerns months before an accounting scandal came to light and the company filed for bankruptcy.
There is no doubt that 2023 will be another challenging year with recession looming in Europe and the US. Uncertainties
remain about the impact of the Covid resurgence in China, about China-US relations, about the depths of the recession in
the West and about the ongoing war in Ukraine, just to name a few issues.
However, one longer-term prediction continues to hold true: a recovery is still to come. A recovery not from one bad year,
but a recovery from a pandemic of an unprecedented scale, at least in living memory. As always, markets will price this in
first. We have already seen a gradual reversal of fund-flows back into emerging markets and in Q4 2022 calendar year
MMIT delivered a NAV return of 6.5%.
*See Glossary beginning on page 86.
Source: Bloomberg, MSCI EM USD Index Data
INVESTMENT MANAGERS’ REVIEW continued
16 MOBIUS INVESTMENT TRUST PLC
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Performance
The NAV and share price of MMIT decreased by 12.3% and 15.0% respectively on a total return basis over the 12-month
period to 30 November 2022, reaching a high of 155.9p on 13 December 2021 and closing at 134.2p. MMIT traded at an
average discount to NAV of 2.3% during the year ended 30 November 2022, closing at a discount of 2.4%. As at
24 February 2023, MMIT traded at a premium of 0.25%.
As mentioned above, the weaker performance was driven by negative sentiment, rather than company fundamentals. In
addition, the cyclical downturn in the semiconductor industry with weak demand and high inventories after two years of
rapid pandemic-induced growth, also affected performance. However, once again we believe it is important to look
beyond 2023 when we expect demand to pick up and the chip industry to resume its growth path.
Over the reporting period, the top three contributors to performance were Turkish apparel brand Mavi (+2.1%), software firm
EPAM Systems (+1.9%), and Indian steel tube manufacturer APL Apollo (+1.4%). These companies benefitted significantly
from their strong balance sheets during the difficult conditions for trade and economic activity seen in the past year.
Hong Kong-based EC Healthcare (-4.2%), and Taiwanese semiconductor businesses Parade Technologies (-2.7%) and
ZillTek Technologies (-1.9%) were the main detractors over the reporting period. EC Healthcare was heavily impacted by
China’s zero-Covid policy as mainland Chinese were unable to travel to the Hong Kong-based clinics. Since the reversal of
China’s zero-Covid policy in November 2022, EC Healthcare’s share price has more than doubled.
Portfolio Overview
As of 30 November 2022, MMIT had invested 87.9% of capital, with 22 holdings across 11 countries. The largest
geographic exposure was Taiwan (22.9%), followed by India (13.9%) and South Korea (10.6%). 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 technology (52.8%), followed by health care (15.1%) and consumer staples (6.3%).
The Trust’s technology exposure is well diversified across software, hardware and the semiconductor value chain, and at
the same time geographically spread, with companies based in Brazil, India, Kenya, Malaysia, South Korea, Taiwan and
Turkey. Furthermore, many companies have geographically diversified production facilities and customers. This is true for
the majority of the Trust’s Taiwanese holdings. The team continues to monitor the tensions between China-Taiwan very
closely and is in regular contact with companies and experts on the ground. We think Chinese military action against
Taiwan unlikely at this stage as it would significantly harm China’s long-term economic prospects. Stability and growth
are the clear priorities for the Chinese leadership in the midterm.
During the reporting period, MCP added three new holdings to the portfolio and exited eight holdings which had reached
their target price or where the current environment had significantly changed the business case.
INVESTMENT MANAGERS’ REVIEW continued
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In Q1 2022, MCP sold MMIT’s shares in Polycab India, an Indian cable manufacturer, as the stock had reached its target
price. Since inception, the stock had appreciated by more than 266% in value (in USD terms) and was among the top
contributors to performance since inception.
MCP also sold Americanas, a Brazilian e-commerce company over strategy and governance concerns. In January this
year, the company was involved in an accounting scandal, the stock price plummeted as a result and the company filed
forbankruptcy.
YDUQS, a Brazilian education business, was sold due to a combination of regulatory risk, slow growth, and various
deteriorating company-specific factors: high leverage with a declining interest coverage ratio exposed the company to
substantial risk, which was reflected in rising debt levels.
During in-person meetings with the management of Brazilian diagnostics company Fleury, it became clear that increasing
leverage in a high-interest rate economy and the resulting decrease in balance sheet quality would make future M&A
activity more challenging; considering the business model heavily depends on acquisitions, this represented a clear
change in MCP’s initial investment case and the team decided to sell MMIT's holding in Fleury.
During Q1 2022, MCP started building a position in Classys Inc., a South Korean provider of medical aesthetics devices.
With a broad client base — including clinics, hospitals, and beauty salons — Classys has a global market share (ex-US) of
30%, thus leading the market for non-surgical, painless fat reduction instruments. Its ‘razor and blade’ business model
offers continuous gross margin improvements, and high R&D spending ensures a technological edge, as well as a wide
product portfolio. While the company benefits from a global footprint already, there is significant potential for market
expansion, particularly in the US.
In March 2022, MMIT invested in EPAM Systems, a global leader in digital platform engineering and software development
services. Founded in 1993 by a Belarusian engineer, the company is today headquartered in the US. EPAM serves over
600 clients, including several Fortune 500 and Forbes Global 2000 companies. The sudden escalation in conflict between
Russia and Ukraine in February 2022 triggered a sell-off in the company’s shares as over 50% of employees were at the
time located in Ukraine, Belarus, and Russia. This short-term negativity provided an attractive investment opportunity in
a quality company for the long term. EPAM committed $100m to relocate at-risk employees and has already relocated
most of its workforce in the affected areas. As a result of their proactiveness, EPAM didn’t lose customers and reported
stronger-than-estimated results.
In April 2022 MCP built a position in a Taiwanese technology company. E Ink boasts a unique technology, clear pricing
power and competitive leadership. Established in 1992, E Ink is the world’s largest e-paper manufacturer and produces
electronic paper displays with its electrophoretic ink technology. We are particularly interested in their quasi-
monopolistic position in this technology and believe that the electronic shelf label (ESL) segment looks especially
exciting. The technology is known for its usage in e-readers such as the Amazon Kindle or comparable products, but the
application is far wider. E Ink has recently been listed as one of the Asia-Pacific Climate Leaders in 2022 in a report by the
Financial Times, Nikkei and Statista.
Engagement
Throughout 2022, MCP saw strong progress on ESG+C® factors among portfolio companies, after having engaged with
every single holding. Among the 162 engagement points, discussions around governance factors accounted for almost half
(48%) of all touch points. We believe that establishing robust governance standards is key to unlocking further
improvements in the environmental, social and culture fields. Almost 80% of holdings have now launched environmental
reporting initiatives, with 55% measuring quantitative environmental targets. Upon launch of MCP’s proprietary ESG+C®
framework, the portfolio’s Glassdoor score (a measurement of corporate culture) stood at 3.63%. As of Q4 2022, this has
improved to 3.80, with 5 being the highest possible score. Based on the many conversations we have had with management
teams in 2022 around ESG+C®, we strongly believe that there are a lot more improvements to come in through 2023.
INVESTMENT MANAGERS’ REVIEW continued
18 MOBIUS INVESTMENT TRUST PLC
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As seen below, a number of MCP’s portfolio companies implemented employee share option schemes, introduced
non-financial benefits, hired dedicated sustainability professionals and established key policies around anti-corruption
and ethics. While this definitely represents a step in the right direction, some companies still have some way to go. MCP is
dedicated to working closely with these companies to make improvements going forward.
In the (near) absence of Covid-related travel restrictions, the team was finally able to hold in-person meetings with
companies again. In October, MCP spent a whole week in Istanbul to meet with portfolio companies and other exciting
new businesses, and spoke with a range of economists, policy experts and local entrepreneurs to get a better picture of
the current economic climate and outlook for the new year. We visited the headquarters of Mavi, Turkey’s leading denim
retailer and one of MCP’s best-performing stocks of 2022. We have worked with Mavi on enhancing gender diversity and
improving functional expertise within the board, implementing long-term incentives for management, and improving
reporting quality. Based on MCP’s recommendation, Mavi hired an external sustainability specialist to help set long-term
ESG targets for the company. The company published their first sustainability report in 2021. Driven by innovation and
technology, Mavi successfully introduced a sustainable fashion line. “All Blue” products are made with organic, recycled
and upcycled materials and the manufacturing processes consume less energy, water, and fewer chemicals. The company
aims for the whole denim collection to consist of sustainable “All Blue” products by 2030.
In the wake of the tragic earthquake in Turkey, the team continues to monitor the situation very carefully. MCP is in
regular contact with portfolio companies and have been assured that employees are safe and operations unaffected by
this natural disaster. The team's thoughts are with all of those affected in Turkey and Syria.
Having visited Turkey and Brazil in 2022, MCP is currently planning company visits in China, Hong Kong, Taiwan and India
for H1 2023.
Outlook: Why the Tide Should Be Turning for Emerging Markets
Emerging market investors have witnessed troubled waters over the past few years: a global pandemic that had a
negative impact on trade, consumption and supply chains; increased geopolitical tensions between the US and China; a
war in Europe with wide ramifications for global trade and fiscal policies resulting in rising inflation, tighter monetary
policy and appreciation of the US dollar. Furthermore, volatile commodity prices that benefitted a few countries but hurt
many, and very difficult capital market conditions made it particularly difficult for emerging markets. In summary, all of
this has led to very low confidence, record capital outflows and a sell-off in emerging markets. Over the last 10 years,
emerging markets have delivered close to negative annualised real returns.
After this prolonged period of weak performance, we now see several indicators suggesting that the tide is turning. First
of all, investors should never lose sight of valuations. We are currently witnessing record levels of under-valuations in EM:
the present average price to book value at nearly 1.5x is in the 30-year bottom quartile.
INVESTMENT MANAGERS’ REVIEW continued
19ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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Source: Bloomberg, as of 03 January 2023
Secondly, while the US and certainly Europe will be challenged by a moderate to deep recession in 2023, growth in
emerging markets, particularly in Asia, is forecasted to recover to average 4.9% in 2023. This should encourage investors
to focus on these growing regions. The radical shift by the Chinese government away from zero-Covid that we have been
witnessing in the past two months will have a very positive impact on growth and supply chains. We believe that we are at
the beginning of a multi-year earnings growth recovery, and this will be driven by the reopening in Asia. The average EPS
growth forecast over three years annualised (CAGR) for the MSCI EM Index is 13% and 15% for MMIT’s portfolio.
Furthermore, inflation pressure in the US is moderating. The slowing pace in inflation is a clear indicator that the Fed’s rate
hiking cycle is nearing its peak and monetary policy is expected to ease. Many emerging markets are ahead of developed
markets in the hiking cycle and inflationary pressure, especially in Asia, remains contained. The US dollar rally is losing steam
on the back of favourable inflation data, easing the pressure on emerging market currencies, debt and monetary policy.
Source: Bloomberg, as of 05 January 2023
Finally, over the past 20 years, business models in emerging markets have significantly evolved. Investors can find highly
innovative companies that are still relatively undiscovered by the market. The new driver in emerging markets is
technological innovation in areas including, but not limited to, factory automation, renewable energy, AI or Internet of
Things (IOT), as well as digitalisation and modern and efficient service offerings.
INVESTMENT MANAGERS’ REVIEW continued
20 MOBIUS INVESTMENT TRUST PLC
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Conclusion
The next year no doubt will remain challenging, with recession looming in Europe and the US. However, all of the above
will be priced in well in advance and we have already seen a shift in investor sentiment towards emerging markets. After
net capital flows to EM during Q4 2022, January 2023 saw the highest portfolio inflows to EM in two years according to
the Institute of International Finance, with $65.7 billion.
Source: Bloomberg, Institute of International Finance – Capital Flows Tracker
Data as of December 2022
We have heard many differing opinions about what investors can expect from the coming year. We share the view of Neil
Armstrong, the first man on the moon, who once wisely said, “We predict too much for the next year and yet far too little
for the next ten.” At Mobius Capital Partners, we continue to focus on the long-term potential of our companies which are
catering to growing trends like digitalisation, quality health care, factory automation and renewable energy and on
creating long-term, sustainable shareholder value for our investors.
Carlos Hardenberg
Mark Mobius
Mobius Capital Partners LLP
Investment Managers
28 February 2023
INVESTMENT MANAGERS’ REVIEW continued
21ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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Business Review
The Strategic Report, set out on pages 2 to 35, contains a
review of the Company’s business model and strategy, an
analysis of its performance during the financial year ended
30November 2022, 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 on pages 30 to 33.
Business Model
The Company is an externally managed investment trust
and its Ordinary shares are premium listed on the Official
List and traded on the main market of the London Stock
Exchange.
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 Mobius Capital Partners LLP
tomanage its investment portfolio. Company secretarial
and administrative services are provided by Frostrow
Capital LLP (“Frostrow”). In addition, Frostrow provides the
AIFM Directive risk management function on behalf of the
AIFM (see page29 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 on page 29.
Strategy for the Year ended
30 November 2022 and
Strategic Review
Throughout the year ended 30 November 2022, 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. Mobius Capital Partners LLP and Frostrow
Capital LLP 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 Managers believe 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 Managers’ Review on pages 13 to 20.
Investment Objective and Policy
The Company’s investment objective and policy are set out
on pages 9 and 10.
Dividend Policy
It is the Company’s policy to pursue capital growth for
shareholders as well as income. Many of the companies in
which the Company invests are relatively early-stage
businesses to which the Company is committed for the
long term. 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 only pay the minimum dividend
required to maintain investment trust status.
Results and Dividend
The results attributable to shareholders for the year are
shown on page 70. In the year ended 30 November 2022,
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.
BUSINESS REVIEW
22 MOBIUS INVESTMENT TRUST PLC
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Subject to shareholders’ approval at the forthcoming
Annual General Meeting, a final dividend of 1.20p per share
will be paid on 5 May 2023 to shareholders on the register
as of 11 April 2023. The associated ex-dividend date will be
6 April 2023.
The Board
The Board of the Company comprises Maria Luisa Cicognani
(Chairman), Christopher Casey and Gyula Schuch, all of
whom are independent non-executive directors.
Dr Sophie Robé resigned as a Director of the Company on
1 June 2022 and Gyula Schuch was appointed as a Director
of the Company on the same day.
Mrs Cicognani and Mr Casey served during the whole year
under review and, together with Mr Schuch, up to the date
of signing this report, and they will stand for re-election
and election respectively at the forthcoming Annual
General Meeting.
Further information on the Directors can be found on
pages 36 and 37.
Information in respect of the Board’s diversity policy and
Board diversity can be found on pages 44 and 45.
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:
l Investment Objective and Policy, incorporating the
investment guidelines and limits, and changes to these;
l whether the Manager should be authorised to gear the
portfolio up to a pre-determined limit;
l review of performance against the Company’s KPIs;
l review of the performance and continuing
appointment of service providers;
l maintenance of an effective system of oversight, risk
management and corporate governance; and
l during the year under review, the Board also oversaw
the execution of the redemption facility in November.
Further details are given on page 40.
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, on pages 36 to 61,
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 on pages 34 and 35.
Key Performance Indicators (“KPIs”)
The Company’s Board of Directors meets at least four
times a year. At each quarterly meeting it reviews
performance against a number of key measures, asfollows:
l Net asset value per share total return*^
l Average discount/premium of share price to net asset
value per share over the year^
l Ongoing charges ratio^
* Source: Morningstar
^ Alternative Performance Measure (see Glossary beginning on page86)
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 beginning
on page86.
Over the year ended 30 November 2022, the Company
ranked sixth in its peer group with a net asset value per
share total return performance of -12.3% against a peer
group average of -8.8%. Subsequent to the year-end, from
1 December 2022 to 31 January 2023, the Company ranked
third against its peer group with a net asset value total
return of 4.6%; the average for the peer group was 3.1%.
The Board continues to monitor this closely.
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.
During the year ended 30 November 2022, between
January and April, 450,000 new ordinary shares were
issued by the Company. 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
BUSINESS REVIEW continued
^ Alternative Performance Measure (see Glossary beginning on page86)
23ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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2.3%, but for some of the time the shares traded at a
premium to NAV per share, so that share issuances were
possible. Since the year-end, a further 150,000 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. As at 24 February 2023, the Company’s shares
traded at a premium of 0.25% 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 2022 30 November 2021
2.3% 2.7%
Peer group average Peer group average
discount 12.6% discount 9.1%
^ Alternative Performance Measure (see Glossary beginning on page86)
On 30 November 2022, the Company also undertook its
first redemption exercise during which redemption
requests in respect of 2,767,334 Ordinary Shares, or 2.5%
of issued share capital, were received. 1,356,317 Ordinary
Shares were matched with buyers and sold at the agreed
redemption price and 1,411,017 ordinary shares were
redeemed and cancelled by the Company. For more details,
please see page 40.
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 2022 the ongoing
charges ratio was 1.5%. This ongoing charges ratio
compares with the average of the Company’s peer group
of1.1%. 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.
Ongoing charges ratio^
Year ended Year ended
30 November 2022 30 November 2021
1.5% 1.5%
Peer group average 1.1% Peer group average 1.2%
^ Alternative Performance Measure (see Glossary beginning on page86)
Prospects
The Board continues to support fully the Investment
Managers’ strategy of investing in a high conviction
portfolio across emerging and frontier markets with an
active ownership approach. The Board firmly 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 2022, has provided a NAV total return of
37.8% and a share price total return of 31.6%, compared
with average peer group returns of 16.1% and 12.5%
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 2022, 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 satisfied with the controls that are in place for the
Company. The Committee was reassured that all service
providers of the Company had adequatemeasures to
ensure that no operational issues would arise out of post-
Covid-19 hybrid working practices and that cyber and IT
risks were properly addressed.
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
overleaf on pages 24 to 28.
BUSINESS REVIEW continued
24 MOBIUS INVESTMENT TRUST PLC
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BUSINESS REVIEW continued
Principal Risks and
Uncertainties Key Mitigations
Investment Risks (including
financial risks)
Market, Foreign Exchange and Fiscal Risk
in Emerging and Frontier Markets
By the nature of its activities, the Company’s
portfolio is exposed to fluctuations in market
prices (from both individual security prices
and foreign exchange rates) and due to the
exposure to emerging markets world-wide, in
which the portfolio companies operate, it is
expected to have higher volatility than the
wider market. As such investors should be
aware that by investing in the Company they
are exposing themselves to this risk.
Furthermore, by nature of its emerging
markets portfolio, the Company is exposed to
fiscal and legal risk in the various countries
where investments are held.
Events like the Covid-19 pandemic and the war
in Ukraine also had an impact on markets,
although this was not just restricted to
emerging markets but was a global
phenomenon.
The Board has appointed Mobius Capital Partners LLP to manage the
portfolio within the remit of the investment objective and policy. The
investment policy limits ensure that the portfolio is diversified, reducing
the risks associated with individual stocks and markets. Furthermore,
foreign exchange risk is being considered when making investment
decisions. Frostrow Capital LLP monitors compliance with the investment
policy on a daily basis.
The Board on an ongoing basis, through monthly and quarterly reporting
from Frostrow Capital LLP and Mobius Capital Partners LLP, monitors
exposure to investments, performance, and compliance with the
investment objective and policy.
At each Board meeting Mobius Capital Partners LLP provide an
explanation of investment decisions, the make-up of the investment
portfolio and the investment strategy.
The Company also employs specialist tax advisers in some jurisdictions
to ensure that all tax laws, tax rules and tax regulations are adhered to.
Portfolio Risk
The performance of the Company’s portfolio
is influenced by a number of factors, including
the quality of the initial investment decision;
the quality of the management team of the
investee company and the ability of that team
to implement its business strategy
successfully; and the success of the
Investment Managers in building an effective
working relationship with the management of
each investee company in order to agree and
implement value-creation strategies.
The Investment Managers, Mobius Capital Partners LLP, have put in place
a rigorous investment process which ensures disciplined investment
selection and portfolio management. This includes detailed due diligence
and portfolio reviews as well as active engagement with investee
companies, in particular on environmental, social, governance and
cultural (“ESG+C
®
”) matters.
The AIFM, Mobius Capital Partners LLP, has delegated its risk
management function to Frostrow Capital LLP.
Counterparty Risk
In addition to market and foreign currency
risks, discussed above, the Company is
exposed to credit risk arising from the use of
counterparties. If a counterparty were to fail,
the Company could be adversely affected
through either delay in settlement or loss of
assets. The most significant counterparty the
Company is exposed to is The Northern Trust
Company, the Company’s Custodian, which is
responsible for the safekeeping of the
Company’s assets. Under the terms of the
contract with the Custodian the Company’s
investments are required to be segregated
from The Northern Trust Company’s own
assets.
Counterparty risk is managed by the Board through:
l reviews of the arrangements with, and services provided by, the
Custodian to ensure that the security of the Company’s custodial
assets is being maintained;
l ensuring cash is only held at banks that have been identified as
reputable and of high credit quality. The Northern Trust Company has
a credit rating of Aa2 (Moody’s), AA- (Standard and Poor’s) and AA
(Fitch Ratings); and
l monitoring of the Custodian, including reviews of internal control
reports and sub-custodial arrangements, asappropriate.
Further information on other financial risks, can be found in note 14 to the
Financial Statements beginning on page 79.
25ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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Principal Risks and
Uncertainties Key Mitigations
BUSINESS REVIEW continued
Strategic Risks
Strategy Implementation Risk
The Company is subject to the risk that its
long-term strategy and its level of
performance fail to meet the expectations of
its shareholders.
l
A robust and sustainable corporate governance structure has been
implemented with the Board being responsible for continued delivery
for shareholders.
l
Experienced emerging and frontier markets investment managers
have been retained to deliver the strategy.
l
There is healthy dialogue between the Board and the Investment
Managers as well as challenge from the Board when felt necessary.
Investment Management Key Person Risk
There is a risk that the individual(s) responsible
for managing the Company’s portfolio may not
be able to continue in their roles.
The Board manages this risk by:
l appointing an Investment Manager who operates a team environment
such that the loss of any individual should not impact service levels;
l receiving regular reports from the Investment Manager, such reports
include any significant changes in the make-up of the team supporting
the Company;
l meeting the wider team, outside the designated lead manager, at both
physical and virtual Board meetings and at the Investment Manager’s
offices;
l outside regular Board meetings the Chairman is in regular contact
with senior representatives of the Investment Manager; and
l delegating to the Management Engagement and Remuneration
Committee responsibility to perform an annual review of the service
received from the Investment Manager, including, inter alia, the team
supporting the lead manager and succession planning.
The Board is satisfied that the Company’s Investment Managers are able
to positively address any challenges, as the two senior managers are
working with a team of very skilled, more junior analysts who are taking
over increasing responsibilities and who are able to step up if needed.
Shareholder Relations Risk
The Company is also exposed to the risk that
investment strategy and performance are not
properly communicated to shareholders.
In managing this risk the Board:
l reviews the Company’s investment objective and policy and Mobius
Capital Partners LLP’s investment approach in relation to the
investment performance, market and economic conditions and the
operation of the Company’s peers;
l regularly discusses the Company’s future development and strategy;
l engages regularly with larger shareholders through MCP, Frostrow
and the brokers and is available to all shareholders at the AGM;
l undertakes a regular review of the level of the Company’s share
price discount/premium to net asset value per share and
consideration is given to ways in which share price performance
may be enhanced, including the effectiveness of marketing, share
issuance and share buy-backs, where appropriate;
l reviews an analysis of the shareholder register at each Board
meeting and is kept informed of shareholder sentiment; and
l undertakes a redemption exercise every three years to give
shareholders the option to redeem their shares at net asset value if
they are not happy with their shareholding in the Company.
26 MOBIUS INVESTMENT TRUST PLC
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Principal Risks and
Uncertainties Key Mitigations
BUSINESS REVIEW continued
Operational Risks
Service Providers Risk
The Board is reliant on the systems of the
Company’s service providers and as such
disruption to, or a failure of, those systems
could lead to a failure to comply with
corporate governance requirements, law and
regulations, leading to reputational damage
and/or financial loss to the Company. This
encompasses disruption or failure caused by
cyber crime or continued hybrid working
practices following the Covid-19 pandemic and
covers dealing, trade processing,
administrative services, financial and other
operational functions.
To manage these risks the Board:
l ensures that all major service agreements are in line with best
practice and reviews performance against these terms annually,
taking action as needed;
l receives a monthly report from Frostrow Capital LLP, which
includes, inter alia, details of compliance with applicable laws and
regulations;
l reviews internal control reports and key policies, including the
disaster recovery procedures, of its service providers;
l maintains a risk matrix with details of risks to which the Company is
exposed, the approach to those risks, key controls relied on and the
frequency of the controls operation;
l receives updates on pending changes to the regulatory and legal
environment and progress towards the Company’s compliance with
such changes;
l has considered the increased risk of cyber-attacks and has received
reports and assurance from its service providers regarding the
controls in place; and
l has considered the major service providers’ business continuity
procedures and resilience and is satisfied that all service providers
are able to provide good service levels regardless of whether staff
are working remotely or in the office.
Macro Risks
Geopolitical Risk
The geopolitical risk to the Company is closely
monitored by the Board.
Significant political and economic change in
the countries where MMIT invests, and those
countries’ degree of interconnection with the
rest of the world, and also other global events
might lead to volatile markets impacting the
Company’s performance and reduced investor
appetite for the Company’s shares.
To manage this risk, the Board:
l monitors compliance with the Company’s investment policy;
l undertakes a regular review of the markets the Company is invested
in and receives regular reports from the investment managers;
l insists on macroanalysis as a vital part of the investment process;
l consults regularly with the investment team on political and
economic risk factors; and
l favours a cautious and analysis-based approach by the investment
team when it comes to investing in countries with volatile economic
and political conditions.
UK Regulatory Risk
The regulatory environment in which the
Company operates changes materially,
affecting the Company’s modus operandi.
The Board monitors regulatory change with the assistance of the
Company’s AIFM, Frostrow and external professional advisers to ensure
that the Board is aware of any likely changes in the regulatory
environment and will be able to adapt as required.
27ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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BUSINESS REVIEW continued
Principal Risks and
Uncertainties Key Mitigations
UK Legal Risk
The Company and/or the Directors fail to
comply with legal requirements in relation to
FCA dealing rules and procedures, the AIFMD,
the Listing Rules, the Companies Act 2006,
relevant accounting standards, the Bribery
Act 2010, the Criminal Finances Act 2017, the
Association of Investment Companies (“AIC”)
Statement of Recommended Practice
(“SORP”), GDPR, tax regulations or any other
applicable regulations.
The Board monitors regulatory change with the assistance of its
AIFM/Investment Managers and external professional advisers to ensure
compliance with applicable laws and regulations including the
Companies Act 2006, the AIFM Rules, the Corporation Tax Act 2010
(“Section 1158”), the Market Abuse Regulation (“MAR”), the Disclosure
Guidance and Transparency Rules (“DTRs”) and the FCA’s Listing Rules.
The Board reviews compliance reports and internal control reports
provided by its service providers, as well as the Company’s financial
statements and revenue forecasts.
The Depositary reports twice yearly to the Audit Committee, confirming
that the Company has been managed in accordance with the AIFMD, the
Articles and with investment restrictions and leverage limits.
The Directors attend seminars and conferences to keep up to date on
regulatory changes and receive industry updates from the Company
Secretary. The Company Secretary also presents a quarterly report on
changes in the regulatory environment, including AIC updates, and how
changes have been addressed.
Governance Risk
Poor adherence to corporate governance best
practice or errors or irregularities in
published information could lead to censure
and/or result in reputational damage to
the Company.
The Board reviews all information supplied to shareholders and
Frostrow’s marketing activity at each meeting.
Details of the Company’s compliance with corporate governance best
practice, including information on relationships with shareholders, are
set out in the Corporate Governance Report on pages 36 to 52.
ESG and Climate Change Risk
ESG risks and climate change could have an
adverse impact on the portfolio companies’
operational performance, affecting their
investment value over the short or
medium term.
At every Board meeting, the Board receives ESG+C
®
updates, which
include information on any climate change related engagement, from
the Investment Managers together with monthly portfolio updates. The
Board challenges the Investment Manager on ESG matters to ensure
that the portfolio companies are acting in accordance with the Board’s
ESG approach.
MMIT invests in companies that have the potential to improve, and benefit
from, environmental, social and corporate governance factors. As part
of their engagement the team at MCP actively supports portfolio
companies in improving their ESG-performance. Engagement is tailored
and consists of constructive advice to portfolio companies on a range of
ESG issues including the reduction of greenhouse gas emissions (GHG
emissions) and an improvement in the CDP score as an indicator of a
company's environmental sustainability. Furthermore, the investment
strategy uses screening against an exclusion list of companies in which
investments may not be made, taking ESG criteria into account.
Mobius Capital Partners LLP is a signatory to the UK Stewardship Code
and actively engages with portfolio companies on ESG+C
®
matters
including climate change.
Details of the Investment Managers’ ESG+C
®
approach can be found in
the Investment Managers’ Review on pages 13 to 20 and on the
Investment Managers’ website at www.mobiuscapitalpartners.com
.
Mobius Capital Partners published their first active engagement report
in Q2 2022. This report provided more detail on MCP’s customised
ESG+C
®
engagement approach, action points raised with portfolio
companies as well as outcomes from engagement. The report is
available for download on the manager’s website:
www.mobiuscapitalpartners.com
.
28 MOBIUS INVESTMENT TRUST PLC
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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 its half-yearly
meetings. 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, the Board identified as an emerging risk
the deteriorating economic environment in many
countries, which may impact portfolio investments and,
potentially, the Company’s service providers. This risk
includes the cost of living crisis, increased energy costs
and food supply difficulties from a country macro level
down to every household and business.
Whilst it is not possible to mitigate the above emerging
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 on
pages24 to 27 and have formed a reasonable expectation
that the Company will be able to continue in operation and
meet its liabilities as they fall due over the next five
financial years. The Board has chosen a five-year horizon
in view of the long-term nature and outlook adopted by the
Investment Manager when making investment decisions.
To make this assessment and in reaching this conclusion,
the Audit Committee has considered the Company’s
financial position and its ability to liquidate its portfolio
and meet its liabilities as they fall due:
l the portfolio is principally comprised of investments
traded on major international stock exchanges. Based
on current trading volumes, 98.6% of the current
portfolio could be liquidated within 30 trading days
with 93.0% 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;
l 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
l 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 on pages 24 to 27
and various severe but plausible downside scenarios, has
also considered the following assumptions in considering
the Company’s longer-term viability:
l there will continue to be demand for investment trusts;
l the Board and the Investment Manager will continue to
adopt a long-term view when making investments;
l the Company invests principally in the securities of
listed companies in emerging markets to which
investors will wish to continue to have exposure;
l regulation will not increase to a level that makes
running the Company uneconomical; and
l the performance of the Company will continue to be
satisfactory.
The continuing uncertainty in the global economy, the
ongoing war in Ukraine as well as Covid-19 related
lockdowns in some countries, have created significant
supply chain disruption and 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.
BUSINESS REVIEW continued
29ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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BUSINESS REVIEW continued
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, some meetings were still
held online, 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. No issues were raised and the Audit
Committee was reassured that all key service providers
were operating well and to their normal high service
standards while ensuring the safety of their employees by
enabling them to work remotely.
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 five years.
Principal Service Providers
Investment Manager
Mobius Capital Partners LLP 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 whose assets totalled
approximately £20billion as at the date of this report.
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 Mobius Capital Partners LLP
(“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 Mobius Capital
Partners LLP and Frostrow Capital LLP are set out in
note3 to the Financial Statements on page 75.
Depositary and Custodian
Northern Trust Investor Services Limited is the Company’s
Depositary, having been appointed by the Board and
Mobius Capital Partners LLP 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.
Corporate Broker
Peel Hunt LLP (“Peel Hunt”) was appointed as the
Company’s broker with effect from 11 January 2022, taking
over from Jefferies International Limited following a
review undertaken by the Management Engagement and
Remuneration Committee.
Investment Manager and Manager
Evaluation and Re-Appointment
The review of the performance of Mobius Capital Partners
LLP as Investment Manager and Frostrow as Manager,
Company Secretary and Administrator is a continuous
process carried out by the Board with a formal evaluation
being undertaken each year. 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 Mobius
Capital Partners LLP and Frostrow Capital LLP, 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:
30 MOBIUS INVESTMENT TRUST PLC
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l the quality and depth of experience of Mobius Capital
Partners LLP and the level of performance of the
portfolio in absolute terms and relative to the
Company’s peer group since launch; and
l 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.
Frostrow arranges and manages a continuous programme
of one-to-one meetings with professional investors around
the UK. These include regular meetings with “gate
keepers”, the senior points of contact responsible for their
respective organisations’ research output and
recommended lists. The programme of regular meetings
also includes autonomous decision makers within large
multi-office groups, as well as small independent
organisations. Some of these meetings involve Mobius
Capital Partners, 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 214 investor meetings
and five investor seminars were held during which MMIT
was discussed.
Frostrow produces many key corporate documents,
monthly factsheets, 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.
Finally, during the redemption exercise a specialist PR
agency, Camarco PR, was appointed to support
engagement with shareholders.
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 beginning on page 36. The Chairman’s Statement
beginning on page 6 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
Mobius Capital Partners 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:
BUSINESS REVIEW continued
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BUSINESS REVIEW continued
The Investment Manager, Frostrow and the
Company’s broker, on behalf of the Board, complete
a programme of investor relations throughout the
year.
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 reviews and considers the marketing plans on
a regular basis. Reports from the Company’s broker
are submitted to the Board on investor sentiment
and industry issues.
Key mechanisms of engagement include:
l the Annual General Meeting;
l the Company’s website which hosts reports,
video interviews with the Investment Managers
and monthly factsheets;
l one-on-one investor meetings and online
webinars;
l should any significant votes be cast against a
resolution, proposed at the Annual General
Meeting, the Board will engage with
Shareholders in order to understand the
reasons behind the votes against;
l 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
l 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.
Following the redemption exercise in November
2022, valid redemption requests were received for a
total of 2,767,334 ordinary shares (representing
2.5% of the issued share capital). Of these,
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.
Clear communication of the Company’s
strategy and the performance against the
Company’s objective can help the share price
trade at a narrower discount or a wider
premium to its net asset value per share which
benefits shareholders.
New shares can be issued to meet demand
without net asset value per share dilution to
existing shareholders. Increasing the size of
the Company can benefit liquidity as well as
spread costs.
In an effort to control the discount at which
shares trade to their net asset 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
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 currently hold any shares in
treasury.
Once every three years, the Company also
offers a redemption facility through which
shareholders may request the redemption of
all or part of their holding of redeemable
ordinary shares (“Ordinary Shares”) for cash.
Investors
Who?
STAKEHOLDER
GROUP
Why?
THE BENEFITS OF ENGAGING WITH
THE COMPANY’S STAKEHOLDERS
How?
HOW THE BOARD, THE INVESTMENT MANAGER
AND ADMINISTRATOR HAVE ENGAGED WITH
THE COMPANY’S STAKEHOLDERS
32 MOBIUS INVESTMENT TRUST PLC
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BUSINESS REVIEW continued
The Board and Frostrow engage regularly with other
service providers both in one-to-one meetings and
via regular written reporting. Representatives from
service providers are asked to attend Board and
Audit Committee meetings when deemed
appropriate. This regular interaction provides an
environment where topics, issues and business
development needs can be dealt with efficiently and
collegiately.
The Company contracts with third parties for
other services including: depositary,
investment accounting & administration as
well as company secretarial and registrars.
TheCompany ensures that the third parties to
whom the services have been outsourced
complete their roles in line with their service
level agreements, thereby supporting the
Company in its success and ensuring
compliance with its obligations.
Service
Providers
Active engagement on ESG+Culture issues with the
aim of improving operations, ESG-standards and
performance, and thereby catalysing a re-rating of
the investee’s stock price, lies at the heart of the
Investment Manager’s strategy. The Investment
Manager individually tailors engagement on ESG+C
®
issues to the portfolio company and its respective
sector. In addition to ESG factors, MCP places a high
emphasis on understanding a company’s corporate
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 2022 Investor Day, two
portfolio companies were invited to present their
respective businesses to shareholders, and talk
about their experience of working with the Mobius
Capital Partners team on improving ESG+C
®
issues.
Gaining a deeper understanding of the
portfolio companies and their strategies as
well as incorporating consideration of ESG
factors into the investment process assists in
understanding and mitigating risks of an
investment as well as identifying future
potential opportunities.
Portfolio
Companies
Who?
STAKEHOLDER
GROUP
Why?
THE BENEFITS OF ENGAGING WITH
THE COMPANY’S STAKEHOLDERS
How?
HOW THE BOARD, THE INVESTMENT MANAGER
AND ADMINISTRATOR HAVE ENGAGED WITH
THE COMPANY’S STAKEHOLDERS
The Board meets regularly with the Company’s
Investment Manager throughout the year both
formally at the scheduled Board meetings and
informally as needed. The Board also receives
monthly performance and compliance reporting.
The Board further receives regular updates from the
Investment Manager concerning engagement on
ESG+C
®
matters with the companies within the
portfolio.
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.
Engagement with the Company’s Investment
Manager is necessary to evaluate their
performance against the Company’s stated
strategy and to understand any risks or
opportunities this may present. The Board
ensures that the Investment Manager’s
environmental, social and governance ("ESG")
approach is in line with standards elsewhere
and is in line with the Board’s expectations.
Engagement also helps ensure that Investment
Management costs are closely monitored and
remain competitive.
Investment
Manager
33ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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BUSINESS REVIEW continued
l The Investment Managers, Frostrow and the broker meet regularly with
shareholders and potential investors to discuss the Company’s strategy,
performance, the portfolio and any ESG+Culture issues which might be raised.
At the 2022 AGM, and following two years of larger gatherings not being allowed
due to Covid-19, Directors were able for the first time to have face-to-face
interactions with shareholders who attended the meeting. The Investment
Managers also gave a presentation and shareholders were able to ask questions.
l Shareholders are provided with performance updates via the Company’s website as
well as the usual financial reports and monthly factsheets.
l 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.
Key topics of engagement with investors
l Ongoing dialogue with shareholders
concerning the strategy of the Company,
performance, the portfolio and
ESGissues.
l Impact on market volatility on the
performance of theCompany.
l Share price performance and the
widening of investment company
sectordiscounts.
What?
WHAT WERE THE KEY TOPICS
OF ENGAGEMENT?
Outcomes and actions
WHAT ACTIONS WERE TAKEN, INCLUDING PRINCIPAL DECISIONS?
l Updates are received by the Board at every Board meeting.
l The Board is kept well informed about the team composition at MCP and the
Investment Manager gives regular updates on new team members.
l 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.
l The Board has received regular updates from the Investment Manager throughout
the year.
Key topics of engagement with the
Investment Manager on an ongoing basis
l Portfolio composition, performance,
outlook and business updates as well as
ESG engagement with portfolio
companies.
l Team composition.
l The impact of market volatility upon
their business.
l Following a benchmarking exercise, Peel Hunt LLP was appointed as the Company’s
new broker with effect from 11 January 2022.
l Reviews of the Company’s service providers during the year have been positive and
the Directors believe that their continued appointment is in the best interests of
the Company.
Key topics of engagement with
Other Service Providers
l The Directors have frequent
engagement with the Company’s other
service providers through the annual
cycle of reporting and due diligence
meetings or site visits by Frostrow. This
engagement is completed with the aim
of maintaining an effective working
relationship and oversight of the
services provided.
l The Investment Managers are aware that trusts perceived to be falling behind in
ESG and climate change concerns will be downrated by investors. This issue
therefore makes up an important part of the risk assessment when looking at
possible investments.
l For the Investment Managers good governance is the best way to ensure best value
for shareholders. To this end, environmental and social factors as well as
governance are discussed in meetings with managements.
Key topics of engagement with
Portfolio Companies
The Investment Managers, on behalf of the
Board, have engaged with a number of
portfolio companies:
l in order to address ESG matters
including climate change and, in
particular, to understand the risks faced
by portfolio companies and how they
can be addressed.
l in order to achieve good governance
overall, as good governance means that
board and management of portfolio
companies are aware and proactive in
their approach to all environmental and
social issues.
34 MOBIUS INVESTMENT TRUST PLC
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Responsible and Sustainable
Investing
It is the Board’s view that, in order to achieve long-term
success, companies need to maintain high standards of
corporate governance and corporate responsibility. More
information is given in the Investment Managers’ Review
on pages 13 to 20.
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 Managers’
ESG+C
®
Policy
The Investment Managers’ ESG Policy can be found on
their website at www.mobiuscapitalpartners.com
and it
explains how ESG and corporate culture factors are being
assessed all through the investment process as follows:
l an initial recommendation by the Investment
Committee;
l establishment of an ESG+C
®
action plan and
engagement with companies;
l monitoring, measuring and reporting ESG+C
®
improvement; and
l exercising voting rights.
In particular, the ESG Policy states that Mobius Capital
Partners 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.
Quarterly ESG factsheets can also be found on the
Investment Managers’ website, giving a breakdown of
investment companies’ disclosure of
l 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.
l 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.
l governance targets such as gender equality and
female directors, Board independence, sustainability
reporting, Global Reporting Initiative Compliant
reporting, dedicated Investor Relations professionals
and others.
l 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 Managers are 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.
BUSINESS REVIEW continued
35ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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BUSINESS REVIEW continued
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 Mobius Capital Partners LLP’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 2022,
its performance and the outlook for the Company can be
found in the Chairman’s Statement on pages 6 to 8 and in
the Investment Manager’s Review on pages 13 to 20.
The Company’s overall strategy remains unchanged.
For and on behalf of the Board of Directors
Maria Luisa Cicognani
Chairman
28 February 2023
36 MOBIUS INVESTMENT TRUST PLC
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BOARD OF DIRECTORS
Maria Luisa Cicognani
Independent Non-Executive Chairman
Appointed to the Board on 5 September 2018
Remuneration per annum: £37,000*
Shareholding in the Company: 71,740*
Skills and Experience:
Maria Luisa has over 25 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 Arafa Holding in
Cairo and a non-executive director of Eurizon Capital SgR.
Standing for re-election
Yes
Christopher Casey
Independent Non-Executive Director, Chairman of the
Audit Committee and Senior Independent Director
Appointed to the Board on 5 September 2018
Remuneration per annum: £32,000*
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, independent non-executive
director and audit committee chairman of China
Polymetallic Mining Limited until 2016, independent non-
executive director and audit committee chairman of
Latchways plc until 2015 and independent non-executive
director and audit committee chairman of Eddie Stobart
Logistics plc, until August 2020.
Christopher’s career spans over 40 years and he was
previously an audit partner at KPMG before moving to
transaction services, providing due diligence assistance to
private equity and corporate clients. 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 chairman
of The European Smaller Companies Trust plc,
non-executive director and audit committee chairman of
BlackRock Sustainable American Income Trust plc and Life
Settlements Assets plc as well as non-executive director of
CQS Natural Resources Growth and Income plc.
Standing for re-election
Yes
* Information as at 30 November 2022.
37ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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Gyula Schuch
Independent Non-Executive Director and Chairman of the
Management Engagement and Remuneration Committee
Appointed to the Board on 1 June 2022
Remuneration per annum: £27,000*
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.
He holds a Master of Business Administration degree from
the University of Business Administration and Economics in
Vienna.
Other Appointments:
Gyula is currently Equity Partner at Ithuba Capital, a
management-owned independent investment bank and
regional advisory firm with headquarters in Vienna.
Standing for election
Yes
BOARD OF DIRECTORS continued
* Information as at 30 November 2022.
38 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
The Directors present this Annual Report on the affairs of
the Company together with the audited financial statements
and the Independent Auditors’ Report for the year ended
30November 2022.
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
2022, 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 on pages 43 to 52
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
premium listed on the Official List of the UK Listing Authority
and traded on the main market of the London Stock
Exchange, which is a regulated market as defined in Section
1173 of the Act.
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 on pages 70 to 82 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’ on pages 22 and 23.
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 beginning on page86.
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.
Resolutions relating to the following items of special
business will be proposed at the forthcoming AGM.
Resolution 10: Authority to allot shares up to
approximately 20% of the ordinary shares in issue.
Resolution 11: 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 12: 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 13: 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 on pages 89 to 92. Explanatory
notes regarding the resolutions can be found on pages 93
to 95. 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.
REPORT OF THE DIRECTORS
39ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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Report Governance Auditors’ Report Statements and Notice of AGM
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
on page 59.
AGM Arrangements
The AGM will be held on Wednesday, 26 April 2023. 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 on page 91.
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 listed on
pages36 and 37. Maria Luisa Cicognani and Christopher
Casey both served as Directors throughout the year to
30November 2022 and up to the date of this report.
Dr Sophie Robé resigned as a Director on 1 June 2022, and
Gyula Schuch was appointed as a Director and as the
Chairman of the Management Engagement and
Remuneration Committee on the same day. He served 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.
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 2022. It is intended that this policy will
continue for the year ending 30 November 2023 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 on pages 58 to 61.
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 on page 59 of this Annual Report.
Capital Structure
As at 30 November 2022, there were 107,548,983
redeemable ordinary shares of 1p each (2021: 108,510,000
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 on page 41.
REPORT OF THE DIRECTORS continued
40 MOBIUS INVESTMENT TRUST PLC
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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 on page 91.
Share Issues and Buybacks
The Directors currently have the authority to issue shares
up to an aggregate nominal amount equal to 10% 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 10% of the issued share
capital for cash, without pre-emption rights applying. These
authorities will expire at the AGM to be held on 26 April
2023, when resolutions to renew and increase them to 20%
of the Company’s issued share capital will be proposed.
Furthermore, at the last AGM held on 19 May 2022, the
Directors were granted authority to repurchase up to
16,333,104 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 2022, the number of ordinary shares in
issue was 107,548,983. 450,000 ordinary shares were
issued during the year and no shares were bought back.
1,411,017 ordinary shares were redeemed following the
redemption exercise undertaken during the year, as
described below.
Since the year-end 150,000 new Ordinary Shares were
issued, bringing the total number of Ordinary Shares
to107,698,983.
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. 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.
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.
On 4 October 2022, the Company issued a regulatory
announcement reminding shareholders of the upcoming
redemption point and setting out the process for
redemption. The deadline for redemption requests was
2 November 2022. By that date, valid redemption requests
in respect of a total of 2,767,334 were received, representing
2.54% of issued share capital at the time. On the day of the
Redemption Point, 30 November 2022, the redemption price
based on the Company’s NAV as at 29 November 2022 was
calculated. The redemption price was announced on the
London Stock Exchange on 1 December 2022. 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.
Shareholders’ specific redemption requests were satisfied
through approximately 51% of the ordinary shares being
redeemed and cancelled by the Company, and,
approximately 49% being matched with and sold to buyers.
The Board and the Investment Managers believe that the
Company’s investment case remains highly compelling and
therefore did not redeem their shares.
REPORT OF THE DIRECTORS continued
41ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Substantial Interests in
Share Capital
As at 30 November 2022 and 31 January 2023, 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 2022
Number of % of issued
ordinary share
Shareholder shares held capital
Allan & Gill Gray Foundation 16,108,850 14.78
Joseph Bernhard Mark
Mobius 15,617,092 14.34
Hargreaves Lansdown,
stockbrokers (EO) 9,736,792 8.93
Interactive Investor (EO) 8,282,424 7.60
Columbia Threadneedle
Investments 5,425,000 4.98
Connor Broadley 3,773,257 3.47
JM Finn, stockbrokers 3,729,398 3.42
AJ Bell, stockbrokers (EO) 3,494,579 3.21
Charles Stanley 3,456,986 3.17
EO = Execution only
31 January 2023
Number of % of issued
ordinary share
Shareholder shares held capital
Allan & Gill Gray Foundation 16,008,850 14.89
Joseph Bernhard Mark
Mobius 15,617,092 14.52
Hargreaves Lansdown,
stockbrokers (EO) 9,727,901 9.04
Interactive Investor (EO) 8,537,090 7.94
Columbia Threadneedle
Investments 5,425,000 5.04
Connor Broadley 4,552,821 4.24
A.I.M. Overseas PTC 4,500,000 4.18
JM Finn, stockbrokers 3,740,698 3.48
AJ Bell, stockbrokers (EO) 3,703,425 3.44
Charles Stanley 3,498,315 3.26
EO = Execution only
Interests of the lead investment managers in the shares of
the Company as at 30 November 2022:
Mark Mobius (see also above) 15,617,092 14.34
Carlos Hardenberg 940,000 0.87
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 on
pages 43 to 52.
Global Greenhouse Gas Emissions
for the Year ended 30 November
2022
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.
REPORT OF THE DIRECTORS continued
42 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Listing Rule 9.8.4
Listing Rule 9.8.4 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 beginning on
page54.
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 on
pages 28 and 29, 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.
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
rising interest rates, together with the consequences of the
war in Ukraine and the subsequent long-term effects on
economies and international relations.
Other Statutory Information
The following information is disclosed in accordance with
the Companies Act 2006:
l 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.
l 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
28 February 2023
REPORT OF THE DIRECTORS continued
43ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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 Mobius Capital Partners
LLP and Company management, company secretarial, marketing and administrative services to Frostrow Capital LLP.
* The Directors believe that Christopher Casey 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.
The Board
Independent Chairman – Maria Luisa Cicognani
Two additional non-executive Directors, all considered independent.
The Board has appointed Christopher Casey as Senior Independent Director.
Key responsibilities:
l to provide leadership and set strategy, values and standards within a framework of prudent effective controls
which enable risk to be assessed and managed;
l to ensure that a robust corporate governance framework is implemented; and
l to challenge constructively and scrutinise the performance of all outsourced activities.
Management Engagement and
Remuneration Committee
Chairman
Gyula Schuch
All Independent Directors
Key responsibilities:
l to review regularly the contracts, performance
and remuneration of the Company’s principal
service providers;
l to set the remuneration policy of the Company; and
l to determine and agree with the Board the
remuneration of the Directors. Where appropriate,
the Committee will consider both the need to
judge the position of the Company relative to
other companies regarding the remuneration of
Directors and the need to appoint external
remuneration consultants.
Audit Committee
Chairman
Christopher Casey*
All Independent Directors
(The Chairman of the Board is also a member
of the Committee)
Key responsibilities:
l to monitor the integrity of the Company’s Annual
Report and financial statements and of the half-
yearly report;
l to oversee the risk and control environment and
financial reporting; and
l to review the performance of the Company’s
external Auditors and to set their remuneration.
CORPORATE GOVERNANCE
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
44 MOBIUS INVESTMENT TRUST PLC
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”),
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 9.8.6 of the 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 Corporate Governance Statement on pages 43 to 52
forms part of the Report of the Directors on pages 38 to42.
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 Mobius Capital Partners LLP and
company secretarial, administration, marketing and risk
management services to Frostrow Capital LLP.
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
on pages 9 to 10.
The purpose and strategy of the Company are described in
the Strategic Report on page 21.
Strategy issues and all material operational matters are
considered at Board meetings.
Board Culture
The Board aims to fully enlist differences of opinion, unique
vantage points and areas of expertise. The Chairman
encourages open debate to foster a supportive and co-
operative approach for all participants. Strategic decisions
are discussed openly and constructively.
The Board aims to be open and transparent with
shareholders and other stakeholders and for the Company
to conduct itself responsibly, ethically and fairly in its
relationships with service providers. 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
CORPORATE GOVERNANCE continued
45ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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.
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 recently updated
Listing Rules (LR 9.8.6R(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 is held by a
woman; and
(iii) at least one individual on the board is from a minority
ethnic background.
The FCA’s disclosure requirements apply to financial years
starting on or after 1 April 2022, so are not yet applicable
to the Company but will serve as guidelines when
appointing new directors.
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 2022: 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
Appointments to the Board on the following page.
As required under LR 9.8.6R(10), further details in respect of
the three targets outlined above as at 30 November 2022 is
disclosed below:
No. of Number
Board of senior
members Percentage positions*
Men 2 66.6% 1 (Audit Chair
and SID)
Women 1 33.3% 1 (Chair of
Board)
Other – – –
Not specified/
prefer not to say – – –
White British or
other White
(including
minority-white
groups) 3 100.0% 2
Any other
ethnic group – – –
* 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 on the Board. Christopher
Casey currently serves as both Senior Independent Director (“SID”)
and Chair of the Audit Committee.
In order to collect the data required to fulfil the
disclosures, the Board agreed that self-reporting by the
individuals concerned was the most appropriate method.
The following two questions were posed and ‘Not specified
/prefer not to say’ could be recorded in response:
1. For the purposes of the Listing Rules disclosures, how
should you be categorised; and
2. Please advise your ethnicity.
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.
Directors’ Independence
The Board consists of three non-executive Directors, each
of whom is independent of Mobius Capital Partners LLP
and the Company’s other service providers. No member of
the Board is a Director of another investment company
managed by Mobius Capital Partners LLP, nor has any
Board member been an employee of the Company, Mobius
Capital Partners LLP 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 Directors will retire at
CORPORATE GOVERNANCE continued
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
46 MOBIUS INVESTMENT TRUST PLC
the Company’s AGM and seek to be re-elected or elected
respectively by shareholders. Further details regarding the
Directors can be found on pages 36 and37.
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 Directors took on an increase
in total commitments. Brief biographical details of the
Directors, including details of their significant
commitments, can be found on pages 36 and 37. 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 on page 59 of this Annual Report.
Meetings
The Board meets formally at least five times each year.
Representatives of Mobius Capital Partners LLP 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 Mobius Capital Partners LLP 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 2022 and the number of meetings attended
by each Director.
Management
Engagement &
Audit Remuneration
Board Committee Committee
Number of meetings (5) (2) (1)
Maria Luisa Cicognani 5 2 1
Christopher Casey 5 2 1
Gyula Schuch
1
3 1 1
Sophie Robé
2
2 1 –
1
Gyula Schuch was appointed as a Director on 1 June 2022.
2
Sophie Robé resigned as a Director on 1 June 2022.
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, share issuances,
Board changes and the Redemption exercise.
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
CORPORATE GOVERNANCE continued
47ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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.
Following an extensive recruitment process, Gyula Schuch
was appointed as a non-executive Director of the Company
on 1 June 2022. No search agency had been involved, but
input on possible candidates had been received from the
Directors themselves and various industry contacts.
Following a number of interviews, the consensus had been
to offer a position as independent, non-executive Director
of MMIT to Gyula Schuch, who had extensive experience in
emerging markets and capital markets, and M&A, as well as
a good understanding of asset management products and
a strong understanding of Board governance.
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
re-election of Directors at the Annual General Meeting.
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 on page 36 and the Board
considers that she has sufficient time to commit to the
Company’s affairs as necessary.
Mr Casey is the Senior Independent Director, having taken
over from Dr Robé following her resignation. His biography
and other appointments are detailed on page 36 and the
Board considers that he has 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:
l taking the chair at general meetings and Board
meetings, conducting meetings effectively and
ensuring that all Directors are involved in discussions
and decision making;
l setting the agenda for Board meetings and ensuring the
Directors receive accurate, timely and clear information
for decision-making;
l taking a leading role in determining the Board’s
composition and structure;
l overseeing the induction of new directors and the
development of the Board as a whole;
l leading the annual board evaluation process and
assessing the contribution of individual directors;
l supporting and also challenging the Investment Manager
(and other suppliers where necessary);
l ensuring effective communications with shareholders
and, where appropriate, stakeholders; and
l engaging with shareholders to ensure that the Board has
a clear understanding of shareholders’ views.
The Senior Independent Director (“SID”) serves as a
sounding board for the Chairman and acts as an
intermediary for other Directors and shareholders. The SID
is responsible for:
l working closely with the Chairman and providing support;
l leading the annual assessment of the performance of
the Chairman;
l holding meetings with the other non-executive Directors
without the Chairman being present, on such occasions
as necessary;
l carrying out succession planning for the Chairman’s role;
l working with the Chairman, other Directors and
shareholders to resolve major issues; and
l 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).
CORPORATE GOVERNANCE continued
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
48 MOBIUS INVESTMENT TRUST PLC
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. 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 will 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. For the year under
review, this was not considered necessary.
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 2022, the
performance of the Board, its committees and individual
Directors (including each Director’s independence) was
again evaluated through a formal assessment process led
by the Chairman. This involved the circulation of a Board
and Committee evaluation checklist, tailored to suit the
nature of the Company, followed by discussions between
the Chairman and each of the Directors. The performance
of the Chairman was evaluated by the other Directors under
the leadership 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, especially for Mr Casey, 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. The Board has considered the position of all the
Directors including the Chairman as part of the evaluation
process and believes that it would be in the Company’s best
interests to propose them for re-election and election
respectively.
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
CORPORATE GOVERNANCE continued
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49ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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:
l 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.
l 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.
l Matters relating to certain Stock Exchange
requirements and announcements, the Company’s
internal controls, and the Company’s corporate
governance structure, policies and procedures.
l 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 Mobius
Capital Partners LLP and operational management is
delegated to Frostrow Capital LLP.
The Board takes responsibility for the content of
communications regarding major corporate issues even if
Mobius Capital Partners and Frostrow act as spokesman.
The Board is kept informed of relevant promotional
material that is issued by Mobius Capital Partners.
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 financial, strategic,
operational and macro risk management can be found in
the Strategic Report on pages 23 to 27.
An overview of the Internal Controls structure of the
Company and its service providers is shown overleaf.
CORPORATE GOVERNANCE continued
50 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Internal Controls Structure
The Board has a responsibility for
establishing and assessing internal
controls to ensure the Company
operates effectively, efficiently and
within the risk appetites set by the
Board. As the Company relies on
third-party service providers for all
of its operations, it obtains regular
reports from these counterparties
on the nature and effectiveness of
controls within these organisations.
The Company’s principal service
providers are the Investment
Manager, Mobius Capital Partners,
the Company Secretary,
administrator, and risk manager,
Frostrow Capital, and its custodian
and depositary, Northern Trust.
The Board receives regular
reporting on compliance with the
control environment and assesses
the effectiveness of the internal
controls through review of the
assurance reports from each of
these organisations.
In addition, the Company retains a
number of secondary providers
who report regularly to the Board.
These include the registrar, broker
and financial adviser and legal
adviser. The services provided by
these firms are not integral to the
Company’s operating model and
internal controls and so the
reporting they provide to the Board
on their operations is less stringent.
The Management Engagement
Committee formally evaluates the
performance and service delivery
of all third-party service providers
at least annually and the Audit
Committee evaluates the
performance of the Company’s
external auditor annually, following
the completion of the annual audit
process.
Principal third-party
service providers
The Directors
l receive regular
reporting at meetings;
l review the assurance
report produced by
each organisation;
l receive additional
reporting on the control
environment from each
of the principal third
party service providers;
and
l formally evaluate their
performance on an
annual basis.
Mobius Capital LLP
(Investment Management)
Reporting
l Investment performance update at each meeting
l Internal Control Report (quarterly)
l Compliance Report (quarterly)
l Effectiveness of control environment (annually)
l Portfolio attribution
Northern Trust
(Depositary and Custodian)
Reporting
l Depositary’s Report (semi-annually)
l Effectiveness of control environment (semi-annually)
l Presentation from the Depositary and Custodian (annually)
Frostrow Capital LLP
(Company Secretary, Fund Administrator and Risk Manager)
Reporting
l Balance sheet l Investment limits and restrictions (monthly)
l Liquidity and gearing l Compliance with investment policy and
l Income forecasts guidelines (monthly)
l Portfolio valuation l Compliance report (quarterly)
l Portfolio transactions l Effectiveness of control environment
(annually)
PricewaterhousesCoopers LLP
(Statutory Auditor)
Board of Directors
Entirely independent and non-executive
Sub-committees:
l Audit Committee
l Management Engagement & Remuneration Committee
e
CORPORATE GOVERNANCE continued
Secondary third-
party service
providers
The Directors
l receive regular
reporting on their
activities at meetings;
and
l formally evaluate their
performance on an
annual basis.
Computershare Investor
Services PLC
(Registrar)
Stephenson Harwood LLP
(Legal Adviser)
Peel Hunt LLP
(Corporate Broker)
51ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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 on pages 30 to 33.
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 and the UK
Stewardship Code. 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 on pages 29 and 30.
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 a review in September 2021, the Committee decided that
a new broker should be appointed following a
benchmarking exercise. The new broker, Peel Hunt LLP,
was appointed with effect from 11 January 2022.
At its most recent review, in September 2022, 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 Mobius Capital Partners LLP and Frostrow
Capital LLP 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 webinars 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. Subject to any new
Covid–19 restrictions, all shareholders are encouraged to
attend the Annual General Meeting, where they are given
the opportunity to question the Chairman, the Board and
representatives of Mobius Capital Partners LLP. The
Directors welcome the views of all shareholders and place
considerable importance on communications with them.
UK Stewardship Code and Exercise of
VotingPowers
The Board and the Investment Manager support the UK
Stewardship Code, issued by the FRC, which sets out the
principles of effective stewardship by institutional
investors. The Company’s investment portfolio is managed
by Mobius Capital Partners LLP who have extensive
experience with emerging markets and who have a strong
commitment to effective stewardship.
The Board has delegated discretion to Mobius Capital
Partners LLP to exercise voting powers on its behalf in
respect of shares owned by the Company.
CORPORATE GOVERNANCE continued
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52 MOBIUS INVESTMENT TRUST PLC
Nominee Share Code
Where the Company’s shares are held via a nominee
company name, the Company undertakes:
l to provide the nominee company with multiple copies
of shareholder communications, so long as an
indication of quantities has been provided in advance;
and
l 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 on
page41.
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
Redemption Facility, and in respect of the appointment of
Peel Hunt as the new brokers, when a review of Peel Hunt’s
engagement letters was undertaken. Furthermore,
Mr Schuch’s appointment letter and deed of indemnity
were reviewed by the Company’s lawyers.
Audit, Risk and Internal Control
The Statement of Directors’ Responsibilities on page 53
describes the Directors’ responsibility for preparing this
annual report.
The Audit Committee Report, beginning on page 54,
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 on pages 24 to 27.
The Board’s assessment of the Company’s longer-term
viability is set out in the Business Review on pages 28
and 29.
Remuneration
The Directors’ Remuneration Report beginning on page 58
sets out the levels of remuneration for each Director and
explains how Directors’ remuneration is determined.
Frostrow Capital LLP
Company Secretary
28 February 2023
CORPORATE GOVERNANCE continued
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Report Governance Auditors’ Report Statements and Notice of AGM
53ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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:
l select suitable accounting policies and then apply
them consistently;
l 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;
l make judgements and accounting estimates that are
reasonable and prudent; and
l 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 Directors, whose names and functions are
listed in the ‘Board of Directors’ on pages 36 to 37 confirm
that, to the best of their knowledge:
l 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
l 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:
l so far as the Director is aware, there is no relevant
audit information of which the Company’s auditors are
unaware; and
l 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 auditors are aware of that information.
Approved by the Board of Directors and signed on its
behalf by
Maria Luisa Cicognani
Chairman
28 February 2023
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
In respect of the Annual Report and the Financial Statements
54 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Introduction from the Chairman
I am pleased to present my fourth formal report to
shareholders as Chairman of the Audit Committee, for the
year ended 30 November 2022.
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 on pages 36 and 37.
The Committee met twice during the year under review and
once more since the year-end. Attendance by each Director
during the year is shown in the table on page 46.
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 and removal of the
external Auditors, and agreeing the scope of their
work and their remuneration, reviewing their
independence and the effectiveness of the audit
process. Also, to be responsible for the selection
process of the external Auditors.
4. To consider any non-audit work to be carried out by
the Auditors. The Audit Committee reviews the need
for non-audit services to be performed by the Auditors
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 Auditors (see
page 56 for further information).
5. To consider the need for an internal audit function.
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
2022 were:
l The Committee is aware of the increase in fraudulent
activity over the last three years exploiting
organisations, as a result of the Covid-19 pandemic,
together with the cost of living crisis. 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.
l The Committee noted the consultation published by
the Department of Business, Energy and Industrial
Strategy on restoring trust in audit and corporate
AUDIT COMMITTEE REPORT
for the year ended 30 November 2022
55ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
governance, and will continue to monitor the timescale
for implementation of these proposals.
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 on pages 24 to 27. 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 appropriate systems have been in place for
the year under review.
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 the
Auditors twice during the year.
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 auditors as need dictates.
The following matters were dealt with at the meetings:
February 2022
l Consideration and review of the annual results and the
Auditors’ report to the Committee;
l Approval of the Annual Report and Financial
Statements;
l Review of the Depositary’s Report for the period ended
30 November 2021;
l Review of the Investment Manager’s internal controls;
l Review of the relevant internal controls reports of
Frostrow, the Depositary and the Registrar;
l 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;
l Review of the Company’s risk matrix;
l Review of the Company’s policies in respect of anti-
bribery and corruption as well as anti-tax evasion;
l Review of the Company’s Non-Audit Services Policy;
l Evaluation of the Committee’s effectiveness.
July 2022
l Consideration and review of the half-yearly report and
financial statements;
l Approval of the half-yearly report;
l Review of the Committee’s terms of reference;
l Review of the Investment Manager’s Systems and
Controls Report as well as the Investment Manager’s
Compliance Monitoring Review;
l Review of the Depositary’s Report for the six months
ended 31 May 2022;
l Review of the key service providers’ ongoing business
resilience, in particular in respect of financial crime,
cyber crime and information security;
l Review of the Company’s risk matrix;
l Approval of the Auditors’ engagement letter and
review of their plan for the 2023 audit.
Annual Report and Financial Statements
The Annual Report and the Financial Statements as a
whole, are the responsibility of the Board. The Directors’
Responsibility Statement is contained on page 53. 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 on pages 73 to 75, 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 of Investments
Reassurance was sought from the Depositary concerning
the safekeeping of the Company’s investments.
AUDIT COMMITTEE REPORT continued
56 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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 received assurance that all dividends
receivable, including special dividends, had been accounted
for appropriately.
Going Concern
Having considered the Company’s financial position, the
Committee satisfied itself that it is appropriate for the
Board to present the Financial Statements on the going
concern basis.
Long-term Viability
The Committee satisfied itself that it is appropriate for the
Board to make the statement on pages 28 and 29, that
they have a reasonable expectation that the Company will
be able to continue its operations over the next five 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 Auditors
The Audit
The nature and scope of the audit for the year, together
with PricewaterhouseCoopers LLP’s audit plan, were
considered by the Committee on 26 July 2022. The
Committee then met PricewaterhouseCoopers LLP on
21 February 2023 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 Auditors and sought their perspective.
Independence and Effectiveness
In order to fulfil the Committee’s responsibility regarding
the independence of the Auditors, the Committee reviewed:
– the senior audit personnel in the audit plan for the year,
– the Auditors’ arrangements concerning any potential
conflicts of interest,
– the extent of any non-audit services, and
– the statement by the Auditors that they remain
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 Auditors’ 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 Auditors to the Company can be
found below.
The Committee is satisfied with the Auditors’
independence and the effectiveness of the audit process,
together with the degree of diligence and professional
scepticism brought to bear.
Appointment and Tenure
PricewaterhouseCoopers LLP were appointed as the
Auditors of the Company shortly after the incorporation of
the Company. Ms Colleen Local has been the Engagement
Leader allocated to the Company by
PricewaterhouseCoopers LLP since the audit for the year
ended 30 November 2021.
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
Engagement Leader will be required to rotate after serving
a maximum of 5 years with the Company; it is therefore
anticipated that Ms Local will serve as Engagement Leader
until completion of the audit process the year ended
30November 2025. The Company has complied throughout
the year ended 30 November 2022 with the provisions of
the Statutory Audit Services Order 2014, issued by the
Competition and Markets Authority (“CMA Order”).
The re-appointment of PricewaterhouseCoopers LLP as
Auditors to the Company will be submitted for 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 26 April 2023.
AUDIT COMMITTEE REPORT continued
57ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Non-Audit Services
The Company operates on the basis whereby the provision
of all non-audit services by the Auditors 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 Auditors 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 Auditors if they are 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, PricewaterhouseCoopers
LLP have carried out no 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
28 February 2023
AUDIT COMMITTEE REPORT continued
58 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
DIRECTORS’ REMUNERATION REPORT
for the year ended 30 November 2022
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 Auditors to audit certain
disclosures provided in this report. Where disclosures have
been audited, they are indicated as such and the Auditors’
audit opinion is included in their report to shareholders on
pages 62 to 69.
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 2022, it was
agreed that with effect from 1 December 2022 the
Directors’ fees will increase as follows:–
The Chairman – £40,000
The Chairman of the Audit Committee – £35,000
Non-executive Directors – £30,000
As already noted in previous annual reports, Directors’ fees
should be increased annually 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 below 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 26 April 2023.
The Remuneration Policy as set out on page 61 will also be
put to shareholders at the AGM on 26 April 2023 and will
then 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.
59ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Directors’ Remuneration history
The table below contains the annual percentage change in remuneration over the three years prior to 30 November 2022
in respect of the various director roles:
Annualised fees to Year to 30 November Year to 30 November Year to 30 November
Fee Rates 30 November 2019 2020 2021 2022
Chairman of the Board £35,000 £35,000 £35,700 £37,000
0% +2.0% +3.6%
Chair of Audit Committee £30,000 £30,000 £30,600 £32,000
0% +2.0% +4.6%
Non-executive Director £25,000 £25,000 £25,500 £27,000
0% +2.0% +5.9%
Additional fees – – – –
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 and repurchase of the Company’s
shares (buy-backs) for the years ended 30 November 2022
and 30November 2021.
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
shares held
30 November
2022
Maria Luisa Cicognani Beneficial 71,740
Christopher Casey Beneficial 10,000
Gyula Schuch – none
Dr Sophie Robé
3
– (n/a)
3
Dr Robé resigned as a Director of the Company on 1 June 2022.
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.
Directors’ Fees
2022
Repurchase of
Company’s shares
2022
0
200
400
600
800
1000
1200
1400
1600
1800
2000
£’000
Directors’ Fees
2021
Dividends
2021
Dividends
2022
Repurchase of
Company’s shares
2021
DIRECTORS’ REMUNERATION REPORT continued
Fixed Taxable Total
Date of Fees Expenses Remuneration
Appointment 2022 2022 2022
to the Board £ £ £
Maria Luisa Cicognani 5 September 2018 37,000 – 37,000
Christopher Casey 5 September 2018 32,000 – 32,000
Gyula Schuch
1
1 June 2022 13,500 – 13,500
Dr Sophie Robé
2
5 September 2018 13,500 – 13,500
96,000 – 96,000
1
Mr Schuch was appointed as a Director of the Company on 1 June 2022.
2
Dr Robé resigned as a Director of the Company on 1 June 2022.
60 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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) from launch to
30 November 2022.
Total Shareholder Return for the
Period from launch to
30 November 2022^
Source: Morningstar
Rebased to 100 as at 1 October 2018
^Alternative performance measure, see Glossary beginning on page 86
Statement of Voting at Annual General Meeting
The Directors’ Remuneration Report for the period ended 30November 2021 was approved by shareholders at the
Annual General Meeting held on 19 May 2022.
32,529,347 votes (99.72%) were in favour, with 91,401 votes (0.28%) against and 6,339 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
23April 2020.
26,187,627 votes (99.75%) were in favour, with 66,027 votes (0.25%) against and 15,700 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
for the year to Fees for the year to
30 November 2023 30 November 2022
Chairman £40,000 £37,000
Audit Committee Chairman/Senior Independent Director £35,000 £32,000
Non-executive Director £30,000 £27,000
Total £105,000 £96,000
Index +17.5%
Share Price +31.6%
Nov-21
Nov-20
Nov-19
Oct-18
Nov-18
Nov-22
20
40
60
80
100
120
140
160
180
DIRECTORS’ REMUNERATION REPORT continued
61ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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 2022 and 2023 are shown in
the table on the previous page.
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
will be put to shareholders at the AGM on 26 April 2023
and thereafter will 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
2022:
(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
28 February 2023
DIRECTORS’ REMUNERATION REPORT continued
62 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Report on the audit of the financial statements
Opinion
In our opinion, Mobius Investment Trust plc’s financial statements:
l give a true and fair view of the state of the company’s affairs as at 30 November 2022 and of its loss for the year
then ended;
l have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and
Republic of Ireland”, and applicable law); and
l have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the Statement of Financial
Position as at 30 November 2022; the Income Statement and the Statement of Changes in Equity for the year then
ended; and the notes to the financial statements, which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
not provided.
We have provided no non-audit services to the company in the period under audit.
Our audit approach
Overview
Audit scope
l The Company is a standalone Investment Trust Company. The principal service providers to the Company are Mobius
Capital Partners LLP, which acts as AIFM, and Frostrow Capital LLP, which acts as company secretary and administrator.
l The Board of Directors and the AIFM engages The Northern Trust Company (the “Custodian”) to carry out duties of
safekeeping and cashflow monitoring agent.
l We conducted our audit of the Financial Statements using information from the AIFM, Frostrow Capital LLP and
Northern Trust Global Services plc, with whom Frostrow Capital LLP has engaged to provide certain administrative
functions.
l We tailored the scope of our audit taking into account the types of investments held by the Company, the
involvement of the third parties referred to above, the accounting processes and controls, and the industry in which
the Company operates.
l We obtained an understanding of the control environment in place at both the AIFM and Northern Trust Global
Services plc and adopted a fully substantive testing approach using reports obtained from these entities.
Key audit matters
l Income from investments
l Valuation and existence of investments
Materiality
l Overall materiality: £1,440,000 (2021: £1,660,000) based on 1% of net assets.
l Performance materiality: £1,080,000 (2021: £1,245,000).
INDEPENDENT AUDITORS’ REPORT
to the members of Mobius Investment Trust plc
63ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made subjective judgements, for example in respect of
significant accounting estimates that involved making assumptions and considering future events that are
inherentlyuncertain.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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) identified by the auditors, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters,
and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
thesematters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Income from investments
Refer to the Audit Committee Report, the Income
Statement, Note 1(c) Accounting Policies and Note 2
Income.
For the Company we consider that ‘income’ refers to both
revenue and capital (including gains and losses on
investments). We focused this risk on the
existence/occurrence of gains/losses on investments as
well as the completeness and accuracy of dividend income
recognition and its presentation in the Income Statement
as set out in the requirements of The Association of
Investment Companies’ Statement of Recommended
Practice (the “AIC SORP”).
We assessed the accounting policy for income recognition
for compliance with accounting standards and the AIC
SORP and performed testing to check that income had
been accounted for in accordance with this stated
accounting policy.
We found that the accounting policies implemented were in
accordance with accounting standards and the AIC SORP
and that income (revenue and capital gains and losses on
investments) has been accounted for in accordance with
the stated accounting policy.
We understood and assessed the design and
implementation of key controls surrounding income
recognition.
Capital gains/losses on Investments
The gains/losses on investments held at fair value
comprise realised and unrealised gains/losses. For
unrealised gains and losses, we tested the valuation of the
portfolio at the year-end (see below), together with testing
the reconciliation of opening and closing investments and
agreeing the year end holdings to independent
confirmations.
For realised gains/losses, we tested the occurrence of
capital gains/losses by agreeing a sample of disposal
proceeds to bank statements and we re-performed the
calculation of a sample of realised gains/losses.
INDEPENDENT AUDITORS’ REPORT continued
to the members of Mobius Investment Trust plc
64 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Key audit matter How our audit addressed the key audit matter
Revenue (or dividend income)
To test for completeness, we tested that the appropriate
dividends had been received in the year by reference to
independent data of dividends declared for all listed
investments during the year.
Our testing did not identify any unrecorded dividends.
We tested occurrence by verifying that all dividends
recorded in the year had been declared in the market by
investment holdings, and we traced a sample of dividends
received to bank statements.
We also tested the allocation and presentation of dividend
income between the revenue and capital return columns of
the Income Statement in line with the requirements set out
in the AIC SORP by determining reasons behind dividend
distributions.
Based on the audit procedures performed and evidence
obtained, we concluded that income from investments was
not materially misstated.
Valuation and existence of investments
Refer to the Audit Committee report, Note 1(b) Accounting
Policies and Note 8 Investments held at fair value through
profit or loss.
The investment portfolio at 30 November 2022 comprised
listed equity investments of £126.8 million. We focused on
the valuation and existence of investments because
investments represent the principal element of the net
asset value as disclosed in the Statement of Financial
Position in the financial statements.
We tested the valuation of the investments by agreeing
prices used in the valuation to independent third-party
sources.
We tested the existence of the investments by agreeing the
holdings of all investments to an independent confirmation
from the custodian, The Northern Trust Company as at
30November 2022.
No material misstatements were identified from
this testing.
INDEPENDENT AUDITORS’ REPORT continued
to the members of Mobius Investment Trust plc
65ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the company, the accounting processes and controls,
and the industry in which it operates.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of
significant accounting judgements, such as the classification of special dividends as revenue or capital.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall company materiality £1,440,000 (2021: £1,660,000).
How we determined it 1% of net assets
Rationale for benchmark applied We have applied this benchmark, a generally accepted auditing practice for
investment trust audits, in the absence of indicators that an alternative
benchmark would be appropriate and because we believe this provides an
appropriate and consistent year-on-year basis for our audit.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and
disclosures, for example in determining sample sizes. Our performance materiality was 75% (2021: 75%) of overall
materiality, amounting to £1,080,000 (2021: £1,245,000) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
£72,000 (2021: £83,000) as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of
accounting included:
l evaluating the Directors’ updated risk assessment and considering whether it addressed relevant threats, including
those presented by COVID-19, rising inflation, Russia’s invasion of Ukraine, and the subsequent economic uncertainty;
l evaluating the Directors’ assessment of potential operational impacts, considering their consistency with other
available information and our understanding of the business and assessed the potential impact on the financial
statements;
l reviewing the Directors’ assessment of the Company's financial position in the context of its ability to meet future
expected operating expenses, their assessment of liquidity as well as their review of the operational resilience of the
Company and oversight of key third-party service providers; and
l assessing the implication of significant reductions in NAV as a result of market performance on the ongoing ability of
the Company to operate.
INDEPENDENT AUDITORS’ REPORT continued
to the members of Mobius Investment Trust plc
66 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
INDEPENDENT AUDITORS’ REPORT continued
to the members of Mobius Investment Trust plc
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 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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
company's ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency
or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement
of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.
With respect to the Strategic report and Report of the Directors, we also considered whether the disclosures required by
the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic Report and Report of the Directors
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Report of the Directors for the year ended 30 November 2022 is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we
did not identify any material misstatements in the Strategic report and Report of the Directors.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
67ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and
that part of the corporate governance statement relating to the company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review. Our additional responsibilities with respect to the corporate
governance statement as other information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the financial statements and our knowledge obtained
during the audit, and we have nothing material to add or draw attention to in relation to:
l The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
l The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being managed or mitigated;
l The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their identification of any material uncertainties to the
company’s ability to continue to do so over a period of at least twelve months from the date of approval of the
financial statements;
l The directors’ explanation as to their assessment of the company’s prospects, the period this assessment covers and
why the period is appropriate; and
l The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue
in operation and meet its liabilities as they fall due over the period of its assessment, including any related
disclosures drawing attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the company was substantially less in scope
than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and
considering whether the statement is consistent with the financial statements and our knowledge and understanding of
the company and its environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the corporate governance statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
l The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for the members to assess the company's position,
performance, business model and strategy;
l The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems; and
l The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the
company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
INDEPENDENT AUDITORS’ REPORT continued
to the members of Mobius Investment Trust plc
68 MOBIUS INVESTMENT TRUST PLC
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Report Governance Auditors’ Report Statements and Notice of AGM
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation
of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and
fair view. The directors are also responsible for such internal control as they 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.
Auditors’ 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 auditors’ 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.
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.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of section 1158 of the Corporation Tax Act 2010, and we considered the extent to
which non-compliance might have a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of
override of controls), and determined that the principal risks were related to posting inappropriate journal entries to
increase revenue (investment income and capital gains) or to increase net asset value. Audit procedures performed by
the engagement team included:
l discussions with the AIFM and the Audit Committee, including consideration of known or suspected instances of
non-compliance with laws and regulation and fraud;
l reviewing relevant committee meeting minutes, including those of the Board and Audit Committee;
l assessment of the Company’s compliance with the requirements of sections 1158 of the Corporation Tax Act 2010,
including recalculation of numerical aspects of the eligibility conditions;
l identifying and testing year end material or revenue-impacting journal entries, posted by the Administrator during
the preparation of the financial statements; and
l designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
INDEPENDENT AUDITORS’ REPORT continued
to the members of Mobius Investment Trust plc
69ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions,
accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
l we have not obtained all the information and explanations we require for our audit; or
l 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
l certain disclosures of directors’ remuneration specified by law are not made; or
l the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the directors on 7 November 2018 to audit
the financial statements for the year ended 30 November 2019 and subsequent financial periods. The period of total
uninterrupted engagement is 4 years, covering the years ended 30 November 2019 to 30 November 2022.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial
statements form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the
Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’
report provides no assurance over whether the annual financial report has been prepared using the single electronic
format specified in the ESEF RTS.
Colleen Local (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
28 February 2023
INDEPENDENT AUDITORS’ REPORT continued
to the members of Mobius Investment Trust plc
70 MOBIUS INVESTMENT TRUST PLC
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Report Governance Auditors’ Report Statements and Notice of AGM
Year ended Year ended
30 November 2022 30 November 2021
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
(Losses)/gains on investments held at fair value 8 – (20,444) (20,444) – 54,197 54,197
Exchange (losses)/gains on foreign currencies – (185) (185) (2) 488 486
Income 2 2,859 – 2,859 1,695 – 1,695
Investment management and management
service fees 3 (529) (1,235) (1,764) (506) (1,180) (1,686)
Other expenses 4 (480) – (480) (443) – (443)
Return/(loss) on ordinary activities before taxation 1,850 (21,864) (20,014) 744 53,505 54,249
Taxation on ordinary activities 5 (302) (325) (627) (178) (4,160) (4,338)
Return/(loss) after taxation attributable to
equity shareholders 1,548 (22,189) (20,641) 566 49,345 49,911
Return/(loss) per share basic and diluted 7 1.42p (20.38)p (18.96)p 0.54p 46.78p 47.32p
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 on pages 73 to 82 are an integral part of these statements.
INCOME STATEMENT
for the year ended 30 November 2022
71ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 November 2022
Capital
Share Share Special Redemption Capital Revenue
capital premium reserve reserve reserves reserve Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 December 2021 1,098 10,184 96,932 – 57,579 709 166,502
Issue of Ordinary shares 4 649 – – – – 653
Cancellation of Ordinary shares
(Redemption facility) (14) – (1,839) 14 – (1,839)
(Loss)/profit for the year – – – – (22,189) 1,548 (20,641)
Ordinary Final dividend (0.35p) for
the year ended 30 November 2021 – – – – – (381) (381)
Balance at 30 November 2022 1,088 10,833 95,093 14 35,390 1,876 144,294
Capital
Share Share Special Redemption Capital Revenue
capital premium reserve reserve reserves reserve Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 December 2020 1,063 4,865 96,932 – 8,234 143 111,237
Issue of Ordinary shares 35 5,319 – – – – 5,354
Profit for the year – – – – 49,345 566 49,911
Balance at 30 November 2021 1,098 10,184 96,932 – 57,579 709 166,502
The accompanying notes on pages 73 to 82 are an integral part of these statements.
72 MOBIUS INVESTMENT TRUST PLC
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2022 2021
Notes £’000 £’000
Fixed assets
Investments held at fair value through profit or loss 8 126,834 144,801
Current assets
Debtors 9 1,196 1,187
Cash and cash equivalents 20,104 24,460
21,300 25,647
Current liabilities
Creditors (amounts falling due within one year) 10 (2,452) (986)
Net current assets 18,848 24,661
Total assets less current liabilities 145,682 169,462
Non-current liabilities
Deferred tax liability 11 (1,388) (2,960)
Net assets 144,294 166,502
Capital and reserves
Called up share capital 12 1,088 1,098
Share premium 10,833 10,184
Special reserve 95,093 96,932
Capital redemption reserve 14 –
Retained Earnings:
Capital reserves 35,390 57,579
Revenue reserve 1,876 709
Total Shareholders’ funds 144,294 166,502
Net asset value per Ordinary Share (p) 13 134.17 153.44
The Financial Statements on pages 70 to 82 were approved, and authorised for issue, by the Board of Directors on
28 February 2023 and signed on its behalf by:
Maria Luisa Cicognani
Chairman
The accompanying notes on pages 73 to 82 are an integral part of these statements.
Mobius Investment Trust plc – Company Registration Number: 11504912 (Registered in England and Wales)
STATEMENT OF FINANCIAL POSITION
as at 30 November 2022
73ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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 on page 42 in
the Report of the Directors forms part of these Financial Statements.
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 Judgement
There are two significant judgements involved in the presentation of the Company’s accounts being the judgement on the
functional and presentational currency of the Company and the provision of the Deferred tax liability on unrealised
capital gains on Indian securities.
The Company’s investments are made in foreign currencies, however the Board considers the Company’s functional and
presentational 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. All values are rounded to the nearest thousand pounds (£’000) except where otherwise indicated.
The Deferred tax liability has been valued as disclosed in note 11.
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 on page 78.
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:
l Level 1 – Quoted prices in active markets;
l 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
l Level 3 – Inputs are unobservable (i.e. for which market data is unavailable).
(c) Investment Income
Dividends receivable from equity shares are recognised 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.
Foreign dividends are gross of withholding tax.
NOTES TO THE FINANCIAL STATEMENTS
74 MOBIUS INVESTMENT TRUST PLC
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Report Governance Auditors’ Report Statements and Notice of AGM
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 revenue 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:
l Expenses which are incidental to the acquisition or disposal of an investment are treated as part of the cost or
proceeds of that investment;
l 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.
(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) Functional and presentational currency
The financial information is shown in sterling, being the Company’s presentational currency. In arriving at the functional
currency, the Directors have considered the following:
(i) the primary economic environment of the Company;
(ii) the currency in which the original capital was raised;
(iii) the currency in which distributions are made;
(iv) the currency in which performance is evaluated; and
(v) the currency in which the capital would be returned to shareholders on a break-up basis.
The Directors have also considered the currency to which underlying investments are exposed and liquidity is managed.
The Directors are of the opinion that sterling best represents the functional currency.
(h) Cash and cash equivalents
Cash and cash equivalents are defined as cash and demand deposits readily convertible to known amounts of cash and
subject to insignificant risk of changes in value.
(i) Nature and purpose of reserves
Ordinary share capital
l represents the nominal value of the issued ordinary share capital.
1. Accounting Policies (continued)
75ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Share premium account
l 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
l 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
l 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:
l gains or losses on the disposal of investments;
l exchange differences of a capital nature;
l the increases and decreases in the fair value of investments which have been recognised in the capital column of the
Income Statement; and
l expenses which are capital in nature as disclosed on page76.
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
l 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.
(j) 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
2022 2021
£’000 £’000
Income from investments
Overseas Dividends 2,842 1,695
Other income – bank interest 17 –
2,859 1,695
3. Investment Management and Management Service Fees
Year ended Year ended
30 November 2022 30 November 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fee –
Mobius Capital Partners LLP 432 1,008 1,440 413 963 1,376
Management service fee – Frostrow Capital LLP 97 227 324 93 217 310
529 1,235 1,764 506 1,180 1,686
Further information regarding Investment Management and Management Service fees can be found on page 29.
1. Accounting Policies (continued)
76 MOBIUS INVESTMENT TRUST PLC
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4. Other Expenses
Year ended Year ended
30 November 30 November
2022 2021
£’000 £’000
Directors’ fees 96 109
Auditor’s remuneration –
Statutory annual audit 37 37
Custody fees 95 92
Depositary fees 25 25
Printing and postage 14 12
Registrar fees* 25 17
Company broker fees 44 40
Stock listing and FCA fees 18 15
Legal and professional fees** 21 6
Marketing and promotional costs 60 46
Tax advice 18 20
Other administrative expenses 27 24
480 443
* Includes £6,000 in connection with the Redemption facility.
** Includes £11,000 in connection with the Redemption facility.
5. Taxation
(a) Analysis of Charge in the Year
Year ended Year ended
30 November 2022 30 November 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Overseas taxation 302 – 302 178 – 178
Overseas capital gains tax – 325 325 – 4,160 4,160
302 325 627 178 4,160 4,338
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 held for less than a year) and 10% on long term capital gains. A deferred tax liability for
CGT as at 30 November 2022 is recognised as shown in Note 11 on page 78 £1,388,000 (2021: £2,960,000).
(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 19.0%.
Year ended Year ended
30 November 2022 30 November 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Total return/(loss) on ordinary
activities before tax 1,850 (21,864) (20,014) 744 53,505 54,249
Corporation tax charged at 19.0% 351 (4,154) (3,803) 141 10,166 10,307
Effects of:
Non-taxable losses/(return)
on investments – 3,884 3,884 – (10,297) (10,297)
Non-taxable foreign exchange
losses/(gains) – 35 35 – (93) (93)
Unutilised management expenses 193 235 428 181 224 405
Income not subject to corporation tax (544) – (544) (322) – (322)
Overseas taxation 302 – 302 178 – 178
Indian capital gains tax – 325 325 – 4,160 4,160
Tax charge for the year 302 325 627 178 4,160 4,338
77ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
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(c) Provision for UK Deferred Taxation
For the year ended 30 November 2022, the Company had cumulative unutilised management expenses for taxation
purposes of £7,815,000 (2021: £5,571,000). 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 £1,954,000
(2021: £1,393,000) based on a prospective corporation tax rate of 25% (2021: 25%). The UK corporation tax rate is
currently enacted to 25% effective 1 April 2023.
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) on page 76.
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. Details of the ex-dividend and payment dates are shown in the Chairman’s Statement on
page7).
Year ended Year ended
30 November 30 November
2022 2021
£’000 £’000
Revenue available for distribution by way of dividend for the year 1,548 566
Final dividend of 1.20p (2021: 0.35p) per share* (1,291) (380)
Revenue reserves available following distribution 257 186
* Based on the number of shares in issue as at 30 November 2022 being 107,548,983 (2021: 108,510,000 on the ex-dividend date, 25 April 2022,
108,960,000 shares were held).
7. Return/(loss) per share – basic and diluted
The return per share figures are based on the following figures:
Year ended Year ended
30 November 30 November
2022 2021
£’000 £’000
Net revenue return 1,548 566
Net capital (loss)/return (22,189) 49,345
Net total (loss)/return (20,641) 49,911
Year ended Year ended
30 November 30 November
2022 2021
Pence Pence
Revenue return per share 1.42 0.54
Capital (loss)/return per share (20.38) 46.78
Total (loss)/return per share (18.96) 47.32
Weighted average number of Ordinary shares in issue during the year 108,850,685 105,474,288
During the year (2021: nil) there were no dilutive instruments held, therefore the basic and diluted return per share are
the same.
5. Taxation (continued)
78 MOBIUS INVESTMENT TRUST PLC
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8. Investments held at fair value through profit or loss
30 November 30 November
2022 2021
£’000 £’000
Opening book cost 94,404 89,158
Opening investment holding gains 50,397 20,650
Opening fair value 144,801 109,808
Purchases at cost 51,897 36,940
Sales proceeds (49,420) (56,144)
(Losses)/gains on investments held at fair value through profit or loss (20,444) 54,197
Closing fair value 126,834 144,801
Closing book cost 108,263 94,404
Closing investment holding gains 18,571 50,397
Closing fair value 126,834 144,801
The Company received £49,420,000 (2021: £56,144,000) from investments sold in the year. The book cost of the
investments when they were purchased was £38,038,000 (2021: £31,694,000). 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 £62,000 (2021: £54,000).
Sales transaction costs incurred during the year were £70,000 (2021: £143,000) and comprised commission.
9. Debtors
30 November 30 November
2022 2021
£’000 £’000
Outstanding sales due for settlement 1,098 934
Accrued income 8 37
Overseas tax recoverable 43 20
Non-redeemable preference shares recoverable 13 13
Ordinary shares issued receivable – 153
Other debtors 34 30
1,196 1,187
10. Creditors: amounts falling due within one year
30 November 30 November
2022 2021
£’000 £’000
Outstanding purchases due for settlement 364 733
Investment management fee – Mobius Capital Partners LLP 117 139
Management service fee – Frostrow Capital LLP 26 31
Ordinary shares bought back for cancellation – Redemption facility 1,839 –
Other creditors 106 83
2,452 986
11. Deferred tax liability
30 November 30 November
2022 2021
£’000 £’000
Deferred taxation on unrealised capital gains on Indian securities 1,388 2,960
See note 5(a) on page 76 for further details.
79ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
12. Called up Share Capital
30 November 30 November
2022 2021
£’000 £’000
50,000 (2021: 50,000) non-redeemable preference shares of £1 each 13 13
Allotted and fully paid
107,548,983 (2021: 108,510,000) Ordinary shares of 1p each 1,075 1,085
1,088 1,098
The capital of the Company is managed in accordance with its investment policy which is detailed in the Strategic Report
on pages 9 and 10.
During the year the Company issued 450,000 new shares for a consideration of £653,000 (2021: 3,510,000 new ordinary
shares for a consideration of £5,354,000).
In addition, the Company redeemed and cancelled 1,411,017 ordinary shares during the year ended 30 November 2022 for
a total cost of £1,839,000 (2021: nil). See page 8 of the Chairman’s Statement for further details.
The share capital includes 50,000 non-redeemable preference shares of a nominal value of £1 each; of which one quarter
is paid 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
2022 2021
Net Assets (£’000) 144,294 166,502
Number of shares in issue 107,548,983 108,510,000
Net asset value per share 134.17p 153.44p
During the year (2021: 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 on page 78) 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 shown on page 72.
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 on pages 13 to 20. 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 2022 (2021: 10%), the impact on the profit and
loss and net asset value would have been £15.0 million (2021: £15.0 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.
80 MOBIUS INVESTMENT TRUST PLC
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Report Governance Auditors’ Report Statements and Notice of AGM
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 reset, is shown below:
30 November 30 November
2022 2021
£’000 £’000
Exposure to floating interest rates:
Cash and cash equivalent 20,104 24,460
Net exposure 20,104 24,460
Interest rate sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 5% (2021: 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 2022 30 November 2021
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 1,005 (1,005) 1,223 (1,223)
Capital return – – – –
Total return after taxation 1,005 (1,005) 1,223 (1,223)
Net assets 1,005 (1,005) 1,223 (1,223)
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.
14. Financial Instruments (continued)
81ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
14. Financial Instruments (continued)
Foreign currency exposure:
2022 2021
Investments Cash Debtors Creditors Investments Cash Debtors Creditors
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
New Taiwanese dollar 33,125 27 23 (128) 33,122 11,055 – (733)
Indian rupee 20,000 – – (1,388) 40,422 – – (2,960)
Korean won 15,288 – 235 (467) 7,920 – – –
Hong kong dollar 13,579 – – – 17,385 – – –
US dollar 11,870 – – – 6,288 – 934 (478)
Turkish lira 8,883 – 1,098 – 5,715 – – –
Brazilian real 7,967 – 9 (3) 13,753 – 37 –
Kenyan shilling 6,978 182 – – 5,704 – – –
Vietnamese dong 6,023 1,381 – – 6,882 108 – –
South African rand 3,121 – – – 7,061 – – –
Polish zloty – – 20 –
– – 20 –
Egyptian pound – – – – 549 – – –
126,834 1,590 1,385 (1,986) 144,801 11,163 991 (4,171)
At 30 November 2022, the Company had £18,514,000 (2021: £13,297,000) of sterling cash balances.
Foreign currency risk
During the year sterling weakened by an average of 1.73% (2021: 2.6% strengthened) against all of the currencies in the
investment portfolio (weighted for exposure at 30 November 2022), 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 £13.0 million
(2021: £15.0 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 £13.0 million (2021: £15.0 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.
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:
2022 2021
£’000 £’000
Cash and cash equivalents 20,104 24,460
Debtors 1,196 1,187
21,300 25,647
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.
82 MOBIUS INVESTMENT TRUST PLC
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Report Governance Auditors’ Report Statements and Notice of AGM
14. Financial Instruments (continued)
Credit risk (continued)
– 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 on pages 23 to 28.
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, 98.6% of the current portfolio could be liquidated within 30 trading days, with 93.0%
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, including Covid-19 and its mitigations can be found in the
Business Review beginning on page 21.
15. Transactions with the Investment Manager and Related Parties
l Mobius Capital Partners LLP
l The Directors of the Company
The Company employs Mobius Capital Partners LLP as its Investment Manager. During the year ended 30 November
2022, Mobius Capital Partners LLP earned £1,440,000 (2021: £1,376,000) in respect of Investment Management fees, of
which £117,000(2021: £139,000) was outstanding at the year end. Details of the fees of all Directors can be found on
pages 58 to 61 and in note 4 on page 76.
The Directors’ interests in the capital of the Company can be found on page 59. 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 2022 (2021: none).
17. Post Balance Sheet Events
Subsequent to the Company’s year end, the net asset value per share of the Company has increased by 3.4% from 134.2p
to 138.7p and the Company’s share price has also increased by 6.1% from 131.0p to 139.0p as at 24 February 2023.
83ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
AIFMD RELATED DISCLOSURE
Alternative Investments Fund Managers Directive (“AIFMD”) Disclosures
(Unaudited)
Investment objective and leverage
Mobius Capital Partners 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 on pages 9 and 10.
The table below sets out the current maximum permitted limit and actual level of leverages for the Company (see
Glossary beginning on page 86 for 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 2022 89.0% 101.8%
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 2022, MCP had eight 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 Mobius Capital Partners LLP 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
84 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
The Company
Mobius Investment Trust plc (the “Company” or “MMIT”) is
a closed-ended investment company. Its shares are listed
on the premium segment of the Official List and traded on
the main market of the London Stock Exchange. The
Company is a member of the Association of Investment
Companies.
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.
The investment policy of the Company is set out on
pages 9 and 10.
Capital Structure
As at 30 November 2022, the Company’s capital structure
consisted of 107,548,983 Ordinary shares of 1p each and
50,000 Management shares of £1 each.
Alternative Investment Fund
Manager
Mobius Capital Partners LLP (“MCP”) has been the
Company’s Alternative Investment Fund Manager (“AIFM”)
since inception.
Investment Philosophy
Mobius Capital Partners LLP is an emerging and frontier
markets asset manager offering an innovative private
equity approach to public markets. Mobius Capital Partners
LLP is focused on a single long-only strategy based on
actively partnering with portfolio companies to improve
their corporate governance and to deliver a clear
Environmental, Social and Governance (“ESG”) pathway.
Mobius Investment Trust plc invests in a high conviction
portfolio of approximately 20-30 small to mid-cap
companies, across emerging and frontier markets.
Management Fee
1% per annum of the lower of (i) Net Asset Value and
(ii) Market Capitalisation (the “Fund Value”) up to and
including £500 million; 0.85% of the Fund Value over
£500 million and up to £1 billion; and 0.75% of the Fund
Value over £1 billion. There are no provisions for a
performance fee in the Investment Management Agreement.
ISA Status
The Company’s shares are eligible for Stocks and Shares
ISAs.
Retail Investors advised by IFAs
The Company currently conducts its affairs so that its
shares can be recommended by Independent Financial
Advisers (“IFAs”) in the UK to ordinary retail investors in
accordance with the Financial Conduct Authority (“FCA”)
rules in relation to non-mainstream investment products
and intends to continue to do so. The shares are excluded
from the FCA’s restrictions on non-mainstream pooled
investment products because they are shares in an
investment trust.
How to Invest
The Company’s shares are traded openly on the London
Stock Exchange and can be purchased through a stock
broker or other financial intermediary. The shares are
available through savings plans (including investment
dealing accounts, ISAs and SIPPs) which facilitate both
regular monthly investments and lump sum investments in
the Company’s shares. There are a number of investment
platforms that offer these facilities. Further details can be
found on page 88.
Website
www.mobiusinvestmenttrust.com
SHAREHOLDER INFORMATION
A member of the Association of Investment Companies
85ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Financial Calendar
30 November Financial Year End
February/March Final Results Announced
April Annual General Meeting
May Dividend payment
31 May Half Year End
July/August Half Year Results Announced
Annual General Meeting
The 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
Wednesday, 26 April 2023 at 12.00 noon.
How to Vote
If you hold your shares directly you will have received a
paper proxy form. For this year’s Annual General Meeting
(“AGM”) you should ensure that this is returned to the
Company’s registrars, Computershare, before 12noon on
Monday, 24 April 2023. Shareholders who hold their shares
in uncertificated form in CREST, should use the CREST
electronic proxy appointment service as described in the
Notice of Annual General Meeting, note4 on page 91.
If you hold your shares via an investment platform or a
nominee, you should contact them to inquire about
arrangements to vote.
If you would like to attend the meeting in person,
shareholders should bring their attendance card or proof
of identity. If you have a disability or impairment, please let
us know, so that we may try to make suitable
arrangements at the meeting.
Shareholders are advised that they should exercise
their votes in advance of the meeting by proxy, by
following the voting instructions given in the Notice of
the Annual General Meeting.
Dividend
If a final dividend is payable, it is normally paid annually
following approval at the Annual General Meeting. For the
year ended 30 November 2022, the Board is
recommending the payment of a final dividend of 1.20p per
ordinary share in line with investment trust rules. Further
details are given on page 7 in the Chairman’s Statement.
Shareholders who wish to have dividends paid directly into
a bank account, rather than by cheque to their registered
address, can complete a mandate form for the purpose.
Mandates may be obtained from the Company’s Registrars,
Computershare Investor Services, on request.
Share Prices
The Company’s shares are listed on the London Stock
Exchange under ‘Investment Companies’. The Company’s
“ticker” is MMIT.
Change of Address
Communications with shareholders are mailed to the
address held on the share register. In the event of a change
of address or other amendment this should be notified to
the Company’s Registrars, Computershare Investor
Services, under the signature of the registered holder.
Daily Net Asset Value
The daily net asset value per share of the Company’s
shares can be obtained on the Company’s website at
www.mobiusinvestmenttrust.com
and is published daily via
the London Stock Exchange.
Profile of the Company’s Ownership
% of shares held at 30 November 2022
and 2021
* Includes shares held by market makers and holdings too small to analyse.
Source: Richard Davies Investor Relations
Other 8.5%
Institutions
27.6%
Private Wealth Managers 22.4%
Retail and
A
dviser Platforms
41.5%
2022
Other* 1.2%
Institutions
28.4%
Private Wealth Managers 25.7%
Retail and
A
dviser Platforms
44.7%
2021
SHAREHOLDER INFORMATION continued
86 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
GLOSSARY OF TERMS AND ALTERNATIVE
PERFORMANCE MEASURES (“APMs”)
^ Alternative Performance Measure
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.
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.
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
page83 for further details).
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.
87ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
GLOSSARY OF TERMS AND ALTERNATIVE
PERFORMANCE MEASURES (“APMS”) (continued)
^ Alternative Performance Measure
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.
Year ended Year ended
NAV Per Share 30 November 30 November
Total Return Page 2022 2021
Opening NAV (p) 2 153.4 105.9
(Decrease)/increase
in NAV (p) (19.2) 47.5
Closing NAV (p) 2 134.2 153.4
(Decrease)/increase
in NAV 2 (12.5%) 44.9%
Impact of reinvested
dividends 0.2% –
NAV Total Return 2 (12.3%) 44.9%
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
2022 2021
Ongoing Charges Page £’000 £’000
Investment
management fees
and management
service fees 75 1,764 1,686
Operating expenses 76 480 443
Total expenses 2,244 2,129
Less costs in relation to
the Redemption facility (17) –
Total recurring expenses 2,227 2,129
Average net assets
during the year 147,854 140,405
Ongoing Charges 2 1.5% 1.5%
Peer Group
The Company has selected the following seven companies
taken from the AIC’s Global Emerging Markets sector to
form the Company’s peer group:
Barings Emerging EMEA Opportunities, BlackRock Frontiers
Investment Trust, Fidelity Emerging Markets Limited,
JP Morgan Emerging Markets Investment Trust, JPMorgan
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 on page 77 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.
Year ended Year ended
30 November 30 November
Share Price 2022 2021
Total Return Page p p
Opening share price 2 154.5 103.0
(Decrease)/increase
in share price (23.5) 51.5
Closing share price 2 131.0 154.5
(Decrease)/increase
in share price (15.2%) 50.0%
Impact of reinvested
dividends +0.2% –
Share price
Total Return 2 (15.0%) 50.0%
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.
88 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Retail Investors advised by IFAs
The Company currently conducts its affairs so that its
shares can be recommended by Independent Financial
Advisers (“IFAs”) in the UK to ordinary retail investors in
accordance with the Financial Conduct Authority (“FCA”)
rules in relation to non-mainstream investment products
and intends to continue to do so. The shares are excluded
from the FCA’s restrictions which apply to non-mainstream
investment products because they are shares in an
investment trust.
Investment Platforms
The Company’s shares are traded openly on the London
Stock Exchange and can be purchased through a stock
broker or other financial intermediary. The shares are
available through savings plans (including Investment
Dealing Accounts, ISAs, Junior ISAs and SIPPs) which
facilitate both regular monthly investments and lump sum
investments in the Company’s shares. There are a number
of investment platforms that offer these facilities. A list of
some of them, that is not comprehensive nor constitutes
any form of recommendation, can be found below:
AJ Bell Youinvest www.youinvest.co.uk
Barclays Smart Investor www.barclays.co.uk/smart-investor
Bestinvest www.bestinvest.co.uk
Charles Stanley Direct www.charles-stanley-direct.co.uk
EQi www.eqi.co.uk
Halifax Investing www.halifax.co.uk/investing.html
Hargreaves Lansdown www.hl.co.uk
HSBC www.hsbc.co.uk/investments
iDealing www.idealing.com
interactive investor www.ii.co.uk
IWeb www.iweb-sharedealing.co.uk
Saxo Markets www.home.saxo
WealthClub www.wealthclub.co.uk/
Computershare – Share Dealing
Service
A share dealing service is available to existing shareholders
through the Company’s Registrar, Computershare Investor
Services, to either buy or sell shares. Shareholders wishing
to use this service will need their Shareholder Reference
Number (“SRN”), which can be found on the share
certificate. If shareholders are unable to locate their SRN,
they should contact Computershare.
Computershare’s Internet Share Dealing Service provides
shareholders with a simple way to sell or purchase shares
(subject to availability) on the London Stock Exchange.
Real time trading is available during market hours (08.00
to 16.30 Monday to Friday excluding bank holidays).
Shareholders who would like to use Computershare’s Share
Dealing Service should do so online at
https://www
-uk.computershare.com/Investor/#ShareDealingInfo,
and a share dealing telephone helpline is available by
dialling 0344 322 2575.
The fee for this service will be 1.4% of the value of each
sale or purchase of shares, subject to a minimum of £40.
Stamp duty of 0.5% may also be payable on purchases.
Risk warnings
Past performance is no guarantee of future performance.
The value of your investment and any income from it may
go down as well as up and you may not get back the
amount invested. This is because the share price is
determined by the changing conditions in the relevant
stock markets in which the Company invests and by the
supply and demand for the Company’s shares. As the
shares in an investment trust are traded on a stock market,
the share price will fluctuate in accordance with the supply
and demand and may not reflect the underlying net asset
value of the shares; where the share price is less than the
underlying value of the assets, the difference is known as
the ‘discount’. For these reasons investors may not get
back the original amount invested. Although the
Company’s shares are denominated in sterling, it may
invest in stocks and shares which are denominated in
currencies other than sterling and to the extent they do so,
they may be affected by movements in exchange rates. As
a result the value of your investment may rise or fall with
movements in exchange rates. Investors should note that
tax rates and reliefs may change at any time in the future.
The value of ISA tax advantages will depend on personal
circumstances. The favourable tax treatments of ISAs may
not be maintained.
HOW TO INVEST
89ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Notice is hereby given that the fourth 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 Wednesday, 26 April 2023
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 2022 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 2022.
3. To approve the Directors’ Remuneration Policy.
4. To approve a Final Dividend of 1.20p per
ordinary share.
5. That Ms M L Cicognani be re-elected as a Director.
6. That Mr C Casey be re-elected as a Director.
7. That Mr G Schuch be elected as a Director.
8. That PricewaterhouseCoopers LLP be re-appointed as
Auditors to hold office from the conclusion of the
meeting to the conclusion of the next Annual General
Meeting at which accounts are laid.
9. That the Audit Committee be authorised to determine
the Auditors’ remuneration.
Special Business
To consider and, if thought fit, pass the following
resolutions, of which resolutions 11, 12 and 13 will be
proposed as Special Resolutions.
Authority to Allot Shares
10. 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 £215,397 (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 2024 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
11. That, subject to the passing of resolution 10, 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 10 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 £215,397, (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 2024 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
12. 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 16,144,077 or, if
NOTICE OF THE ANNUAL GENERAL MEETING
90 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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 2024 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
13. 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.
By order of the Board Registered office
25 Southampton Buildings
Frostrow Capital LLP London
Company Secretary WC2A 1AL
28 February 2023
NOTICE OF THE ANNUAL GENERAL MEETING continued
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.
91ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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).
NOTICE OF THE ANNUAL GENERAL MEETING continued
92 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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 24 April 2023 (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 27 February 2023 (being the latest practicable date prior to
the publication of this notice) the Company’s issued share capital
consisted of 107,698,983 ordinary shares carrying one vote each.
Accordingly, the total voting rights in the Company at 27 February
2023 were 107,698,983 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 14 March 2023, 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.
NOTICE OF THE ANNUAL GENERAL MEETING continued
93ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Resolution 1 – To receive the Report of the
Directors and Accounts
The Report of the Directors and Accounts for the year
ended 30November 2022 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 on pages 58 to 61.
Resolution 3 – Remuneration Policy
The Directors’ Remuneration Policy is set out in the Annual
Report on page 61.
Resolution 4 – To approve a Final Dividend
The rationale for the payment of a final dividend of 1.20p
per ordinary share is set out in the Chairman’s Statement
beginning on page 7 and in the Business Review on
pages21 and 22.
Resolutions 5 to 7 – Re-election of Directors
Resolutions 5 to 7 deal with the re-election or election of
each Director. Biographies of each of the Directors can be
found on pages 36 and 37.
The Board has confirmed, following a performance review,
that the Directors standing for re-election and election
respectively continue to perform effectively.
Resolutions 8 and 9 – Re-appointment of Auditors
and the determination of their remuneration
Resolutions 8 and 9 relate to the re-appointment of
PricewaterhouseCoopers LLP as the Company’s
independent Auditors to hold office until the next AGM of
the Company and also authorise the Audit Committee to
set the Auditors’ remuneration.
Resolutions 10 and 11 – Authority to Allot Shares
and Disapplication of Pre-emption Rights
Ordinary Resolution 10 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 £215,397 (equivalent to 21,539,796 shares, or 20% of the
Company’s existing issued Ordinary share capital on
27February 2023, 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 11 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 27 February 2023, 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 10. 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.
Although the percentage of the authority sought in
Resolutions 10 and 11 is higher than the one previously
sought, it 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 10 and 11 is in shareholders’ interest.
The Directors intend to use the authority given by
Resolutions 10 and11 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 12 – 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
EXPLANATORY NOTES TO THE RESOLUTIONS
94 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
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 12 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 27 February 2023, being
the nearest practicable date prior to the signing of this
Report, (amounting to 16,144,077 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 13 – General Meetings
Special Resolution 13 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 2024,
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 81,740 shares.
EXPLANATORY NOTES TO THE RESOLUTIONS continued
95ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
EXPLANATORY NOTES TO THE RESOLUTIONS continued
Location of the Annual General Meeting
25 Southampton Buildings, London WC2A 1AL on Wednesday, 26 April 2023 at 12 noon.
96 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
DIRECTORS AND OTHER INFORMATION
Directors
Maria Luisa Cicognani
(Chairman of the Board)
Christopher M. Casey
(Audit Committee Chairman and
Senior Independent Director)
Gyula Schuch
(Chairman of the Management Engagement and
Remuneration Committee)
Registered Office
Mobius Investment Trust plc
25 Southampton Buildings
London WC2A 1AL
United Kingdom
Incorporated in England and Wales on 7 August 2018 with
company number 11504912 and registered as an
investment company under Section 833 of the Companies
Act 2006. Launched on 1 October 2018.
Investment Manager and AIFM
Mobius Capital Partners LLP
20 North Audley Street
London W1K 6LX
United Kingdom
New address with effect from 6 March 2023:
17 Cavendish Square
London W1G 0PH
United Kingdom
Company Secretary, Administrator
and Management Services
Frostrow Capital LLP
25 Southampton Buildings
London WC2A 1AL
United Kingdom
Tel.: 0203 008 4910
Email: info@frostrow.com
/ CoSec@frostrow.com
Corporate Broker
Peel Hunt LLP
7th Floor
100 Liverpool Street
London EC2M 2AT
United Kingdom
(Peel Hunt was appointed as the Company’s new broker on 11 January 2022. Prior
to that date, the Company’s broker was Jefferies International Limited, Vintners
Place, 68 Upper Thames Street, London EC4Y 3BJ)
Custodian
The Northern Trust Company
50 Bank Street
Canary Wharf
London E14 5NT
United Kingdom
Depositary
Northern Trust Investor Services Limited
50 Bank Street
Canary Wharf
London E14 5NT
United Kingdom
Legal Adviser to the Company
Stephenson Harwood LLP
1 Finsbury Circus
London EC2M 7SH
United Kingdom
Independent Auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
United Kingdom
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
United Kingdom
Telephone: 0370 703 6304*
* Calls cost no more than calls to geographic numbers (01 or 02) and must be
included in inclusive minutes and discount schemes in the same way. Calls from
landlines are typically charged up to 9p per minute; calls from mobile phones
typically cost between 3p and 55p per minute. Calls from landlines and mobiles
are included in free call packages.
Notifications of changes of address and enquiries
regarding share certificates or dividend cheques should be
made in writing to the Registrars quoting your shareholder
reference number. Registered shareholders can obtain
further details of their holdings on the internet by visiting
www.investorcentre.co.uk
Identification Codes
SEDOL: BFZ7R98
ISIN: GB00BFZ7R980
Ticker: MMIT
Legal Entity Identifier (“LEI”):
21380033EKFQS15X1W22
Global Intermediary Identification
Number (“GIIN”):
J9AYNU.99999.SL.826
Perivan 264642
Mobius Investment Trust plc
25 Southampton Buildings, London WC2A 1AL
www.mobiusinvestmenttrust.com
This report is printed on Revive 100% White Silk a totally recycled paper
produced using 100% recycled waste at a mill that has been awarded the
ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (“TCF”) process.
This report has been produced using vegetable based inks.
Avoid investment fraud
1 Reject cold calls
If you’ve received unsolicited contact about
an investment opportunity, chances are
it’s a high risk investment or a scam. You
should treat the call with extreme caution.
The safest thing to do is to hang up.
2 Check the FCA Warning List
The FCA Warning List is a list of firms and
individuals we know are operating without
our authorisation.
3 Get impartial advice
Think about getting impartial financial
advice before you hand over any money.
Seek advice from someone unconnected to
the firm that has approached you.
Report a Scam
If you suspect that you have been
approached by fraudsters please tell the
FCA using the reporting form at
www.fca.org.uk/consumers/report-
scam-unauthorised-firm. You can also call
the FCA Consumer Helpline on
0800 111 6768
If you have lost money to investment fraud,
you should report it to Action Fraud on
0300 123 2040 or online at
www.actionfraud.police.uk
Find out more at
www.fca.org.uk/scamsmart
Investment scams are
designed to look like
genuine investments
Spot the warning signs
Have you been:
• contacted out of the blue
• promised tempting returns
and told the investment is safe
• called repeatedly, or
• told the offer is only available
for a limited time?
If so, you might have been
contacted by fraudsters.
Remember: if it sounds too
good to be true, it probably is!
Be ScamSmart