MOBIUS INVESTMENT TRUST PLC

ANNUAL REPORT OF MOBIUS INVESTMENT TRUST PLC
FOR THE YEAR ENDED 30 NOVEMBER 2021

 

Mobius Investment Trust plc (the "Company" or "MMIT") today announces audited results

for the year ended 30 November 2021

 

 

FINANCIAL HIGHLIGHTS

	As at	As at
	30 November	30 November
	2021	2020	% change
Net Asset Value per Ordinary share†	153.4p	105.9p	+44.9%
Share price	154.5p	103.0p	+50.0%
Premium/(discount)*	0.7%	(2.7%)	-

†      UK GAAP measure

*       Alternative performance measure, see Glossary.

	Year ended	Year ended
	30 November	30 November
	2021	2020
Net Asset Value per Ordinary share total return*^	+44.9%	+16.3%
Share price total return*^	+50.0%	+24.7%
Ongoing charges*	1.5%	1.5%
Dividend per share - final	0.35p	-

*       Alternative performance measure, see Glossary.  

^      Source: Morningstar.

 

CHAIRMAN'S STATEMENT

Introduction

Mobius Investment Trust plc successfully celebrated three years of operations on 1 October 2021 and this annual report covers our accounting year from 1 December 2020 to 30 November 2021. Our shareholders have supported us in these challenging times and on behalf of the Board I would like to thank them for their continued support throughout the last 12 months.

2021 was another year dominated by Covid-19 related volatility. Despite the difficulties of this environment I am very pleased to report that the Company generated significant outperformance during this period. With the Net Asset Value "NAV" and share price performances of +44.9% and +50.0% respectively, MMIT was at the top of its peer group and traded at a premium to NAV for four months during the year.

Strong investor interest for our strategy drove a narrowing of the discount and since August 2021; to the end of the financial year, MMIT traded at an average premium of 0.5%. The Board took the opportunity to issue 3,510,000 shares in total during the year to meet the demand. As at 30 November 2021, the premium stood at 0.7% compared to the peer group discount of 11.3%, and since the year-end, we have issued a further 250,000 shares to date.

Emerging markets continued to show volatility in performance with the MSCI EM index returning just over 1% during the financial year ended 30 November 2021. This was due to a number of factors including Covid-19, inflation, central bank rates moves, China-US tensions and China's regulatory crackdown on a number of sectors. After an enthusiastic start into 2021 with the vaccine rollouts gaining pace and stimuli programs around the world having a positive impact on the recovery, new Covid-19 variants hit markets with emerging economies particularly at risk because of low vaccination rates.

As I am writing Russia has launched a military operation in Ukraine. This will send shock-waves to all markets for the months to come.  It is unclear how the world will gather to support Ukraine and what the outcome of this support will be.  Emerging markets and nascent democracies will be looking at what developed countries will do as a lesson for the future.  In the face of uncertainties there will be costs but also opportunities and we will be closely monitoring the developments and the effect that this new situation will have on our strategy.

Investors' sentiment has been shaken by the roller-coaster of good news and set-backs: new Covid-19 variants, supply chain disruptions and inflationary pressures weighing on the global recovery have framed investors' sentiment in the last twelve months. Markets reacted accordingly. We ended the year though with some good news on Omicron's lower hospitalisation impact and milder symptoms and the wider use of some experimental drugs to help the most medically vulnerable if they cannot take the vaccine.

A return to adjusted normality out of the Covid pandemic seems in sight in our societies.  The effect of the events in Ukraine, however, will certainly have economic reverberations on many countries which rely on fossil fuels and other imports from Russia.  Higher commodity prices will put pressure on economic growth and the restoration of our pre-Covid lives.

Volatility will not disappear. During the year and despite a volatile environment, MMIT's portfolio proved resilient. The highly-differentiated strategy with its focus on quality companies combined with proprietary ESG plus Culture ("ESG+C®")¹ engagement has delivered strong returns at a lower standard deviation than the MSCI EM Index². The focus on companies with sound balance sheets and low leverage provided good protection against markets' volatility. Equally important though, is the close relationship between the investment team and the management of portfolio companies as a result of the ongoing engagement. This proximity has been crucial in giving the team invaluable insights in the challenges companies have been facing and their actions to navigate the crisis. While the opportunities to meet with management in person were still limited, the team conducted regular calls with all investee companies to drive the engagement forward and help companies to obtain different perspectives about how to apply innovative thinking to new situations.

1      Please see detailed explanation in the Business Review.

2      Standard Deviation since Inception on 1 October 2018: MMIT: 16.35, MSCI EM Mid Cap Index: 16.71 (Source: Bloomberg/Mobius Capital Partners).

The ESG focus of the strategy provided another layer of downside protection, and the Investment Managers' focus on businesses with robust governance and transparency as well as the ongoing improvements corporations are reporting with regards to their ESG profile is seen positively by the markets. Studies have shown that ESG leaders outperform, especially in emerging markets³. ESG analysis is an integral part of MMIT's investment process. The investment team has created a proprietary framework to assess ESG-factors in companies. This framework focuses on what is material to each business. In addition to the traditional environmental, social and governance factors the team has added corporate culture as a separate category. The founders' decades of experience in investing in emerging markets have shown that corporate culture is an often neglected but crucial aspect when it comes to the long-term success of companies. While MMIT does not focus on ESG-leaders, it invests in companies that have the potential to become such and helps them along the way. Throughout the year we have seen a number of engagement successes, not only on the reporting side but also in terms of Board diversity, the adoption of management share option schemes and environmental targets being set in revised corporate strategies. In some instances, this has contributed to the inclusion of portfolio holdings in sustainability indices for the first time. Please refer to the Investment Managers' Review for more information on ESG engagement and our successful results.

3      Friede, Busch and Basse, "ESG & Corporate Financial Performance: Mapping the global landscape", December 2015.

Mobius Capital Partners will be publishing their first active engagement report in Q2 2022. This report will provide more detail on MCP's customised ESG+C^® engagement approach, action points raised with portfolio companies as well as outcomes from engagement. The report will be available for download on the Investment Managers' website: www.mobiuscapitalpartners.com.

On 30 September 2021, the Company completed its first three years with demonstrating strong performance over the period. This important milestone has been seen by many investors as a confirmation that the highly differentiated approach of MMIT can deliver alpha. Mobius Capital Partners held a virtual investor day on the occasion to provide an update on portfolio, performance and strategy. We were delighted that many of you were able to join and have the opportunity to see presentations from some of our investee companies.

Performance

The net asset value per share ("NAV") of MMIT increased by 44.9% over the 12-month period to 30 November 2021, reaching a high of 158.98p on 15 November 2021 and closing the year at 153.44p. The share price performed even more strongly over the reporting period, increasing by 50.0% and closing at 154.50p on 30 November. While MMIT traded at an average discount to NAV of 2.7% during the period under review, the discount was continuously narrowing and MMIT reached premium territory in August 2021, reaching a high on 13 August 2021 at 3.11%, and closing on 30 November at a premium of 0.7%.

In accordance with its premium and discount management policy, MMIT's Board continues to closely monitor the discount or premium and will take action either through buybacks or share issuances to reduce discount or premium respectively, if it concludes it is in shareholders' interests to do so.

Dividend

The Company made a small revenue profit during the year and, as a result, the Board recommends to shareholders the payment of a small dividend which allows the Company to comply with the investment trust rules regarding distributable income.

Subject to shareholders' approval at the forthcoming Annual General Meeting, a final dividend of 0.35p per Ordinary share will be paid on 27 May 2022 to shareholders on the register as of 29 April 2022. The associated ex-dividend date will be 28 April 2022.

The Company's principal objective remains to provide shareholder returns through capital growth in its investments combined with income via dividends and the Board is maintaining its current policy to pay only those dividends required to maintain UK investment trust status. Subject to the investment trust rules, any dividends and distributions will continue to be at the discretion of the Board from time to time.

Management Team and Service Providers

MMIT's successful performance would not be possible without the dedication and competence of the Mobius Capital Partners ("MCP") team. We are very 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. The team has been in touch with our investors frequently: it has delivered four webinars and events with the partners also releasing five interviews. Frostrow's support has been crucial in keeping our shareholders closely updated on the Company's success and feeding any queries to the MCP team.

The Board has kept in close contact with all our service providers, receiving regular updates and confirmations that the day-to-day business of the Company continued to run efficiently and met all the commitments we have given to our shareholders. I would like to thank them for maintaining their professionalism and taking steps to ensure the safety of all employees while continuing to deliver excellent services.

I would also like to welcome Peel Hunt LLP ("Peel Hunt") as the Company's new Broker. Following a benchmarking exercise and a detailed review of services offered by various brokers, Peel Hunt was appointed after the year-end, on 11 January 2022. The Board thanks Jefferies International Limited, the previous broker, for the support given since the Company's IPO.

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 incredible support and contribution during the last twelve months of uncertainty and for their uninterrupted resilience. Charlie Shi resigned as a Director of the Company with effect from 26 July 2021; as already noted in the half-year report, the Board thanks him for his contribution. Going forward, and in agreement with the other Directors, I have taken over the role of Chairman of the Management Engagement and Remuneration Committee. During the year, the support of our Company Secretary has been vital and a special word of thanks to Frostrow for the support given to us.

Annual General Meeting

Again, as in the previous year, the Company's 2021 Annual General Meeting ("AGM") had to be held without shareholders attending due to continuing safety regulations in respect of Covid-19. However, many shareholders made use of their voting rights to let us know their agreement with the AGM resolutions.

The third AGM of the Company will take place at 12.00 noon on Thursday, 19 May 2022. At the time of writing, it is very much hoped that it will be possible to hold the AGM at 25 Southampton Buildings, London WC2A 1AL and 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.

Similar to last year, the Board will keep the impact of the ongoing Covid-19 pandemic under review and might make changes to the AGM arrangements should infection levels or further government restrictions so demand. Any changes to the AGM arrangements will be communicated on the Company's website, www.mobiusinvestmenttrust.com.

Articles of Association ("Articles")

In light of the circumstances created by the Covid-19 pandemic, the Board is proposing to make amendments to the Company's Articles to give the Company the flexibility to hold general meetings partially by electronic means and to enable members to attend and participate in general meetings at one or more satellite meeting places. In addition, the Board is proposing to amend the Articles to give it certain additional powers in respect of postponing or adjourning meetings in appropriate circumstances and the security arrangements at meetings. The amendments are being proposed in response to restrictions on social interactions during the pandemic which have, on occasion, made it impossible or impractical for shareholders to attend physical general meetings.

The Board's objective is to make it easier for Shareholders to participate in general meetings through introducing electronic access for those not able to travel and to ensure appropriate security measures are in place for the protection and wellbeing of Shareholders. I should make it clear that these powers would only be used if the specific circumstances or applicable law and regulation require it and the Board's intention is to always hold a physical AGM provided it is both safe and practical to do so. The safety of all of the Company's stakeholders must of course remain paramount.

The principal changes proposed to be introduced in the Articles, and their effect, are set out in more detail in the Report of the Directors and in the Explanatory Notes to the AGM Resolutions.

Redemption Facility

As Shareholders may be aware, the Company operates a redemption facility through which Shareholders are entitled to request the redemption of all or part of their holding of ordinary shares on a periodic basis. The first redemption point for the ordinary shares will be 30 November 2022. Each subsequent redemption point falls on 30 November every third year thereafter, with the next redemption point falling on 30 November 2025. The terms of the redemption facility are set out in the Company's Articles of Association and were summarised in the Company's IPO prospectus.

In early October 2022, and roughly four weeks ahead of the deadline for submitting redemption requests, the Company expects to issue a regulatory announcement reminding shareholders of the upcoming redemption point and setting out the process for redemption.

As noted above, the Company's share price and NAV total returns have been excellent and the shares are trading at the top of the peer group. We believe that the Company's investment case remains highly compelling. Therefore, the Directors and the Investment Managers do not intend to redeem their shares.

Outlook

Covid-19 has brought a fundamental re-thinking in our societies and of the way we work. It has also spurred the emergence of new technologies and the wider adoption of digitalisation in many businesses. We do not know as yet how the wider adoption of these new technologies will affect the real economy. The pandemic has brought some working efficiencies but has also taken a toll on human interactions and we are seeing many set-backs in education and in the way younger generations are learning about how to live together in the non-virtual world. We believe that the years to come will be very interesting as resource allocations will shift to new economic sectors and productivity gains will be driven by a wider application of technological applications: we are very optimistic for any company involved in biotech and chemtech, or just ready to adopt more tech. A lot will be learned from the pandemic which will accelerate progress in some sectors while those who are late in adopting the changes will likely become laggards. Our strategy is to continue to identify those rising stars and rough diamonds amongst the early adopters of change.

As I am writing, we are watching events unfold in Ukraine and are waiting to see how the world will react. I expect 2022 to be a volatile year as societies adapt to live with Covid-19 with a mix of progress through vaccine take up and development and herd immunity through infection.

MMIT's portfolio has shown that it can perform strongly even at times of heightened volatility. The strategy offers access to a set of highly-innovative companies outside the benchmark universe. So, while uncertainties remain as to the pace of the global recovery, I do believe that we are well positioned to capture the right opportunities and we have a winning strategy to continue to deliver attractive returns to our investors in the coming months.  

Maria Luisa Cicognani
Chairman
24 February 2022

 

 

 

 

 

INVESTMENT OBJECTIVE AND POLICY

Investment objective

The Company's investment objective is to achieve long-term capital growth and income returns predominantly through investment in a diversified portfolio of companies exposed directly or indirectly to emerging or frontier markets.

Investment policy

Asset allocation

The Company seeks to meet its investment objective by investing in a diversified portfolio of companies exposed directly or indirectly to emerging or frontier markets. The Company invests predominantly in:

·      companies incorporated in and/or traded on stock exchanges located in emerging or frontier markets; or

·      companies which have the majority of their operations, or earn a significant amount of their revenues in, emerging or frontier markets but are traded on stock exchanges located in developed countries.

The Company focuses on small to mid-cap companies. The Company may invest in pre-IPO and unlisted companies subject to the investment restrictions detailed below.

In pursuing its investment objective, the Company may:

·      invest in equity or equity related securities (including preference shares, convertible unsecured loan stock, warrants and other similar securities);

·      hedge against directional risk using index futures and/or cash;

·      hold bonds and warrants on transferable securities;

·      utilise options and futures for hedging purposes and for efficient portfolio management;

·      enter into contracts for differences;

·      hold participation notes;

·      use forward currency contracts; and

·      hold liquid assets.

Notwithstanding the above, the Company does not intend to utilise derivatives or other financial instruments to take short positions, nor to increase the Company's leverage in excess of the limit set out in the borrowing policy.

The Company does not track or mirror any index or benchmark and, accordingly, the Company is frequently overweight or underweight in certain investments, or concentrated in a more limited number of sectors, geographical areas or countries, when compared with a particular index or benchmark.

The Company focuses on companies that have:

·      a resilient business model and sound management;

·      the possibility for operational and environmental, social and governance ("ESG") improvements;

·      the potential to improve competitive advantages and cash flow generation; and

·      stakeholders that are open to, and have an interest in, positive change.

The Company, through its Investment Manager, seeks to unlock value in investee companies by actively partnering with them through a governance-oriented approach, seeking to act as a catalyst for broader ESG improvements.

The Company does not expect to take controlling interests in investee companies.

The Company seeks to provide shareholders with exposure to a portfolio which is appropriately diversified by geography and sector to achieve an appropriate balance of risk over the long term. The Company's portfolio typically comprises approximately 20 to 30 investments. The Company at all times invests and manages its assets in a manner which is consistent with the objective of spreading and mitigating investment risk.

Investment restrictions

The Company observes the following investment restrictions, each calculated at the time of investment:

·      no more than 10 per cent of Gross Assets are invested in a single company;

·      no more than 35 per cent of Gross Assets are invested in companies incorporated in or traded on an exchange in or otherwise primarily exposed to a single emerging or frontier market; and

·      no more than 15 per cent of Gross Assets are invested in companies that are not traded on a stock exchange.

In compliance with the Listing Rules, no more than 10 per cent, in aggregate, of Gross Assets may be invested in other investment companies which are listed on the Official List.

Borrowing

The Company may deploy leverage of up to 20 per cent of Net Asset Value (calculated at the time of borrowing) to seek to enhance long-term capital growth and income returns and for the purpose of capital flexibility. The Company's leverage is expected to primarily comprise bank borrowings but may include the use of derivative instruments and such other methods as the Board may determine.

Hedging

The Company's reporting currency and share price quotation is Sterling. However, the Company makes investments denominated in currencies other than Sterling. In addition, the majority of the income from the Company's investments is generated in currencies other than Sterling.

The Company does not intend to hedge currency risk in respect of the capital value of its portfolio or in respect of its Sterling distributions. However, the Company reviews its hedging strategy on a regular basis. The Company does not engage in currency trading for speculative purposes.

Cash management

Whilst it is the intention of the Company to be fully or near fully invested in normal market conditions, the Company may hold cash on deposit and may invest in cash equivalent investments, which may include short-term investments in money market type funds and tradeable debt securities ("Cash and Cash Equivalents").

There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant cash or cash equivalent position instead of being fully or near fully invested.

Investment Policy Commentary

Borrowing

There was no borrowing during the year under review or after the year end, nor have any derivatives been used.

Hedging

The Investment Manager does not use currency hedging products 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 PORTFOLIO

as at 30 November 2021

		Fair value	% of net
Company	Country	£'000	assets
Polycab India	India	12,497	7.5
Persistent Systems	India	12,113	7.3
APL Apollo Tubes	India	11,980	7.2
eMemory Technology	Taiwan	10,594	6.4
EC Healthcare	China	10,089	6.1
LEENO Industrial	South Korea	7,919	4.8
Clicks Group	South Africa	7,061	4.2
Vietnam Dairy Products	Vietnam	6,882	4.1
Yum China	China	6,288	3.8
ZillTek Technology	Taiwan	5,821	3.5
Safaricom	Kenya	5,704	3.4
Elite Material	Taiwan	5,688	3.4
TOTVS	Brazil	5,035	3.0
Sinbon Electronics	Taiwan	4,069	2.4
WIN Semiconductors	Taiwan	3,945	2.4
Fleury	Brazil	3,842	2.3
Metropolis Healthcare	India	3,833	2.3
Lojas Americanas	Brazil	3,756	2.3
Logo	Turkey	3,576	2.1
Kangji Medical Holdings	China	3,206	1.9
Parade Technologies	Taiwan	3,005	1.8
Pentamaster	Malaysia	2,672	1.6
Mavi Giyim Sanayi Ve Ticaret	Turkey	2,139	1.3
YDUQS Participacoes	Brazil	1,119	0.7
China Kepei Education	China	1,108	0.7
Cairo Investments & Real Estate Development	Egypt	549	0.3
Plover Bay Technologies	China	311	0.2
Total Investments		144,801	87.0
Other Net Assets		21,701	13.0
Shareholders' Funds		166,502	100.0

 

Portfolio Distribution

Sector Breakdown

30 November 2021

Technology	35.5%
Industrials	18.1%
Healthcare	12.6%
Consumer Discretionary	9.0%
Consumer Staples	8.4%
Communications	3.4%
Cash	13.0%

 

30 November 2020

Technology	31.5%
Health Care	20.1%
Consumer Discretionary	17.6%
Industrials	12.4%
Communications	8.4%
Consumer Staples	5.5%
Financials	3.2%
Cash	1.3%

 

Geographical Breakdown

30 November 2021

India	24.3%
Taiwan	19.9%
China	12.7%
Brazil	8.3%
South Korea	4.8%
South Africa	4.2%
Vietnam	4.1%
Turkey	3.4%
Kenya	3.4%
Malaysia	1.6%
Egypt	0.3%
UK*	13.0%

*       includes uninvested cash

 

30 November 2020

India	22.7%
Brazil	14.8%
China	14.2%
South Korea	14.0%
Taiwan	10.9%
Turkey	5.8%
Kenya	4.4%
Russia	3.9%
South Africa	3.4%
Malaysia	2.6%
Vietnam	2.1%
Egypt	0.5%
UK*	0.7%

*     includes uninvested cash

INVESTMENT MANAGERS' REVIEW

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 is a well-known emerging markets fund manager with more than 20 years' experience having lived in Warsaw, Singapore, Istanbul and London. 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 with a diverse background and different language skills. The firm operates with a very flat hierarchy and collaborates intensely with external experts in different geographies and sectors.

 

Introduction

In 2021 the strategy reached its important three-year performance mark, having delivered robust absolute and relative results since inception. The focus on quality companies with strong capital structures in combination with the active engagement contributed to the portfolio's resilience in times of volatility and drove the outperformance against peers. During the period covered in this report MMIT delivered NAV and share price returns of +44.9% and +50.0% respectively, leading the peer group by a wide margin.

As we are entering our fourth year, we like to reconfirm our general investment principles:

1)   focus on one concentrated strategy with clear capacity limits

2)   invest in the highest quality emerging businesses with strong competitive advantage

3)   use non-traditional sources to build conviction and continuously study industries and business models

4)   act as partners and long-term investors through constructive engagement with every portfolio company

The result is a differentiated investment strategy which aims to capture the most exciting opportunities in emerging and frontier markets. Over the last three years, this formula has yielded strong results for our shareholders, despite the unprecedented global challenges we have faced during that time.

After a lot of optimism at the beginning, driven by vaccine efficacy, 2021 turned out to be a challenging year, especially for emerging markets. Vaccination progress was slow and new waves of Covid-19 variants meant that the speed of the recovery was uneven. Many developing countries took longer to emerge from lockdowns. Even now, two years after Covid-19 emerged in China, a great part of Asia remains closed to foreign visitors.

Renewed Covid-19 outbreaks and the discovery of new variants added to market volatility throughout the period. Local events, including China's regulatory campaign, the Chinese real estate crisis, the Chinese Zero-Covid policy, an irrational monetary policy in Turkey and the threat of an expensive social welfare scheme in Brazil, worried investors. We are watching all these developments very carefully and regularly speak to the management teams of our portfolio companies to understand the challenges they are facing.

During the second half of the year, it became evident that high inflation on the back of an accelerating recovery, supply chain bottlenecks, pent-up demand and rising energy prices would not be as transitory as the Fed might have hoped. This led to a turn from a dovish to a more hawkish stance at the end of the year. While rising interest rates and a stronger US Dollar would affect emerging markets, we don't believe the relationship between rate hikes and emerging markets flows is as strong as sometimes portrayed.

On the bright side, strong corporate earnings for Q3 in developed and emerging market companies were taken as a positive sign of the ongoing global recovery. China reported a record trade surplus for the year, and 2021 ended with the hope that Omicron would be milder than previous variants and a beginning of a life with COVID-19 with fewer restrictions.

At the time of writing the Russian invasion of Ukraine has sent shockwaves through Europe and financial markets. We carefully monitor geopolitical risks and developments and will closely watch the situation in the Ukraine as it unfolds. Investors are well advised to steer clear of regions which are subject to significant political risks. This is especially the case when there are risks of sanctions, a sharp increase in cost of capital, or worse, capital controls. Currency losses can be very significant, as we witnessed in the more recent history in Argentina or Turkey. We have sold our single investment in Russia at the end of 2021, and have a strong preference for countries with lower risks and better governance.

Performance

Mobius Investment Trust plc has had a strong year. The Net Asset Value (NAV) and share price increased by 44.9% and 50.0% respectively over the 12-month period to 30 November 2021, with the NAV reaching a high of 158.98p on 15 November 2021 and closing at 153.44p.

The share price performed even stronger over the reporting period, increasing by 50.0% and closing at 154.50p on 30 November. While MMIT traded at an average discount to NAV of 2.7% during the period under review, its shares reached stable premium territory in August, reaching a high on 13 August at 3.11%, and closing the period at a premium of 0.69%.

Stock selection was an important driver of performance across geographies. Over the period, the top three largest contributors to performance were eMemory Technology (+16.3%), a Taiwan-based technology company, which has seen a surge in demand for its services with the work from home drive and reaped the benefits of the on-going roll-out of 5G, Indian software business Persistent Systems (+14.1%), and APL Apollo (+9.4%), the leading branded steel products manufacturer in India, whose strategic actions taken during the pandemic resulted in significant market share gains. Brazilian e-commerce business Americanas SA (-2.1%), Russian internet company VK (-1.6%), previously Mail.Ru, and Brazilian health care company Fleury (-1.5%) were the main detractors over the reporting period.

Portfolio Overview

As of 30 November 2021, MMIT had 87.0% of capital invested, with 27 holdings across 11 countries. The largest geographic exposure was India (24.3%), followed by Taiwan (19.9%), China (12.7%), and Brazil (8.3%). The largest sector exposure was Technology (35.5%), followed by Industrials (18.1%), Health Care (12.6%) and Consumer Discretionary (9.0%). We recently sold one holding and due to strong performance trimmed a number of our large positions to comply with regulations and our risk parameters. We are currently conducting due diligence on a number of strong, new investment ideas and expect to deploy existing cash levels carefully across new and existing positions.

MMIT - Portfolio Overview

As of 30 November 2021

	Top 10 Holdings:	Country	Industry	(%) of MMIT Portfolio	Market Cap (USD mln)	MSCI EM Index	MSCI EM Mid Cap Index
1	Polycab India	India	Industrials	7.5	3,455	X	X
2	Persistent Systems	India	Technology	7.3	3,174	X	X
3	APL Apollo	India	Industrials	7.2	2,316	X	X
4	eMemory Technology	Taiwan	Technology	6.4	4,455	✔	X
5	EC Healthcare	China	Health Care	6.1	1,412	X	X
6	LEENO Industrial	South Korea	Technology	4.8	1,921	X	X
7	Clicks Group	South Africa	Consumer Staples	4.2	3,267	✔	✔
8	Vinamilk	Vietnam	Consumer Staples	4.1	6,073	X	X
9	Yum China	China	Consumer Discretionary	3.8	16,171	✔	X
10	Zilltek Technology Corp	Taiwan	Technology	3.5	438	X	X
	Top 10 Holdings			54.9

Source: Bloomberg, Mobius Capital Partners

Since the Interim Report in July we added Zilltek Technology Corp, an analogue and mixed signals IC design house in Taiwan. Its products are used in PCs, wearable devices, and TVs applications. Zilltek is the market leader in the Notebook digital microphone segment with an estimated market share of 40%. MCP is actively working with Zilltek to establish best practices when it comes to IR and reporting, publishing sustainability reports in line with GRI standards, and improving sell side coverage.

We exited AK Medical, a Chinese manufacturer of orthopaedic implants in the second half of 2021. The stock contributed strongly to MMIT's performance since inception (+9.1%). During 2021 increased regulatory pressure fundamentally changed the investment case and the Investment Managers took the decision to sell the shares in the business. During the period we also sold our only Russian investment, communications company, VK (previously Mail.Ru) over governance concerns and limited progress on engagement.

Engagement & ESG

With travel still limited throughout the year, MCP continued to actively engage with portfolio holdings on operational and ESG+C® issues via video conferencing. As mentioned in previous reports, we believe that successful ESG integration in emerging and frontier markets has little in common with the box-ticking approach to ESG issues used by many passive emerging market investors. Our investment strategy makes minimal use of ESG ratings and is built on a customised and constructive engagement approach that focuses on what is material to each and every holding.

Over the reporting period, we continued to engage with companies on a range of issues including the adoption of the Task Force on Climate-Related Financial Disclosure (TCFD) recommendations, the publication of sustainability reports with clear long-term ESG-targets, the linking of these targets to management compensation, the improvement of board diversity and independence, the enhancement of investor relations, and the optimisation of balance sheets.

We have seen some encouraging progress within the portfolio over the last year. Indian software company Persistent Systems, for example, extended its ESOP (executive stock option program) to cover approximately 80% of employees to address attrition issues faced by the IT industry. This provides the company with an edge in attracting quality talent. Persistent also made progress on several other engagement points. The management initiated disclosures on carbon footprint and reduction on the CDP portal in line with TCFD guidelines, set a target for a carbon footprint reduction of 10% p.a. and committed to publish their first ESG report this year. Furthermore, Persistent Systems appointed a female independent director to their board increasing board diversity and independence.

Other highlights included:

·      APL Apollo published its first ESG report, which discloses granular data on water, energy consumption, and emissions

·      Mavi established an "All Blue strategy", focusing on sustainable fabrics

·      Safaricom's M-Pesa reached 50m active customers a month, contributing to financial inclusion across the continent

·      TOTVS is offering training to students from state technical schools to stimulate employability

·      Persistent Systems and APL Apollo started receiving sell-side coverage from Macquarie and Motilal respectively

·      APL Apollo appointed a new independent director to its board

·      Yum China increased wages for delivery riders to ensure riders are happier, deliver better service quality, and protect the brand

·      Clicks Group appointed its first female CEO

Outlook

What we have learned in the last two years, is that nothing is certain when it comes to dealing with Covid-19. Progress has been slow and there have been setbacks along the way. We believe we will continue to see this pattern well into the second quarter of this year. We are cautiously optimistic that this will be followed by a phase of stabilisation in the second half of 2022. Supply chains should start to normalise and this, in combination with the trickle-down effect of higher base rates, should help to ease the inflationary pressure.

Growth will still see decent levels, with some countries like India, one of our largest exposures, expected to grow their GDP by 9%. The vaccine roll-out in emerging markets has picked up pace. At the same time some emerging markets have reached high levels of immunity through infection. Corporate earnings will be driven by continued consumer spending on the back of pent-up demand and still-easy monetary policy.

We are bullish on the long-term prospects of our holdings. The portfolio has not only proven resilient to the high levels of volatility in the last two years but has delivered outsized returns. The key to this success, we believe, lies in the nature of the companies in the portfolio. Careful stock selection lies at the heart of the strong performance. These companies are typically not on the radar of international investors. Their average market cap is between $3bn to $5bn, they are often still family-/founder-owned and most are yet to receive an ESG-rating.

These companies are often leading players in their respective niches with strong local brands. They are very entrepreneurial, highly competitive and constantly innovate. They are led by excellent management teams and have outstanding cultures. The majority have already started on the path of improving their ESG-footprint and they are open to working closely with us on becoming leaders in this field. The companies we look for have strong balance sheets, low levels of debt and high profitability. In many cases their quality and competitive edge has enabled them to gain market share during the last couple of years.

Furthermore, many of our companies focus on specialised components that are catering to some of the most innovative industries and trends such as AI, autonomous driving, sensor technology, renewable energy, internet of things and cybersecurity. These trends are well on the way and have accelerated during the pandemic. This, we believe, will continue to drive the demand for our companies' products. Our investment pipeline is strong as we continue to find disruptive and innovative businesses with strong competitive advantages and sound balance sheets, especially in Asia. Let's not forget, periods of volatility always come with an opportunity for long-term investors.

Carlos Hardenberg

Mark Mobius

Mobius Capital Partners LLP
Investment Managers
24 February 2022

BUSINESS REVIEW

Business Review

The Strategic Report contains a review of the Company's business model and strategy, an analysis of its performance during the financial year ended 30 November 2021, future developments and details of the principal risks and challenges it faces. The Strategic Report has been prepared solely to provide information to shareholders to enable them to assess how the Directors have performed their duty to promote the success of the Company.

The Strategic Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the date of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Further information on how the Directors have discharged their duty under Section 172 of the Companies Act 2006 can be found below in the Business Review.

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. The Northern Trust Company and Northern Trust Investor Services Limited are the Company's Custodian and Depositary, respectively.

Further information, including the remuneration and contractual terms of appointment, of these principal service providers to the Company is set out below.

Strategy for the Year ended 30 November 2021 and Strategic Review

Throughout the year ended 30 November 2021, 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 increased 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.

Investment Objective and Policy

The Company's investment objective and policy are set out above.

Dividend Policy

It is the Company's policy to pursue capital growth for shareholders as well as income. Many of the companies in which the Company invests are relatively young 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 investment 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 in the Statement of Financial Position. In the year ended 30 November 2021, the Company made a revenue profit. Under investment trust rules regarding distributable income, a final dividend must be paid to allow the Company to comply with those rules.

Subject to shareholders' approval at the forthcoming Annual General Meeting, a final dividend of 0.35p per share will be paid on 27 May 2022 to shareholders on the register as of 29 April 2022. The associated ex-dividend date will be 28 April 2022.

The Board

The Board of the Company comprises Maria Luisa Cicognani (Chairman), Christopher Casey and Dr Sophie Robé, all of whom are independent non-executive directors. Charlie Shi resigned as a Director of the Company on 26 July 2021.

Mrs Cicognani, Mr Casey and Dr Robé served during the whole of the year under review and up to the date of signing this report and they will stand for re-election at the forthcoming Annual General Meeting.

Further information on the Directors can be found below.

Board Focus and Responsibilities

With the day to day management of the Company outsourced to service providers the Board's primary focus at each Board meeting is reviewing the investment performance and associated matters, such as, inter alia, future outlook and strategy, gearing, asset allocation, investor relations, marketing, and industry issues.

In line with its primary focus, the Board retains responsibility for all the key elements of the Company's strategy and business model, including:

·      Investment Objective and Policy, incorporating the investment guidelines and limits, and changes to these;

·      whether the Manager should be authorised to gear the portfolio up to a pre-determined limit;

·      review of performance against the Company's KPIs;

·      review of the performance and continuing appointment of service providers; and

·      maintenance of an effective system of oversight, risk management and corporate governance.

Details of the principal KPIs, along with details of the principal risks, and how they are managed, follow within this Business Review.

The Corporate Governance report includes a statement of compliance with corporate governance codes, together with the outline of the internal control and risk management framework within which the Board operates.

Information on the Company's social, community, employee or environmental responsibilities can be found in the Business Review below.

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:

·      Net asset value per share total return*^

·      Average discount/premium of share price to net asset value per share over the year^

·      Ongoing charges ratio^

*       Measured since launch.

^      Alternative Performance Measure (see Glossary)

Net asset value per share total return

The Company is committed to building a long-term investment record and will assess itself by reference to its peers.

The Company's peer group has been defined as a selection of investment trusts from the AIC's Global Emerging Markets Sector, that have a similar investment objective to the Company and they are set out in the Glossary.

Over the year ended 30 November 2021, the Company ranked first in its peer group with a net asset value per share total return performance of 44.9% against a peer group average of 13.0%. Subsequent to the year-end, from 1 December 2021 to 31 January 2022, the Company ranked ninth against its peer group with a net asset value total return of -5.0%; the average for the peer group was -0.2%. 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 2021, 3,510,000 new shares were issued by the Company. New shares will only be issued at a premium to the Company's cum income net asset value per share at the time of issue. Since the end of July 2021, the Company traded at an average premium of 0.5%, and was able to issue a steady stream of shares. Since the year-end, a further 250,000 new 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. At the time of writing, the Company's shares trade at a discount 1.1% to the net asset value per share and no shares have been bought back.

Average premium/(discount) of share price to net asset value per share*^ during the year

30 November 2021 (2.7%)	30 November 2020 (9.8%)
Peer group average discount (9.1%)	Peer group average discount (8.4%)

*       Source: Morningstar

^      Alternative Performance Measure (see Glossary)

Ongoing charges ratio

The Board continues to be conscious of expenses and works hard to maintain a sensible balance between high quality service and costs.

Over the year ended 30 November 2021 the ongoing charges ratio was 1.5%. This ongoing charges ratio compares to the average of the Company's peer group of 1.2%.

Ongoing charges ratio^

Year ended 30 November 2021 1.5% Peer group average 1.2%

Year ended 30 November 2020 1.5% Peer group average 1.3%

^      Alternative Performance Measure (see Glossary)

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 2021, has provided a NAV total return of 57.2% and a share price total return of 55.2%, compared to average peer group returns of 25.4% and 21.7% respectively.

Principal Risks, Emerging Risks and Risk Management

The Board considers that the risks detailed within this report are the principal risks to the delivery of its strategy that are currently facing the Company.

The Board is responsible for the ongoing identification, evaluation and management of the principal risks faced by the Company and 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. The impact of the global Covid-19 pandemic on the operations of the Company and its service providers was also considered as part of this process.

During the year ended 30 November 2021, the Audit Committee, on behalf of the Board, has 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. In respect of the ongoing impact of Covid-19 on business everywhere, the Committee was reassured that all service providers of the Company had adequate business continuity measures to ensure that no operational issues would arise out of working-from-home 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 below.

 

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. The emergence of the Covid-19 pandemic also had an impact on markets, especially in March 2020 when most suffered big falls, although the impact of Covid-19 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 quarterly 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: ·      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; ·      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 ·      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.
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.	A robust and sustainable corporate governance structure has been implemented with the Board being responsible for continued delivery for shareholders. Experienced emerging and frontier markets investment managers have been retained to deliver the strategy. 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 leave their employment with the Investment Managers or may be prevented from undertaking their duties.	The Board manages this risk by: ·      appointing an Investment Manager who operates a team environment such that the loss of any individual should not impact service levels; ·      receiving regular reports from the Investment Manager, such reports include any significant changes in the make-up of the team supporting the Company; ·      meeting the wider team, outside the designated lead manager, at both physical and virtual Board meetings and at the Investment Manager's offices; ·      outside of regular Board meetings the Chairman is in regular contact with senior representatives of the Investment Manager; and ·      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 they have a deep bench of analysts who are able to step up if needed.
Shareholder Relations Risk The Company is also exposed to the risk, particularly if the investment strategy and approach are unsuccessful, that the Company underperforms its peer group resulting in the Company becoming unattractive to investors and a widening of the share price discount to net asset value per share.	In managing this risk the Board: ·      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; ·      regularly discusses the Company's future development and strategy; ·      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; and ·      reviews an analysis of the shareholder register at each Board meeting and is kept informed of shareholder sentiment.
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 the ongoing Covid-19 pandemic and covers dealing, trade processing, administrative services, financial and other operational functions.	To manage these risks the Board: ·      ensures that all major service agreements are in line with best practice and reviews performance against these terms annually, taking action as needed; ·      receives a monthly report from Frostrow Capital LLP, which includes, inter alia, details of compliance with applicable laws and regulations; ·      reviews internal control reports and key policies, including the disaster recovery procedures, of its service providers; ·      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; ·      receives updates on pending changes to the regulatory and legal environment and progress towards the Company's compliance with such changes; ·      has considered the increased risk of cyber-attacks and has received reports and assurance from its service providers regarding the controls in place; and ·      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.
Geopolitical Risk The geopolitical risk to the Company is closely monitored by the Board.	The Board monitors compliance with the Company's investment policy. Macroanalysis is a vital part of the investment process, and the investment team takes a very cautious approach when it comes to investing in countries with volatile economic and political conditions. In addition, the Board consults regularly with the team on political risk factors.
Other Global Risk Other global events, such as the Covid-19 pandemic, acts of war or terrorist attacks, might affect the performance of portfolio companies or result in the Company's service providers being unable to meet their contractual duties.	During the year, and particularly in view of the ongoing Covid-19 pandemic, the Investment Managers successfully continued their dialogue with investee companies and the Board has stayed in close contact with the Investment Managers and has been monitoring portfolio and share price developments. The Board has also received assurances from all of the Company's service providers in respect of: ·      their business continuity plans and the steps being taken to guarantee the ongoing efficiency of their operations while ensuring the safety and well-being of their employees; ·      their cyber security measures including improved user-access controls, safe remote working and evading malicious attacks; and ·      any increased risks of fraud as a result of decreased operations and possible employee terminations and weakness in user-access controls resulting in the potential for management overrides. The Board will monitor developments as they occur.
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.
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, GDPR, tax regulations or any other applicable regulations.	The Board monitors regulatory change with the assistance of its AIFM/Investment Manager 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 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 in the Annual Report.
ESG and Climate Change Risk ESG risks and climate change could have an adverse impact on the portfolio companies' operational performance.	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. The Investment Manager 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 Manager's ESG+C® approach can be found in the Investment Managers' Review and on the Investment Manager's website at www.mobiuscapitalpartners.com. Mobius Capital Partners will be publishing their first active engagement report in Q2 2022. This report will provide more detail on MCP's customised ESG+C® engagement approach, action points raised with portfolio companies as well as outcomes from engagement. The report will be available for download on the manager's website: www.mobiuscapitalpartners.com.

 

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, such as the potential adverse effect of climate change on some of the portfolio companies' operations affecting their investment value over the short or medium term.

The experience and knowledge of the Directors is 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 brokers. 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.

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 above 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:

·      the portfolio is principally comprised of investments traded on major international stock exchanges. Based on current trading volumes, 98.2% of the current portfolio could be liquidated within 30 trading days with 60.8% in one day or less under normal market conditions and there is no expectation that the nature of the investments held within the portfolio will be materially different in future;

·      the expenses of the Company are predictable and modest in comparison with the assets and there are no capital commitments foreseen which would alter that position; and

·      the Company has no employees, only its non-executive Directors. Consequently, it does not have redundancy or other employment related liabilities or responsibilities.

The Audit Committee, as well as considering the potential impact of the Company's principal risks and various severe but plausible downside scenarios, has also considered the following assumptions in considering the Company's longer-term viability:

·      there will continue to be demand for investment trusts;

·      the Board and the Investment Manager will continue to adopt a long-term view when making investments;

·      the Company invests principally in the securities of listed companies in emerging markets to which investors will wish to continue to have exposure;

·      regulation will not increase to a level that makes running the Company uneconomical; and

·      the performance of the Company will continue to be satisfactory.

Covid-19 continued to be factored into the key assumptions made by assessing its impact on the Company's key risks and whether the key risks had increased in their potential to affect the normal, favourable and stressed market conditions. As part of this review the Board considered the impact of a significant and prolonged decline in the Company's performance and prospects. This included a range of plausible downside scenarios such as reviewing the effects of substantial falls in investment values and the impact of the Company's ongoing charges ratio, which were the subject of stress testing and reverse stress testing.

Furthermore, the Audit Committee again considered the operational resilience of the Company's service providers, and thereby the operational viability of the Company. During the year under review, the majority of meetings were held online, and all key service providers were contacted with regard to their business continuity systems in place due to the pandemic 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.

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 17 investment trust and investment company clients whose assets totalled approximately £18.4 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.

Depositary

With effect from 10 September 2018, Northern Trust Global Services SE, UK Branch ("NTGS-UK") was appointed as the Company's Depositary by the Board and Mobius Capital Partners LLP. The original agreement was novated and amended with effect from 1 October 2021, when the responsibility for services in relation to safekeeping of the Company's assets, cash monitoring and regulatory oversight was transferred to Northern Trust Investor Services Limited ("NTISL").

NTGS-UK was the UK branch of Northern Trust Global Services SE, a bank established in Luxembourg, and was permitted to provide trustee and depositary services into the UK by virtue of having extra permissions in the UK. However, as a consequence of the UK's decision to leave the European Union, the UK financial services regulator, the Financial Conduct Authority ("FCA"), decreed that UK branches of EU banks are no longer able to provide trustee and depositary services into the UK and those services have to be provided by a UK-incorporated company. A grace period had been allowed for firms to implement the new rules which came into force on 1 January 2021.

In order to comply with the new rules, Northern Trust established NTISL to be the new trustee and depositary. NTISL is a company incorporated in England and Wales, and it is authorised by the FCA to be a trustee and depositary. NTISL will provide the same services as NTGS-UK with the same processes and procedures in place. The costs for the transfer from NTGS-UK to NTISL were born by 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

Jefferies International Limited ("Jefferies") was the Company's corporate broker since its IPO in 2018. During the year under review, the Management Engagement and Remuneration Committee on behalf of the Board reviewed the contract with the broker and undertook a comparison of costs and services received with those of other broking houses. Following this exercise, Peel Hunt LLP ("Peel Hunt") was appointed with effect from 11 January 2022. The Board is grateful to Jefferies for the support provided to the Company since its IPO.

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:

·      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

·      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 and Ireland. 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. Over the course of the Covid-19 pandemic, many of these meetings have been held via video conference.

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.

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 and Ireland.

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 Jefferies International Limited. Since the year-end, as noted above, Peel Hunt was appointed as the new broker to the Company and will work in close contact with both Frostrow and the Investment Managers.

The Company continues to benefit from regular press coverage, with articles appearing in respected publications that are widely read by both professional and self-directed private investors. The latter typically buy their shares via retail platforms, which account for a significant proportion of the Company's share register.

Stakeholder Interests and Board Decision-Making (Section 172 Statement)

Under reporting regulations and the AIC Code, the Directors are required to explain how they have discharged their duties under Section 172 of the Companies Act 2006 in promoting the success of the Company for the benefit of the members as a whole. This includes the likely consequences of the Directors' decisions in the long term and how they have taken wider stakeholders' needs into account.

The Directors aim to act fairly as between the Company's shareholders. The Board's approach to shareholder relations is summarised in the Corporate Governance Report. The Chairman's Statement provides an explanation of actions taken by the Directors during the year to achieve the Board's long-term aim of ensuring capital growth and income returns predominantly through investment in a diversified portfolio of companies operating in emerging or frontier markets.

As an externally managed investment trust, the Company has no employees, customers, operations, or premises. Therefore, the Company's key stakeholders (other than its shareholders) are considered to be its service providers. The need to foster business relationships with the service providers and maintain a reputation for high standards of business conduct are central to the Directors' decision-making as the Board of an externally managed investment trust. The Directors believe that fostering constructive and collaborative relationships with the Company's service providers will assist in their promotion of the success of the Company for the benefit of all shareholders.

The Board engages with representatives from its service providers throughout the year. Representatives from 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 below:

 

 

 

 

 

 

 

 

 

 

 

 

 

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
Investors	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.	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: ·      the Annual General Meeting; ·      the Company's website which hosts reports, video interviews with the Investment Managers and monthly factsheets; ·      one-on-one investor meetings and online webinars; ·      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; ·      the Board will explain in its AGM results announcement the actions it intends to take to consult with shareholders in order to understand the reasons behind any significant votes against resolutions; and ·      following the consultation, an update will be published no later than six months after the AGM and the Annual Report will detail the impact the Shareholder feedback has had on any decisions the Board has taken and any actions or resolutions proposed.
Investment Manager	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.	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.
Service Providers	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. The ongoing Covid-19 pandemic has meant that it was vital to make certain there were adequate procedures in place at the Company's key service providers to ensure the safety and wellbeing of their employees and the continued high quality of service to the Company.	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 Board together with Frostrow have maintained regular contact with the Company's key service providers during the pandemic, as well as carrying out a review of the service providers' business continuity plans and additional cyber security provisions.
Portfolio Companies	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.	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 2021 Investor Day, three portfolio companies from India, Taiwan and Turkey 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.

 

What? WHAT WERE THE KEY TOPICS OF ENGAGEMENT?	Outcomes and actions WHAT ACTIONS WERE TAKEN, INCLUDING PRINCIPAL DECISIONS?
Key topics of engagement with investors ·      Ongoing dialogue with shareholders concerning the strategy of the Company, performance, the portfolio and ESG issues.	·      The Investment Manager, 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. ·      Shareholders are provided with performance updates via the Company's website as well as the usual financial reports and monthly factsheets. ·      At the 2021 AGM, Directors were unable to have the usual face-to-face interactions for the second year running, due to the guidance from the UK government in respect of gatherings. Instead, a webinar was held after the AGM during which the Investment Managers gave a presentation and shareholders were able to ask questions.
Key topics of engagement with the Investment Manager on an ongoing basis ·      Portfolio composition, performance, outlook and business updates as well as ESG engagement with portfolio companies. ·      The impact of Covid-19 on their business and the portfolio. ·      Team composition.	·      Updates are received by the Board at every Board meeting. ·      The Board is kept well informed about the team composition at MCP and the Investment Manager gives regular updates on new team members. ·      During the period, MMIT strengthened the investment team with two highly-qualified female analysts, a Mandarin speaking analyst and an analyst from India, supporting the global coverage with a focus on Asia. ·      Regular updates were received by the Board throughout the year in respect of the impact of the pandemic on investment decision making and working practices. ·      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.
Other Service Providers ·      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.	·      Following a benchmarking exercise, Peel Hunt LLP was appointed as the Company's new broker with effect from 11 January 2022. ·      No further specific action has been required as the reviews of the Company's other service providers have been positive and the Directors believe their continued appointment is in the best interests of the Company.

 

 

 

 

 

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.

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 and was delighted to see a number of very encouraging results in the sustainability arena, including the addition of three investee company holdings, Yum China, Win Semiconductors and Fleury, to the Dow Jones Sustainability Index 2020 in recognition of their achievements in the ESG-sphere.

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:

·      an initial recommendation by the Investment Committee;

·      establishment of an ESG+C® action plan and engagement with companies;

·      monitoring, measuring and reporting ESG+C® improvement; and

·      exercising voting rights.

In particular, the ESG Policy states that 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

·      environmental targets such as environmental reporting, quantitative environmental targets and Carbon Disclosure Project Portfolio Company scores. The Carbon Disclosure Project increases environmental transparency and accountability of companies and enables progress tracking. The scoring ranges from A, A-to B, B-to C, C-to D, D-and F.

·      social targets such as employee training initiatives and reporting on Sustainable Development Goals in the fields of Industry, Innovation and Infrastructure, Good Health and Wellbeing, and Decent Work and Economic Growth.

·      governance targets such as gender equality and female directors, Board independence, sustainability reporting, Global Reporting Initiative Compliant reporting, dedicated Investor Relations professionals and others.

·      corporate culture targets such as a Code of Conduct, share option schemes, non-financial employee benefits, anti-corruption and whistleblower policies, dedicated sustainability professionals and gender equality among C-level executives.

 

Climate Change

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.

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.

As an investment trust with limited internal resources, the Company has little impact on the environment. The Company believes that high standards of ESG make good business sense and have the potential to protect and enhance investment returns. Consequently, the Investment Manager's investment criteria ensure that ESG and ethical issues are taken into account and best practice is encouraged. 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 to its peer group.

The Board is regularly updated by Frostrow Capital 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 2021, its performance and the outlook for the Company can be found in the Chairman's Statement and in the Investment Manager's Review.

The Company's overall strategy remains unchanged.

For and on behalf of the Board of Directors

Maria Luisa Cicognani
Chairman
24 February 2022

BOARD OF DIRECTORS

Maria Luisa Cicognani
Independent Non-Executive Chairman and Chairman of the
Management Engagement and Remuneration Committee

Appointed to the Board on 5 September 2018

Remuneration per annum: £35,700*

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 a non-executive director of TBC Bank Group plc and non-executive chairman of Arafa Holding in Cairo.

Standing for re-election

Yes

Christopher Casey
Independent Non-Executive Director and Chairman of the Audit Committee

Appointed to the Board on 5 September 2018

Remuneration per annum: £30,600*

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 2021.

Dr Sophie Robé
Independent Non-Executive Director and Senior Independent Director

Appointed to the Board on 5 September 2018

Remuneration per annum: £25,500*

Shareholding in the Company: none*

Skills and Experience:

Sophie has over 20 years' experience in asset management as well as responsible and impact investing. She is the founder of FIIND Impact, an advisory firm specialised on sustainable and impact investing. Before that, she founded Phenix Capital in 2012 and was co-CEO until March 2020. Sophie was a director at Jupiter Asset Management London, heading business development in the Netherlands from 2010 to 2012, and acting as Global Head of hedge fund sales from 2002 to 2010. She also held senior positions at Commerzbank Asset Management, incl. head of quantitative analysis from 1997 until 2002.

Sophie is currently a member of the ESG committee and a former board member of the CFA Society of the Netherlands. Sophie is a CFA Charterholder and holds a PhD in Finance and Econometrics from the University of Kassel in Germany.

Other Appointments:

Sophie is also a director of FIIND Impact BV and FIIND Impact Foundation in the Netherlands.

Standing for re-election

Yes

*     Information as at 30 November 2021.

REPORT OF THE DIRECTORS

The Directors present this Annual Report on the affairs of the Company together with the audited financial statements and the Independent Auditors' Report for the year ended 30 November 2021.

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 2021, the following information is set out in the Strategic Report: a review of the business of the Company including details of its objective, strategy and business model, future developments, details of the principal risks and uncertainties associated with the Company's activities (including the Company's financial risk management objectives and policies), information regarding community, social, employee and human rights and environmental issues.

Information about Directors' interests in the Company's ordinary shares is included within the Annual Report in the Remuneration section of the Directors' Remuneration Report.

The Corporate Governance Statement forms part of this Directors' Report.

Business and Status of the Company

The Company is registered as a public limited company in England and Wales (Registered Number: 11504912) and is an investment company within the terms of Section 833 of the Companies Act 2006 (the "Act"). Its Ordinaryshares 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 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' in the Business Review.

The Directors believe that these measures enhance the comparability of information between reporting periods and aid investors in understanding the Company's performance. The measures used for the year under review have remained consistent with the prior period.

Definitions of the terms used and the basis of calculation adopted are set out in the Glossary.

Annual General Meeting ("AGM")

THE FOLLOWING INFORMATION TO BE DISCUSSED AT THE FORTHCOMING ANNUAL GENERAL MEETING IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt about the action you should take, you should seek advice from your stockbroker, bank manager, solicitor, accountant or other financial adviser authorised under the Financial Services and Markets Act 2000 (as amended). If you have sold or transferred all of your ordinary shares in the Company, you should pass this document, together with any other accompanying documents, including the form of proxy, at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for onward transmission to the purchaser or transferee.

Resolutions relating to the following items of special business will be proposed at the forthcoming AGM.

Resolution 9: Authority to allot shares up to approximately 10% of the ordinary shares in issue.

Resolution 10: Authority to issue new shares or sell shares from Treasury for cash, up to approximately 10% of the Company's issued ordinary shares at a price per share not less than the net asset value per share, and to disapply pre‑emption rights in respect of those shares.

Resolution 11: Authority to buy back up to 14.99% of shares in issue at the time of the AGM, either for cancellation or for placing into Treasury.

Resolution 12: To adopt the draft Articles of Association produced to the meeting as the Articles of Association of the Company in substitution for, and to the exclusion of, the Company's existing Articles of Association. Please see below for details of the proposed changes.

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 below. Explanatory notes regarding the resolutions can be found at the end of this document. Ordinary resolutions require that more than 50% of the votes cast at the relevant meeting be in favour of the resolution for it to be passed. Special resolutions require that at least 75% of the votes cast be in favour of the resolution for it to be passed.

Recommendation

The Directors consider that all the resolutions to be proposed at the AGM are in the best interests of the Company and its members as a whole. The Directors unanimously recommend that shareholders vote in favour of all the resolutions, as they intend to do in respect of their own beneficial holdings, details of which are set out in the Directors' Remuneration Report.

AGM Arrangements

The Board hopes that it will be possible to hold the AGM in person on 19 May 2022. In case the decision has to be made again that it will not be possible for shareholders to meet with the Board in person and that the Board can only conduct the minimal statutory business at the AGM, then arrangements will be made for shareholders to attend via a webinar, view the Managers' presentation 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 [email protected].

Shareholders are strongly encouraged to exercise their votes in respect of the meeting in advance by returning their forms of proxy. This will ensure that all shareholders' votes are registered in the event that attendance is not possible or restricted or if the meeting is postponed. Further details about the voting process can be found in the Notice of Meeting.

Articles of Association

Amendment of the Company's Articles of Association requires a special resolution to be passed by shareholders.

Proposed Amendments to the Articles of Association

The Board is proposing to make amendments to the Articles of Association ("Articles") to give the Company the flexibility to hold general meetings (including annual general meetings) partially by electronic means and to enable members to attend and participate in general meetings at one or more satellite meeting places. In addition, the Board is proposing to amend the Articles to give it certain additional powers in respect of postponing or adjourning meetings in appropriate circumstances and the security arrangements at meetings. The amendments are being proposed in response to restrictions on social interactions during the Covid-19 pandemic which have, on occasion, made it impossible or impractical for shareholders to attend physical general meetings.

The Board's aim in introducing these changes is to make it easier for shareholders to participate in general meetings through introducing electronic access for those not able to travel and to ensure appropriate security measures are in place for the protection and wellbeing of shareholders. However, the Board is committed to ensuring that, under normal circumstances, general meetings (including annual general meetings) will incorporate a physical meeting where shareholders can meet with the Board and representatives of the Investment Managers in person.

The principal changes proposed to be introduced in the Articles, and their effect, are set out below:

(i)   Electronic participation in general meetings

The Board will have the ability to determine the means of attendance and participation used in relation to general meetings of the Company, including whether the meeting shall be held physically (at one or more locations), or partly physically and partly through an electronic facility.

(ii)  Postponement and adjournment of general meetings

The Board's existing powers to postpone, adjourn and/or move the location of a general meeting will be expanded to allow the Board to change a physical meeting to a partly electronic meeting and vice versa. The Board may exercise its ability to postpone a meeting if, in its absolute discretion, it considers that it is impractical or unreasonable for any reason to hold the meeting on the date or at the time or at any place specified in the notice calling the general meeting, and by means of any electronic facility specified in the notice in addition to the physical meeting. If it appears to the chair of the general meeting that an electronic facility has become inadequate for the purposes of the meeting, then the chair may, without having to seek the consent of the meeting (given that this may not be practicable in the circumstances), interrupt or adjourn the general meeting.

(iii) Accommodation of members and security arrangements

The Board may make such arrangements as the Board shall in its absolute discretion consider to be appropriate to ensure the security and orderly conduct of the meeting and to control the level of attendance at any meeting (including at any principal meeting place, satellite meeting place or electronic facility). Similarly, if a general meeting is held partly by means of an electronic facility, the Board may make any arrangement and impose any requirement or restriction that is necessary to ensure the identification of those taking part by way of such electronic facility and the security of electronic communication.

(iv) Method of voting at meetings conducted wholly or partly electronically

A resolution put to the vote at a general meeting held partly by means of an electronic facility or facilities shall be decided on a poll, with poll votes to be cast by such electronic means as the Board, in its sole discretion, deems appropriate for the purposes of the meeting.

(v)  Documents available for inspection at a meeting

If, in the case of a general meeting which is held partly by means of an electronic facility, any document is required to be on display or available for inspection at that meeting (whether prior to and/or for the duration of the meeting), the Company shall ensure that it is electronically available to persons entitled to inspect it for at least the required period of time.

The proposed new Articles (marked to show the proposed changes) will be available for inspection on the Company's website at www.mobiusinvestmenttrust.com, the National Storage Mechanism and at the Company's registered office from the date of this Report and Accounts until the conclusion of the Annual General Meeting or may be obtained from the Company Secretary by requesting a copy using the address and details provided below.  The proposed new Articles will also be available for inspection at the place of the forthcoming Annual General Meeting for at least 15 minutes before and during that Annual General Meeting.

Directors

The current Directors of the Company are listed above. They all served as Directors throughout the year to 30 November 2021.

Charlie Shi served as a Director and as the Chairman of the Management Engagement and Remuneration Committee until his resignation on 26 July 2021.

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 2021. It is intended that this policy will continue for the year ending 30 November 2022 and subsequent years.

Directors' Indemnities

Subject to the provisions of applicable UK legislation, the Company provides an indemnity for Directors in respect of costs incurred in the defence of any proceedings brought against them and also liabilities owed to third parties, in either case arising out of their positions as Directors of the Company. This was in place throughout the financial year under review and up to the date of the approval of this report. The indemnities are qualifying third party provisions for the purposes of the Companies Act 2006.

A copy of each deed of indemnity is available for inspection at the Registered Office of the Company during normal business hours and will be available for inspection at the Annual General Meeting.

Directors' Fees

Reports on Directors' Remuneration and also the Directors' Remuneration Policy are set out below.

Appointment and Replacement of Directors

Unless otherwise determined by the Company by ordinary resolution, the number of Directors shall not be less than two.

Directors' Interests

The beneficial interests in the Company of the Directors, and of the persons closely associated with them, are set out in the Directors' Remuneration Report.

Capital Structure

As at 30 November 2021, there were 108,510,000 ordinary shares of 1p each (2020: 105,000,000 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 below.

The management shares do not carry a right to receive notice of, or attend or vote at, any general meeting of the Company unless no other shares are in issue at that time. The management shares are entitled to receive, in priority to any payment of a dividend on any other class of share, a fixed cumulative dividend of 0.01% per annum on their nominal amount. On a return of capital (including on a winding up) the holders of the management shares shall only receive an amount up to the capital paid up on such management shares. The management shares are not redeemable.

There are no restrictions concerning the transfer of ordinary shares in the Company; no special rights with regard to control attached to ordinary shares; no restrictions on voting rights; no agreements between holders of ordinary shares regarding their transfer known to the Company; and no agreements which the Company is party to that might affect its control following a successful takeover bid.

Details of the voting rights in the Company's shares at the date of this Annual Report are given in Note 2 to the Notice of the Annual General Meeting below.

Details of the substantial shareholders in the Company are listed below.

Share Issues and Buybacks

The Directors 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. Furthermore, at the last Annual General Meeting held on 28 April 2021, the Directors were granted authority to repurchase up to 15,739,500 Ordinary shares, being 14.99% of the Company's issued share capital. Those authorities will expire at the Annual General Meeting to be held on 19 May 2022, when resolutions to renew them will be proposed.

At 30 November 2021, the number of Ordinary shares in issue was 108,510,000. 3,510,000 were issued during the year and no shares were bought back.

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.

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 will be 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 will be 30 November 2022 and each subsequent redemption point shall 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.

In early October 2022, and roughly four weeks ahead of the deadline for submitting redemption requests, the Company expects to issue a regulatory announcement reminding shareholders of the upcoming redemption point and setting out the process for redemption.

The Board and the Investment Managers believe that the Company's investment case remains highly compelling and do not intend to redeem their shares.

Substantial Interests in Share Capital

As at 30 November 2021 and 31 January 2022, 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 2021
Shareholder	Number of ordinary shares held	% of issued share capital
Allan & Gill Gray Foundation	19,007,470	17.52
Joseph Bernhard Mark Mobius	15,617,092	14.39
Hargreaves Lansdown, stockbrokers (EO)	9,936,962	9.16
Interactive Investor (EO)	7,941,998	7.32
BMO Global Asset Management (UK)	5,425,000	5.00
JM Finn, stockbrokers	3,836,961	3.54
Connor Broadley	3,483,019	3.21

 

		31 January 2022
Shareholder	Number of ordinary shares held	% of issued share capital
Allan & Gill Gray Foundation	18,358,850	16.90
Joseph Bernhard Mark Mobius	15,617,092	14.37
Hargreaves Lansdown, stockbrokers (EO)	9,879,361	9.09
Interactive Investor (EO)	8,150,039	7.50
BMO Global Asset Management (UK)	5,425,000	4.99
JM Finn, stockbrokers	3,724,246	3.43
Connor Broadley	3,604,397	3.32
Charles Stanley	3,370,545	3.10
AJ Bell, stockbrokers (EO)	3,270,374	3.01

Interests of key management personnel in the shares of the Company as at 30 November 2021:

Mark Mobius (see also above)	15,617,092	14.39
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 below.

Global Greenhouse Gas Emissions for the Year ended 30 November 2021

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.

Requirements of the Listing Rules

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. For the year ended 30 November 2021, the continuing global Covid-19 pandemic has remained an influencing factor affecting the investment management and general operations of the Company and its service providers as well as the deliberations of the Board. It is expected that it will remain an influencing factor for the year ending 30 November 2022.

The Board has considered a detailed assessment of the Company's ability to meet its liabilities as they fall due, including tests which modelled the effects of further substantial falls in markets and significant reductions in market liquidity to that experienced to date in connection with the Covid-19 pandemic, on the Company's NAV, its cash flows and its expenses. Further information is provided in the Audit Committee report below.

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 in the Business Review, 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.

Statement of Disclosure of Information to the Auditors

The Directors who held office at the date of this report confirm that, so far as they are aware, there is no relevant audit information of which the Company's Auditors are unaware and each Director has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Company's Auditors are aware of that information.

Other Statutory Information

The following information is disclosed in accordance with the Companies Act 2006:

·      The rules on the appointment and replacement of directors are set out in the Company's articles of association (the "Articles"). A change to the Articles would be governed by the Companies Act 2006.

·      Subject to the provisions of the Companies Act 2006, to the Articles, and to any directions given by special resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the Company. The powers shall not be limited by any special powers given to the Directors by the Articles and a meeting of the Directors at which a quorum is present may exercise all the powers exercisable by the Directors. The Directors' powers to buy back and issue shares, in force at the end of the year, are recorded in the Directors' Report.

There are no agreements:

(i)   to which the Company is a party that might affect its control following a takeover bid; and/or

(ii)   between the Company and its Directors concerning compensation for loss of office.

By order of the Board

Frostrow Capital LLP
Company Secretary
24 February 2022

CORPORATE GOVERNANCE

The Board and Committees

Responsibility for effective governance lies with the Board. The governance framework of the Company reflects the fact that as an investment company it has no employees and outsources portfolio management to Mobius Capital Partners LLP and Company management, company secretarial, marketing and administrative services to Frostrow Capital LLP.

The Board Independent Chairman - Maria Luisa Cicognani Two additional non-executive Directors, all considered independent. The Board has appointed Dr Sophie Robé as Senior Independent Director. Key responsibilities: ·      to provide leadership and set strategy, values and standards within a framework of prudent effective controls which enable risk to be assessed and managed; ·      to ensure that a robust corporate governance framework is implemented; and ·      to challenge constructively and scrutinise the performance of all outsourced activities.

Management Engagement and Remuneration Committee Chairman - Maria Luisa Cicognani All Independent Directors Key responsibilities: ·      to review regularly the contracts, performance and remuneration of the Company's principal service providers; ·      to set the remuneration policy of the Company; and ·      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: ·      to monitor the integrity of the Company's annual report and financial statements and of the half-yearly report; ·      to oversee the risk and control environment and financial reporting; and ·      to review the performance of the Company's external Auditors and to set their remuneration

*       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.

 

 

The Company does not have a Nomination Committee. Instead, all duties of a Nomination Committee such as the annual consideration of Directors' performance and the skills possessed collectively by the Board as well as the consideration of new appointments, are performed by the Board as a whole.

Corporate Governance Report

The Company is committed to the highest standards of corporate governance and the Board is accountable to shareholders for the governance of the Company's affairs.

The Board of Mobius Investment Trust plc has considered the principles and recommendations of the AIC Code of Corporate Governance published in February 2019 (the "AIC Code"). The AIC Code addresses all the principles set out in the UK Corporate Governance Code (the "UK Code"), 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 forms part of the Report of the Directors.

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 above.

The purpose and strategy of the Company are described in the Strategic Report.

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.

 

Board Diversity

The Board supports the principle of boardroom diversity, of which gender is one important aspect, and the recommendations of the Lord Davies review.

The Board's aim is to have a broad range of approaches, backgrounds, skills, knowledge and experience represented and to make appointments on merit against objective criteria, including diversity in its broadest sense. The Board believes that this will promote the long-term sustainable success of the Company and generate value for all shareholders by ensuring there is a breadth of perspectives 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 will be a key consideration in any Director search process. The gender balance of, currently, two women and one man exceeds 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. The Parker Review, which includes research undertaken by the FRC, set a target for each FTSE 100 board to have at least one director of colour by 2021 and for each FTSE 250 board to have the same by 2024. When appointing new Board members, the Directors will consider gender and ethnic diversity besides knowledge, skills and experience.

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. All current Directors were appointed on 5 September 2018 and have been in office for the year under review. All Directors will retire at the Company's AGM and seek to be re-elected by shareholders. Further details regarding the Directors can be found above.

The Board carefully considers the various guidelines for determining the independence of non-executive Directors, placing particular weight on the view that independence is evidenced by an individual being independent of mind, character and judgement. All Directors are presently considered to be independent. All Directors retire at the AGM each year and, if appropriate, seek re-election. 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 above. All of the Directors consider that they have sufficient time to discharge their duties.

Directors' Interests

The beneficial interests of the Directors in the Company are set out in the Directors' Remuneration Report.

Meetings

The Board meets formally at least five times each year. Representatives of 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 2021 and the number of meetings attended by each Director.

Number of meetings	Board (5)	Audit Committee (2)	Management Engagement & Remuneration Committee (1)
Maria Luisa Cicognani	5	2	1
Christopher Casey	5	2	1
Sophie Robé	5	2	1
Charlie Shi*	3	1	-

*       Charlie Shi retired as a Director of the Company on 26 July 2021.

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 and the appointment of the Company's new broker.

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.

A composition and succession plan has been approved to ensure that the Board members collectively (i) display the necessary balance of professional skills, experience, length of service and industry/Company knowledge; and (ii) are fit and proper to direct the Company's business with prudence and integrity. This plan is reviewed annually and at such other times as circumstances may require.

To this end, the Board collectively reviews all appointments to the Board and its Committees and, if necessary, will seek to add persons with complementary skills or who possess skills and experience which might fill any gaps in the Board's knowledge or experience and who can devote sufficient time to the Company to carry out their duties effectively.

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.

Achieving diversity and balance of skills and knowledge in the Board will be a key determinant of any new appointments. Selecting the best candidate, irrespective of background is paramount.

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 above, and the Board considers that she has sufficient time to commit to the Company's affairs as necessary.

Dr Robé is the Senior Independent Director. Her biography and other appointments are detailed above, and the Board considers that she has sufficient time to commit to the Company's affairs as necessary.

Responsibilities of the Chairman and the SID

The Chairman's primary role is to provide leadership to the Board, assuming responsibility for its overall effectiveness in directing the Company. The Chairman is responsible for:

·      taking the chair at general meetings and Board meetings, conducting meetings effectively and ensuring that all Directors are involved in discussions and decision making;

·      setting the agenda for Board meetings and ensuring the Directors receive accurate, timely and clear information for decision-making;

·      taking a leading role in determining the Board's composition and structure;

·      overseeing the induction of new directors and the development of the Board as a whole;

·      leading the annual board evaluation process and assessing the contribution of individual directors;

·      supporting and also challenging the Investment Manager (and other suppliers where necessary);

·      ensuring effective communications with shareholders and, where appropriate, stakeholders; and

·      engaging with shareholders to ensure that the Board has a clear understanding of shareholders' views.

 

The 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:

·      working closely with the Chairman and providing support;

·      leading the annual assessment of the performance of the Chairman;

·      holding meetings with the other non-executive Directors without the Chairman being present, on such occasions as necessary;

·      carrying out succession planning for the Chairman's role;

·      working with the Chairman, other Directors and shareholders to resolve major issues; and

·      being available to shareholders and other Directors to address any concerns or issues they feel have not been adequately dealt with through the usual channels of communication (i.e. through the Chairman or the Investment Manager).

Policy on Director Tenure

The Board subscribes to the view that long-serving Directors should not be prevented from forming part of an independent majority. It does not consider that a Director's tenure necessarily reduces his or her ability to act independently and, following formal performance evaluations, believes that each of the Directors is independent in character and judgement and that there are no relationships or circumstances which are likely to affect their judgement.

The Board's policy on tenure is that continuity and experience are considered to add significantly to the strength of the Board and, as such, no limit on the overall length of service of any of the Company's Directors, including the Chairman, has been imposed. 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.

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 2021, 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.

Training and Advice

New appointees to the Board are provided with a full induction programme. The programme covers the Company's investment strategy, policies and practices. The Directors are also given key information on the Company's regulatory and statutory requirements as they arise including information on the role of the Board, matters reserved for its decision, the terms of reference of the Board Committees, the Company's corporate governance practices and procedures and the latest financial information. It is the Chairman's responsibility to ensure that the Directors have sufficient knowledge to fulfil their role.

On an ongoing basis, and further to the annual evaluation process, the Company Secretary will make arrangements for Directors to develop and refresh their skills and knowledge in areas which are mutually identified as being likely to be required, or of benefit to them, in carrying out their duties effectively. Directors will endeavour to make themselves available for any relevant training sessions which may be organised for the Board.

The AIC holds regular Director Roundtable events throughout the year, which are designed to cover the latest issues and regulatory developments affecting the investment company sector. The Director Roundtables are open to all member investment company directors.

Conflicts of Interest

Company Directors have a statutory obligation to avoid a situation in which they (and connected persons) have, or can have, a direct or indirect interest that conflicts, or may possibly conflict, with the interests of the Company.

In line with the Companies Act 2006, the Board has the power to sanction any potential conflicts of interest that may arise and impose such limits or conditions that it thinks fit. A register of interests and external appointments is maintained and is reviewed at every Board meeting to ensure that all details are kept up to date. Should a conflict arise, the Board has the authority to request that the Director concerned abstains from any relevant discussion, or vote. Appropriate authorisation will be sought prior to the appointment of any new directors or if any new conflicts or potential conflicts arise.

No conflicts of interest arose during the year under review.

Matters Reserved for Decision by the Board

The Board has adopted a schedule of matters reserved for its decision. This includes, inter alia, the following:

·      Decisions relating to the strategic objectives and overall management of the Company, including the appointment or removal of the Investment Manager and other service providers, establishing the investment objectives, strategy and performance comparators, the permitted types or categories of investments and the proportion of assets that may be invested in them.

·      Requirements under the Companies Act 2006, including the approval of the half-year and annual financial statements, the recommendation of the final dividend (if any), the appointment or removal of the Company Secretary and determining the policy on share issuance and buybacks.

·      Matters relating to certain Stock Exchange requirements and announcements, the Company's internal controls, and the Company's corporate governance structure, policies and procedures.

·      Matters relating to the Board and its Committees, including the terms of reference and membership of the committees, and the appointment of directors (including the Chairman and the SID).

Day-to-day investment management is delegated to 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 and operational risk management can be found in the Strategic Report.

Stakeholders

As an externally managed investment trust, the Company does not have employees. Its main stakeholders therefore comprise a small number of service providers and its shareholders.

The AIC Code requires the Directors to explain their statutory duties as stated in sections 171-177 of the Companies Act 2006. Under section 172, directors have a duty to promote the success of the Company for the benefit of its members as a whole and, in doing so, have regard to the consequences of any decisions in the long term, as well as having regard to the Company's stakeholders amongst other considerations. The Board's report on its compliance with section 172 of the Companies Act 2006 is contained within the Strategic Report.

Relationship with the Investment Manager

At each Board meeting, representatives from the Investment Manager are in attendance to present verbal and written reports covering their activity, portfolio and investment performance over the preceding period, and compliance with the applicable rules and guidance of the FCA 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 in the Business Review.

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 the most recent review, in September 2021, the Committee concluded that all service providers were performing well, but that a new broker should be appointed following a benchmarking exercise. It was agreed that all other service providers 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 two 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 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.

Nominee Share Code

Where the Company's shares are held via a nominee company name, the Company undertakes:

·      to provide the nominee company with multiple copies of shareholder communications, so long as an indication of quantities has been provided in advance; and

·      to allow investors holding shares through a nominee company to attend general meetings, provided the correct authority from the nominee company is available.

Nominee companies are encouraged to provide the necessary authority to underlying shareholders to attend, speak and vote at the Company's general meetings.

Significant Holdings and Voting Rights

Details of the shareholders with substantial interests in the Company's shares, the Directors' authorities to issue and repurchase the Company's shares, and the voting rights of the shares are set out in the Report of the Directors.

Company Secretary

The Board has direct access to the advice and services of the Company Secretary, Frostrow, which is responsible for ensuring that the Board and Committee procedures are followed and that the Company complies with applicable regulations. The Company Secretary is also responsible to the Board for ensuring timely delivery of information and reports and that statutory obligations of the Company are met.

Independent Professional Advice

The Board has formalised arrangements under which the Directors, in the furtherance of their duties, may seek independent professional advice at the Company's expense.

Legal advice was sought again during the year in respect of the 2021 Annual General Meeting which had to be held under lockdown conditions, with no shareholders being allowed to attend physically. Legal advice was also sought in respect of the forthcoming 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.

Audit, Risk and Internal Control

The Statement of Directors' Responsibilities below describes the Directors' responsibility for preparing this annual report.

The Audit Committee Report explains the work undertaken to allow the Directors to make this statement and to apply the going concern basis of accounting. It also sets out the main roles and responsibilities and the work of the Audit Committee throughout the year and describes the Directors' review of the Company's risk management and internal control systems.

A description of the principal risks facing the Company and an explanation of how they are being managed is provided in the Strategic Report.

The Board's assessment of the Company's longer-term viability is set out in the Business Review.

Remuneration

The Directors' Remuneration Report sets out the levels of remuneration for each Director and explains how Directors' remuneration is determined.

Frostrow Capital LLP
Company Secretary
24 February 2022

STATEMENT OF DIRECTORS' RESPONSIBILITIES

In respect of the Annual Report and the Financial Statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" Section 1A, and applicable law).

Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the Directors are required to:

·      select suitable accounting policies and then apply them consistently;

·      state whether applicable United Kingdom Accounting Standards, comprising FRS 102 Section 1A have been followed, subject to any material departures disclosed and explained in the financial statements;

·      make judgements and accounting estimates that are reasonable and prudent; and

·      prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are 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 also 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 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 accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the 'Board of Directors' confirm that, to the best of their knowledge:

·      the Company's financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 102 Section 1A, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

·      the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the Report of the Directors is approved:

·      so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

·      they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Approved by the Board of Directors and signed on its behalf by

Maria Luisa Cicognani
Chairman
24 February 2022

AUDIT COMMITTEE REPORT

for the year ended 30 November 2021

Introduction from the Chairman

I am pleased to present my third formal report to shareholders as Chairman of the Audit Committee, for the year ended 30 November 2021.

Role, Composition and Meetings

The role of the Committee is to ensure that shareholder interests are properly protected in relation to the application of financial reporting and internal control principles, risk management and to assess the effectiveness of the audit. The Committee's role and responsibilities are set out in full in its terms of reference which are available for review on the Company's website at www.mobiusinvestmenttrust.com.

Due to the small size of the Board, the Audit Committee comprises the whole Board (all Directors are independent and non-executive), including the Chairman of the Company. In accordance with the terms of reference of the Committee, the Chairman of the Board may be a member of the Committee, but may not act as the Committee Chairman.

The Committee has sufficient recent and relevant financial experience and, as a whole, has competence relevant to the sector in which the Company operates. I am also the audit committee chairman of various other listed companies and was, previously, an audit partner at KPMG LLP.

The other Committee members have a combination of financial, investment and other relevant experience gained throughout their careers. The experience of the members of the Committee can be assessed from the Directors' biographies set out above.

The Committee met twice during the year under review and once more since the year-end. Attendance by each Director during the year is shown above in the Report of the Directors.

Responsibilities of the Audit Committee

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.

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.

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 below 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.

Significant Issues Considered by the Audit Committee during the Year

Covid-19

The Covid-19 pandemic commenced at the beginning of 2020 and is still ongoing. During the year under review, the Committee again gave in-depth consideration to the pandemic's potential effects on the Company. Despite initial volatility in line with markets world-wide in 2020, the Company's performance has remained robust. The long-term effect of the pandemic on the global economy and, in particular, emerging markets will become clearer in time and the Committee will continue to monitor the impact of Covid-19, which is also captured in the Company's risk register.

In order to mitigate the business risks caused by the pandemic, the Committee continues to review the operational resilience of its various service providers, who have continued to demonstrate their ability to provide services to the expected level, whilst doing so remotely.

Internal Controls and Risk Management

The Directors have identified main areas of risk as described in the Strategic Report. They have set out the actions taken to evaluate and manage these risks. The Committee reviews the various actions taken and satisfies itself that they are sufficient: in particular the Committee reviews the Company's schedule of key risks at each meeting and requires amendments to both risks and mitigating actions if necessary.

The Board has overall responsibility for the Company's risk management and systems of internal controls and for reviewing their effectiveness. In common with the majority of investment trusts, investment management, accounting, company secretarial and custodial services have been delegated to third parties. The effectiveness of the internal controls is assessed on a continuing basis by the Company Secretary, the Investment Manager and the Depositary. Each maintains its own systems and the Committee receives regular reports from them. The Committee is satisfied that 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 2021

·      Consideration and review of the annual results and the Auditors' report to the Committee;

·      Approval of the Annual Report and Financial Statements;

·      Review of the Depositary's Report for the period ended 30 November 2020;

·      Review of the Investment Manager's internal controls;

·      Review of the relevant internal controls reports of Frostrow, the Depositary and the Registrar;

·      Review of the procedures for the detection of fraud and cyber security and the measures for these put in place by the key service providers;

·      Review of the Company's risk matrix;

·      Review of the Company's policies in respect of anti-bribery and corruption as well as anti-tax evasion;

·      Evaluation of the Committee's effectiveness.

July 2021

·      Consideration and review of the half-yearly report and financial statements;

·      Approval of the half-yearly report;

·      Review of the Committee's terms of reference;

·      Review of the Investment Manager's Systems and Controls Report as well as the Investment Manager's Compliance Monitoring Review;

·      Review of the Depositary's Report for the six months ended 31 May 2021;

·      Review of the key service providers' ongoing Covid-19 resilience;

·      Review of the Company's risk matrix;

·      Approval of the Auditors' engagement letter and review of their plan for the 2022 audit;

·      Review of the Company's policies.

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 above. The Board looks to the Committee for advice in relation to the Financial Statements both as to their form and content, and on any specific areas requiring judgement.

Although the Committee did not identify any significant issues as part of its review of the Annual Report and Financial Statements, it paid particular attention to:

Accounting Policies

The Accounting policies, as set out below, 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.

Valuation of Investments

The Committee reviewed the robustness of the Investment Manager'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 in the Business Review, 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 Auditor

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 27 July 2021. The Committee then met PricewaterhouseCoopers LLP on 16 February 2022 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 conflicts of interest,

-    the extent of any non-audit services,

-    the statement by the Auditors that they remain independent within the meaning of the regulations and their professional standards, and

-    the Auditors' independence.

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. Mr Christopher Meyrick was the Engagement Leader allocated to the Company by PricewaterhouseCoopers LLP up until the conclusion of the audit for the year ended 30 November 2020. He has now been succeeded as engagement Leader by Ms Colleen Local.

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 in 2026. The Company has complied throughout the year ended 30 November 2021 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 19 May 2022.

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. 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
24 February 2022

DIRECTORS' REMUNERATION REPORT

for the year ended 30 November 2021

Statement from the Chairman of the Board and 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 below.

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.

At the most recent review, held in September 2021, it was agreed that with effect from 1 December 2021 the Directors' fees will increase as follows:-

The Chairman - £37,000

The Chairman of the Audit Committee - £32,000 Non-executive Directors - £27,000

As already noted in the previous annual reports, Directors' fees should be increased annually in line with the peer group and the market.

Directors' Fees

The Directors, as at the date of this report, and who have all served throughout 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 121 and 122 of the current Company's Articles of Association and Articles 126 and 127 of the proposed new 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 19 May 2022. The Remuneration Policy as set out below will apply until it is next put to shareholders for renewed approval, which must be at intervals of not more than three years, or when the Directors' Remuneration Policy is varied in which case shareholder approval for the new Directors' Remuneration Policy will be sought. The Remuneration policy will be put to shareholders again at the AGM in 2023.

	Date of Appointment to the Board	Fixed Fees 2021 £	Taxable Expenses 2021 £	Total Remuneration 2021 £
Maria Luisa Cicognani	5 September 2018	35,700	-	35,700
Christopher Casey	5 September 2018	30,600	-	30,600
Dr Sophie Robé	5 September 2018	25,500	-	25,500
Charlie Shi*	5 September 2018	16,640	-	16,640
		108,440	-	108,440

*       Mr Shi resigned as a Director of the Company on 26 July 2021.

Directors Remuneration history

The table below contains the annual percentage change in remuneration over the three years prior to 30 November 2021 in respect of the various director roles:

	Annualised fee to	Year to 30 November	Year to 30 November
Fee Rates	30 November 2019	2020	2021
Chairman of the Board	£35,000	£35,000	£35,700
	-	0%	+2%
Chair of Audit Committee	£30,000	£30,000	£30,600
	-	0%	+2%
Non-executive Director	£25,000	£25,000	£25,500
	-	0%	+2%
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 the average total Directors' fees paid by the Company's peer group for the years ended 30 November 2021 and 30 November 2020.

[Graphic here]

 

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
		2021
Maria Luisa Cicognani	Beneficial	71,740
Christopher Casey	Beneficial	10,000
Dr Sophie Robé	-	-

Since the year end there have not been any changes in the Directors' interests.

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 below illustrates the shareholder return for a holding in the Company's Shares compared with the Net Asset Value per share from launch to 30 November 2021.

Total Shareholder Return for the Period from launch to 30 November 2021

[Graphic here]

 

Statement of Voting at Annual General Meeting

The Directors' Remuneration Report for the period ended 30 November 2020 was approved by shareholders at the Annual General Meeting held on 28 April 2021.

56,386,386 votes (99.91%) were in favour, with 48,843 votes (0.09%) against and 4,880 votes withheld. Any proxy votes which were at the discretion of the Chairman were included in the "for" total.

 

 

 

 

	Projected fees
	for the year to	Fees for the year to
	30 November 2022	30 November 2021
Chairman	£37,000	£35,700
Audit Committee Chairman	£32,000	£30,600
Non-executive Director and
Senior Independent Director	£27,000	£25,500
Non-executive Director*	-	£16,640
Total	£96,000	£108,440

*       Mr Shi resigned from the Board on 26 July 2021

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 2021 and 2022 are shown in the table above.

Fees for any new Director appointed will be on the above basis. Fees payable in respect of subsequent years will be determined following an annual review, with any increases to be in line with the peer group and the market. Any views expressed by shareholders with regards to fees paid to Directors will be taken into consideration by the Management Engagement and Remuneration Committee and the Board. No communications have been received from shareholders regarding Directors' remuneration.

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. Accordingly, it was put to shareholders at the first AGM in 2020 and will next be on the AGM agenda in 2023.

Annual Statement

On behalf of the Board, I confirm that the Remuneration Policy, set out above, and the Remuneration Report summarise, as applicable, for the year ended 30 November 2021:

(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.

Maria Luisa Cicognani
Chairman of the Board and the Management Engagement
and Remuneration Committee
24 February 2022

INDEPENDENT AUDITORS' REPORT

to the members of Mobius Investment Trust plc

Report on the audit of the financial statements

Opinion

In our opinion, Mobius Investment Trust plc's financial statements:

·      give a true and fair view of the state of the company's affairs as at 30 November 2021 and of its return for the year then ended;

·      have been properly prepared 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); and

·      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 2021; 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

·      The Company is a standalone Investment Trust Company and engages Mobius Capital Partners LLP (the 'AIFM') to manage its assets.

·      We conducted our audit of the Financial Statements using information from the AIFM, Frostrow Capital LLP and Northern Trust with whom Frostrow Capital LLP has engaged to provide certain administrative functions.

·      We obtained an understanding of the control environment in place at both the AIFM and the Administrator, and adopted a fully substantive testing approach using reports obtained from the AIFM and Administrator.

Key audit matters

·      Income from investments

·      Valuation and existence of investments

Materiality

·      Overall materiality: £1,660,000 (2020: £1,100,000) based on 1% of net assets.

·      Performance materiality: £1,245,000 (2020: £825,000).

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.

Consideration of impacts of COVID-19, which was a key audit matter last year, is no longer included because of the reduced uncertainty of the impact of COVID-19 in the current year as markets and economies continue to recover. Otherwise, the key audit matters below are consistent with last year.

Key audit matter	How our audit addressed the key audit matter
Income from investments
ISAs (UK) presume there is a risk of fraud in income recognition because of the pressure management may feel to achieve a certain objective. For the Company we consider that 'income' refers to both revenue and capital (including gains and losses on investments). We focussed 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 of 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. Revenue (or dividend income) To test accuracy, we tested dividend receipts by agreeing the dividend rates from all investments to independent third-party sources. 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. No material misstatements were identified from this testing. 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. No material misstatements were identified from this testing.
Valuation and existence of investments
The investment portfolio at 30 November 2021 comprised listed equity investments of £144.8 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 100% of prices used in the valuation to independent third-party sources. We tested the existence of the investments by agreeing 100% of the holdings of all investments to an independent confirmation from the custodian, Northern Trust Investor Services Limited as at 30 November 2021. No material misstatements were identified from this testing.

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.

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	£1,660,000 (2020: £1,100,000).
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% (2020: 75%) of overall materiality, amounting to £1,245,000 (2020: £825,000) 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 £83,000 (2020: £55,000) 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:

·      evaluating the Directors' updated risk assessment and considering whether it addressed relevant threats, including those presented by COVID-19;

·      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;

·      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

·      assessing the implication of significant reductions in NAV as a result of market performance on the ongoing ability of the Company to operate.

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 2021 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.

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:

·      The directors' confirmation that they have carried out a robust assessment of the emerging and principal risks;

·      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;

·      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;

·      The directors' explanation as to their assessment of the company's prospects, the period this assessment covers and why the period is appropriate; and

·      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 group 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:

·      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;

·      The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and

·      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.

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:

·      discussions with the Manager and the Audit Committee, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

·      reviewing relevant committee meeting minutes, including those of the Board and Audit Committee;

·      assessment of the Company's compliance with the requirements of section 1158 of the Corporation Tax Act 2010, including recalculation of numerical aspects of the eligibility conditions;

·      identifying and testing journal entries, in particular year end journal entries posted by the Administrator during the preparation of the financial statements; and

·      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.

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:

·      we have not obtained all the information and explanations we require for our audit; or

·      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

·      certain disclosures of directors' remuneration specified by law are not made; or

·      the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns.

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 3 years, covering the years ended 30 November 2019 to 30 November 2021.

Colleen Local (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors

London
24 February 2022

INCOME STATEMENT

for the year ended 30 November 2021

		Year ended 30 November 2021			Year ended 30 November 2020
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value	8	-	54,197	54,197	-	16,260	16,260
Exchange (losses)/gains on foreign currencies		(2)	488	486	(3)	(16)	(19)
Income	2	1,695	-	1,695	966	-	966
Investment management and management service fees	3	(506)	(1,180)	(1,686)	(340)	(794)	(1,134)
Other expenses	4	(443)	-	(443)	(414)	-	(414)
Return on ordinary activities before taxation		744	53,505	54,249	209	15,450	15,659
Taxation on ordinary activities	5	(178)	(4,160)	(4,338)	(94)	(3)	(97)
Return after taxation attributable to equity shareholders		566	49,345	49,911	115	15,447	15,562
Return per share basic and diluted	7	0.54p	46.78p	47.32p	0.11p	14.71p	14.82p

The total column of this statement represents the Company's Income Statement. The Revenue and Capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies (AIC).

All items in the above statement derive from continuing operations.

The Company had no other comprehensive income or expenses other than those shown above and therefore no separate Statement of Other Comprehensive Income has been presented.

The accompanying notes are an integral part of these statements.

STATEMENT OF CHANGES IN EQUITY

for the year ended 30 November 2021

	Share	Share	Special	Capital	Revenue
	capital	premium	reserve	reserves	reserve	Total
	£'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

 

	Share	Share	Special	Capital	Revenue
	capital	premium	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 1 December 2019	1,063	4,865	96,932	(7,213)	343	95,990
Dividends paid	-	-	-	-	(315)	(315)
Profit for the year	-	-	-	15,447	115	15,562
Balance at 30 November 2020	1,063	4,865	96,932	8,234	143	111,237

The accompanying notes are an integral part of these statements.

STATEMENT OF FINANCIAL POSITION

as at 30 November 2021

		2021	2020
	Notes	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	8	144,801	109,808
Current assets
Debtors	9	1,187	156
Cash and cash equivalents		24,460	1,547
		25,647	1,703
Current liabilities
Creditors (amounts falling due within one year)	10	(986)	(274)
Net current assets		24,661	1,429
Total assets less current liabilities		169,462	111,237
Non-current liabilities
Deferred tax liability	11	(2,960)	-
Net assets		166,502	111,237
Capital and reserves
Called up share capital	12	1,098	1,063
Share premium		10,184	4,865
Special reserve		96,932	96,932
Retained Earnings:
Capital reserves		57,579	8,234
Revenue reserve		709	143
Total Shareholders' funds		166,502	111,237
Net asset value per Ordinary Share (p)	13	153.44	105.94

The Financial Statements were approved, and authorised for issue, by the Board of Directors on 24 February 2022 and signed on its behalf by:

Maria Luisa Cicognani

Chairman

The accompanying notes are an integral part of these statements.

Mobius Investment Trust plc - Company Registration Number: 11504912 (Registered in England and Wales)

NOTES TO THE FINANCIAL STATEMENTS

1. Accounting Policies

The principal accounting policies, all of which have been applied consistently throughout the year in the preparation of these Financial Statements, are set out below:

(a) Basis of preparation

The Financial Statements have been prepared in accordance with UK Generally Accepted Accounting Practice ("GAAP") under UK 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 April 2021 and the Companies Act 2006 under the historical cost convention as modified by the valuation of investments at fair value through profit or loss.

The Financial Statements have been prepared on a going concern basis. The disclosure on going concern in the Report of the Directors forms part of these Financial Statements.

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 5(a).

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 below.

In addition, for financial reporting purposes, fair value measurements are categorised into a fair value hierarchy based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

·      Level 1 - Quoted prices in active markets;

·      Level 2 - Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data), either directly or indirectly; and

·      Level 3 - Inputs are unobservable (i.e. for which market data is unavailable).

(c) Investment Income

Dividends receivable from equity shares are recognised 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.

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:

·      Expenses which are incidental to the acquisition or disposal of an investment are treated as part of the cost or proceeds of that investment;

·      Expenses are taken to the Capital reserve via the capital column of the Income Statement, where a connection with the maintenance or enhancement of the value of investments can be demonstrated. In line with the Board's expected long-term split of returns, in the form of capital gains and income from the Company's portfolio, 70% of the Investment Management fees, Administration and Management Services fees and finance costs are taken to the Capital reserve.

(e) Taxation

In line with the recommendations of the SORP, the tax effect of different items of expenditure is allocated between capital and revenue using the marginal basis. Deferred taxation is provided on all timing differences that have originated but not been reversed by the Statement of Financial Position date other than those regarded as permanent. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the reversal of timing differences can be deducted. Any liability to deferred tax is provided for at the rate of tax enacted or substantially enacted.

Dividend income received by the Company may be subject to withholding tax imposed in the country of origin. The tax charges shown in the Income Statement relates mainly to overseas withholding tax on dividend income.

(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

·      represents the nominal value of the issued ordinary share capital.

Share premium account

·      represents the surplus of net proceeds received from the issue of new shares over the nominal value of such shares. The share premium account is non-distributable.

Special reserve

·      this reserve is created upon the cancellation of the Share Premium Account. This reserve is distributable by way of a dividend and can also be used to fund any repurchases of the Company's own shares.

Capital redemption reserve

·      a transfer will be made to this reserve on cancellation of the Company's own shares purchased, equal to the nominal value of the shares. To date, this reserve has not been used. This reserve is non-distributable.

Capital reserve

This reserve reflects any:

·      gains or losses on the disposal of investments;

·      exchange differences of a capital nature;

·      the increases and decreases in the fair value of investments which have been recognised in the capital column of the Income Statement; and

·      expenses which are capital in nature as disclosed above.

This reserve can also be used to distribute realised capital profits by way of a dividend and to fund any repurchases of the Company's own shares.

Any gains in the fair value of investments that are not readily convertible to cash are treated as unrealised gains in the Capital reserve.

Revenue reserve

·      reflects all income and expenditure which are recognised in the revenue column of the Income Statement and is distributable by way of dividend.

It is the Board's current policy to only pay dividends out of the Revenue reserve.

(j) Equity dividends

Interim dividends are recognised in the period in which they are paid. Final dividends are not recognised until they have been approved by shareholders at the Annual General Meeting ("AGM").

2. Income

	Year ended	Year ended
	30 November	30 November
	2021	2020
	£'000	£'000
Income from investments
Overseas Dividends	1,695	966
	1,695	966

 

3. Investment Management and Management Service Fees

	Year ended 30 November 2021			Year ended 30 November 2020
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment management fee - Mobius Capital Partners LLP	413	963	1,376	278	648	926
Management service fee - Frostrow Capital LLP	93	217	310	62	146	208
	506	1,180	1,686	340	794	1,134

Further information regarding Investment Management and Management Service fees can be found in the Business Review.

 

4. Other Expenses

	Year ended	Year ended
	30 November	30 November
	2021	2020
	£'000	£'000
Directors' fees	109	115
Auditor's remuneration - Statutory annual audit	37	32
Custody fees	92	74
Depositary fees	25	25
Printing and postage	12	14
Registrar fees	17	13
Company broker fees	40	40
Stock listing and FCA fees	15	14
Legal and professional fees	6	6
Marketing and promotional costs	46	50
Tax advice	20	15
Other administrative expenses	24	16
	443	414

 

5. Taxation

(a) Analysis of Charge in the Year

	Year ended 30 November 2021			Year ended 30 November 2020
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Overseas taxation	178	-	178	94	-	94
Overseas capital gains tax	-	4,160	4,160	-	3	3
	178	4,160	4,338	94	3	97

Overseas tax arose as a result of irrecoverable withholding tax on overseas dividends and Indian capital gains tax ("CGT").

Indian capital gains tax 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 capital gains tax as at 30 November 2021 is recognised as shown in Note 11 (2020: nil).

 

(b) Reconciliation of Tax Charge

The revenue account tax charge for the year is higher than the standard rate of corporation tax in the UK of 19.0%.

 

 

 

 

	Year ended 30 November 2021			Year ended 30 November 2020
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Total return on ordinary activities before tax	744	53,505	54,249	209	15,450	15,659
Corporation tax charged at 19.0%	141	10,166	10,307	40	2,936	2,976
Effects of:
Non-taxable gains on investment	-	(10,297)	(10,297)	-	(3,089)	(3,089)
Non-taxable foreign exchange (gains)/losses	-	(93)	(93)	2	3	5
Unutilised management expenses	181	224	405	142	150	292
Income not subject to corporation tax	(322)	-	(322)	(184)	-	(184)
Overseas taxation	178	-	178	94	-	94
Indian capital gains tax	-	4,160	4,160	-	3	3
Tax charge for the year	178	4,160	4,338	94	3	97

 

(c) Provision for UK Deferred Taxation

For the year ended 30 November 2021, the Company had cumulative unutilised management expenses for taxation purposes of £5,571,000 (2020: £3,442,000). 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 £1,393,000 (2020: £654,000) based on a prospective corporation tax rate of 25% (2020: 19%).

Due to the Company's status as an investment company and the intention to continue meeting the conditions required to maintain such a status in the foreseeable future, the Company has not provided for deferred UK tax on any capital gains or losses arising on the revaluation or disposal of investments.

Deferred tax has been provided for on capital gains arising on Indian Securities as disclosed in note 5(a) above.

 

6. Dividends

In accordance with FRS 102 dividends are included in the Financial Statements in the year in which they are paid or approved by Shareholders. Details of the ex-dividend and payment dates are shown in the Chairman's Statement).

	Year ended	Year ended
	30 November	30 November
	2021	2020
	£'000	£'000
Revenue available for distribution by way of dividend for the year	566	115
Final dividend of 0.35p (2020: nil) per share	(380)	-
Revenue reserves available following distribution	186	115

7. Return per share - basic and diluted

The return per share figures are based on the following figures:

	Year ended	Year ended
	30 November	30 November
	2021	2020
	£'000	£'000
Net revenue return	566	115
Net capital return	49,345	15,447
Net total return	49,911	15,562

 

	Year ended	Year ended
	30 November	30 November
	2021	2020
	Pence	Pence
Revenue return per share	0.54	0.11
Capital return per share	46.78	14.71
Total return per share	47.32	14.82
Weighted average number of Ordinary shares in issue during the year	105,474,288	105,000,000

During the year (2020: nil) there were no dilutive instruments held, therefore the basic and diluted return per share are the same.

 

8. Investments held at fair value through profit or loss

	30 November	30 November
	2021	2020
	£'000	£'000
Opening book cost	89,158	83,386
Opening investment holding gains/(losses)	20,650	(3,331)
Opening fair value	109,808	80,055
Purchases at cost	36,940	43,735
Sales proceeds	(56,144)	(30,242)
Gains on investments held at fair value through profit or loss	54,197	16,260
Closing fair value	144,801	109,808
Closing book cost	94,404	89,158
Closing investment holding gains	50,397	20,650
Closing fair value	144,801	109,808

The company received £56,144,000 (2020: £30,242,000) from investments sold in the year. The book cost of the investments when they were purchased was £31,694,000 (2020: £37,963,000). 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 £54,000 (2020: £88,000).

Sales transaction costs incurred during the year were £143,000 (2020: £44,000) and comprise commission.

 

9. Debtors

	30 November	30 November
	2021	2020
	£'000	£'000
Outstanding sales due for settlement	934	-
Accrued income	37	107
Overseas tax recoverable	20	22
Non-redeemable preference shares recoverable	13	13
Ordinary shares issued receivable	153	-
Other debtors	30	14
	1,187	156

 

10. Creditors: amounts falling due within one year

	30 November	30 November
	2021	2020
	£'000	£'000
Outstanding purchases due for settlement	733	-
Investment management fee - Mobius Capital Partners LLP	139	177
Management service fee - Frostrow Capital LLP	31	20
Other creditors	83	77
	986	274

 

11. Deferred tax liability

	30 November	30 November
	2021	2020
	£'000	£'000
Deferred taxation on unrealised capital gains on Indian securities	2,960	-

See note 5(a) abover for further details.

 

12. Called up Share Capital

	30 November	30 November
	2021	2020
50,000 (2020: 50,000) non-redeemable preference shares of £1 each	13	13
Allotted and fully paid
108,510,000 (2020: 105,000,000) Ordinary shares of 1p each	1,085	1,050
	1,098	1,063

The capital of the Company is managed in accordance with its investment policy which is detailed in the Strategic Report.

During the year ended 30 November 2021 the company issued 3,510,000 new shares for a consideration of £5,354,000 (2020: nil)

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
	2021	2020
Net Assets (£'000)	166,502	111,237
Number of shares in issue	108,510,000	105,000,000
Net asset value per share	153.44p	105.94p

During the year (2020: 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) are valued at fair value in accordance with the Company's accounting policies. The fair value of all other financial assets and liabilities is represented by their carrying value in the Statement of Financial Position.

All investments have been classified as Level 1.

The main risks that the Company faces arising from its financial instruments are:

(i)   market risk, including:

-      Other price risk, being the risk that the value of investments will fluctuate as a result of changes in market prices;

-      interest rate risk, being the risk that the future cash flows of a financial instrument will fluctuate because of changes in interest rates;

-      foreign currency risk, being the risk that the value of financial assets and liabilities will fluctuate because of movements in currency rates;

(ii)   credit risk, being the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company; and

(iii)  liquidity risk, being the risk that the Company will not be able to meet its liabilities when they fall due. This may arise should the Company not be able to liquidate its investments. Under normal market trading volumes the investment portfolio could be substantially realised within a week.

Other price risk

The management of price risk is part of the Investment management process and is typical of equity investment. The investment portfolio is managed with an awareness of the effects of adverse price movements through detailed and continuing analysis with an objective of maximising overall returns to shareholders. Further information on how the investment portfolio is managed is set out in the Investment Managers' Review. Although it is the Company's current policy not to use derivatives they may be used from time to time, with prior Board approval, to hedge specific market risk or gain exposure to a specific market.

If the investment portfolio valuation rose or fell by 10% at 30 November 2021 (2020: 10%), the impact on the profit and loss and net asset value would have been £15.0 million (2020: £11.0 million). The calculations are based on the investment portfolio valuation as at the respective Statement of Financial Position dates and are not necessarily representative of the year as a whole.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

When the Company retains cash balances the majority of the cash is held in the custody account at Northern Trust Investor Services Limited. 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. However, the Company was not geared in 2021 or 2020. The majority of the Company's net financial assets were non-interest bearing. As a result, the Company is not subject to significant amount of risk due to fluctuations in the prevailing levels of market interest rates. The Directors do not consider the exposure to interest risk as being material to the Company.

Foreign currency risk

Foreign currency risk is the risk that fair values of future cash flows of a financial instrument fluctuate because of changes in foreign exchange rates.

The Company Invests in overseas securities and holds foreign currency cash balances which give rise to currency risks. Foreign currency risks are managed alongside other market risks as part of the management of the investment portfolio. it is currently not the Company's policy to hedge this risk on a continuing basis but it can do so from time to time.

Foreign currency exposure:

	2021				2020
	Investments	Cash	Debtors	Creditors	Investments	Cash	Debtors	Creditors
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
New Taiwanese dollar	33,122	11,055	-	(733)	11,485	699	-	-
Indian rupee	40,422	-	-	(2,960)	25,305	-	-	-
Hong kong dollar	17,385	-	-	-	11,568	-	-	-
Brazilian real	13,753	-	37	-	16,399	-	94	-
Korean won	7,920	-	-	-	15,567	-	-	-
South African rand	7,061	-	-	-	3,794	-	-	-
Vietnamese dong	6,882	108	-	-	2,332	4	-	-
US dollar	6,288	-	934	(478)	11,399	-	13	-
Turkish lira	5,715	-	-	-	6,504	-	-	-
Kenyan shilling	5,704	-	-	-	4,900	-	-	-
Egyptian pound	549	-	-	-	555	-	-	-
Polish zloty	-	-	20	-	-	-	21	-
	144,801	11,163	991	(4,171)	109,808	703	128	-

At 30 November 2021, the Company had £13,297,000 (2020: £844,000) of sterling cash balances.

Currency sensitivity

During the year sterling strengthened by an average of 2.6% (2020: 4.0% strengthened) against all of the currencies in the investment portfolio (weighted for exposure at 30 November 2021), 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 £15.0 million (2020: £11.0 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 £15.0 million (2020: £11.0 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:

	2021	2020
Cash and cash equivalents	24,460	1,547
Debtors	1,187	156
	25,647	1,703

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 AFIM and the Administrator.

-    Cash is only held at banks that have been identified by the Board as reputable and of high credit quality.

The Northern Trust Company has a credit rating of Aa2 (Moody's) AA- (Standard & Poor's) and AA (Fitch Ratings).

The Board monitors the Company's risk as described in the Strategic Report.

Liquidity risk

The Company's liquidity risk is managed on an ongoing basis by the Investment Manager and the Administrator. The Company's overall liquidity risks are monitored on a quarterly basis by the Board.

Based on current trading volumes, 98.2% of the current portfolio could be liquidated within 30 trading days, with 60.8% in one day 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.

15. Transactions with the Investment Manager and Related Parties

·      Mobius Capital Partners LLP

·      The Directors of the Company

The Company employs Mobius Capital Partners LLP as its Investment Manager. During the year ended 30 November 2021, Mobius Capital Partners LLP earned £1,376,000 (2020: £926,000) in respect of Investment Management fees, of which £139,000 (2020: £177,000) was outstanding at the year end. Details of the fees of all Directors can be found in the Directors' Remuneration Report and in note 4 to the Financial Statements.

The Directors' interests in the capital of the Company can be found in the Directors' Remuneration Report. There were no other material transactions during the year with the Directors of the Company.

16. Contingent Liabilities

There were no contingent liabilities at 30 November 2021 (2020: none).

17. Post Balance Sheet Events

Subsequent to the Company's year end, the net asset value per share of the Company has decreased by 6.1% from 153.4p to 144.0p and the Company's share price has also decreased by 7.8% from 154.5p to 142.5p as at 23 February 2022.

At noon, on the day of signing, the share price has fallen further to 135.25p, equating to a fall of 12.5% since the year end, owing to factors set out in the Chairman's Statement.

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"). The Company represents approximately 74% of Mobius Capital Partners total funds under management.

A description of the investment strategy and objectives of the Company, the types of assets in which the Company may invest, the techniques it may employ, any applicable investment restrictions, the circumstances in which it may use leverage, the types and sources of leverage permitted and the associated risks, any restrictions on the use of leverage and the maximum level of leverage which the AIFM and Investment Manager are entitled to employ on behalf of the Company and the procedures by which the Company may change its investment strategy and/or the investment policy can be found above in the Investment Objective and Policy.

The table below sets out the current maximum permitted limit and actual level of leverages for the Company (see Glossary 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 2021	93.7%	101.6%

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 2021, MCP had six 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

SHAREHOLDER INFORMATION

Financial Calendar

30 November	Financial Year End
February	Final Results Announced
May	Annual General Meeting
May	Dividend payment
31 May	Half Year End
July	Half Year Results Announced

Annual General Meeting

Subject to any Covid-19 restrictions, 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 Thursday, 19 May 2022 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 Tuesday, 17 May 2022. 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.

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 voting 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, in case the ongoing Covid-19 pandemic makes it impossible again to hold a physical AGM, 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. 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.

For the year ended 30 November 2021, the Board is recommending the payment of a final dividend of 0.35p in line with investment trust rules. Further details are given in the Chairman's Statement.

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.

 

 

 

 

 

GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES ("APMs")

Alternative Investment Fund Managers Directive (AIFMD)

Agreed by the European Parliament and the Council of the European Union and transposed into UK legislation, the AIFMD classifies certain investment vehicles, including investment companies, as Alternative Investment Funds (AIFs) and requires them to appoint an Alternative Investment Fund Manager (AIFM) and depositary to manage and oversee the operations of the investment vehicle. The Board of the Company retains responsibility for strategy, operations and compliance and the Directors retain a fiduciary duty to shareholders.

Brexit

The advisory public referendum which was held on 23 June 2016 in the United Kingdom to indicate whether voters wanted to remain or withdraw from membership of the European Union (EU). The referendum vote was cast in favour of leaving the EU. The process of actually leaving is termed Brexit. The United Kingdom officially left the EU on 31 January 2020 and on 31 December 2020, the 11-month transition period came to an end.

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.

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.

Net Asset Value ("NAV")

The value of the Company's assets, principally investments made in other companies and cash being held, minus any liabilities. The NAV is also described as 'shareholders' funds. The NAV is often expressed in pence per share after being divided by the number of shares which have been issued. The NAV per share is unlikely to be the same as the share price which is the price at which the Company's shares can be bought or sold by an investor. The share price is determined by the relationship between the demand and supply of the shares.

Net Asset Value Per Share ("NAV") Total Return^

The theoretical total return on an investment over a specified period assuming dividends paid to shareholders were reinvested at net asset value per share at the time the shares were quoted ex-dividend. This is a way of measuring investment management performance of investment trusts which is not affected by movements in discounts or premiums.

		Year ended	Year ended
		30 November	30 November
NAV Per Share Total Return		2021	2020
Opening NAV (p)		105.9	91.4
Increase in NAV (p)		47.5	14.5
Closing NAV (p)		153.4	105.9
Increase in NAV		44.9%	15.9%
Impact of reinvested dividends		-	0.4%
NAV Total Return		44.9%	16.3%

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
		2021	2020
Ongoing Charges		£'000	£'000
Investment management fees and management service fees		1,686	1,134
Operating expenses		443	414
Total expenses		2,129	1,548
Average net assets during the year		140,405	102,031
Ongoing Charges		1.5%	1.5%

Peer Group

From this sector, the Company has selected the following companies to form the peer group:

Barings Emerging EMEA Opportunities, BlackRock Frontiers Investment Trust, Fidelity Emerging Markets Limited, Fundsmith Emerging Equities Trust, JP Morgan Emerging Markets Investment Trust, JPMorgan Global Emerging Markets Income Trust, Jupiter Emerging & Frontier Income Trust, ScotGems, 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 to the Financial Statements 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
		2021	2020
Share Price Total Return		p	p
Opening share price		103.0	83.0
Increase in share price		51.5	20.0
Closing share price		154.5	103.0
Increase in share price		50.0%	24.1%
Impact of reinvested dividends		0.0%	0.6%
Share price Total Return		50.0%	24.7%

^      Alternative Performance Measure

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.

 

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.

NOTICE OF THE ANNUAL GENERAL MEETING

Notice is hereby given that the third Annual General Meeting of Mobius Investment Trust plc will be held at the Company's registered office address at 25 Southampton Buildings, London WC2A 1AL on Thursday, 19 May 2022 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 2021 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 2021.

3.   To approve a Final Dividend.

4.   That Ms M L Cicognani be re-elected as a Director.

5.   That Mr C Casey be re-elected as a Director.

6.   That Dr S Robé be re-elected as a Director.

7.   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.

8.   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 10, 11, 12 and 13 will be proposed as Special Resolutions.

Authority to Allot Shares

9.   That, the Board of Directors of the Company (the "Board") be and it is hereby generally and unconditionally authorised pursuant to and in accordance with section 551 of the Companies Act 2006 (the "Act") to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for or to convert any security into shares in the Company up to an aggregate nominal amount of £108,760 (or if changed, the number representing 10% of the issued 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 2023 or 15 months from the date of passing this resolution, whichever is the earlier, unless previously revoked, varied or renewed by the Company in general meeting and provided that the Company may before such expiry make an offer or enter into an agreement which would or might require shares to be allotted, or rights to subscribe for or to convert securities into shares to be granted, after such expiry and the Board may allot shares or grant such rights in pursuance of such an offer or agreement as if the authority conferred hereby had not expired.

Disapplication of Pre-emption Rights

10.  That, subject to the passing of resolution 9, the Board of Directors of the Company (the "Board") be and it is hereby generally empowered pursuant to sections 570 and 573 of the Act to allot equity securities (within the meaning of section 560 of the Act) (including the grant of rights to subscribe for, or to convert any securities into, ordinary shares of 1p each in the capital of the Company ("Ordinary Shares")) for cash pursuant to the authority conferred on them by such Resolution 9 as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to:

the allotment of equity securities up to an aggregate nominal amount of £108,760, (or if changed, the number representing 10% 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 2023 or 15 months from the date of passing this resolution, whichever is the earlier, unless previously revoked, varied or renewed by the Company in general meeting and provided that the Company may before such expiry make an offer or enter into an agreement which would or might require equity securities to be allotted after such expiry and the Board may allot equity securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired.

Authority to Repurchase Shares

11.  That, the Company be and is hereby generally and unconditionally authorised for the purposes of section 701 of the Act to make one or more market purchases (as defined in section 693(4) of the Act) of ordinary shares of 1p each in the capital of the Company for cancellation or for holding in Treasury on such terms and in such manner as the board of directors may determine provided that:

(i)   the maximum aggregate number of Ordinary Shares which may be purchased is 16,303,124 or, if changed, the number representing 14.99% of the issued share capital of the Company immediately prior to the passing of this resolution;

(ii)   the minimum price which may be paid for an Ordinary Share is 1p (exclusive of associated expenses);

(iii)  the maximum price which may be paid for an Ordinary Share (exclusive of associated expenses) shall not be more than the higher of: (a) an amount equal to 105% of the average of the middle market quotations for an Ordinary Share as derived from the London Stock Exchange Daily Official List for the five dealing days immediately preceding the day on which the Ordinary Share is purchased; and (b) the higher of the last independent trade and the highest current independent bid on the London Stock Exchange for an Ordinary Share; and

(iv)  unless previously renewed, varied or revoked, this authority shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2023 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.

New Articles of Association

12.  THAT the amended Articles of Association as set out in the document produced to the meeting and initialled by the Chairman of the meeting for the purposes of identification be hereby approved and adopted as the Articles of Association of the Company in substitution for, and to the exclusion of, all existing Articles of Association.

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.

All shareholders should look on the Company's website, www.mobiusinvestmenttrust.com, for any changes to the AGM arrangements and whether attendance will be possible. In any case, all shareholders are strongly advised to exercise their votes in advance of the meeting by proxy, by following the voting instructions overleaf.

By order of the Board Frostrow Capital LLP Company Secretary 24 February 2022

Registered office 25 Southampton Buildings London WC2A 1AL

Notes

1.     If you wish to attend the Annual General Meeting in person, you should arrive at the venue for the Annual General Meeting in good time to allow your attendance to be registered. It is advisable to have some form of identification with you as you may be asked to provide evidence of your identity to the Company's registrar, Computershare Investor Services plc (the "Registrar"), prior to being admitted to the Annual General Meeting.

Please bear in mind that in case of renewed Covid-19 restrictions, it might not be possible to attend the AGM in person at all.

2.     Members are entitled to appoint one or more proxies to exercise all or any of their rights to attend, speak and vote at the Annual General Meeting. A proxy need not be a member of the Company but must attend the Annual General Meeting to represent a member. To be validly appointed a proxy must be appointed using the procedures set out in these notes and in the notes to the accompanying proxy form.

If members wish their proxy to speak on their behalf at the meeting, members will need to appoint their own choice of proxy (not the chairman of the Annual General Meeting) and give their instructions directly to them.

Members can only appoint more than one proxy where each proxy is appointed to exercise rights attached to different shares. Members cannot appoint more than one proxy to exercise the rights attached to the same share(s). If a member wishes to appoint more than one proxy, they should contact the Registrar on 0370 703 6304. Lines are open between 8.30 am and 5.30 pm, Monday to Friday, the Registrars' overseas helpline number is +44 370 703 6304.

A member may instruct their proxy to abstain from voting on any resolution to be considered at the meeting by marking the abstain option when appointing their proxy. It should be noted that an abstention is not a vote in law and will not be counted in the calculation of the proportion of votes "for" or "against" the resolution.

The appointment of a proxy will not prevent a member from attending the Annual General Meeting and voting in person if he or she wishes.

A person who is not a member of the Company but who has been nominated by a member to enjoy information rights does not have a right to appoint any proxies under the procedures set out in these notes and should read note 8 overleaf.

3.     A proxy form for use in connection with the Annual General Meeting is enclosed. To be valid any proxy form or other instrument appointing a proxy, together with any power of attorney or other authority under which it is signed or a certified copy thereof, must be received by post or (during normal business hours only) by hand by the Registrar at Computershare Investor Services plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY no later than 48 hours (excluding non-working days) before the time of the Annual General Meeting or any adjournment of that meeting.

If you do not have a proxy form and believe that you should have one, or you require additional proxy forms, please contact the Registrar on 0370 703 6304. Lines are open between 8.30 am and 5.30 pm, Monday to Friday, The Registrar's overseas helpline number is +44 370 703 6304.

4.     CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual and by logging on to the following website: www.euroclear.com/CREST. CREST personal members or other CREST sponsored members, and those CREST members who have appointed (a) voting service provider(s), should refer to their CREST sponsor or voting service provider(s) who will be able to take the appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy, must in order to be valid, be transmitted so as to be received by the Registrar (ID 3RA50) no later 48 hours (excluding non-working days) before the time of the Annual General Meeting or any adjournment of that meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the Registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed (a) voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

5.     In the case of joint holders, where more than one of the joint holders purports to appoint one or more proxies, only the purported appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first named being the most senior).

6.     Any corporation which is a member can appoint one or more corporate representatives. Members can only appoint more than one corporate representative where each corporate representative is appointed to exercise rights attached to different shares. Members cannot appoint more than one corporate representative to exercise the rights attached to the same share(s).

7.     To be entitled to attend and vote at the Annual General Meeting (and for the purpose of determining the votes they may cast), members must be registered in the Company's register of members at 6.30 p.m. on 17 May 2022 (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 23 February 2022 (being the latest practicable date prior to the publication of this notice) the Company's issued share capital consisted of 108,760,000 ordinary shares carrying one vote each. Accordingly, the total voting rights in the Company at 23 February 2022 were 108,760,000 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;

14.2 copies of the Directors' deeds of indemnity; and

14.3 a copy of the proposed new Articles of Association of the Company.

Alternatively, should Covid-19 restrictions be renewed and the Annual General Meeting needs to be held without shareholders present, the above documents can be requested from the Company Secretary.

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 5 April 2022, being the date six clear weeks before the meeting, and (in the case of a matter to be included on the business only) must be accompanied by a statement setting out the grounds for the request.

EXPLANATORY NOTES TO THE RESOLUTIONS

Resolution 1 - To receive the Report of the Directors and Accounts

The Report of the Directors and Accounts for the year ended 30 November 2021 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 above.

Resolution 3 - To approve a Final Dividend

The rationale for the payment of a final dividend is set out in the Chairman's Statement and in the Business Review.

Resolutions 4 to 6 - Re-election of Directors

Resolutions 4 to 6 deal with the re-election of each Director. Biographies of each of the Directors can be found above.

The Board has confirmed, following a performance review, that the Directors standing for re-election continue to perform effectively.

Resolutions 7 and 8 - Re-appointment of Auditors and the determination of their remuneration

Resolutions 7 and 8 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 9 and 10 - Authority to Allot Shares and Disapplication of Pre-emption Rights

Ordinary Resolution 9 in the Notice of Annual General Meeting will renew the authority to allot the unissued ordinary share capital up to an aggregate nominal amount of £108,760 (equivalent to 10,876,000 shares, or 10% of the Company's existing issued ordinary share capital on 23 February 2022, being the nearest practicable date prior to the signing of this Report or, if changed, the number representing 10% of the issued ordinary share capital of the Company immediately prior to the passing of this resolution). Such authority will expire on the date of the next AGM or after a period of 15 months from the date of the passing of the resolution, whichever is earlier. This means that the authority will have to be renewed at the next AGM.

When shares are to be allotted for cash, Section 551 of the Companies Act 2006 (the "Act") provides that existing shareholders have pre-emption rights and that the new shares must be offered first to such shareholders in proportion to their existing holding of shares. However, shareholders can, by special resolution, authorise the Directors to allot shares otherwise than by a pro rata issue to existing shareholders. Special Resolution 10 will, if passed, give the Directors power to allot for cash equity securities up to 10% of the Company's existing ordinary share capital on 23 February 2022, or, if changed, the number representing 10% of the issued ordinary share capital of the Company immediately prior to the passing of this resolution as if Section 551 of the Act does not apply. This is the same nominal amount of ordinary share capital which the Directors are seeking the authority to allot pursuant to Resolution 9. This authority will also expire on the date of the next AGM or after a period of 15 months, whichever is earlier. This authority will not be used in connection with a rights issue by the Company.

The Directors intend to use the authority given by Resolutions 9 and 10 to allot ordinary shares and disapply pre-emption rights only in circumstances where this will be clearly beneficial to shareholders as a whole. The issue proceeds would be available for investment in line with the Company's investment policy. No issue of shares will be made which would effectively alter the control of the Company without the prior approval of shareholders in general meeting.

Shares will only be issued at a premium to the Company's cum income net asset value per share at the time of issue.

Resolution 11 - Authority to Repurchase Shares

The Directors wish to renew the authority to buy back ordinary shares for cancellation or for holding in Treasury. The principal aim of a share buy-back facility is to enhance shareholder value by acquiring shares at a discount to net asset value, as and when the Directors consider this to be appropriate. The purchase of ordinary shares, when they are trading at a discount to net asset value per share, should result in an increase in the net asset value per share for the remaining shareholders. This authority, if conferred, will only be exercised if to do so would result in an increase in the net asset value per share for the remaining shareholders and if it is in the best interests of shareholders generally. Any purchase of shares will be made within guidelines established from time to time by the Board. It is proposed to seek shareholder authority to renew this facility for another year at the AGM.

Under the current Listing Rules, the maximum price that may be paid on the exercise of this authority must not exceed the higher of (i) 105% of the average of the middle market quotations for the shares over the five business days immediately preceding the date of purchase and (ii) the higher of the last independent trade and the highest current independent bid on the trading venue where the purchase is carried out. The minimum price which may be paid is 1p per share. Shares which are purchased under this authority may be cancelled or held in Treasury.

Special Resolution 11 in the Notice of AGM will renew the authority to purchase in the market a maximum of 14.99% of ordinary shares in issue on 23 February 2022, being the nearest practicable date prior to the signing of this Report, (amounting to [16,303,124] shares or, if changed, the number representing 14.99% 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 Annual General Meeting or after a period of 15 months from the date of passing of the resolution, whichever is earlier.

Resolution 12 - New Articles of Association

With Special Resolution 12 the Board is proposing to make amendments to the Articles of Association ("Articles") to give the Company the flexibility to hold general meetings (including annual general meetings) partially by electronic means and to enable members to attend and participate in general meetings at one or more satellite meeting places. In addition, the Board is proposing to amend the Articles to give it certain additional powers in respect of postponing or adjourning meetings in appropriate circumstances and the security arrangements at meetings. The amendments are being proposed in response to restrictions on social interactions during the Covid-19 pandemic which have, on occasion, made it impossible or impractical for shareholders to attend physical general meetings.

The Board's aim in introducing these changes is to make it easier for shareholders to participate in general meetings through introducing electronic access for those not able to travel and to ensure appropriate security measures are in place for the protection and wellbeing of shareholders. However, the Board is committed to ensuring that, under normal circumstances, general meetings (including annual general meetings) will incorporate a physical meeting where shareholders can meet with the Board and the Investment Managers in person.

The principal changes proposed to be introduced in the Articles, and their effect, are set out in the Report of the Directors.

The proposed new Articles (marked to show the proposed changes) will be available for inspection on the Company's website at www.mobiusinvestmenttrust.com, the National Storage Mechanism and at the Company's registered office from the date of this Report and Accounts until the conclusion of the Annual General Meeting or may be obtained from the Company Secretary by requesting a copy using the address and details provided below. The proposed new Articles (marked to show the proposed changes) will also be available for inspection at the place of the forthcoming Annual General Meeting for at least 15 minutes before and during that Annual General Meeting.

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 2023, 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.

 

The Annual Report will be posted to shareholders on or around 14 March 2022.

 

Further copies may be obtained from the Company Secretary: Frostrow Capital LLP, at 25 Southampton Buildings, London WC2A 1AL.

 

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

The Annual Report will also be available on the Company's website at www.mobiusinvestmenttrust.com where up to date information on the Company, including daily NAV, share prices and fact sheets, can also be found.

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