MANCHESTER AND LONDON
INVESTMENT TRUST PLC
Annual Report & Financial Statements for the year ended 31 July 2024
Manchester and London Investment Trust plc Annual Report & Financial Statements 2024
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Manchester and London Investment Trust plc Annual Report & Financial Statements 2024
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CONTENTS
Strategic Report
Financial summary 3
Chairman’s statement 4
Manager’s review 6
Equity exposures and portfolio sector analysis 11
Principal portfolio equity holdings 13
Investment record of the last ten years 16
Business model 17
Directors 28
Directors’ Report 29
Statement of Corporate Governance 35
Report from the Audit Committee 45
Directors’ Remuneration Report 48
Remuneration Policy 52
Statement of Directors’ Responsibilities in Relation
to the Annual Report and Financial Statements 53
Independent Auditor’s Report to the Members 56
Financial Statements
Statement of Comprehensive Income 68
Statement of Changes in Equity 69
Statement of Financial Position 70
Statement of Cash Flows 71
Notes Forming Part of the Financial Statements 72
Glossary 90
Notice of AGM 93
Shareholder Information 110
Corporate Information 111
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Annual Report & Financial Statements 2024
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Annual Report & Financial Statements 2024
Financial summary
Total Return
Year to
31 July
2024
Year to
31 July
2023
Percentage
increase/
(decrease)
Total return (£’000) 121,160 28,754 321.4%
Return per Share 301.45p 71.45p 321.9%
Total revenue return per Share 1.42p 3.67p (61.3%)
Dividend per Share 21.00p 14.00p 50.0%
Capital
As at
31 July
2024
As at
31 July
2023
Percentage
increase
Net assets attributable to equity Shareholders
(i)
(£’000) 334,099 221,379 50.9%
Net asset value (“NAV”) per Share 831.24p 550.79p 50.9%
NAV total return
(ii)†
55.4% 15.3%
Benchmark performance
– total return basis
(iii)
13.8% 5.1%
Share price 704.00p 451.00p 56.1%
Share price (discount)/premium to NAV
†
(15.3%) (18.1%)
(i)
NAV as at 31 July 2024 includes a net £nil in respect of share buybacks (2023: £289,000).
(ii)
Total return including dividends reinvested, as sourced from Bloomberg.
(iii)
The Company’s benchmark is the MSCI UK Investable Market Index (“MXGBIM” or the
“benchmark”), as sourced from Bloomberg.
Ongoing Charges
Year to
31 July
2024
Year to
31 July
2023
Ongoing charges as a percentage of average
net assets*
†
0.47% 0.54%
* Based on total expenses, excluding finance costs and certain non-recurring items for the year
and average monthly NAV.
†
Alternative performance measure. Details provided in the Glossary on pages 90 to 92.
STRATEGIC REPORT
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Chairman’s statement
Introduction & Performance
This was the year that broke through previous all-time highs and set new peaks. The
performance for this financial year resulted in a NAV total return per Share of 55.4%*.
The Manager’s multi-year interest in and studying of Artificial Intelligence (“Ai”)
continues to put the fund in a good position to capitalise on the continuation of the
Era of Ai. The conviction of the Manager and Board remains strong that the growth
of Ai is in its infancy. The year in financial market terms can be summarised as a story
of lowering inflation, slowing economies, geo-political tensions, and the continuing
dominance of mega capitalisation equities.
Discount Management, PDMRs & Buy Backs
At the year end, the Shares traded at a 15.3% discount to their NAV per Share,
compared to a discount of 18.1% in 2023. This was despite the Company buying no
shares into Treasury during the year. The Manager subjectively believes that buying
back shares to close discounts is akin to “Canute commanding the tide” and that
the discount will only close when 10-year Treasury yields are clearly on a downward
path and growth shares are back in vogue. We note that the other Investment Trust
Companies that focus on investing in Technology are on similar free float adjusted
discounts. The Directors and the Managers bought a net total of 389,272 shares (with
a value of £2.5m) during the financial year.
Board Composition
We are committed to attracting the best talent that can lead and challenge the
direction of the Company. The Manager & the Board invite any interested parties
who believe they can add to the diversity of the Board and have some knowledge
of Technology investment or operations to indicate their interest in becoming a
non-executive director of the Company by emailing them at ir@mlcapman.com
Annual General Meeting
Our fifty-second Annual General Meeting (“AGM”) will be held virtually on 6 November
2024 at 12.00 noon.
We are aware that some shareholders prefer physical AGMs and, although they are
materially more expensive, we do see some benefits in undertaking a physical/virtual
hybrid every three years or so. If appropriate at the time, we will consider holding a
physical AGM in 2025.
The notice of AGM for 2024 is on pages 93 to 109 and will also be available on the
Company’s website. Detailed explanations on the formal business and the resolutions
to be proposed at the AGM are contained within the Shareholder Information section
of the Annual Report and Accounts as well as the Notice of AGM.
Environmental, Social and Governance Matters (ESG)
We continue to keep abreast of ESG developments and the Board assumes a
supervisory role in this regard. The Manager is responsible for considering ESG factors
in the investment process.
We are led to believe that Nvidia sourced 76% of its energy from renewable sources
in FY24, with a commitment to reaching 100%.
Microsoft has committed to become carbon negative, water positive and zero waste
by 2030 and has a target to halve its Scope 3 emissions from 2020 to 2030.
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Annual Report & Financial Statements 2024
The sources for these commitments can be found at:
https://images.nvidia.com/aem-dam/Solutions/documents/FY2024-NVIDIA-
Corporate-Sustainability-Report.pdf
https://query.prod.cms.rt.microsoft.com/cms/api/am/binary/RW1lMjE
We welcome these initiatives.
The portfolio does not contain any stocks in the following sectors:
1. Energy and Fossil Fuels: The energy sector, particularly companies involved in fossil
fuel extraction and production, has been criticized for its environmental impact
due to greenhouse gas emissions, oil spills, and other pollution-related issues.
2. Mining and Metals: The mining sector allegedly has significant environmental
impacts due to resource extraction, habitat disruption, and waste generation.
Concerns also arise regarding labour practices and community displacement
in some cases.
3. Tobacco: The tobacco industry is often seen as having negative social impacts
due to health risks associated with smoking, marketing practices targeting
vulnerable populations, and legal controversies.
4. Heavy Manufacturing: Industries such as heavy manufacturing and heavy
chemicals might have higher environmental impacts due to emissions, waste
production, and energy consumption.
5. Utilities: While the utilities sector is essential for providing energy, the environmental
impact of some energy generation methods (such as coal) and concerns about
emissions can impact the sector’s ESG performance.
6. Agriculture: Certain agricultural practices, such as large-scale monoculture
farming and excessive pesticide use, can have negative environmental
consequences, impacting the agricultural sector’s ESG factors.
7. Fast Fashion: The fashion industry can have social and environmental issues
related to labour practices, waste generation, and resource consumption.
As at 31 July 2024, the portfolio has a Sustainalytics Environment score of 81.8% (where
50% is the median).
Outlook
We look forward with excitement as the Era of Artificial Intelligence develops. This
technology is so powerful it is quite possible that its growth can continue to overpower
a challenging economic and political backdrop. However, we are of the view that
the geopolitical risks that lie ahead and the stress to global networks should not be
under-estimated.
Daniel Wright
Chairman
25 September 2024
* Source: Bloomberg. See Glossary on pages 90 to 92.
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Manager’s review
Market Review
H2 2023 and H1 2024 witnessed generally disinflationary data, lower energy prices,
and better-than-expected company earnings which provided Equity Markets with
further relief. Tech-heavy indices moved higher as the optimists, and also finally the
pessimists, saw a forthcoming reduction in rates.
Technology Review
2023/4 saw an ugly unwinding of the performance of Software stocks (to which we
were underweight) as expenditure was seen to be redirected to Ai.
As we have written many times in the last year, we had shifted out of “Soft Tech” names
into “Hard Tech” names and repositioned with Ai “Core & Central” to our portfolio.
As we have written in earlier Newsletters, we see the Era of Ai developing in four
Stages being:
1. Infrastructure Build: the build out of the data centers needed for Ai.
2. Migration of Data to the Cloud: the migration and management of the data
required to train the Ai models.
3. Launch of Applications using AI: the existing and new applications we will use to
harness the power of Ai.
4. The Future Use Applications: the new applications that we cannot envisage a use
for now that will become wildly popular in the future.
2023/24 was very much a period that saw growth focused within Stages 1 & 2.
Portfolio Review
The portfolio’s NAV total return per Share of 55.4% represented a 41.6% outperformance
against the benchmark and compared to a 23.9% return for the Nasdaq Composite
(in GBP) and a 21.4% return for the Nasdaq 100 Technology subindex (in GBP).
The 0.2% increase in the value of Sterling against the US Dollar over the year was a
minor headwind for performance due to the significant level of US Dollar exposure in
the portfolio. Overall, we estimate that the loss in portfolio performance from Foreign
Exchange was roughly 0.1%.
The Total Return of the portfolio broken down by sector holdings in local currency
(separating costs and foreign exchange) is shown below:
Total return of underlying sector holdings in local currency
(excluding costs and foreign exchange) 2024
Information Technology 55.6%
Communication Services 1.4%
Consumer Discretionary 0.1%
Other Investments (including Funds, ETFs and Hedges) (0.1%)
Foreign Exchange, operating costs & financing (1.5%)
Total NAV per Share return 55.4%
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Annual Report & Financial Statements 2024
Total return of underlying sector holdings in local currency
(excluding costs and foreign exchange) 2023
Information Technology 28.7%
Communication Services (3.2%)
Consumer Discretionary (3.3%)
Other Investments (including Funds, ETFs and Hedges) (0.5%)
Foreign Exchange, operating costs & financing (6.3%)
Total NAV per Share return 15.3%
Information Technology
The Information Technology sector delivered 100.4% of the NAV total return per Share.
Material positive performers (>1% contribution to return) included Nvidia Corp,
Microsoft Corp, Arista Networks Inc, Advanced Micro Devices Inc, ASML Holding NV,
Synopsys Inc and Cadence Designs Systems Inc.
There were no material negative contributors.
The portfolio’s weighting to this sector (including options on a MTM basis) at the year
end was 103.2% of the net assets (2023: 97.3%).
Communication Services
The Communication Services sector delivered 2.5% of the NAV total return per share.
Material positive performers (>1% contribution to return) included Alphabet Inc.
There were no material negative contributors.
The portfolio’s weighting to this sector (including options on a MTM basis) at year end
was 4.0% of the net assets (2023: 5.1%).
Consumer Discretionary
The Consumer discretionary sector delivered 0.2% of the NAV total return per share.
There were no material negative nor material positive contributors.
The portfolio’s weighting to this sector (including options on a MTM basis) at year end
was 0.0% of the net assets (2023: 0.3%). Should this weighting remain materially the
same by next year end, we are likely to show exposure to the Healthcare sector
instead next year.
Other (including funds, ETFs and beta hedges)
Other holdings delivered minus 0.2% of the NAV total return per Share.
There were no material negative nor material positive contributors.
The portfolio’s weighting to this sector (including options on a MTM basis) at year end
was 2.8% of the net assets (2023: 7.0%).
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Market Outlook
After more than 525bps of US rate hikes over the past couple of years, the range
of potential outcomes for the next 12 months now appears somewhat narrower.
Advanced economies are expected to experience slower growth, inflation is expected
to stay reasonably muted, and interest rate cuts are hoped to be forthcoming which
when combined provide optimism for future stock returns. China remains a global
deflation engine. We see geopolitical risks remaining between the US and China and
continuing de-risking of supply chains.
We do believe that our portfolio of long duration assets may be more interest rate
sensitive than it is sensitive to a mild recession. We also believe that if rates fall beyond
a certain point (such as 2.75% – 3.00%) we could see investors switch Money Market
Fund holdings for Growth Equities. We have also discussed this Fund Flow tsunami in
our Newsletters throughout the year.
“ It has become appallingly obvious that our technology will exceed
our humanity”.
– Albert Einstein
Market Risks
The primary challenges to equities remain inflation, recession, regulation, energy prices
and war. The Fed’s preferred measure, the PCE price index, has fallen but history has
seen reversals before. We are hopeful that over time productivity gains from Ai can
assist in further reducing inflation. There is the possibility that countries that undertake
material Ai investment such as the USA, will be rewarded with a decade or so of both
productivity gains and relatively strong economic growth. Should that scenario be
combined with contained geopolitical risks, then we could see a period of sustained
stock market returns.
In the shorter term, recession risk is always a concern when the Fed has been so active
in attempting to slow the economy. Geopolitical risks, such as the conflict in Ukraine
and US-Sino relations, also pose very material concerns. China, Iran, N Korea and
Russia are all bad actors that can cause numerous horrific events that could cause
material downside for the markets. The companies in our portfolio have a material
exposure to China and Taiwan, hence we have been active at various times during
the year at laying on hedges against this risk (via EWT US and MCHI US). We are
constantly watching the oil price with anxiety.
“ Humans are allergic to change. They love to say, ‘We’ve always done it
this way.’ I try to fight that. That’s why I have a clock on my wall that runs
counter-clockwise.”
– Grace Hopper
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Annual Report & Financial Statements 2024
Technology Outlook
IT spending is expected to increase by ~4% over the next 12 months. By 2028, the value
of Ai accelerators used in servers may be more than $32.8 billion, up from $14 billion
in 2023, growing at a CAGR of 18.5% according to Gartner. The Nasdaq composite
is projected to deliver above-market growth in 2025 with projected revenues and
earnings progress of 10.7% and 17.7% respectively. Our portfolio holdings are forecast
by Bloomberg estimates to see weighted average projected revenues and earnings
progress of ~25.3% and 50.9% respectively for their next financial year. Forecasts are
mainly useless apart from providing some relative indications, hence the figures
provided purely illustrate that our portfolio could be considered relatively faster growth.
Technology stocks have seen their valuations more than recover but a lot of the over-
hyped stocks from 2021/22 are a long way from fully recovered in terms of valuations.
We see a lot of these names ultimately being disrupted by Ai and hence they look
expensive “Value Traps” to us.
“ I do not fear computers. I fear the lack of them.”
– Isaac Asimov
Ai Outlook
We see continued spending by enterprises on digital transformation and cybersecurity,
but we guess that the outliers for the next 12 months may continue to be Ai and Cloud
Computing. The progress of Ai is embryonic compared to its immense, era-defining
potential. As we have said many times before, we are investing in the “picks and
shovels ENABLERs of Ai” and especially the hyper-scalers and the semiconductor
designers. The latter is forecast to capture up to 50% of Ai’s associated value and
we would guess that Nvidia will get the lion’s share of that. We have positioned our
portfolio so that a vast majority of our holdings have Ai “core and central” to their
business purpose. If Ai is the era defining technology we believe it to be, the portfolio
may perform very well and, vice versa.
“ The only constant is change, continuing change, inevitable change, that is
the dominant factor in society today. No sensible decision can be made any
longer without taking into account not only the world as it is, but the world as
it will be.”
– Isaac Asimov
Ai & Technology Risks
Regulatory challenges and misinformed Luddite braying will continue, mainly dressed
up as ethical concerns, but we expect that Ai’s transformative capabilities overpower
these headwinds.
We have also repeatedly stated in our Newsletters that we see Quantum Computing
as the next era of technological advancement after Ai.
Multiple more general risks exist for our medium-term constructive view on technology.
For example, we may have misunderstood how many incumbent Software and
Technology companies that Ai will disrupt and we certainly feel some other investors
are underestimating this risk. There may be a new technological change that we have
not foreseen such as the arrival of Quantum Computing sooner than expected. China
may surpass the USA in technological advancement rendering the US technology
companies as disrupted. Valuations are also always a concern in Technology
investing. However, contrary to the proclamations of the Bubble Callers (nearly all
of whom missed the recent Ai Enablers’ stock gains), we do not see the stocks in our
portfolio as overvalued.
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Regulation remains a key risk and as Europe falls further and further behind in the
Ai era then regulation becomes perversely more likely there. The disrupted and the
establishment will fight very hard to maintain the status quo. Developing US-Sino relations
will continue to negatively impact supply chains, especially in semiconductors, and
Taiwan’s role as the leading semiconductor producer coupled with China’s territorial
ambitions adds a huge risk to world peace.
“ A new scientific truth does not triumph by convincing its opponents and
making them see the light, but rather because its opponents eventually die,
and a new generation grows up that is familiar with it.”
– Max Planck.
Concentration Risk
We always seek as diversified a portfolio as we can possibly construct but we must
address the concentration risk within our portfolio. Our top two holdings – Microsoft,
and Nvidia – represented around 59% of our NAV at the period end and our top 5
holdings represent about 78% of our portfolio. Sadly, we do believe the outstanding
winners from the Ai era may in time be counted on the fingers of two hands. So
what are we meant to do: diversify to dilute performance? Punish our winners for
proving they are elite? The logical conclusion to this risk for shareholders that are Retail
Investors is that our Fund should form part of a diversified portfolio. Please do not
over-concentrate on our Fund if you cannot afford to bear potential loss. However,
it is worth noting that according to two of the leading ratings agencies MSFT has a
better credit rating than US sovereign debt.
May I remind you that the limits on portfolio concentration per our Investment Policy
are as follows:
“ No single holding will represent more than 20% of gross assets at the time of
investment. In addition, the Company’s five largest holdings (by value) will
not exceed (at the time of investment) more than 75% of gross assets.”
We do prioritize risk reduction in our approach, aiming to partially hedge specific risks
that concern us (but hedging requires luck in its timing) and, in addition, avoiding any
holdings that give us nagging doubts.
“ Three-quarters of Warren Buffett’s equity portfolio are tied up in just 5 stocks.”
– CNBC headline August 2023.
Conclusion
The risks are varied, numerous and material but the Era of Ai is in its youth. Ai offers
investors a first-class ticket to what could be one of the most exciting investment and
economic periods of the century.
Long the Future.
M&L Capital Management Limited
Manager
25 September 2024
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Equity exposures and portfolio sector analysis
Equity exposures (longs)
As at 31 July 2024
Company Sector*
Exposure
£’000**
% of net
assets**
NVIDIA Corporation** Information Technology 113,863 34.1
Microsoft Corporation** Information Technology 83,127 24.9
ASML Holding NV** Information Technology 24,221 7.2
Advanced Micro Devices Inc. Information Technology 22,499 6.7
Arista Networks Inc. Information Technology 21,721 6.5
Synopsys Inc. Information Technology 19,366 5.8
Broadcom Inc. Information Technology 16,452 4.9
Alphabet Inc.
Communication
Services 13,643 4.1
Micron Technology Inc. Information Technology 12,980 3.9
Oracle Corporation Information Technology 9,967 3.0
Cadence Design Systems Inc. Information Technology 8,023 2.4
Intuitive Surgical Inc. Health Care 6,127 1.8
iShares 0-3 Month Treasury Bond ETF ETF 5,858 1.7
Dell Technologies Inc. Information Technology 4,585 1.4
Motorola Solutions Inc. Information Technology 4,317 1.3
Applied Materials Inc. Information Technology 3,222 1.0
Western Digital Corporation Information Technology 2,281 0.7
Polar Capital Technology Trust Fund 2,187 0.7
MS AI Power Basket** Equity Basket 361 0.1
Novo Nordisk A/S Health Care 174 0.1
Allianz Technology Trust PLC Fund 10 0.0
Total long positions 374,984 112.3
Other net assets and liabilities (40,885) (12.3)
Net assets 334,099 100.0
* GICS – Global Industry Classification Standard.
** Including equity swap exposures as detailed in note 13.
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Annual Report & Financial Statements 2024
Portfolio sector analysis (excluding options and short equity swap hedges)
As at 31 July 2024
Sector
% of net
assets
Information Technology 103.8
Communication services 4.1
Equity Basket 0.1
Fund 0.7
Health Care 1.9
ETF 1.7
Cash and other net assets and liabilities (12.3)
Net assets 100.0
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Principal portfolio equity holdings
The positions described below have an Exposure that aggregates to 99.2% of Net
Assets.
Microsoft Corporation (“Microsoft”)
Microsoft is a global enterprise software company and a leader in cloud computing,
business software, operating systems and gaming.
NVIDIA Corporation (“NVIDIA”)
NVIDIA is the market leader in GPUs. Whilst originally created for graphics processing,
specialised GPUs are also key in the training and inference of AI models due to
their parallel processing capabilities. Following the emergence of Chat GPT, which
demonstrated the immense potential of generative AI, NVIDIA has reported surging
demand for its AI chips. NVIDIA currently has a dominant position in the AI chip
hardware market and has also built a strong position in the wider software ecosystem
for AI training and inference (for example with their CUDA platform). As a result,
NVIDIA has become the preferred partner for many enterprises seeking to harness the
potential of AI.
ASML Holding NV (“ASML”)
ASML is a producer of Semiconductor manufacturing equipment, with a near
monopoly in advanced EUV lithography, which is one of the leading edge production
technologies in the industry’s never ending quest to make smaller and more advanced
Semiconductor chips (Integrated Circuits used in a wide variety of electronic devices).
Advanced Micro Devices Inc. (“AMD”)
AMD is a semiconductor company that designs and manufactures a range of
microprocessors, graphics processing units (GPUs), and related technologies.
Established in 1969, AMD has played a crucial role in the evolution of computing
hardware, providing innovative solutions for both consumer and enterprise markets.
Like NVIDIA, AMD has leveraged its GPU technology to make notable strides in the
field of AI chips and accelerators. AMD’s entrance into the AI chip market presents a
competitive alternative to industry leader NVIDIA going forward, offering customers
more options when selecting hardware for their AI workloads.
Synopsys Inc. (“Synopsys”)
Synopsys is an EDA (electronic design automation) company that focuses on
Semiconductor chip design software and verification tools (such as finding and
resolving bugs in Semiconductor chip designs). EDA software is mission critical to
Semiconductor chip design, particularly as the demands on Semiconductor chip
capabilities continues to increase. The majority of the EDA market is controlled by
three players; Cadence, Synopsys and Siemens.
Unlike the highly cyclical Semiconductor manufacturers, the EDA software market has
a very high degree of recurring revenue and growth tends to be more correlated to
Semiconductor R&D than Capital or Operational Expenditure within the industry.
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Arista Networks Inc. (“Arista”)
Arista is a technology company that specialises in providing networking solutions
for data centres and cloud environments. The company’s products encompass a
range of switches, routers, and software-defined networking (SDN) solutions, designed
to meet the demands of modern data-intensive applications and the dynamic
requirements of cloud computing. Arista’s solutions often emphasise low-latency,
high-speed data transmission, making it a key player in the networking industry,
particularly for enterprises seeking advanced infrastructure solutions. As a result, Arista
is heavily exposed to cloud capex from the hyperscale cloud providers.
Alphabet Inc. (“Alphabet”)
Alphabet is a global technology company with products and platforms across a
wide range of technology verticals, including online advertising, cloud computing,
autonomous vehicles, artificial intelligence and smart phones.
Oracle Corporation (“Oracle”)
Oracle Corporation is a multinational technology company that specialises in
providing a wide range of software, hardware, and cloud-based services to
businesses and organisations. Founded in 1977, Oracle is best known for its robust
database management systems, which are widely used to store, retrieve, and
manage large volumes of structured and unstructured data. The company’s extensive
portfolio includes enterprise software applications for various functions like customer
relationship management (CRM), enterprise resource planning (ERP), human capital
management (HCM), and more. Oracle also offers cloud services that encompass
infrastructure as a service (IaaS), platform as a service (PaaS), and software as a
service (SaaS), enabling clients to leverage cloud computing for enhanced scalability,
efficiency, and flexibility. With a significant presence in both hardware and software
markets, Oracle plays a critical role in supporting modern business operations and
digital transformation efforts across industries.
Micron Technology Inc (“Micron”)
Micron Technology is a leading global manufacturer of memory and storage solutions,
including DRAM, NAND flash memory, and other semiconductor components. These
products are critical for a wide range of computing devices, from smartphones and
PCs to data centers and cloud infrastructure. As artificial intelligence (AI) continues
to advance, the demand for high-performance memory is growing rapidly. AI
applications, such as machine learning and deep learning, require vast amounts of
data to be processed and analysed quickly. This drives the need for more memory
capacity and faster data access speeds, making Micron’s memory solutions
increasingly vital in supporting AI workloads.
Broadcom Inc (“Broadcom”)
Broadcom is a global technology leader known for designing and manufacturing
a wide range of semiconductor and infrastructure software products. One of
Broadcom’s key areas of growth is its AI ASIC (Application-Specific Integrated Circuit)
business. These AI ASICs are custom-designed chips optimised for specific AI workloads,
enabling faster and more efficient processing of complex algorithms used in machine
learning, data analytics, and AI-driven applications. Broadcom’s AI ASICs are critical
in powering high-performance data centers and cloud environments, where the
demand for specialised hardware to support AI workloads is rapidly increasing.
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Annual Report & Financial Statements 2024
All Equity & Debt portfolio holdings
As at 31 July 2024
Stocks
Gross
(Underlying
Only)
% of NAV
Net Delta
(inc Net Delta
exposure of
options)
% of NAV
NVIDIA Corporation 34.1 33.8
Microsoft Corporation 24.9 24.9
Advanced Micro Devices Inc. 6.7 6.8
ASML Holding NV 7.2 6.8
Arista Networks Inc. 6.5 6.1
Synopsys Inc. 5.8 5.3
Broadcom Inc. 4.9 5.1
Alphabet Inc. 4.1 4.1
Micron Technology Inc. 3.9 4.0
Oracle Corporation 3.0 2.4
Cadence Design Systems Inc. 2.4 2.3
Intuitive Surgical Inc. 1.8 1.8
iShares 0-3 Month Treasury Bo 1.7 1.7
Dell Technologies Inc. 1.4 1.4
Motorola Solutions Inc. 1.3 1.3
Applied Materials Inc. 1.0 1.0
Polar Capital Technology Trust 0.7 0.7
Western Digital Corporation 0.7 0.7
Remy Cointreau SA – 0.3
Pernod Ricard SA – 0.1
MSXXAIPW 0.1 0.1
Novo Nordisk A/S 0.1 0.1
Liberty Media Corp-Liberty Formula One – 0.1
Allianz Technology Trust PLC 0.0 0.0
iShares Biotechnology ETF – (0.4)
Invesco QQQ Trust Series 1 (0.8) (0.8)
iShares Russell 2000 ETF (0.8) (0.8)
Total 110.7 108.8
For an explanation of why we report exposures on a Delta Adjusted basis please read our FAQ
at https://mlcapman.com/faq/
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Investment record of the last ten years
Year ended
Total
return
(£’000)
Return per
Share*
(p)
Dividend per
Share
(p)
Net
assets
(£’000)
NAV
per Share*
(p)
31 July 2015 2,483 11.47 6.00 63,074 293.35
31 July 2016 13,424 62.50 13.36 75,546 350.81
31 July 2017 20,055 92.43 9.00 94,661 429.05
31 July 2018 26,792 115.27 12.00 130,388 532.81
31 July 2019 15,900 58.75 14.00 166,981 568.66
31 July 2020 24,037 74.74 14.00 225,933 625.23
31 July 2021 22,222 57.10 14.00 269,686 665.43
31 July 2022 (61,162) (151.62) 21.00 198,546 493.04
31 July 2023 28,754 71.45 14.00 221,379 550.79
31 July 2024 121,160 301.45 21.00 334,099 831.24
* Basic and fully diluted.
Dividends
Dividends (pence per Share)
Dividends to 31 July
0
2
4
6
8
10
12
16
22
14
18
20
20212015 2016 2017 2018 2019 2020
14.00 14.00
9.00
12.00
14.00
2024
6.00
13.36
14.00
20232022
21.00 21.00*
0
20
40
60
80
160
140
120
100
NAV (£m)
300
320
340
360
280
260
240
180
200
220
NAV and NAV per Share to 31 July
0
50
100
150
200
250
400
300
500
550
700
650
800
750
850
600
350
450
NAV per Share (p)
NAV NAV per Share
2021201820172015 20242016 2019 2020
831.24
293.35
350.81
429.05
532.81
568.66
625.23
665.43
20232022
550.79
493.04
* Includes proposed dividend.
Manchester and London Investment Trust plc
17
Annual Report & Financial Statements 2024
Business model
The Company is an investment company as defined by Section 833 of the Companies
Act 2006 and operates as an investment trust in accordance with Section 1158 of the
Corporation Tax Act 2010.
The Company is also governed by the Listing Rules and the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority (the “FCA”) and is listed on the
Closed-ended investment funds Category of the London Stock Exchange.
A review of investment activities for the year ended 31 July 2024 is detailed in the
Manager’s review on pages 6 to 10.
Investment objective
The investment objective of the Company is to achieve capital appreciation.
Investment policy
Asset allocation
The Company’s investment objective is sought to be achieved through a policy of
actively investing in a diversified portfolio, comprising any of global equities and/or
fixed interest securities and/or derivatives.
The Company may invest in derivatives, money market instruments, currency
instruments, contracts for differences (“CFDs”), futures, forwards and options for the
purposes of (i) holding investments and (ii) hedging positions against movements in,
for example, equity markets, currencies and interest rates.
The Company seeks investment exposure to companies whose shares are listed,
quoted or admitted to trading. However, it may invest up to 10% of gross assets (at
the time of investment) in the equities and/or fixed interest securities of companies
whose shares are not listed, quoted or admitted to trading.
Risk diversification
The Company intends to maintain a diversified portfolio and it is expected that the
portfolio will have between approximately 20 to 100 holdings. No single holding will
represent more than 20% of gross assets at the time of investment. In addition, the
Company’s five largest holdings (by value) will not exceed (at the time of investment)
more than 75% of gross assets.
Although there are no restrictions on the constituents of the Company’s portfolio by
geography, industry sector or asset class, it is intended that the Company will hold
investments across a number of geographies and industry sectors. During periods in
which changes in economic, political or market conditions or other factors so warrant,
the Manager may reduce the Company’s exposure to one or more asset classes and
increase the Company’s position in cash and/or money market instruments.
The Company will not invest more than 15% of its total assets in other listed closed-
ended investment funds. However, the Company may invest up to 50% of gross assets
(at the time of investment) in an investment company subsidiary, subject always to
the other restrictions set out in this investment policy and the Listing Rules.
Manchester and London Investment Trust plc
18
STRATEGIC REPORT continued
Annual Report & Financial Statements 2024
Gearing
The Company may borrow to gear the Company’s returns when the Manager
believes it is in Shareholders’ interests to do so. The Company’s Articles of Association
(“Articles”) restrict the level of borrowings that the Company may incur up to a sum
equal to two times the net asset value of the Company as shown by the then latest
audited balance sheet of the Company.
The effect of gearing may be achieved without borrowing by investing in a range
of different types of investments including derivatives. Save with the approval of
Shareholders, the Company will not enter into any investments which have the effect
of increasing the Company’s net gearing beyond the limit on borrowings stated in
the Articles.
General
In addition to the above, the Company will observe the investment restrictions
imposed from time to time by the Listing Rules which are applicable to investment
companies with shares listed on the Official List of the FCA.
No material change will be made to the investment policy without the approval of
Shareholders by ordinary resolution.
In the event of any breach of the investment restrictions applicable to the Company,
Shareholders will be informed of the remedial actions to be taken by the Board and
the Manager by an announcement issued through a regulatory information service
approved by the FCA.
Investment Strategy and Style
The fund’s portfolio is constructed with flexibility but is primarily focused on stocks that
exhibit the attributes of growth.
Target Benchmark
The Company was originally set up by Brian Sheppard as a vehicle for British retail
investors to invest in with the hope that total returns would exceed the total returns on
the UK equity market. Hence, the benchmark the Company uses to assess performance
is one of the many available UK equity indices being the MSCI UK Investable Market
Index (MXGBIM). The Company has used this benchmark to assess performance for
over five years but is not set on using this particular UK Equity index forever into the
future and currently uses this particular UK Equity index because at the current time it
is viewed as the most cost advantageous of the currently available UK Equity indices
(which have a high degree of correlation and hence substitutability). However, once
the Company announces the use of an index, then this index should be used across
all of the Company’s documentation.
Investments for the portfolio are not selected from constituents of this index and hence
the investment remit is in no way constrained by the index, although the Manager’s
management fee is varied depending on performance against the benchmark. It is
suggested that Shareholders review the Company’s Active Share Ratio that is on the
fund factsheets as this illustrates to what degree the holdings in the portfolio vary from
the underlying benchmark.
Environmental, Social, Community and Governance
The Company considers that it does not fall within the scope of the Modern Slavery
Act 2015 and it is not, therefore, obliged to make a slavery and human trafficking
statement. In any event, the Company considers its supply chains to be of low risk as
its suppliers are typically professional advisers.
Manchester and London Investment Trust plc
19
Annual Report & Financial Statements 2024
In its oversight of the Manager and the Company’s other service providers, the Board
seeks assurances that they have regard to the benefits of diversity and promote
these within their respective organisations. The Company has given discretionary
voting powers to the Manager. The Manager votes against resolutions they consider
may damage Shareholders’ rights or economic interests and reports their actions
to the Board. The Company believes it is in the Shareholders’ interests to consider
environmental, social, community and governance factors when selecting and
retaining investments and has asked the Manager to take these issues into account.
The Manager does not exclude companies from their investment universe purely on
the grounds of these factors but adopts a positive approach towards companies
which promote these factors. The portfolio’s Sustainalytic’s Environmental Percentile
was 81.8% as at 31 July 2024.
The Company notes the Task Force on Climate-related Financial Disclosures (‘TCFD’)
reporting recommendations. However, as a listed investment company, the Company
is not subject to the Listing Rule requirement to report against the framework. The
Company fully recognises the impact climate change has on the environment and
society, and information on the Manager’s endeavours on ESG can be found on page
4. The Manager continues to work with the investee companies to raise awareness on
climate change risks, carbon emission and energy efficiency.
Stakeholder Engagement
The Company’s s172 Statement can be found in the Corporate Governance Statement
on pages 43 and 44 and is incorporated into this Strategic Report by reference.
Dividend policy
The Company may declare dividends as justified by funds available for distribution.
The Company will not retain in respect of any accounting period an amount which is
greater than 15% of net revenue in that period.
Recurring income from dividends on underlying holdings is paid out as ordinary dividends.
Results and dividends
The results for the year are set out in the Statement of Comprehensive Income on
page 68 and in the Statement of Changes in Equity on page 69.
For the year ended 31 July 2024, the net revenue return attributable to Shareholders
was £570,000 (2023: £1,479,000) and the net capital return attributable to Shareholders
was £120,590,000 (2023: £27,275,000). Total Shareholders’ funds increased by 50.9% to
£334,099,000 (2023: £221,379,000).
The dividends paid/proposed by the Board for 2023 and 2024 are set out below:
Year ended
31 July 2024
(pence per
Share)
Year ended
31 July 2023
(pence per
Share)
Interim dividend 7.00 7.00
Special dividend 7.00 –
Proposed final dividend 7.00 7.00
21.00 14.00
Subject to the approval of Shareholders at the forthcoming AGM, the proposed final
ordinary dividend will be payable on 8 November 2024 to Shareholders on the register
at the close of business on 4 October 2024. The ex-dividend date will be 3 October 2024.
Manchester and London Investment Trust plc
20
STRATEGIC REPORT continued
Annual Report & Financial Statements 2024
Further details of the dividends paid in respect of the years ended 31 July 2024 and
31 July 2023 are set out in note 7 on page 80.
Principal risks and uncertainties
The Board considers that the following are the principal risks and uncertainties facing
the Company. The actions taken to manage each of these are set out below. If one
or more of these risks materialised, it could potentially have a significant impact upon
the Company’s ability to achieve its investment objective. These risks are formalised
within the risk matrix maintained by the Company’s Manager.
Risk How the risk is managed
Investment Performance
Risk
The performance of the
Company may not be
in line with its investment
objectives.
Investment performance is monitored and reviewed
daily by M&L Capital Management Limited (“MLCM”)
as AIFM through:
• Intra-day portfolio statistics; and
• Daily Risk reports.
The metrics and statistics within these reports may be
used (in combination with other factors) to help inform
investment decisions.
The AIFM also provides the Board with monthly
performance updates, key portfolio stats (including
performance attribution, valuation metrics, VaR and
liquidity analysis) and performance charts of top
portfolio holdings.
It should be noted that none of the above steps
guarantee that Company performance will meet its
stated objectives.
Key Man Risk and
Reputational Risk
The Company may be
unable to fulfil its investment
objectives following the
departure of key staff at
the Manager.
The Manager has a remuneration policy that
incentivises key staff to take a long-term view as
variable rewards are spread over a five-year period.
MLCM also has documented policies and procedures,
including a business continuity plan, to ensure
continuity of operations in the unlikely event of a
departure.
MLCM has a comprehensive compliance framework
to ensure strict adherence to relevant governance
rules and requirements.
Fund Valuation Risk
The Company’s valuation is
not accurately represented
to investors.
NAVs are produced independently by the Administrator,
based on the Company’s valuation policy.
Valuation is overseen and reviewed by the AIFM’s
valuation committee which reconciles and checks
NAV reports prior to publication.
It should be noted that the vast majority of the portfolio
consists of quoted equities, whose prices are provided
by independent market sources; hence material input
into the valuation process is rarely required from the
valuation committee.
Manchester and London Investment Trust plc
21
Annual Report & Financial Statements 2024
Risk How the risk is managed
Third-Party Service Providers
Failure of outsourced service
providers in performing their
contractual duties.
All outsourced relationships are subject to an
extensive dual-directional due diligence process and
to ongoing monitoring. Where possible, the Company
appoints a diversified pool of outsourced providers
to ensure continuity of operations should a service
provider fail.
The cyber security of third-party service providers is a
key risk that is monitored on an ongoing basis. The safe
custody of the Company’s assets may be compromised
through control failures by the Depositary or Custodian,
including cyber security incidents. To mitigate this risk,
the AIFM receives monthly reports from the Depositary
confirming safe custody of the Company’s assets held
by the Custodian.
Regulatory Risk
A breach of regulatory rules/
other legislation resulting in
the Company not meeting
its objectives or investors’
loss.
The AIFM adopts a series of pre-trade and post-trade
controls to minimise breaches. MLCM uses a fully
integrated order management system, electronic
execution system, portfolio management system and
risk system developed by Bloomberg. These systems
include automated compliance checks, both pre-
and post-execution, in addition to manual checks by
the investment team. The AIFM undertakes ongoing
compliance monitoring of the portfolio through a
system of daily reporting.
Furthermore, there is additional oversight from the
Depositary, which ensures that there are three distinct
layers of independent monitoring.
Fiduciary Risk
The Company may not be
managed to the agreed
guidelines.
The Company has a clear documented investment
policy and risk profile. The AIFM employs various
controls and monitoring processes to ensure
guidelines are adhered to (including pre- and post-
execution checks as mentioned above and monthly
Risk meetings). Additional oversight is also provided by
the Company’s Depositary.
Fraud Risk
Fraudulent actions may
cause loss.
The AIFM has extensive fraud prevention controls and
adopts a zero tolerance approach towards fraudulent
behaviour and breaches of protocol surrounding fraud
prevention. The transfer of cash or securities involve the
use of dual authorisation and two-factor authentication
to ensure fraud prevention, such that only authorised
personnel are able to access the core systems and
submit transfers. The Administrator has access to core
systems to ensure complete oversight of all transactions.
Manchester and London Investment Trust plc
22
STRATEGIC REPORT continued
Annual Report & Financial Statements 2024
Risk How the risk is managed
Portfolio Concentration
The Portfolio’s concentration
in Nvidia Corp. and
Microsoft Corp. could lead
to materially negative
performance results for the
Company should one or
both of these holdings have
declining share prices.
It is interesting to note that using a sequential selection
screen of all equities on Bloomberg using the hurdles of
ROIC, ROE, Operating Margin and Revenue Growth set
at the rates Nvidia currently enjoys, outputs zero further
suggested stocks that are domiciled outside China.
Whilst some may like us to diversify our Portfolio more, this
analysis may suggest diversification would lead to the
dilution of the Portfolio’s average financial metrics quality.
The Manager has a series of alerts set on all Holdings
which alert them to all news on Top Holdings. The
Manager watches our larger holdings very carefully
and has visited Nvidia in California in each of the last 3
financial years.
In addition, at times the Manager will attempt
to directly hedge out some of the risk of a fall in
Technology stocks by selling Call options on individual
holdings. For example, at the year end, we held a
Nvidia Sold Call option position. At times, we also buy
Long Put options on Technology indices or individual
stock names. However, these hedges are most likely to
only provide immaterial comfort should large positions
or the general markets decline.
Again, we encourage investors to diversify their own
portfolios and only hold shares in Manchester & London
as part of a well-diversified portfolio.
In addition to the above, the Board considers the following to be the principal financial
risks associated with investing in the Company: market risk, interest rate risk, liquidity
risk, currency rate risk and credit and counterparty risk. An explanation of these risks
and how they are managed along with the Company’s capital management policies
are contained in note 16 of the Financial Statements on pages 85 to 89.
The Board, through the Audit Committee, has undertaken a robust assessment
and review of all the risks stated above and in note 16 of the Financial Statements,
together with a review of any emerging or new risks which may have arisen during
the year, including those that would threaten the Company’s business model, future
performance, solvency or liquidity. Whilst reviewing the principal risks and uncertainties,
the Board considered the impact of the COVID-19 pandemic and the implications of
the Russia conflict on the Company, concluding that these events did not materially
affect the operations of the business.
In accordance with guidance issued to directors of listed companies, the Directors
confirm that they have carried out a review of the effectiveness of the systems of
internal financial control during the year ended 31 July 2024, as set out on pages 41
and 42. There were no matters arising from this review that required further investigation
and no significant failings or weaknesses were identified.
Further discussion about risk considerations can be found in the Company’s latest
prospectus available at https://mlcapman.com/manchester-london-investment-
trust-plc/
Manchester and London Investment Trust plc
23
Annual Report & Financial Statements 2024
Year-end gearing
At the year end, gross long equity exposure represented 112.3% (2023: 112.4%) of
net assets.
Key performance indicators
The Board considers the most important key performance indicator to be the comparison
with its benchmark index. This is referred to in the Financial Summary on page 3.
Other key measures by which the Board judges the success of the Company are the
Share price, the NAV per Share and the ongoing charges measure.
Total net assets at 31 July 2024 amounted to £334,099,000 compared with £221,379,000
at 31 July 2023, an increase of 50.9%, whilst the fully diluted NAV per Share increased
to 831.24p from 550.79p. During the year, no Ordinary Shares were bought back and
held in treasury.
Net revenue return after taxation for the year was a positive £570,000 (2023: positive
£1,479,000).
The quoted Share price during the period under review has ranged from a discount
of 9.08% to 24.65%.
Ongoing charges, which are set out on page 3, are a measure of the total expenses
(including those charged to capital) expressed as a percentage of the average net
assets over the year. The Board regularly reviews the ongoing charges measure and
monitors Company expenses.
Future development
The Board and the Manager do not currently foresee any material changes to the
business of the Company in the near future. As the majority of the Company’s equity
investments are denominated in US Dollar, any currency volatility may have an impact
(either positive or negative) on the Company’s NAV per Share, which is denominated
in Sterling.
Management arrangements
Under the terms of the management agreement, MLCM manages the Company’s
portfolio in accordance with the investment policy determined by the Board. The
management agreement has a termination period of three months. In line with the
management agreement, the Manager receives a variable portfolio management
fee. Details of the fee arrangements and the fees paid to the Manager during the
year are disclosed in note 3 to the Financial Statements.
The Manager is authorised and regulated by the FCA.
M&M Investment Company Limited (“MMIC”), which is controlled by Mr Mark
Sheppard who forms part of the Manager’s management team, is the controlling
Shareholder of the Company. Further details regarding this are set out in the Directors’
Report on page 31.
Manchester and London Investment Trust plc
24
STRATEGIC REPORT continued
Annual Report & Financial Statements 2024
Alternative Investment Fund Managers Directive (the “AIFMD”)
The Company permanently exceeded the sub-threshold limit under the AIFMD in 2017
and MLCM was appointed as the Company’s AIFM with effect from 17 January 2018.
Following their appointment as the AIFM, MLCM receives an annual risk management
and valuation fee of £59,000 to undertake its duties as the AIFM in addition to the
portfolio management fees set out above.
The AIFMD requires certain information to be made available to investors before
they invest and requires that material changes to this information be disclosed in the
Annual Report.
Remuneration
In the year to 31 July 2024, the total remuneration paid to the employees of the
Manager was £460,000 (2023: £420,000), payable to an average employee number
throughout the year of three (2023: three).
The management of MLCM is undertaken by Mr Mark Sheppard and Mr Richard Morgan,
to whom a combined total of £421,000 (2023: £388,000) was paid by the Manager
during the year.
The remuneration policy of the Manager is to pay fixed annual salaries, with
non-guaranteed bonuses, dependent upon performance only. These bonuses are
generally paid in the Company’s Shares, released over a five-year period.
Leverage
The leverage policy has been approved by the Company and the AIFM. The policy
limits the leverage ratio that can be deployed by the Company at any one time
to 275% (gross method) and 250% (commitment method). This includes any gearing
created by its investment policy. This is a maximum figure as required for disclosure
by the AIFMD regulation and not necessarily the amount of leverage that is actually
used. The leverage ratio as at 31 July 2024 measured by the gross method was 122.4%
and that measured by the commitment method was 117.5%.
Leverage is defined in the Glossary on page 91.
Risk profile
The risk profile of the Company as measured through the Summary Risk Indicator
(“SRI”) score, is currently at a 6 on a scale of 1 to 7 as at 31 July 2024 (31 July 2023: 6). This
score is calculated on past performance data using prescribed PRIIPS methodology.
Liquidity, counterparty and currency risks are not captured on the scale. The Manager
will periodically disclose the current risk profile of the Company to investors. The
Company will make this disclosure on its website at the same time as it makes its
Annual Report and Financial Statements available to investors or more frequently at
its discretion.
For further information on SRI – including key risk disclaimers – please read the Fund
Key Information Document available at https://mlcapman.com/manchester-london-
investment-trust-plc/
Manchester and London Investment Trust plc
25
Annual Report & Financial Statements 2024
Liquidity arrangements
The Company currently holds no assets that are subject to special arrangements
arising from their illiquid nature. If applicable, the Company would disclose the
percentage of its assets subject to such arrangements on its website at the same time
as it makes its Annual Report and Financial Statements available to investors, or more
frequently at its discretion.
Continuing appointment of the Manager
The Board keeps the performance of MLCM, in its capacity as the Company’s Manager,
under continual review. It has noted the good long-term performance record and
commitment, quality and continuity of the team employed by the Manager. As a
result, the Board concluded that it is in the best interests of the Shareholders as a
whole that the appointment of the Manager on the agreed terms should continue.
Human rights, employee, social and community issues
The Board consists entirely of non-executive Directors. The Company has no employees
and day-to-day management of the business is delegated to the Manager and
other service providers. As an investment trust, the Company has no direct impact on
the community or the environment, and as such has no human rights or community
policies. In carrying out its investment activities and in relationships with suppliers, the
Company aims to conduct itself responsibly, ethically and fairly. Further details of
the Environmental, Social and Governance policy can be found in the Statement
of Corporate Governance on pages 42 and 43. Details of the Company’s Board
composition and related diversity considerations can be found in the Statement of
Corporate Governance on page 38.
Gender diversity
At 31 July 2024, the Board comprised four male Directors. As stated in the Statement
of Corporate Governance, the appointment of any new Director is made on the basis
of merit.
Approval
This Strategic Report has been approved by the Board and signed on its behalf by:
Daniel Wright
Chairman
25 September 2024
Manchester and London Investment Trust plc
26
STRATEGIC REPORT continued
Annual Report & Financial Statements 2024
Manchester and London Investment Trust plc
27
Annual Report & Financial Statements 2024
Manchester and London Investment Trust plc
28
Annual Report & Financial Statements 2024
DIRECTORS
All the Directors are non-executive. Mr Morris, Sir James Waterlow and Mr Wright are
independent of the Company’s Manager.
Daren Morris
Mr Morris was appointed to the Board of the Company on 10 December 2021. He
is the Company’s Senior Independent Director (“SID”). He is currently CFO of Big
Technologies PLC, a company listed on AIM and active in the provision of advanced
technology for the electronic monitoring of individuals. Mr Morris was previously CFO
of Volex PLC from 2015 to 2020. He was part of the executive management team that
led a turnaround of Volex and drove a quadrupling of the share price over the period.
He spent the first eighteen years of his career in investment banking and accountancy
and was a Managing Director at both UBS Investment Bank and Morgan Stanley,
advising manufacturing and technology companies on their expansion and financing
strategies. Daren’s public company board experience includes Big Technologies plc,
Volex plc, Easynet plc and Nexen Tech Corporation. Daren is a qualified chartered
accountant (ICAEW ACA 1997) and read Physics at Trinity College, Oxford.
Mr Morris is Chairman of the Audit Committee.
Number of Listed Company Directorships: 2
Brett Miller
Mr Miller was appointed to the Board on 30 August 2013. He presently also serves as
a director of SLF Realisation Fund Limited and Ecofin US Renewables Infrastructure
Trust Plc. In addition he is a director of a number of unlisted and/or private companies.
He graduated from the University of the Witwatersrand (South Africa) with a bachelors
degree majoring in law and economics and additionally holds a law degree from
the London School of Economics. He qualified as a solicitor and practised until 1997.
Mr Miller is head of compliance, governance and risk oversight, holds the SMF16 and
SMF17 roles under the Senior Managers and Certification Regime and also sits on the
risk management committee of MLCM, the Company’s Manager.
Mr Miller is not a member of the Audit Committee.
Number of Listed Company Directorships: 3
Sir James Waterlow
Sir James Waterlow was appointed to the Board on 17 August 2020. He has specialised
in investment trusts for thirty years, for the past fifteen as a partner on the Investment
Funds team at Singer Capital Markets. During his career he has advised approximately
thirty investment trust boards and worked on a significant number of transactions,
raising over £5 billion for new and existing funds.
Sir James Waterlow is a member of the Audit Committee.
Number of Listed Company Directorships: 1
Daniel Wright
Mr Wright was appointed to the Board on 29 October 2018. He is the executive
chairman of Science in Sport Plc, appointed in October 2023 to lead the turnaround of
that business. He is a non-executive director of SolasCure Limited and non-executive
chairman of Uinsure Group Holdings. Mr Wright was previously the founder partner,
chief operating officer and head of portfolio at NorthEdge Capital, executive
chairman of Accrol Group Holdings Plc, and Chairman of Vision Support Services
Group Limited, a private company that he founded and grew to become Europe’s
leading distributor of textiles to the hospitality sector. He has also held previous roles at
Cable Partners LLC, Deutsche Morgan Grenfell Private Equity and The Royal Bank of
Scotland. Mr Wright qualified as a chartered accountant with Arthur Andersen in 1996.
Mr Wright is the Chairman of the Board.
Number of Listed Company Directorships: 2
Manchester and London Investment Trust plc
29
Annual Report & Financial Statements 2024
The Directors present their report and the audited Financial Statements for the year ended
31 July 2024.
Directors
The current Directors of the Company are listed on page 28. All served throughout the
year under review.
Details about the re-election of the Directors are given in the Statement of Corporate
Governance on page 38.
Share capital
As at 31 July 2024, the Company’s issued share capital comprised 40,528,238 Shares of
25 pence each, of which 335,220 were held in Treasury.
At general meetings of the Company, Shareholders are entitled to one vote on a
show of hands and on a poll, to one vote for every Share held. Shares held in Treasury
do not carry voting rights.
In circumstances where Chapter 11 of the Listing Rules would require a proposed
transaction to be approved by Shareholders, the controlling Shareholder (see page 31
for further details) shall not vote its Shares on that resolution. In addition, any Director
of the Company appointed by MMIC, the controlling Shareholder, shall not vote on
any matter where conflicted and the Directors will act independently from MMIC and
have due regard to their fiduciary duties.
Issue of Shares
At the Annual General Meeting held on 1 November 2023, Shareholders approved
the Board’s proposal to authorise the Company to allot Shares up to an aggregate
nominal amount of £2,512,064. In addition, the Directors were authorised to issue Shares
and sell Shares from Treasury up to an aggregate nominal value of £1,004,826 on a
non-pre-emptive basis. This authority is due to expire at the Company’s forthcoming
AGM on 6 November 2024.
There were no share issues during the year.
As at the latest practicable date of 20 September 2024, the total voting rights
were 40,127,018.
DIRECTORS’ REPORT
Manchester and London Investment Trust plc
30
Annual Report & Financial Statements 2024
Purchase of Shares
At the Annual General Meeting held on 1 November 2023, Shareholders approved
the Board’s proposal to authorise the Company to acquire up to 14.99% of its issued
Share capital (excluding Treasury Shares) amounting to 6,024,933 Shares. This authority
is due to expire at the Company’s forthcoming AGM on 6 November 2024. Since
September 2021, the highest price the Company has paid for shares held in Treasury
was 666 pence. The average cost per share of the shares held in Treasury was
549 pence. As at 31 July 2024, the share price was 704 pence.
During the year, 0 Shares have been bought back and at 31 July 2024 there were 40,528,238
Shares in issue of which 335,220 were held in treasury. After the year end, 66,000 shares were
bought back into Treasury, at an average price of 625p, increasing the number of shares
held in Treasury to 401,220.
Sale of Shares from Treasury
At the Annual General Meeting held on 1 November 2023, Shareholders approved the
Board’s proposal to authorise the Company to waive pre-emption rights in respect of
Treasury Shares up to an aggregate amount of £1,004,826 and to permit the allotment
or sale of Shares from Treasury at a discount to a price at or above the prevailing NAV.
This authority is due to expire at the Company’s forthcoming AGM on 6 November 2024.
No Shares were sold from Treasury during the year. As at the latest practicable date of
20 September 2024, 401,220 Shares are held in Treasury.
Substantial shareholdings
The Company has been informed of the following notifiable interests in the Company’s
Share capital carrying voting rights as at 31 July 2024:
Number of
Shares held
% of total
voting rights
M&M Investment Company Limited* 23,300,866 57.97
Following the year end, the Company has been informed that there has been a
change in interests as at the latest practicable date. As at the latest practicable date,
the notifiable interests in the Company’s Share capital is:
Number of
Shares held
% of total
voting rights
M&M Investment Company Limited* 23,310,866 58.09
* Figures include shares held by connected parties.
DIRECTORS’ REPORT continued
Manchester and London Investment Trust plc
31
Annual Report & Financial Statements 2024
Controlling Shareholder
MMIC, which is controlled by Mr Mark Sheppard who forms part of the investment
management team at MLCM, is the controlling Shareholder of the Company.
The Company has in place a continuing written and legally binding relationship
agreement with MMIC and its associates. Since entering the relationship agreement,
the Company has fully complied with the independence provisions included within
this agreement and, so far as the Company is aware, the independence provisions
included in this agreement have also been complied with during the period under
review by the controlling Shareholder and its associates. The relationship agreement is
available on the Company’s website.
Under the shareholder relationship agreement between the Company and MMIC,
the Controlling Shareholder can appoint non-executive Directors to the Board,
as long as the majority of these appointments are deemed to be independent
from MMIC and the appointment of all Directors are not to the detriment of the
Shareholders as a whole.
As at the latest practicable date, MMIC holds 58.09% of the total voting rights of
the Company.
Information about securities carrying voting rights
The following information is disclosed in accordance with the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008 and DTR 7.2.6 of
the FCA’s Disclosure Guidance and Transparency Rules.
• The Company’s capital structure and voting rights are summarised on pages
29 and 30.
• Details of the substantial Shareholders of the Company are set out on page 30.
• An amendment to the Company’s Articles of Association and the giving of
powers to issue or buy back the Company’s Shares requires an appropriate
resolution to be passed by Shareholders. Proposals to grant powers to the Board
to issue and buy back Shares are set out in the Notice of the Annual General
Meeting.
• There are no restrictions concerning the transfer of securities in the Company; no
restrictions on voting rights (with the exception of those disclosed on page 29);
no special rights with regard to control attached to securities; no agreements
between holders of securities 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 (however, refer to the paragraph regarding
the Controlling Shareholder above for details on the relationship agreement).
Dividends
Details of the interim dividend and special dividend paid by the Company during the
year and the final dividend recommended by the Board are set out in the Strategic
Report on page 19.
Events after the reporting period
There are no post balance sheet events to report.
Manchester and London Investment Trust plc
32
Annual Report & Financial Statements 2024
Financial risk management
The principal financial risks and the Company’s policies for managing these risks are
set out in note 16 to the Financial Statements.
Corporate Governance
The Statement of Corporate Governance on pages 35 to 44 forms part of the
Directors’ Report.
Going concern
The Directors consider that it is appropriate to adopt the going concern basis in
preparing the Financial Statements. After making enquiries, and considering the nature
of the Company’s business and assets, the Directors consider that the Company has
adequate resources to continue in operational existence for the foreseeable future.
In arriving at this conclusion, the Directors have considered the liquidity of the portfolio
and the Company’s ability to meet obligations as they fall due for a period of at least
12 months from the date that these Financial Statements were approved.
Cashflow projections have been reviewed and provide evidence that the Company
has sufficient funds to meet both its contracted expenditure and its discretionary
cash outflows in the form of the dividend policy. Additionally, Value at Risk scenario
analyses to demonstrate that the company has sufficient capital headroom to
withstand market volatility are performed periodically.
Viability statement
The Directors have assessed the prospects of the Company over a five-year period.
The Directors consider five years to be a reasonable time horizon to consider the
continuing viability of the Company, however they also consider viability for the
longer-term foreseeable future.
In their assessment of the viability of the Company, the Directors have considered each
of the Company’s principal risks and uncertainties as set out in the Strategic Report on
pages 20 to 22 and in particular, have considered the potential impact of a significant
fall in global equity markets on the value of the Company’s investment portfolio
overall. The Directors have also considered the Company’s income and expenditure
projections and the fact that the Company’s investments mainly comprise readily
realisable securities which could be sold to meet funding requirements if necessary.
On that basis, the Board considers that five years is an appropriate time period to
assess continuing viability of the Company.
In forming their assessment of viability, the Directors have also considered:
• internal processes for monitoring costs;
• expected levels of investment income;
• the performance of the Manager;
• portfolio risk profile;
• liquidity risk;
• gearing limits;
• counterparty exposure; and
• financial controls and procedures operated by the Company.
The Board has reviewed the influence of the COVID-19 pandemic on its service
providers and is satisfied with the ongoing services provided to the Company.
DIRECTORS’ REPORT continued
Manchester and London Investment Trust plc
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Annual Report & Financial Statements 2024
Based upon these considerations, the Directors have concluded that there is a
reasonable expectation that the Company will be able to continue in operation and
meet its liabilities as they fall due over the five-year period.
Greenhouse gas emissions
The Company 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 its underlying portfolio. As the Company’s energy consumption falls under the
minimum 40,000 kWh reporting threshold set by the Streamlined Energy and Carbon
Reporting framework, the Company is exempt from making energy consumption
disclosures.
Donations
The Company made no political or charitable donations during the year.
Requirements of the Listing Rules
Listing Rule 6.6.1 requires the Company to include specified information 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 no additional disclosures are required in relation to Listing
Rule 6.6.1.
Auditor information
The Directors who held office at the date of approval of the Directors’ Report confirm
that, so far as they are each aware, there is no relevant audit information of which
the Company’s Auditor is unaware, and each Director has taken all the steps that
he ought to have taken as a Director to make himself aware of any relevant audit
information and to establish that the Company’s Auditor is aware of that information.
Annual General Meeting
The Annual General Meeting of the Company will be held virtually on Wednesday,
6 November 2024 at 12.00 noon.
The notice convening the Annual General Meeting is set out on page 93 and includes
an explanation of the items of business to be considered at the meeting. This notice
can also be found on the Company’s website.
By order of the Board
Link Company Matters Limited
Company Secretary
25 September 2024
Manchester and London Investment Trust plc
34
<<<XXX>>> REPORT continued
Annual Report & Financial Statements 2024
Manchester and London Investment Trust plc
35
Annual Report & Financial Statements 2024
STATEMENT OF CORPORATE
GOVERNANCE
Statement of Corporate Governance
This corporate governance statement forms part of the Directors’ Report.
Introduction
The Board is accountable to Shareholders for the governance of the Company’s
affairs and is committed to maintaining high standards of corporate governance and
the principles of good governance as set out in the UK Corporate Governance Code
(the “UK Code”) issued by the Financial Reporting Council in July 2018, a copy of
which can be found at www.frc.org.uk.
Statement of compliance with the UK Code
Pursuant to the Listing Rules of the FCA, the Company is required to provide Shareholders
with a statement on how the principles set out in the UK Code have been applied
and whether the Company has complied with the provisions of the UK Code. The
Board recognises the importance of a strong corporate governance culture and has
established a framework for corporate governance which it considers to be appropriate
to the business of the Company as an investment trust.
The Board has reviewed the principles and provisions of the UK Code and considers
that it has complied throughout the year, except as disclosed below:
• in light of the responsibilities retained by the Board and the Audit Committee
and the responsibilities delegated to the Company’s third party service
providers, including the Manager, the Company has not appointed a chief
executive officer;
• given the structure and size of the Company, the Board does not consider it
necessary to appoint separate management engagement, remuneration or
nomination committees, and the roles and responsibilities normally reserved for
these committees are matters for the full Board; and
• the Company does not have an internal audit function as all of the Company’s
management functions are performed by third parties whose internal controls
are reviewed by the Board. However, the need for an internal audit function is
reviewed by the Audit Committee annually.
During the year, the Company appointed Daren Morris as a SID (see page 4). This
appointment fulfills Provision 12 of the UK Code, providing a sounding board for the
Chairman and serving as an intermediary for the other Directors and shareholders.
Manchester and London Investment Trust plc
36
Annual Report & Financial Statements 2024
Board of Directors
Under the leadership of the Chairman, the Board is responsible for the effective stewardship
of the Company’s affairs, including corporate strategy, corporate governance, risk
assessment and the investment policy. The Directors have overall responsibility for review
of the Company’s investment activity and performance and the control and supervision
of the Manager and other service providers of the Company.
The Board consists of four non-executive Directors, three of whom are considered
to be independent of the Company’s Manager. The Board seeks to ensure that it
has an appropriate balance of skills and experience and considers that, collectively,
the Directors have an appropriate balance of skills, experience, independence and
knowledge of the Company to enable it to provide effective strategic leadership and
proper governance of the Company.
The terms and conditions of appointment of the Directors are formalised in letters
of appointment, copies of which are available for inspection from the Company’s
registered office. None of the Directors has a contract of service with the Company
nor has there been any other contract or arrangement between the Company and
any Director at any time during the year.
The Board has ensured that all Directors continually update the skills and knowledge
required to fulfil their role both on the Board and the Audit Committee. The Directors
have access to the advice and services of the Company Secretary who is responsible
to the Board for ensuring that established Board procedures and applicable rules and
regulations are complied with.
Chairman
The Chairman leads the Board and is responsible for its overall effectiveness in
directing the Company. He promotes a culture of openness and debate and
facilitates constructive Board relations and the effective contribution of all Directors.
In liaison with the Company Secretary, he ensures that the Directors receive accurate,
timely and clear information. The Chairman, Daniel Wright, is deemed by his fellow
independent Board members to be independent and free of any conflicts of interest.
He considers himself to have sufficient time to spend on the affairs of the Company.
The role and responsibilities of the Chairman are clearly defined and set out in writing,
copies of which are available on the Company’s website.
STATEMENT OF CORPORATE
GOVERNANCE continued
Manchester and London Investment Trust plc
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Annual Report & Financial Statements 2024
Independence of the Directors
As part of its annual evaluation, the Board reviewed the independence status of
each Director and the Board as a whole. In the Board’s opinion, Mr Morris, who is the
Company’s SID, Sir James Waterlow and Mr Wright are considered to be independent
of the Manager in both character and judgement that they perform their duties at all
times in an independent manner and that there are no relationships or circumstances
which are likely to affect the judgement of any Director.
As set out on page 28, Mr Miller is head of governance and risk oversight, holds
the SMF16 and SMF17 roles under the Senior Managers and Certification Regime
and sits on the risk management committee at MLCM, the Company’s Manager.
Therefore, Mr Miller is not deemed to be independent of the Manager. Due to his
non-independent status, Mr Miller abstains from discussions about the continuing
appointment of the Manager.
Following completion of the evaluation process, the Board is of the opinion that
Mr Miller continues to provide effective contributions to the performance of the Board
and is committed to his role. As regards his effectiveness, Mr Miller’s biographical
details set out on page 28 demonstrate the experience he brings to the Board, which
is complementary to that of the other Directors.
Apart from Mr Miller, none of the Directors or any persons connected with them had a
material interest in the transactions and arrangements of, or the agreement with, the
Manager during the year.
Performance evaluation
The Board has established a questionnaire-based process for the annual evaluation of
the performance of the Board, the Audit Committee and the individual Directors, led
by the Chairman. The Chairman acts on the results of the evaluation by recognising
the strengths and addressing any weaknesses of the Board, as appropriate.
Following this year’s evaluation, the Board is satisfied that the structure, mix of skills
and operation of the Board continue to be effective and relevant for the Company,
offering a balance of independence and knowledge of the Company to enable it to
provide effective strategic leadership and proper governance of the Company. The
performance of each of the Directors continues to be effective and demonstrates
commitment to the role and having considered the Directors’ other time commitments
and directorships. The Board is satisfied that each Director has the capacity to be fully
engaged with the Company’s business.
The Board does not consider the use of external consultants to conduct this evaluation
is likely to provide any meaningful advantage over the process that has been
adopted. However, the option of doing so will be regularly reviewed.
Manchester and London Investment Trust plc
38
Annual Report & Financial Statements 2024
Gender & Diversity
The following disclosures are provided in respect of the FCA Listing Rules targets
that: i) 40% of a board should be women; ii) at least one senior role should be held
by a woman; and iii) at least one board member should be from a non-white ethnic
background, as defined by the Office of National Statistics (ONS) criteria. As an
externally managed investment company with no chief executive officer (CEO) or
chief financial officer (CFO), the roles which qualify as senior under FCA guidance
are Chair and Senior Independent Director (SID). The Board also considers the role of
Audit Committee Chair to represent a senior role within this context. The Board has
considered that the Company’s year end date to be the most appropriate date for
disclosure purposes. There have been no changes since 31 July 2024, data has been
collected on a self-reporting basis and the Directors were asked to confirm that the
data reported at 31 July 2023 remained valid and correct. As at 31 July 2024, the
Board comprised four Non-Executive Directors, all men, and included two chartered
accountants, one investment trust specialist and a former qualified lawyer. The Board’s
recruitment process seeks to draw upon as diverse a pool of candidates as possible,
including men and women from across all ethnic backgrounds working in the fields of
science, industry, finance and technology.
As at 31 July 2024, the Board did not comply with the FCA Listing Rule target with respect
to ethnic background nor was it compliant with respect to the 40% target for women
or that one senior role should be held by a woman. The Board’s ongoing succession
planning will take this target into consideration. If anyone reading this Annual Report
believes they are a suitable candidate for a non-executive director role on this board
and wishes to be considered for succession planning, please contact the Manager of
the Company at ir@mlcapman.com with your CV.
Board as at 31 July 2024
Gender
Number of
Board Members
% of
the Board
Number of
senior positions
on the Board
Men 4 100% 2
Ethnic background
Number of
Board Members
% of
the Board
Number of
senior positions
on the Board
White British or
Other White (including
minority white groups) 4 100% 2
Election/re-election of Directors
The Board does not have a specific policy on tenure. Under the Company’s Articles of
Association and in accordance with the UK Code, Directors are subject to election by
Shareholders at the first annual general meeting after their appointment. Thereafter,
at each annual general meeting, any Director who has not stood for re-election at
either of the two preceding annual general meetings shall retire and be subject to
re-election. In addition, one-third of the Directors eligible to retire by rotation shall
retire from office at each annual general meeting.
Beyond these requirements, the Board has agreed a policy whereby all Directors will
seek annual re-election at the Company’s annual general meetings. This is in line with
the recommendations of the UK Code.
The Board has considered the re-election of Mr Wright, Mr Miller, Mr Morris and
Sir James Waterlow at the forthcoming Annual General Meeting and recommends
this on the basis of their skills, knowledge and continued contribution.
STATEMENT OF CORPORATE
GOVERNANCE continued
Manchester and London Investment Trust plc
39
Annual Report & Financial Statements 2024
Induction of new Directors
A procedure for the induction of new Directors has been established, including the
provision of an induction pack containing relevant information about the Company,
its processes and procedures. New appointees will have the opportunity of meeting
with the Chairman and relevant persons at the Manager.
Indemnity provisions
The Board has formalised arrangements under which Directors, in the furtherance
of their duties, may take independent professional advice. Under the Company’s
Articles of Association, the Directors are provided, subject to UK legislation, with an
indemnity in respect of liabilities which they may sustain or incur in connection with
their appointment. Apart from this, there were no third party indemnity provisions over
the course of the year or since the year end.
Board responsibilities and relationship with the Manager
It is the responsibility of the Board to ensure that there is effective stewardship of
the Company’s affairs and that the Company meets its obligations to Shareholders.
Strategic issues and all operational matters of a material nature are determined by
the Board and, in order to enable them to discharge their responsibilities, Directors
have full and timely access to relevant information. Board responsibilities include:
• changes to the Company’s objective and investment policy;
• approval of annual and half-yearly reports and financial statements, circulars
and other Shareholder communications;
• appointment and removal of Directors;
• changes to the Company’s service providers; and
• use of gearing and derivative instruments for investment purposes.
The Board meets regularly and at each meeting reviews investment performance and
financial results and monitors compliance with the Company’s objectives.
The Board and Committee agendas are shaped to ensure that discussion is focused
on the Company’s strategic priorities, principal activities, reviews of significant issues
and key elements of the portfolio.
At each Board meeting, the Directors follow a formal agenda which is circulated
in advance by the Company Secretary. The Company Secretary, Administrator and
Manager regularly provide financial information, together with briefing notes and
papers in relation to changes in the Company’s economic and financial environment,
statutory and regulatory changes and corporate governance best practice.
The Company’s day-to-day functions have been subcontracted to a number of service
providers, each engaged under separate legal agreements. The management of the
Company’s assets has been delegated to MLCM, which has discretion to manage
the assets in accordance with the Company’s investment policy.
At each Board meeting, a representative from the Manager is in attendance to
present verbal and written reports covering the Company’s activities, portfolio and
investment performance over the preceding period. Ongoing communication with
the Board is maintained between formal meetings.
Manchester and London Investment Trust plc
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Annual Report & Financial Statements 2024
Meetings
The Directors meet at regular Board meetings, with additional meetings arranged as
necessary. Board and Committee meetings held during the year 31 July 2024 and the
attendance of the individual Directors are shown below:
Board
Meetings
Audit
Committee
Number of meetings
during the year 4 2
Daniel Wright 4/4 2/2
Brett Miller* 4/4 2/2
Daren Morris 3/4 2/2
Sir James Waterlow 4/4 2/2
* Mr Miller is not a member of the Audit Committee.
Committees
The Board is assisted in its operations by the Audit Committee, the terms of reference
for which are available on the Company’s website.
Audit Committee
The Audit Committee comprises Mr Wright, Mr Morris and Sir James Waterlow and since
his appointment on 10 December 2021 is chaired by Mr Morris. Mr Morris, a qualified
chartered accountant, is deemed to have recent and relevant financial experience
and the Committee as a whole has competence relevant to the investment trust sector.
A Report from the Audit Committee is set out on pages 45 to 47.
Conflicts of interest
It is the responsibility of each individual Director to avoid an unauthorised conflict of
interest situation arising. Directors must request authorisation from the Board as soon as
they become aware of the possibility of an interest that conflicts or might possibly conflict
with the interests of the Company (a “situational conflict”). The Company’s Articles of
Association authorise the Board to approve such situations, where deemed appropriate.
The Board is responsible for considering Directors’ requests for authorisation of situational
conflicts and for deciding whether or not the situational conflict should be authorised.
The factors to be considered will include: whether the situational conflict could prevent
the Director from properly performing his duties; whether it has, or could have, any
impact on the Company; and whether it could be regarded as likely to affect the
judgement and/or actions of the Director in question. When the Board is deciding
whether to authorise a conflict or potential conflict, only Directors who have no interest
in the matter being considered are able to take the relevant decision, and in taking the
decision, the Directors must act in a way they consider, in good faith, will be most likely
to promote the Company’s success. The Directors are able to impose limits or conditions
when giving authorisation if they think this is appropriate in the circumstances.
A register of conflicts is maintained by the Company Secretary and is reviewed at
Board meetings, to ensure that any authorised conflicts remain appropriate. Directors
are required to confirm at these meetings whether there has been any change to
their position.
STATEMENT OF CORPORATE
GOVERNANCE continued
Manchester and London Investment Trust plc
41
Annual Report & Financial Statements 2024
Internal control review
The Board is responsible for risk management and ensuring that the Company has
in place an effective system of internal financial controls designed to ensure the
maintenance of proper accounting records and the safeguarding of the Company’s
assets. These systems are designed to provide reasonable, but not absolute, assurance
against material misstatement or loss. The Board recognises its responsibility for regular
review of all aspects of internal financial control.
The Board has established an ongoing process for identifying, evaluating and managing
the principal risks faced by the Company. This process is subject to regular review by
the Board and is in accordance with the FRC Guidance on Risk Management, Internal
Control and Related Finance and Business Reporting. The process was fully in place
throughout the year and up to the date of approval of the Financial Statements. The
principal risks facing the Company and the actions taken to manage these are detailed
on pages 20 to 22.
The Board has established a series of parameters which are designed to limit the
inherent risk in managing a portfolio of investments and the Board receives regular
reports from the Manager and Administrator, which are reviewed in detail.
Internal control assessment process
The Board has contractually delegated responsibility for management of the
investment portfolio, risk management and the provision of accounting services to
external service providers. This is after full and proper consideration by the Board of
the quality and cost of services offered, including the financial control systems in
operation insofar as they relate to the affairs of the Company.
The key procedures which have been established to provide effective internal control,
are as follows:
• Investment management and risk management are provided by MLCM. The
Manager also maintains the Company’s risk matrix. The Board is responsible for
setting the overall investment strategy, monitors the activity of the Manager
and reviews the risk matrix regularly at Board meetings. The Manager provides
reports at these meetings, which cover investment performance and
compliance matters.
• Custody and safekeeping of assets is undertaken by Morgan Stanley & Co.
International plc and JP Morgan Securities PLC.
• The duties of investment management and custody of assets are segregated. The
procedures of the individual parties are designed to complement one another.
• Link Company Matters Limited provides company secretarial services to the
Company.
• Fund administration services are provided to the Company by its Administrator,
Link Alternative Fund Administrators Limited.
• The Directors of the Company clearly define the duties and responsibilities of
the service providers and advisers in terms of their contracts. The appointment
of service providers and advisers is conducted by the Board after consideration
of the standing and reputation of the parties involved. The Directors regularly
monitor their ongoing performance and contractual arrangements.
• For investments that are actively traded in organised financial markets, fair
value is determined by reference to Exchange quoted market prices at the
close of business at the end of the reporting period. The Administrator produces
valuation reports independently for the Board based on the Company’s
valuation policy.
Manchester and London Investment Trust plc
42
Annual Report & Financial Statements 2024
• Liquidity risk is minimised by investing in a portfolio of quoted companies that
are readily realisable. The Manager reports to the Board if there is any material
change in the liquidity profile of the Company.
• The Board reviews in detail the financial information produced by the
Administrator and the Manager on a regular basis.
The Board has carried out a review of the effectiveness of the risk management and
internal control systems and how those systems operated throughout the year. The
Directors confirm that no significant failings or weaknesses were identified.
Company Culture
The Company’s defined purpose is to deliver its investment objective. The Directors
agree that establishing and maintaining a healthy corporate culture among the
Board and in its interaction with the Manager and Shareholders will support the
delivery on its purpose, values and strategy. The culture of the Board promotes a desire
for good governance, mindful of the interests of the Company’s stakeholders. The
Board believes that, as an investment trust with no employees, this is best achieved by
working in partnership with the Manager.
The Company has a number of policies and procedures in place to assist with
maintaining a culture of good governance such as those relating to Diversity,
Directors’ conflicts of interest and Directors’ dealings in the Company’s Shares. The
Board assesses and monitors compliance with these policies as well as the general
culture of the Board through Board meetings and in particular during the annual
evaluation process which is undertaken by each Director (for more information see
the performance evaluation section on page 37).
The Board seeks to ensure the alignment of its purpose, values and strategy with its
culture through ongoing dialogue and engagement with its service providers, principally
the Manager. The culture of the Company’s service providers, including their policies,
practices and behaviour, is considered by the Board as a whole during the annual
review of the performance and continuing appointment of all service providers.
Environmental, social and governance policy
As an investment trust, the Company has adopted the environmental, social and
governance policy (“ESG”) of its Manager. This ESG policy can be found at the
Manager’s website at www.mlcapman.com/esg.
In addition, the Company’s ethical policy is focused on ensuring that the Company’s
resources are properly managed and invested within the guidelines approved by the
Board.
The Company’s Manager ensures that investments are made in companies that it
considers to be well managed and subject to appropriate corporate governance. A
well-managed company is considered to be one which complies with all the relevant
legislation and which meets the environmental, social, community and ethical
requirements of the country in which it operates. It is important to recognise that local laws
and requirements of some markets do not necessarily equate with those of developed
countries.
The Manager performs extensive investment analysis, assessing both the risk and the
return of targeted investments for the Company. The depth of its research provides
comprehensive insights into the many factors that affect the value of an investment,
which also include environmental, social and governance issues. This analysis is
monitored by the Manager and reported to the Board.
STATEMENT OF CORPORATE
GOVERNANCE continued
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Annual Report & Financial Statements 2024
The Company’s ultimate objective is to maximise investment return for its Shareholders
without bearing an unacceptable level of risk. Accordingly, the Board and the
Manager will seek to favour companies that pursue best practice in governance.
ESG in practice
Some examples of the Company’s ESG policy in practice are set out below:
• The Company is committed to caring for the environment and ensuring that
its carbon footprint is minimised. One of the main policies to achieve this is the
encouragement of the use of electronic communication with Shareholders, in
order to save paper, printing consumables and energy.
• The portfolio holds no exposure to mining or oil and gas exploration companies.
• The Manager’s team own cars which are electric vehicles.
• The Manager’s team travel to work on foot or on public transport and maximises
its use of public transport.
• The Manager looks to conduct all meetings virtually where possible.
Exercise of voting powers
The Board has agreed that a formal policy regarding voting in investee companies
is not required. It has given the Manager discretionary voting powers to vote how
it deems appropriate whilst maintaining a primary focus on financial returns. The
Manager utilised the votes of the Company on seven different occasions during the
year (2023: seven).
Stakeholder Engagement (s172 Statement)
Background
The Directors have a duty (under section 172 of the Companies Act 2006) to promote
the success of the Company for the benefit of Shareholders as a whole. In doing so,
the Directors must have regard to other broader matters including the likely long-term
consequences of any decision, and on the need to foster the Company’s relationships
with its employees, suppliers, customers and others and to have regard to their interests,
the impact of the Company on the community and the environment, and the desirability
of maintaining a reputation for high standards of business conduct.
Stakeholders
The Board seeks to understand the needs and priorities of the Company’s stakeholders
and these are taken into account during all its discussions and as part of its decision-
making. The Chairman ensures that the Board as a whole has a clear understanding of
the views of Shareholders by receiving regular updates from the Manager.
During the year under review, the Board has continued to discuss and monitor
which parties should be considered as stakeholders of the Company and has again
concluded that, as the Company is an externally managed investment trust and does
not have any employees or customers in the traditional sense, the Company primarily
owed a duty of care to its Shareholders. Furthermore, as a Company with a majority
Shareholder, safeguarding the interests of minority Shareholders was considered of
particular importance. Due to the Company’s relatively small size, the Board considered
the impact on parties other than its Shareholders to be minimal and in line with the FRC
Guidance in relation to section 172(1) statements, this statement focuses on stakeholders
that are considered key to the Company’s business, and therefore does not cover every
stakeholder in the Company. The section below discusses the actions taken by the
Company to ensure that the interests of the Shareholders are taken into account.
Manchester and London Investment Trust plc
44
Annual Report & Financial Statements 2024
The Board is committed to maintaining open channels of communication and to
engage with Shareholders in a manner which they find most meaningful, in order to
gain an understanding of the views of Shareholders. These include:
• Annual General Meeting – The Company welcomes and encourages
attendance and participation from Shareholders at virtual AGMs and General
Meetings, Shareholders have the opportunity to virtually meet the Chairman,
the Directors and the Manager and to address questions to them directly.
• Shareholder meetings – Unlike trading companies, Shareholders in investment
companies often meet with the Manager rather than with members of the
board. Throughout the period, the Manager contacted Shareholders and
private client investment managers who have holdings in the Company. These
contacts and any subsequent meetings are reported to the Directors. After
each meeting, contact with the Chairman is offered to Shareholders should
any of their concerns remain unrectified in the meeting with the Manager.
Feedback from meetings between the Manager and Shareholders is shared
with the Board. The Chairman, the Chairman of the Audit Committee or other
members of the Board are available to meet with Shareholders to understand
their views on governance and the Company’s performance where they wish
to do so.
• Publications – The Annual Report and Half-Year results are made available on
the Company’s website and are circulated to those Shareholders requesting
hard copies. These reports provide Shareholders with a clear understanding of
the Company’s portfolio and financial position. Feedback and/or questions the
Company receives from Shareholders help the Company evolve its reporting,
aiming to render the reports and updates transparent and understandable.
The information contained in the reports is supplemented by regular NAV
announcements and a monthly factsheet available on the Company’s website.
• Shareholder concerns – Any issues of concern can be addressed to
the Board by any Shareholder by emailing the Company Secretary at
mlitcosec@linkgroup.co.uk. The Manager can be contacted regarding any
matters within the scope of its role at IR@mlcapman.com. The Independent
Directors and other members of the Board are also available to Shareholders
if they have concerns that have not been addressed through the normal
channels.
The above mechanisms for engaging with stakeholders are kept under review by the
Directors and will be discussed on a regular basis at Board meetings to ensure that
they remain effective. The Board recognises the importance of engaging with its core
stakeholders, and of taking account of their interests when making decisions. Should
the Shareholders of the Company wish to contact the Chair of the Company, they
can do so by contacting the registered office of the Company.
STATEMENT OF CORPORATE
GOVERNANCE continued
Manchester and London Investment Trust plc
45
Annual Report & Financial Statements 2024
REPORT FROM THE AUDIT
COMMITTEE
I am pleased to present the Audit Committee (the “Committee”) report for the year
ended 31 July 2024. The Composition of the Committee is set out on page 40.
Role of the Audit Committee
The primary responsibilities of the Committee are to:
• monitor the integrity of the financial statements of the Company and review
the financial reporting process and the accounting policies;
• keep under review the effectiveness of the Company’s internal control
environment and risk management systems;
• make recommendations to the Board in relation to the re-appointment or
removal of the external Auditor and its remuneration and to approve its terms
of engagement; and
• oversee the relationship with the external Auditor, which includes reviewing the
effectiveness of the audit process, developing and implementing a policy on
the supply of non-audit services by the Auditor and reviewing and monitoring
the Auditor’s independence and objectivity.
The Committee has direct access to the Auditor, who is also invited to attend the
Committee meeting at which the Annual Report and Financial Statements are
reviewed.
Matters considered in the year
The Committee met twice during the financial year. Details of the composition of the
Committee, attendance and how its performance evaluation has been conducted
are detailed in the Statement of Corporate Governance on pages 35 to 44.
The Committee has:
• reviewed the internal controls and risk management systems of the Company
and those of its third party service providers;
• reviewed and, where appropriate, updated the Company’s principal risks and
uncertainties;
• agreed the audit plan with the Auditor, including the principal areas of focus,
and agreed the audit fee;
• received and discussed with the Auditor its report on the results of the audit; and
• reviewed the Company’s half-yearly and annual financial statements and
advised the Board accordingly.
The Audit Committee has reviewed and, where appropriate, updated the risk matrix.
This is done on a six-monthly basis.
Manchester and London Investment Trust plc
46
Annual Report & Financial Statements 2024
Significant issues
The significant issues considered by the Committee in relation to the Company’s
Annual Report and Financial Statements were:
• Valuation of investments: During the year, the Committee reviewed the
valuation process for the Company’s investments and the systems in place to
ensure the accuracy of these valuations, their validity in light of liquidity and
the criteria used by the Manager and the Company’s Auditor when assessing
whether valuations are appropriate.
• Internal control systems: The Committee reviewed the internal control systems
by continually monitoring the services and controls of its third party service
providers. There were no significant matters of concern identified in the
Committee’s review of the internal controls of its third party service providers.
• Going concern and long-term viability: The Committee assessed every six
months that it remained appropriate to prepare the Company’s Financial
Statements on a going concern basis, and made its recommendations to the
Board. The Board’s conclusions are set out on page 32. The Committee also
considered the longer-term viability statement within the Annual Report for the
year ended 31 July 2024. This statement is set out on pages 32 and 33.
Following consideration and detailed review of the above, the Committee was of the
opinion that the Annual Report and Financial Statements, taken as a whole, are fair,
balanced and understandable, and provide the information necessary to assess the
Company’s position and performance, business model and strategy, and advised the
Board accordingly.
Auditor
Deloitte LLP (“Deloitte”) were appointed as the Company’s Auditor on 28 November
2016, in relation to the audit for the year ended 31 July 2017. Their appointment was
approved by Shareholders at the Annual General Meeting held on 27 November 2017.
Michael Caullay is the audit partner for 2023/2024.
In accordance with audit tender requirements, the Company, being a public interest
entity, intends to carry out an audit tender during 2026 in respect of the 2027 audit.
Audit fees and non-audit services provided by the Auditor
The Committee reviewed and approved the audit plan and fees presented by the
Auditor and considered its report on the Financial Statements. Details of the audit fee
for the year ended 31 July 2024 are set out in note 4 to the Financial Statements.
The Committee reviews the need for non-audit services and authorises such on a
case-by-case basis, giving consideration to the cost effectiveness of the services and
the independence and objectivity of the Auditor, and taking into account relevant UK
law, regulation, ethical standards and other professional and regulatory requirements.
Non-audit work may be given to the external Auditor unless there is a conflict of interest
or someone else is considered to have more relevant experience. Any non-audit work
to be carried out by the Auditor, including any special projects, must be approved
by the Committee in advance. No non-audit services were provided by the Auditor
during the year (2023: nil).
REPORT FROM THE AUDIT
COMMITTEE continued
Manchester and London Investment Trust plc
47
Annual Report & Financial Statements 2024
Independence and objectivity of the Auditor
As part of the review of the Auditor’s independence and objectivity, Deloitte has
confirmed that it is independent of the Company and has complied with relevant
auditing and ethical standards. In evaluating Deloitte, the Committee has taken into
consideration the standing, skills and experience of the firm and the audit team. The
Committee, from direct observation and enquiry of the Manager, the Administrator
and the Company Secretary, is satisfied that Deloitte is both independent and
effective at carrying out its responsibilities. Deloitte’s performance will continue to be
reviewed annually taking into account all relevant governance guidance and best
practice. Should the Auditor become aware of any situation that might potentially
compromise its independence, the Committee expects the Auditor to bring that
situation to its attention at the earliest opportunity.
Effectiveness of external audit
The Chairman of the Committee maintains regular contact with the Auditor and the
Committee has considered the performance of the Auditor, the services provided by
it during the year and reviewed its independence and objectivity.
The Committee also monitors and reviews the effectiveness of the external audit
process for the Annual Report, including a detailed review of the audit plan and audit
results report and discussion of these with the Auditor, and makes recommendations
to the Board on the appointment/re-appointment, remuneration and terms of
engagement of the Auditor. Any concerns regarding the effectiveness of the external
audit process would be reported to the Board. No concerns were raised in respect of
the year ended 31 July 2024.
Re-appointment of the Auditor
In determining whether to recommend the re-appointment of the Auditor, the
Committee takes into account their effectiveness, relevant knowledge and value
added service together with value for money. On the basis of this assessment, the
Committee recommended to the Board to propose the re-appointment of Deloitte as
Auditor to the Company at the forthcoming Annual General Meeting.
Daren Morris
Chairman of the Audit Committee
25 September 2024
Manchester and London Investment Trust plc
48
Annual Report & Financial Statements 2024
DIRECTORS’ REMUNERATION
REPORT
The Board has prepared this report in accordance with the requirements of the Large and
Medium-Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations
2013 in respect of the year ended 31 July 2024. An ordinary resolution for the approval of
this Report will be put to Shareholders at the forthcoming Annual General Meeting.
The law requires the Company’s Auditor to audit certain disclosures provided. Where
disclosures have been audited, they are indicated as such. The Auditor’s opinion is
included in the Independent Auditor’s Report on pages 56 to 65.
Annual statement from Chairman
I am pleased to present the Directors’ Remuneration Report for the year ended 31 July 2024.
The Board reviewed the level of remuneration payable to each Director during the
year. Each Director of the Company takes no part in discussions concerning their own
remuneration.
Directors’ fees were changed during the year, effective from 1 April 2024. The Chairman
is paid a fee of £35,000, the Audit Committee Chairman is paid a fee of £30,000, the fee
paid to other independent Directors is £27,000 and the fee for non-independent Directors
is £25,000.
The Directors’ Remuneration Policy was approved by shareholders at the 2023 Annual
General Meeting. The Board does not propose to make any changes to the existing
remuneration policy. There will be no significant change in the way the remuneration
policy is implemented during the course of the next financial year.
Directors’ emoluments for the year (audited)
The Directors who served during the year received the following emoluments in the
form of fees:
Fees Expenses* Total
Year to
31 July
2024
£
Year to
31 July
2023
£
Year to
31 July
2024
£
Year to
31 July
2023
£
Year to
31 July
2024
£
Year to
31 July
2023
£
Daniel Wright
(Chairman) 30,333 28,000 1,168 1,788 31,501 29,788
Brett Miller 21,667 20,000 – – 21,667 20,000
Daren Morris 26,667 25,000 – – 26,667 25,000
Sir James Waterlow 23,667 22,000 – – 23,667 22,000
102,334 95,000 1,168 1,788 103,502 96,788
* Travel expenses incurred in relation to attendance at Board and Committee meetings of
the Company.
Manchester and London Investment Trust plc
49
Annual Report & Financial Statements 2024
Annual percentage change to Director emoluments (audited)
Fees Percentage change
Year
to
31 July
2024
£
Year
to
31 July
2023
£
2023-
2024
%
2022-
2023
%
2021-
2022
%
2020-
2021
%
2019-
2020
%
Daniel Wright
(Chairman)* 30,333 28,000 5.8 2.7 16.9 41.4 43.7
Brett Miller 21,667 20,000 8.3 – 1.7 22.9 –
Daren Morris** 26,667 25,000 6.7 55.1 N/A – –
David Harris*** – – – – (67.9) 43.0 6.5
Sir James Waterlow 23,667 22,000 7.6 – 5.5 N/A –
102,334 95,000
* Mr Wright was appointed Chairman on 26 November 2021
** Mr Morris was appointed as non-executive Director of the Company and Chairman of the
Audit Committee on 10 December 2021.
*** Mr Harris resigned as director on 26 November 2021.
Company performance
The Company’s benchmark is the MXGBIM. The graph below shows the Company’s
long-term total return performance (Share price return plus dividends paid) compared
with the MXGBIM since the inception of MLCM (which is when the current Management
team formed) being 22 September 2015.
Source: Bloomberg.
50
100
500
350
300
450
400
150
200
250
2016 2017 2018 2019 2020 2021 2022 2023
2024
MNL
401.74478
MXGBIM
Index
190.44357
Manchester and London Investment Trust plc
50
Annual Report & Financial Statements 2024
Relative importance of spend on pay
The table below shows the proportion of the Company’s income spent on pay.
2024
£’000
2023
£’000
%
Change
Dividends payable to Shareholders in
respect of the financial year 8,441 5,626 50.0
Management fee 1,458 532 174.1
Total remuneration paid to Directors 102 95 7.3
Directors’ interests (audited)
There is no requirement under the Company’s Articles of Association for Directors to
hold Shares in the Company.
The interests of the current Directors and their connected persons in the voting rights
of the Company are set out below:
As at
31 July 2024
No. of
Shares
As at
31 July 2023
No. of
Shares
Daniel Wright** (Chairman) 144,542** 124,542**
Brett Miller 1,734* 1,734*
Daren Morris 38,000 40,000
Sir James Waterlow 15,000 15,000
* This includes 734 Shares of which the beneficial interests are held by Mr Miller’s family members.
** This includes 95,086 Shares (2023: 95,086 Shares) of which the beneficial interests are held by
Mr Wright’s family members.
Between 31 July 2024 and the date of this Report, Daniel Wright purchased a further 5,000 shares,
taking his total beneficial interest to 149,542 shares.
DIRECTORS’ REMUNERATION
REPORT continued
Manchester and London Investment Trust plc
51
Annual Report & Financial Statements 2024
Voting at Annual General Meeting
The Directors’ Remuneration Report for the year ended 31 July 2023 was approved at
the Annual General Meeting held on 1 November 2023. The Directors’ Remuneration
Policy was last approved by Shareholders at the Annual General Meeting held on
1 November 2023. The votes cast on the Directors’ Remuneration Report (including
the Remuneration Policy) were as follows:
Directors’ Remuneration Report (including the Remuneration Policy) (AGM 2023)
Number
of votes
% of
votes cast
For 25,875,799 95.47
Against 1,227,943 4.53
Total votes cast 27,579,844 98.27
Number of votes withheld 476,102 1.73
Approval
The Directors’ Remuneration Report was approved by the Board of Directors and
signed on its behalf by:
Daniel Wright
Chairman
25 September 2024
Manchester and London Investment Trust plc
52
Annual Report & Financial Statements 2024
This Remuneration Policy was approved by Shareholders at the Annual General
Meeting on 1 November 2023. The policy provisions set out below will apply until they
are next put to Shareholders for approval, which must be at intervals of at least once
every three years, or the Remuneration Policy is varied, in which event, Shareholder
approval for the new Remuneration Policy will be sought at the forthcoming Annual
General Meeting. Notwithstanding this, the Board wishes to put the Remuneration
Policy to Shareholders for approval annually.
The Board reviews and sets the level of remuneration payable to each Director annually.
The Company’s Articles of Association limit the aggregate fees payable to the Directors
to a total of £500,000 per annum. Subject to this overall limit, it is the Board’s policy that
the remuneration of Directors should be set at a level that is commensurate with the
duties and responsibilities of the role. Remuneration levels elsewhere in the investment
trust industry and all other relevant information are taken in account when considering
Directors’ fees. The Board considers that the current policy to remunerate the Directors
by way of fixed fees is appropriate to the Company’s present circumstances and
there are no plans to introduce any alternative remuneration schemes.
Directors are not eligible for bonuses, pension benefits, Share options, long-term incentive
schemes or other benefits. It is the Board’s policy that Directors do not have service
contracts but are provided with letters of appointment as a non-executive Director.
Future pay (unaudited)
Component Director
Rate at
1 August
2024
Purpose of
Remuneration
Annual fee Chairman £35,000 Commitment as Chairman
1
Annual fee
Chairman of the
Audit Committee
£30,000 Commitment as Audit
Committee Chairman
1
Annual fee
Independent
Director
£27,000 Commitment as an
independent
non-executive Director
2
Annual fee
Non-independent
Director
£25,000 Commitment as a
non-independent
non-executive Director
3
Expenses
All Directors N/A Reimbursement of
expenses incurred in the
performance of duties as
a Director
1
The Company’s policy is for the Chairman and the Audit Committee Chairman to be paid
higher fees than the other Directors to reflect the more onerous roles.
2
The Company’s Articles of Association limit the aggregate fees payable to the Board of Directors
to a total of £500,000 per annum.
3
The Company’s policy is to apply a discount to the fee paid to a non-independent Director.
Fees for any new Director appointed will be on the above basis. Fees payable in respect
of subsequent periods will be determined by the Board following an annual review.
Any views expressed by Shareholders on the fees being paid to Directors would
be taken into consideration by the Board. There are no performance conditions
attaching to the remuneration of the Directors as the Board does not consider such
arrangements or benefits necessary or appropriate for non-executive Directors. Under
the Directors’ letters of appointment, there is a notice period of six months and no
compensation is payable to a Director on loss of office.
REMUNERATION POLICY
Manchester and London Investment Trust plc
53
Annual Report & Financial Statements 2024
STATEMENT OF DIRECTORS’
RESPONSIBILITIES IN RELATION
TO THE ANNUAL REPORT AND
FINANCIAL STATEMENTS
The Directors are responsible for preparing the Company’s Annual Report and
Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial
period. Under that law, they have elected to prepare the Financial Statements in
accordance with International Financial Reporting Standards (“IFRS”) as adopted
by the European Union. 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 in accordance with IAS 8 ‘Accounting
Policies, Changes in Accounting Estimates and Errors’ and then apply them
consistently;
• present information, including accounting policies, in a manner that provides
relevant, reliable, comparable and understandable information;
• provide additional disclosure when compliance with specific requirements
in IFRS is insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the Company’s financial position
and financial performance;
• state that the Company has complied with IFRS, subject to any material
departures disclosed and explained in the Financial Statements;
• make judgements and estimates that are reasonable and prudent; and
• prepare Financial Statements on a going concern basis unless it is inappropriate
to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the Company’s transactions and disclose with
reasonable accuracy, at any time, the financial position of the Company and to
enable them to ensure that the Financial Statements comply with the Companies Act
2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing
a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate
Governance Statement that comply with that law and those regulations, and
ensuring that the Annual Report includes information required by the Listing Rules and
Disclosure Guidance and Transparency Rules of the FCA.
Manchester and London Investment Trust plc
54
Annual Report & Financial Statements 2024
The Financial Statements are published on the Company’s website,
www.mlcapman.com/manchester-london-investment-trust-plc, which is maintained
on behalf of the Company by the Manager. The Manager has agreed to maintain,
host, manage and operate the Company’s website and to ensure that it is accurate
and up-to-date and operated in accordance with applicable law. The work carried
out by the Auditor does not involve consideration of the maintenance and integrity
of this website and accordingly, the Auditor accepts no responsibility for any changes
that have occurred to the Financial Statements since they were initially presented
on the website. Visitors to the website need to be aware that legislation in the United
Kingdom covering the preparation and dissemination of the Financial Statements
may differ from legislation in their jurisdiction.
We confirm that to the best of our knowledge:
i. the Financial Statements, prepared in accordance with the IFRS, give a true and
fair view of the assets, liabilities, financial position and profit of the Company; and
ii. the Annual Report includes a fair review of the development and performance
of the business and position of the Company, together with a description of the
principal risks and uncertainties that it faces.
The Directors consider that the Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable and provide the information necessary
for Shareholders to assess the Company’s position and performance, business model
and strategy.
On behalf of the Board
Daniel Wright
Chairman
25 September 2024
STATEMENT OF DIRECTORS’
RESPONSIBILITIES IN RELATION
TO THE ANNUAL REPORT AND
FINANCIAL STATEMENTS
continued
Manchester and London Investment Trust plc
55
Annual Report & Financial Statements 2024
Manchester and London Investment Trust plc
56
Annual Report & Financial Statements 2024
INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS
Report on the audit of the Financial Statements
1. Opinion
In our opinion the Financial Statements of Manchester and London Investment Trust
plc (the ‘Company’):
• give a true and fair view of the state of the Company’s affairs as at 31 July 2024
and of its return for the year then ended;
• have been properly prepared in accordance with United Kingdom adopted
international accounting standard and the Statement of Recommended
Practice issued by the Association of Investment Companies in July 2022
“Financial Statements of Investment Trust Companies and Venture Capital
Trusts”; and
• have been prepared in accordance with the requirements of the Companies
Act 2006.
We have audited the Financial Statements which comprise:
• the statement of comprehensive income;
• the statement of changes in equity;
• the statement of financial position;
• the statement of cash flows and
• the related notes 1 to 19.
The financial reporting framework that has been applied in their preparation is
applicable law and United Kingdom adopted international accounting standards
and the Statement of Recommended Practice issued by the Association of Investment
Companies (“SORP”) in July 2022 “Financial Statements of Investment Trust Companies
and Venture Capital Trusts”.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK)
(ISAs (UK)) and applicable law. Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit of the Financial Statements
section of our report.
We are independent of the Company in accordance with the ethical requirements
that are relevant to our audit of the Financial Statements in the UK, including the
Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We confirm that we have not provided any non-audit
services prohibited by the FRC’s Ethical Standard to the Company.
We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Manchester and London Investment Trust plc
57
Annual Report & Financial Statements 2024
3. Summary of our audit approach
Key audit matters
The key audit matter that we identified in the current year was:
• Valuation and existence of listed investments
Within this report, key audit matter is identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
The materiality that we used in the current year was £3.34m which
was determined on the basis of 1% of net assets.
Scoping
We performed our audit scoping based upon quantitative and
qualitative risk assessment factors for each account balance
recorded as at 31 July 2024.
Significant changes
in our approach
There have been no significant changes to our audit approach
in the current year.
4. Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that the Directors’ use of
the going concern basis of accounting in the preparation of the Financial Statements
is appropriate.
Our evaluation of the Directors’ assessment of the Company’s ability to continue to
adopt the going concern basis of accounting included:
• Considering as part of our risk assessment the nature of the Company, its
business model and related risks, the requirements of the applicable financial
reporting framework and the system of internal control;
• Assessed the underlying data and key assumptions used to make the
assessment, and evaluating the Directors’ plans for future actions in relation to
their going concern assessment;
• Assessing the liquidity and ability of the Investment Manager to trade in the
investment portfolio to cover operational expenditure as appropriate; and
• Assessing the appropriateness of the going concern disclosure in note 1 to the
Financial Statements.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant
doubt on the Company’s ability to continue as a going concern for a period of at least
twelve months from when the Financial Statements are authorised for issue.
In relation to the reporting on how the Company has applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation
to the Directors’ statement in the Financial Statements about whether the Directors
considered it appropriate to adopt the going concern basis of accounting.
Manchester and London Investment Trust plc
58
Annual Report & Financial Statements 2024
Our responsibilities and the responsibilities of the Directors with respect to going
concern are described in the relevant sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the Financial Statements of the current period and include
the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team.
These matters were addressed in the context of our audit of the Financial Statements
as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
5.1. Valuation and existence of listed investments
Key audit matter
description
The listed investments of the company of £309m (2023: £188.3m)
make up 92.5% (2023: 85%) of total assets of the company at
31 July 2024.
There is a risk that the listed investments may not be valued
correctly or may not represent the assets of the company. Given
the nature and size of the balance and its importance to the
company, we have considered that there is a potential risk of
fraud in this area.
See the accounting policy in note 1 of the Financial Statements
and also note 9 of the Financial Statements.
How the scope
of our audit
responded to the
key audit matter
We performed the following procedures to address the key audit
matter identified:
• inspected the internal controls report over the administrator
to obtain an understanding of relevant controls;
• tested the controls relating to valuation and existence of
listed investments for the period of 7 months between the
date of the internal controls report and the company’s
year end;
• agreed 100% of the company’s listed investment portfolio
at the year end to confirmations received directly from
the depositary; and
• agreed 100% of the bid prices of listed investments on
the investment ledger at year end to closing bid prices
published by an independent pricing source.
Key observations Based on the work performed, we concluded that the valuation
and existence of listed investments are appropriate.
INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS continued
Manchester and London Investment Trust plc Annual Report & Financial Statements 2024
59
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the Financial Statements
that makes it probable that the economic decisions of a reasonably knowledgeable
person would be changed or influenced. We use materiality both in planning the
scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the Financial
Statements as a whole as follows:
Materiality £3.34m (2023: £2.2m)
Basis for determining
materiality
1% of net assets (2023: 1% of net assets)
Rationale for the
benchmark applied
We have used net assets as our materiality benchmark as we
consider it to be the most relevant indicator of the Company’s
performance for the users of the Financial Statements, as well as
being a key driver of shareholder value.
Materiality £3.34m
Audit Committee reporting
threshold £0.17m
Net assets
£334.00m
Net assets
Materiality
Manchester and London Investment Trust plc Annual Report & Financial Statements 2024
60
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the
probability that, in aggregate, uncorrected and undetected misstatements exceed
the materiality for the Financial Statements as a whole. Performance materiality was
set at 70% of materiality for the 2024 audit (2023: 70%). In determining performance
materiality, we considered the following factors:
a. The Company’s structure and operating model.
b. The continuity in place within the business from the previous year with both
management and the administrator.
c. The lack of changes to accounting policies during the current period which
would require significant judgement.
d. Our experience from prior period audits, where there has not been a history of
uncorrected misstatements or controls deficiencies.
e. Quality of the control environment and our ability to rely on controls over the
valuation and existence of listed investments.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all
audit differences in excess of £0.17m (2023: £0.11m), as well as differences below
that threshold that, in our view, warranted reporting on qualitative grounds. We
also report to the Audit Committee on disclosure matters that we identified when
assessing the overall presentation of the Financial Statements.
7. An overview of the scope of our audit
7.1. Scoping
Our audit scope was determined by obtaining an understanding of the Company
and its environment, including internal controls, and assessing the risks of material
misstatement. Audit work to respond to the risks of material misstatement was
performed directly by the audit engagement team.
7.2. Our consideration of the control environment
In assessing the company’s control environment, we considered controls in place
at the company’s service organisation which acts as administrator. As part of this,
we reviewed the System and Organisation Controls (SOC 1) Report of the service
organisation and have taken a controls reliance approach in respect of the controls
relating to valuation and existence of listed investments. For the period of 7 months
between the date of the SOC1 report and the company’s year end, we tested the
controls relating to valuation and existence of listed investments. We also reviewed
the controls report of the service organisation in respect of general IT controls.
Further, we obtained an understanding of relevant business processes and controls
that address the risk of material misstatement in financial reporting.
INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS continued
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7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change
on the business and its Financial Statements. The company continues to develop
its model for assessing and assigning an ESG score on existing and potential
investments based on assessment of the potential impacts of environmental, social
and governance (“ESG”) related risks, including climate change, as outlined on
pages 42 and 43. As a part of our audit, we process of identifying climate-related
risks and the impact on the company’s Financial Statements. We have read the
climate related disclosures in the annual report to consider whether they are
materially consistent with the Financial Statements and our knowledge obtained in
the audit.
8. Other information
The other information comprises the information included in the annual report, other
than the Financial Statements and our auditor’s report thereon. The Directors are
responsible for the other information contained within the annual report.
Our opinion on the Financial Statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the Financial Statements or
our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we
are required to determine whether this gives rise to a material misstatement in the
Financial Statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are
responsible for the preparation of the Financial Statements and for being satisfied
that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of Financial Statements that are
free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, the Directors are responsible for assessing
the Company’s ability to continue as a going concern, disclosing as applicable,
matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
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10. Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial
Statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these Financial Statements.
A further description of our responsibilities for the audit of the Financial Statements
is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
11. Extent to which the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined above, to
detect material misstatements in respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities,
including fraud and non-compliance with laws and regulations, we considered the
following:
• the nature of the industry and sector, control environment and business
performance including the design of the company’s remuneration policies,
key drivers for directors’ remuneration, bonus levels and performance targets;
• results of our enquiries of management, directors and the Audit Committee
about their own identification and assessment of the risks of irregularities,
including those that are specific to the company’s sector;
• any matters we identified having obtained and reviewed the Company’s
documentation of their policies and procedures relating to:
• identifying, evaluating and complying with laws and regulations and
whether they were aware of any instances of non-compliance;
• detecting and responding to the risks of fraud and whether they have
knowledge of any actual, suspected or alleged fraud; and
• the internal controls established to mitigate risks of fraud or non-compliance
with laws and regulations.
• the matters discussed among the audit engagement team and relevant internal
specialists, including tax, IT, and financial instrument specialists, regarding how
and where fraud might occur in the Financial Statements and any potential
indicators of fraud.
INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS continued
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As a result of these procedures, we considered the opportunities and incentives that
may exist within the organisation for fraud and identified the greatest potential for
fraud in the following area: valuation and existence of listed investments. In common
with all audits under ISAs (UK), we are also required to perform specific procedures to
respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that
the Company operates in, focusing on provisions of those laws and regulations that
had a direct effect on the determination of material amounts and disclosures in the
Financial Statements. The key laws and regulations we considered in this context
included the UK Companies Act, Listing Rules, and Investment Trust Tax Legislations.
In addition, we considered provisions of other laws and regulations that do not have
a direct effect on the Financial Statements but compliance with which may be
fundamental to the Company’s ability to operate or to avoid a material penalty.
11.2. Audit response to risks identified
As a result of performing the above, we identified the valuation and existence of
listed investments as a key audit matter related to the potential risk of fraud. The
key audit matters section of our report explains the matter in more detail and also
describes the specific procedures we performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the
following:
• reviewing the financial statement disclosures and testing to supporting
documentation to assess compliance with provisions of relevant laws and
regulations described as having a direct effect on the Financial Statements;
• enquiring of management and the Audit Committee concerning actual and
potential litigation and claims;
• performing analytical procedures to identify any unusual or unexpected
relationships that may indicate risks of material misstatement due to fraud;
• reading minutes of meetings of those charged with governance; and
• in addressing the risk of fraud through management override of controls,
testing the appropriateness of journal entries and other adjustments; assessing
whether the judgements made in making accounting estimates are indicative
of a potential bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud
risks to all engagement team members, including internal specialists, and remained
alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
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Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ remuneration report to be audited has been
properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the Directors’ report for the
financial year for which the Financial Statements are prepared is consistent with
the Financial Statements; and
• the strategic report and the Directors’ report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment
obtained in the course of the audit, we have not identified any material misstatements
in the strategic report or the Directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate Governance Statement
relating to the Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the Financial Statements and our knowledge obtained during the
audit:
• the Directors’ statement with regards to the appropriateness of adopting the
going concern basis of accounting and any material uncertainties identified
set out on page 72;
• the Directors’ explanation as to its assessment of the Company’s prospects,
the period this assessment covers and why the period is appropriate set out on
page 72;
• the Directors’ statement on fair, balanced and understandable set out on
page 54;
• the Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on page 22;
• the section of the annual report that describes the review of effectiveness of risk
management and internal control systems set out on page 41; and
• the section describing the work of the Audit Committee set out on pages 45 to
47.
INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS
continued
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14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our
audit; or
• adequate accounting records have not been kept, or returns adequate for
our audit have not been received from branches not visited by us; or
• the Financial Statements are not in agreement with the accounting records
and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion
certain disclosures of Directors’ remuneration have not been made or the part of the
Directors’ remuneration report to be audited is not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by
the Board of Directors on 28 November 2016 to audit the Financial Statements for
the year ending 31 July 2017 and subsequent financial periods. The period of total
uninterrupted engagement including previous renewals and reappointments of the
firm is 8 years, covering the years ending 31 July 2017 to 31 July 2024.
15.2. Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we
are required to provide in accordance with ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
Michael Caullay (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Glasgow, United Kingdom
25 September 2024
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NOTES FORMING PART OF THE
FINANCIAL STATEMENTS continued
For the year ended 31 July 2024
Annual Report & Financial Statements 2024
Manchester and London Investment Trust plc
67
Annual Report & Financial Statements 2024
Manchester and London Investment Trust plc
68
Annual Report & Financial Statements 2024
2024 2023
Notes
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Gains
Gains on investments at fair
value through profit or loss 9 357 123,556 123,913 296 29,284 29,580
Investment income 2 1,092 – 1,092 575 – 575
Bank interest 2 1,354 – 1,354 1,754 – 1,754
Gross return 2,803 123,556 126,359 2,625 29,284 31,909
Expenses
Management fee 3 (1,458) – (1,458) (532) – (532)
Other operating expenses 4 (563) – (563) (499) – (499)
Total expenses (2,021) – (2,021) (1,031) – (1,031)
Return before finance costs
and tax 782 123,556 124,338 1,594 29,284 30,878
Finance costs 5 (68) (2,966) (3,034) (38) (2,009) (2,047)
Return on ordinary activities
before tax 714 120,590 121,304 1,556 27,275 28,831
Taxation 6 (144) – (144) (77) – (77)
Return on ordinary activities
after tax 570 120,590 121,160 1,479 27,275 28,754
Return per Share pence pence pence pence pence pence
Basic and fully diluted 8 1.42 300.03 301.45 3.67 67.78 71.45
The total column of this statement is the Income Statement of the Company prepared in accordance
with international accounting standards in conformity with the requirements of the Companies Act
2006. The supplementary revenue return and capital return columns are presented in accordance
with the Statement of Recommended Practice issued by the Association of Investment Companies
(“AIC SORP”).
All revenue and capital items in the above statement derive from continuing operations. No
operations were acquired or discontinued during the year.
There is no other comprehensive income, and therefore the return for the year after tax is also the
total comprehensive income.
STATEMENT OF COMPREHENSIVE
INCOME
For the year ended 31 July 2024
The notes on pages 72 to 89 form part of these Financial Statements.
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Annual Report & Financial Statements 2024
The notes on pages 72 to 89 form part of these Financial Statements.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 July 2024
Notes
Share
capital
£’000
Share
premium
£’000
Special
reserve**
£’000
Capital
reserve*
£’000
Retained
earnings**
£’000
Total
£’000
Balance at 1 August 2023 10,132 25,888 94,338 91,021 – 221,379
Changes in equity for 2024
Ordinary shares bought back and
held in treasury 14 – – – – – –
Total comprehensive income – – – 120,590 570 121,160
Dividends paid 7 – – (7,870) – (570) (8,440)
Balance at 31 July 2024 10,132 25,888 86,468 211,611 – 334,099
Balance at 1 August 2022 10,132 25,888 98,780 63,746 – 198,546
Changes in equity for 2023
Ordinary shares bought back and
held in treasury 14 – – (289) – – (289)
Total comprehensive income – – – 27,275 1,479 28,754
Dividends paid 7 – – (4,153) – (1,479) (5,632)
Balance at 31 July 2023 10,132 25,888 94,338 91,021 – 221,379
* Within the balance of the capital reserve, £50,175,000 relates to realised gains (2023: £33,340,000). Realised
gains are distributable by way of a dividend. The remaining £161,436,000 relates to unrealised gains on
financial instruments (2023: £57,681,000) and is non-distributable.
** Fully distributable.
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Annual Report & Financial Statements 2024
Notes 2024
£’000
2023
£’000
Non-current assets
Investments at fair value through profit or loss
9 309,002 188,264
Current assets
Unrealised derivative assets
13 4,866 5,680
Trade and other receivables 10 419 147
Cash and cash equivalents 11 7,187 17,049
Cash collateral receivable from brokers 13 16,371 12,186
28,843 35,062
Creditors – amounts falling due within one year
Unrealised derivative liabilities
13 (3,248) (1,411)
Trade and other payables 12 (498) (277)
Cash collateral payable to brokers 13 – (259)
(3,746) (1,947)
Net current assets 25,097 33,115
Net assets 334,099 221,379
Capital and reserves
Ordinary Share Capital
14 10,132 10,132
Share premium 25,888 25,888
Special Reserves 86,468 94,338
Capital reserve 211,611 91,021
Retained earnings – –
Total equity 334,099 221,379
Basic and fully diluted NAV per Share 15 831.24p 550.79p
Number of Shares in issue excluding treasury 14 40,193,018 40,193,018
The Financial Statements on pages 68 to 89 were approved by the Board of Directors and authorised
for issue on 25 September 2024 and are signed on its behalf by:
Daniel Wright
Chairman
Manchester and London Investment Trust Public Limited Company
Company Number: 01009550
STATEMENT OF FINANCIAL POSITION
As at 31 July 2024
The notes on pages 72 to 89 form part of these Financial Statements.
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Annual Report & Financial Statements 2024
2024
£’000
2023
£’000
Cash flow from operating activities
Return on operating activities before tax
121,304 28,831
Interest expense 3,034 2,047
Gains on investments held at fair value through profit or loss (123,533) (27,810)
Increase in receivables (34) (116)
Increase in payables 163 26
Exchange gains on Currency Balances (23) (1,473)
Tax (144) (77)
Net cash generated from operating activities 767 1,428
Cash flow from investing activities
Purchases of investments
(79,749) (116,934)
Sales proceeds 65,875 73,120
Derivative instrument cashflows 14,638 17,023
Net cash inflow/(outflow) from investing activities 764 (26,791)
Cash flow from financing activities
Ordinary shares bought back and held in treasury
– (289)
Equity dividends paid (8,440) (5,632)
Interest paid (2,976) (1,980)
Net cash used in financing activities (11,416) (7,901)
Net decrease in cash and cash equivalents (9,885) (33,264)
Exchange gains on Currency Balances 23 1,473
Cash and cash equivalents at beginning of year 17,049 48,840
Cash and cash equivalents at end of year 7,187 17,049
STATEMENT OF CASH FLOWS
For the year ended 31 July 2024
The notes on pages 72 to 89 form part of these Financial Statements.
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Annual Report & Financial Statements 2024
NOTES FORMING PART OF THE
FINANCIAL STATEMENTS
For the year ended 31 July 2024
1. General information and accounting policies
Manchester and London Investment Trust plc is a public limited company incorporated in the UK
and registered in England and Wales. The principal activity of the Company is that of an investment
trust company within the meaning of Sections 1158/1159 of the Corporation Tax Act 2010 and its
investment approach is detailed in the Strategic Report.
The Company’s Financial Statements have been prepared in accordance with United Kingdom
adopted international accounting standards in conformity with the requirements of the Companies
Act 2006. The Financial Statements have also been prepared in accordance with the AIC SORP for
the financial statements of investment trust companies and venture capital trusts.
Basis of preparation
In order to better reflect the activities of an investment trust company and in accordance with the
AIC SORP, supplementary information which analyses the Statement of Comprehensive Income
between items of revenue and capital nature has been prepared alongside the Statement of
Comprehensive Income.
The Financial Statements are presented in Sterling, which is the Company’s functional currency as
the UK is the primary environment in which it operates, rounded to the nearest £’000, except where
otherwise indicated.
Going concern
The financial statements have been prepared on a going concern basis and on the basis that approval
as an investment trust company will continue to be met.
The Directors have made an assessment of the Company’s ability to continue as a going concern and
are satisfied that the Company has adequate resources to continue in operational existence for a
period of at least 12 months from the date when these financial statements were approved.
In making the assessment, the Directors of the Company have considered the likely impacts of
international and economic uncertainties on the Company, operations and the investment portfolio.
These include, but are not limited to, the impact of another pandemic, the war in Ukraine, political
instability across Europe, supply shortages and inflationary pressures.
The Directors noted that the Company, with the current cash balance and holding a portfolio of listed
investments, is able to meet the obligations of the Company as they fall due. The current cash balance,
enables the Company to meet any funding requirements and finance future additional investments.
The Company is a closed-end fund, where assets are not required to be liquidated to meet day to
day redemptions.
The Directors have completed stress tests assessing the impact of changes in market value and income
with associated cash flows. In making this assessment, they have considered plausible downside
scenarios. These tests were driven by the possible effects of continuation of the COVID-19 pandemic
but, as an arithmetic exercise, apply equally to any other set of circumstances in which asset value
and income are significantly impaired. The conclusion was that in a plausible downside scenario
the Company could continue to meet its liabilities. Whilst the economic future is uncertain, and the
Directors believe that it is possible the Company could experience further reductions in income and/or
market value, the opinion of the Directors is that this should not be to a level which would threaten the
Company’s ability to continue as a going concern.
The Directors, the Manager and other service providers have put in place contingency plans to
minimise disruption. Furthermore, the Directors are not aware of any material uncertainties that may
cast significant doubt on the Company’s ability to continue as a going concern, having taken into
account the liquidity of the Company’s investment portfolio and the Company’s financial position in
respect of its cash flows, borrowing facilities and investment commitments (of which there are none
of significance). Therefore, the financial statements have been prepared on the going concern basis.
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Annual Report & Financial Statements 2024
1. General information and accounting policies continued
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single segment of business,
being investment business. The Company primarily invests in companies listed on recognised
international exchanges.
Accounting developments
In the year under review, the Company has applied amendments to IFRS issued by the IASB
adopted in conformity with UK adopted international accounting standards. These include annual
improvements to IFRS, changes in standards, legislative and regulatory amendments, changes in
disclosure and presentation requirements. This incorporated:
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
• Definition of Accounting Estimates (Amendments to IAS 8);
• Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction – Amendments
to IAS 12 Income Taxes; and
The adoption of the changes to accounting standards has had no material impact on these or
prior years’ financial statements. There are amendments to IAS/IFRS that will apply from 1 August
2024 as follows:
• Classification of liabilities as current or non-current (Amendments to IAS 1);
• Non-current liabilities with Covenants (Amendments to IAS1;
• Supplier Finance Arrangements – Amendments to IAS7 and IFRS7; and
• Annual improvements to IFRS Standards.
The Directors do not anticipate the adoption of these will have a material impact on the
financial statements.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of policies and the reported
amounts in the financial statements. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates.
There were no significant accounting estimates or critical accounting judgements in the year.
Manchester and London Investment Trust plc
74
NOTES FORMING PART OF THE
FINANCIAL STATEMENTS continued
For the year ended 31 July 2024
Annual Report & Financial Statements 2024
1. General information and accounting policies continued
Investments
Investments are measured initially, and at subsequent reporting dates, at fair value through profit
and loss, and derecognised at trade date where a purchase or sale is under a contract whose
terms require delivery within the timeframe of the relevant market. For listed equity investments, this
is deemed to be closing prices.
Changes in fair value of investments are recognised in the Statement of Comprehensive Income
as a capital item. On disposal, realised gains and losses are also recognised in the Statement of
Comprehensive Income as capital items.
All investments for which fair value is measured or disclosed in the Financial Statements are
categorised within the fair value hierarchy in note 9.
Financial instruments
The Company may use a variety of derivative instruments, including equity swaps (also referred
to as contracts for differences), futures, forwards and options under master agreements with the
Company’s derivative counterparties to enable the Company to gain long and short exposure on
individual securities.
The Company recognises financial assets and financial liabilities when it becomes a party to the
contractual provisions of the instrument. Listed options and futures contracts are recognised at fair
value through profit or loss valued by reference to the underlying market value of the corresponding
security, traded prices and/or third party information.
Notional dividend income arising on long positions is recognised in the Statement of Comprehensive
Income as revenue. Interest expenses on open long positions are allocated to capital. All remaining
interest or financing charges on derivative contracts are allocated to the revenue account.
Unrealised changes to the value of securities in relation to derivatives are recognised in the
Statement of Comprehensive Income as capital items.
Foreign currency
Transactions denominated in foreign currencies are converted to Sterling at the actual exchange
rate as at the date of the transaction. Monetary assets and liabilities and non-monetary assets held
at fair value denominated in foreign currencies at the year end are translated at the Statement
of Financial Position date. Any gain or loss arising from a change in exchange rate subsequent to
the date of the transaction is included as an exchange gain or loss in the capital reserve or the
revenue account depending on whether the gain or loss is capital or revenue in nature.
Cash and cash equivalents
Cash comprises cash in hand and overdrafts. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to
insignificant risk of changes in value.
For the purposes of the Statement of Financial Position and the Statement of Cash Flows, cash and
cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank
overdrafts when applicable.
Cash held in margin/collateral accounts at the Company’s brokers is presented as Cash collateral
receivable from brokers in the financial statements. Any cash collateral owed back to the brokers
on marked to market gains of Equity Swaps is shown in the financial statements as Cash collateral
payable to brokers.
Trade receivables, trade payables and short-term borrowings
Trade receivables, trade payables and short-term borrowings are measured at amortised cost.
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Annual Report & Financial Statements 2024
1. General information and accounting policies continued
Revenue recognition
Revenue is recognised when it is probable that economic benefits associated with a transaction
will flow to the Company and the revenue can be reliably measured.
Dividends from overseas companies are shown gross of any non-recoverable withholding taxes
which are disclosed separately in the Statement of Comprehensive Income.
Dividends receivable on quoted equity shares are taken to revenue on an ex-dividend basis.
Dividends receivable on equity shares where no ex-dividend date is quoted are brought into
account when the Company’s right to receive payment is established.
All other income is accounted for on a time-apportioned basis and recognised in the Statement of
Comprehensive Income.
Expenses
All expenses are accounted for on an accruals basis and are charged to revenue. All other
administrative expenses are charged through the revenue column in the Statement of
Comprehensive Income.
Finance costs
Finance costs are accounted for on an accruals basis.
Financing charged by the Prime Brokers on open long positions are allocated to capital, with other
finance costs being allocated to revenue.
Taxation
The charge for taxation is based on the net revenue for the year and any deferred tax.
Deferred tax is provided using the liability method on temporary differences between the tax bases
of assets and liabilities and their carrying amount for financial reporting purposes at the reporting
date. Deferred tax assets are only recognised if it is considered more likely than not that there will
be suitable profits from which the future reversal of timing differences can be deducted. In line
with recommendations of the AIC SORP, the allocation method used to calculate the tax relief on
expenses charged to capital is the “marginal” basis. Under this basis, if taxable income is capable
of being offset entirely by expenses charged through the revenue account, then no tax relief is
transferred to the capital account.
No taxation liability arises on gains from sales of investments by the Company by virtue of its
investment trust status. However, the net revenue (excluding investment income) accruing to the
Company is liable to corporation tax at prevailing rates.
Dividends payable to Shareholders
Dividends to Shareholders are recognised as a liability in the period in which they are approved
and are taken to the Statement of Changes in Equity. Dividends declared and approved by the
Company after the Statement of Financial Position date have not been recognised as a liability of
the Company at the Statement of Financial Position date.
Share capital
The share capital is the nominal value of issued ordinary shares and is not distributable.
Manchester and London Investment Trust plc
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NOTES FORMING PART OF THE
FINANCIAL STATEMENTS continued
For the year ended 31 July 2024
Annual Report & Financial Statements 2024
1. General information and accounting policies continued
Share premium
The Share premium account represents the accumulated premium paid for Shares issued in
previous periods above their nominal value less issue expenses. This is a reserve forming part of the
non-distributable reserves. The following items are taken to this reserve:
• costs associated with the issue of equity;
• premium on the issue of Shares; and
• premium on the sales of Shares held in Treasury over the market value.
Special Reserve
The special reserve was created by a cancellation of the share premium account increasing the
distributable reserves of the Company. The special reserve is distributable, and the following items
are taken to this reserve:
• costs of share buy-backs, including related stamp duty and transaction costs; and
• dividends.
Capital reserve
The following are taken to capital reserve:
• gains and losses on the realisation of investments;
• increases and decreases in the valuation of the investments held at the year end;
• cost of share buy backs;
• exchange differences of a capital nature; and
• expenses, together with the related taxation effect, allocated to this reserve in accordance
with the above policies.
Retained earnings
The revenue reserve represents accumulated revenue account profits and losses. The surplus
accumulated profits are distributable by way of dividends.
2. Income
2024
£’000
2023
£’000
Dividends from listed investments 1,092 575
Bank interest 1,354 1,754
2,446 2,329
Manchester and London Investment Trust plc
77
Annual Report & Financial Statements 2024
3. Management fee
2024
£’000
2023
£’000
Base fee 1,399 473
Risk management and valuation fee 59 59
1,458 532
The Management Fee payable to the Manager is equal to 0.5% per annum of the Company’s NAV
(the “Base Fee”), calculated as at the last business day of each calendar month (the “Calculation
Date”), and is paid monthly arrears. An uplift of 0.25% of the NAV will be applied to the fee, should
the performance of the Company over the 36-month period to the Calculation Date be above
that of the Company’s benchmark. Should the performance of the Company over the 36-month
period to the Calculation Date be below that of the Company’s benchmark, a downward
adjustment of 0.25% of the NAV will be applied to the fee.
It was announced on 2 September 2024, that with effect 1 September 2024, the Board agreed with
the Manager a new tiered management fee replacing the current fee arrangements.
Tiered Management Fee:
• 0.7% per annum of the NAV up to and including £750 million;
• 0.5% per annum of the NAV between £750 million and £1.5 billion; and
• 0.3% per annum of the NAV above £1.5 billion.
There will be no performance fee payable to the Manager.
Risk Management and Valuation fee:
There will be no change to the Risk Management and Valuation fee, however, the fee will be
adjusted annually in January by the UK Consumer Prices Index (“CPI”) with the first increase being
in January 2026 on the basis of the January 2026 CPI (percentage change over 12 months) figure.
The Board believes that the new fee structure offers a simpler and more predictable arrangement,
removes the unnecessary volatility in ongoing charges for shareholders and allows the Manager
to better plan for the future and broaden the expertise of the management team supporting the
Company. It also addresses concerns raised by proxy advisors and compliance departments over
the variability of the fee arrangements.
Also, the Board believes that the changes have the potential to generate cost savings for
shareholders in both the short and long-term, in particular, if the Company were to see a material
increase in NAV.
In addition, a Risk Management and Valuation fee equating to £59,000 on an annualised basis is
charged by the AIFM. The Manager is also reimbursed any expenses incurred by it on behalf of
the Company.
Manchester and London Investment Trust plc
78
NOTES FORMING PART OF THE
FINANCIAL STATEMENTS continued
For the year ended 31 July 2024
Annual Report & Financial Statements 2024
4. Other operating expenses
2024
£’000
2023
£’000
Directors’ fees 102 95
Auditors’ remuneration 37 35
Registrar fees 32 27
Depositary fees 101 69
Other expenses 291 273
563 499
Other operating expenses include irrecoverable VAT where appropriate, excluding the Auditors’
and Directors’ remuneration which have been shown net of VAT.
No non-audit services were provided by Deloitte LLP in the year to 31 July 2024.
5. Finance costs
2024
£’000
2023
£’000
Charged to revenue 68 38
Charged to capital* 2,966 2,009
3,034 2,047
* Finance costs charged to capital relate to interest on equity swaps.
6. Taxation
a) Analysis of charge in year.
Year to
31 July 2024
Year to
31 July 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Current tax:
Overseas tax not recoverable 144 – 144 77 – 77
144 – 144 77 – 77
Manchester and London Investment Trust plc
79
Annual Report & Financial Statements 2024
6. Taxation continued
b) The current taxation charge for the year is lower than the standard rate of Corporation Tax in
the UK of 25% (2023: 25%).
The differences are explained below:
Net return before taxation 714 120,590 121,304 1,556 27,275 28,831
Theoretical tax at UK corporation tax
rate of 25% (2023: 21%)* 178 30,147 30,325 327 5,728 6,055
Effects of:
UK dividends that are not taxable – – – (6) – (6)
Foreign dividends that are not taxable (208) – (208) (115) – (115)
Non-taxable investment gains – (30,889) (30,889) – (6,150) (6,150)
Offshore income gains 63 – 63 – – –
Irrecoverable overseas tax 144 – 144 77 – 77
Unrelieved excess expenses (33) 742 709 (206) 422 (216)
Total tax charge 144 – 144 77 – 77
* The theoretical tax rate is calculated using a blended tax rate over the year.
c) Factors that may affect future tax charges.
At 31 July 2024, there is an unrecognised deferred tax asset, measured at the latest enacted tax
rate of 25%, of £4,775,000 (2023: £4,070,000). This deferred tax asset relates to surplus management
expenses and non trade loan relationship debits. It is unlikely that the company will generate sufficient
taxable profits in the foreseeable future to recover these amounts and therefore the asset has not been
recognised in the year, or in prior years.
As at 31 July 2024, the company has unrelieved capital losses of £9,329,000 (2023: £9,329,000). There is
therefore, a related unrecognised deferred tax asset, measured at the latest enacted rate of 25%, of
£2,332,000 (2023: £2,332,000). These capital losses can only be utilised to the extent that the company
does not qualify as an investment trust in the future and, as such, the asset has not been recognised.
Manchester and London Investment Trust plc
80
NOTES FORMING PART OF THE
FINANCIAL STATEMENTS continued
For the year ended 31 July 2024
Annual Report & Financial Statements 2024
7. Dividends
Amounts recognised as distributions to equity holders in the year:
2024
£’000
2023
£’000
Final ordinary dividend for the year ended 31 July 2023 of 7.0p (2022:
7.0p) per share 2,813 2,819
Interim ordinary dividend for the year ended 31 July 2024 of 7.0p (2023:
7.0p) per share 2,813 2,813
Special dividend for the year ended 31 July 2024 of 7.0p (2023: Nil) per
share 2,814 –
8,440 5,632
The Directors are proposing a final dividend of 7.0p for the financial year 2024.
These proposed dividends have been excluded as a liability in these Financial Statements in
accordance with IFRS.
We also set out below the total dividend payable in respect of the financial year, which is the basis
on which the requirements of Section 1158 of the Corporation Tax Act 2010 are considered.
Included in the dividend distributions to equity holders in the year is £7,870,000 (2023: £4,153,000)
paid from special reserve.
2024
£’000
2023
£’000
Interim ordinary dividend for the year ended 31 July 2024 of 7.0p (2023:
7.0p) per Share 2,813 2,813
Special dividend for the year ended 31 July 2024 of 7.0p (2023: Nil) per
share 2,814 –
Proposed final ordinary dividend* for the year ended 31 July 2024
of 7.0p (2023: 7.0p) per Share 2,814* 2,813
8,441 5,626
* Based on Shares in circulation on 31 July 2024 (excluding Shares held in treasury).
8. Return per Share
Net Return
£’000
2024
Weighted
Average
Shares
Total
(p)
Net Return
£’000
2023
Weighted
Average
Shares
Total
(p)
Basic and fully diluted return:
Net revenue return after taxation 570
40,193,018 1.42 1,479 40,242,768 3.67
Net capital return after taxation 120,590
40,193,018 300.03 27,275 40,242,768 67.78
Total 121,160
40,193,018 301.45 28,754 40,242,768 71.45
Basic revenue, capital and total return per Share is based on the net revenue, capital and
total return for the period and on the weighted average number of Shares in issue of 40,193,018
(2023: 40,242,768).
Manchester and London Investment Trust plc
81
Annual Report & Financial Statements 2024
9. Investments at fair value through profit or loss
2024
£’000
2023
£’000
Analysis of investment portfolio movements
Opening cost at 1 August
136,155 82,500
Opening unrealised appreciation at 1 August 52,109 45,611
Opening fair value at 1 August 188,264 128,111
Movements in the year
Purchases at cost
79,749 116,009
Sales of investments (66,024) (73,432)
Realised profit on sales 2,006 11,078
Increase in unrealised appreciation 105,007 6,498
Closing fair value at 31 July 309,002 188,264
Closing cost at 31 July 151,886 136,155
Closing unrealised appreciation at 31 July 157,116 52,109
Closing fair value at 31 July 309,002 188,264
Fair value hierarchy
Financial assets of the Company are carried in the Statement of Financial Position at fair value.
The fair value is the amount at which the asset could be sold or the liability transferred in an orderly
transaction between market participants, at the measurement date, other than a forced or
liquidation sale. The Company measures fair values using the following hierarchy that reflects the
significance of the inputs used in making the measurements.
Categorisation within the hierarchy has been determined on the basis of the lowest level input that
is significant to the fair value measurement of the relevant assets as follows:
• Level 1 – valued using quoted prices unadjusted in an active market.
• Level 2 – valued by reference to valuation techniques using observable inputs for the asset
or liability other than quoted prices included in Level 1.
• Level 3 – valued by reference to valuation techniques using inputs that are not based on
observable market data for the asset or liability.
Manchester and London Investment Trust plc
82
NOTES FORMING PART OF THE
FINANCIAL STATEMENTS continued
For the year ended 31 July 2024
Annual Report & Financial Statements 2024
9. Investments at fair value through profit or loss continued
The tables below set out fair value measurements of financial instruments as at the year end, by
their category in the fair value hierarchy into which the fair value measurement is categorised.
Financial assets/liabilities at fair value through profit or loss at 31 July 2024
Level 1
£’000
Level 2
£’000
Total
£’000
Investments 309,002 – 309,002
Unrealised Derivative Assets – 4,866 4,866
Unrealised Derivative Liability – (3,248) (3,248)
Total 309,002 1,618 310,620
Financial assets/liabilities at fair value through profit or loss at 31 July 2023
Level 1
£’000
Level 2
£’000
Total
£’000
Investments 188,264 – 188,264
Unrealised Derivative Assets – 5,680 5,680
Unrealised Derivative Liability – (1,411) (1,411)
Total 188,264 4,269 192,533
There have been no transfers during the year between Level 1 and 2 fair value measurements.
Transaction costs
During the year, the Company incurred transaction costs of £154,000 (2023: £176,000) on the
purchase and disposal of investments.
Analysis of capital gains and losses
2024
£’000
2023
£’000
Gains on sales of investments 2,006 11,078
Investment holding gains 105,007 6,498
Realised gains on derivatives 17,684 7,238
Unrealised (losses)/gains on derivatives (1,252) 3,309
123,445 28,123
Realised gains on currency balances and trade settlements 111 1,161
Dividend income in respect of equity swaps 357 296
123,913 29,580
Manchester and London Investment Trust plc
83
Annual Report & Financial Statements 2024
10. Trade and other receivables
2024
£’000
2023
£’000
Dividends receivable 52 6
Due from brokers 237 –
Interest receivable 95 105
Prepayments 35 36
419 147
11. Cash and cash equivalents
2024
£’000
2023
£’000
Cash and cash equivalents 7,187 17,049
7,187 17,049
As at the balance sheet date, the Company held shares valued at £11,000 (2023: £3,852,000) in the
Morgan Stanley Sterling Liquidity fund, which has been classified as a Cash equivalent (see Note 1).
12. Trade and other payables
2024
£’000
2023
£’000
Due to Brokers 6 –
Accruals 492 277
498 277
13. Derivatives
The Company may use a variety of derivative contracts under master agreements with the
Company’s derivative counterparties to enable it to gain long and short exposure, including Options
and Equity Swaps (which are synthetic equities), and are valued by reference to the market values of
the investments’ underlying securities.
The sources of the return under the Equity Swap contracts (e.g. notional dividends, financing costs,
interest returns and realised and unrealised gains and losses) are allocated to the revenue and capital
accounts in alignment with the nature of the underlying source of income.
• Notional dividend income or expense arising on long or short positions is apportioned wholly
to the revenue account.
• Notional interest or financing charges on open long positions are apportioned wholly to
the capital account. All remaining interest or financing charges on derivative contracts are
allocated to the revenue account.
• Changes in value relating to underlying price movements of securities in relation to Equity
Swap exposures are allocated to capital.
Manchester and London Investment Trust plc
84
NOTES FORMING PART OF THE
FINANCIAL STATEMENTS continued
For the year ended 31 July 2024
Annual Report & Financial Statements 2024
13. Derivatives continued
The fair values of derivative financial assets are set out in the table below:
2024
Original
£’000
2023
£’000
Unrealised derivative assets 4,866 5,680
Cash collateral receivable from brokers 16,371 12,186
Unrealised derivative liabilities (3,248) (1,411)
Cash collateral payable to brokers – (259)
The corresponding gross exposure on long equity swaps as at 31 July 2024 was £65,982,000
(2023: £60,756,000) and the total gross exposure of short equity swaps was £5,272,000
(2023: £5,203,000). The net marked to market futures and options total value as at 31 July 2024 was
negative £1,697,000 (2023: negative £1,064,000).
As at 31 July 2024, the Company held cash and cash equivalent balances of £7,187,000
(2023: £17,049,000). The Company also pledged cash of £16,371,000 (2023: £12,186,000) on collateral
accounts with counterparty brokers specifically for derivatives (including exchange traded
derivatives positions and non-exchange traded swap positions). This cash represents collateral
posted to broker deposit accounts in relation to amounts due to brokers in order to maintain open
positions and constitute a number of types of margin required (such as initial, marked to market
variation etc).
The nature of the Company’s portfolio means that the Company gains significant exposure to a
number of markets through Equity Swaps. The Company may use Equity Swaps to manage gearing.
However, to the extent the Manager has elected not to be geared, the Company will generally
hold a level of cash (or equivalent holding in the Cash Fund) on its balance sheet representative
of the difference between the cost of purchasing investments directly and the lower initial cost of
making a margin payment on an Equity Swap contract.
As at 31 July 2024, the Company also owed £nil (2023: £259,000) to brokers in respect of cash
collateral received relating to amounts owed by these brokers to cover unrealised gains on open
Equity Swaps on the Statement of Financial Position. To the extent there are unrealised losses on
Equity Swap contracts uncovered by balances held at the broker, the Company will transfer deposit
monies across to these broker margin deposit accounts. The Manager monitors margin positions on
a daily basis to ensure any margin deposit balances are as expected and any amounts owed to
the Company are transferred on a timely basis. In the event of default, a proportion of the monies
held in the collateral accounts resides with the counterparty broker.
Manchester and London Investment Trust plc
85
Annual Report & Financial Statements 2024
14. Share capital
2024 2023
Share capital
Number
of Shares
Nominal
value £’000
Number
of Shares
Nominal
value £’000
Shares of 25p each issued
and fully paid
Balance as at 1 August
40,528,238 10,132 40,528,238 10,132
Shares issued – – – –
Balance as at 31 July 40,528,238 10,132 40,528,238 10,132
Treasury shares
Balance as at 1 August
335,220 258,183
Buyback of Ordinary Shares into Treasury – 77,037
Balance at end of year 335,220 335,220
Total Ordinary Share capital excluding
Treasury shares 40,193,018 40,193,018
No shares were issued during the year (2023: nil).
During the year, nil Ordinary Shares (2023: 77,037) were bought back and held in treasury for total
cost of £nil.
15. NAV per Share
NAV per Share Net assets attributable
2024
(p)
2023
(p)
2024
£’000
2023
£’000
Shares: basic and fully diluted 831.24 550.79 334,099 221,379
The basic NAV per Share is based on net assets at the year end and 40,193,018 (2023: 40,193,018)
Shares in issue, adjusted for any Shares held in Treasury.
16. Risks – investments, financial instruments and other risks
Investment objective and policy
The Company’s investment objective and policy are detailed on pages 17 and 18.
The investing activities in pursuit of its investment objective involve certain inherent risks.
The Company’s financial instruments can comprise:
• shares and debt securities held in accordance with the Company’s investment objective
and policy;
• derivative instruments for trading, hedging and investment purposes;
• cash, liquid resources and short-term debtors and creditors that arise from its operations; and
• current asset investments and trading.
Risks
The risks identified arising from the Company’s financial instruments are market risk (which comprises
market price risk and interest rate risk), liquidity risk and credit and counterparty risk. The Company
may enter into derivative contracts to manage risk. The Board reviews and agrees policies for
managing each of these risks, which are summarised below.
These policies remained unchanged since the beginning of the accounting period.
Manchester and London Investment Trust plc
86
NOTES FORMING PART OF THE
FINANCIAL STATEMENTS continued
For the year ended 31 July 2024
Annual Report & Financial Statements 2024
16. Risks – Investments, financial instruments and other risks continued
Market risk
Market risk arises mainly from uncertainty about future prices of financial instruments used in the
Company’s business. It represents the potential loss the Company might suffer through holding
market positions by way of price movements, interest rate movements and exchange rate
movements. The Company assesses the exposure to market risk when making each investment
decision and these risks are monitored by the Manager on a regular basis and the Board at
quarterly meetings with the Manager.
Details of the long equity exposures held at 31 July 2024 are shown on page 11.
If the price of these investments and equity swaps had increased by 5% at the reporting date
with all other variables remaining constant, the capital return in the Statement of Comprehensive
Income and the net assets attributable to equity holders of the Company would increase by
£18,486,000 (2023: £12,191,000).
A 5% decrease in share prices would have resulted in an equal and opposite effect of £18,486,000
(2023: £12,191,000), on the basis that all other variables remain constant. This level of change is
considered to be reasonable based on observation of current market conditions.
At the year end, the Company’s direct equity exposure to market risk was as follows:
Company
2024
£’000
2023
£’000
Equity long exposures
Investments held in equity form
309,002 188,264
Long exposure held in equity swap hedges 65,982 60,756
374,984 249,020
Short exposure held in equity swap hedges (5,272) (5,203)
369,712 243,817
Interest rate risk
Interest rate risk arises from uncertainty over the interest rates charged by financial institutions.
It represents the potential increased costs of financing for the Company. The Manager actively
monitors interest rates and the Company’s ability to meet its financing requirements throughout the
year and reports to the Board. No sensitivity analysis is presented because, as at the financial year
end, the Company held zero balances invested in bonds or fixed interest securities. The Company is
charged interest on its Equity Swap positions but these may be partially offset with interest received
on cash, collateral and cash equivalent balances.
Liquidity risk
Liquidity risk reflects the risk that the Company will have insufficient funds to meet its financial
obligations as they fall due. The Directors have minimised liquidity risk by investing in a portfolio of
quoted companies that are readily realisable.
The Company’s uninvested funds are held almost entirely with the Prime Brokers or on deposits with
UK banking institutions.
Manchester and London Investment Trust plc
87
Annual Report & Financial Statements 2024
16. Risks – Investments, financial instruments and other risks continued
As at 31 July 2024, the financial liabilities comprised:
Company
2024
£’000
2023
£’000
Unrealised derivative liabilities 2,959 1,411
Trade payables and accruals 498 277
Cash collateral payable to brokers – 259
3,457 1,947
The above liabilities are stated at amortised cost or fair value.
The Company manages liquidity risk through constant monitoring of the Company’s gearing
position to ensure the Company is able to satisfy any and all debts within the agreed credit terms.
Currency rate risk
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. If Sterling had strengthened by 5% against all
other currencies at the reporting date, with all other variables remaining constant, the total return
in the Statement of Comprehensive Income and the net assets attributable to equity holders of
the Company, assuming the Company held no balances in Sterling, would have decreased by
£16,704,000 (2023: £11,069,000). If Sterling had weakened by 5% against all currencies, there would
have been an equal and opposite effect. This level of change is considered to be reasonable
based on observation of current market conditions.
The Company’s material foreign currency exposures are laid out below.
As at 31 July 2024
Sterling
£’000
US Dollar
£’000
Euro
£’000
Total
£’000
Investments 2,197 306,805 – 309,002
Unrealised derivative assets – 4,866 – 4,866
Cash and cash equivalents 479 7,585 (877) 7,187
Cash collateral receivable from brokers 8,457 7,111 803 16,371
Unrealised derivative liabilities – (2,535) (713) (3,248)
Other net liabilities (79) – – (79)
11,054 323,832 (787) 334,099
Manchester and London Investment Trust plc
88
NOTES FORMING PART OF THE
FINANCIAL STATEMENTS continued
For the year ended 31 July 2024
Annual Report & Financial Statements 2024
16. Risks – Investments, financial instruments and other risks continued
As at 31 July 2023
Sterling
£’000
US Dollar
£’000
Euro
£’000
Total
£’000
Investments 1,641 186,623 – 188,264
Unrealised derivative assets – 4,522 1,158 5,680
Cash and cash equivalents 6,450 10,865 (266) 17,049
Cash collateral receivable from brokers 6,746 5,214 226 12,186
Unrealised derivative liabilities – (1,232) (179) (1,411)
Cash collateral payable to brokers (259) – – (259)
Other net liabilities (130) – – (130)
14,448 205,992 939 221,379
The Company constantly monitors currency rate risk to ensure balances, wherever possible, are
translated at rates favourable to the Company.
Credit and counterparty risk
Credit risk is the risk of financial loss to the Company if the contractual party to a financial instrument
fails to meet its contractual obligations.
The maximum exposure to credit risk as at 31 July 2024 was £28,843,000 (2023: £35,062,000). The
calculation is based on the Company’s credit risk exposure as at 31 July 2023 and this may not be
representative for the whole year.
The Company’s quoted investments are held on its behalf by the Prime Brokers. Bankruptcy or
insolvency of the Prime Brokers may cause the Company’s rights with respect to securities held
by the Prime Brokers to be delayed. The Manager and the Board monitor the Company’s risk
and exposures.
Where the Manager makes an investment in a bond, corporate or otherwise, the credit worthiness
of the issuer is taken into account so as to minimise the risk to the Company of default. The credit
standing and other associated risks are reviewed by the Manager.
Investment transactions are carried out with a number of brokers where creditworthiness is reviewed
by the Manager.
Cash is only held at banks that have been identified by the Board as reputable and of high credit
quality. The Manager reviews these on a continual basis with regular updates to the Board.
Manchester and London Investment Trust plc
89
Annual Report & Financial Statements 2024
16. Risks – Investments, financial instruments and other risks continued
Capital management policies
The structure of the Company’s capital is noted in the Statement of Changes in Equity and
managed in accordance with the investment objective and policy set out in the Strategic Report.
The Company’s capital management objectives are to maximise the return to Shareholders while
maintaining a capital base to allow the Company to operate effectively and meet obligations as
they fall due.
The Board, with the assistance of the Manager, monitors and reviews the capital on an ongoing basis.
The Company is subject to externally imposed capital requirements:
• as a public company, the Company is required to have a minimum Share capital of £50,000;
and
• in accordance with the provisions of Sections 832 and 833 of the Companies Act 2006, the
Company, as an investment company:
• is only able to make a dividend distribution to the extent that the assets of the Company
are equal to at least one and a half times its liabilities after the dividend payment has been
made; and
• is required to make a dividend distribution each year such that it does not retain more than
15% of the income that it derives from shares and securities.
These requirements are unchanged since last year and the Company has complied with them at all
times.
A sensitivity analysis has not been prepared for interest risk, as the Company is not materially exposed
to interest rates.
17. Related party transactions
MLCM, a company controlled by Mr Mark Sheppard, is the Manager and AIFM of the Company.
Mr Sheppard is also a director of MMIC, which is the controlling Shareholder of the Company.
The Manager receives a monthly management fee for these services which in the year under review
amounted to a total of £1,458,000 (2023: £532,000) excluding VAT. The balance owing to the Manager
as at 31 July 2024 was £218,000 (2023: £52,000).
Details relating to the Directors’ emoluments are found in the Directors’ Remuneration Report on
page 48.
18. Ultimate control
The ultimate controlling Shareholder throughout the year and the previous year was MMIC, a
company incorporated in the UK and registered in England and Wales. This company was controlled
throughout the year and the previous year by Mr Mark Sheppard and his immediate family.
A copy of the financial statements of MMIC can be obtained from the Company’s website:
www.mlcapman.com/manchester-london-investment-trust-plc.
19. Post Statement of Financial Position events
There are no post balance sheet events to report.
Manchester and London Investment Trust plc Annual Report & Financial Statements 2024
90
Active share
Active share is a measure of the percentage of stock holdings in a manager’s portfolio
that differ from the comparative benchmark index. It is calculated by summing the
absolute differences between benchmark and portfolio holdings’ weights, then
dividing by two (to eliminate double counting). An active share of 100 indicates no
overlap with the index and an active share of zero indicates a portfolio that tracks the
index (when using leverage, maximum active share levels can exceed 100%).
Alternative Performance Measure (‘APM’)
An APM is a numerical measure of the Company’s current, historical or future financial
performance, financial position or cash flows, other than a financial measure defined
or specified in the applicable financial framework. In selecting these Alternative
Performance Measures, the Directors considered the key objectives and expectations
of typical investors in an investment trust such as the Company.
Delta
Delta measures the degree to which an option is exposed to shifts in the price of the
underlying asset (i.e. stock) or commodity (i.e. futures contract). Values range from
1.0 to –1.0 (or 100 to –100, depending on the convention employed). See website link
for further details: https://mlcapman.com/faq/
Delta Adjusted Exposure
Delta times the underlying security’s notional exposure for options. For all other
instruments, the notional exposure of the security. At the sector and portfolio levels,
this is the sum of the individual security delta adjusted exposures. See website link for
further details: https://mlcapman.com/faq/
Discount/premium
If the Share price is lower than the NAV per Share it is said to be trading at a discount.
The size of the discount is calculated by subtracting the Share price from the NAV per
Share and is usually expressed as a percentage of the NAV per Share. If the Share
price is higher than the NAV per Share, this situation is called a premium.
Gearing
Gearing refers to the level of the Company’s debt to its equity capital. The Company
may borrow money to invest in additional investments for its portfolio. If the Company’s
assets grow, the Shareholders’ assets grow proportionately more because the
debt remains the same. But if the value of the Company’s assets falls, the situation
is reversed. Gearing can therefore enhance performance in rising markets but can
adversely impact performance in falling markets.
Gearing represents borrowings at par less cash and cash equivalents (including any
outstanding trade or foreign exchange settlements) expressed as a percentage of
Shareholders’ funds.
Potential gearing is the Company’s borrowings expressed as a percentage of
Shareholders’ funds.
GLOSSARY
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Leverage
Under the AIFMD it is necessary for AIFs to disclose their leverage in accordance with
the prescribed calculations of the Directive. Leverage is often used as another term
for gearing which is included within the Strategic Report. Under the AIFMD there are
two types of leverage that the AIF is required to set limits for, monitor and periodically
disclose to investors. The two types of leverage calculations defined are the gross and
commitment methods. These methods summarily express leverage as a ratio of the
exposure of debt, non-sterling currency, equity or currency hedging and derivatives
exposure against the net asset value. The difference between the two methods is
that the commitment method nets off derivative instruments and the gross method
aggregates them.
Net asset value (“NAV”)
The NAV is Shareholders’ funds expressed as an amount per individual Share.
Shareholders’ funds are the total value of all the Company’s assets, at a current
market value, having deducted all liabilities and prior charges at their par value (or
at their asset value). The total NAV per Share is calculated by dividing the NAV by the
number of Shares in issue excluding Treasury Shares.
Prime Broker
Prime brokerage is the bundling of services by investment banks enabling the
Company to borrow securities and cash in order to be able to invest on a netted basis
and achieve an absolute return. The Prime Broker provides custody and a centralised
securities clearing facility for the Company so the Company’s collateral requirements
are netted across all deals handled by the Prime Broker.
Ongoing charges ratio
As recommended by the AIC, ongoing charges are the Company’s annualised
expenses including (excluding finance costs, variable management fee and certain
non-recurring items) expressed as a percentage of the average monthly net assets of
£281,638,000. The ongoing charges ratio is 0.47%.
Total assets
Total assets include investments, cash, current assets and all other assets. An asset
is an economic resource, being anything tangible or intangible that can be owned
or controlled to produce value and to produce positive economic value. Assets
represent the value of ownership that can be converted into cash. The total assets
less all liabilities will be equivalent to total Shareholders’ funds.
Rounding throughout this annual report is done on a line by line basis not a total basis.
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Total return
Total return statistics enable the investor to make performance comparisons between
investment trusts with different dividend policies. The total return measures the
combined effect of any dividends paid, together with the rise or fall in the Share price
or NAV. This is calculated by the movement in the NAV or Share price plus dividend
income reinvested by the Company at the prevailing NAV or Share price.
NAV Total Return Page
31 July
2024
31 July
2023
Closing NAV per Share (p) 3 831.24 550.79
Total dividends paid in the
year ended 31 July 2024 (2023) (p)
21.00 14.00
Adjusted closing NAV (p) 852.24 564.79 a
Opening NAV per Share (p) 3 550.79 493.04 b
NAV total return unadjusted
(c=((a-b)/b)) (%)
54.73 14.55 c
NAV total return adjusted (%)* 3/4 55.44 15.34
* Based on NAV price movements and dividends reinvested at the relevant cum dividend NAV
value during the period. Where the dividend is invested and the NAV value falls this will further
reduce the return or, if it rises, any increase will be greater. The source is Bloomberg who have
calculated the return on an industry comparative basis.
GLOSSARY (continued)
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Important information:
This document is important and requires your immediate attention. If you are in any doubt as to any
aspect of the proposals referred to in this document or as to the action you should take, you should
consult your stockbroker, bank manager, solicitor, accountant or other independent professional
adviser authorised under the Financial Services and Markets Act 2000 (as amended) if you are
resident in the United Kingdom or, if not, from another appropriately authorised independent
professional adviser, without delay.
If you have sold or transferred all of your Ordinary Shares in the capital of the Company and, as
a result, no longer hold any Ordinary Shares in the Company, please send this document as soon
as possible to the purchaser or transferee, or to the person through whom the sale or transfer was
effected for transmission to the purchaser or transferee. If you have sold only part of your holding of
Ordinary Shares in the Company, you should retain the documents and consult the person through
whom the sale was effected.
Pursuant to Article 52.2 of the Company’s Articles of Association (the “Articles”), the Board has
determined that the Annual General Meeting will be held wholly by means of an Electronic Facility
(as defined in the Articles) namely by a live webcast. Full details are set out in the Letter from the
Chairman. Shareholders will be able to attend the meeting virtually. Explanations and definitions of
abbreviations can be found in the Glossary of the latest Annual Report and the Articles.
The Board encourages Shareholders to vote electronically or to appoint the Chairman of
the meeting as their proxy with their voting instructions. You may appoint a proxy online via
www.signalshares.com. If shares are not held directly, Shareholders are encouraged to arrange
for their nominee to vote on their behalf and appoint a proxy via the CREST system. To be valid,
any form of proxy or other instrument appointing a proxy must be received by post or (during
normal business hours only) by hand at the Company’s Registrar, at the address shown on the
form of proxy, or in the case of shares held through CREST, via the CREST system, or if submitting
the proxy vote electronically, via the Registrar’s website, by no later than 12.00 noon on Monday,
4 November 2024.
MANCHESTER AND LONDON
INVESTMENT TRUST PLC
(the “Company”)
(registered in England and Wales under number 01009550 with
12a Princes Gate Mews, London, England, SW7 2PS as registered address)
Notice of the fifty second Annual General Meeting
of the Company to be held virtually at 12.00 noon GMT
on Wednesday, 6 November 2024
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NOTICE OF
ANNUAL GENERAL MEETING continued
Letter from the Chairman
Dear Shareholder,
Notice of the Annual General Meeting
I am pleased to advise that the fiftieth Annual General Meeting (“AGM”) of the Company will be
held by means of an Electronic Facility on Wednesday, 6 November 2024 at 12.00 noon.
Meeting and Voting Arrangements
The Company understands and respects the importance of the AGM to shareholders and the
Company will offer shareholders the option to ask questions in advance of the meeting. The 2024
AGM will be a fully virtual meeting by means of an electronic facility and Shareholders are invited
to participate in the AGM electronically via Microsoft Teams. Further details are set out on page
98. Please contact the Manager who will provide further information. Shareholders are asked to
exercise their votes by submitting their proxy electronically in advance of the meeting and to
appoint the Chairman of the meeting as their proxy with their voting instructions. Further details of
how you can vote are set out on pages 98 and 99.
Business of the Meeting
The formal Notice of the AGM, which follows this letter, sets out the business to be considered at
the meeting. Shareholders are being asked to vote on various items of business, being: the receipt
and acceptance of the Annual Report and the Financial Statements for the year ended 31 July
2024; the approval of the Directors’ Remuneration Report, the approval of the Remuneration
Policy; the approval of the final ordinary dividend; the election and re-election of Directors;
the re-appointment of Deloitte LLP as Auditor; the authorisation of the Directors to determine
the remuneration of the Auditor; the authorisation of the Directors to offer scrip dividends; the
authorisation of the Directors to allot Ordinary Shares and disapply statutory pre-emption rights for
certain issues of Ordinary Shares; the authorisation of the Company to make market purchases of
Ordinary Shares; the authorisation for the sale of Treasury Shares at a discount to Net Asset Value
(”NAV”); and the holding of general meetings (other than annual general meetings) on not less
than 14 clear days’ notice.
Resolutions 1 to 12 will be proposed as ordinary resolutions and resolutions 13 to 16 will be proposed
as special resolutions.
RESOLUTION 1 – Annual Report and Financial Statements for the year ended
31 July 2024
The Directors are required to present to the meeting the Company’s Strategic Report, Directors’
Report, Auditor’s Report and the audited financial statements for the financial year ended 31 July
2024 (the “Annual Report and Financial Statements”). These are contained in the Annual Report of
the Company for such period.
RESOLUTION 2 – Directors’ Remuneration Report
The Directors’ Remuneration Report for the year ended 31 July 2024 is set out on pages 48 to 51 of
the Annual Report and Financial Statements. In accordance with Companies Act 2006 (the “Act”),
this vote to approve the Remuneration Report is advisory only and the Directors’ entitlement to
receive remuneration is not conditional on it. The resolution and vote are a means of providing
Shareholder feedback to the Board.
NOTICE OF
ANNUAL GENERAL MEETING continued
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RESOLUTION 3 – Directors’ Remuneration Policy
The Directors’ Remuneration Policy is set out on page 52 of the Annual Report and Accounts. The
Policy is unchanged since it was presented at the AGM of the Company held on 1 November
2023. This resolution is binding in nature and, if approved, will take effect from the conclusion of the
AGM. Renewal of the policy is required to be sought at intervals of at least three years, or earlier
if there are any changes to the Policy, and the Policy will next be submitted to Shareholders for
approval no later than the 2027 AGM. Notwithstanding this, the Board wishes to put the Policy to
Shareholders for approval annually.
RESOLUTION 4 – Final Dividend
The final ordinary dividend for the year ended 31 July 2024, as recommended by the Directors, is
7 pence per Share. If approved by Shareholders at the forthcoming AGM, this final dividend will
be paid on 8 November 2024 to Shareholders on the register at the close of business on 4 October
2024. The ex-dividend date will be 4 October 2024.
RESOLUTIONS 5 to 8 – Election and Re-election of Directors
In line with the UK Corporate Governance Code (the “UK Code”), the Board has agreed a policy
whereby all Directors will seek annual re-election at the Company’s AGMs. In line with this policy,
Daniel Wright, Brett Miller, Daren Morris and James Waterlow will stand for re-election.
Mr Wright has no previous relationship with the Company other than his position as an independent
non-executive Director, nor with the controlling Shareholder of the Company or any associate of
the controlling Shareholder of the Company within the meaning of Listing Rule 10.6.16 R. In addition
to being satisfied that Mr Wright is independent of the controlling Shareholder, the other Directors
have also determined that he satisfies all the other independence criteria in the UK Code.
Mr Miller is head of compliance, governance and risk oversight, holds the SMF16 and SMF17 roles
under the Senior Managers and Certification Regime and sits on the risk management committee
of M&L Capital Management Limited, the Company’s Manager. He is therefore not deemed to be
independent of the Manager.
Neither Mr Morris, nor Sir James have previous relationships with the Company other than their position
as independent non-executive Directors, and Mr Morris as Audit Committee Chair. Sir James and
Mr Morris have no connections with the controlling Shareholder of the Company or any associate
of the controlling Shareholder of the Company within the meaning of Listing Rule 10.6.16 R.
M&M Investment Company Limited, which is controlled by Mark Sheppard who forms part of
the investment management team at M&L Capital Management Limited, is the controlling
Shareholder of the Company (further details can be found on page 31 of the Annual Report). The
Listing Rules require independent non-executive directors of Main Market listed companies that
have a controlling shareholder to be re-elected by a majority of the votes cast by the independent
Shareholders of the Company, as well as by a majority of the votes cast by all the Shareholders. In
the case of the Company, ‘independent Shareholders’ mean all the Shareholders of the Company
other than M&M Investment Company Limited.
Accordingly, the votes cast by the independent Shareholders and by all the Shareholders for the
resolutions for the re-election of Mr Wright, Mr Morris and Sir James (Resolutions 5, 6, 7 and 8) will
be calculated separately. Such a resolution will be passed only if a majority of the votes cast by
the independent Shareholders are in favour, in addition to a majority of the votes cast by all the
Shareholders being in favour. If the resolution to approve the re-election of Mr Wright, Mr Morris
or Sir James is passed, but separate approval by the independent Shareholders is not given, the
Listing Rules permit the Director to remain in office pending a further resolution to be approved by
all Shareholders, at a meeting which must be held more than 90 days, but within 120 days, of the
first votes.
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NOTICE OF
ANNUAL GENERAL MEETING continued
The Chairman and the Board confirm that, following formal performance evaluations, the
performance of each of the Directors continues to be effective and demonstrates commitment
to the role and having considered the Directors’ other time commitments and board positions, are
satisfied that each Director has the capacity to be fully engaged with the Company’s business. The
Chairman and the Board therefore believe that it is in the interests of Shareholders that each of the
Directors standing for re-election and election are elected. Directors’ biographical details can be
found in the Annual Report on page 28.
RESOLUTIONS 9 and 10 – Re-appointment of Auditor and to authorise the
Directors to determine the Remuneration of the Company’s Auditor
Auditors must be appointed at each general meeting at which the Annual Report and Financial
Statements are presented to Shareholders. An assessment of the independence and objectivity of
Deloitte LLP has been undertaken by the Audit Committee; it has recommended to the Board that
a resolution for the re-appointment of Deloitte LLP as the Company’s Auditor be put to Shareholders
at the forthcoming AGM. Further details about the performance of the Auditor can be found on
page 47 of the Annual Report. Resolution 10, if passed, would authorise the Directors to determine
the level of Auditor’s remuneration.
RESOLUTION 11 – Authority to offer Scrip Dividends
The Directors are proposing to obtain the authority to offer an optional scrip dividend to Shareholders
in future periods. Scrip dividends are subject to Shareholder approval and Resolution 11 is being
proposed at the AGM to obtain that approval. The authority contained in Resolution 11 is to expire
at the conclusion of the annual general meeting of the Company to be held in 2025.
Unless circumstances change, the Directors would expect to renew this authority annually at
the annual general meetings of the Company. Details of how any scrip dividend scheme would
operate will be released to Shareholders if such an option is actually offered in the future.
RESOLUTION 12 – Authority to allot Shares
Resolution 12, an ordinary resolution, as set out in the notice of meeting, if passed, will renew the
Directors’ authority to issue up to an aggregate nominal value of £2,507,938, representing 10,031,754
Ordinary Shares (being approximately one-quarter of the issued share capital (excluding Treasury
Shares) as at 20 September 2024), in accordance with statutory pre-emption rights. The authority,
if given, will lapse at the conclusion of the next annual general meeting of the Company after the
passing of this resolution (which must be held no later than 31 January 2026). The authority will be
used where Directors consider it to be in the best interests of Shareholders. The Directors will only
issue new Ordinary Shares at a price at or above the prevailing net asset value per Ordinary Share.
As at 20 September 2024, 401,220 Shares were held in Treasury.
RESOLUTION 13 – Waiver of Pre-emption Rights
Resolution 13, a special resolution, if passed, will renew the Directors’ authority to disapply the
statutory pre-emption rights of existing Shareholders in relation to the issue of Ordinary Shares
for cash or the sale of Ordinary Shares out of Treasury up to an aggregate nominal amount of
£1,003,175 (being approximately 10% of the issued share capital (excluding Treasury Shares) as at
20 September 2024). This authority, if given, will expire at the next annual general meeting, when
a resolution for its renewal will be proposed. The authority will be used where Directors consider it
to be in the best interests of Shareholders. Any Ordinary Shares issued on a non-pre-emptive basis
under this authority will be issued at a price at or above the prevailing NAV per Ordinary Share. The
passing of Resolution 13 is subject to the passing of Resolution 12.
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RESOLUTION 14 – Authority to allot or sell Treasury Shares at a discount to NAV
Subject to the passing of Resolution 13, Resolution 14 will renew the Company’s authority to sell
Shares from Treasury at a discount to NAV. Treasury Shares may only be sold at a discount to NAV
per Share if that discount does not exceed the weighted average discount to NAV per Share at
which the Shares were purchased and provided that any Shares sold from Treasury for cash are
sold at higher prices (including expenses) than the weighted average price at which those Shares
were bought into Treasury.
RESOLUTION 15 – Authority to make market purchases of the Company’s
own Shares
At the annual general meeting held on 1 November 2023, the Company was granted authority
to purchase up to 14.99% of the Company’s Ordinary Shares in issue (excluding Treasury Shares)
amounting to 6,024,933 Ordinary Shares. Since September 2021, the highest price the Company
has paid for shares held in Treasury was 666 pence. The average cost per share of the shares held
in Treasury was 549 pence. As at 31 July 2024, the share price was 704 pence. As at 20 September
2024, 66,000 Shares have been bought back under this authority.
Resolution 15, which will be proposed as a special resolution, seeks to renew the authority granted
at last year’s annual general meeting and gives the Company authority to buy back its own Shares
in the market. The authority limits the number of Ordinary Shares that could be purchased to a
maximum of 6,015,040 (representing 14.99% of the issued Ordinary Share capital of the Company
(excluding Treasury Shares) as at the close of business on 20 September). The authority sets out
the minimum and maximum prices. This authority will expire at the conclusion of the next annual
general meeting of the Company.
Whilst the Directors have no present intention of using this authority, the Directors would use this
authority in order to address any imbalance between the supply and demand for the Ordinary
Shares and to manage the discount to NAV at which the Ordinary Shares trade. When proposing
this resolution the Directors have considered the following: the Company does not capitalize any
operational (non-Equity Swap Finance) costs, the Manager’s fee structure is viewed as competitive
when compared to similarly invested, actively managed, investment trust companies, and the
Directors believe that the discount is a function of the size of the Company, the liquidity of its shares,
and the Ten Year US Treasury yield.
Any purchases of Shares would be by means of market purchases through the London Stock
Exchange or other available exchanges. Any Shares purchased pursuant to this authority may
either be held as Treasury Shares or cancelled by the Company, as determined by the Directors
at the time of purchase. The authority will only be used after careful consideration, taking into
account market conditions prevailing at the time, other investment opportunities, appropriate
gearing levels and the overall financial position of the Company.
RESOLUTION 16 – Notice of General Meetings
Under the Act, the notice period required for all general meetings of a company is 21 days. Annual
general meetings will always be held on at least 21 clear days’ notice but Shareholders can approve
a shorter notice period for other general meetings, provided this is not less than 14 clear days. Such
a notice period provides flexibility and, if approved, will remain effective until the next annual
general meeting of the Company, when it is intended that a similar resolution will be proposed. The
Directors will only call general meetings on 14 clear days’ notice where they consider it in the best
interests of Shareholders to do so and the relevant matter requires to be dealt with expediently.
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Annual Report & Financial Statements 2024
NOTICE OF
ANNUAL GENERAL MEETING continued
Action to be taken now
Shareholders are permitted to attend the AGM virtually. The Board recognises that the AGM
represents an important forum for Shareholders to ask questions and virtual annual general meetings
allow a methodology for more shareholders to attend the meeting (up to 1,000) for a lower cost
(including travel costs and carbon footprint) and hence the Board believes virtual meetings are
more inclusive than physical meetings. The Teams platform is a product of Microsoft Corp., which
is the Company’s largest investment holding, so this will be a great opportunity for Shareholders to
get first-hand experience of a Microsoft product.
You are encouraged to appoint a proxy online via www.signalshares.com. Alternatively, if you hold
your shares in CREST, you may appoint a proxy via the CREST system. Notice of your appointment of
a proxy should reach the Company’s Registrar, Link Group by 12.00 noon on Monday, 4 November
2024. If you hold your shares through a nominee service, please contact the nominee service
provider regarding the process for appointing a proxy and encourage them to vote electronically
without delay.
If you would like to attend the AGM virtually, please email (with Subject Line: Request to Join vAGM)
your details to ir@mlcapman.com with proof that you are a Shareholder or you have a Letter of
Authority from the nominee company that you hold shares with. You will receive a personal email
with the Teams Invite for the meeting.
On the day
You can join via Teams in the 15 minutes before the AGM from any device, whether or not you
have a Teams account. If you don’t have an account, follow these steps to join as a guest.
1. Go to the meeting invite and select Join Microsoft Teams Meeting.
2. That will open a web page, where you will see two choices: Download the Windows app and
Join on the web instead. If you join on the web, you can use either Microsoft Edge or Google
Chrome. Your browser may ask if it is okay for Teams to use your mic and camera. Be sure to
allow it so you will be seen and heard at the AGM.
3. Enter your name and choose your audio and video settings. If the meeting room (or another
device that is connected to the meeting) is nearby, choose Audio off to avoid disrupting.
Select Phone audio if you want to listen to the meeting on your mobile phone.
4. When you are ready, hit Join now.
5. This will bring you into the meeting lobby. Teams then notifies the Manager that you are there,
and then you can be admitted.
If you have a family member who is already a subscriber to Teams why not have a practice run with
your own family meeting with them?
Join Microsoft Teams Meeting
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How will the virtual AGM work?
When the AGM opens at the appointed time, you will be able to see and hear the Chairman. The
Chairman will open the AGM and address all questions that have been submitted in advance.
There will be a short opportunity to ask any further questions. Then the Chairman will ask if anyone
wishes to vote using the Poll Card (please do not elect to do so if you have already voted by Proxy
and do not wish to change your vote). If anyone does wish to vote by Poll Card, the process of
how and when to vote using a Poll Card will be explained and Poll Card votes will be accepted
throughout the AGM and the following 30 minutes after the AGM.
The Chairman will then formally put each resolution to the AGM and advise of the proxy votes
already received in advance.
The Manager will then say a few words about the Portfolio and the Financial markets. A further
opportunity will then be provided to ask the Manager questions.
The AGM will then formally close.
The results of the AGM will be announced by an RNS and posted to the Company’s website:
https://mlcapman.com/manchester-london-investment-trust-plc/
How to vote, speak and ask a question at the virtual AGM
There will be an opportunity to download, complete, sign and submit poll cards at the Virtual
meeting but the Board encourages Shareholders to vote electronically and to appoint the
Chairman of the meeting as their proxy with their voting instructions. You will find instructions in the
notes to the notice to enable you to vote electronically via www.signalshares.com and how to
register to do so. All valid proxy votes will be included in the voting. The ability to vote by Poll Card
will close 30 minutes after the close of the AGM.
Shareholders are also invited to ask questions at the AGM. The Board invites Shareholders to submit
any questions they may have for the virtual AGM by email (with Subject Line: Question for vAGM)
to ir@mlcapman.com. The Manager will endeavor to answer your question or get an answer to
your question and provide that to you personally before the AGM but the Chairman will also post
your question at the AGM, identify you as the person who formed the question and any reply
provided to you. If you do have a specific question whilst the AGM is in progress then use the “Raise
Hand” function in the “Reactions” menu on the Teams Meeting platform or by typing the question
through the Chat function on the Teams platform. You will be kept on mute by the AGM host until
you are invited to speak/ask your question(s).
Recommendation
The Board considers all the resolutions to be proposed at the AGM to be in the best interests of
Shareholders and the Company as a whole. Accordingly, the Directors unanimously recommend
that all Shareholders vote in favour of the resolutions, as they intend to do in respect of their own
shareholdings.
Keeping in touch
If you have not already done so we suggest you provide your email to the Registrars investor
relations site by logging on to www.signalshares.com AND providing your email to the Manager at
ir@mlcapman.com if you wish to receive the Fund Factsheet monthly.
Yours faithfully,
Daniel Wright
Chairman
25 September 2024
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NOTICE OF
ANNUAL GENERAL MEETING continued
NOTICE OF THE ANNUAL GENERAL MEETING 2024
Notice is hereby given that the Annual General Meeting (the “AGM”) of Manchester and London
Investment Trust plc (the “Company”) will be held virtually on Wednesday, 6 November 2024 at
12.00 noon.
Resolutions 1 to 12 (inclusive) will be proposed as ordinary resolutions, which means that for each of
these to be passed, more than 50% of the votes cast must be in favour of the resolution. Resolutions
13 to 16 will be proposed as special resolutions, meaning that for each of these to be passed, at
least 75% of the votes cast must be in favour.
Each of the resolutions to be considered at the AGM will be voted on by way of a poll. This ensures
that, if shareholders are unable to attend the AGM but have appointed proxies, their votes are
taken into account. The results of the polls will be announced to the London Stock Exchange and
published on the Company’s website as soon as possible after the conclusion of the AGM.
Business of the Meeting
Ordinary Resolutions
1. To receive and accept the Company’s Annual Report and Financial Statements for the year
ended 31 July 2024.
2. To receive and approve the Directors’ Remuneration Report for the year ended 31 July 2024.
3. To approve the Directors’ Remuneration Policy.
4. To declare a final ordinary dividend of 7 pence per Ordinary Share for the year ended 31 July 2024.
5. To re-elect Daniel Wright as a Director.
6. To re-elect Brett Miller as a Director.
7. To re-elect Daren Morris as a Director.
8. To re-elect James Waterlow as a Director.
9. To re-appoint Deloitte LLP as Auditor of the Company to hold office from the conclusion of this
meeting until the conclusion of the next annual general meeting of the Company at which the
Annual Report and Financial Statements are laid.
10. To authorise the Directors to determine the Auditor’s remuneration.
11. THAT, the Directors of the Company be and are hereby authorised to offer holders of the Ordinary
Shares of 25 pence each in the capital of the Company (“Ordinary Shares”) the right to elect
to receive newly issued Ordinary Shares, which are credited as fully paid up, instead of cash in
respect of the whole (or part at the Directors’ discretion) of any dividend declared from time to
time in respect of which the Directors determine that such election should apply, such authority
to expire at the conclusion of the annual general meeting of the Company to be held in 2025.
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12. THAT, the Directors of the Company be and are hereby generally and unconditionally authorised,
in addition to any existing authorities, 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 Ordinary
Shares of 25 pence each in the capital of the Company (“Ordinary Shares”), up to an aggregate
nominal amount of £2,507,938, representing 10,031,754 Ordinary Shares (being approximately
one-quarter of the issued share capital (excluding Treasury Shares) as at 20 September 2024),
such authority to expire at the next annual general meeting of the Company after the passing of
this resolution (unless previously revoked or varied by the Company in a general meeting), save
that the Company may, at any time prior to the expiry of such authority, make an offer or enter
into an agreement which would or might require Ordinary Shares to be allotted and the Directors
may allot Ordinary Shares in pursuance of such an offer or agreement as if the authority conferred
hereby had not expired.
Special Resolutions
13. THAT, subject to the passing of Resolution 12 above, in addition to any existing authorities, the
Directors be and are hereby empowered, pursuant to Sections 570 to 573 of the Act to allot
Ordinary Shares for cash and to sell Ordinary Shares from Treasury for cash pursuant to the authority
referred to in Resolution 12 above as if Section 561 of the Act did not apply to any such allotment
or sale provided that this authority: (i) shall be limited to the allotment of Ordinary Shares and the
sale of Ordinary Shares from Treasury for cash up to an aggregate nominal amount of £1,003,175
(representing approximately 10% of the issued Share capital (excluding Treasury Shares) of the
Company as at 20 September 2024); and (ii) shall expire at the conclusion of the next annual
general meeting of the Company after the passing of this resolution (unless previously revoked
or varied by the Company in general meeting), save that the Company may, at any time prior
to the expiry of such power, make an offer or enter into an agreement which would or might
require Ordinary Shares to be allotted or sold from Treasury after the expiry of such power, and
the Directors may allot Ordinary Shares or sell Ordinary Shares from Treasury in pursuance of such
an offer or agreement as if such power had not expired.
14. THAT, subject to the passing of Resolution 13, to generally and unconditionally authorise and
empower the Directors in compliance with the Listing Rules to sell, transfer and allot Shares held
by the Company in Treasury (whether or not those Shares are held in Treasury at the date this
Resolution is passed or repurchased pursuant to the authority sought under Resolution 15 below)
for cash and that such Shares may be allotted or sold or transferred for a price which represents
a discount to the most recently published NAV per Share as at the date of such allotment or sale
provided that such discount does not exceed the weighted average discount to NAV per Share
at which the Shares were purchased and provided that any Shares sold from Treasury for cash are
sold at higher prices (including expenses) than the weighted average price at which those Shares
were bought into Treasury. The authority hereby granted shall require renewal from Shareholders
and expire at the conclusion of the next annual general meeting of the Company after the
passing of this Resolution, save that the Company may before such expiry enter into offers or
agreements which would or might require Shares held in Treasury to be sold or allotted after such
expiry and the Company may sell or allot Shares pursuant to any such offer or agreement as if the
authority hereby granted had not expired.
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NOTICE OF
ANNUAL GENERAL MEETING continued
15. THAT, in substitution of all existing authorities, to unconditionally and generally authorise the
Company, pursuant to section 701 of the Act, to make one or more market purchases (within the
meaning of section 693 of the Act) of any of its own Ordinary Shares of 25 pence provided that:
a. the maximum number of Ordinary Shares hereby authorised to be so purchased shall be
6,015,040 (or, if less, 14.99% of the number of Ordinary Shares in issue (excluding Treasury
Shares) immediately following the passing of this Resolution);
b. the minimum price, exclusive of expenses, which may be paid for such Shares shall be
25 pence each;
c. the maximum price, exclusive of expenses, which may be paid for a Share contracted to
be purchased on any day shall be an amount not more than the highest of (i) 105% of the
average of the Last Price per Bloomberg (or the closing price of the London Stock Exchange
Daily Official List) of the Company’s Ordinary Shares for the five business days immediately
preceding the day on which such Share is contracted to be purchased and (ii) the higher of
the price of the last independent trade, and the highest current independent bid price for a
share of the Company on the trading venues where the market purchases by the Company
pursuant to the authority conferred by this Resolution 14 will be carried out;
d. the authority hereby conferred shall expire at the conclusion of the next annual general
meeting of the Company, unless previously renewed, varied or revoked by the Company in
a general meeting; and
e. the Company may make a contract or contracts to purchase its own shares under the
authority hereby conferred prior to the expiry of such authority which will or might be executed
wholly or partly after the expiration of such authority and may make a purchase of its own
Shares in pursuance of any such contract(s).
16. THAT, a general meeting, other than an annual general meeting, may be called on not less than
14 clear days’ notice.
By order of the Board
Daniel Wright
Chairman
25 September 2024
Registered Office:
12a Princes Gate Mews
London SW7 2PS
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NOTES TO THE NOTICE OF THE ANNUAL GENERAL MEETING
1. To be entitled to vote at the Meeting (and for the purpose of the determination by the Company
of the number of votes they may cast), Shareholders must be registered in the Register of Members
of the Company at close of trading on Monday, 4 November 2024. Changes to the Register of
Members after the relevant deadline shall be disregarded in determining the rights of any person
to attend and vote at the Meeting.
2. Shareholders are entitled to appoint another person as a proxy to exercise all or part of their rights
to attend and to speak and vote on their behalf at the Meeting. A Shareholder may appoint
more than one proxy in relation to the Meeting provided that each proxy is appointed to exercise
the rights attached to a different Ordinary Share or Ordinary Shares held by that Shareholder. A
proxy need not be a Shareholder of the Company however the Board recommends that you only
appoint the Chairman of the meeting as your proxy.
3. In the case of joint holders, where more than one of the joint holders purports to appoint a
proxy, only the 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).
4. A vote withheld is not a vote in law, which means that the vote will not be counted in the
calculation of votes for or against the resolution. If no voting indication is given, your proxy will
vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as
he or she thinks fit in relation to any other matter which is put before the Meeting.
5. You can vote either:
a. By logging on to www.signalshares.com and following the instructions.
b. You may request a hard copy form of proxy directly from the registrars, Link Group via email to
shareholderenquiries@linkgroup.co.uk or by calling 0371 664 0300. Calls cost 12p per minute
plus your phone company’s access charge. Calls outside the United Kingdom will be charged
at the applicable international rate. Lines are open between 09:00 – 17:30, Monday to Friday
excluding public holidays in England and Wales.
c. In the case of CREST members, by utilising the CREST electronic proxy appointment service in
accordance with the procedures set out below.
In order for a proxy appointment to be valid a form of proxy must be completed. In each case
the form of proxy must be received by Link Group at Central Square, 29 Wellington Street, Leeds
LS1 4DL by 12.00 noon on Monday, 4 November 2024.
6. If you return more than one proxy appointment, either by paper or electronic communication,
the appointment received last by the Registrar before the latest time for the receipt of proxies will
take precedence. You are advised to read the terms and conditions of use carefully. Electronic
communication facilities are open to all Shareholders.
7. The return of a completed form of proxy, electronic filing or any CREST Proxy Instruction (as
described in note 11 below) will in itself not prevent a Shareholder from attending the virtual
Meeting and voting in person if he/she wishes to do so.
8. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy
appointment service may do so for the Meeting (and any adjournment of the Meeting) by using
the procedures described in the CREST Manual (available from www.euroclear.com. CREST
Personal Members or other CREST sponsored members, and those CREST members who have
appointed a 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.
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NOTICE OF
ANNUAL GENERAL MEETING continued
9. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate
CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with
Euroclear UK & International Limited’s specifications and must contain the information required
for such instructions, as described in the CREST Manual. The message must be transmitted so as
to be received by the issuer’s agent (ID RA10) by 12.00 noon on Monday, 4 November 2024. For
this purpose, the time of receipt will be taken to mean the time (as determined by the timestamp
applied to the message by the CREST application host) from which the issuer’s agent 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.
10. CREST members and, where applicable, their CREST sponsors or voting service providers should
note that Euroclear UK & International 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.
11. Any corporation which is a Shareholder can appoint one or more corporate representatives
who may exercise on its behalf all of its powers as a Shareholder provided that no more than
one corporate representative exercises powers in relation to the same shares. So if your shares
are held in Nominee you will need the Nominee to appoint you as a corporate representative
and they will need to provide us a letter setting out the details of your appointment AND of your
shareholding. If we do not have such a letter, or the Registrar has not been provided such a letter,
or your letter is not complete then you will be denied access to the meeting.
12. As at 20 September 2024 (being the latest practicable business day prior to the publication of
this Notice), the Company’s ordinary issued share capital consists of 40,528,238 Ordinary Shares,
carrying one vote each. As at 20 September 2024, 401,220 Shares are held in treasury. Therefore,
the total voting rights in the Company as at 20 September 2024 are 40,127,018.
13. Under Section 527 of the Companies Act 2006, Shareholders meeting the threshold requirements
set out in that section have the right to require the Company to publish on a website a statement
setting out any matter relating to: (i) the audit of the Company’s financial statements (including
the Auditor’s Report and the conduct of the audit) that are to be laid before the Meeting; or (ii)
any circumstances connected with an auditor of the Company ceasing to hold office since the
previous meeting at which annual financial statements and reports were laid in accordance with
Section 437 of the Companies Act 2006 (in each case) that the Shareholders propose to raise
at the relevant meeting. The Company may not require the Shareholders requesting any such
website publication to pay its expenses in complying with Sections 527 or 528 of the Companies
Act 2006. Where the Company is required to place a statement on a website under Section 527 of
the Companies Act 2006, 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 Meeting for the relevant financial year includes any statement that the Company has
been required under Section 527 of the Companies Act 2006 to publish on a website.
Manchester and London Investment Trust plc
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Annual Report & Financial Statements 2024
14. Any Shareholder have the right to attend the Meeting has the right to ask questions. The
Company must cause to be answered any such question relating to the business being dealt with
at the Meeting but no such answer need be given if: (a) to do so would interfere unduly with the
preparation for the Meeting or involve the disclosure of confidential information; (b) the answer
has already been given on a website in the form of an answer to a question; or (c) it is undesirable
in the interests of the Company or the good order of the Meeting that the question be answered.
Should you have any questions regarding the business of the meeting, please email the Board or
Manager on ir@mlcapman.com.
15. Copies of the Directors’ letters of appointment or service contracts are available for inspection on
the Company’s website and during normal business hours at the registered office of the Company
on any business day from the date of this Notice until the conclusion of the Meeting.
16. A person to whom this notice is sent who is a person nominated under Section 146 of the Companies
Act 2006 to enjoy information rights (a “Nominated Person”) may, under an agreement between
him/her and the Shareholder by whom he/she was nominated, have a right to be appointed (or
to have someone else appointed) as a proxy for the AGM. 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 Shareholder as to the exercise of voting rights.
The statements of the rights of members in relation to the appointment of proxies in note 2 above
do not apply to a Nominated Person. The rights described in this note can only be exercised by
registered members of the Company.
17. You may not use any electronic address (within the meaning of Section 333(4) of the Companies
Act 2006) provided in either this Notice or any related documents (including the form of proxy) to
communicate with the Company for any purposes other than those expressly stated.
18. A copy of this Notice, and other information required by Section 311A of the Companies Act
2006, can be found on the Company’s website at www.mlcapman.com/manchester-london-
investment-trust-plc.
Manchester and London Investment Trust plc
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NOTICE OF
ANNUAL GENERAL MEETING continued
APPENDIX 1 – Biographies of the Directors
Daniel Wright
Mr Wright was appointed to the Board on 29 October 2018, so he has served on the Board as an
independent non-executive director for six years. Mr Wright was appointed as Chairman of the
Board on 26 November 2021.
Principal External Appointments:
Director of SolasCure Limited.
Executive Chairman of Science in Sport Plc.
Non-Executive Chairman of Uinsure Group Holdings.
Mr Wright was previously the founding partner, chief operating officer and head of portfolio at
NorthEdge Capital, executive chairman of Accrol Group Holdings Plc and Chairman of Vision
Support Services Group Limited, a private company that he founded and grew to become
Europe’s leading distributor of textiles to the hospitality sector.
He has also held previous roles at Cable Partners LLC, Deutsche Morgan Grenfell Private Equity and
The Royal Bank of Scotland.
Bio
Mr Wright graduated from the University of Cambridge and qualified as a chartered accountant
with Arthur Andersen in 1996.
What we value: Experienced Chairman with deep understanding of how companies work,
Accounting knowledge, Interest in International affairs and geo-politics. Dan has an interest in
149,542 (95,086 of which held by PCAs) shares in the company.
Daren Morris
Mr Morris was appointed to the Board of the Company and as Chairman of the Audit Committee
on 10 December 2021. He is also the Company’s Senior Independent Director.
Principal External Appointments:
CFO of Big Technologies PLC, a company listed on AIM and active in the provision of advanced
technology for the electronic monitoring of individuals. Previously CFO of Volex PLC from 2015
to 2020. Spent the first 18 years of his career in investment banking and accountancy and was
a Managing Director at both UBS Investment Bank and Morgan Stanley. Mr Morris’s other public
company board experience includes Big Technologies plc, Volex plc, Easynet plc and Nexen Tech
Corporation.
Bio
Mr Morris is a qualified chartered accountant (ICAEW ACA 1997) and graduated in Physics from
Trinity College, Oxford.
What we value: Mr Morris has done an excellent job as Chairman of the Audit Committee. He has
a highly impressive CV of public company and City experience. He has an interest in 38,000 shares
in the company.
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Annual Report & Financial Statements 2024
Brett Miller
Mr Miller was appointed to the Board on 30 August 2013, so he has served on the Board for 11 years.
Mr Miller is not a member of the Audit Committee.
Principal External Appointments:
Director of Ecofin US Renewables Infrastructure Trust plc.
Director of SLF Realisation Fund Limited.
Bio
Mr Miller graduated from the University of the Witwatersrand (South Africa) with a Bachelors degree
majoring in law and economics and additionally holds a law degree from the London School of
Economics. He qualified as a solicitor and practised until 1997. Mr Miller is head of compliance,
governance and risk oversight, holds the SMF16 and SMF17 roles under the Senior Managers and
Certification Regime and also sits on the risk management committee of MLCM, the Company’s
Manager.
What we value: Long service with deep knowledge of the last decade of the Company’s history,
Legal knowledge, Extensive public company knowledge. Mr Miller has an interest of 1,734 shares
in the company.
Sir James Waterlow
Sir James Waterlow was appointed to the Board on 17 August 2020. Sir James Waterlow is a member
of the Audit Committee.
Bio
Specialised in investment trusts for thirty years, for the past fifteen as a partner on the Investment
Funds team at Singer Capital Markets. During his career he has advised approximately 30 investment
trust boards and worked on a significant number of transactions, raising over £5 billion for new and
existing funds.
Sir James graduated from the University of Exeter.
What we value: Very useful understanding of the Investment Trust Company sector as it develops
in context to both regulatory and market events. Extensive contacts with Investors in Investment
Funds. Sir James has an interest in 15,000 shares in the company.
The Directors are shareholders like you. They are hardworking and dedicated and we ask you for
your support in their re-appointment.
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NOTICE OF
ANNUAL GENERAL MEETING continued
APPENDIX 2 – Technical help for the Virtual AGM
1. Now: Email ir@mlcapman.com requesting a Microsoft Teams Meeting invite. Subject Line: Request
to Join vAGM
2. Now: Please vote for the resolutions:
• By logging on to www.signalshares.com and following the instructions;
• You may request a hard copy form of proxy directly from the registrars, Link Group, on
Tel: 0371 664 0300. Calls cost 12p per minute plus your phone company’s access charge. Calls
outside the United Kingdom will be charged at the applicable international rate. Lines are open
between 09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales.
• In the case of CREST members, by utilising the CREST electronic proxy appointment service in
accordance with the procedures set out below.
• In order for a proxy appointment to be valid a form of proxy must be completed. In each case
the form of proxy must be received by Link Group at Central Square, 29 Wellington Street,
Leeds LS1 4DL by 12.00 noon on Monday 4 November 2024.
3. Now: Please email your questions to ir@mlcapman.com. Subject Line: Question for vAGM.
4. On the day: Please vote Go to the meeting invite and select Join Microsoft Teams Meeting.
• That will open a web page, where you will see two choices: Download the Windows app and
Join on the web instead. If you join on the web, you can use either Microsoft Edge or Google
Chrome. Your browser may ask if it’s okay for Teams to use your mic and camera. Be sure to
allow it so you’ll be seen and heard in your meeting.
• Enter your name and choose your audio and video settings. If the meeting room (or another
device that’s connected to the meeting) is nearby, choose Audio off to avoid disrupting.
Select Phone audio if you want to listen to the meeting on your mobile phone.
• When you’re ready, hit Join now.
• This will bring you into the meeting lobby. Teams then notifies the Manager that you’re there,
and then you can be admitted.
Join Microsoft Teams Meeting
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Annual Report & Financial Statements 2024
5. At the Virtual AGM: If you want to vote by Poll Card at the meeting (and you have not voted by
Proxy before OR you have voted by Proxy before but wish to change your vote) then please now
download (they will be posted on the Team platform), complete, sign and submit by email to ir@
mlcapman or via the “Chat” function on Teams your completed poll cards at the Virtual meeting
6. At the Virtual AGM: If you do have a specific question whilst the AGM is in progress then use the
“Raise Hand” function in the “Reactions” menu on the Teams Meeting platform or by typing the
question through the Chat function on the Teams platform.
Manchester and London Investment Trust plc Annual Report & Financial Statements 2024
110
Frequency of NAV publication
The Company’s NAV is released to the London Stock Exchange on a weekly basis.
Sources of further information
Copies of the Company’s annual and half-yearly reports, factsheets and
further information on the Company can be obtained from its website:
www.mlcapman.com/manchester-london-investment-trust-plc.
Key dates (expected)
Company’s year end 31 July 2024
Annual results announced 25 September 2024
Ex-dividend date 3 October 2024
Record date 4 October 2024
Annual General Meeting 6 November 2024
Final dividend payment date 8 November 2024
Company’s half-year end 31 January 2025
Half-yearly results announced March 2025
Electronic communications from the Company
Shareholders now have the opportunity to be notified by email when the Company’s
annual reports, half-yearly reports and other formal communications are available
on the Company’s website, instead of receiving printed copies by post. This has
environmental benefits in the reduction of paper, printing, energy and water
usage, as well as reducing costs to the Company. If you have not already elected
to receive electronic communications from the Company and wish to do so, visit
www.signalshares.com. To register, you will need your investor code, which can be
found on your share certificate or your dividend confirmation statement.
Alternatively, you can contact Link’s Customer Support Centre, which is available to
answer any queries you have in relation to your shareholding:
By phone: call 0371 664 0300 (calls cost 12 pence per minute plus your phone
company’s access charge. Calls outside the UK will be charged at the applicable
international rate. Link is open between 09:00 – 17:30, Monday to Friday excluding
public holidays in England and Wales).
By email: shareholder.enquiries@linkgroup.co.uk
By post: Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
SHAREHOLDER INFORMATION
Manchester and London Investment Trust plc Annual Report & Financial Statements 2024
111
CORPORATE INFORMATION
Directors and advisers
Directors
Daniel Wright (Chairman)
Brett Miller
Sir James Waterlow
Daren Morris (Audit Committee Chairman)
Manager and AIFM
M&L Capital Management Limited
12a Princes Gate Mews
London SW7 2PS
Email: ir@mlcapman.com
Company Secretary
Link Company Matters Limited
Central Square
29 Wellington Street
Leeds LS1 4DL
Registrar
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
Tel: 0371 664 0300
Email: shareholder.enquiries@
linkgroup.co.uk
Auditor
Deloitte LLP
110 Queen Street
Glasgow G1 3BX
Administrator
Link Alternative Fund Administrators Limited
Broadwalk House
Southernhay West
Exeter EX1 1TS
Bank
National Westminster Bank plc
11 Spring Gardens
Manchester M60 2DB
Depositary
Indos Financial Limited
The Scalpel
18
th
Floor
52 Lime Street
London EC3M 7AF
Tel: 020 3876 2225
Prime Brokers
JP Morgan Securities PLC
25 Bank Street
Canary Wharf
London E14 5JP
Tel: 020 7134 8584
Morgan Stanley & Co International PLC
25 Cabot Square
Canary Wharf
London E14 4QA
Tel: 020 7425 8000
Company details
Registered Office
12a Princes Gate Mews
London SW7 2PS
Country of Incorporation
Registered in England and Wales
Number: 01009550
Company website
www.mlcapman.com/manchester-london-investment-trust-plc
Manchester and London Investment Trust plc
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Annual Report & Financial Statements 2024
NOTESNOTES
Manchester and London Investment Trust plc Annual Report & Financial Statements 2024
113
Manchester and London
Investment Trust plc
Registered in England & Wales
Number: 01009550
Registered Office
12a Princes Gate Mews
London SW7 2PS
Company website
www.mlcapman.com/manchester-
london-investment-trust-plc