M&G Luxembourg S.A. Niederlassung Deutschland

Frankfurt am Main

Befreiender Jahresabschluss zum Geschäftsjahr vom 01.01.2022 bis zum 31.12.2022

M&G Luxembourg S.A.

Luxemburg/Luxemburg

TABLE OF CONTENTS

MANAGEMENT REPORT

AUDIT REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED PROFIT AND LOSS ACCOUNT

NOTES TO THE ANNUAL ACCOUNTS

Management Report as at 31 December 2022

Business overview

M&G Luxembourg S.A (the 'Company') is part of M&G plc group, a UK-listed savings and investments group with an extensive international presence. The Company is a wholly owned subsidiary of M&G FA Limited and an indirect subsidiary of M&G plc, both entities are incorporated in the United Kingdom.

The Company is authorised and regulated by the Commission de Surveillance du Secteur Financier ("CSSF") to act as an AIFM and UCITS manager with extended MiFID permissions.

The principal activities are

(a)	administration, marketing and management of all types of alternative investment funds (AIFs),
(b)	management of collective vehicles (not qualifying as an AIF), including creating, promoting and administering collective investments in transferable securities (UCITS),
(c)	discretionary portfolio management activities, and
(d)	non-core services including investment advice, reception and transmission of orders in relation to financial instruments.

2022 Activities

During the year, the Company finalised its merger with M&G International investments S.A. on the 31st March 2022, creating a "Super ManCo" (Investment Fund Manager with MiFiD top up licences). The merger led to M&G Luxembourg being appointed as the Global Distributor of its managed funds. The Company also entered into an agreement to become sub-distributor of funds created by responsAbility, a Swiss domiciled impact investment manager acquired by M&G in May 2022. responsAbility's funds are managed by external AIFMs, and not by the Company.

The Company offers distribution, marketing, promotional and client servicing activities to wholesale intermediaries and institutional clients through its branches, rep. office and subsidiary (M&G International Investments Switzerland A.G.) in Europe, and via interentity sub-distribution agreements in the UK, APAC and the Americas.

The Company has expanded the products it manages and distributes with the addition of:

(a) New fund umbrellas

•	M&G (Lux) Global Funds SICAV-RAIF
•	M&G (Lux) Reserved Investment Funds 2 SCA SICAV-RAIF
•	M&G European Living Property Fund ScSP - SICAV-RAIF
•	M&G Speciality Finance Fund 2

(b) New discretionary mandate

a. Euromobiliare M&G Infrastrutture Sostenibili

(c) 27 new sub funds across the fund umbrellas managed, and

(d) Distribution services of third party managed funds.

The new funds and discretionary mandate combined added EUR 3,305,197,241 Asset under Management (AuM) as at 31 December 2022.

Future development

Future strategic developments include but are not limited to:

•	Promoting M&G's Private Assets investment strategies and capabilities to wholesale intermediaries and professional clients.
•	Continuing to expand the breadth of SFDR article 8 and 9 funds available.
•	Developing client solutions and segregated mandates across Europe alongside the development of thematic 'building block' strategies as core components for investors.

The Company also continuously reviews its activities and opportunities to manage funds and capabilities of the wider M&G group and distribute in new markets.

Principal risks

Overview

The Company is exposed to inherent risk of providing fund management and sub-delegation activities to other entities within M&G Group and/or external third parties.

The Company has implemented risk processes and governance arrangements in line with the M&G Group's and its own risk management framework and policies.

The Company manages all aspects of risk in order to deliver outcomes to clients and shareholders in line with the M&G Group strategy and risk appetite in accordance with regulatory expectations.

The specific risks relevant to the Company may be categorised as follows:

Strategic Risk

The risk of loss for the Company's business or failure to maximise opportunity resulting from ineffective, inefficient or inadequate senior management processes for the development and implementation of the business strategy.

Changing client preferences, together with economic and political conditions, could adversely impact performance against the strategy. The Company operates in highly competitive markets, and client needs and expectations are constantly evolving. Economic factors, including heightened levels of inflation, may impact product demand and the ability to generate an appropriate return on business activities. Increased geopolitical risks and conflicts, and policy uncertainty, may impact the Company's products, investments and operating model.

Third Party Management Risk

The risk of financial or non-financial impact resulting from failure and disruption in, and inadequate oversight of, third parties including vendors, suppliers, consultants, business partners, advisors, intra-group suppliers / arrangements, joint ventures and distributors.

Financial Crime

The risk of failure to have adequate systems and controls in place to protect the Company and its customers and clients from financial crime and noncompliance with applicable legislation and regulations.

Operational Risk

The risk of financial or non-financial impact resulting from inadequate or failed internal or outsourced processes and controls, colleague errors, technology issues or from external events which impact operations.

A material failure or operational disruption in the processes and controls supporting the Company's activities, that of its third-party suppliers or that the Company's technology could result in poor client outcomes, reputational damage, increased costs and regulatory censure. The Company is highly dependent on technology and the loss or sustained unavailability of key hardware or software, inadequate information security arrangements and ineffective use of digital solutions could impact the ability to operate effectively. Additionally, serious failings in the delivery, or persistent under performance of third-party supplier arrangements, could impact the delivery of services to the Company's clients.

The Group Operational Risk Policy as adopted by the Company's defines the approach to identifying, assessing, managing and reporting operational risks and associated controls across the business - including IT, data and outsourcing arrangements. The Company applies business continuity and crisis management requirements in conjunction with M&G Group frameworks and policies. Key business services and the critical shared services on which they rely need an enhanced approach to avoid causing intolerable harm. The Company achieves this through a risk-based approach, which considers the harm a service could cause if disrupted. The Company has oversight and risk management of third parties supported by the M&G Group, including the approach to selection, contracting and onboarding, management and monitoring, and termination and exiting.

Investment Risk

The Company agrees investment objectives and risk profiles of the M&C funds it manages and any segregated mandates. A failure to deliver against these objectives, including sustained underperformance of funds, to maintain risk profiles that are consistent with clients' expectations, or to ensure that fund liquidity profiles are appropriate for expected redemptions may all lead to poor client outcomes and result in fund outflows. If these risks materialise for larger funds or a range of funds, the Company's profitability, reputation and growth plans may be impacted.

The fund managers are accountable for the performance and the risks of the funds they manage. The Company's Risk team, which is functionally and hierarchically independent from the business operating units, monitor and oversee fund performance, liquidity and risks. Such activities feed into established oversight and escalation forums to identify, measure and oversee investment performance, investment risk and fund liquidity risks.

Credit Risk

The risk of loss or adverse change in the financial situation of the business, or that of clients, resulting from fluctuations in the credit standing of issuers of securities, counterparties and any debtors in the form of default or other significant credit event.

The Company may be exposed to the risk that a party to a financial instrument, banking transaction or reinsurance contract causes a financial loss to the Company or its clients by failing to discharge an obligation. For trading or banking activities this relates to the risk that the counterparty to any contract the business enters into is unable to meet their obligations.

The Company adopted the Group Credit Risk Policy which sets standards for assessing, measuring and managing credit risk, monitored by a dedicated, independent team. Limits are set for individual counterparties, issuers and ratings and regularly reviewed with related exposures monitored against these limits.

Market Risk

The Company's profitability is sensitive to market fluctuations. Significant changes in the level or volatility of prices in equity, property or bond markets could have material adverse effects on revenues. Exchange rate movements could impact fee and investment income denominated in foreign currencies.

Procedures are in place to respond to significant market events and disruptions, bringing together colleagues across M&G to provide an enhanced monitoring and decision-making capability.

Corporate liquidity risk

The Company must carefully manage the risk that sufficient cash resources are available to meet obligations to creditors as they fall due. This includes ensuring each part of the business has sufficient resources to cover outgoing cash flows, under a range of severe but plausible scenarios.

Adequate liquid resources are maintained and the liquidity positions of the Company are regularly monitored. Detailed liquidity contingency funding plans are in place to manage a liquidity crisis.

Regarding liquidity management, the Company is also party to the M&G Group's contingency funding plan should a particularly adverse liquidity event arise.

It is management's opinion that the principal risks outlined above are mitigated and/or managed through robust risk management and internal control processes.

Regulatory Compliance

The risk of financial or non-financial impact resulting from a failure to meet regulatory requirements or a failure to adequately consider regulatory expectations, standards or principles.

Accountability for compliance with regulatory and legal requirements sits with the Company's senior management. The Company's Compliance function supports the business by providing guidance to, and oversight of, the business in relation to regulatory compliance, AML and KYC requirements and conflicts of interest, and carries out routine monitoring and deepdive activities to assess compliance with regulations and legislation. National and global regulatory developments are monitored and form part of the Company's engagement with government policy teams and regulators, which includes updates on responses to any changes.

Reputational Risk

The risk that the Company through its activities, behaviours and/or communications does not meet shareholders' expectations in ways which adversely impact trust and the Company's reputation - potentially leading to a decline in revenue, increased costs, the loss of key personnel and/or adverse regulatory reaction.

Conduct Risk

The risk that acts or omissions of the Company, or individuals with the Company, deliver poor or unfair outcomes for customers and clients, employees, other stakeholders or affect market integrity.

Observing the proper standards of conduct in all its forms is essential at M&G. Due to its broad nature conduct risk management is pervasive and reflected in various policies and processes including such as Code of Conduct and Conflicts of Interest, Market Abuse and Investment Communications Recording policies. The Company leverages the recently launched Conduct Management Framework of M&G's Asset Management business to provide a consistent process for conduct management in relation to these policies.

Financial Result

Assets under management as at 31 December 2022 amounted to EUR 92,504,179,622 (2021: EUR 97,920,376,595).

Turnover, consisting mainly of fund management services was EUR 605,284,246 (2021: EUR 561,610,777), a 7.8% increase year on year primarily driven by marketing, promotional and client servicing fees earned (new activity undertaken due to the merger with M&G International Investments S.A.).

The profit after tax for the year was EUR 24,181,332 (2021: EUR 2,885,566). The significant increase in profit is mainly due to the Company undertaking global distribution services for funds managed following the merger with M&G International Investments S.A. Further details of the result are set out in the Profit and Loss Account on pages 14 and 15.

The Company's Total Assets as at 31 December 2022 increased by 39% to EUR 220,848,604 (2021: EUR 158,550,458).

Non - financial

The Company had an average of 146 employees in 2022 (2021:46 employees).

Other Information

The Company had no activities in the field of research and development during the year ended 31 December 2022.

The Company did not acquire any of its own shares during the year ended 31 December 2022.

Going Concern

The Directors have a reasonable expectation that the Company has adequate resources to continue its operations for a period of at least 12 months from the date that the financial statements are approved. In making this assessment the Directors have considered the profitability, liquidity and solvency of the Company, taking into account current performance and financial position, factors likely to affect the Company's future development, and key risks in the current economic climate.

On the basis of the assessment described, the Directors have adopted the going concern basis of accounting in preparing the Company's annual accounts for the year ended 31 December 2022.

Our community

In 2022, our M&G plc's total community investment spend was £4.3 million, of which £3.3 million was cash. This includes donations to 19 charitable organisations across Europe. The balance of in-kind donations includes 1,345 colleagues who dedicated 8,964 hours of fundraising and volunteering in all our communities.

M&C Luxembourg S.A. continue to be a proud member of the Luxembourg Diversity Charter and the recently joined the newly launched Luxembourg Women in Finance Charter.

M&G Luxembourg S.A.

Micaela Forelli, Managing Director

Audit report

To the Shareholder of M&G Luxembourg S.A.

Report on the audit of the annual accounts

Our opinion

In our opinion, the accompanying annual accounts give a true and fair view of the financial position of M&G Luxembourg S.A. (the "Company") as at 31 December 2022, and of the results of its operations for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts.

What we have audited

The Company's annual accounts comprise:

•	the balance sheet as at 31 December 2022;
•	the profit and loss account for the year then ended; and
•	the notes to the annual accounts, which include a summary of significant accounting policies.

Basis for opinion

We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession (Law of 23 July 2016) and with International Standards on Auditing (ISAs) as adopted for Luxembourg by the "Commission de Surveillance du Secteur Financier" (CSSF). Our responsibilities under the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the "Responsibilities of the "Ṟéviseur d'entreprises agree" for the audit of the annual accounts" section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

We are independent of the Company in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the annual accounts. We have fulfilled our other ethical responsibilities under those ethical requirements.

Other information

The Board of Directors is responsible for the other information. The other information comprises the information stated in the management report but does not include the annual accounts and our audit report thereon.

Our opinion on the annual accounts does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the annual accounts, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the annual accounts or our knowledge obtained in the audit, or otherwise appears to be materially misstated. 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.

Responsibilities of the Board of Directors for the annual accounts

The Board of Directors is responsible for the preparation and fair presentation of the annual accounts in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts, and for such internal control as the Board of Directors determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts, the Board of Directors is 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Responsibilities of the "Ṟéviseur d'entreprises agṟé̱é" for the audit of the annual accounts

The objectives of our audit are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit 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 the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF 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 annual accounts.

As partofan audit in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

•	identify and assess the risks of material misstatement of the annual accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
•	obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control;
•	evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors;
•	conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the related disclosures in the annual accounts or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit report. However, future events or conditions may cause the Company to cease to continue as a going concern;
•	evaluate the overall presentation, structure and content of the annual accounts, including the disclosures, and whether the annual accounts represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal and regulatory requirements

The management report is consistent with the annual accounts and has been prepared in accordance with applicable legal requirements.

Luxembourg, 28 April 2023

PricewaterhouseCoopers, Soci̱éṯé coop̱érative

Represented by

Serene Shtayyeh

Consolidated balance sheet as at 31 December 2022

(expressed in EUR)

ASSETS	Notes	31 December 2022	31 December 2021
		EUR	EUR
A. SUBSCRIBED CAPITAL UNPAID		-	-
I. Subscribed capital not called		-	-
II. Subscribed capital called but unpaid		-	-
B. FORMATION EXPENSES		-	-
C. FIXED ASSETS		495,640	14,566
I. Intangible assets		-	-
1. Cost of development		-	-
2. Concessions patents, licenses, trademarks and similar rights and assets, if they were		-	-
3. Goodwill, to the extent that it was acquired for valuable consideration		-	-
4. Payment on account and intangible fixed assets under development		-	-
II. Tangible assets	3	484,840	14,566
1. Land and buildings			-
2. Plant and machinery		-	-
3. Other fixtures and fittings, tools and equipment		484,840	14,566
4. Payment on account and tangible fixed assets in the course of contruction		-	-
III. Financial assets	4	10,800	-
1. Shares in affiliated undertakings		10,800	-
2. Loans to affiliated undertakings			-
3. Participating interests		-	-
4. Loans to undertakings with which the undertaking is linked by virtue of participating interest		-	-
5. Investments held as fixed assets		-	-
6. Other loans		-	-
D. CURRENT ASSETS	5, 21	210,412,116	158,302,502
I. Stocks		-	-
1. Raw materials and consumables		-	-
2. Work in progress		-	-
3. Finished goods and goods for resale		-	-
4. Payments on account		-	-
II. Debtors		108,956,095	97,821,053
1. Trade debtors		96,560,210	96,252,459
a) becoming due and payable within one year		96,560,210	96,252,459
b) becoming due and payable after more than one year		-	-
2. Amounts owed by affiliated undertakings		6,060,448	20,474
a) becoming due and payable within one year		6,060,448	20,474
b) becoming due and payable after more than one year		-	-
3. Amounts owed by undertakings with which the undertaking is linked by the virtue of participating interests		-	-
a) becoming due and payable within one year		-	-
b) becoming due and payable after more than one year		-	-
4. Other debtors		6,335,437	1,548,120
a) becoming due and payable within one year		5,621,765	1,436,895
b) becoming due and payable after more than one year		713,672	111,225
III. Investments		-	-
1. Shares in affiliated undertakings		-	-
2. Own shares or corporate units		-	-
3. Other Investments		-	-
IV. Cash at bank and in hand		101,456,021	60,481,449
E. PREPAYMENTS	6	9,940,848	233,390
TOTAL ASSETS		220,848,604	158,550,458

The accompanying notes are an integral part of these annual accounts

CAPITAL, RESERVES AND LIABILITIES	Notes	31 December 2022	31 December
		EUR	EUR
A. Capital and reserves	7,8	54,324,417	25,073,568
I. Subscribed capital		250,000	125,000
II. Share premium account		16,500,000	16,500,000
III. Revaluation reserve		-	-
IV. Reserves		6,388,556	817,200
1. Legal Reserve		12,500	12,500
2. Reserve for own shares or own corporate units		-	-
3. Reserves provided for by the articles of association		-
4. Other reserves, including the fair value reserve		6,376,056	804,700
a) Other available reserves		4,944,517	-
b) Other non-available reserves		1,431,539	804,700
V. Profit or loss brought forward		7,004,529	4,745,802
VI. Profit or loss for the financial Year		24,181,332	2,885,566
VII. Interim Dividends		-	-
VIII. Capital Investment Subsidies		-	-
B. Provisions	9	12,956,360	1,376,412
1. Provisions for pensions and similar obligations		-	-
2. Provisions for taxation		12,956,360	1,376,412
3. Other provisions		-
C. Creditors	10,21	153,567,827	132,100,478
1. Debenture loans		-	-
a) Convertible bonds		-	-
i) becoming due and payable within one year		-	-
ii) becoming due and payable after more than one year		-	-
b) Non-convertible bonds		-	-
i) becoming due and payable within one year		-	-
ii) becoming due and payable after more than one year		-	-
2. Amounts owed to credit institutions		-	-
a) becoming due and payable within one year		-	-
b) becoming due and payable after more than one year		-	-
3. Payments received on account of orders in so far as they are not shown separately as deductions from stocks		-	-
a) becoming due and payable within one year		-	-
b) becoming due and payable after more than one year		-	-
4. Trade creditors		37,073,694	863,474
a) becoming due and payable within one year		37,073,694	863,474
b) becoming due and payable after more than one year		-	-
5. Bills of exchange payable		-	-
a) becoming due and payable within one year		-	-
b) becoming due and payable after more than one year		-	-
6. Amounts owed to affiliated undertakings		84,089,893	120,690,253
a) becoming due and payable within one year		84,089,893	120,690,253
b) becoming due and payable after more than one year		-	-
7. Amounts owed to undertakings with which the undertaking is linked by the virtue of participating interests		-	-
a) becoming due and payable within one year		-	-
b) becoming due and payable after more than one year		-	-
8. Other creditors		32,404,240	10,546,751
a) Tax authorities		172,575	45,241
b) Social security debts		606,962	67,499
c) Other creditors		31,624,703	10,434,011
i) becoming due and payable within one year		31,542,748	10,285,325
ii) becoming due and payable after more than one year		81,955	148,686
D. DEFERRED INCOME		-	-
TOTAL LIABILITIES		220,848,604	158,550,458

Consolidated Profit and Loss account for the year ended 31 December 2022

(expressed in EUR)

PROFIT AND LOSS ACCOUNT	Notes	2022	2021
		EUR	EUR
1. Net turnover	11,21	605,284,246	561,610,777
2. Variation in stocks of finished goods and in work in Progress		-	-
3. Work performed by the undertaking for its own purposes and capitalised		-	-
4. Other operating income	12,21	1,548,596	962,214
5. Raw materials and consumables and other external expenses	13	(15,406,205)	(908,178)
a) Raw materials and consumables		-	-
b) Other external expenses		(15,406,205)	(908,178)
6. Staff costs	14,15,16	(34,508,805)	(5,947,769)
a) Wages and salaries		(27,715,956)	(4,960,529)
b) Social security costs		(6,497,325)	(881,677)
i) relating to pensions		(2,506,713)	(621,076)
ii) other social security costs		(3,990,612)	(260,601)
c) Other staff costs		(295,524)	(105,563)
7. Value Adjustments	3	(233,679)	(9,270)
a) in respect of formation expenses and of tangible and intangible fixed assets		(233,679)	(9,270)
b) in respect of current assets		-	-
8. Other operating expenses	17	(520,546,553)	(551,965,662)
9. Income from participating interests		-	-
a) derived from affiliated undertakings		-	-
b) other income from participating interests		-	-
10. Income from other investments and loans forming part of the fixed assets		-	-
a) derived from affiliated undertakings		-	-
b) other income not included under a)		-	-
11. Other interest receivable and similar income	18	265,659	475,549
a) derived from affiliated undertakings		-	-
b) other interest and similar income		265,659	475,549
12. Share of profit or loss of undertakings accounted for under the equity method		-	-
13. Value adjustments in respect of financial assets and of investments held as current assets		-	-
14. Interest payable and other similar expenses	19	(1,369,091)	(192,890)
a) concerning affiliated undertakings		-	-
b) other interest and similar expenses		(1,369,091)	(192,890)
15. Tax on profit or loss	9, 20	(10,806,167)	(1,089,740)
16. Profit or loss after taxation		24,228,001	2,935,031
17. Other taxes not shown under item 1 to 16	9, 20	(46,669)	(49,465)
18. Profit or loss for the financial year		24,181,332	2,885,566

NOTE 1 - GENERAL INFORMATION

M&G Luxembourg S.A. (hereafter the "Company") was incorporated on 20 July 2012 and is organised under the laws of Luxembourg as a Société Anonyme for an unlimited period.

The registered office of the Company is established at 16, boulevard Royal, L-2449 Luxembourg.

The Company completed a merger with M&G International Investments S.A. ("Absorbed Company") on 31 March 2022. Up until the date of merger, M&G International Investments S.A. principal activities was to act as distributor of units/shares in undertakings for collective investment (UCI) without making or accepting payments and as an investment adviser. The Company was authorised and regulated by the Commission de Surveillance du Secteur Financier ("CSSF") as an Investment Firm.

The merger led to the following consequences:

a)	Transfer of assets, liabilities and legal relationships of the Absorbed Company to the Company by operation of law;
b)	Transfer of assets and liabilities held by each of the Absorbed Company European branches to the relevant M&G Luxembourg European branches in their respective jurisdictions;
c)	Transfer of shares of the Subsidiary as held by the Absorbed Company and becoming the sole shareholder of the Subsidiary;
d)	The Company undertakes distribution, marketing, promotional services and investment advisory services.

The Company's accounts are included in the consolidated financial statements of M&G FA Limited, representing the direct entity of which the company is a subsidiary, are prepared in accordance with International Accounting Standards as adopted in the UK and has applied exemptions available under FRS 101. The consolidated financial statements are available to the public and may be obtained from its registered office at 10 Fenchurch Avenue, London EC3M 5AG.

The Company's ultimate parent undertaking, M&G plc, includes the Company and its subsdiary in its consolidated financial statements. The consolidated financial statements of M&G plc are prepared in accordance with International Accounting Standards as adopted in the UK and are available to the public and may be obtained from its registered office at 10 Fenchurch Avenue, London EC3M 5AG.

The Company's financial year starts on 1 January and ends on 31 December of each year.

The purpose of the Company is the administration and management of alternative investment funds ("AIFs") within the meaning of the law of 12 July 2013 on alternative investment fund managers as amended from time to time (the "AIFM Law"), in accordance with and within the limitations set forth by the "AIFM Law".

The Company carries out activities connected with the management, administration and marketing of the AIFs.

In accordance with the AIFM Law, the Company, as alternative investment fund manager ("AIFM") performs the activities listed in Annex I of the AIFM Law, in particular investment management functions with regards to the AIFs as follows:

a)	portfolio management
b)	risk management

The Company additionally performs in the course of the collective management of the AIFs the following other functions:

a) administration;

(1)	legal and fund management accounting services;
(2)	customer inquiries;
(3)	valuation and pricing, including tax returns;
(4)	regulatory compliance monitoring;
(5)	maintenance of unit-/shareholder register;
(6)	distribution of income;
(7)	unit/shares issues and redemptions;
(8)	contract settlements, including certificate dispatch;
(9)	record keeping;

b) marketing;

c) activities related to the assets of AIFs, namely services necessary to meet the fiduciary duties of the Company as AIFM, facilities management, real estate administration activities, advice to undertakings on capital structure, industrial strategy and related matters, advice and services relating to mergers and the purchase of undertakings and other services connected to the management of the AIFs and the companies and other assets in which they have invested.

Forthe avoidance of doubt, "AIFs" also include (1) the AIFs management company(ies), where the AIF is a common fund, (2) the AIF's general partner(s) where the AIF is a partnership and/or (3) the directly or indirectly wholly owned or controlled subsidiaries of the AIFs referred to herein.

The Company is furthermore authorised to create, promote, administer and manage undertakings for collective investment (not qualifying as AIF), including undertakings for collective investment in transferable securities authorised accordingto the directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities ("UCITS"), as amended, in accordance with the provisions of chapter 15 of the Luxembourg Law of 17 December 2010 on undertakings for collective investment, as amended (the "2010 law"). The Company may provide the above mentioned services also to the directly or indirectly wholly-owned or controlled subsidiaries of the UCITS and UCIs referred to in this paragraph.

In addition to the collective portfolio management activity as set out above, The Company is allowed to perform the following services:

a) in accordance with article 101.3 a) of the 2010 Law and/or article 5.4 a) of the AIFM Law, management of portfolios of investments, (1) including those owned by pension funds, in accordance with mandates given by investors on a discretionary client-by-client basis, where such portfolios include one or more of the instruments listed in Section B of Annex II of the Law of 5th April, 1993 on financial sector, as amended (the "1993 Law") and/or (2) including those owned by pension funds and institutions for occupational retirement provision in accordance with paragraph (1) of article 19 of Directive 2003/41/EC in accordance with mandates given by investors on a discretionary client-by-client basis.

b) as non core services :

•	in accordance with article 101.3 b) of the 2010 Law and/or article 5.4 b) (1) (i) of the AIFM Law, investment advice including investment advice concerning one or more of the instruments listed in Section B of Annex II of the 1993 Law; and
•	In accordance with article 5.4 b) (iii) of the AIFM Law, reception and transmission of orders in relation to financial instruments.

Within the European Union, the Company may also create subsidiaries. The Company may delegate part of its activities to third parties. The Company may provide services in Luxembourg and abroad and may for that purpose establish representative offices and/or branches.

The Company may also administer its own assets on an ancillary basis and carry out any operations which it may deem useful or necessary in the accomplishment and development of its purposes as well as any other activity authorised under all applicable laws remaining within the limitations set forth by chapter 15 of the 2010 Law and as applicable the AIFM Law.

The Company operates in various locations in Europe through its network of branches, a subsidiary and a representative office as listed below,

Name	Status	Location	Date of establishment
M&G Luxembourg S.A. Succursale Belge	Branch	Belgium	21 May 2021
M&G Luxembourg S.A. Dutch Branch	Branch	Netherlands	14 July 2021
M&G Luxembourg S.A., Svensk Filial	Branch	Sweden	15 July 2021
M&G Luxembourg S.A. Paris Branch	Branch	France	28 January 2021
M&G Luxembourg S.A., Sucursal en España	Branch	Spain	13 November 2021
M&G Luxembourg S.A., Succursale Italiana	Branch	Italy	3 August 2021
M&G Luxembourg S.A., Germany	Branch	Germany	21 October 2021
M&G Luxembourg S.A., Austrian Rep. Office	Rep. Office	Austria	21 October 2021
M&G International Investments Switzerland AG	Subsidiary	Switzerland	14 July 2014

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 General principles

The annual accounts are prepared on a consolidated basis made up of Luxembourg office, European branches, representative office and Switzerland subsidiary (M&G International Investments Switzerland AG).

The annual accounts are prepared in accordance with Luxembourg legal and regulatory requirements and according to generally accepted accounting principles applicable in Luxembourg under the historical cost convention. The accounting policies and valuation principles are, apart from those enforced by law, determined and implemented by management.

These annual accounts have been prepared on a going concern basis that assumes that the Company will continue its operations in the foreseeable future.

These annual accounts have been presented following the layout in Title II of the law of 19 December 2002 on the register of commerce and companies and the accounting and annual accounts of undertakings as subsequently modified.

The preparation of annual accounts requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies.

Changes in assumptions may have a significant impact on the annual accounts in the period in which the assumptions changed. Management believes that the underlying assumptions are appropriate and that the annual accounts therefore present the financial position and results fairly.

2.2 Significant accounting policies

The main valuation rules applied by the Company are the following:

2.2.1 Tangible assets

Tangible assets are valued at purchase price including the expenses incidental thereto or at production cost. Tangible assets are depreciated over their estimated useful economic lives. Where the Company considers that a tangible asset has suffered a durable depreciation in value, an additional write-down is recorded to reflect this loss.

These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply.

2.2.2 Financial assets

Financial assets are valued at purchase price/nominal value (loans and claims) including the expenses incidental thereto.

In case of durable depreciation in value according to the opinion of the Board of Directors, value adjustments are made in respect of financial assets, so that they are valued at the lower figure to be attributed to them at the balance sheet date. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply.

2.2.3 Debtors

Debtors are valued at their nominal value. A value adjustment is made when their recovery is partly or completely in doubt. These value adjustments are not continued if the reasons for which they were made have ceased to apply.

2.2.4 Foreign currency translation

The Company maintains its books and records in Euro. All transactions expressed in currencies other than Euro are translated into Euro at the exchange rate effective at the time of the transaction.

Cash at bank is translated at the exchange rate effective at the balance sheet date. Exchange gains and losses are recorded in the profit and loss account for the year.

M&G International Investment Switzerland AG, subsidiary of the Company, maintains its books and records in Swiss Franc. Assets and liabilities are translated in Euro on the basis of the exchange rates effective at the balance sheet date. Profit and loss is translated in Euro on the basis of the year to date average rate.

Other assets and liabilities are translated separately respectively at the lower or at the higher of the value converted at the historical exchange rate or the value determined on the basis of the exchange rates effective at the balance sheet date. Unrealised exchange losses are recorded in the profit and loss account. Realised exchange gains and losses are recorded in the profit and loss account when realised. Unrealized gain are not recognized.

2.2.5 Prepayments

This asset item comprises expenditures incurred during the financial year but relating to a subsequent financial year.

2.2.6 Provisions

Provisions are intended to cover losses or debts, the nature of which are clearly defined and which, at the date of the balance sheet, are either likely to be incurred or certain to be incurred but uncertain as to their amount or the date on which they will arise.

2.2.7 Share based payment transactions

Share based payment is recognised as an expense over the vesting period of the awards. The amount recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. However, the corresponding provision is held against ultimate parent, M&G plc.

2.2.8 Creditors

Creditors are recorded at their reimbursement value.

2.2.9 Net Turnover

Net turnover comprises the amounts derived from the provision of services falling within the Company's ordinary activities, after deduction of value added tax and other taxes directly linked to turnover.

2.2.10 Expenses

Expenses are recorded on an accrual basis.

Expenses are made up of operating cost i.e. employee, business running, professional and outsource service expenses. Some expenses are classified as other operating expenses i.e. Portfolio Management and Distribution fees.

2.3. Comparative figures

As noted above in Note 1, the merger of the Company with M&G International Investments S.A. has a significant impact on comparative figures. The 2022 Annual Accounts includes the asset, liabilities and operational expenses of the Absorbed Company and its branches. Also, the 2022 Annual Accounts is prepared on a consolidation basis including the financial information of M&G International investment Switzerland AG.

NOTE 3 - TANGIBLE ASSETS

As at 31 December 2022, tangible assets are composed of:

Plant and Machinery	31 December 2022	31 December 2021
	EUR	EUR
Gross book value - opening balance	2,344	2,344
Additions for the year	-	-
Disposals for the year	-	-
Transfer from M&G International Investments S.A.	3,829	-
Gross book value - closing balance	6,173	2,344
Accumulated value adjustment	(2,344)	(2,344)
Allocation for the year	(957)	-
Reversal for the year	-	-
Transfer from M&G International Investments S.A.	(2,872)	-
Accumulated value adjustment - closing balance	(6,173)	(2,344)
Net book value - closing balance	-	-
Net book value - opening balance	-	-

Other fixtures and fittings, tools and equipment	31 December 2022	31 December 2021
	EUR	EUR
Gross book value - opening balance	586,200	586,200
Additions for the year	-	-
Disposals for the year	(2,114)	-
Transfer from M&G International Investments S.A.	2,800,000	-
Gross book value - closing balance	3,384,086	586,200
Accumulated value adjustment	(571,634)	(562,364)
Allocation for the year	(233,679)	(9,270)
Reversal for the year	-	-
Transfer from M&G International Investments S.A.	(2,093,933)	-
Accumulated value adjustment - closing balance	(2,899,246)	(571,634)
Net book value - closing balance	484,840	14,566
Net book value - opening balance	14,566	23,836

NOTE 4 - FINANCIAL ASSETS

As at 31 December 2022, financial assets consist of M&G Luxembourg S.A., Sucursal en España investment at cost of EUR 10,800 in Club Financiero Genova shares (2021: nil)

NOTE 5 - DEBTORS

	31 December 2022	31 December 2021
	EUR	EUR
Trade debtors	96,560,210	96,252,459
Other debtors	6,335,437	1,548,120
Amounts owed by affiliated undertakings	6,060,448	20,474
TOTAL	108,956,095	97,821,053

As at 31 December 2022, trade debtors are mainly composed of management fees from fixed income AIFs EUR 61,713,089 (2021: EUR 53,961,167), management fees receivable from wholesale UCITS fund EUR 20,037,847 (2021: EUR 26,915,710), management, central administration and domiciliation fees for Real Estate Funds EUR 14,180,913 (2021: EUR 15,375,582) and asset/property management services provided to Real Estate funds SPVs by the Italian and Dutch branches of the company EUR 628,361 (2021: nil).

Other debtors mainly consist of tax advance payments to tax authorities for EUR 5,621,764 (2021: EUR 1,436,895) and rental guarantee deposits in relation with rented offices amounting to EUR 713,673 (2021: EUR 111,225).

Amounts owed by affiliated undertakings as at 31 December 2022 mainly consists of Distribution, Marketing and promotional services for EUR 6,060,448 (2021: EUR 20,474).

NOTE 6 - PREPAYMENTS

Prepayments are mainly composed of upfront fees for EUR 8,939,090 (2021: nil), prepaid rent, IT subscriptions, marketing costs, contributions to complementary pensions scheme and placement agent fees for EUR 1,001,758 (2021: EUR 233,390).

NOTE 7 - CAPITAL AND RESERVES

7.1 Subscribed capital

Following the merger of M&G International Investments S.A. with the company on 31 March 2022, the subscribed capital increased of EUR 125,000.

The subscribed capital, amounting to EUR 250,000 (2021: EUR 125,000) is represented by 2,500 shares (2021: 1,250 shares) with a nominal value of EUR 100 each, fully paid.

7.2 Share premium and similar premiums

As at 31 December 2022, the share premium account amounts to EUR 16,500,000 (2021: EUR 16,500,000).

7.3 Legal reserve

In accordance with Luxembourg company law, the Company is required to transfer a minimum of 5% of its net profit for each financial year to a legal reserve. This requirement ceases to be necessary once the balance of the legal reserve reaches 10% of the issued share capital. The legal reserve is not available for distribution. The legal reserve as at 31 December amounts to EUR 12,500.

7.4 Other available reserve

Further to the merger of M&G International Investments S.A. with the company on 31 March 2022, a merger premium reserve of EUR 24,578,184 was recorded as part of transfer of its net assets.

The Company declared an interim dividend of EUR 22,300,000 during the extraordinary general meeting held on the 27 July 2022. Dividend was paid out of the distributable reserves.

The Company recognised retained earnings brought forward of EUR 2,666,333 from M&G International Investments Switzerland AG, following the merger of M&G International Investments S.A. with the Company.

7.5 Net wealth tax reserve

Following the extraordinary shareholder meeting dated 21 December 2022, the company allocated EUR 626,839 of prior year distributable reserve to a net wealth tax reserve.

As at 31 December 2022, the net wealth tax reserve amounts to EUR 1,431,539 (2021: EUR 804,700)

NOTE 8 - MOVEMENTS FOR THE YEAR ON THE RESERVES AND PROFIT AND LOSS ITEMS

	Subscribed capital	Share premium account	Legal reserve	Other available reserve
	EUR	EUR	EUR	EUR
Balance as at 31 December 2021	125,000	16,500,000	12,500	-
Increase of subscribed capital	125,000	-	-	-
Allocation of previous year's profit or (loss)	-	-	-	-
Merger premium reserve	-	-	-	24,578,184
M&G International Investments Switzerland AG Retained earning	-	-	-	2,666,333
Distribution of reserve	-	-	-	(22,300,000)
Profit for the financial year ended 31 December 2022	-	-	-	-
Balance as at 31 December 2022	250,000	16,500,000	12,500	4,944,517

	Net Wealth Tax Reserve	Profit or loss brought forward	Profit or loss for the period	Total
	EUR	EUR	EUR	EUR
Balance as at 31 December 2021	804,700	4,745,802	2,885,566	25,073,568
Increase of subscribed capital	-	-		125,000
Allocation of previous year's profit or (loss)	626,839	2,258,727	(2,885,566)	-
Merger premium reserve	-	-	-	24,578,184
M&G International Investments Switzerland AG Retained earning	-	-	-	2,666,333
Distribution of reserve	-	-	-	(22,300,000)
Profit for the financial year ended 31 December 2022	-	-	24,181,332	24,181,332
Balance as at 31 December 2022	1,431,539	7,004,529	24,181,332	54,324,417

NOTE 9 - PROVISIONS

As at 31 December 2022, provisions are composed of:

	31 December 2022	31 December 2021
	EUR	EUR
Corporation Tax
M&G Luxembourg S.A.	7,638,880	1,312,197
M&G Luxembourg S.A., Succursale Italiana	1,679,816	-
M&G Luxembourg S.A., Dutch Branch	899,660	-
M&G Luxembourg S.A., Niederlassung Deutschland	827,869	-
M&C Luxembourg S.A., Svensk Filial	729,216	-
M&G Luxembourg S.A., French Branch	545,927	117,890
M&G Luxembourg S.A., Sucursal en Espana	464,881	-
M&G International Investments Switzerland AG	301,955	-
M&G Luxembourg S.A., Succursale beige	27,375	-
M&G LuxembourgS.A., Austrian Rep. office	16,081	-
Net Wealth Tax
M&C Luxembourg S.A.	(178,300)	(53,675)
TOTAL	12,953,360	1,376,412

Provisions are in respect for Corporate Income Tax, Municipal Business tax and Solidarity Surtax EUR 7,638,880 (2021: EUR 1,312,197), a receivable for net wealth tax for EUR 178,300 (2021: EUR 53,675) and European branches tax payable of EUR 5,492,780 (2021: EUR 117,890).

NOTE 10 - CREDITORS

As at 31 December 2022, creditors are composed of:

	31 December 2022	31 December 2021
	EUR	EUR
Amounts owed to affiliated undertakings	84,089,893	120,690,253
Trade creditors	37,073,694	863,474
Other creditors	32,404,240	10,546,751
TOTAL	153,567,827	132,100,478

Creditors are mainly composed of distribution fees and portfolio management fees payable to affiliated undertakings for EUR 84,089,893 (2021: EUR 120,690,253)

Trade creditors are made of Trailer fees for EUR 36,867,832 (2021: nil) and invoices received but not paid at the end of 2022 for EUR 205,862 (2021: EUR 863,474).

Amounts due and payable for the account shown under "Other creditors" include VAT payable of EUR 167,546 (2021: EUR 45,241), social security and tax on salary of EUR 588,773 (2021: EUR 67,499), accruals for variable compensation to staff of EUR 13,938,530 (2021: EUR 1,011,835) and year end general accruals for EUR 17,709,391 (2021: EUR 9,422,176).

NOTE 11 - NET TURNOVER

Net turnover for the financial years 2022 and 2021 is analysed as follows:

Activities	Geographical markets	2022	2021
		EUR	EUR
Annual Management Fees	Luxembourg	421,303,704	408,415,634
Annual Management Fees	Ireland	117,807,644	120,025,875
Administrative Fees	Luxembourg	32,687,330	32,263,311
Distribution Income	United Kingdom	31,670,512	-
Hedging Fees	Luxembourg	828,939	905,957
Asset & Property Management Fees	Italy	513,510	-
Asset & Property Management Fees	Netherlands	472,607	-
TOTAL		605,284,246	561,610,777

Annual Management Fees are made of management fees for services provided to UCITS funds amounting to EUR 366,777,109 (2021: EUR 377,994,530), various AIF Funds for EUR 170,354,973 (2021: EUR 148,565,009) and Discretionary portfolios for EUR 1,979,266 (2021: EUR 1,881,970).

Administrative Fees and Hedging Fees income are made of services provided to M&G (LUX) Investment Funds 1 for EUR 30,708,858 (2021: EUR 29,820,195) and M&G (LUX) Investment Funds 2 FCP for EUR 2,807,411 (2021: EUR 3,349,073).

As noted above in Note 1, the Company's activities include Distribution services contributing EUR 31,670,512 (2021: nil) and other Asset & Property Management Fees for EUR 986,117 (2021: nil) due to absorbed activities.

NOTE 12 - OTHER OPERATING INCOME

	2022	2021
	EUR	EUR
M&G Luxembourg S.A.	1,274,338	962,214
M&G Luxembourg S.A., French Branch	121,600	-
M&G Luxembourg S.A., Niederlassung Deutschland	124,518	-
M&G Luxembourg S.A., Sucursal en Espana	28,140	-
TOTAL	1,548,596	962,214

Other Income is made of domiciliation fees and other service agreement fees for EUR 968,844 (2021: EUR 962,214), recharge of salary cost with M&G FA Limited of EUR 305,494 (2021: nil) and recharge of office costs for EUR 274,258 (2021: nil) in respect of European branches offices shared with three Real Estate branches :

―	M&G Real Estate Limited, French Branch
―	M&G Real Estate Limited, German Branch
―	M&G RE España 2016, S.L.

NOTE 13 - RAW MATERIALS AND CONSUMABLES AND OTHER EXTERNAL EXPENSES

Other external expenses are analyses as follows :

	2022	2021
	EUR	EUR
Marketing and event costs	7,757,494	59
Rents and service charges	2,264,733	343,048
Professional fees	2,093,495	180,089
Travel and expenses	865,297	5,972
Office running costs	772,389	92,224
Other staff expenses	680,398	41,811
Audit fees	261,925	93,407
Legal fees	271,509	55,729
Software Licenses	226,964	62,923
Profesional subscriptions	157,682	18,870
Office equipment costs	50,712	14,324
Other expenses	3,607	-
Dilapidation costs	-	(278)
TOTAL	15,406,205	908,178

As noted above in Note 1, the Company activities extends to distribution, marketing, promotional services of its managed funds. This has led to new cost categories and expense for the Company.

NOTE 14 - STAFF COSTS

The average number of staff employed by the Company during the year is as follows:

	2022	2021
Management	16	6
Employees	130	40
TOTAL	146	46

As noted above in Note 1, the increase in number of employees is due to merger with M&G International Investments S.A. and the transfer of activities to the Company's European branches in their respective jurisdictions.

NOTE 15 - EMOLUMENTS GRANTED TO THE MEMBERS OF THE MANAGEMENT AND SUPERVISORY BODIES AND COMMITMENTS ARISING OR ENTERED IN RESPECT OF RETIREMENT PENSIONS FOR FORMER MEMBERS OF THOSE BODIES

The emoluments paid to the members of the management of the Company amount to EUR 2,345,465 (2021: EUR 1,779,622).

NOTE 16 - ADVANCES AND LOANS GRANTED TO THE MEMBERS OF THE MANAGEMENT AND SUPERVISORY BODIES AND COMMITMENTS ENTERED INTO ON THEIR BEHALF BY WAY OF GUARANTEES OF ANY KIND

There are no advances and loans granted to members of the management in that capacity of the Company.

NOTE 17 - OTHER OPERATING EXPENSES

Other operating expenses for EUR 520,546,553 (2021: EUR 551,965,662) mainly comprise portfolio management fees and distribution fees as per below :

Type of fees	Counterparty	2022	2021
		EUR	EUR
Portfolio Management Fees	M&G Investment Management Limited	254,202,338	265,176,138
Distribution Fees	External Service providers/clients	117,200,520	-
Distribution Fees	M&G International Investments S.A.	61,327,595	253,019,220
Distribution Fees	M&G Investment Management Limited	27,420,779	-
Distribution Fees	M&G Investments (Singapore Pte) Ltd	1,786,344	-
Distribution Fees	M&G FA Limited	1,216,140	-
Distribution Fees	M&G Real Estate Limited	1,017,208	-
Distribution Fees	M&G Investments (Americas) Inc.	954,450	-
Distribution Fees	M&G Investments (Hong Kong) Limited	706,778	-
Distribution Fees	M&G Real Estate Asia Pte.	552,114	-
Distribution Fees	M&G Real Estate Limited	513,041	-
Distribution Fees	M&G Investments Japan Co., Ltd.	94,048	-
Fund administration	External Service providers/clients	27,540,656	20,411,474
Other Expenses	PPM Securities	13,823,677	11,523,923
Other Expenses	M&G Alternatives Investment Management Ltd.	1,053,805	-
Other Expenses	M&G Investment Management Limited	816,202	287,266
Other Expenses	External Service providers/clients	424,259	34,223
Other Expenses	M&G Securities Ltd.	394,026	-
Other Expenses	M&G International Investments S.A.	327,483	-
Other Expenses	M&G (Lux) Reserved Investment Funds (2), SICAV-RAIF	165,770	42,109
Support Services	M&G FA Limited	9,009,320	1,471,309
TOTAL		520,546,553	551,965,662

As noted above in Note 1, the Company absorbed the legal relationships of sub distributors and service providers.

NOTE 18 - INTEREST RECEIVABLE AND SIMILAR INCOME

Interest receivable and similar income is mainly composed of foreign exchange gains of EUR 265,659 (2021: EUR 475,549).

NOTE 19 - INTEREST PAYABLES AND SIMILAR EXPENSES

Interest payable and similar expenses is mainly composed of foreign exchange losses and bank charges of EUR 1,369,091 (2021: EUR 192,890).

NOTE 20 - TAX ON PROFIT OR LOSS

The Company is subject to applicable general tax regulations in Luxembourg and local tax jurisdictions where its branches and representative office are based. In addition, the Company has automatically applied the Luxembourg double tax treaty in consolidating its European offices.

NOTE 21 - RELATED PARTIES TRANSACTIONS

In 2022, the Company recognised the following fee income :

		2022	2021
		EUR	EUR
Fund Management	M&G (LUX) Investment Funds 1	383,581,757	396,774,422
Fund Management	Specialist Investment Funds (1) plc	78,734,789	79,360,240
Fund Management	M&G European Property Fund SICAV-FIS	22,503,803	16,526,602
Fund Management	Lion Credit Opportunity Fund plc	19,881,781	18,535,723
Fund Management	Luxembourg Specialist Investment Fund RAIF FCP	15,199,959	8,940
Fund Management	Specialist Investment Funds (3) plc	13,188,677	13,971,165
Fund Management	M&G (LUX) Investment Funds 2 FCP	9,942,194	8,416,285
Fund Management	Specialist Investment Funds (4) common contractual fund	5,987,617	8,152,832
Fund Management	M&G European Secured Property Income Fund FCP-FIS	4,536,092	3,929,081
Fund Management	M&C European Specialist Investment	4,320,387	3,860,414
Fund Management	M&G Asia Property Fund	3,298,088	2,626,542
Fund Management	M&G Alternatives ScSP-RAIF 2022	2,858,986	1,084,094
Fund Management	M&G Speciality Finance Fund	2,852,396	2,421,237
Fund Management	M&G (LUX) Investment Funds FCP	2,458,730	2,112,678
Fund Management	Discretionary Portfolios	1,979,266	1,881,970
Fund Management	M&G UK Residential Property Fund FCP-FIS	1,280,709	1,646,007
Fund Management	M&G (LUX) Reserved Investment Funds (1) FCP-RAIF	233,049	-
Fund Management	Specialist Investment Funds (2) ICAV	246,015	-
Fund Management	Luxembourg Specialist Investment Feeder Fund SICAV RAIF	204,353	-
Fund Management	M&G Speciality Finance Fund 2	141,851	-
Fund Management	M&G UK Property Fund FCP-FIS	91,778	283,038
Fund Management	M&G European Living Property Fund ScSP - SICAV-RAIF	76,676	-
Fund Management	Specialist Investment Funds (5) Trust	14,781	19,507
Distribution Income	M&G Investment Management Limited	25,031,088	-
Distribution Income	M&G Alternatives Investment Management Ltd.	4,038,511	-
Distribution Income	M&G Securities Ltd.	2,536,078	-
Distribution Income	M&G Real Estate Limited	64,835	-
	TOTAL	605,284,246	561,610,777

In 2022, the Company recognised the following other income from related parties.

	2022	2021
Domiciliation fees	EUR	EUR
M&G European Property Fund SICAV-FIS	494,013	495,034
M&G Asia Property Fund	185,544	178,719
M&G European Secured Property Income Fund FCP-FIS	259,006	240,821
M&G UK Property Fund FCP-FIS	9,880	9,290
M&G UK Residential Property Fund FCP-FIS	9,880	9,679
Prudential Investment (Luxembourg) 2 S.à r.l.	10,521	8,581
Recharge of Office Costs
M&G Real Estate Limited, French Branch	121,600	-
M&G Real Estate Limited, German Branch	124,518	-
M&C RE España 2016, S.L.	28,140	-
Staff Cost Recharge
M&G FA Limited	305,494	-
Other Services
M&G (Guernsey) Ltd.	-	20,090
TOTAL	1,548,596	962,214

As at 31 December 2022, the Company had the following fees receivable from related parties:

	31 December 2022	31 December 2021
	EUR	EUR
M&G (LUX) Investment Funds 1	21,006,634	26,542,524
Luxembourg Specialist Investment Fund RAIF FCP	15,198,666	8,940
Specialist Investment Funds (1) plc	12,572,078	16,085,499
M&G European Property Fund SICAV-FIS	11,807,493	8,788,121
Lion Credit Opportunity Fund plc	9,804,261	9,680,496
Specialist Investment Funds (4) common contractual fund	6,167,127	15,363,081
Specialist Investment Funds (3) plc	4,399,467	2,955,185
Cost Recharge to various funds	3,700,576	959,487
M&G Speciality Finance Fund	2,462,038	2,611,751
Discretionary Portfolios	2,051,084	1,881,970
M&G (LUX) Investment Funds 2 FCP	1,372,992	865,379
M&G Alternatives ScSP-RAIF 2022	1,339,899	533,466
M&G European Secured Property Income Fund FCP-FIS	1,274,754	4,094,160
M&G European Specialist Investment	1,203,949	3,558,873
M&G Asia Property Fund	907,798	812,832
M&G UK Residential Property Fund FCP-FIS	420,962	997,663
Specialist Investment Funds (2) ICAV	360,803	114,582
Luxembourg Specialist Investment Feeder Fund SICAV RAIF	204,353	-
M&G Speciality Finance Fund 2	141,851	-
M&G European Living Property Fund ScSP - SICAV-RAIF	76,676	-
M&G (LUX) RESERVED INVESTMENT FUNDS (1) FCP-RAIF	57,941	-
M&G UK Property Fund FCP-FIS	20,355	374,197
Specialist Investment Funds (5) Trust	8,453	24,253
TOTAL	96,560,210	96,252,459

As at 31 December 2022, the Company had the following net receivables from the following related parties listed below:

	31 December 2022	31 December 2021
	EUR	EUR
M&G Alternatives Investment Management Ltd.	3,772,074	-
M&G Real Estate Limited, French Branch	383,864	-
M&G Real Estate Limited, Swedish Branch	173,856	-
M&G Real Estate Limited, German Branch	36,080	-
M&G Securities Ltd.	1,673,914	1,969
M&G RE España 2016, S.L.	20,660	-
M&G Real Estate Ltd.	-	18,505
TOTAL	6,060,448	20,474

In 2022, the Company recharged the following cost to related parties. These includes staff costs and invoices paid on their behalf:

	2022	2021
	EUR	EUR
M&G FA Limited	305,494	-
M&G Prudential Services Ltd	-	152,920
M&G (Guernsey) Ltd.		20,090
TOTAL	305,494	173,010

In 2022, the Company mainly incurred the following expenses with related parties :

Type of fees	Counterparty	2022	2021
		EUR	EUR
Portfolio Management Fees	M&C Investment Management Limited	254,202,338	264,865,556
Distribution Fees	M&G International Investments S.A.	61,327,595	253,019,220
Distribution Fees	M&C Investment Management Limited	27,420,779	-
Distribution Fees	M&G Investments (Singapore Pte) Ltd	1,786,344	-
Distribution Fees	M&G FA Limited	1,216,140	-
Distribution Fees	M&G Real Estate Limited	1,017,208	-
Distribution Fees	M&G Investments (Americas) Inc.	954,450	-
Distribution Fees	M&G Investments (Hong Kong) Limited	706,778	-
Distribution Fees	M&G Real Estate Asia Pte.	552,114	-
Distribution Fees	M&G Real Estate Limited	513,041	-
Distribution Fees	M&G Investments Japan Co., Ltd.	94,048	-
Other expenses	PPM Securities	13,823,677	11,523,923
Other Expenses	M&G Alternatives Investment Management I	1,053,805	-
Other Expenses	M&G Investment Management Limited	816,202	287,266
Other Expenses	External Service providers/clients	424,259	34,223
Other Expenses	M&G Securities Ltd.	394,026	-
Other Expenses	M&G International Investments S.A.	327,483	-
Other Expenses	M&C (Lux) Reserved Investment Funds (2), CICAV RAIE	165,770	42,109
Support Services	M&G FA Limited	9,009,320	1,471,309
TOTAL		375,805,377	531,243,606

As at 31 December 2022, the Company had the following net payables to the following related parties listed below:

	31 December 2022	31 December 2021
	EUR	EUR
M&G Investment Management Ltd.	60,918,988	28,354,632
PPM Securities	7,630,634	7,236,239
M&G FA Limited	7,425,125	963,279
M&G plc	4,003,189	96,210
M&G Real Estate Limited	1,462,530	-
Prudential Property Investment Managers Ltd	1,403,514	-
M&G Investments (Singapore Pte) Ltd	606,418	-
M&G Prudential Services Ltd	152,920	152,920
M&G Investments (Hong Kong) Limited	126,910	-
M&G (Lux) Reserved Investment Funds (2), SICAV-RAIF	123,678	-
M&G Investments (Americas) Inc.	94,174	-
M&G Real Estate Asia Pte.	93,109	-
M&G Investments Japan Co., Ltd.	33,412	-
Prudential UK Real Estate Limited Partnership	15,292	-
M&G International Investments S.A.	-	83,583,563
M&G International Investments S.A., Succursale francaise	-	303,410
TOTAL	84,089,893	120,690,253

The Company delegates distribution activities and portfolio management activities to M&G Investment Management Limited.

The Company delegates distribution,client identification, marketing, sales support and promotional services to the following Croup companies:

―	M&G Investments (Americas) Inc.
―	M&G Real Estate Asie Pte.
―	M&G Investments (Hong Kong) Limited
―	M&G Investments (Japan) KK
―	M&G Investments (Singapore Pte) Ltd
―	M&G Investments (Australia) Pty
―	M&G Investments Switzerland AG
―	Prudential Assurance Company Limited ^*
―	M&G FA Limited ^*

^* The Company has a Master Service Agreement with M&G FA limited covering group support services and rebates agreement with Prudential Assurance Company Limited.

NOTE 22 - POST BALANCE SHEET EVENTS

In 2022, the global economy experienced persistent inflationary pressure, heightened recessionary fears, central bank tightening, rising geopolitical risk inc. Russia/Ukraine conflict and UK political instability driving negative market sentiments. Recessionary fears in both European and US markets are expected to flow through into 2023 as economic stresses from rate increases and rising inflation mount.

Surging energy prices from the Russia/Ukraine conflict and supply chain disruptions driven by China's zero Covid policy, have adversely impacted markets. The conflict could pose a longer-term risk to market stability.

M&G Plc response to developments related to the Ukraine conflict is coordinated by Group Central Response Team, with representatives across M&G. The Company had non material/limited exposure to Russian assets via equity positions held with funds under management. Relevant details requested by the regulator CSSF was provided.

There are no financial effect of material events arising after the balance sheet date impacting the annual accounts under review.