Jupiter Green InvTst - Annual Financial Report
13/07/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230713:nRSM8507Fa&default-theme=true
RNS Number : 8507F Jupiter Green Investment Trust Plc 13 July 2023
Jupiter Green Investment Trust plc ('the company')
Legal Entity Identifier: 549300MFRCR13CT1L845
Annual Financial Results for the year ended 31 March 2023
Financial Highlights for the year ended 31 March 2023
Capital Performance As at As at
31 March 2023 31 March 2022
Total assets less current liabilities (£'000) 54,578 55,390
Ordinary Share Performance As at As at
31 March 2023 31 March 2022 % change
Mid-market price (p) 224.00 210.00 +6.7
Undiluted net asset value per ordinary share(▲) 258.58 258.43 +0.0
Diluted net asset value per ordinary share 259.86 259.18 +0.3
MSCI World Small Cap Index*** 390.67 412.12 -5.2
Discount to net asset value (%)(▲) 13.37 18.74
Ongoing charges ratio (%) excluding finance costs (Note 6) (▲) 1.72 1.57
Performance (excluding dividend income) Since Launch
Year-
on-year
Net asset change in Year-
Total assets value Dividends Net Asset on-year
less per declared per Value per change in
current ordinary ordinary ordinary benchmark
Year ended 31 March liabilities share share share index***
£'000 p p % %
8 June 2006 (launch) 24,297 97.07 - - -
2007 31,679 118.07 - +22.3* -
2008 52,734 114.14 - -3.9** -
2009 33,809 76.86 - -32.7 -36.5
2010 43,590 106.65 - +38.8 +41.6
2011 41,085 120.49 0.40 +13.0 +11.0
2012 36,181 108.49 0.60 -10.0 -23.8
2013 37,571 124.42 1.20 +14.7 +10.3
2014 38,142 145.00 1.10 +16.5 +28.6
2015 38,545 152.35 0.55 +5.1 +10.6
2016 33,418 150.79 0.65 -1.0 -3.3
2017 38,509 184.33 1.20 +22.2 +28.4
2018 40,147 191.31 1.30 +3.8 +3.7
2019 35,934 188.70 2.20 -1.4 +6.0
2020 32,581 173.31 2.40 -8.2 +3.4
2021 53,304 266.73^ 0.64 +53.9 +61.0
2022 55,390 258.43 0.00 -3.1 +2.6
2023 54,578 258.58^ 0.00† 0.0 -5.2
* In September 2006, new ordinary shares totalling 1,058,859 were issued
and in November 2006, new ordinary shares totalling 600,000 were issued.
Investment performance adjusted for the new issues of Ordinary shares.
** In April, July and August 2007, new ordinary shares totalling 20,249,074
were issued and a total of 737,963 ordinary shares were cancelled in March
2008. Investment performance adjusted for the new issues and the subsequent
cancellation of shares.
*** With effect from 2 September 2020 the Company
retrospectively changed its benchmark from the FTSE ET100 Total Return Index
to the MSCI World Small Cap Index, both expressed in sterling terms.
^ Being the exercise price for the purposes of the 2023 subscription rights.
† No final dividend will be paid.
Strategic Report
Chairman's Statement
Performance
Against the backdrop of a tumultuous year in 2022 in which the Russian
invasion of Ukraine led to sharply rising fossil fuel prices and the
inflationary pressures that ensued continued to dominate market sentiment, we
are pleased to present the Annual Report and Accounts for your Company for the
twelve months to 31 March 2023.
The Company's Net Asset Value total return delivered -0.4%, outperforming the
wider Global small Cap index, -3.1%. The Company's share price however
delivered a +6.7% return over the same period.
It is encouraging that the absolute return of the portfolio over the 12-month
period was positive, although this should be viewed in the context of a
volatile year for equity markets, in particular environmental solutions
companies, in the face of significant macro and geopolitical headwinds, and
one in which the NAV of the Company sharply recovered from the lows in 2022.
The Company's 12-month financial reporting period covers the entire timeframe
since Russia's invasion of Ukraine in February 2022, which catalysed an
inflationary crisis in the global economy and an orchestrated effort by
central banks to tame inflation with tighter monetary policy, making for an
extremely challenging environment for all investors, particularly those
focused on smaller companies in the early stages of their growth.
Energy has undoubtedly been the area of greatest disruption feeding
inflationary pressures into all sectors which rely on fossil fuels. This
fossil fuel energy shock highlights how critical energy systems are to
everyday life and living standards. Furthermore, that environmental solutions
- on both the demand and supply-side of the energy equation - are pivotal to
urgently shaping sustainable and resilient energy systems.
Last summer, new legislation providing the greatest support for environmental
solutions in the history of the United States passed into law. Yet you would
hardly have known it from the name. The Inflation Reduction Act of 2022 (IRA),
signed into law by President Joe Biden on 16 August 2022, was originally
billed as the 'Build Back Better Act', but neither name reflects the true
intentions behind the law - combatting climate change and reinvigorating US
industrial and strategic policy in the process.
Not only does the IRA give the US a meaningful chance of meeting its
greenhouse gas reduction targets of 40% below 2005 levels by 2030, but it also
presents an unprecedented catalyst for companies in the environmental
solutions space. The IRA provides $369 billion of spending over ten years,
including $158bn on clean energy, $13bn on electric vehicle incentives, $14bn
in home energy efficiency upgrades, and $22bn in home energy supply
improvements. Moreover, there is upwards of $37bn for simple, effective
advanced manufacturing incentives that have already begun to shift the
corporate investment landscape.
In response, the EU's Net-Zero Industry Act and European Critical Raw
Materials Act, both part of a Green Deal Industrial Plan and dubbed the 'EU
IRA', are designed to prevent the bloc falling further behind. The proposed
legislation sets a headline benchmark of ensuring that at least 40% of
low-carbon technology needs are met by manufacturing within the EU by 2030.
The pace and scope of this investment, and the regulatory change that
accompanies, provides a welcome boost to the universe of environmental
solutions businesses. Naturally, there will be both winners and losers from
any process of change. Ultimately, thematic investment is an acceptance of,
and appetite for, the future to be different to the past. By capturing
structural growth opportunities through economic cycles, the Company's
investment managers seek to provide investors with above-market returns over
the long term. While the structural growth opportunity is accelerating, so too
is its complexity, placing specialist active managers at an advantage.
Discount management
The Board remains committed to its stated policy of using share buy-backs with
the intention of ensuring that, in normal market conditions, the market price
of the company's shares will track their underlying net asset value.
The discount at which the ordinary shares trade was 13.4% as at the 31 March.
During the year the Company's shares traded at a discount to its NAV ranging
between -6.5% to -25%. The Board continues to monitor the level at which the
Company's shares trade and may seek to limit any future volatility through the
prudent use of share buybacks, as the circumstances require. The company
bought back a total of 328,726 shares for cancellation at an average discount
of 14.4%, adding 0.3% to NAV.
Subscription issue
Each year shareholders are entitled to subscribe for new ordinary shares on
the basis of one new ordinary share for every ten held. This year, the
subscription price was 258.43 (being the audited undiluted net asset value of
the ordinary shares as at 31 March 2022). The prevailing market price on the
subscription date was 224p. As such a small number of subscription requests
received resulting in the issue of 13,639 ordinary shares from treasury.
Board succession
We were delighted to welcome Baroness Bryony Worthington to join the Board as
non-executive director in September 2022. Bryony has a wealth of experience in
the environmental campaigning and policy, with time spent at Friends of the
Earth the Department for Environment, Food and Rural Affairs working as the
lead author in the team which drafted the UK's 2008 Climate Change Act. Bryony
launched Sandbag in 2008 to raise public awareness of and improve the European
Union's Emissions Trading Scheme (ETS).
Life of the company
The company does not have a fixed life, however, the Board considers it
desirable that shareholders should have the opportunity to review the future
of the company every three years. Accordingly, the directors will propose
Resolution 10 of the notice of the meeting, as an ordinary resolution for the
continuation of the company in its current form at the AGM of the company to
be held on 14 September 2023. The Directors have no indication that the vote
will not pass and will all be voting in favour of continuation, and we
encourage shareholders to do the same.
Outlook
The Jupiter Environmental Solutions team has a long-established record of
investing in emerging and established Green technologies, and it is their
long-held conviction that solving environmental challenges will be critical to
continued global development.
Addressing both the causes and effects of these climate challenges will become
inevitable, and as such Environmental Solutions as an asset class are no
longer deemed peripheral. The development of technologies through innovation
are key to combatting the world's climate and environmental crisis. These
solutions are now setting the pace for policy and regulation - a welcome
reversal to the previous relationship. The scale of change required to reverse
global warming is creating significant opportunities for investors to support
environmental solutions companies, which provide products and services which
are critical to achieving sustainability targets. It is becoming ever more
evident that these solutions will spread widely and to as-yet unpenetrated
sectors of the global economy.
Governments are likely to continue to play a major role, in terms to
encouraging the development of environmental solutions as part of the path to
achieving net zero by 2050, and through the regulation of all companies to
improve transparency around climate and biodiversity impact.
As attitudes toward addressing climate solutions shift, there is a broadening
of the value chain beyond the conventional lens. The opportunities throughout
the market that this creates will be plentiful and we firmly believe the
Jupiter Green Investment Trust remains well-positioned to identify them.
Michael Naylor
Chairman
12 July 2023
( )
Investment Adviser's Review
Market review
The first several months of the period under review were characterised by a
continued slump in global stock and bond markets as concerns grew around
persistent inflation, moderating economic growth and hawkish central bank
policy. In Europe, energy prices surged as Russia cut supplies in retaliation
for sanctions related to the war in Ukraine. In China, the economy was
constrained by a faltering property market and lockdowns intended to control
COVID-19.
Markets began to pick up in the second half of 2022 and into the first quarter
of 2023, latterly due to investor optimism from China's reopening. European
stocks benefited in-part from being one of their largest trading partners and
the market continued to rebound in the region on falling natural gas prices
and improving investor sentiment from depressed levels. In the US, gradually
moderating inflation and signals of economic resilience led the market to view
the Federal Reserve's slowing pace of interest rate rises as a signal that a
deep recession can be averted.
In July, a largely unexpected breakthrough in Washington led to the Inflation
Reduction Act (IRA), which was subsequently passed by Congress in August. The
Act represents the largest government investment in addressing climate change
in US history and provides $370bn over 10 years for climate solutions.
In response to the US Inflation Reduction Act (IRA) published last year, the
European Commission published two important components of its Green Deal
Industrial Plan in March: (1) the Net-Zero Industry Act, to scale up
manufacturing and attract investment for strategic net-zero technologies in
the EU; and (2) the Critical Raw Materials Act to ensure the EU's access to
resilient and sustainable supply of critical raw materials.
Policy review
The Company's approach to investing in sustainable solutions remains focussed
on six environmental solutions themes:
■ Circular economy: solutions for sustainable materials and resource
stewardship
■ Clean energy: generation, storage and distribution
■ Sustainable Oceans & Freshwater Systems: conservation and
management
■ Green Mobility: technologies and services for sustainable movement
■ Green Buildings & Industry: enabling a low carbon transition
■ Sustainable Agriculture & Land Ecosystems: solutions protecting
natural resources and well-being
Within those themes, the Company is focused on companies - many of them on the
smaller end of the market capitalisation spectrum - that are at the forefront
of innovating technological solutions to environmental challenges with a large
potential market ('innovators'), as well as companies that are already rapidly
delivering proven solutions in their markets ('accelerators'). We believe this
approach should deliver attractive capital growth to shareholders over the
long term.
Despite the economic turbulence and volatility across investment markets, the
period under review offered continued evidence that the Company's focus on
global environmental solutions can deliver attractive investment returns. In
the wake of passage of the US IRA (which we believe will in time present a
multi-year catalyst for environmental solutions), the Clean Energy theme,
which includes companies such as First Solar, was particularly buoyant.
Infineon and Monolithic Power also both performed well. We added to these two
names in Q4 following a sell-off across much of the semiconductor sector,
which overlooked the structural growth opportunity and leadership both
companies have in energy-efficient power solutions.
Another key contributor to performance was Ansys (which was bought during the
period). Ansys is the world's leading engineering simulation software provider
with diversified end-market exposure and a strong financial profile. Sitting
in our Circular Economy theme, Ansys provides solutions to reduce customers'
resource and material use by reducing physical prototypes in the R&D and
testing phase of product development. Ansys released a strong set of full year
results and guidance in February, which led to share price outperformance
versus its peers.
The Sustainable Agriculture and Land theme was a notable detractor on a
thematic basis, with European materials stocks such as DSM and Borregaard
among the bottom of the portfolio contributors. A Eurocentric client base
combined with energy cost pressures in Europe have presented a challenging
near-term environment for such businesses. Another notable detractor was
Advanced Drainage (Circular Economy), which issued a profits warning. In one
of its divisions there was a destocking of inventories, which was more severe
than management had anticipated and dampened expectations significantly.
Outlook
We have a long-held conviction that environmental challenges are central to
global development in the long term. Addressing both the causes and effects of
these challenges is in our view becoming inevitable, with environmental
solutions currently crossing a watershed moment where they are no longer
deemed peripheral, but instead integral to future pathways and markets.
The great energy shock of the last 18 months - and the critical role that
"clean'' solutions are playing in responding to the long-term challenges of
energy security, affordability and climate change - serve to highlight the
crucial importance of environmental solutions in solving these unavoidable and
era-defining issues.
We expect the volatility in equity markets to continue into the near term,
presenting opportunities for long-term active investors focussing on
structural trends such as energy transition and more widely across our six
environmental solution investment themes.
Jon Wallace
Fund Manager
Jupiter Asset Management Limited
Investment Adviser
12 July 2023
Top five contributors and detractors
Detail
Total Returns (%) Contribution to Return (%)
Contributors
FIRST SOLAR INC 176.65 2.27
VALMONT INDUSTRIES 53.42 1.08
INFINEON TECHNOLOGIES AG 27.68 0.87
PRYSMIAN SPA 32.45 0.83
WATTS WATER TECHNOLOGIES- A 29.48 0.64
Detail
Total Returns (%) Contribution to Return (%)
Detractors
ORSTED O/S -25.91 -0.68
CERES POWER HOLDINGS PLC -47.02 -0.72
HANNON ARMSTRONG SUSTAINABLE -32.05 -0.98
BEFESA SA -37.79 -1.01
KONINKLIJKE DSM NV -29.11 -1.03
Investment Portfolio as at 31 March 2023
31 March 2023 31 March 2022
Market value Percentage Market value Percentage
Company Country of Listing £'000 of Portfolio £'000 of Portfolio
Veolia Environnement France 1,851 3.4 1,824 3.4
Infineon Technologies Germany 1,845 3.3 1,474 2.7
Evoqua Water Technologies United States of America 1,785 3.2 2,176 4.0
Prysmian Italy 1,728 3.1 1,329 2.5
Schneider Electric France 1,707 3.1 1,684 3.1
Monolithic Power Systems United States of America 1575 2.9 1,537 2.9
Vestas Wind Systems Denmark 1,575 2.9 1,530 2.8
Stantec Canada 1,551 2.8 1,042 1.9
Daikin Industries Japan 1,508 2.7 1,331 2.5
ANSYS United States of America 1,494 2.7 - -
Watts Water Technologies United States of America 1,447 2.6 1,077 2.0
Waste Connections Canada 1,415 2.6 - -
Clean Harbors United States of America 1,402 2.5 869 1.6
Acuity Brands United States of America 1,371 2.5 931 1.7
SolarEdge Technologies United States of America 1,319 2.4 1,316 2.5
Trimble United States of America 1,301 2.4 - -
NextEra Energy Partners United States of America 1,287 2.3 1,657 3.1
Borregaard Norway 1,277 2.3 1,248 2.3
Koninklijke DSM Netherlands 1,272 2.3 1,830 3.4
First Solar United States of America 1,263 2.3 1,125 2.1
Renewi United Kingdom 1,225 2.2 1,336 2.5
Xylem United States of America 1,186 2.2 776 1.5
Republic Services United States of America 1,163 2.1 - -
TOMRA Systems Norway 1,145 2.1 1,176 2.2
Eurofins Scientific Luxembourg 1,113 2.0 - -
Orsted Denmark 1,099 2.0 1,396 2.6
Alfa Laval Sweden 1,045 1.9 - -
Advanced Drainage Systems United States of America 1,044 1.9 1,216 2.3
Aptiv Jersey 1,021 1.9 1,023 1.9
Hannon Armstrong Sustainable
Infrastructure Capital, REIT United States of America 972 1.8 1,513 2.8
Novozymes Denmark 971 1.8 769 1.4
Littelfuse United States of America 960 1.7 - -
Shimano Japan 944 1.7 881 1.6
Horiba Japan 941 1.7 821 1.5
Daiseki Japan 917 1.7 909 1.7
Ormat Technologies United States of America 908 1.7 - -
Befesa Luxembourg 837 1.5 1,370 2.6
Flat Glass Group China 830 1.5 852 1.6
Sensirion Holding Switzerland 754 1.4 1,672 3.1
Re:NewCell Sweden 745 1.4 810 1.5
Azbil Japan 701 1.3 707 1.3
Ceres Power Holdings United Kingdom 686 1.2 726 1.4
Atlas Copco Sweden 617 1.1 600 1.1
Brambles Australia 585 1.1 455 0.8
Innergex Renewable Energy Canada 581 1.1 800 1.5
Corbion Netherlands 579 1.0 573 1.1
Greencoat Renewables Ireland 530 1.0 531 1.0
Sensata Technologies Holding United Kingdom 529 1.0 900 1.7
Hoffmann Green Cement
Technologies France 208 0.4 544 1.0
Agronomics Isle of Man 193 0.3 339 0.6
Agronomics Warrant
11/12/2023 Isle of Man - - - -
Total Investments 55,002 100.0
The holdings listed above are all equity shares unless otherwise stated
Cross Holdings in other Investment Companies
As at 31 March 2023, 1.0% of the Company's total assets was invested in
Greencoat Renewables, an Irish listed investment Company.
Whilst the requirements of the UK Listing Authority permit the Company to
invest up to 10% of the value of the total assets of the Company (before
deducting borrowed money) in other investment companies (including investment
trusts) listed on the Main Market of the London Stock Exchange, it is the
directors' current intention that the Company invests not more than 5% in
other investment companies.
Analysis of Investments by Investment Theme, Stage of Development, Geography
and Economic Sector
Analysis of Investments by Investment Theme and Stage of Development
As at 31 March 2023 (ex-cash)
Environmental theme
Sustainable Sustainable
Green agriculture Ocean &
Circular Clean Buildings & Green and Land Freshwater
economy Energy Industry Mobility ecosystems Systems Total
Stage of Development % % % % % % %
Innovators* 3.92 3.54 0.39 0.00 0.35 0.00 8.20
Accelerators* 10.64 17.92 20.74 3.60 11.85 7.29 72.04
Leaders* 9.72 0.00 3.02 4.39 0.00 2.63 19.76
Total 2023 24.28 21.46 24.15 7.99 12.20 9.92 100.00
* Innovators are companies that are innovating technological change to
environmental challenges. Accelerators are companies that already have a
proven solution to environmental challenges and are set to continue rapid
growth within their addressable market. Established leaders are larger
companies which have developed a commanding presence in their chosen markets.
Analysis of Investments by Geography and Economic Sector
As at 31 March 2023 (ex-cash)
United
States of United
America Japan France Kingdom Denmark Others Total
Sectors % % % % % % %
Basic Materials - - - - - 3.7 3.7
Consumer Discretionary - 1.7 - - - 1.9 3.6
Consumer Staples - - - - - 3.3 3.3
Energy 4.7 - - 1.2 2.9 - 8.8
Health Care - - - - 1.8 2.3 4.1
Industrials 13.3 5.7 3.5 1.0 - 15.0 38.5
Real Estate 1.8 - - - - - 1.8
Technology 5.6 - - - - 3.3 8.9
Utilities 11.8 1.7 3.4 2.2 2.0 6.2 27.3
Total 2023 37.2 9.1 6.9 4.4 6.7 35.7 100.0
Strategic Review
The Strategic Report has been prepared in accordance with the Companies Act
2006 (Strategic Report and Directors' Report) Regulations 2013.
The Strategic Report seeks to provide shareholders with the relevant
information to enable them to assess the performance of the Directors of the
Company during the period under review.
Business and Status
During the year the Company carried on business as an investment trust with
its principal activity being portfolio investment. The Company has been
approved by HM Revenue & Customs ('HMRC') as an investment trust subject
to the Company continuing to meet the eligibility conditions of sections 1158
and 1159 of the Corporation Taxes Act 2010 and the ongoing requirements for
approved companies as detailed in Chapter 3 of Part 2 of the Investment Trust
(Approved Company) (Tax) Regulations 2011. In the opinion of the Directors,
the Company has conducted its affairs in the appropriate manner to retain its
status as an investment trust.
The Company is a public limited Company and is an investment Company within
the meaning of section 833 of the Companies Act 2006. It is also an
Alternative Investment Fund (AIF) for the purposes of the EU Alternative
Investment Fund Managers Directive.
The Company has a fixed share capital although it may issue or purchase its
own shares subject to shareholder approval, usually sought annually.
The Company is not a close Company within the meaning of the provisions of the
Corporation Tax Act 2010 and has no employees.
The Company was incorporated in England & Wales on 12 April 2006 and
started trading on 8 June 2006, immediately following the Company's launch.
Reviews of the Company's activities are included in the Chairman's Statement
and Investment Adviser's Review.
There has been no significant change in the activities of the Company during
the year to 31 March 2023 and the Directors anticipate that the Company will
continue to operate in the same manner during the current financial year.
Investment Objective
The investment objective of the Company is to achieve capital growth and
income, both over the long term, through investment in a diverse portfolio of
companies providing environmental solutions.
Investment Strategy
The Investment Adviser has adopted a bottom-up approach. The Investment
Adviser, supported by Jupiter's Governance and Sustainability team, researches
companies, ensuring that each potential investment falls within the Company's
stated investment policy. Consideration is also given to a potential
investment's risk/return profile and growth prospects before an investment is
made. Once companies operating within the appropriate theme have been
identified and due diligence has been carried out, the Investment Adviser will
decide whether a particular investment would be appropriate.
Investment Policy
From the year ended 31 March 2021, the Company's investment focus was adjusted
towards a greater emphasis on Companies which are innovating technological
solutions to sustainability challenges ('innovators') and companies that are
already rapidly delivering proven sustainable solutions in their markets
('accelerators'). A by-product of these changes is a greater focus on smaller
companies which are at the forefront of the innovation driving sustainable
solutions.
The following investment restrictions are observed:
■ no more than 5% of the Company's total assets (at the time of such
investment) may be invested in unlisted securities;
■ no more than 15% of the total assets of the Company (before deducting
borrowed money) is lent to or invested in any one Company or group at the time
the investment or loan is made. For this purpose any existing holding in the
Company or group concerned is aggregated with the proposed investment;
■ distributable income is principally derived from investments;
■ not more than 10%, in aggregate, of the value of the total assets of
the Company (before deducting borrowed money) is invested in other UK listed
investment companies (including investment trusts) listed on the Official
List. Whilst the requirements of the UK Listing Authority permit the Company
to invest up to this 10% limit, it is the Directors' current intention that
the Company invests not more than 5%, in aggregate, of the value of the total
assets of the Company (before deducting borrowed money) in such other
investment companies; and
■ the Company at all times invests and manages its assets in a way which
is consistent with its objective of spreading investment risk.
In accordance with the requirements of the UK Listing Authority, any material
changes in the principal investment policies and restrictions of the Company
would only be made with the approval of shareholders by ordinary resolution.
Future Developments
It is the Board's ambition to continue to grow the asset base of the Company
through a combination of organic growth of net asset value and issuance of new
shares with a view to achieving the critical mass necessary to attract broader
demand from large national discretionary wealth managers, and other long-term
institutional buyers of investment trust shares.
Benchmark Index
The Company's benchmark is the MSCI World Small Cap Index.
Management
The Company has no employees and most of its day to day responsibilities are
delegated to Jupiter Asset Management Limited ('JAM'), who act as the
Company's Investment Adviser and Company secretary. Further details of the
Company's arrangement with JAM and the Alternative Investment Fund Manager
('AIFM'), Jupiter Unit Trust Managers Limited, can be found in Note 22 to the
accounts. Both JAM and JUTM are part of the Jupiter Group which comprises
Jupiter Fund Management PLC and all of its subsidiaries ('Jupiter').
J.P. Morgan Europe Limited ('JPMEL') acts as the Company's depository. The
Company has also entered into an outsourcing arrangement with J.P. Morgan
Chase Bank N.A. ('JPMCB') for the provision of accounting and administration
services.
Although JAM is named as the company secretary, JPMEL provides administrative
support to the Company secretary as part of its formal mandate to provide
broader fund administration services to the Company.
Viability Statement
In accordance with Provision 36 of the Code of Corporate Governance as issued
by the Association of Investment Companies in February 2019 (the 'AIC Code'),
the Board has assessed the prospects of the Company over a longer period than
the twelve months required by the 'Going Concern' provision, reviewing in line
with the three year cycle of the continuation vote. In doing so the Board
believes that there will be no issue in the next continuation vote being
passed. The Company's investment objective is to achieve capital growth and
income, both over the long term and the Board regards the Company as a
long-term investment.
The Board has considered the Company's business model including its investment
objective and investment policy as well as the principal and emerging risks
and uncertainties that may affect the Company.
In addition, the Board has considered the reporting produced by the Jupiter
Investment Risk Team concerning a number of potential future scenarios
resulting from ongoing market volatility. The Board continues to monitor
income and expense forecasts for the Company.
The Board has noted that:
■ The Company holds a highly liquid portfolio invested predominantly
in listed equities.
■ The investment management fee is the most significant expense of
the Company. It is charged as a percentage of the portfolio value and so would
reduce if the market value of the portfolio were to fall. The remaining
expenses are more modest in value and are predicable in nature. No
significant increase to ongoing charges or operational expenses is
anticipated.
■ Green and sociably responsible investing is now high on the agenda
of many retail investors and that the Company is well placed to attract these
retail investors through targeted marketing.
■ Climate change is a key issue for asset managers and their
investors. ESG issues are integrated into the Company's investment processes
and these are continually monitored to ensure that the investment objectives
are followed to mitigate any risk of the perception of greenwashing and any
related litigation.
■ The Board is satisfied that Jupiter and the Company's other key
third-party suppliers maintain suitable processes and controls to ensure that
they can continue to provide their services to the Company.
The Board has therefore 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 next three years.
As part of its assessment, the Board has noted that shareholders will be
required to vote on the continuation of the Company at the 2023 AGM.
Further information regarding the planned life of the Company can be found
within the Report and Accounts.
Gearing
Gearing is defined as the ratio of a Company's debt less cash held compared to
its equity capital, expressed as a percentage. The effect of gearing is that
in rising markets the Company tends to benefit from any growth of the
Company's investment portfolio above the cost of payment of the prior ranking
entitlements of any lenders and other creditors. Conversely, in falling
markets the Company suffers more if the Company's investment portfolio
underperforms the cost of those prior entitlements.
The Company may utilise gearing at the director's discretion for the purpose
of financing the Company's portfolio and enhancing shareholder returns. In
particular, the Company may be geared by bank borrowings which will rank in
priority to the ordinary shares for repayment on a winding up or other return
of capital.
The Articles provide that, without the sanction of the Company in a general
meeting, the Company may not incur borrowings above a limit of 25% of the
Company's total assets at the time of drawdown of the relevant borrowings.
Loan facility
The Company has a revolving loan facility agreement with Royal Bank of
Scotland International Limited of £5 million which the Investment Adviser has
been authorised by the Board to draw down for investment purposes. The
facility to gear the Company's investment portfolio is deployed tactically by
the Investment Adviser with a view to enhancing shareholder returns. The
Directors have determined that the maximum level of gearing will be 25% of the
Company's total assets at the time of
drawdown. The finance costs shown in the Statement of Comprehensive Income are
in respect of interest charges on the utilised balance along with the costs
incurred for non-utilisation of the facility during the year to the end of the
loan term.
Use of Derivatives
The Company may invest in derivative financial instruments comprising options,
futures and contracts for difference for investment, hedging and efficient
portfolio management, as more fully described in the investment policy. There
is a risk that the use of such instruments will not achieve the goals desired.
Also, the use of swaps, contracts for difference and other derivative
contracts entered into by private agreements may create a counterparty risk
for the Company. This risk is mitigated by the fact that the counterparties
must be institutions subject to prudential supervision and that the
counterparty risk on a single entity must be limited in accordance with the
individual restrictions. There were no open derivatives at year end.
Currency Hedging
The Company's accounts are maintained in sterling while investments and
revenues are likely to be denominated and quoted in currencies other than
sterling. Although it is not the Company's present intention to do so, the
Company may, where appropriate and economic to do so, employ a policy of
hedging against fluctuations in the rate of exchange between sterling and
other currencies in which its investments are denominated.
Key Performance Indicators
At their quarterly Board meetings the Directors consider a number of
performance indicators to help assess
the Company's success in achieving its objectives. The key performance
indicators used to measure the
performance of the Company over time are as follows:
■ Net asset value changes over time;
■ Ordinary share price movement;
■ A comparison of ordinary share price and net asset value to
benchmark;
■ Discount and premium to net asset value; and
■ Growth in assets under management.
Information on some of the above key performance indicators and how the
Company has performed against them can be found within the Report and
Accounts.
In addition, a history of the net asset values, the price of the ordinary
shares and the benchmark index are shown on the monthly factsheets which can
be viewed on the Investment Adviser's website www.jupiteram.com/JGC and which
are available on request from the company secretary.
Discount to Net Asset Value
The Directors review the level of the discount or premium between the middle
market price of the Company's ordinary shares and their net asset value on a
regular basis.
The Directors have powers granted to them at the last AGM to purchase ordinary
shares and either cancel or hold them in treasury as a method of controlling
the discount to net asset value and enhancing shareholder value.
The Company repurchased 328,726 ordinary shares for holding in treasury during
the year under review at a discount of 14.40%.
Under the Listing Rules, the maximum price that may currently be paid by the
Company on the repurchase of any ordinary shares is 105% of the average of the
middle market quotations for the ordinary shares for the five business days
immediately preceding the date of repurchase. The minimum price will be the
nominal value of the ordinary shares. The Board is proposing that its
authority to repurchase up to approximately 14.99% of its issued share capital
should be renewed at the AGM. The new authority to repurchase will last until
the conclusion of the AGM of the Company in 2023 (unless renewed earlier). Any
repurchase made will be at the discretion of the Board in light of prevailing
market conditions and within guidelines set from time to time by the Board,
the Companies Act, the Listing Rules and Model Code.
Treasury Shares
In accordance with the Companies (Acquisition of Own Shares) (Treasury Shares)
Regulations 2003 (the 'Regulations') which came into force on 1 December 2003
any ordinary shares repurchased, pursuant to the above authority, may be held
in treasury. These ordinary shares may subsequently be cancelled or sold for
cash. This would give the Company the ability to reissue shares quickly and
cost effectively and provide the Company with additional flexibility in the
management of its capital. The Company issued 2,567 ordinary shares from
treasury during the year under review.
Principal and Emerging Risks and Uncertainties
The Directors confirm that they have carried out a robust assessment of the
emerging and principal risks facing the Company, including those that would
threaten its business model, future performance, solvency or liquidity. Most
of these risks are market related and are similar to those of other investment
trusts investing primarily in listed markets. The Audit Committee reviews the
Company's risk control summary at each meeting, and as part of this process,
gives consideration to identifying emerging risks. Any emerging risks that are
identified, that are considered to be of significance will be recorded on the
Company's Risk Control Summary with any mitigations. In carrying out this
assessment, consideration is being given to the current market conditions
which may impact the Company. No emerging risks have been identified.
Investment policy and process - Inappropriate investment policies and
processes may result in under performance against the prescribed benchmark
index and the Company's peer group.
The Board manages these risks by ensuring a diversification of investments and
regularly reviewing the portfolio asset allocation and investment process. In
addition, certain investment restrictions have been set and these are
monitored as appropriate.
Investment Strategy and Share Price Movements -The Company is exposed to the
effect of variations in the price of its investments. A fall in the value of
its portfolio will have an adverse effect on shareholders' funds. It is not
the aim of the Board to eliminate entirely the risk of capital loss, rather it
is its aim to seek capital growth. The Board reviews the Company's investment
strategy and the risk of adverse share price movements at its quarterly Board
meetings taking into account the economic climate, market conditions and other
factors that may have an effect on the sectors in which the Company invests.
There can be no assurances that appreciation in the value of the Company's
investments will occur but the Board seeks to reduce this risk.
Liquidity Risk - The Company may invest in securities that have a very limited
market which will affect the ability of the Investment Adviser to dispose of
securities when it is no longer felt that they offer the potential for future
returns. Likewise the Company's shares may experience liquidity problems when
shareholders are unable to realise their investment in the Company because
there is a lack of demand for the Company's shares. At its quarterly meetings
the Board considers the current liquidity in the Company's investments and the
level of liabilities when setting restrictions on the Company's exposure. The
Board also reviews, on a quarterly basis, the Company's buy-back programme and
in doing so is mindful of the liquidity in the Company's shares.
Gearing Risk - The Company's gearing can impact the Company's performance by
accelerating the decline in value of the Company's net assets at a time when
the Company's portfolio is declining. Conversely gearing can have the effect
of accelerating the increase in the value of the Company's net assets at a
time when the Company's portfolio is rising. The Company's level of gearing is
under constant review by the Board who take into account the economic
environment and market conditions when reviewing the level.
Regulatory Risk - The Company operates in a complex regulatory environment and
faces a number of regulatory risks. A breach of section 1158 of the
Corporation Tax Act 2010 could result in the Company being subject to capital
gains tax on portfolio movements. Breaches of other regulations such as the
UKLA Listing rules, could lead to a number of detrimental outcomes and
reputational damage. Breaches of controls by service providers such as the
Investment Adviser could also lead to reputational damage or loss. The Board
monitors regulatory risks at its quarterly Board meetings and relies on the
services of its Company secretary, JAM, and its professional advisers to
ensure compliance with, amongst other regulations, the Companies Act 2006, the
UKLA Listing Rules, the FCA's Disclosure Guidance and Transparency Rules and
the Alternative Investment Fund Managers' Directive. In order to ensure that
the Company remains compliant, the Board directly and via the Audit Committee/
Management Engagement Committee receives regular updates from the Investment
Adviser and the Company's other key service providers. The Investment Adviser
is contractually obliged to ensure that its conduct of business conforms to
applicable laws and regulations.
Credit and Counterparty Risk - The failure of the counterparty to a
transaction to discharge its obligations under that transaction could result
in the Company suffering a loss. Further details of the management of this
risk can be found in Note 13 to the accounts of the Annual Report.
Loss of Key Personnel - The day-to-day management of the Company has been
delegated to the Investment Adviser. Loss of the Investment Adviser's key
staff members could affect investment return. The Board is aware that JAM
recognises the importance of its employees to the success of its business. Its
remuneration policy is designed to be market competitive in order to motivate
and retain staff and succession planning is regularly reviewed. The Board also
believes that suitable alternative experienced personnel could be employed to
manage the Company's portfolio in the event of an emergency.
Operational - Failure of the core accounting systems, or a disastrous
disruption to the Investment Adviser's business or that of the administration
provider JPMCB, could lead to an inability to provide accurate reporting and
monitoring.
Financial - Inadequate financial controls could result in misappropriation of
assets, loss of income and debtor receipts and inaccurate reporting of net
asset value per share. The Board annually reviews the Investment Adviser's
report on its internal controls and procedures.
Details of how the Board monitors the operational services and financial
controls of Jupiter and J.P. Morgan are included within the Internal Control
section of the Report of the Directors.
Enterprise risk is reviewed twice a year, taking into its remit emerging risks
as they become immediate, whist still maintaining a long-term perspective
where they are evolving at a fast rate. Climate change and its potential
impacts is under scrutiny at every meeting, this being the very purpose of the
Company.
Climate Change - the impact of climate change risk has been considered and it
is concluded that it does not have a material impact on the Company's
investments. In line with IFRS investments are valued at fair value, which for
the Company are quoted bid prices for investments in active markets at the
Statement of Financial Position date and therefore reflect market participants
view of climate change. Given the nature of the Company all investments are
monitored to ensure that they are in line with the investment objective to
mitigate any risk of
the perception of greenwashing and any related litigation.
Geopolitical - There is increasing risk to market stability and investment
opportunities from geopolitical conflicts such as between Russia and Ukraine.
The Company has no exposure to Russian Stocks.
Capital Gains Tax Information
The closing price of the ordinary shares on the first date of dealing for
capital gain tax purposes was 99p.
Directors
Details of the Directors of the Company and their biographies are set out
within the Report and Accounts.
The Company's policy on Board diversity is included in the Corporate
Governance section of the Report of the Directors.
As at 31 March 2023, the Board comprises of one female and three male
Directors.
Employees, Environmental, Social and Human Rights issues
The Company has no employees as the Board has delegated the day to day
management and administration functions to JUTM, JAM and other third-party
suppliers. There are therefore no disclosures to be made in respect of
employees.
Integration of Environmental, Social and Governance ('ESG') considerations
into the Investment Adviser's Investment Process
JAM has a 30 year record of integrating ESG factors into the investment
process. Its Governance and Sustainability team leverages its relationships
with partner organisations such as the UN Principles for Responsible
Investment ("UN PRI"), the Investor Forum and Institutional Investors Group on
Climate Change ("IIGCC") and regularly engages with these and other industry
bodies to ensure it remains at the forefront of ESG integration. Where
relevant, lessons learned are disseminated across JAM's wider investment team
via its Stewardship Committee. JAM considers stewardship to be an integral
component of its investment process. Typically, JAM does not seek to exclude
companies based on headline risk factors, disclosures or practices, instead
believing that engagement aimed at enhancing long-term outcomes for investors
requires a more rigorous and nuanced approach. Moreover, the Investment
Adviser is of the view that compelling opportunities can arise in companies
where there is evidence of positive change in the areas of environmental and
social risk mitigation and governance practices, but where the market may be
yet to reflect this in investee Company share prices.
Modern Slavery Act
The Modern Slavery Act 2015 requires certain companies to prepare a slavery
and human trafficking statement. As the Company has no employees and does not
supply goods and services, it is not required to make such a statement.
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from its operations as
the day to day management and administration functions have been outsourced to
third-parties and it neither owns physical assets, property nor has employees
of its own. It therefore does not have responsibility for any other emissions
producing sources under the Companies Act 2006 (Strategic Report on Directors'
Reports) Regulations 2013.
Section 172 Statement
Under section 172 of the Companies Act 2006, the directors have a duty to act
in good faith and to promote the success of the Company for the benefit of its
shareholders as a whole. This includes taking into consideration the likely
consequences of their decisions on the long term and on the Company's
stakeholders such as its shareholders, employees and suppliers, while acting
fairly between stakeholders. The Directors must also consider the impact of
the Company's decisions on the environment, the community and its reputation
for maintaining high standards of business conduct.
The Company ensures that the Directors are able to discharge this duty by,
amongst other things, providing them with relevant information and training on
their duties. The Company also ensures that information pertaining to it is
provided, as required, to the Directors as part of the information presented
in regular Board meetings in order that stakeholder considerations can be
factored into the Board's decision-making. The Directors' responsibilities are
also set out in the schedule of matters reserved for the Board and the terms
of reference of its committees, both of which are reviewed regularly by the
Board. At all times the Directors can access as a Board, or individually,
advice from its professional advisers including the company secretary and
independent external advisers.
The Company's investment objective, to achieve capital and income growth over
the long term, supports the Directors' statutory obligations to consider the
long-term consequences of the Company's decisions. How the long-term focus of
the Company is achieved, is set out in more detail in the Annual Report and
above where the Investment Adviser's approach to environmental, social and
governance issues is explained in the section entitled Integration of ESG
considerations into the Investment Adviser's investment process. This approach
is fundamental to the Company achieving long-term success for the benefit of
all of its stakeholders.
The Company's corporate purpose is to generate a total return by investing in
companies which are developing and implementing solutions for the world's
environmental challenges. The Company is also aware of its own potential
impact on the environment and has a number of practical policies in place to
reduce that impact. Examples include the use and sharing of electronic
documents by the Board rather than printing documentation and the provision of
electronic copies of the annual report and accounts which are available to
shareholders and others on the Company website. Where physical copies of the
annual and half yearly financial reports are made, they use materials and
processes designed to both minimise the environmental impact and to maximise
the recycling potential as described in more detail on the inside back cover
of this document. The proxy voting form previously printed in the annual
report and accounts and posted back to the registrars has been removed and
shareholders are invited to vote via the registrar's secure portal. The Board
will continue to review its travel arrangements and will seek to minimise
physical meetings. The Directors as a matter of course continue to seek new
opportunities and to make use of new technologies and processes that will
further enhance environmental operation of the Company.
Engagement with stakeholders and the effect on principal decisions
The Shareholders - The shareholders of the Company are both institutional and
retail in nature and details of those with substantial shareholdings are
detailed within the Report and Accounts.
The Board believe that shareholders have a vital role in encouraging a higher
level of corporate performance and is committed to listening to the views of
its shareholders and giving useful and timely information by providing open
and accessible channels of communication including those listed below.
The AGM - The Company encourages participation from shareholders at its AGMs
where they can communicate directly with the Directors and investment adviser.
Given the environmental ethos of the Company shareholders are encouraged to
submit their votes by proxy ahead of the meeting, or attend the meeting
remotely, rather than attending in person. Further details of how the AGM will
be held can be found within the Report and Accounts. The Board and investment
adviser welcome your questions which may be submitted to
Nick.Black@jupiteram.com. Subject to confidentiality, we will respond to any
questions submitted either directly or by publishing our response on the
company's website. All views of the shareholders will be taken into
consideration and action taken where appropriate.
Online Information - The Company's website (www.jupiteram.com/JGC) contains
the Annual and Half Yearly Financial Report along with monthly factsheets and
commentaries and video updates from the investment adviser. The daily NAV per
share, monthly top ten portfolio listings, dividend announcements and various
regulatory announcements can be found on the regulatory news service of the
London Stock Exchange. Jupiter Green Investment Trust PLC JGC Stock | London
Stock Exchange.
Shareholder Communications
Shareholders can raise issues or concerns at any time by writing to the
Chairman or the Senior Independent Director at the registered office.
Further details about how the Board incorporates the views of the company's
shareholders in its decision-making process can be found in the UK Stewardship
Code and the Exercise of Voting Powers section. Further information about how
the Board ensures that each director develops an understanding of the views of
the Company's shareholders and can be found in the section entitled
Shareholder Relations.
The Investment Adviser
The investment management function is critical to the long-term success of the
Company. The Board and the investment adviser maintain an open and
constructive relationship, with meetings taking place a minimum of four times
per annum with monthly updates and additional meetings as circumstances
require. The Audit Committee meets at least twice a year and as part of its
role considers the internal controls put in place by the investment adviser.
The 'Management of the Company' section in the report details the Board's
consideration of the investment adviser's performance, its terms of
appointment and their annual assessment of its continued stewardship of the
portfolio and its oversight of the administrative functions. The day to day
responsibilities of the Company are delegated to the investment adviser who is
the key service provider and supplies investment management, administration
and Company secretarial services. The investment adviser oversees the
activities of the Company's other third-party suppliers on behalf of the
Company and maintains open and collaborative relationships to maintain
quality, efficiency and cost control through regular communication with
dedicated members of the investment adviser's operational teams. The Board
regularly reviews reports from its investment
adviser, the AIFM, the depositary, the Company broker, the investor relations
research provider and the auditors. These provide vital information concerning
changes in market practice or regulation which affect the Company and assist
the Board in its decision-making process. Representatives from these providers
attend Company Board meetings and give presentations on a regular basis
enabling in depth discussions concerning both their findings and their
performance.
The Board reviews the culture and values of the investment adviser as part of
its ongoing assessment of its performance to ensure these are aligned to those
of the Board. Further information on the investment adviser's culture and
values can be found in the 'Integration of ESG considerations into the
investment adviser's investment process' section of the Annual Report.
Other Third-Party Suppliers
As an externally managed investment Company with no employees or physical
assets, the principal stakeholders of the Company are its shareholders,
investment adviser, AIFM, depositary, custodian, administrator and registrar.
The Investment Adviser works with the key service providers to ensure the
adequacy of the services provided to the Company. On occasion, representatives
of the key service providers are invited to attend to present to the Board in
addition to the regular updates provided by the Investment Adviser.
Principal Decisions
The Directors take into account the s172 considerations in all material
decisions of the Company ensuring in Board discussions that appropriate
attention is given to the short and long-term benefits for stakeholders.
Examples of significant Board discussions and decisions made in the period are
set out below:
· Discount Management: Following discussion at the Board and with the
Company's broker, the Board decided to use the share buy-back programme within
agreed parameters. This resulted in a decision to buyback 328,726 ordinary
shares of the Company during the year.
· Board Evaluation: The independent non-executive directors undertake
on, an annual basis, an appraisal in relation to their oversight and
monitoring of the performance of the investment adviser and other key service
providers. In addition the directors undertake, on an annual basis, a written
assessment of the effectiveness of the Board as a whole by completion of a
formal evaluation questionnaire. The SID also leads a formal evaluation of the
performance of the Chairman.
· Board Succession: In 2022, the Board decided that Michael Naylor
should continue as Chairman of the Company for another 5 years. Although this
exceeds the usual time that a director is appointed to an Investment Trust he
remains independent of mind and given his skills, experience and knowledge of
the Company the directors unanimously opined that he still had more to offer.
Simon Baker was appointed to the Board on 31 July 2015. The Annual General
Meeting in September 2023 represents the eighth anniversary of his
appointment. The Nomination Committee met on 4 July 2023 and concluded that
although exceeding the usual tenure for a Director to be appointed to an
investment trust his passion and dedication to the Company would be a benefit
over the next 3 years. Furthermore, the Directors noted that Simon Baker
remained independent of mind and able to provide the appropriate level of
challenge to portfolio managers.
· Loan: A revolving loan facility agreement with Royal Bank of Scotland
International Limited of £5 million was approved by the Board, and the
Investment Adviser has been authorised by the Board to draw down for
investment purposes. The Loan facility has been drawn down to £3 million of
the £5 million facility.
· Annual General Meeting: As a result of the additional cost and the
level of take-up at the hybrid AGM, the Board decided that shareholders would
be offered an opportunity to attend the AGM in person and ask questions.
· Third-Party Suppliers: The Board decided to make no changes to its
principal third party suppliers in the period.
· Geopolitical Considerations: The Board has discussed the investment
risks and risks in respect of third parties and has noted that the fund had no
exposure to Russian stocks. The Board considers that the levels of risk within
the Company are acceptable and in line with its investment objective.
In Summary
The structure of the Board and its various committees and the decisions it
makes are underpinned by the duties of the Directors under s172 on all
matters. The Board firmly believes that the sustainable long-term success of
the Company depends upon taking into account the interests of all the
Company's key stakeholders.
Michael Naylor
Chairman
12 July 2023
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and financial
statements in accordance with UK adopted International Accounting standards.
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 return or loss of the Company for that
period.
In preparing those financial statements, the Directors are required to:
a) select suitable accounting policies in accordance with UK adopted
International Accounting standards 8 Accounting Policies, Changes in
Accounting Estimates and Errors and then apply them consistently;
b) present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information
c) provide additional disclosures when compliance with the specific
requirements in UK adopted International Accounting standards is insufficient
to enable users to understand the impact of particular transactions, other
events and conditions on the entity's financial position and financial
performance
d) state that the Company has complied with UK adopted International
Accounting standards subject to any material departures disclosed and
explained in the financial statements; and
e) make judgements and estimates that are reasonable and prudent.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website
www.jupiteram.com/JGC. The work carried out by the auditors does not include
consideration of the maintenance and integrity of the website and accordingly
the auditors accept no responsibility for any changes that have occurred to
the financial statements when they are presented on the website.
The financial statements are published on www.jupiteram.com/JGC, which is a
website maintained by Jupiter Asset Management Limited.
Visitors to the website need to be aware that legislation in the United
Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006. 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 Statement of Corporate Governance that comply with that law and
those regulations.
Each of the Directors, who are listed the report, confirm to the best of their
knowledge that:
a) the financial statements, prepared in accordance with UK adopted
International Accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company;
b) the report includes a fair view of the development and performance of
the business and the position of the Company together with a description of
the principal and emerging risks and uncertainties that the Company faces; and
c) in their opinion, the Annual Report and Accounts taken as a whole, is
fair, balanced and understandable and it provides the information necessary to
assess the Company's performance, business model and strategy
So far as each Director is aware at the time the report is approved:
a) there is no relevant audit information of which the Company's Auditors
are unaware; and
b) the Directors have taken all steps required of a Company director to
make themselves aware of any relevant audit information and to establish that
the Company's Auditors are aware of that information.
By order of the Board
Michael Naylor
Chairman
12 July 2023
Statement of Comprehensive Income
for the year ended 31 March 2023
Year ended 31 March 2023 Year ended 31 March 2022
Revenue Capital Total Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Loss on investments at fair value through
profit or loss 10 - (265) (265) - (356) (356)
Foreign exchange gain - 465 465 - 155 155
Income 3 759 - 759 692 - 692
Total income/(loss) 759 200 959 692 (201) 491
Investment management fee 4 (92) (277) (369) (102) (307) (409)
Other expenses 5 (539) - (539) (500) - (500)
Total expenses (631) (277) (908) (602) (307) (909)
Net return/(loss) before finance costs and tax 128 (77) 51 90 (508) (418)
Finance costs 7 (27) (82) (109) (10) (29) (39)
Return/(loss) on ordinary activities
before taxation 101 (159) (58) 80 (537) (457)
Taxation 8 (91) - (91) (86) - (86)
Net loss after taxation 10 (159) (149) (6) (537) (543)
Loss per ordinary share 9 0.05p (0.75)p (0.70)p (0.03)p (2.51)p (2.54)p
Diluted Loss per ordinary share 9 0.05p (0.75)p (0.70)p (0.03)p (2.51)p (2.54)p
* There is no other comprehensive income and therefore the 'Net loss after
taxation' is the total comprehensive expense for the year.
The total column of this statement is the income statement of the Company,
prepared in accordance with UK adopted international accounting standards. The
supplementary revenue return and capital return columns are both prepared
under guidance produced by the Association of Investment Companies (AIC). All
items in the above statement derive from continuing operations.
Statement of Financial Position as at 31 March 2023
2023 2022
Note £'000 £'000
Non current assets
Investments held at fair value through profit or loss 10 55,002 53,776
Current assets
Prepayments and accrued income 11 1,459 181
Cash and cash equivalents 2,954 4,614
4,413 4,795
Total assets 59,415 58,571
Current liabilities
Other payables 12 (4,837) (3,181)
Total assets less current liabilities 54,578 55,390
Capital and reserves
Called up share capital 15 34 34
Share premium 16 2,468 2,465
Redemption reserve* 17 239 239
Retained earnings* 18 51,837 52,652
Total equity shareholders' funds 54,578 55,390
Net Asset Value per ordinary share 19 258.58p 258.43p
Diluted Net Asset Value per ordinary share 19 259.86p 259.18p
* Under the company's Articles of Association, dividends may be paid out of
any distributable reserve of the company.
Approved by the Board of directors and authorised for issue on 12 July 2023
and signed on its behalf by:
Michael Naylor
Chairman
Company Registration Number 05780006
Statement of Changes in Equity for the year ended 31 March 2023
Share Share Redemption Retained
Capital Premium Reserve Earnings Total
For the year ended 31 March 2023 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2022 34 2,465 239 52,652 55,390
Net loss for the year - - - (149) (149)
Ordinary shares reissued from treasury - 3 - 3 6
Ordinary shares repurchased - - - (669) (669)
Balance at 31 March 2023 34 2,468 239 51,837 54,578
Share Share Redemption Retained
Capital Premium Reserve Earnings Total
For the year ended 31 March 2022 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2021 34 1,563 239 51,468 53,304
Net loss for the year - - - (543) (543)
Dividend paid - - - (137) (137)
Ordinary shares reissued from treasury - 902 - 2,052 2,954
Ordinary shares repurchased - - - (188) (188)
Balance at 31 March 2022 34 2,465 239 52,652 55,390
Dividends paid during the period were paid out of revenue reserves.
Cash Flow Statement for the year ended 31 March 2023
2023 2022
Note £'000 £'000
Cash flows from operating activities
Investment income received (gross) 712 693
Deposit interest received 27 1
Investment management fee paid (338) (438)
Other cash expenses (475) (455)
Interest paid (109) (39)
Net cash outflow from operating activities before taxation (183) (238)
Taxation (91) (86)
Net cash outflow from operating activities 20 (274) (324)
Net cash flows from investing activities
Purchases of investments (12,177) (14,268)
Sale of investments 10,989 11,161
Net cash outflow from investing activities (1,188) (3,107)
Cash flows from financing activities
Shares repurchased (669) (188)
Shares reissued from treasury 6 2,954
Drawdown of short-term bank loan - 2,100
Equity dividends paid - (137)
Net cash (outflow)/inflow from financing activities 21 (663) 4,729
(Decrease)/increase in cash (2,125) 1,298
Change in cash and cash equivalents
Cash and cash equivalents at start of year 4,614 3,161
Realised gain on foreign currency 465 155
Cash and cash equivalents at end of year 2,954 4,614
Notes to the accounts
1. Accounting policies
The Accounts comprise the financial results of the Company for the year to 31
March 2023. The Accounts are presented in pounds sterling, as this is the
functional currency of the Company. The Accounts were authorised for issue in
accordance with a resolution of the directors on 12 July 2023. All values are
rounded to the nearest thousand pounds (£'000) except where indicated.
The accounts have been prepared in accordance with UK adopted International
Accounting Standards.
Where presentational guidance set out in the Statement of Recommended Practice
(SORP) for Investment Trusts issued by the Association of Investment Companies
(AIC) in April 2021 is consistent with the requirements of UK adopted
International Accounting Standards, the directors have sought to prepare the
financial statements on a basis compliant with the recommendations of the
SORP.
Basis of preparation
In preparing these financial statements the Directors have considered the
impact of climate change risk as a principal risk, and have concluded that it
does not have a material impact on the Company's investments. In line with
IFRS investments are valued at fair value, which for the Company are quoted
prices for the investments in active markets at the Balance Sheet date and
therefore reflect market participants view of climate change risk.
The financial statements have been prepared on a going concern basis. In
considering this, the directors took into account the Company's investment
objective, risk management policies and capital management policies, the
diversified portfolio of readily realisable securities which can be used to
meet short-term funding commitments and the ability of the Company to meet all
of its liabilities and ongoing expenses as for the period to 31 July 2024,
which is a period of at least 12 months from the date the financial statements
were authorised for issue. The directors have also considered the continuation
vote, due to be proposed at the upcoming AGM, and have no reason to believe
that this resolution will not pass.
(a) Income recognition
Income includes dividends from investments quoted ex-dividend on or before the
date of the Statement of Financial Position.
Dividends receivable from equity shares are taken to the revenue return column
of the Statement of Comprehensive Income.
Special dividends are treated as repayment of capital or as revenue depending
on the facts of each particular case.
(b) Presentation of Statement of Comprehensive Income
In order to better reflect the activities of an investment trust company and
in accordance with guidance issued by the Association of Investment Companies
(AIC), supplementary information which analyses the Statement of
Comprehensive Income between items of a revenue and capital nature has been
presented alongside the statement.
An analysis of retained earnings broken down into revenue (distributable)
items and capital (distributable) items is given in Note 19. Investment
Management fees and finance costs are charged 75 per cent. to capital and 25
per cent. to revenue (2022: 75 per cent. to capital and 25 per cent. to
revenue). All other operational costs (including administration expenses to
capital) are charged to revenue.
(c) Basis of valuation of investments
Investments are recognised and derecognised on a trade date where a purchase
and sale of an investment is under contract whose terms require delivery of
the investment within the timeframe established by the market concerned, and
are initially measured at cost, being the consideration given.
All investments are classified as held at fair value through profit or loss.
All investments are measured at fair value with changes in their fair value
recognised in the Statement of Comprehensive Income in the period in which
they arise. The fair value of listed investments is based on their quoted bid
price at the reporting date without any deduction for estimated future selling
costs.
Foreign exchange gains and losses on fair value through profit and loss
investments are included within the changes in the fair value of the
investments.
For investments that are not actively traded and/or where active stock
exchange quoted bid prices are not available, fair value is determined by
reference to a variety of valuation techniques. These techniques may draw,
without limitation, on one or more of: the latest arm's length traded prices
for the instrument concerned; financial modelling based on other observable
market data; independent broker research; or the published accounts relating
to the issuer of the investment concerned.
(d) Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents are
short-term, highly liquid investments that are readily convertible to known
amounts of cash and that are subject to insignificant risks of changes in
value.
(e) Foreign currencies
Transactions in currencies other than pounds sterling are recorded at the
rates of exchange prevailing on the dates of the transactions. At the date of
each Statement of Financial Position, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on
that date.
Non-monetary assets and liabilities carried at fair value that are denominated
in foreign currencies are translated at the rates prevailing at the date when
the fair value was determined. Gains and losses arising on retranslation are
included in the Statement of Comprehensive Income within the revenue or
capital column depending on the nature of the underlying item.
(f) Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the Statement of Comprehensive
Income because it excludes items of income or expense that are taxable or
deductible in other periods and it further excludes items that are never
taxable or deductible. The Company's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the date of
the Statement of Financial Position.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profit will be available against which deductible
temporary differences can be utilised.
Investment trusts which have approval under Section 1158 of the Corporation
Tax Act 2010 are not liable for taxation of capital gains.
(g) Accounting developments
At the date of authorisation of the financial statements, the following
amendment to the UK adopted International Accounting Standards and
Interpretations was assessed to be relevant and is effective for annual
periods beginning on or after 1 January 2023:
IAS 1: Effective for annual reporting periods beginning on or after 1 January
2023 Classification of Liabilities as Current or Non-current - Amendments to
UK adopted International Accounting Standards 1. Effective for annual
reporting periods beginning on or after 1 January 2024.
Definition of Accounting Estimates - Amendments to UK adopted International
Accounting Standards IAS 8. Effective for annual reporting periods beginning
on or after 1 January 2024.
Disclosure of Accounting Policies - Amendments to UK adopted International
Accounting Standards IAS 1 and IFRS Practice Statement 2. Effective for annual
reporting periods beginning on or after 1 January 2024.
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - Amendments to UK adopted International Accounting Standards 12.
Effective for annual reporting periods beginning on or after 1 January 2024.
The directors expect that the adoption of the standards listed above will have
either no impact or that any impact will not be material on the financial
statements of the Company in future periods.
2. Significant accounting judgements, estimates and assumptions
Management have not applied any significant accounting judgements to this set
of Financial Statements or those of the prior period other than the allocation
of special dividends received between revenue and capital.
The allocation is dependent upon the underlying reason for the payment.
Examples of capital events which would result in the dividend being allocated
to capital is a return of capital to shareholders or proceeds from the
disposal of assets. Examples of revenue events which would result in the
dividend being allocated to revenue are the distribution of excess or
exceptional profits in the year. The circumstances are reviewed by the manager
making recommendations to the Board who determine the appropriate allocation.
The management make no other significant accounting estimates.
3. Income
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Income from investments
Dividends from UK companies - 21
Dividends from overseas companies 732 670
Deposit interest 27 1
Total income 759 692
Special dividends received in the year amounted to £0.02m (2022: £0.06m)
allocated to revenue and £nil (2022: £nil) allocated to capital.
4. Investment management fee
Year ended 31 March 2023 Year ended 31 March 2022
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fee 92 277 369 102 307 409
75% (2022: 75%) of the investment management fee is treated as a capital
expense. Details of the investment management contract are given in Note 22.
5. Other expenses
Year ended 31 March 2023 Year ended 31 March 2022
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Directors' remuneration 107 - 107 107 - 107
Auditors' remuneration including VAT - audit 62 - 62 44 - 44
Fund accounting 56 - 56 58 - 58
Broker fees 45 - 45 36 - 36
Registrar services 22 - 22 51 - 51
Professional and legal fees 49 - 49 30 - 30
Public Relations Fee 36 - 36 47 - 47
Other 162 - 162 127 - 127
539 - 539 500 - 500
6. Ongoing charges
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Investment management fees 369 409
Other expenses 539 500
Total expenses (excluding finance costs) 908 909
Average net assets 52,866 58,063
Ongoing charges % 1.72 1.57
7. Finance costs
Year ended 31 March 2023 Year ended 31 March 2022
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Non-utilisation fee 2 5 7 3 9 12
Short-term loan interest 24 73 97 7 20 27
Bank overdraft interest 1 4 5 - - -
27 82 109 10 29 39
Finance costs are in respect of the costs incurred for non-utilisation and
short-term loan interest during the year of the bank loan facility.
As at 31 March 2023, £3.0 million (2022: £3.0 million) was drawdown of the
loan facility.
8. Taxation
Year ended 31 March 2023 Year ended 31 March 2022
Revenue Capital Total Revenue Capital Total
Tax on ordinary activities £'000 £'000 £'000 £'000 £'000 £'000
Overseas tax 91 - 91 86 - 86
The tax assessed for the year equates to that resulting from applying the
standard rate of corporation tax in the UK of 19% (2022: 19%).
The calculation is explained below:
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Loss on ordinary activities before taxation (58) (457)
Corporation tax at 19% (2022: 19%) (11) (87)
Effects of
Exempt dividend income (120) (113)
Unrelieved tax losses and other deductions arising in the period 174 165
Capital expenses deductible for tax purposes (68) (64)
Foreign tax suffered 91 86
Tax free capital gain/(loss) in investments (38) 38
Income taxed in different years (3) -
Double tax relief received (2) (3)
Current tax charge for the year 91 86
There are unrelieved management expenses at 31 March 2023 of £10,292,000
(2022: £9,374,000) but the related deferred tax asset at 25% (2022: 25%) has
not been recognised. This is because the Company is not expected to generate
taxable income in a future period in excess of the deductible expenses of that
future period and, accordingly, it is unlikely that the Company will be able
to reduce future tax liabilities through the use of existing unrelieved
expenses.
9. Earnings per ordinary share
The earnings per ordinary share figure is based on the net loss for the year
of £170,000 (2022: net loss £543,000) and on 21,300,543 (2022: 21,416,147)
ordinary shares, being the weighted average number of ordinary shares in issue
during the year.
The earnings per ordinary share figure detailed above can be further analysed
between revenue and capital, as below.
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Net revenue gain/loss 10 (6)
Net capital loss (159) (537)
Net total loss (149) (543)
Weighted average number of ordinary shares in issue during the year used for
the
purposes of the undiluted calculation 21,300,543 21,416,147
Weighted average number of ordinary shares in issue during the year used for
the
purposes of the diluted calculation 21,300,543 21,416,147
Undiluted
Revenue gain per ordinary share 0.05p (0.03)p
Capital losses per ordinary share (0.75)p (2.51)p
Total losses per ordinary share (0.70)p (2.54)p
Diluted
Revenue gain per ordinary share 0.05p (0.03)p
Capital losses per ordinary share (0.75)p (2.51)p
Total losses per ordinary share (0.70)p (2.54)p
Any ordinary shares to be issued under the ordinary subscription rules were
dilutive for the year ended 31 March 2023 and 31 March 2022.
10. Non current assets
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Market value of investments at beginning of year 53,776 51,025
Net unrealised losses at beginning of year (18,919) (22,322)
Cost of investments at beginning of year 34,857 28,703
Purchases at cost during year 13,748 14,268
Sales at cost during year (6,742) (8,114)
Cost of investments at end of year 41,863 34,857
Net unrealised gain at the year end 13,139 18,919
Market value of investments at end of year 55,002 53,776
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Listed on UK stock exchange 2,633 3,909
Listed on overseas stock exchanges 52,369 49,867
Market value of investments at end of year 55,002 53,776
Gain/losses on investments
2023 2022
£'000 £'000
Net gains on sale of investments 5,515 3,047
Movement in unrealised losses (5,780) (3,403)
Loss on investments (265) (356)
Transaction costs
The following transaction costs were incurred during the year:
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Purchases 6 15
Sales 6 6
12 21
11. Other Receivables
2023 2022
£'000 £'000
Sales for future settlement 1,268 -
Prepayments and accrued income 191 181
1,459 181
12. Other payables
2023 2022
£'000 £'000
Interest payable 13 2
Non-utilisation fee - 1
Short-term bank loan 3,000 3,000
Other creditors 253 178
Purchases awaiting settlement 1,571 -
4,837 3,181
From 1 January 2022, the interest rate on the short-term bank loan changed
from LIBOR to SONIA. This change had no material impact to the cost of the
loan.
Bank loan
The Company's revolving bank loan is with RBS, with a loan facility available
up to a maximum of £5 million (2022: same).
During the year the Company used the loan facility as follows:
Date Amount Borrowed Date Renewed
10 March 2022 £0.9 million 10 June 2022
13 March 2022 £2.1 million 14 June 2022
10 June 2022 £0.9 million 24 August 2022
14 June 2022 £2.1 million 24 August 2022
24 August 2022 £3.0 million 24 November 2022
24 November 2022 £3.0 million 24 February 2023
24 February 2023 £3.0 million 24 May 2023
As at 31 March 2023, the outstanding loan balance of £3.0 million was renewed
on 24 February 2023. This was further renewed on 24 May 2023.
The Non-utilisation fee (Note 7) relate to the fee payable on the unutilised
portion of the loan facility.
13. Derivatives and other financial instruments
Background
The Company's financial instruments comprise securities and other investments,
cash balances and debtors and creditors that arise directly from its
operations, for example, in respect of sales and purchases awaiting settlement
and debtors for accrued income. The numerical disclosures below exclude
short-term debtors and creditors.
During the year under review, the Company had little exposure to credit, cash
flow and interest rate risks.
The principal risks the Company faces in its portfolio management activities
are:
■ foreign currency risk
■ market price risks i.e. movements in the value of investment holdings
caused by factors other than interest rate or currency movement
The investment adviser's policies for managing these risks are summarised
below and have been applied throughout the year.
Foreign Currency Risk
A proportion of the company's portfolio is invested in overseas securities and
their sterling value can be significantly affected by movements in foreign
exchange rates. The Company does not normally hedge against foreign currency
movements affecting the value of the investment portfolio, but takes account
of this risk when making investment decisions.
Foreign currency sensitivity
The following table illustrates the sensitivity of the return after tax for
the year to exchange rates for the Pound Sterling against the US Dollar, Euro,
Japanese Yen, Norwegian Krone, Canadian Dollar, Danish Krone, Swedish Krona,
Swiss Franc, Hong Kong Dollar and Australian Dollar. It assumes the following
changes in exchange rates:
£/US Dollar +/-10% (2022 +/-5%) £/Norwegian Krone +/-5% £/Australian Dollar +/-5%
(2022: +/-5%) (2022: +/-5%)
£/Japanese Yen +/-5% (2022: +/-5%) £/Euro +/-5% (2022: +/-5%) £/Swedish Krona +/-5%
(2022: +/-5%)
£/Danish Krone +/-5% (2022: +/-5%) £/Canadian Dollar +/-10% £/Hong Kong Dollar +/-10% (2022:
(2022: +/-5%) +/-5%)
£/Swiss Franc +/-10% (2022: +/-5%)
These percentages have been determined based on market volatility in exchange
rates over the previous twelve months. The sensitivity analysis is based on
the Company's foreign currency financial instruments held at the date of each
Statement of Financial Position.
If sterling had weakened against the currencies below this would have the
following effect:
2023 2022
Impact on Impact on Impact on Impact on
revenue capital revenue capital
return return Total return return Total
£'000 £'000 £'000 £'000 £'000 £'000
US Dollar (5) 2,608 2,603 (2) 1,228 1,226
Euro (1) 580 579 (1) 678 677
Japanese Yen - 249 249 - 231 231
Norwegian Krone - 120 120 - 121 121
Canadian Dollar - 212 212 - 92 92
Danish Krone - 181 181 - 184 184
Swedish Krona - 120 120 - 70 70
Swiss Franc - 75 75 - 83 83
Hong Kong Dollar - 83 83 - 42 42
Australian Dollar - 29 29 - 23 23
(6) 4,257 4,251 (3) 2,752 2,749
13. Derivatives and other financial instruments (continued)
If sterling had strengthened against the currencies below this would have the
following effect:
2023 2022
Impact on Impact on Impact on Impact on
revenue capital revenue capital
return return Total return return Total
£'000 £'000 £'000 £'000 £'000 £'000
US Dollar 5 (2,608) (2,603) 2 (1,228) (1,226)
Euro 1 (580) (579) 1 (678) (677)
Japanese Yen - (249) (249) - (231) (231)
Norwegian Krone - (120) (120) - (121) (121)
Canadian Dollar - (212) (212) - (92) (92)
Danish Krone - (181) (181) - (184) (184)
Swedish Krona - (120) (120) - (70) (70)
Swiss Franc - (75) (75) - (83) (83)
Hong Kong Dollar - (83) (83) - (42) (42)
Australian Dollar - (29) (29) - (23) (23)
6 (4,257) (4,251) 3 (2,752) (2,749)
(b) Market Price Risk
By the very nature of its activities, the Company's investments are exposed to
market price fluctuations. Further information on the investment portfolio and
investment policy is set out in the Investment Adviser's Review.
A portion of the financial assets of the Company are denominated in currencies
other than sterling with the result that the Statement of Financial Position
and total return can be significantly affected by currency movements.
Other price risk sensitivity
The following illustrates the sensitivity of the return after taxation for the
year and the equity to an increase or decrease of 20% in the fair value of the
Company's equities. This level of change is considered to be reasonably
possible based on observation of market conditions during the year. The
sensitivity analysis is based on the Company's equities at each financial
position statement date, adjusted for the management fee paid in the year.
The impact of a 20 per cent. increase in the value of investments on the
revenue return as at 31 March 2023 is a decrease of £19,000 (2022: £19,000)
and on the capital return is an increase of £10,943,000 (2022: £10,699,000).
The impact of a 20 per cent. fall in the value of investments on the revenue
return as at 31 March 2023 is an increase of £19,000 (2022: £19,000) and on
the capital return is a decrease of £10,943,000 (2022: £10,699,000).
(c) Interest rate risk
Interest rate movements may affect:
■ the fair value of investments of any fixed interest securities;
■ the level of income receivable from any floating interest-bearing
securities, cash at bank and on deposit; and
■ the interest payable on the Company's floating interest term loans.
The financial assets (excluding short-term debtors and creditors) consist of:
2023 2022
Non-interest Non-interest
Floating rate bearing Total Floating rate bearing Total
£'000 £'000 £'000 £'000 £'000 £'000
Sterling 54 2,104 2,158 53 3,008 3,061
US Dollar 2,154 23,441 25,595 4,558 20,138 24,696
Euro - 11,671 11,671 - 13,631 13,631
Japanese Yen 453 5,010 5,463 3 4,649 4,652
Norwegian Krone 124 2,422 2,546 - 2,424 2,424
Danish Krone 105 3,644 3,749 - 3,695 3,695
Hong Kong Dollar - 830 830 - 852 852
Swedish Krona - 2,408 2,408 - 1,410 1,410
Canadian Dollar 64 2,133 2,197 - 1,842 1,842
Swiss Franc - 754 754 - 1,672 1,672
Australian Dollar - 585 585 - 455 455
2,954 55,002 57,956 4,614 53,776 58,390
The floating rate assets consist of cash deposits at call. Sterling cash
deposits at call earn interest at floating rates based on daily Sterling
Overnight Index Average (SONIA) rates.
The non-interest bearing assets represent the equity element of the investment
portfolio at 31 March 2023.
The financial liabilities consist of:
2023 2022
Non-interest Non-interest
Floating rate bearing Total Floating rate bearing Total
£'000 £'000 £'000 £'000 £'000 £'000
Sterling - 3,000 3,000 - 3,000 3,000
- 3,000 3,000 - 3,000 3,000
The liability consists of a bank loan (see Note 12).
(d) Interest rate sensitivity
As interest rates for any short-term loans are fixed at the commencement of
the loan, only cash at call are subject to interest rate movement.
All such deposits at call earn interest at a daily rate. Therefore, if a
sensitivity analysis was performed by increasing or decreasing the interest
rates applicable to the Company's cash balances held at each reporting date,
with all other variables held constant, there would be no material change to
the profit after taxation or net assets for the year.
(e) Credit and Counterparty Risk
Credit Risk is the exposure to loss from the failure of a counterparty to
deliver securities or cash for acquisitions or to repay deposits. The Company
manages credit risk by using brokers from a database of approved brokers who
have undergone rigorous due diligence tests by the Investment Adviser's Risk
Management Team and by dealing through JAM with banks approved by the
Financial Conduct Authority. Any derivative positions are marked to market and
exposure to counterparties is monitored on a daily basis by the fund manager;
the Board of directors reviews it on a quarterly basis. The maximum exposure
to credit risk as at 31 March 2023 was £4,428,000 (2022: £4,795,000)
consisting of short-term debtors, cash and cash equivalents.
Impairment of financial instruments
The Company holds only trade receivables with no financing component and which
have maturities of less than 12 months at amortised cost and, as such, has
chosen to apply an approach similar to the simplified approach for expected
credit losses (ECL) under IFRS 9 to all its trade receivables. Therefore, the
Company does not track changes in credit risk, but instead, recognises a loss
allowance based on lifetime ECLs at each reporting date.
The Company's approach to ECLs reflects a probability-weighted outcome, the
time value of money and reasonable and supportable information that is
available without undue cost or effort at the reporting date about past
events, current conditions and forecasts of future economic conditions.
In the investment advisors' opinion, due to the low level of expected future
losses on cash and receivables, no provision has been made for ECLs.
(f) Liquidity Risk
Liquidity risk is not considered significant. All liabilities are payable
within three months. The Company's assets comprise mainly readily realisable
securities which can be sold to meet funding requirements if necessary.
Short-term flexibility is achieved through the use of short‑term borrowings.
(g) Fair Value hierarchy
IFRS 13 'Fair Value Measurement' requires an entity to classify fair value
measurements using fair value hierarchy that reflects the significance of the
inputs used in making the measurements. The fair value hierarchy shall have
the following levels:
Level 1 reflects financial instruments quoted in an active market.
Level 2 reflects financial instruments whose fair value is evidenced by
comparison with other observable current market transactions in the same
instrument or based on a valuation technique whose variables includes only
data from observable markets.
Level 3 reflects financial instruments whose fair value is determined in whole
or in part using a valuation technique based on assumptions that are not
supported by prices from observable market transactions in the instrument and
not based on available observable market data.
The financial assets measured at fair value in the Statement of Financial
Position are grouped into the fair value hierarchy as follows:
2023 2022
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Equity Investments 55,002 - - 55,002 53,776 - - 53,776
55,002 - - 55,002 53,776 - - 53,776
14. Capital management policies and procedures
The Company's capital comprises the equity share capital, share premium and
reserves as shown in the Statement of Financial Position.
The Board, with the assistance of the investment adviser, monitors and reviews
the broad structure of the Company's capital on an ongoing basis. This review
includes:
■ The need to buy back equity shares, either for cancellation or to hold
in treasury, which takes account of the difference between the net asset value
per share and the share price (i.e. the level of share price discount or
premium); and
■ The extent to which revenue in excess of that which is required to be
distributed should be retained. During the period, the Company complied with
the externally imposed capital requirements:
■ As a public Company, the Company has a minimum share capital of
£50,000; and
■ In order to be able to pay dividends out of profits available for
distribution, the Company has to be able to meet one of the two capital
restriction tests imposed on investment companies by Company law.
15. Called-up share capital
2023 2022
Number £ Number £
Allotted, issued and fully paid
Ordinary shares of 0.1p each 33,724,958 33,725 33,724,958 33,725
2,567 new ordinary shares were issued from treasury on 13 April 2022.
1,524,328 new ordinary shares were issued from treasury between 6 April 2021
and 12 May 2021.
Between 23 June 2022 and 17 February 2023, 328,726 (0.97%) ordinary shares
were repurchased into treasury. On 8 July 2021, 75,000 (0.22%) ordinary shares
were repurchased into treasury.
12,617,803 ordinary shares were held in treasury at 31 March 2023 (31 March
2022: 12,291,644).
16. Share Premium
2023 2022
£'000 £'000
At beginning of year 2,465 1,563
Premium on reissue of shares from treasury during the year 3 902
At end of year 2,468 2,465
2,567 shares were re-issued from treasury at a discount to NAV of 8.01% from
the 2022 subscription price.
No shares were re-issued from treasury.
17. Redemption reserve
2023 2022
£'000 £'000
At beginning of year 239 239
At end of year 239 239
18. Retained earnings
The table below shows the movement in the retained earnings analysed between
revenue and capital items.
2023 2022
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
At beginning of year - 52,652 52,652 143 51,325 51,468
Net loss for the year 10 (159) (149) (6) (537) (543)
Dividends paid nil (2022: 0.64p) - - - (137) - (137)
Ordinary shares reissued from treasury - 3 3 - 2,052 2,052
Ordinary shares repurchased - (669) (669) - (188) (188)
At end of year 10 51,827 51,837 - 52,652 52,652
There were no dividends paid during the year. All dividends are paid from the
revenue reserve.
19. Net asset value per ordinary share
The net asset value per ordinary share is based on the net assets attributable
to the equity shareholders of £54,578,000 (2022: £55,390,000) and on
21,107,155 (2022: 21,433,314) ordinary shares, being the number of ordinary
shares in issue at the year end, excluding treasury shares.
2023 2022
Undiluted
Ordinary shareholders' funds (£'000) 54,578 55,390
Number of ordinary shares in issue 21,107,155 21,433,314
Net asset value per ordinary share (pence) 258.58 258.43
Diluted
Ordinary shareholders' funds assuming exercise of Subscription shares (£'000) 60,333 61,106
Number of potential ordinary shares in issue 23,217,871 23,576,645
Net asset value per ordinary share (pence) 259.86p 259.18
The diluted net asset value per ordinary share assumes that all outstanding
dilutive subscription rights (2023: 2,110,716, 2022: 2,143,331) were converted
into ordinary shares at the year end and is calculated using the net asset
value per ordinary share at the prior year end. Any shares to be issued under
the subscription rules were anti-dilutive for the year ended 31 March 2023.
This is an annual opportunity for shareholders to subscribe for 1 new share
for every 10 held and the price will be equal to the audited undiluted NAV per
share from the previous year.
20. Reconciliation of net cash outflow from operating activities
2023 2022
£'000 £'000
Net loss after taxation (149) (543)
Loss on investments at fair value through profit or loss 265 356
Increase in prepayments and accrued income (10) (24)
Increase in accruals and other creditors 85 42
Foreign exchange gain (465) (155)
Net cash outflow from operating activities (274) (324)
21. Reconciliation of financial liabilities
At At
1 April Transactions 31 March
2022 In the year Cashflow 2023
£'000 £'000 £'000 £'000
Short-term bank loan 3,000 - - 3,000
Sales of ordinary shares from treasury - (6) 6 -
Shares repurchased - 669 (669) -
Cash flows from financing activities 3,000 663 (663) 3,000
At At
April Transactions 31 March
2021 In the year Cashflow 2022
£'000 £'000 £'000 £'000
Short-term bank loan 900 - 2,100 3,000
Equity dividends paid - 137 (137) -
Sales of ordinary shares from treasury - (2,954) 2,954 -
Shares repurchased - 188 (188) -
Cash flows from financing activities 900 (2,629) (4,729) 3,000
22. Related parties
Jupiter Unit Trust Managers Limited ('JUTM'), the Alternative Investment Fund
Manager, is a Company within the same group as Jupiter Asset Management
Limited ('JAM'), the investment adviser. JUTM receives an investment
management fee as set out below.
JUTM is contracted to provide investment management services to the Company
subject to termination by not less than twelve months' notice by either party.
The basis for calculation of the management fee charged to the Company to
0.70% of net assets up to £150 million, reducing to 0.60% for net assets over
£150 million and up to £250 million, and reducing further to 0.50% for net
assets in excess of £250 million after deduction of the value of any Jupiter
managed investments.
The management fee payable to JUTM for the period 1 April 2022 to 31 March
2023 was £369,162 (year to 31 March 2022: £409,172) with £64,344 (31 March
2022: £33,296) outstanding at period end.
There are no transactions with the Directors other than aggregated
remuneration for services as Directors as disclosed in the Directors'
Remuneration Report and as set out in Note 5 to the Accounts and the
beneficial interests of the Directors in the Ordinary shares of the Company.
The Company has invested from time to time in funds managed by Jupiter Fund
Management PLC or its subsidiaries. There were no such investments at the year
end (31 March 2022: Nil). No investment management fee is payable by the
Company to Jupiter Asset Management Limited in respect of the Company's
holdings in investment trusts, open-ended funds and investment companies in
respect of which Jupiter Investment Management Group Limited, or any
subsidiary undertaking of Jupiter Investment Management Group Limited,
receives fees as investment manager or investment adviser.
All transactions with related parties were carried out on an arm's length
basis.
23. Contingent liabilities and capital commitments
There were no contingent liabilities or capital commitments at 31 March 2023
(2022: Nil).
24. Post balance sheet events
Since the year end (1 April to 30 June) 439,300 ordinary shares were
repurchased to be held in treasury and 13,639 ordinary shares were re-issued
from treasury.
For further information, please contact:
Nick Black
Director- Investment Trusts
Jupiter Asset Management Limited, Company Secretary
investmentcompanies@jupiteram.co (mailto:investmentcompanies@jupiteram.co) m
020 3817 1000
12 July 2023
END
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR SFDFMEEDSELW
Recent news on Jupiter Green Investment Trust
See all newsJupiter Green InvTst - Results of Second Meeting
Results of Scheme Elections
Recommended Proposals for the Reconstruction and Voluntary Winding-Up of the Company UPDATED TIMETABLE
RCS - Jupiter Green InvTst - Kepler Trust Intelligence: New Research
Recommended Proposals for the Reconstruction and Voluntary Winding-Up of the Company