Jupiter Green InvTst - Annual Financial Report
25/07/2024 18:00
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RNS Number : 9090X Jupiter Green Investment Trust Plc 25 July 2024
Jupiter Green Investment Trust plc ('the company')
Legal Entity Identifier: 549300MFRCR13CT1L845
Annual Financial Results for the year ended 31 March 2024
Financial Highlights for the year ended 31 March 2024
Capital Performance As at As at
31 March 2024 31 March 2023
Total assets less current liabilities (£'000) 50,318 54,578
Ordinary Share Performance As at As at
31 March 2024 31 March 2023 % change
Mid-market price (p) 181.00 224.00 -19.2
Undiluted net asset value per ordinary share(▲) 263.59 258.58 +1.9
Diluted net asset value per ordinary share 263.13 259.86 +1.3
MSCI World Small Cap Index*** 435.48 390.67 11.5
Discount to net asset value (%)(▲) 31.33 13.37
Ongoing charges ratio (%) excluding finance costs (Note 6) (▲) 1.54 1.72
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
2024 50,318 263.59^ 0.00† +1.9 +11.5
* 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 2024 subscription rights.
† No final dividend will be paid.
Chairman's Statement
Performance
I am pleased to present the Annual Report and Accounts for the Jupiter Green
Investment Trust PLC ('the Company') for the 12 months to 31 March 2024.
In the period under review, financial markets were driven by intense scrutiny
of inflation data and central bank policy and commentary around the direction
of interest rates. Markets came under pressure during the latter half of 2023
as inflation remained elevated, central banks vowed to keep interest rates
higher for longer, bond yields rose and economic growth slowed. A small group
of US-listed technology companies managed to outperform the broader market as
they were seen to be beneficiaries of potential growth in artificial
intelligence. Inflation concerns eased late in the year as data showed the
inflation rate slowing, and the US Federal Reserve forecast in December that
it would cut interest rates 2024. This triggered an equity market rally that
ran through early 2024.
Rising geopolitical tensions also impacted markets during the period. These
included the tragic war in Ukraine, which reached its second anniversary with
no end in sight. In October, Hamas launched a shocking attack on Israel, and
Israel responded with an intense air and ground attack in Gaza. The conflict
has left the region facing a profound humanitarian and diplomatic crisis.
In environmental policy, the Global Stocktake Technical Assessment report was
released in September. Its main takeaway was that the world is off-track on
the path to meeting the temperature goal set out in the Paris Agreement.
Crucially, there remains an acknowledgement that the technologies exist to
reach the targets, if implemented in time.
The European Union's Carbon Border Adjustment Mechanism, which aims to
introduce a tax on carbon- intensive imports, entered its transitional phase.
The impact of global reporting standards may offer opportunities to companies
able to benefit from that trend, while presenting a risk to those unwilling to
adapt.
The UK government announced a roll-back on green policies, pushing back
targets for vehicle
electrification and delaying a ban on new gas boilers. These policies run
counter to global measures, particularly in the US.
The 28th Conference of Parties (COP) on climate change was held in Dubai in
December. Important agreements were reached to aid countries most adversely
impacted by the effects of climate change, and nations agreed to phase down
fossil fuels. Another important outcome was bringing food into the scope of
climate change action. More than 130 companies signed a declaration on
sustainable agriculture.
Discount Management and Review
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 31.33 as at 31 March 2024.
During the year the Company's shares traded at a discount to its NAV ranging
between 9.12% and 31.33%. The Board continue 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 circumstances require. The company bought
back a total of 2,031,011 shares for cancellation at an average discount of
16.89%, adding 831,643 to the NAV.
Despite this, the discount has recently traded out further than the board
would like. The Board takes the performance of Jupiter Green's shares very
seriously and as such, we work energetically with our corporate brokers and
other advisers to articulate the investment case to shareholders and potential
shareholders. In tandem, due to its relatively small size and the challenging
macro environment, the Board is currently evaluating options for the future of
the business in recognition that it may be in the best interests of
shareholders for the Company not to continue in its present form. At this
point in time, there can be no certainty as to the outcome of this but the
Board will notify the market at the appropriate time.
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 258.58p (being the audited undiluted net asset value of
the ordinary shares as at 31 March 2023). As the market price on the
subscription date was 181.00p, the Board decided that the share subscription
would not be in the best interest of shareholders and announced on 9 April
2024 that the subscriptions received would be rejected.
Board Succession
In the Interim Report and Accounts, I noted that due to my length of tenure it
was my intention to step down from the Board of the Company at the next Annual
General Meeting. As a result, the Nomination Committee have been looking for
replacements for both the Chair of the Board and Simon Baker, who is also
approaching the limit of his tenure. However, these searches have now been put
on hold due to the difficulty of finding suitable successors due to the size
of the Company and the prevailing structural challenges it faces. As such, the
Board composition will remain as it was during the 12 months under review.
Change in Administrator & Depositary
During the year the Board agreed that with effect from 1 April 2024, Northern
Trust be appointed Administrator & Depositary for the Company.
Outlook
Technology and innovation are key to combating 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 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 development of environmental solutions as part of the path to net
zero, and through the regulating 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
24 July 2024
( )
Investment Adviser's Review
Market review
The period under review was defined by the dominance of the 'Magnificent 7'
mega-cap technology companies, particularly those supported by Artificial
Intelligence (AI) as a structural tailwind. Alongside this dynamic, markets
have also faced a period of volatility as investors have responded to concerns
about the persistence of inflation, rising interest rates and geopolitical
uncertainty.
However, in this environment environmental solutions businesses - the
Company's investment universe - was resilient overall but mixed at an
individual theme level. Combinations of areas of weakened environmental policy
commitments, as well as signals of moderating growth rates in pockets of
solution themes, was offset by continued structural growth and positive
outlooks elsewhere. For example, following several years of strong growth, a
weaker consumer environment combined with a more challenging policy backdrop
has tempered expectations in the nearer future for electric vehicle sales
growth, while expectations have risen significantly for investments into
critical infrastructure such as in areas of water-related technologies and
solutions for efficient, clean, and resilient power grids.
As long-term investors seeking to identify companies which provide products or
services designed to address global environmental challenges, we have been
encouraged by areas of convergence at recent global summits. We echo the
Chairman's view that a pivotal step at the COP 28 Climate Conference was to
bring food systems into national climate plans for the first time. This move
has also served to help broaden the opportunity set investors looking to
access solutions to reduce greenhouse gases across the economy, including
those that improve natural resource efficiencies in food systems.
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 (GBI): 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 challenging market backdrop for environmental solutions companies,
the period under review evidenced the attractive multi- decade opportunity
afforded by an opportunity set of companies focussed on providing products and
services which address vital environmental challenges.
Leading returns was the Company's Sustainable Oceans & Freshwater Systems
theme, alongside the Green Building & Industry (GBI) theme. GBI is one of
the Company's largest allocations, alongside Circular Economy, at around 25%,
and includes solutions for energy efficiency applications that are critical to
a resilient and decarbonised power sector. The prospect of a step-change in
power demand in the US given an increase in planned industrial and data-centre
investments also served to bolster the outlooks for several companies in this
theme. Monolithic Power, Acuity Brands and Schneider Electric were among the
top stock contributors within the theme.
The Water theme, which comprises relatively less at approximately 11% of our
overall portfolio allocation, offers both diversification and access to
structural opportunities related to much-needed investment in water
infrastructure. Our investments focus on leading solution providers operating
globally to serve utility and commercial sectors, as opposed to water
utilities themselves.
Companies within the theme also offer climate adaptation solutions, improving
efficiencies in water usage, addressing flooding control during the period of
unusually high rainfall. The largest contributor at the stock level over 12
months was Advanced Drainage Systems, a US-based leader in stormwater
management solutions. We recently took profits from the company following a
rally on strong results. While the Green Mobility theme has faced headwinds on
slowing growth in electric vehicle (EV) sales which has weakened sentiment for
some of our investments engaged in the EV supply chain, our position in
Horiba, a Japanese precision instrument manufacturer, contributed very
positively over the year.
The largest detractor to performance during the year was the Clean Energy
theme. The theme has an approximate 18% weighting in the portfolio, and saw
setbacks where companies such as Solaredge and Orsted faced considerable
pressure from relatively high interest rates, supply chain constraints and
rising input costs.
Outlook
We have a long-held conviction that global development is and always has been
dependent on the natural world. While we remain highly cognisant of
geo-political tensions, potential macro-economic weaknesses and regulatory
risks for instance that impact upon our investment landscape like any other,
we would highlight that observed changes to the environment, not least climate
indicators, are more severe than anticipated and in many cases still not fully
explained.
Our conviction also remains that this presents an ever-more compelling
long-term growth opportunity for leading companies focussed on delivering
real- world solutions to protecting the climate as well as wider forms of
natural capital, including water resources and biodiversity.
It is notable that growth drivers within our environment solution themes
continue to be buoyed by an appreciation of the broader benefits of
environmental solutions amongst corporations and governments. Areas where this
is apparent include the role environmental technologies are playing in helping
to address growing energy security concerns, and the benefits to human health
of tackling longstanding and 'emerging' pollutants in water resources.
In our view, this will continue to provide resilience in investment returns at
a time when there is a risk that policy commitment to environmental agendas,
at least at the headline level, may wane or even take a backwards step, with
the US election later this year a notable case in point. However, we are
encouraged by the clear signals of a widespread recognition that, irrespective
of political leaning, environmental technologies and services across our six
investment themes will play a pivotal role in the economy of the future.
Jon Wallace
Investment Fund Manager
Jupiter Asset Management Limited
Investment Adviser
24 July 2024
Top five contributors and detractors
Detail
Total Returns (%) Contribution to Return (%)
Contributors
ADVANCED DRAINAGE SYSTEMS, INC. 100.99 1.86
HORIBA, LTD. 75.03 1.35
ACUITY BRANDS, INC. 44.28 1.19
MONOLITHIC POWER SYSTEMS, INC. 35.38 0.99
SCHNEIDER ELECTRIC SE 33.38 0.98
Detail
Total Returns (%) Contribution to Return (%)
Detractors
ORSTED -35.99 -0.76
CERES POWER HOLDINGS PLC -63.58 -0.85
NEXTERA ENERGY PARTNERS LP -46.75 -1.15
RE:NEWCELL AB -92.67 -1.53
SOLAREDGE TECHNOLOGIES, INC. -77.16 -1.98
Source: Bloomberg
Investment Portfolio as at 31 March 2024
31 March 2024 31 March 2023
Market value Percentage Market value Percentage
Company Country of Listing £'000 of Portfolio £'000 of Portfolio
Clean Harbors United States of America 1,697 3.4 1,402 2.5
Acuity Brands United States of America 1,694 3.4 1,371 2.5
Xylem United States of America 1,669 3.4 1,186 2.2
Waste Connections Canada 1,617 3.3 1,415 2.6
Republic Services United States of America 1,612 3.3 1,163 2.1
Prysmian Italy 1,595 3.2 1,728 3.1
Veolia Environnement France 1,506 3.0 1,851 3.4
Vestas Wind Systems Denmark 1,483 3.0 1,575 2.9
Borregaard Norway 1,465 3.0 1,277 2.3
Novonesis (Novozymes) Denmark 1,463 2.9 971 1.8
Advanced Drainage Systems United States of America 1,430 2.9 1,044 1.9
Schneider Electric France 1,407 2.8 1,707 3.1
Stantec Canada 1,406 2.8 1,551 2.8
Infineon Technologies Germany 1,313 2.6 1,845 3.3
Watts Water Technologies United States of America 1,303 2.6 1,447 2.6
ANSYS United States of America 1,295 2.6 1,494 2.7
Trimble United States of America 1,284 2.6 1,301 2.4
Renewi United Kingdom 1,250 2.5 1,225 2.2
Veralto United States of America 1,227 2.5 - -
Monolithic Power Systems United States of America 1,203 2.4 1,575 2.9
DSM-Firmenich Switzerland 1,201 2.4 - -
Eurofins Scientific Luxembourg 1,197 2.4 1,113 2.0
Alfa Laval Sweden 1,124 2.3 1,045 1.9
TOMRA Systems Norway 1,061 2.1 1,145 2.1
Horiba Japan 1,004 2.0 941 1.7
Flat Glass Group China 952 1.9 830 1.5
Hannon Armstrong Sustainable Infrastructure Capital, REIT
United States of America 945 1.9 972 1.8
First Solar United States of America 903 1.8 1,263 2.3
Littelfuse United States of America 888 1.8 960 1.7
Aptiv Jersey 874 1.8 1,021 1.9
Ormat Technologies United States of America 871 1.8 908 1.7
Belimo Holding Switzerland 842 1.7 - -
Atlas Copco Sweden 803 1.6 617 1.1
Shimano Japan 803 1.6 944 1.7
Orsted Denmark 788 1.6 1,099 2.0
Azbil Japan 698 1.4 701 1.3
Daiseki Japan 694 1.4 917 1.7
Brambles Australia 671 1.4 585 1.1
Corbion Netherlands 663 1.3 579 1.0
NextEra Energy Partners United States of America 623 1.3 1,287 2.3
Befesa Luxembourg 621 1.3 837 1.5
Sensirion Holding Switzerland 499 1.0 754 1.4
EDP Renovaveis Spain 448 0.9 - -
Greencoat Renewables Ireland 413 0.8 530 1.0
Hoffmann Green Cement Technologies
France 319 0.6 208 0.4
Innergex Renewable Energy Canada 310 0.6 581 1.1
SolarEdge Technologies United States of America 302 0.6 1,319 2.4
Ceres Power Holdings United Kingdom 250 0.5 686 1.2
Total Investments 49,686 100.0
The holdings listed above are all equity shares unless otherwise stated.
Cross Holdings in other Investment Companies
As at 31 March 2024, 0.8% of the company's total assets was invested in
Greencoat Renewables, a 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 2024 (ex-cash)
Environmental theme
Circular Clean Green Buildings Green Sustainable Agriculture Sustainable & Ocean Freshwater
& and Land
economy Energy Industry Mobility ecosystems Systems Total
Stage of Development % % % % % % %
Accelerators* 12.30 15.20 18.99 3.60 13.48 8.94 72.51
Established Leaders* 11.26 - 4.05 3.80 - 2.68 21.79
Innovators* 2.66 2.37 0.67 - - - 5.70
Total 2024 26.22 17.57 23.71 7.40 13.48 11.62 100.00
* 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 2024 (ex-cash)
United
States of United
America Japan France Kingdom Denmark Others Total
Sectors % % % % % % %
Basic Materials - - - - - 3.0 3.0
Consumer Discretionary - 1.6 - - - 1.8 3.4
Consumer Staples - - - - - 3.7 3.7
Energy 2.4 - - 0.5 3.0 - 5.9
Health Care - - - - 2.9 2.4 5.3
Industrials 19.2 3.4 3.4 - - 18.0 44.0
Real Estate 1.9 - - - - - 1.9
Technology 5.0 - - - - 2.6 7.6
Utilities 9.8 1.4 3.0 2.5 1.6 6.9 25.2
Total 2024 38.3 6.4 6.4 3.0 7.5 38.4 100.0
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.
There has been no significant change in the activities of the Company during
the year to 31 March 2024 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. The Board is currently
evaluating options for the future of the business in recognition that it may
be in the best interests of shareholders for the Company not to continue in
its present form.
At this point in time, there can be no certainty as to the outcome of this but
the Board will notify the market at the appropriate time.
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.
During the year the Board agreed that with effect from 1 April 2024, Northern
Trust be appointed Administrator & Depositary for 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. 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.
Notwithstanding, as discussed in the Chairman's Statement, the board is
currently evaluating the options for the future of the Company and the
material uncertainty identified in relation to this matter.
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.
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 2,031,011 ordinary shares for holding in treasury
during the year under review at an average discount of 16.89%.
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 2024 (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 13,639 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 - There are multiple risks of climate change or ESG on
companies, either directly, through any third parties or through our
investments in companies on shareholders' behalf. 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 UK adopted International
Accounting Standards 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.
Geopolitical - There is increasing risk to market stability and investment
opportunities from geopolitical conflicts such as between Russia and Ukraine.
The Board reviews the investment portfolio to identify any stocks that could
be impacted.
The Company has limited exposure to stocks within current conflict areas
thereby mitigating this risk as far as possible.
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 2024, 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
As described within the Investment Approach, the investment adviser is
dedicated to environmental solutions. This means seeking long-term
opportunities and allocating capital to companies focused on solving
environmental challenges such as climate change and natural capital depletion.
The integration of ESG risks and opportunities is fundamental to the
investment decision-making process and to the ongoing stewardship of
shareholder assets.
The integration of ESG risks and opportunities with respect to stock selection
is centred on the six environmental themes described within the Investment
Policy. The monitoring of assets is crucial, and the Investment Adviser
understands the importance of active ownership. Where relevant, the investment
adviser will engage on matters connected to financial performance, strategic
execution, sustainability issues and corporate governance. The Investment
Adviser will use engagement to obtain investor insights and where relevant to
utilise its investor influence (either directly or collaboratively) to affect
change or escalate concerns. This will be conducted at the discretion of the
investment adviser.
The Investment Adviser is supported by the investment manager and specifically
resources from the ESG Research & Integration team and Stewardship team.
Please refer to the investment manager's website for details concerning the
group-wide:
■ Responsible Investment Policy
■ Proxy Voting Policy
■ Annual Stewardship Report
Task Force on Climate-related Financial Disclosures
The Company's report on the UK's Task Force on Climate-related Financial
Disclosures Report ('TCFD') discloses estimates of the portfolio's
climate-related risks and opportunities according to the Financial Conduct
Authority Environmental, Social and Governance Sourcebook and the Task Force
on Climate-related Financial Disclosures Recommendation. It is available on
the website: Task Force on Climate-Related Financial Disclosures - Jupiter
Asset Management (jupiteram.com)
(https://www.jupiteram.com/task-force-on-climate-related-financial-disclosures/)
Jupiter Unit Trust Managers Limited also has a TCFD report which is available
here: Task Force on Climate-Related Financial Disclosures - Jupiter Asset
Management (jupiteram.com)
(https://www.jupiteram.com/task-force-on-climate-related-financial-disclosures/)
UK Stewardship Code and the Exercise of Voting Powers
The Investment Adviser supports the principles of the UK Stewardship Code
2020. The Investment Manager's parent, Jupiter Fund Management plc is the
formal signatory under the UK Stewardship Code 2020. Please refer to the
Investment Manager's website to access the Annual Stewardship Report.
As an active owner, the Investment Adviser recognises the importance of
stewardship in relation to the pursuit of sustained value creation and
sustainability outcomes. The Investment Adviser will be engaged in an array of
issues and receives support from the Stewardship Team on matters connected
with corporate governance and dialogue with management teams and company
boards.
The exercise of rights and responsibilities through informed voting is
fundamental to the Investment Adviser's stewardship approach. The Investment
Adviser is ultimately accountable for voting decisions and receives support
from the Stewardship Team to assess ballots and provide subject matter
expertise regarding best practice. The Investment Adviser has access to third
party proxy research but is not mandated to follow these recommendations.
Please refer to the Investment Manager's website for full voting disclosure.
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.
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.
Investee companies
On the Company's behalf, the Investment Adviser engages with investee
companies and updates the Board on material developments affecting individual
investee companies. The Investment Adviser has discretionary authority to
exercise voting rights on behalf of the Company on resolutions proposed by
investee companies.
Corporate broker and retail marketer
The Company's broker, Cavendish (previously known as finnCap), and retail
marketer, Kepler Partners LLP, attend all quarterly Board meetings and support
the Board in its strategic decisions on growing the Company. The Company's
broker has published research on the Company and frequently engages with
potential investors on the Company's behalf.
Public relations advisors
The Company works with its public relations adviser, SEC Newgate, to raise the
Company's profile through press and media activity.
The Association of Investment Companies ('AIC')
The Company is a member of the AIC and provides regular reporting on the
Company to the AIC. The Company engages with AIC consultations such as voting
on the AIC Board elections.
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:
Issue How we engage Decision
Discount management The Board continues to monitor the Following discussion at the Board and with the Company's broker, the Board
decided to use the share buy-back programme within
Company's discount to ensure that it is in a position to issue shares to grow
the Company when market conditions allow. In July 2021 the Board discussed agreed parameters. This resulted in a decision to buyback 2,031,011 ordinary
utilising the share buyback programme alongside shares of the Company during the year.
the share issuance programme to balance supply and demand and manage the
Company's discount.
With the discount widening since the year end, the Board are evaluating
options in relation to the future of the Company.
Board evaluation The Board has not arranged an externally facilitated evaluation during this The independent non-executive directors undertake on, an annual basis, an
period, although this is considered by the Board on a regular basis. 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 The Nomination Committee undertakes an annual evaluation of the composition of In the Interim Report and Accounts, the Chairman noted his intention to step
the Board and its committees taking into account the requirements of the AIC down from the Board as a result of length of tenure. As a result, the
Code. Nomination Committee have been looking for replacements for both the Chair of
the Board and Simon Baker, who is also approaching the limit of his tenure.
Appropriate recommendations will then be made to the Board in respect of the However, these searches have now been put on hold due to the difficulty of
need to refresh the composition of the Board and its committees. finding suitable successors due to the size of the Company and the prevailing
structural challenges it faces. As such, the Board composition will remain as
it was during the 12 months under
review.
Loan The Company may utilise gearing at the director's discretion for the A revolving loan facility agreement with Royal Bank of Scotland International
Limited of £5 million was approved by the Board, and the Investment Adviser
purpose of financing the Company's portfolio and enhancing shareholder has been authorised by the Board to draw down for investment purposes.
returns.
The Loan facility has been drawn down to £3 million of the £5 million
facility.
Third-Party suppliers The continuance, or otherwise, of engagement of key third-party service During the year the Board agreed that with effect from 1 April 2024, Northern
providers are principal Trust be appointed Administrator & Depositary for the Company.
decisions taken by the Board every
year.
Geopolitical Considerations Given the conflicts in various parts of the globe the Board has considered The Board has discussed the investment risks and risks in respect of third
what impact this may have on the Company. parties. 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
24 July 2024
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
24 July 2024
Statement of Comprehensive Income
for the year ended 31 March 2024
Year ended 31 March 2024 Year ended 31 March 2023
Revenue Capital Total Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Loss on investments at fair value through
profit or loss - 182 182 - (265) (265)
Foreign exchange (loss)/gain - 465 465 - 465 465
Income 3 705 - 705 759 - 759
Total income 705 84 705 759 200 959
Investment management fee 4 (86) (257) (343) (92) (277) (369)
Other expenses 5 (412) - (412) (539) - (539)
Total expenses (498) (257) (755) (631) (277) (908)
Net return/(loss) before finance costs and tax 207 (173) 34 128 (77) 51
Finance costs (48) (144) (192) (27) (82) (109)
Return/(loss) on ordinary activities
before taxation 159 (317) (158) 101 (159) (58)
Taxation (79) - (79) (91) - (91)
Net return/(loss) after taxation 80 (317) (237) 10 (159) (149)
Return/(loss) per ordinary share 7 0.40p (1.58)p (1.18)p 0.05p (0.75)p (0.70)p
Diluted return/(loss) per ordinary share 7 0.40p (1.58)p (1.18)p 0.05p (0.75)p (0.70)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 2024
2024 2023
Note £'000 £'000
Non current assets
Investments held at fair value through profit or loss 49,686 55,002
Current assets
Prepayments and accrued income 124 1,459
Cash and cash equivalents 3,670 2,954
3,794 4,413
Total assets 53,480 59,415
Current liabilities
Other payables (3,162) (4,837)
Total assets less current liabilities 50,318 54,578
Capital and reserves
Called up share capital 34 34
Share premium 2,485 2,468
Redemption reserve* 239 239
Retained earnings* 47,560 51,837
Total equity shareholders' funds 50,318 54,578
Net Asset Value per ordinary share 263.59p 258.58p
Diluted Net Asset Value per ordinary share 263.13p 259.86p
* 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 24 July 2024
and signed on its behalf by:
Michael Naylor
Chairman
Company Registration Number 05780006
Statement of Changes in Equity for the year ended 31 March 2024
Share Share Redemption Retained
Capital Premium Reserve Earnings Total
For the year ended 31 March 2024 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2023 34 2,468 239 51,837 54,578
Net loss for the year - - - (237) (237)
Ordinary shares reissued from treasury - 17 - 18 35
Ordinary shares repurchased - - - (4,058) (4,058)
Balance at 31 March 2024 34 2,485 239 47,560 50,318
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
Dividends paid during the period were paid out of revenue reserves.
Cash Flow Statement for the year ended 31 March 2024
2024 2023
Note £'000 £'000
Cash flows from operating activities
Investment income received (gross) 702 712
Deposit interest received 48 27
Investment management fee paid (349) (338)
Other cash expenses (488) (475)
Interest paid (192) (109)
Net cash outflow from operating activities before taxation (279) (183)
Taxation (79) (91)
Net cash outflow from operating activities (358) (274)
Net cash flows from investing activities
Purchases of investments (6,711) (12,177)
Sale of investments 11,906 10,989
Net cash outflow from investing activities 5,195 (1,188)
Cash flows from financing activities
Shares repurchased (4,058) (669)
Shares reissued from treasury 35 6
Net cash outflow from financing activities (4,023) (663)
Increase/(decrease) in cash 814 (2,125)
Change in cash and cash equivalents
Cash and cash equivalents at start of year 2,954 4,614
Realised (loss)/gain on foreign currency (98) 465
Cash and cash equivalents at end of year 3,670 2,954
Notes to the accounts
1. Accounting policies
The Accounts comprise the financial results of the Company for the year to 31
March 2024. 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 24 July 2024. 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, with
material uncertainty, and under the historical cost convention modified by the
revaluation of investments held at fair value through profit or loss. 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 2025,
which is a period of at least 12 months from the date the financial statements
were authorised for issue.
The Board is currently evaluating options for the future of the business in
recognition that it may be in the best interests of shareholders for the
Company not to continue in its present form. At this point in time, there can
be no certainty as to the outcome of this evaluation and the Board will notify
the market at the appropriate time. Whilst there can be no certainty as to the
outcome of this evaluation within 12 months of the approval of these financial
statements, and therefore while there remains a material uncertainty, the
Board has prepared the financial statements on a going concern basis. The
financial statements do not contain the adjustments that would result if the
Company were unable to continue as a going concern.
(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.
Bank interest and interest on short-term deposits are accrued up to the period
end date are taken to the revenue return column of the Statement of
Comprehensive Income.
(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.
Investment Management fees and finance costs are charged 75 per cent. to
capital and 25 per cent. to revenue (2023: 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 transaction concerned, and are
initially measured at transaction 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 on the last reporting date being 28 March
2024 is based on their quoted bid price at the reporting 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 2024:
IAS 1: 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 significant accounting estimates.
3. Income
Year ended Year ended
31 March 2024 31 March 2023
£'000 £'000
Income from investments
Dividends from overseas companies 657 732
Deposit interest 48 27
Total income 705 759
Special dividends received in the year amounted to £0.02m (2023: £0.02m)
allocated to revenue and £nil (2023: £nil) allocated to capital.
4. Investment management fee
Year ended 31 March 2024 Year ended 31 March 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fee 86 257 343 92 277 369
75% (2023: 75%) of the investment management fee is treated as a capital
expense.
5. Other expenses
Year ended 31 March 2024 Year ended 31 March 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Directors' remuneration 107 - 107 107 - 107
Auditors' remuneration including VAT - audit 66 - 66 62 - 62
Fund accounting 54 - 54 56 - 56
Broker fees 36 - 36 45 - 45
Registrar services 51 - 51 22 - 22
Professional and legal fees - - - 49 - 49
Public Relations Fee 36 - 36 - - 36
Other 62 - 62 162 - 162
412 - 412 539 - 539
6. Ongoing charges
Year ended Year ended
31 March 2024 31 March 2023
£'000 £'000
Investment management fees 343 369
Other expenses 412 539
Total expenses (excluding finance costs) 755 908
Average net assets 48,899 52,866
Ongoing charges % 1.54 1.72
7. Earnings per ordinary share
The earnings per ordinary share figure is based on the net loss for the year
of £237,000 (2023: net loss £149,000) and on 20,120,482 (2023: 21,300,543)
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 2024 31 March 2023
£'000 £'000
Net revenue gain 80 10
Net capital loss (317) (159)
Net total loss (237) (149)
Weighted average number of ordinary shares in issue during the year used for
the
purposes of the undiluted calculation 20,120,482 21,300,543
Weighted average number of ordinary shares in issue during the year used for
the
purposes of the diluted calculation 20,120,482 21,300,543
Diluted/Undiluted
Revenue gain per ordinary share 0.40p 0.05p
Capital losses per ordinary share (1.58)p (0.75)p
Total losses per ordinary share (1.18)p (0.70)p
Diluted
Revenue gain per ordinary share 0.40p 0.05p
Capital losses per ordinary share (1.58)p (0.75)p
Total losses per ordinary share (1.18)p (0.70)p
8. 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 2023 to 31 March
2024 was £342,792 (year to 31 March 2023: £369,162) with £58,542 (31 March
2023: £64,344) 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 2023: 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.
9. Contingent liabilities and capital commitments
There were no contingent liabilities or capital commitments at 31 March 2024
(2023: Nil).
10. Post balance sheet events
Since the year end (1 April to 24 July 2024) 114,003 ordinary shares were
repurchased to be held in treasury and no ordinary shares were re-issued from
treasury.
11. Availability of Annual Report and Accounts
A copy of the Annual Report & Accounts will also be available for download
from the company's section of Jupiter Asset Management's website
www.jupiteram.com/JGC
A copy of the Annual Report & Accounts will also be submitted to the FCA's
National Storage Mechanism and will soon be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The Annual Report and Accounts will shortly be posted to those registered
shareholders who have elected to receive a hard copy.
For further information, please contact:
Investment manager Jupiter Asset Management InvestmentCompanies@Jupiteram.com (mailto:InvestmentCompanies@Jupiteram.com)
Media enquiries Jupiter Asset Management CorporateCommunications@jupiteram.com
(mailto:CorporateCommunications@jupiteram.com)
SEC Newgate (Chairman) JupiterGreen@SECNewgate.co.uk (mailto:JupiterGreen@SECNewgate.co.uk)
07960 342 503
Corporate Broker Cavendish CorporateBrokingICT@cavendish.com (mailto:CorporateBrokingICT@cavendish.com)
Nick Black
Client Group
Jupiter Asset Management Limited, Company Secretary
25 July 2024
END
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