Final Results
Jupiter European Opportunities trust Plc
Annual Financial Report for the year ended 31 May 2013
The Board is pleased to announce the Annual Financial Report for the year ended 31 May 2013. The full Annual Report will shortly be available to be viewed or downloaded from the Company's website at www.jupiteronline.com
Copies of the Annual Report will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do
CHAIRMAN'S STATEMENT
Performance
During the year under review the Net Asset Value (NAV) of your shares - in other words, their underlying value - rose from 291.05p to 403.58p, a gain of 38.7%. For reasons set out by Alexander Darwall, your Fund Manager, in his accompanying Review, this was less than the advance achieved by our benchmark, the FTSE Europe Total Return ex-UK Index, which returned 43.3%. For the second successive year, therefore, Alexander and his team have not earned a performance fee for the management company which employs them, even though they worked as hard as ever on your behalf (and mine).
However, the share price rose by no less than 59.1%, as a growing band of wealth managers appreciated the outstanding long term performance of your Company and the rigorous investment process which has created that performance. It would appear that many of them regard your Company as an attractive investment vehicle whereby their clients can gain from participation in some of the best companies which Europe, including the UK, has to offer. Such was the continuing demand for your Company's shares that they currently trade at a small premium to NAV even though European shares can hardly be described as fashionable. It may indeed be arguable that your Company is one of the beneficiaries of the Retail Distribution Review, in that the principal buyers of investment trusts focus on an exceptional performance record and a degree of marketability which ensures that they can build up - or reduce - sizeable positions in investment trust companies with relative ease.
Growing your Company
As intimated in my Interim Statement, your Board, Managers and our brokers, Cenkos, have given extensive consideration as to how to increase the size of your Company. From shareholders' point of view a larger Company should become more marketable - in other words, it should be easier to buy or sell the shares - and the expenses of managing it would be spread over a larger body of assets, potentially bringing down the "Ongoing Charges" ratio. But expanding the size of an investment company in one fell swoop can be prohibitively expensive.
In the end we opted for the low cost option of issuing new shares to meet demand, always at a premium to NAV so that the interests of existing shareholders were not diluted. Over our past financial year, therefore, a total of 4.875 million new shares were issued raising £18,352,500 for your Company at minimal expense. This produces an average issue price of 376.45p per share, which means that many buyers are showing a paper profit - most satisfactory. Your Board will be seeking your permission at the Annual General Meeting to renew the authority to allot shares and to disapply pre-emption rights for up to a third of the Company's issued share capital. Whilst one third of the Company's issued share capital is higher than the disapplication of pre-emption rights authority ordinarily recommended by corporate governance best practice, your Board believes that taking a larger than normal authority is justified in the present circumstances. As set out above, any use of this authority will be accretive to the NAV. Whilst Shareholders' voting rights will be diluted; your Board believes that this consideration is outweighed by the flexibility that a larger authority provides. It will also mean that the Company should save the costs of having to convene more frequent general meetings in order to obtain further Shareholder authority. We feel this is a sufficient way of growing the Company.
Meanwhile we and our advisers will keep under review other ways of expanding your Company as and when suitable opportunities arise.
Gearing
As Alexander mentions in his Review, the level of borrowings ("gearing") came down considerably over the year. Part of this process was natural - as markets rose the gearing percentage automatically declined - but it also reflected your Managers' view that a reduced level of borrowing was appropriate. Over the year, therefore, the gearing ratio came down from 22% to 16.5%. As usual at this time of year, your Managers are negotiating the renewal of our £65 million borrowing facility for another year once it expires in October.
Dividend
Shareholders will recall that it is not our investment objective to pay dividends, but inasmuch as we end the year with surplus income, that surplus is paid out to shareholders. As was the case last year, in order to retain our status as an investment trust under Section 1158 of the Corporation Tax Act 2010 we are not permitted to retain more than 15% of eligible investment income. Accordingly an interim dividend of 3.5p per Ordinary Share (2012: 1.85p) was declared on 15 August 2013 payable on 27 September 2013 to shareholders on the Register of Members on 23 August 2013.
Board Remuneration
Directors' fees have remained unchanged since 1 June 2007. Six years on, it is clear from independent surveys that your Board is to some degree underpaid by comparison with investment companies of similar size to Jupiter European Opportunities Trust. Accordingly it is proposed that the basic Director's fee be increased from £20,000 to £22,000 with a £3,000 supplement for the Chairman of the Audit Committee. In my case, as Chairman, the fee will rise from £23,000 to £30,000. In total, the new fee level will still be well below the permitted maximum of £150,000.
The AIFM Directive
One consequence of the AIFM Directive will be the requirement to appoint a Depositary for your Company. It is not clear what will be the benefit for shareholders; it is indisputable that this impost will add to the costs of managing your Company. Your Manager, Jupiter Asset Management, has meanwhile taken the decision to outsource its investment trust accounting function to JP Morgan, which will also become the custodian of the Company's assets. It is not expected that this should incur additional expense for the Company. We understand that JP Morgan would also act as Depositary for all the investment trusts in the Jupiter stable once the AIFM Directive requirement comes into force.
Outlook
There is increasing evidence that the United Kingdom economy is recovering and that Continental Europe is emerging from recession. At the same time there are expectations that America's level of "QE" or quantitative easing (viz. printing money) may ease in the near future provided that the economy expands and unemployment falls; meanwhile the UK and European authorities expect to maintain, or even increase, their level of QE. As an Australian politician has recently reminded us "nobody can be the suppository of all wisdom", but investment in well managed companies, with strong balance sheets and the potential to grow their businesses on a worldwide basis, should provide some protection against future eventualities.
H.M. Priestley Chairman
21 August 2013
MANAGER'S REVIEW
The NAV of the Company's Ordinary shares rose by 38.7% during the twelve months to 31 May 2013. This compares with a 43.3% rise, in sterling terms, of the FTSE World Europe ex UK Total Return Index. The sum of the Company's borrowings was little changed. At the year end the total was £54.1million. These borrowings, representing 12% of net assets at year end, improved returns. Borrowing costs were low at barely 1.2% (2012 - 1.8%) and were comfortably covered by the increasing dividends from companies held in the portfolio. The FTSE World (total return) index rose by 29.4% in sterling terms, The MSCI Latin America Index by 8.2%; the MSCI AC Asia ex-Japan Index by 21.1% and the S&P500 by 29.3%.
The explanation for the strength of European equities cannot be found in economic growth. According to the IMF, the European Union's economy contracted by 0.2% in 2012; zero growth is forecast for 2013 and only 1.3% growth estimated for 2014. This does not compare well with other parts of the world. Developing Asia (26 countries including China and India) boasts figures of 6.7%, 7.1% and 7.3% for those respective years. The rate of growth in Latin America has slowed. Nevertheless, the IMF expects the Brazilian economy to grow by 3% in 2013 and by a further 4% in 2014. The US economy is also proving to be much more dynamic with actual or forecast growth rates of 2.2%, 1.8% and 2.9% for the years 2012, 2013 and 2014 respectively. We believe the good performance of European equities can be explained by two partly related factors: the announcement in July 2012 by ECB President Mario Draghi that he would intervene such that sovereign borrowing costs remained low in those countries with poor public finances; and expectations that corporate profits will continue to improve in Europe. According to UBS, the investment bank, corporate profits in Europe, ex-financials improved slightly in 2012. However, UBS anticipates faster progress in 2013 and 2014 with corporate profits' growth rates of 8.4% and 10.1% respectively for those years.
The most obvious single explanation for your Company's underperformance against its benchmark in the period under review is the strongly underweight position in financials, particularly banks. Such was the scale of the rally in banks' shares that it offset the 'right' underweight positions in utilities, telecommunications and oil and gas. In terms of individual stocks, the main negative contributors were Aggreko, Vopak and Standard Chartered. The first two companies suffered pricing pressures, in both cases the result of industry overcapacity. Regulatory fines imposed on Standard Chartered were damaging and highlighted the vulnerability of banks to political considerations. The principal positive contributors to performance were Wirecard, Reed Elsevier and Experian. These companies all share certain characteristics although engaged in totally different business activities. They are beneficiaries of digital technology, have extensive multi-national interests and can claim some unique, strong and sustainable points of differentiation in their business models. Other stocks that improved performance included Provident Financial, Grenkeleasing and Syngenta. The first two are 'winners' in the financial sector where the mainstream banks are struggling with legacy problems and political issues. Syngenta remains a truly global company, a leader in agro-technology.
There were few outright sales. We sold the position in Takkt, the German mail order company, as growth disappointed; shares in Neopost (the French franking machinery company) were sold as, again, growth rates remain low; likewise, we sold the position in Modern Times Group (the Scandinavian media group) following poor results; and we sold all the shares we held in Pearson. Pearson is a leading digital-based education and publishing business. Whilst we recognise the strength of its assets and strategy it faces significant difficulties in execution. We reduced the position in NovoNordisk, the world's leading insulin company, following the failure in America to gain approval for a key new drug. However, we remain convinced that the company enjoys excellent prospects and has since bought more shares. Indeed, we increased positions in a range of core holdings where new developments, coupled with attractive valuations, strengthened our confidence. Thus we added to our positions in Fresenius (as its clinical nutrition business prospers), Experian (as results corroborated our appreciation of its business), and Grenkeleasing, where results confirm the success of their business model.
Outlook
Operating margins in Europe (and indeed capital's share of GDP) are already high by historic standards so it is reasonable to question whether further increases are realistic. We believe that 'winning' business models can deliver further improvements in profitability. For companies with highly differentiated products and services where there is evidence of pricing power, prospects remain good. As never before, 'winning' companies are able to deploy their advantages worldwide.
A lacklustre economic backdrop is largely irrelevant to our investment process and our portfolio's investment prospects. An understanding of 'real world' drivers is critical for us. Our focus on understanding company specifics underpins our confidence for the future.
Alexander Darwall
Fund Manager
Jupiter Asset Management Limited
21 August 2013
OBJECTIVE
The Company carries on business as an Investment Trust.
The objective of the Company is to invest in securities of European companies and in sectors or geographical areas which are considered by the Investment Manager to offer good prospects for capital growth, taking into account economic trends and business development.
The Company's performance is benchmarked against the FTSE World Europe ex UK Total Return Index.
INVESTMENT POLICY
The Investment Manager adopts a stock picking approach in the belief that a thorough analysis and understanding of a company is the best way to identify long-term superior growth prospects. This understanding begins with identifying those companies where the ownership structure and incumbent management are conducive to the realisation of the aim of achieving superior long-term earnings growth. The Investment Manager will seek to identify companies which enjoy certain key business characteristics including some or all of the following:
· a strong management record and team, and the confidence that the Investment Manager has in that management's ability to explain and account for its actions;
· proprietary technology and other factors which indicate a sustainable competitive advantage;
· a reasonable expectation that demand for their products or services will enjoy long-term growth; and
· an understanding that structural changes are likely to benefit rather than negatively impact that company's prospects.
There may be sectors which do not enjoy the business characteristics described above and in such circumstances the Investment Manager will seek to identify companies that are expected to generate superior earnings growth within that sector.
In analysing potential investments, the Investment Manager will employ differing valuation techniques depending on their relevance to the business characteristics of a particular company. However, the underlying feature will be the sustainability and growth of free cashflow in the long-term.
Any material change in the investment policy of the Company described above may only be made with the approval of Shareholders by an ordinary resolution
RISKS AND UNCERTAINTIES
The principal risk factors that may affect the Company and its business can be divided into the following areas:
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.
Foreign Currency Movements - The Company has exposure to foreign currency through its overseas investments. The Board considers carefully factors which may affect the foreign currency in which the Company has an exposure at its quarterly board meetings taking into account the economic and political climate of various regions and the prospects for sterling.
Interest Rates - The Company has exposure to cash which generates interest through interest bearing accounts. The Board is mindful of interest rates when setting limits on the Company's exposure to cash.
Derivatives - The Company invests in derivatives from time to time. Derivatives may be a riskier investment than equities as they can exaggerate the return that can be achieved compared to investing directly in equities. The Board has set limits on the amount of exposure the Company has to derivatives and it reviews these limits at its quarterly board meetings.
Liquidity Risk - This risk can be viewed as the liquidity of the securities in which the Company invests and the liquidity of the Company's shares. The Company may invest in securities that have a very limited market which will affect the ability of the Company's Fund Manager to dispose of securities when he no longer feels 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 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 it is mindful of the liquidity in the Company's shares. In addition, the Board seeks the advice of the Company's brokers, Cenkos, who give advice on ways in which the Board can influence the liquidity in the Company's shares. The Company monitors performance to ensure it is able to meet the financial objectives of the loan repayment.
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 setting the level.
Discount to Net Asset Value - A discount in the price at which the Company's shares trade to Net Asset Value would mean that shareholders would be unable to realise the true underlying value of their investment. As a means of controlling the discount to Net Asset Value the Board has established a buy back programme which is under constant review as market conditions change. Further details of the buy back programme can be found on page 13 of the Report and Accounts under the heading 'Discount to Net Asset Value'.
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 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 Manager could also lead to reputational damage or loss. The Board relies on the services of its Company Secretary, Jupiter Asset Management Limited, and its professional advisers to ensure compliance with, amongst other regulations, the Companies Act 2006 and the UKLA Listing Rules.
Loss of Key Personnel - The day-to-day management of the Company has been delegated to the Investment Manager. Loss of the Manager's key staff members could affect investment return. The Board is aware that Jupiter Fund Management PLC 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 Manager's core accounting systems, or a disastrous disruption to its business, could lead to an inability to provide accurate reporting and monitoring. The Manager is contractually obliged to ensure that its conduct of business conforms to applicable laws and regulations. Details of how the Board monitors the services provided by Jupiter Asset Management Limited and its associates are included within the Internal Control section of the Corporate Governance review on page 16 of the Report and Accounts.
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 Manager's statements on its internal controls and procedures.
Statement of Comprehensive Income for the year ended 31 May 2013
| 31 May 2013 | 31 May 2012 | |||||
| Revenue Return £'000 | Capital Return £'000 | Total £'000 | Revenue Return £'000 | Capital Return £'000 | Total £'000 | |
| Gain/ (loss) on investments at fair value through profit or loss | _ - | 94,682 | 94,682 | - | (19,068) | (19,068) |
| Loss on contracts for difference | _ | (237) | (237) | - | - | - |
| Foreign exchangeloss/(gain) on loan | _ | (2,747) | (2,747) | - | 666 | 666 |
| Other exchange gain/ (loss) | 165 | 76 | 241 | (70) | (237) | (307) |
| Investment income | 8,371 | _ | 8,371 | 6,375 | - | 6,375 |
| Other income | 4 | _ | 4 | 4 | - | 4 |
| Total income | 8,540 | 91,774 | 100,314 | 6,309 | (18,639) | (12,330) |
| Investment management fee | (2,654) | _ | (2,654) | (2,038) | - | (2,038) |
| Other expenses | (696) | _ | (696) | (555) | - | (555) |
| Total expenses | (3,350) | _ | (3,350) | (2,593) | - | (2,593) |
| Return before finance costs and tax | 5,190 | 91,774 | 96,964 | 3,716 | (18,639) | (14,923) |
| Finance costs | (630) | _ | (630) | (936) | - | (936) |
| Return before taxation | 4,560 | 91,774 | 96,334 | 2,780 | (18,639) | (15,859) |
| Taxation | (466) | _ | (466) | (464) | - | (464) |
| Return after taxation | 4,094 | 91,774 | 95,868 | 2,316 | (18,639) | (16,323) |
| Return per Ordinary share | 5.05p | 113.27p | 118.32p | 2.91p | (23.42)p | (20.51)p |
The total column of this statement is the statement of comprehensive income of the Company prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies ('AIC').
The return after taxation is also the total comprehensive profit for the year.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year apart from the liquidation of the subsidiary.
Statement of Financial Position as at 31 May 2013
| 2013 | 2012 | |
| £'000 | £'000 | |
| Non current assets | ||
| Investments held at fair value through profit or loss | 381,838 | 280,022 |
| Current assets | ||
| Receivables | 3,268 | 4,892 |
| Cash at bank | 12,009 | 659 |
| 15,277 | 5,551 | |
| Total assets | 397,115 | 285,573 |
| Current liabilities | (56,314) | (57,520) |
| Total assets less current liabilities | 340,801 | 228,053 |
| Capital and reserves | ||
| Called up share capital | 844 | 795 |
| Share premium | 59,589 | 41,286 |
| Special reserve | 33,687 | 33,687 |
| Capital redemption reserve | 45 | 45 |
| Retained earnings | 246,636 | 152,240 |
| Total equity | 340,801 | 228,053 |
| Net Asset Value per Ordinary share | 403.58p | 291.05p |
Statement of Changes in Equity as at 31 May 2013
| Capital | ||||||
| Share | Share | Special | Redemption | Retained | ||
| For the year ended | Capital | Premium | Reserve | Reserve | Earnings | Total |
| 31 May 2013 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| 1 June 2012 | 795 | 41,286 | 33,687 | 45 | 152,240 | 228,053 |
| Net profit for the year | - | - | - | - | 95,868 | 95,868 |
| Ordinary share issue | 49 | 18,303 | _ | _ | - | 18,352 |
| Dividends declared and paid | - | - | - | - | (1,472) | (1,472) |
| Balance at 31 May 2013 | 844 | 59,589 | 33,687 | 45 | 246,636 | 340,801 |
| Capital | ||||||
| Share | Share | Special | Redemption | Retained | ||
| For the year ended | Capital | Premium | Reserve | Reserve | Earnings | Total |
| 31 May 2012 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| 1 June 2011 | 798 | 41,286 | 34,376 | 42 | 172,780 | 249,282 |
| Net loss for the year | - | - | - | - | (16,323) | (16,323) |
| Ordinary share cancellation | (3) | - | (689) | 3 | - | (689) |
| Dividends declared and paid | - | - | - | - | (4,217) | (4,217) |
| Balance at 31 May 2012 | 795 | 41,286 | 33,687 | 45 | 152,240 | 228,053 |
Cash Flow Statement for the year ended 31 May 2013
| 2013 | 2012 | |
| £'000 | £'000 | |
| Cash flows from operating activities | ||
| Purchases of investments | (62,358) | (88,353) |
| Sales of investments | 54,696 | 75,089 |
| Investment income received | 8,104 | 6,165 |
| Interest received | 3 | 5 |
| Investment management fee paid | (2,444) | (2,559) |
| Investment performance fee paid | (4,237) | |
| Payment to CFD counterparty | (530) | - |
| Other cash expenses | (692) | (597) |
| Cash outflow from operating activities before finance costs and taxation | (3,221) | (14,487) |
| Finance costs | (617) | (868) |
| Taxation | (890) | (332) |
| Net cash outflow from operating activities | (4,728) | (15,687) |
| Financing activities | ||
| Ordinary shares issued | 18,352 | - |
| Ordinary shares purchased and cancelled | - | (689) |
| Dividend paid | (1,472) | (4,217) |
| Short-term loans received | 205,541 | 241,080 |
| Short-term loans repaid | (205,541) | (221,052) |
| Increase /(decrease) in cash | 12,152 | (565) |
| Cash and cash equivalents at start of year | (384) | 488 |
| Realised gain/(loss) on foreign currency | 241 | (307) |
| Cash and cash equivalents at end of year | 12,009 | (384) |
NOTES:
1. Income
| 2013 £'000 | 2012 £'000 | |
| Income from investments | ||
| Dividends from United Kingdom companies | 3,673 | 2,434 |
| Dividends from overseas companies | 4,698 | 3,941 |
| 8,371 | 6,375 | |
| Other income | ||
| Deposit interest | 4 | 4 |
| Foreign exchange gains/(losses) | 165 | (70) |
| 169 | (66) | |
| Total income | 8,540 | 6,309 |
| Total income comprises | ||
| Dividends | 8,371 | 6,375 |
| Interest | 4 | 4 |
| Foreign exchange gains/(losses) | 165 | (70) |
| 8,540 | 6,309 | |
| Income from investments | ||
| Listed in the UK | 3,673 | 2,434 |
| Listed overseas | 4,698 | 3,941 |
| 8,371 | 6,375 |
2 Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities
| 2013 | 2012 | |
| £'000 | £'000 | |
| Net return before finance costs and taxation | 96,964 | (14,923) |
| (Gain)/loss on investments | (94,682) | 19,068 |
| Realised (gain)/loss on foreign currency | (241) | 307 |
| Foreign exchange loss/(gain) on loans | 2,747 | (666) |
| Purchases of investments | (62,358) | (88,353) |
| Sales of investments | 58,227 | 75,089 |
| Increase in prepayments and accrued income | (663) | (209) |
| Decrease in other creditors and accruals | (3,215) | (4,800) |
| Net cash outflow from operating activities before interest and taxation | (3,221) | (14,487) |
Related parties
Mr Darwall is an employee of Jupiter Asset Management Limited. Jupiter Asset Management Limited and Jupiter Administration Services Limited, a company within the same group as Jupiter Asset Management Limited, receive investment management and administration fees as set out below.
Jupiter Asset Management Limited is contracted to provide investment management services to the Company (subject to termination by not less than one year's notice by either party) for a quarterly fee of 0.1875% of the total assets of the Company, excluding the value of any Jupiter managed investments, payable in arrears on 31 May, 31 August, 30 November and the last calendar day of February. The Management fee for the year was £2,654,000 (2012: £2,038,000) with £739,000 outstanding as at 31 May 2013 (2012: £529,000).
Jupiter Asset Management Limited is also entitled to an investment performance fee which is based on the out-performance of the Net Asset Value per Ordinary share over the total return on the Benchmark Index, the FTSE World Europe ex UK Total Return Index in an accounting period. Any performance fee payable will equal 15% of the amount by which the increase in the Net Asset Value per Ordinary share (plus any dividends per Ordinary share paid or payable and any accrual for unpaid performance fees for the period) exceeds the higher of (a) the Net Asset Value per Ordinary share on the last business day of the previous accounting period; (b) the Net Asset Value per Ordinary share on the last day of a period in respect of which a performance fee was last paid: and (c) 100p. In each case the values of (a), (b) and (c) are increased by the percentage by which the total return of the Benchmark Index increases or decreases during the calculation period. The total amount of any performance fee payable in respect of one accounting period is limited to 4.99% of the Total Assets of the Company. No performance fee was payable for the year ended 31 May 2013 (2012: £nil).
Jupiter Administration Services Limited is contracted to provide secretarial, accounting and administrative services to the Company for an annual fee of £71,000 adjusted each year in line with the Retail Price Index payable quarterly (2012: £69,000). None of the fee payable for the year ended
31 May 2013 was outstanding at the year end (2012: nil).
The Company has invested from time to time in funds managed by Jupiter Investment Management Group Limited or its subsidiaries. The only such holding as at 31 May 2013 was East European Food Fund representing 0.007% of total investments (2012: 0.1% of total investments).
4. Going Concern
The Company's business activities, capital structure and borrowing facilities, together with the factors likely to affect its future development, performance and position are set out in the Manager's Review on page 8 and the Report of the Directors on pages 11 to 19 of the Reports and Accounts. In addition, Note 13 to the financial statements includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk.
The Company's assets consist mainly of securities which are readily realisable, its ongoing expenses are low relative to its net assets and therefore the directors consider that the Company has appropriate financial resources to enable it to meet its day-to-day working capital requirements and to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
5. Directors' Responsibilities for the Financial Statements
The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare financial statements in accordance with Internal Financial Reporting Standards (IFRSs) as adopted by the European Union.
Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit and loss of the Company for that period. In preparing those financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
make judgments and estimates that are reasonable and prudent;
state whether the financial statements have been prepared in accordance with IFDSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper 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.
The Directors, who are listed on page 3 of the Report & Accounts, confirm to the best of their knowledge that:
(i) the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
(ii) the Report of the Directors 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 risks and uncertainties that the Company faces.
By Order of the Board
H M Priestley
Chairman
21 August 2013
The annual report will be sent to those registered shareholders who have elected to receive a copy. Copies may be obtained from the registered office of the Company at 1 Grosvenor Place, London, SW1X 7JJ.
The Annual General Meeting of the Company is scheduled to take place at 10.30 a.m. on Thursday, 3 October 2013 at the Company's registered office.
By order of the Board
Jupiter Asset Management Limited
Secretaries
Enquiries:
Celia Whitten
Jupiter Asset Management Limited
020 7412 5565
Richard Pavry
Jupiter Asset Management Limited
020 7412 0703
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Jupiter European Opportunities Trust PLC via Thomson Reuters ONE
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