Annual Financial Results to 31 March 2016
Jupiter Green Investment Trust plc (the 'Company')
Annual Financial Results for the year ended 31 March 2016
This announcement contains regulated information
Financial Highlights
|
Capital Performance |
|
|
|
||
|
|
As at |
As at |
% |
||
|
|
31.03.16 |
31.03.15 |
change |
||
|
Total assets less current liabilities (£'000) |
33,418 |
38,545 |
-1.0* |
||
|
MSCI World Small Cap Index (Total Return) |
219.188 |
224.658 |
-2.4 |
||
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|
|
|
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||
|
* Investment performance has been adjusted for the repurchase of Ordinary shares during the year. |
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Ordinary Share Performance |
|
|
|
||
|
|
As at |
As at |
% |
||
|
|
31.03.16 |
31.03.15 |
change |
||
|
Mid market price (p) |
131.25 |
148.00 |
-11.3 |
||
|
Net asset value per Ordinary share (p) |
150.79 |
152.35 |
-1.0 |
||
|
Discount to net asset value (%) |
13.0 |
2.9 |
- |
||
|
|
|
|
|
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|
Performance since launch |
|
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||
|
|
Total Assets less Current Liabilities £'000 |
Net Asset Value per Ordinary Share p |
Dividends paid per Ordinary Share p |
Year- on-year change in Net Asset Value per Ordinary Share % |
Year- on-year change in Benchmark Index % |
|
8 June 2006 (launch) |
24,297 |
97.07 |
- |
- |
- |
|
2007 |
31,679 |
118.07 |
- |
+22.3* |
+18.4 |
|
2008 |
52,734 |
114.14 |
- |
-3.9** |
-7.4 |
|
2009 |
33,809 |
76.86 |
- |
-32.7 |
-27.6 |
|
2010 |
43,590 |
106.65 |
- |
+38.8 |
+63.1 |
|
2011 |
41,085 |
120.49 |
0.40 |
+13.0 |
+16.2 |
|
2012 |
36,181 |
108.49 |
0.60 |
-10.0 |
-4.0 |
|
2013 |
37,571 |
124.42 |
1.20 |
+14.7 |
+18.3 |
|
2014 |
38,142 |
145.00 |
1.10 |
+16.5 |
+10.7 |
|
2015 |
38,545 |
152.35 |
0.55 |
+5.1 |
+14.6 |
|
2016 |
33418 |
150.79 |
0.65† |
-1.0 |
-2.4 |
* 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.
† Subject to approval by shareholders at the Annual General Meeting to be held on 31 August 2016.
Strategic Report
Chairman's Statement
It is with pleasure that I present the Annual Report for the year ended 31 March 2016, my first as Chairman.
The wider market backdrop was unsettled during the year under review. China's economy continued to cool and investors grew concerned about the ability of the country's authorities to engineer a soft landing. The policy response to a boom and bust in mainland China's stock market during the summer months was highly unusual, while the decision to devalue the renminbi in August fanned concern that further adjustments to the currency could lead to a global deflationary shock. Deflation had been a key global risk for most of the period, resulting in aggressive policy responses from the European Central banks and Bank of Japan: quantitative easing programmes were expanded and benchmark interest rates were adjusted to below zero per cent. In the US, meanwhile, the Federal Reserve delayed plans to normalise monetary policy on several occasions until finally raising interest rates by 25 basis points in December. This move precipitated a major downward move in stock markets globally with some indices falling into bear market territory in January 2016 (i.e. falling over 20 per cent. from an earlier peak), before recovering towards the end of the period under review.
Against this backdrop, the Company has underperformed. During the period under review, the total return on the net assets, adjusted for share cancellations decreased by 1.0 per cent. This compares with a decrease in the Company's benchmark index, the MSCI World Small Cap Index Total Return of 2.4 per cent. over the same period and a decrease on the total return from FTSE ET 100 index of 4.4 per cent over the same period. The middle market price per Ordinary share decreased by 11.3 per cent. to 131.25p from 148.00p.
I recommend the Investment Adviser's review in which the Fund Manager, Charlie Thomas discusses how positive developments in the backdrop to environmental investing provided stability to the Company at a time of wide market turbulence.
The most seminal development, of course, was the important agreement reached at the UN Climate Change Conference (COP21) in December. Ahead of these talks, individual countries revealed their plans to reduce carbon emissions as part of the Intended Nationally Determined Contributions (INDC) scheme. This new "bottom-up" framework produced some surprisingly strong levels of commitment, which importantly included a pledge from the US of a cut in carbon emissions by 26-28 per cent by 2025 compared to 2005 levels, and an 80 per cent. cut by 2050. China, meanwhile, pledged that carbon emissions would peak in the country by 2030 and committed to the goal of cutting emissions by some 60-65 per cent from 2005 levels per unit of GDP over the same time frame. Other notable pledges included the G7's plan to cut greenhouse gas emissions from 2010 levels by the "upper end of 40-70 per cent." by the middle of the century - a move said by the BBC that "effectively signalled the end of the fossil fuel era".1
At the time of writing, the process of ratifying the COP21 climate change deal had only just begun, with 170 countries signing up to the deal at a ceremony in New York. The long-term legacy of this agreement and its potential importance in terms of mitigating climate change are yet to be seen.
Dividend
It is not the Company's investment policy to pay dividends. However, as was the case last year, in order to retain its status as an investment trust under Section 1158 of the Corporation Tax Act 2010 the Company is not permitted to retain more than 15 per cent. of eligible investment income arising during any given financial year. Accordingly a resolution to declare a final dividend of 0.65p per share (2015: 0.55p) will be proposed at the Company's Annual General Meeting ('AGM') on 31 August 2016. Subject to shareholder approval, the final dividend will be paid on 30 September 2016 to those shareholders on the Register of Members on 9 September 2016.
This dividend is being declared for the sole reason that the Company has no choice under Section 1158 of the Corporation Tax Act 2010 other than to make this payment in relation to the financial year under review. The declaration of the dividend as a final dividend will also provide shareholders with an opportunity to express their approval on the matter, in line with corporate governance guidelines. In the unlikely event that Shareholders were to vote against such a resolution at the AGM to pay an equivalent final dividend then the Directors would pay an equivalent interim dividend, as otherwise the Company would be likely to lose investment trust status, with potentially disastrous tax consequences for a large number of its shareholders.
Share issues
Shareholders were given the opportunity to subscribe for new Ordinary shares on 1 April 2016 on the basis of one new Ordinary share for every ten held. The subscription price was 152p. Subscriptions were received from shareholders resulting in the issue of 21,955 new Ordinary shares.
Share Buybacks and Discount Management
The Board implements a discount and premium policy under which it will use share buy backs and new issues of shares 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 Board believes that this commitment to the active removal of discount and premium risk will provide materially improved liquidity for both buyers and sellers of the Company's shares.
The Board recognises that in the second half of the financial year, the strategy has not always been successful. There have been periods in that time when underlying equity markets have been sufficiently volatile to cause dislocation between the Net Asset Value and share price. Notwithstanding that, it is the Board's intention to continue with this policy, which it believes is in the interests of all shareholders.
The Board believes that the Company's investment performance, combined with its dividend and the adoption of this nil discount control policy will enhance the attraction of the Company to investors and improve the Company's ability to grow over time.
Shareholders should note there can be no guarantee that any discount control mechanism implemented by the Board will necessarily have its desired effect. The making and timing of share buy backs are subject to a number of legal and regulatory regulations and, subject to these, will always remain at the discretion of the Board.
Gearing
In October 2015, your Company renewed its £3 million flexible loan arrangement with Scotia Bank Europe Plc. which is being extended into the new financial year. Gearing is used strategically by the Fund Manager to enhance the Company's returns when the market are expected to rise. As at 31 March 2016 there were no amounts drawn down under the facility.
The Board
As mentioned in last year's Chairman's Statement, my predecessor, Perry Crosthwaite informed shareholders of his decision to retire from the Board at the conclusion of the 2015 Annual General Meeting. In addition, Charles Crole also advised of his intention to retire from the Board at the conclusion of the AGM which was held on 2 September 2015. On behalf of the Board and Jupiter, I would like to thank both Perry and Charles for their considerable contribution to the Board during their tenure. I would also like to formally welcome Simon Baker to the Board; Simon was appointed as a director of the Company on 1 July 2015 and was subsequently appointed as Chairman of the Audit Committee.
Annual General Meeting
The Company's AGM will be held on Wednesday, 31 August 2016 at 11:00 a.m. at the new offices of Jupiter Asset Management Limited, The Zig Zag Building, 70 Victoria Street, London SW1E 6SQ.
In addition to the formal business, the Fund Manager will provide a short presentation to shareholders on the performance of the Company over the past year as well as an outlook for the future. The Board would welcome your attendance at the AGM as it provides shareholders with an opportunity to ask questions of the Board and Investment Adviser.
Outlook
As Charlie Thomas notes, the five yearly review mechanism, whereby each country is required to appraise how well they are achieving their climate goals and to increase their various rates of commitment, has the potential to accelerate the process of decarbonisation in the global economy with the end goal of limiting temperate increase to 2oC above preindustrial global mean levels. Moreover, this mechanism has the potential to underpin rates of investment in environmental technologies and ultimately deepen the pool of investment opportunities for the company. These are indeed positive developments that your Fund Manager will continue to monitor.
Michael Naylor
Chairman
24 June 2016
1 http://www.bbc.co.uk/news/science-environment-33055651
Investment Adviser's Review
Performance review
For the 12 months ended 31 March 2016, the total return for the net assets of the Company decreased by 1.0 per cent.* compared to a decreased of 2.4 per cent.* for the Company's benchmark, the MSCI World Small Cap Index (Total Return) and a decrease of 4.4 per cent. for the FTSE ET100 Index (Total Return).
Market review
Global stock markets were unsettled during the year under review. The MSCI World Small Cap Index (Total Return) ended the period with a small loss, masking sharp falls in August and September last year, as well as January this year for which there were two main causes. The first of these was the prospect of a normalisation of US interest rates. After many months of deliberation, the Federal Reserve finally increased interest rates in December. The second point of concern was that China's ailing economy might be heading towards a hard landing. The decision by China's authorities to devalue the country's currency in August fanned these concerns. Deflation risk was a particular worry for investors during the year and was manifested in sharp falls in the value of oil and other commodities. Sentiment improved in the final months of the year under review on the back of relatively robust US economic data and indications that China's economy may be stabilising.
Notwithstanding the difficult economic backdrop, it was an important year for the environmental investment area. After the UN formally adopted the 2030 Sustainable Development Goals in September, December's UN Climate Change Conference in Paris (COP21) ended with a landmark agreement. This was foreshadowed by some quite extraordinary policy commitments from the US, China and the G7. For us, a key policy outcome from the conference was the review mechanism which requires member states to review and tighten climate change policies every five years. Meanwhile, the wind and solar industry received a notable boost from the US after it extended its programme of tax breaks for this area. This decision demonstrated an increased willingness by Congress to deliver policies aimed at tackling climate change, while also recognising the long-term economic value of these industries. It was particularly notable that 2015 witnessed record levels of investment in wind and solar projects worldwide ($329 billion, according to Bloomberg) at a time when oil, coal and natural gas prices reached new lows. Towards the end of the period, minds were sharpened by news that average worldwide temperatures in 2015 climbed to 0.75C above long-term averages recorded between 1961 and 2014, according to the Met Office. This troubling pattern has continued into 2016 with data for March showing that the month was some 1.07C hotter than its average for over a century - a stark reminder that global warming is very much an event of today.
Company review
Against this challenging backdrop, the Company lost modest ground during the period, but performed relatively well compared to MSCI World Small Cap Index (Total Return) and the environmentally-focused FTSE ET100 Index.
The renewable energy theme was a notable highlight during the period. Vestas Wind Systems, First Solar and SunPower were buoyed by the positive outcome to the Paris conference and the extension to solar and wind tax credits in the US. Several holdings from the waste management sector made excellent progress during the year on the back of improved trading, which included Casella Waste Systems, Veolia Environnement and Tomra. The sector also received a boost from the planned merger between major US waste businesses Progressive Waste Solutions and Waste Connections, which may herald further mergers and acquisitions activity in the sector.
In contrast, US organic food holdings, United Natural Foods and Whole Foods Market, detracted from performance with each coming under pressure due to concern about growing competition in the market. Industrial recycling business Horsehead fell in value after it announced delays to the start date of a new production facility. We sold out of this holding as a result. Lastly, the VW emissions scandal in late-September and concerns over China's economic growth weighed on holdings with exposure to the auto sector, including bearing specialist SKF and engine efficiency companies BorgWarner and Johnson Matthey. Ultimately, we believed the greater transparency on vehicle performance produced by the incident could lead to stronger demand for the products offered by some of these businesses.
We also took advantage of market weakness to add to existing positions and establish new holdings in companies such as First Solar (a solar modules manufacturer), SunPower (a solar products and services company), Miura (heat energy, water treatment, and environmental solutions), Sensata (automotive sensors) and Infineon Technologies (an auto and industrial chip maker with a prominent position in solutions for automotive efficiency and driver assistance). Meanwhile, we trimmed various holdings, for example taking profits in Cranswick and Wabtec.
Outlook
We continue to believe there are real causes for optimism about the long-term outlook for environmental investing. The fact that the alternative energy sector appears to be decoupling somewhat from fossil fuels (as shown by the pickup in investment in the former at a time when the latter has fallen in price) is indicative of the profound structural change that is occurring in the global economy, as it gradually decarbonises and improves the efficiency by which natural resources are used. Structural change is at the heart of our investment thesis and we seek to invest in businesses whose products and services are at the forefront of this powerful economic transformation.
Following the success of COP21 in Paris last year, we expect further progress by governments and corporations when it comes to environmental policies (with the exception of some countries, including the UK) and an acceleration of awareness of issues surrounding climate change by individuals. We will also be watching developments in China, a country which has fast become a leader in terms of environmental policy and investment. It has overtaken Europe as the largest contributor to renewable energy investment and recently released its 13th five year plan that included a raft of policies that should support the green economy and lower the nation's carbon footprint. The broader implications of these reforms are vast, with the government committed to encouraging growth in areas such as infrastructure for electric vehicles, environmentally friendly construction and clean energy. We are encouraged by China's aim to transition towards a greener economy and will continue to monitor developments closely for new investment opportunities that these measures may present.
Charlie Thomas
Fund Manager
Jupiter Asset Management Limited
24 June 2016
* Source: Jupiter Asset Management.
Investment Portfolio as at 31 March 2016
|
|
|
|
31 March 2016 |
|
31 March 2015 |
|
|
|
|
|
|
|
|
|
|
|
Country |
Market value |
Percentage |
Market value |
Percentage |
|
|
Company |
of Listing |
£'000 |
of Portfolio |
£'000 |
of Portfolio |
|
|
Smith A. O. |
United States |
1,781 |
5.4 |
1,534 |
4.2 |
|
|
Wabtec |
United States |
1,404 |
4.3 |
2,003 |
5.5 |
|
|
Vestas Wind Systems |
Denmark |
1,377 |
4.2 |
806 |
2.2 |
|
|
Cranswick |
United Kingdom |
1,343 |
4.1 |
1,204 |
3.3 |
|
|
LKQ Corporation |
United States |
1,180 |
3.6 |
1,005 |
2.8 |
|
|
Tomra Systems |
Norway |
997 |
3.0 |
803 |
2.2 |
|
|
Emcor Group |
United States |
994 |
3.0 |
950 |
2.6 |
|
|
National Express Group |
United Kingdom |
972 |
3.0 |
830 |
2.3 |
|
|
Toray Industries |
Japan |
812 |
2.5 |
798 |
2.2 |
|
|
Valmont Industries |
United States |
802 |
2.4 |
795 |
2.2 |
|
|
Johnson Matthey |
United Kingdom |
781 |
2.4 |
941 |
2.6 |
|
|
EDP Renovaveis |
Spain |
769 |
2.3 |
460 |
1.3 |
|
|
Stantec |
Canada |
734 |
2.2 |
850 |
2.3 |
|
|
Xylem |
United States |
727 |
2.2 |
551 |
1.5 |
|
|
Novozymes |
Denmark |
726 |
2.2 |
1,155 |
3.2 |
|
|
RPS Group |
United Kingdom |
679 |
2.1 |
762 |
2.1 |
|
|
Sensata Technologies |
United States |
644 |
2.0 |
643 |
1.8 |
|
|
WS Atkins |
United Kingdom |
623 |
1.9 |
746 |
2.0 |
|
|
FirstGroup |
United Kingdom |
604 |
1.8 |
586 |
1.6 |
|
|
Covanta |
United States |
593 |
1.8 |
724 |
2.0 |
|
|
Veolia Environnement |
France |
591 |
1.8 |
566 |
1.6 |
|
|
United Natural Foods |
United States |
570 |
1.7 |
1,092 |
3.0 |
|
|
Miura |
Japan |
570 |
1.7 |
- |
- |
|
|
BorgWarner |
United States |
546 |
1.7 |
860 |
2.4 |
|
|
Shimano |
Japan |
546 |
1.7 |
522 |
1.4 |
|
|
First Solar |
United States |
542 |
1.6 |
281 |
0.8 |
|
|
Andritz |
Austria |
537 |
1.6 |
580 |
1.6 |
|
|
Schneider Electric |
France |
500 |
1.5 |
352 |
1.0 |
|
|
Shanks Group |
United Kingdom |
482 |
1.5 |
636 |
1.7 |
|
|
Regal Beloit |
United States |
478 |
1.4 |
608 |
1.7 |
|
|
Azbil |
Japan |
467 |
1.4 |
492 |
1.3 |
|
|
SKF |
Sweden |
455 |
1.4 |
423 |
1.2 |
|
|
Air Water |
Japan |
443 |
1.3 |
531 |
1.5 |
|
|
Clean Harbors |
United States |
435 |
1.3 |
484 |
1.3 |
|
|
Mayr-Melnhof Karton |
Austria |
410 |
1.2 |
353 |
1.0 |
|
|
Itron |
United States |
408 |
1.2 |
346 |
0.9 |
|
|
Daiseki |
Japan |
389 |
1.2 |
415 |
1.1 |
|
|
Keller Group |
United Kingdom |
386 |
1.2 |
440 |
1.2 |
|
|
Suez Environnement |
France |
384 |
1.2 |
360 |
1.0 |
|
|
China Everbright |
Hong Kong |
375 |
1.1 |
536 |
1.5 |
|
|
Ricardo Group |
United Kingdom |
365 |
1.1 |
1,084 |
3.0 |
|
|
Centrotec Sustainable |
Germany |
359 |
1.1 |
347 |
0.9 |
|
|
Sunpower |
United States |
358 |
1.1 |
- |
- |
|
|
Casella Waste |
United States |
358 |
1.1 |
283 |
0.8 |
|
|
Watts Water |
United States |
352 |
1.1 |
284 |
0.8 |
|
|
China Longyuan Power |
China |
349 |
1.1 |
496 |
1.4 |
|
|
Hollysys Automation Technologies |
United States |
337 |
1.0 |
308 |
0.8 |
|
|
NSK |
Japan |
333 |
1.0 |
533 |
1.5 |
|
|
Whole Foods Market |
United States |
314 |
1.0 |
509 |
1.4 |
|
|
Augean |
United Kingdom |
248 |
0.8 |
259 |
0.7 |
|
|
Pure Technologies |
Canada |
248 |
0.8 |
409 |
1.1 |
|
|
Vossloh |
Germany |
222 |
0.7 |
201 |
0.5 |
|
|
Wacker Chemie |
Germany |
219 |
0.7 |
279 |
0.8 |
|
|
Infineon Technologies |
Germany |
175 |
0.5 |
- |
- |
|
|
Zumtobel Group |
Austria |
175 |
0.5 |
- |
- |
|
|
Boer Power |
Hong Kong |
158 |
0.5 |
287 |
0.8 |
|
|
SunOpta |
United States |
112 |
0.3 |
202 |
0.6 |
|
|
Atlantis Resources |
United Kingdom |
89 |
0.3 |
55 |
0.1 |
|
|
Newalta |
Canada |
39 |
0.1 |
279 |
0.8 |
|
|
TEG Group* |
United Kingdom |
20 |
0.1 |
20 |
0.1 |
|
|
TOTAL |
|
32,886 |
100.0 |
|
|
|
* Suspended
Cross holdings in other investment companies
As at 31 March 2016, none of the Company's total assets were invested in the securities of other UK listed investment companies. It is the Company's stated policy that not more than 10 per cent., in aggregate, of the value of the Total Assets of the Company (before deducting borrowed money) may be invested in other investment companies (including investment trusts) listed on the Main Market of the London Stock Exchange. Whilst the requirements of the UK Listing Authority permit the Company to invest up to this 10 per cent. limit, it is the Directors' current intention that the Company invests not more than 5 per cent., in aggregate, of the value of the Total Assets of the Company (before deducting borrowed money) in such other investment companies.
Sector and Geographical Analysis of Investments as at 31 March 2016
|
|
|
|
|
|
North |
Far |
|
2015 |
2016 |
Equities |
UK |
Europe |
America |
East |
|
% |
% |
|
% |
% |
% |
% |
|
|
|
|
|
|
|
|
|
6.3 |
9.4 |
Oil & Gas |
|
|
|
|
|
6.3 |
9.4 |
Alternative Energy |
0.3 |
5.3 |
2.7 |
1.1 |
|
|
|
|
|
|
|
|
|
9.1 |
6.9 |
Basic Materials |
|
|
|
|
|
7.1 |
6.9 |
Chemicals |
2.4 |
0.7 |
|
3.8 |
|
2.0 |
- |
Industrial Metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
59.3 |
60.6 |
Industrials |
|
|
|
|
|
11.5 |
13.6 |
Construction & Materials |
1.2 |
0.5 |
11.9 |
|
|
1.0 |
1.2 |
General Industrials |
|
1.2 |
|
|
|
9.4 |
9.8 |
Electronic & Electrical Equipment |
- |
1.5 |
6.4 |
1.9 |
|
12.6 |
15.0 |
Industrial Engineering |
0.1 |
6.7 |
6.5 |
1.7 |
|
4.5 |
4.8 |
Travel & Leisure |
4.8 |
|
|
|
|
20.3 |
16.2 |
Support Services |
7.4 |
|
6.5 |
2.3 |
|
|
|
|
|
|
|
|
|
12.7 |
12.4 |
Consumer Goods |
|
|
|
|
|
6.7 |
6.3 |
Automobiles & Parts |
|
|
5.3 |
1.0 |
|
4.6 |
4.4 |
Food Producers |
4.1 |
|
0.3 |
|
|
1.4 |
1.7 |
Leisure Goods |
|
|
|
1.7 |
|
|
|
|
|
|
|
|
|
3.2 |
2.2 |
Health Care |
|
|
|
|
|
3.2 |
2.2 |
Pharmaceuticals & Biotechnology |
|
2.2 |
|
|
|
|
|
|
|
|
|
|
|
4.4 |
2.7 |
Consumer Services |
|
|
|
|
|
4.4 |
2.7 |
Food & Drug Retailers |
|
|
2.7 |
|
|
|
|
|
|
|
|
|
|
5.0 |
5.3 |
Utilities |
|
|
|
|
|
2.4 |
2.3 |
Electricity |
|
2.3 |
|
|
|
2.6 |
3.0 |
Gas, Water & Multiutilities |
|
3.0 |
|
|
|
|
|
|
|
|
|
|
|
- |
0.5 |
Technology |
|
|
|
|
|
- |
0.5 |
Technology Hardware & Equipment |
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
100.0 |
2016 Totals |
20.3 |
23.9 |
42.3 |
13.5 |
|
100.0 |
|
2015 Totals |
23.6 |
21.2 |
42.5 |
12.7 |
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 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 an investment company within the meaning of section 833 of the Companies Act 2006.
The Company is not a close company within the meaning of the provisions of the Corporation Tax Act 2010 and has no employees.
The Company was incorporated in England & Wales on 12 April 2006 and started trading on 8 June 2006, immediately following the Company's launch.
Reviews of the Company's activities are included in the Chairman's Statement and Investment Adviser's Review.
There has been no significant change in the activities of the Company during the year to 31 March 2016 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 generate long-term capital growth for Ordinary shareholders through a diverse portfolio of companies providing environmental solutions.
Investment Strategy
The Investment Adviser has adopted a bottom-up approach. The Investment Adviser, supported by the sustainable investment and Governance 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
The Company will invest primarily in securities which are quoted, listed or traded on a recognised exchange. However, up to 5 per cent. of the Company's Total Assets (at the time of such investment) may be invested in unlisted securities.
The Company observes the following investment restrictions:
No more than 15 per cent. of the Total Assets of the Company will be lent to or invested in any one company or group;
Whilst the UK Listing Authority permits companies to invest up to 15 per cent. of Total Assets in other investment companies, the Directors have no intention to invest more than 10 per cent. in aggregate, of the value of the total assets of the Company in such other investment companies;
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.
Benchmark Index
The Company's Benchmark Index is the MSCI World Small Cap Index Total Return, expressed in Sterling.
Management
The Company has no employees and most of its day to day responsibilities are delegated to Jupiter Asset Management Limited, who act as the Company's Investment Adviser and Company Secretary.
J.P. Morgan Europe Limited acts as the Company's Depository and the Company has entered into an outsourcing arrangement with J.P Morgan Chase Bank N.A. for the provision of accounting and administration services.
Viability Statement
In accordance with provision C.2.2 of the UK Corporate Governance Code as issued by the Financial Reporting Council in September 2014, the Board has assessed the prospects of the Company over the next three years. The Company's investment objective is to achieve long-term capital growth and the Board regards the Company as a long-term investment. As part of its assessment, the Board has noted that shareholders will be required to vote on the continuation of the Company at the 2017 AGM. The Board is of the opinion that this is an appropriate timeframe as it will provide shareholders with assurances on the viability of the Company post the date of the continuation vote.
As part of its assessment, the Board has considered the Company's business model including its investment objective and investment policy as well as the principal risks and uncertainties that may affect the Company as detailed below.
The Board has noted that:
• The Company holds a highly liquid portfolio invested predominantly in listed equities; and
• No significant increase to ongoing charges or operational expenses is anticipated.
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 total assets to its net assets, expressed as a percentage. The effect of gearing is that in rising markets a geared share class tends to benefit from any outperformance of the relevant 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 value of the geared shares class 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 of Association (the 'Articles') provide that, without the sanction of the Company in general meeting, the Company may not incur borrowings above a limit of 25 per cent. of the Company's total assets at the time of drawdown of the relevant borrowings.
Loan facility
The Company has a revolving £3 million bank loan facility with Scotiabank Europe PLC. The company did not draw down this loan during the year under review. The Finance costs shown in the Statement of Comprehensive Income are in respect of the costs incurred for non-utilisation of the facility during the year.
Use of Derivatives
The Company may invest in derivative financial instruments, comprising options, futures and contracts for differences 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 differences 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.
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
· Fund in/outflows of the retail investment wrapper products managed by the Manager.
The Jupiter ISA/Savings Scheme closed on 30 November 2015.
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 Annual General Meeting 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 3,230,460 Ordinary shares for cancellation during the year under review at an average discount of 5.5 per cent.
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 Annual General Meeting. The new authority to repurchase will last until the conclusion of the Annual General Meeting of the Company in 2017 (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.
Principal Risks and Uncertainties
The principal risk factors relating to the Company can be divided into the following areas:
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.
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.
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. At its quarterly meetings the Board is mindful of the outlook for equity markets when reviewing the Company's gearing.
Regulatory Risk - The Company operates in a complex regulatory environment and faces a number of regulatory risks. A breach of section 1158 of the CTA 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 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, the UKLA Listing Rules, the FCA's Disclosure and Transparency Rules and the Alternative Investment Fund Managers Directive.
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.
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 Investment Adviser develops its recruitment and remuneration packages in order to retain key staff, has training and development programmes in place and undertakes succession planning.
Operational - Failure of the core accounting systems, or a disastrous disruption to the Investment Adviser's business, could lead to an inability to provide accurate reporting and monitoring. The Investment Adviser is contractually obliged to ensure that its conduct of business conforms to applicable laws and regulations.
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.
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
As at 31 March 2016, the Board comprises of one female and two 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 parties. There are therefore no disclosures to be made in respect of employees.
The Board has noted the Investment Adviser's policy on Environmental, Social and Human Rights issues as detailed below:
The Investment Adviser considers various factors when evaluating potential investments. While an investee company's policy towards the environmental and social responsibility, including with regard to human rights, is considered as part of the overall assessment of risk and suitability for the portfolio, the Investment Adviser does not necessarily decide to, or not to, make an investment on environmental and social grounds alone.
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.
For and on behalf of the Board
Michael Naylor
Chairman
24 June 2016
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable United Kingdom law and those International Financial Reporting Standards ("IFRS") as adopted by the European Union.
Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the 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 IAS 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 IFRSs 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 IFRS, 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 Auditor does not include consideration of the maintenance and integrity of the website and accordingly the Auditor accepts 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, confirm to the best of their knowledge that:
(a) 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;
(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 risks and uncertainties that the Company faces; and
(c) that in the opinion of the Board, 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 that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
By Order of the Board
Michael Naylor
Chairman
24 June 2016
Statement of Comprehensive Income for the year ended 31 March 2016
|
|
Year ended 31 March 2016 |
Year ended 31 March 2015 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
(Loss)/gain on investments at fair value through profit or loss |
- |
(703) |
(703) |
- |
2,391 |
2,391 |
|
Foreign exchange loss |
- |
(6) |
(6) |
- |
(24) |
(24) |
|
Income |
539 |
- |
539 |
570 |
- |
570 |
|
Total income |
539 |
(709) |
(170) |
570 |
2,367 |
2,937 |
|
Investment management fee |
(30) |
(268) |
(298) |
(31) |
(284) |
(315) |
|
Other expenses |
(262) |
- |
(262) |
(325) |
- |
(325) |
|
Total expenses |
(292) |
(268) |
(560) |
(356) |
(284) |
(640) |
|
Net return/(loss) before finance costs and tax |
247 |
(977) |
(730) |
214 |
2,083 |
2,297 |
|
Finance costs |
(10) |
- |
(10) |
(13) |
- |
(13) |
|
Return/(loss) on ordinary activities before taxation |
237 |
(977) |
(740) |
201 |
2,083 |
2,284 |
|
Taxation |
(36) |
- |
(36) |
(38) |
- |
(38) |
|
Net return/(loss) after taxation |
201 |
(977) |
(776) |
163 |
2,083 |
2,246 |
|
Return/(loss) per Ordinary share |
0.83p |
(4.05)p |
(3.22)p |
0.63p |
8.07p |
8.70p |
|
Diluted return/(loss) per Ordinary share |
0.83p |
(4.05)p |
(3.22)p |
0.63p |
8.07p |
8.70p |
The total column of this statement is the income statement of the Company, prepared in accordance with IFRS. 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.
No operations were acquired or discontinued during the year.
All income is attributable to the equity holders of Jupiter Green Investment Trust PLC. There are no minority interests.
Statement of Financial Position as at 31 March 2016
|
|
2016 |
2015 |
|
|
£'000 |
£'000 |
|
Non current assets |
|
|
|
Investments held at fair value through profit or loss |
32,886 |
36,349 |
|
Current assets |
|
|
|
Prepayments and accrued income |
85 |
94 |
|
Cash and cash equivalents |
567 |
2,242 |
|
|
652 |
2,336 |
|
Total assets |
33,538 |
38,685 |
|
Current liabilities |
|
|
|
Other payables |
(120) |
(140) |
|
Total assets less current liabilities |
33,418 |
38,545 |
|
Capital and reserves |
|
|
|
Called up share capital |
34 |
34 |
|
Share premium |
29,481 |
29,348 |
|
Redemption reserve |
239 |
239 |
|
Special reserve |
24,292 |
24,292 |
|
Retained earnings |
(20,628) |
(15,368) |
|
Total equity shareholders' funds |
33,418 |
38,545 |
|
Net Asset Value per Ordinary share |
150.79p |
152.35p |
|
Diluted Net Asset Value per Ordinary share |
150.79p |
151.68p |
Approved by the Board of Directors and authorised for issue on 24 June 2016 and signed on its behalf by:
Michael Naylor
Chairman
Company Registration Number 05780006
Statement of Changes in Equity for the year ended 31 March 2016
|
|
Share |
Share |
Special |
Redemption |
Retained |
|
|
For the year ended |
Capital |
Premium |
Reserve |
Reserve |
Earnings |
Total |
|
31 March 2016 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 31 March 2015 |
34 |
29,348 |
24,292 |
239 |
(15,368) |
38,545 |
|
Net loss for the year |
- |
- |
- |
- |
(776) |
(776) |
|
Dividends paid |
- |
- |
- |
- |
(138) |
(138) |
|
Ordinary shares issued |
- |
133 |
- |
- |
- |
133 |
|
Ordinary shares repurchased |
- |
- |
- |
- |
(4,346) |
(4,346) |
|
Balance at 31 March 2016 |
34 |
29,481 |
24,292 |
239 |
(20,628) |
33,418 |
|
|
Share |
Share |
Special |
Redemption |
Retained |
|
|
For the year ended |
Capital |
Premium |
Reserve |
Reserve |
Earnings |
Total |
|
31 March 2015 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 31 March 2014 |
33 |
28,348 |
24,292 |
239 |
(14,770) |
38,142 |
|
Net gain for the year |
- |
- |
- |
- |
2,246 |
2,246 |
|
Dividends paid |
- |
- |
- |
- |
(284) |
(284) |
|
Ordinary shares issued |
1 |
1,000 |
- |
- |
- |
1,001 |
|
Ordinary shares repurchased |
- |
- |
- |
- |
(2,560) |
(2,560) |
|
Balance at 31 March 2015 |
34 |
29,348 |
24,292 |
239 |
(15,368) |
38,545 |
Cash Flow Statement for the year ended 31 March 2016
|
|
2016 |
2015 |
|
|
£'000 |
£'000 |
|
Cash flows from operating activities |
|
|
|
Investment income received |
548 |
542 |
|
Investment management fee paid |
(283) |
(317) |
|
Investment performance fee paid |
- |
(350) |
|
Other cash expenses |
(297) |
(323) |
|
Net cash outflow from operating activities before taxation |
(32) |
(448) |
|
Interest paid |
(10) |
(13) |
|
Taxation |
(36) |
(38) |
|
Net cash outflow from operating activities |
(78) |
(499) |
|
Net cash flows from investing activities |
|
|
|
Purchases of investments |
(2,536) |
(1,381) |
|
Sale of investments |
5,296 |
5,893 |
|
Net cash inflow from investing activities |
2,760 |
4,512 |
|
Cash flows from financing activities |
|
|
|
Shares issued |
133 |
1,001 |
|
Shares repurchased |
(4,346) |
(2,560) |
|
Equity dividends paid |
(138) |
(284) |
|
Net cash outflow from financing activities |
(4,351) |
(1,843) |
|
Increase/(decrease) in cash |
(1,669) |
2,170 |
|
Change in cash and cash equivalents |
|
|
|
Cash and cash equivalents at start of year |
2,242 |
96 |
|
Realised loss on foreign currency |
(6) |
(24) |
|
Cash and cash equivalents at end of year |
567 |
2,242 |
Notes to the accounts
1. Accounting policies
The Accounts comprise the financial results of the Company for the year to 31 March 2016. 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 June 2016. All values are rounded to the nearest thousand pounds (£'000) except where indicated.
The Accounts have been prepared in accordance with International Financial Reporting Standards (IFRS), which comprise standards and interpretations approved by the International Accounting Standards Board (IASB) and International Accounting Standards Committee (IASC), as adopted by the European Union (EU).
Where presentational guidance set out in the Statement of Recommended Practice (SORP) for Investment Trusts issued by the Association of Investment Companies (AIC) in January 2009 and replaced in November 2014 is consistent with the requirements of IFRS, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.
The Company continues to adopt the going concern basis in the preparation of the financial statements.
(a) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business.
Revenue 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.
Deposit and other interest receivable, expenses and interest payable are accounted for on an accruals basis. These are classified within operating activities in the cash flow statement.
(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. In accordance with the Company's Articles of Association, net capital returns may not be distributed by way of dividend.
An analysis of retained earnings broken down into revenue (distributable) items and capital (non-distributable) items is given in Note 15. Investment Management fees are charged 90 per cent. to capital and 10 per cent. to revenue. All other operational costs including administration expenses and finance costs (but with the exception of any investment performance fees which are charged to capital) are charged to revenue.
(c) Basis of valuation of investments
Investments are recognised and derecognised on a trade date where a purchase and sale of an investment is under contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at cost, being the consideration given.
All investments are classified as held at fair value through profit or loss. All investments are measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income in the period in which they arise. The fair value of listed investments is based on their quoted bid price at the reporting date without any deduction for estimated future selling costs.
Foreign exchange gains and losses on fair value through profit and loss investments are included within the changes in the fair value of the investments.
For investments that are not actively traded and/or where active stock exchange quoted bid prices are not available, fair value is determined by reference to a variety of valuation techniques. These techniques may draw, without limitation, on one or more of: the latest arm's length traded prices for the instrument concerned; financial modelling based on other observable market data; independent broker research; or the published accounts relating to the issuer of the investment concerned.
(d) Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to insignificant risks of changes in value.
(e) Foreign currencies
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At the date of each Statement of Financial Position, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on that date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in net profit or loss for the year, except for exchange differences arising on non-monetary assets and liabilities where the changes in fair value are recognised directly in equity.
(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 Income and Corporation Taxes Act 2010 ('ICTA') are not liable for taxation of capital gains.
(g) Special reserve
The reserve is a transfer from the share premium account.
(h) Accounting developments
The following standards, amendments and interpretations have been published by IASB but are not yet effective for year ended 31 March 2016:
International Accounting Standards (IAS/IFRS's)
IFRS 9 Financial Investments Classification and Measurement
Effective date: 1 January 2018
Amendments to IFRS 7 Financial Instruments Disclosures
Effective date: 1 January 2016
Amendments to IAS 7 Statement of Cashflows
Effective date: 1 January 2017
The Directors anticipate that the adoption of the above standards and interpretations in future periods will have no material impact on the financial statements of the Company. The Company intends to adopt the standards in the reporting period when they become effective.
2. Significant accounting judgements, estimates and assumptions
The preparation of the Company's Financial Statements on occasion requires management to make judgements, estimates and assumptions that affect the reported amounts in the primary financial statements and the accompanying disclosures. These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the current and future periods, depending on circumstance.
3. Income
|
|
Year |
Year |
|
|
ended |
ended |
|
|
31 March |
31 March |
|
|
2016 |
2015 |
|
|
£'000 |
£'000 |
|
Income from investments |
|
|
|
Dividends from UK companies |
200 |
214 |
|
Dividends from overseas companies |
339 |
356 |
|
Total income |
539 |
570 |
4. Investment management and performance fee
|
|
Year ended 31 March 2016 |
Year ended 31 March 2015 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investment management fee |
30 |
268 |
298 |
31 |
284 |
315 |
|
|
30 |
268 |
298 |
31 |
284 |
315 |
90 per cent. of the investment management fee is treated as a capital expense.
5. Earnings per Ordinary share
The earnings/(loss) per Ordinary share figure is based on the net loss for the year of £776,000 (2015: net gain £2,246,000) and on 24,111,881 (2015: 25,806,579) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.
|
|
Year |
Year |
|
|
ended |
ended |
|
|
31 March |
31 March |
|
|
2016 |
2015 |
|
|
£'000 |
£'000 |
|
Net revenue profit |
201 |
163 |
|
Net capital (loss)/profit |
(977) |
2,083 |
|
Net total (loss)/profit |
(776) |
2,246 |
|
|
|
|
|
Weighted average number of Ordinary shares in issue during the year used for the purposes of the undiluted calculation |
24,111,881 |
25,806,579 |
|
Weighted average number of Ordinary shares in issue during the year used for the purposes of the diluted calculation |
24,111,881 |
25,806,579 |
|
|
|
|
|
Undiluted |
|
|
|
Revenue earnings per Ordinary share |
0.83p |
0.63p |
|
Capital earnings per Ordinary share |
(4.05)p |
8.07p |
|
Total earnings per Ordinary share |
(3.22)p |
8.70p |
|
|
|
|
|
Diluted |
|
|
|
Revenue (loss)/earnings per Ordinary share |
0.83p |
0.63p |
|
Capital (loss)/earnings per Ordinary share |
(4.05)p |
8.07p |
|
Total earnings per Ordinary share |
(3.22)p |
8.70p |
6. 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, 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) for a fee payable monthly, of one twelfth of 0.85 per cent. of the net assets of the Company after deduction of the value of any Jupiter managed investments.
The management fee payable to JUTM for the period 1 April 2015 to 31 March 2016 was £297,419 with £68,427 (2015: £54,214) outstanding at year end.
JUTM is also entitled to an investment performance fee which is based on the outperformance of the Net Asset Value per Ordinary Share over the total return on the Benchmark Index in an accounting year. Any performance fee payable will equal the time weighted average number of Ordinary shares in issue during the period multiplied by 15 per cent. 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 total return on the Benchmark Index. The performance fee will only be payable if the Net Asset Value per Ordinary Share (adjusted as described above) exceeds the highest of (i) the Net Asset Value per Ordinary Share on the last business day of the previous performance period; (ii) the Net Asset Value per Ordinary share on the last day of a performance period in respect of which a performance fee was last paid: and (iii) 100p. The total amount of management fees and any performance fee payable in respect of one accounting period is limited to 1.75 per cent. of the Net Asset Value of the Company on the last business day of the relevant performance period. There was no performance fee payable for the year ended 31 March 2016 (2015: £nil).
The Company has invested from time to time in funds managed by Jupiter Investment Management Group Limited or its subsidiaries. There were no such holdings as at 31 March 2016.
7. Contingent liabilities and capital commitments
There were no contingent liabilities in respect of investments not fully called up and none in respect of underwriting as at 31 March 2016.
8. Post year end events
Since the year end an additional 421,000 Ordinary shares were repurchased to be held in Treasury for prices between 136.50p and 142.00p per share.
On 4 April 2016 subscriptions were received from shareholders resulting in the allotment of 21,955 new ordinary shares.
Availability of Annual Report and Accounts
The Annual Report and Accounts will shortly be posted to those registered shareholders who have elected to receive a hard copy. An electronic version of the Annual Report & Accounts which includes the Notice of AGM and Form of Proxy will soon be available to download from the Company's section of the Jupiter Asset Management website at www.jupiteram.com/JGC.
For further information, please contact:
Richard Pavry
Head of Investment Trusts
Jupiter Asset Management Limited, Company Secretary
investmentcompanies@jupiteram.com
020 7314 4822
24 June 2016
This information is provided by RNS
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