Interim Results

Jupiter European Opportunities Trust PLC Announcement of Unaudited Interim Results for the half year to 30th November 2005 CHAIRMAN'S STATEMENT European markets moved ahead during the period under review and your manager drew further on your Company's borrowing facilities in order to enhance your Company's performance. The 13.3 per cent. increase in Net Asset Value fell a little short of the 14.8 per cent achieved by our benchmark index, although part of the shortfall was made good by a reduction in the discount to Net Asset Value at which your Company's shares trade on the London Stock Exchange. The major reason for your Company's underperformance compared with its benchmark index was a below-average weighting in oils and mining companies. As at 21st February 2006 the unaudited net asset value per Ordinary Income share had increased to 168.64p. This represents an increase of 11.4 per cent. since 30th November 2005, which compares with an increase of 10.9 per cent. in your Company's benchmark index over the same period. Shareholders should be aware of two features of your Company which differentiate it from the majority of its peers. One is concentration - at the interim reporting date the portfolio consisted of just 34 holdings, each of which can significantly affect overall performance. Such success as your Company has hitherto enjoyed has been largely due to excellent stockpicking by the manager. The second distinguishing feature is our UK weighting, which is currently close to 18 per cent. The four components of that total-Associated British Ports, Johnson Matthey, Intertek Group and Mecom-feature either because they are thought to have excellent prospects and no Eurozone equivalent or, where an equivalent exists, because they are seen as the "category killer". In other words, they are the best in class and just happen to have a London listing rather than, or in addition to, a listing elsewhere in Europe. The interim accounts set before you are the first for your Company prepared in accordance with International Financial Reporting Standards (IFRS), the most immediate impact of which has been to reduce the 31st May 2005 total asset valuation by £60,000. This is because your Company's investment portfolio is now valued on a bid priced basis, rather than at the middle market prices of the underlying holdings. Whether IFRS gives a truer picture than its predecessor, UK GAAP (Generally Accepted Accounting Principles) is debatable, but it is a touch more conservative. The outlook for world markets in 2006 depends largely on the attitude of US consumers, whose purchasing power has been eroded by a steady stream of interest rate increases. Given that 75 per cent of Eurozone trade is effected between member countries, European markets are less exposed than many to the US consumer, and your Company's portfolio has, in any case, been constructed around companies which should prosper in spite of the international outlook rather than because of it. I look forward to reporting on the full year's results to 31st May 2006 later in the year. H M Priestley Chairman 24th February 2006 MANAGER'S REVIEW For the six months to the end of November 2005 your Company's Net Asset Value per Ordinary share rose by 13.3 per cent. compared with 14.8 per cent. for your Company's benchmark index, the FTSE World Europe ex UK Total Return Index. The middle market price of your Company's Ordinary shares rose by 14.4 per cent., reflecting a narrowing of the discount to Net Asset Value at which they trade on the London Stock Exchange from 2.7 Per cent. on 31st May 2005 to 1.7 per cent. at the period end. JEOT Securities, your Company's the trading subsidiary, made a profit of £167,000. Equity markets across the world performed well during the period under review. The FTSE All World Series equity index rose by 8.6per cent. and European equities once again outperformed the average market performance, doing better than both the US and UK markets. Of the major global markets Japan, up nearly 32 per cent. in the period, was by far the strongest. Continuing strong demand (world GDP is estimated to have risen by 4.3% in real terms in 2005) is an important factor, underpinning rising valuations. In effect, the tremendous growth of East Asia has extended the `normal' business cycle, encouraging many investors to believe that a sustained, higher level of world economic growth is possible. The high oil price (up 10 per cent. to $57.3 for the benchmark WTI grade in the period under review) is one manifestation of this strong global economic performance. Against this generally positive background, cyclical stocks tended to outperform. With interest rates relatively low by historic standards, funding was cheap and this in turn caused a significant pick up in Mergers and Acquisitions ("M&A") activity. Here private equity was a major factor. Although European growth was only an estimated 1.2 per cent. in 2005, there were signs of improvement in demand, helped by the weakening of the euro against the dollar (down by 4.7 per cent. in the period under review). The accession of a number of Eastern European countries to the European Union has proved to be a potent catalyst for more restructuring in European companies and lower tax rates. All these factors help explain Europe's relatively good performance. Broadly speaking commodity, export, capital goods orientated stocks outperformed (oils, especially refiners, did well), and retail, media, automotive and other domestic orientated stocks underperformed. But, as ever, there were exceptions to the rule. Financials performed well, a sign both of the healthy state of the European banking sector and of the impact of M&A activity, notably the high profile cross border acquisition of a German bank by a leading Italian bank. Telecommunications was the worst performing sector, but there were a couple of strongly performing stocks following takeovers. Even though European interest rates remained low by historic standards, consumer confidence remained low with high unemployment. This was manifested in a rising savings ratio in Germany. There were only two total disposals of big positions during the period under review: Celesio and Coloplast. Both were sold on valuation grounds. Other disposals included BioMerieux, which was again sold for valuation reasons. In the UK we added to our holdings in Mecom, the publishing mini conglomerate. We increased holdings in Associated British Ports as we expect the rate of earnings growth to accelerate. French purchases included Eurofins Scientific, a world leader in the food testing business. Another was that of Quick the Franco- Belgian fast food chain. In France, we took a position in the world's leading payments terminals manufacturer, Ingenico, and bought a holding in Fimalac, owner of the world's third largest rating agency. In Scandinavia a position was taken in Sandvik which is a world leader in tooling; this company is a beneficiary of the extended capital goods cycle. In Norway we bought a small position in the world's second largest luxury cruising company, Royal Caribbean. We also increased your Company's holding in Ypsomed, the Swiss medical devices company. Investment Outlook. The fact that your Company currently has €22.2 million of its flexible borrowing facility drawn down is an indication of our confidence for the future. Corporate earnings growth remains robust in the wake of good global growth figures. Export orientated, technologically `rich' European companies continue to benefit directly, or indirectly, from the extended capital goods demand itself the result of the `productivity story' of East Asia. Furthermore, European companies continue to restructure despite political interference. Globalisation can have the effect of blunting the power of politicians. With this backdrop, European companies with strong proprietary characteristics are well placed and valuations for these companies appear undemanding for the potential rewards. Alex Darwall Manager Jupiter Asset Management Limited 24th February 2006 LIST OF TOP TWENTY INVESTMENTS as at 30th November 2005 Company Country of Market Percentage of Listing Value Fixed Assets % £'000 Associated British Ports United Kingdom 10,893 8.1 Techem Germany 10,711 8.0 Numico Netherlands 10,703 8.0 Neopost France 10,558 7.9 Novozymes Denmark 9,724 7.3 Intertek Group United Kingdom 7,838 5.8 Reed Elsevier Netherlands 7,019 5.2 Dassault Systemes France 6,412 4.8 Essilor International France 5,797 4.3 Syngenta Switzerland 5,547 4.1 L'Air Liquide France 5,226 3.9 DNB Holdings Norway 5,174 3.9 Johnson Matthey United Kingdom 4,115 3.1 Euler Hermes France 4,003 3.0 Novo-Nordisk Denmark 3,885 2.9 DIS Germany 3,855 2.9 Imerys France 3,618 2.7 Royal Caribbean Norway 2,574 1.9 Vopak Netherlands 2,132 1.6 Ypsomed Holding Switzerland 1,995 1.5 _______ 121,779 90.9 CROSS HOLDINGS IN OTHER INVESTMENT COMPANIES The Company had no exposure to the shares of other UK listed investment companies on 30th November 2005. It is the Company's stated policy that this exposure should not be permitted to exceed 15 per cent. of its total assets. CONSOLIDATED INCOME STATEMENT For the six months to 30th November 2005 (Unaudited) Six months to Six months to Year ended 30th November 2005 30th November 2004 31st May 2005 2005 (Restated) (Restated) Revenue Capital Total Revenue Capital Total Revenue Capital Total Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments at fair value through profit and loss 4 - 14,316 14,316 - 9,663 9,663 - 20,848 20,848 Foreign exchange (losses) on loan - (97) (97) - (429) (429) - (168) (168) Other exchange - (29) (29) - 49 49 - (4) (4) (losses)/gains ____ ______ ______ ____ ______ _____ ____ ______ ______ - 14,190 14,190 - 9,283 9,283 - 20,676 20,676 Income 988 - 988 651 - 651 1,970 - 1,970 Dealing profits of subsidiary 167 - 167 131 - 131 253 - 253 Foreign exchange gains/losses by subsidiary 21 - 21 11 - 11 (5) (5) _____ ____ ____ ____ ___ ___ _____ _____ _____ Total income 1,176 14,190 15,366 793 9,283 10,076 2,218 20,676 22,894 Investment management fee (574) - (574) (450) - (450) (962) - (962) Investment performance fee - - - - (383) (383) - (1,524)(1,524) Other expenses (97) - (97) (205) - (205) (376) - (376) Interest payable (203) - (203) (171) - (171) (312) - (312) ____ _____ _____ _____ ____ _____ ______ _____ _____ Total expenses (874) - (874) (826) (383)(1,209) (1,650)(1,524)(3,174) ____ _____ _____ ______ ____ _____ ______ _____ _____ Net return before taxation 302 14,190 14,492 (33) 8,900 8,867 568 19,152 19,720 Taxation (129) - (129) (82) - (82) (124) - (124) Net return after ____ _____ ______ ______ _____ _____ _____ ______ ______ taxation 173 14,190 14,363 (115) 8,900 8,785 444 19,152 19,596 ____ _____ _____ _____ _____ _____ _____ ______ ______ Earnings per Ordinary share 3 0.22 17.59p 17.81p (0.14)p 11.03p 10.89p 0.55p 23.74p 24.29p The total column of this statement is the income statement of the Group, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance produced by the Association of Investment Trust Companies. All items in the above statement derive from continuing operations. The financial information does not constitute `accounts' as defined in section 240 of the Companies Act 1985. CONSOLIDATED BALANCE SHEET As at 30th November 2005 (unaudited) 30th 30th 31st November November May 2005 2004 2005 (Restated)(Restated) Note £'000 £'000 £'000 Non current assets Investments held at fair value through profit or loss 133,908 106,373 118,508 _______ _______ _______ Current assets Investments 1,975 412 1,525 Prepayments and accrued income 83 82 107 Sales awaiting settlement 867 552 - Taxation recoverable 259 256 294 Cash and cash equivalents 3,072 341 41 _______ _______ _______ 6,256 1,643 1,967 _______ _______ _______ Total assets 140,164 108,016 120,475 ======= ======= ======= Current liabilities Bank overdraft - - (561) Interest payable (55) (24) (15) Taxation payable - (164) - Accruals (358) (699) (2,137) Purchases awaiting settlement (2,542) - (83) _______ _______ _______ (2,955) (887) (2,796) _______ _______ _______ Total assets less current liabilities 137,209 107,129 117,679 Non current liabilities Bank loan (15,126) (10,220) (9,959) _______ _______ _______ Net Assets 122,083 96,909 107,720 ======= ======= ====== Capital and reserves Called up share capital 807 807 807 Share premium 38,843 38,843 38,843 Special reserve 37,597 37,597 37,597 Redemption reserve 22 22 22 Retained earnings 7 44,814 19,640 30,451 _______ _______ _______ Total equity shareholders' funds 122,083 96,909 107,720 ======= ======= ====== Net asset value per Ordinary share 8 151.35p 120.14p 133.54p CONSOLIDATED STATEMENT OF CHANGES IN NET EQUITY For the six months to 30th November 2005 (Unaudited) Share Share Special Redemption Retained Capital Premium Reserve Reserve Earnings Total £'000 £'000 £'000 £'000 £'000 £'000 For the six months to 30th November 2005 31st May 2005 807 38,843 37,597 22 30,451 107,720 Net profit for the period - - - - 14,363 14,363 ____ ______ ______ _____ ______ _______ Balance at 30th November 2005 807 38,843 37,597 22 44,814 122,083 ____ ______ ______ _____ ______ _______ For the year ended 31st May 2005 31st May 2004 807 38,843 37,597 22 10,855 88,124 Net profit for the year - - - - 19,596 19,596 ____ ______ ______ _____ ______ _______ Balance at 31st May 2005 807 38,843 37,597 22 30,451 107,720 ____ ______ ______ _____ ______ _______ For the six months to 30th November 2004 31st May 2004 807 38,843 37,597 22 10,855 88,124 Net profit for the - - - - 8,785 8,785 period ____ ______ ______ _____ ______ ______ Balance at 30th November 807 38,843 37,597 22 19,640 96,909 2004 ____ ______ ______ _____ ______ ______ CONSOLIDATED CASH FLOW STATEMENT For the six months to 30th November 2005 (Unaudited) Six months Six months Year ended to 30th to 30th 31st May November November 2005 2005 2004 (Restated) (Restated) £'000 £'000 £'000 Cash flows from operating activities Investment income received 1,025 622 1,885 Deposit interest received 7 32 60 Investment management fee (785) (430) (666) paid Sales less purchases of (283) 790 (202) dealing subsidiary Other cash receipts 21 - - Other cash expenses (1,683) (207) (357) _______ _______ _______ Cash generated from (1,698) 807 720 operations Interest paid (163) (162) (312) Taxation (94) 118 (127) _______ _______ _______ Net cash (outflow) / inflow (1,955) 763 281 from operating activities _______ _______ _______ Cash flows from investing activities Purchases of investments (22,379) (22,146) (41,874) Sales of investments 22,885 18,843 38,256 _______ _______ _______ 506 (3,303) (3,618) _______ _______ _______ Cash flows from financing activities Long term loan received 5,070 - - _______ _______ _______ Increase / (decrease) in cash 3,621 (2,540) (3,337) Realised (losses) / gains on (29) 60 (4) foreign currency _______ _______ _______ Change in cash and cash 3,592 (2,480) (3,341) equivalents Cash and cash equivalents at (520) 2,821 2,821 start of period _______ _______ _______ Cash and cash equivalents at 3,072 341 (520) end of period _______ _______ _______ Notes to the Financial Statements 1 Accounting Policies The consolidated accounts comprise the unaudited financial results of the Company and its subsidiary JEOT Securities Limited for the six months to 30th November 2005. The accounts are presented in pounds sterling, as this is the functional currency of the Company. The consolidated accounts have been prepared in accordance with the policies that the directors anticipate will be complied with in the annual financial statements. The disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRSs are given in notes 2 and notes 8 to 10. Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts issued by the Association of Investment Trusts in January 2003 and revised in December 2005 is consistent with the requirement of International Financial Reporting Standards ("IFRS"), the financial statements have been prepared on a basis complaint with the SORP. The principal accounting policies all of which have been applied consistently throughout the period are set out below. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. 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 balance sheet date and is classified within operating activities in the cash flow statement. Income on fixed income securities is recognised on a time apportionment basis according to the period for which these investments are held. 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. Presentation of income statement In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the AITC, supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. In accordance with the Company's status as a UK investment company under section 266 of the Companies Act 1985, 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 7. In arriving at this breakdown, expenses have been presented as revenue items except Any performance fees payable are allocated wholly to capital, reflecting the fact that, although they are calculated on a total return basis, they are expected to be attributable largely, if not wholly, to capital performance. 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, including transaction costs, being the consideration given and excluding transaction or other dealing costs associated with the investment. 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 income statement in the period in which they arise. The fair value of listed investments is based on their quoted bid market price at the balance sheet date without any deduction for estimated future selling costs. The fair value of any unquoted investments is based on the market price on the balance sheet date where an organised market exists; otherwise, unquoted investments are valued by the Directors at the balance sheet date based on dealing prices or stockbrokers' valuations where available, net asset values or other relevant information. Foreign exchange gains and losses on fair value through profit and loss investments are included within the changes in its fair value. Bank borrowings Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis to the profit and loss account using effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Borrowing costs Borrowing costs are recognised in profit or loss in the period in which they are incurred. All borrowing costs are charged directly to revenue. Foreign Currencies Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet 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 period, except for exchange differences arising on non-monetary assets and liabilities where the changes in fair value are recognised directly in equity. 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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. 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 profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Investment Trusts which have approval under section 842 of the Income and Corporation Taxes Act 1988 are not liable for taxation on capital gains. 2 IFRS restatement The restatement has been prepared on the basis of all IFRSs currently issued by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (IFRIC) effective for 2005 reporting and adopted by the European Union, which is the basis on which the next annual accounts of the Company will be prepared. The Company has prepared its restatement based on a transition date of 1 June 2004. The Company has not relied on any exemptions in IFRS 1. When preparing the accounts to 30th November 2005, the Directors have amended certain accounting and valuation methods applied in the UK GAAP accounts to comply with IFRS as follows: a) Under IAS 39 - `Financial instruments recognition and measurement'; quoted investments previously reported at mid-market value are now shown at bid price and classified as "investments held at fair value through profit and loss". The effect of these changes is recorded in the Income Statements. b) Under UK GAAP the profit and loss account of the Group was the revenue column of the Statement of Total Return. However, under IFRS, the profit and loss account is now the total column of the Income Statement. As a result all of the items in the capital column of the income statement form part of the profit or loss of the Group. 3 Earnings per ordinary share The earnings per ordinary share figure is based on the net gain for the six months of £14,363,000 (six months to 30th November 2004: £8,785,000; year ended 31st May 2005: £19,596,000 restated) and on 80,664,723 (six months to 30th November 2004: 80,664,723; year ended 31st May 2005: 80,664,723) ordinary shares, being the number of ordinary shares in issue during the period. The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below. Six months to Six months to Year ended 31st 30th November 30th November May 2005 2005 2004 (Restated) (Restated) £'000 £,000 £'000 Net revenue 173 (115) 444 profit / (loss) Net capital 14,190 8,900 19,152 profit ________ ________ ________ Net total 14,363 8,785 19,596 profit ======== ======== ======== Number of Ordinary 80,664,723 80,664,723 80,664,723 shares in issue during the period pence pence pence Revenue earnings per 0.22 (0.14) 0.55 Ordinary share Capital earnings per 17.59 11.03 23.74 Ordinary share ________ ________ ________ Total earnings per 17.81 10.89 24.29 Ordinary share ======== ======== ======== 4 Gains on Investments Six months Six months to Year ended 31 to 30th 30th November May 2005 November 2004 (Restated) 2005 (Restated) £'000 £'000 £,000 Net gains realised on 7,277 327 (488) sale of investments Movement in 7,039 9,336 21,336 unrealised gains ________ ________ ________ Gains on investments 14,316 9,663 20,848 ======== ======== ======== 5Transaction Costs The following transaction costs were incurred during the period: Six months Six months to Year ended 31 to 30th 30th November May 2005 November 2004 2005 £'000 £'000 £,000 Purchases 79 70 114 Sales 52 37 82 ________ ________ ________ 131 107 196 ======== ======== ======== 6 Comparative Information The financial information contained in this interim report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the six months to 30th November 2005 and 30th November 2004 has not been audited. The information for the year ended 31st May 2005 has been extracted from the latest published audited financial statements, as restated to comply with IFRS (see note 9). The audited financial statements for the year ended 31st May 2005 have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under section 237(2) or (3) of the Companies Act 1985. 7 Retained earnings The table below shows the movement in the retained earnings analysed between revenue and capital items. Revenue Capital Total £'000 £'000 £,000 At 31st May 2005 (as 1,036 29,415 30,451 restated) Movement during the period: Net income for the 173 14,190 14,363 period ________ ________ ________ At 30th November 2005 1,209 43,605 44,814 ======== ======== ======== 8 Net asset value per Ordinary share The net asset value per Ordinary share is based on the net assets attributable to the equity shareholders of £122,083,000 (30th November 2004: £96,909,000 as restated; 31st May 2005: £107,720,000 as restated) and on 80,664,723 (30th November 2004: 80,664,723; 31st May 2005: 80,664,723) Ordinary shares, being the number of Ordinary shares in issue at the period end. 9 (a) Restatement of balances as at and for the year ended 31st May 2005 The reconciliation of equity at 31 May 2005 (the date of the last UK GAAP financial statements) and the reconciliation of profit for 2005 are required by IFRS 1 First-time adoption of IFRS in the year of transition. Note Previously Effect of Restated reported UK transition IFRS GAAP to IFRS 31st May 31st May 2005 2005 (Audited) £'000 £'000 £'000 Investments 1 118,568 (60) 118,508 Current assets 1,967 1,967 Creditors: amounts falling (2,796) (2,796) due within one year ________ ________ Total assets less 117,739 117,679 current liabilities Creditors: (9,959) (9,959) amounts falling due after more than one year ________ ________ 107,780 107,720 ======== ======== Capital and reserves Called up share 807 807 capital Share premium 38,843 38,843 Special reserve 37,597 37,597 Redemption 22 22 reserve Capital reserve - 2 (8,044) 8,044 - realised Capital reserve - 2 37,519 (37,519) - unrealised Revenue reserve 2 /Retained 1,036 29,415 30,451 earnings ________ ________ 107,780 107,720 ======== ======== Notes to the reconciliation 1. Investments (excluding derivatives) are designated as held at fair value under IFRS and are carried at bid prices which total their fair value of £118,508,000. Previously, under UK GAAP they were carried at mid prices. The aggregate differences, being a revaluation downwards of £60,000, also decrease retained earnings. 2. Under IFRS, there is no differentiation between capital and revenue gains/losses. The previous headings of Capital reserve - realised and Capital reserve - unrealised are now included under the heading Retained earnings. (b) Reconciliation of the Statement of Total Return to the Income Statement for the year ended 31st May 2005 Under IFRS the Income Statement is the equivalent of the Statement of Total Return reported previously. 31st May EPS impact 2005 in pence £'000 Total transfer to reserves per the Statement of Total Return 19,656 - Investments held at fair value changed from mid to bid basis 0 - at 31st May 2004 Investments held at fair value changed from mid to bid (60) (0.07) basis at 31st May 2005 ________ ________ Net profit per the Income 19,596 (0.07) Statement ======== ======== The portfolio valuations at 31st May 2004 and 31st May 2005 are required to be valued at fair value under IFRS. These values differ from the previous valuations by £nil and £60,000 respectively. 10 (a) Restatement of balances as at and for the period to 30th November 2004 In addition to the reconciliations required by IFRS 1 First-time adoption of IFRS in the year of transition, the reconciliation of equity at 30 November 2004 and the reconciliation of profit for the six months ended 30 November 2004 have been included below to enable a comparison of the 2005 interim figures with the corresponding period of the previous financial year. Previously Effect of Restated IFRS Note reported UK transition 30th November GAAP to IFRS 2004 30th November 2004 (Unaudited) £'000 £'000 £'000 Investments 1 106,373 - 106,373 Current assets 1,643 1,643 Creditors: amounts falling (887) (887) due within one year ________ ________ Total assets less 107,129 107,129 current liabilities Creditors: (10,220) (10,220) amounts falling due after more than one year ________ ________ 96,909 96,909 ======== ======== Capital and reserves Called up share 807 807 capital Share premium 38,843 38,843 Special reserve 37,597 37,597 Redemption 22 22 reserve Capital reserve - 2 (5,652) 5,652 - realised Capital reserve - 2 25,198 (25,198) - unrealised Revenue reserve 2 /Retained 94 19,546 19,640 earnings ________ ________ 96,909 96,909 ======== ======== Notes to the reconciliation 1. Investments are designated as held at fair value under IFRS and are carried at bid prices which equate to their fair value of £106,373,000. Previously, under UK GAAP, they were carried at mid prices. The resultant aggregate difference is nil. 2. Under IFRS, there is no differentiation between capital and revenue gains/losses. The previous headings of Capital reserve - realised and Capital reserve - unrealised are now included under the heading Retained earnings. (b) Reconciliation of the Statement of Total Return to the Income Statement for the period to 30th November 2004 Under IFRS the Income Statement is the equivalent of the Statement of Total Return reported previously. 30th November EPS impact 2004 in pence £'000 Total transfer to reserves per the Statement of Total Return 8,785 - Investments held at fair value changed from mid to bid basis - - at 31st May 2004 Investments held at fair value - changed from mid to bid - basis at 30th November 2004 ________ ________ Net profit per the Income 8,785 - Statement ======== ======== The portfolio valuations at 31st May 2004 and 30th November 2004 are required to be valued at fair value under IFRS. These values are the same as the previous valuations. 11Restatement of opening balances as at 31st May 2004 The reconciliation of equity at 1 June 2005 (date of transition) is required by IFRS 1 First-time adoption of IFRS in the year of transition. Note Previously Effect of Restated reported UK transition IFRS GAAP to IFRS 31st May 31st May 2004 2004 (Audited) £'000 £'000 £'000 Investments 1 93,335 93,335 Current assets 5,039 5,039 Creditors: amounts falling (459) (459) due within one year ________ ________ Total assets less current 97,915 97,915 liabilities Creditors: amounts falling (9,791) (9,791) due after more than one year ________ ________ 88,124 88,124 ======== ======== Capital and reserves Called up share 807 807 capital Share premium 38,843 38,843 Special reserve 37,597 37,597 Redemption 22 22 reserve Capital reserve - 2 (6,028) 6,028 - realised Capital reserve - 2 16,291 (16,291) - unrealised Revenue reserve 2 /Retained 592 10,263 10,855 earnings ________ ________ 88,124 88,124 ======== ======== Notes to the reconciliation 1. Investments are designated as held at fair value under IFRS and are carried at bid prices which total their fair value of £93,335,000. They were carried at mid prices previously under UK GAAP. The aggregate difference is nil. 2. Under IFRS, there is no differentiation between capital and revenue gains/losses. The previous headings of Capital reserve - realised and Capital reserve - unrealised are now included under the heading Retained earnings. The interim report will be sent to all shareholders and copies may be obtained from the registered office of the Company at 1 Grosvenor Place, London, SW1X 7JJ. BY ORDER OF THE BOARD JUPITER ASSET MANAGEMENT LIMITED SECRETARIES

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