Half Yearly Financial Report to 30 September 2018

RNS Number : 8465J

Jupiter Green Investment Trust Plc

07 December 2018

 

Jupiter Green Investment Trust plc ('the company')

Legal Entity Identifier: 549300MFRCR13CT1L845

Half Yearly Financial Report for the six months to 30 September 2018 (unaudited)

Financial Highlights for the six months to 30 September 2018

Capital Performance

	30 September	31 March
	2018	2018
Total Assets less Current Liabilities ( £'000)	42,033	40,147

Ordinary Share Performance

	30 September	31 March
	2018	2018		% Change
Mid market price (p)	191.00	186.50		+2.4
Undiluted net asset value per Ordinary share (p)	199.15	191.31	^^	+4.1
Undiluted net asset value per Ordinary share (p)
(with dividends added back)	200.45			+4.8
Diluted net assets value per Ordinary share (p)^	198.44	190.68		+4.1
Diluted net asset value per ordinary share (p)
(with dividends added back)	199.74			+4.8
FTSE ET100 Total Return Index	2,893.62	2,687.60		+7.7
Discount to net asset value (%)	4.09	2.51
Ongoing charges ratio (%) excluding finance costs	1.41	1.48		-4.7

^ Being the net asset value per share assuming that all annual subscription rights are taken up.

^^ Being the exercise price for the purposes of the 2019 subscription rights.

Chairman's Statement

It is with pleasure that I present the interim report for Jupiter Green Investment Trust PLC, for the six months to 30 September 2018.

The last six months have been testing for global stock markets. Whilst US stocks, especially technology stocks, largely continued to flourish, other markets - particularly in less developed countries - came under growing pressure as rising US interest rates and a strong dollar raised their external borrowing costs. US President Donald Trump's protectionist stance added to emerging market strains, not least in Asia. In Europe, meanwhile, the election of a populist and potentially spendthrift government in Italy raised concerns about the country's debt levels, and in the UK the ubiquitous question of Brexit remained unresolved.

The period was not all bad news. The steady expansion of the global economy since mid-2016 remained intact. While the International Monetary Fund ('IMF') trimmed its global growth projection for 2018-19 to 3.7 per cent. from 3.9 per cent. In April, its outlook remained positive. The gradual normalisation of US monetary policy was also positive insofar as it reflected the growing resilience of the US economy.

Investment performance

During the six months under review the total return on the diluted net asset value of the company's shares was 4.8 per cent. (with dividends added back). This compares with an increase in the company's benchmark index, the total return on the FTSE ET100 Index, of 7.7 per cent. The middle market price of the Company's shares had increased by 2.4 per cent.

The background to the performance of the company over the course of the past six months is discussed in detail by Charlie Thomas in his investment adviser's review, in which he discusses the impact of market distortions on the company's relative performance, in particular the seemingly unhealthy decoupling of the performance of the US stock market and other markets globally. He also highlights the progress made by holdings providing vital solutions to increasingly pressing environmental problems.

Board composition

Board composition Since the Annual General Meeting ('AGM') held on 4 September 2018, we have appointed Jaz Bains as a director and we welcome him to the board. Jaz is the Group Risk & Investment Director for Renewable Energy Systems (RES), which he joined in 2003. On behalf of RES Jaz also co-manages The Renewables Infrastructure Group, which is listed on the FTSE 250. He has spent his working life in power and electricity businesses. Prior to joining RES Jaz worked for Midlands Electricity and Cinergy Corporation. He has a BSc degree in Mathematics with Management Applications from Brunel University.

Dividend

At this year's AGM shareholders approved a proposal that the company move from its former policy of paying the minimum dividend necessary in order to maintain its investment trust status to paying a higher, semi-annual dividend. Accordingly, an interim dividend in relation to the current financial year will be declared in January for payment in March 2019.

Outlook

It is no surprise that interest in sustainable forms of investing - environmental, social and governance (ESG) investing - has been expanding rapidly as younger generations demand more responsible corporate behaviour. Some of the world's biggest institutional investors are leading the way by allocating more of their funds in companies that score well on ESG criteria. Sapling vehicles for ESG investment also continue to grow, including climate bonds (or green bonds), whose proceeds are earmarked for use on assets or projects that help in the fight against climate change.

In keeping with this, the company continues to invest in businesses tackling some of the world's most pressing problems including the quest for more sustainable consumption, energy-efficient transport, better pollutions control and testing, and more efficient water infrastructure. Many investee companies are at the forefront of changing trends such as in waste recycling and the development of circular economies.

At a time of heightened market volatility, Charlie and his team remain focused on the many opportunities for sustainable investing across a range of themes and remain alert to the possibility of buying long-term growth at attractive valuations.

Michael Naylor

Chairman

7 December 2018

Investment Adviser's Review

Market review

The global stock market rally was extended but became more fragmented over the review period as gains were increasingly concentrated among a shrinking group of US technology stocks and as cracks appeared elsewhere. Tax cuts encouraged US companies to repatriate capital and fed share buybacks. But away from the US, European markets performed more timidly, reined in by renewed budgetary fears after the election of a populist government in Italy and by continuing Brexit concerns. Currency crises in Turkey and Argentina also spread contagion fears among emerging markets. The underlying causes of this market distress - tighter monetary policy in the US and potentially Europe, the growing US-China trade dispute, creeping inflation concerns, and the strong dollar - remain. US Treasuries also felt the pressure, despite the temporary succour provided as capital fleeing emerging markets sought sanctuary in them. As a result, closely watched 10-year US Treasury yields rose above 3.2 per cent. for the first time since 2011 shortly after the review period ended.

Policy review

Against this backdrop, the company underperformed its broad-based benchmark. The key impediment to relative performance was the company's underweight exposure to the US, and stock selection in that country. The portfolio has a natural underweight in the US since the investment universe of environmental and sustainable solutions companies is relatively less prevalent there than other regions.

In addition, some of the company's US holdings underperformed: namely, United Natural Foods (UNFI) and A.O. Smith. UNFI lost value following news that it had bid for mainstream grocery distributor Supervalu. The company is sensibly seeking to diversify its business following Amazon's takeover of UNFI's strategic client Whole Foods, but investors have been concerned about the amount of leverage UNFI will require to fund the deal.

Not holding Tesla was a key benefit during the period under review; the stock lost ground after the company's charismatic CEO, Elon Musk, was required to pay a $20 million settlement and step down as chairman after an ill-considered tweet in which he claimed to have secured funding to take the company private.

The biggest positive contribution to the company's relative returns came from Tomra, the recycling technology leader. The stock reached new highs following a positive capital markets day at which it highlighted a positive five-year growth trajectory. The Norwegian company is one of a limited number of businesses actively providing solutions for the circular economy and the reduction of plastic waste.

Adding value too were the company's holdings in Clean Harbors (environmental services including hazardous waste disposal) and Xylem (water technology). Xylem ended higher after its second-quarter results beat expectations and the US group presented a more confident outlook. Shares in Clean Harbors were similarly buoyed by a positive set of quarterly results in which the company also raised its earnings guidance. Offshore salmon farmer SalMar and Australian logistics services group Brambles Inc, two recent additions to the company, also added value.

Investment Outlook

Global equity markets have grown more volatile because of a range of concerns, including escalating trade tensions and the potential impact of monetary tightening in the US and Europe. Companies providing environmental services and sustainable solutions, and their share prices, are not immune to these dynamics. While periods of market volatility can be unsettling for investors, they can also present opportunities to buy long-term growth at more attractive valuations. As long-term investors we remain focused on the fundamentals of companies across our universe of sustainable investment themes and remain optimistic about the overall growth potential. Where the consumer, economic and regulatory drivers of these investment themes have interacted, they have increased the growth potential of key areas, including the provision of better air quality and reduction of waste.

There continue to be pockets of environmental policy momentum, from California's continued commitment to strict emissions targets to a recent pledge by 19 cities around the world to make all buildings carbon neutral by 2050. The publication in October of a long-awaited global warming report by the Intergovernmental Panel on Climate Change has lent new urgency to that challenge. At the same time, there are growing opportunities in localised waste recycling following China's ban on imports of recyclable materials and as pressure grows to reduce plastic waste. Offshore wind is going through a transition too as new markets open up or accelerate, with active opportunities across the US, Taiwan and, most recently, India.

Charlie Thomas

Fund Manager

Jupiter Asset Management Limited

Investment Adviser

7 December 2018

Investment Portfolio as at 30 September 2018

		Market
	Country	value	Percentage
Company	of listing	£'000	of portfolio
Xylem	United States	1,565	3.8
A.O. Smith	United States	1,495	3.6
Tomra Systems	Norway	1,380	3.3
Cranswick	United Kingdom	1,110	2.7
Siemens	Germany	1,072	2.6
EMCOR Group	United States	1,027	2.5
Johnson Matthey	United Kingdom	1,014	2.4
Wabtec	United States	995	2.4
Valmont Industries	United States	988	2.4
Sensata Technologies Holding	United Kingdom	905	2.2
Azbil	Japan	874	2.1
National Express Group	United Kingdom	852	2.0
Clean Harbors	United States	838	2.0
Eaton	Ireland	831	2.0
Vestas Wind Systems	Denmark	804	1.9
Itron	United States	799	1.9
Toray Industries	Japan	789	1.9
NextEra Energy Partners	United States	781	1.9
Suez	France	762	1.8
Daiseki	Japan	722	1.7
RPS Group	United Kingdom	721	1.7
Horiba	Japan	718	1.7
Schneider Electric	France	701	1.7
Regal Beloit	United States	689	1.6
BorgWarner	United States	670	1.6
Orsted	Denmark	653	1.6
Casella Waste Systems 'A'	United States	645	1.5
Covanta Holding	United States	628	1.5
ANDRITZ	Austria	628	1.5
Hannon Armstrong Sustainable
Infrastructure Capital, REIT	United States	626	1.5
Shimano	Japan	618	1.5
Veolia Environement	France	609	1.5
Novozymes 'B'	Denmark	600	1.4
First Solar	United States	593	1.4
Watts Water Technologies 'A'	United States	585	1.4
Firstgroup	United Kingdom	569	1.4
Prysmian	Italy	568	1.4
SKF 'B'	Sweden	550	1.3
Wartsila	Finland	525	1.3
Miura	Japan	524	1.3
Stantec	Canada	519	1.2
East Japan Railway	Japan	492	1.2
Mayr Melnhof Karton	Austria	477	1.2
Infineon Technologies	Germany	466	1.1
NSK	Japan	460	1.1
Greencoat Renewables	Ireland	459	1.1
Keller Group	United Kingdom	457	1.1
Renewi	United Kingdom	456	1.1
United Utilities Group	United Kingdom	422	1.0
Innergex Renewable Energy	Canada	414	1.0
Huaneng Renewables 'H'	China	390	0.9
Ricardo	United Kingdom	370	0.9
Varta	Germany	353	0.8
RA International Group	United Kingdom	351	0.8
Jupiter Global Ecology Diversified
Fund Class I GBP Q Inc Dist HSC*	Luxembourg	345	0.8
Salmar	Norway	336	0.8
Brambles	Australia	333	0.8
Atlas Copco 'A'	Sweden	332	0.8
Fjord1	Norway	311	0.8
Stericycle	United States	306	0.7
Simec Atlantis Energy	Singapore	292	0.7
China Everbright International	Hong Kong	286	0.7
Salmones Camanchaca	Chile	283	0.7
Innogy	Germany	269	0.6
Lenzing	Austria	265	0.6
Vossloh	Germany	233	0.6
Total		41,700	100.0

*Shares in a sub-fund of the Jupiter Global Fund SICAV

The holdings listed above are all equity shares unless otherwise stated.

Cross Holdings in other Investment Companies

As at 30 September 2018, 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.

Interim Management Report

Related Party Transactions

During the first six months of the current financial year no transactions with related parties have taken place which have materially affected the financial position or performance of the company. Details of related party transactions are contained in the Annual Report and Accounts for the year ended 31 March 2018 and in Note 9 to the Financial Statements of this report.

Principal Risks and uncertainties

The principal risks and uncertainties faced by the company can be divided into the following areas:

•    Investment policy and process;

•    Investment strategy and share price movements;

•    Discount to net asset value;

•    Gearing risk;

•    Credit and counterparty risk;

•    Loss of key personnel;

•    Operational; and

•    Financial.

The board reported on the above principal risks and uncertainties in the Annual Report & Accounts for the year ended 31 March 2018.

Going Concern

The directors, having considered the company's investment objective, risk management and capital management policies, the diversified portfolio of readily realisable securities which can be used to meet short-term funding commitments and the ability of the company to meet all of its liabilities and ongoing expenses, are satisfied that the company has adequate resources to continue in operation for the foreseeable future. The directors continue to adopt the going concern basis of accounting in preparing the accounts.

As part of its assessment, the board has noted that shareholders will be required to vote on the continuation of the company at the 2020 AGM.

Directors' Responsibility Statement

The board of directors of Jupiter Green Investment Trust PLC confirms that to the best of its knowledge:

a.  The condensed set of financial statements have been prepared in accordance with applicable United Kingdom law and those International Financial Reporting Standards ('IFRS') as adopted by the European Union and give a true and fair view of the state of affairs of the company, and of the return or loss of the Company as at 30 September 2018.

b.  The Chairman's Statement, the Investment Adviser's Review and the Interim Management Report include a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules.

c.  The Interim Management Report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules.

The Half Yearly Financial Report has not been audited or reviewed by the company's auditor.

For and on behalf of the Board

Michael Naylor

Chairman

7 December 2018

Statement of Comprehensive Income

For the six months to 30 September 2018 (unaudited)

	Six months to 30 September 2018			Six months to 30 September 2017
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gain on investments held at fair value through profit or loss	-	1,599	1,599	-	2,512	2,512
Foreign exchange gain/(loss)	-	185	185	-	(97)	(97)
Income	485	-	485	399	-	399
Total income	485	1784	2,269	399	2,415	2,814
Investment management fee	(37)	(112)	(149)	(15)	(136)	(151)
Investment performance fee	-	-	-	-	(132)	(132)
Other expenses	(148)	-	(148)	(144)	-	(144)
Total expenses	(185)	(112)	(297)	(159)	(268)	(427)
Net Return on ordinary activities before finance costs and taxation	300	1,672	1,972	240	2,147	2,387
Finance costs	(1)	(3)	(4)	(6)	-	(6)
Return on ordinary activities before taxation	299	1,669	1,968	234	2,147	2,381
Taxation	(30)	-	(30)	(28)	-	(28)
Net return after taxation	269	1,669	1,938	206	2,147	2,353
Return per Ordinary share	1.28p	7.91p	9.19p	0.97p	10.09p	11.06p

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 period.

All income is attributable to the equity holders of Jupiter Green Investment Trust PLC. There are no minority interests.

The financial information does not constitute 'accounts' as defined in section 434 of the Companies Act 2006.

Statement of Financial Position

As at 30 September 2018

	30 September 2018 (unaudited) £'000	31 March 2018 (audited) £'000
Non current assets
Investments held at fair value through profit or loss	41,700	37,397
Current assets
Prepayments and accrued income	344	123
Cash and cash equivalents	350	2,785
	694	2,908
Total assets	42,394	40,305
Current liabilities
Other payables	(361)	(158)
Total net assets less current liabilities	42,033	40,147
Capital and reserves
Called up share capital	34	34
Share premium	29,705	29,630
Redemption reserve	239	239
Special reserve	24,292	24,292
Retained earnings	(12,237)	(14,048)
Total equity shareholders' funds	42,033	40,147
Net Asset Value per Ordinary share	199.15p	191.31p
Diluted Net Asset Value per Ordinary share	198.44p	190.68p

Statement of Changes in Equity

For the six months to 30 September 2018

For the six months to 30 September 2018 (unaudited)	Share Capital £'000	Share Premium £'000	Special Reserve £'000	Redemption Reserve £'000	Retained Earnings £'000	Total £'000
Balance at 31 March 2018	34	29,630	24,292	239	(14,048)	40,147
Net return for the period	-	-	-	-	1,938	1,938
Ordinary shares reissued from Treasury	-	75	-	-	166	241
Ordinary shares repurchased	-	-	-	-	(19)	(19)
Dividend declared and approved
by shareholders	-	-	-	-	(274)	(274)
Balance at 30 September 2018	34	29,705	24,292	239	(12,237)	42,033

For the six months to 30 September 2017 (unaudited)	Share Capital £'000	Share Premium £'000	Special Reserve £'000	Redemption Reserve £'000	Retained Earnings £'000	Total £'000
Balance at 31 March 2017	34	29,488	24,292	239	(15,544)	38,509
Net return for the period	-	-	-	-	2,353	2,353
Ordinary shares reissued from Treasury	-	142	-	-	694	836
Ordinary shares repurchased	-	-	-	-	(704)	(704)
Dividend paid	-	-	-	-	(253)	(253)
Balance at 30 September 2017	34	29,630	24,292	239	(13,454)	40,741

Cash Flow Statement

For the six months to 30 September 2018 (unaudited)

	2018 £'000	2017 £'000
Cash flows from operating activities
Investment income received (gross)	520	412
Deposit interest received	2	-
Investment management fee paid	(150)	(124)
Performance fee	(59)*	-
Other cash expenses	(219)	94
Net cash inflow from operating activities before taxation	94	382
Interest paid	(2)	(4)
Taxation	(30)	(28)
Net cash inflow from operating activities	62	350
Net cash flows from investing activities
Purchases of investments	(6,995)	(828)
Sales of investments	4,091	2,945
Net cash (outflow)/inflow from investing activities	(2,904)	2,117
Cash flows from financing activities
Shares repurchased	(19)	(704)
Shares reissued from Treasury	241	836
Equity dividends paid	-	(253)
Net cash inflow/(outflow) from financing activities	222	(121)
(Decrease)/increase in cash	(2,620)	2,346
Cash and cash equivalents at start of period	2,785	110
Realised gain/(loss) on foreign currency	185	(97)
Cash and cash equivalents at end of period	350	2,359

*Performance fee paid this period in relation to previous financial year.

Notes to the Financial Statements for the six months to 30 September 2018

1.   Accounting Policies

The Accounts comprise the unaudited financial results of the Company for the period to 30 September 2018. The Accounts are presented in pounds sterling, as this is the functional currency of the Company. 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 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 Board 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.

Income includes dividends from investments quoted ex-dividend on or before the date of the Statement of Financial Position.

Dividends receivable from equity shares are taken to the revenue return column of the Statement of Comprehensive Income.

(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.

Until 31 March 2018 investment management fees were charged 90 per cent. to capital and 10 per cent. to revenue. With effect from 1 April 2018 the proportion was changed to 75 per cent. to capital and 25 per cent. to revenue.

All other operational costs including administration expenses and finance costs (but with the exception of any investment performance fees which were 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.

2.   Gain on Investments

	Six months to 30 September 2018 £'000	Six months to  30 September 2017  £'000
Net gain realised on sale of investments	2,452	1,571
Movement in unrealised (losses)/gains	(853)	941
Gain on investments	1,599	2,512

3.   Earnings per Ordinary Share

The earnings per Ordinary share figure is based on the net profit for the six months of £269,000 (six months to 30 September 2017: net profit £206,000) and on 21,098,426 Ordinary shares (six months to 30 September 2017: 21,257,641), being the weighted average 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 30 September 2018 £'000	Six months to 30 September 2017 £'000
Net revenue profit	269	206
Net capital profit	1,669	2,147
Net total profit	1,938	2,353
Weighted average number of Ordinary shares in issue during the period	21,098,426	21,257,641
Revenue earnings per Ordinary share (p)	1.28	0.97
Capital earnings per Ordinary share (p)	7.91	10.09
Total earnings per Ordinary share (p)	9.19	11.06

4.   Transaction Costs

The following transaction costs were incurred during the period:

	Six months to 30 September 2018 £'000	Six months to 30 September 2017 £'000
Purchases	8	2
Sales	3	1
Total	11	3

5.   Retained Earnings

The table below shows the movement in the retained earnings analysed between revenue and capital items.

	Revenue £'000	Capital £'000	Total £'000
At 31 March 2018
Movement during the period:	348	(14,396)	(14,048)
Net income for the period	269	1,669	1,938
Shares repurchased	-	(19)	(19)
Ordinary shares reissued from Treasury	-	166	166
Dividends declared and approved	(274)	-	(274)
At 30 September 2018	343	(12,580)	(12,237)

6.   Net Asset Value per Ordinary share

The Net Asset Value per Ordinary share is based on the net assets attributable to the Ordinary shareholders of £42,033,000 (31 March 2018: £40,147,000) and on 21,106,267 (31 March 2018: 20,985,269) Ordinary shares, being the number of Ordinary shares in issue at the period end excluding Treasury shares.

	Six months to 30 September 2018 £'000	Year ended 31 March 2018 £'000
Undiluted
Ordinary shareholders' funds	42,033	40,147
Number of Ordinary shares in issue	21,106,267	20,985,269
Net asset value per Ordinary share (pence)	199.15	191.31
Diluted
Ordinary shareholders' funds	46,071	44,015
Number of Ordinary shares in issue	23,216,894	23,083,796
Net asset value per Ordinary share (pence)	198.44	190.68

The diluted net asset value per Ordinary share assumes that all outstanding dilutive Subscription shares, being one for ten Ordinary shares, will be converted to Ordinary shares at the end of the financial year.

7.   Fair valuation of investments

The financial assets measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy as follows:

	30 September 2018				31 March 2018
	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Equity Investments	41,700	-	-	41,700	37,397	-	-	37,397
	41,700	-	-	41,700	37,397	-	-	37,397

Level 1 reflects financial instruments quoted in an active market.

Level 2 reflects financial instruments whose fair value is evidenced by comparison with other observable current market transactions in the same instrument or based on a valuation technique whose variables includes only data from observable markets.

Level 3 reflects financial instruments whose fair value is determined in whole or in part using a valuation technique based on assumptions that are not supported by prices from observable market transactions in the instrument and not based on available observable market data.

8.   Principal risk profile

The principal risks which the Company faces include exposure to:

(i)   market price risk, including currency risk, interest rate risk and other price risk

(ii)   credit and counterparty risk

(iii)  liquidity risk

Market price risk - This is the risk that the fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - currency risk, interest rate risk and other price risk.

Credit and counterparty risk - This is the exposure to loss from the failure of a counterparty to deliver securities or cash for acquisitions or to repay deposits.

Liquidity risk - This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.

Further details of the Company's management of these risks can be found in the Company's Annual report and accounts for the year ended 31 March 2018.

There have been no changes to the management of or the exposure to these risks since that date.

9.   Related parties

Jupiter Unit Trust Managers Limited ('JUTM'), the Alternative Investment Fund Manager, is a company within the same group as Jupiter Asset Management Limited ('JAM'), the Investment Adviser. JUTM receives an investment management fee as set out below.

JUTM is contracted to provide investment management services to the company subject to termination by not less than twelve months' notice by either party. The basis for calculation of the management fee charged to the company was adjusted with effect from 1 June 2018 from 0.75 per cent. of net assets per annum to a tiered fee amounting to 0.70 per cent. of net assets up to £150 million, reducing to 0.60 per cent. for net assets over £150 million and up to £250 million, and reducing further to 0.50 per cent. for net assets in excess of £250 million after deduction of the value of any Jupiter managed investments.

The management fee payable to JUTM for the period 1 April 2018 to 30 September 2018 was £149,739 (year to 31 March 2018: £304,270) with £24,319 (31 March 2018: £24,914) outstanding at period end.

With effect from 1 April 2018 the proportion of the investment management fee and finance costs that are treated as a capital expense in the company's reports and accounts were reduced from 90 per cent. to 75 per cent., so as to bring its accounting policy into line with that of comparable investment trusts.

The company and the investment manager agreed to remove the performance fee arrangements with effect from 1 April 2018.

The company has invested from time to time in funds managed by Jupiter Investment Management Group Limited or its subsidiaries. There was one such investment with a market value of £345,180 (31 March 2018: £344,190). No investment management fee is payable by the company to Jupiter Asset Management Limited in respect of the company's holdings in investment trusts, open-ended funds and investment companies in respect of which Jupiter Investment Management Group Limited, or any subsidiary undertaking of Jupiter Investment Management Group Limited, receives fees as investment manager or investment adviser.

Availability of Half Yearly Financial Report

The Half Yearly Financial Report will shortly be available on company's website www.jupiteram.com/JGC.

By Order of the Board

Jupiter Asset Management Limited, Company Secretary

7 December 2018

For further information, please contact:

Richard Pavry

Head of Investment Trusts

Jupiter Asset Management Limited

[e-mail]

020 3817 1000

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