JEFI.L Regulatory News (JEFI)

28 January 2022

JUPITER EMERGING & FRONTIER INCOME TRUST PLC

RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021

Legal Entity Identifier: 213800RLXLM87NO26S30

Jupiter Emerging & Frontier Income Trust PLC ("JEFI" or the "Company") today announces its audited results for the year ended 30 September 2021.

Financial highlights

· Share price total return of 31.5% and Net Asset Value ("NAV") total return of 28.6%, compared to 13.3% return for the benchmark, the MSCI Emerging Markets (Total Return) Index in Sterling.

· Dividends of 4.45p declared for year under review, slightly higher than previous year (2020: 4.4p).

Portfolio highlights

· Exposure to frontier markets and smaller companies and underweight position in China were positive drivers of relative performance.

· Largest single country exposure to Taiwan led to outperformance with continued strength in technology stocks.

· Significant positive contributors to performance were from a broad range of sectors and markets: Brazilian port operator Wilson Sons, Indian refiner and fuel marketing business Hindustan Petroleum (HPCL), and Mediatek, the Taiwanese chip designer.

· Relative performance bolstered by zero weighting to Alibaba, one of the largest benchmark constituents.

· Second and third quarter earnings announcements from holdings mostly characterised by impressive year-on-year earnings growth, strengthening the Company's revenue outlook.

· Four new positions established during the year: Latin American online travel agent Despegar, Egyptian bank Credit Agricole Egypt, Taiwanese chip designer Elan, and China Medical System.

Since the year end, the Board has announced its intention to put forward proposals to amend the Redemption Facility by restricting the number of shares that can be redeemed to 20% and to move from an annual facility to one which will be offered once every three years, starting in June 2024. This follows a consultation with shareholders and is in response to the Redemption Facility resulting in a significant reduction in the size of JEFIT's capital base in the past year.

John Scott, Chairman, said:

"JEFIT is a vehicle which provides investors with a route to many of the world's less accessible markets, while offering an attractive yield by way of dividends, and your Board applauds the recovery in our fortunes achieved by our Investment Adviser in 2021. Nonetheless, strong nerves are still required as the world comes to terms with the likelihood that COVID-19 and its descendants will be with us for some time.

"In many ways, most of the factors which contributed to this strong performance were the same factors which contributed to the underperformance in the previous year, and, in this context, the Investment Adviser should be applauded for holding his nerve through some of the most turbulent equity market conditions in living memory."

Commenting on the market outlook, Ross Teverson, Fund Manager of JEFI, said:

"The Company's exposure to frontier markets and smaller companies was positive for relative performance, as was the underperformance of China, where the portfolio has a much lower weighting than the benchmark. We have long held the view that China's weighting in the Company's benchmark represents a high level of single- country risk for an asset class as diverse as emerging markets.

"There has already been a significant recovery in the Company's revenue outlook, driven by a resumption of dividend payments by those companies that temporarily halted payouts at the height of the pandemic and by an improved earnings outlook for many of our holdings. We remain positive on the outlook for earnings and dividends at both a Company and an asset class level in 2022.

"In a world where the valuations for many asset classes look high relative to history, the opposite continues to hold true for most companies and sectors within emerging and frontier markets, despite the potential for strong long-term growth. As investors continue to look past the impact of the pandemic, we expect that the scope for operational recovery and rerating from attractive valuations will be positive for stock performance."

The full results statement is below.

For further information please contact

Jupiter:

Magnus Spence

investmentcompanies@jupiteram.com

+44 (0)20 3817 1000

Media contact:

Powerscourt

jupiter@powerscourt-group.com 

+44 (0) 20 7250 1446

About JEFI

· JEFI aims to achieve long-term capital growth and income through investment predominantly in companies exposed directly or indirectly to Emerging Markets and Frontier Markets worldwide.

· JEFI focuses on investing in companies that are undergoing positive change that has not yet been appreciated by the market.

· The Company's benchmark is the MSCI Emerging Markets Index (Total Return) in Sterling, but JEFI is not restricted to investing in constituent companies of the benchmark.

· JEFI's fund manager is Ross Teverson, Head of Strategy, Emerging Markets at Jupiter.

Jupiter Emerging & Frontier Income Trust plc (the 'Company')

Legal Entity Identifier: 213800RLXLM87NO26S30

Annual Financial Results for the year ended 30 September 2021

Financial Highlights for the year ended 30 September 2021

Chairman's Statement

I present to you the Annual Report and audited accounts for Jupiter Emerging & Frontier Income Trust PLC ("JEFIT", or the "Company") for the twelve months ended 30 September 2021.

In last year's annual report I noted that, in the context of a tough period of investment performance for the Company's portfolio, despite those challenges we looked to the future with "cautious optimism" and that we retained full confidence in the approach of the Fund Manager, Ross Teverson, and his team. Such faith proved to be well-founded this year.

Although the past year has been a good one for investors in the markets where we invest, the last twelve months have seen plenty of disruption to the smooth passage of equity returns. Beginning with the arrival of effective Covid-19 vaccines, raising hopes that 2021 would see an end to the pandemic, reality soon dawned. The rapid spread of the highly contagious Delta variant meant that, while life did indeed return to something closer to 'normal', it rapidly became clear that Covid-19 would be with us in some form for the foreseeable future and the disruption caused by Omicron is a reminder that the pandemic is by no means behind us. The economic disruption this causes, not least in China, which is still attempting to pursue a 'zero Covid' policy, took some of the wind out of the market's sails this year.

Away from Covid-19, but staying in China, there have been timely reminders of the role that politicians can play in the fortunes of equity markets. As the Chinese government began a new wave of regulatory crackdowns on various sectors, most notably internet platforms and private education firms, investors were reminded of the central control exerted by Beijing on private enterprises. Any talk of the 'end of capitalism' in China seems misplaced, however, as the private sector remains a central plank of the Chinese Government's plans to deliver on its 'common prosperity' pledges to raise living standards and create a more even distribution of wealth.

As a business looking to invest in the opportunities available across the full spectrum of emerging and frontier markets, we recognise that the asset class is about much more than China alone. That remains true (the Company has significantly less exposure in aggregate to mainland China and Hong Kong than our benchmark), but China has continued to dominate the headlines. Perhaps not for the right reasons, it did so yet again in September, as the imminent financial collapse of real estate giant Evergrande threatened a debt crisis that had echoes of earlier crises in the West. At the time of writing the Evergrande saga remains unresolved.

Investment performance

During the period under review, the Company's share price and Net Asset Value ("NAV") with dividends paid added back returned 31.5% and 28.6%, respectively. This compares with a total return of 13.3% for our benchmark, the MSCI Emerging Markets Index (Total Return). To a considerable extent, we have made up the underperformance suffered in 2020, when our markets sold off strongly in the early days of Covid-19.

The Company's recent investment performance is considered in detail in the Investment Adviser's Review. In summary, however, the principal factors driving the strong absolute and relative performance this year were a recovery in global equity markets following the roll out of vaccination programmes in developed countries, an underweight position in China, an allocation to smaller companies and frontier markets, as well as maintaining a reasonable level of gearing in the portfolio throughout the year. In many ways, most of the factors which contributed to this strong performance were the same factors which contributed to the underperformance in the previous year and, in this context, the Fund Manager should be applauded for holding his nerve through some of the most turbulent equity market conditions in living memory.

Gearing

The Company has access to a flexible loan facility with Scotiabank Europe plc for amounts of up to £11m. As at 30 September 2021, the Company's net gearing level, based on the amount of drawn down bank debt, less cash held on the balance sheet, was 9.3%. Gearing remains very cheap and therefore we use leverage in the portfolio to enhance shareholder returns. The current cost of borrowing is 1.3% which compares favourably with a portfolio that yields in excess of 4.0% and provides the potential for capital gain in rising markets, as well as enhancing our earnings. The counterpoint is that in falling markets the presence of borrowings will exacerbate capital losses.

The Board reviews the Company's gearing on a regular basis. The current maximum has been set at 20% of the Company's net assets and we will continue to encourage the Investment Adviser to use the borrowing facility and the Company's cash reserves, since we believe this will enhance future returns for shareholders.

Dividends

The Company pays four dividends a year. The first of these, an interim dividend of 1 penny per share, was paid on 26 March 2021. On 25 June 2021, the Board paid a second interim dividend of 1 penny per share which was followed by a dividend payment of 1.2p per share on 24th September 2021 and a fourth interim dividend payment of 1.25p per share which was paid on 30 December 2021. As a result, total dividends for the year were 4.45p per share, slightly higher than the total distributions of last year.

Discount and premium management

Shareholders will be aware that, at the discretion of the Board, the Company offers a redemption facility, whereby once a year investors have the opportunity to redeem their shares at close to NAV. In earlier years, redemptions have been at a modest level, but this year shareholders representing approximately 30% of JEFIT's register notified us of their wish to redeem. All of these requests were met and, as a result, an amount of £29.6m was returned to redeeming shareholders. The effect of these redemptions is that the net assets of the Company have fallen in the year and stood at £65.1m as at 30th September 2021. This is clearly a disappointing outcome, particularly in the context of the excellent NAV and share price performance which has been seen in the past twelve months.

Your Board recognises that this shrinkage makes the size of the Company smaller than is desirable for an investment trust. We have therefore undertaken a consultation exercise with our larger shareholders to assist us in our review of the redemption facility which, as we have experienced in the past year, can result in a significant reduction in the size of JEFIT's capital base. On the basis of the views expressed to us by shareholders, your Board recently announced that it intends to put forward proposals to amend the redemption facility by restricting the number of shares that can be redeemed to 20% and to move from an annual facility to one which will be offered once every three years, starting in June 2024. Shareholders will also be offered a continuation vote when considering the proposed changes to the redemption facility and further continuation votes will be held on a triennial basis from June 2024.

Annual General Meeting

The Company's Annual General Meeting ("AGM") will be held on Monday, 28 March 2022 at 3:00pm at the offices of Jupiter Asset Management Limited, The Zig Zag Building, 70 Victoria Street, London SW1E 6SQ.

PRIIPs Key Information Documents

Notwithstanding the UK's departure from the European Union, we are required to provide investors with a Key Information Document ("KID") which includes performance projections which are the product of prescribed calculations based on the Company's historical performance. Whilst the content and format of the KID cannot be amended under the applicable regulations, the Board does not believe that these projections are an appropriate or helpful way to assess JEFIT's prospects.

Accordingly, the Board urges shareholders also to consider the comprehensive information set out in both the Company's Half Yearly Financial Report and Annual Report & Accounts, together with the monthly fact sheets and Company announcements (including daily NAV announcements), when considering an investment in the Company's shares. These documents are available on the Company's website at www.jupiteram.com/JEFI.

Outlook

The opportunities for the Company's Investment Adviser to seek attractive companies are as strong as ever. A strategy designed to capitalise upon underappreciated positive change should be an excellent fit for an environment where so much is changing, and many big issues (e.g., Covid-19, climate change, events in China, wider geopolitics) can distract markets from what is really happening on the ground with individual companies.

Just as a difficult year of investment performance should be no cause to panic and change a fundamentally sound investment strategy, so too is a strong year of performance no reason for complacency. While nearly 10 billion doses of Covid-19 vaccines have been administered, meaning that perhaps half the world's population has now received two doses, the arrival at the end of 2021 of the highly infectious Omicron variant is serving to remind us that the battle is by no means over.

JEFIT is a vehicle which provides investors with a route to many of the world's less accessible markets, while offering an attractive yield by way of dividends, and your Board applauds the recovery in our fortunes achieved by our Investment Adviser in 2021. Nonetheless, strong nerves are still required as the world comes to terms with the likelihood that Covid-19 and its descendants will be with us for some time and as we adapt to this reality there will be bumps in the road, especially in the markets where we invest.

John Scott

Chairman

28 January 2022

Investment Adviser's Review

Market review

During the financial year to September 2021, the Company's portfolio staged a strong recovery. Over the period, the portfolio's return of 28.6% was significantly ahead of the Company's benchmark, the MSCI Emerging Markets Index, which ended the period up 13.3%. The Company's exposure to frontier markets and smaller companies was positive for relative performance, as was the underperformance of China, where the portfolio has a much lower weighting than the benchmark.

Over the period, MSCI benchmark returns for key markets were as follows: China -11.1%; Taiwan 38.7%; India 44.0%; MSCI Frontier Markets 25.7%; Mexico 48.0%; Russia 54.9%; and Brazil 15.2%. Emerging and frontier market equities generally performed well, with the Chinese market being a notable exception. Taiwan, which is one of the Company's largest single country exposure, outperformed the asset class on continued strength in the technology sector. Some of the markets where sentiment had been most impacted by the pandemic, such as Mexico and India, also performed strongly over the period.

China's underperformance over the period can be explained by several factors. Having been seen as a relative safe haven during the pandemic, the valuations of some Chinese companies had become quite stretched by October 2020. The resultant lack of valuation support, combined with heightened regulatory scrutiny of large private firms and growing concerns over property sector indebtedness, came together to weigh heavily on Chinese equities. We have long held the view that China's weighting in the Company's MSCI Emerging Market benchmark represents a high level of single- country risk for an asset class as diverse as emerging markets.

During the second half of the Company's financial year, some of the "reopening" enthusiasm that buoyed smaller emerging and frontier markets towards the end of 2020, waned. This was in part due to slower vaccination progress relative to developed markets and only a nascent resumption of tourism activity in markets such as Georgia, Turkey and Kenya. However, it is encouraging to see that vaccine rollouts accelerated during the second half of 2021 and tourist arrivals in most markets continued to recover.

It was pleasing to see that second and third quarter earnings announcements from the Company's holdings were in most cases characterised by impressive year-on-year earnings growth. Significantly, the Company's revenue outlook has continued to strengthen. When Bank of Georgia announced an interim dividend (which accompanied a better-than-expected second quarter earnings release), this marked a complete return to dividends by the Company's bank sector holdings.

Performance

Significant positive contributors to performance over the period included stocks from across a broad range of sectors and markets. Brazilian port operator, Wilson Sons, Indian refiner and fuel marketing business, Hindustan Petroleum (HPCL), and Taiwanese chip designer, Mediatek, all delivered strong share price returns.

Wilson Sons has been owned in the portfolio since JEFIT listed in 2017. Working together with our Stewardship Team, we have previously engaged with the Chairman and believe that management quality is high. Despite owning excellent port assets and having potential for structural growth in earnings as international trade volumes and cabotage expand over time, Wilson Sons' stock has long appeared undervalued. However, the firm recently announced that it would move to a Brazilian main listing structure (replacing the current depository receipt structure), which has driven a re-rating of the company's valuation towards a multiple that better reflects its strong competitive position and growth potential.

HPCL, which owns and operates refineries, gas pipelines and service stations across India, has demonstrated strong operational resilience throughout the pandemic. Better-than-expected earnings delivery, combined with share buybacks and a significant year-on-year increase in dividend payments drove strong share price performance over the period. We believe that HPCL is a good example of why it is important to engage with and analyse companies operating in sectors with higher ESG risk, rather than working on the basis of exclusions. While some might reasonably question the long- term future of fuel retailing, a closer examination of HPCL's business reveals that the company, as a supplier of city gas and LPG, has a key role to play in India's energy transition. Management is also working to leverage HPCL's extensive network of fuel stations for non-fuel retail opportunities and electric vehicle charging.

Mediatek has continued to deliver very strong operational performance, in terms of both sales and margins. The company's new fifth generation (5G) handset chipsets have been positively received by customers and these should drive a sustained uplift in margins for the company as 5G adoption becomes more widespread. Additionally, Mediatek continues to expand into non-mobile product areas: It is already the largest supplier of ARM-based processors for Google's Chromebook, custom designs chips for Amazon's Echo and is in the process of developing chips for advanced driver-assistance systems (ADAS) in cars.

Not owning Alibaba (one of the largest constituents in the Company's MSCI Emerging Markets benchmark) was also a positive driver of the portfolio's relative performance. The suspension of the keenly anticipated initial public offering of Alibaba's subsidiary, ANT Financial, and heightened antitrust scrutiny of the entire Chinese internet sector weighed on sentiment towards the stock.

Detractors from relative performance included GRIT Real Estate and China Medical System. GRIT is a leading pan-African real estate company, which mainly leases properties to multinational tenants on a hard-currency basis. Throughout the course of a normal economic cycle, GRIT could be considered a very resilient business. However, the pandemic proved to be particularly challenging for the company, as it has over 20% exposure to the hospitality sector (tenants include Lux, Clubmed and Beachcomber) and a similar exposure to retail. The need to defer rental collections on several hotels concerned investors, particularly as it led to a downward adjustment in appraised property values. However, rental payments from these tenants are resuming, as tourist arrivals begin to recover, and the outlook for 2022 appears to be materially better than 2021.

The share price of China Medical Systems (a new position discussed below under "Activity") was weak during the third quarter of 2021, along with the rest of the Chinese pharmaceutical sector. However, the company delivered strong interim results and we view the business as being much better positioned to navigate regulatory uncertainty than peers.

Activity

During the period, positions in Ginko (a Taiwanese contact lens maker), John Keells (a Sri Lankan conglomerate), and Banorte (a Mexican bank) were exited. New positions were established in Despegar (the leading Latin American online travel agent), Credit Agricole Egypt (an Egyptian bank), Elan (a Taiwanese chip designer), and China Medical System.

The position in Ginko was sold as a combination of a recovered valuation but also intensifying competition in new digital marketing channels, led us to the view that there were more attractive opportunities elsewhere. The holding in John Keells was also disposed of as Sri Lanka's challenging fiscal position made the currency vulnerable, potentially overwhelming the positive stock-specific investment case we had identified. Banorte was exited after a period of strong relative performance, as the valuation had become less attractive relative to our other bank sector holdings.

We view Credit Agricole Egypt (CAE) as a good example of the type of opportunity that the trust structure enables us to capture. The stock's liquidity is reasonable but not high enough to meet the threshold for most open-ended emerging market funds. Consequently, the stock is overlooked by many foreign investors and its valuation appears low relative to similar banks across emerging and frontier markets. CAE has a strong retail franchise, a highly regarded digital strategy and is well positioned to benefit from rising financial inclusion in Egypt. Despite the pandemic, CAE has continued to achieve a high level of profitability, loan growth has remained in positive year-on-year territory, and its capital position has strengthened.

The position in Despegar was initiated after quarterly results showed that the business was beginning to recover from the impact of Covid-19 and we are of the view that the company's strong competitive position in a structurally growing industry is not reflected in valuations. While Despegar does not pay dividends yet, the high net cash position and history of dividend payments by its largest shareholder (Expedia), and buybacks on the part of US peer, Booking Holdings, suggest meaningful shareholder returns are likely in future.

Elan, which was purchased in early 2021, designs and sells chips that enable touch screen functionality and fingerprint recognition in notebook PCs and other devices. In the coming years, penetration of both features should increase substantially from today's level of just over 30 per cent. Elan has a clear lead in this market, which we expect it to maintain, given that the company is very close to major platforms, particularly Microsoft and Google.

The general weakness in the Hong Kong and Chinese equity markets created what we saw as opportunities in certain stocks, such as China Medical System (CMS). CMS partners with overseas pharmaceutical companies to market drugs in China (partners include AstraZeneca and India's Sun Pharma). The company has consistently achieved high returns on capital and has a clear policy of paying out 40% of earnings as a dividend. In our view, CMS scores very well on capital management, which, along with management alignment and environmental and social risk mitigation, is one of the three areas we focus on when considering Environmental, Social and Governance ("ESG") attributes of a company. Furthermore, we believe that the company's valuation does not fully reflect the potential for CMS to continue delivering high earnings growth on the back of its expanding pipeline of new products.

Outlook

We continue to see a combination of improving operational performance and valuations that are low relative to history for many of the portfolio's holdings. Despite the recovery we have so far seen, valuations for many of JEFIT's holdings remain at a level that, in our view, does not fully reflect their growth potential.

While many smaller emerging and frontier markets remain a long way behind developed markets and China in terms of their vaccine programmes, there was a marked acceleration in vaccinations during the second half of 2021, which bodes well for a continued recovery in economic activity in 2022.

In a world where the valuations for many asset classes look high relative to history, the opposite continues to hold true for most companies and sectors within emerging and frontier markets, despite the potential for strong long-term growth. As investors continue to look past the impact of the pandemic, we expect that the scope for operational recovery and re-rating from attractive valuations will be positive for stock performance.

There has already been a significant recovery in the Company's revenue outlook, driven by a resumption of dividend payments by those companies that temporarily halted payouts at the height of the pandemic and by an improved earnings outlook for many of our holdings. We remain positive on the outlook for earnings and dividends at both a Company and an asset class level in 2022. Consensus dividend forecasts imply a strong level of dividend growth, with forecasts for the portfolio's holdings suggesting a forward-looking portfolio yield of around 5.6%, which compares to a 12-month trailing dividend yield of 4.8%.

Gearing in the trust (loan value as a percentage of net asset value) currently stands at just below 10%, which compares to a guided range of 0% to 20%. Given where valuations are currently, we consider it appropriate to maintain this level of gearing in the trust.

Ross Teverson

Fund Manager

Jupiter Asset Management Limited

Investment Adviser

28 January 2022

List of Investments as at 30 September 2021

+ Suspended security as at 30 September 2021 and subsequently delisted following acquisition.

* Hong Kong and the United Kingdom are classified as developed markets but the portfolio holdings listed in these markets operate predominantly in emerging and/or frontier markets.

As at 30 September 2021 none of the Company's Total Assets was invested in the securities of other listed closed-ended investment companies. It is the Company's stated policy that its exposure to other closed-ended listed investment companies should not exceed 10% of Total Assets.

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 Tax Act 2010 ("CTA 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 CTA 2010 and has no employees.

The Company was incorporated in England & Wales on 4 April 2017.

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 30 September 2021 and the Directors expect that the Company will continue to operate in the same manner during the current financial year.

Investment Objective

The Company's investment objective is to achieve capital growth and income, both over the long term, through investment predominantly in companies exposed directly or indirectly to Emerging Markets and Frontier Markets worldwide.

Investment Policy

The Company will invest at least 70% of Total Assets in companies that, at the time of investment, have their registered offices or principal places of business in Emerging Markets or Frontier Markets, or which exercise a material part of their economic activities in Emerging Markets and/or Frontier Markets, and which are considered by the Investment Manager to be undervalued or otherwise to offer good prospects for capital growth.

The Company may invest up to 25% of Total Assets in companies that, at the time of investment, have their registered offices or principal places of business in, or which exercise a material part of their economic activities in, Frontier Markets (calculated at the time of investment).

The Company may invest up to 5% of Total Assets in unquoted companies (calculated at the time of investment).

The Company will invest no more than 10% of Total Assets in any single holding (calculated at the time of investment).

Investment Restrictions

The Company will at all times invest and manage its assets with the objective of spreading risk in accordance with its published investment policy.

The Company will not invest more than 10% of its Total Assets in other listed closed ended investment funds (as defined in the Listing Rules).

In accordance with the requirements of the Financial Conduct 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 Emerging Markets Index (Total Return) in sterling.

Gearing

Gearing is defined as the ratio of a company's debt less cash held compared to its equity capital, expressed as a percentage. The effect of gearing is that, in rising markets, the Company tends to benefit from any growth of the Company's investment portfolio above the cost of payment of the prior ranking entitlements of any lenders and other creditors. Conversely, in falling markets the Company suffers more if its investment portfolio underperforms the cost of those prior entitlements.

The Company may deploy gearing of up to 20% of Net Asset Value (calculated at the time of borrowing) to seek to enhance long-term capital growth and income returns and for the purpose of capital flexibility. The Company's gearing is expected to primarily comprise bank borrowings, but may include the use of derivative instruments and such other methods as the Board may determine.

Loan Facility

The Company's loan facility with Scotiabank Europe PLC, which expired in September 2021, was renewed by the Board for a further six months to March 2022.

The ability to borrow in this way is seen as a clear advantage enjoyed by investment trusts as compared with open ended investment vehicles such as unit trusts.

The Directors consider it a priority that the Company's level of gearing should be maintained at appropriate levels with sufficient flexibility to enable the Company to adapt at short notice to changes in market conditions. The Board reviews the Company's level of gearing on a regular basis.

Use of Derivatives

The Company may invest in derivative financial instruments comprising options, futures and contracts for difference for investment, hedging and efficient portfolio management, as more fully described in the investment policy. There is a risk that the use of such instruments will not achieve the goals desired. Also, the use of swaps, contracts for difference and other derivative contracts entered into by private agreements may create a counterparty risk for the Company. This risk is mitigated by the fact that the counterparties must be institutions subject to prudential supervision and that the counterparty risk on a single entity must be limited in accordance with the individual restrictions.

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 employ a policy of hedging against fluctuations in the rate of exchange between sterling and other currencies in which its investments are denominated.

Dividend Policy

The Company currently targets an annualised dividend yield of a minimum of 4% of NAV. Due to the flexibility afforded by the investment trust structure, the Company has the scope to build a revenue reserve, potentially allowing for progressive dividend payments. It is intended that the Company can build up revenue reserves over time so as to enable the Board to smooth the level of future interim dividend payments where practicable. However, in accordance with regulation 19 of the Investment Trust (Approved Company) (Tax) Regulations 2011, the Company will not (except to the extent permitted by those regulations) retain more than 15% of its income (as calculated for UK tax purposes) in respect of an accounting period.

Annual Redemption Facility

The Company has a redemption facility through which shareholders are entitled to request the redemption of all or part of their holding of Ordinary shares as at 30 June on an annual basis. The Board has absolute discretion to operate the annual redemption facility on any given redemption point and to accept or decline in whole or part any redemption request.

As explained in the Chairman's statement, the Board intends to put forward proposals to amend the redemption facility by restricting the number of shares that can be redeemed to 20% of issued share capital and to move from an annual facility to one which will be offered every three years, starting June 2024.

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:

Discount management

The Board reviews 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 Company will issue shares when there is sufficient demand. Such issuances will always be at a price which is in excess of the Net Asset Value. No shares were issued during the year under review.

At the Annual General Meeting ("AGM") held on 5 March 2021, the Company was granted the power to purchase its 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.

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 2021 AGM. The new authority to repurchase will last until the conclusion of the AGM of the Company in 2022 (unless renewed earlier). Any repurchases 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 and the Listing Rules.

As a result of the annual redemption facility, on 15 July 2021 the Company repurchased 4,607,803 Ordinary shares for cancellation.

Treasury Shares

In accordance with the Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003 (the 'Regulations') which came into force on 1 December 2003 any Ordinary shares repurchased, pursuant to the above authority, may be held in Treasury. These Ordinary shares may subsequently be cancelled or sold for cash. The latter option would give the Company the ability to reissue shares quickly and cost effectively and provide the Company with additional flexibility in the management of its capital.

As at 30 September 2021, there were no Ordinary shares held in Treasury.

Management

The Company has no employees and most of its day to day responsibilities are delegated to Jupiter Asset Management Limited ("JAM"), which acts as the Company's Investment Adviser and Company Secretary.

J.P. Morgan Europe Limited ("JPMEL") acts as the Company's Depositary and the Company has entered into an outsourcing arrangement with J.P. Morgan Chase Bank N.A. ("JPMCB") as Custodian and for the provision of accounting and administrative services.

Although JAM is named as the Company Secretary, JPMEL provides administrative support to the Company Secretary as part of its formal mandate to provide broader fund administration services to the Company.

Viability Statement

In accordance with Provision 36 of the Code of Corporate Governance as issued by the Association of Investment Companies in February 2019 (the "AIC Code"), the Board has assessed the prospects of the Company over a period longer than the twelve months required by the 'Going Concern' provision. The Board assessed proposed changes to the redemption facility and the introduction of a triennial continuation vote, as described in the Chairman's Statement. Following discussions with major shareholders it is the view of the Board that these changes will support the ongoing viability of the Company. The Board has assessed the viability of the Company over the next three years. The Company's investment objective is to achieve long-term capital and income growth and the Board regards the Company's shares as a long-term investment. Given that the Company was launched in 2017 the Board is of the opinion that three years is currently the appropriate period on which to base the viability of the Company. It is expected that, as the Company builds a longer record, the viability statement will cover a five year period.

In carrying out its assessment, the Board has considered the Company's business model, including its investment objective and investment policy as well as the principal and emerging risks and uncertainties that may affect the Company as detailed below.

In addition, the Board has considered the reporting produced by the Jupiter Investment Risk Team concerning a number of potential future scenarios resulting from the Covid-19 pandemic. The Board continues to monitor income and expense forecasts for the Company. The Board continually re-assesses the operational resilience which was first tested and proven effective during the onset of Covid-19.

The Board has noted that:

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.

Principal and Emerging Risks and Uncertainties

The Directors confirm that they have carried out a robust assessment of the emerging and principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. Most of these risks are market related and are similar to those of other investment trusts investing primarily in listed markets. The Audit Committee reviews the Company's risk control summary at each meeting, and as part of this process, gives consideration to identifying emerging risks. Any emerging risks that are identified, and are considered to be of significance will be recorded on the Company's risk control summary with any mitigations. In carrying out this assessment, consideration is being given to the market and the impact from the Covid-19 outbreak and any climate related risks which may impact on the investments held by the Company.

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.

Investment Strategy and Share Price Movement - 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 its aim is 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.

Liquidity Risk - The Company may invest in securities that have a very limited market which will affect the ability of the Investment Adviser to dispose of securities when it is no longer felt that they offer the potential for future returns. Likewise the Company's shares may experience liquidity problems when shareholders are unable to realise their investment in the Company because there is a lack of demand for the Company's shares. At its quarterly meetings the Board considers the current liquidity in the Company's investments when setting restrictions on the Company's exposure. The Board also reviews, on a quarterly basis, the Company's buyback programme and in doing so is mindful of the liquidity in the Company's shares

.

Gearing Risk - The Company's gearing can impact the Company's performance by accelerating the decline in value of the Company's net assets at a time when the Company's portfolio is declining. Conversely gearing can have the effect of accelerating the increase in the value of the Company's net assets at a time when the Company's portfolio is rising. The Company's level of gearing is under constant review by the Board who take into account the economic environment and market conditions when reviewing the level.

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 underlying value of their investment. As approved by shareholders at the 2021 AGM, the Board currently has the authority to purchase the Company's Ordinary shares as a method of controlling the discount to Net Asset Value and enhancing shareholder value. Shareholder approval will be sought to renew this authority at the forthcoming AGM (and every subsequent) AGM of the Company.

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 FCA's 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 is responsible for ensuring the Company's compliance with, amongst other regulations, the Companies Act 2006, the FCA's Listing Rules, the FCA's Disclosure and Transparency Rules and the Alternative Investment Fund Managers Directive. In order to ensure that the Company remains compliant, the Board directly and via the Audit Committee receives regular updates from the Investment Adviser and the Company's other key service providers. The Investment Adviser is contractually obliged to ensure that its conduct of business confirms to applicable laws and regulations.

Credit and Counterparty Risk - The failure of the counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss.

Loss of Key Personnel - The day-to-day management of the Company has been delegated to the Investment Adviser. Loss of the Investment Adviser's key staff members could affect investment return. The Board is aware that JAM recognises the importance of its employees to the success of its business. Its remuneration policy is designed to be market competitive in order to motivate and retain staff and succession planning is regularly reviewed. The Board also believes that suitable alternative experienced personnel could be employed to manage the Company's portfolio in the event of an emergency.

Operational - Failure of the core accounting systems, or a disastrous disruption to the Investment Adviser's business or that of the administration provider, JPMCB, could lead to an inability to provide accurate reporting and monitoring.

Financial - Inadequate financial controls could result in misappropriation of assets, loss of income and debtor receipts and inaccurate reporting of Net Asset Value per share. The Board annually reviews the Investment Adviser's report on its internal controls and procedures.

Covid-19 - During the Covid-19 pandemic the Board requested that the Investment Adviser increase the frequency of its monitoring of key suppliers to ensure the safety of working conditions and continuity of operational functions. The Board decided to increase its monitoring of the portfolio and is in more frequent discussion with the investment adviser.

Enterprise risk is reviewed twice a year, taking into its remit emerging risks as they become immediate, whilst still maintaining a long-term perspective where they are evolving at a fast rate.

Directors

As at 30 September 2021 the Board comprises one female and three male Directors.

Employees, Environmental, Social and Human Rights issues

The Company has no employees as the Board has delegated the day to day management and administration functions to JUTM, JAM and other third party service providers. There are therefore no disclosures to be made in respect of employees.

Integration of ESG considerations into the Investment Adviser's Investment Process

JAM has a 30 year record of integrating ESG factors into the investment process. Its Governance and Sustainability team leverages its relationships with partner organisations such as the UN Principles for Responsible Investment ("UN PRI"), the Investor Forum and Institutional Investors Group on Climate Change ("IIGCC") and regularly engages with these and other industry bodies to ensure it remains at the forefront of ESG integration. Where relevant, lessons learned are disseminated across JAM's wider investment team via its Stewardship Committee.

JAM considers stewardship to be an integral component of its investment process. Typically, JAM does not seek to exclude companies based on headline risk factors, disclosures or practices, instead believing that engagement aimed at enhancing long- term outcomes for investors requires a more rigorous and nuanced approach. Moreover, the Investment Adviser is of the view that compelling opportunities can arise in companies where there is evidence of positive change in the areas of environmental and social risk mitigation and governance practices, but where the market may be yet to reflect this in investee company share prices.

Modern Slavery Act

The Modern Slavery Act 2015 requires certain companies to prepare a slavery and human trafficking statement. As the Company has no employees and does not supply goods and services, it is not required to make such a statement.

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from its operations as its day to day management and administration functions have been outsourced to third parties and it neither owns physical assets or property nor has employees of its own. It therefore does not have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report on Directors' Reports) Regulations 2013.

Section 172 Statement

Under Section 172 ("S172") of the Companies Act 2006, the Directors have a duty to act in good faith and to promote the success of the Company for the benefit of its shareholders as a whole. This includes taking into consideration the likely consequences of their decisions on the long term and on the Company's stakeholders, such as its shareholders, employees and suppliers, while acting fairly between shareholders.

The Directors must also consider the impact of the Company's decisions on the environment, the community and its reputation for maintaining high standards of business conduct.

The Company ensures that the Directors are able to discharge this duty by, amongst other things, providing them with relevant information and training on their duties. The Company also ensures that information pertaining to its stakeholders is provided, as required, to the Directors as part of the information presented in regular Board meetings in order that stakeholder considerations can be factored into the Board's decision making. The Directors' responsibilities are also set out in the schedule of Matters Reserved for the Board and the terms of reference of its committees, both of which are reviewed regularly by the Board. At all times the Directors can access as a Board, or individually, advice from its professional advisers including the Company Secretary and independent external advisers.

The Company's investment objective, to achieve capital growth and income over the long term, supports the Directors' statutory obligations to consider the long term consequences of the Company's decisions. How the long-term focus of the Company is achieved is set out in more detail where the Investment Adviser's approach to environmental, social and governance issues is explained in the section entitled Integration of ESG considerations into the Investment Adviser's Investment Process. This approach is fundamental to the Company achieving long-term success for the benefit of all of its stakeholders.

The Company's investment objective is to achieve capital growth and income through investment in companies exposed directly or indirectly to Emerging and Frontier markets worldwide.

The Company is also aware of its own potential impact on the environment and has a number of practical policies in place to reduce that impact.

Examples include the use and sharing of electronic documents by the Board rather than printing documentation and the provision of electronic copies of the annual report and accounts which are available to shareholders and others on the Company website. Where physical copies of the annual and half yearly financial reports are made, they use materials and processes designed to both minimise the environmental impact and to maximise the recycling potential.

Engagement with suppliers, customers and others and the effect on principal decisions

The Shareholders - The shareholders of the Company are both institutional and retail.

The Board believes that shareholders have a vital role in encouraging a higher level of corporate performance and is committed to listening to the views of its shareholders and giving useful and timely information by providing open and accessible channels of communication including those listed below.

The AGM - The Company encourages participation from shareholders at its AGMs where they can communicate directly with the Directors and Investment Adviser. A short presentation by the Investment Adviser on the performance of the Company over the past year, as well as an outlook for the future will be made available on the Company's website in advance of the AGM.

Online Information - The Company website contains the Annual and Half Yearly Financial Report along with monthly factsheets and commentaries from the Investment Adviser. The daily NAV per share, monthly top ten portfolio listings and other regulatory announcements can be found on the regulatory news service of the London Stock Exchange.

Shareholder Communications

Shareholders can raise issues or concerns at any time by writing to the Chairman or the Senior Independent Director at the Registered Office.

The Investment Adviser

The investment management function is critical to the long-term success of the Company. The Board and the Investment Adviser maintain an open and constructive relationship, with meetings taking place a minimum of four times per annum, with monthly updates and additional meetings as circumstances require. The Audit Committee meets at least twice a year and as part of its role considers the internal controls put in place by the Investment Adviser.

The day to day responsibilities of the Company are delegated to the Investment Adviser which as the key service provider supplies investment management, administration and company secretarial services. The Investment Adviser oversees the activities of the Company's other third-party suppliers on behalf of the Company and maintains open and collaborative relationships to maintain quality, efficiency and cost control through regular communication with dedicated members of the Investment Adviser's operational teams. The Board regularly reviews reports from its Investment Adviser, the AIFM, the depositary, the Company broker, the investor relations research provider and the Independent Auditors.

These provide vital information concerning changes in market practice or regulation which affect the Company and assist the Board in its decision making process. Representatives from these providers attend Company Board meetings and give presentations on a regular basis enabling in depth discussions concerning both their findings and their performance.

Other Third-Party Service Providers

As an externally managed investment company with no employees or physical assets, the principal stakeholders of the Company are its shareholders, Investment Adviser, AIFM, depositary, custodian, administrator and registrar. The continuance, or otherwise, of engagement of key third-party service providers are principal decisions taken by the Board every year.

Principal Decisions

The Directors take into account the S172 considerations in all material decisions of the Company. Examples of this can be seen as follows.

§ During 2021, the Board appointed Marten & Co. to provide marketing services with a view to increasing the retail investor base. Marten & Co. target retail investors and investor platforms as well as some smaller regional IFAs and wealth managers that were not previously targeted by the Company. The Board agreed that Marten & Co.'s retail marketing experience will be beneficial in the pursuit of growing the Company's retail investor base.

§ The annual redemption facility resulted in a total of 25,670,791 Ordinary shares being submitted by shareholders, representing 30 per cent of the issued share capital of the Company. As explained in the Chairman's statement, the Board intends to put forward proposals to amend the redemption facility by restricting the number of shares that can be redeemed to 20% and to move from an annual facility to one which will be offered every three years, starting June 2024.

§ The Company's loan facility with Scotiabank Europe PLC, which expired in September 2021, was renewed by the Board for a further six months.

In Summary

The structure of the Board and its various committees and the decisions it makes are underpinned by the duties of the Directors under S172 on all matters. The Board firmly believes that the sustainable long-term success of the Company depends upon taking into account the interests of all the Company's key stakeholders.

For and on behalf of the Board

John Scott

Chairman

28 January 2022

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable United Kingdom law and International Financial Reporting Standards ('IFRS') in conformity with the Companies Act 2006.

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:

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website www.jupiteram.com/JEFI. 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/JEFI, 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 confirms to the best of their knowledge that:

So far as each Director is aware at the time the report is approved:

By order of the Board

John Scott

Chairman

28 January 2022

* There is no other comprehensive income and therefore the 'Net return/(loss) after taxation' is the total comprehensive income for the period

The total column of this statement is the income statement of the Company, prepared in accordance with IFRS in conformity with the Companies Act 2006.

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.

The financial statements were approved by the Board of Directors and authorised for issue on 28 January 2022 and signed on its behalf by:

John Scott

Chairman

* Special Reserve was constituted following a transfer from the Share Premium reserve and can also be used to pay dividends.

** Dividends paid during the period were paid out of revenue reserves.

Notes to the Accounts

1. Accounting Policies

The Accounts comprise the financial results of the company for the year to 30 September 2021. 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 21 January 2022. 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 in conformity with the Companies Act 2006.

Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for Investment Trusts issued by the Association of Investment Companies ("AIC") in October 2019 is consistent with the requirements of IFRS in conformity with the Companies Act 2006, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

The Directors also considered the proposed changes to the redemption facility, as described in the Chairman's Statement, and following discussions with major shareholders it is the Director's view that the Company will continue as a going concern.

The Company is engaged in a single segment of business, being that of an investment trust company and consequently no business segmental analysis is provided.

(a) Income

Dividends from investments are recognised when the investment is quoted ex-dividend or when the right to income has been established. Dividends received from equity shares are taken to the revenue return column, except special dividends, which are reviewed on a case by case basis to determine if the dividend is to be treated as revenue or capital.

Deposit and other interest receivable are accounted for on an accruals basis. These are classified within operating activities in the Statement of Cash flows.

(b) Presentation of Statement of Comprehensive Income

In order to better reflect the activities of an investment trust company and in accordance with supplementary guidance issued by the AIC, the Statement of Comprehensive Income is presented with items of a revenue and capital nature in two columns.

Investment management fees and finance costs are charged 75% to capital and 25% to revenue.

(c) Investments

Investments are recognised and derecognised on a trade date where a purchase or 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 the fair value, being the consideration given.

All investments are classified as held at fair value through profit or loss (FVTPL). 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 or loss investments are included within the changes in the fair value of the investment.

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 translated 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 translation are included in the Statement of Comprehensive Income within the revenue or capital column depending on the nature of the underlying item.

(f) Borrowing and finance costs

Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs and subsequently measured at amortised cost. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Statement of Comprehensive Income using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the year in which they arise.

All finance costs are charged 75% to capital and 25% to revenue of the Statement of Comprehensive Income.

(g) Expenses

Expenses are accounted for on an accruals basis. Management fees are charged 75% to capital and 25% to revenue with all other expenses charged fully to the revenue column, except for expenses which are incidental to the purchase of sale of an investment which are charged to capital.

(h) Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the date of the Statement of Financial Position.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilised.

Investment trusts which have approval under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation of capital gains.

(i) Ongoing Charges Figure

The Ongoing Charges Figure (OCF) is calculated as the ratio of the total ongoing charges to the average net asset value of the Company over the year. The OCF is made up of the Investment Management fee and other operating costs deducted from the Company during the year, excluding finance costs and performance fees.

(j) Reserves

Share Capital

This reserve is the nominal value of the shares in issue.

Share Premium

The share premium may be used for the payment of share issue costs.

For shares issued from treasury, the share premium is the element over and above the weighted average cost of the shares.

Special Reserve

The special reserve may be used to finance the Company's share buyback facility.

The special reserve may also be used to fund the distribution of profits to investors via dividend payments.

Capital Redemption Reserve

The capital redemption reserve is used for the transfer of the nominal value of shares which are repurchased for cancellation from share capital.

Retained Earnings

Capital Reserve

The capital reserve is not available for the payments of dividends.

The following are accounted for in this reserve:

Revenue Reserve

The revenue profit or loss for the year is taken to or from this reserve.

The revenue reserve may be used to fund the distribution of profits to investors via dividend payments.

(k) Accounting developments

At the date of authorisation of the financial statements, the following amendment to the IFRS Standards and Interpretations was assessed to be relevant and is effective for annual periods beginning on or after 1 January 2020:

IFRIC 23: Uncertainty over Income Tax Treatments

IFRIC 23 has not had an effect on the measurement or disclosure of amounts recognised within the financial statements of the Company.

Standards issued but not yet effective

At the date of authorisation of the financial statements, the following standards and interpretations were assessed to be relevant and are all effective for annual periods beginning on or after 1 January 2021:

There are no accounting standards, amendments, or interpretations effective in the year and issued but not effective, that have or will have material impact on these financial statements. Furthermore, the Company has not early adopted any such standards, amendments, and interpretations to existing standards prior to their effective date.

2. Significant accounting judgements, estimates and assumptions

The Board has not applied any significant accounting judgements to this set of Financial Statements or those of the prior period other than the allocation of special dividends received between revenue and capital.

This allocation is dependent upon the underlying reason for the payment. Examples of capital events which would result in the dividend being allocated to capital is a return of capital to shareholders or proceeds from the disposal of assets. Examples of revenue events which would result in the dividend being allocated to revenue are the distribution of excess or exceptional profits in the year. The circumstances are reviewed by the Investment Adviser making recommendations to the Board who determine the appropriate allocation.

The Board make no other significant accounting estimates.

3. Income

Special dividends received in the year amounted to £0.05m (2020: £0.04m) allocated to revenue and £0.794,m (2020: £nil) allocated to capital.

4. Investment management fee

5. Ongoing Charges

6. Earnings/(loss) per Ordinary share

The earnings per ordinary share is based on the net return for the year of £22,815,000 (2020: Loss: £9,500,000) and on 78,924,394 (2020: 89,015,445) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.

The return/(loss) per share figure detailed above can be further analysed between revenue and capital, as below.

7. 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

£65,106,000 (2020: £75,131,000) and on 59,794,380 (2020: 85,465,171) Ordinary shares, being the number of Ordinary shares in issue at the year end.

8. Related parties

Jupiter Unit Trust Managers Limited ("JUTM"), the Alternative Investment Fund Manager, is a company within the same group as Jupiter Asset Management Limited, 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 an annual fee of 0.75% of the total assets of the Company after deduction of the value of any Jupiter managed investments, payable quarterly in arrears.

The Management fee payable to JUTM for the period 1 October 2020 to 30 September 2021 was £588,000 (year to 30 September 2020: £596,000) with £123,000 outstanding at year end (year to 30 September 2020: £142,000).

9. Contingent assets, liabilities and capital commitments

There were no contingent liabilities or capital commitments outstanding as at 30 September 2021 and 30 September 2020.

10. Post balance sheet event

On 22 November 2021 the Company announced a fourth interim dividend of 1.25p per Ordinary share which was paid on 30 December 2021.

11. Annual Results

This Annual Results announcement does not constitute the Company's statutory accounts for the years ended 30 September 2020 and 30 September 2021 but is derived from those accounts. Statutory accounts for the year ended 30 September 2020 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 30 September 2020 and the year ended 30 September 2021 both received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not include statements under Section 498 of the Companies Act 2006 respectively. The statutory accounts for the year ended 30 June 2021 have not yet been delivered to the Registrar of Companies and will be delivered following the Annual General Meeting.

The Annual General Meeting of the Company will be held on 28 March 2022 at 3:00pm.

A copy of the Annual Report & Accounts will shortly be submitted to the National Storage Mechanism and will soon be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The Annual Report & Accounts will also be available for download from the Company's section of Jupiter Asset Management's website www.jupiteram.com/JEFI

The Annual Report & Accounts will shortly be posted to those registered shareholders who have elected to receive a hard copy.

For further information, please contact:

Magnus Spence

Head of Investment Trusts and Alternatives

Jupiter Asset Management Limited, Company Secretary

020 3817 1325

28 January 2022

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