JEFI.L Regulatory News (JEFI)

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

Legal Entity Identifier: 213800RLXLM87NO26S30

Annual Financial Results for the year ended 30 September 2020

Financial Highlights for the year ended 30 September 2020

** For the financial year ending 30 September 2020, the Company announced that it would move from paying semi-annual to quarterly dividends.

Chairman's Statement

I am pleased to present the Annual Report and audited accounts for Jupiter Emerging & Frontier Income Trust PLC (the 'Company', or 'JEFIT') for the year ended 30 September 2020.

The year under review has been an exceptionally challenging period in all investment markets and there is no disguising the fact that JEFIT's performance has been disappointing. When Covid-19 was recognised as a pandemic in the early months of 2020 little was known about its consequences but, as the world looked on in horror at the coronavirus tsunami overwhelming the public health resources of Spain and northern Italy (in particular), in March many governments woke up to the scale of the developing catastrophe and consigned their countries to months of lockdown in an attempt to limit the spread of the virus.

At first, it seemed to work, a decline in new cases through the summer giving cause for optimism, but this has proved to be something of a false dawn. Most countries in Europe and North America are now battling a fresh surge of infections, in some cases - notably in the USA and UK - worse than the first wave. Many of the regions into which JEFIT invests - the most important in this context being China, where the virus originated - have fared better than the developed economies, but this is cold comfort for investors if the export markets for the companies that we own go into hibernation for several months.

The impact on investment markets has indeed been severe, with few precedents in peacetime. For an alarming period in March markets were in freefall, until strong intervention from central banks and governments restored some calm to the system, and saw many companies' share prices claw back a portion of earlier losses. Most major markets have subsequently rebounded, though not in a consistent pattern. Investors have generally sought safety in growth stocks, most of which were already at high valuations long before Covid, as well as in large cap stocks, making them even larger. Neither of these trends has been helpful to our investment style, which tends to look for smaller, dividend-paying companies operating in the world's less established markets. This has not been the right place to be in 2020.

Our investment performance

During the period under review, the Company's share price and Net Asset Value ('NAV') with dividends added back returned -13.0% and -10.1% (2019: 0.0% and +10.5%), respectively, reflecting a slight widening of our discount on the back of poor underlying performance, albeit in very choppy conditions. This compares with a total return of 12.2% for our benchmark, the MSCI Emerging Markets Net Total Return Index, meaning a period of negative returns on both an absolute and relative basis. JEFIT has never aspired to be an index tracker and, given the construction of our portfolio, it is to be expected that there will be wide discrepancies between our results and those of our benchmark, which includes a strong China component. We would, nonetheless, be happier if those variations were in our favour and not the other way round.

The Company's recent investment performance is considered in more detail in the Investment Adviser's Review. In summary, however, the principal factors driving the underperformance this year include the Company's diverse geographic and market capitalisation spread at a time when investors have been flocking to China and, as mentioned above, to ultra-large caps; we are underweight on the former and have no exposure to the latter.

Gearing

The Company currently has access to a flexible loan facility with Scotiabank Europe plc for amounts up to £21 million. As at 30 September 2020, the Company's net gearing level, based on the amount of drawn down bank debt, less the cash held on the balance sheet, was 13.8%. Gearing is at present very cheap and, like many investment trusts, we use it to a modest extent to enhance shareholder returns. With our cost of borrowing of 1.3% allowing us to expand a portfolio which yields in excess of 4%, the longer term attractions should be apparent, but the counterpoint is that in falling markets the presence of borrowings will exacerbate capital losses, and that is exactly what we have experienced in the year under review.

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 annually; we started this programme in the year under review, in response to investor demand. The first of these, an interim dividend of 1.20p, was paid in April 2020. This was followed by further distributions of 1.20p, 1.00p and 1.00p paid in July, September and December 2020, respectively, resulting in total dividends for the year of 4.40 pence per share (2018/19: two dividends, totalling 4.60 pence per share). At the time of writing, this represents an historical yield of 4.2%.

The Board recognises the importance of income to its shareholders and in the year under review has used the equivalent of 0.5 pence per share of the Company's revenue reserves to supplement the Company's earned income and thus enhance the distributions it has made to its shareholders.

As stated in the Company's announcement to the Stock Exchange on 26 August 2020, although the level of dividend income received by the Company from its portfolio has fallen in recent months as a result of the Covid-19 pandemic, the Investment Adviser is confident that income will recover during the financial year ending 30 September 2021 as a number of investee companies that have cancelled or deferred payments over the last six months are expected to resume paying dividends.

Discount and premium management

The Company's total asset base is currently at the lower end of the minimum size preferred by many institutional and wealth management investors and the Board and the Investment Adviser remain committed to growing the Company. Since our shares have traded for most of the period at a discount to NAV, this has precluded the issue of any additional shares.

The Company has an annual redemption policy, whereby shareholders have the right to offer shares back to the Company for redemption. The next opportunity for redemption will be in June 2021.

Annual General Meeting

The Company's Annual General Meeting ('AGM') will be held on Friday, 5 March 2021 at 11:00 a.m. at the offices of Jupiter Asset Management Limited, The Zig Zag Building, 70 Victoria Street, London SW1E 6SQ. The Board, having consulted with the Company Secretary, has decided that shareholders will not be permitted to attend this year's AGM in person. Should Government advice change, the Company will release an announcement to the London Stock Exchange advising shareholders of any change to the way that the AGM will be held.

Your attention is also drawn to the Report of the Directors where various resolutions relating to special business are explained, including a resolution to amend the Company's Articles to allow a 'virtual AGM' to be held in the future. This would allow shareholder attendance and voting using appropriate technology should public health or other measures so require.

Please note that we have removed paper from the voting process to reduce further the environmental impact of the Company. Electronic proxy voting is now available and shareholders may also submit voting instructions using the web-based voting facility at www.signalshares.com and www.proxymity.io for institutional shareholders. If you have not already registered with Signal Shares you will need your Investor Code which can be found on your share certificate or recent dividend confirmation. Once registered you will be able to vote immediately by selecting 'Proxy Voting' from the menu.

In advance of the AGM, 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. Despite shareholders not being able to attend in person, the Board and Investment Adviser would welcome questions, which shareholders may submit to Magnus.Spence@jupiteram.com. Subject to confidentiality, we will respond to any questions submitted either direct or by publishing our response on the Company website.

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 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 mandate which your Board gives to the Investment Adviser is to identify well-managed companies in less established markets, since we believe these are under-appreciated by international investors and have the greatest potential to reward their shareholders. But the world's economic model has been up-ended by an infection which takes no prisoners and continues to spring surprises on those battling to understand it and contain its effects.

Every crisis produces some winners amongst many losers. Lockdowns have given home shopping the greatest boost imaginable and working from home has been as good for Zoom as it has been bad for the makers of business attire. Very little of what has occurred in 2020 has been of obvious benefit to most of the companies in JEFIT's portfolio - we do not employ Ross Teverson and his team to buy Apple or Amazon, whatever the attractions of these companies with trillion dollar capitalisations. So, while recognising that the past 12 months have been an exceptionally challenging period for our Investment Adviser, we have to look to the future and I do so with cautious optimism.

In a year which has been notably short of good news, we have seen remarkable progress on vaccines effective against Covid-19 and there are already several of these being administered, all of which have appeared very much faster than was initially thought possible. It seems likely that large numbers will have the opportunity to be vaccinated by the middle of 2021 and this should allay many fears and facilitate at least a partial return to life as we once knew it. In addition, we have undoubtedly learnt much about testing regimes, protecting the vulnerable, containing the disease and treating its victims; and perhaps even about testing and tracing.

And, at a macro level, there is some cause to be positive. 2021 may usher in many changes, including the potential tailwind that the Biden presidency might bring for emerging markets. While few will yearn for a return to the era of trade policies being dictated by late-night outbursts on Twitter, a period of what might politely be described as a more conventional approach to international relations can only be positive for those corners of the globe where JEFIT goes looking for value. Markets this year may have been volatile, and the headlines alarming, but the Investment Adviser has remained clear-headed in its approach to managing the portfolio. At the time of writing, our share price has recovered strongly to 106 pence and our discount has narrowed to 2%. Your Board remains fully behind Ross and his team and recent purchases of JEFIT stock by the Company's Directors should tell their own story.

John Scott

Chairman

28 January 2021

Investment Adviser's Review

Market review

The financial year to 30 September 2020 proved to be a challenging period for the Company's portfolio. Over the period, the portfolio's negative return of -10.1% was significantly below that of the Company's benchmark, the MSCI Emerging Markets Index, which ended the period in positive territory, rising by 12.2%. During the period, the Company's portfolio faced style headwinds, with frontier markets and smaller companies underperforming the headline index. However, the main detractor from performance was the extreme divergence between China, where the portfolio has a much lower weighting than the benchmark, and other markets that have experienced a greater impact from the Covid-19 pandemic.

While emerging and frontier markets recovered substantial ground from the lows reached in March and April of this year, most markets outside of North Asia were in negative territory over the period. MSCI benchmark returns for key markets were as follows: China 27.9%; Taiwan 27.7%; India -2.2%; Frontier Markets -7.3%; Mexico -23.8%; Russia -18.9%; and Brazil -34.9%. From a funds flow perspective, North Asia benefitted from inflows, while most other markets, particularly those in Latin American and frontier markets, experienced quite persistent outflows.

We believe that it is important to recognise that while coronavirus daily case numbers have remained high in most markets, many companies' results and guidance suggest that the worst of the Covid-19 impact on operational performance may be behind us. Similarly, macro data points in markets such as Brazil, Mexico, and India, indicate that economic activity has substantially recovered from the lows experienced in the second quarter of 2020, despite continued high levels of new Covid-19 infections in those countries. We believe that a combination of an improving operating environment for companies and attractive valuations, creates considerable opportunity for investors in the asset class.

Clearly banks have been some of the hardest hit businesses through the pandemic. However, the overall picture is one of banks having provisioned conservatively during the first half of 2020 and now being in a position where capital ratios, which are generally higher in emerging markets than in developed markets, are improving on a sequential basis.

This was evident in quarterly results for Bank of Georgia, which is held in the portfolio. The bank saw its total capital ratio improve at the end of the second quarter of 2020, having taken very prudent provisions in the previous quarter. Further evidence of an improving picture came from leading Russian bank, Sberbank, which, having earlier in the year delayed its dividend decision, later confirmed that it would distribute a normal level of dividend (which the Company received in October, rather than the usual June/July timing).

Performance

A number of the Company's holdings performed well over the period, particularly those in the Technology sector. However, this was more than offset by the weak share price performance of holdings in markets such as Mexico, India and Kenya.

Positive contributors to performance over the period included Chinese online game developer, NetEase, and Taiwanese mobile phone chipset designer, MediaTek.

NetEase's business has not been materially affected by Covid-19, as consumers have maintained or even increased their time spent online. As such, the stock has benefitted as a relative safe haven in a time of heightened uncertainty.

MediaTek, a designer of chips for mobile phones and other consumer electronics applications, has continued to deliver very strong operational performance, in terms of both sales and margins. The company's new 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.

The largest detractors from relative performance included some of the large index constituents that are not held in the portfolio. Over the period, the share prices of Chinese Internet giants Tencent and Alibaba performed strongly. While these businesses proved to be resilient in the Covid-19 environment, we believe that there are more compelling opportunities elsewhere in the emerging and frontier markets investment universe - in companies that also offer significant long-term growth potential but where that potential is not currently reflected in valuations.

The portfolio's holding in Emaar Malls also impacted performance. Emaar Malls owns and operates what we consider to be one of the best retail and leisure assets globally - Dubai Mall, situated adjacent to the Burj Khalifa in downtown Dubai. Dubai Mall will remain a key retail location for global brands selling into the region and the relatively low level of debt on the company's balance sheet means that it has been able to weather the disruption experienced this year

Activity

During the period, significant activity included the sale of the Company's holdings in Russian steel producer, NLMK, and UAE-based low-cost carrier, Air Arabia. Purchases included Moldovan wine producer, Purcari Wineries, as well as Turkish insurer AvivaSa, and Chinese gas distributor, Kunlun.

The sale of NLMK was driven by opportunity cost considerations, rather than any concerns about the outlook for the business. NLMK proved resilient to this year's Covid-19 disruption in Russia and, as such, performed well, but we believe the growth potential is greater for our new holdings. In the case of Air Arabia, we felt that investors risked being overly optimistic with their expected timeframe for a return to normal levels of air travel within the region.

Purcari serves the Romanian and Moldovan wine market and it is expanding into Poland and China. The business operates mostly in the 'affordable luxury' segment and is positioned to benefit from rising disposable incomes across much of eastern Europe.

AvivSa, a joint venture between the UK's Aviva and Turkey's Sabanci, is a leading Turkish life insurer. It is a well-managed business, with consistently strong profitability. The company benefits from a compelling structural growth outlook, given attractive demographics and rising insurance penetration in the country. We believe that this positive long-term potential is not currently reflected in the stock's valuation.

Kunlun is a Chinese distributor of natural gas and LPG, which is in the process of simplifying its business by de-emphasising upstream investments and potentially selling their pipeline assets. Historically, the company's valuation has been held back by concerns about the profitability of upstream projects and uncertainty over the future of those pipeline assets. This is now changing and recent transactions for pipeline assets in China suggest that Kunlun should be able to dispose of its own pipelines at an attractive price in the near future. The shares generate a mid-single digit yield with considerable scope for this to increase on rising gas volumes and disposal gains.

ESG Considerations

Stewardship forms a core component of our investment process. In our view, engagement aimed at enhancing long-term outcomes for clients requires a rigorous and nuanced approach that goes beyond simple rules or exclusions. In some instances, the underappreciated change that we invest in relates to an improvement in governance or practices that is not yet reflected in datasets and which we believe is yet to be reflected in the share price.

As an investment house, Jupiter has a 30 year history of integrating ESG factors into the investment process. Our Governance and Sustainability team leverages our 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 engage with these and other industry bodies to ensure they are at the forefront of ESG integration.

In analysing emerging and frontier market equities, we focus on three key areas. These are alignment, capital management, and environmental and social risk mitigation.

Alignment: we look for companies that have consistently demonstrated management alignment with minority shareholders, ideally one driven by long-term, equity-based compensation that permeates beyond the executive team.

A high payout ratio is often a good indication of positive alignment of shareholder interests. It is one way we can gain greater comfort in markets which are perceived as higher risk, such as Russia or Sub-Saharan Africa. We believe that our holding, Sberbank, which is Russia's largest bank, falls into this category. The company is benefitting from several positive changes, such as technology-driven cost reduction, as well as structurally growing demand for home loans. However, the company is also government controlled - something which would, in many cases, dampen our enthusiasm for an investment, as the management teams of some state-owned companies are effectively bureaucrats for whom minority shareholder interests come some way down the list of priorities. In the case of Sberbank, however, the management have a long history of paying dividends, the payout ratio is rising over time and management own significant equity in the company. These considerations provide support for our view that management are well aligned with minority shareholders.

Capital Management: we examine how a company has historically used shareholders' capital and the management's willingness to return excess cash to shareholders though dividends or share buybacks.

Two of our holdings, Samsung Electronics and SK Hynix, are headquartered in Korea, a market which has historically been criticised for poor governance practices. The popular perception of Korea is still one of a conglomerate-controlled or chaebol-controlled system in which the interests of minority shareholders are neglected. While this may be a fair characterisation of how the country used to operate, significant change has taken place in recent years, with clear signs of improving management alignment and capital management for Korean companies. Additionally, in 2018, the country introduced a new Stewardship Code, which outlines seven core principles which act as a guide for company governance. We see Samsung as a good example of improving capital management. Since 2015, the company has had an explicit shareholder return policy in place. It enhanced this policy in 2017, making a commitment to hike dividends and pay out at least 50% of free cash flow over a 3-year period, and we expect further enhancements to be announced in the coming year.

Environmental and Social Risk mitigation: we seek to understand potential environmental and social risks to a business and whether the company is taking the necessary steps to mitigate these risks.

Since 2017, Jupiter has supported the recommendations of the Task Force on Climate related Financial Disclosures (TCFD). TCFD provides a framework for company boards to identify climate risks and make appropriate, helpful disclosures. Within emerging and frontier markets, we apply these principles within our portfolio and regularly engage with holdings such as Russia's Norilsk Nickel, which is one of the companies included on the Climate Action 100 list (a list of 100 'systemically important emitters'). Excluding Norilsk Nickel from a portfolio simply because of the environmental challenges that the business faces would be a mistake in our view. A mistake, not only because Norilsk Nickel, as the world's largest producer of refined nickel, is a key enabler of major technological changes, such as the transition to cleaner, electric vehicles (for which nickel is a key battery material), but also because the company is investing to reduce the environmental impact from its activities. By 2023 the miner is required to cut harmful emissions by 75% and it has already made significant inroads toward doing this. While metal smelting is unlikely to ever be a 'green' industry and has inherent environmental risk, we believe Norilsk has made significant commitments toward improving its environmental impact, and this represents positive change upon which the company can build.

Outlook

While the past year has presented significant challenges to many emerging and frontier market companies, we believe it is also important to recognise that valuations are very low relative to history for many companies and sectors within the asset class. These low valuation levels at which many of the portfolio holdings currently trade tend to be reached only during periods of heightened uncertainty, but it is also the case that they have typically created compelling long-term buying opportunities in emerging and frontier market equities.

The portfolio's valuation currently averages around 1.3x book value - a level that, for the Global Emerging Markets asset class as a whole, has historically preceded strong average 5-year returns. The portfolio has a lower valuation than the index on a range of measures, including price-to-earnings and price-to-cashflow. A wide valuation dispersion currently exists because large index constituents have been perceived as relative safe havens during the pandemic, driving a re-rating in their valuations. In contrast, many smaller emerging and frontier market stocks are trading close to historic low multiples and the valuation gap has been pushed to extreme levels. In the past, neither the very high valuations we currently see for some large index constituents, nor the low or very low valuations we see for many other names, have persisted for long.

The Company's gearing (loan value as a percentage of NAV) stood at 13.8% at the end of the financial year. Given current valuation levels for portfolio holdings, we consider this to be an appropriate level.

The companies held in the portfolio typically have strong balance sheets (many are in a net cash position and our holdings in the banking sector are well-capitalised - much more so than their developed market or Chinese peers). For this reason, none of our portfolio companies had to raise equity during the Company's financial year and we believe that they are well-positioned to resume a strong growth trajectory over the coming 12 months.

Ross Teverson

Fund Manager

Jupiter Asset Management Limited

Investment Adviser

January 2021

List of Investments as at 30 September 2020

As at 30 September 2020 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 2020 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

In order to improve the potential for capital returns to shareholders the Company has, with effect from 25 September 2020, negotiated a flexible loan facility with Scotiabank Europe plc ('Scotiabank') for up to

£21 million, with a maturity date of 24 September 2021.

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 will be 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.

Key Performance Indicators

At their quarterly Board meetings the Directors consider a number of performance indicators to help assess the Company's success in achieving its objectives. The key performance indicators used to measure the performance of the Company over time are as follows:

§ Net Asset Value changes;

§ The discount or premium of share price to Net Asset Value;

§ A comparison of the absolute and relative performance of the Ordinary share price and the Net Asset Value per share relative to the return on the Company's Benchmark Index;

§ Ordinary share price movement;

§ Dividend yield; and

§ The Company's ongoing charges ratio.

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 26 February 2020, 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, the Listing Rules and Model Code.

As a result of the annual redemption facility, on 15 July 2020 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. This 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 2020, 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 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 including a material and prolonged fall in equity markets and a significant rise in operating expenses along with the portfolio's liquidity. The Board continues to monitor income, expense and cash forecasts for the Company. The Board has also assessed the operational resilience of its key service providers in light of Covid-19.

The Board has noted that:

§ The Company has maintained a consistent performance and broadly consistent share price discount to NAV;

§ The Company holds a liquid portfolio invested predominantly in listed equities;

§ The investment management fee is the most significant expense of the Company. It is charged as a percentage of the portfolio value and so would reduce if the market value of the portfolio were to fall. The remaining expenses are more modest in value and are predicable in nature.

§ No significant increase to ongoing charges or operational expenses is anticipated; and

§ The Board is satisfied that Jupiter and the Company's other key third-party service providers maintain suitable processes and controls to ensure that they can continue to provide their services to the Company in spite of the Covid-19 pandemic.

The Board has also considered the market outlook, both for emerging and frontier market equities and for the Company, and has concluded that these remain an attractive opportunity for investors.

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.

Principle Risks and Uncertainties

The principal and emerging risks and uncertainties that may affect the Company are described below:

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 it is its aim to seek capital growth. The Board reviews the Company's investment strategy and the risk of adverse share price movements at its quarterly board meetings taking into account the economic climate, market conditions and other factors that may have an effect on the sectors in which the Company invests.

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 true underlying value of their investment. As approved by shareholders at the 2019 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 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 - The outbreak of the Covid-19 pandemic poses additional risks to the Company beyond the risks described above. They include liquidity risks to markets and business continuity risks for the Investment Adviser. Each of these risks is being assessed on a daily basis by 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 2020 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 Environmental, Social and Governance ('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's Sustainability Investment team considers stewardship to be an integral component of its investment process. Typically, the team 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. Despite shareholders not being able to attend in person, the Board and Investment Adviser would welcome questions which shareholders may submit to Magnus.Spence@jupiteram.com. Subject to confidentiality, we will respond to any questions submitted either directly or by publishing our response on the Company website. All views of the shareholders will be taken into consideration and action taken where appropriate.

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.

§ With the rise in status of Covid-19 to a 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.

§ The Board decided to seek shareholder approval at the forthcoming AGM to take advantage of the provisions of the Companies Act 2006 to allow future general meetings to be held either as a physical meeting or an electronic meeting, or a combination of both. This will provide shareholders with the ability to attend future AGMs remotely if the Company is unable to hold a physical meeting

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 2021

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:

(a) select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;

(b) present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

(c) provide additional disclosures when compliance with the specific requirements in IFRS in conformity with the Companies Act 2006 is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance;

(d) state that the Company has complied with IFRS in conformity with the Companies Act 2006, subject to any material departures disclosed and explained in the financial statements; and

(e) make judgements and estimates that are reasonable and prudent.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website www.jupiteram.com/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:

(a) the financial statements, prepared in accordance with IFRS in conformity with the Companies Act 2006, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;

(b) the Strategic Report and Report of the Directors include a fair view of the development and performance of the Company together with a description of the principal and emerging risks and uncertainties that the Company faces; and

(c) in their opinion, the Annual Report and Accounts taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's performance, business model and strategy.

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

(a) there is no relevant audit information of which the Company's Auditors are unaware; and

(b) the Directors have taken all steps required of a company director to make themselves aware of any relevant audit information and to establish that the company's Auditors are aware of that information.

By order of the Board

John Scott

Chairman

28 January 2021

* 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 2021 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 2020. 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 28 January 2021. 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 Company adopts the going concern basis in the preparation of the financial statements:

(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 retranslated at the rates prevailing on that date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in 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.

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:

§ Gains and losses on the realisation of investments,

§ Changes in fair value of investments held at the year-end,

§ Transaction costs,

§ Foreign currency difference,

§ The costs of purchasing Ordinary share capital.

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 2019:

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 2020:

§ IAS 1 and IAS 8 Amendments: Definition of Material

§ IFRS 9, IAS 39 and IFRS 7 Amendments: Interest Rate Benchmark Reform. These will be effective for the financial statements for the year ending 30 September 2021.

With LIBOR expected to be discontinued after the end of 2021, this being part of the loan facility interest calculation, a new reference rate will be implemented upon renewal of the loan facility in September 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 preparation of the Company's financial statements on occasion requires management to make judgements, estimates and assumptions that affect the reported amounts in the primary financial statements and the accompanying disclosures. These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the current and future periods, depending on circumstance.

Management do not believe that any accounting judgements, estimates or assumptions have had a significant impact on this set of financial statements.

3. Income

4. Investment management fee

5. Ongoing Charges

6. (Loss)/Earnings per Ordinary share

The loss per Ordinary share is based on the net loss for the year of £9,500,000 (2019: Return: £9,612,000) and on 89,015,445 (2019: 92,834,572) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.

The (loss)/return 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 £75,131,000 (2019: £93,868,000) and on 85,465,171 (2019: 90,072,974) 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 2019 to 30 September 2020 was £596,000 (year to 30 September 2019: £691,000) with £142,000 outstanding at year end (year to 30 September 2019: £178,000).

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.

9. Contingent assets, liabilities and capital commitments

There were no contingent liabilities or capital commitments outstanding as at 30 September 2019 and 30 September 2020.

10. Post balance sheet event

Since the year end no additional Ordinary shares have been issued.

On 26 November 2020 the Company announced a fourth interim dividend of 1.00p per Ordinary share which was paid on 30 December 2020.

11. Annual Results

This Annual Results announcement does not constitute the Company's statutory accounts for the years ended 30 September 2019 and 30 September 2020 but is derived from those accounts. Statutory accounts for the year ended 30 September 2019 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 30 September 2019 and the year ended 30 September 2020 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 2020 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 Friday, 5 March 2021.

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

29 January 2021

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