Jupiter Second Split Trust PLC : Annual Financial Report Jupiter Second Split Trust PLC Annual Financial Report for the year ended 31 October 2012 The following is an extract from the Company's Annual Report and Accounts for the year ended 31 October 2012. The Annual Report and Accounts have been submitted to the National Storage Mechanism and will shortly be available at www.hemscott.com/nsm.do. The Annual Report and Accounts will shortly be available to be viewed on or downloaded from the Company's website at www.jupiteronline.com CHAIRMAN'S STATEMENT In the period from 1 November 2011 to 31 October 2012, your Company's total assets increased by 3.6%. This compares favourably with the rate of 0.9% for your Company's Benchmark index, 3 month Sterling LIBOR, and the cost of the accrued entitlement of the Company's Zero Dividend Preference shares at 4.3% of total assets for the same period. The geared split capital structure of the Company resulting from the prior entitlement of the Zero Dividend Preference shares meant that the Net Asset Value of the Company's Geared Ordinary shares decreased by 2.3% during the period under review. The Packaged Units are not geared by the Company's split capital structure since they each comprise one Geared Ordinary share and two Zero Dividend Preference shares (the rights of which balance one another). The Net Asset Value of the Packaged Units increased in line with the Company's total assets by 3.6% over the period under review to 108.07p per Packaged Unit from 104.34p. The Net Asset Value of the Zero Dividend Preference shares increased by 6.9% from 33.13p to 35.43p during the period under review. Revenues after tax for the year to 31 October 2012 amounted to £1.155 million representing 0.53p per Geared Ordinary share (compared to £1.928 million representing 0.86p per Geared Ordinary shares for the same period last year). Market Highlights It was another year of tremendous economic uncertainty, which caused significant fluctuations in capital markets throughout the world. The most acute stresses were in the eurozone at the start of the period when markets had lost patience with a divisive and glacially slow political process and the reluctance of richer states to commit more funds to bolster the bailout mechanism in the face of the growing risks that Spain or Italy might require assistance. Interest rates for the bonds of these countries soared, while Standard and Poor's downgraded nine countries in the region, including France. As large holders of regional government bonds, Europe's banks saw heavy falls in their share prices and unsecured lending to these banks dried up. The region appeared to be on the brink of a credit crisis with potentially catastrophic consequences for the global economy. With the political process proving dysfunctional, market pundits feared an unravelling of the single market. The resolve of newly appointed head of the European Central Bank (ECB) Mario Draghi was therefore met with considerable surprise. Working with a limiting constitutional framework, he did what politicians were reluctant to do: introduce a policy on a par with the crisis he sought to address. Through its Long Term Refinancing Operation ('LTRO'), the central bank injected over €1 trillion into European banks. This not only averted a credit crisis by recapitalising the region's banks, but encouraged domestic banks to buy sovereign debt in the region, thereby lowering borrowing costs for highly indebted countries. The calm this policy created was short-lived, however. Spain's economy contracted sharply and its banking sector required a €100 billion bailout. Meanwhile, the growing mood of anti-austerity led to the collapse of the Dutch government and rise of radical political parties in Greece which led to an undecided election in May. This ignited worry that the country would either renege on bailout conditions or opt out of the eurozone all together when elections were re-run in June. Both outcomes were averted, albeit narrowly. The election of socialist President Francois Hollande in France added to the political uncertainty in the region. Hollande fought an anti-austerity campaign and his victory undermined the united front it had shared with Germany under Sarkozy's government. Late in the summer, the ECB was forced again to seek ways to address a growing liquidity crisis. For those countries in desperate need of economic stability in order to balance budgets, a flight of investment capital was a debilitating pattern that had been gathering pace for several months. This capital flight exposed the challenges the ECB faced in trying to implement policies that addressed divergent economic and fiscal needs across the region. To address this problem the ECB announced a policy entitled Open Market Transactions or OMT. This was an offer to governments of the most indebted countries to buy their short-dated bonds in the secondary market and thus bring down borrowing costs and buy time for reforms. At the time of writing, this policy is yet to be taken up by any country, but the announcement in itself was enough to bring down bond yields. While the ECB's actions have gone some considerable way to negating systemic risk in the region, its problems remain considerable. Greece continues to struggle to meet bailout conditions, Spain appears reluctant to take-up the ECB's OMT policy, political factionalism is on the rise and EU summits continue to end largely in disappointment, despite assurances by eurozone leaders that they remain committed to the project overall. Additionally, France and Germany, which have hitherto shown resilience in the face of problems elsewhere in the region, appear to be lurching towards recession. Economic and policy risk in the region therefore remains high. While events in Europe were the root cause of much of the market's volatility, economic conditions elsewhere in the world remain difficult. Japan, which had recovered strongly after the Tohoku earthquake in March 2011, slipped back toward recession later in the period. A marked increase in the Bank of Japan's asset purchase programme and the introduction of a 1% inflation target did little to boost domestic demand against a backdrop of external weakness and growing political tensions with China. The economic growth rate in China slowed for seven consecutive quarters before it appeared to stabilise at a rate of 7.4% in the third quarter of 2012. This slowdown was led by a contraction in manufacturing in the face of export weakness to Europe and other Western countries. The once-a-decade process of appointing a new leader of the Chinese Communist party, which was mired by controversy, appeared to slow policy intervention. However, soon after the appointment of Xi Jinping as the country's next president, the central bank pumped some $60 billion into money markets to help facilitate the government's drive to bolster investment in infrastructure. With inflation falling to 1.7% year on year in October, officials have a lot of room to support the slower growth trajectory if necessary. With Bush-era tax breaks due to expire at the end of 2012, the US presidential election was closely watched by investors. Concern about policy paralysis post the election led to caution among corporations and reluctance to commit to any new capital spending. The Federal Reserve, which was concerned about the slow pace of recovery, took the step of introducing QE3, an open-ended policy of purchasing $40 billion tranches of mortgage-backed securities. Although the US has a significant government debt burden and fiscal deficit to address, the aggressive steps of policy makers in recent years have led to stronger banks and faster public-sector deleveraging than other Western countries. Early signs suggest that the latest Federal Reserve action has lowered mortgage rates and improved consumer confidence. Markets will be watching data closely to see if this results in the sort of demand necessary to boost employment, and therefore the tax receipts necessary to counteract a drop in stimulus and ultimately grow to a level sufficient to reduce government debt. Persistent macroeconomic uncertainty and market volatility have vindicated our decision to restructure the Trust in November 2009. This has been reflected in the steady absolute gain and very low volatility of returns that your Manager has achieved since these changes were implemented. The flexibility to invest across a number of asset classes using sophisticated long and short investment techniques has been particularly useful to neutralise asset price risks and I recommend the Manager's review for further details of how he has positioned the portfolio to profit during these uncertain conditions. Gordon Campbell Chairman 19 February 2013 Manager's Review For the year to 31 October 2012 the value of the Trust's total assets increased by 3.6% compared to 0.9% for its benchmark, the 3 month Sterling LIBOR Index. From the Trust's reconstruction on 3 November 2009 to 31 October 2012, the value of total assets has increased by 10.0% compared to 2.3% for the benchmark. Market review During the period under review, the Western economy continued to be mired in problems related to dangerously high government-debt levels. This made conditions in asset markets particularly hazardous. Europe remained of most concern. Developments in this region sustained the "risk on, risk off" behaviour that has become the norm in asset markets since the credit crisis some five years ago. Early in the period, the European Central Bank (ECB) was forced to inject €1 trillion in cheap liquidity into the banking sector to avert a credit crisis. However, it was only a matter of months before the next crisis ensued. In May, agitation against German-led austerity across the region led to the rise of radical parties in general elections and fears that Greece was on the brink of leaving the monetary union. Meanwhile, following the bailout of Bankia, Spain's banks appeared dangerously close to collapse, prompting the EU to commit €100 billion to buttress the sector. So grave were the concerns about southern Europe, money fled from the south and was placed in the bonds of perceived havens such as Germany at negative yields (i.e. investors were willing to pay to hold these bonds rather than receive coupons). In attempt to stop this debilitating transfer of funds, the ECB was forced into further unorthodox policies, taking the radical and constitutionally controversial step of proposing to backstop the bond markets of beleaguered sovereigns, albeit conditionally. The US economy, meanwhile, continued to grow at a sluggish pace. Although it remained in better shape than that of Europe, corporate profitability started to contract towards the end of the period and businesses became nervous about the looming "fiscal cliff" when some $600 billion in Bush-era tax breaks expire at the end of 2012. On concern that the US economy faced long term structural damage due to a falling job participation rate and languishing consumer demand, the US Federal Reserve introduced a programme of unlimited quantitative easing ("QE3") in September. Investment The Trust's cautious strategy continued to generate a solid absolute return, while keeping the overall volatility of the Fund's returns at a very low level, especially in comparison to stock market indices. Overall, this strategy involved a balance of positions in currency, fixed income and equity markets, taking care to neutralise asset price risk where necessary. In particular, direct exposure to individual equities was kept to the minimum due to our on-going concerns about the potential for market shocks as Western governments struggle to contain budget deficits and burgeoning sovereign debt levels. Most notably, pairing a short position in the euro against longs in US stock index derivatives paid off during the year. We continue to believe the pairing of a short in the euro with longs in US equities is sensible given the marked divergence between the two economic regions. We have been careful about our exposure to the US dollar, however. While it has been prudent to hold longs in this safe-haven currency during periods of heightened concern about the eurozone, it has been very sensitive to Federal Reserve policy and we cut our exposure to the currency ahead of QE3 and remained cautious of the currency throughout the election period, particularly as the re-election of Obama ostensibly means protracted dilutive policies of the Federal Reserve. We prefer long positions in currencies such as the Norwegian krone and Canadian dollar (although not exclusively), the latter being somewhat of a proxy for the US recovery without the government balance sheet risk. These currencies are also backed by solid balance sheets and enjoy relatively low levels of volatility. The contribution of the fixed interest portion of the Fund was also positive. Our pairing of longs in AAA-rated Australian Government bonds against short positions in Japanese Government bonds added good value. Early in the period, we took the decision to take profits in our Australian bonds after a significant rally, reinvesting the proceeds in a high-yield bond issued by Barclays. While the latter benefited from the ECB's liquidity measures in December and January, we took the precaution of locking in profits made by this holding when the LIBOR scandal emerged in July (although this scandal had limited impact on the price of these bonds). Overall, we continue to hold a short position in Japanese Government bonds against high yielding corporate bonds. The recent contraction in Japan's economy continues to put pressure on the government's balance sheet at a time of political uncertainty. Outlook Western governments are making little headway in the battle to contain fiscal deficits, forcing central banks into ever more radical policies to counter the economic consequences of austerity and widespread deleveraging. Progress at a policy level appears to have stalled in Europe, which continues to suffer a downward austerity-led spiral in the economy. In a recent speech, Germany's Chancellor Merkel suggested the crisis may last another five years, a timeframe that may be too long given growing public disquiet and political fragmentation. In contrast to Europe, public-sector deleveraging in the US is relatively advanced and bank recapitalisation has left the economy in a far stronger position. An extension to tax breaks, combined with the Fed's current quantitative easing programme, may improve conditions further, particularly if the uptick in consumer confidence is sustained. However, the country's longer term debt problem remains and it will be a tough battle to wean the economy off the fiscal and monetary policies that have been elephantine in scale, but managed to stimulate only a lukewarm recovery. Phillip Gibbs Jupiter Asset Management Limited 19 February 2013 Investment Objective The objective of the Company is to achieve absolute returns. The Company aims to provide Geared Ordinary shareholders with capital growth, with income as a secondary objective and to provide Zero Dividend Preference shareholders with a predetermined final capital entitlement on the Winding-Up Date. Investment Policy The investment policy of the Company is to invest in listed equities and equity related securities (such as convertible securities, preference shares, convertible unsecured loan stock, warrants and other similar securities). The Investment Manager ('Jupiter Asset Management Limited') is not limited in the asset allocation of the Company's investment portfolio between sectors, geographic regions or the types of equities and equity related securities in which the Company may invest, but instead the Investment Manager considers each potential investment on its own merits. The Investment Manager focuses on the sectors that he considers to be the most undervalued areas of the market from time to time and the allocation of assets between different sectors will be determined by the Investment Manager in its absolute discretion. In addition to equities, and equity related securities (including derivatives), the types of investment and assets in which the property of the Company may be invested include cash, near cash, fixed interest securities, currency exchange transactions, index linked securities, money market instruments (MMIs) and deposits. These instruments may be used for the purposes of both efficient portfolio management and, when it is considered to be appropriate for investment purposes by the Investment Manager and the Board, to adopt an investment strategy aimed at achieving positive returns across market cycles with low levels of volatility. This strategy will seek to take advantage of specific macroeconomic circumstances and market pricing anomalies. At times the portfolio may be concentrated in any one or a combination of such assets and as well as holding physical long positions the Investment Manager may create synthetic long and short positions through the use of equity related securities. The Investment Manager will seek to limit volatility through diversified portfolio holdings and sector exposures, active management of the Company's net and gross portfolio exposure to the market, and through the use of derivatives. The Company's investment portfolio is focused on companies where, in the opinion of the Investment Manager, valuations are low and growth in earnings or assets is not fully appreciated. The Investment Manager seeks to identify companies within growth industries which enjoy certain key characteristics, including an imaginative, proven and incentivised management team and balance sheet strength. The Company manages an adequate spread of investment risk, with no one investment making up more than 10% of the Total Assets of the Company at the time of investment. The Board has not set an objective of a specific Portfolio Yield for the Company and the level of such yield is expected to vary with the sectors and geographical regions to which the company's portfolio is exposed at any given time. However, substantially all distributable revenues that are generated from the Company's investment portfolio are expected to be paid out in the form of annual dividends. It is the Company's stated policy that not more than 10%, in aggregate, of Total Assets may be invested in other UK investment companies unless such companies have stated investment policies to invest no more than 15% of the Total Assets in other UK listed investment companies (including listed investment trusts). The Company may make use of short-term borrowings such as an overdraft facility for liquidity and investment purposes in order to gear the returns on the Company's investment portfolio but in any event borrowings will not exceed, at any one time, 25% of Total Assets without shareholder approval by ordinary resolution. The Company may also hedge currency exposures. The Company may also purchase unlisted securities (up to a maximum of 5% of Total Assets). Any material change in the investment policy of the Company described above may only be made with the approval of Shareholders by an ordinary resolution and the separate class approval of Geared Ordinary shareholders. BENCHMARK INDEX 3 month sterling LIBOR calculated as at the first business day of each calendar month. RISKS AND UNCERTAINTIES The principal risk factors that may affect the Company and its business can be divided into the following areas: 1.Investment Strategy and Share Price Movement 2.Foreign currency Movements 3.Interest Rates 4.Derivatives 5.Liquidity Risk 6.Gearing Risk 7.Discount to Net Asset Value 8.Regulatory Risk 9.Credit and Counterparty Risk 10.Loss of Key Personnel 11.Operational 12.Financial The investment Manager's policies for managing the financial risks are either summarised below or can be found in the Annual Report & Accounts for the year ended 31 October 2012, (which will be available short on the Company's website) and have been applied throughout the year. Policy a.Foreign Currency Risk The Company may hedge against foreign currency movements affecting the value of the investment portfolio where adverse movements are anticipated but otherwise takes account of this risk when making investment decisions. b.Market Price Risk By the very nature of its activities, the Company's investments are exposed to market price fluctuations. The Company's exposure to market price risk as at 31 October 2012 is represented by its investments held on the Statement of Financial Position under the heading "Investments held at Fair Value through Profit or Loss". Further information on the investment portfolio and investment policy is set out in the Manger's Review. c.Interest Rate Risk Interest rate movements may affect: a.The fair value of investment of fixed interest securities b.The level of income receivable from interest-bearing securities and cash at bank and on deposit d.Liquidity Risk The Company's assets comprise mainly readily realisable securities which can be sold to meet funding requirements if necessary. e.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. f.Primary Financial Instruments Fair values of financial assets and financial liabilities are given in Note 15(f) to the Accounts g.Financial Assets and liabilities - full details are given in Note 15 (g) to the accounts h.Fair value hierarchy The Company adopted the amendments to IFRS 7 full details are given in Note 15 (h) to the accounts (i) Movements in Level 3 investments 2012 £'000 At the beginning of the year 1,317 Movement during the year : Movements in valuation (578) _______ At the end of the year 739 _______ i.Use of Derivatives The Company may take short positions (using contracts for difference) in respect of a small number of large capital securities with the view to enhance the returns to shareholders and manage risk of the portfolio. STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 October 2012 Year ended 31 October 2012 Year ended 31 October 2011 Revenue Capital Revenue Capital Return Return Return Return Total Total £'000 £'000 £'000 £'000 £'000 £'000 Gain/(loss) on - 2,045 2,045 - (2,041) (2,041) investments at fair value through profit or loss Foreign exchange gain - 6,252 6,252 - 3,929 3,929 Income from investments 3,399 - 3,399 4,010 - 4,010 Interest 661 - 661 602 - 602 ______ ______ ______ ______ _____ _____ Total income 4,060 8,297 12,537 4,612 1,888 6,500 ______ ______ ______ ______ _____ _____ Investment management (1,752) - (1,752) (1,655) - (1,655) fee Investment performance - (9) (9) - - - fee Other expenses (414) - (414) (387) (17) (404) ______ ______ ______ ______ _____ _____ Total expenses (2,166) (9) (2,175) (2,042) (17) (2,059) ______ ______ ______ ______ _____ _____ Net return before finance costs and taxation 1,894 8,288 10,182 2,570 1,871 4,441 Interest payable 1 - 1 (11) - (11) Finance costs of Zero - (9,944) (9,944) - (9,274) (9,274) Dividend Preference shares ______ ______ ______ ______ _____ _____ Net return before taxation 1,895 (1,656) 239 2,559 (7,403) (4,884) Taxation (740) (10) (750) (631) 21 (610) ______ ______ ______ ______ _____ _____ Net return after 1,155 (1,666) (511) 1,928 (7,382) (5,454) taxation ______ ______ ______ ______ _____ _____ Return per Geared 0.53 0.77 (0.24) 0.89 (3.41) 2.52 Ordinary share (pence) The total column of this statement is the profit and loss of the Company, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance produced by the Association of Investment Companies (AIC). All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. STATEMENT OF FINANCIAL POSITION as at 31 October 2012 2012 2011 £'000 £'000 Non-current assets Investments held at fair value through profit or 43,059 94,562 loss Current assets Receivables 4,708 18,348 Open forward contracts 143,753 103,133 Cash and cash equivalents 189,119 115,841 _______ _______ 337,580 237,322 _______ _______ Creditors: amounts falling due within one year (953) (1,329) Open forward contracts (145,875) (104,230) _______ _______ Net current assets 190,752 131,763 _______ _______ Total assets less current liabilities 233,811 226,325 _______ _______ Creditors: amounts falling due after more than one year Zero Dividend Preference shares (153,313) (143,369) _______ _______ Total net assets 80,498 82,956 ======= ======= Capital and reserves Called up share capital 1,237 1,237 Share premium 26,321 26,321 Special reserve 30,530 30,530 Retained earnings 22,410 24,868 _______ _______ Total equity 80,498 82,956 ======= ======= Net Asset Value per Geared Ordinary share 37.21p 38.08p* Approved by the Board of Directors and authorised for issue on 19 February 2013 and signed on its behalf by: G A Campbell Chairman Company Registration Number - 5207714 *For consistency 2011 figures included JSST Securities Limited STATEMENT OF CHANGES IN EQUITY for the year ended 31 October 2012 Share Share Special Retained Capital Premium Reserve Earnings Total £'000 £'000 £'000 £'000 £'000 For the year ended 31 October 2012 31 October 2011 1,237 26,321 30,530 24,868 82,956 Net return for the year - - - (511) (511) Dividend paid - - - (1,947) (1,947) ______ _____ _____ _______ _______ Balance at 31 October 2012 1,237 26,321 30,530 22,410 80,498 ______ _____ _____ _______ _______ Share Share Special Retained Capital Premium Reserve Earnings Total £'000 £'000 £'000 £'000 £'000 For the year ended 31 October 2011 31 October 2010 1,237 26,321 30,530 32,035 90,141 Net return for the year - - - (5,454) (5,454) Dividend paid - - - (1,731) (1,731) ______ _____ _____ _______ _______ Balance at 31 October 2011 1,237 26,321 30,530 24,868 82,956 ______ _____ _____ _______ _______ CASH FLOW STATEMENT for the year ended 31 October 2012 Year ended Year ended 31 October 2012 31 October 2011 £'000 £'000 Cash flows from operating activities Purchases of investments (79,890) (136,180) Sales of investments 133,932 152,643 Realised gain on foreign currency 6,252 3,929 Investment income received 4,090 4,819 Deposit Interest received 658 599 Investment management fee paid (1,729) (1,649) Other cash expenses (398) (361) Change in open forward currency contracts 1,025 (2,132) Payments from/(to) Contracts for Difference 12,745 (12,900) (CFD) and Futures and Options counterparty _______ _______ Net cash inflow from operating activities 76,685 8,768 before finance costs and taxation _______ _______ Interest received/(paid) 1 (11) Taxation (1,171) (667) _______ _______ Net cash inflow from operating activities 75,515 8,090 _______ _______ Cash flows from investing activities Issue costs paid - (17) Dividend paid (1,947) (1,731) Payments to subsidiary (290) (246) _______ _______ Increase in cash 73,278 6,096 _______ _______ Change in cash and cash equivalents Cash and cash equivalents at start of year 115,841 109,745 _______ _______ Cash and cash equivalents at end of year 189,119 115,841 _______ _______ NOTES: 1. Income Year ended Year ended 31 October 2012 31 October 2011 £'000 £'000 Income from investments: Dividends from UK companies - 39 Dividends from overseas companies 178 220 Corporate Bond Income 2,388 2,742 Income from government stock 833 1,009 3,399 4,010 ___ ___ Other income: Deposit interest 661 602 ___ ___ Total Income 4,060 4,612 Total income comprises Dividends 178 259 Fixed Interest 3,221 3,751 Deposit interest 661 602 4,060 4,612 Income from investments: Listed in the UK 1,498 1,349 Listed overseas 1,901 2,661 3,399 4,010 2 Reconciliation of Net return before finance costs and taxation to net cash inflow from operating activities 2012 2011 £'000 £'000 Net return before finance costs and taxation 10,182 4,441 Gain on fixed asset investments through profit or loss (2,045) (2,041) Loss on contracts for difference (1,192) (8,211) Gain on futures & options 999 5,420 Purchases of investments (79,890) (136,180) Sales of investments 133,932 152,643 Increase in open forward contract liability 1,025 2,132 Issue costs charged to capital - (17) Decrease in prepayments, other debtors and accrued income 690 513 Decrease/(increase) in amount due from contracts for 12,938 (10,110) difference and futures & options counterparty Increase in other creditors and accruals 46 28 _____ _____ 76,685 8,768 3.Related parties Mr Richard Pavry is an employee of Jupiter Asset Management Limited which receives investment management fees as detailed below. Jupiter Administration Services Limited, a company within the same group as Jupiter Asset Management Limited receives administration fees as set out below. Jupiter Asset Management Limited is contracted to provide investment management services to the Company (subject to termination by not less than 12 months' notice by either party) for a quarterly fee of 0.1875% of the Total Assets less current liabilities of the Company excluding the value of any Jupiter managed investments payable in arrears on 31 January, 30 April, 31 July and 31 October in each year. Management fees of £438,504 were outstanding as at 31 October 2012 (2011: £415,324). Jupiter Asset Management Limited is also entitled to an investment performance fee if Total Assets less current liabilities (after adding back any dividends paid or performance fee accrued) at the end of any given accounting period have increased over the greatest of three 'high water marks', being (i) the Initial Total Assets; (ii) the Total Assets on the last business day of a calculation period in respect of which a performance fee was last paid (after deduction of any performance fee paid to the Investment Manager in respect of that period); and (iii) the Total Assets on the last business day of the previous calculation period (after deduction of any performance fee paid to the Investment Manager in respect of that period) increased by the total return on the Benchmark index over the course of the calculation period, The Benchmark index being the higher of: (i) the annualised cost of the ZDP Share accrual expressed as a percentage of Total Assets; (ii) the Hurdle Rate on the ZDP Shares; and (iii) 3 month sterling LIBOR calculated as at the first business day of each calendar month. In such circumstances, the performance fee will amount to 15% of any such excess. The calculation of the total amount of any performance fee will be adjusted for the repurchase or redemption of Shares in any given accounting period and/or for the change in any borrowings by the Company in any given accounting period. The performance fee will be calculated by reference to the Adjusted Total Asset Value as at the last day of the relevant calculation period. The combined amount of any management and performance fees payable in respect of any 12 month period will not exceed 4.99% of the Net Asset Value of the Geared Ordinary shares and the ZDP Shares (as at the last day of the relevant period) and, to the extent that any such fees would otherwise exceed 4.99% of such Net Asset Value, they will be waived by the Investment Manager and will not be carried forward. There was an investment performance fee payable for the year ended 31 October 2012 of £9,585 (2011: nil) which was outstanding at the year end. Jupiter Administration Services Limited is contracted to provide secretarial, accounting and administration services to the Company for an annual fee of £94,393 adjusted each year in line with the Retail Price Index payable quarterly. None of the fee payable for the year ended 31 October 2012 was outstanding at the year end (2011: nil). The Company has invested from time to time in funds managed by Jupiter Investment Management Group Limited or its subsidiaries. As at 31 October 2012 there was one such investment, East European Food Fund representing 0.004% of total assets including cash. (2011: two investments representing 2.4%). 4. Going Concern The Company's business activities, capital structure and borrowing facilities, together with the factors likely to affect its future development, performance and position are set out in the Manager's Review above and the Report of Directors which is contained within the Annual Report & Accounts which will be published shortly. In addition, Note 15 to the financial statements includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk. The Company's assets consist mainly of securities which are readily realisable, its ongoing expenses are low relative to its net assets and therefore the Directors consider that the Company has appropriate financial resources to enable it to meet its day-to-day working capital requirements. The Directors review a rolling 12 month forecast and the Company's list of investments at each meeting and they consider that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. 5. Directors' Responsibilities for the Financial Statements The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable United Kingdom law and those International Financial Reporting Standards ('IFRS') as adopted by the European Union. Under Company law the Directors must not approve the financial statements unless they are satisfied that they present fairly the financial position of the Company and the financial performance and cash flows of the Company for that period. In preparing the financial statements, the Directors are required to: (i) select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and then applying them consistently; (ii) present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; (iii) provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; (iv) state that the Company has complied with IFRS, subject to any material departures disclosed and explained in the financial statements; and (v) make judgements and estimates that are reasonable and prudent. The Directors are responsible for keeping proper 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 Company 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. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. 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. 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, who are listed on page 6 of the Report & Accounts, confirm to the best of their knowledge that: (i) the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and (ii) the Manager's Review includes a fair view of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that the Company faces. So far as each of the directors is aware at the time the report is approved: (i) there is no relevant audit information of which the Company's auditors are not aware; and (ii) the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. The Annual General Meeting of the Company has been convened for Wednesday 27 March 2013 at 11.30am. The above financial information does not constitute statutory accounts as defined in section 434(3) of the Companies Act 2006 of the Company. The statutory accounts for the year to 31 October 2011 have been delivered to the Registrar of Companies. The Annual Report and Accounts are expected to be posted to all registered shareholders shortly and copies may shortly be obtained from the registered office of the Company at 1 Grosvenor Place, London SW1X 7JJ or downloaded from the Company's section of Jupiter Asset Management Limited's website (www.jupiteronline.com). Monthly factsheets for Jupiter's investment trust clients are available for download from www.jupiteronline.com and by post or fax on request from the company secretarial department. Enquiries: Celia Whitten Company Secretarial Department Jupiter Asset Management Limited firstname.lastname@example.org 020 7314 5565 Richard Pavry Jupiter Asset Management Limited 020 7412 0703 ------------------------------------------------------------------------------ This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Jupiter Second Split Trust PLC via Thomson Reuters ONE HUG#1679332
Jupiter Second Split Trust PLC : Annual Financial Report
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