Jupiter Second Enhanced Income Trust PLC. Interim Report

Jupiter Second Enhanced Income Trust PLC Interim Report for the six months to 30 April 2009

Contents Investment Objectives and Investment Policy 2 Company Information 3 Financial Highlights 4 Chairman s Statement 6 Manager s Review 7 Capital Structure 9 Top Twenty Investments 11 Cross Holdings in other Investment Companies 11 Interim Management Report 12 Income Statement 13 Balance Sheet 14 Reconciliation of Movements in Shareholders Funds 15 Cash Flow Statement 16 Notes to the Accounts 17 Risk Warnings 21 Investor Information 23 THE COMPANY IS A MEMBER OF THE 1

Investment Objectives and Investment Policy Investment Objectives Investment Policy The objectives of the Company are to repay the capital entitlement of the Zero Dividend Preference shareholders and to maximise the income and return of capital to the Geared Income shareholders. The investment policy of the Company is to invest mainly in a portfolio of UK listed equities, UK equity-related securities (such as convertible securities, preference shares, convertible unsecured loan stock, warrants and other similar securities) and UK fixed interest securities. The equities selected by the Investment Manager as suitable for the portfolio will generally be those judged to be lowly valued, typically offering an attractive dividend yield with sufficiently strong cash generation from their operational activities to grow the dividend to shareholders over a number of years. Such equities are likely to be considered by the Investment Manager to be undervalued by the stock market at the time of purchase and will offer scope for capital gains. The portfolio manager selects each stock on its individual merits as an investment rather than replicating the relevant company s weighting within its benchmark, the FTSE All-Share Index. The portfolio is therefore unlikely to represent the constituents of its benchmark, but instead is intended to offer a well diversified investment strategy focussed on maximising returns from the prevailing economic background. The portfolio manager has complete flexibility to invest any proportion of the Company s investment portfolio in debt securities from time to time. Investment in debt securities will be in convertible bonds, corporate bonds and other debt securities (such as gilts) considered by the Investment Manager to be quasi-cash instruments. Investment in bonds issued by corporate issuers will generally be in those of issuers which are either rated as investment grade issuers or are considered by the Investment Manager to have an equivalent grade. The Investment Manager may also invest in sub-investment grade corporate bonds where it considers that their ratings are likely to improve. The percentage of the portfolio invested in debt securities at any given time will primarily be driven by tactical considerations but will also depend upon the outlook for interest rates and the scope for improved debt ratings. It is the Company s policy to invest no more than 15 per cent. of its total assets in other UK listed closed-ended investment funds as defined in section 15.6.8 of the Listing Rules. 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 Income shareholders. 2

Company Information Directors Manager, Secretary and Registered Office Telephone Facsimile Website Email Custodian J G West, Chairman W M Caldwell C Jones C I C Munro A Nutt Jupiter Asset Management Limited 1 Grosvenor Place London SW1X 7JJ Authorised and regulated by the Financial Services Authority 020 7412 0703 020 7314 4873 www.jupiteronline.co.uk investmentcompanies@jupiter-group.co.uk The Northern Trust Company 50 Bank Street Canary Wharf London E14 5NT Authorised and regulated by the Financial Services Authority Registrars Telephone Website Auditors Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU 0870 162 3100 www.capitaregistrars.com Ernst & Young LLP 1 More London Place London SE1 2AF Company Registration Number 5207816 An investment company under s.833 of the Companies Act 2006. Benchmark Index FTSE All-Share Index (Bloomberg Indication Code: ASX) 3

Financial Highlights for the six months to 30 April 2009 Performance 30.04.09 31.10.08 % Change Total assets less current liabilities, excluding value of Zero Dividend Preference shares 53,292 58,216-8.5 FTSE All-Share Index (Capital)* 2,173.06 2,183.69-0.5 FTSE All-Share Index (Total Return)* +2.1 Share Performance 30.04.09 31.10.08 % Change Zero Dividend Preference shares Middle market price (p) 77.50 71.00 +9.2 Net Asset Value (p) 81.15 78.29 +3.7 Premium/(discount) (%) (4.5) (9.3) Geared Income shares Middle market price (p) 7.00 13.50-48.1 Net Asset Value (p) 3.68 14.38-74.4 Premium/(discount) (%) 90.2 (6.1) Packaged Units Middle market price (p) 75.00 85.5-12.3 Net Asset Value (p) 84.83 92.67-8.5 Premium/(discount) (%) (11.6) (7.7) 4

Financial Highlights for the six months to 30 April 2009 continued Revenue Performance Six months to 30.04.09 Six months to 30.04.08 % Change Revenue after taxation 986 1,560-36.8 Return per Geared Income share (p) 1.57 2.48-36.7 Geared Income Shares Total dividends declared in the period (p) 3.5 1.7 +105.9 Total Return (NAV and dividends) (%) -50.1-33.1 Packaged Units Total dividends declared in respect of the period (p) 3.5 1.7 +105.9 Total Return (NAV and dividends) (%) -4.7-14.0 * This document contains information based on the FTSE All-Share Index. FTSE is a trade mark jointly owned by the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited ( FTSE ) under licence. The FTSE All-Share Index is calculated by FTSE. FTSE does not sponsor, endorse or promote the product referred to in this document and is not in any way connected to it and does not accept any liability in relation to its issue, operation and trading. All copyright and database rights in the index values and constituent list vest in FTSE. 5

Chairman s Statement Performance The six months to 30 April 2009 was a period of poor performance for your Company in continuing difficult and challenging market conditions. The total assets less current liabilities of your Company fell by 8.5 per cent. during the period. By comparison the return on the Company s Benchmark Index, the FTSE All-Share, was -0.5 per cent. (in capital terms) over the same period. The Net Asset Value of the Company s Geared Income shares fell by 74.4 per cent. during the six months under review. Taking the dividend payments into account, the Company provided Geared Income shareholders with a total return of -50.1 per cent. The Zero Dividend Preference shares saw an increase in their Net Asset Value of 3.7 per cent. over the six months under review from 78.29p to 81.15p. The modest discount on the Zero Dividend Preference shares narrowed from 9.3 per cent. at 31 October 2008 to 4.5 per cent. at the end of the period. The Packaged Units are not geared by the Company s split capital structure since they are each comprised of one Geared Income share and one Zero Dividend Preference share. The return on the Net Asset Value of the Packaged Units was -8.5 per cent. over the period. Revenue and Dividends Revenues after tax for the period amounted to 986,000 (which compares with 1,560,000 in respect of the first six months of the 2008 accounting year). The Board has declared two interim dividends of 1.5p and 2.0p in respect of the current financial year. These payments compare favourably with the first two interim dividends of 1.7p in total paid in respect of the 2008 year of account. End of Life The Directors are actively considering the options for continuation or reconstruction of the Company at the end of its life on 30 October 2009. Details are expected to be announced later in the year and a circular will be sent to all shareholders in due course containing full details of our proposals. Outlook The Manager s Review gives information on market conditions and investments and outlines the difficult circumstances faced by shareholders during the worst financial crisis for many decades. The portfolio will continue to adjust to prevailing market conditions, seeking reliable sources of income. Jimmy West Chairman 26 June 2009 6

Manager s Review Market Review In the period under review, global financial markets have slowly come to grips with the immense damage done after the US Treasury permitted the collapse of Lehman Brothers last September. This event caused panic in markets, not only because of the multiplicity of transactions which embedded Lehman into the financial system, but also because it caused increased distrust between market counterparties. At a stroke, all banks and insurance companies once considered to be too big to fail became vulnerable. As banks sought more capital to strengthen their balance sheets either privately or via the government s rescue package, existing shareholders saw the value of their stakes severely diluted. This resulted in a significant fall in bank shares which drove a more general downturn in the equity market. The prospect of a deep recession caused sharp falls in the value of cyclical stocks in sectors such as real estate, industrial metals and automobile parts. Financial markets again experienced turmoil in January and February as banks on both sides of the Atlantic came under heavy selling pressure. The US and UK authorities were pushed into a second round of bail-outs. The Bank of England continued to cut interest rates aggressively from 4.5 per cent., at the start of November, to an effective floor of 0.5 per cent. in March. But since the transmission mechanism whereby cheaper money diffused into the economy had already broken down, the Bank switched to unorthodox methods to increase the supply of money to the economy. It hoped that by buying a vast quantity of 5-25 year gilts and other assets ( 75bn by the end of May) it would ease the deflationary effects of deleveraging and stimulate lending. During the period under review your Company underperformed the FTSE All-Share Index because it was overweight in defensive, income-paying stocks such as BP, Royal Dutch Shell (B), GlaxoSmithKline and AstraZeneca. These were among the main detractors to index returns. Nor did your Company hold low yielding mining stocks such as BHP Billiton and Xstrata which contributed positively to the index towards the end of the period under review. Your Company also carried a high cash weighting (over 20 per cent.) in an attempt to protect the interests of all shareholders against unusually high levels of market volatility. We added further to positions in Admiral, where insurance rates are hardening, GlaxoSmithKline, Tullet Prebon, Centrica and FirstGroup. While not immune to the effects of a slowing economy, some 55 per cent. of the latter s profits are contract-backed. It remains a defensive play capable of growing its dividend. Outlook One notable feature of the current downturn is the degree of synchronisation across economies. We have experienced not so much a crisis within the financial system as a crisis of the financial system. According to an IMF study of 122 recessions, those associated with financial crises tend to be unusually severe, while globally synchronised recessions tend to be long and deep. The current downturn is a rare combination of both, so recovery is likely to be sluggish and reliant on a revival of the US economy. More specifically, besides the restoration of confidence in the financial sector, we need to see signs of stabilisation in the US housing market because the American household represents nearly 20 per cent. of the global economy. Set against this gloomy prognosis, governments have been quick to react with aggressive easing of monetary policy in tandem with fiscal measures (where possible) to support economic activity in the short-term. These actions could help move the recovery forward. While the economic outlook is not great, equity markets have already discounted much of the bad news. A good case can be made for shares at current levels. Earnings multiples are 7

Manager s Review continued low and yields are high, particularly compared with government bonds. Good quality companies with strong market positions and sound balance sheets are trading at levels not seen for many years. In a year when many companies are reducing (or even suspending) dividends, reliable sources of yield have become harder to find, being concentrated among a smaller proportion of very large companies. Oils, gas, beverages, insurers, pharmaceuticals and certain transport stocks are best placed to support dividends with their strong cash flows and low levels of debt. These tend to be diversified global businesses. Those with dollar revenues can also provide additional protection against Sterling weakness in the face of poorer growth prospects. Anthony Nutt Fund Manager Jupiter Asset Management Limited 26 June 2009 8

Capital Structure Zero Dividend Preference Shares Number in issue: 62,822,084 Rights of the shares: The Zero Dividend Preference shares are designed to provide a pre-determined capital entitlement on 30 October 2009 which ranks behind the Company s creditors (if any) but in priority to the capital entitlements of the Geared Income shares. The Zero Dividend Preference shares are not entitled to income and their entire return will take the form of capital. They are not entitled to the revenue reserves of the Company, if any, on a winding-up, even if their entitlement could not otherwise be met. A holder of Zero Dividend Preference shares had an initial capital entitlement of 58.65p per share at 1 November 2004. At inception, the Company s capital structure was designed to provide Zero Dividend Preference shareholders with a pre-determined capital entitlement of 84.13750615p per Zero Dividend Preference share on 30 October 2009. At 30 April 2009 this entitlement amounted to 81.15p per share. The repayment entitlement of 84.13750615p per Zero Dividend Preference share at the planned winding-up date was covered 1.0 times at 30 April 2009 and the Gross Redemption Yield, the annualised return on the Middle Market price, was 17.9 per cent. as at that date. Geared Income Shares The Zero Dividend Preference shares entitle their holders to vote at all general meetings of the Company. In addition, they carry the right to vote as a class on certain proposals which would be likely to materially affect their position. Number in issue: 62,822,084 Rights of the shares: The Geared Income shares are designed to provide holders with income, where the Zero Dividend Preference shares have no entitlement, and capital growth. Geared Income shareholders are entitled to all the Company s surplus assets after satisfying the entitlements of the Zero Dividend Preference shares and the Company s creditors (if any) on the planned winding-up date of 30 October 2009. 9

Capital Structure continued In addition, Geared Income shareholders will be entitled, on a windingup, to receive any undistributed revenues of the Company, subject to all creditors having been paid out in full, even if the cover on the Zero Dividend Preference shares do not receive their full entitlement. The Geared Income shares are geared by the Zero Dividend Preference shares both in terms of income, where the Zero Dividend Preference shares have no entitlement, and capital, where the Zero Dividend Preference shares have a fixed entitlement. If the total assets of the Company were to remain unchanged from 30 April 2009 to the winding-up date of 30 October 2009, the net assets attributable to the Geared Income shares on that date would be 0.69p per share. In order for the Geared Income shares to be repaid at their 30 April 2009 share price of 7.00p, the total assets would have to increase by 7.4 per cent. between 30 April 2009 and the winding-up date. Packaged Units Geared Income shareholders have the right to vote at general meetings of the Company. In addition they will carry the right to vote as a class on certain proposals which would be likely to materially affect their position. Number in issue: 2,944,868* Rights of the shares: Life of the Company The Company s shares are also traded on the London Stock Exchange as packaged units. Each unit comprises one Zero Dividend Preference share and one Geared Income share. * This figure is comprised within the number of Geared Income and Zero Dividend Preference shares identified as being in issue in the paragraphs above. The Company has a planned life until 30 October 2009, on which date the directors are required to convene an Extraordinary General Meeting and propose a resolution requiring the Company to be wound up voluntarily unless the directors have previously been released from that obligation by the Company s shareholders. The limited life of the Company is designed to ensure that all shareholders can realise the underlying Net Asset Value of their shares (after liquidation costs), irrespective of their market price on the winding-up date. 10

Top Twenty Investments as at 30 April 2009 Company Market value 30.04.09 31.10.08 % of total investments Market value % of total investments BP 4,459 10.6 5,751 12.9 Royal Dutch Shell B 3,405 8.1 4,288 9.6 Vodafone 3,271 7.7 3,125 7.0 Glaxosmithkline 2,876 6.8 2,628 5.9 Astrazeneca 2,785 6.6 3,071 6.9 Scottish & Southern Energy 2,269 5.4 1,213 2.7 Centrica 1,910 4.5 1,350 3.0 BT Group 1,808 4.3 2,212 5.0 William Hill 1,567 3.7 685 1.5 Admiral Group 1,453 3.4 1,022 2.3 Sanofi-Aventis 1,444 3.4 1,150 2.6 ENI 1,412 3.3 1,396 3.1 Provident Financial 1,295 3.1 1,213 2.7 Logica 1,275 3.0 900 2.0 Legal & General Group 1,152 2.7 867 1.9 Lloyds TSB Group 1,128 2.7 1,388 3.1 Wincanton 1,025 2.4 1,134 2.5 FirstGroup 926 2.2 826 1.9 Brit Insurance Holdings 888 2.1 870 2.0 Tullet Prebon 831 2.0 427 1.0 Total of Top Twenty Investments 37,179 88.0 Cross Holdings in other Investment Companies As at 30 April 2009, none of the Company s total assets less current liabilities were invested in the securities of other UK listed investment companies (including investment trusts). It is the Company s stated policy that this exposure should not be permitted to exceed 15 per cent. of total assets less current liabilities. 11

Interim Management Report Related Party Transactions During the first six months of the current financial year no transactions with related parties have taken place which have materially affected the financial position or performance of the Company during the period. Details of related party transactions are contained in the Annual Report and Accounts 2008 and on page 20 of this report. Principal Risks and Uncertainties The principal risks and uncertainties associated with the Company s business can be divided into the following areas: market price movements interest rate, liquidity and credit risk, and loss of investment risks status. Information on these risks is set out in the Annual Report and Accounts 2008. In the view of the Board these principal risks and uncertainties are applicable to the remaining six months of the financial year as they were to the six months under review. Directors Responsibility Statement We the Directors of Jupiter Second Enhanced Income Trust PLC confirm to the best of our knowledge that: (a) The condensed set of financial statements have been prepared in accordance with the Accounting Standards Board s statement Half Yearly Financial Reports; (b) The Chairman s Statement, the Manager s Review and the Interim Management Report include a fair review of the information required by Disclosure and Transparency Rule 4.2.7R; and (c) The Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R on related party transactions. The half-yearly financial report has not been audited or reviewed by the Company s auditors. By Order of the Board J G West Chairman 26 June 2009 12

Income Statement for the six months to 30 April 2009 (unaudited) Revenue Six months to 30.04.09 Six months to 30.04.08 Capital Total Revenue Capital Total Loss on investments held at fair value through profit or loss (1,828) (1,828) (13,735) (13,735) Income 1,398 1,398 2,053 2,053 Gross return 1,398 (1,828) (430) 2,053 (13,735) (11,682) Investment management fee (228) (228) (314) (314) Other expenses (166) (166) (179) (179) Net return on ordinary activities before finance costs and taxation 1,004 (1,828) (824) 1,560 (13,735) (12,175) Finance costs (1,793) (1,793) (1,677) (1,677) Net return on ordinary activities before taxation 1,004 (3,621) (2,617) 1,560 (15,412) (13,852) Tax on ordinary activities (18) (18) Net return on ordinary activities after tax 986 (3,621) (2,635) 1,560 (15,412) (13,852) Net return per Geared Income share (Note 2) 1.57p (5.76)p (4.19)p 2.48p (24.53)p (22.05)p The total column of this statement is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement. The financial information does not constitute accounts as defined in section 240 of the Companies Act 1985. 13

Balance Sheet as at 30 April 2009 30.04.09 (unaudited) 31.10.08 (audited) Fixed asset investments Investments at fair value through profit or loss 42,227 44,593 Current assets Debtors 672 1,479 Cash at bank 11,987 12,336 12,659 13,815 Creditors: amounts falling due within one year (1,595) (192) Zero Dividend Preference shares (50,977) (49,184) Net current assets (39,913) (35,561) Total net assets 2,314 9,032 Capital and reserves Called up share capital 628 628 Share premium 3,141 3,141 Special reserve 21,681 21,681 Capital reserve (22,726) (19,105) Revenue reserve (410) 2,687 Total shareholders funds 2,314 9,032 Net Asset Value per Geared Income share (Note 5) 3.68p 14.38p Approved by the Board of Directors and authorised for issue on 26 June 2009 and signed on its behalf by J G West Chairman 14

Reconciliation of Movements in Shareholders Funds for the six months to 30 April 2009 For the six months to 30 April 2009 (unaudited) Share Capital Share Premium Special Reserve Capital Reserve Revenue Reserve Total Balance at 1 November 2008 628 3,141 21,681 (19,105) 2,687 9,032 Net return for the period (3,621) 986 (2,635) Dividends paid and declared 4th interim dividend for year ended 31 October 2008 (1,885) (1,885) 1st interim dividend for period ending 30 October 2009 (942) (942) Dividend declared and unpaid 2nd interim dividend for period ending 30 October 2009 (payable 30 June 2009) (1,256) (1,256) Balance at 30 April 2009 628 3,141 21,681 (22,726) (410) 2,314 For the six months to 30 April 2008 (unaudited) Share Capital Share Premium Special Reserve Capital Reserve Revenue Reserve Total Balance at 1 November 2007 628 3,141 21,681 15,450 1,660 42,560 Net return for the period (15,412) 1,560 (13,852) Dividends paid and declared 4th interim dividend for year ended 31 October 2007 (785) (785) 1st interim dividend for year ended 31 October 2008 (503) (503) Balance at 30 April 2008 628 3,141 21,681 38 1,932 27,420 15

Cash Flow Statement for the six months to 30 April 2009 (unaudited) 2009 2008 Operating activities Net cash inflow from operating activities 1,492 716 Taxation Net tax (paid)/received (18) 6 1,474 722 Capital expenditure and financial investment Purchase of investments (5,079) (9,578) Sale of investments 6,083 20,765 Net cash inflow from capital expenditure and financial investment 1,004 11,187 Equity dividends paid (2,827) (1,288) (Decrease)/increase in cash (349) 10,621 16

Notes to the Accounts for the six months to 30 April 2009 1. Accounting Policies The principal accounting policies all of which have been applied consistently throughout the period are set out below. (a) Basis of Preparation The Financial Statements for the six months to 30 April 2009 have been prepared in accordance with UK Generally Accepted Accounting Principles ( UK GAAP ) and with the Statement of Recommended Practice ( SORP ) for Investment Trust Companies issued by the Association of Investment Companies ( AIC ) in January 2003 and revised in December 2005. The Company continues to adopt the going concern basis in the preparation of the financial statements, although there are uncertainties that the Directors have had to consider in deciding to prepare the financial statements on this basis, which are set out below. The Company has a planned life until 30 October 2009, on which date the directors are required to convene an Extraordinary General Meeting and propose a resolution requiring the Company to be wound up voluntarily unless the directors have previously been released from that obligation by the Company s shareholders. It is the Directors intention to put proposals to shareholders later in the year for the continuation or reconstruction of the Company. The validity of the going concern basis would depend on the Directors proposing the continuation of the Company and such a continuation vote being passed by shareholders. This condition indicates the existence of a material uncertainty which may cast significant doubt on the ability of the Company to continue as a going concern. The primary purpose of a continuation vote is to determine whether (b) (c) shareholders are satisfied to continue the operations of the Company, or whether shareholder interests would be better served by a liquidation or re-organisation of the Company. The Directors will consider the form of proposals to be put to Shareholders over the coming months. The Directors, having considered the prospects of shareholder support for any proposed continuation of the Company, and the future cash flows of the Company, are satisfied that it is appropriate to prepare the financial statements on a going concern basis. Revenue Dividends on investments are included in revenue when the investment is quoted ex dividend. UK dividends are shown net of tax credits. Interest on deposits is accounted for on an accruals basis. The fixed return on a debt security is recognised on a time apportionment basis so as to reflect the yield on the debt security. Where the Company has elected to receive its dividends in the form of additional shares rather than in cash, the amount of the cash dividend is recognised as income. Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital reserves. Expenses Expenses are accounted for on an accruals basis. Management fees, administration and other expenses are charged fully to the revenue column of the income statement. That part of any Investment performance fee which is deemed by the Directors to relate to the capital outperformance of the Company s investments will be charged to capital and that part relating to revenue outperformance will be charged to revenue. Expenses which are incidental to the purchase or sale of an investment are charged to capital. 17

Notes to the Accounts for the six months to 30 April 2009 continued 1. Accounting Policies continued (d) (e) (f) Finance Costs Finance costs are accounted for on an accruals basis, and in accordance with the provisions of Financial Reporting Standard 25 Financial Instruments and are charged in full to the revenue column of the Income Statement. In accordance with the provisions of Financial Reporting Standard 25 Financial Instruments the Zero Preference shares are classified as a liability in the accounts and are charged to the capital column of the Income Statement. Taxation Withholding tax deducted at source from income received is treated as part of the taxation charge in the income account, in instances where it can not be recovered. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more, or right to pay less, tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences between the Company s taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods. Foreign Currency Assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. (g) (h) Foreign currency transactions are translated at the rates of exchange applicable at the transaction date. Foreign currency differences are dealt with in the capital reserve. Capital Reserve The following are accounted for in this reserve: gains and losses on the realisation of investments foreign exchange gains and losses unrealised gains and losses on investments The capital reserve is not available for the payment of dividends. Investments Investments are recognised and derecognised on the trade date where a purchase and sale of an investment is under contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at cost, being the consideration given. All investments are classified as held at fair value through profit or loss. Changes in the fair value of investments listed at fair value through profit or loss and gains and losses on disposal are recognised in the income statement as Gains on investments at fair value through profit or loss. The fair value of listed investments is based on their quoted bid market price at the balance sheet date without any deduction for estimated future selling costs. Foreign exchange gains and losses on fair value through profit and loss investments are included within the changes in the fair value of the investment. 18

Notes to the Accounts for the six months to 30 April 2009 continued 2. Return per Geared Income Share Six months to 30.04.09 Six months to 30.04.08 Net revenue return 986 1,560 Net capital return (3,621) (15,412) Net total return (2,635) (13,852) Number of Geared Income shares in issue during the period 62,822,084 62,822,084 Revenue earnings per Geared Income share (p) 1.57 2.48 Capital earnings per Geared Income share (p) (5.76) (24.53) Total earnings per Geared Income share (p) (4.19) (22.05) The return per Geared Income share figure is based on the net loss for the six months of 2,635,000 (six months to 30 April 2008; net loss of 13,852,000) and on 62,822,084 Geared Income shares being the number of Geared Income shares in issue throughout the period. 3. Transaction Costs During the period expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments in the Income Statement. The total costs were as follows: Six months to 30.04.09 Six months to 30.04.08 Purchases 15 49 Sales 8 28 23 77 4. Comparative Information The financial information contained in this interim report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the six months to 30 April 2009 and 30 April 2008 has not been audited. The information for the year ended 31 October 2008 has been extracted from the latest published audited financial statements. The audited financial statements for the year ended 31 October 2008 have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under section 237 (2) of the Companies Act 1985. 19

Notes to the Accounts for the six months to 30 April 2009 continued 5. Net Asset Value per Geared Income Share The Net Asset Value per share and the Net Asset Value attributable to each class of share as at 30 April 2009, calculated in accordance with the Articles of Association, were as follows: Net Asset Value per share attributable pence 30.04.09 31.10.08 Net assets attributable Net Asset Value per share attributable pence Net assets attributable Geared Income shares 3.68 2,314 14.38 9,032 Net Asset Value per Geared Income share on the balance sheet is based on net assets of 2,314,000 (31 October 2008: 9,032,000) and 62,822,084 (31 October 2008: 62,822,084) Geared Income shares, being the number of Geared Income shares in issue at the end of the period. 6. Related Parties Mr Nutt is a director of Jupiter Asset Management Limited and Jupiter Investment Management Group Limited whose subsidiaries Jupiter Asset Management Limited and Jupiter Administration Services Limited receive investment management and 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 0.2125 per cent. of the net assets 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. 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 (a) the Equity Proceeds (b) Total Assets less current liabilities at the end of the last financial period in respect of which a performance fee was last paid (after deduction of the performance fee paid to the Investment Manager in respect of that period) and (c) 1.10 multiplied by Total Assets less current liabilities at the end of the previous accounting period (after deduction of any performance fee paid to the Investment Manager in respect of that period). In such circumstances, the performance fee will amount to 15 per cent. 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 accounting period. The combined amount of any management and performance fees payable in respect of any twelve month period will not exceed 5 per cent. of the Total Assets less current liabilities of the Company. No performance fee was payable for the six months to 30 April 2009 (2008: nil). Jupiter Administration Services Limited is contracted to provide secretarial, accounting and administrative services to the Company for an annual fee of 86,556 adjusted each year in line with the Retail Price Index payable quarterly. 20

Risk Warnings Performance Past performance is not a guide to future performance. There can be no guarantee that the investment objectives of the Company will be met. An investment in the Company is suitable only for investors who are capable of evaluating the risks and merits of such an investment and who have sufficient resources to bear any loss which might result from such an investment (taking into account the fact that those losses may be equal to the whole amount invested). An investment in the Company will not be suitable for investors seeking an index-linked return on their investment. Investors should consult their stockbroker, bank manager, solicitor, accountant or other independent financial adviser before making an investment in the Company. Investment in the Company should be regarded as long-term in nature and may not be suitable as a short-term investment. The Company s investments are subject to normal market fluctuations and the risks inherent in the purchase, holding or selling of equity securities and related instruments, and there can be no assurance that appreciation in the value of those investments will occur. There can be no guarantee that the full value of the Company s investments would be realisable in the event of sale. There is no guarantee that the market prices of the Geared Income shares will fully reflect their respective underlying Net Asset Values. The Company invests in overseas securities and is exposed to and can hold currencies other than sterling. As a result, exchange rate movements may cause the value of investments to decrease or increase. Other risk factors such as political and economic conditions should also be considered. Conflicts of interest may arise as a result of the Manager acting for both the Company and other funds. The Company may borrow for the purpose of the orderly settlement of transactions or other general working capital purposes or to create structural gearing. Due to the gearing effect of any borrowings undertaken by the Company, shareholders would, to an exaggerated extent, suffer from any underperformance of the Company s assets, compared to the cost of any borrowing and conversely, will benefit from any out-performance relative to any borrowing costs. Where investment trust companies are involved in corporate activity, this may change the risk profile of individual shares, as well as impacting on the portfolio strategy, capital structure and duration of the company. The value of current tax relief depends on individual circumstances. If you have doubts about your tax position you should seek professional advice. ISAs were introduced on 6 April 1999 for an initial ten year period. ISAs are subject to government legislation and as such their tax treatment may be changed in the future. 21

Risk Warnings continued Boiler Room Scams Over the last year, many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based brokers who target UK shareholders, offering to sell them what often turn out to be worthless or high risk shares in US or UK investments. These operations are commonly known as boiler rooms. These brokers can be very persistent and extremely persuasive, and a 2006 survey by the Financial Services Authority ( FSA ) has reported that the average amount lost by investors is around 20,000. It is not just the novice investor that has been duped in this way; many of the victims had been successfully investing for several years. Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports. If you receive any unsolicited investment advice: Make sure you get the correct name of the person and organisation Check that they are properly authorised by the FSA before getting involved by visiting www.fsa.gov.uk/register Report the matter to the FSA either by calling 0845 606 1234 or visiting www. moneymadeclear.fsa.gov.uk If the calls persist, hang up. If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme. The FSA can be contacted by completing an online form at www.fsa.gov.uk/pages/doing/regulated/law/ alerts/overseas.shtml Details of any share dealing facility that the Company endorses will be included in Company mailings. More detailed information on this or similar activity can be found on the FSA website www.moneymadeclear.fsa.gov.uk 22

Investor Information How to Invest in the Company Jupiter Asset Management Limited operates dedicated Investment Companies ISA and Savings Schemes ( Schemes ) which offer a simple and cost-effective means of buying shares in the Company. Investors can use these Schemes to create a monthly savings plan, for lump sum investments or for a combination of both. Maximum Minimum Jupiter Investment Companies Savings Scheme Jupiter Investment Companies Stocks & Shares ISA for 2009/2010 Lump Sum Monthly Lump Sum Monthly N/A N/A 7,200 600 500 50 1,000 125 Jupiter Investment Companies Stocks & Shares ISA Transfer N/A 1,000 Jupiter Investment Companies Cash ISA Transfer N/A 1,000 Direct via Stock Market Please refer to your stockbroker. For further information and details of the terms and conditions of the Schemes please write to Jupiter Asset Management Limited, PO Box 300, West Malling, Kent ME19 4YY, call 0845 30 60 100, email investmentcompanies@jupiter-group.co.uk or connect online to www.jupiteronline.co.uk. Performance Updates Under the Listing Rules of the London Stock Exchange, the Company is required to publish quarterly Interim Management Statements to shareholders. Your Company s statements will include a report from the Investment Manager; an updated Net Asset Value for the Company s shares together with historical performance statistics relative to the Company s benchmark index; a list of the Company s ten largest portfolio holdings; the level of gearing and details of any major investment changes which have taken place during the quarter under review. The Company s Interim Management Statements are announced to the London Stock Exchange through the Regulatory News Service. Much of the information contained in the Interim Management Statement is also included in the Company s monthly fact sheet, which contains key information about its performance, investment portfolio and pricing. The factsheets, together with electronic copies of the most recent full and interim reports and accounts and interim management statement, are available for download from www. jupiteronline.co.uk. Should you wish to be added to an email distribution list for future editions of the monthly fact sheet, please send an email to investmentcompanies@jupiter-group.co.uk. For investors who do not have access to the internet, these documents are also available on request from Jupiter s Customer Services Team on 0845 30 60 100. Further information about the Company is also available from third party websites such as www.hemscott.com, and www.trustnet.com. 23

Investor Information continued Investor Codes Both classes of shares of the Company and the Packaged Units are listed on the London Stock Exchange and their prices are published daily in the Financial Times under Investment Companies. Sedol Number Geared Income shares Zero Dividend Preference shares Packaged Units ISIN Geared Income shares Zero Dividend Preference shares Packaged Units Ticker Geared Income shares Zero Dividend Preference shares Packaged Units B02WRR9 B02WRW4 B02WS10 GB00B02WRR9 GB00B02WRW4 GB00B02WS10 JSE JSEZ JSEU 24

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JUPITER PRIMADONA GROWTH TRUST PLC Section header Jupiter Asset Management Limited is authorised and regulated by the Financial Services Authority whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS. It is a subsidiary of Jupiter Investment Management Group Limited, 1 Grosvenor Place, London SW1X 7JJ. If you are unsure of any investment decisions you should consult an Independent Financial Adviser. 907-06.09 PC 26