RIGHTS AND ISSUES
INVESTMENT TRUST PLC
Annual Financial Report
for the year ended 31st December 2024
Front cover image
(source: Shutterstock)
Inside front cover image
(source: Shutterstock)
Contents
Investment Objective, Policy and Approach .................................................................................................................................................. 2
Capital Structure........................................................................................................................................................................................................... 2
Historic Record.............................................................................................................................................................................................................. 3
Company Information................................................................................................................................................................................................ 4
Registration Details...................................................................................................................................................................................................... 4
Notice of Annual General Meeting ..................................................................................................................................................................... 5
Chairman’s Statement................................................................................................................................................................................................ 8
Investment Manager’s Review .............................................................................................................................................................................. 10
Portfolio Statement................................................................................................................................................................................................... 13
Strategic Report........................................................................................................................................................................................................... 14
Report of the Directors .......................................................................................................................................................................................... 28
Corporate Governance Statement.................................................................................................................................................................... 32
Report of the Audit, Risk and Compliance Committee........................................................................................................................... 37
Directors’ Annual Remuneration Report......................................................................................................................................................... 40
The Company’s Policy on Directors’ Remuneration .................................................................................................................................. 42
Statement of Directors’ Responsibilities ........................................................................................................................................................ 45
Independent Auditor’s Report ............................................................................................................................................................................ 46
Statement of Comprehensive Income ............................................................................................................................................................ 53
Statement of Financial Position .......................................................................................................................................................................... 54
Statement of Changes in Equity......................................................................................................................................................................... 55
Cash Flow Statement............................................................................................................................................................................................... 56
Notes to the Financial Statements.................................................................................................................................................................... 57
Glossary of Terms (including Alternative Performance Measures)..................................................................................................... 70
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
1
Investment Objective, Policy and Approach
The Company’s objective is to exceed the benchmark index over the long term whilst managing risk.
The Company invests in equities with an emphasis on smaller companies. UK smaller companies will normally
constitute at least 80% of the investment portfolio. UK smaller companies include both listed securities and those
admitted to trading on the Alternative Investment Market (“AIM”).
The investment portfolio will normally lie in the range of 80% to 100% of shareholders’ funds with the remainder
being held in cash.
In January 2021 the Board thoroughly reviewed the performance of the Company in the context of the investment
objective, the investment policy and the continuation of the Company. The Directors unanimously supported the
continuation for a minimum period of five years to 2026. The Directors continued to review the Company’s
performance against its Key Performance Indicators throughout the financial year and, based on this review, the
Board continues to support this assessment.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
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Capital Structure
ISSUED SHARE CAPITAL
(at 31st December 2024)
4,841,803 Ordinary shares of 25p each.
INCOME ENTITLEMENT
Equal entitlement to dividends and other distributions.
CAPITAL ENTITLEMENT
Equal entitlement to the surplus assets.
VOTING
One vote per Ordinary share.
PRICE (mid-market)
(at 31st December 2024)
2,380.0p
DIVIDEND YIELD*
1.8%
DISCOUNT*
(at 31st December 2024)
6.4%
*Alternative Performance Measure (APM). Further
information on APMs is shown on pages 14 and 15.
DISCOUNT MANAGEMENT POLICY
On 7th December 2016, the Company implemented
share buy-back arrangements to encourage the level
of discount to be not more than 10%.
SHARE BUY BACKS
During the year to 31st December 2024, the Company
bought back 778,881 Ordinary shares for cancellation
and accordingly paid £17.7 million consideration. In
accordance with the Board’s announcement in August
2024, the Company will continue to repurchase up to
an average of £1 million of the Company’s shares each
calendar month on a rolling basis during the 12 months
ending 31st July 2025, subject to the renewal of the
share buyback authority at the forthcoming Annual
General Meeting (“AGM”). The Directors will keep the
operation of the buyback programme under review in
the context of the Discount Management Policy and
share price performance.
RIGHTS AND ISSUES INVESTMENT TRUST PLC (“THE COMPANY”) MAY BE LIQUIDATED AT ANY TIME, BUT
THE BOARD OF DIRECTORS HAS CONCLUDED THAT IT IS NOT ITS PRESENT INTENTION TO DO SO PRIOR TO
25TH JULY 2026.
Note: The above is a summary of rights. For full information shareholders should refer to the Articles of Association.
Historic Record
Net asset value Net FTSE All Share
Year to Net asset value per share dividend FTSE All Share Index (Rebased
31st December per share (Index 1984 = 100) per share Index 1984 = 100)
1984 29.0p 100 3.80p 592.94 100
1990 75.4p 260 7.50p 1032.60 174
1995 175.0p 602 10.50p 1802.56 304
2000 473.9p 1631 25.50p 2983.81 503
2005 732.0p 2520 40.50p 2847.00 480
2010 776.4p 2673 25.50p 3094.41 522
2011 751.2p 2586 25.50p 2857.88 482
2012 962.0p 3312 26.75p 3093.41 522
2013 1382.5p 4759 40.00p* 3609.63 609
2014 1297.1p 4465 36.00p 3532.74 596
2015
†
1595.6p 5492 36.00p 3444.26 581
2016 2002.2p 6892 52.50p* 3873.22 653
2017 2372.3p 8166 30.75p 4221.82 712
2018 2118.1p 7291 31.50p 3675.27 620
2019 2275.2p 7832 32.25p 4196.47 709
2020 2258.9p 7776 32.25p 3673.63 619
2021 3036.6p 10471 34.75p 4208.02 710
2022 2283.2p 7873 40.00p 4075.13 688
2023 2337.1p 8059 43.00p 4232.01 714
2024
2543.4p 8770 44.00p 4467.8 754
* Includes Special Dividend
† From 2015 onwards the historic record is for the Company only and not the Group.
Note: Until 2016 the net asset value per share was based on the Capital shares adjusted for the reconstruction
(four Ordinary shares for each Capital share). Thereafter, performance is based on the Ordinary shares, formerly
named the Income shares (the only remaining share class).
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
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Company Information
DIRECTORS Dr A. J. HOSTY (Chairman)
S. J. B. KNOTT
J. B. ROPER
M. H. VAUGHAN
REGISTERED OFFICE Hamilton Centre
Rodney Way
Chelmsford CM1 3BY
WEBSITE www.jupiteram.com/rightsandissues
INVESTMENT MANAGER/ALTERNATIVE JUPITER UNIT TRUST MANAGERS LIMITED
INVESTMENT FUND MANAGER The Zig Zag Building
70 Victoria Street
London SW1E 6SQ
investmentcompanies@jupiteram.com
SECRETARY/ADMINISTRATOR APEX FUND ADMINISTRATION SERVICES (UK) LIMITED
Hamilton Centre
Rodney Way
Chelmsford CM1 3BY
SOLICITORS EVERSHEDS SUTHERLAND (INTERNATIONAL) LLP
1 Wood Street
London EC2V 7WS
AUDITOR ERNST & YOUNG LLP
Atria One
144 Morrison Street
Edinburgh
EH3 8EB
REGISTRARS MUFG CORPORATE MARKETS (Formerly LINK GROUP)
Central Square
29 Wellington Street
Leeds LS1 4DL
BROKERS CAVENDISH CAPITAL MARKETS LIMITED
One Bartholomew Close
London EC1A 7BL
CUSTODIAN/DEPOSITORY NORTHERN TRUST COMPANY
50 Bank Street
Canary Wharf
London E14 5NT
Registration Details
Company Registration Number: 00736898 (Registered in England)
SEDOL number: 0739207
ISIN number: GB0007392078
London Stock Exchange (EPIC) Code: RIII
Global Intermediary Identification Number (GIIN): I2ZVNY.99999.SL.826
Legal Entity Identifier (LEI): 2138002AWAM93Z6BP574
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
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Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of the members of Rights and Issues Investment Trust Public
Limited Company will be held at the Zig Zag Building, 70 Victoria Street, London SW1E 6SQ on 24th March 2025,
at 12 noon, for the following purposes:
Ordinary Business
1. To receive the audited financial statements and Reports of the Directors and Auditor for the year ended
31st December 2024.
2. To approve the Annual Report on Directors’ Remuneration, set out on pages 40 to 44 in the Annual Report and
Financial Statements 2024 (excluding the Remuneration Policy on page 42), for the financial year ended 31st
December 2024.
3. To approve the payment of a final dividend of 32.00 pence per Ordinary share for the financial year ended
31st December 2024 to holders of shares at the close of business on 7th March 2025.
4. To re-elect Dr A. J. Hosty as a Director.
5. To re-elect Mr S. J. B. Knott as a Director.
6. To re-elect Mr J. B. Roper as a Director.
7. To re-elect Ms M. H. Vaughan as a Director.
8. To re-appoint Ernst & Young LLP as Auditor to the Company, to hold office until the end of the next general
meeting at which accounts are laid before the Company.
9. To authorise the Directors of the Company to determine the Auditor’s remuneration.
Special Business
To consider and, if thought fit, pass resolution 10 as a Special Resolution, as follows:
10. THAT the Company be and is hereby generally and unconditionally authorised in accordance with section 701 of
the Companies Act 2006 to make market purchases (within the meaning of section 693 of the Companies Act
2006) of Ordinary shares, provided that:
10.1 the maximum aggregate number of Ordinary shares hereby authorised to be purchased shall be 719,900
(representing approximately 14.99% of the Ordinary shares in issue on 19th February 2025);
10.2 the minimum price (exclusive of expenses) which may be paid for an Ordinary share is its nominal value;
10.3 the maximum price (exclusive of expenses) which may be paid for an Ordinary share is not more than the
higher of (i) an amount equal to 105% of the average market value of the Ordinary shares for the five business
days immediately preceding the day on which the Ordinary share is purchased; and (ii) the higher of the last
independent bid and the highest current independent bid on the London Stock Exchange when the purchase
is carried out, or such other amount as may be specified by the FCA from time to time;
10.4 the authority hereby conferred will expire at the conclusion of the next Annual General Meeting of the
Company unless such authority is renewed prior to such time; and
10.5 the Company may make a contract to purchase Ordinary shares under the authority hereby conferred prior
to the expiry of such authority which will or may be executed wholly or partly after the expiration of such
authority and may make a purchase of Ordinary shares pursuant to any such contract; provided that all
Ordinary shares purchased pursuant to this authority shall be cancelled or transferred into treasury
immediately upon completion of the purchases.
By Order of the Board,
APEX FUND ADMINISTRATION SERVICES (UK) LIMITED
Secretary, 20th February 2025
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
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Notice of Annual General Meeting (continued)
Notes:
1. Any member entitled to vote at the meeting is entitled to appoint one or more proxies (who need not be a shareholder of the Company)
to vote on behalf of that member. Shareholders are nevertheless encouraged by the Board to appoint the Chairman of the meeting as their
proxy to vote on their behalf. Members can also send any questions that they might like answered by the Board to the Company Secretary,
Apex Fund Administration Services (UK) Limited at cosec-uk@apexgroup.com by 10th March 2025.
2. The right to appoint a proxy does not apply to persons whose Ordinary shares in the Company (the “Shares”) are held on their behalf by
another person and who ha
ve been nominated to receive communications from the Company in accordance with section 146 of the
Companies Act 2006 (“nominated persons”). Nominated persons may have a right under an agreement with the registered shareholder who
holds the Shares on their behalf to be appointed (or to have someone else appointed) as a proxy. Alternatively, if nominated persons do not
have such a right, or do not wish to exercise it, they may have a right under such an agreement to give instructions to the person holding
the Shares as to the exercise of voting rights.
3. In order to be valid, a form of proxy and a power of attorney or other authority under which it is signed, or certified by a notary or office
cop
y of such power or authority, must reach the Company’s registrars, MUFG Corporate Markets, PXS1, Central Square, 29 Wellington Street,
Leeds, LS1 4DL not less than 48 hours (excluding any part of a day which is a non-working day) before the time of the meeting or of any
adjournment of the meeting. Shareholders may lodge their proxy via the registrar’s website www.signalshares.com. If not already registered,
shareholders will need their investor code (IVC) which can be located on their share certificate. If you need any help voting online or if a
paper proxy is required please contact MUFG Corporate Markets by email to shareholderenquiries@cm.mpms.mufg.com or by calling them
on 0371 664 0300 or, if calling from overseas, on +44 (0) 371 664 0300. Calls are charged at the standard geographic rate and will vary by
provider. Calls from outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00 - 17:30,
Monday to Friday excluding public holidays in England and Wales.
4. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so by utilising
the procedures described in the CREST manual. CREST personal member
s or other CREST sponsored members, and those CREST members
who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take
the appropriate action on their behalf.
5. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message must be transmitted so as to be
received by the Company’s agent, MUFG Corporate Markets (whose CREST ID is RA10) by the specified latest time(s) for receipt of proxy
appointments. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message
b
y the CREST applications host) from which the Company’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed.
6. The Company may treat as invalid a CREST proxy instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regula
tions 2001. A register showing the interests of each Director and their connected persons, so far as they are aware, in the Ordinary
shares will be available for inspection at the offices of the Company Secretary, Apex Fund Administration Services (UK) Limited, Hamilton
Centre, Rodney Way, Chelmsford, Essex CM1 3BY, during normal business hours every weekday except Saturdays, from the above date to the
day pr
eceding that of the general meeting. It will also be available for inspection at the place of the meeting for 15 minutes prior to the
general meeting and during the meeting.
7. Unless otherwise indicated on the Form of Proxy, CREST or any other electronic voting instruction, the proxy will vote as they think fit or,
at their discr
etion, withhold from voting.
8. From the date of this notice and for the following two years the following information will be available on the Company’s website and can
be a
ccessed at www.jupiteram.com/rightsandissues:
i. the matters set out in this notice of general meeting;
ii. the total numbers of Shares in respect of which shareholders are entitled to exercise voting rights at the meeting; and
iii. the totals of the voting rights that shareholders are entitled to exercise at the meeting in respect of the Shares.
9. Any shareholders’ statements, shareholders’ resolutions and shareholders’ matters of business received by the Company after the da
te of
this notic
e will be added to the information already available on the website as soon as reasonably practicable and will also be made available
for the following two years.
10. Where a poll is taken at the general meeting, from the date of this notice and for the following two years the following information will be
av
ailable on the Company’s website and can be accessed at www.jupiteram.com/rightsandissues:
i. the date of the general meeting;
ii. the text of the resolutions or, as the case may be, a description of the subject matter of the poll;
iii. the number of votes validly cast;
iv. the proportion of the Company’s issued share capital represented by those votes;
v. the number of votes cast in favour;
vi. the number of votes cast against; and
vii. the number of abstentions (if counted).
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
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11. In order to vote at this meeting you must comply with the procedures set out in notes 1 to 3 by the time specified in note 3.
12. The right of shareholders to vote at the meeting by appointing the Chairman as their proxy is determined by reference to the register of
sharehol
ders. As permitted by section 360B(3) of the Companies Act 2006 and Regulation 41 of the Uncertificated Securities Regulations
2001, shareholder
s (including those who hold Shares in uncertificated form) must be entered on the Company’s share register at close of
business on 20th March 2025 in order to be entitled to vote at the meeting. Such shareholders may only cast votes in respect of Shares held
at such time. Changes to entries on the relevant register after that time shall be disregarded in determining the rights of any person to attend
or vote at the meeting.
13. The total number of Ordinary shares of 25p in issue as at 19th February 2025, the last practicable day before printing this document, was
4,802
,683 Shares and the total number of voting rights was therefore also 4,802,683.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
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Chairman’s Statement
Market backdrop
For small cap industrials and this investment trust which focuses on them 2024 can perhaps
best be described as a year of two quite distinct halves. The first half of the year saw the
continued effects of economic policy decisions on containing and reducing energy led
inflation. This was combined with increasing levels of investor confidence helping to
support the FTSE All-Share index to gain 7.4%. This was followed by a second half largely
driven by the post UK election sentiment where we saw government trying to manage
economic expectations downwards. Thus, despite inflation remaining steady and two
reductions in bank base rates, investor confidence weakened with a corresponding
reduction in demand. Consequently, progress in the overall market was more subdued, with gains of only 1.9% in the
second half. The timing and results of the US elections and the UK Government’s autumn budget may also have
played a role in making investors more cautious towards the year end. These factors, as well as competitive pressures,
will continue to test the management of our portfolio companies. Our Investment Manager will continue to monitor
closely their ability to maintain market share and margins.
Company performance
The Company’s investments generated a NAV per share return for shareholders of 8.8% in 2024 compared to 5.5%
for our chosen benchmark, the FTSE All-Share Index. The share price increased by 11.7% over the year, from 2130.0p
to 2380.0p; and at the end of the year the discount to NAV had narrowed to 6.4%, a reduction from 8.9% at the end
of the prior year, and averaged 9.7% over the course of the year.
Jupiter
As reported in the half year report our portfolio is now managed by lead manager Matt Cable, supported by Tim
Service. They have continued to actively manage the portfolio. In 2024 four complete exits were achieved and five
new positions were acquired. These changes and the performance of the individual holdings that have driven the
Company’s performance are more fully described in the Investment Manager’s Review on pages 10 to 12.
The Management Engagement Committee carried out its second formal review of Jupiter’s performance in November.
It noted the continuity of investment style, the changes that had been made to reduce the concentration of the
portfolio and discussed the new positions that have been taken. The Board will continue to keep the Investment
Manager’s performance under regular review. The increase in marketing activities for the Company reported on last
year have continued. These are carried out to try to raise awareness of the Company to a much wider audience of
investors, particularly the self-directed private individual. Over the course of the year online and in person events
were held for a variety of investors, including wealth managers, professional fund managers and private individuals.
The Board recognises the importance of engaging with existing and potential shareholders and supports the use of
third party ‘paid for’ research and video content agencies to achieve this. This content can be found on the Company’s
web pages at www.jupiteram.com.
Discount
At the end of December 2024 the discount stood at 6.4%. During the year the Company bought back 778,881 Ordinary
shares in the market at a cost of £17.7 million. The share buyback programme remains an important tool to try to
narrow the discount between the Company’s share price and net asset value per share or reduce its volatility.
Buybacks at the margin provide a useful increase in liquidity for those shareholders seeking to realise their investment
whilst also delivering an economic uplift for those shareholders wishing to remain invested in the Company. Subject
to shareholder approval of the share buyback resolution at the forthcoming Annual General Meeting the current
buyback programme will run until July 2025.
Shareholder consultations
Over the course of 2024 the Board consulted with a number of major shareholders to hear their views on a potential
share split. Whilst there was some continued support for this initiative on the basis that it was thought it might help
increase liquidity, the clear and significant majority thought that at this time the costs of such an exercise far
outweighed any potential benefits to shareholders. Consequently, the Board has decided to call an indefinite pause
on these plans. There were also some shareholders that thought a change of name might help promote the Company.
Again, a clear and significant majority of shareholders that were consulted were of the view that the potential
distraction of such an exercise far outweighed any likely benefits.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
8
Dividend
The Directors are aware of the appetite our shareholders have for income and are proposing a final dividend of
32.00p per share which, if approved at the upcoming AGM, would result in total dividends for the year of 44.00p per
share, an increase of 2.3% over the previous year’s dividend.
Annual General Meeting
The Company’s Annual General Meeting is to be held at 12 noon on Monday, 24th March 2025 at Jupiter’s offices, the
Zig Zag Building, 70 Victoria Street, London SW1E 6SQ. The AGM will be followed by a presentation by our Investment
Manager. My fellow Directors and I look forward to meeting as many shareholders as possible at the meeting.
As we know, a significant number of shareholders hold their shares via execution only platforms. These platforms are
increasingly making it easier to participate in voting. Your platform provider will be able to assist you in this regard.
Irrespective of whether you intend to attend the AGM in person, please submit your proxy votes in respect of the
resolutions via the registrar’s portal. Details of how to do this can be found in the notice of AGM on pages 5 to 7.
Alternatively, if you hold your shares via an execution only platform or online stockbroker, the AIC has produced a
helpful summary setting out how to vote your shares on its website: www.theaic.co.uk/how-to-vote-your-shares.
Should you have any questions for the Board these can be submitted to our Company Secretary at the registered
office or via email to cosec-uk@apexgroup.com.
Outlook
As we look forwards into 2025 it is fair to say that we expect to see continued volatility in the markets, with the
completion of the elections in the UK and USA in 2024 potentially mitigating some of this. So, whilst there are some
signs that energy prices, inflation and interest rates may have peaked, we are now seeing rising gilt yields and, in the
UK where we focus, higher employment taxes to contend with. As a Board we are very mindful of these factors.
These and other factors will provide opportunities as well as challenges. Accordingly, we will continue to encourage
our Investment Manager to seek investments in differentiated companies operated by good management teams
that they believe to be fundamentally underpriced. The Board believes that our team at Jupiter have the skills and
knowledge to identify these and so continue to be well placed to deliver for your Company into the future.
Andrew Hosty
Chairman
20th February 2025
You can view or download copies of the Half Yearly and the Annual Reports from the Company’s website at
www.jupiteram.com/rightsandissues
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
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Investment Manager’s Review
Introduction
We are pleased to present our investment report to shareholders of Rights and Issues for the year to December 2024.
As mentioned in our interim report, Dan Nickols announced his retirement from the industry at the end of June. We
wish him well and thank him for his considerable contributions to the team and the early success of Rights and Issues
following our appointment as investment managers. In line with Jupiter’s well established succession plans, Matt
Cable assumed the role of lead manager for Rights and Issues, supported by Tim Service, who was also appointed
head of Jupiter’s Small and Mid-Cap team. Tim is a longstanding member of the team who also has lead manager
responsibilities for a number of Jupiter’s small and mid-cap capabilities.
Given the continuity of management within the Jupiter team there is no change to the Company’s overall investment
strategy. It remains a fundamental, bottom-up stock picking process, expressed in a relatively concentrated but well
diversified portfolio. With the team’s change of leadership, we have made certain enhancements to this process,
with a particular focus on stronger risk controls based on new monitoring tools. These are designed to reduce
unintended exposures in the portfolio and hence limit unexpected performance surprises.
In this report we discuss the current market backdrop, update shareholders on performance and changes to the
portfolio over the year and provide an outlook for the year ahead.
Market backdrop
The first half of the year was characterised by moderating inflation and increasing investor confidence that interest
rates would fall and economic growth accelerate. As we noted in our interim report, the FTSE All-Share index gained
7.4% in the year to June. Inflation has remained broadly stable, as expected, through the balance of the year and
there have been two cuts to the bank base rate. However, market interest rates have risen, with the yield on two-
year government gilts reaching around 4.4% at the end of the year – well above the lows of about 3.6% in the summer.
As we have discussed before, higher interest rates generally have the effect of supressing economic activity, which
in turn impacts the value of equities. At the same time, the newly elected Labour government spent much of the
second half of the year strenuously attempting to lower expectations, with much talk of fiscal ‘black holes’ and
‘painful decisions’. In the event, the autumn budget was relatively benign (with the exception of an unwelcome
increase in employer national insurance contributions). The damage to confidence, however, appeared to have been
done, again reflected in equity performance.
In November Donald Trump was elected US President for a second time. Furthermore, the Republican Party gained
full control of Congress which will allow the new administration much greater scope to implement its agenda. How
much of the pre-election rhetoric around tariffs, immigration and foreign relations translates into policy remains to
be seen, driving further uncertainty. Interestingly the US equity market seems to have taken this all in its stride, but
elsewhere investors are once again taking a more cautious approach.
Despite these challenges the UK market was broadly stable through the second half of the year, with the FTSE All-
Share returning 1.9%, and hence 9.5% for the year as a whole.
Portfolio Performance
The Company’s portfolio of investments returned 9.3% for the year on a total return basis, marginally behind its
benchmark, the FTSE All-Share Index. The Company’s shares performed significantly better than this at 14.0%,
reflecting a narrowing of their discount to net asset value.
Given the concentrated nature of the portfolio, relative performance is largely a result of individual stock returns.
Some of the most significant contributors and detractors to performance for the year included (total return for the
year shown in brackets):
Renold (+35%)
For the second year running, industrial chain manufacturer Renold was one of the top contributors to fund
performance in 2024. Picking up where it left off the previous year, the company has delivered a series of profit
upgrades driven by strong operational performance and attractive acquisitions. After the share price peaked towards
the end of the first half, it has drifted back through the balance of the year. As such the valuation remains compelling
in our view and we remain positive on the investment case.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
10
Eleco (+83%)
Building design and management software company Eleco was also a strong performer in the year. Following a strong
transition from a mainly licence-based business model to one more focused on subscription income, Eleco is now
experiencing strong profit growth which has been rewarded by the market. We see considerable scope for further
growth and hence continue to hold the shares.
Gamma Communications (+37%)
Supplier of telecommunications services mainly to smaller and mid-sized businesses, Gamma Communications also
contributed strongly to performance in 2024. Concerns about pricing power that had previously weighed on the
valuation have proved to be largely unfounded, allowing the shares to re-rate throughout the year, supported by
modest increases to profit expectations. Again, we remain positive on prospects.
Spirax Group (-35%)
Industrial thermal energy and fluid products business Spirax Group was a major detractor from performance for the
year. Weakness in end markets drove a series of profit downgrades and undermined confidence, resulting in a de-
rating of the shares. We believe that recovery may now take longer than the market expects and have therefore
sold the position completely.
Videndum (-58%)
Content creation product manufacturer Videndum detracted from performance for the second year in a row as its
end markets took longer to recover than expected following strikes in Hollywood and a consumer downturn.
Management was changed towards the end of the year and we will wait to hear the plans of the new team before
taking a view on the future of the investment.
Vp (-6.4%)
Specialist equipment rental business Vp was also a performance detractor in 2024 as construction markets remained
weak and profit expectations were lowered. While frustrating, we continue to view Vp as a quality business with
what is now a very attractive valuation. We remain holders.
Portfolio changes
There were four complete sales and five new additions to the portfolio over the year.
Sales included Spirax Group, as mentioned above, as well as agricultural supplies and industrial business Carr’s Group.
We believe that recovery in Carr’s end market may take longer and be less complete than the market expects.
Software business Gresham Technologies and telecoms testing company Spirent also left the portfolio as each
received takeover bids.
New stocks added to the portfolio during the year included:
Jet2 is a vertically integrated airline and tour operator with what we see as a differentiated model and customer
proposition. This is validated by consistent share gains that have left it as the largest operator (by IATA licences) in
its target markets.
Identity verification and fraud prevention business GB Group is a high-quality operator in our view, but has been
through a difficult post-pandemic period as markets have normalised, exacerbated by an acquisition that was poorly
received by the stock market. We believe that this has created an opportunity to invest in a quality business at an
attractive valuation.
Alternative asset manager Foresight Group has strong positions in the attractive infrastructure and regional private
equity niches. It serves clients ranging from retail investors to large institutions and has ambitious plans to grow
profits over the next few years.
Norcros is a designer and distributor of bathroom hardware through brands such as Triton and Vado. Since disposing
of its Johnson Tiles business, it has operated a largely capital-light model with most of the manufacturing outsourced
to third parties. With a relatively new management team firmly focused on a growth agenda we think the opportunity
to create value is significant.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
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12
Investment Manager’s Review
(continued)
Sthree is a global recruitment business with a focus on contract (rather than permanent) placements and STEM
(Science, Technology, Engineering and Maths) disciplines. It is in a cyclical sector currently experiencing a deep and
prolonged downturn which, we believe, has created an attractive valuation opportunity for long term investors.
Summary and Outlook
In many ways the year has played out broadly as expected. Inflation has continued to moderate and interest rates
have started to come down. By the standards of recent years there have been relatively few macroeconomic shocks
for markets to contend with. While conflicts continue in Ukraine and the Middle East (as well as other regions that
attract less attention) they cannot be said to be influencing commodity prices or global supply chains as they did
previously.
In this context it was not surprising to see markets performing reasonably well in the first half of the year and
somewhat frustrating that they have lost momentum more recently. On a global level it is fair to say that caution
remains the watchword in many areas. The US remains an exception as deficit funded spending and ongoing
enthusiasm for all things AI have helped sustain an appetite for risk that seems ever more decoupled from the rest
of the world.
In the UK a hoped-for recovery in activity has been choked off as much by negative sentiment as policy (although
higher employment taxes will have an effect). Both consumers and businesses still seem to be in ‘wait and see’ mode
before committing to higher spending. While few businesses are seeing outright market weakness, there are also
few reports of sustained recovery.
In this environment we expect the equity market to remain fairly volatile with potentially repeated ‘false dawns’ and
occasional periods of weakness. This does not mean we are any less enthusiastic about the longer term. Many
companies are still reporting depressed earnings and valuations remain attractive. Pockets of strong structural growth
remain. Hence there are opportunities for investors with a longer-term outlook.
Given this backdrop we believe that a balanced approach to portfolio construction remains appropriate. We are not
positioned for a rapid recovery, but neither are we taking an overly defensive stance that might miss out on the
recovery when it arrives. This will require patience but, we believe, will ultimately yield positive results.
Matt Cable
Lead Manager
Tim Service
Fund Manager
20th February 2025
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Portfolio Statement
Details of the investments held within the portfolio as at 31st December 2024 are given below by the market value:
31st December 2024 31st December 2023
% of Net % of Net
Holdings Market Value Assets Holdings Market Value Assets
£000’s £000’s
UK Investments
Renold 18,813,923 8,843 7.19 28,745,000 9,802 7.46
Gamma Communications 516,289 7,899 6.42 640,919 7,204 5.48
Vp 1,393,566 7,665 6.22 2,404,250 14,906 11.35
Macfarlane 7,090,653 7,587 6.16 11,680,653 13,666 10.40
Hill & Smith 404,313 7,544 6.13 522,465 9,969 7.59
Telecom Plus 430,975 7,387 6.00 459,113 7,401 5.63
Eleco 4,479,758 6,540 5.31 4,520,781 3,617 2.75
Colefax 835,952 6,520 5.29 1,055,952 7,286 5.55
Jet2 399,296 6,321 5.14 – – –
Treatt 1,281,009 6,232 5.06 1,281,009 6,444 4.91
OSB 1,401,694 5,666 4.60 1,401,694 6,501 4.95
GB 1,663,873 5,657 4.59 – – –
Alpha Group International 241,738 5,633 4.57 336,513 5,721 4.36
IMI 292,263 5,322 4.32 292,263 4,922 3.75
Oxford Instruments 245,735 5,296 4.30 58,268 1,337 1.02
Marshalls 1,545,642 4,536 3.68 1,545,642 4,319 3.29
RS 604,401 4,107 3.34 464,401 3,806 2.90
Morgan Advanced Materials 1,500,000 4,080 3.31 1,500,000 4,245 3.23
Foresight 877,203 3,588 2.91 – – –
Sthree 890,288 2,622 2.13 –
Videndum 959,582 1,397 1.13 959,582 3,339 2.54
Norcros 318,554 812 0.66 – – –
Dyson 1,000,000 31 0.03 1,000,000 41 0.03
Spirax-Sarco Engineering* – – – 59,668 6,268 4.77
Gresham Technologies* – – – 2,360,303 2,714 2.07
Spirent Communications* – – – 1,516,091 1,869 1.42
Carr’s* – – – 4,750,000 4,617 3.51
Total Investments 121,285 98.49 129,994 98.96
Net current assets 1,862 1.51 1,365 1.04
Net Assets 123,147 100.00 131,359 100.00
Unless otherwise specified, the actual holdings are, in each case, of ordinary shares or stock units and of the nominal
value for which listing has been granted.
*Sold during the year to 31st December 2024.
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14
Strategic Report
The Strategic Report is designed to provide information primarily about the Company’s business and results for the
year ended 31st December 2024 and should be read in conjunction with the Chairman’s Statement and the Investment
Manager’s Review on pages 8 and 9 and 10 to 12 respectively.
Performance Statistics
31st December 31st December
2024 2023
NAV per Ordinary Share 2,543.4p 2,337.1p
Closing mid-market price per Ordinary Share 2,380.0p 2,130.0p
Discount to NAV* (6.4%) (8.9%)
Dividends per Ordinary Share
1
44.0p 43.00p
Dividend yield* 1.8% 2.0%
Ongoing Charges* 0.9% 0.9%
Earnings per Ordinary Share – basic
Revenue 42.1p 50.4p
Capital 181.2p 11.0p
NAV return per Ordinary Share* 8.8% 2.4%
FTSE All-Share Index 5.5% 3.8%
*These are Alternative Performance Measures.
1
Assumes shareholder approval of the proposed final dividend of 32.00p per Ordinary share at the forthcoming AGM.
Explanation of Alternative Performance Measures (“APM”)
An alternative performance measure is a financial measure of historical or future financial performance, financial
position or cash flow that is not prescribed by the relevant accounting standards. The APMs are the discount to
NAV, dividend yield, ongoing charges and NAV return as defined below.
Discount to NAV
The discount to net asset value is the amount, expressed as a percentage, by which the share price is less than the
net asset value per share.
The discount to NAV is calculated as follows:
2024 2023
Net asset value per Ordinary Share (a) 2,543.4p 2,337.1p
Closing mid-market price per Ordinary share (b) 2,380.0p 2,130.0p
Discount to NAV ((a-b)/a)*100 6.4% 8.9%
Dividend Yield
The dividend yield is a financial ratio which indicates how much the Company pays out in dividends each year relative
to its share price. The figure is calculated by dividing the aggregate value of dividends per share in a given year by
the closing share price as at 31st December each year and is represented as a percentage.
The dividend yield is calculated as follows:
2024 2023
Total Dividends paid per Ordinary Share
1
(a) 44.00p 43.00p
Closing mid-market price Ordinary Share (b) 2,380.0p 2,130.0p
Dividend Yield (a)/(b)*100 1.8% 2.0%
1
Assumes shareholder approval of the proposed final dividend of 32.00p per Ordinary share at the forthcoming AGM.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
15
Ongoing Charges
Ongoing charges are expenses charged to revenue or capital that relate to the operation of the Company as an
investment trust and are deemed likely to recur in the foreseeable future. They do not include the costs of acquisition
or disposal of investments, financing costs and gains or losses arising on investments. Ongoing charges are calculated
on the basis of the annualised ongoing charge as a percentage of the average net asset value in the period.
The calculation methodology for ongoing charges is set out by the Association of Investment Companies (“AIC”)
and is calculated as follows:
2024 2023
£’000 £’000
Investment management fee 672 670
Other expenses 522 470
Total Expenses (a) 1,194 1,140
Average NAV (b) 134,330 133,930
Ongoing Charge (a)/(b)*100 0.9% 0.9%
NAV Return
The NAV return is the percentage change in closing NAV per share compared with opening NAV per share.
The NAV return is calculated as follows:
NAV per Ordinary Share 31st December 2024 (a) 2,543.4p
NAV per Ordinary Share 31st December 2023 (b) 2,337.1p
NAV return (a/b-1)*100 8.8%
Status
The Company is registered as an investment company as defined in section 833 of the Companies Act 2006 and
operates as such. The Company is not a close company within the meaning of the provisions of the Corporation Tax
Act 2010.
The Company is an “alternative investment fund” (“AIF”) for the purposes of the EU Alternative Investment Fund
Managers (“AIFM”) Directive, as adopted in the UK. In the opinion of the Directors the Company has conducted its
affairs during the year under review so as to qualify as an investment trust for the purposes of Chapter 4 of Part 24
of the Corporation Tax Act 2010 and continues to meet the eligibility conditions set out in section 1158 of the
Corporation Tax Act 2010.
The Board is directly accountable to shareholders. The Company is listed on the London Stock Exchange and is
subject to the UK Listing Rules, Prospectus Rules and Disclosure Guidance and Transparency Rules published by the
Financial Conduct Authority (“FCA”). The Company is governed by its articles of association, amendments to which
must be approved by shareholders by special resolution. The Company is a member of the Association of Investment
Companies (“AIC”).
The FCA rules in relation to non-mainstream pooled investments do not apply to the Company.
Strategy for Meeting the Objectives
The Company’s objective is to exceed the benchmark index over the long-term whilst managing risk.
To achieve this objective, the Board appointed Jupiter on 3rd October 2022 to continue the Company’s long-term
strategy of seeking out undervalued investments. This is supported by the five-yearly review that addresses the
above objective. The most recent review was conducted in January 2021, at which the Board concluded that the
continuation of the Company for the period until July 2026 was in the best interests of shareholders.
Strategic Report (continued)
The Company fulfils its investment objective and policy by operating as an investment company. The Board delegates
operational matters to specialist third-party service providers. The closed-ended nature of the Company allows a
longer-term view on investments because liquidity issues as a result of redemptions are less likely to arise. The Board
has closely monitored performance in 2024 to ensure the Company’s strategic objectives are continuing to be met.
In pursuing its strategy, close attention is also paid to the control of costs. Further information on this is contained
in the Key Performance Indicators on page 21.
Investment Selection
There is a rigorous process of risk analysis at the level of the individual investment, based on the characteristics of
the investee company. This controls the overall risk profile of the investment portfolio.
Since its appointment the Investment Manager has taken steps to balance risk and improve performance by reducing
the Company’s largest holdings and investing in additional holdings at similar weights. The Investment Manager has
also invested in companies from a broader range of industries and sectors over the past year and will continue to
seek out undervalued investments that offer the opportunity for capital growth.
The investment portfolio is managed on a medium-term basis with a low level of investment turnover. This minimises
transaction costs and ensures medium-term consistency of the investment approach.
The Company’s investment activities are subject to the following limitations and restrictions:
The policy does not envisage hedging either against price or currency fluctuations. Whilst performance is compared
against major UK indices, the composition of indices has no influence on investment decisions or the construction
of the portfolio. As a result, it is expected that the Company’s investment portfolio and performance will deviate
from comparator indices.
Full details of the Company’s portfolio are set out on page 13 and further information is set out in Notes 9 to 10
inclusive.
Sustainability of Business Model and promoting the success of the Company
The Board is responsible for the overall strategy of the Company and decisions regarding corporate governance,
asset allocation, risk and control. The day-to-day management of the investments is delegated to the Investment
Manager and the management of the operations to specialist third-party suppliers.
The Directors are conscious of their duties under section 172 of the Companies Act 2006 and, in particular, the
overarching duty to promote the success of the Company for the benefit of the shareholders, with careful attention
paid to wider stakeholders’ interests. The Board is aware of the importance of ensuring that the Company has a
sustainable, well-governed business model to achieve its strategy and objectives.
As part of discharging its section 172 duties, the Company, through the Investment Manager, uses its influence as a
shareholder, where possible, to encourage the companies in which it invests to adopt best practice on environmental,
social and corporate governance (“ESG”) matters. Further related information can be found on pages 18 to 20.
The third-party service providers are a key element of ensuring the success of the business model. The Board monitors
the chosen service providers closely to ensure that they continue to deliver the expected level of service. The Board
also receives regular reporting from them, evaluates the control environment and governing contract in place at each
service provider and formally assesses their appointment annually.
Culture & Values
All the Directors seek to discharge their responsibilities and meet shareholder expectations in an open and transparent
manner. The Board seeks to recruit Directors who have diverse business experience including managing the types of
companies in which the Company invests. The industry experience on the Board ensures that there is detailed
knowledge and constructive challenge in the decision-making process. This helps the Company achieve its overarching
aim of enhancing shareholder value. The Directors are mindful of costs and seek to ensure that the best value is
achieved in managing the Company.
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16
The Company’s values of skill, knowledge and integrity are aligned to the delivery of its investment objective and
are monitored closely by the Board.
The Board seeks to employ third party providers who share the Company’s values and, importantly, will work with
the Directors openly and transparently to achieve the Company’s aims. As detailed in the Business Ethics section
below, the Board expects and seeks assurance that the companies with which it works adopt working practices that
are of a very high standard.
The Responsibilities as an Institutional Shareholder section below describes the Company’s approach to managing
its investments, including ESG matters.
Business Ethics
The Company maintains a zero-tolerance policy towards the provision of illegal services, bribery and corruption in
its business activities, including the facilitation of tax evasion. As the Company has no employees and the Company’s
operations are delegated to third-party service providers, the Board seeks assurances from those providers that they
comply with the provisions of the Modern Slavery Act 2015 and maintain adequate safeguards in keeping with the
provisions of the Bribery Act 2010 and Criminal Finances Act 2017.
As an investment vehicle the Company does not provide goods or services in the normal course of business, and
does not have customers. Accordingly, the Directors consider that the Company is not within the scope of the
Modern Slavery Act 2015.
Board Diversity
The Company’s affairs are overseen by a Board comprising four non-executive Directors, one of whom is female,
three of whom are male. None of the Directors is from an ethnic minority background. The UK Listing Rules on board
diversity targets are as follows: at least 40% of board members should be women, at least one board member should
be from an ethnic minority background and at least one of the senior positions on the board should be held by a
woman. The role of Audit, Risk and Compliance Committee Chair is held by a woman, however, the first two of
these targets are currently not met by the Company. In terms of progress in achieving diversity, the Board is
committed to ensuring that vacancies arising are filled by the best qualified candidates, whilst recognising the benefits
of diversity in the composition of the Board. Improving the Board’s gender and ethnic diversity will be a key focus
when the Board undertakes any further recruitment. Further details on the gender and ethnic background of the
Directors are included in the Corporate Governance Statement on page 33.
The Directors have broad experience, bringing knowledge of investment markets, business, financial services,
accounting and regulatory expertise to discussions on the Company’s business. The Directors regularly consider the
leadership needs and specific skills required to achieve the Company’s investment objective. Whilst appointments
are based on skills and experience, the Board is mindful of the importance of diversity of gender, social and ethnic
backgrounds, cognitive and personal strengths and experience. All appointments are based on objective criteria and
merit and are made following a formal, rigorous and transparent process.
Responsibilities as an Institutional Shareholder
The Board has delegated authority to the Investment Manager for monitoring the corporate governance of investee
companies. The Board has delegated to the Investment Manager responsibility for selecting the portfolio of
investments within investment guidelines established by the Board and for monitoring the performance and activities
of investee companies. On behalf of the Company the Investment Manager carries out detailed research on investee
companies and possible future investee companies through internally generated research. The research includes an
evaluation of fundamental details such as financial strength, quality of management, market position and product
differentiation. Other aspects of research include an appraisal of social, ethical and environmentally responsible
investment policies.
The Board has delegated authority to the Investment Manager to vote on behalf of the Company in accordance
with the Company’s best interests. The primary aim of the use of voting rights is to address any issues which might
impinge on the creation of a satisfactory return from investments. The Company’s policy is, where appropriate, to
enter into engagement with an investee company in order to communicate its views and allow the investee company
an opportunity to respond.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
17
Strategic Report (continued)
In such circumstances the Investment Manager would not normally vote against investee company management
but would seek, through engagement, to achieve its aim. The Investment Manager would, however, vote against
resolutions it considers would damage the Company’s shareholder rights or economic interests.
The Company has a procedure in place such that where the Investment Manager, on behalf of the Company, has
voted against an investee company resolution, it is reported to the Board.
The Board considers that it is not appropriate for the Company to formally adopt the UK Stewardship Code. However,
many of the UK Stewardship Code’s principles on good practice on engagement with investee companies are used
by the Company, as described above.
Corporate and Social Responsibility
When investments are made, the primary objective is to achieve the best investment return while allowing for an
acceptable degree of risk. In pursuing this objective, various factors that may impact on the performance are
considered and these may include socially responsible investment issues.
As an investment trust, the Company’s own direct environmental impact is minimal. The Company has no greenhouse
gas emissions to report from its operations, nor does it have responsibility for any other emissions-producing sources
under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013 for the year to 31st
December 2024 (2023: same). The Directors receive and use electronic meeting packs only. The Company provides
electronic copies of the annual and half-yearly reports and other shareholder information on its website. All printed
material, wherever possible, is on recycled material. The Investment Manager attempts to minimise the Company’s
carbon footprint. The Company’s indirect impact occurs through the investments it makes.
The Company does not purchase electricity, heat, steam or cooling for its own use nor does it have responsibility
for any other emissions producing sources.
Environmental, Social & Governance (“ESG”) Reporting
Overview
As a high-conviction active asset manager, the Investment Manager recognises that it has an important role to play in
the allocation of capital, both as active owners and long-term stewards of the assets in which it invests on behalf of
clients. The investment team has a defined investment process, and consideration of material ESG issues is integrated
into both investment analysis and decision-making, influencing asset allocation, portfolio construction, security
selection, position sizing, stewardship, engagement and subsequent decisions on whether to remain invested or exit.
This context is important when viewing the Investment Manager’s approach to ESG factors that are highlighted
below. These are complex matters where progress may not be linear and may manifest over multiple years.
Furthermore, certain environmental and social issues may also depend on a policy or regulatory response in addition
to investor input.
The Investment Manager’s Responsible Investment Policy and Stewardship Report, available on its website
(https://www.jupiteram.com/global/en/corporate/sustainability-at-jupiter/reports/), describes how it supports the
Company’s integration of environmental, social and governance (ESG) responsibilities, setting out its sustainability
governance and oversight, its approach to ESG integration and materiality and core material ESG issues.
ESG in a UK small and mid-cap context
The Company’s investment universe comprises small and mid-size companies which may be exposed to important
sustainability risks and opportunities that can have material impacts on value. As an active investment manager, the
Investment Manager believes that effective ESG integration cannot be outsourced to third parties, but must be
incorporated into the fundamental analysis conducted by the investment team.
In particular, smaller companies remain under-researched by ESG rating agencies relative to their larger listed peers.
Where they are covered at all, smaller companies are often penalised by rating agencies, either due to their corporate
governance arrangements or a relative lack of detailed corporate disclosure about ESG issues. These factors present
challenges but also, in the Investment Manager’s view, opportunities to identify ESG risks or opportunities affecting
companies which are not priced efficiently by financial markets.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
18
Corporate Governance
To grow successfully, the leadership of smaller companies must not only execute strategically, they must also lay the
foundations for future growth by creating appropriate corporate governance structures. The Investment Manager
believes that as corporate culture is set at an early stage, the relationships formed with key stakeholders such as
customers, the workforce and suppliers at this point in a company’s development can be fundamental to long-term
success. The Investment Manager fully endorses the principles of the UK Corporate Governance Code and, while it
acknowledges the need for pragmatism with smaller companies, it still expects high standards of governance at
investee companies to support their growth in a sustainable manner.
The Investment Manager assesses company governance on a range of issues. These issues may include but are not
limited to:
n Boards and executive leadership: The Investment Manager builds an understanding of the quality of leadership
teams and boards through assessment of i) board and committee composition and independence, ii) board and
executive tenure and succession planning, iii) Diversity, Equity and Inclusion (“DE&I“) oversight and actions at
board level and throughout an enterprise, iv) oversight and management of corporate culture.
n Remuneration: Management incentivisation structures should be aligned with shareholder interests. The
Investment Manager considers KPIs governing short and long-term incentivisation, as well as the overall quantum,
when assessing remuneration packages. It seeks to understand how remuneration structures encourage correct
behaviours and how management compensation decisions are linked to successful strategic execution,
management effectiveness, workforce considerations and the sustainability agenda.
n Protection of minority rights and related party transactions: The Investment Manager will escalate engagement
where it believes that minority rights have been compromised.
n Systemic risks: The environment in which companies operate continues to change rapidly and the Investment
Manager considers where businesses are exposed to wider systemic risks, including through the assessment of
global standards, such as the UN Global Compact.
n Conduct, litigation and relations with policy makers and regulators: Poor relations with regulators can severely
hamper corporate success and result in value destruction for investors. The Investment Manager seeks to
understand board oversight of regulatory matters and how a company guards against malpractice.
n Corporate culture: The Investment Manager may engage with boards to understand how corporate culture is
being led, developed, and monitored and to highlight strengths and areas for development. Where relevant, it
seeks to understand how management is advancing culture and where and how culture challenges emerge.
n Audit and control environment: The Investment Manager considers quality and independence of auditors. It
may escalate engagement with Audit Committee chairs where it believes that audit standards are not in line with
its expectations.
Environmental
Climate
Limiting global temperature rises to 1.5 degrees above preindustrial levels, in line with the Paris Agreement, is an
urgent challenge facing the global economy. The Investment Manager uses its influence as an investor through
stewardship and active ownership to encourage companies to identify, manage and mitigate climate change risks or
opportunities. It believes that the scale of climate change will impact all sectors, industries and asset classes and it
acknowledges the positive role that investors can play in tackling it through its investment decisions and capital
allocation.
Biodiversity
The Investment Manager considers biodiversity impacts in its ESG analysis of companies, in line with its approach
and commitments. It engages with investee companies where it believes their practices are unsustainable, with the
goal of achieving change, reversing biodiversity loss, while preserving and enhancing the value of the Company’s
assets.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
19
Strategic Report (continued)
Social
Human Rights
Companies with poor management of human rights can face a range of issues including fines, workforce issues and
supply chain challenges which may affect their licence to operate. The Investment Manager monitors and assesses
human rights policies and procedures for its investee companies to ensure that they are promoting good governance
and management of human rights issues. It expects companies to comply with internationally-recognised human
rights codes and standards.
Human Capital
Good human capital management supports both value creation and business resilience, and the Investment Manager
believes that investing in human capital correlates with longer-term business success. Promoting Diversity, Equity
and Inclusion (DE&I) enables companies to attract talent from a wider talent pool. It also contributes to better
decision-making, performance, innovation and employee satisfaction and retention. The Investment Manager
understands that approaches to human capital management, including DE&I, will differ and, as an active owner, it
seeks to understand an investee company’s operating model and engage to advise on best practice and potential
improvements.
Health and safety
Where a company fails to meet health and safety standards, the Investment Manager will engage and encourage
the company to improve its practices and to disclose health and safety indicators. Good health and safety should
be embedded in a business and the Investment Manager promotes a zero-harm ethos.
Engagement
Engagement is central to the Investment Manager’s active ownership approach. The investment team maintains a
dialogue with companies to inform its investment decisions and carry out strategic engagement, based on ESG
materiality. The Investment Manager regularly engages with companies to monitor material ESG issues that will impact
the long-term success of an investment. The Investment Manager is committed to long-term engagement goals;
however, to protect shareholders’ interests it reserves the right to exit an investment if the investment team
concludes that progress is insufficient or does not meet the Company’s strategic objectives. The Investment Manager
also engages in collective engagement where such action aligns with its own objectives and this may also include
dialogue with industry bodies/associations and policy makers as well as dialogue with other investor
s.
Proxy Voting
Exercising its shareholder voice through active proxy voting is central to the Investment Manager’s stewardship
approach to represent the Company’s interests, hold boards to account and support investee companies. Its
investment managers are accountable for the exercise of their shareholder votes supported by the Stewardship
team, which is responsible for proxy voting operations, the monitoring of meeting ballots and providing an initial
assessment of each meeting’s agenda, including an assessment of independent proxy advisory research. The
Investment Manager’s Proxy Voting Policy is available on the above mentioned website.
Data Science and third-party data resource
The Investment Manager’s in-house data science team has built a proprietary desktop tool, known as ESG Hub, which
allows the investment teams to apply multi-factor ESG screening to their investment universe and to build custom
reports. The data science team also works with third-party ESG data providers to challenge and provide constructive
feedback to enhance the quality and integrity of the ESG data sets it uses.
Screening
The Investment Manager does not exclude, except i) where required by law, ii) in line with the specifications of the
Company’s mandate, or iii) if a company is involved in banned activities under the following international conventions:
n The 1997 Ottawa Convention (Anti-Personnel Mine Ban Treaty)
n The 2008 Convention on Cluster Munitions (CCM)
It uses third party vendors to screen for involvement in controversial and banned weaponry.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
20
Task Force on Climate-related Financial Disclosures
The Investment Manager’s report on the UK’s Task Force on Climate-related Financial Disclosures Report (‘TCFD’)
discloses estimates of the Company’s portfolio’s climate-related risks and opportunities according to the Financial
Conduct Authority’s Environmental, Social and Governance Sourcebook and the Task Force on Climate-related
Financial Disclosures Recommendation. It is available on the Investment Manager’s website: www.jupiteram.com/task-
force-on-climate-related-financial-disclosures/.
Streamlined Energy and Carbon Reporting
The Company is categorised as a lower energy user under the HMRC Environmental Reporting Guidelines March
2019 and is therefore not required to make the detailed disclosures of energy and carbon information set out within
the guidelines. The Company’s energy and carbon information is therefore not disclosed in this Report.
Review of the Business
A review of the year and commentary on the future outlook is provided in the Chairman’s Statement on pages 8
and 9.
During the year under review, the assets of the Company were invested in accordance with the Company’s investment
policy.
During the year the Company’s net assets have decreased from £131.4m to £123.1m, largely as a result of the ongoing
share buyback programme, offset by a modest increase in the value of investments. At 31st December 2024 the net
asset value per Ordinary share was 2543.4p (2023: 2,337.1p).
Key Performance Indicators
The Board is provided with detailed information on the Company’s performance at every Board meeting. Key
Performance Indicators are:
n Shareholders’ funds equity return compared to the FTSE All-Share Index (the Company’s benchmark index).
n Dividends per Ordinary share.
n Ongoing Charges ratio (formerly titled the Total Expense Ratio).
Further information is provided in the Glossary of Terms on page 70.
Shareholders’ funds equity return
In reviewing the performance of the Company, the Board monitors shareholders’ funds in relation to the FTSE All-
Share Index. During the year NAV per Ordinary share increased by 8.8% compared to an increase of 5.5% in the FTSE
All- Share Index. Over the five years ended 31st December 2024 NAV per Ordinary share increased by 11.8% compared
with an increase of 6.5% in the FTSE All-Share Index. The NAV return calculation can be found on page 15.
Dividends per Ordinary share
The total dividend per Ordinary share paid and proposed is 44.0p (2023: 43.0p).
Ongoing Charges
Ongoing charges are expenses charged to revenue or capital that relate to the operation of the Company as an
investment trust and are deemed likely to recur in the foreseeable future. They include the investment management
fee but do not include the costs of acquisition or disposal of investments, financing costs and gains or losses arising
on investments. Ongoing charges are calculated on the basis of the annualised ongoing charges as a percentage of
the average net asset value in the period. The Ongoing Charges for the year ended 31st December 2024 were 0.9%
(2023: 0.9%). Under the terms of the Investment Management Agreement, an operating expenses cap will be applied
to the Company’s annual ordinary operating expenses at 0.8 per cent. of the Company’s average daily NAV during
each financial year for a period of five years with effect from 3rd October 2022. Further details are given in Note 3 on
page 59.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
21
Strategic Report (continued)
Principal and Emerging Risks and Uncertainties
The Board of Directors has a process for identifying, evaluating and managing the key risks of the Company. This
process operated during the year and has continued to the date of this report. The Directors confirm that during
the year they have carried out a robust assessment of the emerging and principal risks facing the Company, including
those that would threaten its business model, future performance, solvency or liquidity. Most of these risks are
market related and are similar to those of other investment trusts investing primarily in listed markets. The Audit,
Risk and Compliance Committee reviews the Company’s Risk Matrix and Risk Heat Map at each meeting and, as part
of this process, gives consideration to identifying emerging risks. Any emerging risks that are identified and that are
considered to be of significance will be recorded in the Company’s Risk Matrix, together with any mitigations. In
carrying out this assessment, consideration is given to the current market conditions which may impact the Company.
No emerging risks have been identified.
The Company’s principal risks and how they are being managed or mitigated are described below.
Investment in an individual smaller company inherently carries a higher risk than investment in an individual large
company. In a diversified portfolio, the portfolio risk of a smaller company portfolio is only slightly greater than the
portfolio risk of a large company portfolio. The Company’s portfolio is diversified. Additionally, the Company invests
overwhelmingly in smaller UK listed and AIM traded companies and has no exposure to derivatives. The principal
financial risks are therefore market price risk and liquidity risk. Further details on these risks and how they are managed
may be found in Note 18 to the financial statements on pages 66 to 68.
Additional principal risks identified by the Company, together with the Board’s approach to dealing with them are
as follows:
Investment performance – The performance of the investment portfolio will deviate from the performance of the
benchmark index. The Board’s objective is to exceed the benchmark index over the long-term whilst managing risk.
The Board ensures that the Investment Manager is managing the portfolio within the scope of the investment policy;
the Board monitors the Company’s performance against the benchmark; and the Board also receives detailed
portfolio attribution analyses. The Board has a clearly defined investment philosophy which requires the Investment
Manager to operate a diversified portfolio.
Share price discount – Investment trust shares often trade at a discount to their underlying net asset values. A
disproportionate widening of the discount comparative to peers could lead to a decrease in value for shareholders.
The Board continually monitors the level of the discount and discusses its discount manag
ement policy with the
Investment Manager. On 7th December 2016, the Company implemented share buy-back arrangements to mitigate
the risk of the discount increasing. In July 2024, the Board announced a further extension to the share buy-back
programme. The Board authorised the repurchase of shares of an average rolling £1 million per month until 31st July
2025 (subject to the renewal of the buy-back authority at the forthcoming AGM).
Loss of key personnel – The Investment Manager is crucial to performance and the loss of key personnel could
adversely affect performance in the medium term. The Board reviews its strategy for this risk annually. Jupiter Unit
Trust Managers Limited (JUTM) provides two dedicated fund managers to the Company as part of the Investment
Management Agreement. Jupiter also regularly considers its remuneration packages in order to retain staff and
routinely reviews succession planning. Following the retirement of Dan Nickols, the lead investment manager, in June
2024 the Board reviewed the management arrangements for the Company within JUTM and concluded that Matt
Cable was well placed to succeed Mr Nickols as lead manager. Mr Cable is supported by Tim Service. The Board took
comfort from the many years combined investment experience of Mr Cable and Mr Service, as well as the strength
in depth of Jupiter’s Small and Mid-Cap Equities team.
Regulatory risk – The Company must comply with the requirements of section 1158 of the Corporation Tax Act 2010
to maintain its investment trust status. This is achieved by the consistent investment policy and is monitored by the
Board. The Board seeks assurance from the Administrator that the investment trust status is being maintained. The
Audit, Risk and Compliance Committee reviews a schedule of regulatory risk items at its meetings and takes action
to address any regulatory changes.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
22
Protection of assets – The Company’s assets are protected by the use of an independent custodian, Northern Trust
Company. The Board monitors the custodian to ensure assets remain protected. The Company operates internal
controls to safeguard assets held by the custodian, for example, through the Administrator which reconciles the
Company’s cash and stock positions to the custodian’s records on a daily basis.
Geopolitical risk – Changes in the political landscape could substantially affect the Company’s prospects and the
value of its investment portfolio. Geopolitical risks are discussed at Board meetings. The risks to market stability as
a result of international conflicts are discussed between the Investment Manager and the Board, including the impact
of the ongoing war between Russia and Ukraine and the hostilities in the Middle East. The Company has no exposure
to investments within or impacted by the current conflict areas.
Climate change risk – Climate change will bring fundamental shifts to economic activity and human behaviour across
the planet. The Board and Investment Manager regularly consider how climate change could affect the Company’s
investment portfolio and shareholder returns. In line with UK adopted International Accounting Standards
investments are valued at fair value which, for the Company, are quoted bid prices for investments in active markets
at the Statement of Financial Position date and therefore reflect market participants’ views of climate change.
Pandemic Risk – The COVID-19 pandemic highlighted the speed at and extent to which a pandemic or health
emergency can exert strain on both global and localised economies and infrastructure. The structural changes that
have been accelerated by the pandemic continue to present risks and opportunities for different sectors and their
products, markets and supply chains. The Investment Manager mitigates exposure to these risks by carefully
monitoring performance and adaptability of portfolio companies, diversifying investments and seeking to learn
lessons from the COVID-19 pandemic which may be of use in the event of future pandemics or health crises.
Cyber Risk – Cyber incidents are becoming increasingly common and may cause disruption and impact business
operations, potentially resulting in financial losses, theft, interference with the ability to maintain the Company’s
financial records, and reputational issues. The Company has appointed experienced service providers that invest
heavily in their IT operations, with a particular focus on cyber security. The Board met with representatives from the
cyber security teams of each of the key service providers during the year to gain an understanding of the processes
that each has in place to manage these risks in general and, specifically, in relation to the Company. The Board took
comfort from the assurances provided and will continue to keep this area under review. The Company’s key service
providers periodically confirm to the Board that they have in place business continuity plans and procedures to
mitigate the impact on the Company of a disruption in service.
Economic conditions – Changes in economic conditions including, but not limited to, interest rates, rates of inflation,
competition and tax legislation, could have a significant effect on the Company’s prospects and the value of its
investment portfolio. The Board reviews the investment strategy and the portfolio with the Investment Manager at
each Board meeting. The Investment Manager continually considers economic conditions whilst seeking to meet
the Company’s investment objective.
These and other risks facing the Company are reviewed regularly by the Audit, Risk and Compliance Committee and
the Board.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
23
Strategic Report (continued)
Section 172 Statement
The Board seeks to promote the success of the Company for the benefit of its shareholders. In doing so it gives
consideration to the likely long-term consequences of any decision with regard to the interests of its business
relationships and the environment in which it operates. As at 31st December 2024, the Company had no employees.
Stakeholder Group Engagement in the year and their material issues
Shareholders Shareholders play an important role in monitoring and safeguarding the governance of the
Company. They have access to the Board via the Company Secretary throughout the year.
The Board welcomes the opportunity to engage with shareholders at its Annual General
Meeting. The Company continues to communicate with shareholders via the Company
Secretary, its website and the publication of its financial reports throughout the year. The
Chairman regularly meets with larger investors to gauge investor sentiment and always
responds to questions from shareholders.
The Board encourages shareholders to ask questions of the Chairman of the Board and all
other Directors via the Company Secretary and to ask questions of the Investment Manager.
Shareholders may submit questions to cosec-uk@apexgroup.com or investment
companies@jupiteram.com. Communication with shareholders enables the Board to make
informed decisions when considering how to promote the success of the Company over
the long term.
Suppliers The Board relies on a number of advisors for support in the successful operation of the
Company and in meeting its obligations. The Board therefore considers the Investment
Manager, Secretary/Administrator, Broker, Registrar, Custodian and Depository to be
stakeholders.
Key suppliers are required to report to the Board on a regular basis and, as detailed on page
16, there is a robust framework in place to evaluate their performance annually. The
Company employs a collaborative approach and looks to build long-term partnerships based
on open terms of business and fair payment terms.
The Secretary engages with key suppliers to ensure that services provided are satisfactory.
Investee Companies The Board recognises the benefits of good communication with and stewardship of investee
companies and the importance of such in meeting the Company’s investment objective.
The Investment Manager meets with the management of companies in which the Company
has a significant interest and reports on findings to the Board regularly.
Regulators As a company listed on the London Stock Exchange, the Board ensures compliance with
the necessary rules and regulations relevant to the Company in order to build trust and
maintain its reputation in the market.
Community and As discussed in more detail on pages 15 to 27 and throughout this report, in pursuing the
environment
Company’s objectives, various factors that may impact on performance are considered. These
may include environmental, social and governance (‘ESG’) issues. The Board believes that poor
practices can have an impact on the value of investments and potential investments and
consideration of ESG factors as part of the investment process is therefore key.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
24
Factoring Stakeholders into Principal Decisions
The Board defines principal decisions as not only those that are material to the Company but also those that are
significant to any of the Company’s key stakeholders as identified above. In making the following principal decisions,
the Board considered the outcome from its stakeholder engagement as well as the need to maintain a reputation
for high standards of business conduct and the need to act fairly as between the members of the Company.
Principal Decision 1 Share buy-back programme
In July 2024 the Company announced a further extension of the share buyback programme.
The Board authorised repurchases of shares of up to an average £1 million per month until
July 2025. The continuation of the programme is designed to address the share price
discount.
Principal Decision 2 Board Composition
The Board undertakes a detailed review of its own composition annually, including assessing
the knowledge and experience therein. As a result of this review the Board concluded that
it was not necessary to increase the current number of directors at present. Mr Roper has
declared his intention to retire at the conclusion of the Annual General Meeting in 2026. A
recruitment exercise will be undertaken in 2025 to identify a suitable successor. The Board
will continue to review its composition annually or in the event of any further changes.
Principal Decision 3 Dividend Policy
The Board continues to operate a progressive dividend policy. The Board has increased the
annual dividend, having paid and recommended dividends totalling 44.00p per share to
shareholders for the financial year ended 31st December 2024 (2023: 43.0p).
Principal Decision 4 Remuneration
During the year the Nominations and Remuneration Committee undertook a review of the
level of non-executive Directors’ fees. The Committee considered the level of fees relative to
various benchmarks, together with the Company’s performance and the need to attract
and retain directors of a high calibre. The Committee concluded that Directors’ fees should be
increased with effect from 1st January 2025 by £1,635 for the Chair of the Audit, Risk and
Compliance Committee, by £1,900 for the Chairman and by £1,425 for each of the other non-
executive directors and that the fees should continue to be reviewed annually to ensure that
the levels of remuneration remain attractive to current and prospective directors. On the
recommendation of the Nominations and Remuneration Committee the Board considered and
approved the proposed increase in Directors’ fees.
Principal Decision 5 Management Engagement Committee
The Board monitors the Investment Manager's performance against the Company’s
investment objective at each Board meeting. In addition, the Board took the decision to
establish a Management Engagement Committee in early 2023. The Committee meets
annually to review the contractual terms of the Investment Management Agreement and
the performance of the Investment Manager. On the recommendation of the Management
Engagement Committee the Board approved the continuing appointment of the Investment
Manager, having concluded that it was in the best interests of the Company and its
shareholders.
Principal Decision 6 Consideration of Share Split
During the year the Board reconsidered a sub-division of the Company’s shares. After due
deliberation it again concluded that the benefits would not be sufficiently far-reaching for
the Company and its shareholders.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
25
Strategic Report (continued)
Factoring Stakeholders into Principal Decisions (continued)
Principal Decision 7 Change of Name
Following feedback from a number of shareholders the Board considered the merits of a
change of name for the Company. After due deliberation the Board concluded that a name
change would not inherently improve the Company’s marketability and liquidity. Instead,
the Board requested that JUTM put greater emphasis on raising the profile of the Company.
Viability Statement
The Board reviews the performance and progress of the Company over five-year periods and uses these assessments,
regular investment performance updates from the Investment Manager and a continuing programme of risk
monitoring to assess the future viability of the Company. The Directors consider that a period of five years is a
reasonable time horizon to consider the viability of the Company. The Company also uses this period for its strategic
planning. The following facts support the Directors’ view of the viability of the Company:
n The Company’s portfolio comprises marketable smaller UK-listed and AIM traded securities and has short term
cash on deposit.
n The Company does not use gearing.
n The expenses of the Company were covered three times by investment income in 2024.
In order to maintain viability, the Company has a robust risk control framework for the identification and mitigation
of risk which is reviewed regularly by Board. Consideration was also given to the principal risks and uncertainties
faced by the Company, as detailed on pages 22 to 23. The Directors seek assurances from suppliers that their
operations are well managed and that they are taking appropriate action to monitor and mitigate risk. The Board
also considered the political and economic environment in relation to the Company’s investment positions, its future
income streams and its ability to continue trading.
Based on the above, the Directors confirm that they have a reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they fall due over the period of their assessment.
Shareholder Communication
The Board is committed to maintaining open channels of communication with shareholders. It is the Chairman’s role
to ensure effective communication with the Company’s shareholders and it is the responsibility of the Board to
ensure that satisfactory dialogue takes place, based on the mutual understanding of objectives. The Board remains
cognisant of the importance of clear communications with shareholders and will respond to all reasonable requests
for information or meetings.
The Investment Manager maintains a regular dialogue with major shareholders and reports to the Board. In the event
that shareholders wish to raise issues or concerns with the Directors, they are welcome to do so at any time via the
Company Secretary at cosec-uk@apexgroup.com. The Annual Report and half-year results are circulated to
shareholders wishing to receive them and are available on the Company’s website. These provide shareholders with
a clear understanding of the Company’s portfolio and financial position. This information is supplemented by the
daily calculation and publication of the NAV per share. JUTM also publishes a monthly factsheet that can be found
on the Company’s website, www.jupiteram.com/uk/en/individual/rights-and-issues-investment-trust-plc. Shareholders
are encouraged to ask questions either at the Annual General Meeting or via the Company Secretary.
2024 AGM Voting
At the AGM held on 27th March 2024 resolution 2, to approve the Directors’ Remuneration Report, and resolution
5, to re-elect Mr Simon Knott as a Director, were passed with the necessary majority but with less than 80% of the
votes cast in favour of the resolutions by shareholders. In accordance with Provision 4 of the UK Corporate
Governance Code the Company is required to provide an update on its consultation with the shareholder(s) that
voted against these resolutions.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
26
The Board liaised with the significant shareholder who voted against both resolutions and understands that the
reason for the vote against the Directors’ Remuneration Policy was because of the ex-gratia payment to Dr David
Bramwell, the former Chairman. This payment was to fund a gift in recognition of Dr Bramwell’s long service to the
Company and his contribution as Chair. The shareholder acknowledged that the sum of the payment was insignificant
and the Board confirmed that this payment was not intended to set a precedent for any such payments in the future
and does not envisage making such a payment again.
Regarding the decision to vote against the re-election of Mr Simon Knott, the Board understands that it was a
compliance driven vote reflecting the institutional shareholder’s view that Mr Knott was non-independent, having
formerly been the CEO of the Company prior to the appointment of Jupiter Unit Trust Managers Limited as
investment manager in October 2022, when it was a self-managed investment trust. This contrasts with positive
feedback received by the Board regarding Mr Knott’s continuing involvement as a non-executive director. The Board
clarified with the shareholder that Mr Knott has no current or former association with JUTM other than as a non-
executive director of the Company and, despite his tenure as Investment Director, the Board considers him to be
independent. Furthermore, with his extensive investment knowledge and in-depth understanding of the companies
within the portfolio, Mr Knott’s contribution to the Board and its committees is invaluable.
The percentage of the total shares in issue cast against resolutions 2 and 5 was 6.5% and 6.4% respectively. The
weighting of these votes was disproportionately distorted due to the relatively low number of votes cast at the
AGM. The Board urges shareholders to exercise their right to vote by appointing the Chairman as their proxy and
indicating how they would like their votes to be cast.
Company’s Directors and Employees
The number of directors at 31st December 2024 was four (2023: four).
2024 2023
Male Female Male Female
Directors (non-executive) 3 1 3 1
Other Employees 0 0 0 0
The Directors have considered the Strategic Report and believe that taken as a whole it is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Company’s performance and
strategy.
The Strategic Report was approved by the Board and signed on its behalf by:
Dr Andrew J. Hosty
Chairman
20th February 2025
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
27
Report of the Directors
The Directors have pleasure in submitting their Report, together with the audited financial statements in respect of
the year ended 31st December 2024.
Directors
The Directors who served during the year were as follows:
Dr Andrew Hosty (Chairman of the Board and of the Management Engagement Committee)
Andrew is a Chartered Engineer and Fellow of the Royal Academy of Engineers. He is an international business leader
with over 20 years of non-executive board experience and 30 years of executive and management experience,
spanning private equity, UK Plc and global blue-chip corporates. From 2016 to 2018 Andrew was the CEO of the Sir
Henry Royce Institute, the UK’s home of advanced materials research and innovation. Andrew was Chief Operating
Officer of Morgan Advanced Materials and served on the Plc Board as an Executive Director from 2010 to 2016. These
experiences and his current work with other operating companies mean that Andrew can contribute to a range of
business matters over a wide spectrum of end markets.
Jonathan Roper (Senior Independent Director)
Jonathan is a solicitor and until his retirement from practice was a partner in Eversheds Sutherland (now Eversheds
Sutherland (International) LLP.) He has more than 35 years’ experience of commercial practice in the City, advising
primarily on public and private company mergers and acquisitions, joint ventures and equity and other financing
arrangements for UK and overseas clients, including many in the financial services sector, and often at a strategic
board level. Until recently, was a member of the Council of the London School of Hygiene & Tropical Medicine and
chair of its Audit & Risk Committee.
Simon Knott
Simon served as Investment Director of the Company from 1983 focusing on UK smaller companies. Following the
appointment of Jupiter as Investment Manager on 3rd October 2022 Simon retired as Investment Director but remains
a non-executive director of the Company.
Helen Vaughan (Chair of the Audit, Risk and Compliance Committee)
Helen is a Chartered Accountant and a certified independent fund director. She has over 30 years of investment
management experience. As the Chief Operating Officer for the J O Hambro Capital Management Group, Helen
oversaw the transformation of the Group’s operating model to one which supported rapid growth and also
significantly reduced operational risk to the business. She retired from this company in September 2019. Prior to this,
Helen was Director of Business Development at Credit Suisse Asset Management and before that Head of Investment
Operations at SLC Asset Management and Head of Client Accounting at Framlington Group Limited.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
28
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
29
Dividends
The Board is recommending a final dividend of 32.00p per Ordinary share (2023: 31.25p). If approved, taken with the
interim dividend of 12.00p per Ordinary share (2023: 11:75p), this will result in a total dividend to the holders of Ordinary
shares for the year of 44.00p per Ordinary share (2023: 43.00p).
Substantial Shareholdings
As at 20th February 2025 the Company had received notification in accordance with Chapter 5 of the Disclosure
and Transparency Rules of the following voting rights:
Ordinary % of voting
shares rights*
S. J. B. Knott 785,062 16.10
Dartmoor Investment Trust 609,258 12.06
Rathbones Investment Management International Ltd 284,109 4.94
* The percentage of voting rights is as at the time of the notification.
Section 992 Companies Act 2006 Disclosures
Details of the Company’s capital structure and voting rights are given on page 2 of this document and in Note 14 on
page 65 of the financial statements.
Corporate Governance
Full details are given in the Corporate Governance Statement on pages 32 to 36. The Corporate Governance
Statement forms part of this Directors’ Report.
Whilst the Company has no employees or customers, the Directors give regular consideration to the need to foster
the Company’s business relationships with its stakeholders including, but not limited to, its shareholders and service
providers. The effect of this consideration upon the principal decisions taken by the Company during the year to
31st December 2024 is set out in further detail in the Strategic Report on pages 25 and 26.
Stakeholder Considerations
The Notice of the Annual General Meeting to be held on 24th March 2025 is set out on pages 5 to 7.
Share Buyback Authority (resolution 10): The Board is seeking to renew the authority granted at the Annual General
Meeting held on 27th March 2024 that authorises the Company to make market purchases of Ordinary shares for
cancellation. At the forthcoming Annual General Meeting the Directors will seek to renew this authority to buy back
for cancellation up to 14.99% of Ordinary shares in issue, representing 719,900 Ordinary shares as at 19th February
2025. The authority will expire at the conclusion of the Annual General Meeting of the Company in 2026 unless the
authority is renewed. The share buyback programme was extended for a further 12 months in July 2024. Cavendish
Capital Markets, the Company’s broker, continues to facilitate these buybacks on the Company’s behalf and in
accordance with the relevant provisions of the Companies Act 2006 and UK Listing Rules.
Recommendation: The Directors recommend that shareholders vote in favour of the resolutions to be proposed at
the Annual General Meeting, as they intend to do in respect of their own beneficial holdings; all resolutions are
considered to be in the best interests of the Company and its shareholders.
Report of the Directors (continued)
Directors’ Remuneration Report
The Directors’ Annual Remuneration Report on pages 40 to 44 provides information on the Directors’ remuneration
and their interests in the share capital of the Company, together with details of their letters of appointment and
memoranda of service.
Investment Management Agreement
JUTM provides discretionary investment management services to the Company under an Investment Management
Agreement (‘IMA’) dated 30th August 2022. The IMA provides for an investment management fee equal to 0.6 per
cent per annum on the Company’s NAV up to and including £200 million and 0.5 per cent per annum on the
Company’s NAV in excess of £200 million.
An operating expenses cap will be applied in respect of each financial year by means of a balancing charge which
will reduce the management fee payable to the Investment Manager with respect to the quarter ending 31st March
of the following financial year. Under the terms of the IMA the Manager has agreed to cap the Company’s annual
ordinary operating expenses incurred and calculated in accordance with the Company’s usual procedures at 0.8 per
cent. of the Company’s average daily NAV during each financial year. The operating expenses cap will not apply to
the extent that the management fee would be less than 0.5 per cent of the Company’s average daily NAV during
any financial year. The operating expenses cap will apply for a period of five years with effect from 3rd October
2022. The Manager and the Board will review the operating expenses cap at least annually to determine whether the
level of the cap remains appropriate.
The IMA may be terminated by either the Company or JUTM on not less than six months’ notice to the other party
or earlier in the event of default. There is no compensation payable on termination.
The Board has reviewed the performance of the Investment Manager and believes that its continuing appointment
is in the best interests of the Company and its shareholders.
Administration & Secretarial Agreement
The accounting, company secretarial and administrative services are provided by Apex Fund Administration Services
(UK) Limited under an agreement terminable by either party on not less than six months’ notice or earlier in the
event of default. There is no compensation payable on termination.
Disclosure of Information to Auditor
So far as each Director at the date of approval of this report is aware:
n there is no relevant audit information of which the Company’s Auditor is unaware; and
n 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 Auditor is aware of that information.
Going Concern
The Company’s assets comprise mainly readily realisable equity securities and cash and the value of its assets is
significantly greater than its liabilities. Additionally, after reviewing the Company’s budget, including the current
financial resources, projected expenses and its medium-term plans, the Directors believe that the Company’s
resources are adequate for it to continue in operational existence for the period up to 28th February 2026, which is
at least 12 months from the date of approval of these financial statements. The Directors have considered the impact
of the increased market volatility since the outbreak of COVID-19, the risks arising from the ongoing conflicts between
Russia and Ukraine and in the Middle East, as well as the political and economic uncertainty in relation to both the
Company’s operations and performance, and have concluded that the Company will continue to be able to meet
its financial obligations and that these factors do not affect the going concern status. Accordingly, the Directors
consider that it is appropriate to continue to prepare the financial statements on a going concern basis.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
30
General
The Company purchases liability insurance covering the Directors and Officers of the Company.
The Directors’ Report was approved by the Board and signed on its behalf by:
Dr Andrew J. Hosty
Chairman
20th February 2025
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
31
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
32
Corporate Governance Statement
AIC Code
The Board has considered the AIC Code of Corporate Governance, published in February 2019 (AIC Code). The AIC
Code addresses the Principles and Provisions set out in the UK Corporate Governance Code (the UK Code), as well
as setting out additional provisions on issues that are of specific relevance to investment companies.
The Board considers that reporting against the Principles and Provisions of the AIC Code, which has been endorsed
by the Financial Reporting Council, provides more relevant information to shareholders.
The Board confirms that the Company has complied with the Principles and Provisions of the AIC Code.
The AIC Code is available on the AIC website (www.theaic.co.uk). It includes an explanation of how the AIC Code
adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies.
Operation of the Board of Directors
The Directors of the Company, as shown on page 4, are Dr A. J. Hosty, Mr S. J. B. Knott, Mr J. B. Roper and Ms M. H.
Vaughan. The Directors' biographical details, set out on page 28, demonstrate a breadth of investment, commercial
and professional experience.
The Board is collectively responsible for promoting the success of the Company. It deals with the important aspects
of the Company’s affairs, including the setting of parameters for and the monitoring of investment strategy, as well
as the review of investment performance. It reviews the share price and the discount or premium to net asset value.
The Board sets limits on the size and concentration of new investments. The application of these and other
restrictions, including those which govern the Company’s tax status as an investment trust, are reviewed regularly at
meetings of the Board and have been subject to close monitoring during the financial year.
The Board delegates all investment matters to the Investment Manager but retains all decisions concerning unquoted
investments. The Investment Manager takes decisions as to the purchase and sale of individual investments and is
responsible for effecting those decisions on the best available terms in accordance with the investment policy as
stated on page 2.
The Chairman leads the Board and ensures that it deals effectively with all the aspects of its role. In particular, he
ensures that the Administrator provides the Directors, in a timely manner, with management, regulatory and financial
information that is clear, accurate and relevant. Representatives of the Administrator attend each Board meeting,
enabling the Directors to seek clarification on specific issues or to probe further on matters of concern. There is an
agreed procedure for Directors, in the furtherance of their duties, to take independent professional advice, if
necessary, at the Company’s expense.
The Directors, their roles and attendance records are as follows:
Directors Role Audit, Risk and Nominations and Management Board
Compliance Remuneration Engagement meetings
Committee Committee Committee attended
Mr S. J. B. Knott Non-executive 3 (4) 1 (1) 1 (1) 5 (7)
Dr A. J. Hosty
1
Non-executive – 1 (1) 1 (1) 7 (7)
Mr J. B. Roper
2
Non-executive 4 (4) 1 (1) 1 (1) 7 (7)
Ms M. H. Vaughan
3
Non-executive 4 (4) 1 (1) 1 (1) 7 (7)
1
Chairman of the Board and the Management Engagement Committee
2
Chairman of Nominations and Remuneration Committee
3
Chairman of Audit, Risk and Compliance Committee
Seven board and six board committee meetings were held during the year. In addition, two ad-hoc Board Committee
meetings were held to approve the Annual Report and the Half Year Report. Any instances of non-attendance at
meetings were due to ill health. In accordance with the AIC Code, Dr A. J. Hosty is not a member of the Audit, Risk
and Compliance Committee but may attend meetings by standing invitation.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
33
Independence of the Directors
The Board of Directors, which comprises four non-executive Directors, normally meets six times a year to review
the affairs of the Company. The Directors have reviewed their independence by reference to the AIC Code. Under
the criteria of the AIC Code Mr S. J. B. Knott is not deemed independent by virtue of his previous position as
Investment Director. Notwithstanding this, the Board is of the opinion that Mr Knott is independent as he has no
current or prior association with JUTM other than as a non-executive Director of the Company. Furthermore, with
his extensive investment knowledge and in-depth understanding of the companies within the portfolio, Mr Knott’s
contribution to the Board and its committees is invaluable. All other Directors have had no material connection
other than as Directors of the Company. The Board is of the opinion that each of the non-executive Directors is
independent in character and judgment and that there are no relationships or circumstances that are likely to affect
their judgment. In April 2025 Mr. J. B. Roper will have served on the Board for more than nine years and (along with
the other Directors) will stand for re- election by the shareholders at the forthcoming AGM. The Board is firmly of
the view, however, that length of service does not of itself impair a Director’s ability to act independently. As such,
the Board considers Mr. J. B. Roper to be independent but, in accordance with the Code, his role and contribution
will be subject to particularly rigorous review.
Board Diversity – Gender and Ethnic Background
In accordance with Listing Rule 9.8.6 R(9) and (11), the Company is required to include a statement in the Annual
Report setting out whether it has met the following targets on board diversity. The reference date for this statement
is 31st December 2024, the Company’s year end:
1) At least 40% of individuals on its board are women;
2) At least one of the senior board positions is held by a woman; and
3) At least one individual on its board is from a minority ethnic background.
The following tables set out the prescribed format for information in accordance with the requirements of LR 9 Annex 2.
(a) Table for reporting on gender identity or sex
Number of Percentage Number of senior
Board of the positions on
members Board the Board
Men 3 75% 2
Women 1 25% 1
Not specified/prefer not to say - - -
(b) Table for reporting on ethnic background
Number of Percentage Number of senior
Board of the positions on
members Board the Board
White British or other White (including minority white groups) 4 100% 3
Mixed Multiple Ethnic Groups - - -
Asian/Asian British - - -
Black/African/Caribbean/Black British - - -
Other ethnic group, including Arab - - -
Not specified/prefer not to say - - -
The UK Listing Rules only recognise the roles of Chairman, Chief Executive (CEO), Senior Independent Director and
Chief Financial Officer (CFO) as senior board positions. As an externally managed investment company with no
executive management the Board considers that the CEO and CFO positions are not relevant to the Company. The
Board does, however, consider the Chair of the Audit, Risk and Compliance Committee to be a senior board position
and the above disclosure is made on this basis.
The UK Listing Rules require disclosure of an explanation of the Company’s approach to collecting the data used for
the purposes of making the disclosures. The data was collated in consultation with the Directors.
Corporate Governance Statement (continued)
Further details on Board diversity and the Board’s approach to meeting the diversity targets are set out in the Strategic
Report on page 17.
There have been no changes to the Board since 31st December 2024 and the date of approval of this report.
Conflicts of Interest
The Articles of Association reflect the codification of certain Directors’ duties arising from the Companies Act 2006
and in particular the duty for Directors to avoid conflicts of interest. The Board has put in place a framework for
Directors to report conflicts of interest or potential conflicts of interest.
All Directors are required to notify the Company Secretary of any situations, or potential situations, where they
consider that they have or may have a direct or indirect interest or duty that conflicts or may possibly conflict with
the interests of the Company. The Board considers that the framework has worked effectively throughout the period
since its adoption. Directors are also made aware that there remains a continuing obligation to notify the Company
Secretary of any new situation that may arise, or any change to a situation previously notified. It is the Board’s
intention to continue to review all notified situations on a regular basis. This process was maintained throughout
the year.
Nominations and Remuneration Committee
The Committee oversees a formal review procedure and evaluates the overall composition of the Board from time
to time, taking into account the existing balance of skills and knowledge. Its chairman is an independent non-
executive Director. There are procedures for new Directors to receive relevant information on the Company together
with an appropriate induction. The Committee is satisfied that the Board and its Committees function effectively,
both collectively and individually, and that they contain the appropriate balance of skills and experience to provide
effective management. The Board uses a skills matrix in order to identify any gaps in the current Board’s knowledge
and experience which will be used to support future evaluations and succession planning. The Committee also
reviews the composition of the Board and manages the recruitment process for new Directors.
Further details of the work of the Committee are given on page 40.
Board and Director Evaluation
The Board formally reviews its performance and the performance of its committees on an annual basis. The annual
evaluation took place following the end of the financial year and questionnaires were used to facilitate the assessment
of the performance of the Board, individual directors and the Chairman and to make recommendations as to how
the effectiveness of the Board might be improved. The results of the performance evaluation were discussed by
the Directors and it was agreed that the composition of the Board and its committees reflected a suitable mix of
skills and experience and that the Board and its committees were functioning effectively. The evaluation further
confirmed that all Directors continue to be effective on behalf of the Company and committed to the role.
In order to prevent “over boarding” and possible conflict, any significant external commitments require the prior
consent of the Board.
Tenure of Directors
It is the Board’s policy that all Directors will normally have their tenure limited to nine years from the date of
appointment to the Board. This is also subject to the Director’s re-election at each Annual General Meeting.
As in previous years, all incumbent Directors will retire at the Annual General Meeting and, being eligible, offer
themselves for re-election. The Board considers that all Directors bring broad, current and relevant business
experience that allows them to contribute effectively to the leadership of the Company. The Board evaluation
confirmed that the performance of all Directors continues to be effective and that all Directors are committed to
their roles. The Board therefore recommends the re-election of all Directors at the forthcoming Annual General
Meeting.
The Board considers succession planning on a regular basis. As noted on page 25 Mr Roper has declared his intention
to retire at the conclusion of the Annual General Meeting in 2026. A recruitment exercise will be undertaken in 2025
to identify a suitable successor.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
34
Each non-executive Director has signed a letter of appointment to formalise the terms of their engagement as a
Director of the Company (or there is a memorandum of such terms), copies of which are available on request and
at the Company’s Annual General Meeting. The appointment dates of each Director are shown on page 42. No
Director is or was materially interested in any contract subsisting during or at the end of the year that was significant
in relation to the Company’s business.
No Director has, or during the financial year had, a contract of service with the Company.
The Company is committed to ensuring that vacancies arising are filled by the best qualified candidates and recognises
the value of diversity in the composition of the Board.
Risk Management and Internal Control
The Board is fully aware of its duty to present a balanced and understandable assessment of the Company’s position.
It acknowledges its responsibility for the Company’s system of internal financial controls and their effectiveness.
The Board meets regularly and reviews performance against approved plans and forecasts. In addition, the day-to-
day administration and accounting functions are carried out by the Administrator and reports are submitted regularly
to the Board.
As part of the system of internal control, there is a process to identify, evaluate and manage the significant risks
faced by the Company, which has been in place during the year under review and up to the date of approval of
these financial statements. This has been reviewed by the Board, is in accordance with the guidelines in the AIC Code
and is considered by the Board to be effective and fit for purpose. The system of risk analysis adopted by the Board
is designed to manage rather than eliminate the risk of failure to achieve the investment objectives of the Company.
It must be stressed that undertaking an acceptable degree of controlled risk is always necessary in the management
of any investment trust if above average performance is to be achieved. For this reason, the process can only provide
reasonable and not absolute assurance against loss.
Audit, Risk and Compliance Committee
The Audit, Risk and Compliance Committee is a formally constituted committee of the Board with defined terms of
reference, which include its role and the authority delegated to it by the Board, and which are available at the
Company’s registered office and on the Company’s website. Its specific responsibilities include reviewing the
Company’s annual and half yearly results, together with the supporting documentation.
This Committee also reviews the performance of key suppliers; however, the performance of the Investment Manager
is reviewed by the newly established Management Engagement Committee.
Further details are given in the Report of the Audit, Risk and Compliance Committee on pages 37 to 39.
Management Engagement Committee
Following the appointment of JUTM as Investment Manager the Board established a Management Engagement
Committee. The Committee comprises all Directors and is chaired by Dr A. J. Hosty. The Committee meets at least
annually to conduct a formal evaluation of the Investment Manager. The evaluation includes the consideration of
the investment strategy and the processes of the Investment Manager, as well as its overall service to the Company
and shareholders. As a result of this process, the Board, having been advised by the Management Engagement
Committee, is satisfied that the continuing appointment of the Investment Manager is in the interests of the
Company and its shareholders as a whole.
Independent Auditor
Following a tender exercise in 2023 the Company appointed Ernst & Young LLP (‘EY’) as independent auditor for the
financial year ending 31st December 2024. EY’s appointment was approved by shareholders at the 2024 Annual General
Meeting. EY has expressed its willingness to remain in office. Resolutions will be proposed at the forthcoming AGM
to re-appoint EY as independent auditor and to authorise the Directors to determine the auditor’s remuneration.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
35
Corporate Governance Statement (continued)
Statement of Compliance
The Directors consider that during the year ended 31st December 2024 the Company complied with all the relevant
provisions set out in the AIC Code.
This Corporate Governance Statement was approved by the Board and signed on its behalf:
Dr Andrew J. Hosty
Chairman
20th February 2025
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
36
Report of the Audit, Risk and Compliance Committee
Role of the Audit, Risk and Compliance Committee
The Audit, Risk and Compliance Committee’s main functions are as follows:
n To monitor the internal financial control and risk management systems on which the Company is reliant.
n To monitor the integrity of the half-year and annual financial statements of the Company by reviewing and
challenging, where necessary, the actions and judgments of the Investment Manager.
n To meet the Auditor to review its proposed audit programme and the subsequent Audit Report, to review the
effectiveness of the audit process and the levels of fees paid in respect of both audit and non-audit work.
n To make recommendations to the Board in relation to the appointment, reappointment or removal of the Auditor
and to negotiate its remuneration and terms of engagement on audit and non-audit work.
n To monitor and review annually the Auditor’s independence, objectivity, effectiveness, resources and qualification.
n To monitor the performance of key suppliers.
The Audit, Risk and Compliance Committee meets at least twice each year and operates within defined terms of
reference which are available at the Company’s registered office and on the Company’s website.
Composition of the Audit, Risk and Compliance Committee
The Audit, Risk and Compliance Committee comprises three non-executive Directors, at least one of whom has
recent and relevant financial experience.
Significant Issues and Risks
In planning its own work and reviewing the audit plan of the Auditor, the Audit, Risk and Compliance Committee
takes account of the most significant issues and risks, both operational and financial, likely to impact upon the
Company’s financial statements.
The valuation of the investment portfolio is a significant risk factor; however, the values of all investments can be
verified against daily market prices.
A further significant risk control issue is to ensure that the investment portfolio reported upon in the financial
statements is supported by evidence of physical ownership of the relevant securities. The Company uses the services
of an independent custodian, Northern Trust Company, to hold the assets of the Company. The investment portfolio
is regularly reconciled to the custodian’s records and that reconciliation is also reviewed by the Auditor. Northern
Trust Company also acts as the Company’s Depositary.
The incomplete or inaccurate recognition of income in the financial statements are risks. Internal control systems,
including frequent reconciliations, are in place to ensure income is fully accounted for. The Board is provided with
information on the Company’s income account at each meeting.
Financial statements issued by the Company need to be fair, balanced and understandable. The Audit, Risk and
Compliance Committee reviews the Annual Report as a whole and makes suitable recommendations to the Board.
The Company’s half-yearly report is approved by the Audit, Risk and Compliance Committee prior to publication.
The Audit, Risk and Compliance Committee assesses whether it is appropriate to prepare the Company’s financial
statements on a going concern basis and makes recommendations to the Board. The Board’s conclusions are set out
in the Report of the Directors.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
37
Report of the Audit, Risk and Compliance Committee (continued)
Internal Controls
The Audit, Risk and Compliance Committee is responsible for ensuring that suitable internal control systems to
prevent and detect fraud and error are designed and implemented and is also responsible for reviewing the
effectiveness of such controls. The Board confirms that there is an ongoing process for identifying, evaluating and
managing the significant risks faced by the Company. This process has been in place for the year under review and
up to the date of approval of this Report and is regularly reviewed. In particular, it has reviewed and updated the
process for identifying and evaluating the significant risks affecting the Company and the policies by which these
are managed. The risks of failure of any such controls are identified in a risk assessment which identifies the likelihood
and severity of the impact of such risks and the controls in place to minimise the probability of such risks occurring;
the risk management process and systems of internal control are designed to manage rather than eliminate the risk
of failure to achieve the Company’s objectives. It should be recognised that such systems can only provide reasonable,
but not absolute, assurance against material misstatement or loss. Equally, it must be stressed that undertaking an
acceptable degree of controlled risk is always necessary in the management of any investment trust if above average
performance is to be achieved.
The following are the key components which the Company has in place to provide effective internal control:
n The Board has agreed clearly defined investment criteria; reports on compliance therewith are regularly reviewed
by the Board.
n The Board has a procedure to ensure that the Company can continue to be approved as an investment trust by
complying with section 1158 of the Corporation Tax Act 2010.
n The Administrator prepares forecasts and management accounts which allow the Board to assess the Company’s
activities and review its performance.
n The performance of the Investment Manager and any contractual agreements with other third party service
providers, and adherence to them, are regularly reviewed.
n The Board receives and reviews the internal controls reports of the Investment Manager, Administrator, Custodian
and Depositary and seeks assurances as to the impact, if any, on the Company in the event of any shortcomings.
n The Company does not itself have a whistleblowing policy in place. The Company delegates its administration
to third party providers which have such policies in place.
The Audit, Risk and Compliance Committee has reviewed the need for an internal audit function, but has concluded
that, given the size of the organisation and the clear segregation of investment management and control of the
assets, there is no need for such a function at the current time. The Audit, Risk and Compliance Committee continues
to keep such a requirement under review.
External Audit and Process
The Audit, Risk and Compliance Committee meets at least twice a year with the Auditor. The Auditor provides a
planning report in advance of the annual audit and a report on the annual audit. The Committee has an opportunity
to question and challenge the Auditor in respect of each of these reports; it also agrees the level and scope of
materiality to be adopted in respect of the annual audit.
In addition, at least once a year, the Audit, Risk and Compliance Committee has an opportunity to discuss any aspect
of the Auditor’s work with the Auditor in the absence of the Investment Manager and Administrator.
After each audit, the Audit, Risk and Compliance Committee will review the audit process and consider its
effectiveness.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
38
Auditor Assessment and Independence
The Company’s Auditor is EY. EY was appointed as the Company’s auditor in 2023, following a formal tender process,
and this appointment was approved by shareholders at the 2024 AGM. EY’s first audit for the Company is in respect
of the year ended 31st December 2024.
EY presented its audit plan to the Committee in July 2024. The plan sets out the scope of the audit, the principal
risks that would be addressed, as detailed in the Independent Auditor’s Report, the timetable and the proposed
fees. These amounted to £55,000, excluding VAT, for the year. The comparative figure for the prior year’s audit, which
was undertaken by Begbies, was £16,250, excluding VAT.
The Audit, Risk and Compliance Committee has approved and implemented a policy on the engagement of the
Auditor to supply non-audit services, taking into account the recommendations of the FRC, and does not believe
there is any impediment to the Auditor’s objectivity and independence. All non-audit work to be carried out by the
Auditor must be approved by the Audit, Risk and Compliance Committee in advance. The cost of non-audit services
provided by the Auditor for the financial year ended 31st December 2024 was £nil (2023: £nil).
Independence
During the year the Committee reviewed the independence policies and procedures of the Auditor, including quality
assurance procedures. It was considered that those policies and procedures remained fit for purpose.
Conclusion
The Audit, Risk and Compliance Committee has reviewed the matters within its terms of reference and reports as
follows:
n it has approved the financial statements for the year ended 31st December 2024;
n it has reviewed the effectiveness of the Company’s internal controls and risk management;
n it has reviewed the need for a separate internal audit function;
n it has satisfied itself as to the independence of the Auditor;
n it has satisfied itself that the contents of the Annual Report are consistent with the financial statements; and
n it has considered the terms of EY’s engagement and has recommended to the Board that a resolution be proposed
at the Annual General Meeting for the re-appointment of Ernst & Young LLP as Auditor.
Ms M. H. Vaughan
Director
Chair, Audit, Risk and Compliance Committee
20th February 2025
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
39
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
40
Directors’ Annual Remuneration Report
Introduction
This Report is submitted in accordance with the requirements of sections 420 to 422 of the Companies Act 2006 in
respect of the year ended 31st December 2024. An ordinary resolution to approve this Report will be put to members
at the forthcoming Annual General Meeting; however, the Directors’ remuneration is not conditional upon the
resolution being passed.
The Company has established a Nominations and Remuneration Committee, the terms of reference of which include
annually reviewing and recommending to the Board the level of Directors’ fees and remuneration. The full terms of
reference are available at the Company’s registered office and on the Company’s website. The Committee comprises
all Board members and is chaired by Mr J. B. Roper. The Board being members of the Committee enables Directors
to address any potential conflicts when assessing individual levels of remuneration.
Directors’
remuneration as a single figure (audited)
Taxable Taxable
Fees Benefits Total for Fees Benefits Total for
2024 2024 2024 2023 2023 2023
Director £ £ £ £ £ £
Mr D. M. Best
1
– – – 24,000 – 24,000
Dr A. J. Hosty (Chairman)
2
38,000 – 38,000 30,000 – 30,000
Mr S. J. B. Knott 28,500 – 28,500 27,000 – 27,000
Mr J. B. Roper 28,500 – 28,500 27,000 – 27,000
Ms M. H. Vaughan 32,750 – 32,750 31,000 – 31,000
Total 127,750 – 127,750 139,000 – 139,000
1
Mr D. M. Best retired as a Director on 31st August 2023.
2
Dr A. J. Hosty, a non-executive Director, became Chairman on 31st August 2023.
Annual percentage change in Directors’ remuneration
The annual percentage change in fees for each Director who served in the year under review is set out in the following
table:
Year to Year to Year to Year to Year to
31st December 31st December 31st December 31st December 31st December
2024 2023 2022 2021 2020
% % % % %
Dr A. J. Hosty (Chairman)
1
26.7 25.0 9.1 – –
Mr S. J. B. Knott
2
5.6 – n/a n/a n/a
Mr J. B. Roper 5.6 12.5 9.1 – –
Ms M. H. Vaughan
3
5.6 n/a n/a n/a n/a
Mr D. M. Best
4
n/a – 9.0 – –
Dr D. M. Bramwell
5
n/a n/a 7.1 – –
1
Dr A. J. Hosty’s role changed from non-executive Director to Chairman on 31st August 2023
2
Mr S. J. B. Knott’s appointment as a non-executive Director commenced on 3rd October 2022
3
Ms M. H. Vaughan was appointed a Director on 1st January 2023
4
Mr D. M. Best’s role changed from non-executive Director to Chairman on 31st December 2022 and he retired on
31st August 2023
5
Dr D. M. Bramwell retired on 31st December 2022
The above table takes no account of the one-off additional payments made in 2022 to Mr Best and Mr Roper of
£11,000 and £17,000 respectively following extensive additional work carried out during the year in relation to
succession planning, a tender offer, change of broker, change of investment manager and recruitment of a non-
executive director.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
41
No payments of other types prescribed in the relevant regulations such as Long-term Incentive Plans (“LTIPs”) or
pensions and pension-related benefits were made.
All Directors are entitled to the reimbursement of expenses incurred by them in order to perform their duties as
Directors of the Company.
No additional remuneration or compensation was paid or payable by the Company during the year to any other
current or former Directors.
With effect from 1st January 2025 the fees payable to the Directors are as follows: Chairman £39,900, Chair of the
Audit, Risk and Compliance Committee £34,385 and other non-executive Directors £29,925.
Statement of Directors’ shareholdings and share interests (audited)
The Company has not set any requirements or guidelines for the Directors to own Ordinary shares in the Company.
The beneficial interests of the Directors and their connected persons in the Ordinary shares of the Company are
shown in the table below.
Ordinary shares
31st December 31st December
2024 2023
Dr A. J. Hosty – –
Mr S. J. B. Knott 785,062 488,111
Mr J. B. Roper – –
Ms M. H. Vaughan – –
No changes in the Directors’ interests shown above have occurred since 31st December 2024.
Performance graph
The graph below illustrates the total shareholder return for the Ordinary shares relative to the FTSE All-Share Index.
This has been selected as the most appropriate index against which to compare performance as it is the Company’s
benchmark index.
2019 2020 2021 2022 2023 20242014 2015 2016 20182017
10 Year cumulative performance graph 2014 to 2024
100%
140%
80%
20%
0%
-20%
FTSE All Share Index (rebased 100)
NAV per share (rebased 100)
40%
60%
120%
Directors’ Annual Remuneration Report (continued)
Significance of spend on pay
Directors’ Shareholder
remuneration distribution
£ £
2024 127,750 2,326,000
2023 139,000 2,443,000
Difference (11,250) (117,000)
% Change (8.1) (4.8)
Service contracts and letters of appointment
Except as set out below, there are no written service contracts or contract for services in respect of any Director.
There are no share options, LTIPs, pension or profit-related pay arrangements with any of the Directors.
There are letters of appointment for all four non-executive Directors:
Director Date
Dr A. J. Hosty 1st July 2017
Mr S. J. B. Knott 3rd October 2022
Mr J. B. Roper 5th April 2016
Ms M. H. Vaughan 8th December 2022
No terms or notice periods are set out in any terms of appointment of any of the Directors. All Directors are subject
to re-election at the Company’s Annual General Meeting to be held on 24th March 2025.
There are no provisions for the payment of compensation for loss of office, early termination or wrongful termination
by the Company. Any payment on termination of their appointments would be calculated in accordance with their
strict legal entitlements.
The Company’s Policy on Directors’ Remuneration
The following is the Company’s policy for Directors’ remuneration which was last approved by shareholders at the
Annual General Meeting held on 23rd March 2023. The shareholders will be asked to reconsider the Remuneration
Policy at the Annual General Meeting to be held in 2026.
Introduction
The Company’s policy as regards non-executive Directors is that fees payable to them should reflect their expertise,
responsibilities and time spent on Company matters. In determining the level of non-executive remuneration, market
equivalents should be considered with regard being had to the overall activities and size of the Company.
The maximum aggregate level of fees payable to the Directors for acting as Directors of the Company is £250,000
per annum (or such higher amount as is decided by ordinary resolution). Directors may also be remunerated for
providing special services or for performing any other office or employment by the Company (other than as auditor).
The Company does not confer any share options, long-term incentives or retirement benefits on any Director, nor
does it make a contribution to any pension scheme on behalf of the Directors. The Company also puts Directors’
liability insurance in place.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
42
Future Policy Table
The tables below summarise the various elements of the remuneration packages of the Directors.
Chairman and non-executive Directors’ fees
Element Purpose and link to strategy
Chairman and The fees paid to the Chairman and the other non-executive Directors aim to be competitive with
non-executive other investment trusts of equivalent size and complexity. Fees are fixed annual sums and are
Directors’ fees reviewed periodically by the Board (for non-executive Directors) and the Nominations and
Remuneration Committee (for the Chairman). Neither the Chairman nor the other non-executive
Directors receive any incentive payment.
Notes:
No Director is entitled to receive any pension provision.
The Company has no employees.
Approach to Recruitment Remuneration
The principles the Company would apply in setting remuneration for new Board members would be in line with the
Remuneration Policy. Fees and salary for new appointees would therefore be expected to be commensurate with
that of the existing Board members and their relevant peer group.
Statement of Consideration of Employment Conditions elsewhere in the Company
As the Company has no employees there was no consultation when setting the Directors’ Remuneration Policy and
no remuneration comparison measurement with employees was used.
It is intended that the Directors’ Remuneration Policy will continue to apply until the Annual General Meeting in
2026.
Voting at Annual General Meeting
A binding ordinary resolution approving the Directors’ Remuneration Policy was approved on 23rd March 2023. The
votes cast were as follows:
Remuneration Policy
For – % of votes cast 99.85%
Against – % of votes cast 0.15%
Total votes cast 1,178,164
Number of votes withheld 6,896
A non-binding ordinary resolution adopting the Annual Report on Directors’ Remuneration for the year ended 31st
December 2023 was approved by shareholders at the Annual General Meeting held on 27th March 2024. The votes
cast by proxy were as follows:
Annual Report on Directors’ Remuneration
For – % of votes cast 73.8%
Against – % of votes cast 26.2%
At Chairman’s discretion – % of votes cast 0.0%
Total votes cast 1,349,441
Number of votes withheld 3,802
As less than 80% of the votes cast were in favour of the resolution the Board consulted with shareholders to address
the concerns that influenced their voting. Details of the outcome of this consultation can be found on pages 26
and 27.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
43
Directors’ Annual Remuneration Report (continued)
Annual Statement
On behalf of the Board and in accordance with Part 2 of Schedule 8 to the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations 2013, I confirm that the above Report (which has been
agreed by the Board) summarises, as applicable, for the year ended 31st December 2024:
n the major decisions on Directors’ remuneration;
n any substantial changes relating to Directors’ remuneration made during the year; and
n the context in which the changes occurred and decisions that have been taken.
Mr J. B. Roper
Director
Chairman, Nominations and Remuneration Committee
20th February 2025
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
44
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable
United Kingdom law and UK adopted International Accounting Standards.
The Directors are required to prepare the financial statements for each financial year which present fairly the financial
position, the financial performance and cash flows of the Company for that period. In preparing those financial
statements the Directors are required to:
n select suitable accounting policies in accordance with UK adopted International Accounting Standard 8
Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;
n make judgments and estimates that are reasonable and prudent;
n present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
n provide additional disclosures when compliance with the specific requirements of UK adopted International
Accounting Standards is insufficient to enable users to understand the impact of particular transactions, other
events and conditions on the Company’s financial position and financial performance;
n state that the Company has complied with UK adopted International Accounting Standards subject to any
material departures disclosed and explained in the financial statements; and
n prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any
time the financial position of the Company and to 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 Directors’ Report, Strategic
Report and Directors’ Remuneration Report that comply with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company’s website. Visitors to the website need to be aware that legislation in the UK governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors consider that the Annual Report and financial statements taken as a whole are fair, balanced and
understandable and provide shareholders with the information necessary to assess the Company’s position and
performance, business model and strategy.
The Directors confirm that to the best of their knowledge:
n the financial statements, prepared in accordance with applicable accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the Company; and
n the Strategic Report includes a fair review 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 it faces.
Dr A. J. Hosty
Chairman
20th February 2025
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
45
Independent Auditor’s Report
To the Members of Rights and Issues Investment Trust PLC
Opinion
We have audited the financial statements of the Rights and Issues Investment Trust PLC (“the Company”) for the
year ended 31st December 2024 which comprise the Statement of Comprehensive Income, Statement of Financial
Position, Statement of Changes in Equity, Cash Flow Statement and the related notes 1 to 20, including a summary
of material accounting policy information.
The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted
international accounting standards.
In our opinion, the financial statements:
n
give a true and fair view of the Company’s affairs as at 31st December 2024 and of its profit for the year then ended;
n have been properly prepared in accordance with UK-adopted international accounting standards; and
n have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain
independent of the Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment
of the Company’s ability to continue to adopt the going concern basis of accounting included:
n Confirming our understanding of the Company’s going concern assessment process by engaging with the Directors
and the Company Secretary to determine if all key factors were considered in their assessment.
n Inspecting the Directors’ assessment of going concern, including the revenue forecast, for the period to 28th
February 2026 which is at least 12 months from the date the financial statements were authorised for issue. In
preparing the revenue forecast, the Company has concluded that it is able to continue to meet its ongoing costs
as they fall due.
n Reviewing the factors and assumptions, including the impact of the current economic environment, as applied
to the revenue forecast and the liquidity assessment of the investments. We considered the appropriateness of
the methods used to calculate the revenue forecast and the liquidity assessment and determined, through testing
of the methodology and calculations, that the methods, inputs and assumptions utilised were appropriate to be
able to make an assessment for the Company.
n Reviewing the Company’s going concern disclosures included in the Annual Report in order to assess that the
disclosures were appropriate and in conformity with the reporting standards.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a
going concern for a period assessed by the Directors, being the period to 28th February 2026 which is at least 12
months from when the financial statements are authorised for issue.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
46
In relation to the Company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report. However, because not all future events or conditions can be predicted, this statement
is not a guarantee as to the Company’s ability to continue as a going concern.
Overview of our audit approach
Key audit matters • Risk of incomplete or inaccurate revenue recognition, including the classification of
special dividends as revenue or capital items in the Statement of Comprehensive Income
• Risk of incorrect valuation or ownership of the investment portfolio
Materiality • Overall materiality of £1.23m which represents 1% of shareholders’ funds
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine
our audit scope for the Company. This enables us to form an opinion on the financial statements. We take into
account size, risk profile, the organisation of the Company and effectiveness of controls, the potential impact of
climate change and changes in the business environment when assessing the level of work to be performed. All audit
work was performed directly by the audit engagement team.
Climate change
Stakeholders are increasingly interested in how climate change will impact companies. The Company has determined
that the most significant future impact from climate change on its operations will be how climate change could
affect the Company’s investments, and shareholder returns. This is explained in the principal and emerging risks and
uncertainties section on pages 22 and 23, which forms part of the “Other information,” rather than the audited
financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering
whether they are materially inconsistent with the financial statements or our knowledge obtained in the course of
the audit or otherwise appear to be materially misstated, in line with our other responsibilities on “Other information”.
Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating
management’s assessment of the impact of climate change risk and whether this has been appropriately reflected
in the financial statements as set out in note 1 and the conclusion that there was no further impact of climate change
to be taken into account as the investments are valued based on market pricing as required by UK-adopted
International Accounting Standards.
We also challenged the Directors’ considerations of climate change risk in their assessment of going concern and
viability and associated disclosures.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion
thereon, and we do not provide a separate opinion on these matters.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
47
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
48
We have performed the following
procedures:
We obtained an understanding of
the processes and controls
surrounding revenue recognition
including the classification of special
dividends by performing
walkthrough procedures.
For 100% of dividends received and
accrued, we recalculated the income
by multiplying the investment
holdings at the ex-dividend date,
traced from the accounting records,
by the dividend per share, which
was agreed to an independent data
vendor. We also agreed all exchange
rates to an independent data vendor
and agreed all dividends received
and accrued to bank statements,
where paid.
For 100% of dividends accrued, we
reviewed the investee company
announcements to assess whether
the dividend entitlements arose
prior to 31st December 2024.
To test completeness of recorded
income, we verified that expected
dividends for each investee
company held during the year had
been recorded as income with
reference to investee company
announcements obtained from an
independent data vendor.
For all investments held during the
year, we reviewed the type of
dividends paid with reference to an
external data vendor to identify
those which were special and
compared those identified to
managements special dividend listing.
Based on the work performed, we
did not identify any special
dividends during the year. This is
consistent with the Company’s
accounting records.
The results of our procedures
identified no material misstatement
in relation to the risk of incomplete
or inaccurate revenue recognition,
including the classification of special
dividends as revenue or capital items
in the Statement of Comprehensive
Income.
Independent Auditor’s Report
To the Members of Rights and Issues Investment Trust PLC
Risk Our response to the risk Key observations communicated to
the Audit, Risk and Compliance
Committee
Incomplete or inaccurate revenue
recognition, including the
classification of special dividends
as revenue or capital items in the
Statement of Comprehensive
Income (as described on page 37 in
the Report of the Audit, Risk and
Compliance Committee and as per
the accounting policy set out on
page 58).
The total revenue for the year to
31st December 2024 was £3.4m,
consisting primarily of dividend
income from listed investments.
There is a risk of incomplete or
inaccurate revenue recognition
through the failure to recognise
proper income entitlements or to
apply an appropriate accounting
treatment.
The Directors may be required to
exercise judgment in determining
whether income receivable in the
form of special dividends should be
classified as ‘revenue’ or ‘capital’ in
the Statement of Comprehensive
Income.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
49
We performed the following
procedures:
We obtained an understanding of
the processes and controls
surrounding investment pricing and
legal title of investments by
performing walkthrough procedures.
For 100% of listed investments in
the portfolio, we verified the
market prices and exchange rates to
an independent pricing vendor and
recalculated the investment
valuations as at the year-end.
We inspected the stale pricing
reports produced by the
administrator to identify prices for
any listed investments that have
not changed around the year-end
to verify whether the listed price is
a valid fair value through review of
trading activity. No stale prices
were identified.
We compared the Company’s
investment holdings as at 31st
December 2024 to independent
confirmations received directly
from the Company’s Depositary
and Custodian.
The results of our procedures
identified no material misstatement
in relation to the risk of incorrect
valuation or ownership of the
investment portfolio.
Risk Our response to the risk Key observations communicated to
the Audit, Risk and Compliance
Committee
Incorrect valuation or ownership
of the investment portfolio (as
described on page 37 in the Report
of the Audit, Risk and Compliance
Committee and as per the
accounting policy set out on page
58).
The valuation of the portfolio as at
31st December 2024 was £121.3m
consisting entirely of listed equities,
with the exception of one
unquoted equity which was valued
at £0.03m.
The valuation of the assets held by
the Company is the key driver of
the Company’s net asset value and
total return. Incorrect investment
pricing, or a failure to maintain
proper legal title of the investments
held by the Company could have a
significant impact on net asset value
and the return generated for
shareholders.
The fair value of listed investments
is determined using quoted market
bid prices at close of business on
the reporting date.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected
to influence the economic decisions of the users of the financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the Company to be £1.23 million, which is 1% of Shareholders’ funds. We believe that
materiality basis provides us with material alignment to the key measurement of the Company’s performance.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds
materiality.
On the basis of our risk assessments, together with our assessment of the Company’s overall control environment,
our judgment was that performance materiality should be set at 50% of our planning materiality, namely £0.62m.
We have set performance materiality at this percentage due to the nature of this being a first year audit.
Independent Auditor’s Report
To the Members of Rights and Issues Investment Trust PLC
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit, Risk and Compliance Committee that we would report to them all uncorrected audit
differences in excess of £0.06m, which is set at 5% of planning materiality, as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measur
es of materiality discussed above
and in light of other relevant qualitative considerations in forming our opinion.
Given the importance of the distinction between revenue and capital for investment trusts, we have also applied
a separate threshold for the revenue column of the Statement of Comprehensive Income of £0.11m, being our
reporting threshold.
Other information
The other information comprises the information included in the annual report other than the financial statements,
notes to the financial statements and our Auditor’s Report thereon. The Directors are responsible for the other
information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement
of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
n the information given in the Strategic Report and the Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
n the Strategic Report and Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the Strategic Report or Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
n adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
n the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
n certain disclosures of Directors’ remuneration specified by law are not made; or
n we have not received all the information and explanations we require for our audit
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
50
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained
during the audit:
n Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and
any material uncertainties identified set out on page 30;
n Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and
why the period is appropriate set out on page 26;
n Director’s statement on whether it has a reasonable expectation that the Company will be able to continue in
operation and meets its liabilities set out on page 30;
n Directors’ statement on fair, balanced and understandable set out on page 45;
n Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on
pages 22 and 23;
n The section of the annual report that describes the review of effectiveness of risk management and internal
control systems set out on page 35; and;
n The section describing the work of the Audit, Risk and Compliance Committee set out on pages 37 to 39.
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 45, the Directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for
such internal control as the Directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The
extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with
governance of the Company and management.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
51
Independent Auditor’s Report
To the Members of Rights and Issues Investment Trust PLC
n We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and
determined that the most significant are the UK Adopted International Accounting Standards, the Companies
Act 2006, the UK Listing Rules, the AIC Code and the Statement of Recommended Practice, Section 1158 of the
Corporation Tax Act 2010, and The Companies (Miscellaneous Reporting) Regulations 2018.
n We understood how the Company is complying with those frameworks through discussions with the Audit, Risk
and Compliance Committee and Company Secretary, and review of the Board and committee minutes.
n We assessed the susceptibility of the Company’s financial statements to material misstatement, including how
fraud might occur by considering the key risks impacting the financial statements. We identified a fraud risk with
respect to the incomplete or inaccurate revenue recognition through incorrect classification of special dividends
as revenue or capital items in the Statement of Comprehensive Income. Further discussion of our approach is
set out in the section on key audit matters above.
n Based on this understanding we designed our audit procedures to identify non-compliance with such laws and
regulations. Our procedures involved review of the reporting to the Directors with respect to the application of
the documented policies and procedures and review of the financial statements to ensure compliance with the
reporting requirements of the Company.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Auditor’s Report.
Other matters we are required to address
n Following the recommendation from the Audit, Risk and Compliance Committee, we were appointed by the
Company at its Annual General Meeting on 27th March 2024 to audit the financial statements for the year ending
31st December 2024 and subsequent financial periods.
n The period of total uninterrupted engagement including previous renewals and reappointments is one year,
covering the year ended 31st December 2024.
n The audit opinion is consistent with the additional report to the Audit, Risk and Compliance Committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Caroline Mercer
(Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Edinburgh
20th February 2025
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52
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
53
Financial Statements
Statement of Comprehensive Income
for the year ended 31st December 2024
Year ended 31st December 2024 Year ended 31st December 2023
Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Investment income 2 3,313 – 3,313 3,999 – 3,999
Other operating income 2 108 – 108 94 – 94
Total income 3,421 – 3,421 4,093 – 4,093
Gains on fair value through
profit or loss assets 10 – 9,706 9,706 – 797 797
3,421 9,706 13,127 4,093 797 4,890
Expenses
Investment management fee 3 672 – 672 670 – 670
Other expenses 4 522 131 653 470 156 626
1,194 131 1,325 1,140 156 1,296
Profit before finance costs
and taxation 2,227 9,575 11,802 2,953 641 3,594
Finance costs – – – – – –
Profit before tax 2,227 9,575 11,802 2,953 641 3,594
Tax 6 – – – – – –
Profit for the year 2,227 9,575 11,802 2,953 641 3,594
Return per Ordinary share 8 42.1p 181.2p 223.3p 50.4p 11.0p 61.4p
The total column represents the statement of comprehensive income of the Company.
The revenue and capital columns, including the revenue and capital earnings per Ordinary Share, are supplementary
information prepared under guidance published by the AIC.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired
or discontinued during the period. All income is attributable to the equity holders of the Company.
The Company does not have any other comprehensive income. Therefore no separate Statement of Comprehensive
Income has been presented.
The notes on pages 57 to 69 form part of these financial statements.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
54
Financial Statements (continued)
Statement of Financial Position
as at 31st December 2024
31st December 31st December
2024 2023
Notes £'000 £'000
Non-current assets
Investments – fair value through profit or loss 10 121,285 129,994
Current assets
Other receivables 12 457 556
Cash and cash equivalents 1,893 1,051
2,350 1,607
Total assets 123,635 131,601
Current liabilities
Other payables 13 488 242
Total assets less current liabilities 123,147 131,359
Net assets 123,147 131,359
Equity
Called up share capital 14 1,210 1,405
Capital redemption reserve 15 1,045 850
Retained reserves:
Capital reserve 15 81,693 84,416
Revaluation reserve 15 36,483 41,873
Revenue reserve 15 2,716 2,815
Total equity 123,147 131,359
Net asset value per share
Ordinary shares 16 2543.4p 2,337.1p
The notes on pages 57 to 69 form part of these financial statements.
The financial statements were approved by the Board and authorised for issue on 20th February 2025. They were
signed on its behalf by:
Dr A. J. Hosty
Chairman
Company Registration Number: 00736898
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
55
Financial Statements (continued)
Statement of Changes in Equity
for the year ended 31st December 2024
Capital
Share redemption Capital Revaluation Revenue
capital reserve reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
For the year ended 31st December 2024
Balance at 31st December 2023 1,405 850 84,416 41,873 2,815 131,359
Profit for the year – – 14,965 (5,390) 2,227 11,802
Total recognised income and expense 1,405 850 99,381 36,483 5,042 143,161
Ordinary shares bought back
and cancelled (195) 195 (17,688) – – (17,688)
Dividends (Note 7) – – – – (2,326) (2,326)
Balance at 31st December 2024 1,210 1,045 81,693 36,483 2,716 123,147
Capital
Share redemption Capital Revaluation Revenue
capital reserve reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
For the year ended 31st December 2023
Balance at 31st December 2022 1,542 713 67,191 69,032 2,305 140,783
Loss for the year – – 27,800 (27,159) 2,953 3,594
Total recognised income and expense 1,542 713 94,991 41,873 5,258 144,377
Ordinary shares bought back
and cancelled (137) 137 (10,575) – – (10,575)
Dividends (Note 7) – – – – (2,443) (2,443)
Balance at 31st December 2023 1,405 850 84,416 41,873 2,815 131,359
The notes on pages 57 to 69 form part of these financial statements.
Dividends paid were paid from the revenue reserve.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
56
Financial Statements (continued)
Cash Flow Statement
for the year ended 31st December 2024
31st December 31st December
2024 2023
Notes £'000 £'000
Cashflows from operating activities
Profit before tax 11,802 3,594
Adjustments for:
Gains on investments (9,706) (797)
Purchases of investments 10 (23,495) (30,042)
Proceeds on disposal of investments 10 41,910 35,292
Operating cash flows before movements in working capital 20,511 8,047
Decrease in receivables 99 5
Increase/(decrease) in payables 62 (22)
Net cash from operating activities before income tax 20,672 8,030
Income taxes received – –
Net cash flows from operating activities 20,672 8,030
Cashflows from financing activities
Ordinary shares bought back (17,504) (10,575)
Dividends paid 7 (2,326) (2,443)
Net cash used in financing activities (19,830) (13,018)
Net increase/(decrease) in cash and cash equivalents 842 (4,988)
Cash and cash equivalents at beginning of year 1,051 6,039
Cash and cash equivalents at end of year 1,893 1,051
The net cash flows from operating activities includes cash flows of £3,414,000 from dividend income (2023: £4,099,000)
and £108,000 from interest income (2023: £94,000).
The notes on pages 57 to 69 form part of these financial statements.
Notes to the Financial Statements
for the year ended 31st December 2024
1. Reporting Entity
Rights and Issues Investment Trust PLC is a closed-ended investment company, registered in England and Wales on
2nd October 1962 with Company number 00736898. The Company’s registered office is Hamilton Centre, Rodney
Way, Chelmsford CM1 3BY. Business operations commenced on 28th July 1966 when the Company’s shares were
admitted to trading on the London Stock Exchange. The Company invests primarily in a portfolio of equity securities
with an emphasis on smaller companies. UK smaller companies will normally constitute at least 80% of the investment
portfolio. UK smaller companies include those listed on either the London Stock Exchange or the Alternative
Investment Market (“AIM”).
Details of the Directors, Investment Manager and Advisors can be found on page 4.
The financial statements of the Company are presented for the year ended 31st December 2024 and were authorised
for issue by the Board on 20th February 2025.
Basis of Accounting
The financial statements have been prepared in accordance with international accounting standards and the
applicable legal requirements of the Companies Act 2006.
In preparing these financial statements, the Directors have considered the impact of climate change risk and
concluded there was no impact as the values of investments are based on market quoted prices and therefore reflect
market participants view of climate change risk. None of the Company’s other assets and liabilities are considered
to be potentially impacted by climate change.
Under international accounting standards, the AIC Statement of Recommended Practice “Financial Statements of
Investment Trust Companies and Venture Capital Trusts” (“SORP”) issued in July 2022 has no formal status, but the
Company adheres to the guidance of the SORP.
Going concern
The financial statements have been prepared on a going concern basis. In forming this opinion, the Directors have
considered the general economic backdrop, the potential impact of the war in Ukraine and the hostilities in the
Middle East on the going concern and viability of the Company. In making their assessment, the Directors have
reviewed income and expense projections and the liquidity of the investment portfolio, and considered the
mitigation measures which key service providers, including the Investment Manager, have in place to maintain
operational resilience.
The Directors have a reasonable expectation that the Company has adequate operational resources to continue in
operational existence for at least twelve months from the date of approval of these financial statements and up to
28th February 2026. Further information on the Company’s going concern can be found on page 30.
Significant accounting policies
a. Accounting convention
The accounts are prepared under the historical cost basis, except for the measurement of fair value of investments.
b. Adoption of new IFRS standards
There have been minor amendments to IAS 1 and 7 and IFRS 7 and 16 which were effective for annual periods
beginning on or after 1st January 2024 and have not had any material impact on the accounts. Amendments to IAS
21 (The Effects of Changes in Foreign Exchange Rates) are effective for annual periods beginning on or after 1st January
2025 and are not anticipated to have any material impact on the accounts.
c. Income
Dividend income is included in the financial statements on the ex-dividend date. All other income is included on an
accruals basis.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
57
Notes to the Financial Statements (continued)
for the year ended 31st December 2024
d. Expenses
The Company’s policy is to expense transaction costs on acquisition/disposal through the gains on investment at fair value
through profit or loss. All other expenses are accounted for on an accruals basis and charged through the revenue account.
e. Taxation
The charge for taxation is based on the net revenue for the year. Deferred taxation is recognised in respect of all
temporary differences that have originated but not reversed at the balance sheet date to which there are none (2023:
none). Investment trusts which have approval under section 1158 of the Corporation Tax Act 2010 are not liable for
taxation on capital gains.
f. Dividends
Dividends payable to shareholders are recognised in the financial statements when they are paid or, in the case of
final dividends, when they are approved by the shareholders.
g. Cash and cash equivalents
Cash comprises cash in hand and deposits payable on demand. Cash equivalents are short-term highly liquid
investments that are readily convertible to known amounts of cash.
h. Investments
Investments are classified as fair value through profit or loss as the Company’s business is investing in financial assets
with a view to profiting from their total return in the form of interest, dividends or capital growth.
Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are
recognised in the Income Statement as “Gains or losses on investments held at fair value through profit or loss”. Also
included within this heading are transaction costs in relation to the purchase or sale of investments.
All investments, classified as fair value through profit or loss, are further categorised into the following fair value hierarchy:
Level 1 – Unadjusted prices quoted in active markets for identical assets and liabilities.
Level 2 – Having inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (ie as prices) or indirectly (ie derived from prices).
Level 3 – Having inputs for the asset or liability that are not based on observable data.
Investments traded on active stock exchange markets are valued at their fair value, which is determined by the
quoted market bid price at the close of business at the balance sheet date. Where trading in a security is suspended,
the investment is valued at the Board’s estimate of its fair value.
The unquoted investment is valued by the Board at fair value using the International Private Equity and Venture
Capital Valuation Guidelines.
Judgments, estimates or assumptions
The Directors have reviewed matters requiring judgments, estimates or assumptions. The preparation of the financial
statements require management to make judgments, estimates or assumptions that affect the amounts reported
for assets and liabilities as at the year end date and the amounts reported for revenue and expenses during the year.
However, the nature of the estimate means that actual outcomes could differ from those estimates. No significant
judgments, estimates or assumptions have been made in the preparation of these financial statements.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
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Notes to the Financial Statements (continued)
for the year ended 31st December 2024
2. Income
2024 2023
£'000 £'000
Income from investments
Franked investment income 3,313 3,999
Other operating income
Deposit interest 108 94
Total income 3,421 4,093
Total income comprises:
Dividends 3,313 3,999
Interest 108 94
3,421 4,093
Income from investments
UK 3,313 3,990
Unlisted stock – 9
3,313 3,999
3. Investment Management fee
2024 2023
£'000 £'000
Investment management fee 806 804
Operating expenses rebate (134) (134)
Total 672 670
Following the appointment of Jupiter as Investment Manager on 3rd October 2022 a management fee is payable
quarterly to the Investment Manager on the following basis:
0.60% per cent per annum on the Company's NAV up to and including £200 million.
0.50% per cent per annum on the Company’s NAV in excess of £200 million.
An operating expenses cap (rebate) will be applied, in respect of each financial year by means of a balancing charge,
which will reduce the management fee payable to the Investment Manager with respect to the quarter ending 31st
March of the following financial year. It will apply for a period of 5 years with effect from 3rd October 2022. The
operating expenses cap will not apply to the extent that the management fee would be less than 0.50% of the
Company’s average daily NAV during any financial year. The Manager and the Board will review the operating expenses
cap at least annually to determine whether the level of the cap remains appropriate.
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Notes to the Financial Statements (continued)
for the year ended 31st December 2024
4. Other Expenses
2024 2023
£'000 £'000
Staff costs (note 5) 7 4
Non-executive Directors’ fees 128 147
Administration fees 94 94
Auditor’s remuneration
– Audit 66 19
Secretarial services 58 42
Other 169 164
522 470
Capital expenses 131 156
Total 653 626
5. Staff Costs and Directors’ Remuneration
2024 2023
£'000 £'000
Social security costs 7 4
Total 7 4
2024 2023
£'000 £'000
Directors’ emoluments 128 139
Payments to former directors – 8
128 147
The Company has not had any employees since the appointment of JUTM as Investment Manager on 3rd October
2022.
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Notes to the Financial Statements (continued)
for the year ended 31st December 2024
6. Taxation
2024 2023
Revenue Capital Total Revenue Capital To tal
£’000 £’000 £’000 £’000 £’000 £’000
Corporation tax at 25% (2023: 23.5%) – – – – – –
Profit before tax 2,227 9,575 11,802 2,953 641 3,594
Tax on profit at effective rate 25% (2023: 23.5%) 557 2,394 2,951 694 151 845
Factors affecting the recovery/charge for the year:
Income not taxable (828) – (828) (940) – (940)
Capital items not taxable – (2,427) (2,427) – (187) (187)
Unutilised losses 271 33 304 246 36 282
Current tax charge for the year – – – – – –
At the year end there is a potential deferred tax asset of £2,486,287 (2023: £2,214,810) in relation to surplus management
expenses of £9,945,149 (2023: £8,859,238). It is unlikely that the Company will generate sufficient taxable profits in the
future to utilise these expenses and therefore no deferred tax asset has been recognised in the year. The Company
has not provided for deferred tax on capital gains or losses arising on the revaluation or disposal of investments as
it is exempt from tax on these items because of its status as an investment trust company.
Factors that may affect future tax charges
The Company has not recognised any deferred tax asset arising as a result of having unutilised management expenses.
These expenses will only be utilised if the tax treatment of the Company’s income and capital gains changes or if
the Company’s investment profile changes.
7. Dividends
Amounts recognised as distributions to equity holders in the year:
2024 2023
£'000 £'000
Paid
Final dividend for the year ended 31st December 2023 of 31.25p per share
(year ended 31st December 2022: 29.25p) 1,702 1,767
Interim dividend for the year ended 31st December 2024 of 12p per share
(year ended 31st December 2023: 11.75p) 624 676
2,326 2,443
2024 2023
£'000 £'000
Proposed
Final dividend payable for the year ended 31st December 2024 of 32.00p
per share (year ended 31st December 2023: 31.25p) 1,537 1,720
The final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included
as a liability in these financial statements.
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Notes to the Financial Statements (continued)
for the year ended 31st December 2024
7. Dividends (continued)
Set out below is the total dividend paid and payable in respect of the financial year, which is the basis on which the
requirements of section 1158 of the Corporation Tax Act 2010 are considered.
2024 2023
£'000 £'000
Revenue available for distribution by way of dividend for the year 2,227 2,953
Interim dividend for the year ended 31st December 2024 of 12p per share
(year ended 31st December 2023: 11.75p) (624) (676)
Proposed final dividend for the year ended 31st December 2024 of 32.00p per share
(year ended 31st December 2023: 31.25p) (1,537) (1,720)
Net addition to Revenue reserve 66 557
8. Return per Ordinary Share
2024 2023
£'000 £'000
Return attributable to equity shareholders:
Revenue return 2,227 2,953
Capital return 9,575 641
11,802 3,594
p p
Revenue return per share 42.1 50.4
Capital return per share 181.2 11.0
223.3 61.4
Return by share is calculated using the weighted average number of income shares in issue during the year of 5,249,524
(2023: 5,854,307).
9. Investments
Analysis of the investments
The number of companies or institutions in which equities, convertibles or fixed interest securities were held was
22 (2023: 22).
2024 2023*
£'000 % £'000 %
Equity Groups
Basic Materials
Chemicals 6,232 5.14 6,444 4.96
Industrial Metals and Mining 7,544 6.22 9,969 7.67
Consumer Discretionary
Leisure Goods 1,397 1.15 3,339 2.57
Consumer Staples
Food Producers – – 4,617 3.55
Financials
Finance and Credit Services 5,666 4.67 6,501 5.00
Investment Banking and Brokerage Services 9,221 7.60 5,721 4.40
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Notes to the Financial Statements (continued)
for the year ended 31st December 2024
9. Investments (continued)
Analysis of the investments
2024 2023*
£'000 % £'000 %
Industrials
Construction and Materials 5,348 4.41 4,319 3.32
Electronic and Electrical Equipment 14,698 12.12 10,504 8.08
General Industrials 7,587 6.25 13,666 10.51
Industrial Engineering – – 6,268 4.82
Industrial Support Services 6,729 5.55 3,806 2.93
Industrial Transportation 7,665 6.32 14,906 11.47
Technology
Software and Computer Services – – 2,714 2.09
Telecommunications
Telecommunications Equipment – – 1,869 1.44
Utilities
Electricity 7,387 6.09 7,401 5.69
AIM Traded Stocks 41,780 34.45 27,909 21.47
Delisted 31 0.03 41 0.03
Fixed Interest
Preference – – – –
Total UK 121,285 100.00 129,994 100.00
*The figures for 2023 have been reworked based on the latest categories as per the latest FTSE categorisation.
10. Investments held at fair value through profit or loss
2024 2023
£'000 £'000
Investments listed on a recognised investment exchange
UK equity listed investments at fair value 79,474 96,323
AIM traded stocks 41,780 33,630
Unlisted stock 31 41
121,285 129,994
AIM traded/
Listed Unlisted Total
2024 2024 2024
£’000 £’000 £’000
Opening book cost 69,954 18,167 88,121
Opening unrealised appreciation 26,369 15,504 41,873
Opening valuation 96,323 33,671 129,994
Movement in the year:
Purchases at cost 13,762 9,733 23,495
Sales - proceeds (33,544) (8,366) (41,910)
Sales - realised gains on sales 11,474 3,622 15,096
Decrease/(increase) in unrealised appreciation (8,541) 3,151 (5,390)
Closing valuation 79,474 41,811 121,285
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Notes to the Financial Statements (continued)
for the year ended 31st December 2024
10. Investments held at fair value through profit or loss (continued)
AIM traded/
Listed Unlisted Total
2024 2024 2024
£’000 £’000 £’000
Closing book cost 61,646 23,156 84,802
Closing unrealised appreciation 17,828 18,655 36,483
79,474 41,811 121,285
Realised gains on sales 11,474 3,622 15,096
Decrease/(increase) in unrealised appreciation (8,541) 3,151 (5,390)
Gains on investments 2,933 6,773 9,706
With the exception of the unlisted stock, the Company’s investments are Level 1 assets under the definition of IFRS
13 and comprise equity listed and AIM traded investments classified as held at fair value through profit or loss.
Investments have been revalued over time and, until they are sold, any unrealised gains or losses are included in the
fair value movement on investments.
During the year transaction costs of £75,583 were incurred on the acquisition of investments (2023: £133,196). Costs
relating to disposals of investments during the year amounted to £19,154 (2023: £14,624). All transaction costs have
been included within the capital column of the Income Statement.
11. Significant Interests in Investee Companies
The Company has a holding of 3% or more that is material in the context of the financial statements in the following
investments as at 31st December 2024:
%
Name holding
Colefax Group 14.13
Renold 8.35
Elecosoft 5.38
Macfarlane Group 4.44
Vp 3.44
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Notes to the Financial Statements (continued)
for the year ended 31st December 2024
12. Other Receivables
2024 2023
£'000 £'000
Amounts due from brokers 2 –
Prepayments and accrued income 455 556
457 556
Cash and cash equivalents
Cash at bank 1,893 1,051
13. Other Payables
2024 2023
£'000 £'000
Accruals 304 242
Outstanding share buybacks 184 –
488 242
14. Share Capital
2024 2023
£'000 £'000
Allotted, Called Up and Fully Paid
4,841,803 Ordinary Shares of 25p each (2023: 5,620,684) 1,210 1,405
Number of
Ordinary
shares
2024
Balance at beginning of year 5,620,684
Ordinary shares bought back and cancelled (778,881)
4,841,803
15. Reserves
2024
Capital
redemption Capital Revaluation Revenue
reserve reserve reserve reserve
£’000 £’000 £’000 £’000
Beginning of year 850 84,416 41,873 2,815
Ordinary shares bought back and cancelled 195 (17,688) – –
Decrease in unrealised appreciation – – (5,390) –
Net gains on realisation of investments – 15,096 – –
Expenses – (131) – –
Profit for year – – – 2,227
Dividends – – – (2,326)
End of year 1,045 81,693 36,483 2,716
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66
Notes to the Financial Statements (continued)
for the year ended 31st December 2024
15. Reserves (continued)
2023
Capital
redemption Capital Revaluation Revenue
reserve reserve reserve reserve
£’000 £’000 £’000 £’000
Beginning of year 713 67,191 69,032 2,305
Ordinary shares bought back and cancelled 137 (10,575) – –
Decrease in unrealised appreciation – – (27,159) –
Net gains on realisation of investments – 27,956 – –
Expenses – (156) – –
Profit for year – – – 2,953
Dividends – – – (2,443)
End of year 850 84,416 41,873 2,815
The capital reserve represents realised profits and losses arising on the disposal of investments. The revaluation
reserve represents unrealised profits and losses arising on the revaluation of investments held. The revenue reserve
represents accumulated revenue less the distributions paid. Both the capital reserve and revenue reserve together
represent the total distributable reserves at the year end.
16. Net Asset Value per share
The net asset value per Ordinary share calculated in accordance with the Articles of Association was as follows:
Net asset value per Net asset value
Ordinary share attributable attributable
2024 2023 2024 2023
p p £’000 £’000
Ordinary shares 2543.4 2337.1 123,147 131,359
The movements during the year attributable to each class of share were as follows:
Ordinary Ordinary
shares shares
2024 2023
£’000 £’000
Total net assets at beginning of year 131,359 140,783
Shares bought back and cancelled (17,688) (10,575)
Total recognised gains for the year 9,575 641
Transfer to reserves (99) 510
Total net assets attributable at end of year 123,147 131,359
Number of shares in issue 4,841,803 5,620,684
The Company may repurchase its own shares and then cancel them, reducing the freely traded shares ranking for
dividends and enhancing returns and earnings per Ordinary Share to the remaining Shareholders. When the Company
repurchases its share, it does so at a total cost below the prevailing NAV per share.
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Notes to the Financial Statements (continued)
for the year ended 31st December 2024
16. Net Asset Value per share (continued)
The estimated percentage added to the NAV per share as a result of buybacks of 1.8% (2023: 1.6%) is derived from
the repurchase of shares in the market at a discount to the prevailing NAV at the point of repurchase. The shares
were bought back at a weighted average discount of 11.4% (2023: 16.0%).
2024 2023
Weighted average discount of buybacks 11.4% 16.0% a
Percentage of shares bought back 13.9% 8.8% b
NAV accretion from buyback 1.8% 1.6% (a*b)/(100-b)
17. Related Party Transactions
Fees payable during the year to the Directors and their interests in shares of the Company are considered to be
related party transactions. Details are disclosed within the Directors’ Remuneration Report on pages 40 to 44. The
balance of fees due to Directors at the year end was £nil (2023: £nil).
The Company has an agreement with Jupiter Unit Trust Managers Limited for the provision of Investment Management
services. Details of fees earned during the year and balances outstanding at the year end are disclosed in note 3.
18. Financial assets and liabilities
The Company’s financial assets and liabilities comprise securities, cash balances and debtors and creditors that arise
from its operations, for example, in respect of sales and purchases awaiting settlement and debtors for accrued
income.
The investment policy and objectives of the Company are stated on page 2.
As an investment trust, the Company invests in securities for the long term. Accordingly it is and has been throughout
the year under review, the Company’s policy that no short term trading in investments or other financial instruments
should be undertaken.
The main risks arising from the Company’s financial instruments are market price risk, liquidity risk and credit risk.
The Board’s policy for managing these risks is summarised below. These policies have remained unchanged since the
beginning of the year to which these financial statements relate.
Market price risk
Market price risk arises from uncertainty about future prices of financial instruments held. It represents the potential
loss the Company might suffer through holding market positions in the face of price movements. Market Risk
comprises other price risk and interest rate risk.
Other price risk
The Board meets at least quarterly to consider the asset allocation of the portfolio in order to minimise the risk
associated with industry sectors. The Investment Manager has responsibility for monitoring the existing portfolio
selected in accordance with the Company’s investment objectives and seeks to ensure that individual stocks meet
an acceptable risk-reward profile.
Company's exposure to changes in market prices as at 31st December 2024 on its quoted equity investments was
£121,254,000 (2023: £129,953,000).
If the price of the investments held increased or decreased by 10%, with all other variables held constant, the net
assets attributable to Shareholders would increase or decrease by approximately £1,212,500 (2023: £1,299,530).
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68
Notes to the Financial Statements (continued)
for the year ended 31st December 2024
18. Financial assets and liabilities (continued)
Interest rate risk
The Company has limited exposure to Interest Rate risk on the underlying investments held. The only exposure to
interest rate risk is from cash held at bank of £1,893,000 (2023: £1,051,000).
If the value of sterling increased or decreased by 10%, with all other variables held constant, then the net assets
attributable to Shareholders would increase or decrease by approximately £189,300 (2023: £105,100).
Liquidity risk
Liquidity risk is not considered significant. All liabilities are payable within three months. The company’s assets comprise
mainly readily realisable securities which can be sold to meet funding requirements if necessary. The Company currently
holds one unquoted security, Dyson, which is not quoted on the London Stock Exchange or AIM.
Credit risk
Credit risk is the failure of the counterparty to a transaction to discharge its obligations which could result in the
Company suffering a loss. At the year end the Company’s maximum exposure to credit risk was as follows:
2024 2023
£'000 £'000
Receivables 457 556
Cash and cash equivalents 1,893 1,051
2,350 1,607
The risk is managed by dealing only with brokers and banks which have satisfactory credit ratings and are approved
by the Audit, Risk and Compliance Committee.
Financial assets and liabilities
All assets and liabilities are included at fair value.
Valuation of financial instruments
IFRS 13 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the
significance of inputs used in making the measurements. The valuation techniques used by the Company are explained
in the accounting policies note 1h Investments.
The fair value hierarchy has the following levels:
Level 1 – Unadjusted prices quoted in active markets for identical assets and liabilities.
Level 2 – Having inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (ie as prices) or indirectly (ie derived from prices).
Level 3 – Having inputs for the asset or liability that are not based on observable data.
31st December 2024 Level 1 Level 2 Level 3 To tal
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
UK Equity Listed 79,474 – – 79,474
AIM traded stocks 41,780 – – 41,780
Unlisted stock – 31 – 31
Net fair value 121,254 31 – 121,285
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69
Notes to the Financial Statements (continued)
for the year ended 31st December 2024
18. Financial assets and liabilities (continued)
31st December 2023 Level 1 Level 2 Level 3 To tal
£'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
UK Equity Listed 96,323 – – 96,323
AIM traded stocks 33,630 – – 33,630
Unlisted stock – 41 – 41
Net fair value 129,953 41 – 129,994
There were no transfers between Level 1 and Level 2 during the period.
The fair value of the Company’s investment in Dyson which is classified above as Level 2, is determined using the
outsourced provider S&P Global with their valuation techniques and price assessed and agreed by the governance
process in place by the Unlisted Assets Valuation Committee of the Investment Manager and ratified by the Board.
19. Capital management policies and procedures
The Company’s capital comprises the equity share capital, share premium and reserves as shown in the Statement
of Financial Position.
The Board, with the assistance of the Investment Manager, monitors and reviews the broad structure of the
Company’s capital on an ongoing basis. This review includes:
• The need to buy back Ordinary shares, either for cancellation or to hold in treasury, which takes account of the
difference between the net asset value per share and the share price (i.e. the level of share price discount or
premium); and
• The extent to which revenue in excess of that which is required to be distributed should be retained. During the
period, the Company complied with the externally imposed capital requirements:
• As a public company, the Company has a minimum share capital of £50,000; and
• In order to be able to pay dividends out of profits available for distribution, the Company has to be able to meet
one of the two capital restriction tests imposed on investment companies by Company law
20. Post Balance Sheet events
Between the year end and 19th February 2025, the latest practicable date before the publication of the financial
statements, the Company has bought back and cancelled 39,120 Ordinary shares for a cost of £848,653.
Glossary of Terms
Alternative performance measures
The European Securities and Markets Authority (‘ESMA’) published its guidelines on Alternative Performance Measures
(‘APMs’). APMs are defined as being a ‘financial measure of historical or future financial performance, financial position,
or cash flows, other than a financial measure defined or specified in the applicable accounting framework.’ The
guidelines are aimed at promoting the usefulness and transparency of APMs included in regulated information and
aim to improve comparability, reliability and/or comprehensibility of APMs. The following APMs (indicated by *) are
used throughout the annual report, financial statements and notes to the financial statements.
Annualised dividend yield
The annualised dividend yield is the amount paid to shareholders in the form of dividends (pence per share) as a
percentage of the share price as at 31st December each year. The calculation is shown on page 14.
Benchmark
The Company’s benchmark is the FTSE All-Share Index.
Benchmark Total Return Index
A total return index is a type of equity performance index that tracks both the capital gains of a group of stocks
over time and assumes that any cash distributions, such as dividends, are reinvested back into the index.
Discount*
The amount, expressed as a percentage, by which the share price is less than the net asset value per share. As at
31st December 2024, the share price was 2,380.00p and the net asset value per share was 2,543.40p, the discount
therefore being (6.4%). As at 31st December 2023, the share price was 2,130.00p and the net asset value per share was
2,337.10p, the discount therefore being (8.9%).
Discount management
Discount management is the process of the buyback and issue of Company shares by the Company with the intention
of managing any imbalance between supply and demand for the Company’s shares and thereby the market price.
The aim is to ensure that, in normal market conditions, the market price of the Company’s shares will not materially
vary from its NAV per share. The authority to repurchase the Company’s shares is voted upon by the shareholders
at each annual general meeting.
Jupiter or JUTM
Jupiter Unit Trust Managers Limited, the Company’s Investment Manager and Alternative Investment Fund Manager.
Mid market price
The mid-market price is the mid-point between the buy and the sell prices.
NAV per share
The net asset value (‘NAV’) is the value of the investment Company’s assets less its liabilities. The NAV per share is
the NAV divided by the number of shares in issue. The calculation is shown in Note 16 on page 66. The difference
between the NAV per share and the share price may be referred to as the discount or premium, as defined within
this glossary.
Ongoing charges*
Ongoing charges are the total expenses including both the investment management fee and other costs, as a
percentage of average NAV. The calculation is shown on page 15.
Premium*
The amount, expressed as a percentage, by which the share price is more than the net asset value per share. The
Company’s shares were trading at a discount for both 2024 and 2023.
Smaller company
A smaller company is defined as a company which has a market capitalisation smaller than the market capitalisation
of the 100th company of the FTSE 100.
RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY
70
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