Annual Report and Financial Statements
For the year ended 28 February 2026
Contents
Who We Are
Performance and Results Highlights
### Annual Review
Chairman's Statement Investment Adviser's Report Investment Portfolio
### Directors' Report Board of Directors Report of the Directors Corporate Governance
Directors' Remuneration Report Audit Committee Report
### Independent Auditor's Report
### Financial Statements
Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows
Index to Notes to the Financial Statements Notes to the Financial Statements
### Other Information
Company Advisers
Page
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68
Useful Information for Shareholders 69
Numbers in the Interim Report and Financial Statements are quoted in US dollar (“$”) unless otherwise stated.
Who We Are
## Corporate Objective
JZ Capital Partners Limited (“JZCP” or the "Company") seeks to maximise and realise the value of its investments in its US and European micro-cap companies and US real estate, and to return capital to shareholders.
## About Us
JZCP has investments in US and European micro-cap companies, as well as real estate properties in the US.
JZCP’s Investment Adviser is Jordan/Zalaznick Advisers, Inc. (“JZAI”) which was founded by David Zalaznick and Jay Jordan in 1986. JZAI is supported by teams of investment professionals in New York, Chicago, London and Madrid.
In August 2020, the Company's shareholders approved changes to the Company’s investment policy. Under the policy, the Company will make no further investments except in respect of which it has existing obligations and to continue selectively to support the existing portfolio. The intention is to realise the maximum value of the Company's investments and, having repaid all debt (completed December 2023), to return capital to shareholders (the "Company's Investment Policy"). In July 2024, the Company obtained shareholder approval to amend the Company's Articles to permit redemptions of the Ordinary shares by changing the rights of the Ordinary shares to enable them to be redeemable at the option of the Company.
JZCP is a Guernsey-domiciled closed-ended investment company authorised by the Guernsey Financial Services Commission. JZCP's shares trade on the London Stock Exchange.
Performance and Results Highlights
## Realisations During The Year
During the year ended 28 February 2026, the Company recorded realisation and refinancing proceeds, other distributions and escrows of $14.3 million (28 February 2025: $47.4 million). Post year end, the Company realised its interest in Factor Energia for €10.8 million (approximately $13.1 million).
Throughout the year the Company invested $2.0 million (28 February 2025: $23.9 million) in order to support and maximise the value of the existing portfolio. Since the Company adopted its investment policy in August 2020, the Company has achieved realisations in excess of $540 million, repaid approximately $270 million of debt and returned
$70 million of capital to shareholders.
Realisations and refinancings - Post implementation of the Company's Investment Policy in August 2020
Proceeds
$ million
| | |
| --- | --- |
| Factor Energia - Post year-end realisation of European micro-cap portfolio company | 13.1 |
| Tierpoint - Current year realisation of U.S. micro-cap portfolio company | 6.7 |
| Esperante - Current year refinancing of property | 5.0 |
| Other current year distributions from the European micro-cap portfolio Prior year realisations | 2.6 |
| Distributions from JZHL Secondary Fund ("JZHL") | 171.6 |
| Secondary sale of U.S micro-cap companies to JZHL Secondary Fund in December 2020 | 87.7 |
| Realisation proceeds from other U.S. micro-cap portfolio companies | 208.5 |
| Distributions and loan repayments from the European micro-cap portfolio | 34.0 |
| Proceeds from real estate portfolio | 13.6 |
| Total | 542.8 |
| Net Asset Value ("NAV") per Share and Total NAV Returns | |
NAV per share at 28 February 2026 was **$4.14** (28 February 2025: $4.06).
| | | | | |
| --- | --- | --- | --- | --- |
| | 1 Year | 3 Year | 5 Year | 7 Year |
| Total NAV return | 2.0% | 2.0% | -2.6% | -58.8% |
Following table presents the Company's annual NAV performance by sector:
Investment income (+5 cents) is derived from interest received on treasuries and cash held.
Performance and Results Highlights (continued)
## Shareholder Returns
| | | | |
| --- | --- | --- | --- |
| 1 Year | 3 Year | 5 Year | 7 Year |
| -18.3% | 20.8% | 144.0% | -56.3% |
JZCP's share price at 28 February 2026 was **£1.70** (28 February 2025: £2.20).
Total Shareholder return
## NAV to Market Price Discount
| | | | | |
| --- | --- | --- | --- | --- |
| 28.2.2019 | 28.2.2021 | 28.2.2023 | 28.2.2025 | 28.2.2026 |
| 42.3% | 74.3% | 53.0% | 31.8% | 44.8% |
The data below shows the theoretical discount of the year-end share price and the year-end NAV per share and does not factor in the timing delay in announcing the year-end NAV to the market.
Discount
Total NAV return, Total Shareholder returns and NAV to Market Price discount, are classified as Alternative Performance Measurements under European Securities and Market Authority guidelines and are further explained on page 69 under Useful Information for Shareholders.
Chairman's Statement
The Directors present the results of the Company for the financial year ended 28 February 2026. The NAV per share has increased from $4.06 at 28 February 2025 to $4.14 at 28 February 2026 ($4.04 at 31 August 2025).
### Investment Policy and Liquidity
As has been predicted would be likely, and apart from the realisations referred to below of the Company’s interests in TierPoint and Factor Energia through the JZHL Secondary Fund and Fund III respectively, its situation remains little changed from that reported with the interim results for the six-month period ended 31 August 2025. The Board and Investment Adviser remain committed to the implementation of the Investment Policy to maximise the value of, and to realise, the Company’s investment portfolio and to continue to return capital. The Directors are pleased to have been able to implement two returns of capital amounting to approximately $70 million.
We have emphasised that further returns of capital are dependent on further realisations and whilst, as previously reported, and as expected, this has been, and continues to be a quiet time for realisations, the realisations of the investments in TierPoint and Factor Energia for approximately $6.7 million and $13.1 million respectively suggested the possibility for a further modest return of capital. However, the possibility of an unexpected requirement for a capital contribution towards the refinancing of one of the Company’s portfolio investments has arisen. Any capital contribution that might be required would not have any impact on the Company’s net asset value but would affect the liquidity available to make a further return of capital. As the outcome is currently uncertain, the Directors have determined to postpone any such further return of capital until the situation is resolved. The Directors will make a further announcement in this regard as soon as they are able and is appropriate.
The Company now has cash and cash equivalent balances of approximately $94 million and an investment portfolio of approximately $148 million. It continues to be the Company’s policy to maintain a significant cash cushion whilst the investment portfolio remains substantial. The Directors feel this is prudent out of general caution, including against a circumstance such as that described above, and further justified by the recent volatility related to U.S. trade policy and war in Iran.
In accordance with the Investment Policy, and as previously announced, existing investments will be supported where there are continuing obligations to do so or otherwise for the maximisation of their value. For this purpose and in addition to whatever is needed to satisfy the requirement, if any, as described above, $20.5 million was reserved for Follow-on Flex Pack, of which $12.3 million has been invested (financial commitments of $8.2 million are outstanding); $12.5 million for Esperante, the office tower in West Palm Beach in Florida, of which $8.7 million has been invested ($3.8 million outstanding); $15 million for Spruceview; and $20 million for capital calls from JZI Fund III, L.P., including an anticipated requirement for further support.
Some further modest realisations may be achieved in the short to medium term; however, recent market turmoil caused by U.S. policy may lead to delays in realising the Company’s investment portfolio. Regardless, it remains the case that the realisation of the majority in value of the investment portfolio is not planned or expected until towards the end of the estimated period to complete the Company’s managed wind down. Shareholders are reminded that the investment portfolio includes investments that the Company doesn’t control.
### US and European Micro-cap Portfolios
The US micro-cap and European portfolios were flat for the year. We continue to work on several realisations in both portfolios.
### Real Estate Portfolio
The Company’s two remaining real estate assets that have equity value are 247 Bedford Avenue in Brooklyn, New York (where Apple is the principal tenant), and the Esperante office building in West Palm Beach, Florida.
The real estate portfolio was written up four cents per share during the period.
### Outlook
The Company continues to be in a strong financial position following the return of approximately $70 million to shareholders. The Board and the Investment Adviser continue to be focused on the implementation of the Company’s investment policy by the maximisation of the value of the Company’s remaining investments, their orderly realisation and the return of capital to shareholders.
David Macfarlane
### Chairman
### 11 June 2026
Investment Adviser's Report
Dear Fellow Shareholders,
Over the past two years, we have continued to realize investments and returned $70 million in capital to shareholders: $40 million in July 2024 and $30 million in March 2025. At the same time, we continue to require a significant amount of cash to support and maximize the value of our existing portfolio. We will continue to evaluate the Company’s ability to make further distributions of capital to shareholders as we realize assets.
Over the past two years, we have achieved several realizations in our US and European micro-cap portfolios and our real estate portfolio, which include: (i) $5 million from a refinancing of the Esperante property, (ii) $17.5 million from JZI Fund III, L.P., from the realizations of Karium, My Lender and S.A.C; (iii) $20.7 million in net proceeds from the sale of Deflecto; (iv) $6.2 million from the realization of TierPoint; (v) $4.7 million from the sale of the two divisions comprising our Testing Products vertical; (vi) $6.7 million from the realization of one of the divisions of our Industrial Services Solutions vertical as well as other ISS-related proceeds; and (vii) approximately $3.6 million in escrow distributions.
In April 2026 (post-period), JZCP received €6.2 million in proceeds from the realization of Factor Energia. JZCP expects to receive a further approximately €4.6 million in proceeds from the sale of Factor Energia over the coming 12 months.
Net Asset Value ("NAV")
JZCP’s NAV per share increased by 8 cents, or approximately 2.0%, during the year.
#### NAV per Ordinary share as of 1 March 2025 $4.06
Change in NAV due to capital gains and accrued income
+ US micro-cap 0.01
- European micro-cap (0.01)
+ Real estate 0.04
+ Income from treasuries and interest on cash 0.05
Other increases/(decreases) in NAV
+ Foreign exchange effect 0.09
- Expenses (0.10)
#### NAV per Ordinary share as of 28 February 2026 $4.14
The US micro-cap and European portfolios were flat for the year and our real estate portfolio was written up by four cents.
Returns
The chart below summarizes cumulative total shareholder returns and total NAV returns for the most recent one-year, three-year and five-year periods.
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | 28.2.2026 | 31.8.2025 | 28.2.2025 | 28.2.2023 | 28.2.2021 |
| Share price (in GBP) | £1.70 | £1.92 | £2.20 | £1.58 | £0.78 |
| NAV per share (in USD) | $4.14 | $4.04 | $4.06 | $4.06 | $4.25 |
| NAV to market price discount | 44.8% | 35.9% | 31.8% | 53.0% | 74.3% |
| | | 6 month return | 1 year return | 3 year return | 5 year return |
| Total Shareholders' return (GBP) | | (11.5%) | (18.3%) | 20.8% | 144.0% |
| Total NAV return per share (USD) | | 2.5% | 2.0% | 2.0% | (2.6%) |
Investment Adviser's Report (continued)
Portfolio Summary
Our portfolio is well-diversified by asset type and geography, including 21 US and European micro-cap investments across six industries as of 28 February 2026. The European portfolio, consisting of eleven companies, itself is well-diversified geographically across Spain, Italy, Portugal, Luxembourg, Denmark and the UK.
Below is a summary of JZCP’s assets and liabilities at 28 February 2026 as compared to 28 February 2025. An explanation of the changes in the portfolio follows:
| | | | |
| --- | --- | --- | --- |
| | 28.2.2026 US$'000 | | 28.2.2025 US$'000 |
| US micro-cap portfolio | 58,461 | | 64,612 |
| European micro-cap portfolio | 47,022 | | 44,400 |
| Real estate portfolio | 34,000 | | 34,567 |
| Other investments | 23,373 | | 23,614 |
| Total Private Investments | 162,856 | | 167,193 |
| Treasuries | 55,223 | | 82,017 |
| Cash | 30,658 | | 25,074 |
| Total Treasuries and Cash | 85,881 | | 107,091 |
| Other assets | 1,358 | | 1,155 |
| Total Assets | 250,095 | | 275,439 |
| Other liabilities | 570 | | 774 |
| Total Liabilities | 570 | | 774 |
| Total Net Assets | 249,525 | | 274,665 |
Investment Adviser's Report (continued)
Portfolio Summary (continued)
US micro-cap portfolio
As you know from previous reports, our US portfolio is grouped into industry ‘verticals’ and co-investments. As of December 4, 2020, certain of our verticals and co-investments are now grouped under JZHL Secondary Fund, LP (“JZHL” or the “Secondary Fund”). JZCP has a continuing interest in the Secondary Fund through a Special LP Interest, which entitles JZCP to certain distributions from the Secondary Fund.
Our ‘verticals’ strategy focuses on consolidating businesses under industry executives who can add value via organic growth and cross-company synergies. Our co-investments strategy has allowed for greater diversification of our portfolio by investing in larger companies alongside well-known private equity groups.
The US micro-cap portfolio was essentially flat for the year.
European micro-cap portfolio
Our European portfolio was essentially flat for the year.
JZCP invests in the European micro-cap sector through its approximately 18.8% ownership of JZI Fund III,
L.P. As of 28 February 2026, Fund III held 11 investments: five in Spain, two in Italy and one in the UK, Portugal, Denmark and Luxembourg.
Real estate portfolio
The Company’s two remaining real estate assets that have equity value are 247 Bedford Avenue in Brooklyn, New York (where Apple is the principal tenant), and the Esperante office building in West Palm Beach, Florida.
The real estate portfolio was written up four cents per share during the period.
Other investments
Our asset management business in the U.S. and Latin America, Spruceview Capital Partners, has continued to grow since we last reported to you. During the year, assets under management increased organically from existing clients, as well as through new private markets funds, as the firm continued to launch new strategies.
We expect Spruceview’s assets under management to continue to grow organically from both existing and new clients.
As previously reported, Richard Sabo—former Chief Investment Officer of Global Pension and Retirement Plans at JPMorgan and a member of that firm’s executive committee—is leading a team of 25 investment, business and product development, legal and operations professionals.
Outlook
We are working on new realizations and further distributions. Thank you for your continued support.
### Yours faithfully, Jordan/Zalaznick Advisers, Inc. 11 June 2026
Investment Portfolio
| | | | | |
| --- | --- | --- | --- | --- |
| 28 February 2026 Percentage | | | | |
| | Cost1 | Value | | of Portfolio |
| | US$'000 | US$'000 | | % |
| US Micro-cap portfolio | | | | |
| US Micro-cap Fund | | | | |
| JZHL Secondary Fund L.P.2 | | | | |
| JZCP's investment in JZHL Secondary Fund is further detailed on pages 10-11 | 24,536 | 31,235 | | 14.3 |
| US Micro-cap (Vertical) | | | | |
| INDUSTRIAL SERVICES SOLUTIONS WC, L.P. (“ISS”)3 | | | | |
| Provider of aftermarket maintenance, repair, and field services for critical process | | | | |
| equipment throughout the US | 18,430 | 22,422 | | 10.3 |
| US Micro-cap (Co-investment) | | | | |
| ORIZON | | | | |
| Manufacturer of high precision machine parts and tools for aerospace and defence | | | | |
| industries | 3,899 | 4,804 | | 2.2 |
| US Micro-cap (Other) | | | | |
| NATIONWIDE STUDIOS | | | | |
| Processor of digital photos for pre-schoolers | 26,324 | - | | - |
| Total US Micro-cap portfolio | 73,189 | 58,461 | | 26.8 |
| European Micro-cap portfolio | | | | |
| EUROMICROCAP FUND 2010, L.P. | | | | |
| Invested in European Micro-cap entities | 825 | - | | - |
| JZI FUND III, L.P. | | | | |
| JZCP's investment in JZI Fund III is further detailed on page 11 | 55,651 | 47,022 | | 21.6 |
| Debt Investments (loans to European micro-cap companies) | | | | |
| TORO FINANCE | | | | |
| Provides short term receivables finance to the suppliers of major Spanish | | | | |
| companies | 21,619 | - | | - |
| XACOM4 | | | | |
| Supplier of telecom products and technologies | 2,055 | - | | - |
| Total European Micro-cap portfolio | 80,150 | 47,022 | | 21.6 |
Investment Portfolio (continued)
28 February 2026
Cost 1 Value
US$'000 US$'000
Percentage of Portfolio
%
Real Estate portfolio
247 BEDFORD AVENUE
| | | | | |
| --- | --- | --- | --- | --- |
| Prime retail asset in northern Brooklyn, NY | 18,848 | 8,035 | 3.7 | |
| ESPERANTE | | | | |
| An iconic building on the downtown, West Palm Beach skyline | 18,955 | 24,840 | | 11.4 |
| JZ REALTY | | | | |
| Loan to REIT structure | 1,125 | 1,125 | | 0.5 |
| Total Real Estate portfolio | 38,928 | 34,000 | | 15.6 |
| Other investments | | | | |
| JZ INTERNATIONAL Fund of European LBO investments | - | 6 | | - |
| SPRUCEVIEW CAPITAL PARTNERS, LLC | | | | |
| Asset management company focusing primarily on managing endowments and pension funds | 35,455 | 23,367 | | 10.7 |
| Total Other investments | 35,455 | 23,373 | | 10.7 |
| U.S. Treasury Bills ("Treasuries") | | | | |
| U.S. Treasury Bills - Maturity 12 March 2026 | 1,999 | 2,015 | | 0.9 |
| U.S. Treasury Bills - Maturity 26 March 2026 | 5,001 | 5,033 | | 2.3 |
| U.S. Treasury Bills - Maturity 23 April 2026 | 2,775 | 2,785 | | 1.3 |
| U.S. Treasury Bills - Maturity 21 May 2026 | 45,344 | 45,390 | | 20.8 |
| Total Treasuries | 55,119 | 55,223 | | 25.3 |
| Total - portfolio | 282,841 | 218,079 | | 100.0 |
1 Other than JZHL Secondary Fund (see footnote 2), the book cost represents the original book cost incurred by JZCP adjusted for subsequent transactions and excludes Payment In Kind ("PIK") investments.
2 Notional cost of the Company's interest in JZHL Secondary Fund which is calculated in accordance with IFRS, and represents the fair value of the Company's LP interest on recognition adjusted for subsequent distributions.
3 Co-investment with Fund A, a Related Party (Note 18).
4 Classified as investment at amortised cost.
| | | | |
| --- | --- | --- | --- |
| Investment Portfolio | (continued) | | |
| JZCP's Top Ten Investments | |
| | Portfolio | Value US$'000 | Percentage of Portfolio4 |
| 1. Esperante | Real estate | 24,840 | 14.8% |
| 2. Spruceview Capital Partners, LLC | Other | 23,367 | 13.9% |
| 3. Industrial Services Solutions WC, L.P. | U.S. micro-cap | 22,422 | 13.4% |
| 4. The Robinette Company1 | U.S. micro-cap | 17,694 | 10.6% |
| 5. Peaceable Street Capital, LLC2 | U.S. micro-cap | 13,541 | 8.1% |
| 6. Factor Energia3 | European micro-cap | 12,752 | 7.6% |
| 7. 247 Bedford Avenue | Real estate | 8,035 | 4.8% |
| 8. UFASA3 | European micro-cap | 5,717 | 3.4% |
| 9. Luxida3 | European micro-cap | 4,989 | 3.0% |
| 10. Orizon | U.S. micro-cap | 4,804 | 2.9% |
1 JZCP's valuation being 61.5% Special L.P. interest in the underlying investment in JZHL Secondary Fund.
2 JZCP's valuation being 37.5% Special L.P. interest in the underlying investment in JZHL Secondary Fund.
3 Investment held through JZI Fund III, L.P. JZCP holds indirectly a 18.75% partnership interest in JZI Fund III,
L.P. The valuations in above table are JZCP's approximate share of JZI Fund III's total value.
4 Excludes investments in treasuries
JZHL Secondary Fund L.P. (the "Secondary Fund")
Summary of JZCP's US Micro-cap investments held through the Secondary Fund
ACW Flex Pack, LLC1 Peaceable Street Capital, LLC1 The Robinette Company2
JZCP Valuation1
28.2.2026
$'000s
- 13,541
17,694
JZCP's interest in JZHL Secondary Fund 31,235
1JZCP's valuation being 37.5% Special L.P. interest in the underlying investment in JZHL Secondary Fund.
2JZCP's valuation being 61.5% Special L.P. interest in the underlying investment in JZHL Secondary Fund.
ACW Flex Pack, LLC ("Flex Pack")
Flex Pack is a provider of a variety of custom flexible packaging solutions to converters and end-users.
Peaceable Street Capital, LLC ("Peaceable")
Peaceable is a specialty finance platform focused on making structured investments in small and mid-sized income producing commercial real estate. Peaceable focuses on a diverse portfolio of property types including multi-family, office, self-storage, industrial, retail, RV parks, mobile home parks, parking, health care and hotels.
The Robinette Company ("Robinette")
Robinette is a full-service paper and film packaging manufacturer and converter specialising in sustainable packaging for the food, beverage, nutraceutical, construction, textile and health care markets.
History and valuation of the Secondary Fund
In December 2020, the Company completed the sale of its interests in certain US micro-cap portfolio companies to the newly formed, JZHL Secondary Fund L.P., led by Hamilton Lane Advisors, L.L.C.
The Company's limited partner interest in the Secondary Fund is valued by considering the valuation of the underlying investments and the agreed distribution waterfall. The other investors in the Secondary Fund (the "Secondary Investors") were entitled to a priority return before any distributions were made to the Company.
In May 2024, the Company agreed to invest up to approximately US$20.5 million into the Secondary Fund, with the Secondary Fund to use such amount, together with additional amounts invested by other investors in the Secondary Fund to make an investment into a newly incorporated company, The RC Acquisition, LLC ("Follow-on Flex Pack") that is a related company of, and incorporated in a parallel structure to ACW Flex Pack, LLC ("Existing Flex Pack"). Follow-on Flex Pack subsequently acquired The Robinette Company.
Investment Portfolio (continued)
### JZHL Secondary Fund L.P. (continued)
| | | | | |
| --- | --- | --- | --- | --- |
| Distributions made by the | Secondary Fund are detailed in below table: | | Paid to | |
| | | Total | Secondary | Paid to |
| | | Distribution | Investors | JZCP |
| | | US$'000 | US$'000 | US$'000 |
| April 2022 | Flow Control LLC | 77,000 | 77,000 | - |
| June 2022 | Testing Solutions Holdings (including escrows) | 185,781 | 88,422 | 97,359 |
| December 2023 | Felix Storch Holdings, LLC (including escrows) | 169,810 | 106,678 | 63,132 |
| October/November 2024 | TIC Solutions Holdings (including escrows) | 10,608 | 6,630 | 3,978 |
| November 2024 | Safety Solutions Holdings | 2,227 | 1,462 | 765 |
| December 2025 | Tierpoint, LLC | 17,774 | 11,109 | 6,665 |
| | Other distributions including escrows | 2,019 | 1,421 | 598 |
| | | 465,219 | 292,722 | 172,497 |
Following the distributions detailed above, the Secondary Fund (excluding its investment in The Robinette Company) is valued and capital returned accordingly in the ratio of 62.5 per cent. to the Secondary Investors (pro rata in accordance with their respective contributions) and 37.5 per cent. to the Company. The Robinette Company is valued and capital returned accordingly in the ratio of 38.5 per cent. to the Secondary Investors (pro rata in accordance with their respective contributions) and 61.5 per cent. to the Company.
### Summary of JZCP's European micro-cap investments held through JZI Fund III, L.P.
JZCP Cost (EURO)1 JZCP Value (EURO)1 JZCP Value (USD)
As at As at As at
| | | | | |
| --- | --- | --- | --- | --- |
| | Country | 28.2.2026 €'000s | 28.2.2026 €'000s | 28.2.2026 $'000s |
| ALIANZAS EN ACEROS Steel service center | Spain | 5,214 | - | - |
| BLUESITES Build-up in cell tower land leases | Portugal | 485 | 3,075 | 3,631 |
| CANARY GREEN CORNER | | | | |
| Build-up of petrol stations | Spain | 4,763 | 3,771 | 4,453 |
| COLLINGWOOD Niche UK motor insurer | UK | 3,015 | 3,056 | 3,609 |
| ERSI Reinforced steel modules | Lux | 8,656 | 774 | 914 |
| FACTOR ENERGIA2 | | | | |
| Electricity supplier | Spain | 3,650 | 10,800 | 12,752 |
| FINCONTINUO Niche consumer lender | Italy | 6,556 | 1,931 | 2,280 |
| LUXIDA Build-up in electricity distribution | Spain | 3,341 | 4,225 | 4,989 |
| S.A.C | | | | |
| Vendor loan note to management of exited | | | | |
| operational van leasing company | Denmark | 2,872 | 2,617 | 3,090 |
| TREEE e-waste recycling | Italy | 7,344 | 1,127 | 1,330 |
| UFASA Niche consumer lender | Spain | 4,424 | 4,842 | 5,717 |
| Other net assets | | | | 4,257 |
| Total valuation | | | | 47,022 |
1The Company indirectly holds an 18.75% partnership interest in JZI Fund III. The costs and valuations in above table are JZCP 's approximate share of JZI Fund III's total cost/value.
2Investment realised post year end (see Note 27).
Board of Directors
David Macfarlane (Chairman)1
Mr Macfarlane was appointed to the Board of JZCP in 2008 as Chairman and a non-executive Director. Until 2002, he was a Senior Corporate Partner at Ashurst. He was a non-executive director of the Platinum Investment Trust Plc from 2002 until January 2007.
James Jordan
Mr Jordan is a private investor who was appointed to the Board of JZCP in 2008. He was a director of the First Eagle family of mutual funds until 31 December 2023. Until 30 June 2005, he was the managing director of Arnhold and S. Bleichroeder Advisers, LLC, a privately owned investment bank and asset management firm; and until 25 July 2013, he was a non-executive director of Leucadia National Corporation.
Sharon Parr2,3
Ms Parr was appointed to the Board of JZCP in June 2018. She has over 35 years' experience in the finance industry and spent a significant portion of her professional career with Deloitte and Touche in a number of different countries. After a number of years in the audit department, on relocating to Guernsey in 1999 she transferred into their fiduciary and fund management business and, after completing a management buyout and subsequently selling to Barclays Wealth in 2007, she ultimately retired from her role there as Global Head of Wealth Structuring in 2011. Ms Parr holds a number of Non-Executive Directorships across the financial services sector including in other listed funds. Ms Parr is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of the Society of Trust and Estate Practitioners, and is a resident of Guernsey.
Ashley Paxton4
Mr Paxton was appointed to the Board in August 2020. He has more than 25 years of funds and financial services industry experience, with a demonstrable track record in advising closed-ended London listed boards and their audit committees on IPOs, capital market transactions, audit and other corporate governance matters. He was previously C.I. Head of Advisory for KPMG in the Channel Islands, a position he held from 2008 through to his retirement from the firm in 2019. He is a Fellow of the Institute of Chartered Accountants in England and Wales and a resident of Guernsey.
1Chairman of the nominations committee of which all Directors are members.
2Chair of the audit committee of which all Directors are members.
3Appointed as Senior Independent Director of the Company on 4 September 2025.
4Appointed as Chair of the management engagement committee of the Company on 12 December 2025.
Report of the Directors
The Directors present their annual report together with the audited financial statements of JZ Capital Partners ("JZCP" or the "Company") for the year ended 28 February 2026.
Principal Activities
JZ Capital Partners Limited is a closed-ended investment company with limited liability which was incorporated in Guernsey on 14 April 2008 under the Companies (Guernsey) Law, 1994 and is subject to the Companies (Guernsey) Law, 2008. The Company's Capital consists of Ordinary shares which are traded on the London Stock Exchange.
In line with the Company’s current investment policy (agreed by shareholders on 12 August 2020), the Company will make no further investments except in respect of which it has existing obligations or to the extent that investment is required to support existing investments. The intention is to realise the maximum value of the Company's investments and, having repaid all debt, to return capital to shareholders. In December 2023, the Company repaid all of its debt and has subsequently made two returns of capital in July 2024 and March 2025. The Company will continue to assess its ability to make further returns of capital to Shareholders and will seek to do so as and when it has sufficient cash reserves that are not otherwise required to support its existing investments to maximise value and/or to meet its existing obligations such as operational expenses.
The Company’s Investment Policy had been to target predominantly private investments, seeking to back exceptional management teams to deliver on attractive investment propositions. The Company is now focused on supporting its investments
Business Review
The total comprehensive income attributable to Ordinary shareholders for the year ended 28 February 2026 was
$4,860,000 (year ended 28 February 2025: loss $1,128,000). The net asset value ("NAV") of the Company at the year end was $249,525,000 (28 February 2025: $274,665,000) equal to $4.14 (28 February 2025: $4.06) per Ordinary share.
On 13 March 2025, the Company effected a compulsory partial redemption of 7,352,941 Ordinary shares, which resulted in the further return of capital of an aggregate amount of approximately $30 million.
A review of the Company's activities and performance is detailed in the Chairman's Statement on page 4 and the Investment Adviser's Report on pages 5 to 7. The valuations of the unlisted investments are detailed on pages 8 to 11.
Principal Risks and Uncertainties
The Company's Board believes the principal risks and uncertainties that relate to an investment in JZCP are as follows:
Portfolio Liquidity
The Company invests predominantly in unquoted companies and real estate. Therefore, this potential illiquidity means there can be no assurance investments will be realised at their latest valuation or on the timing of such realisations. The Board considers this illiquidity when planning to meet its future obligations. On a quarterly basis and ad-hoc as required, the Board reviews a working capital model produced by the Investment Adviser which highlights the Company's projected liquidity and financial commitments.
Investment Performance and Impact on NAV
The Company is reliant on the Investment Adviser to support the Company's investment portfolio by executing suitable investment decisions. The Investment Adviser provides the Board with an explanation of all investment decisions and also provides quarterly investment reports and valuation proposals of investee companies. The Board reviews investment performance quarterly and investment decisions are checked to ensure they are consistent with the agreed investment strategy.
Operational and Personnel
Although the Company has no direct employees, the Company considers what dependence there is on individuals within the Investment Adviser and service providers that are key to the Company meeting its operational and control requirements.
Report of the Directors (continued)
Principal Risks and Uncertainties (continued)
Share Price Trading at Discount to NAV
JZCP's share price is subject to market sentiment and will also reflect any periods of illiquidity when it may be difficult for shareholders to realise shares without having a negative impact on share price.
Macroeconomic Risks and Impact on NAV
The Company's performance, and underlying NAV, is influenced by economic factors that affect the demand for products or services supplied by investee companies and the valuation of Real Estate interests held. Economic factors will also influence the Company's ability to invest and realise investments and the level of realised returns. Approximately 22% of the Company's underlying investments are denominated in non-US dollar currencies, the euro (20%) and also sterling (2%). Fluctuations to these exchange rates will affect the NAV of the Company.
Uncertainties in today's world that influence economic factors include:
1. Geopolitical Conflicts Including the Wars in the Middle East and Ukraine
JZCP's investments are predominantly focused in the U.S. and Western Europe, and as such, the portfolio has no direct exposure to the affected regions.
The Board continues to receive reports from the Investment Adviser on the impact of any fluctuations of energy costs on its investment portfolio. The Board considers there is no material impact on the Company's investment portfolio due to the increase in oil prices resulting from the U.S./Iran war and continues to review the volatility in financial markets resulting from further escalations.
2. Changes in Trade Policy and International Relationships
The Board will continue to monitor the situation regarding U.S. trade policy and any likely impact on the valuation of the Company's investments due to tariffs. Whilst the U.S. Supreme Court has ruled the import tariffs imposed by the
U.S. government are unlawful, uncertainties still remain.
3. Climate Change
JZCP does not have a sustainability-driven investment strategy, nor is its intention to do so, but the Board believes that considering the principle of being environmentally responsible is important in realising the maximum value of the Company's investments.
JZCP only invests where it has existing obligations or to continue selectively to support the existing portfolio. JZAI, where possible, plans to use its influence as an investor to ensure investee businesses and funds have a cautious and responsible approach to environmental management of their business operations. JZCP invests across a wide range of businesses but has limited exposure to those that create high levels of emissions.
The Board considers the impact of climate change on the Company's business strategy and risk profile and, where appropriate will make timely climate change related disclosures. Regular updates, given by the Investment Adviser on portfolio companies and properties will include potential risk factors pertaining to climate change and how/if these risks are to be mitigated. The Board receives a report from the Investment Adviser categorising the Company's investments according to their level of exposure to climate-related risks. These climate-related risks can be categorised as either physical (impact of extreme weather, rising sea levels) or transitional (impact of the transition to a lower-carbon economy).
The Board also has regard to the impact of the Company’s own operations on the environment and other stakeholders. There are expectations that portfolio companies operate in a manner that contributes to sustainability by considering the social, environmental, and economic impacts of doing business. The Board requests the Investment Adviser Report on any circumstances where expected standards are not met.
The Board has assessed the impact of climate change and has judged that the Company's immediate exposure to the associated risks is low and therefore there is no material impact on the fair value of investments and the financial performance reported in these Annual Financial Statements.
The Board considers the principal risks and uncertainties above are broadly consistent with those reported at the prior year-end.
Report of the Directors (continued)
Going Concern
A fundamental principle of the preparation of financial statements in accordance with IFRS is the judgement that an entity will continue in existence as a going concern for a period of at least 12 months from the end of the reporting period, which contemplates continuity of operations and the realisation of assets and settlement of liabilities occurring in the ordinary course of business.
In reaching its conclusion, the Board has considered the risks that could impact the Company’s liquidity over the period ending 30 June 2027 (the "Going Concern period"). There were no events or conditions identified beyond this period which may cast significant doubt on the Company's ability to continue as a going concern.
Going Concern Assessment
At 28 February 2026, the Company had no outstanding debt and held liquid assets of approximately $85.9 million (28 February 2025: $107.1 million), comprising cash of $30.7 million (28 February 2025: $25.1 million) and treasuries of $55.2 million (28 February 2025: $82.0 million). During the year ended 28 February 2026, the Company received approximately $13.8 million from realisations and distributions, $0.3 million from escrows and $3.0 million interest from treasury bills and cash. The Company had cash outflows relating to follow-on investments and expenses of approximately $8.0 million and returned $30.0 million of capital to shareholders. At the date of this report, the Company holds cash and treasuries of approximately $94.6 million. Potential further returns of capital in the longer term will be subject always to retaining sufficient funds to support certain existing investments to maximise their value and/or to meet its existing obligations such as operational expenses.
As at 11 June 2026, the Company had financial commitments outstanding in relation to fund investments in JZI Fund III of $6.2 million and JZHL Secondary Fund of $8.2 million (relating to Follow-on Flex Pack). The Company anticipates it may require the following amounts to support certain existing assets: approximately $3.8 million for Esperante, $15 million for Spruceview and $20 million for JZI Fund III (including the above stated $6.2 million financial commitment outstanding). The expected timeframe for these further investments is within a two to three year period.
The Board takes account of the levels of funding obligations the Company could be called on through capital calls on existing investments, as well as the accuracy of previous forecasts to assess the predicted accuracy of forecasts presented. The Company continues to work on the realisation of various investments within a timeframe that will enable the Company to maximise the value of its investment portfolio. Due to the Company's strong liquidity, the timeframe to realise investments is not determined by the need to meet financial obligations and the Company is able to mitigate any downturn in the wider economy which might influence the ability to exit investments.
Going Concern Conclusion
After careful consideration and based on the assessment outlined above, the Board is satisfied, as at the date of the signing of the Annual Report and Financial Statements, that it is appropriate to adopt the going concern basis in preparing the Financial Statements and it has a reasonable expectation that the Company will continue in existence as a going concern for the period ending 30 June 2027.
Viability Statement
In accordance with the UK Corporate Governance Code (the "UK Code"), the Board has assessed the expectations that the Company will be able to continue in operation and meet ongoing financial obligations. In order to make the assessment and as noted above, the Board has carried out a robust review of the principal risks and uncertainties to which the Company is exposed and that potentially threaten future performance and liquidity. It has assessed the Company's current position and prospects as detailed in the Chairman's Statement and Investment Adviser's Report. The period covered by the viability statement is the next three financial years to 28 February 2029.
The Board considers that a viability period of three years remains appropriate and continues to work with the Investment Adviser to realise its investments within this period in line with the wind down investment policy. Whilst further modest realisations may be achieved in the short to medium term, recent market turmoil caused predominantly by U.S. policy may lead to delays in realising the Company’s investment portfolio and it remains the case that the realisation of the majority of the value of the investment portfolio (which includes investments over which the Company doesn't have control) is not planned or expected until towards the end of this period. The Board continues to consider the Company has sufficient liquidity to remain viable over this three year period, notwithstanding the uncertainty over the ultimate timing of the realisation of investments. The Board will continue to review the period of assessment on an annual basis and anticipates a shorter viability period may become appropriate as the Company progresses with its investment policy, being to maximise and realise the value of its investments and to return capital to shareholders.
Viability Statement (continued)
In reaching its conclusion on the Company’s viability, the Directors have considered the following:
1. Stability in Company's Balance Sheet
The Company has stabilised its balance sheet, and has no outstanding debt at 28 February 2026. Investment is being curtailed to commitments and what is necessary to maximise the value of the existing portfolio.
Since the Company adopted a new investment policy in August 2020, the Company has repaid all of its outstanding debt which at the time consisted of Zero Dividend Preference shares (£57.6 million), Convertible Unsecured Loan Stock (£38.9 million) and a Senior Credit Facility (approximately $150 million).
The Company is in a position to meet its financial obligations in both the near and medium term as it looks to maximise and realise the value of remaining investments.
2. Financing obligations Commitments
As at 28 February 2026, JZCP had financial commitments of $14.3 million (28 February 2025: $13.7 million) outstanding in relation to fund investments.
Follow-on investments
The Company anticipates, in addition to the above commitments, that it may require the following amounts to support certain other existing assets: approximately $3.8 million for Esperante, $15 million for Spruceview and $13.8 million for JZI Fund III (total $20 million including $6.2 million financial commitments). The expected timeframe for these further investments is within a two to three year period.
3. Investment performance and portfolio liquidity
The Board reviews, on a quarterly basis, the valuation and prospects of all underlying investee companies. The Board is generally satisfied with the recent performance of the investment portfolio and believes the historic realisation of investments at or above NAV provide support to the level of the current valuations. The Company continues to explore suitable realisation opportunities for its investment portfolio,
4. Return of capital to shareholders
Returns of capital will be subject always to retaining sufficient funds to support certain existing investments to maximise their value and/or to meet its existing obligations such as operational expenses.
5. Mitigation of other risks as outlined in the Principal Risks and Uncertainties (detailed on pages 13-14). Viability Conclusion
In concluding on the viability of the Company, the Board has concluded that there is a reasonable expectation that
the Company will remain viable over the three-year period ending 28 February 2029, being the period of the assessment.
Ongoing Charges
Ongoing charges for the years ended 28 February 2026 and 28 February 2025 have been prepared consistently with the methodology used in previous years. The ongoing charges ratio represents annualised recurring operational expenses as a percentage of the average NAV. Ongoing charges are based on costs incurred in the year as being the best estimate of future costs but are amended if this method is not considered an accurate prediction of future expenses. The ongoing charges for the year ended 28 February 2026 were 2.30% (28 February 2025: 2.39%).
Directors
The Directors listed below, who served on the Board during the year and are all deemed independent and non-executive, were in office at the end of the year and subsequent to the date of this report. The biographical details of the Directors are shown on page 12.
David Macfarlane (Chairman) James Jordan
Sharon Parr Ashley Paxton
Dividends
No dividends were paid or proposed for the years ended 28 February 2026 and 28 February 2025.
Returns of Capital
On 13 March 2025, the Company effected a compulsory partial redemption of 7,352,941 Ordinary Shares, which resulted in the return of capital of an aggregate amount of $30 million.
On 25 July 2024, the Company effected a compulsory partial redemption of 9,803,921 Ordinary Shares, which resulted in the return of capital of an aggregate amount of $40 million.
Annual General Meeting
The Company's Annual General Meeting is due to be held on 8 September 2026.
Substantial Shareholders
As at 11 June 2026, the Company has been notified in accordance with the Disclosure Guidance and Transparency Rules of the following interests of 5% or more of the total Ordinary share capital of the Company. The percentage of Ordinary shares relates to the number informed by shareholders on the relevant notification rather than the current share register. The percentage of Ordinary shares set out below for each substantial shareholder will therefore not take account of any Ordinary shares bought or sold by them or the effect of any share buy backs undertaken by the Company on their shareholdings, in each case, not so notified as required by, or in accordance with, the Disclosure Guidance and Transparency Rules. For the avoidance of doubt, the percentage of Ordinary shares set out below should not therefore be used for the purposes determining if the Company is or is to become a controlled foreign corporation within the meaning of The United States Internal Revenue Code of 1986, as amended (further information on the Company's controlled foreign corporation status can be found at pages 73 and 74 under the section Useful Information for Shareholders). Shareholders and prospective shareholders must consult their own tax advisers concerning US tax laws. There were no changes in the notifications from the year-end to the date of this report.
% of Ordinary
shares
| | |
| --- | --- |
| Edgewater Growth Capital Partners L.P. | 23.7% |
| John W. Jordan II & Affiliates | 13.6% |
| Armstrong Investments Limited | 10.5% |
| Jefferies Financial Group | 10.4% |
| David W. Zalaznick | 9.4% |
| Arnhold, LLC | 5.9% |
| Almitas Capital LLC | 5.8% |
| Weiss Asset Management L.P. | 5.2% |
It is the responsibility of the shareholders to notify the Company of any change to their shareholdings only when it reaches 5% of shares in issue and any subsequent change only when the shareholding increases or decreases by a further 5% (up to 30% of shares in issue i.e. 10%, 15%, 20%, 25% and 30%) and thereafter 50% and 75%. The percentage of Ordinary shares shown above represents the ownership of voting rights that have been notified to the Company.
Directors' Holdings of Company's Ordinary Shares
The beneficial interests of the Directors in the Ordinary shares of the Company are shown below:
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | Number of Ordinary shares at 1 March 2025 | | Redemption of Ordinary shares1 | | Number of Ordinary shares at 28 February 2026 |
| David Macfarlane | 62,500 | | (6,793) | | 55,707 |
| James Jordan | 34,174 | | (3,713) | | 30,461 |
| Sharon Parr | 8,735 | | (949) | | 7,786 |
| Ashley Paxton | 21,400 | | (2,325) | | 19,075 |
| | 126,809 | | (13,780) | | 113,029 |
1 On 13 March 2025, the Company effected a compulsory partial redemption of 7,352,941 Ordinary shares, which represented approximately 10.87% of the Ordinary shares in issue prior to the redemption.
Details of the Ordinary shares can be found in Note 13 on page 58.
Engaging with Stakeholders
In line with best practice, the Board is required to ensure effective engagement with, and participation from, its shareholders and stakeholders. The Board should also understand the views of the Company’s key stakeholders and describe in the Annual Report how their interests and the matters set out in Section 172 of the Companies Act 2006 have been considered in Board discussions and decision-making.
The Board identifies its key stakeholders as the following:
* Shareholders and prospective investors; and
* JZAI, the Investment Adviser of its portfolio investments and other service providers. The Company has no employees.
The Board believes that the maintenance of good relations with both institutional and retail shareholders is important for the prospects of the Company. It therefore seeks active engagement with investors, bearing in mind the duties regarding equal treatment of shareholders and the dissemination of inside information. The Board receives feedback on shareholder views from its Corporate Broker and Investment Adviser, and is circulated with Broker reports on the Company.
The Board considers that the Annual General Meeting, a meeting for all shareholders, is the key point in the year when the Board of Directors accounts to all shareholders for the performance of the Company. The Board encourages shareholders to attend the Annual General Meeting where Directors will be present and available to engage with shareholders.
The Board believes that the Company policy of reporting to shareholders as soon as possible after the Company's year end and the holding of the Annual General Meeting at the earliest opportunity is valuable.
The Company provides an Interim Report and Accounts in accordance with IAS 34 "Interim Financial Reporting" and will aim to issue monthly NAV announcements within 21 days of the month end, these announcements will be posted on JZCP's website at the same time, or soon thereafter. A monthly factsheet is also posted on the Company's website.
Engaging with Service Providers
The Board is in regular communication with the Investment Adviser to discuss the Company’s strategy as well as being kept up to date with portfolio matters.
A Management Engagement Committee was established in 2018, to review the performance and contractual arrangements of the Company’s service providers. The Board looks to engage with service providers and encourage communication of any concerns of matters arising and deal with them appropriately.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable laws and regulations. The Companies (Guernsey) Law, 2008 requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss for that year.
In preparing Financial Statements the Directors are required to:
* select suitable accounting policies and apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the Financial Statements;
* prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;
* confirm that there is no relevant audit information of which the Company’s Auditor is unaware; and
* confirm that they have taken all reasonable steps which they ought to have taken as Directors to make themselves aware of any relevant audit information and to establish that the Company’s Auditor is aware of that information.
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 have been properly prepared in accordance with the Companies (Guernsey) Law, 2008 and International Financial Reporting Standards as adopted by the European Union (“IFRS”). They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors confirm that they have complied with these requirements in preparing the Financial Statements.
Responsibility Statement of the Directors in respect of the Financial Statements
The Directors confirm that to the best of their knowledge:
* the Financial Statements have been prepared in accordance with IFRS and give a true and fair view of the assets, liabilities and financial position, and profit or loss of the Company;
* the Annual Report includes a fair review of the development and performance of the business and position of the Company together with the description of the principal risks and uncertainties that the Company faces, as required by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority; and
* the Directors confirm that the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s performance and strategy.
Directors’ Statement
So far as each of the Directors is aware, there is no relevant audit information of which the Company's Auditor is unaware, and each Director has taken the necessary steps to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.
Approved by the Board of Directors and signed on behalf of the Board on 11 June 2026.
David Macfarlane Sharon Parr
Chairman Senior Independent Director
Corporate Governance
Introduction
As a Guernsey incorporated company with a UK listing, JZCP’s governance policies and procedures are based on the principles of the UK Corporate Governance Code 2024 (the "UK Code") as required under the Disclosure Guidance and Transparency Rules. The UK Code is available on the Financial Reporting Council ("FRC")'s website, [www.frc.org.uk.](http://www.frc.org.uk/) The Company is subject to the Guernsey Financial Services Commission ("GFSC")'s Code, which applies to all companies registered as collective investment schemes in Guernsey. The GFSC has also confirmed that companies that report against the UK Code are deemed to meet the GFSC Code.
Throughout the accounting period the Company has complied with the recommendations of the UK Code and thus the relevant provisions of the UK Corporate Governance Code, except as set out below:
* the tenure of the Chairman (see page 21).
* the Chairman serving as a member of the Audit Committee.
The Board considers the following UK Code provisions are not relevant to the position of JZ Capital Partners Limited, being an externally managed investment company. The Company has therefore not reported further in respect of these provisions:
* the role of the chief executive;
* executive directors remuneration;
* annually assessing the need for an internal audit function; and
* having means for the workforce to raise concerns.
There have been no other instances of non-compliance, other than those noted above.
Guernsey Code of Corporate Governance
The GFSC's “Finance Sector Code of Corporate Governance” (the "Guernsey Code") came into effect on 1 January 2012 and was subsequently amended on 18 February 2016. The introduction to the Guernsey Code states that companies which report against the UK Corporate Governance Code are deemed to meet the Guernsey Code.
The Board
Corporate Governance of JZCP is monitored by the Board which at the end of the year comprised four Directors, all of whom are non-executive. Biographical details of the Board members at the date of signing these Financial Statements are shown on page 12 and their interests in the shares of JZCP are shown in the Report of the Directors on page 17. The Directors' biographies highlight their wide range of relevant financial and sector experience.
Directors' Independence
The Board continually considers the independence of the Directors, including in light of the circumstances which are set out in the UK Code as likely to impair a director's independence.
There are no circumstances that exist, including those under the UK Code, which the Board considers likely to impair the independence of any of the Directors.
Two Board members (David Macfarlane and James Jordan) have, however, served on the Board for a period of longer than nine years which is one of those circumstances set out in the UK Code. The conclusion the Board has reached is that despite having served on the Board for more than nine years, this has not impacted the independence of such Directors. However, the Board will continue to assess on an annual basis how length of service could impair judgement and decision making both on the basis of an individual Director and the Board as a whole.
In line with best practice, all Directors are subject to annual re-election.
Further details on the Board’s processes and criteria for the appointment of directors can be found under the section of this Annual Report detailing the work of the Nomination Committee (page 22).
Board Composition
The Board acknowledges that the Board and its Committees should have a combination of skills, experience and knowledge and that membership should be regularly refreshed. The Board annually evaluates its composition, diversity and how effectively each member contributes and how they work together to achieve objectives. Further details on the evaluation of the Board and its Committees can be found below in this section of the Annual Report.
Chairman Tenure
The UK Code states that the Chairman should not remain in post beyond nine years from the date of their first appointment to the Board. However, to facilitate effective succession planning and the development of a diverse board, the Code allows for this period to be extended for a limited time.
The Chairman has served on the Board since the Company’s inception (April 2008) and the Board acknowledged that succession to the role needed to be anticipated in line with effective succession planning. A substantial refreshment of the Board was planned to take place in 2021, including the appointment of a new Chairman. However, in the light of the events which saw a material decline in the Company's NAV, it was decided the Chairman would continue to oversee the implementation of the investment policy introduced in 2020. The Board’s policy is that continuity and experience are considered to add significantly to the strength of the Board and as such these attributes need to be weighed against any advantages that a new appointment may bring. Therefore, no limit on the overall length of service of the Chairman is imposed and the Chairman will continue to seek re-election to the Board annually.
Proceedings of the Board
The Board has overall responsibility for the Company's activities and the determination of its investment policy and strategy. The Company has entered into an investment advisory and management agreement with its Investment Adviser, JZAI, pursuant to which, subject to the overall supervision of the Directors, the Investment Adviser acts as the investment manager to the Company and manages the investment and reinvestment of the assets of the Company in pursuit of the investment objective of the Company and in accordance with the investment policies and investment guidelines from time to time of the Company and any investment limits and restrictions notified by the Directors (following consultation with the Investment Adviser). Within its strategic responsibilities, the Board regularly considers corporate strategy as well as dividend policy, the policy on share buy backs and corporate governance issues.
The Board meets at least quarterly to direct and supervise the Company’s affairs. This includes reviewing the investment strategy, risk profile, gearing strategy and performance of the Company and the performance of the Company’s functionaries, and monitoring compliance with the Company's objectives.
The Board deems it appropriate to review the valuations of the investment portfolio on a quarterly basis. It receives, from the Investment Advisor a comprehensive review of the portfolio, its valuation methodology and general strategy. The schedule of Board and Committee meetings is shown on page 23.
Continuing terms of Investment Adviser agreement
In the opinion of the Directors, the continuing appointment of the Investment Adviser on the terms agreed continues to be in the interests of shareholders. In reaching its conclusion the Board considers the Investment Adviser's performance, expertise and ability in effectively assisting the management of portfolio companies.
Supply of information
The Chairman ensures that all Directors are properly briefed on issues arising at, and when necessary in advance of, Board meetings. The Company's advisers provide the Board with appropriate and timely information in order that the Board may reach proper decisions. Directors can, if necessary, obtain independent professional advice at the Company's expense.
Directors' training
The Board is provided with information concerning changes to the regulatory or statutory regimes as they may affect the Company, and the Directors are offered the opportunity to attend courses or seminars on such changes, or other relevant matters. An induction programme is available for any new Director appointments. The induction programme offers training about the Company, its managers, their legal responsibilities and investment company industry matters.
Chairman and Senior Independent Director
The Chairman is a non-executive Director, together with the rest of the Board. There is no executive Director position within the Company. Day-to-day management of the Company's affairs has been delegated to third-party service providers.
In order to align with best practice, on 4 September 2025 the Company appointed Sharon Parr as Senior Independent Director of the Company.
Proceedings of the Board (continued)
Board diversity
The Board has also given careful consideration to the recommendations of the Davies Review and the findings of the Hampton-Alexander Review on the evolving gender diversity debate. The Board continues to review its composition in terms of diversity, appropriate range of skills and experience and the Board is committed to ensuring that diversity of thought is considered when appointments to the Board are under consideration – as indeed has always been its practice.
UK Listing Rules require the Board to record that the following requirements have not been met throughout the year: (i) at least 40% of the individuals on its board of directors are women; and (ii) at least one individual on its board of directors is from a minority ethnic background. The Board considers its current composition appropriate as it implements its investment policy and does not envisage any changes in the near-term. The positions of Senior Independent Director and Chair of the Audit Committee are held by Sharon Parr. The below information is collated by the Company's administrator.
Gender representation on the Board as at 28 February 2026
Ethnic representation on the Board as at 28 February 2026
| | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Gender identity | No. Board members | % on the Board | No. senior positions on the Board1 | Ethnic background | No. Board members | % on the Board | No. senior positions on the Board1 |
| Male | 3 | 75% | 1 | White British | 3 | 75% | 3 |
| Female | 1 | 25% | 2 | White American | 1 | 25% | 0 |
1 Senior positions on the Board are the Chairman, Senior Independent Director and Chair of the Audit Committee.
The Board's annual performance review
The Board, Audit Committee, and Nomination Committee undertake a review of their own performance and that of individual Directors on an annual basis. In order to review their effectiveness, the Board and its Committees carry out a process of formal self-appraisal. The Board and Committees consider how they function as a whole and also review the individual performance of its members. This process is conducted by the Chairman reviewing each member’s performance, contribution and commitment to the Company. The Board, as a whole, reviews the performance of the Chairman. Each Board member is also required to submit details of training they have undertaken on an annual basis. Currently, no third-party evaluation of the Directors effectiveness is undertaken. The results of the performance review concluded that the Board was functioning effectively and the Board and its committees provided a suitable mix of skills and experience.
Board Committees
In accordance with the UK Code, the Board has established an Audit Committee and a Nomination Committee, in each case with formally delegated duties and responsibilities within written terms of reference. The identity of each of the Chairmen of the Committees referred to below is reviewed on an annual basis. The Board, consisting of all non-executive Directors, has decided that the entire Board should fulfil the role of the Audit and Nomination Committees. The terms of reference of the Committees are kept under review and can be viewed on the Company's website [www.jzcp.com.](http://www.jzcp.com/)
Nomination Committee
In accordance with the Code, the Company has established a Nomination Committee. The Nomination Committee leads the process for all Board appointments, oversees the development of and reports on, amongst other things, its approach to a diverse pipeline for succession.
The Nomination Committee takes into consideration the Code’s rules on independence of the Board in relation to the Company, its senior management and major shareholders. The Nomination Committee is chaired by David Macfarlane, and each of the other Directors is also a member. The members of the committee are independent of the Investment Adviser. The Nomination Committee has the responsibility for considering the size, structure and composition of the Board, retirements and appointments of additional and replacement Directors and making appropriate recommendations to the Board.
Due to the nature of the Company being a listed investment company investing in private equity with an international shareholder base, the Company needs Directors with a broad range of financial experience. For this reason, Directors use external consultants as well as using their own contacts to identify suitable candidates. The final decision with regard to appointments always rests with the Board and all such appointments are subject to confirmation by shareholders.
Board Committees (continued)
Audit Committee
The Audit Committee is chaired by Sharon Parr and all other Directors are members. Contrary to the recommendations of the UK Code, the Board considers it is appropriate for the Company's Chairman to serve as a member of the Audit Committee due to his considered independence and the skills/experience contributed. Members of the Committee are independent of the Company’s external auditors and the Investment Adviser. All members have the necessary financial and sector experience to contribute effectively to the Committee. The Audit Committee meets at least twice a year and meets the external auditors at least twice a year. The Audit Committee is responsible for overseeing the Company’s relationship with the external auditors, including making recommendations to the Board on the appointment of the external auditors and their remuneration. The Committee also considers the nature, scope and results of the auditors’ work and reviews, develops and implements policies on the supply of any non-audit services that are to be provided by the external auditors.
The activities and responsibilities of the Audit Committee are further described on pages 26-28 of the Audit Committee Report and the recommendations to the Board made by the Audit Committee regarding the going concern and viability of the Company are detailed in the Report of the Directors (pages 15-16).
Management Engagement Committee
From 12 December 2025, the Management Engagement Committee is chaired by Ashley Paxton, previously David Macfarlane, and comprises the entire Board. Responsibilities include reviewing the performance and contractual arrangements of the Company’s service providers.
Remuneration Committee
In view of its non-executive and independent nature, the Board considers that it is not appropriate for there to be a separate Remuneration Committee as prescribed by the UK Code. The process for agreeing the non-executive Directors' fees is set out in the Directors' Remuneration Report on page 25.
Disclosure Committee
The Disclosure Committee is constituted of two Directors and two representatives of the Investment Adviser to monitor and review the Company’s obligation to inform the market in compliance with the Market Abuse Regulations in respect of matters and events affecting the Company.
Board and Committee meeting attendance
The number of formal meetings of the Board and its Committees held during the fiscal year and the attendance of individual Directors at these meetings was as follows:
Number of meetings
Management
| | | | | |
| --- | --- | --- | --- | --- |
| | Board Main | Ad Hoc Meetings | Audit Committee | Engagement Committee |
| Total number of meetings | 4 | 1 | 5 | 1 |
| David Macfarlane | 4 | 1 | 5 | 1 |
| James Jordan | 4 | 0 | 5 | 1 |
| Sharon Parr | 4 | 1 | 5 | 1 |
| Ashley Paxton | 4 | 1 | 5 | 1 |
The main Board meetings are held to agree the Company's valuation of its investments, agree the Company's Financial Statements and discuss and agree other strategic issues. Other meetings are held when required to agree board decisions on ad-hoc issues.
Internal Controls
The Board is ultimately responsible for establishing and maintaining the Company’s system of internal financial and operating control and for maintaining and reviewing its effectiveness on an annual basis. The Company's risk matrix continues to be the core element of the Company's risk management process in establishing the Company's system of internal financial and reporting control. The risk matrix is prepared and maintained by the Board which initially identifies the risks facing the Company and then collectively assesses the likelihood of each risk, the impact of those risks and the strength of the controls operating over each risk. The system of internal financial and operating control is designed to manage rather than to eliminate the risk of failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss.
Internal Controls (continued)
These controls aim to ensure that assets of the Company are safeguarded, proper accounting records are maintained and the financial information for publication is reliable. The Board confirms that there is an ongoing process for identifying, evaluating and managing the principal 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 Annual Report and Financial Statements and is reviewed by the Board and is in accordance with the FRC's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting.
The Board has evaluated the systems of internal controls of the Company. In particular, it has prepared a process for identifying and evaluating the principal risks affecting the Company and the policies by which these risks are managed.
The Board has delegated the day-to-day responsibilities for the management of the Company’s investment portfolio, the provision of depositary services and administration, registrar and corporate secretarial functions including the independent calculation of the Company's NAV and the production of the Annual Report and Financial Statements which are independently audited.
Formal contractual agreements have been put in place between the Company and providers of these services.
Even though the Board has delegated responsibility, it retains accountability for these functions and is responsible for the systems of internal control. At each quarterly Board meeting, compliance reports are provided by the Administrator, Company Secretary and Investment Adviser, the reports are reviewed to determine if there are any findings that impact the Company. The Board also receives confirmation from the Administrator of its accreditation under its Service Organisation Controls report.
The Company’s risk exposure and the effectiveness of its risk management and internal control systems are reviewed by the Board at its quarterly meetings to determine if there are any findings that impact the Company.
The Board believes that the Company has adequate and effective systems in place to identify, mitigate and manage the risks to which it is exposed.
Following amendments to the Code effective for financial years beginning on or after 1 January 2026, the Board is required to carry out an annual review of effectiveness across financial, operational, compliance, and reporting controls and provide an explicit annual declaration on the effectiveness of the Company's internal controls. The Board continues to consider how these amendments impact the Company's processes and reporting.
Whistleblowing Policy
The Directors are non-executive and the Company does not have employees, hence no whistleblowing policy is required. However, the Directors have satisfied themselves that the Company's service providers have appropriate whistleblowing policies and procedures and have received confirmation from the service providers that nothing has arisen under those policies and procedures which should be brought to the attention of the Board.
UK Criminal Finances Act 2017
In respect of the UK Criminal Finances Act 2017 which has introduced a new Corporate Criminal Offence of 'failing to take reasonable steps to prevent the facilitation of tax evasion', the Board confirms that it is committed to zero tolerance towards the criminal facilitation of tax evasion.
The Board also keeps under review developments involving other social and environmental issues, such as Modern Slavery and General Data Protection Regulation, and will report on those to the extent they are considered relevant to the Company's operations.
International Tax Reporting
For purposes of the US Foreign Account Tax Compliance Act (“FATCA”), the Company registered with the US Internal Revenue Services (“IRS”) as a Guernsey reporting Foreign Financial Institution (“FFI”), received a Global Intermediary Identification Number CAVBUD.999999.SL.831, and can be found on the IRS FFI list.
The Common Reporting Standard (“CRS”) is a global standard for the automatic exchange of financial account information developed by the Organisation for Economic Co-operation and Development (“OECD”), which has been adopted by Guernsey and which came into effect on 1 January 2016. The CRS replaced the intergovernmental agreement between the UK and Guernsey to improve international tax compliance that had previously applied.
The Board takes necessary actions to ensure that the Company is compliant with Guernsey regulations and guidance in this regard.
Directors' Remuneration Report
The Company's policy in regard to Directors' remuneration is to ensure that the Company maintains a competitive fee structure in order to recruit, retain and motivate non-executive Directors of excellent quality in the overall interests of shareholders.
Remuneration Policy
The Directors do not consider it necessary for the Company to establish a separate Remuneration Committee. All of the matters recommended by the Code that would be delegated to such a committee are considered by the Board as a whole.
It is the responsibility of the Board to determine and approve the Directors' fees, following a recommendation from the Chairman, having regard to the level of fees payable to non-executive Directors in the industry generally, the role that individual Directors fulfil in respect of Board and Committee responsibilities and the time committed to the Company's affairs. The Chairman's remuneration is decided separately and is approved by the Board.
The Company's Articles state that Directors' remuneration payable in any accounting year shall not exceed in the aggregate an annual sum of $650,000. Each Director is also entitled to reimbursement of their reasonable expenses. There are no commission or profit-sharing arrangements between the Company and the Directors. Similarly, none of the Directors is entitled to pension, retirement or similar benefits. No element of the Directors' remuneration is performance related.
The remuneration policy set out above is the one applied for the year ended 28 February 2026 and is not expected to change in the foreseeable future.
Directors' and Officers' liability insurance cover is maintained by the Company on behalf of the Directors.
Remuneration for Services to the Company as Non-Executive Directors
| | | |
| --- | --- | --- |
| | Year Ended 28 February 2026 US$ | Year Ended 28 February 2025 US$ |
| David Macfarlane (Chairman) | 120,000 | 120,000 |
| James Jordan | 50,000 | 50,000 |
| Sharon Parr | 70,000 | 70,000 |
| Ashley Paxton | 50,000 | 50,000 |
| | 290,000 | 290,000 |
Fees payable to the Chairman and Directors are $120,000 per annum and $50,000 per annum respectively. The Chair of the Audit Committee will receive an additional amount of $20,000 per annum.
No Director has a service contract with the Company, nor are any such contracts proposed.
Directors' Term of Appointment
In line with the UK Code of Corporate Governance, all Directors seeking re-election to the Board will do so on an annual basis regardless of their tenure not yet exceeding nine years.
The Directors were appointed as non-executive Directors by letters issued in April 2008 (David Macfarlane and James Jordan), June 2018 (Sharon Parr) and August 2020 (Ashley Paxton) which state that their appointment and any subsequent termination or retirement shall be subject to three-months’ notice from either party in accordance with the Articles. Each Director’s appointment letter provides that, upon the termination of his/her appointment, that he/she must resign in writing and all records remain the property of the Company. The Directors’ appointments can be terminated in accordance with the Articles and without compensation. There is no notice period specified in the Articles for the removal of Directors. The Articles provide that the office of Director shall be terminated by, among other things: (a) written resignation; (b) unauthorised absences from board meetings for six months or more; (c) unanimous written request of the other directors; and (d) an ordinary resolution of the Company.
Signed on behalf of the Board of Directors on 11 June 2026 by:
David Macfarlane Sharon Parr
Chairman Senior Independent Director
Audit Committee Report
Dear Shareholder,
On the following pages, we present the Audit Committee's Report, setting out the responsibilities of the Audit Committee and its key activities during the year ended 28 February 2026. The Audit Committee has reviewed the Company's financial reporting, the independence and effectiveness of the external auditor and the internal control and risk management systems of the Company's service providers. In order to assist the Audit Committee in discharging these responsibilities, regular reports are received and reviewed from the Investment Manager, Administrator and external auditor.
A member of the Audit Committee will continue to be available at each Annual General Meeting to respond to any shareholder questions on the activities of the Audit Committee.
Responsibilities
The terms of reference of the Audit Committee include the requirement to:
* monitor the integrity of the published Financial Statements of the Company;
* review and report to the Board on the significant issues and judgements made in the preparation of the Company's published Financial Statements, (having regard to matters communicated by the external Auditors) and other financial information;
* monitor and review the quality and effectiveness of the external Auditors and their independence;
* consider and make recommendations to the Board on the appointment, reappointment, replacement and remuneration of the Company's external Auditor;
* advise the Board that the annual report and accounts, taken as a whole, is fair, balanced and understandable;
* review and consider the Company's Principal risks and uncertainties;
* consider the long-term viability of the Company;
* review the Company's procedures for prevention, detection and reporting of fraud, bribery and corruption; and
* monitor and review the internal control and risk management systems of the service providers.
The Audit Committee's full terms of reference can be viewed on the Company's website [www.jzcp.com.](http://www.jzcp.com/)
Key Activities of the Audit Committee
The following sections discuss the assessments made by the Audit Committee during the year:
Financial Reporting:
The Audit Committee's review of the Annual Financial Statements focused on the following significant areas:
* Assessment of Going Concern and Viability
The Audit Committee has considered the ability of the Company to continue as a going concern over the period ending 30 June 2027. After careful consideration the Committee have recommended to the Board that it is satisfied that it is appropriate to adopt the going concern basis in preparing these Financial Statements and they have a reasonable expectation that the Company will continue in existence as a going concern for the period. The reasons for reaching this judgement are detailed in the Report of the Directors on page 15.
For the viability assessment, the Audit Committee has assessed the expectations that the Company will be able to continue in operation and meet ongoing financial obligations over the period ending 28 February 2029. In making its recommendation to the Board the Committee has carried out a robust review of the Company's principal risks and uncertainties to which the Company is exposed and that potentially threaten future performance and liquidity and has assessed the Company's current position and prospects as detailed in the Chairman's Statement and Investment Adviser's Report. The key factors considered by the Committee are detailed in the Report of the Directors on pages 15-16.
The Audit Committee was also satisfied that the disclosures in the basis of preparation note and the viability statement, relating to the going concern assessment of the Company, were appropriately clear and transparent.
* Valuation of Unquoted Investment Fair Values including the impact on management fees
The fair value of the Company’s unquoted securities at 28 February 2026, which are valued using techniques detailed in Note 5 of the Financial Statements, was $162,856,000 accounting for 74.7% of the Company's investment portfolio. The Committee has concentrated on ensuring the Investment Adviser has applied appropriate valuation methodologies to these investments in producing the net asset value of the Company.
Members of the Audit Committee discuss the valuation process with the Investment Adviser on a quarterly basis. The Audit Committee gains comfort in the valuations produced by reviewing the methodologies used and challenging the recommendations of the Investment Adviser. The Audit Committee are thus satisfied that the valuation techniques are appropriate and represent fair value.
### Key Activities of the Audit Committee (continued)
Financial Reporting (continued):
* Valuation of Unquoted Investment Fair Values including the impact on management fees (continued)
The valuation of the unquoted investments is the key driver of the Company’s gross asset value and the basis of the management fees payable to the Investment Adviser. The management fees payable could therefore potentially be misstated if there were to be an error in the calculation of the gross assets. The Audit Committee is satisfied that there is a robust procedure around the production and authorisation of the Company's NAV calculations and therefore management fees have been correctly calculated as stated in the Annual Report and Financial Statements.
* Engagement with Regulators
During the year, (as referred to in the interim financial statements for the period ended 31 August 2025), in accordance with Part 2 of the Financial Reporting Council ("FRC")'s Corporate Reporting Review Operating Procedures the FRC undertook a review of the Company’s Annual Report and Financial Statements for the year ended 28 February 2025. The FRC's role is to consider compliance with the reporting requirements, rather than to verify the information provided. As a result, the review process does not provide assurance that the Company's Annual Report and Financial Statements for the year ended 28 February 2025 is correct in all material respects. Whilst there were no material concerns/queries raised from the review, matters were highlighted where the FRC suggested that users of the accounts would have benefited from further clarification within certain disclosures. The Audit Committee has considered these points raised as part of the current reporting cycle and have addressed the matters raised within Notes 2 and 16 of the Financial Statements.
In addition to the above, the FRC’s Audit Quality Review (‘AQR’) team reviewed the audit of the Company's 2025 financial statements as part of their annual inspection of Ernst & Young LLP. The findings from the review, none of which were significant, have been considered by the Committee and discussed with the Auditor.
The background to AQR inspections, their approach to assessing audit quality, together with their confidentiality obligations are set out in the FRC website at
Risk Management:
The Audit Committee continued to consider the process for managing the risk of the Company and its service providers. Risk management procedures for the Company, as detailed in the Company's risk assessment matrix, were reviewed and approved by the Audit Committee. New risks are added to the matrix when deemed appropriate.
Fraud, Bribery and Corruption:
The Audit Committee continues to monitor the fraud, bribery and corruption policies of the Company. The Board receives a confirmation from all service providers of any instances of fraud, bribery or corruption.
In a press release dated 21 March 2022, the Company announced that it had come to the Board's attention that allegations of fraudulent conduct had been made against two individuals who were members of the management team that manages JZCP's investments in European micro-cap companies. A claim was made in respect thereof in the New York State Supreme Court (the “New York Action”). The claimants were JZ International LLC as well as a fund in which JZCP has no interest. Following the announcement, the Company undertook a review and concluded the alleged fraudulent conduct did not impact the Company's investments held through JZI Fund III L.P.
In April 2023, a subsidiary of the Fund, commenced an action against the same two individuals (and certain of their associates) in Spain based, in part, on the allegations in the New York Action (the “Spanish Action”). The Spanish Action was admitted by a Spanish court for further investigation, and as a result, in May 2023, the New York Action was discontinued (finalised as of June 2023). The Spanish Action is ongoing as of this date.
There have been no further suspected instances of fraud, bribery or corruption during the year ended 28 February 2026.
The External Auditor
Ernst & Young LLP have acted as external auditor since the Company's inception in April 2008. This is the third year, of an anticipated five-year tenure, for Daniel Saunders as audit partner. A full tender process was undertaken during December 2018 and January 2019 resulting in Ernst & Young LLP being reappointed.
Independence, objectivity and fees
The independence and objectivity of the external auditor is reviewed by the Audit Committee which also reviews the terms under which the external auditor is appointed to perform non-audit services.
In line with the UK FRC Revised Ethical Standard and the potential threat to the Auditor's independence by providing non-audit services, the Audit Committee prohibits the external auditor providing non-audit services to the Company. This general prohibition does not extend to an interim review report providing the fee for such interim review is subject to a 70% fee cap when compared to the audit fee.
The following table summarises the remuneration paid and payable by the Company to Ernst & Young LLP and to other Ernst & Young LLP member firms for audit and other services during the years ended 28 February 2026 and 28 February 2025.
| | | | | |
| --- | --- | --- | --- | --- |
| | Year ended | $ Equivalent Year ended | Year ended | $ Equivalent Year ended |
| 28.2.2026 | 28.2.2026 | 28.2.2025 | 28.2.2025 |
| Ernst & Young LLP | | | | |
| - Annual audit | £261,000 | $352,000 | £252,000 | $328,000 |
| - Auditor's interim review | £66,000 | $87,000 | £63,000 | $80,000 |
| Performance and effectiveness: | | | | |
During the year, when considering the effectiveness of the external auditor, the Audit Committee has taken into account the following factors:
* the audit plan presented to them before each audit;
* the post audit report including variations from the original plan;
* changes in audit personnel;
* the external auditor's own internal procedures to identify threats to independence;
* the FRC AQR report referred to above; and
* feedback received from both the Investment Adviser and Administrator.
The Audit Committee reviewed and challenged the audit plan and the post audit report of the external auditor and concluded that audit risks had been sufficiently identified and were sufficiently addressed. The Audit Committee considered reports from the external auditor on their procedures to identify threats to independence and concluded that the procedures were sufficient to identify potential threats to independence.
There were no significant adverse findings from this evaluation.
The Audit Committee has examined the scope and results of the audit, its cost effectiveness and the independence and objectivity of the external Auditor and considers Ernst & Young LLP, as external Auditor, to be independent of the Company.
Internal control and risk management systems:
Additional work performed by the Audit Committee in the areas of internal control and risk management are disclosed on pages 23-24.
The Audit Committee has also reviewed the need for an internal audit function. The Audit Committee has decided that the systems and procedures employed by the Investment Adviser and the Administrator, including the Administrator's internal audit function, provide sufficient assurance that a sound system of internal control, which safeguards the Company’s assets, is maintained. An internal audit function specific to the Company is therefore considered unnecessary.
In finalising the Annual Report and Accounts for recommendation to the Board for approval, the Audit Committee has also recommended to the Board that the Annual Report and Accounts should be considered fair, balanced and understandable.
Sharon Parr
Chair, Audit Committee 11 June 2026
Independent Auditor's Report
To The Members of JZ Capital Partners Limited Opinion
We have audited the financial statements of JZ Capital Partners Limited (the “Company”) for the year ended 28
February 2026 which comprise the Statement of Financial Position, the Statement of Comprehensive Income, the Statement of Changes in Equity, the Statement of Cash Flows, and the related notes 1 to 27, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards as adopted by the European Union (“IFRS”).
In our opinion, the financial statements:
* give a true and fair view of the state of the Company’s affairs as at 28 February 2026 and of its profit for the year then ended;
* have been properly prepared in accordance with IFRS; and
* have been properly prepared in accordance with the requirements of The Companies (Guernsey) Law, 2008.
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, including the UK 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:
* The audit engagement partner directed and supervised the audit procedures on going concern;
* In conjunction with our walkthrough of the Company’s financial statement close process, we confirmed our understanding of management’s going concern assessment process and also engaged with management early to
ensure appropriate factors were considered in their assessment;
* We obtained management’s going concern assessment, including cash flow forecasts prepared by the Investment Adviser, Jordan/Zalaznick Advisers, Inc (“JZAI”) for the going concern period to 30 June 2027;
* We evaluated the assumptions made in the cashflow forecast and tested its arithmetical accuracy;
* We challenged the appropriateness of management’s forecasts by assessing historical forecasting accuracy, and we applied further stress testing to understand the sensitivity of the assessment to the timing and quantum of asset
realisations;
* We challenged the appropriateness of the going concern period, including assessing whether there were events or conditions beyond 30 June 2027 which may warrant extending the going concern period;
* We assessed whether the available liquidity was sufficient to cover commitments made to unquoted investments and other ongoing commitments including Investment Adviser fees and other expenses;
* We held discussions with the Investment Adviser and the Audit Committee in relation to the status of the asset realisations; and
* We assessed the appropriateness of the disclosures in the Annual Report and Financial Statements relating to going concern.
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 to 30 June 2027.
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.
Independent Auditor's Report (continued)
Overview of our audit approach
Materiality
* Overall materiality of $5m (2025: $2.74) which represents 2% of net assets.
Key audit matters ●
Misstatement in the valuation of unquoted investments: The risk that the fair value of investments might be misstated due to application of inappropriate methodologies or inputs to the valuations and/or inappropriate judgemental factors (including the risk of management override) and the possible impact on management fees.
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, changes in the business environment and the potential impact of climate change when assessing the level of work to be performed.
All audit work was performed directly by the audit engagement team. The audit was led from Guernsey. In addition, we engaged our Strategy and Transactions (“SaT”) and Valuation, Modelling and Economics (“VME”) industry valuation specialists, who assisted us in auditing the valuation of the real estate investments and the unquoted private equity investments. The scope of their work was consistent with the prior year.
Climate change
The Company has explained its climate related risks in the ‘Principal Risks and Uncertainties’ section of the Report of the Directors which forms part of the ‘Other information’ rather than the audited Financial Statements. Our procedures on these disclosures therefore consisted solely of considering whether these disclosures are materially inconsistent with the Company’s financial statements, or our knowledge obtained during the course of the audit, or otherwise appear to be materially misstated, in line with our responsibilities on ‘Other information’.
Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating the adequacy of the Company’s disclosures in the financial statements as set out in note 3, and the conclusion that there was no material impact the financial statements. Based on our work, we have not identified the impact of climate change on the financial statements to be a key audit matter or to impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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.
| | | |
| --- | --- | --- |
| Risk | Our response to the risk | Key observations communicated to the Audit Committee |
| Misstatement in the valuation of unquoted investments (2026: $162.9 million; 2025: $167.2 million) Refer to the Audit Committee Report (page 26-28); Accounting policies (page 44-46); and Note 5 of the Financial Statements (page 51-53) 75% (2024: 67%) of the carrying value of investments relates to the Company’s holdings in unquoted investments, which are valued using different valuation techniques, as described in Note 5 to the financial statements. The valuation of the unquoted investments is the key driver of the Company’s net asset value and total return. Incorrect valuation could have a significant impact on the net asset value of the Company and therefore the return generated for shareholders. The valuation is subjective, with a high level of judgement and estimation linked to the determination of the values with limited market information available, as a result of the low level of liquidity in the private equity and real estate markets at the year-end. | Our audit procedures consisted of: All investments * Confirmed our understanding of the Company’s valuation processes, inputs and methodologies and evaluating the effectiveness of relevant controls that addressed the risk of material misstatements due to fraud or error; Private equity investments * Attended fair value discussions in relation to 28 February 2026 valuations. These included the Investment Adviser, EY core audit team and EY valuation specialists; * Inspected the Investment Adviser's valuation decks and supporting data to assess the appropriateness and relevance of the information used; * Discussed the valuation inputs with the Investment Adviser, challenging assumptions made by them and the Board, to understand the basis of their fair value estimations; * For all material directly held private equity investments held by the Company, we engaged our EY valuation specialists to: + Assess the Investment Adviser’s market estimates and valuation inputs (in relation to financial metrics, discount/premium rate and EBITDA multiples) by reference to comparable transactions, and independently compiled databases/indices; + Determine whether the methodologies used to value the investments were consistent with methods usually used by market participants; + Determine a reasonable range of proposed multiples and of enterprise value for each investment; + Challenge management on the appropriateness of their chosen comparable public companies used to compute multiples as well as corroborating those multiples with independent data; * Identified the significant unobservable inputs to valuations and reviewed and assessed the reasonableness of the sensitivity workings and disclosures, compared the Investment Adviser’s position with VME’s independently derived reasonable range of enterprise values; * Vouched valuation inputs that do not require specialist knowledge to independent sources and tested the arithmetical accuracy of the Company’s calculations; | We concluded that there were no material instances of use of inappropriate policies or methodologies and that the investments were not materially misstated. We also concluded that there were no material matters arising from our audit work on the valuation of financial instruments, in accordance with IFRS, that we wanted to bring to the attention of the Audit Committee. |
`
| | | |
| --- | --- | --- |
| Risk | Our response to the risk | Key observations communicated to the Audit Committee |
| Misstatement in the valuation of unquoted investments (2026: $162.9 million; 2025: $167.2 million) (continued) | Our audit procedures consisted of (continued): Private equity investments (continued) * Agreed the valuation per the financial statements to the models per the valuation decks prepared by JZAI, and agreed the proposed values per the valuation decks to the investment portfolio report prepared by the Administrator; * Reviewed the waterfall calculations through the SPV structures to the Company and reviewing the inputs to, and arithmetic accuracy of, the waterfall calculations; * Reported to the Audit Committee on the calibration of investment valuations against EY’s ranges. Fund Investments For the Company’s investments in JZ Secondary Fund L.P. and JZI Fund III, L.P., we: * Assessed the reasonableness of the Company’s valuation policy of valuing these investments at their Net Asset Value in accordance with the International Private Equity and Venture Capital (‘IPEV’) Valuation Guidelines; * Assessed the reliability of the Net Asset Value of the underlying funds by obtaining their latest audited financial statements, reviewing the audit opinion therein for modifications and reviewing the accounting policies adopting in formulating the NAV; * Assessed the competency and professional reputation of the auditor of the underlying funds that the Company is invested into; * Reviewed and documented observations of the work performed for the purposes of the audits of the underlying funds so far as to assess their reliability for the purposes of the audit of the Company; and * Performed a roll forward reconciliation and assessment for movements occurring in the underlying funds from the date of their financial statements (31 December 2025) and the date of the Company’s financial statements, which included a call with the funds’ Investment Advisor. Real estate Investments * Obtained the independent appraisals and supporting data from the Investment Adviser and assessed whether the data used is appropriate and relevant; * Discussed real estate valuations with the Investment Adviser, challenging assumptions made by them and the Board of Directors regarding the reasonableness of inputs and assumptions; | |
Key audit matters (continued)
| | | |
| --- | --- | --- |
| Risk | Our response to the risk | Key observations communicated to the Audit Committee |
| Misstatement in the valuation of unquoted investments (2026: $162.9 million; 2025: $167.2 million) (continued) | Our audit procedures consisted of (continued): Real estate Investments (continued) * For all underlying real estate investments held by the Company, we engaged with EY Real Estate specialists within our SaT team to perform the below procedures: + Assess JZAI’s and the Company’s specialist’s market related judgments and valuation inputs in relation to real estate asset discount rates, rental per square foot, selling price per square foot by reference to comparable transactions, and independently compiled databases & indices; + Assess whether the methodologies used to value real estate assets were consistent with methods usually used by market participants; + Determine the range of market values and compare with the fair value of the real estate assets; and + Assist in determining whether the Company’s specialist, for the real estate assets, was appropriately qualified and independent. * Vouched valuation inputs that do not require specialist knowledge to independent sources and tested the arithmetical accuracy of the Company’s calculations; * Agreed the valuation per the financial statements back to the models per the independent appraisal reports, prepared by the Company’s specialist. Other Procedures * To address the risk of management override of controls, we reviewed period end and post-closing journal entries to the general ledger to understand the nature of those transactions and determine whether they are appropriate and consistent with accounting for investments held at fair value. * We reviewed the fair value disclosures to assess consistency with IFRS 13 requirements, including evaluating the adequacy of disclosures relating to valuation techniques, fair value hierarchy classification, significant unobservable inputs, and sensitivity analyses, and assessing whether these appropriately reflect the valuation assumptions and estimation uncertainty. | |
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 $5 million (2025: $2.74 million), which is 2% (2025: 1%) of net assets. We believe that net assets is the most appropriate measure of planning materiality given the focus of the investors is on the valuation of the private equity and real estate portfolio.
Materiality was previously set at 1% of net assets. In the current year, taking into account the expected level of future activity and the planned managed wind-down, which introduces a broader range of potential realisable values for investments, we have determined it appropriate to revise the materiality benchmark to 2% of net assets.
During the course of our audit, we reassessed initial materiality and noted that the materiality set during planning remained applicable.
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 judgement was that performance materiality was 75% (2025: 75%) of our planning materiality, namely $3.75m (2025:
$2.06m). We have set performance materiality at this percentage to ensure that the total uncorrected and undetected audit differences in the financial statements did not exceed our materiality level.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of $0.25m (2025: $0.14m), 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 measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the Annual Report set out on pages 1 to 28 and pages 68 to 74, other than 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which The Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion:
* proper accounting records have not been kept by the Company; or
* the financial statements are not in agreement with the Company’s accounting records and returns; or
* we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
The Listing Rules require us to review 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 Listing Rules.
Corporate Governance Statement (continued)
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:
+ Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 15;
+ 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 15 to 16;
+ 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 15;
+ Directors’ statement on fair, balanced and understandable set out on page 19.
+ Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 13 to 14;
+ The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems set out on page 23 and 27; and
+ The section describing the work of the audit committee set out on page 26 to 28.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement set out on page 19 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 the Investment Adviser. Our approach was as follows:
+ We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are The Companies (Guernsey) Law, 2008, as amended, the 2024 UK Corporate Governance Code, the Protection of Investors (Bailiwick of Guernsey) Law, 2020 and the listing requirements of the London Stock Exchange and the Disclosure Guidance and Transparency Rules of the UK Listing Authority;
+ We understood how the Company is complying with those frameworks by:
- Making enquiries of the Investment Advisor and those charged with governance regarding their knowledge of any non-compliance or potential non-compliance with laws and regulations that could affect the Financial Statements
- Discussing the processes and procedures used by the Directors, the Investment Advisors, the Company Secretary and Administrator to identify and respond to fraud risks and ensuring compliance with the relevant frameworks;
- Understanding the Company’s method of enforcing and monitoring non-compliance with such policies and reviewing internal reports that evidenced quarterly compliance testing; and
- Inspecting any correspondence with regulators.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud (continued)
+ We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by:
o identifying misstatement or manipulation of the valuation of the Company’s investments in the unquoted investments and undertaking the audit procedures set out in the Key Audit Matters section above;
o obtaining an understanding of entity-level controls and considering the influence on the control environment;
o obtaining management’s assessment of fraud risks including an understanding of the nature, extent and frequency of such assessment documented in the Board’s risk matrix;
o making inquiries with those charged with governance as to how they exercise oversight of management’s processes for identifying and responding to fraud risks and the controls established by management to mitigate specifically those risks the entity has identified, or that otherwise help to prevent, deter and detect fraud;
o making inquiries with management and those charged with governance regarding how they identify related parties including circumstances related to the existence of a related party with dominant influence; and
o making inquiries with management and those charged with governance regarding their knowledge of any actual or suspected fraud or allegations of fraudulent financial reporting affecting the Company.
+ Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved:
- Through discussion, gaining an understanding of how those charged with governance, the Investment Adviser, the Company Secretary and Administrator identify instances of non-compliance by the Company with relevant laws and regulations;
- Inspecting the relevant policies, processes and procedures to further our understanding;
- Reviewing Board and Audit Committee minutes and internal compliance reporting;
- Inspecting correspondence with regulators; and
- Obtaining relevant written representations from the Board of Directors.
+ Our understanding of the company's current activities, the scope of its authorisation and the effectiveness of its control environment are as follows:
- The activities of the Company are overseen by the Board, who meet regularly throughout the year;
- We have reviewed the System and Organization Controls (SOC 1) Report and bridging letter of Company’s administrator for the year audited and are not aware of any matters of concern relating to the control environment.
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.](https://www.frc.org.uk/auditorsresponsibilities) This description forms part of our auditor’s report.
Other matters we are required to address
* Following the recommendation from the audit committee, we were appointed by the Company to audit the financial statements for the year ended 28 February 2009 and subsequent financial periods. We signed an engagement letter on
27 November 2008.
* The period of total uninterrupted engagement including previous renewals and reappointments is 18 years, covering the years ended 28 February 2009 to 28 February 2026.
* The audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Section 262 of The Companies (Guernsey) Law 2008. 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.
Daniel Saunders
for and on behalf of Ernst & Young LLP Guernsey, Channel Islands
11 June 2026
Independent Auditor's Report
# TO THE DIRECTORS OF JZ CAPITAL PARTNERS LIMITED
Opinion
We have audited the financial statements of JZ Capital Partners Limited (the “Company”), which comprise the statements of financial position as of 28 February 2026 and 28 February 2025, and the related statements of comprehensive income, changes in equity and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of 28 February 2026 and 28 February 2025, and the results of its operations and its cash flows for the years then ended in accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS”).
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). 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 are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.
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 of 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 absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
* Exercise professional judgment and maintain professional skepticism throughout the audit.
* Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
* Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
* Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
* Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
Independent Auditor's Report (continued)
# INDEPENDENT AUDITOR’S REPORT FOR AUDIT CONDUCTED IN ACCORDANCE WITH AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES (continued)
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Other Information
Management is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Ernst & Young LLP Guernsey, Channel Islands
11 June 2026
In order to comply with the U.S. Securities and Exchange Commission's custody rule, an audit opinion was requested, by the Company's Investment Adviser, which satisfies the requirements of auditing standards generally accepted in the United States.
Statement of Comprehensive Income
For the Year Ended 28 February 2026
| | | | |
| --- | --- | --- | --- |
| | | Year Ended | Year Ended |
| Notes | 28 February 2026 US$'000 | 28 February 2025 US$'000 |
| Income and investment and other gains | | | |
| Net gain on investments at fair value through profit or loss | 6 | 5,576 | - |
| Investment income | 7 | 4,266 | 6,707 |
| Bank and deposit interest | | 561 | 749 |
| Realisations from investments held in escrow accounts | 22 | 280 | 3,067 |
| Net foreign currency exchange gains | | 40 | 181 |
| | | 10,723 | 10,704 |
| Expenses and losses | | | |
| Net loss on investments at fair value through profit or loss | 6 | - | (4,686) |
| Investment Adviser's base fee | 8 | (3,750) | (4,415) |
| Administrative expenses | 8 | (1,823) | (2,441) |
| Directors' remuneration | 8 | (290) | (290) |
| | | (5,863) | (11,832) |
| Operating profit/(loss) | | 4,860 | (1,128) |
| Finance costs | | - | - |
| Profit/(loss) before taxation | | 4,860 | (1,128) |
| Taxation | 9 | - | - |
| Total comprehensive income/(loss) | | 4,860 | (1,128) |
Weighted average number of Ordinary shares in issue during
the year 19
60,562,093
71,621,721
Basic and diluted earnings/(loss) per Ordinary share 19 8.02c (1.57)c
There was no other comprehensive income during the year.
All of the profits presented in this statement are from continuing operations.
The accompanying notes on pages 43 to 67 form an integral part of these Audited Financial Statements.
Statement of Financial Position
As at 28 February 2026
| | | | | |
| --- | --- | --- | --- | --- |
| Assets | Notes | 28 February 2026 US$'000 | | 28 February 2025 US$'000 |
| Investments at fair value through profit or loss | 10 | 218,079 | | 249,210 |
| Prepayment of Investment Adviser's base fee | 8 | 895 | | 969 |
| Other receivables | 11 | 463 | | 186 |
| Cash at bank | | 30,658 | | 25,074 |
| Total Assets | | 250,095 | | 275,439 |
| Liabilities Other payables | 12 | 570 | | 774 |
| Total Liabilities | | 570 | | 774 |
| Equity Share capital | 13 | 157,074 | | 176,334 |
| Distributable reserve | 15 | 92,451 | | 98,331 |
| Total Equity | | 249,525 | | 274,665 |
| Total Liabilities and Equity | | 250,095 | | 275,439 |
| Number of Ordinary shares in issue at year end | 13 | 60,320,352 | | 67,673,293 |
| Net Asset Value per Ordinary share | 21 | $4.14 | | $4.06 |
These Audited Financial Statements on pages 39 to 67 were approved by the Board of Directors and authorised for issuance on 11 June 2026. They were signed on its behalf by:
David Macfarlane Sharon Parr
Chairman Senior Independent Director
The accompanying notes on pages 43 to 67 form an integral part of these Audited Financial Statements.
Statement of Changes in Equity
For the Year Ended 28 February 2026
| | | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | | Share Capital | | Distributable Reserve | | Total |
| Notes | US$'000 | | US$'000 | | US$'000 |
| Balance as at 1 March 2025 | | 176,334 | | 98,331 | | 274,665 |
| Profit for the year | | - | | 4,860 | | 4,860 |
| Repurchase of Ordinary shares | 13, 25 | (19,260) | | (10,740) | | (30,000) |
| Balance at 28 February 2026 | | 157,074 | | 92,451 | | 249,525 |
Comparative for the Year Ended 28 February 2025
| | | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | | Share Capital US$'000 | | Distributable Reserve US$'000 | | Total US$'000 |
| Balance as at 1 March 2024 | | 216,650 | | 99,459 | | 316,109 |
| Loss for the year | | - | | (1,128) | | (1,128) |
| Repurchase of Ordinary shares | 13, 25 | (40,316) | | - | | (40,316) |
| Balance at 28 February 2025 | | 176,334 | | 98,331 | | 274,665 |
The accompanying notes on pages 43 to 67 form an integral part of these Audited Financial Statements.
| | | | | |
| --- | --- | --- | --- | --- |
| Statement of Cash Flows For the Year Ended 28 February 2026 | | | | |
| | | 28 February | | 28 February |
| | | 2026 | | 2025 |
| | Notes | US$'000 | | US$'000 |
| Cash flows from operating activities | | | | |
| Cash inflows | | | | |
| Realisation of investments | 10 | 13,765 | | 44,355 |
| Maturity of treasuries | 10 | 190,517 | | 447,083 |
| Interest received on maturity of treasuries | 10 | 2,405 | | 4,522 |
| Escrow receipts received | 22 | 280 | | 3,067 |
| Bank interest received | | 561 | | 749 |
| Income distributions received from investments | | - | | 4,004 |
| Cash outflows | | | | |
| Direct investments and capital calls | 10 | (1,994) | | (23,879) |
| Purchase of treasuries | 10 | (163,959) | | (419,736) |
| Investment Adviser's base fee paid | | (3,676) | | (5,653) |
| Other operating expenses paid | | (2,355) | | (2,671) |
| Net cash inflow from operating activities | | 35,544 | | 51,841 |
| Cash flows from financing activities | | | | |
| Repurchase of Ordinary shares | 13, 25 | (30,000) | | (40,316) |
| Net cash outflow from financing activities | | (30,000) | | (40,316) |
| Increase in cash and cash equivalents | | 5,544 | | 11,525 |
| Reconciliation of Net Cash Flow to Movements in Cash and Cash Equivalents | | | | | |
| Cash at bank at beginning of year | | | 25,074 | | 13,368 |
| Increase in cash and cash equivalents | | | 5,544 | | 11,525 |
| Foreign exchange movements on cash at bank | | | 40 | | 181 |
| Cash at bank at year end | | | 30,658 | | 25,074 |
The accompanying notes on pages 43 to 67 form an integral part of these Audited Financial Statements.
Index to Notes to the Financial Statements
Page
1. General Information 44
2. Basis of Accounting and Material Accounting Policy Information 44
3. Estimates and Judgements 47
4. Segment Information 48
5. Fair Value of Financial Instruments 51
6. Net Gain/(Loss) on Investments at Fair Value Through Profit or Loss 54
7. Investment Income 54
8. Expenses 54
9. Taxation 56
10. Investments 56
11. Other Receivables 58
12. Other Payables 58
13. Share Capital 58
14. Capital Management 59
15. Reserves 59
16. Financial Risk Management Objectives and Policies 60
17. Commitments 64
18. Related Party Transactions 64
19. Basic and Diluted Earnings/(Loss) Per Ordinary Share 65
20. Controlling Party 65
21. Net Asset Value Per Share 65
22. Contingent Assets 65
23. Notes to the Statement of Cash Flows 65
24. Dividends Paid and Proposed 66
25. Return of Capital 66
26. IFRS to US GAAP Reconciliation 66
27. Subsequent Events 67
Notes to the Financial Statements
1. General Information
JZ Capital Partners Limited ("JZCP" or the "Company") is a Guernsey domiciled closed-ended investment company which was incorporated in Guernsey on 14 April 2008. The Company is subject to the Companies (Guernsey) Law, 2008. The Company is classified as an authorised fund under the Protection of Investors (Bailiwick of Guernsey) Law 2020. As at 28 February 2026, the Company's capital consisted of Ordinary shares which are traded on the London Stock Exchange.
The Company's investment policy, adopted in August 2020, is for the Company to make no further investments outside of its existing obligations or to the extent that investment may be made to support selected existing portfolio investments. The intention being to realise the maximum value of the Company’s investments and, after repayment of all debt (which was completed in December 2023), to return capital to shareholders. The Company made an initial return of capital in July 2024 and a second return in March 2025. The Company still remains committed to its investment strategy of realising the maximum value of its investments. The Company will continue to assess its ability to make further returns of capital to Shareholders and will seek to do so as and when it has sufficient cash reserves that are not otherwise required to support its existing investments to maximise value and/or to meet its existing obligations such as operational expenses.
The Company’s previous investment policy was to target predominantly private investments and back management teams to deliver on attractive investment propositions. In executing this strategy, the Company took a long-term view. The Company looked to invest directly in its target investments and was able to invest globally but with a particular focus on opportunities in the United States and Europe.
The Company is currently focused on supporting its investments in the following areas:
1. micro-cap buyouts in the form of debt and equity and preferred stock in both the US and Europe;
2. Spruceview Capital Partners the Company's asset management business based in the US; and
3. US real estate.
The Company has no direct employees. For its services, the Investment Adviser receives a management fee as described in Note 8. The Company has no ownership interest in the Investment Adviser. During the period under review, the Company was administered by Northern Trust International Fund Administration Services (Guernsey) Limited.
2. Basis of Accounting and Material Accounting Policy Information Basis of preparation
The Financial Statements have been prepared in accordance with the International Financial Reporting Standards as
adopted by the European Union ("IFRS"), which comprise standards and interpretations approved by the International Accounting Standards Board ("IASB") together with applicable legal and regulatory requirements of the Companies (Guernsey) Law, 2008 and the London Stock Exchange.
The Financial Statements are presented in US dollars and all values are presented to the nearest thousand dollars ($000), except where otherwise indicated. The functional currency of the Company as determined in accordance with IFRS is the US dollar because this is the currency that best reflects the economic substance of the underlying events and circumstances of the Company.
The Company presents its Statement of Cash Flows statement on a direct basis.
The Company's Statement of Financial Position is presented in order of liquidity, which provides information in a format that is deemed relevant to the Company.
New and amended standards and interpretations
The new standards or amendments to existing standards and interpretations, effective from 1 March 2025, did not have a material impact of the Company’s Financial Statements. The Company has assessed the impact of IFRS 18. Whilst the presentation of the Statement of Comprehensive Income will change when the standard is implemented on 1 March 2027, the valuation and measurement of balances therein will not be impacted.
Changes in accounting policy and disclosure
The accounting policies adopted in the preparation of these Audited Annual Financial Statements have been consistently applied during the year and are consistent with those of the previous year.
1. Basis of Accounting and Material Accounting Policy Information (continued) Material Accounting Policies
Financial instruments
In accordance with IFRS 9 - "Financial Instruments", the Company classifies its financial assets and financial liabilities at initial recognition into the categories of financial assets and financial liabilities discussed below.
Financial assets
The Company classifies its financial assets as subsequently measured at amortised cost or measured at FVTPL on the basis of both:
* The entity’s business model for managing the financial assets; and
* The contractual cash flow characteristics of the financial asset.
1. Financial assets measured at fair value through profit or loss ("FVTPL")
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
i a) Classification
Financial assets classified at FVTPL are those that are managed and their performance evaluated on a fair value basis in accordance with the Company’s investment strategy as documented in its prospectus.
The Company includes in this category:
* Investments in the equity and preferred stock of micro-cap, real estate and other investments;
* Investments in subsidiaries, associates and joint ventures: as the Company is judged to be an investment entity (see Note 3), it measures all such investments at FVTPL; and
* Investments in debt instruments which do not meet the criteria to classify as investments at amortised cost. The Company's investment in treasuries are measured at FVTPL because of the business model in which they are held being part of the Company's investment portfolio.
i b) Measurement
Investments made by the Company are measured initially and subsequently at fair value, with changes in fair value taken to the Statement of Comprehensive Income. Transaction costs are expensed in the year in which they arise for those financial instruments classified at FVTPL.
i c) Fair value estimate
The fair value of financial assets traded in active markets (such as publicly traded securities) is based on quoted market prices at the Statement of Financial Position date. The quoted market price used for financial assets held by the Company is the bid price.
Unquoted preferred shares, micro-cap loans, unquoted equities and equity-related securities investments are typically valued by reference to their enterprise value, which is generally calculated by applying an appropriate multiple to the last twelve months’ earnings before interest, tax, depreciation and amortisation (“EBITDA”). In determining the multiple, the Directors consider inter alia, where practical, the multiples used in recent transactions in comparable unquoted companies, previous valuation multiples used and where appropriate, multiples of comparable publicly traded companies. In accordance with the International Private Equity and Venture Capital Association (“IPEV”) valuation guidelines, a marketability discount is applied which reflects the discount that in the opinion of the Directors, market participants would apply in a transaction in the investment in question.
The valuation techniques to derive the fair value of real estate interests and other investments are detailed in Note 5 (pages 51-52).
1. Other receivables
Other receivables do not carry any interest and are short-term in nature and are accordingly stated at their carrying value as reduced by appropriate allowances for expected credit losses.
1. Basis of Accounting and Material Accounting Policy Information (continued) Material Accounting Policies (continued)
2. Cash and cash equivalents
Cash and cash equivalents comprise bank balances and cash held by the Company, including short-term bank deposits with a maturity of three months or less from the date of acquisition. Cash also includes amounts held in interest-bearing overnight accounts.
Other payables
Other payables (including the accrual of Investment Adviser’s fees) are not interest-bearing and are stated at their nominal value.
Equity
Equity is classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity is recorded at the amount of proceeds received, net of issue costs. Ordinary Shares are classified as equity in accordance with IAS 32 – “Financial Instruments: Presentation” as these instruments include no contractual obligation to deliver cash and the redemption mechanism is not mandatory.
Interest revenue
Interest from treasury bills is recognised on a time apportionment basis reflecting the yield which equates to the interest if calculated using the effective interest rate method.
Dividend income
Dividend income is recognised when the Company's right to receive payment is established. When there is reasonable doubt that income due to be received will actually be received, such income is not accrued until it is clear that its receipt is probable. Where, following an accrual of income, receipt becomes doubtful, the accrual is either fully or partly written off until the reasonable doubt is removed.
Expenses
All expenses are recognised in the Statement of Comprehensive Income on an accruals basis.
Escrow accounts
Where investments are disposed of, the consideration given may include contractual terms requiring that a percentage of the consideration is held in an escrow account pending resolution of any indemnifiable claims that may arise and as such the value of these escrow amounts is not immediately known. The Company records gains realised on investments held in escrow in the Statement of Comprehensive Income following confirmation that any such indemnifiable claims have been resolved and none is expected in the future.
Taxation
As at 11 June 2026, the Company had been granted Guernsey tax exempt status in accordance with The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 (as amended) for both 2026 and 2025. However, in some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment income in the Statement of Comprehensive Income.
3. Estimates and Judgements
The preparation of the Company’s financial statements requires management to make estimates, judgements, and assumptions that affect the reported amounts recognised in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future periods.
The following are the key judgements and other key sources of estimation uncertainty at the end of the reporting year, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:
Estimates
Fair Value of Investments at FVTPL
Certain investments are classified as FVTPL, and valued accordingly, as disclosed in Note 2. The key source of estimation uncertainty is on the valuation of unquoted equities, equity-related securities and real estate investments.
In reaching its valuation of the unquoted equities, equity-related securities and real estate investments, the key estimates management has to make are those relating to the multiples, discount factors and real estate valuation factors (Note 5) used in the valuation models.
Judgements
Assessment as an Investment Entity
Entities that meet the definition of an investment entity within IFRS 10 "Consolidated Financial Statements" are required to measure their subsidiaries at FVTPL rather than consolidate them. The criteria which define an investment entity are as follows:
* An entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;
* An entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and
* An entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.
Having considered the Company's investor profile, investment policy and methodology of valuing investments, management have judged the Company meets the criteria of an investment entity. The Company has clearly defined exit strategies for each of its investment classes, these strategies are again consistent with an investment entity.
The Board has also concluded that the Company meets the additional characteristics of an investment entity stated under IFRS 10, in that it has more than one investment, the investments are predominantly in the form of equities and similar securities, it has more than one investor and it has investors that are not related parties of the Company.
Investment in Associates
An associate is an entity over which the Company has significant influence. An entity is regarded as a subsidiary only if the Company has control over its strategic, operating and financial policies and intends to hold the investment on a long-term basis for the purpose of securing a contribution to the Company’s activities. The Directors have determined that although the Company has over 50% economic interest in EuroMicrocap Fund 2010, L.P. and JZI Fund III GP, L.P. (JZCP holds indirectly a 18.75% partnership interest in JZI Fund III, L.P. through its interest in JZI Fund III GP, L.P.), it does not have the power to govern the financial and operating policies of the entities, but does have significant influence over the strategic, operating and financial policies. The Company also has significant influence over the strategic, operating and financial policies of Spruceview Capital Partners, LLC and JZHL Secondary Fund L.P.
As the Company is an investment entity, it measures its investments in associates at fair value.
Climate Change
The Board has assessed the impact of climate change and has judged that the Company's immediate exposure to the associated risks are low and therefore there is no material impact on the fair value of investments and the financial performance reported in these Financial Statements.
1. Estimates and Judgements (continued) Judgements (continued)
Going Concern
A fundamental principle of the preparation of financial statements in accordance with IFRS is the judgement that an entity will continue in existence as a going concern for a period of at least 12 months from the end of the reporting period, which contemplates continuity of operations and the realisation of assets and settlement of liabilities occurring in the ordinary course of business.
In reaching its conclusion, the Board has considered the risks that could impact the Company’s liquidity over the period ending 30 June 2027 (the "Going Concern period"). There were no events or conditions identified beyond this period which may cast significant doubt on the Company's ability to continue as a going concern.
Going Concern Assessment
At 28 February 2026, the Company had no outstanding debt and held liquid assets of approximately $85.9 million (28 February 2025: $107.1 million), comprising cash of $30.7 million (28 February 2025: $25.1 million) and treasuries of
$55.2 million (28 February 2025: $82.0 million). During the year ended 28 February 2026, the Company received approximately $13.8 million from realisations and distributions, $0.3 million from escrows and $3.0 million interest from treasury bills and cash. The Company had cash outflows relating to follow-on investments and expenses of approximately $8.0 million and returned $30.0 million of capital to shareholders. At the date of this report, the Company holds cash and treasuries of approximately $94.6 million. Potential further returns of capital in the longer term will be subject always to retaining sufficient funds to support certain existing investments to maximise their value and/or to meet its existing obligations such as operational expenses.
As at 11 June 2026, the Company had financial commitments outstanding in relation to fund investments in JZI Fund III of $6.2 million and JZHL Secondary Fund of $8.2 million (relating to Follow-on Flex Pack). The Company anticipates it may require the following amounts to support certain existing assets: approximately $3.8 million for Esperante, $15 million for Spruceview and $20 million for JZI Fund III (including the above stated $6.2 million financial commitment outstanding). The expected timeframe for these further investments is within a two to three year period.
The Board takes account of the levels of funding obligations the Company could be called on through capital calls on existing investments, as well as the accuracy of previous forecasts to assess the predicted accuracy of forecasts presented. The Company continues to work on the realisation of various investments within a timeframe that will enable the Company to maximise the value of its investment portfolio. Due to the Company's strong liquidity, the timeframe to realise investments is not determined by the need to meet financial obligations and the Company is able to mitigate any downturn in the wider economy which might influence the ability to exit investments.
Going Concern Conclusion
After careful consideration and based on the assessment outlined above, the Board is satisfied, as at the date of the signing of the Annual Report and Financial Statements, that it is appropriate to adopt the going concern basis in preparing the financial statements and it has a reasonable expectation that the Company will continue in existence as a going concern for the period ending 30 June 2027.
2. Segment Information
The Investment Manager is responsible for allocating resources available to the Company in accordance with the overall business strategies as set out in the Investment Guidelines of the Company. The Company is organised into the following segments:
* Portfolio of US micro-cap investments
* Portfolio of European micro-cap investments
* Portfolio of Real estate investments
* Portfolio of Other investments - (not falling into the above categories)
The investment objective of each segment is to achieve consistent medium-term returns from the investments in each segment while safeguarding capital by investing in a diversified portfolio.
Investments in treasury bills and corporate bonds are not considered as part of the investment strategy and are therefore excluded from this segmental analysis.
4. Segment Information (continued)
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| Segmental Profit/(Loss) | | | | | |
| For the year ended 28 February 2026 | | | | | |
| | US | European | Real | Other | |
| | Micro-Cap | Micro-Cap | Estate | Investments | Total |
| | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| Interest revenue | 2,097 | - | - | - | 2,097 |
| Total segmental income | 2,097 | - | - | - | 2,097 |
| Net gain/(loss) on investments at FVTPL | (1,868) | 5,213 | 2,472 | (241) | 5,576 |
| Realisations from investments held in escrow | 280 | - | - | - | 280 |
| Investment Adviser's base fee | (954) | (681) | (518) | (352) | (2,505) |
| Total segmental operating profit/(loss) | (445) | 4,532 | 1,954 | (593) | 5,448 |
| For the year ended 28 February 2025 | | | | | |
| | US | European | Real | Other | |
| | Micro-Cap | Micro-Cap | Estate | Investments | Total |
| | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| Interest revenue | 2,897 | - | - | - | 2,897 |
| Total segmental income | 2,897 | - | - | - | 2,897 |
| Net gain/(loss) on investments at FVTPL | 2,591 | (1,726) | (3,595) | (1,956) | (4,686) |
| Realisations from investments held in escrow | 3,067 | - | - | - | 3,067 |
| Investment Adviser's base fee | (1,179) | (797) | (520) | (359) | (2,855) |
| Total segmental operating profit/(loss) | 7,376 | (2,523) | (4,115) | (2,315) | (1,577) |
Certain income and expenditure is not considered part of the performance of an individual segment. This includes net foreign exchange gain/(loss), interest on cash and treasuries and expenses other than the Investment Adviser fees which can be allocated to an individual segment.
The following table provides a reconciliation between total segmental operating profit/(loss) and the total comprehensive income/(loss) for the year:
| | | |
| --- | --- | --- |
| | 28.2.2026 | 28.2.2025 |
| US$ '000 | US$ '000 |
| Total segmental operating profit/(loss) | 5,448 | (1,577) |
| Net foreign exchange gain | 40 | 181 |
| Fees payable to Investment Adviser based on non-segmental assets | (1,245) | (1,560) |
| Expenses not attributable to segments | (2,113) | (2,731) |
| Interest on cash | 561 | 749 |
| Interest on treasuries | 2,169 | 3,810 |
| Total comprehensive income/(loss) | 4,860 | (1,128) |
The following table provides a reconciliation between total segmental income and total income which comprises the Company's income from investments and bank deposits.
| | | |
| --- | --- | --- |
| | 28.2.2026 | 28.2.2025 |
| US$ '000 | US$ '000 |
| Total segmental income | 2,097 | 2,897 |
| Non-segmental income | | |
| Interest on treasuries | 2,169 | 3,810 |
| Bank and deposit interest | 561 | 749 |
| Total income | 4,827 | 7,456 |
1. Segment Information (continued)
Segmental Net Assets
The Company's segmental net assets at the year end are as follows:
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| At 28 February 2026 | US | European | Real | Other | |
| | Micro-Cap | Micro-Cap | Estate | Investments | Total |
| Segmental assets | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| Investments at FVTPL | 58,461 | 47,022 | 34,000 | 23,373 | 162,856 |
| Other receivables | 239 | - | - | - | 239 |
| Prepaid expenses | 236 | 162 | 127 | 85 | 610 |
| Total segmental assets | 58,936 | 47,184 | 34,127 | 23,458 | 163,705 |
| Segmental liabilities | - | - | - | - | - |
| Total segmental net assets | 58,936 | 47,184 | 34,127 | 23,458 | 163,705 |
| At 28 February 2025 | US | European | Real | Other | |
| | Micro-Cap | Micro-Cap | Estate | Investments | Total |
| Segmental assets | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| Investments at FVTPL | 64,612 | 44,400 | 34,567 | 23,614 | 167,193 |
| Prepaid expenses | 325 | 182 | 126 | 83 | 716 |
| Total segmental assets | 64,937 | 44,582 | 34,693 | 23,697 | 167,909 |
| Segmental liabilities | | | | | |
| Other payables | (10) | (6) | (4) | (3) | (23) |
| Total segmental net assets | 64,927 | 44,576 | 34,689 | 23,694 | 167,886 |
The Board is provided with information regarding the total assets and total liabilities of the segment based on bid-market prices of the investments where applicable. This is consistent with IFRS which require the use of bid/offer values.
Treasuries, cash and prepayments are not considered to be part of individual segment assets. Certain liabilities are not considered to be part of the net assets of an individual segment. These include custodian and administration fees payable, directors’ fees payable and other payables and accrued expenses.
The following table provides a reconciliation between total segmental assets/liabilities and total assets/liabilities.
| | | |
| --- | --- | --- |
| | 28.2.2026 | 28.2.2025 |
| US$ '000 | US$ '000 |
| Total Segmental Assets | 163,705 | 167,909 |
| Non-Segmental Assets Cash at bank | 30,658 | 25,074 |
| Treasuries | 55,223 | 82,017 |
| Other receivables | 224 | 186 |
| Prepayment of Investment Adviser's base fee | 285 | 253 |
| Total Assets | 250,095 | 275,439 |
| Total Segmental Liabilities | - | (23) |
| Non-Segmental Liabilities Other payables | (570) | (751) |
| Total Liabilities | (570) | (774) |
| Total Net Assets | 249,525 | 274,665 |
2. Fair Value of Financial Instruments
The Company classifies fair value measurements of its financial instruments at FVTPL using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The financial assets valued at FVTPL are analysed in a fair value hierarchy based on the following levels:
Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2
Those involving inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3
Those involving inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). Investments in JZCP's portfolio valued using unobservable inputs such as multiples, capitalisation rates, discount rates (see page 53) fall within Level 3.
The following table shows the financial instruments at FVTPL by fair value hierarchy category:
| | | | | |
| --- | --- | --- | --- | --- |
| Financial assets at 28 February 2026 | Level 1 | Level 2 | Level 3 | Total |
| | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| US micro-cap | - | - | 58,461 | 58,461 |
| European micro-cap | - | - | 47,022 | 47,022 |
| Real estate | - | - | 34,000 | 34,000 |
| Other investments | - | - | 23,373 | 23,373 |
| Treasuries | 55,223 | - | - | 55,223 |
| | 55,223 | - | 162,856 | 218,079 |
| Financial assets at 28 February 2025 | Level 1 | Level 2 | Level 3 | Total |
| | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| US micro-cap | - | - | 64,612 | 64,612 |
| European micro-cap | - | - | 44,400 | 44,400 |
| Real estate | - | - | 34,567 | 34,567 |
| Other investments | - | - | 23,614 | 23,614 |
| Treasuries | 82,017 | - | - | 82,017 |
| | 82,017 | - | 167,193 | 249,210 |
Valuation techniques
In valuing investments in accordance with IFRS, the Board follows the principles as detailed in the IPEV guidelines (2025).
When fair values of listed equity and debt securities at the reporting date are based on quoted market prices or binding dealer price quotations (bid prices for long positions), without any deduction for transaction costs, the instruments are included within Level 1 of the hierarchy.
Investments for which there are no active markets are valued according to one of the following methods: Real estate
JZCP owns its real estate investments through a wholly-owned subsidiary, which in turn owns interests in real estate properties. The net asset value of the subsidiary is used for the measurement of fair value. The underlying fair value of JZCP’s real estate holdings, however, is represented by the properties themselves. The Company's Investment Adviser and Board review the fair value methods and measurement of the underlying properties on a quarterly basis. Where available, the Company will use third party appraisals on the subject property, to assist the fair value measurement of the underlying property. Third-party appraisals are prepared in accordance with the Appraisal and Valuation Standards (6th edition) issued by the Royal Institution of Chartered Surveyors. Fair value techniques used in the underlying valuations are:
* Use of comparable market values per square foot of recent transactions of properties in similar condition in the vicinity in which the property is located multiplied by the property’s square footage.
* Income capitalisation approach using the property's net operating income and a capitalisation rate. For each of the above techniques third-party debt is deducted to arrive at fair value.
5. **Fair Value of Financial Instruments (continued) Valuation techniques (continued)**
Real estate (continued)
The valuations obtained in relation to the real estate portfolio are dated 31 December 2025. Subsequent discussions with third-party appraisers indicate there would be no significant change in property values between 31 December 2025 and 28 February 2026. Therefore, the Board are comfortable with the valuation of the real estate portfolio presented at 28 February 2026. Due to the inherent uncertainties of real estate valuation, the values reflected in the Financial Statements may differ significantly from the values that would be determined by negotiation between parties in a sales transaction and those differences could be material.
Interests in underlying micro-cap funds
The Company has an investment in JZHL Secondary Fund L.P. and JZI Fund III, L.P. These are valued at the Net Asset Value of the applicable funds based on the 28 February 2026 valuation. The underlying portfolio companies within these funds are valued using below techniques.
Unquoted preferred shares, unquoted equities and equity-related securities
Unquoted equities and equity-related securities investments are classified in the Statement of Financial Position as Investments at fair value through profit or loss. These investments are typically valued by reference to their enterprise value, which is generally calculated by applying an appropriate multiple to the last twelve months' EBITDA. In determining the multiple, the Board consider inter alia, where practical, the multiples used in recent transactions in comparable unquoted companies, previous valuation multiples used and where appropriate multiples of comparable publicly traded companies. In accordance with IPEV guidelines, a marketability discount is applied which reflects the discount that in the opinion of the Board, market participants would apply in a transaction in the investment in question. The increase of the fair value of the aggregate investment is reflected through the unquoted equity component of the investment and a decrease in the fair value is reflected across all financial instruments invested in an underlying company.
In respect of unquoted preferred shares the Company values these investments at fair value by reference to the attributable enterprise value as the exit strategy in respect to these investments would be a one tranche disposal together with the equity component. The fair value of the investment is determined by reference to the attributable enterprise value reduced by senior debt and marketability discount.
Micro-cap loans
Investments in micro-cap debt are valued at fair value by reference to the attributable enterprise value when the Company also holds an equity position in the investee company.
Other investments
Other investments at year end, comprise of mainly the Company's investment in the asset management business - Spruceview Capital Partners LLC ("Spruceview"). Spruceview is valued using a valuation model which considers a forward-looking revenue approach which the Board considers to be consistent with the valuation methods used by peer companies.
The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the reporting year.
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| Year ended 28 February 2026 | US Micro-Cap | European Micro-Cap | Real Estate | Other Investments | Total |
| | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| At 1 March 2025 | 64,612 | 44,400 | 34,567 | 23,614 | 167,193 |
| Investments in year including capital calls | 33 | - | 1,961 | - | 1,994 |
| Payment In Kind ("PIK") | 2,120 | - | - | - | 2,120 |
| Proceeds from investments realised | (6,413) | (2,591) | (5,000) | - | (14,004) |
| Net gains/(losses) on investments | (1,868) | 5,213 | 2,472 | (241) | 5,576 |
| Movement in accrued interest | (23) | - | - | - | (23) |
| At 28 February 2026 | 58,461 | 47,022 | 34,000 | 23,373 | 162,856 |
5. **Fair Value of Financial Instruments (continued)**
The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the comparative reporting year.
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| Year ended 28 February 2025 | US Micro-Cap | European Micro-Cap | Real Estate | Other Investments | Total |
| | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| At 1 March 2024 | 74,948 | 61,025 | 28,815 | 24,670 | 189,458 |
| Investments in year including capital calls | 12,253 | 1,379 | 9,347 | 900 | 23,879 |
| Payment In Kind ("PIK") | 3,048 | - | - | - | 3,048 |
| Proceeds from investments realised | (28,077) | (16,278) | - | - | (44,355) |
| Net gains/(losses) on investments | 2,591 | (1,726) | (3,595) | (1,956) | (4,686) |
| Movement in accrued interest | (151) | - | - | - | (151) |
| At 28 February 2025 | 64,612 | 44,400 | 34,567 | 23,614 | 167,193 |
Quantitative information of significant unobservable inputs and sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy
The significant unobservable inputs used in fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity as at 28 February 2026 and 28 February 2025 are shown below:
Value
28.2.2026 Valuation Unobservable Sensitivity
Effect on Fair Value
US$'000 Technique input Range (weighted average)
used
US$'000
| | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| US micro-cap investments | 58,461 | EBITDA Multiple | Average EBITDA Multiple of Peers | 8.0x -10.0x (8.3x) | -0.5x /+0.5x | (5,533) | 5,535 |
| | | | Discount to | | | | |
| | | | Average Multiple | 10% - 25% (17%) | +5% /-5% | (7,666) | 7,531 |
| European micro-cap | | | Average EBITDA | | | | |
| investments | 47,022 | EBITDA Multiple | Multiple of Peers | 2.9x - 13.1x (7.6x) | -0.5x /+0.5x | (2,594) | 2,594 |
| | | | Discount to | | | | |
| | | | Average Multiple | 4% - 30% (22%) | +5% /-5% | (2,180) | 2,180 |
| Real estate1,2 | 32,875 | Cap Rate/ Income Approach | Capitalisation Rate | 6.0%-8.0% (7.5%) | +50bps/ -50bps | (6,389) | 7,486 |
Other investments3
23,367
Value
Actual Revenue Approach
Revenue $10.3m-$12.5m ($11.4m) Multiple 3.6x-4.4x (4.0x)
-10%/+10%
-10%/+10%
(2,282) 2,282
(2,282) 2,282
Effect on Fair
28.2.2025 Valuation Unobservable US$'000 Technique input
Range (weighted
average)
Sensitivity
used
Value US$'000
| | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| US micro-cap | 64,612 | EBITDA Multiple | Average EBITDA Multiple of Peers | 7.0x - 9.8x (8.9x) | -0.5x /+0.5x | (3,451) | 3,587 |
| investments | | | Discount to Average | | | | |
| | | | Multiple | 5% - 25% (14.5%) | +5% /-5% | (3,769) | 3,841 |
| | | | Average EBITDA | | | | |
| European micro-cap | 44,400 | EBITDA Multiple | Multiple of Peers | 5.1x - 13.1 (7.6x) | -0.5x /+0.5x | (3,197) | 3,003 |
| investments | | | Discount to Average | | | | |
| | | | Multiple | -8% - 54% (34%) | +5% /-5% | (2,528) | 2,432 |
| Real estate1,2 | | Cap Rate/ Income Approach | Capitalisation Rate | 6.0%-8.0% (7.7%) | +50bps/ -50bps | (5,673) | 6,479 |
| Other investments3 | 23,378 | Forward looking Revenue | Revenue | $10.3m-$12.6m ($11.4m) | -10%/+10% | (2,289) | 2,289 |
| | | Approach | Multiple | 3.6x-4.4x (4.0x) | -10%/+10% | (2,289) | 2,289 |
34,567
1The Fair Value of JZCP's investment in financial interests in real estate is measured as JZCP's percentage interest in the value of the underlying properties.
2Sensitivity is applied to the property value and then the debt and other net assets/liabilities associated to the property is deducted before the impact to JZCP's equity value is calculated. Due to gearing levels in the property structures, an increase in the sensitivity of measurement metrics at property level will result in a relatively greater impact at JZCP's equity level.
3JZCP's investment in Spruceview Capital Partners, LLC.
| | | |
| --- | --- | --- |
| 6. **Net Gain/(Loss) on Investments at Fair Value Through Profit or Loss** | | |
| | Year Ended | Year Ended |
| | 28.2.2026 | 28.2.2025 |
| | US$ '000 | US$ '000 |
| Net gain/(loss) on investments held in investment portfolio at year end Net movement in unrealised positions during the year | 17,511 | (15,326) |
| Reversal of net unrealised (loss)/gain in prior years on investments now realised | (12,108) | 1,316 |
| Net movement on unrealised positions | 5,403 | (14,010) |
| Gain on investments realised during the year | | |
| Proceeds from investments realised | 14,004 | 44,355 |
| Cost of investments realised | (25,939) | (33,715) |
| Net realised (loss)/gain | (11,935) | 10,640 |
| Reversal of net unrealised loss/(gain) in prior years on investments now realised | 12,108 | (1,316) |
| Total gain on investments realised during the year | 173 | 9,324 |
| Net gain/(loss) on investments during the year | 5,576 | (4,686) |
1. Investment Income
| | | | | |
| --- | --- | --- | --- | --- |
| Income for the year ended 28 February 2026 | Preferred Dividends | | Other Income | Total |
| | US$ '000 | | US$ '000 | US$ '000 |
| US micro-cap portfolio | 2,097 | | - | 2,097 |
| Treasuries | - | | 2,169 | 2,169 |
| | 2,097 | | 2,169 | 4,266 |
| Income for the year ended 28 February 2025 | Preferred | | Other | |
| | Dividends | | Income | Total |
| | US$ '000 | | US$ '000 | US$ '000 |
| US micro-cap portfolio | 2,897 | | - | 2,897 |
| Treasuries | - | | 3,810 | 3,810 |
| | 2,897 | | 3,810 | 6,707 |
| 8. **Expenses** | | | | |
| | | | Year Ended | Year Ended |
| | | | 28.2.2026 | 28.2.2025 |
| | | | US$ '000 | US$ '000 |
| Investment Adviser's base fee | | | 3,750 | 4,415 |
| Directors' remuneration | | | 290 | 290 |
| Administrative expenses: | | | 4,040 | 4,705 |
| Legal fees | | | 123 | 699 |
| Other professional fees | | | 402 | 479 |
| Accounting, secretarial and administration fees | | | 370 | 370 |
| Auditors' remuneration | | | 363 | 319 |
| Auditors' remuneration - non-audit fees | | | 87 | 80 |
| Directors' insurance | | | 286 | 322 |
| Custodian fees | | | 9 | 14 |
| Other expenses | | | 183 | 158 |
| | | | 1,823 | 2,441 |
| Total expenses | | | 5,863 | 7,146 |
2. Expenses (continued) Directors' Remuneration
For the year ended 28 February 2026 total Directors' fees included in the Statement of Comprehensive Income were $290,000 (year ended 28 February 2025: $290,000); of this amount $48,000 was outstanding at the year end (28 February 2025: $47,000). The Directors' remuneration report in the annual report provides further details of the remuneration paid.
Investment Advisory and Performance fees
The Company entered into the amended and restated investment advisory and management agreement with Jordan/Zalaznick Advisers, Inc. (the "Investment Adviser") on 23 December 2010 (the "Advisory Agreement").
Pursuant to the Advisory Agreement, the Investment Adviser is entitled to a base management fee and to an incentive fee. The base management fee is an amount equal to 1.5 per cent. per annum of the average total assets under management of the Company less excluded assets as defined under the terms of the Advisory Agreement. The base management fee is payable quarterly in arrears; the agreement provides that payments in advance on account of the base management fee will be made.
For the year ended 28 February 2026, total Investment Adviser's fees, based on the average total assets of the Company, were included in the Statement of Comprehensive Income of $3,750,000 (year ended 28 February 2025: $4,415,000). At 28 February 2026, $895,000 was prepaid to the Investment Adviser at the year end (28 February 2025: $969,000).
Waiving of Incentive Fees due to the Investment Adviser
In December 2019 following significant losses reported in the Company's real estate portfolio, the Investment Adviser agreed to waive fees payable by the Company relating to realised gains in the years ended 28 February 2019 and 29 February 2020. No further incentive fees will be paid to the Investment Adviser until the Company and Investment Adviser have mutually agreed to reinstate such payments.
Termination of the Advisory Agreement
The Advisory Agreement may be terminated by the Company or the Investment Adviser upon not less than two and one-half years’ (i.e. 913 days’) notice. However, in view of the Company's managed wind down the Company and Investment Adviser have agreed when the proposed wind down of the Company is complete or agreed to be deemed to be complete (each a "Wind Down Termination Event"), that when notice to terminate the Advisory Agreement is given, by either party, upon the occurence of a Wind Down Termination then the agreement shall terminate with immediate effect without JZCP having any liability to JZAI in regards to the lack of or inadequate notice under the Advisory Agreement.
Administration Fees
Northern Trust International Fund Administration Services (Guernsey) Limited was appointed as Administrator to the Company on 1 September 2012. The Administrator is entitled to an annual fee of $370,000 payable quarterly in arrears. Fees payable to the Administrator are subject to an annual fee review.
Custodian Fees
HSBC Bank (USA) N.A, (the "Custodian") was appointed on 12 May 2008 under a custodian agreement. The Custodian is entitled to receive an annual fee of $2,000 (28 February 2025: $2,000) and a transaction fee of $50 (28 February 2025: $50) per transaction. For the year ended 28 February 2026, total Custodian expenses of
$8,800 (28 February 2025: $17,000) were included in the Statement of Comprehensive Income of which $5,000 (28 February 2025: $10,000) was outstanding at the year end.
Auditors' Remuneration
During the year ended 28 February 2026, the Company incurred fees for audit services of $354,000 (28 February 2025: $319,000).
Non-audit fees paid to Ernst & Young during the year, relating to the interim review, amounted to $87,000 (28 February 2025: $80,000).
3. Taxation
As at 11 June 2026, the Company had been granted Guernsey tax exempt status in accordance with The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 (as amended) for both 2026 and 2025. Its liability for Guernsey taxation is limited to an annual fee of £1,600 (28 February 2025: £1,600).
4. Investments
Category of financial instruments
| | | | | |
| --- | --- | --- | --- | --- |
| | Treasuries | | Unlisted | Carrying Value |
| FVTPL | | FVTPL | Total |
| 28.2.2026 | | 28.2.2026 | 28.2.2026 |
| US$ '000 | | US$ '000 | US$ '000 |
| Book cost at 1 March 2025 | 81,677 | | 264,398 | 346,075 |
| Investments in year including capital calls | 163,959 | | 1,994 | 165,953 |
| Payment in kind ("PIK")1 | - | | 2,120 | 2,120 |
| Proceeds from realisation and repayment of investments | (192,922) | | (14,004) | (206,926) |
| Interest received on maturity | 2,405 | | - | 2,405 |
| Net realised loss | - | | (11,935) | (11,935) |
| Book cost at 28 February 2026 | 55,119 | | 242,573 | 297,692 |
| Unrealised net investment and foreign exchange loss | - | | (80,069) | (80,069) |
| Accrued interest | 104 | | 352 | 456 |
| Carrying value at 28 February 2026 | 55,223 | | 162,856 | 218,079 |
Comparative reconciliation for the year ended 28 February 2025
Category of financial instruments
| | | | | |
| --- | --- | --- | --- | --- |
| | Treasuries | | Unlisted | Carrying Value |
| FVTPL | | FVTPL | Total |
| 28.2.2025 | | 28.2.2025 | 28.2.2025 |
| US$ '000 | | US$ '000 | US$ '000 |
| Book cost at 1 March 2024 | 109,024 | | 271,186 | 380,210 |
| Investments in year including capital calls | 419,736 | | 23,879 | 443,615 |
| Payment in kind ("PIK")1 | - | | 3,048 | 3,048 |
| Proceeds from realisation and repayment of investments | (451,605) | | (44,355) | (495,960) |
| Interest received on maturity | 4,522 | | - | 4,522 |
| Net realised gain | - | | 10,640 | 10,640 |
| Book cost at 28 February 2025 | 81,677 | | 264,398 | 346,075 |
| Unrealised net investment and foreign exchange loss | - | | (97,580) | (97,580) |
| Accrued interest | 340 | | 375 | 715 |
| Carrying value at 28 February 2025 | 82,017 | | 167,193 | 249,210 |
1The cost of PIK investments is deemed to be interest not received in cash but settled by the issue of further securities when that interest has been recognised in the Statement of Comprehensive Income.
10. **Investments (continued) Unlisted Loans**
The Company has two remaining loans to European micro-cap companies; a loan to the parent company of Xacom
has been written off as the company has entered into bankruptcy, and a loan to Toro Finance which has been classified and valued at FVTPL. The loan to Toro Finance has been valued at $nil (28 February 2025: $nil) due to the lack of information available to enable management to assess its recoverability.
Investment in Associates
The Company meets the definition of an investment entity and therefore measures its associates at FVTPL in accordance with IFRS 10.
Carrying Value of Investments in Associates
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| Entity | | % Interest | 28.2.2026 US$'000 | | 28.2.2025 US$'000 |
| JZI Fund III GP, L.P.1 | Cayman | 75% | 43,070 | | 44,400 |
| JZHL Secondary Fund L.P. | Delaware | n/a | 31,235 | | 37,650 |
| Spruceview Capital Partners, LLC | Delaware | 33.75% | 23,367 | | 23,378 |
| EuroMicrocap Fund 2010, L.P. | Cayman | 75% | - | | - |
| | | | 97,672 | | 105,428 |
1Holds a 25% partnership interest in JZI Fund III, L.P. JZCP holds indirectly a 18.75% partnership interest in JZI Fund III, L.P.
The Company's maximum exposure to losses from the associates (shown below) equates to the carrying value plus outstanding commitments:
Entity
28.2.2026
US$'000
28.2.2025
US$'000
JZI Fund III GP, L.P. 53,209 49,850
JZHL Secondary Fund L.P. 31,235 37,650
Spruceview Capital Partners, LLC EuroMicrocap Fund 2010, L.P.
23,367 23,378
- -
107,811 110,878
The principal activity of all JZI Fund III, JZHL Secondary Fund and EuroMicrocap Fund 2010, L.P. is the acquisition of micro-cap companies. The principal activity of Spruceview Capital Partners, LLC is that of an asset management company. There are no significant restrictions on the ability of associates to transfer funds to the Company in the form of dividends or repayment of loans or advances.
Investment in Subsidiaries
The Company meets the definition of an investment entity and therefore measures its subsidiaries at FVTPL in accordance with IFRS 10. The principal place of business for subsidiaries is the USA.
Place of
28.2.2026
28.2.2025
| | | | | |
| --- | --- | --- | --- | --- |
| Entity | incorporation % Interest | | US$'000 | US$'000 |
| JZCP Realty, Ltd | Cayman | 100% | 34,000 | 34,567 |
| Investments in subsidiaries at fair value | | | 34,000 | 34,567 |
There are no significant restrictions on the ability of subsidiaries to transfer funds to the Company. The Company has no contractual commitments to provide any financial or other support to its unconsolidated subsidiaries.
JZCP Realty, Ltd, has a 100% interest in JZ REIT Esperante Corp (Maryland incorporated) and JZ RS Onshore Blocker, LLC (Delaware incorporated).
| | | |
| --- | --- | --- |
| 11. **Other Receivables** | | |
| | 28.2.2026 | 28.2.2025 |
| | US$ '000 | US$ '000 |
| Prepayments | 224 | 186 |
| Distribution receivable | 239 | - |
| | 463 | 186 |
| 12. **Other Payables** | | |
| | 28.2.2026 | 28.2.2025 |
| | US$ '000 | US$ '000 |
| Legal fee provision | 160 | 175 |
| Audit fees | 201 | 192 |
| Other expenses | 161 | 360 |
| Directors' remuneration | 48 | 47 |
| | 570 | 774 |
| 13. **Share Capital** | | |
| Authorised Capital | | |
| Unlimited number of ordinary shares of no par value | | |
| Ordinary shares - Issued Capital | | |
| | 28.2.2026 Number of | 28.2.2025 Number of |
| | shares | shares |
| Balance at 1 March | 67,673,293 | 77,477,214 |
| Compulsory redemption of Ordinary shares | (7,352,941) | (9,803,921) |
| Total Ordinary shares in issue | 60,320,352 | 67,673,293 |
During the prior year, the Company obtained shareholder approval to amend the Company's Articles to permit redemptions of the Ordinary shares by changing the rights of the Ordinary shares to enable them to be redeemable at the option of the Company. This amendment has not impacted the Ordinary shares' classification as equity in accordance with IAS 32 - "Financial Instruments: Presentation". On redemption, the Ordinary shares are cancelled, the Company does not hold any shares in treasury.
On 25 July 2024, the Company effected a compulsory partial redemption of 9,803,921 Ordinary shares, which resulted in the return of capital of an aggregate amount of $40 million.
On 13 March 2025, the Company effected a compulsory partial redemption of 7,352,941 Ordinary shares, which resulted in the return of capital of an aggregate amount of $30 million.
The Company's shares trade on the London Stock Exchange.
The Ordinary shares carry a right to receive the profits of the Company and are entitled to the net assets of the Company on a winding up, after all liabilities have been settled and subject to all creditors having been paid out in full.
Holders of Ordinary shares have the rights to receive notice of, to attend and to vote at all general meetings of the Company.
Capital repaid on buy back of shares
During the year, the Board has agreed that amounts relating to the buy back of Ordinary shares would be allocated against Share capital and the Distributable reserve in proportion to their opening balances. Previously amounts relating to the buy back of Ordinary shares were allocated to Share capital. Amounts paid to buy back Ordinary shares are recorded inclusive of issue costs.
1. Share Capital (continued)
At beginning of year
28.2.2026 28.2.2025
US$ '000 US$ '000
176,334 216,650
Repurchase of Ordinary shares (19,260) (40,316)
At year end 157,074 176,334
2. Capital Management
The Company's capital is represented by the Ordinary shares.
As a result of the ability to issue, repurchase and resell shares, the capital of the Company can vary. The Company is not subject to externally imposed capital requirements and has no restrictions on the issue, repurchase or resale of its shares.
The Company's objectives for managing capital are:
* To invest the capital in investments meeting the description, risk exposure and expected return indicated in its prospectus;
* To achieve consistent returns while safeguarding capital by investing in a diversified portfolio;
* To maintain sufficient liquidity to meet the expenses of the Company; and
* To maintain sufficient size to make the operation of the Company cost-efficient.
The Company's current focus is on realising the maximum value of the Company’s investments and the return of capital to shareholders when circumstances permit as certain assets within the portfolio will require significant further investment and time in order to maximise their value.
The Company is returning capital to shareholders via redemptions of its Ordinary shares when circumstances allow. The Company is able to compulsorily redeem such number of Ordinary shares as the Board sees fit from all shareholders pro rata to their existing holdings of Ordinary shares. The Ordinary shares are compulsorily redeemed at a price per Ordinary share determined by the Board that is equal to the most recently published (or otherwise determined) month-end NAV per Ordinary share, and subject to such other adjustments as the Board considers appropriate.
The Company monitors capital by analysing the NAV per share over time and tracking the discount to the Company's share price.
3. Reserves
Summary of reserves attributable to Ordinary shareholders
| | | | |
| --- | --- | --- | --- |
| | 28.2.2026 US$ '000 | | 28.2.2025 US$ '000 |
| Share capital | 157,074 | | 176,334 |
| Distributable reserve | 92,451 | | 98,331 |
| | 249,525 | | 274,665 |
Distributable reserve
On formation of the Company, the Royal Court of Guernsey granted that on the admission of the Company's shares to the Official List and to trading on the London Stock Exchange's market, the amount credited to the share premium account of the Company immediately following the admission of such shares be cancelled and any surplus thereby created accrue to the Company's distributable reserves to be used for all purposes permitted by The Companies (Guernsey) Law, 2008, including the purchase of shares and the payment of dividends.
Subject to satisfaction of the solvency test, all of the Company's capital and reserves are distributable in accordance with The Companies (Guernsey) Law, 2008.
| | | | |
| --- | --- | --- | --- |
| 15. **Reserves (continued)** Distributable reserve (continued) | | | |
| The Company’s profits and losses are posted to the Distributable reserve. |
| | 28.2.2026 | | 28.2.2025 |
| | US$ '000 | | US$ '000 |
| At beginning of year | 98,331 | | 99,459 |
| Profit/(loss) for the year | 4,860 | | (1,128) |
| Repurchase of Ordinary shares | (10,740) | | - |
| At year end | 92,451 | | 98,331 |
| 16. **Financial Risk Management Objectives and Policies** | | | |
| Introduction | | | |
The Company’s objective in managing risk is the creation and protection of shareholder value. Risk is inherent in the Company’s activities, but it is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. The process of risk management is critical to the Company’s continuing profitability. The Company is exposed to market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk arising from the financial instruments it holds.
Risk management structure and risk mitigation
The Company’s Investment Adviser is responsible for identifying and controlling risks. The Directors supervise the Investment Adviser and are ultimately responsible for the overall risk management approach within the Company. The Company's prospectus sets out its overall business strategies, its tolerance for risk and its general risk management philosophy. The Company may use derivatives and other instruments for trading purposes and in connection with its risk management activities.
Market risk
Market risk is defined as "the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in variables such as equity price, interest rate and foreign currency rate".
The Company's investments are subject to normal market fluctuations and there can be no assurance that no depreciation in the value of those investments will occur. There can be no guarantee that any realisation of an investment will be on a basis which necessarily reflects the Company's valuation of that investment for the purposes of calculating the NAV of the Company.
Changes in industry conditions, competition, political and diplomatic events, tax, environmental and other laws and other factors, whether affecting the United States alone or other countries and regions more widely, can substantially and either adversely or favourably affect the value of the securities in which the Company invests and, therefore, the Company's performance and prospects.
The Company's market price risk is managed through diversification of the investment portfolio across various sectors. The Investment Adviser considers each investment purchase to ensure that an acquisition will enable the Company to continue to have an appropriate spread of market risk and that an appropriate risk/reward profile is maintained.
Equity price risk
Equity price risk is the risk of unfavourable changes in the fair values of equity investments as a result of changes in the value of individual shares. The equity price risk exposure arose from the Company’s investments in equity securities.
The Company does not generally invest in liquid equity investments and the previous portfolio of listed equity investments resulted from the successful flotation of unlisted investments.
For unlisted equity and non-equity shares the market risk is deemed to be inherent in the appropriate valuation methodology (earnings, multiples, capitalisation rates, etc.). The impact on fair value and subsequent profit or loss, due to movements in these variables, is set out in Note 5 on page 53.
4. Financial Risk Management Objectives and Policies (continued)
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. It has not been the Company's policy to use derivative instruments to mitigate interest rate risk, as the Investment Adviser believes that the effectiveness of such instruments does not justify the costs involved.
The table below summarises the Company's exposure to interest rate risks:
Interest bearing
Non-interest
Fixed rate Floating rate bearing Total
| | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | 28.2.2026 US$ '000 | | 28.2.2026 US$ '000 | | 28.2.2026 US$ '000 | | 28.2.2026 US$ '000 |
| Investments at FVTPL | 83,574 | | - | | 134,505 | | 218,079 |
| Cash at bank | - | | 30,658 | | - | | 30,658 |
| Other receivables and prepayments | - | | - | | 1,363 | | 1,363 |
| Other payables | - | | - | | (570) | | (570) |
| | 83,574 | | 30,658 | | 135,298 | | 249,530 |
Interest bearing Non-interest
Fixed rate Floating rate bearing Total
| | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | 28.2.2025 US$ '000 | | 28.2.2025 US$ '000 | | 28.2.2025 US$ '000 | | 28.2.2025 US$ '000 |
| Investments at FVTPL | 108,979 | | - | | 140,231 | | 249,210 |
| Cash at bank | - | | 25,074 | | - | | 25,074 |
| Other receivables and prepayments | - | | - | | 1,155 | | 1,155 |
| Other payables | - | | - | | (774) | | (774) |
| | 108,979 | | 25,074 | | 140,612 | | 274,665 |
The following table analyses the Company's exposure in terms of the interest bearing assets and liabilities maturity dates. The Company's assets and liabilities are included at their carrying value.
As at 28 February 2026
| | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | 0-3 months | | 4-12 months | | 1 - <3 years | 3 - <5 years | Past due | No maturity date | Total |
| US$ '000 | | US$ '000 | | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| Investments at FVTPL | 55,223 | | - | | 1,125 | - | - | 27,226 | 83,574 |
| Cash at bank | 30,658 | | - | | - | - | - | - | 30,658 |
| | 85,881 | | - | | 1,125 | - | - | 27,226 | 114,232 |
| As at 28 February 2025 | | | | | | | | | |
| | 0-3 months | | 4-12 months | | 1 - <3 years | 3 - <5 years | Past due | No maturity date | Total |
| | US$ '000 | | US$ '000 | | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| Investments at FVTPL | 35,425 | | 46,592 | | - | - | 700 | 26,262 | 108,979 |
| Cash at bank | 25,074 | | - | | - | - | - | - | 25,074 |
| | 60,499 | | 46,592 | | - | - | 700 | 26,262 | 134,053 |
The income receivable by the Company is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. However, whilst the income received from fixed rate securities is unaffected by changes in interest rates, the investments are subject to risk in the movement of fair value. The Investment Adviser considers the risk in the movement of fair value as a result of changes in the market interest rate for fixed rate securities to be insignificant, hence no sensitivity analysis is provided.
Of the cash and cash equivalents held, $30,658,000 (28 February 2025: $25,074,000) earns interest at variable rates and the income may rise and fall depending on changes to interest rates.
The Investment Adviser monitors the Company's overall interest sensitivity on a regular basis by reference to the current market rate and the level of the Company's cash balances.
16. **Financial Risk Management Objectives and Policies (continued)**
Interest rate risk (continued)
The table below demonstrates the sensitivity of the Company's profit/(loss) for the year to a reasonably possible movement in interest rates. The Company has treasuries and cash at bank for which interest receivable are sensitive to a fluctuation to rates. The Company is no longer exposed to interest rates payable. The below sensitivity analysis assumes year end balances and interest rates are constant through the year.
Interest Receivable1
| | | |
| --- | --- | --- |
| Change in basis points increase/decrease | 28.2.2026 US$ '000 | 28.2.2025 US$ '000 |
| +100/-100 | 765/(765) | 1,027/(1,027) |
| +300/-300 | 2,294/(2,294) | 3,081/(3,040) |
1 Sensitivity applied to the year-end treasury bill balance which accrued interest at a rate of approximately 3.6% and year-end cash balance at a rate of 3.3%.
Currency risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
Changes in exchange rates are considered to impact the fair value of the Company's investments denominated in Euros and Sterling. However, under IFRS the foreign currency risk on these investments is deemed to be part of the market price risk associated with holding such non-monetary investments. As the information relating to the non-monetary investments is significant, the Company also provides the total exposure and sensitivity changes on non-monetary investments. The following tables set out the Company's exposure by currency to foreign currency risk.
Exposure to Monetary Assets/Liabilities (held in foreign currencies)
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | Sterling | Total | | Sterling | Total |
| 28.2.2026 | 28.2.2026 | | 28.2.2025 | 28.2.2025 |
| US$ '000 | US$ '000 | | US$ '000 | US$ '000 |
| Cash at bank | 59 | 59 | | 43 | 43 |
| Other receivables | 224 | 224 | | 186 | 186 |
| Other payables | (350) | (350) | | (334) | (334) |
| Net Currency Exposure | (67) | (67) | | (105) | (105) |
The sensitivity analysis for monetary and non-monetary net assets calculates the effect of a reasonably possible movement of the currency rate against the US dollar on an increase or decrease in net assets attributable to shareholders with all other variables held constant. An equivalent decrease in each of the aforementioned currencies against the US dollar would have resulted in an equivalent but opposite impact.
| | | |
| --- | --- | --- |
| Currency | Change in Currency Rate | Effect on net assets attributable to shareholders (relates to monetary financial assets and liabilities) |
| | | 28.2.2026 28.2.2025 |
| Sterling | +10% | US$ '000 US$ '000 (7) (11) |
Exposure to Non-Monetary Assets (held in foreign currencies)
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Euro | | Sterling | Total | | Euro | Sterling | Total |
| 28.2.2026 | | 28.2.2026 | 28.2.2026 | | 28.2.2025 | 28.2.2025 | 28.2.2025 |
| US$ '000 | | US$ '000 | US$ '000 | | US$ '000 | US$ '000 | US$ '000 |
| Financial assets at FVTPL | 43,413 | | 3,609 | 47,022 | | 41,104 | 3,296 | 44,400 |
| Net Currency Exposure | 43,413 | | 3,609 | 47,022 | | 41,104 | 3,296 | 44,400 |
| | Change in | Effect on net assets attributable to shareholders | | | | | | |
| Currency | Currency Rate | (relates to non-monetary financial assets) | | | | | | |
| | | 28.2.2026 | | | | | | 28.2.2025 |
| | | US$ '000 | | | | | | US$ '000 |
| Euro | +10% | 4,341 | | | | | | 4,110 |
| Sterling | +10% | 361 | | | | | | 330 |
16. **Financial Risk Management Objectives and Policies (continued)**
Credit risk
The Company takes on exposures to credit risk, which is the risk that a counterparty to a financial instrument will cause a financial loss to the Company by failing to discharge an obligation. These credit exposures exist within debt instruments and cash & cash equivalents. They may arise, for example, from a decline in the financial condition of a counterparty. As the Company’s credit exposure increases, it could have an adverse effect on the Company’s business and profitability if material unexpected credit losses were to occur. In the event of any default on the Company's loan investments by a counterparty, the Company will bear a risk of loss of principal and accrued interest of the investment, which could have a material adverse effect on the Company's income and ability to meet financial obligations.
In accordance with the Company’s policy, the Investment Adviser regularly monitors the Company's exposure to credit risk in its investment portfolio, by reviewing the financial statements, budgets and forecasts of underlying investee companies. Agency credit ratings do not apply to the Company's investment in investee company debt. The 'credit quality' of the debt is deemed to be reflected in the fair value valuation of the investee company. The Company's investment in accumulated preferred stock is excluded from the below analysis as the instruments are deemed to be more closely associated with the investment in the portfolio companies' equity than its debt.
The table below analyses the Company's maximum exposure to credit risk.
| | | | |
| --- | --- | --- | --- |
| | Total | | Total |
| 28.2.2026 | | 28.2.2025 |
| US$ '000 | | US$ '000 |
| Treasuries | 55,223 | | 82,017 |
| Cash and cash equivalents | 30,658 | | 25,074 |
| JZ Realty - Real estate structure Nationwide Studios - Industrial sector being House, Leisure & Personal Goods | 1,125 - | | - 700 |
| | 87,006 | | 107,791 |
Loans at Amortised Cost and Expected Credit Losses ("ECL")
On assessment of the recoverability of the Company's loan classified as at amortised cost, it was concluded there would not be proceeds from the investee company to pay any portion of the loan hence as in the prior year a provision had been made to bring the carrying value to $nil. Regarding this loan, the Company is exposed to no further losses.
The table below analyses the Company’s cash and cash equivalents by rating agency category.
| | | | |
| --- | --- | --- | --- |
| | Outlook | LT Issuer Default Rating | 28.2.2026 $'000 |
| HSBC Bank USA NA | S&P Stable (2025: Stable) | S&P A+ (2025: A+) | 6,709 |
| City National Bank | S&P Stable (2025: Stable) | S&P AA- (2025: AA-) | 23,746 |
| Northern Trust (Guernsey) Limited | S&P Stable (2025: Stable) | S&P AA- (2025: AA-) | 203 |
| | | | 30,658 |
Bankruptcy or insolvency of the Banks may cause the Company's rights with respect to these assets to be delayed or limited. The Investment Adviser monitors risk by reviewing the credit rating of the Bank. If credit quality deteriorates, the Investment Adviser may move the holdings to another bank. The Board considers any associated risk on above cash positions to be immaterial.
Liquidity risk
Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk arises because of the possibility that the Company could be required to pay its liabilities earlier than expected. There has been no change during the year in the Company's processes and arrangements for managing liquidity.
The Company's private investments are predominately private equity, real estate and other unlisted investments. By their nature, these investments will generally be of a long term and illiquid nature and there may be no readily available market for sale of these investments. None of the Company's assets/liabilities are subject to special arrangement due to their illiquid nature.
At the year end the Company has outstanding investment commitments of $14,346,000 (28 February 2025:
$13,674,000). See Note 17.
The Company manages liquidity risk and the ability to meet its obligations by monitoring current and expected cash balances from forecasted investment activity.
1. Financial Risk Management Objectives and Policies (continued)
Liquidity risk (continued)
The table below analyses JZCP's financial liabilities into relevant maturity groups based on the remaining period at the reporting date to the contractual maturity date.
At 28 February 2026 At 28 February 2025
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | Less than 1 year | More than 1 year | | Less than 1 year | More than 1 year |
| US$ '000 | US$ '000 | | US$ '000 | US$ '000 |
| Other payables | 575 | - | | 774 | - |
| Financial commitments (see Note 17) | 4,782 | 9,564 | | 4,558 | 9,116 |
| | 5,357 | 9,564 | | 5,332 | 9,116 |
2. Commitments
At 28 February 2026 and 28 February 2025, JZCP had the following financial commitments outstanding in relation to fund investments:
| | | |
| --- | --- | --- |
| | 28.2.2026 US$ '000 | 28.2.2025 US$ '000 |
| JZI Fund III GP, L.P. €5,240,137 (28.2.2025: €5,240,137) | 6,187 | 5,450 |
| JZHL Secondary Fund (relating to Follow-on Flex Pack)1 | 8,159 | 8,224 |
| | 14,346 | 13,674 |
It is expected the above commitments will be called within the two year period ending 28 February 2028.
1The Company obtained shareholder approval to invest approximately $20.5 million into the Secondary Fund, for an investment into a newly incorporated company that was incorporated in a parallel structure to ACW Flex Pack, LLC. Subsequently, the Company contributed approximately $12.3 million of this $20.5 million towards the Secondary Fund's Follow-On Flex Pack acquisition of The Robinette Company.
Following capital calls in the year and previous financial year of $2.0 million, JZCP has the option to increase further commitments to Spruceview Capital Partners, LLC up to approximately $1.5 million.
3. Related Party Transactions
JZAI is a US-based company founded by David Zalaznick and John ("Jay") Jordan II, that provides advisory services to the Company in exchange for management fees, paid quarterly. Fees paid by the Company to the Investment Adviser are detailed in Note 8. JZAI and various affiliates provide services to certain JZCP portfolio companies and may receive fees for providing these services pursuant to the Advisory Agreement.
JZCP invests in European micro-cap companies through JZI Fund III, L.P. (“Fund III”). Previously, investments were made via the EuroMicrocap Fund 2010, L.P. ("EMC 2010"). Fund III and EMC 2010 are managed by an affiliate of JZAI. At 28 February 2026, JZCP's investment in Fund III was valued at $43.1 million (28 February 2025: $44.4 million). JZCP's investment in EMC 2010 was valued at $nil (28 February 2025: $nil).
JZCP has invested in Spruceview Capital Partners, LLC on a 50:50 basis with Jay Jordan and David Zalaznick (or their respective affiliates). The total amount committed and funded by JZCP to this investment at 28 February 2026 was $36.1 million. As approved by a shareholder vote on 12 August 2020, JZCP has the ability to make up to approximately $4.1 million in further commitments to Spruceview, above the original $33.5 million committed. Further commitments made would be on the same 50:50 basis with Jay Jordan and David Zalaznick (or their respective affiliates). Following capital calls of $2.6 million to date, JZCP has the option to increase further commitments to Spruceview up to approximately $1.5 million.
JZHL Secondary Fund LP (the "Secondary Fund"), is managed by an affiliate of JZAI. At 28 February 2026, JZCP's investment in the Secondary Fund was valued at $31.2 million (28 February 2025: $37.7 million).
On 8 May 2024, the Company received shareholder approval to invest up to $20.5 million into the Secondary Fund to be used, together with additional amounts invested by other investors into the Secondary Fund, to make an investment into a newly incorporated company ("Follow-on Flex Pack") that is a related company of, and incorporated in a parallel structure to, ACW Flex Pack, LLC. Subsequent to the approval, the Secondary Fund made a Follow-on Flex Pack acquisition being The Robinette Company. JZCP contributed approximately $12.3 million towards the acquisition. There were no additional contributions made during the year.
JZCP has co-invested with Fund A, Fund A Parallel I, II and III Limited Partnerships in a number of US micro-cap buyouts. These Limited Partnerships are managed by an affiliate of JZAI. JZCP invested in a ratio of 82%/18% with the Fund A entities. At 28 February 2026, the only co-investment with the Fund A entities, was in Industrial Service Solutions WC, L.P.
Total Directors' remuneration for the year ended 28 February 2026 was $290,000 (28 February 2025: $290,000).
4. Basic and Diluted Earnings/(Loss) Per Ordinary Share
Basic earnings/loss per Ordinary share is calculated by dividing the profit/loss for the year by the weighted average number of Ordinary shares outstanding during the year.
For the year ended 28 February 2026, the weighted average number of Ordinary shares outstanding during the year was 60,562,093 (year ended 28 February 2025: 71,621,721). The diluted earnings per Ordinary share is calculated by considering adjustments required to the profit/loss and weighted average number of Ordinary shares for the effects of potential dilutive Ordinary shares. There were no dilutive ordinary shares in issue in either year, hence basic and diluted earnings per share are the same.
5. Controlling Party
The issued shares of the Company are owned by a number of parties, and therefore, in the opinion of the Directors, there is no ultimate controlling party of the Company.
6. Net Asset Value per Share
The NAV per Ordinary share of $4.14 (28 February 2025: $4.06) is based on the net assets at the year end of
$249,525,000 (28 February 2025: $274,665,000) and 60,320,352 (28 February 2025: 67,673,293) Ordinary
shares, being the number of Ordinary shares in issue at the year end.
The following is a reconciliation of the NAV per Ordinary share as presented in these Financial Statements to the NAV per Ordinary share reported to the London Stock Exchange:
Unaudited NAV per share - announced 24 March 2026 Valuation adjustment
Audited NAV per share
7. Contingent Assets
Amounts held in escrow accounts
28.2.2026
US$
4.07
0.07
4.14
When investments have been disposed of by the Company, proceeds may reflect contractual terms requiring that a percentage is held in an escrow account pending resolution of any indemnifiable claims that may arise. At 28 February 2026, the Company has assessed that the likelihood of the recovery of these escrow accounts cannot be determined and has therefore disclosed the escrow accounts as a contingent asset.
As at 28 February 2026 and 28 February 2025, the Company had the following contingent assets held in escrow accounts which had not been recognised as assets of the Company:
Amount in Escrow
| | | |
| --- | --- | --- |
| | 28.2.2026 | 28.2.2025 |
| Company | US$'000 | US$'000 |
| Deflecto Holdings | 1,845 | 2,125 |
| JZHL Secondary Fund | 17 | 619 |
| Industrial Services Solutions | - | 192 |
| | 1,862 | 2,936 |
Realisations from investments held in escrow accounts
During the year ended 28 February 2026, escrow proceeds of $0.280 million (28 February 2025: $3.067 million) were realised.
8. Notes to the Statement of Cash Flows
| | | |
| --- | --- | --- |
| Investment income and interest received during the year | Year Ended | Year Ended |
| | 28.2.2026 | 28.2.2025 |
| | US$ '000 | US$ '000 |
| Interest from treasuries | 2,405 | 4,521 |
| Bank and deposit interest | 561 | 749 |
| Income from unlisted investments | - | 4,004 |
| | 2,966 | 9,274 |
Purchases and sales of investments are considered to be operating activities of the Company, given its purpose, rather than investing activities. The cash flows arising from these activities are shown in the Statement of Cash Flows.
9. Dividends Paid and Proposed
No dividends were paid or proposed for the years ended 28 February 2026 and 28 February 2025.
10. Return of Capital
On 25 July 2024, the Company effected a compulsory partial redemption of 9,803,921 Ordinary shares, which resulted in the return of capital of an aggregate amount of $40 million. Costs directly attributable to facilitate the compulsory redemption of the Ordinary shares being $0.316 million were included within the Statement of Changes in Equity.
On 13 March 2025, the Company effected a compulsory partial redemption of 7,352,941 Ordinary shares, which resulted in the return of capital of an aggregate amount of $30 million.
11. IFRS to US GAAP Reconciliation
The Company's Financial Statements are prepared in accordance with IFRS, which in certain respects differ from US GAAP. These differences are not material and therefore no reconciliation between IFRS and US GAAP has been presented. For reference, please see below for a summary of the key judgments and estimates taken into account with regards to the Company as of 28 February 2026, as well as the shareholders' financial highlights required under US GAAP.
Assessment as an Investment Entity
As stated in Note 2, the Company meets the definition of an investment entity under IFRS 10 and is therefore required to measure its subsidiaries at FVTPL rather than consolidate them. Per US GAAP (Financial Services - Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements or "ASC 946"), the Company meets the definition of an investment company, and as required by ASC 946, JZCP measures its investment in Subsidiaries at FVTPL.
Fair value measurement of investments
Other than treasuries which are valued using quoted prices, the fair value of the underlying investments held by the Company are determined in accordance with US GAAP and IFRS and based on valuation techniques using unobservable inputs such as multiples, capitalisation rates, discount rates. The valuation techniques follow the principles as detailed in the IPEV guidelines.
Consideration of going concern
As described in Note 3, the Board is satisfied, as at the date of the signing of the Annual Report and Financial Statements, that it is appropriate to adopt the going concern basis in preparing the financial statements and they have a reasonable expectation that the Company will continue in existence as a going concern for the period ending 30 June 2027.
Reconciliation of net income to net cash flow from operating activities
In accordance with US GAAP the Company is required to provide a reconciliation of net income to net cash flow from operating activities. The Company's operating profit/(loss) is deemed to represent net income for the purpose of this reconciliation.
Financial highlights
| | | |
| --- | --- | --- |
| | Year Ended | Year Ended |
| 28.2.2026 | 28.2.2025 |
| US$ '000 | US$ '000 |
| Operating profit/(loss) Non cash movement line items | 4,860 | (1,128) |
| Net movement on unrealised loss on investments held at year end | (5,403) | 14,010 |
| Net foreign currency exchange gains | (40) | (181) |
| Payment in kind - adjustment to income | (2,097) | (2,897) |
| Decrease in income accruals | 236 | 4,716 |
| Movement in expense accruals/prepayments | (168) | (1,178) |
Cash inflow/(outflows) due to purchase and realisation of investments shown as operating activities in cash flow statement
Direct investments and capital calls (1,994) (23,879)
Realisation of investments 13,765 44,355
| | | |
| --- | --- | --- |
| Realised gains (included in operating profit/(loss) and above realisations | (173) | (9,324) |
| Purchase of treasuries | (163,959) | (419,736) |
| Maturity of treasuries adjusted for interest received included in operating profit/(loss) | 190,517 | 447,083 |
| Net cash inflow from operating activities | 35,544 | 51,841 |
26. **IFRS to US GAAP Reconciliation (continued)**
The following table presents performance information derived from the Financial Statements.
| | | | |
| --- | --- | --- | --- |
| | | 28.2.2026 US$ | 28.2.2025 US$ |
| Net asset value per share at the beginning of the year | 4.06 | 4.08 |
| Performance during the year (per share): Net investment income | 0.08 | 0.10 |
| Net realised and unrealised gain/(loss) | 0.10 | (0.02) |
| Operating expenses | (0.10) | (0.10) |
| Total return | 0.08 | (0.02) |
| Net asset value per share at the end of the year | 4.14 | 4.06 |
| Total return | 1.97% | -0.49% |
| Net investment income to average net assets | 1.89% | 2.45% |
| Operating expenses to average net assets | (2.30%) | (2.55%) |
| 27. | Subsequent Events | | |
These Financial Statements were approved by the Board on 11 June 2026. Subsequent events have been evaluated until this date.
On 16th April 2026, the Company announced that JZI Fund III, L.P. has sold its interest in Factor Energia, as a result of which the Company expects to receive cash proceeds of approximately $13.1 million in relation to the sale. Receipt of the sale proceeds are expected in two tranches as distributions from JZI Fund III, L.P., the first distribution of approximately 50% having been received in April 2026, with the remaining balance of the proceeds expected to be received over the first half of 2027.
Company Advisers
Investment Adviser Independent Auditor
The Investment Adviser to JZ Capital Partners Limited (“JZCP”) is Jordan/Zalaznick Advisers, Inc., (“JZAI”) a company beneficially owned by John (Jay) W Jordan II and David W Zalaznick. The company offers investment advice to the Board of JZCP. JZAI has offices in New York and Chicago.
Ernst & Young LLP PO Box 9
Royal Chambers St Julian's Avenue St Peter Port
Guernsey GY1 4AF
Jordan/Zalaznick Advisers, Inc. UK Solicitor
70 E. 55th Street, Ashurst LLP
15th Floor London Fruit & Wool Exchange
New York, NY 10022 1 Duval Square
London E1 6PW
Registered Office
PO Box 255 **US Lawyer**
Trafalgar Court Monge Law Firm, PLLC
Les Banques 435 South Tryon Street
St Peter Port Charlotte, NC 28202
Guernsey GY1 3QL
Guernsey Lawyer
JZ Capital Partners Limited is registered in Guernsey Mourant Ozannes (Guernsey) LLP Number 48761 Royal Chambers
St Julian's Avenue
Administrator, Registrar and Secretary St Peter Port Northern Trust International Fund Administration Guernsey GY1 4HP Services (Guernsey) Limited
PO Box 255 **Financial Adviser and Broker**
Trafalgar Court J.P. Morgan Securities plc
Les Banques 25 Bank Street
St Peter Port London E14 5JP
Guernsey GY1 3QL
UK Transfer and Paying Agent
Equiniti Limited Aspect House Spencer Road Lancing
West Sussex BN99 6DA
US Bankers
HSBC Bank USA NA
452 Fifth Avenue New York NY 10018
(Also provides custodian services to JZ Capital Partners Limited under the terms of a Custody Agreement).
City National Bank
100 SE 2nd Street, 13th Floor Miami, FL 33131
Guernsey Banker
Northern Trust (Guernsey) Limited PO Box 71
Trafalgar Court Les Banques St Peter Port
Guernsey GY1 3DA
Useful Information for Shareholders
Listing
JZCP Ordinary shares are listed on the Official List of the Financial Conduct Authority ("FCA"), and are admitted to trading on the London Stock Exchange.
The price of the Ordinary shares are shown in the Financial Times under "Conventional Private Equity" and can also be found at [https://markets.ft.com.](https://markets.ft.com/)
ISIN/SEDOL numbers
Ticker Symbol ISIN Code SEDOL Number
Ordinary shares JZCP GG00BPNZ7G17 BPNZ7G1
Alternative Performance Measures
In accordance with ESMA Guidelines on Alternative Performance Measures ("APMs") the Board has considered what APMs are included in the annual report and financial statements which require further clarification. An APM is defined as 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 financial reporting framework. APMs included in the Annual Report and Financial Statements, which are unaudited and outside the scope of IFRS, are deemed to be as follows:
Total NAV Return
The Total NAV Return measures how the net asset value ("NAV") per share has performed over a period of time, taking into account both capital returns and dividends paid to shareholders. JZCP quotes NAV total return as a percentage change from the start of the period (one year) and also three-month, three-year, five-year and seven-year periods. It assumes that dividends paid to shareholders are reinvested back into the Company therefore future NAV gains are not diminished by the paying of dividends. The Total NAV Return for the year ended 28 February 2026 was 2.0% (2025: -0.5%), which only reflects the change in NAV ($) as no dividends were paid during the year.
Total Shareholder Return (Ordinary shares)
A measure showing how the share price has performed over a period of time, taking into account both capital returns and dividends paid to shareholders. JZCP quotes shareholder price total return as a percentage change from the start of the period (one year) and also three-month, three-year, five-year and seven-year periods. It assumes that returns of capital and dividends paid to shareholders are reinvested in the shares at the time the shares are quoted ex-dividend. The Shareholder Return for the year ended 28 February 2026, in Sterling terms, was -18.3%, which reflects the change in share price and the return of capital to shareholders at the prevailing NAV per share. The Shareholder Return for the year ended 28 February 2025 was 10.6%.
NAV to Market Price Discount
The NAV per share is the value of all the company’s assets, less any liabilities it has, divided by the number of shares. However, because JZCP shares are traded on the London Stock Exchange, the share price may be higher or lower than the NAV. The difference is known as a discount or premium. JZCP's discount is calculated by expressing the difference between the period end dollar equivalent share price and the period end NAV per share as a percentage of the NAV per share.
At 28 February 2026, JZCP's Ordinary shares traded at £1.70 (28 February 2025: £2.20) or $2.29 (28 February 2025:
$2.77) being the dollar equivalent using the year-end exchange rate of £1: $1.34 (28 February 2025 £1: $1.26). The shares traded at a 44.8% (28 February 2025: 31.8%) discount to the audited NAV per share of $4.14 (2025: $4.06).
Ongoing Charges Calculation
A measure expressing the ongoing annualised expenses as a percentage of the Company's average annualised net assets over the year 2.30% (2025: 2.39%). Ongoing charges, or annualised recurring operating expenses, are those expenses of a type which are likely to recur in the foreseeable future, and which relate to the operation of the Company, excluding financing charges and gains/losses arising on investments.
Ongoing charges are based on costs incurred in the year as being the best estimate of future costs but are amended if this method is not considered an accurate prediction of future expenses. Ongoing expenses for the year are
$5,863,000 (2025: $7,018,000) comprising of the IA base fee $3,749,000 (2025: $4,415,000), Directors' fees
$290,000 (2025: $290,000) and other fees $1,832,000 (2025: $2,313,000). Average net assets for the year are calculated using quarterly NAVs $254,980,000 (2025: $293,700,000).
Key Information Documents
JZCP produces Key Information Documents to assist investors' understanding of the Company's securities and to enable comparison with other investment products. These documents are found on the Company's website - [www.jzcp.com/investor-relations/key-information-documents.](http://www.jzcp.com/investor-relations/key-information-documents)
On 8 December 2025, the FCA published final rules on the new Consumer Composite Investments (CCI) regime, which will replace the current UK's Packaged Retail and Insurance-based Investment Products (PRIIPs) regime. Under the new regime, manufacturers need to provide a product summary and related underlying core information. The Company expects to replace the current key information document with the new product summary in 2027.
Criminal Facilitation of Tax Evasion
The Board has approved a policy of zero tolerance towards the criminal facilitation of tax evasion, in compliance with the Criminal Finances Act 2017.
Non-Mainstream Pooled Investments
From 1 January 2014, the FCA rules relating to the restrictions on the retail distribution of unregulated collective investment schemes and close substitutes came into effect. JZCP's Ordinary shares qualify as an ‘excluded security’ under these rules and will therefore be excluded from the FCA’s restrictions which apply to non-mainstream investment products. Therefore, Ordinary shares issued by JZ Capital Partners can continue to be recommended by financial advisers as an investment for UK retail investors.
Internet Address
The Company: [www.jzcp.com](http://www.jzcp.com/)
Financial Diary
Annual General Meeting 8 September 2026
Interim report for the six months ended 31 August 2026 November 2026 (date to be confirmed) Results for the year ended 28 February 2027 May/June 2027 (date to be confirmed)
JZCP, will aim to issue monthly NAV announcements within 21 days of the month end, these announcements will be posted on JZCP's website at the same time, or soon thereafter.
Payments and Issue of Share Certificates following a Redemption of Ordinary Shares
In the event of a redemption of Ordinary Shares, payments of redemption monies are expected to be effected either through CREST (in the case of Ordinary Shares held in uncertificated form) or by cheque (in the case of Ordinary Shares held in certificated form). Shareholders who hold their Ordinary Shares in certificated form will be paid their Redemption proceeds in US dollars within 10 Business Days of the relevant redemption Date, or as soon as practicable thereafter. The payment will be sent by cheque to the first-named shareholder on the register of members at their registered address. Each Shareholder who holds Ordinary Shares in uncertificated form (that is, in CREST) should ensure that an active US dollar Cash Memorandum Account is in place in CREST by no later than the redemption record date. In the absence of a US dollar Cash Memorandum Account, the payment of the redemption proceeds will not settle, resulting in a delay and the need for settlement of the redemption proceeds to take place outside of CREST.
In the case of Shareholders who hold their Ordinary Shares in certificated form, redemptions will take effect automatically on each redemption Date and the register of members will be updated to reflect the redemption. Certificated Shareholders do not need to return their share certificates to the Company in order to claim their redemption proceeds. Shareholders' existing share certificates for the Ordinary Shares subject to the Redemption will be cancelled and new certificates will be issued for the balance of their holding of Ordinary Shares after each Redemption Date. New share certificates will be dispatched following the completion of a Redemption by 1st class post.
For Shareholders who hold their Ordinary Shares in uncertificated form, redemptions will take effect automatically on each redemption Date and the compulsorily redeemed Ordinary Shares will be cancelled. All Ordinary Shares in issue will be disabled in CREST on the Redemption Record Date and the existing ISIN applicable to such Ordinary Shares will expire. A new ISIN in respect of the remaining issued Ordinary Shares will be enabled and available for transactions from and including the first Business Day following the relevant Redemption Record Date.
Shareholders who have any queries in relation to their shareholding or the settlement procedures described above should contact Equiniti Limited on 0371 384 2265, if calling from within the United Kingdom, or on
+44 371 384 2265, if calling from outside the United Kingdom. Calls to this number from outside the United Kingdom will be charged at applicable international rates. Different charges may apply to calls from mobile telephones. Lines are open 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (excluding public holidays in England and Wales). Please note that Equiniti Limited cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.
Share Dealing
Investors wishing to buy or sell shares in the Company may do so through a stockbroker. Most banks also offer this service.
Foreign Account Tax Compliance Act
The Company is registered (with a Global Intermediary Identification Number CAVBUD.999999.SL.831) under The Foreign Account Tax Compliance Act ("FATCA").
Share Register Enquiries
The Company's UK Transfer and Paying Agent, Equiniti Limited, maintains the share registers. In event of queries regarding your holding, please contact Equiniti Limited on 0871 384 2265, calls to this number cost 8p per minute from a BT landline, other providers' costs may vary. Lines are open 8.30 a.m. to 5.30 p.m., Monday to Friday, if calling from overseas +44 (0) 121 415 7047 or access their website at [www.equiniti.com.](http://www.equiniti.com/) Changes of name or address must be notified in writing to the Transfer and Paying Agent.
Nominee Share Code
Where notification has been provided in advance, the Company will arrange for copies of shareholder communications to be provided to the operators of nominee accounts. Nominee investors may attend general meetings and speak at meetings when invited to do so by the Chairman.
Documents Available for Inspection
The following documents will be available at the registered office of the Company during usual business hours on any weekday until the date of the Annual General Meeting and at the place of the meeting for a period of fifteen minutes prior to and during the meeting:
1. the Register of Directors' Interests in the stated capital of the Company;
2. the Articles of Incorporation of the Company; and
3. the terms of appointment of the Directors.
Warning to Shareholders – Boiler Room Scams
In recent years, many companies have become aware that their shareholders have been targeted by unauthorised overseas-based brokers selling what turn out to be non-existent or high risk shares, or expressing a wish to buy their shares. If you are offered, for example, unsolicited investment advice, discounted JZCP shares or a premium price for the JZCP shares you own, you should take these steps before handing over any money:
* Make sure you get the correct name of the person or organisation
* Check that they are properly authorised by the FCA before getting involved by visiting
* Report the matter to the FCA by calling 0800 111 6768
* If the calls persist, hang up
* More detailed information on this can be found on the Money Advice Service website [www.moneyadviceservice.org.uk](http://www.moneyadviceservice.org.uk/)
US Investors
General
The Company's Articles contain provisions allowing the Directors to decline to register a person as a holder of any class of ordinary shares or other securities of the Company or to require the transfer of those securities (including by way of a disposal effected by the Company itself) if they believe that the person:
1. is a "US person" (as defined in Regulation S under the US Securities Act of 1933, as amended) and not a "qualified purchaser" (as defined in the US Investment Company Act of 1940, as amended, and the related rules thereunder);
2. is a "Benefit Plan Investor" (as described under "Prohibition on Benefit Plan Investors and Restrictions on Non-
ERISA Plans" below); or
3. is, or is related to, a citizen or resident of the United States, a US partnership, a US corporation or a certain type of estate or trust and that ownership of any class of ordinary shares or any other equity securities of the Company by the person would materially increase the risk that the Company could be or become a "controlled foreign corporation" (as described under "US Tax Matters" on pages 73 - 74).
In addition, the Directors may require any holder of any class of ordinary shares or other securities of the Company to show to their satisfaction whether or not the holder is a person described in paragraphs (A), (B) or (C) above.
US Investors (continued)
US Securities Laws
The Company (a) is not subject to the reporting requirements of the US Securities Exchange Act of 1934, as amended (the "Exchange Act"), and does not intend to become subject to such reporting requirements and (b) is not registered as an investment company under the US Investment Company Act of 1940, as amended (the "1940 Act"), and investors in the Company are not entitled to the protections provided by the 1940 Act.
Prohibition on Benefit Plan Investors and Restrictions on Non-ERISA Plans
Investment in the Company by "Benefit Plan Investors" is prohibited so that the assets of the Company will not be deemed to constitute "plan assets" of a "Benefit Plan Investor". The term "Benefit Plan Investor" shall have the meaning contained in 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of the US Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and includes (a) an "employee benefit plan" as defined in Section 3(3) of ERISA that is subject to Part 4 of Title I of ERISA; (b) a "plan" described in Section 4975(e)(1) of the US Internal Revenue Code of 1986, as amended (the "Code"), that is subject to Section 4975 of the Code; and (c) an entity whose underlying assets include "plan assets" by reason of an employee benefit plan or a plan's investment in such entity. For purposes of the foregoing, a "Benefit Plan Investor" does not include a governmental plan (as defined in Section 3(32) of ERISA), a non-US plan (as defined in Section 4(b)(4) of ERISA) or a church plan (as defined in Section 3(33) of ERISA) that has not elected to be subject to ERISA.
Each purchaser and subsequent transferee of any class of ordinary shares (or any other class of equity interest in the Company) will be required to represent, warrant and covenant, or will be deemed to have represented, warranted and covenanted, that it is not, and is not acting on behalf of or with the assets of, a Benefit Plan Investor to acquire such ordinary shares (or any other class of equity interest in the Company).
Under the Articles, the directors have the power to require the sale or transfer of the Company's securities in order to avoid the assets of the Company being treated as "plan assets" for the purposes of ERISA.
The fiduciary provisions of laws applicable to governmental plans, non-US plans or other employee benefit plans or retirement arrangements that are not subject to ERISA (collectively, "Non-ERISA Plans") may impose limitations on investment in the Company. Fiduciaries of Non-ERISA Plans, in consultation with their advisers, should consider, to the extent applicable, the impact of such fiduciary rules and regulations on an investment in the Company.
Among other considerations, the fiduciary of a Non-ERISA Plan should take into account the composition of the Non-ERISA Plan's portfolio with respect to diversification; the cash flow needs of the Non-ERISA Plan and the effects thereon of the illiquidity of the investment; the economic terms of the Non-ERISA Plan's investment in the Company; the Non-ERISA Plan’s funding objectives; the tax effects of the investment and the tax and other risks associated with the investment; the fact that the investors in the Company are expected to consist of a diverse group of investors (including taxable, tax-exempt, domestic and foreign entities) and the fact that the management of the Company will not take the particular objectives of any investors or class of investors into account.
Non-ERISA Plan fiduciaries should also take into account the fact that, while the Company's board of directors and its investment adviser will have certain general fiduciary duties to the Company, the board and the investment adviser will not have any direct fiduciary relationship with or duty to any investor, either with respect to its investment in Shares or with respect to the management and investment of the assets of the Company. Similarly, it is intended that the assets of the Company will not be considered plan assets of any Non-ERISA Plan or be subject to any fiduciary or investment restrictions that may exist under laws specifically applicable to such Non-ERISA Plans. Each Non-ERISA Plan will be required to acknowledge and agree in connection with its investment in any securities to the foregoing status of the Company, the board and the investment adviser that there is no rule, regulation or requirement applicable to such investor that is inconsistent with the foregoing description of the Company, the Board and the Investment Adviser.
Each purchaser or transferee that is a Non-ERISA Plan will be deemed to have represented, warranted and covenanted as follows:
1. The Non-ERISA Plan is not a Benefit Plan Investor;
2. The decision to commit assets of the Non-ERISA Plan for investment in the Company was made by fiduciaries independent of the Company, the Board, the Investment adviser and any of their respective agents, representatives or affiliates, which fiduciaries (i) are duly authorized to make such investment decision and have not relied on any advice or recommendations of the Company, the Board, the Investment adviser or any of their respective agents, representatives or affiliates and (ii) in consultation with their advisers, have carefully considered the impact of any applicable federal, state or local law on an investment in the Company;
Prohibition on Benefit Plan Investors and Restrictions on Non-ERISA Plans (continued)
3. The Non-ERISA Plan’s investment in the Company will not result in a non-exempt violation of any applicable federal, state or local law;
4. None of the Company, the Board, the Investment adviser or any of their respective agents, representatives or affiliates has exercised any discretionary authority or control with respect to the Non-ERISA Plan’s investment in the Company, nor has the Company, the Board, the Investment adviser or any of their respective agents, representatives or affiliates rendered individualized investment advice to the Non-ERISA Plan based upon the Non-ERISA Plan’s investment policies or strategies, overall portfolio composition or diversification with respect to its commitment to invest in the Company and the investment program thereunder; and
5. It acknowledges and agrees that it is intended that the Company will not hold plan assets of the Non-ERISA Plan and that none of the Company, the Board, the Investment adviser or any of their respective agents, representatives or affiliates will be acting as a fiduciary to the Non-ERISA Plan under any applicable federal, state or local law governing the Non-ERISA Plan, with respect to either (i) the Non-ERISA Plan’s purchase or retention of its investment in the Company or (ii) the management or operation of the business or assets of the Company. It also confirms that there is no rule, regulation, or requirement applicable to such purchaser or transferee that is inconsistent with the foregoing description of the Company, the Board and the Investment Adviser.
US Tax Matters
This discussion does not constitute tax advice and is not intended to be a substitute for tax advice and planning. Prospective holders of the Company's securities must consult their own tax advisers concerning the US federal, state and local income tax and estate tax consequences in their particular situations of the acquisition, ownership and disposition of any of the Company's securities, as well as any consequences under the laws of any other taxing jurisdiction.
The Board may decline to register a person as, or may require such person to cease to be, a holder of any class of ordinary shares or other equity securities of the Company because of, among other reasons, certain US ownership and transfer restrictions that relate to “controlled foreign corporations” contained in the Articles of the Company. A shareholder of the Company may be subject to forced sale provisions contained in the Articles in which case such shareholder could be forced to dispose of its securities if the Company’s directors believe that such shareholder is, or is related to, a citizen or resident of the United States, a US partnership, a US corporation or a certain type of estate or trust and that ownership of any class of ordinary shares or any other equity securities of the Company by such shareholder would materially increase the risk that the Company could be or become a "controlled foreign corporation" within the meaning of the Code (a "CFC"). Shareholders of the Company may also be restricted by such provisions with respect to the persons to whom they are permitted to transfer their securities.
In general, a foreign corporation is treated as a CFC if, on any date of its taxable year, its "10% US Shareholders" collectively own (directly, indirectly or constructively within the meaning of Section 958 of the Code) more than 50% of the total combined voting power or total value of the corporation's stock. For this purpose, a "10% US Shareholder" means any US person who owns (directly, indirectly or constructively within the meaning of Section 958 of the Code) 10% or more of the total combined voting power of all classes of stock of a foreign corporation or 10% or more of the total value of shares of all classes of stock of a foreign corporation. Pursuant to current tax laws regarding constructive ownership of CFC stock, the Company’s US subsidiary will be deemed to own all of the stock of the non-US subsidiaries held by the Company for purposes of determining such non-US subsidiaries’ CFC status. The Company's treatment as a CFC as well as its non-US subsidiaries’ treatment as CFCs could have adverse tax consequences for 10% US Shareholders. A 10% US Shareholder must generally include in its gross income its pro rata share of certain earnings and profits of a CFC.
US Tax Matters (continued)
If such 10% US Shareholder sells or exchanges stock of an entity which, during the five-year period ending upon the date of such sale or disposition, was a CFC, then such 10% US Shareholder will be required to treat a portion of the gain recognized upon such sale or exchange as a dividend to the extent of the earnings and profits of the CFC attributable to such stock. In addition, a 10% US Shareholder is subject to an additional taxable income inclusion for its pro-rata amount of “global intangible low-taxed income” (“GILTI”). The includable amount of income is the 10% US Shareholder’s share of the excess of the CFC’s “net CFC tested income” above a notional 10% annual return on the CFC’s aggregate adjusted tax basis in certain tangible depreciable business assets. Corporate 10% US Shareholders are entitled to a deduction equal to 50% of the GILTI amount until 31 December 2025 (and a deduction equal to 37.5% of the GILTI amount thereafter) and may be able to offset a share of such income inclusions with deemed paid foreign tax credits. Any non-corporate 10% US Shareholder may elect to be treated as a corporation for purposes of the subpart F and GILTI rules.
The Company has been advised that it qualified as a "passive foreign investment company" ("PFIC") for the fiscal year ended 28 February 2025. The Company's treatment as a PFIC is likely to have adverse tax consequences for US taxpayers. An analysis for the financial year ended 28 February 2026 will be undertaken this year. An investment in a PFIC will cause US taxpayer to be subject to special tax rules. In general, an entity formed under the laws of a non-US jurisdiction that is classified as a corporation for US federal income tax purposes will be classified as a PFIC if seventy-five percent (75%) or more of its gross income for the taxable year is from passive sources (generally defined to include interest, dividends, rents, royalties and gains from the disposition of passive assets) or fifty percent (50%) or more of the average value of the entity’s assets on the last day of each fiscal quarter during a year consist of assets that generate passive income. There are no minimum stock ownership requirements for application of the PFIC rules. Once a corporation is a PFIC with respect to a shareholder, it is generally always treated as a PFIC unless a purging election is made, irrespective of whether the entity ceases to meet the definitional requirements for PFIC classification. Under the PFIC rules, gain attributable to a disposition of the stock of a PFIC, as well as income attributable to certain “excess distributions” with respect to that PFIC stock, is allocated ratably over the shareholder’s holding period for the stock. The portion of such gain and excess distribution allocated under such rules to such prior years are subject to tax as ordinary income at the highest rate applicable to such income during each such year during such holding period, and is subject to an interest-like charge on the tax liability attributable to income that is treated as allocated to prior years as if such liability had actually been due in each such prior year.
An investor in a PFIC may generally elect to treat that entity as a qualified electing fund (“QEF”) by filing IRS Form 8621. If a QEF election is made with respect to the Company, U.S. holders would generally be required to take into account currently their pro rata share of certain earnings and net capital gain from the Company, in general, without regard to whether the Company makes an actual cash distribution, but would generally not be subject to the tax regime discussed above. The Company shall make available to each investor the PFIC Annual Information Statement with its other tax reporting information for the taxable year upon request. Such statement shall include sufficient information to enable the shareholder to calculate its pro rata share of the PFIC’s ordinary earnings and net capital gain for the tax year.
U.S. investors can obtain the Company's PFIC statement for the year ended 28 February 2025 from the Company's website [http://jzcp.com/investor-relations.](http://jzcp.com/investor-relations) Investors will need to calculate its pro rata share of the PFIC’s ordinary earnings and net capital gain for the tax year.
The taxation of a US taxpayer's investment in the Company's securities is highly complex. Prospective holders of the Company's securities must consult their own tax advisers concerning the US federal, state and local income tax and estate tax consequences in their particular situations of the acquisition, ownership and disposition of any of the Company's securities, as well as any consequences under the laws of any other taxing jurisdiction.
Investment Adviser's ADV Form
Shareholders and state securities authorities wishing to view the Investment Adviser's ADV form can do so by following the link below: