Henderson EuroTrust plc

Annual Report 2023

Seeking growth, quality and consistency

Contents

Strategic Report			Governance			Financial Statements
Performance highlights Chairman’s statement Fund Manager’s report Ten largest holdings Investment portfolio Performance information Key performance indicators Business model Our approach to ESG matters	2 3-4 5-9 11 12 13-15 16 17-24 25-27		Board of Directors Corporate governance report Audit and Risk Committee report Directors’ remuneration report Directors’ report Statement of Directors’ responsibilities	29 30-36 37-40 41-43 44-45 46		Independent Auditor’s Report  Income Statement Statement of Changes in Equity Statement of Financial Position Notes to the Financial Statements		48-52 53 54 55 56-69
						Additional Information
						Glossary Alternative performance measures General shareholder information Sustainability Related Disclosures Corporate information	71 72-73 74-75 76-81 82
To receive insights into the Company scan the QR code and register with Janus Henderson

Strategic Report

The Strategic Report includes the following information:

l Performance highlights

l Chairman’s statement

l Fund Manager’s report

l Ten largest holdings

l Investment portfolio

l Portfolio information

l Performance information

l Key performance indicators

l Business model

l Our approach to ESG matters

Investment Objective

The Company aims to achieve a superior total return from a portfolio of European (excluding the UK) investments where the quality of the business is deemed to be high or significantly improving.

Performance highlights

Total return performance to 31 July 2023

	1 year %	3 years %	5 years %	10 years %
NAV1	16.7	23.0	44.6	157.9
Share price2	19.7	21.1	38.1	144.3
Benchmark3	16.1	36.7	39.2	124.3
Peer group NAV4	14.6	31.8	41.4	146.2

Year to 31 July

NAV per share at year end5 2023	2022		Share price at year end 2023	2022
161.3p	142.1p		139.5p	120.5p
Dividend for year6			Dividend yield8
2023	2022		2023	2022
3.8p	3.8p		2.7%	3.2%
Ongoing charge5, 9			Gearing at year end (% of NAV)5
2023	2022		2023	2022
0.79%	0.75%		£15.6m (4.6%)	£7.3m (2.5%)
Number of investments at year end7
					2023	2022		Discount at year end5, 10
47	41		2023	2022
			13.5%	15.2%
Net assets
2023	2022
£342.0m	£301.0m

1     Net asset value (“NAV”) per ordinary share total return (including dividends reinvested)

2     Share price total return (including dividends reinvested)

3     FTSE World Europe (ex UK) Index

4     Association of Investment Companies (“AIC”) Europe Sector (based on cumulative fair net asset value returns)

5     Alternative performance measure

6     Including the 0.8p interim dividend paid on 28 April 2023 and the 3.0p final dividend which will be put to shareholders for approval at the Annual General Meeting (“AGM”) on 15 November 2023

7     Excluding the nil value position in OW Bunker (2022: excluding OW Bunker)

8     Based on the share price at the year end

9     Calculated using the methodology prescribed by the AIC 10 Calculated using the mid-market closing price

Sources: Morningstar Direct, Janus Henderson

A glossary of terms can be found on page 71 and alternative performance measures can be found on pages 72 and 73

Chairman’s statement

Nicola Ralston

Chairman

Summary:

l Over the year, the share price and the net asset value were ahead of the benchmark index and ahead of the AIC peer group

l Stock selection has been the driver of the modest outperformance, an encouraging outcome given that growth stocks on the whole have lagged the market

l We have increased the board size to five and our new director will be appointed Senior Independent Director following the conclusion of the 2023 AGM

Sartorius AG                                                                                           

Chairman’s statement

The financial year to 31 July 2023 has seen a significant recovery in the share price and net asset value after the disappointment of the previous financial year. I am pleased to report that, over the year, the share price and net asset value were moderately ahead of the benchmark index and materially ahead of the AIC peer group. In the latest financial year, “value” stocks in Europe outperformed “growth” stocks by over 9 percentage points but individual stock selection in quite a difficult environment was strong enough to result in modest overall outperformance.

In the year to 31 July 2023, net asset value total return was 16.7%. This compared with a total return of 16.1% for the benchmark index (FTSE World Europe (ex UK)) and 14.6% for the AIC peer group. The discount to net asset value narrowed during the year, from 15.2% to 13.5%, and as a result, the share price total return for the Company was 19.7%. The share price at 31 July 2023 was 139.5p, only slightly below the all-time high of 140.5p.

Dividend

We have proposed a final dividend of 3.0p, which brings the total dividend for the year ended 31 July 2023 to 3.8p. Subject to shareholder approval the dividend will be paid on 22 November 2023 to shareholders on the register as at 20 October 2023. The shares will be quoted ex-dividend on 19 October 2023.

The Company’s dividend approach is broadly to pay out the level of actual income received. In the Chairman’s Statement of October 2020, I explained that the Board committed to pay out the majority of the (then significant) revenue reserve over three to four years. The proposed final dividend of 3.0p for the year ended 31 July 2023 means that commitment to shareholders will be fulfilled and, once the dividend has been paid in November 2023, the revenue reserve will effectively be zero.

The Board has also decided that, as only a very small part of the Company’s revenue is received in the first half of the financial year (for example, 0.3p per share was received for the six months ended 31 January 2023), going forward the Company will pay a final dividend only, and no interim dividend. This is in line with the Company’s commitment that, once the revenue reserve had been paid out, dividends would broadly reflect the level of income received.

Board changes

During the year we implemented a number of key recommendations following an external Board evaluation exercise undertaken in June 2022. First, we expanded the Board from four to five directors, to broaden the diversity of skills and experience. Stephen White, who is a former European investment manager and experienced investment trust director, joined the Board with effect from 1 December 2022 and will seek election from shareholders at the AGM in November 2023.

Second, we are appointing a Senior Independent Director with effect from the AGM in November 2023. Subject to his election by shareholders, Stephen White will assume this role, thereby providing shareholders with an alternative point of contact to raise any concerns should they not wish to discuss these with me or the Chairman of the Audit and Risk Committee.

In my statement last year, I indicated my intention to retire from the Board at the AGM this year. However, the search for my successor has taken longer than anticipated; the Directors have therefore asked me to stay on until its completion. Consequently, I have agreed that I will retire from the Board, at the latest, at the AGM in November 2024 and an update on the recruitment process will be included in our half year results’ announcement in March 2024.

Annual General Meeting

Our meeting will be held on Wednesday 15 November 2023 at 2.30pm at Janus Henderson Investors’ offices at 201 Bishopsgate, London EC2M 3AE. I hope as many shareholders as possible will be able to attend to take the opportunity to meet the Board and to hear a presentation from the Fund Manager. However, if you are unable to attend in person, you can watch the meeting live by visiting www.janushenderson.com/trustslive. Full details are set out in the Notice which has been sent to shareholders with this report and are also available online at www.hendersoneurotrust.com.

Outlook

We are heartened by the absolute and relative performance of the Company over the last year. We believe that attitudes towards investing in European shares are becoming more positive; Europe is home to many strong global businesses on attractive valuations and also demonstrates an above average focus on sustainability. Inevitably, there will be headwinds at times but we remain committed to seeking out growth companies which have the ability to achieve consistent growth in the long run. There is a wealth of such opportunities in this region.

Over the financial year the discount to net asset value at which our shares trade has ranged from approximately 11.4% to 18.7%, ending the year at 13.5% (2022: 15.2%). In the long run, strong absolute and relative performance is a necessary – but not sufficient – factor in reducing the discount. Therefore, we continue to consider all other factors which might contribute to the appeal of the Company to all types of shareholder, and retail investors in particular. As part of this process, I extend an invitation to any shareholders who have questions, whether specific or general, or who would welcome a more general discussion with me or the Senior Independent Director to get in touch via the Corporate Secretary (itsecretariat@janushenderson.com). I also direct current and potential shareholders to the wealth of materials on the Janus Henderson website (www.janushenderson.com) including short videos and articles by our portfolio manager Jamie Ross, and a video by Jamie on our year end results at www.hendersoneurotrust.com.

Nicola Ralston

Chairman

27 September 2023

Fund Manager’s report

Summary:

l I am pleased to report a positive year for performance, both in absolute terms (the value of your shares has increased), and in relative terms (our net asset value per share has increased by more than the index return)

l This performance has been driven by the positive impact of our stock selection

l We have also found opportunity to increase our exposure to some of the highest quality companies in Europe

Jamie Ross

Fund Manager

Novo Nordisk

Fund Manager’s report

Key messages

I am pleased to report a positive year for performance, both in absolute terms (the value of your shares has increased), and in relative terms (our net asset value per share has increased by more than the index return). This performance has been achieved in an environment where our style of investing (buying and owning high quality growing businesses) has been out of favour, but our stock picking has been strong enough to outweigh this.

What has driven our performance?

The best performing sectors in the financial year tended to be those of a cyclical, interest rate sensitive nature: consumer discretionary, financials, industrials and technology. The sectors that lagged tended to be less economically sensitive: consumer staples, health care, real estate and telecommunications. As has been usual for us, our sector allocations have had little bearing on our relative performance. Stock picking within each sector has been a much more important determinant of performance: we are ‘stock pickers’ not ‘sector pickers’.

Our best performing positions were in three areas: financials, luxury goods companies and semi-conductor equipment businesses.

Within financials, we were particularly well-rewarded for our decision to maintain a large position in UniCredit even through the early days of the Russia-Ukraine conflict in 2022, when investors were concerned about UniCredit’s Russian exposure. We felt that their exposure was small enough to be manageable, even in a worst-case scenario, and that the undervaluation of the company’s shares was far too extreme for us to sell just at the time when higher inflation and interest rates were coming back into the system (typically a good thing for banks, at least initially). UniCredit shares have delivered a total return of more than 150% over the last twelve months and have benefitted from higher interest rates, strong control of the cost base, a benign environment for loan losses and strong capital returns to shareholders. Management have done an excellent job. Munich Re, a longstanding position for us, has been another financial that has performed well in this environment.

We have three luxury goods companies in the portfolio: Hermès and Moncler have been longstanding positions  and LVMH was added more recently, in 2021. Luxury goods companies sell aspiration and desirability – intangible characteristics for which people are prepared to pay a high price. The best companies curate their brand allure with decades of consistent investment, avoid discounting and partner with well-known trend-setters. Within the sector, we have taken the approach of owning brands with the strongest and most longstanding cultural heritage. This approach has led us to owning Hermès, Moncler and LVMH; these are three of the more expensive companies in the sector, but we think it is worth paying up for brands of this quality. We were pleased to see our companies perform well in the period, in part due to short-term factors such as recovery in China after Covid restrictions were lifted, but our investment view takes a much longer-term perspective. We continue to see attractive growth prospects for these high margin and high return companies over the medium- to long-term.

The semiconductor industry encompasses businesses of highly variable quality. The industry is exposed to attractive structural growth drivers such as the growing ubiquity of semiconductor usage and powerful technological themes such as machine learning, artificial intelligence and the internet of things. However, not all companies have a sufficiently commanding market position to translate this growth potential into a high margin and high return business. The three semiconductor companies that we own share one key characteristic: they have consistently high market shares in their core technology. ASML has a 100% market share in high end lithography, ASM International has a commanding market share in a packaging technology called Atomic Layer Deposition, while Besi dominate the nascent area of Hybrid Bonding. Strong market shares in niche technologies drive high margins and return on capital for these companies. We have had a longstanding position in ASML and initiated a new position in ASM International during the year and Besi in June 2022, taking advantage of a period when investors seemed overly concerned about a potential short-term cyclical downswing in industry demand. These two positions rallied particularly strongly over the year.

Finally, Novo Nordisk is worthy of mention. Novo is our largest position and a long standing holding in the portfolio. Novo has recently launched an obesity drug in the US and this has attracted a huge amount of media attention. We have been following their progress in this therapeutic area for a number of years and it is pleasing to see the company finally able to bring an efficacious and well-tolerated product to market. We believe that the obesity franchise is extremely well positioned for growth and this reinforces our positive views on the company. We continue to own a large position in Novo even after the strong multi-year share price performance.

Our underperformers have tended to be defensive in nature. When investors want to buy into improving economic sentiment, they tend to avoid steady, consistent, dependable companies such as Roche, Cellnex and Sartorius. We  ignore these short-term swings in sentiment and continue to value the long-term compounding nature of these businesses. In addition to this issue of style, there were a small number of companies whose operational performance was not as impressive as we would wish. Allfunds, DSM Firmenich and Kion have each struggled this year.

Allfunds, a business that links up fund houses with fund distributors, is exposed to three major drivers of growth in assets under administration: the onboarding of new clients, inflows from existing clients and long-term growth in market levels. Over the past year or two, market volatility across multiple asset classes has impacted the latter two of these drivers whilst the onboarding of new clients, an area where they have more control, has remained resilient. We retain faith in the ability of this high market share, high margin business to generate significant growth over time, but a period of more benign markets would be welcome. DSM has struggled with a number of issues, some industry-wide and some stock- specific. On the former, there has been some post-Covid unwind with a number of US customers destocking their ingredients inventory. On the latter, DSM has suffered from weakness in vitamin pricing and have had to deal with disruption related to the Firmenich merger and senior management changes. We have maintained our positions in both Allfunds and DSM (now DSM Firmenich). Finally, Kion has suffered from cost overruns in its warehouse automation business as well as signs of slowing demand. We felt that our long-term thesis had been sufficiently challenged to sell out of our position in Kion.

Average portfolio weight (%)				Attribution Analysis1
	Company	Index	Relative	Sector allocation effect	Stock selection effect	Total effect
Aerospace & Defence	5.7	2.2	-3.5	0.3	0.7	1.0
Alternative Energy	0.0	0.5	0.5	0.0	0.1	0.1
Automobiles and Parts	0.0	3.3	3.3	0.0	-0.5	-0.5
Banks	7.0	7.5	0.4	1.5	-0.4	1.1
Beverages	2.3	2.1	-0.2	0.0	-0.1	-0.1
Cash	-0.7	0.0	0.7	0.0	-0.1	-0.1
Chemicals	2.3	3.5	1.2	-0.1	0.0	-0.0
Construction & Materials	0.0	3.8	3.8	0.0	-0.1	-0.1
Consumer Services	0.7	0.2	-0.5	-0.1	-0.1	-0.1
Electricity	2.1	2.9	0.8	-1.0	0.1	-0.9
Electronic & Electrical Equipment	2.9	2.7	-0.2	-0.1	0.0	-0.1
Finance and Credit Services	1.5	0.0	-1.5	0.0	-0.7	-0.6
Food Producers	9.8	6.1	-3.8	-1.1	-0.8	-1.9
Gas, Water & Multiutilities	0.0	1.4	1.4	0.0	-0.1	-0.1
General Industrials	1.6	1.9	0.3	-0.5	-0.1	-0.6
Health Care Providers	0.0	0.3	0.3	0.0	-0.0	-0.0
Household Goods and Home Construction	0.0	0.4	0.4	0.0	0.0	0.0
Industrial Engineering	3.6	2.5	-1.1	0.4	-0.1	0.2
Industrial Materials	0.0	0.5	0.5	0.0	0.1	0.1
Industrial Metals & Mining	0.0	0.7	0.7	0.0	0.1	0.1
Industrial Support Services	0.4	1.7	1.4	-0.1	0.5	0.5
Industrial Transportation	0.0	2.6	2.6	0.0	-0.0	-0.0
Investment Banking and Brokerage Services	8.9	3.4	-5.6	0.2	-0.6	-0.3
Leisure Goods	0.0	0.1	0.1	0.0	0.0	0.0
Life Insurance	0.0	0.7	0.7	0.0	0.0	0.0
Media	1.9	1.0	-0.9	-0.2	0.0	-0.2
Medical Equipment and Services	1.7	3.1	1.4	0.1	0.3	0.4
Nonlife Insurance	3.2	5.1	1.9	1.2	0.0	1.2
Oil, Gas and Coal	5.3	4.1	-1.2	0.6	-0.2	0.3
Personal Care, Drug and Grocery Stores	3.2	1.3	-1.9	0.1	-0.1	-0.0
Personal Goods	9.5	7.0	-2.5	1.1	0.3	1.3
Pharmaceuticals & Biotechnology	15.4	13.0	-2.4	0.0	-0.3	-0.2
Precious Metals and Mining	0.0	0.0	0.0	0.0	-0.0	-0.0
Real Estate Investment and Services	0.0	0.7	0.7	0.0	0.4	0.4
Real Estate Investment Trusts	0.0	0.4	0.4	0.0	0.1	0.1
Retailers	0.0	0.7	0.7	0.0	-0.2	-0.2
Software & Computer Services	2.6	4.2	1.6	0.6	0.0	0.6
Technology Hardware & Equipment	5.8	4.6	-1.2	0.8	0.3	1.1
Telecommunications Equipment	0.0	0.6	0.6	0.0	0.3	0.3
Telecommunications Service Providers	3.3	2.8	-0.5	-0.5	-0.1	-0.6
Tobacco	0.0	0.1	0.1	0.0	-0.0	-0.0
Travel and Leisure	0.0	0.6	0.6	0.0	-0.1	-0.1
Total1	100.0	100.0	0.0	3.1	-1.2	1.9

1 Total may not sum to the value shown due to rounding differences Source: Factset

What changes have we made?

We have now had three years of value outperforming growth and quality. Notwithstanding the fact that we managed to outperform marginally over the last year, this style environment has been tough for us. Our inclination throughout the period has been to increase our exposure to high quality companies at a time when they have been out of favour. Each of our purchases and sales over the past twelve months can be seen as moving us in this direction. I will illustrate this with two of our new positions highlighting why we think these are high quality businesses with very attractive long-term prospects.

In March, we initiated a new position in Alcon, the Swiss listed manufacturer of ophthalmic equipment and contact lenses. Over the long term, the industry has experienced healthy growth of 4-5% per annum. Alcon, after years of underinvestment under Novartis ownership, is playing catch up. They have been growing faster than the overall market and expect to continue to do so. Margin potential since the spin-out from Novartis has been clear but the delivery has been slower than hoped for. Recently, however, margin progress has started to come through and the outlook for further margin gains is strong. Finally, on valuation, in MedTech, investors tend to pay for durable growth, i.e. organic revenue growth and the sector trades on around 25 times forward price to earnings. Alcon has usually traded at a 0-10% premium, but when we bought our position, it traded at a small discount. Over the next few years, revenue growth should be faster than the sector (6% versus 4%) and so should earnings per share growth (greater than 15% versus 11%) if they achieve margin progress as guided. We thus see Alcon as a superior growth business capable of margin improvement and a valuation rerating over time.

In May, we bought a position in the Swiss testing company SGS. We have long liked the characteristics of the testing sector. The companies provide a cheap, but essential function to a number of businesses across a wide range of end markets. Often their work is mandated by regulation. The industry is fragmented but is increasingly being consolidated by the large, listed companies, with smaller players disadvantaged in a world where customers want broad, global services. This means that the large companies can consistently acquire the smaller ones at inexpensive valuations, taking advantage of inherent scale benefits to create shareholder value over the medium term. We also believe that increasingly stringent environmental testing regulation is resulting in a boost to testing intensity and this should bring higher growth rates for SGS and their peers especially in the consumer goods-facing part of the business. SGS are the global leader in consumer testing and are in the strongest position to benefit.

Our most notable sales during the period were Enel, CNH International and Kion (a utility company, a tractor company and a forklift truck company respectively).

Largest New Investments		Largest Divestments
Company name	Position size at year end (% of the portfolio)	Company name	Position size at start of year (% of the portfolio)
SGS	2.62	Koninklijke KPN	3.05
ASM International	2.25	Kion	2.00
Alcon	1.91	CNH Industrial	1.87
BNP Paribas	1.85	Enel	1.29
Heineken	1.71
Schneider Electric	1.66
Euronext	1.52
Brenntag	0.95
Industrie De Nora	0.81
Zealand Pharma	0.61

Our medium term outlook

I am pleased that we have managed to outperform modestly in yet another year of value outperformance. We have used the last few years to increase our exposure to growth and quality and I am confident that our companies are well-placed to deliver strong growth, attractive margins and robust return on capital.

Classification of holdings as at 31 July 2023

	Compounders1 Average	Improvers2 Average	Company Average	Index Average
Market Capitalisation (£m)	112,902	43,178	94,024	81,677
Price/book (x)	3.6	1.4	2.6	2.0
Trailing 12 month dividend yield (%)	2.2	2.6	2.3	3.0
Trailing 12 month price/earnings (x)	24.8	13.4	20.2	14.6
Forward 2024 price/earnings (x)	17.5	12.9	16.0	12.9
Historical 3-year earnings per share growth per annum (%)	11.5	16.3	12.8	23.9
Forecast next 12 months earnings per share growth (%)	12.7	8.4	11.5	9.4
Return on equity (%)	27.4	5.7	21.5	19.6
Operating margin (%)	25.1	13.5	22.0	18.3
Long-term debt to capital (%)	31.0	33.9	31.8	33.1
Number of securities	32	15	47	577
Weight (%)3	76.6	28.4

Fundamentals are based on weighted averages at the stock level, excluding net cash/borrowing

1.        Compounders – high-return businesses

2.        Improvers – companies whose return profile should materially improve over time

3.        The weight percentages of Compounders and Improvers are shown including net cash/borrowing Net cash/(borrowing) was -5.1% at 31 July 2023 OW Bunker, a nil value position, is not included in the analysis Source: Factset/Fundamentals in Sterling and Janus Henderson

Top ten contributors to and bottom detractors from relative performance

Jamie Ross

Fund Manager

27 September 2023

Strategic Report

Investment Portfolio

Ten largest holdings at 31 July 2023

Ranking			Valuation	Valuation	% of	% of
2023			2023	2022	Portfolio	Portfolio
(2022)	Company	Country	£’000	£’000	2023	2022
1 (1)	Novo Nordisk Novo Nordisk is a Danish pharmaceutical company focused on diabetes care and obesity. The company’s most well known drugs are sold under the brand names of Ozempic (diabetes) and Wegovy (obesity).	Denmark	20,336	14,391	5.69	4.67
2 (3)	Nestlé Nestlé is a Swiss multi-national packaged food company. The company’s product line includes milk, chocolate, confectionery, bottled water, coffee, creamer, food seasoning and pet foods.	Switzerland	17,817	13,974	4.99	4.53
3 (6)	TotalEnergies TotalEnergies is a diversified energy company that produces and markets fuels and electricity.	France	17,261	11,701	4.83	3.79
4 (2)	Roche Roche is a Swiss multi-national company that develops and manufactures pharmaceutical and diagnostic products.	Switzerland	15,766	14,052	4.41	4.56
5 (5)	Sanofi Sanofi is a French pharmaceutical company. The company manufactures prescription pharmaceuticals and vaccines and serves customers worldwide.	France	14,465	12,461	4.05	4.04
6 (10)	ASML ASML develops, produces, and markets semiconductor manufacturing equipment, specifically machines for the production of chips through lithography. The company services clients worldwide.	Netherlands	13,009	10,292	3.64	3.34
7 (9)	Hermès Hermès designs, produces, and distributes personal luxury accessories and apparel. The company operates a chain of boutiques under the Hermès name that sells items such as leather, scarves, men’s clothes, ties, women’s fashions, perfume, watches, stationery, shoes, hats, gloves, and jewellery products.	France	12,403	10,387	3.47	3.37
8 (14)	LVMH Moët Hennessy Louis Vuitton LVMH is a French luxury goods group. The company produces and sells wine, cognac, perfumes, cosmetics, luggage, watches and jewellery.	France	12,156	9,341	3.40	3.03
9 (12)	Safran Safran is a French aerospace and defence company. The group’s primary activity is in selling and servicing aircraft engines.	France	10,072	9,530	2.82	3.09
10 (25)	SAP SAP is a German software company involved in enterprise management software as well as additional applications.	Germany	9,968	6,244	2.79	2.02
	Total		143,253	112,373	40.09	36.44

Investment portfolio at 31 July 2023

Position 2023	Position 2022	Company	Country	Sector	Market Value 2023 £’000	Percentage of Portfolio 2023
1	1	Novo Nordisk	Denmark	Pharmaceuticals and Biotechnology	20,336	5.69
2	3	Nestlé	Switzerland	Food Producer	17,817	4.99
3	6	TotalEnergies	France	Oil, Gas and Coal	17,261	4.83
4	2	Roche	Switzerland	Pharmaceuticals and Biotechnology	15,766	4.41
5	5	Sanofi	France	Pharmaceuticals and Biotechnology	14,465	4.05
6	10	ASML	Netherlands	Technology Hardware and Equipment	13,009	3.64
7	9	Hermès	France	Luxury Goods	12,403	3.47
8	14	LVMH Moët Hennessy Louis Vuitton	France	Personal Goods	12,156	3.40
9	12	Safran	France	Aerospace and Defence	10,072	2.82
10	25	SAP	Germany	Software and Computer Services	9,968	2.79
Top 10					143,253	40.09
11	4	DSM Firmenich	Switzerland	Food Producer	9,860	2.76
12	11	Cellnex	Spain	Mobile Telecommunications	9,762	2.73
13	29	Airbus	France	Aerospace and Defence	9,642	2.70
14	(*)	SGS	Switzerland	Industrial Support Services	9,353	2.62
15	15	Partners Group	Switzerland	Private Equity Asset Manager	9,028	2.53
16	22	Beiersdorf	Germany	Personal Care, Drug and Grocery Store	8,650	2.42
17	7	Munich Re.	Germany	Insurance	8,441	2.36
18	18	Deutsche Börse	Germany	Financial Services	8,400	2.35
19	(*)	ASM International	Netherlands	Technology Hardware and Equipment	8,033	2.25
20	17	UniCredit	Italy	Banks	7,913	2.21
Top 20					232,335	65.02
21	21	Amundi	France	Bank and Asset Manager	7,899	2.21
22	30	Moncler	Italy	Luxury Goods	7,123	1.99
23	19	Pernod Ricard	France	Beverages	7,036	1.97
24	(*)	Alcon	Switzerland	Medical Equipment and Services	6,825	1.91
25	(*)	BNP Paribas	France	Banks	6,617	1.85
26	(*)	Heineken	Netherlands	Beverages	6,114	1.71
27	(*)	Schneider Electric	France	Electronic and Electrical Equipment	5,948	1.66
28	32	Metso	Finland	Industrial Engineering	5,932	1.66
29	(*)	Euronext	Netherlands	Financial Services	5,439	1.52
30	34	SIG	Switzerland	Containers and Packaging	5,363	1.50
Top 30					296,631	83.00
31	27	EDP Renovaveis	Portugal	Alternative Energy	4,749	1.33
32	23	Universal Music	Netherlands	Media	4,630	1.30
33	8	Bawag	Austria	Banks	4,530	1.27
34	20	Sartorius	Germany	Medical Equipment and Services	4,516	1.26
35	24	Danone	France	Food Producer	4,461	1.25
36	36	Adidas	Germany	Personal Goods	4,421	1.24
37	38	Grifols	Spain	Pharmaceuticals and Biotechnology	4,313	1.21
38	33	Allfunds	Netherlands	Finance and Credit Services	4,266	1.19
39	31	Arkema	France	Chemicals	3,946	1.10
40	(*)	Brenntag	Germany	Chemicals	3,394	0.95
Top 40					339,857	95.10
41	(*)	Industrie De Nora	Italy	Electronic and Electrical Equipment	2,909	0.81
42	40	HelloFresh	Germany	Food and Drug Retailers	2,731	0.76
43	37	Besi	Netherlands	Technology Hardware and Equipment	2,644	0.74
44	41	Brockhaus Capital Management	Germany	Financial Services	2,554	0.71
45	16	ABB	Switzerland	Electronic and Electrical Equipment	2,386	0.67
46	(*)	Zealand Pharma	Denmark	Pharmaceuticals and Biotechnology	2,165	0.61
47	39	Delivery Hero	Germany	General Retailers	2,160	0.60
Total					357,406	100.00

In addition to the above, the Company has a nil value position in OW Bunker. OW Bunker is unquoted.

* Not in the portfolio last year

Performance information

             

Market capitalisation (excluding cash) of the portfolio by weight at 31 July 2023

Performance drivers

Over the year ended 31 July 2023

	%
Benchmark Return	16.1
Sector Allocation1	(2.0)
Stock Selection	3.1
Currency Movements (relative to index)	0.9
Effect of Cash and Gearing	(0.1)
Effect of Ongoing Charge	(0.8)
Residual (due to timing and rounding)	(0.5)
NAV Total Return	16.7

1 Sector allocation is the effect of asset allocation, less the effects of gearing, share buy-backs / issues and currency

Gearing levels

Over the year to 31 July 2023

Financial information Year ended	NAV per Ordinary Share (p)1	Share price percentage premium/(discount) to NAV per Ordinary Share (%)	Revenue return per Ordinary Share (p)1	Dividends per Ordinary Share (p)1
31 July 2014	80.3	(0.9)	1.8	1.8
31 July 2015	89.5	0.7	1.8	1.9
31 July 2016	97.9	(8.1)	2.4	2.0
31 July 2017	119.3	(3.3)	2.8	2.5
31 July 2018	124.7	(8.2)	3.3	3.1
31 July 2019	129.4	(10.0)	2.9	3.1
31 July 2020	139.3	(11.4)	2.2	2.5
31 July 2021	167.4	(8.9)	1.6	2.5
31 July 2022	142.1	(15.2)	3.9	3.8
31 July 2023	161.3	(13.5)	3.2	3.8

1 Figures for 2014 to 2021 have been restated due to the sub-division of each ordinary share of 5p into ten ordinary shares of 0.5p each on 22 November 2021 Source: Factset, Morningstar Direct, Janus Henderson

Performance information (continued)

Total return performance for year ended 31 July 2023

Total return performance to 31 July 2023

	1 year %	3 years %	5 years %	10 years %
NAV1	16.7	23.0	44.6	157.9
Share price²	19.7	21.1	38.1	144.3
Benchmark³	16.1	36.7	39.2	124.3
Peer group NAV4	14.6	31.8	41.4	146.2

Source: Morningstar Direct

Total return performance over the last year (rebased to £1,000)

Source: Morningstar Direct

1   Net asset value (“NAV”) per ordinary share total return (including dividends reinvested)

2   Share price total return (including dividends reinvested)

3   FTSE World Europe (ex UK) Index

4   AIC Europe Sector (based on cumulative fair net asset value returns)

Performance information (continued)

Total return performance over the last ten years (rebased to £1,000)

Source: Morningstar Direct

Total return performance since launch (rebased to £1,000)

Source: Morningstar Direct

1   Net asset value (“NAV”) per ordinary share total return (including dividends reinvested)

2   Share price total return (including dividends reinvested)

3   FTSE World Europe (ex UK) Index

Key performance indicators

Measuring performance

To measure the success of the Company in meeting its objective and to evaluate the performance of the Manager, the Directors take into account the following key performance indicators (“KPIs”). The charts, tables and data on pages 2, 14 and 15 show how the Company has performed against those KPIs, and a glossary of terms and alternative performance measures is included on pages 71 to 73.

KPI	Action
Performance measured against the benchmark	At each of its meetings the Board reviews and compares the performance of the portfolio as well as the net asset value and share price for the Company and the return of its benchmark index, the FTSE World Europe (ex UK) Index. The Board considers this to be its most important key performance indicator.
Premium/discount to net asset value (“NAV”)	The Board monitors the level of the Company’s premium/discount to NAV and looks at ways of managing this at Board meetings. The Board reviews the average premium/ discount of the peer group companies in the AIC Europe Sector. In accordance with the authority granted at the last AGM, and which the Directors seek to renew at the forthcoming Meeting, the Company retains the flexibility to repurchase shares when it sees fit. The Board considers whether to use share buybacks to enhance shareholder value. Shares are only bought back at a price below the prevailing NAV, thereby increasing the NAV for the remaining shareholders. The Board will continue to instruct purchases as required and in accordance with the authority granted. The Company publishes its NAV per share figure on a daily basis, through the official newswire of the London Stock Exchange. This figure is calculated in accordance with the AIC formula and includes current financial year revenue, the same basis as that calculated for the Financial Statements.
Performance against the Company’s peer group	The Company is included in the AIC Europe Sector. In addition to comparison against the stated benchmark, the Board also considers the performance of its peer group at each Board meeting.
Ongoing charge	The ongoing charge reflects those expenses of a type which are likely to recur in the foreseeable future, whether charged to capital or revenue, and which relate to the operation of the investment company as a collective fund, excluding the costs of acquisition or disposal of investments, financing costs and gains or losses arising on investments. The ongoing charge is based on actual costs incurred in the year as being the best estimate of future costs. The Board reviews the ongoing charge and monitors the expenses incurred by the Company. The ongoing charge at 31 July 2023 was 0.79% (2022: 0.75%).

Business model

Strategy

The purpose of Henderson EuroTrust plc (the “Company”) is to achieve a superior total return for the Company’s shareholders from a portfolio of European (excluding the UK) investments where the quality of the business is deemed to be high or significantly improving. This is achieved through the Company’s operation as an investment company with a Board of Directors who delegate investment and operational matters to specialist third-party service providers. These third-party service providers operate in accordance with the Company’s Investment Policy following a disciplined process of investment, by controlling costs and using borrowings to enhance returns. Their performance is monitored and challenged by the Board who retain oversight of the Company’s operations.

The framework of delegation provides a cost-effective mechanism for achieving the Company’s obligations under Section 1158/9 of the Corporation Tax Act 2010, as amended (“Section 1158”). The closed-ended nature of the Company enables the Fund Manager to take a longer term view on investments. It also supports a fully invested portfolio as the Company does not have to maintain or create sufficient cash balances to satisfy investor redemptions. Investment trusts have two other significant advantages over other investment fund structures: first, the ability to borrow to increase potential returns for shareholders and second, the ability to pay dividends out of revenue reserves to support the provision of income, as necessary, to shareholders.

The Company’s status

The Company is an investment company as defined in Section 833 of the Companies Act 2006 (the “Act”). The Company operates as an investment trust in accordance with Section 1158. The Company has obtained approval from HM Revenue & Customs (“HMRC”) of its status as an investment trust under Section 1158; the Directors are of the opinion that the Company has conducted its affairs in compliance with Section 1158 since approval was granted and intends to continue to do so. The Company is liable to corporation tax on its net revenue profits but is exempt from corporation tax on capital gains if it has complied at all times with Section 1158.

The Company and the Board are governed by the Articles of Association (“Articles”), amendments to which must be approved by shareholders by way of a special resolution. The Board is comprised entirely of non-executive directors who are accountable to the Company’s shareholders. The Company is not a close company.

The Company is listed on the Main Market of the London Stock Exchange and is subject to the Listing Rules, Prospectus Rules and the Disclosure Guidance and Transparency Rules published by the Financial Conduct Authority (“FCA”). The Company is a member of the Association of Investment Companies (“AIC”).

Investment Objective

The Company aims to achieve a superior total return from a portfolio of European (excluding the UK) investments where the quality of the business is deemed to be high or significantly improving.

Investment Policy

The Company seeks to invest in large and medium-sized companies which are perceived to be undervalued in view of their growth prospects or on account of a significant change in management or structure.

Asset allocation

The Company has adopted the following allocation limits for each asset class:

l The portfolio will contain between 35 and 55 stocks.

l The Company will not hold more than 10% of the share capital of any company at the time of investment.

l The Company will not invest more than 15% of gross assets in any one company or group of companies.

l The Company can hold investments from any combination of European countries and the portfolio is not constructed with a yield target.

l The Company may invest in companies that are not listed on a stock exchange although in aggregate these may not amount to more than 10% of the portfolio.

Environmental, Social and Governance (“ESG”)

The Company has adopted the following investment restrictions:

l The Company will not invest in companies that derive more than 5% of their revenue from any of the following activities: shale energy extraction, palm oil, arctic oil and gas drilling or exploration, tobacco, or the adult entertainment sector.

l The Company will not invest more than 5% of the portfolio in companies which are classed as ESG Laggards.

l The Company will exclude the bottom 5% of companies in the index when ranked by carbon intensity.

l At least 5% of the portfolio will be invested in companies that are aligned with the UN Sustainable Development Goal of “Good Health & Wellbeing”.

l The Company only invests in companies which comply with the UN Global Compact principles (a voluntary framework encouraging businesses worldwide to adopt sustainable and socially responsible policies).

If an existing investment becomes ineligible based on exclusionary screens, it will be divested within 90 days.

Derivatives

The Company may use financial instruments known as derivatives for the purpose of efficient portfolio management while maintaining a level of risk consistent with the risk profile of the Company.

Gearing

The Company’s Articles of Association allow borrowings up to 100% of shareholders’ funds. In normal circumstances, the Directors would expect the Company to be substantially fully invested but it may hold cash and cash instruments up to 20% or be geared up to 30% of the total assets.

Other Restrictions

It is the Company’s policy to invest no more than 15% of its total assets in other listed closed-ended investment funds. Accordingly, the Company’s shares are an eligible investment under Listing Rule 15.2.5(R) for other listed closed-ended investment funds.

Management

The Company qualifies as an Alternative Investment Fund in accordance with the Alternative Investment Fund Managers Directive (“AIFMD”).

The Company does not have any employees. The Company has an independent Board of Directors which has appointed Janus Henderson Fund Management UK Limited to act as its Alternative Investment Fund Manager. Janus Henderson Fund Management UK Limited delegates investment management services to Janus Henderson Investors UK Limited in accordance with an agreement which has been effective since 22 July 2014. The management agreement with Janus Henderson Fund Management UK Limited is reviewed annually by the Management Engagement Committee (see page 35), and can be terminated on three months’ notice. Both entities are authorised and regulated by the FCA. References to the Manager within this report refer to the services provided by Janus Henderson Fund Management UK Limited and Janus Henderson Investors UK Limited. Both entities are wholly owned subsidiaries of Janus Henderson Group plc, referred to as Janus Henderson.

Janus Henderson and its subsidiaries also provide accounting, company secretarial and general administrative services. Some of the administration, accounting and cash management services are carried out, on behalf of the Manager, by BNP Paribas. Melanie Stoner (Fellow of the Chartered Governance Institute) acts as Company Secretary on behalf of the Corporate Secretary, Janus Henderson Secretarial Services UK Limited.

Fund Manager

The portfolio is managed by Jamie Ross. Jamie became the sole Fund Manager in February 2019. He was previously appointed as Joint Fund Manager with effect from October 2018, having been appointed as Deputy Fund Manager in March 2017. Jamie joined Janus Henderson in 2007, and has worked in the European Equities Team since 2009. Jamie graduated with a BA (Hons) degree in Economics from Durham University. He holds the Chartered Financial Analyst designation and has over ten years of financial industry experience.

Investment selection

The Fund Manager uses rigorous research to identify high-quality European (excluding the UK) companies with strong growth potential. The benchmark is the FTSE World Europe (ex UK) Index. The Fund Manager’s investment approach is based around detailed company-level analysis and results in a relatively concentrated portfolio. It is an active approach aimed at delivering outperformance of the Company’s equity benchmark. Reflecting this, the Company’s portfolio’s active share as at 31 July 2023 was 67.1% versus 70.1% as at 31 July 2022.

Fees

Management fees are charged in accordance with the terms of the management agreement, and provided for when due.

The base management fee is calculated at the rate of 0.65% per annum of net assets up to £300 million and 0.55% for net assets above £300 million, payable quarterly in arrears. There are no performance fee arrangements.

Section 172 statement

The Board is responsible for approving the Company’s long term objectives and commercial strategy and for promoting the Company’s success. At least one of its meetings each year is devoted entirely to reviewing overall strategy and progress is monitored throughout the year. The Directors’ overarching duty is to promote the success of the Company for the benefit of investors, with consideration of stakeholders’ interests, as set out in Section 172 of the Act. The Board regards a well governed business model as essential for the successful delivery of its investment proposition. The Directors consider the likely consequences of their decisions in the longer term and how they have taken wider stakeholders’ needs into account. The Company manages shareholders’ assets with constant awareness of the Company’s stakeholders and their interests. The Board uses a map to support the Directors in identifying and understanding the Company’s stakeholders and fostering the appropriate level and form of interaction with them. The Directors regard the Company’s key stakeholders to be the Company’s shareholders and potential investors, the Manager and other third-party service providers (including the Company’s broker).

The Board engages reputable third-party suppliers with established track records to deliver the day-to-day operations. The most important of these is the Manager, and in particular the Fund Manager, who is responsible for the management of the Company’s assets in line with the Investment Objective. The Board maintains a close working relationship with the Manager and holds it to account for the smooth running of the Company’s day-to-day business. The Board retains responsibility for decisions regarding corporate strategy, corporate governance, risk and internal control assessment, determining the overall limits and restrictions for the portfolio, gearing and asset allocation, investment performance monitoring and setting marketing budgets.

The Fund Manager promotes the Company with the support of the Manager’s dedicated investment trust sales and marketing teams and the Board makes additional spend available to support marketing activities aimed at raising the profile of the Company among retail investors in the UK.

To ensure the chosen service providers continue to deliver the expected level of service, the Board receives regular reporting from them, evaluates the control environments in place at each service provider and formally assesses their appointment annually. By doing so the Board seeks to ensure that the key service providers continue to be appropriately remunerated to deliver the expected level of service.

Engagement with key stakeholders

The Company’s key stakeholders are listed below with examples of the way the Board and the Company has interacted with them in the year under review.

Stakeholders

Engagement

Shareholders and potential investors

The Board is committed to maintaining open channels of communication with shareholders in a manner which they find most meaningful. Unlike trading companies, the Board appreciates that this often takes the form of meeting with the Fund Manager rather than members of the Board. The Manager provides information on the Company, press releases and videos of the Fund Manager on the Company’s website, and via LinkedIn. Feedback from meetings between the Fund Manager and shareholders is shared with the Board. The Chairman, the Chairman of the Audit and Risk Committee and other members of the Board are available to meet with shareholders to understand their views on governance and the Company’s performance when they wish to do so. With assistance from the Manager, the Chairman seeks meetings with shareholders who might wish to meet with her. The annual report and half-year results are circulated to shareholders wishing to receive them and made available on the Company’s website. These provide shareholders with a clear understanding of the Company’s portfolio and financial position. This information is supplemented by the daily calculation and publication of the NAV per share and monthly factsheet which is available on the website. The Fund Manager provides presentations to shareholders and analysts following the publication of the annual financial results. The Fund Manager attends the AGM and provides a presentation on the Company’s performance and the future outlook. The Board encourages shareholders to attend and participate in the AGM, which is also available to watch live online. Shareholders have the opportunity to address questions to the Chairman of the Board, the Fund Manager and all Directors. In the event shareholders wish to raise issues or concerns with the Directors, they are welcome to do so at any time by writing to the Chairman at the registered office. Correspondence from shareholders is shared with the Chairman and the Board. Other members of the Board are also available to shareholders if they have concerns that have not been addressed through the normal channels.

Stakeholders	Engagement
Janus Henderson as Manager l Fund Manager l Sales and marketing l Company secretarial l Financial reporting l Internal controls functions l Internal audit l Investment accounting and administration (outsourced by Janus Henderson to BNP Paribas)	The most important of the Company’s third-party service providers is the Manager, and in particular the Fund Manager, who is responsible for the management of the Company’s assets in line with the Investment Objective. Representatives of the Manager regularly attend Board meetings, providing the opportunity for the Manager and the Board to reinforce further their mutual understanding of what is expected from all parties. Through receipt of timely and accurate information (including monthly performance and compliance reporting against a schedule of investment limits and restrictions determined by the Board and Fund Manager) and regular engagement with representatives of the Manager, the Board is able to provide timely and constructive feedback in order that the Manager can meet the Company’s Investment Objective to the best of its ability and thereby ensuring that the interests of the Manager are also protected.
Other third-party service providers	As an investment company all services are outsourced to third-party service providers. Whilst there is an interdependency between the Company’s key third- party service providers (i.e. the Manager (and indirectly BNP Paribas who provide accounting and administration services to the Company), the Broker, Depositary, Registrar and Auditor), the Board considers third-party service providers to also be one of the Company’s key stakeholder groups. The Board relies on the Manager to provide the third-party service providers with the information required to meet the Company’s requirements. The Company’s third-party service suppliers’ performance is assessed in detail at least annually by the Management Engagement Committee. The Corporate Secretary and Financial Reporting Manager for Investment Trusts, in particular, engage with the key suppliers on a regular and continuous basis and the Manager provides the third- party service providers with feedback from the Board about the day-to-day service provided by each of the third-party suppliers. The Board receives market updates from J.P. Morgan Cazenove (the Broker) throughout the year providing them with information in order that they can promote the Company to investors. The Audit and Risk Committee also meets directly with representatives of the Depositary on an annual basis. The Audit and Risk Committee reviews the internal controls and risk management systems in place at BNP Paribas, the Registrar and Depositary predominantly through the assessment of each supplier’s internal controls and assurance report.

Board discussions and decision-making

The Board is aware that not every decision made by the Board will result in a positive outcome for all the Company’s stakeholders. The Board takes into consideration the Company’s purpose, Investment Objective and Investment Policy as well as the interests of the Company’s stakeholders when discussing matters and making decisions. The following are examples of the key discussions held and decisions made by the Board during the financial year ended 31 July 2023:

l The Board understands that shareholders and potential investors require information in order to make decisions about their investment in the Company. Through the presentation of the Company’s half-year and annual results to shareholders in the half-year Update and

Annual Report and inclusion on the Company’s website for other stakeholders, the Company has provided information in order that shareholders and potential investors are able to make informed decisions about their investment in the Company;

l Directors are required to act in a way they consider to be for the benefit of its members as a whole. Consideration and approval of the resolutions put to shareholders at the AGMs in 2022 and 2023, including the final dividend payment (providing income to investors), are considered by the Directors to be for the benefit of its members as

a whole;

l The Company aims to return income on shareholder investments in the Company. The Board facilitates this through the approval of the Company’s dividends; and

l Another aspect of shareholder interests is management of the Company’s discount. The Chairman, Manager and Broker have conversations with shareholders and potential investors which the Board discuss regularly in order to agree how best to approach the management of the Company’s discount.

The Chairman has included more information regarding a number of these matters in her statement (see page 4).

The Board is in regular contact with the Manager, receiving monthly updates from the Fund Manager on performance and portfolio activity.

The Fund Manager presents the impact of his decisions relating to the portfolio to the Board at each meeting, and to shareholders at the AGM and other arranged meetings during the year, as well as through the half-year and annual results announcements. The Board’s engagement with the Manager is necessary to evaluate the Company’s portfolio’s performance against the stated strategy and benchmark and to understand any risks or opportunities this may present to the Company.

Culture

As explained in the Section 172 statement on pages 18 and 19, the Directors’ overarching duty is to promote the success of the Company for the benefit of investors, with consideration of stakeholders’ interests.

The Board applies various policies, practices and behaviour to ensure that the Board’s culture is in line with the Company’s purpose, values and strategy. The Directors promote mutual support combined with constructive challenge. Integrity, fairness and diligence are defining characteristics of the Board’s culture.

The Directors promote and encourage a culture of transparency and honesty between the Board and the Manager. The Manager is considered by the Board to be the Company’s most significant third-party service provider. Therefore the relationship with key individuals, in particular the Fund Manager, the Company Secretary, the Head of Investment Trusts and the Financial Reporting Manager for Investment Trusts, are paramount to the success of the Company. There is continuous engagement and dialogue between these key individuals and the Directors between Board meetings (in particular with the Chairman and Chairman of the Audit and Risk Committee). Communication channels are open and information, ideas and advice flow between the Board and the Manager with the aim of delivering better results for shareholders and other stakeholders and ultimately driving the Company’s long-term sustainable success. The need to foster, maintain and continually evolve corporate culture is taken into account when making decisions and is therefore integral to the Company’s policies and practices.

The Company has a number of policies and procedures in place to assist with maintaining a culture of good governance, including those relating to Directors’ conflicts of interest and Directors’ dealings in the Company’s shares, as well as those related to bribery and tax evasion. The Board assesses and monitors compliance with these policies regularly through Board meetings and the annual evaluation process (for more information see the performance evaluation section on page 33).

The Board appoints appropriate service providers and evaluates their service on a regular basis as described on pages 34 and 35. The Board considers the culture of the Manager and other service providers through regular reporting and by receiving regular presentations from these stakeholders. The Board has been advised that the Manager fosters and maintains an environment that values the unique talents and contributions of individuals, and strives to cultivate and practise inclusiveness for the long-term success of the business and for the benefit of its own employees and shareholders.

The Board also seeks to control the Company’s costs, thereby enhancing performance and returns for the Company’s shareholders (see Ongoing charge on page 16 and Other administrative expenses (see Note 6 on page 59).

Directors are required to consider the impact on the community and environment. The Board further describes the Company’s and Manager’s approach to environmental, social and governance matters on pages 25 to 27.

Board diversity policy

It is the Company’s aim to have an appropriate level of diversity in the boardroom. The current Directors are broad in their experience and skills, bringing knowledge of investment markets, business, financial services and stakeholder expertise to discussions on the Company’s business. The Board recognises that having a diverse and inclusive culture is essential to its long-term success. The Board discusses matters in such a way as to facilitate a culture of inclusivity among Board members and encourages active contributions from all Directors. The Directors regularly consider the leadership needs and specific skills required to achieve the Company’s Investment Objective. The Nominations Committee considers diversity when making recommendations for appointments to the Board, taking into account gender, social and ethnic backgrounds, cognitive and personal strengths, and experience. The Board’s prime responsibility, however, is the strength of the Board and its overriding aim in making any new appointments is to select the best candidate based on objective criteria and merit. The Board uses search firms that access talent from wide and diverse pools and whose values and approach in identifying and proposing suitable candidates is aligned with the Board’s aims.

The FCA’s Listing Rules require companies, with accounting periods starting on or after 1 April 2022, to report on whether they have met the following targets on board diversity: that at least 40% of the individuals on the board are women; at least one of the senior positions on the board is held by a woman; and that at least one individual on the board is from a minority ethnic background.

At 31 July 2023, two out of the five Directors (40%) are women. As an investment company with a Board of only non-Executive Directors the Company has no employees and therefore does not have senior executive positions, such as a chief executive officer or chief financial officer. Accordingly, there are no disclosures about executive management positions to be included.

None of the five Directors, as at 31 July 2023, were from a minority ethnic background however, two Directors were not born in the UK. As described above, the Board’s prime responsibility is the strength of the Board and its overriding aim in making any new appointments is to select the best candidate based on objective criteria and merit, which it did at the time the current Directors were selected.

The following tables show the breakdown of the Board in terms of gender and ethnic background:

Gender diversity	Number of Directors	Percentage of the Board	Number of senior positions on the Board
Men	3	60	n/a*
Women	2	40	n/a*
Ethnic diversity
White British or other White (including minority white groups)	5	100	n/a*

*This column is not applicable as the Company is externally managed and does not have executive management functions, specifically the roles of CEO and CFO. The Board considers that chairing the Board, its permanent committees and the role of senior independent director are all senior positions in an investment company context. Accordingly, the Chairman of the Board, the Nomination and Management Engagement Committees, and the Chairman of the Audit and Risk Committee are both women. A Senior Independent Director will be appointed from the conclusion of the 2023 AGM, the Director being appointed to this position is a man. These positions are currently held by individuals who consider themselves ‘White British or Other White (including minority white groups)’

The information in the tables was provided by individual Directors in response to a request from the Company.

There have been no changes to the Board or the roles of the Directors between 31 July 2023 and the date of publication of this report. Subject to his election by shareholders, Stephen White will become Senior Independent Director at the conclusion of the AGM in November 2023.

As the Manager is considered by the Board to be the Company’s most significant third party service provider, the Board takes a keen interest in the diversity initiatives in place at its service providers and in particular, supports and encourages the Manager’s diversity training and initiatives to improve any imbalances. These include Janus Henderson’s gender and ethnicity pay gap analysis, returnship, trainee, apprenticeship and internship programmes, such as INROADS, Girls Who Invest, Investment 2020 and #100 Black Interns. The Board monitors the culture at Janus Henderson and appreciates that the Manager fosters and maintains an environment that values the unique talents and contributions of individuals, and strives to cultivate and practise inclusiveness for the long-term success of the business and for the benefit of its employees, investors and shareholders.

Managing our risks

The Board, with the assistance of the Manager, has carried out a robust assessment of the principal risks and uncertainties facing the Company, including those that would threaten its business model, future performance, solvency and liquidity.

With the assistance of the Manager, the Board has drawn up a risk register facing the Company and has put in place a schedule of investment limits and restrictions, appropriate to the Company’s Investment Objective and Policy, in order to mitigate these risks as far as practicable. The Board monitors the Manager, other suppliers and the internal and external environments in which the Company operates to identify new and emerging risks. The Board’s policy on risk management has not materially changed from last year. The principal risks which have been identified and the steps taken by the Board to mitigate these are as follows:

Risk	Mitigation
Investment activity and performance
An inappropriate investment strategy (for example, in terms of stock or sector attribution or the level of gearing) may result in underperformance against the Company’s benchmark index and the companies in its peer group.	The Board monitors investment performance at each Board meeting and regularly reviews the extent of its borrowings. The Board receives monthly updates from the Fund Manager.
Portfolio and market
Although the Company invests almost entirely in securities that are quoted on recognised markets, share prices may move rapidly. The companies in which investments are made may operate unsuccessfully, or fail entirely. Significant economic, political or environmental changes in Europe and globally may impact investment returns. A fall in the market value of the Company’s portfolio would have an adverse effect on shareholders’ funds.	The Board reviews the portfolio at each meeting, regularly considers relevant political, economic and environmental changes and mitigates risk through diversification of investments in the portfolio.
Regulatory
A breach of Section 1158 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the FCA’s Listing Rules could result in suspension of the Company’s shares, while a breach of the Companies Act 2006 could lead to criminal proceedings, or financial or reputational damage.	The Manager is contracted to provide investment, company secretarial, administration and accounting services through qualified professionals. The Board receives internal controls reports produced by Janus Henderson on a quarterly basis, which confirm regulatory compliance.
Operational and cyber
Disruption to, or failure of, the Manager’s accounting, dealing or payment systems or the Custodian’s records could prevent the accurate reporting and monitoring of the Company’s financial position. The Company is also exposed to the operational risk that one or more of its service providers may not provide the required level of service. The Company may also be exposed to the risk of cyber attack on its service providers.	The Board monitors the services provided by the Manager and its other suppliers and receives reports on the key elements in place to provide effective internal control. During the year the Board received reports on the Manager’s approach to information security and cyber attack defence. The Board considers the loss of the Fund Manager as a risk but this is mitigated by the experience of the Equities team at Janus Henderson.
ESG The Company is an Article 8 company under SFDR. Decisions on ESG matters can be subjective and criteria may change as knowledge, technology and science evolves. There is a risk that an investment, assessed as appropriate at a point in time, subsequently does not meet ESG criteria, and exposes the Company to reputational risk.	For those companies with a MSCI Laggard rating, the Board requires the Manager to formally explain the rationale for the potential improvement of the MSCI risk rating to a minimum of ‘medium’ within three years. See pages 25 and 26 for more detail. The Company’s ESG criteria are considered to be sufficiently clear and measurable. These criteria and the Company’s adherence to them are monitored and reviewed on a regular basis. Should the Board or the Manager consider it appropriate to review or alter the criteria, this would be considered on a case by case basis against known factors prevailing at the time.

Details of how the Board monitors the services provided by Janus Henderson and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal controls section of the Corporate Governance report on page 34. Further details of the Company’s exposure to market risk (including market price risk, currency risk and interest rate risk), liquidity risk and credit and counterparty risk and how they are managed are contained in Note 15 on pages 63 to 68.

Viability statement and going concern

The Company is a long-term investor. The Board believes it is appropriate to assess the Company’s viability over a five year period in recognition of the Company’s long-term horizon and what the Board believes to be investors’ horizons, taking account of the Company’s current position and the potential impact of the principal risks and uncertainties as documented in this Strategic Report.

The Directors do not expect there to be any significant change in the current principal risks and adequacy of the mitigating controls in place. In addition, the Directors do not envisage any change in strategy or objectives or any events that would prevent the Company from continuing to operate over that period, as the Company’s assets are liquid, its commitments are limited and the Company intends to continue to operate as an investment trust. In coming to this conclusion, the Board has considered the potential impact of the principal risks and uncertainties facing the Company, in particular the impact of the rise in inflation, COVID-19, the risks arising from the wider ramifications of the conflict between Russia and Ukraine, investment strategy and performance against the benchmark (whether from stock or sector attribution or the level of gearing) and market risk, materialising in severe but plausible scenarios, and the effectiveness of any mitigating controls in place.

The Directors took into account the liquidity of the portfolio and the borrowings in place when considering the viability of the Company over the next five years and its ability to meet liabilities as they fall due. This included consideration of the duration of the Company’s borrowing facilities and how a breach of any covenants could impact on the Company’s net asset value and share price.

Based on this assessment, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five year period.

The Directors consider it appropriate to adopt the going concern basis of accounting in preparing the Financial Statements (see page 56 for further details).

Dividend approach

The Company’s dividend approach is to broadly pay out the level of actual income received. This approach is consistent with the Company’s focus on capital growth.

See the Chairman’s statement on page 4 for more detail in relation to the dividend for the year ended 31 July 2023.

Borrowings

During the year under review, the Company had in place an unsecured loan facility of £25 million (2022: £25 million) which allowed it to borrow as and when appropriate. The maximum amount drawn down in the year under review was £17.7 million (2022: £12.8 million), with borrowing costs for the year totalling £217,000 (2022: £84,000). £8.6 million of the facility was in use at the year end (2022: £12.6 million). Actual gearing at 31 July 2023 was 4.6% (2022: 2.5%) of NAV. Since the year end the Company has put in place an unsecured loan facility of €30 million to replace the previous facility. The Board has delegated responsibility for day to day gearing levels to the Fund Manager. The Fund Manager expects to maintain some level of gearing in most conditions and the normal level of gearing is expected to be between 2% and 6% of NAV, but at times it may be above or below these levels. The Fund Manager does not use gearing in an attempt to time prospective market moves. Instead, the Company’s gearing will increase when the Fund Manager sees attractive, stock specific, opportunities to deploy capital and will reduce gearing when the Fund Manager is a net seller of existing positions, again for stock specific reasons.

Our approach to ESG matters

Environmental, Social and Governance (“ESG”) Policy

Investing sustainably in Europe

The Board believes that sustainable business practices and long-term investment returns are inextricably linked. When analysing a business model, sustainability has always been a key part of the Company’s investment approach and the Board works closely with the Manager to ensure that relevant considerations are incorporated as part of the investment process. The Company seeks to promote ESG characteristics, including climate change mitigation and health & wellbeing.

As set out in the Investment Policy, the Company does not invest in companies that derive more than 5% of their revenue from any of the following activities: shale energy extraction, palm oil, arctic oil and gas drilling or exploration, tobacco, or the adult entertainment sector (31 July 2023: 0% held; 2022: 0% held).

The Company does not invest more than 5% of the portfolio in companies which are classed as ESG Laggards (31 July 2023: 1.2% held; 2022: 0% held).

The Company excludes the bottom 5% of companies in the index when ranked by carbon intensity where the Company believes that the data used to apply the exclusions is reasonably sufficient and accurate (31 July 2023: 0% held; 2022: 0% held).

At least 5% of the portfolio is invested in companies that are aligned with the UN Sustainable Development Goals of “Good Health & Wellbeing” (31 July 2023: 7.5% held; 2022: 5.6% held).

If an existing investment becomes ineligible based on exclusionary screens, it will be divested within 90 days.

The Manager’s ESG Investment Policy includes baseline exclusions which also apply to the Company. The baseline exclusions are current manufacture of or a minority shareholding of 20% in a manufacturer of: cluster munitions; anti-personnel mines; chemical weapons; and biological weapons.

The Company only invests in companies which comply with the UN Global Compact principles (a voluntary framework encouraging businesses worldwide to adopt sustainable and socially responsible policies).

The exclusions and/or limits currently set on investments in sectors and companies are those that the Board, as advised by the Manager, are consistent with the environmental and social characteristics promoted by the Company. The Board believes that adopting this approach in the Company’s Investment Policy broadens the appeal of the Company to certain investors. The Investment Policy restricts the Company from making such investments even if the Manager were to identify attractive investment opportunities. The Manager believes that these restrictions do not detract from the ability to achieve a superior total return for shareholders.

What does sustainability mean to us?

For the Company, a sustainable company is one whose management thinks, acts and allocates capital in a way that maximises the long-term growth in net worth in a way that benefits its wider stakeholders. To be sustainable, a company’s management must consider the long-term implications of how its company impacts the environment, the societies affected by its business activities and other stakeholders. While this is a straightforward concept, implementing it requires both analysis and judgement, and there can be data challenges.

Integration into the investment process

The investment approach of the Manager is focused on finding high return businesses (‘Compounders’) or companies whose return profile should materially improve over time (‘Improvers’). By focusing on return on capital and by having a long-term time horizon, naturally, the Manager is keenly focused on whether a company is demonstrating sustainable business practices.

For each company that the Company invests or considers investing in, the Manager constructs a model and compiles an Investment Thesis which explains why it finds the company attractive. The Investment Thesis is focused on the same three areas for every company, irrespective of sector. Based on the model and the Investment Thesis for the company, the Manager allocates a score for each of the three topics below. Weighting these scores according to the stated percentages produces a single ‘Ranking Framework score’ for each potential investment. This Ranking Framework score frames the debate over the ‘competition for capital’ within the portfolio.

A score for ‘Sustainability considerations’ accounts directly for half of the ‘Quality’ score and therefore has a meaningful impact on a company’s Ranking Framework score. The Manager uses MSCI analysis to construct the score for ‘Sustainability considerations’.

As mentioned above the Board and the Manager have determined that companies classed as Laggards by MSCI will

Ranking Framework

Quality		Valuation		Momentum
Fundamental attractiveness				Timelines

Our approach to ESG matters (continued)

comprise a maximum of 5% of the portfolio by Net Asset Value. This imposes a minimum ESG threshold across the portfolio as a whole, with the effect that companies that might otherwise be considered for investment could be excluded for ESG reasons alone.

The Board and Manager believe that, in addition to the inherent bias towards sustainability, this approach provides a simple, third-party verified methodology that helps us to ensure that consideration of sustainability remains at the very heart of the process.

Why hold any companies with a below average ESG score?

Subject to the 5% limit set out above, the Company may consider investing in companies which may not score well in the short term but appear credibly to be travelling in the right direction. Indeed, for some companies categorised by the Manager as “Improvers”, the reason for expecting an improvement in their return on capital is because of the expected improvement in their sustainability characteristics. For those companies classed as ESG Laggards by MSCI, the Board requires the Manager to formally explain the rationale for the potential improvement of the MSCI risk rating to a minimum of ‘medium’ within three years. The Company currently invests in one company classed as a Laggard, Allfunds. As at 31 July 2023, Allfunds was 1.2% of the portfolio. Progress is reviewed on a regular basis for all such companies in the portfolio; in the event that the expected progress does not materialise, the Board can require the position to be divested. We believe that this process minimises the risk of holding companies which fail to deliver on ESG promises and expectations.

This overall approach should embed a strong bias towards companies that score well on ESG metrics but also enable the Company to benefit from an exposure to companies with an improving ESG profile which meet our other investment criteria.

Sustainable Financial Disclosure Regulation (“SFDR”)

As the Company is marketed in the EU (Ireland), it is indirectly in scope of the SFDR and converted to Article 8 of SFDR (Light Green) with effect from 1 January 2022 to support its ESG policy further. By adopting the restrictions set out in the Investment Policy there has been no material change in the investment process or strategy.

ESG is a rapidly evolving area subject to regulatory change, the Investment Policy and/or the ESG policies of the Company may be subject to change in the future. Any material changes to the Investment Policy would require shareholder approval.

The Company does not have sustainable investment as its objective. Currently, the Company does not actively seek to invest in activities aligned with the Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment (“EU Taxonomy”).

Reporting under SFDR

Pursuant to Article 11 (Transparency of the promotion of environmental or social characteristics and of sustainable investments in periodic reports) of the EU Sustainable Finance Disclosure Regulation (“SFDR”) (Regulation (EU) 2019/2088), the Manager is required to provide a description of the extent to which environmental or social characteristics have been met with reference to the Company providing disclosures pursuant to Article 8(1) of SFDR from 1 January 2022. Please see pages 76 to 81 for the Company’s Sustainability Related Disclosures for the year ended 31 July 2023.

Defining ESG

l Environmental factors include climate change, energy efficiency, resource depletion and water and waste management.

l Social factors include employee and community relations, diversity, quality of life, enhancements in knowledge and advances in supportive technology for improved sustainability.

l Governance factors include mitigating risks such as bribery and corruption, questioning board diversity, executive pay, accounting standards and shareholder rights, and positively influencing corporate behaviour.

Climate change/the environment

As an investment company, the Company’s own direct environmental impact is minimal. The Company has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013 or the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2019. The Fund Manager engages with investee companies on environmental matters where they arise. The Company’s indirect impact occurs through the investments it makes, and the Fund Manager monitors the carbon footprint of the portfolio as a measure of its carbon intensity.

Janus Henderson recognises the importance of managing its operational activities in a sustainable way and minimising any adverse impact on the environment. In 2021, Janus Henderson reached their 3-year target to reduce their carbon footprint by 15% per full-time employee from 2018 levels. In 2022, using guidance from the Science Based Target Initiative, Janus Henderson set ambitious new five-year reduction targets:

l Reduction target of 29.4% in Scope 1 (fuel) and Scope 2 (electricity) emissions;

l Reduction target of 17.5% in Scope 3 (business travel, freight, paper, water, waste, etc.) emissions; and

l Reduction target of 17.5% on water and waste consumption by full time employees.

In addition to this, Janus Henderson has maintained a CarbonNeutral® certification since 2007 and offsets all its operational Scope 1, Scope 2 and Scope 3 operational emissions each year. Through this process, Janus Henderson has invested in a variety of offset projects around the world, delivering financial support to essential renewable energy, forestry and resource conservation projects that support reductions in greenhouse gas emissions. All projects Janus Henderson supports have been classified as `additional’ by an independent third party, meaning that they would not happen without the sale of carbon credits. Janus Henderson discloses its carbon emissions annually through regulatory and voluntary reporting frameworks, including SECR and CDP, as well as in its 2022 Annual Report and in its 2022 Impact Report.

Company engagement

Company engagement is an integral part of the investment approach. The European Equities Team, of which the Fund Manager is a member, conducts in excess of 450 meetings per year and will engage with management on a wide range of issues including those relating to ESG/sustainability. Meeting notes are circulated and debated both amongst the European Equities Team and the wider investment teams at Janus Henderson.

The Fund Manager also collaborates closely with Janus Henderson’s in-house Responsible Investment and Governance (“RI&G”) team, as a specialist resource on ESG issues. The RI&G team assists the investment team in identifying major ESG issues, highlighting potential engagement topics and collaborating on ESG engagement.

Voting and the Stewardship Code

The Board believes that voting at general meetings is an important aspect of corporate stewardship and a means of signalling shareholder views on board policy, practices and performance. The Board has chosen to delegate responsibility to the Manager for voting the rights attached to the shares held in the Company’s portfolio, and the Manager actively votes at shareholder meetings and engages with companies as part of the voting process.

Voting decisions are guided by the best interests of the investee companies’ shareholders and made in consultation with the Fund Manager, who has an in-depth understanding of the respective company’s operations. Voting decisions are taken in keeping with the provisions of the Manager’s ESG Investment Policy which set out the Manager’s approach to corporate governance and compliance with the Stewardship Code and are publicly available on the Manager’s website at www.janushenderson.com. To retain oversight of the process, the Directors receive annual reporting on how the Manager has voted the shares held in the Company’s portfolio, and they review the ESG Investment Policy at least annually.

During the year to 31 July 2023, the Fund Manager met directors of various investee companies to discuss corporate governance issues and helped to shape their policies on such matters. Engagement with management and non-executives of companies held by the Company took place covering a wide range of issues. The issues engaged upon included energy transition and environmental policies, remuneration, board composition and capital allocation.

In the year to 31 July 2023, the Company voted with management on the majority of occasions (687 resolutions) but voted against management on 71 resolutions.

Business ethics

As the Company’s operations are delegated to third-party service providers, the Board seeks assurances, at least annually, from its suppliers that they comply with the provisions of the UK Modern Slavery Act 2015 and maintain adequate safeguards in keeping with the provisions of the Bribery Act 2010, Criminal Finances Act 2017 and sanctions element of the Economic Crime (Transparency and Enforcement) Act 2022. The Company has received assurances from its main suppliers that they maintain a zero-tolerance policy towards the provision of illegal services. On behalf of the Board

Nicola Ralston

Chairman

27 September 2023

Governance

The Governance section includes more information on the following topics:

l Board of Directors – who the Directors are and their experience

l Corporate governance report – how the Company has complied with its regulatory and governance obligations

during the year

l Audit and Risk Committee report

– how the Committee has met its

responsibilities during the year

l Directors’ remuneration report – sets out the Company’s remuneration policy and how much Directors have

been paid during the year

l Directors’ report – provides further regulatory disclosures including detail relating to the Company’s share

capital and the AGM

l Statement of Directors’ responsibilities

Board of Directors

The Directors appointed to the Board at the date of this Annual Report are:

Nicola Ralston

Position: Chairman of the Board

Date of appointment: 1 September 2013

(Chairman 26 March 2014)

Background: Nicola has over 40 years’ investment experience and is a director and co-founder of PiRho Investment Consulting, which focuses on bespoke investment advice to a wide range of institutional funds. She previously spent over 20 years in fund management at Schroders and was formerly head of global investment consulting at Hewitt (now Aon). Nicola is a director of Centrica Combined Common Investment Fund Limited, a member of King Edward VI Foundation Birmingham’s investment committee and a trustee of the Institute of Historical Research Trust. She was chair of the investment committee of the British Heart Foundation, a governor of the CFA Institute and a director of The Edinburgh Investment Trust plc.

Stephen King

Position: Director

Date of appointment: 1 December 2019

Background: Having been HSBC chief economist for 17 years until 2015, Stephen is currently senior economic adviser to HSBC on a part-time basis. Stephen started his career as an economist for the Treasury and became private secretary to the chief economic adviser. He was specialist advisor to the House of Commons’ Treasury Committee between 2015 and 2017. He is a fellow of the Society of Professional Economists and sits on the management council of the National Institute of Economic & Social Research. Stephen has written four books “Losing Control: The Emerging Threats to Western Prosperity” (2010), “When the Money Runs Out: The End of Western Affluence” (2013), “Grave New World: The End of Globalization, the Return of History” (2017) and “We need to talk about inflation” (2023).

Rutger Koopmans

Position: Director

Date of appointment: 18 May 2016

Background: Rutger is a senior finance professional. He started his career at MeesPierson NV (formerly Bank Mees & Hope NV), before moving to ING, where he served as a managing director until 2008. Since then, he has been running an independent strategic advisory practice and he is a director at PIT Self-Placement BV. Rutger is a director of Vollenhoven Olie BV and is chairman of Voedselbank Amsterdam (the Amsterdam Food Bank) and Pluryn (specialised youth care and specialised health care for youth and adults with complicated needs). These entities are not publicly listed. Rutger is also the author of “Your Life Your Rules, taking charge of your working life”.

Stephen White

Position: Director

Stephen White will be appointed as Senior Independent Director with effect from the conclusion of the AGM in November 2023

Date of appointment: 1 December 2022

Background: Stephen is a former investment manager, most notably as head of European equities at F&C Asset Management for twenty years. He was also manager of the former F&C Eurotrust plc and deputy manager of the F&C Investment Trust plc. He was head of European and US equities at British Steel Pension Fund and was formerly a director of JPMorgan European Discovery Trust plc and Global Special Opportunities Trust plc.

Stephen is chairman of Brown Advisory US Smaller Companies plc, a director of Polar Capital Technology Trust plc and audit committee chairman of BlackRock Frontiers Investment Trust plc.

Ekaterina (Katya) Thomson

Position: Chairman of the Audit and Risk Committee

Date of appointment: 17 May 2017 (Chairman of the Audit and Risk Committee 15 November 2017)

Background: Katya is a corporate finance, strategy and business development professional with over 25 years of experience with UK and European blue chip companies. She is a non-executive director and audit committee chairman of Allianz Technology Trust plc, MIGO Opportunities Trust plc and AVI Japan Opportunity Trust plc. Katya is a member of the Institute of Chartered Accountants in England and Wales.

All Directors are non-executive and independent of Janus Henderson. All are members of the Audit and Risk Committee, chaired by Katya Thomson, and the Insider Committee, Management Engagement Committee and Nominations Committee, chaired by Nicola Ralston.

Corporate governance report

Corporate governance

The Board is accountable to shareholders for the governance of the Company’s day-to-day affairs and is pleased to report on the Company’s governance arrangements and how the principles of the applicable codes have been applied during the year under review.

Applicable corporate governance codes

The Company maintains a premium listing on the London Stock Exchange and is therefore required to report on how the principles of the UK Corporate Governance Code (“UK Code”) issued by the Financial Reporting Council (“FRC”) have been applied. Being an investment company, a number of the provisions of the UK Code are not applicable as the Company has no executive directors or internal operations and all day-to-day activities are outsourced to external service providers. The Board has therefore considered the principles and provisions of the AIC Code of Corporate Governance (“AIC Code”) issued in February 2019. The AIC Code addresses the principles and provisions set out in the UK Code, as well as setting out additional provisions and recommendations on issues that are of specific relevance to investment companies.

The Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the FRC, provides more relevant information to shareholders about the Company’s governance arrangements, and that by reporting against the AIC Code the Company has met its obligations in relation to the UK Code and associated disclosure requirements under paragraph 9.8.6 of the Listing Rules.

The UK Code is available on the FRC website (www.frc.org.uk). The AIC Code is available on the AIC website (www.theaic.co.uk) and includes an explanation of how the AIC Code adapts the UK Code’s principles and provisions for investment companies.

Statement of compliance

No senior independent director was in place during the year. The Chairman of the Audit and Risk Committee led the annual evaluation of the Chairman’s performance. Stephen White will be appointed as Senior Independent Director with effect from the conclusion of the AGM in November 2023. Shareholders are invited to raise any concerns with either the Chairman of the Audit and Risk Committee or with any of the other Directors, each of whom has areas of expertise on which they lead.

The Company has no chief executive or other executive directors and has therefore not reported further in respect of these provisions. In addition, the Company does not have any internal operations and therefore does not maintain an internal audit function. However, the Audit and Risk Committee considers the need for such a function at least annually (see page 39 for further information).

As the Company has no employees and has a small Board of solely non-executive Directors, the Board has not established a separate Remuneration Committee. The remuneration of Directors is dealt with by the Board as a whole.

The Company has complied with all other principles and provisions of the AIC Code.

Directors

The Board has set, and each Director has agreed to adopt, generic terms and conditions of appointment of non-executive Directors of the Company.

Any shareholder wishing to inspect these documents can do so by making a request to the Corporate Secretary at itsecretariat@janushenderson.com.

Appointment and retirement

The Board may appoint Directors to the Board without shareholder approval. Any Director so appointed must stand for election by the shareholders at the next AGM in accordance with the Articles.

In accordance with the AIC Code, all Directors will stand for re-election annually.

The contribution and performance of the Directors seeking re-election was reviewed by the Nominations Committee at its meeting in July 2023, which recommended their continuing appointment to the Board.

Under the Articles, shareholders may remove a Director before the end of his or her term by passing an ordinary resolution at a meeting. An ordinary resolution is passed if more than 50% of the votes cast, in person or by proxy, are in favour of the resolution.

Tenure

Whilst there is no formal tenure policy for Directors (other than the Chairman), it is not anticipated that any of the Directors would normally serve in excess of nine years. In exceptional circumstances, which would be fully explained to shareholders at the time, a one or two year extension might be necessary.

Following the conclusion of this year’s AGM, no Director, with the exception of the Chairman (see next page), will have served for more than nine years.

Chairman’s tenure policy

Given the entirely non-executive nature of the Board and as the Chairman may not be appointed as such at the time of their initial appointment as a Director, the Chairman’s tenure may be longer than nine years where this is considered by the Board to be in the best interests of the Company. The Board’s policy is that when a one or two-year extension is necessary a full explanation would be provided. Nicola Ralston reached her nine year anniversary on 1 September 2022. The Board is in the process of finding a suitable successor, as set out in the Chairman’s Statement on page 4 and has consequently asked Nicola Ralston to continue as Chairman until the AGM in November 2024 at the latest. As with all Directors, the continuing appointment of the Chairman is subject to a satisfactory performance evaluation, annual re-election by shareholders and may be further subject to the particular circumstances of the Company at the time they intend to retire from the Board. The Directors are cognisant of the benefits of Board diversity and the regular refreshment of the Board’s membership and seek to refresh the Board while retaining a balance of knowledge of the Company, diversity and the relationship with the Fund Manager.

Directors’ independence

All Directors are non-executive and have a range of other interests. At the Nominations Committee meeting in July 2023, the Directors reviewed their independence and confirmed that all Directors remain wholly independent of the Manager. The Board has determined that all Directors are independent in character and judgement and that their individual skills, broad business experience and high degree of knowledge and understanding of the Company are of great benefit to shareholders.

There were no contracts in force during or at the end of the year in which a Director of the Company is or was materially interested and which is or was significant in relation to the Company’s business. No Director has a contract of service with the Company and there are no agreements between the Company and its Directors concerning compensation for loss of office.

Directors’ conflicts of interest

The Company’s Articles permit the Board to consider and, if it sees fit, to authorise situations where a Director has an interest that conflicts, or may possibly conflict, with the interests of the Company (“situational conflicts”). The Board has a formal system in place for Directors to declare situational conflicts for consideration by those Directors who have no interest in the matter. In deciding whether to authorise the situational conflict, the non-conflicted Directors must act honestly and in good faith in the best interests of the Company and they may impose limits or conditions when giving the authorisation, or subsequently, if they think this is appropriate. Any situational conflicts considered, and any authorisations given, are recorded in the relevant meetings’ minutes and the register of directors interests. The prescribed procedures have been followed in deciding whether, and on what terms, to authorise situational conflicts, and the Board believes that the system it has in place for reporting and considering situational conflicts, continues to operate effectively. The Chairman has had no relationships that may have created a conflict between her interests and those of the Company’s shareholders.

Directors’ professional development

When a new Director is appointed he or she attends an induction seminar which is held by the Manager at the request of the Chairman. Directors are also provided on a regular basis with key information on the Company’s policies, regulatory and statutory requirements and internal controls. Changes affecting Directors’ responsibilities are advised to the Board as they arise. Directors are also able to attend external training facilities and industry seminars at the expense of the Company and each Director’s individual training requirements are considered as part of the annual performance evaluation.

Directors’ insurance and indemnification

Directors’ and officers’ liability insurance cover was in place throughout the financial year and remains in place at the date of this report. The Company’s Articles provide, subject to the provisions of UK legislation, an indemnity for Directors in respect of costs which they may incur relating to the defence of any proceedings brought against them arising from their positions as Directors, in which they are acquitted or judgement is given in their favour by the Court. The Company has granted such an indemnity to Directors to the extent permitted by law in respect of liabilities that may attach to them in their capacity as Directors of the Company.

Corporate governance report (continued)

The Board’s Committees

The Board has three principal Committees: the Audit and Risk Committee, the Management Engagement Committee and the Nominations Committee.

Board of Directors comprises five independent non-executive directors Chairman: Nicola Ralston

Audit and Risk Committee Chairman: Katya Thomson Purpose: Ensure the integrity of the financial reporting, evaluate the effectiveness of the systems of internal control and risk management and oversee the relationship with the external auditors

Management Engagement Committee Chairman: Nicola Ralston Purpose: Ensure the performance of third-party service providers meet expectations and their terms of engagement remain appropriate

Nominations Committee Chairman: Nicola Ralston Purpose: Ensure the Board has a balance of skills, experience and diversity, oversee performance evaluations of the Board and its committees, has a formal approach to the appointment of directors and maintains an effective framework for succession planning

Third-party service providers appointed by the Board

Janus Henderson Fund Manager: Jamie Ross

Investment Management, Sales, Marketing, Corporate Secretary

Alternative Investment Fund Manager:

Janus Henderson Fund Management UK Limited Janus Henderson has contracted with BNP Paribas to provide accounting and administration services

HSBC Bank plc Custodian and depositary

J.P. Morgan Cazenove Corporate broker

Computershare Investor Services plc Registrar

The Board has also constituted an Insider Committee which meets when required to assist the Board in discharging its responsibilities under the Market Abuse Regulations and the FCA’s Listing Rules and Disclosure Guidance and Transparency Rules. All Directors are members of the Insider Committee, which is chaired by the Chairman of the Board.

The terms of reference for each Committee are kept under regular review by the Board and are available on the Company’s website www.hendersoneurotrust.com. The reports on the activities of each of the Board’s principal Committees are set out on pages 35 to 40.

Corporate governance report (continued)

Board of Directors

Composition

The Board comprises five non-executive Directors. Their biographies are included on page 29. Those details demonstrate the breadth of investment, commercial and professional experience relevant to their position as Directors. With the exception of Stephen White, who was appointed to the Board on 1 December 2022, the current Directors served throughout the year. Rutger Koopmans is resident in the Netherlands. The other members of the Board are resident in the UK.

Role of the Board

The Board is collectively responsible for the success of the Company. Its role is to provide leadership within a framework of prudent and effective controls that enables risk to be assessed and managed. The Board is responsible for setting the Company’s standards and values and for ensuring that its obligations to its shareholders and others are understood and met. The Board sets the Company’s strategic aims (subject to the Company’s Articles, and to such approval of the shareholders in general meeting as may be required from time to time) and ensures that the necessary resources are in place to enable the Company’s objectives to be met.

The Board meets formally at least six times a year, with additional Board or Committee meetings arranged when required. The Directors have regular contact with the Fund Manager and representatives of the Corporate Secretary between formal meetings.

The Chairman is responsible for leading the Board and for ensuring that it continues to deal effectively with all the aspects of its role.

The Board has a formal schedule of matters specifically reserved for its decision which include: strategy and management; structure and capital; financial reporting and controls; internal controls and risk management; contracts; communications and public relations; Board membership and other appointments; delegation of authority; remuneration; corporate governance; and policies. The schedule of matters reserved for the Board is available on the website www.hendersoneurotrust.com.

The Board is responsible for the approval of annual and half-year results and other public documents and for ensuring that such documents provide a fair, balanced and understandable assessment of the Company’s position and prospects.

At each meeting the Directors follow a formal agenda, which includes a review of the Company’s NAV, share price, discount, financial position, gearing levels, peer group performance, investment performance, asset allocation and transactions and any other relevant business matters to ensure that control is maintained over the affairs of the Company. The Board monitors compliance with the Company’s objective and is responsible for setting asset allocation, investment and gearing limits within which the Manager has discretion to act, and regularly reviews investment strategy. The Board receives regular reports from the Manager on marketing and investor relations.

The Board has adopted a procedure for Directors to take independent professional advice in the furtherance of their duties at the expense of the Company. To enable them to discharge their responsibilities, all Directors have full and timely access to relevant information.

Board attendance

The table below sets out the number of scheduled Board and Committee meetings held during the year under review and the number of meetings attended by each Director. All Directors, except for Stephen White who was appointed on 1 December 2022, attended the AGM in November 2022.

	Board	ARC	MEC	NC
Number of meetings	6	3	1	1
Nicola Ralston	6/6	3/3	1/1	1/1
Stephen King	6/6	3/3	1/1	1/1
Rutger Koopmans	6/6	3/3	1/1	1/1
Katya Thomson	6/6	3/3	1/1	1/1
Stephen White1	4/4	2/2	1/1	1/1

ARC: Audit and Risk Committee

MEC: Management Engagement Committee

NC: Nominations Committee

1 Appointed 1 December 2022

The Insider Committee did not meet during the year.

The Directors and Committees of the Board also met during the year to undertake other business as considered necessary.

Performance evaluation

The performance of the Company is considered in detail at each Board meeting. In the year under review the Nominations Committee conducted a review of the Board’s performance, together with that of its Committees, the Chairman and each individual Director. This was conducted by way of evaluation questionnaires. The results of the questionnaires were supplied to the Chairman who collated the results and provided a summary to the Board. The Chairman of the Audit and Risk Committee collated the feedback on the Chairman and provided a summary in respect of the Chairman’s evaluation. It was concluded that the performance of the Board, its Committees, the Chairman and each individual Director was satisfactory and the Board has a good balance of skills and experience. In particular, it is considered that each Director makes a significant contribution to the affairs of the Company, the Chairman continues to display effective leadership and Directors seeking re-election at the Company’s AGM merit re-election by shareholders. The Board had appointed an external evaluator, Stogdale St James, to complete the evaluation for the year ended 31 July 2022. The external evaluation had recommended that, rather than moving to five directors only during the period when a new director joins the Board, there was a good case for a five-person board to be the norm for the Company.

The Company adopted the recommendation and appointed Stephen White with effect from 1 December 2022 to give the Board an even wider range of skills and expertise.

Audit, risk and internal control

The Board has established an Audit and Risk Committee, whose report is on pages 37 to 40. The report explains why the Company does not have its own internal audit function, how the independence and effectiveness of the external auditor is assessed, and how the Board satisfies itself on the integrity of the financial statements. The report covers the process by which the Board satisfied itself that the Annual Report presents a fair, balanced and understandable assessment of the Company’s position and prospects. It also describes risk management procedures, as well as how the Board oversees the internal control framework and determines the nature and extent of the principal risks the Company is willing to take in order to achieve its long-term strategic objectives.

Relationship with Janus Henderson

The Board has contractually delegated to external third parties the management of the investment portfolio, the custodial services (which include the safeguarding of the assets delegated through the appointment of the Depositary as explained on page 71), the day-to-day accounting and cash management, company secretarial and administration requirements and registration services. Each of these contracts was entered into after full and proper consideration by the Board of the quality and cost of the services offered, including the control systems in operation in so far as they relate to the affairs of the Company.

The Board receives and considers regular reports from the Manager, and ad hoc reports and information are supplied to the Board as required. In addition, the Chairman is invited to attend meetings of all the chairmen of the investment trust companies managed by Janus Henderson. This provides a forum to discuss industry matters which are then reported to the Board.

The Manager takes decisions as to the purchase and sale of individual investments. The Manager also ensures that all Directors receive, in a timely manner, all relevant management, regulatory and financial information. Representatives of Janus Henderson attend Board meetings enabling the Directors to probe further on matters of concern.

The Directors have access to the advice and services of the Corporate Secretary through its appointed representative who is responsible to the Board for ensuring that Board and Committee procedures are followed and that applicable rules and regulations are complied with. The proceedings at all Board and Committee meetings are minuted, ensuring that any Director’s concerns are recorded. The Board and the Manager operate in a supportive, co-operative and open environment.

The Corporate Secretary, Janus Henderson Secretarial Services UK Limited, is a subsidiary of Janus Henderson with its own reporting lines and audited internal controls. There are processes and controls in place to ensure that there is a clear distinction between Janus Henderson Secretarial Services UK Limited and Janus Henderson, particularly when dealing with any conflicts or issues between the Company and Janus Henderson. Any correspondence from shareholders addressed to the Chairman or the Company received at Janus Henderson’s offices is forwarded to the Chairman of the Company in line with audited procedures and any correspondence is submitted to the next Board meeting.

Janus Henderson and BNP Paribas, which acts for Janus Henderson, have arrangements in place by which their staff may, in confidence, raise concerns about possible improprieties in relation to financial reporting or other matters.

Continued appointment of the Manager

The Board considers the arrangements for the provision of investment management and other services to the Company on an ongoing basis. The principal contents of the agreement with the Manager can be found on page 18.

In addition to the monitoring of investment performance at each Board meeting, the Management Engagement Committee undertakes an annual review of the Company’s investment performance over both the short and longer term, together with the quality of other services provided by the Manager including company secretarial and accounting.

Following an annual review, it is the Directors’ opinion that the continuing appointment of the Manager on the existing terms is in the interests of the Company and its shareholders as a whole.

Management Engagement Committee

The Management Engagement Committee is responsible for reviewing the management contract on a regular basis, ensuring that the terms are fair and reasonable and that its continuance, given the Company’s performance over both short and longer terms, is in the best interests of the Company and its shareholders and also for reviewing the performance and cost effectiveness of the Company’s other service providers.

Membership

All Directors are members of the Management Engagement Committee, which is chaired by the Chairman of the Board.

Meetings

The Committee meets at least annually, with additional meetings scheduled when required.

Role and responsibilities

In discharging its duties over the course of the year, the Committee considered:

l the investment performance of the Company, taking account of the benchmark and performance of competitors in the AIC peer group, the share price total return, NAV total return, dividend growth, dividend yield and discount versus the peer group;

l the quality and experience of the team involved in managing all aspects of the Company’s business;

l the fee structures of its competitors in the AIC peer group and other Janus Henderson managed investment companies;

l the key clauses of the management agreement, how the Manager had fulfilled these and whether these continued to be appropriate; and

l the performance and fees of the Company’s other third-party service providers, including the brokers, depositary, custodian, registrar, auditors, legal counsel and the Company’s accountants.

Re-appointment of the Manager

Following completion of its annual review of the Manager in July 2023, the Committee concluded that the continued appointment of the Manager remained in the best interests of the Company and its shareholders, and therefore recommended to the Board the re-appointment of Janus Henderson for a further year. More detail can be found on page 34.

Committee evaluation

The activities of the Management Engagement Committee were considered as part of the Board appraisal process.

Nominations Committee

The Nominations Committee is responsible for reviewing Board succession planning and tenure policy, the performance of the Board as a whole and the Board Committees, and the appointment of new Directors through an established formal procedure.

Membership

The Committee is chaired by the Chairman of the Board, except when the Chairman’s performance or successor is being considered. All Directors are members of the Committee; the Board believes that this is appropriate as the Board comprises only five directors, and to lose the contribution of any Director to the Committee’s deliberations would not be in the best interests of shareholders.

Meetings

The Committee meets at least annually, with additional meetings scheduled when required.

Role and responsibilities

In discharging its duties over the course of the year, the Committee considered:

l the composition of the Board and each of its Committees, taking account of the skills, experience and knowledge each Director continued to contribute to the success of the Company (see Board diversity policy on pages 21

and 22);

l the outcomes of the Board performance evaluation with a view as to whether adjustments should be made to the number of Directors or knowledge and skills represented on the Board;

l the tenure of each of the Directors, giving consideration as to whether the Board retained a sufficient balance of tenure without becoming complacent;

l the independence of the Directors, taking account of the Directors’ other commitments, in line with the guidelines established by the AIC Code;

l the time commitment of the Directors, in the context of their other business commitments and appointments, and whether this had been sufficient over the course of the year;

l succession planning for appointments to the Board,

the tenure of the current Directors and recommendations of the AIC Code in respect of the length of service

of Directors and the Chairman; and

l the performance and contribution of the Directors standing for election and re-election at the forthcoming AGM.

Following completion of its reviews, the Committee concluded that the Board continued to operate effectively. No Director is considered to be “overboarded”.

When considering succession planning and its tenure policy, the Nominations Committee bears in mind the balance of skills, knowledge, experience, gender and diversity on the Board, the achievement of the Company’s Investment Objective and compliance with the Company’s Articles and the AIC Code. Individual performance and the contribution of each Director remain a key element of the Company’s approach in making determinations on tenure. The Nominations Committee considers diversity as part of the annual performance evaluation and it is considered that there is a broad range of backgrounds, and that each Director brings different qualities to the Board and its discussions.

Given the small size of the Board, it is not considered appropriate for the Company to have set targets for gender diversity; candidates are assessed in relation to the relevant needs of the Company at the time of appointment.

The Nominations Committee will make recommendations when the recruitment of additional non-executive Directors is required. Once a decision is made to recruit additional Directors to the Board, a formal job description is drawn up. The Company may use external recruitment agencies to undertake the search for new non-executive Directors. The Board has appointed Sapphire Partners to assist with the search for a replacement Chairman. The Company has no connection to Sapphire Partners, other than the assistance provided in connection with this recruitment.

The Nominations Committee also reviews and recommends to the Board the Directors seeking election and re-election. Recommendation is not automatic and will follow a process of evaluation of each Director’s performance and consideration of the Director’s independence. The Nominations Committee also takes into account the mix of skills and experience of the current Board members. The Committee considers the time commitment of the Directors including other business commitments and appointments. Having considered the performance of individual Directors, the Committee recommended to the Board that it should support the election and re-election of the Directors at the 2023 AGM.

The Nominations Committee met in July 2023 to carry out its annual review of the Board and its Committees. The results of the performance evaluation are detailed on page 33.

Stephen White joined the Board with effect from 1 December 2022 and will seek election from shareholders at the AGM in November 2023.

Nicola Ralston reached her nine year anniversary on 1 September 2022. The search for a suitable successor has taken longer than anticipated and therefore Nicola has been asked to stay on until its completion. Consequently, Nicola has agreed that she will retire from the Board, at the latest, at the AGM in November 2024.

Committee evaluation

The activities of the Nominations Committee were considered as part of the Board appraisal process.

On behalf of the Board

Nicola Ralston

Chairman

27 September 2023

Audit and Risk Committee report

The Audit and Risk Committee is responsible for ensuring the integrity of the Company’s financial reporting, evaluating the effectiveness of the systems of internal control and risk management and overseeing the relationship with the external auditor.

Composition

The Audit and Risk Committee comprises all Directors and is chaired by Katya Thomson, who is a Chartered Accountant. The other Audit and Risk Committee members have a combination of financial, investment and other experience gained throughout their careers and the Board is satisfied that at least one of the Audit and Risk Committee members has recent and relevant financial experience. The Audit and Risk Committee as a whole is considered to have competence relevant to the sector. The biographies of the Audit and Risk Committee members are shown on page 29. All members of the Audit and Risk Committee are independent.

The Board believes that it is appropriate for the Chairman of the Board to be a member of the Audit and Risk Committee. This is because the Board comprises only five directors, and to lose the Chairman’s contribution to the Audit and Risk Committee’s deliberations would not be in the best interests of shareholders, given her experience and expertise.

The Audit and Risk Committee will monitor the situation and take into account shareholder views on the matter.

Meetings

The Audit and Risk Committee met formally three times during the year under review: in advance of the publication of both the annual and the half-year results and on one other occasion with an agenda that was focused on its broader responsibilities. The Company’s auditor is invited to attend meetings as necessary. Representatives of the Manager (including representatives of the Operational Risk, Internal Audit, Business Resilience functions, and the Chief Information Security Officer) and BNP Paribas may also be invited.

Committee evaluation

The activities of the Audit and Risk Committee were considered as part of the Board appraisal process.

Role and responsibilities

The role of the Audit and Risk Committee is to assist the Board in applying the financial reporting and internal control principles and to maintain an appropriate relationship with the auditor. The Audit and Risk Committee formally reports to the Board. The responsibilities are set out in formal terms of reference which are reviewed at least annually.

In the year under review the main duties undertaken were:

l consideration of the appropriateness of the Company’s accounting policies and of the quality and effectiveness of the accounting records and management information maintained on behalf of the Company, relying on meetings with and reports from Janus Henderson;

l a review of the half-year results and the Annual Report, including the disclosures made therein in relation to internal controls and risk management, viability, going concern and related parties and consideration of whether the report is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position and performance, business model, strategy and continued operation (including advising the Board on whether the Company is able to meet its liabilities as they fall due) in order to make recommendations to the Board. In assessing whether the report is fair, balanced and understandable, each Director reviewed the disclosures made, applying their respective knowledge and expertise. The internal controls over financial reporting were also considered, together with feedback from the Company’s auditor, the Manager and the Corporate Secretary;

l consideration of the appropriate level of dividend to be paid by the Company for recommendation to the Board;

l consideration of the internal controls in place at Janus Henderson, and the Company’s other principal third-party service providers;

l consideration of Janus Henderson’s policies in relation to information security and business resilience, meeting with representatives of Janus Henderson’s internal audit and risk departments periodically;

l consideration of the key risks, risk management systems in place and the Company’s risk assessment;

l consideration of the Company’s Bribery Act Policy and the policies and procedures in place to prevent tax evasion;

l consideration of the nature, scope and cost of the external audit and the findings therefrom;

l annual consideration of whether there is a need for an internal audit function;

l consideration of the appointment of the Auditor, the Auditor’s independence, objectivity, effectiveness, provision of any non-audit services and tenure of appointment;

l consideration of Janus Henderson’s whistleblowing policy for its staff to raise concerns about possible improprieties, including in relation to the Company, in confidence; and

l consideration of the annual confirmation from the Company’s Depositary in respect of the safe-keeping of the Company’s assets.

Annual report for the year ended 31 July 2023

In relation to the Annual Report for the year ended 31 July 2023 the following significant issues were considered by the Audit and Risk Committee:

Significant issue	How the issue was addressed
Valuation and ownership of the Company’s investments	Actively traded investments are valued using stock exchange prices provided by third-party pricing vendors. Ownership is verified by reconciliation to the Custodian’s records and the Directors receive quarterly reports from the Depositary who has responsibility for overseeing operations of the Company, including verification of ownership and valuation.
Recognition of income	Income received is accounted for in line with the Company’s accounting policy (as set out on page 57) and is reviewed by the Committee.
Compliance with Section 1158 of the Corporation Tax Act 2010	The Committee regularly considers the controls in place to ensure that the regulations for ensuring investment trust status are observed at all times, receiving supporting documentation from Janus Henderson and BNP Paribas.
Maintaining internal controls	The Committee receives regular reports on internal controls from Janus Henderson and its delegates and has access to the relevant personnel of Janus Henderson who have a responsibility for risk management and internal audit. The assurance report for one of the Company’s service providers was qualified by their service auditor. The Committee reviewed the instances giving rise to the qualification and received confirmation that the exceptions identified had no impact on the Company.

The Committee is satisfied that the Annual Report and Financial Statements for the year ended 31 July 2023, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s performance, business model and strategy.

System of internal controls

Board of Directors (five non-executive directors)

How the system of internal control operates The Board delegates contractually to service providers all the Company’s operational requirements. It maintains oversight of these providers throughout the year by receiving regular reporting on their activities. All are considered key stakeholders. The Management Engagement Committee formally evaluates the performance and service delivery of all service providers at least annually. The Audit and Risk Committee evaluates the performance of the statutory auditor on completion of each audit cycle.

Janus Henderson (Fund Manager, sales and marketing, company secretarial, financial reporting, internal controls functions, internal audit, investment accounting and administration) Reporting •         Investment performance update at each meeting •         Investment Limits and Restrictions (monthly) •         Internal Controls Report (quarterly) •         Effectiveness of control environment (annually)

HSBC Bank plc (Depositary/ Custodian) Reporting •     Depositary’s Report (quarterly) •     Presentation from the depositary and custodian (annually)

BNP Paribas (Accounting and administration services engaged by the Manager) Reporting •        Balance sheet •        Liquidity and gearing •        Income forecasts •        Portfolio valuation •        Portfolio transactions •        Portfolio attribution •        Effectiveness of control environment (annually)

J.P. Morgan Cazenove (Corporate Broker)

Computershare (Registrar)

Audit and Risk Committee report (continued)

Internal control and risk management

The Board has overall responsibility for the Company’s system of internal control and for reviewing its effectiveness. The Audit and Risk Committee supports the Board in the continuous monitoring of the internal control and risk management framework.

The Board has established an ongoing process for identifying, evaluating and managing the principal and new or emerging risks faced by the Company. The process accords with the FRC’s guidance on Risk Management, Internal Control and Related Business and Financial Reporting published in September 2014. The system was in operation throughout the period and up to the date of this report. The system is designed to meet the specific risks faced by the Company and takes account of the nature of the Company’s reliance on its service providers and their internal controls. The system therefore manages rather than eliminates the risk of failure to achieve the Company’s business objectives and provides reasonable, but not absolute, assurance against material misstatement or loss.

The key components of the internal control framework include:

l clearly defined investment criteria which specify levels of authority and exposure limits. The Board reviews reports on compliance with the criteria at each meeting;

l regular reporting which allows the Board to assess the Company’s financial position. The management accounts and forecasts are reviewed by the Board at each meeting;

l the contractual agreements with the Manager and other third-party service providers. The Board reviews performance levels and adherence to relevant provisions of the agreements on a regular basis through reports received and conducts a formal evaluation of the overall level of service provided at least annually;

l the review of controls at the Manager and other third-party service providers. The Board receives quarterly reporting from the Manager and Depositary and reviews annual assurance reports on the effectiveness of the control environments at the Company’s key service providers; and

l review of additional reporting provided by:

–       the Manager’s Operational Risk team on the control environment in operation at the Manager and their view of the control environments in place at the third-party service providers used by the Company; and

–       the Manager’s Internal Audit team on areas of operation which are relevant to the Company.

The Board has reviewed the Company’s system of internal controls for the year ended 31 July 2023. During the course of its review the Board has not identified or been advised of any failings or weaknesses relating to the Company’s portfolio that have been determined as significant.

Internal audit function

Systems are in operation to safeguard the Company’s assets and shareholders’ investments, to maintain proper accounting records and to ensure that financial information used within the business, or published, is reliable.

The Company is an investment company, has no employees and delegates all executive activities to third-party service providers, principally among them, the investment manager, Janus Henderson. The Board places reliance on the Company’s framework of internal control and the Audit and Risk Committee’s view on reporting received from specific second and third line of defence teams at the Manager.

The Manager’s Operational Risk team supports the Audit and Risk Committee in considering the independently audited reports on the effectiveness of internal controls in place at the Company’s third-party service providers. The Manager’s Internal Audit department provides regular reporting to the Board on the operations at the Manager and presents at least annually to the Audit and Risk Committee. The Board has therefore concluded that it is not necessary at the present time for the Company to have its own internal audit function.

Auditor appointment and tenure

Regulations currently in force require the Company to rotate audit firms after a period of ten years, which may be extended where audit tenders are carried out or where more than one audit firm is appointed to carry out the audit. The Committee last carried out an audit tender process in 2019 which led to the appointment of BDO LLP (“BDO”) for the statutory audit for the financial year ended 31 July 2020 and the audits since that date.

The Auditor is required to rotate partners every five years. This is the fourth year that the current audit partner has been in place.

Auditor review and independence

The Committee monitors the Auditor’s independence through the approval of a policy regulating the non-audit services that may be provided by the auditor to the Company, assessing the appropriateness of audit fees paid and by reviewing the information and assurances provided by the Auditor on their compliance with the relevant ethical standards.

BDO confirmed that all its partners and staff involved with the audit were independent of any links to the Company, and that these individuals had complied with their ethics and independence policies and procedures which are fully consistent with the FRC’s Ethical Standards.

The Audit and Risk Committee has the opportunity to discuss the audit process with the auditor without representatives of the Manager present and considers the effectiveness of the audit process.

Non-audit services policy

The Audit and Risk Committee has approved, and keeps under regular review, the policy on the provision of non-audit services by the auditor. The Audit and Risk Committee has determined that the statutory auditor will not be engaged to provide any non-audit services without the approval of the Audit and Risk Committee. The statutory auditor is not pre-approved to provide any non-audit services. The Audit and Risk Committee may approve the provision of non-audit services if they consider such services to be:

l relevant to the statutory audit work;

l more efficiently provided by the statutory audit firm than by a third party; and

l at low risk of impairing the independence, objectivity and effectiveness of the audit.

The Audit and Risk Committee will refer to the Board any engagement with a cost or potential cost greater than £10,000. All engagements for non-audit services will be determined on a case-by-case basis. In addition, the provision of any non-audit services by the auditor is not permitted to exceed 70% of the average annual statutory audit fee for the three consecutive financial periods preceding the financial period to which the cap applies.

No non-audit services have been provided by BDO since their appointment.

Effectiveness of the external audit

The Audit and Risk Committee has the opportunity to discuss the audit process with the auditor without representatives of the Manager present and considers the effectiveness of the audit process.

The Committee considers the effectiveness of the audit process after each audit. The FRC’s Audit Quality Inspection Report is supplied to the Audit and Risk Committee for information to assist with the assessment of the auditor’s effectiveness.

The Audit and Risk Committee remained satisfied with the performance of BDO for the year ended 31 July 2023.

Fees

Fees paid or payable to the auditor are detailed in Note 6 on page 59.

On behalf of the Board

Katya Thomson

Chairman of the Audit and Risk Committee

27 September 2023

Directors’ remuneration report

Annual statement

As Chairman, Nicola Ralston reports that following an annual review of fees in July 2023, Directors’ fees were increased with effect from 1 August 2023 to £43,500 for the Chairman, £36,500 for the Audit and Risk Committee Chairman and £31,000 for other Directors. The Senior Independent Director (“SID”) will receive an additional £2,000 per annum in view of their additional responsibilities. Stephen White will be appointed as SID at the conclusion of the 2023 AGM. The additional amount paid to non-UK resident Directors in lieu of these individuals claiming travel and other expenses was increased to £6,540 per annum with effect from 1 August 2023. When making a decision to increase remuneration the Directors review the fees paid to directors of other comparable investment trust companies and the Board noted the increases in the Retail Price Index, Consumer Price Index and total pay to growth ratio (in the year to the end of April 2023) which were 11.4%, 8.7% and 7.2% respectively).

The total remuneration to Directors for the year ended 31 July 2023 was £155,546. The Company’s Articles of Association currently state that the aggregate remuneration of the Directors may not exceed £200,000 per annum. The Board proposes an alteration of the aggregate remuneration of Directors to increase that amount to £250,000 per annum. With the increases in Directors fees that were effective 1 August 2023, the total remuneration to Directors for a year would be approximately £182,000, which is close to the current limit. The remuneration policy would be updated accordingly if the resolution to update the aggregate remuneration of Directors is approved by shareholders at this year’s AGM.

The Company’s remuneration policy has been in place since 2014 and was last approved by shareholders at the AGM in 2020. The policy will be put to shareholders for approval at the AGM in November 2023. Other than the proposed change to the aggregate remuneration limit (as described above), no changes to the policy are proposed.

In accordance with Section 439A of the Companies Act 2006 (“Act”), the remuneration report will be put to shareholders at the forthcoming AGM. The vote is advisory.

There have been no other major decisions on Directors’ remuneration or any other changes to the remuneration paid to each individual Director in the year under review.

Report on implementation

This report is submitted in accordance with Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended (the “Regulations”). The report also meets the relevant requirements of the Act and the Listing Rules of the FCA and describes how the Board has applied the principles relating to Directors’ remuneration.

The Board may amend the level of remuneration paid to individual Directors within the parameters of the remuneration policy. The Company’s auditor is required to report on certain information contained within this report; where information set out has been audited it is indicated as such.

All Directors are non-executive and the Company has no chief executive officer or employees; therefore some of the reporting requirements contained in the Regulations are not applicable and have not been reported on, including the requirement for a future policy table and an illustrative representation of the level of remuneration that could be received by each individual Director. It is believed that all relevant information is disclosed within this report in an appropriate format.

The Board as a whole considers the Directors’ remuneration. The Board has not appointed a remuneration committee to consider such matters. The Board has not been provided with advice or services by any person in respect of its consideration of the Directors’ remuneration (although the Directors review annually the fees paid to directors of other comparable investment trust companies).

Remuneration policy

In determining the remuneration policy, the Board takes into account all factors which it deems necessary including relevant legal and regulatory requirements, the AIC Code and whether the policy supports the Company’s long-term sustainable success.

Directors are remunerated in the form of fees, payable quarterly in arrears. In accordance with the Company’s Articles, the aggregate remuneration of the Directors may not exceed £200,000 per annum (a resolution to increase this amount to £250,000 will be proposed at this year’s AGM). Subject to the overall limit, the objective of the remuneration policy is that the fees payable to the Directors should reflect the time spent by the Board on the Company’s affairs and the responsibilities borne by the Directors, and should be sufficient to promote the long-term success of the Company and to enable candidates of a high calibre to be recruited without paying more than is necessary and having regard to the views of shareholders and other stakeholders. The Board obtains information about remuneration in other companies of comparable scale and complexity in order to avoid and manage conflicts of interest in determining remuneration levels.

Directors, including any new appointments to the Board, are paid at the same rate, apart from the Chairman of the Board, the Chairman of the Audit and Risk Committee and the Senior Independent Director who are paid a higher fee in recognition of their additional responsibilities.

The level of remuneration paid to each Director is reviewed annually, although such review will not necessarily result in any change to the rate; any feedback from shareholders would be taken into account when setting remuneration levels. From time to time the Board may approve one-off payments to Directors for specific work undertaken in addition to their regular responsibilities. Directors are authorised to claim reasonable expenses from the Company in relation to the performance of their duties. Payments of additional amounts are made to non-UK resident Directors in lieu of these individuals claiming travel and other expenses (including overnight stays where necessary) attributable to their attendance at Board, Committee and other relevant meetings. The additional amount is included in the aggregate remuneration limit as set out in the Company’s Articles.

No Director has a service contract with the Company. Directors’ appointments may be terminated at any time by written notice with no compensation payable. No Director is eligible to receive bonuses, pension benefits, share options or other benefits and no long-term incentive schemes are in place.

Performance

The graph opposite compares the mid-market price of the Company’s ordinary shares over the ten year period ended 31 July 2023 with the return from the FTSE World Europe (ex UK) Index, the Benchmark, over the same period which closely represents the Company’s own portfolio.

Directors’ remuneration (audited)

The remuneration paid to the Directors who served during the years ended 31 July 2023 and 31 July 2022 was as follows:

	Year ended 31 July 2023 Total salary and fees £	Year ended 31 July 2022 Total salary and fees £	Year ended 31 July 2023 Taxable benefits £	Year ended 31 July 2022 Taxable benefits £	Year ended 31  July 2023 Total £	Year ended 31 July 2022 Total £
Nicola Ralston1	40,000	38,000	–	–	40,000	38,000
Stephen King	28,500	27,000	–	–	28,500	27,000
Rutger Koopmans2	34,520	32,735	–	–	34,520	32,735
Katya Thomson3	33,500	32,000	–	–	33,500	32,000
Stephen White4	19,026	n/a	–	n/a	19,026	n/a
	155,546	129,735	–	–	155,546	129,735

Notes:

The table above omits other columns set out in the relevant regulations because no payments of other types such as performance related pay, vesting performance related pay and pension related benefits were made.

1     Chairman and highest paid Director

2     Paid an additional amount of £6,020 per annum as a non-UK resident director during the financial year ended 31 July 2023, see below for more detail

3     Chairman of the Audit and Risk Committee

4     Appointed on 1 December 2022

For the year ended 31 July 2023, the fees paid to Directors were: Chairman £40,000, Chairman of the Audit and Risk Committee £33,500 and Directors £28,500. Non-UK resident Directors were paid an additional amount of £6,020 per annum in lieu of these individuals claiming travel and other expenses attributable to their attendance at Board, Committee and other relevant meetings.

For the year ended 31 July 2022, the fees paid to Directors were: Chairman £38,000, Chairman of the Audit and Risk Committee £32,000 and Directors £27,000. Non-UK resident Directors were paid an additional amount of £5,735 per annum in lieu of these individuals claiming travel and other expenses attributable to their attendance at Board, Committee and other relevant meetings.

No other remuneration or compensation was paid or payable by the Company during the year to any of the current or former Directors or third parties specified by any of them.

Relative importance of spend on pay

Annual percentage change in Directors’ remuneration

The table below sets out the annual percentage change in fees for each Director who served during the year ended 31 July 2023:

	Year to 31 July 2023 %	Year to 31 July 2022 %	Year to 31 July 2021 %
Nicola Ralston	5.3	8.6	0.0
Stephen King	5.6	8.0	n/a
Rutger Koopmans1	5.5	30.9	(15.3)
Katya Thomson	4.7	10.3	0.0
Stephen White2	n/a	n/a	n/a

1     The 2022 increase and 2021 reduction related to the impact of travel restrictions under COVID-19 which had resulted in the reinstatement and removal of the additional amount paid to non-UK resident Directors in lieu of these individuals claiming travel and other expenses attributable to their attendance at Board, Committee and other relevant meetings. Rutger Koopmans’ increase would have been 8.0% for the year ended 31 July 2022 and 0.0% for the year ended 31 July 2021 if these additional fees were not paid

2     Stephen White was appointed on 1 December 2022

Expenditure by the Company on remuneration and distributions to shareholders

The table below compares the total level of remuneration paid to Directors to the distributions made to shareholders in each year.

	Year ended 31 July 2023	Year ended 31 July 2022	Change
	£	£	£	%
Total remuneration paid to Directors¹:	155,546	129,735	25,811	19.9
Distributions to shareholders:
– Ordinary dividends	8,050,505	5,296,385	2,754,120	52.0

1 Amounts paid will fluctuate due to the number of Directors in any one year

Directors’ interests in shares (audited)

The interests of the Directors in the ordinary shares of the Company at the end of each financial year are shown in the table below.

	Ordinary shares of 0.5p
	31 July 2023	31 July 2022
Nicola Ralston	120,000	120,000
Stephen King	15,000	15,000
Rutger Koopmans	49,000	49,000
Katya Thomson	45,000	45,000
Stephen White	110,000	n/a

There have been no changes to the Directors’ holdings in the period 1 August 2023 to the date of this Annual Report.

In accordance with the Company’s Articles, no Director is required to hold any shares in the Company by way of qualification.

Statement of voting at AGM

At the 2022 AGM, 125,849,685 votes (99.86%) were received voting for (including at the Chairman’s discretion) the resolution seeking approval of the Directors’ Remuneration Report, 170,808 (0.14%) were against, and 26,150 were withheld. In relation to the approval of the Remuneration Policy approved at the 2020 AGM, 11,253,422 (99.59%) were received voting for the resolution, 46,136 (0.41%) were against and 11,384 were withheld. Note the 2020 AGM voting figures do not reflect the sub-division of each ordinary share of 5p into ten ordinary shares of 0.5p each on 22 November 2021. All percentages of votes exclude votes withheld.

On behalf of the Board

Nicola Ralston

Chairman

27 September 2023

Directors’ report

The Directors present the audited Financial Statements of Henderson EuroTrust plc (the “Company”) and their report for the year from 1 August 2022 to 31 July 2023. The Company (a public limited company registered and domiciled in England & Wales with company registration number 02718241) was active throughout the year under review and was not dormant.

The Corporate governance statement (see pages 30 to 36) and Viability statement and going concern (see page 24) form part of the Directors’ report.

Directors

Details of the Directors and their appointments can be found on page 29.

Share capital

The Company’s share capital currently comprises ordinary shares with a nominal value of 0.5p each. The voting rights of the shares on a poll are one vote for each share held. There are no restrictions on the transfer of the Company’s ordinary shares or voting rights, no shares which carry specific rights with regard to the control of the Company and no agreement which the Company is party to that affects its control following a takeover bid. To the extent that they exist, the revenue profits of the Company (including accumulated revenue reserves) are available for distribution by way of dividends to the holders of the ordinary shares. Upon a winding-up, after meeting the liabilities of the Company, the surplus assets would be distributed to the shareholders pro rata to their holding of ordinary shares.

At 31 July 2022 and 31 July 2023 there were 212,055,410 ordinary shares of 0.5p each in issue (of which 200,000 were held in treasury). No shares were issued during the year or in the period from 1 August 2023 to 27 September 2023. Shares in treasury do not carry voting rights, therefore, as at 31 July 2023 and 27 September 2023 the number of shares in issue (with voting rights) was 211,855,410.

The Directors seek annual authority from shareholders to allot new ordinary shares, to disapply pre-emption rights of existing shareholders and to buyback ordinary shares for cancellation or to be held in treasury. At the AGM held in November 2022 the Directors were granted authority to buyback 31,757,126 shares (being 14.99% of the issued ordinary share capital as at 17 November 2022). In the period from 1 August 2023 to 27 September 2023 the Company did not buyback any ordinary shares. There remained 31,757,126 ordinary shares available within the buyback authority granted in 2022. This authority will expire at the conclusion of the 2023 AGM. The Directors intend to renew this authority subject to shareholder approval.

Fund Manager’s interests

Jamie Ross has a beneficial interest in 178,281 ordinary shares.

Holdings in the Company’s shares

Declarations of interests in the voting rights of the Company as at 31 July 2023 in accordance with the Disclosure Guidance and Transparency Rules were as follows:

Shareholder	% of voting rights
Allspring Global Investments	15.8
1607 Capital	12.2
City of London Investment Management	6.4
Evelyn Partners	6.3
Brewin Dolphin	5.1
Rathbones Investment Management	4.1

The Company was notified on 1 September 2023, that Allspring Global Investments had a 16.16% interest in the Company; on 7 September 2023, that Brewin Dolphin had a 4.99% interest in the Company; and on 25 September 2023, that Rathbones Investment Management had a 5.72% interest in the Company following the all-share combination of Rathbones Group Plc with Investec Wealth & Investment Limited. No other changes have been notified in the period 1 August 2023 to 27 September 2023.

Related party transactions

The Company’s transactions with related parties in the year were with its Directors and the Manager. There have been no material transactions between the Company and its Directors during the year and the only amounts paid to them were in respect of expenses and remuneration for which there were no outstanding amounts payable at the year end. Directors’ shareholdings are disclosed on page 43.

In relation to the provision of services by the Manager, other than fees payable by the Company in the ordinary course of business and the facilitation of marketing activities with third parties, there have been no material transactions with the Manager affecting the financial position of the Company during the year under review. More details on transactions with the Manager, including amounts outstanding at the year end, are given in Note 19 on page 69.

Energy and carbon reporting

Details of the Company’s disclosures with regard to energy and carbon reporting can be found on pages 76 to 81.

Post balance sheet events

Since the year end the Company has put in place an unsecured loan facility of €30 million to replace the previous facility. The Company has no other post balance sheet events to report.

Future developments

While the future performance of the Company is mainly dependent on the performance of international financial markets which are subject to various external factors, the Board’s intention is that the Company will continue to pursue its stated Investment Objective and strategy. The Chairman’s statement and Fund Manager’s report provide commentary on the outlook for the Company.

Dividend

See Note 10 to the Financial Statements which sets out details relating to the Dividend on ordinary shares payable for the year ended 31 July 2023.

Annual General Meeting (“AGM”)

The Company’s AGM is currently scheduled to take place at 2.30pm on Wednesday 15 November 2023 at the Company’s registered office.

The Notice of Meeting and details of the resolutions to be put to the AGM are contained in the circular sent to shareholders with this report.

The Company’s AGM will be broadcast live on the internet. If you are unable to attend in person, you can watch the meeting by visiting www.janushenderson.com/trustslive.

Directors’ statement as to disclosure of information to auditors

Each of the Directors who were members of the Board at the date of approval of this Report confirms that to the best of his or her knowledge and belief, there is no information relevant to the preparation of the Annual Report of which the Company’s auditor is unaware and he or she has taken all the steps a Director might reasonably be expected to have taken to be aware of relevant audit information and to establish that the Company’s auditor is aware of that information.

Listing Rule 9.8.4

Listing Rule 9.8.4 requires the Company to include certain information in a single identifiable section of the Annual Report or a cross reference table indicating where the information is set out. The Directors confirm that there are no disclosures to be made in this regard.

Other information

Information on financial risks are detailed on pages 63 to 68. By order of the Board

For and on behalf of

Janus Henderson Secretarial Services UK Limited

Corporate Secretary

27 September 2023

Statement of Directors’ responsibilities

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have prepared the Company’s Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and the Republic of Ireland” and applicable law). Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the net return or loss of the Company for that year. In preparing these Financial Statements, the Directors are required to:

l select suitable accounting policies and then apply them consistently;

l make judgements and accounting estimates that are reasonable and prudent;

l state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Financial Statements;

l prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

l prepare a Directors’ report, a strategic report and a Directors’ remuneration report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors consider that the Annual Report and Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s performance, business model and strategy.

Website publication

The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website. The Financial Statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the Financial Statements contained therein.

Statement under Disclosure Guidance and Transparency Rule 4.1.12

Each of the Directors, who are listed on page 29, confirms that, to the best of his or her knowledge:

l the Company’s Financial Statements, which have been prepared in accordance with UK Accounting Standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

l the Annual Report and Financial Statements include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

On behalf of the Board

Nicola Ralston

Chairman

27 September 2023

Financial Statements

The Financial Statements include:

l Independent Auditor’s Report

l Income Statement

l Statement of Changes in Equity

l Statement of Financial Position

l Notes to the Financial Statements

Electrical tests on electronic cards Christel Sasso / CAPA Pictures / Safran

Independent Auditor’s Report to the Members of Henderson EuroTrust plc

Opinion on the financial statements

In our opinion the financial statements:

l give a true and fair view of the state of the Company’s affairs as at 31 July 2023 and of its profit for the year then ended;

l have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

l have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Henderson EuroTrust plc (the ‘Company’) for the year ended 31 July 2023 which comprise the Income Statement, Statement of Changes in Equity, Statement of Financial Position and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

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. Our audit opinion is consistent with the additional report to the audit committee.

Independence

Following the recommendation of the audit committee, we were appointed by the Board of Directors in March 2020 to audit the financial statements for the year ending 31 July 2020 and subsequent financial periods. The period of total uninterrupted engagement including retenders and reappointments is four years, covering the year ended 31 July 2020 to 31 July 2023.

We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Company.

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:

l Evaluating the appropriateness of the Directors’ method of assessing going concern in light of market volatility by reviewing the information used by the Directors in completing their assessment;

l Assessing the liquidity of the investment portfolio, which underpins the ability to meet the future obligations and operating expenses for a period of 12 months from the date of approval of these financial statements;

l Reviewing the loan agreement to identify the covenants and assessing the likelihood of them being breached based on the Directors’ forecast and sensitivity analysis;

l Assessing the projected management fees for the year to check that it was in line with the current assets under management levels and the projected market growth forecasts for the following year; and

l Checking the accuracy of historical forecasting by agreeing to actual results.

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 of at least twelve months from when the financial statements are authorised for issue.

In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Independent Auditor’s Report to the Members of Henderson EuroTrust plc (continued)

Overview

		2023	2022
Key audit matters	Valuation and ownership of quoted investments Revenue recognition Revenue recognition is no longer considered to be a key audit matter as the Company has a total return objective	✓ ✗	✓ ✓
Materiality	Company financial statements as a whole £3.41m (2022: £3.01m) based on 1% (2022: 1%) of Net assets

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.

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, including 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 forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

How the scope of our audit addressed the key audit matter

Valuation and ownership of quoted investments (Note 11 on Page 62) The investment portfolio at the year-end comprised of investments held at fair value through profit or loss. There is a risk that the prices used for the listed investments held by the Company are not reflective of fair value and the risk that errors made in the recording of investment holdings result in the incorrect reflection of investments owned by the Company. Therefore we considered the valuation and ownership of quoted investments to be the most significant audit area as the quoted investments also represent the most significant balance in the financial statements and underpin the principal activity of the entity. For these reasons and the materiality of the balance in relation to the financial statements as a whole, we considered this to be a key audit matter.

We have responded to this matter by testing the valuation and ownership of 100% of the portfolio of investments. We performed the following procedures on valuation: l Confirmed the year-end bid price was used by agreeing to externally quoted prices; l Assessed if there were contra indicators, such as liquidity considerations, to suggest bid price was not the most appropriate indication of fair value by considering the realisation period for individual holdings; l Obtained direct confirmation of the number of shares held per equity investment from the custodian regarding all investments held at the balance sheet date; l Recalculated the valuation by multiplying the number of shares held per the statement obtained from the custodian by the valuation per share; and l We also considered the completeness, accuracy and clarity of investment-related disclosures against the requirements of relevant accounting standard. Key observations Based on our procedures performed we did not identify any matters to suggest that the valuation and ownership of quoted investments was not appropriate.

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

Independent Auditor’s Report to the Members of Henderson EuroTrust plc (continued)

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

Company financial statements
	2023	2022
Materiality	£3.41m	£3.01m
Basis for determining materiality	1% of Net Assets	1% of Net Assets
Rationale for the benchmark applied	As an investment trust, the net asset value is the key measure of performance for users of the financial statements.
Performance materiality	£2.55m	£2.26m
Basis for determining performance materiality	75% of materiality
Rationale for the percentage applied for performance materiality	The level of performance materiality applied was set after having considered a number of factors including the expected total value of known and likely misstatements and the level of transactions in the year.

Lower testing threshold

We determined that for Revenue return before tax, a misstatement of less than materiality for the financial statements, could influence users of the financial statements as it is a measure of the Company’s performance of income generated from its investments after expenses. As a result, we determined a lower testing threshold for those items impacting revenue return of

£798,000 based on 10% of net revenue.

Reporting threshold

We agreed with the audit committee that we would report to them all individual audit differences in excess of £170,000 (2022: £150,000) for the financial statements as a whole. We also agreed to report differences below these thresholds that, in our view, warranted reporting on qualitative grounds.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report and financial statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our 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 this other information, we are required to report that fact.

We have nothing to report in this regard.

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.

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.

Going concern and longer-term viability l The Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 56; and l The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate set out on page 24.

Independent Auditor’s Report to the Members of Henderson EuroTrust plc (continued)

Other Code provisions l Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable as set out on page 46; l Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 23; l The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 39; and l The section describing the work of the audit committee set out on page 37.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic report and Directors’ report	In our opinion, based on the work undertaken in the course of the audit: l the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and l the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report.
Directors’ remuneration	In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.
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 Act 2006 requires us to report to you if, in our opinion: l adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or l the financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or l certain disclosures of Directors’ remuneration specified by law are not made; or l we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the statement of Directors’ responsibilities, 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.

Extent to which the audit was 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 material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Independent Auditor’s Report to the Members of Henderson EuroTrust plc (continued)

Non-compliance with laws and regulations

We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates, and considered the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud. We considered the significant laws and regulations to be the Companies Act 2006, the FCA Listing and Disclosure Guidance and Transparency Rules, the principles of the AIC Code of Corporate Governance, industry practice represented by the AIC SORP, the applicable accounting framework, and the Company’s qualification as an Investment Trust under UK tax legislation as any non-compliance of this would lead to the Company losing various deductions and exemptions from corporation tax.

We focused on laws and regulations that could give rise to a material misstatement in the Company financial statements. Our tests included:

l agreement of the financial statement disclosures to underlying supporting documentation;

l enquiries of management and those charged with governance relating to any instances of non-compliance with laws and regulations;

l review of minutes of board meetings throughout the period for instances of non-compliance with laws and regulations; and

l reviewing the calculation in relation to the Company’s Investment Trust compliance to check that the Company was meeting its requirements to retain its Investment Trust Status.

Fraud

We assessed the susceptibility of the financial statement to material misstatement including fraud and considered the fraud risk areas to be management override of controls.

Our tests included:

l The procedures set out in the Key Audit Matters section above;

l Recalculating investment management fees in total;

l Obtaining independent confirmation of bank balances; and

l Testing journals which met a defined risk criteria by agreeing to supporting documentation and evaluating whether there was evidence of bias by the Investment Manager and Directors that represented a risk of material misstatement due to fraud.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non- compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Peter Smith (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London

27 September 2023

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Income Statement

Note		Year ended 31 July 2023			Year ended 31 July 2022
		Revenue return £’000	Capital return £’000	Total return £’000	Revenue return £’000	Capital return £’000	Total return £’000
2	Gains/(losses) on investments held at fair value through profit or loss	–	43,816	43,816	–	(54,923)	(54,923)
3	Investment income	8,877	–	8,877	9,298	–	9,298
4	Other income	71	–	71	1	–	1
	Gross revenue and capital gains/(losses)	8,948	43,816	52,764	9,299	(54,923)	(45,624)
5	Management fee	(407)	(1,628)	(2,035)	(410)	(1,642)	(2,052)
6	Other administrative expenses	(553)	–	(553)	(553)	–	(553)
	Net return/(loss) before finance costs and taxation	7,988	42,188	50,176	8,336	(56,565)	(48,229)
7	Finance costs	(43)	(174)	(217)	(17)	(67)	(84)
	Net return/(loss) before taxation	7,945	42,014	49,959	8,319	(56,632)	(48,313)
8	Taxation on net return	(1,120)	–	(1,120)	(69)	(11)	(80)
Net return/(loss) after taxation		6,825	42,014	48,839	8,250	(56,643)	(48,393)
9	Return/(loss) per ordinary share (basic and diluted)	3.22p	19.83p	23.05p	3.89p	(26.73p)	(22.84p)

The total return column of this statement represents the Income Statement of the Company. All revenue and capital items in the above statement derive from continuing operations.

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the AIC. The Company had no recognised gains or losses other than those disclosed in the Income Statement.

Statement of Changes in Equity

Note	Year ended 31 July 2023	Called up share capital £’000	Share premium account £’000	Capital redemption reserve £’000	Capital reserves £’000	Revenue reserve £’000	Total shareholders’ funds £’000
	At 1 August 2022	1,060	41,032	263	251,065	7,590	301,010
	Net return after taxation	–	–	–	42,014	6,825	48,839
10	Final dividend paid in respect of the year ended 31 July 2022 (paid 23 November 2022)	–	–	–	–	(6,356)	(6,356)
10	Interim dividend paid in respect of the year ended 31 July 2023 (paid 28 April 2023)	–	–	–	–	(1,695)	(1,695)
At 31 July 2023		1,060	41,032	263	293,079	6,364	341,798
Note	Year ended 31 July 2022	Called up share capital £’000	Share premium account £’000	Capital redemption reserve £’000	Capital reserves £’000	Revenue reserve £’000	Total shareholders’ funds £’000
	At 1 August 2021	1,060	41,032	263	307,722	4,633	354,710
	Net (loss)/return after taxation	–	–	–	(56,643)	8,250	(48,393)
	Costs relating to sub-division of shares	–	–	–	(14)	–	(14)
10	Final dividend paid in respect of the year ended 31 July 2021 (paid 24 November 2021)	–	–	–	–	(3,602)	(3,602)
10	Interim dividend paid in respect of the year ended 31 July 2022 (paid 22 April 2022)	–	–	–	–	(1,695)	(1,695)
10	Refund of unclaimed dividends over 12 years old	–	–	–	–	4	4
	At 31 July 2022	1,060	41,032	263	251,065	7,590	301,010

The notes on pages 56 to 69 form part of these financial statements

Statement of Financial Position

Note		As at 31 July 2023 £’000	As at 31 July 2022 £’000
	Fixed assets
	Fixed asset investments held at fair value through profit or loss
11	Listed at market value – overseas	357,406	308,398
	Current assets
12	Debtors	3,445	6,192
	Cash at bank and in hand	2,687	2,482
		6,132	8,674
13	Creditors: amounts falling due within one year	(21,740)	(16,062)
Net current liabilities		(15,608)	(7,388)
Total assets less current liabilities		341,798	301,010
Net assets		341,798	301,010
	Capital and reserves
16	Called up share capital	1,060	1,060
17	Share premium account	41,032	41,032
	Capital redemption reserve	263	263
18	Capital reserves	293,079	251,065
	Revenue reserve	6,364	7,590
Total shareholders’ funds		341,798	301,010
14	Net asset value per ordinary share (basic and diluted)	161.3p	142.1p

The Financial Statements on pages 53 to 69 were approved and authorised for issue by the Board of Directors on 27 September 2023 and were signed on their behalf by:

Nicola Ralston

Chairman

Notes to the Financial Statements

1      Accounting policies

a)                      Basis of preparation

The Company is a registered investment company as defined in Section 833 of the Companies Act 2006 and is incorporated in the United Kingdom. It operates in the United Kingdom and is registered at the address on page 82.

The Financial Statements have been prepared in accordance with the Companies Act 2006, FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts (the ‘SORP’) issued in July 2022 by the Association of Investment Companies.

The principal accounting policies applied in the presentation of these Financial Statements are set out below. These policies have been consistently applied to all the years presented. There have been no significant changes to the accounting policies compared to those set out in the Company’s Annual Report for the year ended 31 July 2022.

As an investment company the Company has the option, which it has taken, not to present a cash flow statement. A cash flow statement is not required when an investment company meets all the following conditions: substantially all of the entity’s investments are highly liquid, substantially all of the entity’s investments are carried at market value, and the entity provides a statement of changes in equity. The Directors have assessed that the Company meets all of these conditions.

The Financial Statements have been prepared under the historical cost basis except for the measurement at fair value of investments. In applying FRS 102, financial instruments have been accounted for in accordance with Section 11 and 12 of the standard.

All of the Company’s operations are of a continuing nature.

The preparation of the Company’s Financial Statements on occasion requires the Directors to make judgements, estimates and assumptions that affect the reported amounts in the primary Financial Statements and the accompanying disclosures. These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the current and future periods, depending on circumstance.

The Directors do not believe that any accounting judgements or estimates have been applied to this set of Financial Statements that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

b)                      Going concern

The assets of the Company consist of securities that are primarily readily realisable and, accordingly, the Directors believe that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of the Financial Statements. Having assessed these factors and the principal risks, as well as considering the impact of the rise in inflation, COVID-19 and the risks arising from the wider ramifications of the conflict between Russia and Ukraine, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing the Financial Statements.

c)                      Fixed asset investments held at fair value through profit or loss

All investments are designated upon initial recognition as held at fair value through profit or loss. Assets are de-recognised at the trade date of the disposal. Proceeds are measured at fair value, which are regarded as the proceeds of sale less any transaction costs. The fair value of the financial instruments is based on their quoted bid price at the Statement of Financial Position date, without deduction of the estimated future selling costs.

Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Income Statement as “Gains/(losses) from investments held at fair value through profit or loss”.

Transaction costs in relation to the purchase or sale of investments are also expensed within this line. All purchases and sales are accounted for on a trade date basis.

Unquoted investments are valued by the Directors using primary valuation techniques such as earnings multiples, recent transactions and net assets. All such valuations are reviewed by both Janus Henderson’s EMEA Pricing Committee and by the Directors.

d)                      Capital gains and losses

Capital gains and losses arising on investments sold and investments held, together with exchange differences arising on the translation of foreign currency assets and liabilities, are recognised within the capital reserves.

1      Accounting policies (continued)

e)                      Income

Dividends receivable from equity shares are taken to revenue return on an ex-dividend basis except where, in the opinion of the Directors, the dividend is capital in nature in which case it is taken to the capital return and is included in gains/ (losses) on investments. Bank deposit interest is taken to revenue return on an accruals basis.

The ordinary element of scrip dividends received in lieu of cash dividends is recognised as revenue. Any enhancement above the cash dividend is treated as capital.

Where the Company enters into a commitment to underwrite an issue of securities in exchange for the receipt of commission, a derivative financial instrument is recognised initially at fair value. The derivative is re-measured subsequently at fair value, with the related gains and losses being reflected in the Income Statement. Net losses arising from these derivatives, where actual or expected loss from taking up the securities underwritten exceeds the commission income, are allocated to the capital return. Net gains are allocated to the revenue return.

f)                        Expenses and finance costs

All expenses are accounted for on an accruals basis. Finance costs, including any premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Income Statement using the effective interest rate method. On the basis of the Board’s expected long term split of returns in the form of capital gains and income of 80% and 20% respectively, the Company charges 80% of its finance costs and management fee to the capital return.

All other expenses are charged to revenue return. All of these amounts are stated net of any tax relief and inclusive of any related irrecoverable value added tax.

g)                      Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that were applicable at the Statement of Financial Position date.

The tax effect of different items of expenditure is allocated between the capital return and revenue return using the Company’s effective tax rate.

In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented against capital returns in the supplementary information in the Income Statement is the “marginal basis”. Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of the Income Statement, then no tax relief is transferred from the capital return column.

Deferred taxation is provided on all timing differences that have originated but not reversed by the Statement of Financial Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of timing differences can be deducted. Any liability to deferred tax is provided at the average rate of tax expected to apply based on tax rates and laws that have been enacted or substantially enacted at the Statement of Financial Position date. Deferred tax assets and liabilities are not discounted to reflect the time value of money.

h)                      Foreign currency

The results and financial position of the Company are expressed in pounds Sterling, which is the functional currency and presentational currency.

The Company is required to determine functional currency, being the currency in which the Company predominantly operates. The Board, having regard to the currency of the Company’s share capital and the predominant currency in which its shareholders operate, has determined the functional currency to be Sterling.

Transactions denominated in foreign currencies are converted at actual exchange rates as at the date of the transaction. Monetary assets and liabilities and equity investments held at fair value through profit or loss denominated in foreign currencies at the year end are translated at the rates of exchange prevailing at the year end.

Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in revenue return or capital return, depending on whether the gain or loss is of a revenue or capital nature.

1              Accounting policies (continued)

i)                        Cash at bank and in hand

Cash comprises cash in hand and on demand deposits.

j)                        Dividends payable to shareholders

Dividends payable to shareholders are recognised in the Financial Statements when they are paid or, in the case of final dividends, when they are approved by shareholders. Dividends are dealt with in the Statement of Changes in Equity.

k)                      Issue and repurchase of ordinary shares

The proceeds from the issue of new ordinary shares (including those relating to the sale of shares out of treasury) and the aggregate cost of repurchasing ordinary shares (including those to be held in treasury), including related stamp duty and transaction costs, is taken directly to equity and dealt with in the Statement of Changes in Equity. Share issues and repurchase transactions are accounted for on a trade date basis. The nominal value of ordinary share capital repurchased and cancelled is transferred out of called up share capital and into the capital redemption reserve.

l)                        Capital reserves

Called up share capital represents the nominal value of ordinary shares issued.

The share premium account represents the premium above nominal value received by the Company on issue of shares net of costs.

The revenue reserve represents accumulated profits retained by the Company that have not currently been distributed to shareholders as a dividend.

The capital redemption reserve represents the nominal value of ordinary shares that have been repurchased and cancelled.

Other capital reserves are split into two components, the capital reserve arising on investments sold and the capital reserve arising on revaluation of investments held. The following analyses what is accounted for in each of these components.

Capital reserve arising on investments sold

The following are accounted for in this reserve:

l expenses and finance costs charged to capital net of tax relief;

l gains and losses on the disposal of investments;

l realised foreign exchange differences of a capital nature; and

l costs of repurchasing ordinary share capital.

Capital reserve arising on investments held

The following are accounted for in this reserve:

l increases and decreases in the valuation of investments held at the year end; and

l unrealised foreign exchange differences of a capital nature.

m)                    Distributable reserves

The Company’s capital reserve arising on investments sold and revenue reserve may be distributed by way of a dividend.

2              Gains/(losses) on investments held at fair value through profit or loss

	2023 £’000	2022 £’000
Gains on sale of investments based on historical cost	10,558	4,271
Less: Revaluation gains recognised in previous years	(591)	(32,176)
Gains/(losses) on investments sold in the year based on carrying value at previous statement of financial position date	9,967	(27,905)
Revaluation of investments held at 31 July	34,001	(27,108)
Exchange (losses)/gains¹	(152)	90
	43,816	(54,923)

1 Includes exchange losses of £34,000 (2022: £20,000) on bank loans

3               Investment income

	2023 £’000	2022 £’000
Overseas dividend income	8,877	9,298
	8,877	9,298

4               Other income

	2023 £’000	2022 £’000
Interest received	71	1
	71	1

5               Management fee

		2023			2022
	Revenue return £’000	Capital return £’000	Total return £’000	Revenue return £’000	Capital return £’000	Total return £’000
Management fee	407	1,628	2,035	410	1,642	2,052

A summary of the terms of the management agreement is given in the Strategic Report on page 18. See Note 1(f) on page 57 for more detail regarding the split between revenue return and capital return.

6               Other administrative expenses

	2023 £’000	2022 £’000
Directors’ fees and taxable benefits (see the Directors’ Remuneration Report on page 42)	156	130
Auditor’s remuneration – for statutory audit services	42	35
Bank charges	53	49
Loan – including arrangement fees, non utilisation fees and legal fees	65	97
Legal and professional fees	43	33
Marketing expenses recharged by Janus Henderson	18	58
Printing and postage	18	12
Stock exchange listing	30	29
AIC fees	21	20
Registrar’s fees	13	13
Depositary fees	37	39
Other expenses	57	38
	553	553

The auditor’s remuneration for the year is £42,000 (2022: £35,000).

All transactions with Directors are disclosed in the Directors’ Remuneration Report and are related party transactions.

7               Finance costs

		2023			2022
	Revenue return £’000	Capital return £’000	Total return £’000	Revenue return £’000	Capital return £’000	Total return £’000
Loan interest	43	174	217	9	36	45
Overdraft interest	–	–	–	8	31	39
	43	174	217	17	67	84

8              Taxation on net return

a)                      Analysis of the charge for the year

		2023			2022
	Revenue return £’000	Capital return £’000	Total return £’000	Revenue return £’000	Capital return £’000	Total return £’000
Foreign withholding taxes	1,579	–	1,579	943	11	954
Refund of Corporation tax from FII/GLO claim	–	–	–	(371)	–	(371)
Overseas tax reclaimable	(459)	–	(459)	(503)	–	(503)
Total tax charge for the year (see Note 8b)	1,120	–	1,120	69	11	80

The Company’s profit for the accounting year is taxed at an effective rate of 21% (2022: 19%).

In the prior year, the Company settled a claim with HMRC (on the basis of the principles set out in the Franked Investment Income Group Litigation Order (“FII/GLO”) claim) for corporation tax unduly paid in respect of periods prior to 1 July 2009. The claim was filed on the basis that the relevant UK tax legislation was in breach of EU law for these periods.

This claim was successfully settled with HMRC and was accounted for in the year ended 31 July 2022.

b)                      Factors affecting the tax charge for the year

		2023			2022
	Revenue return £’000	Capital return £’000	Total return £’000	Revenue return £’000	Capital return £’000	Total return £’000
Net return/(loss) before taxation	7,945	42,014	49,959	8,319	(56,632)	(48,313)
Corporation tax at effective rate of 21% (2022: 19%)	1,668	8,823	10,491	1,581	(10,760)	(9,179)
Effects of:
Non-taxable (gains)/losses on investments held at fair value through profit or loss	–	(9,200)	(9,200)	–	10,435	10,435
Other non-taxable	–	(1)	(1)	–	–	–
Non-taxable dividends	(1,864)	–	(1,864)	(1,766)	–	(1,766)
Overseas tax	1,120	–	1,120	439	11	450
Refund of Corporation tax from FII/GLO claim	–	–	–	(371)	–	(371)
Expenses not deductible for tax purposes	–	–	–	–	3	3
Excess management expenses	196	378	574	186	322	508
Total tax charge	1,120	–	1,120	69	11	80

c)                      Deferred taxation

No provision for deferred taxation has been made in the current or prior accounting year. The Company has not provided for deferred tax on capital gains or losses arising on the revaluation and disposal of investments as it is exempt from tax on these items because of its investment trust status.

The Company can offset management fees, other administrative expenses and interest costs against taxable income to eliminate any tax charge on such income. The tax legislation refers to these as management expenses (management fees and other administrative expenses) and non-trade loan relationship deficits (interest costs) and these are captured together under the heading “Excess management expenses” in the table above. Where these are not fully utilised, they can be carried forward to future years. As the Company is unlikely to generate future taxable profits to utilise these amounts, the Company cannot recognise an asset to reflect them, but must still disclose the deferred tax amount carried forward arising from any unutilised amounts. Consequently, the Company has not recognised a deferred tax asset totalling £7,593,000 (2022: £5,252,000) arising as a result of having unutilised management expenses and unutilised non-trade loan relationship deficits totalling £30,373,000 (2022: £27,640,000), and based on a prospective tax rate of 25% (2022: 19%).

9               Return/(loss) per ordinary share (basic and diluted)

The total return per ordinary share is based on the net gain attributable to the ordinary shares of £48,839,000 (2022: loss

£48,393,000) and on 211,855,410 ordinary shares (2022: 211,855,410), being the weighted average number of shares in issue during the year. The total return can be further analysed as follows:

	2023 £’000	2022 £’000
Revenue return	6,825	8,250
Capital return/(loss)	42,014	(56,643)
Total return/(loss)	48,839	(48,393)
Weighted average number of ordinary shares	211,855,410	211,855,410

	2023 Pence	2022 Pence
Revenue return per ordinary share	3.22	3.89
Capital return/(loss) per ordinary share	19.83	(26.73)
Total return/(loss) per ordinary share	23.05	(22.84)

The Company has no securities in issue that could dilute the return per ordinary share. Therefore the basic and diluted return per ordinary share are the same.

10          Dividends on ordinary shares

	Register date	Payment date	2023 £’000	2022 £’000
Final dividend (1.7p) for the year ended 31 July 2021	22 October 2021	24 November 2021	–	3,602
Interim dividend (0.8p) for the year ended 31 July 2022	8 April 2022	22 April 2022	–	1,695
Final dividend (3.0p) for the year ended 31 July 2022	21 October 2022	23 November 2022	6,356	–
Interim dividend (0.8p) for the year ended 31 July 2023	11 April 2023	28 April 2023	1,695	–
Refund of unclaimed dividends over 12 years old			–	(4)
			8,051	5,293

The proposed final dividend of 3.0p per share for the year ended 31 July 2023 is subject to approval by shareholders at the AGM and has not been included as a liability in these Financial Statements. The final dividend will be paid on 22 November 2023 to shareholders on the register of members at the close of business on 20 October 2023. The shares will be quoted ex-dividend on 19 October 2023.

All dividends have been paid or will be paid out of revenue profits and revenue reserves.

The total dividends payable in respect of the financial year which form the basis of Section 1158 of the Corporation Tax Act 2010 are set out below:

	2023 £’000	2022 £’000
Revenue available for distribution by way of dividend for the year	6,825	8,250
Interim dividend of 0.8p (2022: 0.8p) paid 28 April 2023 (2022: 22 April 2022)	(1,695)	(1,695)
Proposed final dividend for the year ended 31 July 2023 of 3.0p (2022: 3.0p) (based on 211,855,410 ordinary shares in issue at 27 September 2023 (2022: 211,855,410)	(6,356)	(6,356)
Transfer (from)/to revenue reserve1	(1,226)	199

1 There is no undistributed revenue in the current year (2022: £199,000 of undistributed revenue)

11          Fixed asset investments held at fair value through profit or loss

	2023 £’000	2022 £’000
Valuation at start of year	308,398	344,803
Investment holding gains at start of year	(18,872)	(78,156)
Cost of investments at start of year	289,526	266,647
Purchases at cost	119,460	199,026
Sales at cost	(103,862)	(176,147)
Cost of investments at end of year	305,124	289,526
Investment holding gains at end of year	52,282	18,872
Valuation at end of year	357,406	308,398

The Company received £114,412,000 (2022: £180,418,000) from investments sold in the year. The book cost of these investments when they were purchased was £103,862,000 (2022: £176,147,000). These investments have been revalued over time and until they were sold any unrealised gains/(losses) were included in the fair value of the investments.

Total transaction costs amounted to £172,000 (2022: £356,000) of which purchase transaction costs for the year ended 31 July 2023 were £130,000 (2022: £296,000) and comprises mainly brokers’ commission. Sale transaction costs for the year ended 31 July 2023 were £42,000 (2022: £60,000).

12          Debtors

	2023 £’000	2022 £’000
Withholding tax recoverable	2,405	2,198
Corporation tax recoverable	–	371
Prepayments and accrued income	34	154
Amounts due from brokers	1,006	3,469
	3,445	6,192

13          Creditors: amounts falling due within one year

	2023 £’000	2022 £’000
Bank loans (see note 15.1.3 and 15.2)	8,569	12,593
Purchases for future settlement	12,300	2,224
Management fee	717	1,123
Loan interest payable	31	2
Other accruals	123	120
	21,740	16,062

During the year under review, the Company had in place an unsecured loan facility of £25 million (2022: £25 million) with SMBC Bank International plc (“SMBC”). Interest under the facility was payable at an agreed margin above the Reference Rate applicable to the loan draw down. The Company was fully compliant with the terms of the facility during the year (2022: same). The loan facility with SMBC expired on 27 September 2023 and was replaced on 26 September 2023

by a three year facility with BNP Paribas, London Branch.

14          Net asset value per ordinary share (basic and diluted)

The net asset value per ordinary share of 161.3p (2022: 142.1p) is based on the net assets attributable to ordinary shares of

£341,798,000 (2022: £301,010,000) and 211,855,410 (2022: 211,855,410) ordinary shares in issue at the year end. There were also 200,000 shares held in Treasury at the year end (2022: 200,000).

The movements during the year of the assets attributable to the ordinary shares were as follows:

	2023 £’000	2022 £’000
Net assets attributable to the ordinary shares at start of year	301,010	354,710
Net return/(loss) after taxation	48,839	(48,393)
Costs relating to sub-division of shares	–	(14)
Dividends paid on ordinary shares in the year	(8,051)	(5,297)
Refund of unclaimed dividends over 12 years old	–	4
Total net assets attributable to the ordinary shares at 31 July	341,798	301,010

15          Risk management policies and procedures

As an investment trust company the Company invests in equities and other investments for the long-term so as to secure its investment objectives as stated in the Strategic Report. In pursuing its Investment Objective, the Company is exposed to a variety of financial risks that could result in either a reduction in the Company’s net assets or a reduction in the profits available for distribution by way of dividends.

These financial risks, market risk (comprising market price risk, currency risk and interest rate risk), liquidity risk and credit risk, and the Directors’ approach to the management of these risks, are set out below. The Board of Directors and

Janus Henderson coordinate the Company’s risk management and there are various risk management systems in place. These are supplemented by in-house developments in the Derivatives Risk and Compliance database.

The Board determines the objectives, policies and processes for managing the risks, and these are set out below under the relevant risk categories. The policies for the management of risk have not changed from the previous accounting year.

The Company has a spread of investments which by their nature are lower risk than placing the entire amount of the Company’s assets in solely one investment. Equity investments can be higher risk than some other investments but the longer term return can be positive. The performance of equities has been and is likely to continue to be volatile over the shorter term.

15.1                            Market risk

The fair value of a financial instrument held by the Company may fluctuate due to changes in market prices. Market risk comprises market price risk (see Note 15.1.1), currency risk (see Note 15.1.2) and interest rate risk (see Note 15.1.3).

Janus Henderson assesses the exposure to market risk when making each investment decision, and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis.

15.1.1                Market price risk

Market price risk (changes in market prices other than those arising from interest rate risk or currency risk) may affect the value of quoted and unquoted investments. The Company may use, and has from time to time used, derivatives to manage market price risk.

Management of the risk

The Board of Directors manages the risks inherent in the investment portfolio by ensuring full and timely reporting of relevant information from Janus Henderson. Investment performance is reviewed at each Board meeting. The Board monitors the Fund Manager’s compliance with the Company’s objectives, and is directly responsible for investment strategy and asset allocation.

The Company’s exposure to changes in market prices at 31 July 2023 on its investments held at fair value through profit or loss was £357,406,000 (2022: £308,398,000).

15    Risk management policies and procedures (continued)

15.1.1               Market price risk (continued)

Concentration of exposure to market price risks

An analysis of the Company’s investment portfolio is shown on page 12. It is recognised that an investment’s country of domicile or of listing does not necessarily equate to its exposure to the economic conditions in that country.

Market price sensitivity

The following illustrates the sensitivity of the return after taxation for the year, and the net assets, to an increase or decrease of 20% (2022: 20%) in the fair values of the Company’s equities. This level of change is considered to be possible based on observation of current market conditions. The sensitivity analysis is based on the Company’s equities at each Statement of Financial Position date, with all other variables held constant.

	2023		2022
	Increase in fair value £’000	Decrease in fair value £’000	Increase in fair value £’000	Decrease in fair value £’000
Income Statement – net return after taxation
Revenue (loss)/return	(79)	93	(68)	80
Capital return/(loss)	71,167	(71,109)	61,409	(61,359)
Total return after tax for the year	71,088	(71,016)	61,341	(61,279)
Impact on net assets	71,088	(71,016)	61,341	(61,279)

15.1.2               Currency risk

The majority of the Company’s assets, liabilities and income are denominated in currencies other than Sterling (the Company’s functional currency and presentational currency). As a result, movements in exchange rates may affect the Sterling value of those items.

Management of the risk

Janus Henderson monitors the Company’s exposure to foreign currencies on a daily basis and reports to the Board at each Board meeting. Janus Henderson measures the risk to the Company of the foreign currency exposure by considering the effect on the Company’s net asset value and total return of a movement in the exchange rates to which the Company’s assets, liabilities, income and expenses are exposed.

Foreign currency borrowings have the effect of reducing the Company’s exposure to future changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments. These borrowings (Consolidated Gross Borrowings) were limited to 30% of the Investment Portfolio Value.

Investment income denominated in foreign currencies is converted into Sterling on receipt.

The Company does not currently use financial instruments to mitigate currency exposure from portfolio assets denominated in currencies other than Sterling or from investment income in the year between the time that income is included in the Financial Statements and its receipt.

Foreign currency exposure

The carrying values of the Company’s monetary items that have foreign currency exposure at 31 July are shown overleaf. Where the Company’s equity investments, which are not monetary items, are denominated in a foreign currency, they have been included separately in the analysis so as to show the overall level of exposure.

15    Risk management policies and procedures (continued)

15.1.2 Currency risk (continued)

2023	Euro £’000	Swiss Franc £’000	Danish Krone £’000	Norwegian Krone £’000	US Dollar £’000	Total £’000
Creditors (amounts due to brokers, bank loans, interest payable)	(15,432)	(5,205)	(262)	–	–	(20,899)
Cash and cash equivalents	1,831	–	–	–	–	1,831
Debtors (amounts due from brokers, withholding tax recoverable)	996	2,061	262	88	4	3,411
Total foreign currency exposure on net monetary items	(12,605)	(3,144)	–	88	4	(15,657)
Investments at fair value through profit or loss	268,368	66,537	22,501	–	–	357,406
Total net foreign currency exposures	255,763	63,393	22,501	88	4	341,749

2022	Euro £’000	Swiss Franc £’000	Danish Krone £’000	Norwegian Krone £’000	Total £’000
Creditors (amounts due to brokers, bank loans, interest payable)	(14,820)	–	–	–	(14,820)
Cash and cash equivalents	1,083	860	–	–	1,943
Debtors (amounts due from brokers, withholding tax recoverable)	3,178	2,245	236	114	5,773
Total foreign currency exposure on net monetary items	(10,559)	3,105	236	114	(7,104)
Investments at fair value through profit or loss	241,623	57,434	9,341	–	308,398
Total net foreign currency exposures	231,064	60,539	9,577	114	301,294

The above amounts are not necessarily representative of the exposure to risk during each year, as levels of monetary foreign currency exposure may change significantly throughout the year.

Foreign currency sensitivity

The following table illustrates the sensitivity of the total profit after tax for the year and the net assets with regard to movements in the Company’s foreign currency financial assets and financial liabilities caused by changes in the exchange rates for Sterling against each currency set out below.

It assumes a +/-10% change in exchange rates (2022: +/-10%).

These percentages are deemed reasonable based on the average market volatility in exchange rates in recent years. The sensitivity analysis is based on the Company’s foreign currency financial assets and financial liabilities held at each Statement of Financial Position date.

If Sterling had depreciated against the currencies shown the impact on the total return would have been as follows:

		2023					2022
	Danish Krone £’000	Euro £’000	Norwegian Krone £’000	Swiss Franc £’000	Danish Krone £’000	Euro £’000	US Dollar1 £’000	Norwegian Krone £’000	Swiss Franc £’000
Income Statement – net return after taxation
Revenue return	19	669	–	165	26	793	6	–	175
Capital return	2,239	25,448	9	6,308	1,059	25,546	–	13	343
Change in total return after taxation for the year and shareholders’ funds	2,258	26,117	9	6,473	1,085	26,339	6	13	518

15    Risk management policies and procedures (continued)

15.1.2            Currency risk (continued)

If Sterling had appreciated against the currencies shown the impact on the total return would have been as follows:

		2023					2022
	Danish Krone £’000	Euro £’000	Norwegian Krone £’000	Swiss Franc £’000	Danish Krone £’000	Euro £’000	US Dollar1 £’000	Norwegian Krone £’000	Swiss Franc £’000
Income Statement – net return after taxation
Revenue return	(19)	(668)	–	(165)	(21)	(631)	(6)	–	(143)
Capital return	(2,238)	(25,444)	(9)	(6,307)	(866)	(21,742)	–	(10)	(280)
Change in total return after taxation for the year and shareholders’ funds	(2,257)	(26,112)	(9)	(6,472)	(887)	(22,373)	(6)	(10)	(423)

1 Although the Company holds no US Dollar investments, some companies in the portfolio may pay their dividends in US Dollar

In the opinion of the Directors, the above sensitivity analyses are not necessarily representative of the year as a whole, since the level of exposure changes frequently as part of the currency risk management process used to meet the Company’s objectives.

15.1.3               Interest rate risk

Interest rate movements may affect the interest payable on the Company’s variable rate borrowings.

Management of the risk

The majority of the Company’s financial assets are non-interest bearing. As a result, the Company’s financial assets are not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when borrowing under the multi-currency loan facility.

Interest rate exposure

The exposure at 31 July of financial assets and financial liabilities to floating interest rates is shown below:

	2023 Total (within one year) £’000	2022 Total (within one year) £’000
Exposure to floating interest rates:
Cash at bank	2,687	2,482
Creditors:
Borrowings under multi-currency loan facility	(8,569)	(12,593)
	(5,882)	(10,111)

Interest rate sensitivity

The Company is primarily exposed to interest rate risk through its multi-currency loan facility and cash at bank.

Loan sensitivity – Borrowings vary throughout the year as a result of the Board’s borrowing policy. Borrowings at the year end were £8,569,000 (2022: £12,593,000) (Note 13) and, if that level of borrowings was maintained for a full year, then a 100 basis point change in interest rates (up or down) would decrease or increase the total net return after taxation by approximately £86,000 (2022: £126,000).

Cash – Cash balances vary throughout the year. Cash balances at the year end were £2,687,000 (2022: £2,482,000) and,

if that level of cash was maintained for a full year, a 100 basis points change in interest rates (up or down) would increase or decrease total net return after taxation by approximately £27,000 (2022: £25,000).

15    Risk management policies and procedures (continued)

15.2                            Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.

Management of the risk

Liquidity risk is not significant as the majority of the Company’s assets are investments in quoted securities that are readily realisable. The Company has a multi-currency loan facility of £25 million (2022: £25 million) of which £8,569,000

(2022: £12,593,000) was drawn down at the year end and an overdraft facility with a sub custodian, the extent of which is determined by the custodian on a regular basis by reference to the value of the securities held by it on behalf of the Company.

The Board gives guidance to the Manager as to the maximum amounts of the Company’s resources that should be invested in any one company. The policy is that the Company should generally remain fully invested and that short-term borrowings be used to manage short-term cash requirements.

Liquidity risk exposure

The contractual maturities of the financial liabilities at 31 July, based on the earliest date on which payment can be required were as follows:

	2023 Due within one month £’000	2022 Due within one month £’000
Bank loans (including accrued interest)	8,600	12,595
Other creditors and accruals	13,140	3,467
	21,740	16,062

15.3                            Credit risk

The failure of the counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss.

Management of the risk

Credit risk is managed as follows:

l investment transactions may be carried out with a large number of approved brokers, whose credit standard is reviewed periodically by Janus Henderson, and limits are set on the amount that may be due from any one broker.

l cash at bank is held only with banks considered to be creditworthy and is subject to continual review.

None of the Company’s financial assets or liabilities are secured by collateral or other credit enhancements. The Company has not been materially exposed to credit risk throughout the year.

15.4                            Fair values of financial assets and financial liabilities

Financial assets and financial liabilities are either carried in the Statement of Financial Position at their fair value (investments) or the Statement of Financial Position amount is a reasonable approximation of fair value due to their short term to maturity (amounts due from brokers, dividend and interest receivable, amounts due to brokers, accruals, forward foreign exchange contracts, cash at bank and bank loans).

15.5                            Fair value hierarchy disclosures

The table below analyses fair value measurements for investments held at fair value through profit or loss. These fair value measurements are categorised into different levels in the fair value hierarchy based on the valuation techniques used and are defined as follows under FRS 102:

Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset as follows:

Financial assets at fair value through profit or loss at 31 July 2023	Level 1 £’000	Level 2 £’000	Level 3 £’000	Total £’000
Equity investments	354,852	2,554	–	357,406
Total	354,852	2,554	–	357,406
Financial assets at fair value through profit or loss at 31 July 2022	Level 1 £’000	Level 2 £’000	Level 3 £’000	Total £’000
Equity investments	306,515	1,883	–	308,398
Total	306,515	1,883	–	308,398

15                               Risk management policies and procedures (continued)

15.5             Fair value hierarchy disclosures (continued)

Level 1 – the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

Level 2 – inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.

Level 3 – inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

Holdings within level 2 will include any investments where there is insufficient liquidity in trading volumes at the year end. The holding in OW Bunker is included in Level 3 and is currently valued at £nil (2022: £nil).

The total carrying value of receivables, as stated in Note 12, is a reasonable approximation of their fair value as at the year end date. The total carrying value of financial liabilities, as disclosed in Note 13, is a reasonable approximation of their fair value at the year end date.

15.6             Capital management policies and procedures

The Company’s capital management objectives are:

l to ensure that it will be able to continue as a going concern; and

l to maximise the revenue and capital return to its equity shareholders through an appropriate balance of equity capital and debt.

The Company’s capital as at 31 July 2023 comprised its equity share capital, reserves and bank loans that are shown in the Statement of Financial Position at a total of £350,367,000 (2022: £313,603,000).

The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This review includes:

l the need to buyback equity shares for cancellation, which takes account of the difference between the net asset value per share and the share price (the level of share price discount or premium);

l the demand for new issues of equity shares; and

l the extent to which revenue in excess of that which is required to be distributed should be retained.

The Company is subject to additional externally imposed capital requirements:

l under the multi-currency loan facility total borrowings (Consolidated Gross Borrowings) not to exceed 30% of the Investment Portfolio Value and the net asset value not to fall below £125 million (2022: £125 million). Since the year end the Company has put in place an unsecured loan facility of €30 million to replace the previous facility. Under the new Credit Facility Agreement the aggregate financial indebtedness is not to exceed 30% of the adjusted total asset value and the net asset value is not to fall below £150 million.

l as a public company, the Company has a minimum share capital of £50,000; and

l in order to be able to pay dividends out of profits available for distribution by way of dividends, the Company has to be able to meet one of the two capital restriction tests imposed on investment companies by law.

These requirements are unchanged since last year, unless stated above.

16                               Called up share capital

	Number of shares entitled to dividend	Total number of shares	Nominal value of shares £’000
Allotted and issued ordinary shares of 0.5p each at 31 July 2022	211,855,410	212,055,410	1,060
At 31 July 2023	211,855,410	212,055,410	1,060

During the year the Company issued no shares (2022: none). During the year the Company repurchased no shares (2022: none).

Shares held in treasury (2023: 200,000; 2022: 200,000) are not entitled to receive a dividend.

There is a single class of ordinary share. Accounting policy 1m) on page 58 details the reserves that can be distributed as a dividend. Since 31 July 2023, no shares have been repurchased or issued.

17                                Share premium account

	2023 £’000	2022 £’000
At start of year	41,032	41,032
At end of year	41,032	41,032

18                                Capital reserves

	Capital reserve arising on investments sold £’000	Capital reserve arising on investments held £’000	Capital reserves total £’000
At 1 August 2022	232,193	18,872	251,065
Transfer on disposal of assets	591	(591)	–
Net movement on investments held at fair value through profit or loss	9,967	34,001	43,968
Net movement on foreign exchange	(152)	–	(152)
Expenses and finance costs charged to capital	(1,802)	–	(1,802)
At 31 July 2023	240,797	52,282	293,079

Capital reserve arising on investments sold £’000		Capital reserve arising on investments held £’000	Capital reserves total £’000
At 1 August 2021	229,566	78,156	307,722
Transfer on disposal of assets	32,176	(32,176)	–
Net movement on investments held at fair value through profit or loss	(27,905)	(27,108)	(55,013)
Net movement on foreign exchange	90	–	90
Expenses and finance costs charged to capital	(1,709)	–	(1,709)
Costs relating to sub-division of ordinary shares	(14)	–	(14)
Tax on capital dividend	(11)	–	(11)
At 31 July 2022	232,193	18,872	251,065

The capital reserve arising on revaluation of investments held includes £3,922,000 of unrealised losses on nil valued investments (2022: £3,922,000). Any distributions from the capital reserve arising on investments sold would be restricted by this amount.

19                                Transactions with the Manager and Related Parties

Under the terms of an agreement effective from 22 July 2014, the Company appointed a wholly owned subsidiary company of Janus Henderson Group plc (‘Janus Henderson’) to provide investment management, accounting, administrative and secretarial services. Janus Henderson has contracted with BNP Paribas to provide accounting and administration services.

Details of the management fee arrangements for these services are given in the Strategic Report on page 18. The total of the management fees paid or payable under this agreement to Janus Henderson in respect of the year ended 31 July 2023 was £2,035,000 (2022: £2,052,000) of which £717,000 (per Note 13) was outstanding at 31 July 2023 (2022: £1,123,000).

Janus Henderson also provides certain sales and marketing services for which there is no extra charge.

In addition to the above, Janus Henderson facilitates marketing activities with third parties which are recharged by Janus Henderson to the Company. The total amount in respect of these third party marketing activities for the year ended 31 July 2023 amounted to £18,000 (2022: £58,000) of which £7,000 was outstanding at 31 July 2023 (2022: £31,000).

Details of fees paid to Directors are included in the Directors’ Remuneration Report on page 42 and in Note 6 on page 59.

Additional information

Additional information includes:

l Glossary

l Alternative performance measures

l General shareholder information

l Sustainability related disclosures

l Corporate information – including contact details for the Company’s service providers, financial calendar and information sources

April 26, 2015 – Ariane Flight VA222

CSG Service Optique – ESA / CNES / Arianespace

Glossary

Alternative Investment Fund Managers Directive (“AIFMD”)

Agreed by the European Parliament and the Council of the European Union and adopted into UK legislation, the AIFMD classifies certain investment vehicles, including investment companies, as Alternative Investment Funds (“AIFs”) and requires them to appoint an Alternative Investment Fund Manager (“AIFM”) and Depositary to manage and oversee the operations of the investment vehicle. The Board of the Company retains responsibility for strategy, operations and compliance and the Directors retain a fiduciary duty to shareholders.

Alternative performance measures

A glossary of alternative performance measures can be found on pages 72 and 73.

Association of Investment Companies (“AIC”)

The Company is a member of the AIC which is the trade body for investment companies and represents the industry in relation to various matters which impact the regulation of such entities. The Company is in the AIC Europe Sector.

Benchmark

An index against which performance is compared. For the Company this is the FTSE World Europe (ex UK) Index.

Custodian

The Custodian is responsible for ensuring the safe custody of the Company’s assets and that all transactions in the underlying holdings are transacted in an accurate and timely manner.

Depositary

As an AIF the Company is required to appoint a Depositary which has responsibility for overseeing the operations of the Company including safekeeping, cash monitoring and verification of ownership and valuation of the underlying holdings and is responsible for the appointment of a Custodian. The Depositary is strictly liable for the loss of any investments or other assets in its custody unless it has notified that it has discharged its liability in certain markets. The Depositary has confirmed that it has not discharged liability in relation to any of the Company’s assets.

Derivative

A contract between two or more parties in relation to an underlying security. The value of a derivative will fluctuate in accordance with the value of the security and is a form of gearing as the fluctuations in value are usually greater than the fluctuations in the underlying security’s value. Examples of derivatives are put and call options, swap contracts, futures and contracts for difference. Foreign exchange, interest rates and commodities may also be traded using derivative contracts.

Dividend dates

When declared or announced, each dividend will have three key dates applied to it. The payment date is the date on which shareholders will receive their dividend, either by BACS transfer or by receipt of a dividend cheque. The record date applied to the dividend is used as a cut-off for the Company’s Registrar to know which shareholders should be paid a dividend. Only shareholders on the register of members at the close of business on the record date will receive the dividend. The ex-dividend date is the business day before the record date and is the date upon which the Company’s NAV and share price will be disclosed ex-dividend.

ESG laggard

The term used by MSCI to describe a company lagging its industry based on its high exposure and failure to manage significant ESG risks.

Investment trusts

Investment trusts are public limited companies, listed on the London Stock Exchange, which provide shareholders with a professionally managed portfolio of investments. Investment trusts are exempt from tax on the capital gains arising on their investments subject to meeting certain criteria. Income, net of expenses and tax, is substantially distributed to shareholders. Investment trusts are also known as investment companies, although the tax legislation retains the reference to investment trusts.

Liquidity

In the context of the liquidity of shares in the stock market, this refers to the availability of buyers in the market for the share in question. Where the market in a particular share is described as liquid, that share will be in demand and holders wishing to sell their shares should find ready buyers. Conversely, where the market in a share is illiquid the difficulty of finding a buyer will tend to depress the price that might be negotiated for a sale.

Market capitalisation

The market value of a company, calculated by multiplying the mid-market price per share by the number of shares in issue.

Treasury shares

Shares repurchased by the Company but not cancelled.

Alternative performance measures (unaudited)

The Company uses the following Alternative Performance Measures (“APMs”) throughout the Annual Report, Financial Statements and Notes to the Financial Statements. The APMs are reconciled to the Financial Statements through the narrative below. The Board believes that each of the APMs, which are typically used within the investment trust sector, provide additional useful information to shareholders to help assess the Company’s performance against its peer group.

Discount or premium

The amount by which the market price per share of an investment trust is either higher (premium) or lower (discount) than the NAV per share, expressed as a percentage of the NAV per share.

	NAV per share Pence	Share price Pence	(Discount)/premium to NAV %
At 31 July 2023	161.3	139.5	(13.5)
At 31 July 2022	142.1	120.5	(15.2)

Gearing/(net cash)

Gearing means borrowing money to buy assets with the expectation that the return on investments bought will exceed the interest cost of the borrowings. The gearing percentage reflects the amount of borrowings the Company has used to invest in the market. If the amount calculated is negative, this is a “net cash” position and no gearing. Gearing is different to borrowing. Borrowing is calculated as loans less cash plus the net of outstanding sales and purchases as a percentage of net assets.

The Company’s gearing is calculated as follows:

		2023	2022
Investments held at fair value through profit or loss (page 62) (£’000)	(A)	357,406	308,398
Net assets (page 55) (£’000)	(B)	341,798	301,010
Gearing/(net cash) (C = A / B – 1) x 100 (%)	(C)	4.6	2.5

NAV per ordinary share

The value of the Company’s assets (i.e. investments (see Note 11) and cash at bank and in hand (see Statement of Financial Position)) less any liabilities (i.e. bank borrowings (see Note 13)) for which the Company is responsible divided by the number of shares in issue (see Note 16). The aggregate NAV is also referred to as total shareholders’ funds in the Statement of Financial Position. The NAV per share is published daily and the year end NAV can be found on page 2 and further information is available on page 63 in Note 14 within the Notes to the Financial Statements.

Ongoing charges

The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total investment management fee and other administrative expenses and expressed as a percentage of the average net asset values throughout the year.

	2023 £’000	2022 £’000
Management fee (Note 5)	2,035	2,052
Other administrative expenses (Note 6)	553	553
Less: non-recurring expenses	(92)	(151)
Ongoing charges	2,496	2,454
Average net assets¹	317,263	326,301
Ongoing charges ratio (%)	0.79	0.75

1 Calculated using the average daily net asset value

The ongoing charges calculated above are different from ongoing costs provided in the Company’s Key Information Document (“KID”) which are calculated in line with the PRIIPs Regulation. The ongoing costs in the KID include finance costs and look through to costs incurred by other investment trusts and funds the Company invests in, if any. The non recurring expenses include non-utilisation fees and certain professional fees (2022: non-utilisation fees and legal fees).

Revenue earnings per share

The revenue earnings per share is the revenue return for the year (see Income Statement) divided by the weighted average number of ordinary shares in issue during the year (see Note 9 on page 61).

Total return

The return on the share price or NAV taking into account both the rise and fall of NAV/share price and dividends paid to shareholders. Any dividends received by a shareholder are assumed to have been reinvested in either additional shares (for share price total return) or the Company’s assets (for NAV total return). Dividends paid and payable are set out in Note 10 on page 61.

	NAV	Share price
NAV/Share price per share at 31 July 2022 (pence)	142.1	120.5
NAV/Share price per share at 31 July 2023 (pence)	161.3	139.5
Change in the year (%)	13.5	15.8
Impact of dividends reinvested (%)	2.8	3.4
Total return for the year (%)	16.7	19.7

Dividend yield

The yield is the annual dividend expressed as a percentage of the year end share price.

		31 July 2023	31 July 2022
Annual dividend (pence)	(A)	3.8	3.8
Share price (pence)	(B)	139.5	120.5
Yield (C=A/B) (%)	(C)	2.7	3.2

General shareholder information

Alternative Investment Fund Managers Directive (“AIFMD”) Disclosures

In accordance with the AIFMD, information in relation to the Company’s leverage and remuneration of Janus Henderson Fund Management UK Limited, as the Company’s Alternative Investment Fund Manager (“AIFM”) is required to be made available to investors. These disclosures, including those on the AIFM’s remuneration policy, are contained in a separate document called “AIFMD Disclosure” which can be found on the Company’s website www.hendersoneurotrust.com.

BACS

Dividends can be paid to shareholders by means of BACS (Bankers’ Automated Clearing Services); mandate forms for this purpose are available from the Registrar. Alternatively, shareholders can write to the Registrar (the address is given on page 82) to give their instructions; these must include the bank account number, the bank account title and the sort code of the bank to which payments are to be made.

Common Reporting Standard

Tax legislation under The Organisation for Economic Co-operation and Development Common Reporting Standard for Automatic Exchange of Financial Account Information requires the Company to provide personal information to HMRC on certain investors who purchase shares in investment trusts. This information has to be provided annually to the local tax authority of the tax residencies of a number of non-UK based certificated shareholders and corporate entities.

Equality Act

Copies of this report and other documents issued by the Company are available from the Corporate Secretary. If needed, copies can be made available in a variety of formats, including Braille or larger type as appropriate.

You can contact the Registrar, which has installed textphones to allow speech and hearing impaired people who have their own textphone to contact them directly, without the need for an intermediate operator by dialling 0370 702 0005. Specially trained operators are available during normal business hours to answer queries via this service.

Alternatively, if you prefer to go through a “typetalk” operator (provided by the Royal National Institute for Deaf People) dial 180015 followed by the number you wish to dial.

Foreign Account Tax Compliance (“FATCA”)

FATCA is a United States federal law whose intent is to enforce the requirement for United States persons (including those living outside the USA) to file yearly reports on their non-USA financial accounts. Investment trusts need to monitor each year the trading volume and frequency of their shares and securities to assess whether they have financial accounts. The Company makes an annual assessment, before the FATCA return is due, to determine if the shares represent financial accounts and, where they do, identify and report USA reportable accounts to HMRC, as required.

General Data Protection Regulation

A privacy statement can be found on the website

www.janushenderson.com.

ISA

The Company intends to continue to manage its affairs in order to qualify as an eligible investment for a stocks and shares ISA.

Non-mainstream pooled investments (“NMPI”) status

The Company currently conducts its affairs so that its ordinary shares of 0.5p each can be recommended by IFAs to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The shares are excluded from the FCA’s restrictions which apply to non- mainstream investment products because they are shares in an investment trust.

Packaged Retail and Insurance- based Investment Products

(“PRIIPs”) Regulation/Key Information Document (“KID”)

Investors should be aware that the PRIIPs Regulation requires the Manager, as the PRIIP manufacturer, to prepare a key information document in respect of the Company. This KID must be made available by the Manager to retail investors prior to them making any investment decision and is available on the Company’s website. The Company is not responsible for the information contained in the KID and investors should note that the procedures for calculating the risks, costs and potential returns are prescribed by legislation. The figures in the KID may not reflect the expected returns for the Company and anticipated performance returns cannot be guaranteed.

Performance details/share price information

Details of the Company’s share price and NAV per share can be found on the website. The address is www.hendersoneurotrust.com. The Company’s NAV is published daily.

The market price of the Company’s ordinary shares is published daily in The Financial Times. The Financial Times also shows figures for the estimated NAV per share and the discount.

The market price of the Company’s shares can also be found in the London Stock Exchange Daily Official List.

Shareholder details

Shareholders who hold their shares in certificated form can check their shareholding with the Registrar via www.computershare.com.

Please note that to gain access to your details on the Computershare site you will need the holder reference number shown on your share certificate.

Taxonomy Regulation

Regulation (EU) 2020/852 (“Taxonomy Regulation”) establishes the basis for the EU taxonomy. The EU taxonomy is a classification system, establishing a list of environmentally sustainable economic activities to provide companies, investors and policymakers with appropriate definitions for which economic activities can be considered environmentally sustainable. In accordance with the Taxonomy Regulation, the Company states that the investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

Warning to shareholders

Many companies are aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based “brokers” who target UK shareholders offering to sell them what often turn out to be worthless or high risk shares in US or UK investments. They can be very persistent and extremely persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports.

Please note that it is very unlikely that either the Company or the Company’s Registrar, Computershare Investor Services PLC, would make unsolicited telephone calls to shareholders and that any such calls would relate only to official documentation already circulated to shareholders and never in respect of investment “advice”.

If you are in any doubt about the veracity of an unsolicited phone call, please call the Corporate Secretary on 020 7818 1818. You can also check the FCA Warning List at #BeScamSmart https://www.fca.org.uk/scamsmart

Sustainability Related Disclosures

Sustainability-related disclosure

Periodic disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and 2a, of Regulation (EU) 2019/2088 and Article 6, first paragraph, of Regulation (EU) 2020/852.

Product name: Henderson EuroTrust plc Legal entity identifier: 213800DAFFNXRBWOEF12

l   Sustainable investment means an investment in an economic activity that contributes to an environmental or social objective, provided that the investment does not significantly harm any environmental or social objective and that the investee companies follow good governance practices.

l The EU Taxonomy is a classification system laid down in Regulation (EU) 2020/852, establishing a list of environmentally sustainable economic activities. That Regulation does not include a list of socially sustainable economic activities.

Sustainable investments with an environmental objective might be aligned with the Taxonomy or not.

Environmental and/or social characteristics

Did this financial product have a sustainable investment objective?
•  •     Yes	•          ✖   No
It made sustainable investments with an environmental objective: __% in economic activities that qualify as environmentally sustainable under the EU Taxonomy in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy It made sustainable investments with a social objective: __%	It promoted  Environmental/ Social (E/S) characteristics and while it did not have as its objective a sustainable investment, it had a proportion of __% of sustainable investments with an environmental objective in economic activities that qualify as environmentally sustainable under the EU Taxonomy with an environmental objective in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy with a social objective ✖   It promoted E/S characteristics, but did not make any sustainable investments

• Sustainability indicators measure how the environmental or social characteristics promoted by the financial product are attained. To what extent were the environmental and/or social characteristics promoted by this financial product met?   From 1st August 2022 until the end of the reference period (herein referred to as the “reference period”).   The Company promotes climate change mitigation and support for the UNGC principles (which cover matters including human rights, labour, corruption and environmental pollution). The Company also promotes good health and well-being by seeking to avoid investments in certain activities with the potential to cause harm to human health and wellbeing via use of binding exclusions, and also by investing a minimum proportion of the Company in investments deemed to align with UN Sustainable Development Goal ‘3’ (“Good Health and Well-being”). The Company does not use a reference benchmark to attain its environmental or social characteristics.

		How did the sustainability indicators perform? The sustainability indicators performed in line with expectations with the portfolio adhering to the Global Compact principles and ESG exclusionary screens. The sustainability indicators performed in line with expectations. All portfolio companies adhered to the Global Compact principles, less than 5% of the portfolio was exposed to companies rated as a ‘Laggard’ by MSCI, more than 5% of the portfolio was invested in companies aligned with the UN SDG of ‘Good Health & Well-being’ and the portfolio retained zero exposure to the bottom 5% of companies in the index when ranked by carbon intensity’. Carbon Footprint (t/million USD) – Scope 1&2: Total Carbon emissions for a portfolio normalized by the market value of the portfolio, expressed in tons CO2e/$M invested. Weighted Average Carbon Intensity (WACI) (t/million USD) – Scope 1&2: Portfolios Exposure to carbon-intensive companies, expressed in tons CO2e/$M invested. The Carbon Footprint value of the portfolio was 15.73 (t/million USD) vs the benchmark 72.55 (t/million USD). The WACI value of the portfolio was 25.86 (t/million USD) vs the benchmark 111.94. The SDG Alignment Portfolio AUM was 7.1%. …and compared to previous periods? Not applicable. This is the first reference period disclosing under this format.
• Principal adverse impacts are the most significant negative impacts of investment decisions on sustainability factors relating to environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.		What were the objectives of the sustainable investments that the financial product partially made and how did the sustainable investment contribute to such objectives? This section is not applicable, the Investment trust company does not invest in Sustainable Investments. How did the sustainable investments that the financial product partially made not cause significant harm to any environmental or social sustainable investment objective? This section is not applicable, the fund does not invest in Sustainable Investments. How were the indicators for adverse impacts on sustainability factors taken into account? This section is not applicable, the Investment trust company does not invest in Sustainable Investments. Were sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights? Details: This section is not applicable, the Investment trust company does not invest in Sustainable Investments.

		How did this financial product consider principal adverse impacts on sustainability factors?
		As at the date of this disclosure, the Investment Manager considers the following principal adverse impacts on sustainability factors (“PAIs”):
		Principle Adverse Impact		How is PAI considered
		Violations of UNGC and OECD		Exclusionary screens
		Exposure to controversial weapon		Exclusionary screens
		GHG Emissions		Exclusionary screens
		Carbon Footprint		Exclusionary screens
		GHG Intensity of Investee Compan	ies	Exclusionary screens
		Exposure to companies active in fo	ssil fuel	Exclusionary Screens
		Activities negatively affecting biodi sensitive areas	versity	Exclusionary Screens
		For further information please refer to the Pre-Contractual Agreement found in the SFDR Website Disclosure found on the Product Page Website.
•	The list includes the investments constituting the greatest proportion of investments of the financial product during the reference period which is: 1st August 2022 to 31st July 2023.	What were the top investments of this financial product?
		Asset name	Country	Sector	Sum of weight (%)
		Novo Nordisk	Denmark	Health Care	5.61
		TotalEnergies	France	Energy	5.35
		Nestlé	Switzerland	Consumer Staples	5.15
		Roche	Switzerland	Health Care	4.68
		Sanofi	France	Health Care	4.23
		UniCredit	Italy	Financials	3.44
		ASML	Netherlands	Information Technology	3.43
		LVMH Moët Hennessy Louis Vuitton	France	Consumer Discretionary	3.42
		Hermès	France	Consumer Discretionary	3.24
		Munich Re.	Germany	Financials	2.98
		Airbus	France	Industrials	2.96
		Cellnex	Spain	Communication Services	2.87
		SAP	Germany	Information Technology	2.74
		Safran	France	Industrials	2.70
		Bawag	Austria	Financials	2.69

The list above represents the average of the Fund’s holdings at each quarter end during the reference period.

		What was the proportion of sustainability-related investments?
• Asset allocation describes the share of investments in specific assets.		What was the asset allocation?
			#1 Aligned with E/S characteristics includes the investments of the financial product used to attain the environmental or social characteristics promoted by the financial product. #2 Other includes the remaining investments of the financial product which are neither aligned with the environmental or social characteristics, nor are qualified as sustainable investments.
		In which economic sectors were the investments made?
		From 1st August 2022 until the end of the reference period we made investments in the following sectors:
		Sector	% weighting
		Communication Services Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Utilities Cash/(leverage)	4.23 11.26 13.74 5.07 18.38 20.12 14.59 10.65 5.63 1.39 -5.06
		The list above represents the economic sectors of the Fund’s holdings during the reference period.
•          To comply with the EU Taxonomy, the criteria for fossil gas include limitations on emissions and switching to fully renewable power or low-carbon fuels by the end of 2035. For nuclear energy, the criteria include comprehensive safety and waste management rules. •          Enabling activities directly enable other activities to make a substantial contribution to an environmental objective. •          Transitional activities are activities for which low-carbon alternatives are not yet available and among others have greenhouse gas emission levels corresponding to the best performance.		To what extent were the sustainable investments with an environmental objective aligned with the EU Taxonomy? Not Applicable: The Investment trust company does not align with the EU Taxonomy. Did the financial product invest in fossil gas and/or nuclear energy related activities complying with the EU Taxonomy1? Not Applicable: The Investment trust company does not align with the EU Taxonomy. Yes: In fossil gas           In nuclear energy _X No 1 Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they contribute to limiting climate change (“climate change mitigation”) and do not significantly harm any EU Taxonomy objective - see explanatory note in the left hand margin. The full criteria for fossil gas and nuclear energy economic activities that comply with the EU Taxonomy are laid down in Commission Delegated Regulation (EU) 2022/1214			79

Taxonomy-aligned activities are expressed as a share of: ·       turnover reflecting the share of revenue from green activities of investee companies. ·       capital expenditure (CapEx) showing the green investments made by investee companies, e.g. for a transition to a green economy. ·       operational expenditure (OpEx) reflecting green operational activities of investee companies.

The graphs below show in green the percentage of investments that were aligned with the EU Taxonomy. As there is no appropriate methodology to determine the taxonomy-alignment of sovereign bonds*, the first graph shows the Taxonomy alignment in relation to all the investments of the financial product including sovereign bonds, while the second graph shows the Taxonomy alignment only in relation to the investments of the financial product other than sovereign bonds.

*For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures.

	What was the share of investments made in transitional and enabling activities? Not Applicable: The Investment trust company does not align with the EU Taxonomy. How did the percentage of investments that were aligned with the EU Taxonomy compare with previous reference periods? Not Applicable: The Investment trust company does not align with the EU Taxonomy.
are sustainable investments with an environmental objective that do not take into account the criteria for environmentally sustainable economic activities under Regulation (EU) 2020/852.	What was the share of sustainable investments with an environmental objective not aligned with the EU Taxonomy? Not Applicable: The Investment trust company does not align with the EU Taxonomy or hold sustainable investments. What was the share of socially sustainable investments? This section is not applicable, the Investment trust company does not invest in Sustainable Investments.

	What investments were included under “other”, what was their purpose and were there any minimum environmental or social safeguards?
	Other assets may include cash or cash equivalents in addition to instruments held for the purposes of efficient portfolio management e.g. temporary holdings of index derivatives. No minimum environmental or social safeguards are applied to such investments.
	What actions have been taken to meet the environmental and/or social characteristics during the reference period?
	There were no exclusionary screens breached for the portfolio and compliance pre-trade controls have been applied to ensure adherence to the ESG exclusionary screens listed above.
• Reference benchmarks are indices to measure whether the financial product attains the environmental or social characteristics that they promote.	How did this financial product perform compared to the reference benchmark? Not Applicable: The Investment trust company does not use a reference benchmark to attain its environmental or social characteristics.
	How does the reference benchmark differ from a broad market index?
	Not Applicable: The Investment trust company does not use a reference benchmark to attain its environmental or social characteristics.
	How did this financial product perform with regard to the sustainability indicators to determine the alignment of the reference benchmark with the environmental or social characteristics promoted?
	Not Applicable: The Investment trust company does not use a reference benchmark to attain its environmental or social characteristics.
	How did this financial product perform compared with the reference benchmark?
	Not Applicable: The Investment trust company does not use a reference benchmark to attain its environmental or social characteristics.
	How did this financial product perform compared with the broad market index?
	Not Applicable: The Investment trust company does not use a reference benchmark to attain its environmental or social characteristics.

Corporate information

Registered office

201 Bishopsgate

London EC2M 3AE

Telephone: 020 7818 1818

Service providers

Alternative Investment Fund Manager

Janus Henderson Fund Management UK Limited

201 Bishopsgate

London EC2M 3AE

Corporate Secretary

Janus Henderson Secretarial Services UK Limited

201 Bishopsgate

London EC2M 3AE

Telephone: 020 7818 1818

Email: support@janushenderson.com

Registrar

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

Telephone: 0370 707 1034

Email: web.enquiries@computershare.co.uk

Depositary and Custodian

HSBC Bank plc

8 Canada Square

London E14 5HQ

Broker

J.P. Morgan Cazenove

25 Bank Street

Canary Wharf

London E14 5JP

Independent Auditor

BDO LLP

55 Baker Street

London W1U 7EU

Financial calendar

Annual results                         announced September 2023

Ex-dividend date                                        19 October 2023

Dividend record date                                  20 October 2023

Annual General Meeting                         15 November 2023

Final dividend payable on                      22 November 2023

Half-year results                                                 March 2024

Interim dividend payable                                       April 2024

Information sources

For more information about Henderson EuroTrust plc, visit the website at www.hendersoneurotrust.com.

To receive regular insights on investment trusts from the Manager, visit: https://www.janushenderson.com/en-gb/ investor/subscriptions/ or scan the QR code and register with Janus Henderson.

Follow Janus Henderson Investment Trusts LinkedIn

– Janus Henderson Investment Trusts, UK.

Investing

Shares can be purchased in the market via a stockbroker or through share dealing platforms. They can also be held through share plans, ISAs or pensions and links to various providers are included on the website.

Potential investors are reminded that the value of investments and the income from them may go down as well as up and investors may not receive the full amount invested. Tax benefits may vary as a result of statutory changes and their value will depend on individual circumstances.

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 them when invited to do so by the Chairman.

Voting on shares

The AIC has provided information on how to vote investment company shares on some major platforms. This information can be found at www.theaic.co.uk/how-to-vote-your-shares.

Henderson EuroTrust plc

Registered as an investment company in England and Wales with

registration number 02718241

Registered office: 201 Bishopsgate, London EC2M 3AE

SEDOL/ISIN number: Ordinary Shares: BP6QR38/GB00BP6QR382

London Stock Exchange (TIDM) Code: HNE

Global Intermediary Identification Number (GIIN): P560WP.99999.SL.826

Legal Entity Identifier (LEI): 213800DAFFNXRBWOEF12

Telephone: 0800 832 832

Email: support@janushenderson.com

www.hendersoneurotrust.com

This report is printed on Revive 100 Silk manufactured from FSC® Recycled certified fibre derived from 100% pre and post-consumer waste at a mill certified with ISO 14001 environmental management standard.

The pulp used in this product is bleached using an Elemental Chlorine Free process. This product is made of material from well-managed FSC®– certified forests, recycled materials, and other controlled sources.

Designed and typeset by 2112 Communications, London.                                                                                                        Printed by Pureprint, Sussex                                                                                             JHI9206/2023