NEW STAR INVESTMENT TRUST PLC

Annual Report • Nov 21, 2024

Job No: 53509 Proof Event: 1 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Cover T: 0207 055 6500 F: 020 7055 6600 NEW STAR INVESTMENT TRUST PLC REPORT AND ACCOUNTS for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST REPORT AND ACCOUNTS JUNE 2024 NEW STAR INVESTMENT TRUST PLC 1 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 Page INVESTMENT OBJECTIVE 2 COMPANY INFORMATION 3 BOARD OF DIRECTORS 4 STRATEGIC REPORT: – FINANCIAL HIGHLIGHTS 5 – CHAIRMAN’S STATEMENT 6 – INVESTMENT MANAGER’S REPORT 7 – SCHEDULE OF LARGEST INVESTMENTS 10 – STRATEGIC REVIEW 11 DIRECTORS’ REPORT 18 CORPORATE GOVERNANCE STATEMENT 25 REPORT OF THE AUDIT AND RISK COMMITTEE 29 DIRECTORS’ REMUNERATION REPORT 32 STATEMENT OF DIRECTORS’ RESPONSIBILITIES 35 INDEPENDENT AUDITOR’S REPORT 36 STATEMENT OF COMPREHENSIVE INCOME 48 STATEMENT OF CHANGES IN EQUITY 49 BALANCE SHEET 50 CASH FLOW STATEMENT 51 NOTES TO THE ACCOUNTS 52 NOTICE OF ANNUAL GENERAL MEETING 73 CONTENTS NEW STAR INVESTMENT TRUST PLC 2 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 The Company’s objective is to achieve long-term capital growth. THIS DOCUMENT IS IMPORTANT and, if you are a holder of Ordinary shares requires your attention. If you are in doubt as to what action to take you should seek advice from your own independent personal financial advisor. If you have sold or otherwise transferred all of your Ordinary shares in the capital of the Company you should send this document and the accompanying Form of Proxy immediately to the purchaser or transferee; or to the stockbroker, bank or other agent through whom the sale or transfer was effected. The Company’s shares are traded on the London Stock Exchange and are not subject to restriction under the Financial Conduct Authority’s non-mainstream investment products regime. REGISTERED OFFICE 1 Knightsbridge Green, London, SW1X 7QA Company Number: 03969011 INVESTMENT OBJECTIVE NEW STAR INVESTMENT TRUST PLC 3 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS G Howard-Spink (Chairman) J L Duffield (Deputy Chairman) D J Gamble W McQuaker INVESTMENT MANAGER Brompton Asset Management Limited 1 Knightsbridge Green, London SW1X 7QA (Authorised and regulated by the Financial Conduct Authority) SECRETARY AND ADMINISTRATOR Apex Fund Administration Services (UK) Ltd Hamilton Centre, Rodney Way, Chelmsford, Essex CM1 3BY Telephone: 01245 398950 | email: cosec-uk@apexgroup.com SOLICITORS CMS Cameron McKenna Nabarro Olswang LLP Cannon Place, 78 Cannon Street London EC4N 6AF AUDITORS Johnston Carmichael LLP Bishops Court, 29 Albyn Place, Aberdeen AB10 1YL CUSTODIAN Brown Brothers Harriman & Co Park House, 16 – 18 Finsbury Circus, London EC2M 7EB REGISTRARS Equiniti Limited Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA Telephone: 0371 384 2549 Website: shareview.co.uk WEBSITE www.nsitplc.com The Company’s shares are traded on the London Stock Exchange and their prices are shown in the Financial Times under “Investment Companies”. COMPANY INFORMATION NEW STAR INVESTMENT TRUST PLC 4 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 Geoffrey Howard-Spink (Chairman) was one of the founders in 1981 of Lowe Group Limited, one of the UK’s biggest advertising groups. He was Chairman of Immedia Group PLC and a director of Chrysalis. Mr Howard-Spink has been a Director since 2000. He was appointed Chairman of the Company with effect from 13th May 2009. John L Duffield (Deputy Chairman) is the Chairman of Brompton Asset Management Group Limited. Mr Duffield was Chairman of New Star Asset Management Group PLC between 2000 and April 2009. Prior to founding New Star, Mr. Duffield was the founder and chief executive of Jupiter International Group from 1985 to 2000. Mr. Duffield has been a Director since 2000. David Gamble was Chief Executive of British Airways Pension Investment Management from 1993 to 2004. He has also served as a director of numerous financial services companies including a number of investment companies. Mr. Gamble was appointed a Director on 16th November 2017 and is the Chairman of the Audit and Risk Committee. William McQuaker was head of Multi-Asset at Henderson Global Investors from June 2005 to April 2016. He is currently a senior adviser to the Solutions & Multi-Asset team at Fidelity International Limited and sits on the investment committee of wealth management company, Artorius. Mr. McQuaker was appointed a Director on 19th June 2023. BOARD OF DIRECTORS * Members of the Audit and Risk Committee and Independent Directors. NEW STAR INVESTMENT TRUST PLC 5 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 FINANCIAL HIGHLIGHTS 30th June 2024 30th June 2023 % Change PERFORMANCE Net assets (£ ‘000) 137,861 125,592 9.77 Net asset value per Ordinary share 194.11p 176.83p 9.77 Mid-market price per Ordinary share 131.50p 120.00p 9.58 Discount of price to net asset value 32.3% 32.1% n/a Total Return 11.69% 2.62% n/a IA Mixed Investment 40% - 85% Shares (total return) 11.80% 3.37% n/a MSCI AC World Index (total return, sterling adjusted) 20.61% 11.89% n/a MSCI UK Index (total return) 13.16% 6.78% n/a 1st July 2023 to 30th June 2024 1st July 2022 to 30th June 2023 Revenue return per Ordinary share 4.05p 2.99p Capital return per Ordinary share 16.62p 1.58p Return per Ordinary share 20.67p 4.57p TOTAL RETURN 11.69% 2.62% DIVIDEND PER ORDINARY SHARE Interim paid April 2024 1.70p 0.90p Proposed final dividend 1.70p 1.70p 3.40p 2.60p * The total return figure for the Company represents the revenue and capital return shown in the Statement of Comprehensive Income divided by the net asset value at the beginning of the period. The total return performance basis is the industry standard and is considered a more appropriate measure than just the revenue returns. This is an alternative performance measure. STRATEGIC REPORT for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 6 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 CHAIRMAN’S STATEMENT PERFORMANCE Your Company’s generated a total return of 11.69% over the year to 30th June 2024, leaving the net asset value (NAV) per ordinary share at 194.11p. By comparison, the Investment Association’s Mixed Investment 40-85% Shares Index gained 11.80%. The MSCI AC World Total Return Index gained 20.61% in sterling while the MSCI UK All Cap Total Return Index rose 13.16%. Over the year, UK government bonds returned 4.50%. Further information is provided in the investment manager’s report. Your Company made a revenue profit for the year of £2.88 million (2023: £2.12 million). RETURN OF CAPITAL On 21st June 2024, the board announced plans to return £17 million to shareholders by way of a B share scheme. On 24th July 2024, shareholders voted in favour of the scheme at an extraordinary general meeting. New B Shares were issued and then redeemed immediately at a price of 24p per B share. Following the scheme, your Company’s total issued share capital and voting rights were unchanged. Your Company financed the repayment by selling a proportion of its holdings across the board with a view broadly to maintaining in percentage terms the asset allocation, including the allocation to cash. As a result, the risk profile of the portfolio was broadly unchanged. CHANGE OF INVESTMENT OBJECTIVE Your Board is proposing to widen the investment objective towards total return rather than simply capital growth. This revised objective will be put to shareholders at the forthcoming annual meeting. GEARINGS AND DIVIDEND Your Company has no borrowings. It ended the year under review with cash and bank deposits representing 11.61% of its NAV and is likely to maintain a significant cash and bank deposit position. In respect of the financial year to 30th June 2024, your Directors recommend the payment of a final dividend of 1.7p per share, making a total for the year of 3.4p (2023: 2.6p). DISCOUNT During the year under review, your Company’s shares continued to trade at a significant discount to their NAV. The Board keeps this issue under review. OUTLOOK Inflation in the US, the UK and eurozone is likely to fall further towards the leading central banks’ 2% targets over the remainder of 2024. Amid this backdrop and at a time of weakening monetary trends within the Group of Seven major industrial nations and the seven largest emerging markets, there are likely to be further reductions in policy interest rates. Lower interest rates should be supportive for equities and bonds. There may, however, be increased volatility ahead of November’s US presidential election, especially given the conflicts in Ukraine and the Middle-East and as investors attempt to discern the potential for profit from advances in artificial intelligence. NET ASSET VALUE After the return of capital, your Company’s unaudited NAV at 30 September 2024 was 169.07p. Geoffrey Howard-Spink Chairman 31st October 2024 STRATEGIC REPORT for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 7 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REPORT for the year ended 30th June 2024 INVESTMENT MANAGER’S REPORT MARKET REVIEW Equities, as measured by the MSCI AC World Total Return Index, and bonds, as measured by the Bloomberg Barclays Global Aggregate Bond Total Return Index, rose 20.61% and 1.50% respectively in sterling over the year to 30 June 2024 as inflation fell towards the major central banks’ 2% targets. In response, the European Central Bank (ECB) eased its monetary policy for the first time in the current interest rate cycle, reducing its main policy rate by a quarter percentage point to 4.25%. Shortly after the year end, the Bank of England cut Bank Rate by a quarter point to 5% and in September the Federal Reserve reduced its policy rate by a half point to 4.75-5.0%. The US core personal consumption expenditures price index, the Fed’s preferred inflation measure, fell from 4.3% in June 2023 to 2.6% in July 2024. UK headline inflation fell from 7.9% in June 2023 to 2.0% in May and June 2024 before increasing to 2.2% in July. The ECB’s preferred eurozone inflation measure fell from 5.5% in June 2023 to lows of 2.4% in November 2023 and April 2024 before increasing to 2.6% in July. Emerging from two quarters of mild recession, the UK recorded stronger-than-expected economic growth of 0.7% in the first quarter of 2024 followed by 0.6% in the second quarter. After Labour’s general election victory in July, tax increases are expected in October’s budget. Clarity on fiscal policy may, however, encourage businesses and households to commit to longer-term spending, enhancing economic activity. By contrast, the Bank of Japan (the BoJ) began to reverse its accommodative monetary policy, which had been intended to achieve sustained 2% inflation through negative interest rates after decades of deflation. The BoJ raised its key short-term interest rate in March 2024 from -0.1% to a 0-0.1% range in the first rise since 2007 and raised the rate a second time in July, taking it to 0.25%. Japanese stocks rose 25.59% in yen terms as currency-weakness improved Japan’s export competitiveness but the yen’s decline against the pound reduced the gain to 13.49% in sterling terms. Among developing economies, China eased monetary policy by cutting its key reserve requirement ratio from 7.6% to 7.4% in September 2023 and to 7% in February 2024. Despite this, Chinese stocks fell 0.87% in sterling over the year as a result of slowing economic growth, property-sector over-indebtedness and bipartisan US support for trade restrictions. China’s “common prosperity” measures collided with shareholder interests to justify a higher risk premium and lower valuations for Chinese stocks. By contrast, Indian equities rose 35.67% in sterling, benefitting from strong economic growth, business-friendly policies and protections for shareholder rights under the rule of law. In India’s general election, Narendra Modi, the Prime Minister, secured a third term in office, albeit propped by coalition partners. PORTFOLIO REVIEW Your Company’s total return over the year under review was 11.69%. By comparison, the Investment Association (IA) Mixed Investment 40-85% Shares sector, a peer group of multi- asset funds with allocations to equities in the 40-85% range, rose 11.80%. The MSCI AC World Total Return and MSCI UK All Cap Total Return Indices rose 20.61% and 13.16% respectively while global bonds rose 1.50% in sterling and UK government bonds rose 4.50%. Your Company is invested across asset classes to increase diversification and reduce longer-term risks. In consequence, performance did not keep pace with a strongly rising equity market as sterling and NEW STAR INVESTMENT TRUST PLC 8 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REPORT for the year ended 30th June 2024 INVESTMENT MANAGER’S REPORT continued dollar cash and low-risk multi-asset investments lagged the gains for equities. Within the equity allocation, a relatively high emerging markets weighting at the expense of the technology-heavy US market compared to the IA 40-85% Shares sector hurt performance. The focus on higher- yielding markets and investments managed in accordance with an income mandate will facilitate the payment of dividends by your Company. US technology stocks rose 45.14% in sterling as investors embraced the commercial potential of artificial intelligence (AI), fuelling the 25.27% gain in US stocks overall. Within the portfolio, Polar Capital Global Technology, the largest holding at the year end, and the iShares S&P 500 exchange- traded fund (ETF) gained 41.70% and 26.94% respectively. Polar Capital Global Technology has focussed on beneficiaries of the demand for artificial intelligence, with Nvidia, the leading designer of AI semiconductors, the largest holding. This focus on AI may lead to greater volatility of returns because of the difficulties inherent in forecasting the commercial development of an emerging technology. Nvidia outsources production to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading foundry, and TSMC is another large Polar Capital holding because hardware suppliers should benefit from commercial applications for AI. TSMC is also a large holding in the portfolio’s emerging markets holdings including Polen Capital Asia Income, Schroder Asian Income Maximiser, the Schroder Oriental Income investment trust and JP Morgan’s two Emerging Markets Income funds, one of which is an investment trust. Nvidia and TSMC gained 193.81% and 65.03% in sterling respectively over the year. Your Company will benefit in the longer term from AI advances because of its significant allocation to technology stocks. Investments outside US technology may, however, provide some protection and diversification if and when technology stocks fall short of investors’ expectations. By contrast, your Company’s relatively high weightings in developing markets hurt performance as equities in Asia excluding Japan and emerging markets lagged, rising 13.92% and 13.62% respectively in sterling. Valuations ended the year relatively low, however, and likely US interest rate cuts may lead to dollar weakness, which typically increases demand for developing economy assets. Within the emerging markets allocation, Stewart Investors Indian Subcontinent did best, rising 24.40%, while Vietnam Enterprise Investments was weakest, up 1.55%. The UK stock market also lagged, rising 13.29%, but smaller stocks did slightly better, rising 14.49%. UK companies ended the year relatively lowly valued and may prove defensive should equities fall overall. Within the portfolio’s UK equity allocation, Aberforth Split Level Income did best, rising 31.60% over the year. The majority of your Company’s holding in this investment trust was rolled over in June 2024 into Aberforth Geared Value & Income, which has a similar mandate, investing in smaller value stocks. Man GLG UK Income, which invests across the market cap spectrum in value stocks, also outperformed rising 20.62%, while Chelverton UK Equity Income, a small cap specialist, gained 13.80%. Over the course of the year, various long-standing investments were sold including Fundsmith as well as Crux European Special Situations and BlackRock Continental Income, two disposals that reduced your Company’s allocation to equities in Europe excluding the UK. NEW STAR INVESTMENT TRUST PLC 9 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REPORT for the year ended 30th June 2024 INVESTMENT MANAGER’S REPORT continued Investment in higher-yielding equity investments facilitates the payment of dividends by your Company. Higher-yielding equities may also deliver attractive total returns because an above- average yield may indicate an undervalued investment opportunity capable of delivering capital returns alongside a healthy dividend. The allocation to equity income holdings increased during the year through purchases of Baillie Gifford Global Income Growth and Redwheel Global Equity Income. A new investment was also made in Clearbridge Global Infrastructure Income. Infrastructure stocks typically benefit from falling interest rates because many have bond-like characteristics as a result of the high visibility of future cash flows. Spending on environmentally friendly electricity generation and distribution to meet governments’ clean energy targets is a major opportunity for some companies in the Clearbridge portfolio. Investment in higher- yielding UK equities was also increased through an addition to Man GLG UK Income. Your Company’s holdings in developing economies increased through purchases of Schroder Asian Income Maximiser, Prusik Asian Equity Income and Schroder Oriental Income. Matthews Asia ex-Japan was sold, however, following a change of manager and investment mandate from income to total return as was Baillie Gifford Pacific. In Japan, Lindsell Train Japanese Equity, a growth-oriented holding, was sold following poor performance while the JP Morgan Japan Small Cap Growth & Income, an investment trust, was added. Trojan, a low-risk multi-asset investment, and BlackRock Gold & General, which invests in mining companies, were sold. These investments provided diversification during the recent rate- tightening cycle in which your Company had a low allocation to bonds, which typically fall as interest rates rise. A sterling-hedged iShares Treasury Bond 7-10 Years ETF holding and Schroder Strategic Credit were purchased, however, because interest rates appeared to reach a cyclical peak and these holdings may provide attractive income as well as capital gains as interest rates fall. OUTLOOK Following your Company’s year end, £17 million was returned to shareholders via a B share issue and redemption. The asset allocation was kept broadly unchanged. Over the coming months, inflation is likely to fall further towards central bank targets, leading to monetary easing across the major western economies. Easier monetary policy should support equities and bonds while your Company’s cash and longer-term deposits provide income and some diversification in the event that markets fall. Your Company has benefited from the strong performance from US technology stocks but changes over the year have resulted in a higher allocation to more lowly-valued countries and sectors, which may prove defensive if investors become disenchanted with the scale or pace of the commercialisation of AI advances. With the outcome far from clear, there may be increased volatility ahead of November’s US presidential election. Since your Company’s year-end, conflict in the Middle East has intensified although the impact on global markets, particularly oil prices, remains muted for now because of US energy self-sufficiency. A focus on equity income investments may provide some defensiveness in times of heightened volatility and facilitate the payment of dividends by your Company. Brompton Asset Management LLP Investment manager 31st October 2024 NEW STAR INVESTMENT TRUST PLC 10 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 SCHEDULE OF LARGEST HOLDINGS AT 30th JUNE 2024 Market value 30th June 2023 Purchases/ (Sales) Market movement Market value 30th June 2024 % of net assets £’000 £’000 £’000 £’000 Polar Capital Global Technology 8,615 – 3,628 12,243 8.88 Baillie Gifford Global Income Growth 4,252 2,500 574 7,326 5.31 TM Redwheel Global Equity Income Fund 2,132 4,700 389 7,221 5.24 Man GLG UK Income Fund 2,597 3,900 683 7,180 5.21 iShares Core S&P 500 UCITS ETF 5,327 – 1,316 6,643 4.82 First State Indian Subcontinent Fund 4,578 – 1,120 5,698 4.12 Aquilus Inflection Fund 4,544 – 522 5,066 3.68 EF Brompton Global Conservative Fund 4,439 – 318 4,757 3.45 MI Chelverton UK Equity Income Fund 4,300 – 309 4,609 3.34 EF Brompton Global Equity Fund 3,615 – 652 4,267 3.10 MI Polen Capital Asia Income Fund 3,782 – 365 4,147 3.01 Aberforth Split Level Income Trust 3,526 – 539 4,065 2.95 Schroder Asian Income Maximiser L Income – 3,900 165 4,065 2.95 FTF Clearbridge Global Infrastructure Income – 3,900 7 3,907 2.83 EF Brompton Global Opportunities Fund 3,332 – 442 3,774 2.74 EF Brompton Global Growth Fund 3,159 – 404 3,563 2.59 Vietnam Enterprise Investments 3,473 – 24 3,497 2.54 MI Brompton UK Recovery Unit Trust 2,933 – 357 3,290 2.38 Schroder Strategic Credit Fund L Income – 3,000 50 3,050 2.21 Prusik Asian Equity Income Fund – 3,000 (27) 2,973 2.16 iShares $ Treasury Bond 7-10yr UCITS ETF – 3,056 (111) 2,945 2.14 EF Brompton Global Balanced Fund 2,503 – 242 2,745 1.99 EF Brompton Global Income Fund 2,120 – 116 2,236 1.62 Schroder Oriental Income Fund 1,627 153 1,780 1.29 Fundsmith Equity Fund 9,745 (10,188) 443 – – BlackRock Continental European Income Fund 4,355 (4,723) 368 – – Blackrock Gold and General 3,832 (3,806) (26) – – Matthews Asia Ex Japan 4,266 (3,889) (377) – – 91,425 6,977 12,645 111,047 80.55 Balance not held in investments above 16,876 (6,137) (70) 10,669 7.74 Total investments (excluding cash and bank deposits) 108,301 840 12,575 121,716 88.29 The investment portfolio, excluding cash, can be further analysed as follows: £ ‘000 Investment funds 97,469 Investment companies and exchange traded funds 20,735 Unquoted investments, including loans of £0.4m 2,753 Other quoted investments 759 121,716 STRATEGIC REPORT for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 11 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REVIEW The Strategic Review is designed to provide information primarily about the Company’s business and results for the year ended 30th June 2024. The Strategic Review should be read in conjunction with the Chairman’s Statement on page 6 and the Investment Manager’s Report on pages 7 to 9, which provide a review of the year’s investment activities of the Company and the outlook for the future. The Directors’ Report on pages 18 to 24 and the Corporate Governance Statement on pages 25 to 28 form part of this Strategic Report. STATUS The Company is an investment company under section 833 of the Companies Act 2006. It is an Approved Company under the Investment Trust (Approved Company) (Tax) Regulations 2011 (the ‘Regulations’) and conducts its affairs in accordance with those Regulations so as to retain its status as an investment trust and maintain exemption from liability to United Kingdom capital gains tax. The Company is a small registered Alternative Investment Fund Manager. PURPOSE CULTURE AND VALUES The Directors acknowledge the expectation under the UK Code on Corporate Governance issued by the Financial Reporting Council in July 2018 (the ‘Code’) that they formally define a purpose for the Company. The Directors have reviewed this requirement and consider that the Company’s purpose is to deliver the Company’s stated investment objective to achieve long-term capital growth for the benefit of its investors. Similarly, the Directors have also considered the Company’s culture and values in line with the Code requirements. The Board has formed the view that as the Company has no direct employees, and with operational management outsourced to the Investment Manager, the Administrator and the Company Secretary, the Company’s culture and values have to be those of the Board. Having a stable composition and established working practices, the Board is defined by experienced membership, trust and robust investment challenge. These are therefore the key characteristics of the Company’s culture and values. STAKEHOLDER RESPONSIBILITIES (S.172 STATEMENT UNDER COMPANIES ACT 2006) The Directors are aware of their responsibilities to stakeholders under both the Code and legislation through regular governance updates from the Company Secretary. As a UK listed investment trust, the Directors outsource operational management of the Company, including day-to-day management of the investment portfolio, to third parties. As a consequence, the Directors consider their key stakeholder groups to be limited to the Company’s shareholders, its third-party advisers and service providers, and individual Board members. The Company’s Articles of Association, the Board’s commitment to follow the principles of the Code and the involvement of the independent Company Secretary in Board matters enable the Directors to meet their responsibilities towards individual shareholder groups and Board members. Governance procedures are in place which allow both investors and Directors to ask questions or raise concerns appropriately. The Board is satisfied that those governance procedures mean the Company can act fairly between individual shareholders and takes account of Mr Duffield’s significant shareholding. In considering the payment of the minimum dividend required to maintain investment trust tax status, the recommendations to vote in favour of the resolutions at the AGM and the asset allocation within the investment portfolio, the Board assessed the potential benefits to shareholders. STRATEGIC REPORT for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 12 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REPORT for the year ended 30th June 2024 STRATEGIC REVIEW continued The Board also regularly considers the performance of its independent third-party service providers. Those third-party service providers in turn have regular opportunities to report on matters meriting the attention of the Board, including in relation to their own performance. The Board is therefore confident that its responsibilities to each of its key stakeholder groups are being discharged effectively. As the Company does not have any employees, the Board does not consider it necessary to establish means for employee engagement with the Board as required by the latest version of the Code. INVESTMENT OBJECTIVE AND POLICY Investment Objective The Company’s investment objective has been to achieve long-term capital growth. It is proposed that the investment objective is widened towards total return rather than simply capital growth. This revised objective will be put to shareholders at the forthcoming annual general meeting. Investment Policy The Company’s investment policy is to allocate assets to global investment opportunities through investment in equity, bond, commodity, real estate, currency and other markets. The Company’s assets may have significant weightings to any one asset class or market, including cash. The Company will invest in pooled investment vehicles, exchange traded funds, futures, options, limited partnerships and direct investments in relevant markets. The Company may invest up to 15% of its net assets in direct investments in relevant markets. The Company will not follow any index with reference to asset classes, countries, sectors or stocks. Aggregate asset class exposure to any one of the United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan or Emerging Markets and to any individual industry sector will be limited to 50% of the Company’s net assets, such values being assessed at the time of investment and for funds by reference to their published investment policy or, where appropriate, the underlying investment exposure. The Company may invest up to 20% of its net assets in unlisted securities (excluding unquoted pooled investment vehicles), such values being assessed at the time of investment. The Company will not invest more than 15% of its net assets in any single investment, such values being assessed at the time of investment. Derivative instruments and forward foreign exchange contracts may be used for the purposes of efficient portfolio management and currency hedging. Derivatives may also be used outside of efficient portfolio management to meet the Company’s investment objective. The Company may take outright short positions in relation to up to 30% of its net assets, with a limit on short sales of individual stocks of up to 5% of its net assets, such values being assessed at the time of investment. NEW STAR INVESTMENT TRUST PLC 13 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REPORT for the year ended 30th June 2024 STRATEGIC REVIEW continued The Company may borrow up to 30% of net assets for short-term funding or long-term investment purposes. No more than 10%, in aggregate, of the value of the Company’s total assets may be invested in other closed-ended investment funds except where such funds have themselves published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds. Information on the Company’s portfolio of assets with a view to spreading investment risk in accordance with its investment policy is set out on page 12. FINANCIAL REVIEW For the year-ended 30 June 2023, the Company changed its management fee allocation policy. Previously the management fee was charged to income. As the Company invests on a fund of funds basis, for much of the investment portfolio this results in two investment management fees being charged to income. For 2023 and subsequent periods, the management fee charged directly by Brompton is being allocated to the capital account. Net assets at 30th June 2024 amounted to £137,861,000 compared with £125,592,000 at 30th June 2023. In the year under review, the NAV per Ordinary share increased by 9.77% from 176.83p to 194.11p, after paying a final dividend of 1.40p per share in respect of 2023 and an interim dividend for 2024 of 1.70p per share. The Company’s gross revenue rose to £3,256,000 (2023: £2,454,000). After deducting expenses and taxation, the revenue profit for the year was £2,881,000 (2023: £2,122,000). Total expenses, including the management fee charged to capital, for the year increased slightly to £1,186,000 (2023: £1,107,000). In the year under review the investment management fee increased to £811,000 (2023: £775,000), reflecting the Company’s higher average NAV over the period. Further details on the Company’s expenses may be found in notes 3 and 4 on page 56. Historically, dividends have not formed a central part of the Company’s investment objective. The increased investment in income focused funds over the last few years and charging management fees to capital has enabled the Directors to declare an increased dividend more recently. At the half year the Company paid a dividend of 1.70p per share. The Directors propose a final dividend of 1.70p per Ordinary share in respect of the year ended 30th June 2024 (2023: 1.70p). If approved at the Annual General Meeting, the dividend will be paid on 13th December 2024 to shareholders on the register at the close of business on 15th November 2024 (ex-dividend 14th November 2024). The primary source of the Company’s funding is shareholder funds. While the future performance of the Company is dependent, to a large degree, on the performance of international financial markets, which in turn are subject to many external factors, the Board’s intention is that the Company will continue to pursue its stated investment objective in accordance with the strategy outlined above. Further comments on the short-term outlook for the Company are set out in the Chairman’s Statement on page 6 and the Investment Manager’s report on pages 7 to 9. NEW STAR INVESTMENT TRUST PLC 14 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REPORT for the year ended 30th June 2024 STRATEGIC REVIEW continued PERFORMANCE MEASUREMENT AND KEY PERFORMANCE INDICATORS Throughout the year the Company’s investments included seven funds managed by the Investment Manager (2023: seven). No investment management fees were payable directly by the Company in respect of these investments. In order to measure the success of the Company in meeting its objectives, and to evaluate the performance of the Investment Manager, the Directors review at each meeting: net asset value, income and expenditure, asset allocation and attribution, the share price of the Company and the discount. The Directors consider a number of different indicators as the Company does not have a formal benchmark and performance against these is shown in the Financial Highlights on page 5. Performance is discussed in the Chairman’s Statement and Investment Manager’s Report on pages 7 to 9. PRINCIPAL RISKS AND UNCERTAINTIES The principal risks identified by the Board, and the steps the Board takes to mitigate them, are discussed below. The Audit and Risk Committee reviews existing and emerging risks on a six- monthly basis. The Board has closely monitored the societal, economic and market focused implications of recent events. Investment strategy Inappropriate long-term strategy, asset allocation and fund selection could lead to underperformance. The Board discusses investment performance at each of its meetings and the Directors receive reports detailing asset allocation, investment selection and performance. Business conditions and general economy The Company’s future performance is heavily dependent on the performance of different equity and currency markets. The Board cannot mitigate the risks arising from adverse market movements. However, diversification within the portfolio will reduce the impact. Further information is given in portfolio risks below. Macro-economic event risk The scale and potential adverse impact of a macro-economic event, such as a pandemic and the outbreak of localised wars has highlighted the possibility of a number of identified risks such as market risk, currency risk, investment liquidity risk and operational risk having an adverse impact at the same time. The risk may impact on the value of the Company’s investment portfolio, its liquidity, meaning investments cannot be realised quickly, or the Company’s ability to operate if the Company’s suppliers face financial or operational difficulties. The Directors closely monitor these areas and currently maintain a significant cash balance. NEW STAR INVESTMENT TRUST PLC 15 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REPORT for the year ended 30th June 2024 STRATEGIC REVIEW continued Portfolio risks - market price, foreign currency and interest rate risks The largest investments are listed on page 10. Investment returns will be influenced by interest rates, inflation, investor sentiment, availability/cost of credit and general economic and market conditions in the UK and globally. A significant proportion of the portfolio is in investments denominated in foreign currencies and movements in exchange rates could significantly affect their sterling value. The Investment Manager takes all these factors into account when making investment decisions but the Company does not normally hedge against foreign currency movements. The Board’s policy is to hold a spread of investments to reduce the impact of the risks arising from the above factors, investing in a spread of asset classes and geographic regions. Net asset value discount The discount in the price at which the Company’s shares trade to net asset value means that shareholders cannot realise the real underlying value of their investment. Over the last few years, the Company’s share price has been at a significant discount to the Company’s net asset value. The Directors regularly review the level of discount, however given the investor base of the Company, the Board is very restricted in its ability to influence the discount to net asset value. Investment Manager The quality of the team employed by the Investment Manager is an important factor in delivering good performance and the loss of key staff could adversely affect returns. A representative of the Investment Manager attends each Board meeting and the Board is informed if any major changes to the investment team employed by the Investment Manager are proposed. The Investment Manager regularly informs the Board of developments and any key implications for either the investment strategy or the investment portfolio. Also see note 19. Tax and regulatory risks A breach of The Investment Trust (Approved Company) (Tax) Regulations 2011 (the ‘Regulations’) could lead to capital gains realised within the portfolio becoming subject to UK capital gains tax. A breach of the FCA Listing Rules could result in suspension of the Company’s shares, while a breach of company law could lead to criminal proceedings, financial and/or reputational damage. The Board employs Brompton Asset Management Limited as Investment Manager, and Apex Fund Administration Services (UK) Ltd as Secretary and Administrator, to help manage the Company’s legal and regulatory obligations. Operational Disruption to, or failure of, the Investment Manager’s or Administrator’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 suppliers may not provide the required level of service. How the Board monitors its service providers, with an emphasis on their business interruption procedures, is set out in the Corporate Governance Statement on pages 25 to 28. NEW STAR INVESTMENT TRUST PLC 16 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REPORT for the year ended 30th June 2024 STRATEGIC REVIEW continued The Directors confirm that they have carried out a robust assessment of the risks and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. VIABILITY STATEMENT The assets of the Company consist mainly of securities that are readily realisable, or cash and bank deposits and it has no significant liabilities and financial commitments. Investment income has exceeded annual expenditure and current liquid net assets cover current annual expenses for many years. Accordingly, the Company is of the opinion that it has adequate financial resources to continue in operational existence for the long term which is considered to be in excess of five years. Five years is considered a reasonable period for investors when making their investment decisions. In reaching this view, the Directors reviewed the anticipated level of annual expenditure against the cash, bank deposits and liquid assets within the portfolio. The Directors have also considered the risks the Company faces in making this viability statement. ENVIRONMENTAL, SOCIAL AND GOVERNANCE ISSUES The Company has no employees, with day-to-day operational and administration of the Company being delegated by the Board to the Independent Investment Manager and the Administrator. The Company’s portfolio is managed in accordance with the investment objective and policy approved by shareholders. The Company is primarily invested in investment funds and exchange traded funds, where it has no direct dialogue with the underlying investments. Environmental, social and governance considerations of underlying investee companies are not a key driver when evaluating existing and potential investments. GREENHOUSE GAS EMISSIONS As the Company has no premises, properties or equipment of its own, the Directors deem the Company to be exempt from making any disclosures under the Companies Act 2006 (Strategic Reports and Directors’ Reports) Regulations 2013. STREAMLINED ENERGY AND CARBON REPORTING The Company is categorised as a lower energy user under the HMRC Environmental Reporting Guidelines March 2019 and is therefore not required to make the detailed disclosures of energy and carbon information set out within the guidelines. The Company’s energy and carbon information is not therefore disclosed in this report. MODERN SLAVERY ACT The Directors rely on undertakings given by its independent third-party advisers that those companies continue to have no instances of modern slavery either within their businesses or supply chains. Given the financial services focus and geographical location of all third-party suppliers to the Company, the Directors perceive the risks of a contravention of the legislation to be very low. NEW STAR INVESTMENT TRUST PLC 17 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STRATEGIC REPORT for the year ended 30th June 2024 STRATEGIC REVIEW continued DIVERSITY The Board of Directors comprises four male directors, and currently no female board members and no minority ethnic members. Mr McQuaker joined the Board in 2023, as he was someone who would add significantly to the debate over the Company’s investment positioning, the key determinant of the Company’s performance. The Board does not have a formal diversity policy, and no targets have been established. The Board is committed to the benefits of diversity, including gender, ethnicity and background when considering new appointments to the Board, whilst always seeking to base any decision on merit, measured by knowledge, experience and ability to make a positive contribution to the Board’s decision-making. The Company has not met the diversity and minority ethnic targets set by the FCA. CLIMATE RELATED REPORTING As a closed-end investment fund, the Company is exempt from any climate related reporting. The Company mainly invests in funds. Those funds are responsible for determining the impact of climate change when making their investment decisions. The Company does not influence the investment decisions of the funds it invests in. 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 were no disclosures to be made in this regard. APPROVAL STATEMENT The Strategic Report of the Company, comprising the information contained on pages 5 to 17 of this Report and Accounts was approved by the Board and signed on its behalf by: Geoffrey Howard-Spink Chairman 31st October 2024 NEW STAR INVESTMENT TRUST PLC 18 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS’ REPORT The Directors present the audited accounts of the Company and their report for the year ended 30th June 2024. STATUS The Company is a public limited company incorporated and registered in England and Wales and is domiciled in the United Kingdom. The Company number is 03969011. The Company is an investment company under section 833 of the Companies Act 2006. It is an Approved Company under the Investment Trust (Approved Company) (Tax) Regulations 2011 (the ‘Regulations’) and conducts its affairs in accordance with those Regulations so as to continue to gain exemption from liability to United Kingdom capital gains tax. The Company is listed on the London Stock Exchange, with ISIN GB0002631041 and SEDOL 0263104 and accordingly is subject to the Listing Rules and the Disclosure Guidance and Transparency Rules issued by the Financial Conduct Authority and the UK Corporate Governance Code 2018 issued by the Financial Reporting Council (‘the Code’). The Company has been approved by the Financial Conduct Authority to be a small registered Alternative Investment Fund Manager. DIRECTORS Board composition The names and biographies of the Directors are given on page 4. The Articles of Association provide that the total number of Directors shall be not less than two nor more than ten. No Director has a contract of employment with the Company. Directors’ terms of appointment are set out in letters of appointment which are available for inspection at the registered office of the Company and will be available at the Annual General Meeting (‘AGM’). The following Directors, all of whom are non-executive, served during the year: Date of appointment as a Director G Howard-Spink (Chairman) 13th April 2000 J L Duffield 5th April 2000 D J Gamble 16th November 2017 W McQuaker 19th June 2023 During the year under review the Company did not arrange insurance cover in respect of legal action against the Directors, as it was considered that the premium would not constitute good value to shareholders. The Directors are indemnified by the Company against all liabilities, except where prohibited by law. DIRECTORS’ REPORT for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 19 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS’ REPORT for the year ended 30th June 2024 DIRECTORS’ REPORT continued Board independence The Board considers a range of factors in determining the independence of the individual Directors including their character and judgement, whether they have any material business relationships with the Company or its advisers, whether they have any close family ties with the Company’s advisers or Directors and their other commitments. The Directors consider that length of service does not of itself impair their ability to act independently, rather, a long-serving Director can offer a perspective that adds value to the deliberations of a well-balanced investment trust company board. It is considered by the Board that, except for Mr Duffield, all of the Directors are independent. The Board has specifically considered whether Mr Howard-Spink’s length of service has impaired his ability to act independently and concluded that he continues to exhibit independence of character and judgement. The Board specifically considered the independence of Mr Gamble at his appointment, who has an immaterial holding in Brompton Asset Management Group Limited and concluded that he is an independent Director. The biographies of the Directors holding office at the date of this report demonstrate a breadth of investment and commercial experience relevant to their positions as Directors. All Directors have a wide range of other interests and are not dependent on the Company itself. The Board considers that, as in previous years, given its small size and the size and nature of the Company’s operations, it is unnecessary to nominate one Director as the Senior Independent Director and all three non-executives accordingly perform these duties. Directors’ appointment, retirement and rotation The Board may appoint directors without shareholder approval. Any Director so appointed must stand for election by shareholders at the next AGM in accordance with the Articles of Association. Under the Articles of Association one-third of Directors are required to retire by rotation each year. The Code requires all Directors to stand for re-election annually. All the Company’s Directors will stand for re-election at the Company’s Annual General Meeting in 2024, all being eligible. Mr Howard-Spink stands for re-election. The Board considers the leadership and contribution by Mr Howard-Spink to its deliberations continues to be extremely valuable, and he continues to exhibit independence of character and judgement. The Board accordingly strongly recommends that shareholders vote in favour of Mr Howard-Spink’s re-election. Mr Duffield, Mr Gamble and Mr McQuaker also stand for re-election. The Board considers the contribution by Mr Duffield, Mr Gamble and Mr.McQuaker on investment matters, company strategy and governance and on investment trust matters to be very valuable, notwithstanding that Mr Duffield is not deemed an independent director. The Directors therefore strongly recommend that shareholders vote in favour of all their re-elections to the Board. NEW STAR INVESTMENT TRUST PLC 20 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS’ REPORT for the year ended 30th June 2024 DIRECTORS’ REPORT continued Mr Duffield has a beneficial interest in 59.14% of the Company’s shares and is the Chairman of the Investment Manager’s parent entity, for these reasons he is not considered to be independent by the Board. In specific circumstances, shareholders may remove a director before the end of their term of office by passing an ordinary resolution at a general 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. Directors’ remuneration The Board consists solely of non-executive directors and accordingly the Company is not required to comply with the principles of the Code in relation to executive directors’ remuneration, nor does it have a Remuneration Committee. Details of the fees paid to the Directors can be found in the Directors’ Remuneration Report on page 32. MANAGEMENT ARRANGEMENTS The Company has no executive directors or employees. The day-to-day management and administration of the Company, including investment management, accounting and company secretarial matters, and custodian arrangements are delegated to specialist third party companies. Investment management services The Company’s investments are managed by Brompton Asset Management Limited (the ‘Investment Manager’ or ‘Brompton’). This relationship is governed by an agreement dated 17th May 2018. The portfolio manager is Gill Lakin. Brompton receives a management fee, payable quarterly in arrears, equivalent to an annual 0.75 per cent of total assets after the deduction of the value of any investments managed by the Investment Manager or its associates (as defined in the investment management agreement). The investment management agreement may be terminated by either party giving three months written notice, to expire on the last calendar day of any month. During the year under review the investment management fee amounted to £811,000 (2023: £775,000). Secretarial, administration and accounting services Company secretarial services, general administration and accounting services for the Company are undertaken by Apex Fund Administration Services (UK) Ltd (the ‘Administrator’). Custodian services Brown Brothers Harriman & Co is the independent custodian to the Company. NEW STAR INVESTMENT TRUST PLC 21 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS’ REPORT for the year ended 30th June 2024 DIRECTORS’ REPORT continued RELATED PARTY TRANSACTIONS Mr Duffield is the Chairman of Brompton Asset Management Group Limited, the ultimate parent of the Investment Manager. Details of the investment management fee and Directors’ fees are given in note 18. SHARE CAPITAL AND SHAREHOLDERS Share capital The Company’s share capital comprises 71,023,695 Ordinary shares of 1p each (2023: 71,023,695), all of which are issued and fully paid. No shares are held in treasury (2023: nil). The Company did not issue or repurchase any shares during the year or up to the date of this report. There are no restrictions on the transfer of the Company’s shares other than: a) transfers by Directors and Persons Discharging Managerial Responsibilities and their connected persons during prohibited periods under the rules of the FCA or which may constitute insider dealing; b) transfers for more than one class of share; c) transfers to more than four joint transferees; and d) transfers of shares which are not fully paid up or on which the Company has a lien provided that such would not prohibit dealings taking place on an open and proper basis. The Company is not aware of any arrangements between shareholders or between the Company and any shareholders which restrict the transfer of shares or which would take effect or terminate in the event of a change of control of the Company. The voting rights of the Ordinary shares on a poll are one vote for every share held. Shareholders are entitled to such dividends (if any) as the Board may from time to time declare, and on a winding up are entitled to a distribution of such surplus assets (if any) as may remain after settling the liabilities of the Company, in proportion to the number of shares held and the respective amounts paid up or credited as paid up on their shares. Substantial share interests At 30th June 2024 and 30th September 2024, the Company was aware of the following interests which represent 3% or more of the voting rights in the Company: Substantial share interests Shareholder % of voting rights 30th June 2024 % of voting rights 30th September 2024 J L Duffield 59.1 59.1 First Equity Limited 4.1 4.1 M R L Astor & Family 3.9 3.9 NEW STAR INVESTMENT TRUST PLC 22 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS’ REPORT for the year ended 30th June 2024 DIRECTORS’ REPORT continued Relations with shareholders The Board and Investment Manager are available for dialogue with shareholders. The primary mediums through which the Company communicates with its shareholders are the Half Year Report and the Annual Report and Accounts which aim to provide shareholders with a clear understanding of the Company’s activities and its results. The Company’s Annual Report and Accounts and Half Year Report are also published on the Company’s website at: www.nsitplc. com and net asset values are published on the London Stock Exchange and the Company’s website monthly. It is currently intended that all shareholders will have the opportunity to attend and vote at the AGM during which the Directors and Investment Manager will be available to answer questions regarding the Company. The Company will generally seek to provide twenty working days’ notice of the AGM. The Notice of Meeting sets out the business of the AGM and any item not of an entirely routine nature is explained in the Directors’ Report or, where applicable, in the Notice of Meeting. Separate resolutions are proposed for each substantive issue. GOING CONCERN The Directors have undertaken a review of the Company’s ability to continue as a going concern. The Directors specifically reviewed whether the Company could continue in operational existence for at least the next 12 months. The Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the accounts, given this review, and since the assets of the Company consist mainly of securities that are readily realisable, or cash and bank deposits and it has no significant liabilities. This is discussed further in the viability statement on page 16. DIRECTOR INDEMNIFICATION As permitted by the Company’s Articles of Association, each Director has the benefit of an indemnity which is a qualifying third-party indemnity, as defined by section 234 of the Companies Act 2006. SUBSIDIARY The Company owns the whole of the issued share capital (£1) of JIT Securities Limited. JIT Securities Limited is dormant and has £nil (2023: £nil) net assets. NEW STAR INVESTMENT TRUST PLC 23 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS’ REPORT for the year ended 30th June 2024 DIRECTORS’ REPORT continued INDEPENDENT AUDITOR Following a competitive tender last year, the Directors chose Johnston Carmichael LLP to be the Company’s auditor. A resolution proposing the appointment of Johnston Carmichael LLP until the close of the 2024 general meeting at which accounts would be laid before members, and to authorise the Directors to determine their remuneration, was approved by shareholders at last year’s AGM. DIRECTORS’ STATEMENT AS TO THE DISCLOSURE OF INFORMATION TO THE AUDITORS The Directors who were members of the Board at the time of approving this Report are listed on page 4. Each of those Directors confirms that: • to the best of his knowledge and belief, there is no information relevant to the preparation of the Report and Accounts of which the Company’s auditors are unaware; and • he 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 auditors are aware of that information. ANNUAL GENERAL MEETING The AGM of the Company will be held at 1 Knightsbridge Green, London, SW1X 7QA on Thursday, 5th December 2024 and will commence at 11.00 am. Shareholders’ views are important, and the Board encourages shareholders to exercise their votes in respect of the meeting in advance, by completing and returning their proxy forms. This will ensure that the votes are registered. In addition, shareholders may also submit questions in advance of the AGM to the Company Secretary via email to cosec-uk@apexgroup.com or by post to the Company Secretary at the address set out on page 3 of this report. The notice of meeting can be found on pages 73 to 77. SPECIAL BUSINESS AT THE AGM In addition to the Ordinary business to be transacted at the forthcoming Annual General Meeting, Resolution 9 will be proposed as an Ordinary Resolution and Resolutions 10 to 14 will be proposed as Special Resolutions. Resolution 9 seeks renewal of the general and unconditional authority for the Directors to allot shares. The authority can be sought for up to 5 years but is put to shareholders annually. The Directors do not currently have any plans to exercise this authority if granted under this Resolution. Resolution 10 is seeking approval of the proposed change in investment objective from long term capital growth to long-term total return through capital growth and income. NEW STAR INVESTMENT TRUST PLC 24 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS’ REPORT for the year ended 30th June 2024 DIRECTORS’ REPORT continued Resolution 11 would allow the Company to allot a limited number of equity securities without applying pre-emption rights. Again, the Directors do not currently have any plans to exercise this authority but consider it desirable and in the Company’s interest to have the authority in place. Resolution 12 is to seek renewal of the existing authority for the Company to make market purchases of the Company’s shares. The authority is limited to 10,646,450 Ordinary shares representing approximately 14.99% of the current issued Ordinary share capital. No market purchases have yet been made but the Directors feel it is important to have the ability to make purchases and the Directors would only exercise the authority, if granted, if they considered it to be in the Company’s best interest. Any Ordinary shares bought back would be cancelled or held in treasury at the discretion of the Directors. Resolution 13 would give the Directors discretion to re-issue Ordinary shares held in treasury into the market. Shares would not be re-issued at a price below the most recent published net asset value prior to re-issue. Resolution 14 will enable the Directors to call general meetings (other than an Annual General Meeting) at not less than 14 days’ notice rather than 21 days. Ordinarily the Directors would expect to give the full notice period but circumstances might make it desirable to call a meeting on shorter notice. A general meeting may only be called on short notice if it complies with certain conditions. The Directors strongly recommend that shareholders vote in favour of all Resolutions being put to the annual general meeting, as they themselves intend to vote in respect of their own beneficial shareholdings totalling 42,003,223, being approximately 59.14% of the Ordinary share capital in issue at the date of this report. The Corporate Governance Statement on pages 25 to 28 forms part of the Directors’ Report. For and on behalf of the Board of Directors Apex Fund Administration Services (UK) Ltd Corporate Secretary 31st October 2024 NEW STAR INVESTMENT TRUST PLC 25 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 CORPORATE GOVERNANCE STATEMENT APPLICABLE GOVERNANCE CODE Throughout the year under review the Company applied the UK Corporate Governance Code issued by the Financial Reporting Council (‘FRC’) in July 2018 (the ‘Code’) and had regard to the Code of Corporate Governance issued by the Association of Investment Companies in February 2019 (the ‘AIC Code’) which provides specific corporate governance guidance for investment trusts, if they are members of the AIC. The Company has not taken advantage of the AIC’s exemptions as it is not a member of the AIC. Full details of the Company’s corporate governance arrangements and instances of non-compliance are given below. The Code referred to above can be found on the FRC’s website at www.frc.gov.uk STATEMENT OF COMPLIANCE It is considered that the Company has complied with the provisions of the Code subject to the exceptions explained below and on page 19 and 32: the chairman has been a director for more than nine years (Code provision 10); the Company has not appointed a Senior Independent Director (Code provision 12); the Company undertakes bi-annual Board evaluations (code provision 21) and the Company does not have a Nominations Committee and Remuneration Committee (Code provision 17 and 32). THE BOARD Responsibilities of the Board The Board is responsible for the effective stewardship of the Company’s affairs. It determines the strategic direction of the Company and sets the boundaries within which the Investment Manager operates. The Board meets at least four times a year and reviews the Company’s investment policy, performance and financial position. The Investment Manager takes decisions as to the purchase and sale of individual investments and is responsible for effecting those decisions on the best available terms. There is an agreed procedure for Directors, in the furtherance of their duties, to take independent professional advice at the Company’s expense. The Chairman is responsible for leading the Board and ensuring that it continues to deal effectively with all aspects of its role. In particular, he ensures that the Investment Manager and Administrator provide the Directors, in a timely manner, with management, regulatory and financial information that is clear, accurate and relevant. Representatives of the Investment Manager attend each Board meeting, enabling the Directors to seek clarification on specific issues or to probe further on matters of concern. The Board comprises four non-executive Directors. In the light of the small size of the Board, it has been decided not to appoint a formal Nominations Committee and appointments of any new Directors are considered by the Board in meeting as a whole. CORPORATE GOVERNANCE STATEMENT for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 26 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 CORPORATE GOVERNANCE STATEMENT for the year ended 30th June 2024 CORPORATE GOVERNANCE STATEMENT continued Powers of the Directors The powers of the Directors are set out in the Articles of Association which are publicly available from Companies House. Except as otherwise provided by regulation and legislation, the Directors may exercise all the ordinary powers usually conferred on directors to manage the affairs of a company and to delegate such of those powers to committees, agents or individuals as they consider appropriate. The Directors may authorise the Company to borrow; to pay fees, expenses, salaries and make other payments to directors, executives and employees; and to provide pensions or other benefits for Directors, executives and employees; but have not exercised these powers except for the payment of fees to non-executive Directors. Board attendance Attendance at the Board and Audit and Risk Committee meetings held during the financial year is shown below. Quarterly Board meetings Audit committee meetings No. of meetings 4 4 John Duffield 4 N/A David Gamble 4 4 Geoffrey Howard-Spink 4 4 William McQuaker 4 4 PERFORMANCE EVALUATION The Company The performance of the Company is considered in detail at each Board meeting. The Board The Board evaluates its own performance, that of the Audit and Risk Committee, and the performance of each Director and the Chairman on a regular basis. Because the Board comprises only four Directors, appraisals are carried out every two years rather than annually. Appraisals are conducted using a tailored questionnaire designed to elicit views on all Board and committee functions, followed by an opportunity to openly discuss the findings and ensure that effectiveness is maintained. A review was carried out in 2024. That evaluation confirmed that the Board continues to perform effectively. INTERNAL CONTROLS The Board has overall responsibility for the establishment of the Company’s systems of internal control and for reviewing their effectiveness. Internal control systems are designed to meet the particular requirements of the Company and to manage rather than eliminate the risks of failure to achieve its objectives. The systems by their very nature provide reasonable but not absolute assurance against material misstatement or loss. The Board has reviewed the effectiveness of the Company’s internal control systems including the financial, operational and compliance controls and risk management processes for the year. NEW STAR INVESTMENT TRUST PLC 27 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 CORPORATE GOVERNANCE STATEMENT for the year ended 30th June 2024 CORPORATE GOVERNANCE STATEMENT continued The key procedures which have been established with a view to providing effective internal control are as follows: • Throughout the year under review, there has been an ongoing process for identifying, evaluating and managing the significant risks faced by the Company, which accords with the guidance in the FRC’s Guidance on Risk Management, Internal Control and Related Financial and Business Reporting (September 2014). The process involves reports from the Company Secretary and Investment Manager on risk control and compliance, in conjunction with the Investment Manager’s regular report which covers investment performance. In addition, the Company Secretary or Investment Manager report on the internal control environment at the Company’s third-party service providers. Internal control statements from third party service providers are also made available to the Audit and Risk Committee. • The Audit and Risk Committee reviews a risk matrix prepared by the investment manager at its 6 monthly meetings and considers whether there are any emerging risks. • The duties relating to investment management, accounting and custody of assets are segregated; the procedures of the individual parties are designed to complement one another. • Investment management is performed by Brompton. The Board is responsible for setting the overall investment policy and monitors the activities of the Investment Manager at its regular meetings. The responsibilities of the Investment Manager are included in the Investment Management Agreement between the Company and Brompton. Brompton is authorised and regulated by the Financial Conduct Authority. • Custody of assets is undertaken by Brown Brothers Harriman & Co. • Administration, accounting and company secretarial duties are performed by Apex Fund Administration Services (UK) Ltd. • Authorisation and exposure limits are set by the Board. • The Company clearly defines the duties and responsibilities of its agents through their contracts. The appointment of agents and advisers is conducted by the Board after consideration of the quality of parties involved; the Board monitors their on-going performance and contractual arrangements. The Board reviews financial information produced by the Investment Manager and the Company Secretary on a regular basis. ACCOUNTABILITY AND RELATIONSHIP WITH INVESTMENT MANAGER The Statement of Directors’ Responsibilities in respect of the accounts is set out on page 35. The Directors’ Report states that the business is a going concern and confirmation of the Directors consideration on viability is on page 16. NEW STAR INVESTMENT TRUST PLC 28 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 CORPORATE GOVERNANCE STATEMENT for the year ended 30th June 2024 CORPORATE GOVERNANCE STATEMENT continued The Board has delegated contractually to external third parties (including the Investment Manager) the management of the investment portfolio, custodial services (including safeguarding of assets), day-to-day accounting, company secretarial and administration duties, and registration services. Each of these contracts was entered into after consideration by the Board of the quality and cost of the services offered. The Board receives regular formal reports from the Investment Manager and ad hoc information as required. STEWARDSHIP The Board has delegated the voting of investee company shares to the Investment Manager. The Board is conscious that the majority of its investments are in diverse funds, and its direct holdings in quoted companies do not constitute positions of significant influence. The Investment Manager regularly informs the Board of any material developments in connection with any investments or investee companies. CONFLICTS OF INTEREST The Board has put in place a framework for Directors to report conflicts of interest or potential conflicts of interest, which it believes works effectively. Directors are aware that they have a continuing obligation to notify the Company Secretary of all existing, new and potential situations or interests which do or could conflict with the interests of the Company. All disclosed situations and interests are reviewed by the Board at its meetings and, where appropriate, authorised. It is the Board’s intention to continue to review all notified situations on a regular basis. NEW STAR INVESTMENT TRUST PLC 29 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 AUDIT AND RISK COMMITTEE Composition of the Audit and Risk Committee The Board has established an Audit and Risk Committee (the ‘Committee’) which consists of all the independent directors. Mr Gamble (Chairman), Mr Howard-Spink and Mr McQuaker. Mr Gamble was appointed Chairman of the Committee on becoming a director in 2017. All three committee members are considered by the Board to be independent of the Investment Manager. It is considered that each of the members of the Audit and Risk Committee has recent and relevant financial experience, and of the sector in which the Company operates. The terms of reference of the Committee are available on the Company’s website: www.nsitplc.com Role of the Audit and Risk Committee The Audit and Risk Committee is required to meet at least twice a year and operates within clearly defined terms of reference. The Committee will meet four times this coming year. The Committee provides a forum through which the Company’s external auditor reports to the Board. The main work and responsibilities of the Audit and Risk Committee include: • monitoring the integrity of the Company’s annual and half yearly financial statements together with the appropriateness of its accounting policies; • considering whether the annual financial statements are fair, balanced and understandable; • considering the Company’s principal and emerging risks and the risk matrix prepared by the Investment Manager; • reviewing financial and other information and regulatory changes; • considering the need for establishing an internal audit function; • considering the nature and scope of the external audit and the findings therefrom; • overseeing the relationship with the external auditor, including assessing the independence and objectivity of the auditor, the effectiveness of the auditor and any non-audit services provided; and • reviewing the investment management agreement and any proposed alterations to the investment management agreement. Significant accounting matters considered by the Audit and Risk Committee As part of the Audit and Risk Committee’s review of the 2024 Annual Report and Accounts, the Committee considered the following significant issues, including the consideration of principal risks and uncertainties in light of the Company’s activities and issues communicated by the Auditor during their work. REPORT OF THE AUDIT AND RISK COMMITTEE for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 30 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 REPORT OF THE AUDIT AND RISK COMMITTEE for the year ended 30th June 2024 AUDIT AND RISK COMMITTEE continued Valuation of the investment portfolio: Approximately 98% of the portfolio values, excluding cash, have been verified by daily or monthly market prices. The valuation of the remainder of the portfolio, which is more subjective, is reviewed separately by the Investment Manager and the Audit and Risk Committee. The Audit and Risk Committee reviewed the Investment Manager’s detailed valuation paper covering the basis adopted for valuing each unquoted investment. Ownership of the investment portfolio: The Company uses the services of an independent global custodian, Brown Brothers Harriman & Co. The Investment Manager and Administrator reconcile their records to those of the custodian. The Auditor obtains independent confirmation of the holdings from the custodian at the year end. Compliance with The Investment Trust (Approved Company) (Tax) Regulations 2011: compliance with these regulations is essential to maintaining the taxation benefits of being an Investment Company for UK tax purposes. Schedules are prepared by the Administrator to confirm ongoing compliance and there is an additional review at the year end by the Investment Manager. Recognition of income: the accounting treatment of special dividends or deemed income could impact the split between income and capital and the minimum dividend payable. EXTERNAL AUDITOR Auditor independence and performance The Audit and Risk Committee makes recommendations to the Board regarding the appointment and independence of the external Auditor and assesses the objectivity and effectiveness of the audit process. Representatives of Johnston Carmichael LLP attended the Audit and Risk Committee meeting at which the draft Annual Report and Accounts were considered. They also engage with the Directors as and when required. Details of the amounts payable to the Auditor during the year under review, for audit and other services, are set out in note 4 on page •. The effectiveness of the audit was assessed by considering the Auditor’s direct engagement with the Audit and Risk Committee, the auditors’ written reports and from feedback by the Investment Manager and the Administrator. In 2023, the Audit and Risk Committee undertook an audit tender process and Johnston Carmichael LLP was appointed for the year ending 30th June 2024. The Auditor does not provide the Company with any non-audit services. The Board concluded, on the recommendation of the Audit and Risk Committee, that the Auditor is independent of the Company and the Investment Manager. NEW STAR INVESTMENT TRUST PLC 31 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 REPORT OF THE AUDIT AND RISK COMMITTEE for the year ended 30th June 2024 AUDIT AND RISK COMMITTEE continued Other Matters In common with many investment trusts, the Company does not have a whistle-blowing policy. The main functions of the Company are delegated to third parties and the Audit and Risk Committee believes that it is appropriate to rely on the whistle-blowing policies operated by those third parties. The Company does not have any employees, and its day-to-day operations are delegated to third parties. The Board has determined that, in view of these circumstances, there is no need for the Company to have an internal audit function. The Directors review periodically whether a function equivalent to internal audit is needed and will continue to monitor its systems of internal controls in order to provide assurance that they operate as intended. Approved by the Audit and Risk Committee and signed on its behalf by: David Gamble Chairman – Audit and Risk Committee 31st October 2024 NEW STAR INVESTMENT TRUST PLC 32 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 ANNUAL REPORT ON REMUNERATION The Directors are pleased to present their report on remuneration. An Ordinary resolution, to approve the Directors’ Remuneration Policy (the ‘Policy’) (which is binding) was put to the 2023 AGM and approved. As is now customary. An Ordinary resolution to adopt this report (which is advisory) will also be proposed for approval by shareholders at the forthcoming AGM. The Auditor is required to report to the Company’s members on certain parts of the Directors’ Remuneration Report and to state whether in their opinion those parts of the report have been properly prepared in accordance with the Act. Where information set out below has been audited, it is clearly indicated. The Auditor’s opinion is included within the Independent Auditor’s Report on pages 36 to 47. This report has been prepared in accordance with Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended). It describes the Policy and how it was implemented for the year to 30th June 2024. The Board does not consider it necessary or appropriate to establish a separate Remuneration Committee as the Company has no employees, the Board is small and there are no executive Directors. Non-executive Directors’ remuneration is determined by the Board in line with the Policy below. REMUNERATION POLICY The Company’s policy is that the remuneration of non-executive Directors should reflect the experience of the Board as a whole, be fair and comparable to that of other investment trusts that have a similar capital structure (ordinary shares) and have a similar investment objective (long-term capital growth). Where Non-Executive Directors undertake additional duties, such as chairmanship of the Board or the Audit and Risk Committee, additional remuneration will be payable. At the 2023 AGM it was agreed that the aggregate ceiling for Directors’ fees should be increased from £100,000 to £150,000. Under the current remuneration policy, the non-executive Directors of the Company are entitled to such rates of annual fees as the Board, at its discretion determines, subject to an aggregate ceiling of £150,000. The changes to the Directors’ remuneration took effect from the end of the 2023 AGM. No Director shall be entitled to any benefits in kind, share options, long-term incentives, pension or other retirement benefits or compensation for loss of office. It is considered that no part of the Directors’ remuneration should be performance related in the light of their non-executive status. Directors are entitled to reimbursement of expenses in respect of duties undertaken in connection with the management of the Company. DIRECTORS’ SERVICE CONTRACTS It is the Board’s policy that none of the Directors has a service contract. Any Director may be removed without notice and no compensation will be due on leaving office. DIRECTORS’ REMUNERATION REPORT for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 33 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS’ REMUNERATION REPORT for the year ended 30th June 2024 ANNUAL REPORT ON REMUNERATION continued VOTING AT AGM The remuneration policy was approved by shareholders at the 2023 AGM, at which 99.98% of the votes were in favour and 0.02% were against. At last year’s AGM, the Directors’ Remuneration Report was also approved 99.98% voted in favour and 0.02% voted against. DIRECTORS’ FEES (AUDITED) The table below shows the new rates of annual fees payable to the highest paid Director, the Chairman, and all other non-executive Directors for the year to 30th June 2024 and the rates for the year to 30th June 2023. 2024 (£) 2023 (£) Chairman 30,000 25,000 Board member and committee chair 27,500 20,000 Board member 25,000 20,000 DIRECTORS’ EMOLUMENTS FOR THE YEAR ENDED 30TH JUNE 2024 (AUDITED) The Director who served in the year received the following emoluments wholly in the form of fees: Name of Director Fees paid/Total (£) 2024 Increase 2023 G Howard-Spink 27,917 (12%) 25,000 D J Gamble 26,458 (32%) 20,000 J L Duffield 25,000 (25%) 20,000 W McQuaker 25,000 (3,333%) 750 Total 104,375 65,000 * appointed 19th June 2023. ** Percentage increase over the prior year. During the year no Directors received taxable benefits (2023: nil). There were no percentage changes in fees for the years ended 30th June 2021, 2022 and 2023. Mr Howard-Spink, Mr Duffield and Mr Gamble each received a £5,000 increase in 2020 representing a 25%, 33% and 33.3% increase respectively. CHANGES TO DIRECTORS’ EMOLUMENTS Fees paid to Directors are reviewed on a regular basis. As they have not been increased for a number of years and were below market levels, the fees were increased following the 2023 AGM. All Directors have received a minimum of £25,000 each with effect from 1st December 2023. Mr McQuaker has received £25,000 from the date of his appointment on 19th June 2023. NEW STAR INVESTMENT TRUST PLC 34 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 DIRECTORS’ REMUNERATION REPORT for the year ended 30th June 2024 ANNUAL REPORT ON REMUNERATION continued RELATIVE IMPORTANCE OF SPEND ON PAY The fees payable in respect of Mr Duffield’s services are paid to the Investment Manager. The Company has no executive Directors. Distributions made to shareholders by way of dividend have no correlation to Directors’ remuneration. Any comparison would not be meaningful. DIRECTORS’ INTERESTS IN SHARES (AUDITED) The interests of the Directors in the Ordinary shares of the Company at the beginning and end of the financial year are shown in the table below. Ordinary shares of 1p beneficial: 30th June 2024 30th June 2023 J L Duffield 42,003,223 42,003,223 D J Gamble – – G Howard-Spink – – W McQuaker – – There have been no changes in the Directors’ interests in the period from 30th June 2024 to the date of this report. YOUR COMPANY’S PERFORMANCE The graph below compares the share price total return (assuming all dividends are reinvested) since 31st December 2009 against the IA Mixed Investment 40-85% (total return). The data has been rebased to 100 at 31st December 2009. By order of the Board Geoffrey Howard-Spink Chairman 31st October 2024 NEW STAR INVESTMENT TRUST PLC 35 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 The Directors are responsible for preparing the financial statements in accordance with applicable United Kingdom law and regulations. Company law requires the Directors to prepare Financial Statements for each financial year. Under law, the Directors are required to prepare Financial Statements under UK adopted international accounting standards. Under Company Law, the Directors must not approve the Company’s Annual Report and Accounts unless they are satisfied that they give a true and fair view of the financial position of the Company and the financial performance and cash flows of the Company for that period. In preparing those Company’s Annual Report and Accounts the Directors are required to: • select suitable accounting policies in accordance with International Accounting Standard (‘IAS’) 8: Accounting Policies, Changes in Accounting Estimates and Errors and apply them consistently; • present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; • provide additional disclosures when compliance with the specific requirements in IAS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company’s financial position and financial performance; • state that the Company has complied with UK adopted International Accounting Standards, subject to any material departures disclosed and explained in the financial statements; and • prepare a Directors’ Report and 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 have concluded that the Company’s Annual Report and Accounts for the year ended 30th June 2024, taken as a whole, is fair, balanced and understandable, and provide the information necessary for shareholders to assess the performance, business model and strategy of the Company. STATEMENT UNDER DISCLOSURE GUIDANCE AND TRANSPARENCY RULE 4.1.12 The Directors of the Company each confirm to the best of their knowledge that: (a) the financial statements have been prepared in accordance with UK adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and (b) the Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties they face. For and on behalf of the Board of Directors Apex Fund Administration Services (UK) Ltd – Secretary 31st October 2024 STATEMENT OF DIRECTORS’ RESPONSIBILITIES for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 36 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 AUDITOR’S REPORT OPINION We have audited the financial statements of New Star Investment Trust plc (“the Company”), for the year ended 30th June 2024, which comprise the Statement of Comprehensive Income, the Statement of Changes in Equity, the Balance sheet, the Cash flow statement, and the related notes, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards. In our opinion, the financial statements: • give a true and fair view of the state of Company’s affairs as at 30th June 2024 and of its profit for the year then ended; • have been properly prepared in accordance with the UK-adopted international accounting standards; and • have been prepared in accordance with the requirements of the Companies Act 2006. BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. OUR APPROACH TO THE AUDIT We planned our audit by first obtaining an understanding of the Company and its environment, including its key activities delegated by the Board to relevant approved third-party service providers and the controls over provision of those services. We conducted our audit using information maintained and provided by Apex Fund Administration Services (UK) Ltd (the “Company Secretary,” and “Administrator”), Brompton Asset Management (the “Investment Manger”), Brown Brothers Harriman & Co (the “Custodian”) and Equiniti Limited (the “Registrar”) to whom the Company has delegated the provision of services. We tailored the scope of our audit to reflect our risk assessment, taking into account such factors as the types of investments within the Company, the involvement of the Administrator, the accounting processes and controls, and the industry in which the Company operates. The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in the evaluation of the effect of misstatements, both individually and in aggregate on the financial statements as a whole. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 37 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 AUDITOR’S REPORT continued KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters. We summarise below the key audit matters in arriving at our audit opinion above, together with how our audit addressed these matters and the results of our audit work in relation to these matters. Key audit matter How our audit addressed the key audit matter and our conclusions Valuation of level 1 and level 2 investments (as per page 29 & 30 (Audit committee report), page 52 (Accounting policies) and Note 8. At 30th June 2024 the valuation of the level 1 and level 2 investments portfolio was 119.0m (30 June 2023: £105.8m). As this is the largest component of the Company’s Balance Sheet, and a key driver of the Company’s net assets and total return, this has been designated as a key audit matter, being one of the most significant assessed risks of material misstatement due to fraud or error. There is a further risk that the investments held at fair value may not be actively traded and the quoted prices may not therefore be reflective of fair value. We assessed controls reports provided by the Custodian and Administrator to evaluate the design of the process and implementation of key controls. We compared market prices and exchange rates applied to all level 1 and level 2 investments held at 30 June 2024 to an independent third- party source and recalculated the level 1 and level 2 investment valuations. We obtained average trading volumes from an independent third-party source for all level 1 investments held at year end and assessed their liquidity. We assessed trading activity for all level 1 and level 2 investments and challenged management’s assessment for evidence of an active market. From our completion of these procedures, we identified no material misstatements in relation to the valuation of the level 1 and level 2 investments. NEW STAR INVESTMENT TRUST PLC 38 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 Key audit matter How our audit addressed the key audit matter and our conclusions Valuation and Ownership of level 3 investments (as per page 29 & 30 (Audit committee report), page 52 (Accounting policies) and Note 8. At 30th June 2024 the valuation of the level 3 investments was £2.8m (30 June 2023: £2.5m). The Company determines the fair value of level 3 investments in accordance with the revised International Private Equity and Venture Capital (IPEV) valuation guidelines. Management is required to estimate the valuation of level 3 investments, which requires them to select an appropriate valuation method and appropriate inputs. There is significant estimation required, therefore this has been designated as a key audit matter, being one of the most significant assessed risks of material misstatements due to fraud or error. Additionally, there is a risk that the Company does not have proper legal title to the level 3 investments recorded as held at year end. We have performed a walkthrough of the process to evaluate the design of the process and implementation of key controls. We obtained evidence of the Board’s challenge and approval of the valuation of the level 3 investments. We stratified the portfolio of the level 3 investments, considering the value of individual investments, the movement in fair value and the inherent risk factors associated with each valuation basis. We then selected a sample of investments for testing, to ensure appropriate coverage of each strata of the portfolio. For the sample of level 3 investments, we: • Obtained an understanding of the sector for each investee company for the period being audited, making enquiries of management. • Gained an understanding of the original investment rationale and valuation basis, along with any milestones set. • Assessed the appropriateness of the valuation basis used, paying particular attention to any changes from the prior year valuation basis. • Assessed whether the valuation methodologies were in line with UK- adopted international accounting standards and IPEV guidelines. • Agreed data used in the valuation models to independent sources. AUDITOR’S REPORT continued NEW STAR INVESTMENT TRUST PLC 39 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 Key audit matter How our audit addressed the key audit matter and our conclusions • Reperformed the enterprise value calculations and waterfalls to ensure mathematical accuracy. • Where appropriate based on the valuation methodology applied, we developed an auditor’s point estimate or range. • Agreed ownership of the sampled level 3 investments held at year-end to share certificates or third-party confirmation. We have performed back-testing over any Level 3 investment disposals (proceeds vs. recent valuations) to assess for potential management bias in the valuation process. We have ensured that accounting estimates and related disclosures are appropriately disclosed in the financial statements. We have assessed whether the disclosures in relation to valuation estimates within the financial statements are in accordance with the AIC SORP and UK adopted international accounting standard requirements From our completion of these procedures, we identified no material misstatements in relation to the valuation of the level 3 investments. AUDITOR’S REPORT continued NEW STAR INVESTMENT TRUST PLC 40 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 Key audit matter How our audit addressed the key audit matter and our conclusions Revenue recognition, including allocation of special dividends as revenue or capital returns (as per page 30 (Audit committee report), Page 52 (Accounting policies) and Note 2. Investment income recognised at 30th June 2024 was £2.4m (30th June 2023: £2.0m), consisting primarily of dividend income from quoted investments. Revenue-based performance metrics are often one of the key performance indicators for stakeholders. The investment income received by the Company during the year directly impacts these metrics and the minimum dividend required to be paid by the Company. There is a risk that revenue is incomplete or inaccurate through failure to recognise income entitlements or failure to appropriately account for their treatment. It has therefore been designated as a key audit matter being one of the most significant assessed risks of material misstatement due to fraud or error. Additionally, there is a further risk of incorrect allocation of special dividends as revenue or capital returns as judgement is required in determining their allocation within the Income Statement. We assessed controls reports provided by the Administrator to evaluate the design of the process and implementation of key controls. We confirmed that income is recognised and disclosed in accordance with the AIC SORP by assessing the accounting policies. We recalculated 100% of dividends due to the Company from level 1 and level 2 investments based on investment holdings throughout the year and announcements made by investee companies. We tested a sample of interest income received from money market accounts and level 3 debt instruments. We agreed a sample of dividends received to bank statements. We assessed the entire dividend population and did not identify any special dividends. From our completion of these procedures, we identified no material misstatements in relation to revenue recognition, including allocation of special dividends as revenue or capital returns. OUR APPLICATION OF MATERIALITY We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature and extent of our work and in evaluating the results of that work. Materiality measure Value Materiality for the financial statements as a whole – we have set materiality as 1% of net assets as we believe that net assets is the primary performance measure used by investors and is the key driver of shareholder value. It is also the standard industry benchmark for materiality for investment trusts and we determined the measurement percentage to be commensurate with the risk and complexity of the audit and the Company’s quoted status. £1.38m AUDITOR’S REPORT continued NEW STAR INVESTMENT TRUST PLC 41 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 Materiality measure Value Performance materiality – performance materiality represents amounts set by the auditor at less than materiality for the financial statements as a whole, to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. In setting this we consider the Company’s overall control environment and any experience of the audit that indicates a lower risk of material misstatements. Based on our judgements of these factors we have set performance materiality at 50% of our overall financial statement materiality as this is our first year as auditor. £0.69m Specific materiality – recognising that there are transactions and balances of a lesser amount which could influence the understanding of users of the financial statements we calculate a lower level of materiality for testing such areas. Specifically, given the importance of the distinction between revenue and capital for the Company, we applied a separate testing threshold for the revenue column of the Income statement, set at the higher of 5% of the revenue net return on ordinary activities before taxation and our Audit Committee Reporting Threshold. We have also set a separate specific materiality in respect of related party transactions and Directors’ remuneration. We used our judgement in setting these thresholds and considered our experience and industry benchmarks for specific materiality. £0.14m Audit Committee reporting threshold – we agreed with the Audit Committee that we would report to them all differences in excess of 5% of overall materiality in addition to other identified misstatements that warranted reporting on qualitative grounds, in our view. For example, an immaterial misstatement as a result of fraud. Overall financial statement materiality as this is our first year as auditor. £0.07m During the course of the audit, we reassessed initial materiality and found no reason to alter the basis of calculation used at year-end. AUDITOR’S REPORT continued NEW STAR INVESTMENT TRUST PLC 42 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 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: • Evaluating management’s method of assessing going concern, including consideration of market conditions and uncertainties; • Assessing and challenging the forecast cashflows and associated sensitivity modelling used by the Directors in support of their going concern assessment; • Obtaining and recalculating management’s assessment of the Company’s ongoing maintenance of investment trust status; and • Assessing the adequacy of the Company’s going concern disclosures included in the Annual Rep ort. 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. OTHER INFORMATION The other information comprises the information included in the Annual Report other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in 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. AUDITOR’S REPORT continued NEW STAR INVESTMENT TRUST PLC 43 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 AUDITOR’S REPORT continued INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: • 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 • The Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • Adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or • 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 • Certain disclosures of Directors’ remuneration specified by law are not made; or • We have not received all the information and explanations we require for our audit; or • A corporate governance statement has not been prepared by the Company. NEW STAR INVESTMENT TRUST PLC 44 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 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: • 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 22; • The Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate set out on page 22; • The Directors’ statement on whether it has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities set out on page 22; • The Directors’ statement on fair, balanced and understandable set out on page 35; • The Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 14 and 15; • The section of the annual report that describes the review of the effectiveness of risk management and internal control systems set out on pages 26 and 27; and • The section describing the work of the Audit Committee set out on pages 29, 30 and 31. RESPONSIBILITIES OF DIRECTORS As explained more fully in the Directors’ responsibilities statement set out on page •, 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 REPORT continued NEW STAR INVESTMENT TRUST PLC 45 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 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. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Extent the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available. All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include: • Companies Act 2006; • FCA listing and DTR rules; • The principles of the UK Corporate Governance Code applied by the AIC Code of Corporate Governance (the “AIC Code”); • Industry practice represented by the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts (“the SORP”) issued in July 2022; • UK adopted International Financial Reporting Standards; and • The Company’s qualification as an investment trust under section 1158 of the Corporation Tax Act 2010. AUDITOR’S REPORT continued NEW STAR INVESTMENT TRUST PLC 46 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 We gained an understanding of how the Company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of relevant correspondence with regulatory bodies and board meeting minutes. We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. We identified a heightened fraud risk in relation to the valuation of level 1 and level 2 investments, valuation and ownership of level 3 investments and the allocation of special dividends as revenue or capital returns (audit procedures performed in response to these risks are set out in the section on key audit matters above) and management override (procedures in response to this risk are included below). In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error: • Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud; • Performing audit work procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, recalculating the investment management fee, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management in their calculation of accounting estimates for potential management bias; • Completion of appropriate checklists and use of our experience to assess the Company’s compliance with the Companies Act 2006 and the Listing Rules; and • Agreement of the financial statement disclosures to supporting documentation. Our audit procedures were designed to respond to the risk of material misstatements 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 intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures described above 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 would become aware of it. AUDITOR’S REPORT continued NEW STAR INVESTMENT TRUST PLC 47 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW STAR INVESTMENT TRUST PLC for the year ended 30th June 2024 OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS Following the recommendation of the Audit Committee, we were appointed by the Board on 26th January 2024 to audit the financial statements for the year ended 30th June 2024 and subsequent financial periods. The period of our total uninterrupted engagement is one year, covering the year ended 30th June 2024. The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain independent of the Company in conducting our audit. Our audit opinion is consistent with the additional report to the Audit Committee. USE OF OUR REPORT This report is made solely to the Company’s members, as a body, in accordance with 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. Bryan Shepka (Senior statutory auditor) For and on behalf of Johnston Carmichael LLP Statutory Auditor Glasgow, United Kingdom 1st November 2024 AUDITOR’S REPORT continued NEW STAR INVESTMENT TRUST PLC 48 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 STATEMENT OF COMPREHENSIVE INCOME for the year ended 30th June 2024 Year ended 30th June 2024 Year ended 30th June 2023 Notes Revenue Return £ ‘000 Capital Return £ ‘000 Total £ ‘000 Revenue Return £ ‘000 Capital Return £ ‘000 Total £ ‘000 INVESTMENT INCOME 2 2,373 – 2,373 1,997 – 1,997 Other operating income 2 883 – 883 457 – 457 3,256 – 3,256 2,454 – 2,454 GAINS AND LOSSES ON INVESTMENTS Gains on investments at fair value through profit or loss 8 – 12,575 12,575 – 2,279 2,279 Legal and professional costs – – – – – – Other exchange Gains/(losses) – 35 35 – (381) (381) Trail rebates – 4 4 – 2 2 3,256 12,614 15,870 2,454 1,900 4,354 EXPENSES Management fees 3 – (811) (811) – (775) (775) Other expenses 4 (375) – (375) (332) – (332) (375) (811) (1,186) (332) (775) (1,107) PROFIT BEFORE TAX 2,881 11,803 14,684 2,122 1,125 3,247 Tax 5 – – – – – – PROFIT FOR THE YEAR 2,881 11,803 14,684 2,122 1,125 3,247 EARNINGS PER SHARE Ordinary shares (pence) 6 4.05p 16.62p 20.67p 2.99p 1.58p 4.57p The total column of this statement represents the Company’s profit and loss account, prepared in accordance with UK adopted international accounting standards. The supplementary Revenue Return and Capital Return columns are both prepared under guidance published by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. The Company did not have any income or expense that was not included in ‘Profit/(Loss) for the year’. Accordingly, the ‘Profit/(Loss) for the year’ is also the ‘Total comprehensive income for the year’, as defined in IAS 1 and no separate Statement of Comprehensive Income has been presented. No operations were acquired or discontinued during the year. All income is attributable to the equity holders of the company. There are no minority interests. The Notes on pages 52 to 72 form an integral part of these Accounts. NEW STAR INVESTMENT TRUST PLC 49 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 Notes Share capital £ ‘000 Share premium £ ‘000 Special reserve £ ‘000 Retained earnings £ ‘000 Total £ ‘000 AT 30TH JUNE 2023 710 21,573 56,908 46,401 125,592 Total comprehensive income for the year – – – 14,684 14,684 Dividends paid 7 – – – (2,415) (2,415) AT 30th JUNE 2024 710 21,573 56,908 58,670 137,861 Included within Retained earnings were £2,621,000 of Company revenue reserves available for distribution. STATEMENT OF CHANGES IN EQUITY for the year ended 30th June 2024 STATEMENT OF CHANGES IN EQUITY for the year ended 30th June 2023 Notes Share capital £ ‘000 Share premium £ ‘000 Special reserve £ ‘000 Retained earnings £ ‘000 Total £ ‘000 AT 30TH JUNE 2022 710 21,573 56,908 44,787 123,978 Total comprehensive income for the year – – – 3,247 3,247 Dividends paid 7 – – – (1,633) (1,633) AT 30th JUNE 2023 710 21,573 56,908 46,401 125,592 Included within Retained earnings were £2,155,000 of Company revenue reserves available for distribution. The Notes on pages 52 to 72 form an integral part of these Accounts. NEW STAR INVESTMENT TRUST PLC 50 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 Notes 30th June 2024 £ ‘000 30th June 2023 £ ‘000 NON-CURRENT ASSETS Investment at fair value through profit or loss 8 121,716 108,301 CURRENT ASSETS Other receivables 10 479 345 Cash and cash equivalents 11 10,236 17,244 Other financial assets (longer-term deposits) 12 5,773 – 16,488 17,589 TOTAL ASSETS 138,204 125,890 CURRENT LIABILITIES Other payables 13 (343) (298) TOTAL ASSETS LESS CURRENT LIABILITIES 137,861 125,592 NET ASSETS 137,861 125,592 EQUITY ATTRIBUTABLE TO EQUITY HOLDERS Called-up share capital 14 710 710 Share premium 15 21,573 21,573 Special reserve 15 56,908 56,908 Retained earnings 15 58,670 46,401 TOTAL EQUITY 137,861 125,592 These Accounts were approved by the Board of Directors and authorised for issue on 31st October 2024. Geoffrey Howard-Spink Chairman New Star Investment Trust Plc Registered in England & Wales No. 03969011 BALANCE SHEET at 30th June 2024 The Notes on pages 52 to 72 form an integral part of these Accounts. NEW STAR INVESTMENT TRUST PLC 51 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 CASH FLOW STATEMENT for the year ended 30th June 2024 Notes Year ended 30th June 2024 £ ‘000 Year ended 30th June 2023 £ ‘000 NET CASH INFLOW FROM OPERATING ACTIVITIES 1,985 1,300 INVESTING ACTIVITIES Purchase of investments 8 (32,535) (9,812) Sale of investments 8 31,695 3,240 (840) (6,572) Longer term deposits 12 (5,773) – NET CASH OUTFLOW FROM INVESTING ACTIVITIES (6,613) (6,572) FINANCING ACTIVITIES Equity dividends paid 7 (2,415) (1,633) NET CASH OUTFLOW FROM FINANCING ACTIVITIES (2,415) (1,633) DECREASE IN CASH (7,043) (6,905) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN CASH & CASH EQUIVALENTS Decrease in cash resulting from cash flows (7,043) (6,905) Exchange movements 35 (381) Movement in net funds (7,008) (7,286) Net funds at start of the year 17,244 24,530 CASH & CASH EQUIVALENTS AT END OF YEAR 17 10,236 17,244 RECONCILIATION OF PROFIT BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES Profit before finance costs and taxation 14,684 3,247 Gains on investments (12,575) (2,279) Exchange differences (35) 381 Capital trail rebates (4) (2) Net revenue gains before taxation 2,070 1,347 Increase in debtors (134) (87) Increase in creditors 45 38 Taxation – – Capital trail rebates 4 2 NET CASH INFLOW FROM OPERATING ACTIVITIES 1,985 1,300 * Includes dividends received in cash of £2,132,000 (2023: £1,607,000), accumulation income of £253,000 (2023: £218,000) and interest received of £726,000 (2023: £586,000). The Notes on pages 52 to 72 form an integral part of these Accounts. NEW STAR INVESTMENT TRUST PLC 52 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 1. ACCOUNTING POLICIES The financial statements have been prepared in accordance with UK adopted international accounting standards. These financial statements are presented in pounds sterling, the Company’s functional currency, being the currency of the primary economic environment in which the Company operates, rounded to the nearest thousand. (a) Basis of preparation: The financial statements have been prepared on a going concern basis (see 1(o)). The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (‘SORP’) issued by the Association of Investment Companies (‘AIC’) in November 2014 and updated in February 2018 and October 2019 with consequential amendments is consistent with the requirements of UK adopted International Accounting Standards, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. The Company is an investment entity and has one subsidiary which is dormant. Accordingly, the Company is not required to prepare consolidated financial statements. The Company is an investment entity as defined by UK adopted International Accounting Standards and assets are held at their fair value reflecting the impact, if any, of climate change (see 1(f)). Consolidated accounts have not been prepared as the subsidiary is immaterial in the context of these financial statements. The net asset value of the investment in JIT Securities Limited has been included in the investments in the Company’s balance sheet. JIT Securities Limited has not traded throughout the year and the preceding year and, as a dormant company, has exemption under 480(1) of the Companies Act 2006 from appointing auditors or obtaining an audit. (b) Presentation of Statement of Comprehensive Income: In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the statement of comprehensive income between items of a revenue and capital nature has been presented alongside the statement of comprehensive income. In accordance with the Company’s Articles of Association, net capital returns may not be distributed by way of a dividend. Additionally, the net revenue profit is the measure the Directors believe is appropriate in assessing the Company’s compliance with certain requirements set out in the Investment Trust (Approved Company) (Tax) Regulations 2011. NOTES TO THE ACCOUNTS for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 53 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 1. ACCOUNTING POLICIES continued (c) Use of estimates: The preparation of financial statements requires the Company to make estimates and assumptions that affect items reported in the company balance sheet and statement of comprehensive income and the disclosure of contingent assets and liabilities at the date of the financial statements. Although these estimates are based on the Directors’ best knowledge of current facts, circumstances and, to some extent, future events and actions, the Company’s actual results may ultimately differ from those estimates, possibly significantly. The most significant estimate relates to the valuation of unquoted investments (see note 18(h)). (d) Revenue: Dividends and other such revenue distributions from investments are credited to the revenue column of the statement of comprehensive income on the day in which they are quoted ex-dividend. Where the Company has elected to receive its dividends in the form of additional shares rather than in cash and the amount of the cash dividend is recognised as income, any excess in the value of the shares received over the amount recognised is credited to the capital reserve. Deemed revenue from offshore funds is credited to the revenue account. Interest on fixed interest securities and deposits is accounted for on an accrual’s basis. (e) Expenses: Expenses are accounted for on an accruals basis. (1) Administration and other expenses, except for transaction charges, are charged to the revenue column of the statement of comprehensive income. (2) Direct management fees are recognised as a capital item in the statement of comprehensive income. (f) Investments held at fair value: Purchases and sales of investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned and are initially measured at fair value. All investments are classified as held at fair value through profit or loss on initial recognition and are measured at subsequent reporting dates at fair value, which is either the quoted bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted. Investments in units of unit trusts or shares in OEICs are valued at the bid price for dual priced funds, or single price for non-dual priced funds, released by the relevant investment manager. Unquoted investments are valued by the Directors at the balance sheet date based on recognised valuation methodologies, in accordance with International Private Equity and Venture Capital (‘IPEVC’) Valuation Guidelines such as dealing prices or third-party valuations where available, net asset values and other information as appropriate. As the quoted investments hold listed companies, the fair value prices should reflect the impact, if any, of climate change. NEW STAR INVESTMENT TRUST PLC 54 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 1. ACCOUNTING POLICIES continued (g) Taxation: The charge for taxation is based on taxable income for the year. Withholding tax deducted from income received is treated as part of the taxation charge against income. Taxation deferred or accelerated can arise due to temporary differences between the treatment of certain items for accounting and taxation purposes. Full provision is made for deferred taxation under the liability method on all temporary differences not reversed by the Balance Sheet date. No deferred tax provision is made against deemed reporting offshore funds. Deferred tax assets are only recognised when there is more likelihood than not that there will be suitable profits against which they can be applied. (h) Foreign currency: Assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Foreign currency transactions are translated at the rates of exchange applicable at the transaction date. Exchange gains and losses are taken to the revenue or capital column of the statement of comprehensive income depending on the nature of the underlying item. (i) Capital reserve: The following are accounted for in the capital reserve: – gains and losses on the realisation of investments together with the related taxation effect; – foreign exchange gains and losses on capital transactions, including those on settlement, together with the related taxation effect; – revaluation gains and losses on investments; – direct management fees; – legal expenses in assessing potential investments or incurred in disposing of investments; and – trail rebates received from the investment managers of the Company’s investments. The capital reserve is not available for the payment of dividends. (j) Revenue reserve: The revenue reserve includes net revenue recognised in the revenue column of the Statement of Comprehensive Income. (k) Special reserve: The special reserve can be used to finance the redemption and/or purchase of shares in issue. (l) Cash and cash equivalents: Cash and cash equivalents comprise deposits with an original maturity of less than 3 months and balances with banks. Cash and cash equivalents may be held for the purpose of either asset allocation or managing liquidity. (m) Longer term deposits: Longer term bank deposits with an original maturity of over 3 months are shown as other financial assets. (n) Dividends payable: Dividends are recognised from the date on which they are irrevocably committed to payment. NEW STAR INVESTMENT TRUST PLC 55 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 1. ACCOUNTING POLICIES continued (o) Segmental Reporting: The Directors consider that the Company is engaged in a single segment of business with the primary objective of investing in securities to generate long term capital growth for its shareholders. Consequently, no business segmental analysis is provided. (p) Going concern basis of preparation: The financial statements are prepared on a going concern basis and on the assumption that approval as an investment trust under section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011 will be retained. (q) New standards, interpretations and amendments effective for the periods beginning on or after 1st July 2023: There are no new standards, amendments to standards and interpretations that have impacted the Company and should be disclosed. (r) New standards, interpretations and amendments issued which are not yet effective and applicable for the periods beginning on or after 1st July 2024: There are no new standards, amendments to standards and interpretations that will impact the Company and should be disclosed. 2. INVESTMENT INCOME Year ended 30th June 2024 £‘000 Year ended 30th June 2023 £‘000 INCOME FROM INVESTMENTS UK net dividend income 2,102 1,707 Unfranked investment income 91 175 UK fixed interest 180 115 2,373 1,997 OTHER OPERATING INCOME Bank interest 883 457 883 457 TOTAL INCOME COMPRISES Dividends 2,193 1,882 Interest income 1,063 572 3,256 2,454 The above dividend and interest income has been included in the profit before finance costs and taxation included in the cash flow statements. NEW STAR INVESTMENT TRUST PLC 56 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 3. MANAGEMENT FEES Year ended 30th June 2024 Year ended 30th June 2023 Revenue £‘000 Capital £‘000 Total £‘000 Revenue £‘000 Capital £‘000 Total £‘000 Investment management fee – 811 811 – 775 775 – 811 811 – 775 775 At 30th June 2024 there were amounts accrued of £212,000 (2023: £194,000) for investment management fees. A summary of the terms of the investment management agreement may be found in the Directors’ Report on page 20. 4. OTHER EXPENSES Year ended 30th June 2024 £‘000 Year ended 30th June 2023 £‘000 Directors’ remuneration 104 66 Administrative and secretarial fee 95 95 Auditors’ remuneration – Audit 56 70 Other expenses 120 101 375 332 Allocated to: – Revenue 375 332 – Capital – – 375 332 * inclusive of VAT. NEW STAR INVESTMENT TRUST PLC 57 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 5. TAXATION (a) Analysis of tax charge for the year: Year ended 30th June 2024 Year ended 30th June 2023 Revenue Return £‘000 Capital Return £‘000 Total £‘000 Revenue Return £‘000 Capital Return £‘000 Total £‘000 Overseas tax 7 – 7 9 – 9 Recoverable income tax (7) – (7) (9) – (9) Total current tax for the year – – – – – – Deferred tax – – – – – – Total tax for the year (note 5b) – – – – – –  (b)Factorsaffectingtaxchargefortheyear: The charge for the year of £nil (2023: £nil) can be reconciled to the profit per the statement of comprehensive income as follows: Year ended 30th June 2024 £‘000 Year ended 30th June 2023 £‘000 Total profit before tax 14,684 3,247 Theoretical tax at the UK corporation tax rate of 25% (2023: 20.50%) 3,671 666 Effects of: Non-taxable UK dividend income (526) (350) Gains and losses on investments that are not taxable (3,154) (389) Excess expenses not utilised 23 99 Overseas dividends which are not taxable (14) (26) Overseas tax 7 9 Recoverable income tax (7) (9) Total tax for the year – – Due to the Company’s tax status as an investment trust and the intention to continue meeting the conditions required to maintain approval of such status in the foreseeable future, the Company has not provided tax on any capital gains arising on the revaluation or disposal of investments. There is no deferred tax (2023: £nil) in the capital account of the Company. There is no deferred tax charge in the revenue account (2023: £nil). At the year-end there is an unrecognised deferred tax asset of £1,156,000 (2023: £1,207,000) based on the enacted tax rates of 25% for financial years beginning 1st April 2023, as a result of excess expenses. NEW STAR INVESTMENT TRUST PLC 58 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 6. RETURN PER ORDINARY SHARE Total return per Ordinary share is based on the total profit on ordinary activities after taxation of £14,684,000 (2023: £3,247,000) and on 71,023,695 (2023: 71,023,695) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year. Revenue return per Ordinary share is based on the revenue profit on ordinary activities after taxation of £2,881,000 (2023: £2,122,000) and on 71,023,695 (2023: 71,023,695) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year. Capital return per Ordinary share is based on net capital profit for the year of £11,803,000 (2023: £1,125,000) and on 71,023,695 (2023: 71,023,695) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year. 7. DIVIDENDS ON EQUITY SHARES Amounts recognised as distributions in the year: Year ended 30th June 2024 £‘000 Year ended 30th June 2023 £‘000 Dividends paid during the year 2023 Final 1,207 994 2024 Interim 1,208 639 2,415 1,633 Dividends payable in respect of the year ended 30th June 2024: 3.4p (2023: 2.6p) per share 2,415 1,846 A final dividend of 1.7p per share is proposed. NEW STAR INVESTMENT TRUST PLC 59 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 8. INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS Year ended 30th June 2024 £‘000 Year ended 30th June 2023 £‘000 121,716 108,301 ANALYSIS OF INVESTMENT PORTFOLIO Quoted* £‘000 Unquoted £‘000 Total £‘000 Opening book cost 78,281 10,729 89,010 Opening investment holding gains/(losses) 27,530 (8,239) 19,291 Opening valuation 105,811 2,490 108,301 Movement in period Purchases at cost 31,873 662 32,535 Sales – Proceeds (31,276) (419) (31,695) – Realised gains on sales 10,249 – 10,249 Movement in investment holding gains for the year 2,306 20 2,326 Closing valuation 118,963 2,753 121,716 Closing book cost 89,127 10,972 100,099 Closing investment holding gains/(losses) 29,836 (8,219) 21,617 Closing valuation 118,963 2,753 121,716 * Quoted investments include unit trust and OEIC funds and one monthly priced fund. Year ended 30th June 2024 £‘000 Year ended 30th June 2023 £‘000 ANALYSIS OF CAPITAL GAINS AND LOSSES Realised gains on sales of investments 10,249 1,443 Investment holding gains/(losses) 2,326 836 Net gains/(losses) on investments attributable to ordinary shareholders 12,575 2,279 Transaction costs The purchase and sale proceeds above include transaction costs on purchases of £8,818 (2023: £786) and on sales of £nil (2023: £nil). NEW STAR INVESTMENT TRUST PLC 60 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 9. INVESTMENT IN SUBSIDIARY UNDERTAKING The Company owns the whole of the issued share capital (£1) of JIT Securities Limited, a company registered in England and Wales. The financial position of the subsidiary is summarised as follows: Year ended 30th June 2024 £‘000 Year ended 30th June 2023 £‘000 Net assets brought forward – – Dividend paid to parent – – Net assets carried forward – – 10. OTHER RECEIVABLES 30th June 2024 £‘000 30th June 2023 £‘000 Prepayments and accrued income 479 345 Taxation – – 479 345 11. CASH AND CASH EQUIVALENTS 30th June 2024 £‘000 30th June 2023 £‘000 Cash at bank and on short term deposit 10,236 17,244 12. OTHER FINANCIAL ASSETS (LONGER TERM DEPOSITS) 30th June 2024 £‘000 30th June 2023 £‘000 Longer term deposits 5,773 – The longer term deposits matured in July 2024. 13. OTHER PAYABLES 30th June 2024 £‘000 30th June 2023 £‘000 Accruals 343 298 NEW STAR INVESTMENT TRUST PLC 61 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 14. CALLED UP SHARE CAPITAL 30th June 2024 £‘000 30th June 2023 £‘000 Authorised 305,000,000 (2023: 305,000,000) Ordinary shares of £0.01 each 3,050 3,050 Issued and fully paid 71,023,695 (2023: 71,023,695) Ordinary shares of £0.01 each 710 710 15. RESERVES Share Premium account £‘000 Special Reserve £‘000 Retained earnings £‘000 At 30th June 2023 21,573 56,908 46,401 Increase in investment holding gains – – 2,326 Net gains on realisation of investments – – 10,249 Losses on foreign currency – – 35 Trail rebates – – 4 Management fees allocated to capital – – (811) Retained revenue profit for year – – 2,881 Dividends paid – – (2,415) At 30th June 2024 21,573 56,908 58,670 The components of retained earnings are set out below: 30th June 2024 £‘000 30th June 2023 £‘000 Capital reserve – realised 34,432 24,955 Capital reserve – revaluation 21,617 19,291 Revenue reserve 2,621 2,155 58,670 46,401 16. NET ASSET VALUE PER ORDINARY SHARE The net asset value per Ordinary share is 194.11 (2023: 176.83). The net asset value per Ordinary share is calculated on net assets of £137,861,000 (2023: £125,592,000) and 71,023,695 (2023: 71,023,695) Ordinary shares in issue at the year end. NEW STAR INVESTMENT TRUST PLC 62 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 17. ANALYSIS OF CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR At 1st July 2023 £‘000 Cash flow £‘000 Exchange movement £‘000 At 30th June 2024 £‘000 Cash at bank and on short term deposit 17,244 (7,043) 35 10,236 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS The Company’s investment objective has been to achieve long-term capital growth. The investment objective is implemented by allocating assets to global investment opportunities through investment in equity, bond, commodity, real estate, currency and other markets. The Company’s assets are stated at fair value. For listed securities, this represents the last traded bid price, or for unit trusts and OEICs, the bid price for dual priced funds, or single price for non-dual priced funds, released by the relevant investment manager. Unquoted investments are valued by the Directors at the balance sheet date based on recognised valuation methodologies, in accordance with IPEVC valuation guidelines such as dealing prices or third-party valuations where available, net asset values and other information as appropriate. The holding of securities, investing activities and associated financing undertaken pursuant to this objective involve certain inherent risks. Events may occur that would result in either a reduction in the Company’s net assets or a reduction of potential revenue profits available for dividend. As an investment trust, the Company invests in securities for the long term. Accordingly, it is, and has been throughout the year under review, the Company’s policy that no short-term trading in investments or other financial instruments shall be undertaken. The main financial instrument risks arising from the Company’s pursuit of its investment objective are market risk (comprising price risk, currency risk, and interest rate risk), liquidity risk and credit risk. The Board has reviewed and agreed policies for managing each of these risks, which are unchanged from the previous year, and which are summarised below. Note 18(h) sets out a summary of the Company’s financial assets and liabilities by category. (a) Market Risk The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices of investments held by the Company. This market risk comprises three elements – currency risk (see note 18(b)), interest rate risk (see note 18(c)), and other price risk (see note 18(d)). The Board reviews and agrees policies for managing these risks. The Company’s Investment Manager 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. NEW STAR INVESTMENT TRUST PLC 63 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS continued (b) Currency Risk A proportion of the Company’s portfolio is invested in investments denominated in a foreign currency and movements in exchange rates can significantly affect their Sterling value. Furthermore, a proportion of the Company’s investments in other collective investment schemes may have underlying currency exposure through their investments and, as a result, the Company may be subject to further indirect currency movement. Management of the risk The Investment Manager does not normally hedge against foreign currency movements affecting the value of the investment portfolio but takes account of this risk when making investment decisions. In addition, the Directors may authorise the Investment Manager to hedge currency risk or increase it in appropriate circumstances. Foreign currency exposure During the year under review, the Investment Manager did not enter into any forward currency contracts. (2023: £nil). The fair values of the Company’s assets that have foreign currency exposure at 30th June 2024 are shown below. 2024 US Dollars £‘000 2024 Euros £‘000 2024 Japanese Yen £‘000 2024 Total £‘000 2023 US Dollars £‘000 2023 Euros £‘000 2023 Japanese Yen £‘000 2023 Total £‘000 Investment at fair value through profit or loss 7,076 5,993 – 13,069 5,830 4,739 2,556 13,125 Cash at bank and short-term deposits 8,673 1 – 8,674 8,953 120 50 9,123 Longer term deposits 2,990 – – 2,990 – – – – Other receivables 174 – – 174 24 – – 24 Total net foreign currency exposure 18,913 5,994 – 24,907 14,807 4,859 2,606 22,272 The above table represents the direct assets denominated/dealt in US Dollars, Euros and Japanese Yen. The Company holds investments which are denominated in sterling which have significant currency exposure. These assets are not included in the above table. The underlying currency exposure will be significantly greater. NEW STAR INVESTMENT TRUST PLC 64 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS continued (b) Currency Risk continued Foreign currency sensitivity During the financial year sterling depreciated by 0.59% against the US dollar (2023: appreciated 4.71%), appreciated by 1.28% against the euro (2023: appreciated 0.25%) and appreciated by 10.80% (2023: appreciated 11.23%) against the Japanese Yen. Applying a 10% change in rate to the exposures listed above would affect net assets and total return as follows: 2024 US Dollars £‘000 2024 Euros £‘000 2024 Japanese Yen £‘000 2024 Total £‘000 2023 US Dollars £‘000 2023 Euros £‘000 2023 Japanese Yen £‘000 2023 Total £‘000 If exchange rates appreciated by 10% (1,719) (545) – (2,264) (1,346) (442) (237) (2,025) If exchange rates depreciated by 10% 2,101 666 – 2,767 1,646 540 290 2,476 It should be noted that the above illustration is based on the currency denominated/dealt assets noted above at the year end, not the total currency exposure. Exposures may be subject to change during the year as a result of investment decisions. (c) Interest Rate Risk The Company will be affected by interest rate changes as it holds cash and bank deposits. The majority of the Company’s investments are equity based and are not therefore subject to interest rate risk. However, interest rate changes will have an impact on the valuation of equities, although this forms part of other price risk, which is considered separately below. Management of the risk 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 making investment decisions. The Company currently has no gearing. The Company may from time to time hold significant cash and bank deposits. Short-term borrowings are used when required. Cash balances are invested in the market and may be put on deposit for up to one year to improve the return. Derivative contracts are not used to hedge against the exposure to interest rate risk. NEW STAR INVESTMENT TRUST PLC 65 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS continued (c) Interest Rate Risk continued Interest rate exposure The exposure, at 30th June, of financial assets and liabilities to interest rate risk is shown by reference to: – floating interest rates – when the rate is due to be re-set; – fixed interest rates – when the financial instrument is due for repayment. 2024 In 1 year or less £‘000 2024 Greater than 1 year £‘000 2024 Total £‘000 2023 In 1 year or less £‘000 2023 Greater than 1 year £‘000 2023 Total £‘000 Exposure to fixed interest rates: Cash and short term deposit accounts 10,196 – 10,196 17,216 – 17,216 Longer term deposits 5,773 – 5,773 – – – Exposure to floating interest rates: Cash at bank 40 – 40 28 – 28 Total exposure to interest rates 16,009 – 16,009 17,244 – 17,244 The above year end amounts may not be representative of the exposure to interest rates during the year, since the level of cash held during the year will be affected by the strategy being followed in response to the Board’s and Investment Manager’s perception of interest rates, the market prospects and the investment opportunities available at any particular time. Interest rate sensitivity The following table illustrates the sensitivity of the profit before taxation for the year and equity to an increase or decrease of 50 (2023: 50) basis points in interest rates regarding the Company’s monetary financial assets which are subject to interest rate risk. The sensitivity analysis is based on the Company’s monetary financial instruments held at each balance sheet date, with all other variables held constant. Increase in rate 2024 £‘000 Decrease in rate 2024 £‘000 Increase in rate 2023 £‘000 Decrease in rate 2023 £‘000 Effect on total return to equity 80 (80) 86 (86) NEW STAR INVESTMENT TRUST PLC 66 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS continued (d) Other Price Risk The Company’s exposure to other price risk comprises mainly movements in the value of its equity related investments. A Schedule of the Largest Investments is given on page 10. Investments are valued in accordance with the Company’s accounting policies. Uncertainty in future valuations of the Company’s investments arises as a result of future changes in the market prices of the Company’s listed equity investments and its unit trust and OEIC investments, and the effect changes in exchange rates may have on the sterling value of the investments. Management of the risk In order to manage this risk, the Directors meet regularly with the Investment Manager to compare the performance of the portfolio against the IA sector benchmark and market indices. Given the Company’s investment objective, the Company does not hedge against the effect of changes in the underlying prices of the investments. The Company had no derivative instruments at the year end. The unquoted investments are held at Directors’ valuations. All valuations are reviewed by the Investment Manager, the Company’s Audit and Risk Committee and subsequently recommended to the Board. Other price risk exposure The Company’s exposure to other changes in market prices at 30th June on its quoted investments, which are all equities or equity related, was as follows: 2024 £‘000 2023 £‘000 Quoted investments at fair value through profit or loss 118,963 105,811 The Company’s exposure to other changes in prices at 30th June on its unquoted investments was as follows: 2024 £‘000 2023 £‘000 Illiquid investments at fair value through profit or loss 2,753 2,490 NEW STAR INVESTMENT TRUST PLC 67 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS continued (d) Other Price Risk continued Analysed as: 2024 £‘000 2023 £‘000 Equities 2,334 1,588 Loan – interest bearing 88 507 Loan – non-interest bearing 331 395 2,753 2,490 Other price risk sensitivity The following table illustrates the sensitivity of the profit after taxation for the year and the equity to an increase or decrease of 10% in the fair values of the Company’s investments. The sensitivity analysis is based on the Company’s investments at each balance sheet date, with all other variables held constant. Increase in fair value 2024 £‘000 Decrease in fair value 2024 £‘000 Increase in fair value 2023 £‘000 Decrease in fair value 2023 £‘000 Effect on total return and on net assets 12,172 (12,172) 10,830 (10,830) (e) Liquidity Risk Liquidity risk is the possibility of failure of the Company to realise sufficient assets to meet its financial liabilities, including outstanding commitments associated with financial instruments. The Company’s assets mainly comprise cash, short term deposits and securities which can be readily sold to meet future funding commitments, if necessary. Unlisted securities, which carry a higher degree of liquidity risk form less than 2.5% (2023: 3%) of the investment portfolio. All financial liabilities of the Company at the balance sheet date are payable within three months. Management of the risk The liquidity risk is managed by maintaining some cash or cash equivalent holdings in order to meet investment requirements and other liabilities as they fall due. At the year end the Company had liquid resources of £130 million (2023: £118 million). This included £16.0 million (2023: £17.2 million) of cash and deposits and £113.9 million (2023: £101.2 million) of listed/daily priced investments. Liquidity risk exposure A summary of the Company’s financial liabilities is provided in note 17(h). The Group has sufficient funds to meet these financial liabilities as they fall due. NEW STAR INVESTMENT TRUST PLC 68 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS continued (f) Credit Risk Credit risk is the exposure to loss from failure of a counterparty to deliver securities or cash for acquisitions or disposals of investments or to repay deposits. Management of the risk Credit risk is managed as follows: – investment transactions are carried out with approved brokers, whose credit standing is reviewed periodically by the Investment Manager. – cash at bank is held only with an authorised list of banks, periodically reviewed by the Board. Credit risk exposure The maximum exposure to credit risk at 30th June 2024 was £16,009,000 (2023: £17,244,000), comprising: 2024 £‘000 2023 £‘000 Cash and cash equivalents 10,236 17,244 Longer term deposits 5,773 – 16,009 17,244 All of the above financial assets are current, their fair values are considered to be approximately the same as the values shown and the likelihood of a material credit default is considered to be low. (g) Fair Values of Financial Assets and Financial Liabilities The Company’s financial assets and financial liabilities are stated at their fair values at the year end. The fair value of quoted shares and securities and unit trusts and OEICs is based on last traded market bid prices or the bid/single price provided by the fund administrator. The fair value of unlisted shares and securities is based on Directors’ valuations as detailed in the accounting policies (note 1(f)). NEW STAR INVESTMENT TRUST PLC 69 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS continued (h) Summary of Financial Assets and Financial Liabilities by Category The carrying amounts of the Company’s financial assets and financial liabilities, as recognised at the balance sheet date of the reporting periods under review, are categorised as follows: 2024 £‘000 2023 £‘000 FINANCIAL ASSETS Financial assets at fair value through profit or loss Current assets carried at cost: 121,716 108,301 Debtors (due from brokers, dividends receivable, accrued income and other debtors) 479 345 Cash and cash equivalents 10,236 17,244 Longer term deposits 5,773 – 138,204 125,890 FINANCIAL LIABILITIES Measured at amortised cost: Creditors: amounts falling due within one year Accruals 343 298 343 298 Fair value of financial instruments The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant assets as follows: • Level 1 – valued using quoted prices unadjusted in active markets for identical assets or liabilities. • Level 2 – valued by reference to valuation techniques using observable inputs for the asset or liability other than quoted prices included within Level 1. • Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data for the asset or liability. NEW STAR INVESTMENT TRUST PLC 70 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS continued (h) Summary of Financial Assets and Financial Liabilities by Category continued The tables below set out fair value measurements of financial instruments at the year end, by the level in the fair value hierarchy into which the fair value measurement is categorised. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS AT 30TH JUNE 2024 Level 1 £‘000 Level 2 £‘000 Level 3 £‘000 Total £‘000 Equities and Funds 113,897 5,066 2,334 121,297 Loan – – 419 419 113,897 5,066 2,753 121,716 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS AT 30TH JUNE 2023 Level 1 £‘000 Level 2 £‘000 Level 3 £‘000 Total £‘000 Equities and Funds 101,267 4,544 1,588 107,399 Loan – – 902 902 101,267 4,544 2,490 108,301 The valuation techniques used by the Company are explained in the accounting policies on pages 52 to 55. There have been no transfers during the year between Levels 1, 2 or 3. The level 2 investment is an offshore fund, traded monthly. All loans are level 3 investments. A reconciliation of fair value measurements in Level 3 is set out below. NEW STAR INVESTMENT TRUST PLC 71 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE ACCOUNTS for the year ended 30th June 2024 18. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS continued (h) Summary of Financial Assets and Financial Liabilities by Category continued LEVEL 3 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS AT 30TH JUNE 2024 £‘000 2023 £‘000 Opening fair value 2,490 2,613 Movement in classification of investments: Purchases at cost, including proceeds reinvested 662 1,136 Sales proceeds (419) (513) Total gains or losses included in gains on investments in the statement of comprehensive income – on sold assets – 7 – on assets held at the end of the year 20 (753) Closing fair value 2,753 2,490 Level 3 valuations comprise the unquoted investments held at Directors’ valuation and one fund with a lock-in period. The Level 3 portfolio represents approximately 2.0% of the net asset value of the Company. Fair value has been established using recognised valuation techniques in accordance with IPEVC guidelines. Two investments individually represent more than 0.5% of the Company’s net asset value. The largest investment (0.88% of NAV) is valued on the basis of the last transaction value. A 10% increase or decrease in its earnings would not have a material impact on the valuation of this investment. The second largest investment is a fund with a lock-in period which is valued at its net asset value. None of the investments are valued based on their earnings. (i) Capital Management The Company’s capital is as disclosed in the Balance Sheet and is managed on a basis consistent with its investment objective and policies, as disclosed in the Strategic Report on pages 12 and 13. The principal risks and their management are disclosed in the Strategic Report. 19. RELATED PARTIES Since 1st January 2010, Brompton or its predecessor Brompton Asset Management LLP has acted as Investment Manager to the Company. This relationship is governed by an agreement dated 17th May 2018. Details of the investment management fee payable can be found on page 20. Mr Duffield is the senior partner of Brompton Asset Management Group LLP, the ultimate parent of Brompton. Mr Duffield owns the majority (59.14%) of the shares in the Company. Mr Gamble has an immaterial holding in Brompton Asset Management Group Limited. The total investment management fee payable to Brompton for the year ended 30th June 2024 was £811,000 (2023: £775,000) and at the year-end £212,000 (2023: £194,000) was accrued. NEW STAR INVESTMENT TRUST PLC 72 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 19. RELATED PARTIES continued The Company’s investments include seven funds managed by Brompton or its associates totalling £24,631,000 (2023: £22,100,000). No investment management fees were payable directly by the Company in respect of these investments. The Company has an equity investment of £100,000 (2023: £100,000) in an investment management company in which a related party of Mr Duffield holds a minority stake. The loan of £400,000 outstanding at 30 June 2023 was repaid during the year. Details of Directors fees paid can be found on page 32. 20. COMMITMENTS AND CONTINGENCIES The Company has made commitments to invest a further £1.2 million (2023: £0.6 million) which remains undrawn at the year-end. There are no other commitments or contingencies at the reporting date (2023: £nil). 21. SUBSEQUENT EVENTS On 8th August 2024 the company returned £17,046,000 to its shareholders by way of a B share scheme. A bonus issue of one new B share was made for each Ordinary Share which was then redeemed for cash. The net assets of the company were reduced by £17 million. In addition to the B share issue, the Shareholders approved a resolution to enable distributions to be paid out of capital profits. NOTES TO THE ACCOUNTS for the year ended 30th June 2024 NEW STAR INVESTMENT TRUST PLC 73 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the 2024 Annual General Meeting of New Star Investment Trust plc (“Company”) shall be held at Tenth Floor, 1 Knightsbridge Green, London, SW1X 7QA commencing at 11.00 am on Thursday 5th December 2024 for the following purposes: ORDINARY BUSINESS To consider, and if thought fit to pass, the following Resolutions which are proposed as Ordinary Resolutions of the Company: 1. To receive and adopt the Company’s Report and Accounts for the year to 30th June 2024 together with the Report of the Auditor therein. 2. To receive and approve the Annual Directors’ Remuneration Report for the year to 30th June 2024. 3. To approve the final dividend of 1.70p per Ordinary share in respect of the year to 30th June 2024 . 4. To re-elect Mr Geoffrey Howard-Spink, retiring in accordance with the UK Corporate Governance Code, as a Director. 5. To re-elect Mr David Gamble, retiring by rotation, as a Director. 6. To re-elect Mr John Duffield, retiring in accordance with the Listing Rules, as a Director. 7. To re-elect William McQuaker as a Director. 8. T o re-appoint Johnston Carmichael LLP as Auditor until the conclusion of the next general meeting at which accounts are laid before members and authorise the Directors to determine the Auditor’s remuneration. SPECIAL BUSINESS To consider, and if thought fit to pass, Resolution 9 as an Ordinary Resolution of the Company, and Resolutions 10 to 14 as Special Resolutions of the Company: 9. That the Directors be generally and unconditionally authorised under section 551 of the Companies Act 2006 (“Act”) to exercise all the powers of the Company to allot Ordinary shares in the capital of the Company (“Shares”) and/or grant rights to subscribe for or convert any security into Shares up to an aggregate of: a) £71,023 in nominal value of such Shares; and b) a further £71,023 in nominal value of Shares in connection with an offer by way of a rights issue: (i) to holders of Ordinary shares in proportion (or as nearly may be) to their existing holdings; and NEW STAR INVESTMENT TRUST PLC 74 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTICE OF ANNUAL GENERAL MEETING SPECIAL BUSINESS continued (ii) to holders of other equity securities as required by the rights of those equity securities or otherwise as the Directors may consider necessary. subject to such exclusions restrictions or other arrangements as the Directors consider necessary or appropriate in relation to fractional entitlements, record dates, treasury shares, or any legal or regulatory or practical problems under the laws of any territory or the requirements of any regulatory body or stock exchange; and unless otherwise renewed varied or revoked the authorities hereby granted shall expire at the earlier of the conclusion of the Annual General Meeting of the Company in 2024 or fifteen months after the passing of this Resolution save that the Company may before such expiry enter into offer(s) or agreement(s) which shall or may require Shares to be allotted after such expiry and the Company may allot Shares in pursuance of such offer(s) or agreement(s) as if the authorities hereby granted had not so expired. 10. That the Company’s investment objective be amended to long term total return through capital growth and income. 11. That subject to the passing of Resolution 9 above the Directors be generally and unconditionally authorised pursuant to section 570 of the Companies Act 2006 (“Act”) to allot equity securities (as defined in section 560 of the Act) as if section 561 of the Act did not apply to such allotment, provided that unless otherwise renewed varied or revoked the authority hereby granted shall expire at the earlier of the conclusion of the Annual General Meeting of the Company in 2025 or the date fifteen months after the passing of this Resolution, and shall be limited to: (i) the allotment of equity securities up to an aggregate nominal amount of £35,511 (being approximately 5% of the capital currently in issue); and (ii) the allotment of equity securities at a price (excluding expenses) not less than the net asset value per share for the business day immediately preceding such allotment, or if earlier the agreement to allot; save that the Company may enter into offer(s) or agreement(s) which shall or may require Shares to be allotted after such expiry and the Company is authorised to allot Shares in pursuance of such offer(s) or agreement(s) as if the authorities hereby granted had not so expired. 12. That the Company be and is hereby generally and unconditionally authorised in accordance with section 701 of the Companies Act 2006 (“Act”) to make market purchases (within the meaning of section 693(4) of the Act) of Ordinary shares in the capital of the Company upon such terms and in such manner as the Directors shall determine provided that: (i) the maximum aggregate number of Ordinary shares authorised hereby to be purchased shall be 10,646,450, being approximately 14.99% of the Ordinary share currently in issue; (ii) the minimum price which may be paid per Ordinary share shall be £0.01; NEW STAR INVESTMENT TRUST PLC 75 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTICE OF ANNUAL GENERAL MEETING SPECIAL BUSINESS continued (iii) the maximum price (exclusive of expenses) which may be paid per Ordinary share shall be an amount equal to the highest of (a) 5% above the average of the mid-market quotations for Ordinary shares as shown on the London Stock Exchange Daily Official List or website on the five business days immediately preceding the day of purchase and (b) in the event of a programme of buybacks the higher of the last independent trade and the highest current independent bid price; (iv) at the discretion of the Directors any Ordinary shares bought back under this authority may be cancelled or placed in treasury; (v) unless otherwise renewed varied or revoked the authority hereby granted shall expire at the earlier of the conclusion of the Annual General Meeting of the Company in 2025 or the date fifteen months after the passing of this Resolution save that the Company may enter into offer(s) or agreement(s) which shall or may require Shares to be bought back after such expiry and the Company may buy back Ordinary shares pursuant to such offer(s) or agreement(s) as if the authority hereby granted had not so expired. 13. That any Ordinary shares held by the Company in treasury, whether as a result of being bought back in accordance with the authority conferred by Resolution 12 above or otherwise may, at the discretion of the Directors, be cancelled or resold or allotted from treasury, provided that they shall not be resold or allotted at a price below the last published net asset value prior to re-issue. 14. That General Meetings of the Company, other than an Annual General Meeting, may be called on not less than 14 clear days’ notice. By order of the Board Apex Fund Administration Services (UK) Ltd Corporate Secretary 31st October 2024 Registered Office: 1 Knightsbridge Green, London SW1X 7QA Registered in England & Wales No: 03969011 NEW STAR INVESTMENT TRUST PLC 76 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING 1. This Report and Accounts is circulated to holders of Ordinary shares, all of whom are entitled to attend, speak and vote at the above Annual General Meeting (“AGM”). 2. Any member entitled to attend and vote at the AGM is also entitled to appoint one or more proxies to attend, speak and vote at the AGM on their behalf, provided that if multiple proxies are appointed they must be appointed in respect of different Ordinary shares. Proxies need not be members of the Company. A form of proxy is sent to members with the Report and Accounts and must be received by the Company’s Registrar: Equiniti Registrars, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA duly completed in accordance with the instructions on the form of proxy not less than 48 hours before the time of the meeting, or in the case of an adjourned meeting not less than 48 hours before the time of the adjourned meeting. If multiple proxies are being appointed the form of proxy should be copied and a separate form of proxy completed, identifying the different Ordinary shares each represents, stating that it is in respect of a multiple proxy appointment, for each proxy and have an original signature of the member making the appointment(s). Completion and return of form(s) of proxy will not preclude a member from attending, speaking and voting in person at the AGM. 3. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy instruction service may do so for the AGM and any adjournment thereof by using the procedure described in the CREST manual (available via www.euroclear.com). CREST personal members or other CREST sponsored members, and those CREST members who have appointed voting service providers, should refer to their CREST sponsors or voting service providers, who will be able to take the appropriate action on their behalf. For a proxy appointment or instructions made using the CREST service to be valid, the appropriate CREST message (a “CREST proxy instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (“EUI”) specifications and must contain the information required for such instructions, as described in the CREST manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA19) no later than 11:00 am on Tuesday 3rd December 2024 or, in the event of an adjournment of the meeting, 48 hours before the adjourned meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST applications host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST proxy instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his/her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In connection thereto, CREST members (and, where applicable, their CREST sponsors or voting service providers) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST proxy instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. NOTICE OF ANNUAL GENERAL MEETING NEW STAR INVESTMENT TRUST PLC 77 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 4. Institutional investors may be able to appoint a Proxy electronically via the Proxymity platform, a process that has been agreed by the Company and approved by the Registrar. Further information regarding Proxymity can be found on www.proxymity.io. Proxies must be lodged by 11:00 am on Tuesday 3rd December 2024 in order to be considered valid. Before appointing a proxy via this process investors will need to have agreed to Proxymity’s associate terms and conditions. It is important to read these carefully as investors will be bound by them and they will govern the electronic appointment of proxies. 5. A person who is not a member of the Company and receives this notice of meeting as a person nominated by a member to enjoy information rights under Section 146 of the Companies Act 2006 (“Act”) does not have a right to appoint proxies. However, if a nominated person has an agreement with the member who nominated them, the nominated person may have a right to be appointed as a proxy or a right to instruct the member as to the exercise of voting rights at the AGM. 6. Shareholders entered on the Register of Members of the Company by 6:30 pm two days before the time for the meeting, or by 6:30 pm two days prior to an adjourned meeting, are entitled to attend and vote at the AGM. Any changes to the Register of Members after such time and date shall be disregarded in determining the rights of any shareholders to attend and vote at the AGM. 7. Under Section 319(A) of the Act the Company must cause to be answered any question relating to the business being dealt with at the AGM put by a member attending the AGM unless answering the question would interfere unduly with the preparation for the meeting, would involve the disclosure of confidential information, an answer has already been given on a website, or is undesirable in the interests of the Company or good order of the AGM. 8. Members may not use any electronic address provided in this notice or any related document(s) to communicate with the Company for any purpose other than as specifically stated. 9. As at 30th October 2024, the latest practicable date prior to the publication of this notice, the issued capital carrying voting rights comprised 71,023,695 Ordinary shares. On a poll, each Ordinary share is entitled to one vote, and accordingly at 30th October 2024 the total voting rights attaching to Ordinary shares in issue was 71,023,695. 10. Information regarding the AGM, including the information required by Section 311A of the Act, can be found on the Company’s website at www.nsitplc.com 11. No Director has a service agreement with the Company. Directors’ letters of appointment will be available for inspection at the AGM venue from 15 minutes before the meeting and until conclusion of the meeting. 12. Members’ sufficient shares are entitled, pursuant to Sections 388 and 388A of the Act, to include a Resolution to be dealt with in the business of the AGM and to require the Company to give notice of that Resolution. NOTICE OF ANNUAL GENERAL MEETING NEW STAR INVESTMENT TRUST PLC 78 Job No. 53509 Proof Event: 3 Blackline Level: 2 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Annual Report 2024 T: 0207 055 6500 Fax 0207 055 6600 Job No: 53509 Proof Event: 1 Park Communications Ltd Alpine Way London E6 6LA Customer: Brompton Project Title: New Star Cover T: 0207 055 6500 F: 020 7055 6600 NEW STAR INVESTMENT TRUST REPORT AND ACCOUNTS JUNE 2024