JPMORGAN US SMALLER CO. INV TST PLC

Annual Report • Mar 28, 2025

JPMorgan US Smaller Companies Investment Trust plc Invest in the heart of America Annual Report & Financial Statements for the year ended 31st December 2024 ISA Millionaire investment trust 2024 Cityscape of downtown Denver with the Flatirons and Longs Peak , United States JPMorgan US Smaller Companies Investment Trust plc (‘the Company’) at a Glance Key Features 2 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Management Company and Company Secretary The Company employs JPMorgan Funds Limited (JPMF or the Manager) as its Alternative Investment Fund Manager (AIFM) and Company Secretary. JPMF delegates the management of the Company’s portfolio to JPMorgan Asset Management (UK) Limited (JPMAM). All of these entities are wholly owned subsidiaries of J.P. Morgan Chase & Co. Investment Objective Capital growth from investing in US smaller companies. Investment Policy The portfolio is a product of the investment team’s bottom-up investment approach and disciplined portfolio construction. The investment philosophy is simple and straightforward; to invest in companies that have a sustainable competitive advantage, that are run by competent management teams who have a track record of success and are good stewards of capital, and to focus on owning equity stakes in businesses that trade at a discount to their intrinsic value. Investment team The investment team is situated in New York. The lead portfolio manager, Don San Jose, has managed the portfolio since November 2008. The co-managers, Dan Percella and Jon Brachle, were appointed in 2014 and 2017 respectively. They are supported by additional investment professionals dedicated to researching US smaller companies, as well as the wider JPMAM investment management team. Investment Objective Capital growth from investing in US smaller companies. Investment Policy The portfolio is a product of the investment team’s bottom-up investment approach and disciplined portfolio construction. The investment philosophy is simple and straightforward: to invest in companies that have a financially sustainable competitive advantage, that are run by competent management teams who have a track record of success and are good stewards of capital, and to focus on owning equity stakes in businesses that trade at a discount to their intrinsic value. Investment team The investment team is situated in New York. The lead portfolio manager, Don San Jose, has managed the portfolio since November 2008. The co-managers, Dan Percella and Jon Brachle, were appointed in 2014 and 2017 respectively. They are supported by additional investment professionals dedicated to researching US smaller companies, as well as the wider JPMAM investment management team. Benchmark Index The Russell 2000 Index total return with net dividends reinvested, expressed in sterling terms (‘the Benchmark’). This index is a smaller companies’ index and is rebalanced annually to represent the smallest two thousand stocks by market capitalisation of all companies quoted in the Russell 3000 Index. Comparison of the Company’s performance is made with this benchmark. Capital Structure At 31st December 2024, the Company’s share capital comprised 65,406,275 ordinary shares of 2.5p each including 4,784,011 shares held in Treasury. Since the year end, a further 369,510 shares have been repurchased into Treasury. Continuation Vote In accordance with the Company’s Articles of Association, the Directors are required to propose a resolution that the Company continue as an investment trust at the forthcoming Annual General Meeting in June 2025 and every fifth year thereafter. Management Company and Company Secretary The Company employs JPMorgan Funds Limited (JPMF or the Manager) as its Alternative Investment Fund Manager (AIFM) and Company Secretary. JPMF delegates the management of the Company’s portfolio to JPMorgan Asset Management (UK) Limited (JPMAM). All of these entities are wholly owned subsidiaries of J.P. Morgan Chase & Co. The investment team, Don San Jose, Jon Brachle and Dan Percella (the ‘Portfolio Managers’) manage the Company’s portfolio on behalf of the Investment Manager. Cityscape view of skyscrapers, Manhattan, New York City, United States Key Features J.P. Morgan Asset Management 3 Association of Investment Companies (‘AIC’) The Company is a member of the AIC. Website The Company’s website, which can be found at www.jpmussmallercompanies.co.uk , or tinyurl.com/JUSC-Home , includes useful information on the Company, such as daily prices, factsheets and current and historic half year and annual reports. Contact the Company/Keeping in Touch General enquiries about the Company should be directed to the Company Secretary at jpmam.investment.trusts@jpmorgan.com . The Board and the Portfolio Managers are keen to increase dialogue with shareholders and other interested parties. If you wish to sign up to receive email updates from the Company, including news and views and latest performance statistics, please scan the QR Code to the right or visit http://tinyurl.com/JUSC-Sign-Up . The JPMorgan US Smaller Companies Investment Trust plc (‘the Company’) has a long-term track record and a disciplined process in US small-cap investing. The Company is managed by a tight knit team with a focus on delivering alpha. The portfolio manager of the Company is Don San Jose, who has 28 years’ experience and has been managing the Company since 2008. He is assisted in the management of the Company by co-portfolio managers Dan Percella and Jon Brachle. The portfolio managers have research responsibilities for the Company. They are also supported by Chris Carter and Jesse Huang, who are dedicated to researching US smaller companies. The investment team has an average of 19 years’ experience. The experience and longevity of the investment team serve as a significant competitive advantage. In addition, the investment team can leverage the vast resources at JPMAM which include over 40 US equity analysts and over 200 research analysts globally. Don San Jose and the team are bottom-up managers and select stocks based on company fundamentals and proprietary fundamental analysis to construct portfolios. It is through independent research focused on high quality stocks, together with a disciplined approach to valuation that the team aims to add value for investors over the long term. The team exercises a fundamental approach to investing in companies with emphasis on durable business models, quality management, consistent earnings, high return on invested capital and sustainable free cash flow. The fundamental components of the investment philosophy have remained consistent since the team began managing US small cap assets. However, the investment approach has evolved considerably in recent years as they have expanded coverage and made use of additional resources, including the integration of ESG metrics into the investment process and the enhanced use of technological tools. Our heritage and our team Our proven investment approach 2,500+ companies Companies under coverage within the Global Equity Research team 1 93.6% Active Share 1 Fundamental approach, focusing on high quality companies with attractive valuations 19+ years The 70+ U.S. equity analysts have an average of 19 years of industry experience 1 70+ professionals The team leverages the insights of over 70 research analysts in the U.S. and over 130 globally 1 Source: J.P. Morgan Asset Management. 1 Data as of December 2024. 4 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Key Features We believe that the analytical focus that we place on uncovering high quality companies which are trading at attractive valuations is a differentiating characteristic of our approach and one that serves to add value for our clients over the long term.” Jon Brachle, Portfolio Manager JPMorgan US Smaller Companies Investment Trust plc “ FINANCIAL CALENDAR Financial year end 31st December Full year results announced March/April Half year end 30th June Half year results announced August/September Annual General Meeting June Contents J.P. Morgan Asset Management 5 Strategic Report Financial Highlights 7 Chair’s Statement 9 Investment Manager’s Report 14 Environmental, Social and Governance (‘ESG’) Report 18 Ten Year Record 28 Portfolio Information 29 List of Investments 30 Business Review 32 Principal and Emerging Risks 36 Long Term Viability 41 Duty to Promote the Success of the Company 42 Directors’ Report Board of Directors 47 Directors’ Report 48 Corporate Governance Statement 50 Audit Committee Report 58 Directors’ Remuneration Report 62 Statement of Directors’ Responsibilities 67 Independent Auditor’s Report 69 Financial Statements Statement of Comprehensive Income 76 Statement of Changes in Equity 77 Statement of Financial Position 78 Statement of Cash Flows 79 Notes to the Financial Statements 80 Regulatory Disclosures Alternative Investment Fund Managers Directive (‘AIFMD’) Disclosure (Unaudited) 97 Securities Financing Transactions Regulation Disclosure (Unaudited) 98 Shareholder Information Notice of Annual General Meeting 100 Glossary of Terms and Alternative Performance Measures (‘APMs’) (Unaudited) 104 Investing in the Company 107 Share Fraud Warning 108 Information About the Company 109 Strategic Report Railroad Station, Chicago, United States Financial Highlights J.P. Morgan Asset Management 7 Strategic Report Total returns (including dividends reinvested) to 31st December 2024 3 Years 5 Years 10 Years 2024 2023 Cumulative Cumulative Cumulative Return on share price 1,A Return on net assets 2,A Benchmark return 3 Return on net assets relative to benchmark return 3,A Dividend in respect of the year 4 +18.7% +4.0% +4.1% +40.0% +11.3% +4.6% +6.9% +45.9% +13.3% +10.1% +49.7% +11.5% 3.1p 3.0p –2.0% –5.5% –4.6% –3.8% +191.3% +187.1% +158.9% +28.2% 1 Source: Morningstar. 2 Source: Morningstar/J.P. Morgan, using cum-income net asset value per share with debt at par value. 3 Source: Russell Investments. The Company’s benchmark is the Russell 2000 Index total return with net dividends reinvested, expressed in sterling terms. 4 2024 dividend is subject to approval by shareholders at the 2025 Annual General Meeting. A Alternative Performance Measure (‘APM’). A glossary of terms and APMs is provided on pages 104 to 106. Summary of results 2024 2023 % change Net asset value, share price, discount and market data at 31st December Net asset value per share 2,A 484.6p 438.6p +10.5 Share price 1 476.0p 404.0p +17.8 Share price discount to net asset value per share A (1.8)% (7.9)% Shareholders’ funds (£’000) 293,789 279,725 +5.0 Exchange rate £1 = $1.2524 £1 = $1.2748 +1.8 3 Shares in issue (excluding shares held in Treasury) 60,622,264 63,770,149 Revenue and Dividend for the year ended 31st December Net revenue attributable to shareholders (£’000) 2,321 2,567 –9.6 Revenue return per share A 3.74p 3.98p –6.0 Dividend per share 4 3.1p 3.0p +3.3 Gearing at 31st December A 7.7% 1.5% Ongoing Charges A 0.92% 0.93% 1 Source: Morningstar. 2 Source: Morningstar/J.P. Morgan, using cum income net asset value per share and debt at par value. 3 The % change in the exchange rate is based on the strengthening of the US dollar against Sterling during the year. 4 2024 dividend is subject to approval by shareholders at the 2025 Annual General Meeting. A Alternative Performance Measure (‘APM’). A glossary of terms and APMs is provided on pages 104 to 106. Financial Highlights 8 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Chair’s Statement J.P. Morgan Asset Management 9 Strategic Report Dear Shareholders, I have great pleasure in presenting the Annual Report of JPMorgan US Smaller Companies Investment Trust plc (‘the Company’) for the year ended 31st December 2024. The year was notable in many ways: continued strong performance from US equity markets, fuelled primarily by a handful of large capitalisation technology stocks; the US Presidential election seeing Donald Trump secure a second term in the White House; and, closer to home, a sustained period of significantly widened discounts leading to record levels of investment trust M&A activity alongside the arrival of vocal activist investors on share registers across the sector. Performance US equity markets began 2024 on a strong note, fuelled by optimism surrounding a ‘soft landing’ for the economy. Positive economic news, strong consumption, solid corporate earnings and Federal Reserve interest rate cuts provided further support to stock market performance. Latterly, the 2024 US elections had a significant impact on the markets on the expectation of tax cuts and pro-growth policies with particular support for domestically-oriented businesses. The initial euphoria rapidly faded as initial policy targets of tariffs, tougher action in immigration and a shift in US foreign policy were seen as less growth-positive and introduced significant uncertainties. Against this backdrop, the Company’s total return on net assets over the year was +11.3% which is modestly behind the +13.3% return for the benchmark, the Russell 2000 index in sterling terms. Total return to shareholders was +18.7% for the year, with the discount at which the Company’s shares traded over the 12 month period narrowing. While the Company’s absolute total return performance was strong, the performance relative to the benchmark over the short term is disappointing. Your investment team focuses on investment in more profitable, higher-quality and less volatile small cap businesses which, while defensive in weaker markets, can lag in markets that exhibit a preference for lower-quality growth stocks. Importantly, the longer-term track record of benchmark outperformance remains intact. This reflects the Manager’s disciplined focus on investment in high-quality, investment opportunities at attractive valuations. Full details of investment performance, changes to the portfolio and the outlook can be found in the Investment Manager’s Report in the Annual Report and Financial Statements. Discount Management, Share Issuance and Buybacks As I noted in our 2024 Interim Report, there has been a growing presence of activist investors on share registers across the sector. For example, US firm SABA Capital Management recently requisitioned meetings at seven trusts in which it had accumulated significant shareholdings; ostensibly to realise the value locked inside persistent share price discounts to net asset value (NAV), but the underlying rationale was widely perceived to be a self-interested attempt to gather assets in a way that failed to protect shareholder interests. The boards and managers of the trusts involved overcame the long standing challenges of communicating with individual shareholders to ensure that they were made aware of the implications of the proposals and encouraged to vote. In each case the resolutions were voted down on strong turnout. While these actions have shaken the sector, there are certainly significant positives to emerge. For example, the rejection of the proposals indicates that shareholders value the unique attributes of investment trusts – most notably an independent board representing the rights of all shareholders. It has reminded all boards that persistent discounts must be proactively addressed. Finally, it has provoked stronger engagement with government and regulators to improve boards’ abilities to engage directly with shareholders. This must include individuals who hold their shares through platforms. I would like to reassure shareholders that your Board continues to take a proactive rather than reactive approach to such issues, as we always have done, to protect and grow your interests as shareholders. On a day-to-day basis this aim is best served by transacting in your Company’s shares when appropriate, aiming to minimise the discrepancy between the share price and the net asset value. Our ability to do so depends on prevailing market conditions and the behaviour and risk appetite of investors. Additional challenges include US smaller companies’ share price volatility and owning dollar-denominated assets whilst reporting in sterling. We only transact in your Company’s shares Dominic Neary Chair when it will enhance shareholder value – buying back stock at a discount to NAV to remove excess supply of the Company’s shares from the market, and issuing at a share price above NAV to avoid the formation of an excessive premium. With the shares trading at a discount throughout 2024 our primary focus was on stimulating demand for your Company’s shares. To this end, we have two key levers at our disposal: an active, value-enhancing share buyback programme, and effective ongoing marketing activities. We have continued to be busy on both fronts. During the year to 31st December 2024, the Company bought back 3,047,895 shares into Treasury, at an average price of 399.0p and a total cost of £12.2 million, in periods when discounts were particularly wide, reflected in the weighted average discount of 11.5% at which these shares were acquired. Since the year end, the Company has repurchased an additional 369,510 shares into Treasury. The Company did not issue any shares during the year or since the year-end. On marketing activities, we continue to improve the promotion of your Company to shareholders and the broader market. For example, the Board has recently engaged an adviser to support the Manager in promoting the attractive characteristics of the Company. Their primary focus is to maximise the impact of the compelling content generated by the investment team under the evergreen tagline ‘Invest in the Heart of America.’ To improve access to this content the Company’s website has been upgraded and we would strongly recommend it as the primary source of information on the Company. The Board continues to work actively on improving the Company’s shareholder communications and PR programme. I am pleased to report that these actions, alongside the emerging recognition of the appeal of attractively-valued, domestically-oriented, high-quality US small cap stocks in a falling rate environment, mean that your Company’s discount, which averaged 8.9% over the course of the year, ending the year at a narrower discount of 1.8% (2023: 7.9%), although it has since widened to 6.5% as I write. Continuation of the Company In accordance with the Company’s Articles of Association, an ordinary resolution will be put to shareholders at the forthcoming AGM that the Company continues in existence as an investment trust for a further five-year period. The Board believes strongly in the case for long-term investment in US smaller companies through an investment trust. US small cap investments are a highly appealing proposition, offering access to a large and diverse opportunity set of exciting and entrepreneurial companies geared to the US economy. Further, current valuations lead us to expect strong performance from small caps over the next few years. The Company provides access to this attractive sector that individual investors and many institutions would find difficult to replicate. The investment trust structure is highly appropriate for investment in this sector, offering stable capital for investment in a less liquid sector, alongside the ability to borrow to enhance investment returns. Finally, the US small cap investment team at JP Morgan have a proven long-term track record of managing your Company through the consistent application of their proven philosophy and process. Over the 10 years to 31st December 2024, the total return from the Company’s net assets was +187.1%, significantly outperforming its benchmark which returned +158.9% over the same period. During the last 12 months, the Board, via the Management Engagement Committee, has undertaken a detailed review of the Manager and its investment approach. While acknowledging that relative performance over shorter term periods has been disappointing, the Board believes that the Manager’s approach continues to be appropriate for the Company and that JPMorgan Asset Management has the appropriate resources to continue to manage the Company successfully. Additionally, the Company’s major shareholders have been consulted where practicable, with feedback from this process indicating strong support for the continuation resolution. Accordingly, the Board believes that the continuation of the Company is in the best interests of all shareholders and strongly recommends that shareholders vote in favour of the resolution at the AGM in June 2025, as the Directors intend to do in respect of their own holdings. Chair’s Statement 10 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Chair’s Statement J.P. Morgan Asset Management 11 Strategic Report Revenue and Dividend The Board is delighted to recommend a dividend of 3.1p in respect of the financial year ended 31st December 2024 (2023: 3.0p). Subject to shareholders’ approval at the Annual General Meeting (AGM), this dividend will be paid on 11th July 2025 to shareholders on the register at the close of business on 13th June 2025. The ex dividend date is 12th June 2025. The Company’s objective is unchanged and remains one of capital growth. The dividend distribution amount will normally be driven by the minimum dividend required to maintain the Company’s investment trust status. Therefore, the dividend level may fluctuate as the distributions typically reflect the naturally occurring income on the underlying portfolio. Gearing Our policy sees gearing levels adjusted to reflect changes in the Board’s expectations for longer-term opportunities and market risks (with input from the Manager), rather than being used as a short-term market-timing tool. At the beginning of the year the Company had a US$30 million (with an option to draw a further US$10 million) revolving credit facility with Scotiabank to maintain a meaningful but modest level of gearing. On 15th March 2024 the Board renewed the facility with Scotiabank, the new facility being a secured 364-day facility for a reduced amount of US$20 million (with a US$10 million accordion option). In November 2024 the Board elected to utilise the full accordion US$10 million facility noting the attraction of small cap valuations relative to large caps. The Board renewed the loan facility in March 2025 with a new loan provider, Bank of America. This is now for US$35 million (with a US$5 million accordion option) and is a 360 day evergreen facility. As at 31st December 2024, the Company had drawn down US$30 million (GBP 24.0 million). It closed the year with a gearing level of 7.7%. The Board believes that the use of gearing is a key advantage of the investment trust structure and has consistently used gearing over time within its permitted 5% cash to 15% geared range. Board and Succession Planning In January 2025 the Board, through its Nomination Committee, carried out a comprehensive evaluation of the Board, its Committees, the individual Directors and the Chair. Topics discussed included the size and composition of the Board, Board information and processes, shareholder engagement, and training and accountability. The resulting report demonstrated the Board is working effectively for shareholders and in line with expectations. It was agreed that all the Directors will offer themselves for re-appointment at the forthcoming AGM and I very much hope you will vote for their re-appointment. The Board has set in place detailed succession plans. These are particularly important for a board of four directors to ensure no discontinuity is caused by the retirement of non-executive directors after nine years’ service, according to our policy, and as recommended by the AIC Code of Corporate Governance. Shefaly Yogendra will retire from the Board at the AGM in 2026. We are in the process of appointing an external adviser to assist in recruiting a new Director, with the intention to complete the process in the latter half of 2025. Board Diversity The Board recognises the value and importance of diversity in the boardroom. I am pleased to report that the Board meets the FCA Listing Rules targets on gender diversity criteria, female representation in a senior role and ethnic representation on the Board. Review of services provided by the Manager During the year, the Board, through its Management Engagement Committee, carried out a thorough review of the investment management, secretarial and marketing services provided to the Company by the Manager. Following this review, the Board has concluded that the continued appointment of the Manager on the terms agreed is in the interests of the shareholders. Chair’s Statement 12 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report The Company’s ongoing charges for the financial year as a percentage of the average of the daily net assets during the year, which include the management fee 1 , gearing costs and other expenses, were 0.92% (2023: 0.93%). Environment, Social and Governance (ESG) considerations The Board continues to engage with the Manager on the integration of ESG factors into its investment process. The Board is satisfied that the Manager has a robust and well-resourced approach, and that ESG factors are considered by the Portfolio Managers throughout the investment process. The Board shares the Manager’s view of the importance of financially material ESG factors when making investments for the long term and, in particular, the necessity of continued engagement throughout the duration of investment. The Portfolio Managers’ ESG report describes the developments in the ESG process that have taken place during the year together with practical examples of how these are implemented. Annual General Meeting We are inviting shareholders to join us in person for the Company’s sixty-eighth AGM to be held on Tuesday 17th June 2025 at 2.30 p.m. at 60 Victoria Embankment, London EC4Y 0JP. The Board hopes to welcome as many shareholders as possible. As with previous years, you will have the opportunity to hear from the Portfolio Managers. Their presentation will be followed by a question and answer session. There will be refreshments afterwards when shareholders will be able to meet members of the Board. Shareholders wishing to follow the AGM proceedings but choosing not to attend in person will be able to do so online, and will be able to ask questions through conferencing software. Details on how to register together with access details can be found on the Company’s website: www.jpmussmallercompanies.co.uk , or by contacting the Company Secretary at jpmam.investment.trusts@jpmorgan.com . In accordance with normal practice, all voting on the resolutions will be conducted on a poll. Due to technological reasons, shareholders viewing the meeting via conferencing software will not be able to vote on the poll and we therefore encourage all shareholders, and particularly those who cannot attend physically, to submit their proxy votes in advance of the meeting, so that they are registered and recorded at the AGM. Proxy votes can be lodged in advance of the AGM either by post or electronically. Detailed instructions are included in the Notes to the Notice of Annual General Meeting in the Annual Report. Please ensure that you act promptly on the notifications for voting, or consider contacting your share platform or wealth manager by their stipulated deadline to ensure that your votes are submitted on time. In addition, shareholders are encouraged to send any questions ahead of the AGM to the Board via the Company Secretary at the email address above. We will endeavour to answer relevant questions at the meeting or via the website depending on arrangements in place at the time. If there are any changes to the above AGM arrangements, the Company will update shareholders through its website and, as appropriate, through an announcement on the London Stock Exchange. My fellow Board members, representatives of JPMorgan and I look forward to the opportunity to meet and speak with shareholders after the formalities of the meeting have been concluded. Stay Informed The Company delivers email updates with regular news and views, as well as the latest performance. If you have not already signed up to receive these communications and you wish to do so, you can opt in via https://tinyurl.com/JUSC-Sign-Up or by scanning the QR code on page 3 of the Annual Report. 1 70 basis points per annum on gross assets (excluding any holding in the JPM liquidity fund). Chair’s Statement J.P. Morgan Asset Management 13 Strategic Report Further, your board is keen to engage with shareholders to ensure that all views are represented in our deliberations, and I therefore welcome your questions and observations via email at jpmam.investment.trusts@jpmorgan.com . Outlook The Board continues to have high confidence in the investment team, and their investment philosophy and process which have been applied consistently to generate strong long-term returns for the Company. The political and economic backdrop is continuing to develop under the new administration as the old order is replaced with a revised political agenda, and a different way of running government and interacting with the rest of the world. While this introduces significant uncertainty, the new administration under Donald Trump has committed to supporting growth in the domestic economy, albeit early actions do not directly support this stated intention. We are confident that the investment team continues to focus their investment decisions on valuation-conscious, all-weather stocks that will be robust in the face of political and economic developments. With the relative valuation of small cap investments so attractive, and the US small cap bias towards the home market, we believe that as the domestic-growth oriented policies are implemented those that Invest in the Heart of America through your Company will benefit from strong investment returns over time. Dominic Neary Chair 27th March 2025 Investment Manager’s Report 14 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Market Review In 2024, the US economy and financial markets experienced another robust year. The S&P 500 Index achieved a second year of double-digit returns, posting an impressive return of more than 25% in US dollars and more than 27% in sterling. This remarkable growth was underpinned by resilient consumer spending and marked the fourth consecutive year of above-trend economic expansion. US equity markets began 2024 on a strong note, fuelled by optimism that the economy would achieve a ‘soft landing’. Initially, economists projected modest growth of only 1.2% growth for the year. However, GDP growth came in above expectations, with real GDP growth for the US increasing by 2.8% year-on-year in 2024. Consumption, which constitutes almost 70% of nominal GDP, has been especially resilient. Year-over-year, real consumer spending rose by 2% for goods, while durable goods and services both increased by 3%. Throughout the year, the job market and interest rates remained central topics of discussion. Despite some concerns about an economic slowdown, employment has grown for 48 consecutive months and the unemployment rate concluded the year at 4.1%, only slightly higher than where it started, at 3.8%. Inflation made significant progress towards the Federal Reserve’s 2% target, which allowed it to begin cutting interest rates. Federal policy has been targetting lower inflation since March 2022, when rates began increasing to slow the economy, and by August 2023 the benchmark rate reached its highest level in 23 years. As inflation moderated, rates were cut by 0.5 percentage points in September 2024, followed by two additional cuts, each of 0.25 percentage points. By year-end, the federal funds rate stood in a range of 4.25% to 4.5%. The US Presidential election also had a significant impact on the markets, which experienced substantial gains following the results. This was largely driven by expectations that the new administration would implement tax cuts and other pro-growth policies. Furthermore, US Corporate earnings also boosted the market’s performance, once again surpassing expectations. Earnings forecasts for 2024 rose steadily due to the supportive macroeconomic environment. Current projections indicate earnings growth of 12% year-on-year for 2024, notably higher than the ten-year average growth rate of 8%. Within the small cap space, the market environment over the past year favoured more growth-oriented investments. The Russell 2000 Index posted an 11.5% gain in US Dollars and 13.3% in Sterling in 2024. While this performance lagged that of larger-cap peers, it matched the index’s historical annualised return since 1978. Within the Russell 2000 index, all sectors except energy posted positive returns. Telecoms, Technology and Consumer Staples were the best performing sectors, while Energy, Health Care and Basic Materials were the worst performers. The following charts provide an overview of the returns of different investment styles in the US market during 2024, as well as the sector performance of the Russell 2000 over the year. 2024 US Equity Market Performance (in USD) 2024 Large Mid Small Value Blend Growth 33.4% 22.1% 15.2% 25.0% 15.3% 11.5% 14.4% 13.1% 8.1% Don San Jose Portfolio Manager Jon Brachle Portfolio Manager Dan Percella Portfolio Manager Investment Manager’s Report J.P. Morgan Asset Management 15 Strategic Report 2024 Russell 2000 Index performance (in USD) Performance Against this background, the Company’s net asset value total return increased by +11.3 % in 2024, underperforming its benchmark, the Russell 2000 Index (Net) total return, which rose by +13.3% in sterling terms. Our portfolio seeks to invest in high quality companies at a reasonable valuation, and maintained a pro-cyclical tilt throughout the year. This focus on quality, however, was a headwind in a market that favoured growth-oriented and higher-momentum stocks. Within the portfolio, we owned a number of securities which performed well, particularly in areas like Financials, Consumer Staples and Energy, where stock selection was positive. Throughout the year, and particularly in the fourth quarter (Q4), however, our portfolio faced challenges driven by heightened investor enthusiasm for technology stocks, particularly in themes like Artificial Intelligence (AI), quantum computing, and space, which make up a smaller proportion of our portfolio. Additionally, the increase in 10-year Treasury yields by 80 basis points during Q4 created further headwinds for some of our Industrial holdings. Although overall index returns were reasonable, factor performance was decidedly risk-on, with low returns on equity, non-earners, volatility, and momentum leading, which was a headwind for our quality-oriented style. With regards to relative performance over the past year, our stock selection in the financials and consumer staples sectors contributed positively to performance. Within Financials, our overweight position in Stepstone Group and exposure to Evercore added to the Company’s performance. Stepstone Group is a global private markets firm which manages investments in private equity, real estate, infrastructure, and private debt. Shares outperformed on account of solid financial results, significant fundraising achievements, and growth in fee-related earnings and margins. The company saw increases in private wealth assets under management and undeployed fee-earning capital. Additionally, the buyout of remaining stakes in its infrastructure, private debt, and real estate businesses positively impacted the stock. We believe Stepstone Group remains well-positioned to capitalise on the secular growth in private markets, and this underpins our ongoing conviction in the stock. Evercore, a provider of investment banking advisory services for mergers and acquisitions, performed strongly, fuelled by solid earnings, robust advisory revenues, and an anticipated recovery in capital markets. Strategic investments in talent, combined with market share gains in large deals also boosted investor confidence. While we still like the company, we are actively monitoring our holding on account of its recent outperformance and investors’ high expectations from the stock. Elsewhere, our exposure to DT Midstream (DTM) proved beneficial. This company provides natural gas transportation and storage services. The stock rose due to consistent profit growth and strategic expansions, including key project completions and pipeline acquisitions. The company’s robust project backlog and increased demand for natural gas added to positive investor sentiment. We continue to view DTM as a quality, defensive energy company, and we remain comfortable with our holding. Energy Health Care Basic Materials Real Estate Utilities Consumer Discretionary Russell 2000 Index Financials Industrials Consumer Staples Technology Telecommunications –6.0% 3.0% 3.6% 6.6% 7.2% 8.1% 11.5% 16.5% 17.2% 21.2% 23.6% 24.0% Investment Manager’s Report 16 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report On the other hand, our stock selection in the Industrials and Technology sectors detracted the most. Within Industrials, our overweight position in Janus International and exposure to Willscot hurt performance. Janus International manufactures and supplies turn-key self-storage and commercial and industrial building solutions. The stock underperformed due to declining revenues and earnings, driven by reduced volumes and pricing, particularly in the self-storage and commercial segments. Despite some growth in new construction, the company’s overall financial performance was hampered by project delays and macroeconomic uncertainties. However, we remain confident in the longer-term prospects for the business, as the current challenges are macroeconomic in nature, rather than company specific. Willscot is the largest provider of modular office space and portable storage solutions. Shares declined due to volume weakness and macroeconomic challenges, including weak non-residential construction activity. The termination of the previously announced McGrath acquisition further added to the volatility. We remain comfortable with our position as the business is of high quality and is expected to recover as macroeconomic conditions improve. Within Technology, our lack of exposure to Super Micro Computer was the largest detractor. This company manufactures server solutions for data centres. The stock performed well in 2024. Demand for AI servers and liquid cooling solutions was high, generating strong revenue growth and facilitating significant market share gains. However, we have avoided this name due to the company’s failure to meet our quality threshold, as we have concerns about the competition environment, cash flow challenges, and regulatory risks. Performance Attribution Year ended 31st December 2024 % % Contributions to total returns Benchmark return 13.3 Asset Allocation 2.2 Stock Selection (4.2) Investment Manager Contribution (2.0) Portfolio total return 11.3 Impact of cash/gearing 0.3 Management fee and Other administrative expenses (0.9) Share buybacks 0.6 Other effects — Cum Income Net Asset Value total return 11.3 Share Price total return 18.7 * Includes impact of FX movements. Source: Wilshire, JPMAM and Morningstar. All figures are on a total return basis. Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark index. A glossary of terms and APMs is provided on pages 104 to 106. Investment Manager’s Report J.P. Morgan Asset Management 17 Strategic Report Portfolio Positioning Our investment philosophy remains focused on finding companies with durable franchises, good management teams, and stable earnings, that trade at a discount to their intrinsic value. We stand by our conviction that the investment case for smaller companies is appealing, especially for long-term investors as they include innovative companies that serve market niches and thereby provide investors with early access to innovative companies. We continue to favour high quality cyclicals, including initiations in the consumer discretionary and basic materials sectors, while also adding to existing holdings that lagged in the quarter. Consistent with our process, these were funded by the sale of certain higher beta cyclicals where valuations had begun to look excessive. We also trimmed some of our lower conviction holdings. Our largest absolute and relative overweight remains in industrials, and our second largest relative overweight is in basic materials. On the other hand, our largest underweights remain in the Health Care, Telecommunications, Energy, and Technology sectors given the lower quality attributes in key parts of these sectors. However, we continue to look for new ideas in these areas. Market Outlook As we enter 2025, we remain constructive on the investment case for small caps, for several reasons. Firstly, valuations are compelling and we see potential for a broadening of returns beyond a handful of US mega-caps, to the market at large, including smaller cap companies. Indeed, the valuation discount of small caps relative to large caps is reminiscent of levels seen during the Tech, Media and Telecom bubble of the late 1990s and early 2000s. Furthermore, while small cap earnings growth has lagged in recent years, Wall Street anticipates that this asset class will nearly double the growth of large caps this year. This optimistic outlook is driven by favourable macro conditions and increased capital spending in innovative areas such as AI, software and healthcare. A supportive macroeconomic environment is important for small caps, as they tend to generate more of their earnings domestically, compared to larger cap companies. Smaller caps are also more exposed to the economic cycle and the level of interest rates, relative to larger caps, which tend to have stronger balance sheets and lower gearing. The risk of near-term recession appears low, as employment levels are stable, and consumer spending is robust and domestic GDP growth looks set to remain above 2% this year. In addition, interest rates are now well off their highs, with further rate reductions expected over the course of the year. While tariffs, federal government layoffs, immigration reform and geopolitical changes under the new US presidential administration have introduced more uncertainty into the economic outlook in the early weeks of 2025, our quality-focused investment process has a history of superior downside protection. We intend to maintain our search for innovative, high-quality, smaller cap companies with attractive investment cases, and we will continue to use any bouts of market volatility to act on compelling stock selection opportunities, with a view to building on the Company’s long-term track record of strong capital growth and outperformance. Don San Jose Jon Brachle Dan Percella Portfolio Managers 27th March 2025 Environmental, Social and Governance (‘ESG’) Report 18 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Integrating Environmental, Social and Governance ESG stands for Environmental, Social and Governance. Awareness of these issues has increased significantly in recent years within the asset management industry, including the investment managers responsible for the Company’s portfolio, among the Board members of your Company, among shareholders and potential shareholders in the Company and, indeed in society at large. The Company is not a sustainable or an ESG investment vehicle. However, in actively managed strategies deemed by J.P.Morgan Asset Management (UK) Limited (‘JPMAM’ or referred to as ‘we’ or ‘us’ below) to be ESG-integrated under our governance process, we systemically assess financially material ESG factors (amongst other factors) in our investment analysis and investment decisions, where possible and appropriate, with the goals of managing risk and improving long-term returns. What is ESG? E is for Environmental This component considers a company’s impact on the world we live in, relating to the quality and functioning of the natural environment and natural systems. S is for Social Social factors address the way that companies act within society; this includes the way that employee interests are managed, and the broader impact a company has on society. G is for Governance This component relates to how companies are managed. It considers the measures that protect shareholder interests as well as the way any company meets regulatory and other external obligations. Environmental, Social and Governance (‘ESG’) Report J.P. Morgan Asset Management 19 Strategic Report Why integrate ESG into the investment process? J.P. Morgan Asset Management (JPMAM) believes that consideration of financially material environmental, social and governance (ESG) issues should be an important part of the investment process. ESG issues will increasingly affect a company’s ability to successfully operate and generate returns, today and over the long term. Systematically integrating ESG information into each stage of the investment process, including research, portfolio construction and company engagement, where material and relevant, should contribute to achieving an enhanced financial return, through better-informed investment decisions and strengthened risk management. With access to more ESG data and better analytical capabilities than ever before, companies can now be evaluated in smarter, more holistic ways. The term for this approach is ESG integration: using financially material ESG factors to generate enhanced risk-adjusted returns. Integrating ESG into investment decision-making brings about a process that is not very different from how investment decisions have been made historically: looking into the future, factoring in potential risks and opportunities around companies’ revenue growth trajectories, and investing accordingly, based on the sustainability of those business models. The difference is that, along with applying traditional financial metrics, the Managers now also access and utilise a set of factors that can help them make even better investments. While the Manager does not explicitly exclude individual stocks on ESG criteria, ESG factors influence their level of conviction and thus impact a stock’s position size within the portfolio. Comprehensive, Integrated Research A key strength of the investment process is JPMAM’s inhouse research, produced by over 100 global fundamental and quantitative equity analysts. The analysts’ ESG views on specific companies are the product of proprietary research and one-on-one engagements with companies. They also draw on data from external providers. These ESG views are one of multiple informational inputs into the investment process, alongside data on traditional financial factors, and so are not the sole driver of decision-making. The research framework uses several internally developed processes to assess the financially material ESG risks and opportunities of any business. An ESG Checklist applies the same detailed 40 questions to more than 2,500 companies under coverage globally. This Checklist asks 12 questions specifically addressing environmental considerations, 14 on social factors and 14 on governance issues. Analysts across Equities and Fixed Income collaborate on the ESG Checklist, with questions about governance tailored to reflect the investment angles of each asset class. The checklist includes both negative and positive questions, and a severity assessment. This is not a ‘pass/fail’ exercise, but rather a tool to inform discussions between portfolio managers and fundamental analysts, and engagements with the companies they cover. Environmental, Social and Governance (‘ESG’) Report 20 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Questions on the checklist include: E S G Environmental Social Goverance • Is the business vulnerable to regulation aimed at limiting greenhouse gas emissions? • Does the company have issues with toxic emissions, waste management or other environmental damage? • Is the company failing to manage its use of water resources responsibly? • Does the company have issues with labour relations? • Has the company had issues with privacy or data security? • Does the company engage in anti- competitive behaviour and/or treat its customers unfairly? • Does the management fail to admit mistakes? • Has the company changed key accounting policies? • Does the owner have a history of poor governance, or of abusing minority shareholders? Environmental, Social and Governance (‘ESG’) Report J.P. Morgan Asset Management 21 Strategic Report Manager’s ESG Approach The checklist, as described on the opposite page, is one tool used to incorporate ESG issues in a meaningful and consistent way. On top of this, they also draw from their own insights and company interactions as well as use other sources including external providers. As the quality and availability of ESG data continues to improve, JPMAM will continue to adapt the process to take advantage of these sources. One such source is the United Nations Global Compact (UNGC), a set of 10 business principles which addresses the areas of human rights, labour, the environment, and anti-corruption. The UN believes that by incorporating these principles into strategies, policies and procedures, and establishing a culture of integrity, companies are not only upholding their basic responsibilities to people and the planet but are also setting the stage for long-term success. The UNGC can be effective in identifying outliers to these principles. While there is no official list of companies that do not meet these principles, third party providers have taken the principles and applied their quantitative assessment to identify a ‘violators list’ of companies they consider to not be adhering to them. This list is very helpful in identifying corporate controversies and assessing how companies manage these controversies. The Manager now considers the UNGC in their investment decisions on behalf of the Company. Where they believe the violations cannot be remedied soon or where the company has not shown any signs of addressing the issue, they will exclude that company. Where it is less clear, they will engage with the company on the issue. ESG Engagement Active engagement with companies has long been an integral part of the Manager’s approach to investment. Engagement is used not only to understand how companies consider issues related to ESG, but also to try to influence their behaviour, encourage best practices, and to identify potential risks and opportunities. Engagement driven by the JPMAM Investment Stewardship Team focuses on the six firm-wide priorities detailed below. Underlying each priority are specific themes which are typically topical issues within the industry and with our clients. These themes are reviewed on an annual basis. Portfolio Managers and Research Analysts in the US Equity Group also directly drive engagement with companies, addressing a broad range of ESG issues as part of their bottom-up stock analysis and ongoing interaction with companies. Environmental Social Governance Climate change Natural capital and ecosystems Governance Strategy alignment with the long term Human capital management Stakeholder engagement Environmental, Social and Governance (‘ESG’) Report 22 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Worker climbing staircase on storage tank. Environmental, Social and Governance (‘ESG’) Report J.P. Morgan Asset Management 23 Strategic Report For the JPMorgan US Smaller Companies Investment Trust, the Investment Stewardship team in conjunction with the Manager conducted engagements across 23 companies in the year to 31st December 2024, specifically to discuss ESG issues. The companies engaged with represented 23.3% (by value) of the portfolio with the engagements by sector and theme broken down as follows: Engagement by pillars 8 companies 13 companies 13 companies Environmental Social Governance Engagement by themes 11.4% 6.8% 31.8% 2.3% 31.8% 15.9% Climate change Natural capital and ecosystems Human capital management Stakeholder engagement Governance Strategy alignment with the long term • North America 95.7% • Other 4.3% • Utilities 4.3% • Health Care 8.7% • Consumer Staples 4.3% • Energy 8.7% • Financials 8.7% • Materials 8.7% • Industrials 30.4% • Consumer Discretionary 13.0% • Information Technology 13.0% Engagement by region Engagement by sector • Senior Executives 51.6% • Operational Specialists 3.2% • Board Directors (incl. Chair) 25.8% • Corporate Secretary 6.5% • Investor Relations & Other 12.9% Engagement by position Environmental, Social and Governance (‘ESG’) Report 24 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Examples Knight-Swift Transportation (KNX) Knight-Swift Transportation (KNX) is a company that provides truckload transportation and logistics services, helping to move goods efficiently across the country. We engaged with KNX, including new CEO Adam Miller, on the recent CEO transition and climate disclosures/ opportunities. Their updated sustainability report contains a very matter-of-fact discussion about the challenges and opportunities for different decarbonising technologies. Some of the technologies (renewable diesel and renewable natural gas) that are more operationally/economically logical, are not favoured by regulators, who are more interested in electric vehicles. But Electric Vehicles (EVs) have so far not shown the progress KNX would need to rely on them. We discussed succession planning and the breadth of experience of the Board. We also discussed the new CEO’s key priorities for the business including a focus on the core business and an aim of creating greater synergies within the brands, for example through technology. Climate: we commended KNX on its latest Sustainability Report, which contains a discussion on the challenges of decarbonising the trucking business that parallels what they have been talking about in our prior engagements. We believed that contributed to the low support level (~12%) for the shareholder proposal asking for emissions reductions targets at the 2024 annual meeting. KNX stressed the challenges of managing two different yardsticks for emissions reductions. Regulators, both at the EPA and the state of California, are very focused on tailpipe emissions. KNX believes it is more appropriate to measure full value chain (‘well to wheel’) emissions. But they must comply with regulators, which would mean having to spend large amounts of money on solutions that don’t show progress. Meanwhile, they get limited credit for solutions that might make more immediate sense like renewable diesel. We highlighted our recent climate addition to our Proxy Voting Guidelines to stress our focus on this issue when financially material. RBC Bearings (RBC) RBC Bearings (RBC) Incorporated designs, manufactures, and markets precision bearings and components for industrial, aerospace, and defence applications. After a years-long set of engagements (and progress) with RBC Bearings on its executive compensation structure, RBC Bearings was added to the Focus List of engagements in the fall of 2024. This conversation focused on compensation, Board governance, succession planning with the Chief Financial Officer (CFO), General Counsel (GC), and Investor Relations (IR) Director in this offseason meeting. Compensation: Although we had supported compensation at the 2024 annual meeting, we reiterated our concern about the company’s decision to increase the CEO’s base salary by 50%. While RBC has continued to face questionable details in their compensation structure over the years, it has not led to a pay-for-performance misalignment and we acknowledged the Company has made consistent incremental improvements in their structure. Because RBC has made positive (albeit incremental) improvements to its pay structure, we asked how they might think about a simplified version of compensation based on time-based Restricted Stock Units (RSUs) (in contrast to duplicative Short Term Incentives (STI)/Long Term Incentives (LTI) measures, LTI split into separate 1- and 3-year components, STI and LTI tied to base salary, etc.). The Company noted that in its shareholder engagement over the past few years that the ‘yardstick’ on what is considered best-in-class compensation structure and practices continues to shift, and appreciated the JPMAM view to regularly and thoughtfully evaluate beyond proxy adviser recommendations. Board Governance and Refreshment: RBC added a new Director, Frederick Elmy, in 2024. Mr. Elmy has reportedly been already very engaged with the Company, including joining every monthly ops management meeting and getting to know executives beyond just the C-suite. They viewed this development positively given some Board members at other companies may not even regularly interact with C-level executives, let alone those beyond C-level, at a regular cadence in their very first year. When pressed on whether RBC is evaluating any other Board refreshment, the Company felt confident in its existing Board (while stating it keeps a constant pool of candidates). Single skill Board topics such as cybersecurity and IT can be covered by bringing specific experts to educate the Board. RBC did note that potential skillset areas the Board considers critical include compliance (government contractor segment) and the Asia customer market. We also discussed broader succession planning across the business. Environmental, Social and Governance (‘ESG’) Report J.P. Morgan Asset Management 25 Strategic Report Proxy Voting Alongside these direct engagements, JPMAM exercises the voting rights of shares held in client portfolios, where entrusted with this responsibility. The Manager seeks to vote in a prudent and diligent manner, based exclusively on its reasonable judgement of what will best serve the financial interests of its clients. JPMAM will aim to vote at all meetings called by the companies in which it is invested, unless there are any market restrictions or conflicts of interests. In the US Equity Group, proxy voting is a collaboration between investors and the Investment Stewardship specialists in the Global Sustainable Investing Team. JPMAM examines the share structure and voting arrangements of the companies in which it invests, as well as the board’s balance, oversight functions and remuneration policy. For full details, please see the J.P. Morgan Asset Management Corporate Governance Policy & Voting Guidelines, copies of which are available on request, or to download from JPMAM’s website: https://am.jpmorgan.com/gb/en/asset- management/per/about-us/investment-stewardship/ A summary of key voting statistics and activity undertaken in respect of stocks in the Company’s portfolio for the 12 months to 31st December 2024 is detailed below. JPMorgan US Smaller Companies Investment Trust plc 1st January 2024 to 31st December 2024 88 meetings, 774 votable items Items Number Percentage (%) Number of votable meetings 88 Number of votable items 774 Number of items voted (instructions of Do Not Vote are not considered voted) 774 100.0 Number of votes for 736 95.1 Number of votes against 24 3.1 Votes withheld 3 0.4 Did not vote 0 0.0 Votes on Management Say on Pay Frequency 11 1.4 With Management 751 97.0 Against Management 23 3.0 Directors Related 20 87.0 Non-Salary Comp 3 13.0 Other/miscellaneous 0 0.0 With Policy 766 99.0 Against Policy 8 1.0 Environmental, Social and Governance (‘ESG’) Report 26 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Task Force on Climate-related Financial Disclosures (TCFD) JPMorgan Asset Management (UK) Limited (‘JPMAMUK’) is an asset manager, operating in the UK as part of J.P. Morgan Asset Management (‘JPMAM’). JPMAM is the marketing name for the investment management businesses of JPMorgan Chase & Co. worldwide. As a global asset management group, JPMAM seeks to adopt a consistent approach in its strategy and management of client assets, including with respect to climate risks and opportunities. Accordingly, this UK addendum, is supplemental to and should be read together with JPMAM’s Global Task Force for Climate Related Financial Disclosures Report (2024 TCFD Report). Please refer to the below link for additional information: https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/sustainable-investing/uk-tcfd-report.pdf The Carbon Scorecard The carbon footprint is an important starting point to help understand the portfolio’s exposure to climate risks. The portfolio companies have a weighted average carbon intensity higher than that of the Russell 2000. Based on this data, MSCI rates the JPMorgan US Smaller Companies Investment Trust plc as having a moderate exposure to carbon intensive companies. The table below contains the numbers as at 31st December 2024. Source: MSCI ESG Research LLC J.P. Morgan Asset Management Carbon emissions tons CO2e/$m invested Total carbon emissions tons CO2e/$m Carbon intensity tons CO2e/$m sales Weighted average carbon intensity (WACI) tons CO2e/$m sales Carbon emissions data availability Portfolio 46.3 18,430 112.4 128.5 99.6 Index 93.6 37 281 124.2 118.2 93.6 , Environmental, Social and Governance (‘ESG’) Report J.P. Morgan Asset Management 27 Strategic Report Looking ahead Over the last few years, the quantity and quality of ESG-related data available to investors have improved significantly. Organisations that encourage voluntary disclosure – such as CDP (formerly the Carbon Disclosure Project), the Sustainability Accounting Standards Board (SASB) and the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) – have played an important role in helping businesses better understand, measure and communicate to investors the ESG risks they are exposed to. Investors can now access higher quality ESG-related data that is more consistent, comparable, and reliable. Clear new regulations, such as the Sustainability Disclosure Requirements (SDR) in the UK which will make disclosures mandatory, have also helped accelerate the availability of data. With access to more ESG data and better analytical capabilities than ever before, JPMAM believes they can now evaluate the companies in which they invest in smarter, more holistic ways. J.P. Morgan Asset Management Ten Year Record 28 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report At 31st December 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Shareholders’ funds (£’000) 99,348 103,805 153,824 166,687 158,831 198,252 236,839 301,783 273,057 279,725 293,789 Net asset value per share (p) 177.3 184.3 276.7 294.2 274.8 343.0 394.9 462.1 421.7 438.6 484.6 Share price (p) 2 172.1 183.9 282.0 303.8 266.0 352.0 403.0 467.0 391.0 404.0 476.0 Share price (discount)/ premium (%) A (2.9) (0.2) 1.9 3.3 (3.2) 2.6 2.1 1.1 (7.3) (7.9) (1.8) Gearing (%) 6.5 9.8 4.1 5.2 5.8 5.0 6.1 6.7 6.8 1.5 7.7 Exchange rate (£1=$) 2 1.56 1.47 1.24 1.35 1.27 1.32 1.37 1.35 1.20 1.27 1.25 Shares in issue 1 56,040,928 56,325,928 55,586,928 56,651,928 57,791,928 57,791,928 59,969,382 65,306,265 64,745,622 63,770,149 60,622,264 Year ended 31st December Gross return (£’000) 1,390 1,728 2,317 2,552 2,693 3,023 2,962 3,266 3,336 4,365 4,045 Revenue return per share (p) 1.15 1.66 2.51 2.79 2.75 2.76 3.00 2.87 2.72 3.98 3.74 Dividend per share (p) nil nil nil 2.5 2.5 2.5 2.5 2.5 2.5 3.0 3.1 Ongoing charges ratio (%) A 1.73 1.69 1.47 1.33 1.36 1.23 1.07 0.99 0.95 0.93 0.92 Annual total returns to 31st December Return on share price (%) 2 +5.6 +6.8 +53.4 +7.7 –11.6 +33.4 +15.5 +16.5 –15.7 +4.0 +18.7 Return on net assets (%) 3,A +12.8 +4.0 +50.1 +6.3 –5.8 +25.8 +16.0 +17.7 –8.2 +4.6 +11.3 Benchmark return (%) 4 +11.1 +0.9 +44.4 +4.5 –5.7 +20.4 +16.0 +15.7 –10.6 +10.1 +13.3 Cumulative total returns rebased to 100 at 31st December 2014 Return on share price (%) 2,A 100.0 106.8 163.8 176.5 155.9 208.1 240.2 279.9 235.9 245.3 291.3 Return on net assets 3,A 100.0 103.9 156.1 165.9 156.4 196.7 228.3 268.7 246.6 258.0 287.1 Benchmark return 4,A 100.0 100.9 145.7 152.3 143.6 173.0 200.7 232.2 207.6 228.5 258.9 1 Excludes any shares held in Treasury. 2 Source: Morningstar/J.P. Morgan. 3 Source: Morningstar/J.P. Morgan, using cum income net asset value per share. 4 Source: Russell Investments. The Company’s benchmark is the Russell 2000 Index total return with net dividends reinvested, expressed in sterling terms. 5 Dividend in relation to 2024 payable on 11th July 2025, subject to approval by shareholders at the 2025 Annual General Meeting. See note 10 on page 85 for details. A Alternative Performance Measure (APM). A glossary of terms and APMs is provided on pages 104 to 106. Portfolio Information J.P. Morgan Asset Management 29 Strategic Report Ten largest investments At 31st December 2024 2023 Valuation Valuation Company 1 Sector £’000 % 2 £’000 % 2 WillScot Industrials 6,587 2.1 5,339 1.9 MSA Safety Industrials 5,647 1.8 5,198 1.8 Cushman & Wakefield 3 Real Estate 5,114 1.6 3,001 1.1 Casella Waste Systems 3 Utilities 4,927 1.6 4,512 1.6 MACOM Technology Solutions Technology 4,848 1.5 5,318 1.9 Bright Horizons Family Solutions 3 Consumer Discretionary 4,782 1.5 4,461 1.6 Hayward 3 Industrials 4,722 1.5 3,567 1.3 Paylocity 4 Industrials 4,677 1.5 — — Encompass Health Health Care 4,603 1.5 5,217 1.8 RBC Bearings Basic Materials 4,584 1.4 5,170 1.8 Total 50,491 16.0 1 All companies shown are listed in the USA. 2 Based on total investments of £316.5m (2023: £284.0m). 3 Not included in the ten largest investments at 31st December 2023. 4 Not held at 31st December 2023. At 31st December 2023, the value of the ten largest investments amounted to £50.0 million representing 17.6% of total investments. Sector analysis At 31st December 2024 2023 Portfolio Benchmark Portfolio Benchmark Sector % 1 % % 1 % Industrials 28.3 19.4 28.0 18.4 Financials 19.1 17.8 16.4 16.0 Consumer Discretionary 12.1 11.7 11.4 13.3 Technology 10.4 11.7 12.8 12.6 Health Care 9.2 16.3 10.5 15.1 Basic Materials 5.4 3.8 5.4 3.8 Real Estate 5.1 6.4 5.1 6.4 Energy 4.0 5.5 2.5 7.4 Consumer Staples 3.5 2.6 3.2 2.8 Utilities 2.9 3.0 4.7 2.8 Telecommunications — 1.8 — 1.4 Total 100.0 100.0 100.0 100.0 1 Based on total investments of £316.5m (2023: £284.0m). List of investments At 31st December 2024 List of investments 30 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Industrials WillScot 6,587 2.1 MSA Safety 5,647 1.8 Hayward 4,722 1.5 Paylocity 4,677 1.5 WEX 4,426 1.4 Simpson Manufacturing 4,036 1.3 Eagle Materials 3,981 1.3 Core & Main 3,888 1.2 First Advantage 3,736 1.2 Verra Mobility 3,602 1.1 Applied Industrial Technologies 3,537 1.1 Hillman Solutions 3,517 1.1 Landstar System 3,515 1.1 Toro 3,256 1.0 Brunswick 3,250 1.0 Janus International 3,238 1.0 Badger Meter 3,209 1.0 AZEK 3,198 1.0 UniFirst 2,908 0.9 Aptar 2,815 0.9 Lincoln Electric 2,431 0.8 AAON 2,347 0.7 Knight-Swift Transportation 2,216 0.7 Douglas Dynamics 1,814 0.6 Cognex 1,723 0.6 Loar 1,384 0.4 89,660 28.3 Financials Wintrust Financial 4,216 1.3 RLI 4,094 1.3 Cullen/Frost Bankers 4,000 1.3 Evercore 3,699 1.2 BankUnited 3,655 1.2 StepStone 3,463 1.1 MarketAxess 3,459 1.1 First Interstate BancSystem 3,399 1.1 Kinsale Capital 3,388 1.1 First Hawaiian 3,337 1.1 First Financial Bancorp 3,315 1.0 Baldwin Insurance 3,234 1.0 City 2,920 0.9 Commerce Bancshares 2,913 0.9 WSFS Financial 2,612 0.8 Financials (continued) Clearwater Analytics 2,544 0.8 Moelis 2,336 0.7 ServisFirst Bancshares 2,286 0.7 Oscar Health 1,631 0.5 60,501 19.1 Consumer Discretionary Bright Horizons Family Solutions 4,782 1.5 Planet Fitness 4,375 1.4 Driven Brands 3,728 1.2 Vail Resorts 3,568 1.1 BJ’s Wholesale Club 3,514 1.1 Wendy’s 3,316 1.0 Acushnet 3,053 1.0 Monarch Casino & Resort 3,012 1.0 Five Below 2,501 0.8 Wyndham Hotels & Resorts 2,426 0.8 Gentex 2,247 0.7 Savers Value Village 1,664 0.5 38,186 12.1 Technology MACOM Technology Solutions 4,848 1.5 Novanta 4,278 1.3 Power Integrations 4,046 1.3 Allegro MicroSystems 3,453 1.1 SPS Commerce 3,158 1.0 Workiva 2,379 0.8 Qualys 2,265 0.7 CCC Intelligent Solutions 2,216 0.7 Fabrinet 2,166 0.7 Blackbaud 2,109 0.7 nCino 2,023 0.6 32,941 10.4 Health Care Encompass Health 4,603 1.5 Envista 3,945 1.3 ICU Medical 3,874 1.2 HealthEquity 3,611 1.1 Azenta 3,168 1.0 QuidelOrtho 3,148 1.0 Certara 2,311 0.7 Concentra 2,199 0.7 Neogen 2,157 0.7 29,016 9.2 % of the Valuation total Company £’000 portfolio % of the Valuation total Company £’000 portfolio List of investments J.P. Morgan Asset Management 31 Strategic Report List of investments continued At 31st December 2024 % of the Valuation total Company £’000 portfolio Basic Materials RBC Bearings 4,584 1.4 Quaker Chemical 3,960 1.2 Perimeter Solutions 3,051 1.0 Balchem 2,830 0.9 Element Solutions 2,820 0.9 17,245 5.4 Real Estate Cushman & Wakefield 5,114 1.6 Ryman Hospitality Properties 4,381 1.4 EastGroup Properties 3,581 1.1 NNN REIT 3,123 1.0 16,199 5.1 Energy SM Energy 4,359 1.4 DT Midstream 3,546 1.1 Cactus 3,394 1.1 Shoals Technologies 1,406 0.4 12,705 4.0 Consumer Staples Primo Brands 4,129 1.3 Utz Brands 3,618 1.2 Freshpet 3,280 1.0 11,027 3.5 Utilities Casella Waste Systems 4,927 1.6 Portland General Electric 4,103 1.3 9,030 2.9 Total investments 316,510 100.0 The Directors present the Strategic Report for the Company’s financial year ended 31st December 2024. The aim of the Strategic Report is to provide shareholders with the ability to assess how the Directors have performed their duty to promote the success of the Company for the collective benefit of shareholders. The Chair’s Statement together with the Investment Manager’s Report, Principal and Emerging Risks, Long Term Viability Statement and Section 172 Statement form part of this Strategic Report. Business model and Investment Objective JPMorgan US Smaller Companies Investment Trust plc (the Company) is an investment trust and has a premium listing on the London Stock Exchange (JUSC LN). As an externally managed investment company, all of the Company’s day-to-day management and administrative functions are outsourced to service providers. As a result, the Company has no executive directors, employees or internal operations. The Company’s objective is to achieve capital growth from investing in US smaller companies. It aims to outperform the Russell 2000 Index total return, with net dividends reinvested, expressed in sterling terms. In seeking to achieve its objectives, the Company employs JPMorgan Funds Limited (JPMF or the Manager) as its AIFM which, in turn, delegates portfolio management to JPMorgan Asset Management (UK) Limited (JPMAM), to actively manage the Company’s assets. The Investment Management team is based in New York. The Board is responsible for all aspects of the Company’s affairs, including the setting of parameters for and the monitoring of the investment strategy as well as the review of investment performance and policy. It also has responsibility for all strategic issues, the dividend policy, the share issuance and buy-back policy, gearing, share price and discount/premium monitoring and corporate governance matters. The Board has determined an investment policy and related guidelines and limits, as described below, within which the Investment Manager must operate. Status of the Company The Company is subject to UK legislation and regulations including UK company law, UK Financial Reporting Standards, the UK Listing, Prospectus, Disclosure Guidance and Transparency Rules, the AIFMD, the Market Abuse Regulations, taxation law and the Company’s own Articles of Association. The Company is an investment company within the meaning of Section 833 of the Companies Act 2006 and has been approved by HM Revenue & Customs as an investment trust (for the purposes of Sections 1158 and 1159 of the Corporation Tax Act 2010). As a result the Company is not liable for taxation on capital gains on investments within the portfolio. The Directors have no reason to believe that approval will not continue to be retained. The Company is not a close company for taxation purposes. A review of the Company’s activities and prospects is given in the Chair’s Statement on pages 9 to 13, and in the Investment Manager’s Report on pages 14 to 17. The Company’s purpose, values, strategy and culture The purpose of the Company is to provide a cost effective, financially sustainable investment vehicle for investors who seek long term capital growth from a portfolio of US smaller companies, which outperforms its benchmark index over the longer term, taking account of wider considerations, including environmental, social and governance issues. To achieve this, the Board of Directors is responsible for employing and overseeing an investment management company that has appropriate investment expertise, resources and controls in place to meet the Company’s investment objective. To ensure that it is aligned with the Company’s purpose, values and strategy, the Board comprises Directors from a diverse background who have a breadth of relevant experience and contribute in an open boardroom culture that both supports and challenges the Manager and other third party suppliers. For more information, please refer to page 47. Strategy of the Company The dynamic nature of the US small cap market makes small caps both exciting and challenging. As an asset class, small caps tend to be less researched, less liquid and prone to more volatility than large-cap stocks. The same characteristics that make managing small caps so challenging provide a unique opportunity. The extensive resources JPMAM dedicates to the process and JPMAM’s commitment to buy-side research underlie its belief that stock selection is the most important component in small-cap investing. The Company is managed by J.P. Morgan’s US small cap investment team. The investment team consists of five dedicated small cap specialists based in New York. The team employs a bottom-up, stock picking approach to portfolio management. The investment philosophy is based on the belief that long-term investments in companies with leading competitive positions, run by highly motivated and talented management that can sustain growth over a period of many years, will lead to stock market outperformance. Alongside this, the team believes that a disciplined valuation process is necessary to enhance long-term returns. Investment Policies and Risk Management In order to achieve its investment objective, the Company invests in a well-diversified portfolio of listed US equities and employs a manager with a strong focus on research and company visits in order to identify the most attractive stocks in the US smaller companies universe. The Board has sought to manage the Company’s risk by imposing various investment restrictions and guidelines. Business Review 32 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Business Review J.P. Morgan Asset Management 33 Strategic Report These restrictions and guidelines may be varied at any time by the Board at its discretion. Investment Restrictions and Guidelines The Board seeks to manage the Company’s risk by imposing various investment limits and restrictions: • No individual investment in the portfolio will be greater than 15% of the Company’s gross assets at the time of investment. • The Company will invest no more than 10% of the Company’s gross assets in JPMorgan liquidity funds. • The Company will invest no more than 10% (subject to Directors’ approval) of the Company’s gross assets at the time of investment in unquoted investments. • The Company will not normally invest in derivative instruments, although it can undertake derivative actions to hedge against risk exposure of existing holdings in the portfolio subject to Board approval. • The Company will use liquidity and borrowings to remain invested within a maximum gearing limit of 15% (+2.5% if as a result of market movement). • The Company will not invest more than 15% of its gross assets in other UK listed investment companies (including investment trusts). • The Company will not invest more than 10% of its gross assets in companies that themselves may invest more than 15% of their gross assets in UK listed investment companies. Monitoring of Compliance Compliance with the Board’s investment restrictions and guidelines is monitored by the Manager and is reported to the Board on a monthly basis. Performance In the year to 31st December 2024, the Company’s total return on share price was +18.7% and the total return on net assets was +11.3%. This compares with the total return on the Company’s benchmark of +13.3%. As at 31st December 2024, the value of the Company’s investment portfolio was £316.5 million. The Investment Manager’s Report on pages 14 to 17 includes a review of developments during the year as well as information on investment activity within the Company’s portfolio. Total Return, Revenue and Dividends Gross total return for the year amounted to £32,592,000 (2023: £16,460,000). Net return after deducting the management fee, administrative expenses, finance costs and taxation, amounted to £28,221,000 (2023: £11,785,000). The Directors recommend a final dividend of 3.1 pence (2023: 3.0 pence) per share payable on 11th July 2025 to shareholders on the register at the close of business on 13th June 2025. No other dividends were paid in respect of the year. The revenue reserve after the payment of the dividend will amount to £2,060,000. Key Performance Indicators (KPIs) The Board uses a number of financial KPIs to monitor and assess the performance of the Company. The principal KPIs are: • Performance against the benchmark index This is the most important KPI by which performance is judged. Information on the Company’s performance is given in the Chair’s Statement and the Investment Manager’s Report. Performance Relative to Benchmark Index Figures have been rebased to 100 at 31st December 2019 Source: Morningstar/Russell. 1 Using cum-income net asset value per share. Five Year Performance Figures have been rebased to 100 as at 31st December 2019 Source: Morningstar/Datastream (total return). 1 Using cum-income net asset value per share. 80 85 90 95 100 105 110 2024 2023 2022 2021 2020 2019 Share price relative total return Net asset value relative total return1 Benchmark index total return is represented by the horizontal/dashed line 60 80 100 120 140 160 180 2024 2023 2022 2021 2020 2019 Share price total return Net asset value total return1 Benchmark total return • Performance against the Company’s peers The principal objective is to achieve capital growth and outperformance relative to the benchmark. The Board also monitors the performance relative to a broad range of competitor funds via reporting included in the papers for the regular Board meetings held during the year. • Performance attribution The purpose of performance attribution analysis is to assess how the Company achieved its performance relative to its benchmark, i.e. to understand the impact on the Company’s relative performance of the various components such as sector selection and stock selection. Details of the attribution analysis for the year ended 31st December 2024 are given in the Investment Manager’s Report on page 16. Premium/(Discount) Performance Source: Morningstar. • Share price premium/(discount) to net asset value (NAV) per share The Board operates a share issuance and share repurchase programme which seeks to address imbalances in supply of and demand for the Company’s shares within the market. This aims to manage both discount volatility and the level of discount in absolute terms and relative to its peers in the sector. In the year to 31st December 2024, the shares traded between a discount of 0.1% and 15.4% and an average discount of 8.9% (based on daily data). Further details of the Company’s share capital can be found below in this Strategic Report. • Ongoing charges The ongoing charges represent the Company’s management fee and all other operating expenses excluding finance costs, expressed as a percentage of the average of the daily net assets during the year. The ongoing charges for the year ended 31st December 2024 are 0.92% (2023: 0.93%). Further details can be found on page 105. The Board reviews the ongoing charges of the Company regularly and on an annual basis compares them against other companies with similar investment objectives and policies. Share Capital The Directors have, on behalf of the Company, the authority to issue new Ordinary shares for cash on a non pre-emptive basis and to repurchase shares in the market for cancellation or to be held in Treasury. The Directors will re-issue shares held in Treasury only at a premium to net asset value per share. During the year, the Company repurchased 99,990 shares for cancellation (2023: nil). The Company repurchased a total of 3,047,895 (2023: 975,473) ordinary shares into Treasury, at an average price of 399.0p and a total cost of £12.2 million, representing 4.66% of the issued share capital as at 31st December 2024. However, nil ordinary shares were reissued from Treasury (2023: nil), and nil new shares were issued during the year (2023: nil). Further details, including the nominal value of these movements, the total proceeds received and the total consideration paid, for these transactions can be found in notes 14 and 15 on pages 87 and 88. The Board will only issue shares in such a way that it would not be dilutive to existing shareholders. Since the year end and as at 26th March 2025, the last practicable date before the publication of this document, the Company has repurchased a further 369,510 shares into Treasury. The Company has not issued any additional shares from Treasury or new ordinary shares under its ordinary share block listing facility. Resolutions to renew the authorities to issue new shares on a non pre-emptive basis and to repurchase shares for cancellation or to be held in Treasury will be put to shareholders for approval at the Annual General Meeting. The full text of these Resolutions is set out in the Notice of Meeting on pages 100 and 101. Employees, Social, Community and Human Rights Issues The Company has a management contract with JPMF. It has no employees and all of its Directors are non-executive, the day to day activities being carried out by third parties. There are therefore no disclosures to be made in respect of employees. The Board notes JPMAM and JPMorgan Chase’s global policy statements in respect of Social, Community and Environmental and Human Rights issues, as highlighted in italics: We are committed to becoming the world’s most diverse and inclusive asset manager. We know diverse perspectives create differentiated thinking. We know our client relationships are stronger when our teams mirror the communities in which we work and invest. We reflect these beliefs in our hiring, development and promotion practices, and by nurturing a culture in which everyone is judged on their merits and empowered to hold each other accountable. Beyond our firm, we put our people and assets to work to help –20 –15 –10 –5 0 5 2024 2023 2022 2021 2020 2019 Premium/Discount Business Review 34 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Business Review J.P. Morgan Asset Management 35 Strategic Report advance equity and economic opportunities – and influence other companies to do the same. We continually reinvest in our communities to close opportunity gaps wherever they exist. We are working to support the transition to a low-carbon economy by scaling green solutions, balancing environmental, social and economic needs, and managing our operational footprint. We help clients navigate the challenges and realise the economic opportunities of the transition to a low-carbon economy. We believe supporting our clients, through advice and capital, to accelerate their low-carbon transition objectives creates positive environmental benefits and generates long-term financial returns for our shareholders. We seek to deliver stronger financial outcomes, including by focusing on the most financially material environmental, social and governance (ESG) issues that we believe impact the long-term performance of companies in which we invest. Additionally, we advocate for robust corporate governance and sound business practices. We believe that understanding financially material ESG factors plays an important role in delivering long-term value creation for our clients. JPMorgan Chase supports fundamental principles of human rights across all our lines of business and in each region of the world in which we operate. JPMorgan Chase’s respect for the protection and preservation of human rights is guided by the principles set forth in the United Nations Universal Declaration of Human Rights. JPMorgan Chase believes it is the role of government in each country to protect the human rights, including the safety and security, of its citizens. However, we believe we can play a constructive role in helping to promote respect for human rights by our own actions and by seeking to engage with the governments of the countries with and in which we operate. Greenhouse Gas Emissions The Company itself has no premises, consumes no electricity, gas or diesel fuel and consequently does not have a measurable carbon footprint. As a low energy user under HMRC guidelines it is not required to disclose energy and carbon information. The Board notes the policy statements from the Investment Manager in respect of Social, Community and Environmental and Human Rights issues and Greenhouse Gas Emissions and that it is a signatory to the CDP (formerly known as Carbon Disclosure Project), as well as JPMorgan Chase being a signatory to the Equator Principles on managing social and environmental risk in project finance. The Company, as a closed ended investment fund, is currently exempt from complying with the Task Force on Climate related Financial Disclosures. For more information, please see page 26 of the ESG report. The Modern Slavery Act 2015 (the ‘MSA’) The MSA requires companies to prepare a slavery and human trafficking statement for each financial year of the organisation. As the Company has no employees and does not supply goods and services, the MSA does not apply directly to it. The MSA requirements more appropriately relate to JPMF and JPMAM. JPMorgan’s statement on the MSA can be found on the following website: www.jpmorganchase.com/about/our- business/human-rights Corporate Criminal Offence The Company maintains zero tolerance towards tax evasion. Shares in the Company are purchased through intermediaries or brokers, therefore no funds flow directly into the Company. As the Company has no employees, the Board’s focus is to ensure that the risk of the Company’s service providers facilitating tax evasion is also low. To this end it seeks assurance from its service providers that effective policies and procedures are in place. Future Prospects The Board continues to focus on maximising total returns over the longer-term. The outlook for the Company is discussed in both the Chair’s Statement and the Investment Manager’s Report (see pages 13 and 17). The Directors confirm that they have carried out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. With the assistance of the Manager, the Audit Committee maintains a risk matrix which identifies the principal risks to which the Company is exposed and methods of mitigating against them as far as practicable. The risks identified and the broad categories in which they fall, and the ways in which they are managed or mitigated are summarised below. The AIC Code of Corporate Governance requires the Audit Committee to put in place procedures to identify emerging risks. At each meeting, the Board reviews all potential risks and considers emerging risks which it defines as potential trends, sudden events or changing risks which are characterised by a high degree of uncertainty in terms of occurrence probability and possible effects on the Company. As the impact of emerging risks is understood, these risks may be entered on the Company’s risk matrix and mitigating actions considered as necessary. In assessing the risks and how they can be mitigated, the Board has given particular attention to those risks that might threaten the viability of the Company. These principal and emerging risks are listed below. It should be noted that the emergence of, or a change in, a risk can have an impact on another risk: Movement in risk status in year to Principal risk Description Mitigating activities 31st December 2024 Investment Management and Performance Poor implementation of the investment strategy may lead to underperformance against the Company’s benchmark index and peer companies. Under- performance A broadly diversified portfolio of equities is managed in line with Board-approved investment restrictions and guidelines. Investments are monitored and reported on by the Manager who provides the Board with regular information, including performance data and attribution analyses, revenue estimates, liquidity reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Portfolio Managers, who participate at all Board meetings, and reviews data which show statistical measures of the Company’s risk profile. The Portfolio Managers employ the Company’s gearing within a strategic range set by the Board. In addition to regular Board reviews of investment strategy, the Board holds a separate meeting devoted to strategy each year. No change Principal and Emerging Risks 36 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Principal and Emerging Risks J.P. Morgan Asset Management 37 Strategic Report Movement in risk status in year to Principal risk Description Mitigating activities 31st December 2024 Investment Management and Performance (continued) Marketing Competitive positioning Competing investment vehicles (e.g. ETFs) or new investment technologies may render the Company’s shares unappealing to shareholders. The Manager has a dedicated investment trust sales team that works closely with the Company’s broker as well as current and prospective shareholders. Regular meetings are held with shareholders to try to ensure continued demand/interest. Both the Manager and the broker submit a sales activity report to each Board meeting and are available to discuss any issues throughout the year. In addition, the Manager’s marketing team has focused on marketing more effectively to retail shareholders which represent a vast majority of the Company’s shareholder base. Increased Increased This risk is managed to some extent by diversification of investments and by regular communication with the Manager on matters of investment strategy and portfolio construction which will directly or indirectly include an assessment of these risks. The Board considers asset allocation, stock selection and levels of gearing on a regular basis and has set investment restrictions and guidelines, which are monitored and reported on by the Manager. The Board monitors the implementation and results of the investment process with the Manager. The Manager’s market strategists are available for the Board and can discuss market trends. External consultants and experts can be accessed by the Board. The Board can, with shareholder approval, look to amend the investment policy and objectives of the Company, if required, to enable investment in companies or assets which offer more appealing risk/return characteristics in prevailing economic conditions. Market risk arises from uncertainty about the future prices of the Company’s investments, which might result from economic, fiscal and regulatory change, including the risk of global economic disruption and market volatility in the aftermath of COVID-19. Geopolitical risks will also affect the market and are currently heightened due to the war between Ukraine and Russia and more recently the conflict in the Middle East, and ongoing tensions with China. Market factors such as interest rates, inflation and equity market performance may impact the value of investments and the performance of the Company. Market and Economic Increased Monitored by the Manager’s PR and marketing teams. False adverse publicity via social platforms and networks could lead to reputational damage to the Company and a lack of engagement by/appetite of existing or potential shareholders. May lead to the discount widening. False adverse publicity Movement in risk status in year to Principal risk Description Mitigating activities 31st December 2024 Operational Risks No change The Board seeks assurance that the Manager takes steps to reduce the likelihood of such an event by ensuring appropriate succession planning and the adoption of a team-based approach, as well as special efforts to retain key personnel. The Board engages with the senior management of the Manager in order to mitigate this risk. A sudden departure of the Portfolio Managers, or several members of the investment management team could result in reputational damage to the Company. Loss of Investment Team or Portfolio Manager Increased The Manager has a team that considers proposed changes to legislation and relevant updates are reported to the Board. The Manager is also a member of the AIC Manager’s Forum and Technical Committee. The Manager’s Sales team is also aware of these changes and will form part of the feedback process. Changes to financial or tax legislation in the UK may lead to changes to the operating model of the Company and/or reduce the appeal of the Company to shareholders. Legislative change Increased The Board monitors the share price against the absolute and sector relative premium/discount levels. The Board reviews sales and marketing activity and sector relative performance, which it believes are the primary drivers of the relative premium/discount level. The Company has authority to buy back its existing shares or issue new shares to enhance the NAV per share for remaining shareholders when deemed appropriate. Investment trust shares often trade at discounts to their underlying NAV; they can also trade at a premium. Discounts and premiums can fluctuate considerably leading to volatile returns for shareholders. Discount Control No change Details of how the Board monitors the services provided by JPM and its associates and the key elements designed to provide effective risk management and internal control are included within the Risk Management and Internal Controls section of the Corporate Governance Statement on page 55. The Manager has a dedicated cyber security team and budget that is focussed on identifying potential or actual threats. The Manager also has a Business Continuity Plan which includes Disaster Recovery Sites and work from home protocols and the relevant technology is regularly tested. The Manager confirms cyber security controls and BCP planning in place for key service providers. The Manager reports to Board on cyber security controls, BCP testing and the implementation of plans to mitigate the impact of not being able to access the office. Cyber security breaches or other events may cause disruption to, or failure of, the Manager’s accounting, dealing or payments systems or the Registrar, Depositary or Custodian’s records may prevent accurate reporting and monitoring of the Company’s financial position or a misappropriation of assets. Outsourcing Principal and Emerging Risks 38 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Principal and Emerging Risks J.P. Morgan Asset Management 39 Strategic Report Movement in risk status in year to Principal risk Description Mitigating activities 31st December 2024 Operational Risks (continued) Environmental No change The Manager has a Cyber security management programme in place with a multi billion dollar budget each year. The Manager's third party oversight team (TPO) is a dedicated function that establishes the risk management governance framework and enforces defined policies and standards for third party service providers. The Company benefits directly and/or indirectly from all elements of JPMorgan’s Cyber Security programme including TPO. The controls are regularly tested and updates are given to the quarterly JPMF Audit, Risk, Compliance & Controls (ARCC) Committee and a summary of these reports is submitted to the Company’s Audit Committee. The information technology controls around physical security of JPMorgan’s data centres, security of its networks and security of its trading applications, are tested by independent auditors and reported every six months against the AAF Standard. The Company and the Manager have evidence from the major service providers that they have procedures in place to maintain the best practices in the fight against cybercrime and to ensure business resiliency. Cyber attack on JPMorgan or the systems that the Manager uses to support the Company. These attacks can take many guises, targetting partners in the supply chain, social engineering (e.g. phising, smishing and vishing), denial of service (via a flood of malicious internet traffic) and ransomware. Cyber Crime Increased The Board receives ESG reports from the Manager on the portfolio and the way ESG considerations are integrated into the investment decision-making, so as to mitigate risk at the level of stock selection and portfolio construction. As extreme weather events become more common, the resiliency, business continuity planning and the location strategies of the Company’s services providers will come under greater scrutiny. Climate change has become one of the most critical issues confronting companies and their investors. Climate change can have a significant impact on the business models, sustainability and even viability of individual companies, whole sectors and even asset classes. Climate Change Movement in risk Emerging status in year to risk Description Mitigating activities 31st December 2024 Increased The Manager has a dedicated investment trust sales team that works closely with the Company’s broker as well as current and prospective shareholders. Regular meetings are held with shareholders to try to ensure demand/interest. The investment decision process of investors may be negatively impacted by various factors which could lead to a lack of demand for the Company’s shares. These factors include the potential impact of social upheaval in both the UK and the US and the consequences of a decline in the number of companies listed in the UK which could result in lower liquidity of the Company’s shares. UK market attraction and/or liquidity Increased The Manager monitors events and makes recommendations to the Board on accounting, dividend and tax policies and the Board seeks external advice where appropriate. Political issues and changes in financial or tax legislation in the UK or the US may lead to changes to the operating model of the Company and/or reduce the appeal of the Company to shareholders. The impact of increased spending on defence is likely to add to the ongoing debt burden from the COVID19 stimulus packages. When combined with other factors (for example; potential of stagflation, recession and the unknown consequences of the war in Ukraine) these could lead to material adverse movements in share prices. Political and Economic Principal and Emerging Risks 40 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Long Term Viability J.P. Morgan Asset Management 41 Strategic Report Long Term Viability The Company is an investment trust with an objective of achieving capital growth from investing in US smaller companies. The Company enjoys the benefit of the closed ended structure and is therefore better able to withstand market movements since it is not subject to forced liquidation of investments due to sudden or large redemptions by shareholders. The Board notes by way of context that the Company has invested through many difficult economic and market cycles since its incorporation in 1955. The Board is cognisant of the unusually high levels of political, economic and market uncertainty being experienced at the current time and its potential impact on the prospects of many of the Company’s portfolio holdings. This includes the continuing war between Ukraine and Russia and more recently the conflict in the Middle East, the political tensions between the US and China and the global trade implications following the election of the new President. Notwithstanding these crises, given the factors stated below, the Board expects the Company to continue for the foreseeable future and has conducted its assessment for a period of five years. In conducting its assessment of the long term viability of the Company, the Board has taken account of the Company’s current financial position, its debt level and debt covenants, the liquidity of its holdings as well as the principal and emerging risks that it faces (see page 36), the investment capabilities of the Manager, the Manager’s historical longer term investment performance and the current outlook for the US economy and its equity markets. The Board has further considered the mitigation measures which key service providers, including the Manager, have in place to maintain operational resilience. In addition to the above, the Company has carried out stress testing of a number of scenarios where the Company might be put under significant stress due to market volatility. This included modelling the impact of substantial market falls and testing portfolio liquidity under stress. The results demonstrated the impact on the Company’s NAV, its expenses, its debt levels and the covenants attached to that debt as well as the Company’s ability to meet its liabilities. In even the most stressed scenario, the Company was shown to have sufficient cash, or to be able to liquidate a sufficient portion of its listed holdings, in order to meet its liabilities as they fall due. See notes 13 and 14 on pages 86 and 87. The Directors consider five years to be an appropriate time horizon to assess the Company’s viability. In determining this time horizon the Directors had regard to their view that, given the Company’s objective of achieving capital growth, shareholders should consider the Company as a long term investment proposition. This is consistent with advice provided by independent financial advisers and wealth managers, that investors should consider investing in equities for a minimum of five years. The Directors also take account of the inherent uncertainties of equity markets and the existence of a continuation vote every five years. The Board has also taken into account the fact that the Company has a continuation vote to be considered by shareholders at the Company’s 2025 AGM and the likelihood of shareholders voting in favour of continuation, having consulted the Company’s major shareholders through the remit of its advisers. The Directors confirm that they have a reasonable expectation that the Company will be able to continue in operation, subject to shareholders voting in favour of continuation at the AGM in 2025, and meet its liabilities as they fall due over the next five years until 31st December 2029. This reasonable expectation is subject to there being no significant adverse change to the regulatory or taxation environment for investment trusts; and subject to there being no sustained adverse investment performance by the current or any successive Portfolio Managers, that may result in the Company not being able to maintain a supportive shareholder base. Duty to Promote the Success of the Company 42 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Section 172 of the Companies Act 2006 (‘Companies Act’) states that: A Director of a company must act in the way that, is considered in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to the following six items. The Board ensures that the Company fosters a culture where all parties are treated fairly and with respect and the Board recognises the importance of keeping the interests of the Company’s stakeholders, and of acting fairly between them, front of mind in its key decision making. In managing the Company, the aim of both the Board and Manager is always to ensure the long-term sustainable success of the Company. Therefore, the likely long-term consequences of any decision made by the Board are a key consideration. In managing the Company during the year under review, the Board acted in the way which it considered, in good faith, would be most likely to promote the Company’s long-term sustainable success and to achieve its wider objectives for the benefit of shareholders as a whole, having had regard to the wider stakeholders and the other matters set out in section 172 of the Companies Act. The likely consequences of any decision in the long term The Company does not have any employees. The interests of the Company’s employees The Board’s approach is described under ‘Stakeholders’ on the next page. The need to foster the Company’s business relationships with suppliers, customers and others The Board takes a close interest in ESG issues and climate change, sets the overall strategy and regularly reviews the Manager’s adherence to their process. However, the integration of financially material ESG factors does not modify the Company’s investment objective and the Company does not have an ESG focused investment strategy. However, the Board has appointed a Manager that, through its Investment Manager, integrates financially material ESG considerations into its investment process, with the goal of enhancing long-term, risk-adjusted financial returns. Further details are set out in the ESG report on pages 18 to 27. The impact of the Company’s operations on the community and the environment The Board’s approach is described under the Company’s Purpose, Values, Strategy and Culture on page 32. The desirability of the Company maintaining a reputation for high standards of business conduct The Board’s approach is described under ‘Stakeholders’ on the next page. The need to act fairly between members of the Company Duty to Promote the Success of the Company J.P. Morgan Asset Management 43 Strategic Report The Board believes the best interests of the Company are aligned with those of its key stakeholders as all parties wish to see and ultimately benefit from the Company achieving its investment objectives while carrying on business in compliance with the highest possible regulatory, legal, ethical and commercial standards. The table below sets out details of the Company’s engagement with its key stakeholders: Shareholders Continued shareholder engagement is critical to the continued existence of the Company and the successful delivery of its long-term strategy. The Board is focused on fostering and maintaining good working relationships with shareholders and understanding the views of shareholders in order to incorporate them into the Board’s strategic thinking and objectives. Shareholders are encouraged to attend the Company’s Annual General Meeting. Shareholders can contact Directors via the Company Secretary. In addition, the Chair and Directors make themselves available as and when required to address shareholders’ queries and offer meetings to larger shareholders. Engagement with shareholders has also improved with the increased use of regular webcasts and the opportunity for shareholders to sign up for electronic news updates. The Board continues to investigate actively how to improve communications and engagement with shareholders including through company communications, the Company’s website etc. Manager The principal supplier is the Manager, in particular the investment management team who are responsible for managing the Company’s assets in order to achieve its stated investment objective. The Board maintains a good working relationship with the Manager, who also provides administrative support and promotes the Company through its investment trust sales and marketing teams. The Board monitors the Company’s investment performance at each Board Meeting in relation to its objective and also to its investment policy and strategy. The Board also maintains strong lines of communication with the Manager via its dedicated company secretary and client director whose interactions extend well beyond the formal business addressed at each Board and Committee meeting. This enables the Board to remain regularly informed of the views of the Manager and the Company’s shareholders (and vice versa). The Company Broker Depositary Registrar Investee Companies Debt providers Legal Advisers Custodian Manager/Investment Manager Investment Manager Portfolio Management Shareholders Wider Society Third Party Service Providers Stakeholders The Board has identified the following as its key stakeholders and third party service providers of the Company: Duty to Promote the Success of the Company 44 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Strategic Report Investee companies The Board is committed to responsible investing and actively monitors the activities of investee companies through its delegation to the Manager. In order to achieve this, the Manager has discretionary powers to exercise voting rights on behalf of the Company on all resolutions proposed by the investee companies. In respect of the year under review, the Manager engaged with many of its investee companies and voted at all of the annual general meetings and extraordinary meetings held during the year by the Company’s portfolio companies (full details can be found in the ESG report on page 25). The Board monitors investments made and divested and questions the Manager’s rationale for exposures taken and voting decisions made. Other key service providers The Board ensures that it promotes the success of the Company by engaging specialist third party suppliers, with appropriate capability, performance records, resources and controls in place to deliver the services that the Company requires for support in meeting relevant obligations and safeguarding the Company’s assets. For this reason, the Board considers the Company’s Custodian, Depositary, Registrar and Broker to be stakeholders. The Board maintains regular contact with its key external service providers, either directly, or via its dedicated company secretary or client director, and receives regular reporting from these providers at Board and Committee meetings. The Management Engagement Committee meets annually to review and appraise its key service providers. Wider society and the Environment Whilst strong long term investment performance is essential for an investment trust, the Board recognises that to provide an investment vehicle that is sustainable over the long term, both it and the Manager must have regard to ethical and environmental issues that impact society. Hence environmental, social and governance (ESG) considerations are integrated into the Manager’s investment process and will continue to evolve. Further details of the Manager’s integrated approach to ESG can be found on pages 18 to 27. The Manager is a signatory to the UK Stewardship Code. This reflects the Manager’s commitment to stewardship responsibilities and to drive positive corporate change and industry developments to benefit not only the Company but also the environment and wider society over the long-term. Key Decisions and Actions The Directors confirm that they have considered their duty under Section 172 when making decisions during the financial year under review. Key decisions and actions during the year which have required the Directors to have regard to applicable section 172 factors include: Dividends Payable to Shareholders Although the Company’s objective is to deliver capital growth, the level of dividends paid are a key consideration for the Board, given the ongoing demand for income. In the Company’s financial year ended 31st December 2024, the Company’s revenue for the year, after expenses and tax, decreased from the prior year by 9.6%. The Board has declared a final dividend of 3.1 pence per share. Share buybacks The Board pursues an active buyback policy which aims to enhance value for current investors by buying shares at anything wider than a small discount to NAV. In addition to the primary benefit of the NAV enhancement provided to existing shareholders, the buyback policy has the effect of reducing discount volatility and improving liquidity in the Company’s shares,both of which should be beneficial to shareholders. During the year 3,047,895 shares were purchased into Treasury, at a cost of £12.2 million, representing 4.66% of the Company’s issued share capital at the beginning of 2024, and at an average discount to NAV of 8.9%. Re-appointment of Manager The Directors have reviewed the competitiveness of the management fee and the Company’s other operating costs; held the Manager to account for investment performance; encouraged the Manager to enhance its sales and marketing efforts and further integrate ESG into the Manager’s investment process. A review of the Manager and its services was undertaken during the year by the Management Engagement Committee. Post the review process, the Board re-appointed the Manager. Duty to Promote the Success of the Company J.P. Morgan Asset Management 45 Strategic Report Succession Planning The Board has continued to progress its orderly succession plans during the year. The Board believes that the current optimal size of the Board is four Directors. Ahead of the retirement of Shefaly Yogendra following the AGM in 2026, the Board intends to appoint a new Non-Executive Director in the latter half of 2025. Accordingly it will appoint an external executive search company to find a suitable candidate for this position. Your Directors believe that shareholder interests are best served by ensuring a smooth and orderly succession for the Board which serves to provide both continuity and refreshment whilst ensuring diversity of both background and experience. Raising the Profile of the Company The Board is focussed on enhancing the sales and marketing efforts of the Company. The Board engaged a third party to refine the Company’s key attributes and attractions, alongside the development of a marketing plan to raise awareness of the Company amongst existing and potential shareholders. The same third party now supports the Manager to make compelling content to aid the promotion of the Company. The Board continues to encourage the Manager to enhance its sales, marketing and PR efforts, having initiated a series of promotional activities over 2024 to raise awareness of the Company. It is important that the Company remains front of mind with both institutional and retail investors. The Board employs Kepler to provide research notes for the Company twice a year. In addition, the Portfolio Managers also use webcasts and speak at video conferences, organised by brokers and external companies. The Company’s website has been enhanced. Borrowings and Gearing The Board, with discussion with the portfolio managers, regularly reviews the Company’s debt position. This process includes identifying the need for finance, the type of finance and the parties to work with. This leads to pricing and term discussions including covenants with the selected debt provider. The Company, through its Manager, maintains the relationship and continued engagement with the debt provider which includes regular debt compliance reporting. The Company’s multicurrency revolving unsecured loan facility with Scotiabank was due to be renewed on 27th October 2023. The facility was extended to 15th March 2024 to allow time to finalise the loan renewal documentation, the delay being caused by the move from unsecured to secured. On 15th March 2024 the Board renewed the facility with Scotiabank, the new facility being a secured 364 day facility for a reduced amount of US$20 million (with a US$10 million accordion option). This facility was renewed with a new loan provider, Bank of America, on 14th March 2025. The current facility is a secured 360 day evergreen facility for an increased amount of US$35 million (with a US$5 million accordion option). Change of Registrar As part of review of its key service providers, the Company, through its Manager, undertook a review of Equiniti Limited (‘Equiniti’), its Registrar, which has been engaged by the Company for a number of years. After a request to various potential providers for proposals and a thorough due diligence process by the Manager, and after careful consideration, the Board, with effect from 15th July 2024, moved the Company’s registrar services from Equiniti to Computershare Investor Service Plc (‘Computershare’) as it believed this to be in the best interests of shareholders. Miscellaneous In addition, the Directors have kept under review the competitiveness of the management fee and the Company’s other operating costs; they have undertaken a robust review of the principal and emerging risks faced by the Company; they have continued to encourage the Manager to enhance its sales and marketing efforts; they have discussed, confirmed and monitored the Company’s dividend; and they have discussed and monitored gearing levels and the Portfolio Managers’ requirements for cash. Furthermore, the Board has been in frequent contact with the Manager, receiving regular updates on the operating effectiveness of the Manager and key service providers and on areas such as portfolio performance and activity, portfolio liquidity and the discount to NAV at which the Company’s shares trade. By order of the Board Lucy Dina, for and on behalf of JPMorgan Funds Limited Company Secretary 27th March 2025 Steel workers adjusting position of brake press formed steel with crane, Washington, United States Directors’ Report Dominic Neary‡† (Chair of the Board, Management Engagement and Nomination Committees) A Director since 2019. Last reappointed to the Board: 2024. Dominic managed US and global equity portfolios over his investment career, and has been involved with investment trusts throughout. He was previously a director of the Value and Indexed Property Income Trust plc, the manager of The Scottish American Investment Company PLC and an investment manager at Baillie Gifford & Co., Edinburgh and other investment institutions. Connections with Manager: None. Shared directorships with other Directors: None. Shareholding in Company: 11,750. Shefaly Yogendra‡† (Chair of the Remuneration Committee)‡† A Director since 2016. Last reappointed to the Board: 2024. Shefaly is a risk and decision-making specialist and has spent her career working with technology investors and startups. She earlier worked in Ditto Al and HCL Technologies, and was a founder and a director of Livyora, a fine jewellery venture. She was previously a Trustee of BeyondMe, an executive director of Ditto AI and an Independent Governor of London Metropolitan University. More recently, she was also a director of Witan Investment Trust plc and Witan Investment Services Limited. She is currently a director of Harmony Energy Income Trust plc and Temple Bar Investment Trust plc. Connections with Manager: None. Shared directorships with other Directors: None. Shareholding in Company: 1,000. Christopher Metcalfe‡† (Senior Independent Director) A Director since 2019. Last reappointed to the Board: 2024. Christopher has extensive US equity fund management and investment trust experience. He also has a deep understanding of UK investors having worked for a decade each at three of the largest fund management institutions in London; namely in senior positions managing investment funds at Newton Investment Management, Schroder Investment Management and Henderson Administration Group plc. He was previously a director of Aberdeen Smaller Companies Income Trust plc. He is currently a director and chair of Martin Currie Global Portfolio Trust plc and a director of CT UK Capital and Income Investment Trust and Herald Investment Trust. Connections with Manager: None. Shared directorships with other Directors: None. Shareholding in Company: 6,000. Mandy Donald‡† (Chair of the Audit Committee) A Director since 2022. Last appointed to the Board: 2024. Mandy is an experienced non-executive director and audit committee chair in a portfolio of roles. She is currently a non-executive director and audit & risk committee chair of Liontrust Asset Management plc, a non-executive director of Gowling WLG LLP and a non-executive director and audit committee chair of Punter Southall Group. She is also a non-executive director and audit committee chair of Begbies Traynor Group plc. She qualified as a Chartered Accountant at Ernst & Young LLP and has extensive experience in strategy, governance, finance, audit and risk management. Connections with Manager: None. Shared directorships with other Directors: None. Shareholding in Company: Nil. * Member of the Audit Committee. ‡ Member of the Nomination Committee, Remuneration Committee and Management Engagement Committee. † Considered independent by the Board. J.P. Morgan Asset Management 47 Directors’ Report Board of Directors The Directors present their report and the audited financial statements for the year ended 31st December 2024. Directors The Directors of the Company who held office at the date of this report are detailed on page 47. Details of Directors’ beneficial shareholdings may be found in the Directors’ Remuneration Report on page 64. No changes have been reported to the Directors’ shareholdings since the year end. In accordance with corporate governance best practice, all Directors will retire at the forthcoming Annual General Meeting (AGM) and, being eligible, will offer themselves for reappointment by shareholders. The Board seeks to balance the need for refreshment of its members with the value derived from their experience and continuity. The Nomination Committee, having considered their qualifications, performance and contribution to the Board and Committees, confirms that each Director continues to be effective and demonstrates commitment to the role, and the Board recommends to shareholders that those standing for reappointment be reappointed. Statements supporting the Directors’ reappointments can be found on page 52. Director Indemnification and Insurance As permitted by the Company’s Articles of Association, the Directors have the benefit of a deed of indemnity which is a qualifying third party indemnity, as defined by Section 234 of the Companies Act 2006. The indemnities were in place during the year and as at the date of this report. During the year an insurance policy has been maintained by the Company which indemnifies the Directors of the Company against certain liabilities arising in the conduct of their duties. There is no cover against fraudulent or dishonest actions. Management of the Company The Manager and Company Secretary to the Company is JPMorgan Funds Limited (JPMF), a company authorised and regulated by the FCA. The active management of the Company’s assets is delegated by JPMF to an affiliate, JPMorgan Asset Management (UK) Limited (JPMAM) with day to day investment management activity conducted in New York. The Manager is a wholly-owned subsidiary of JPMorgan Chase Bank which, through other subsidiaries, also provides marketing, banking, dealing and custodian services to the Company. The Manager is employed under a contract which can be terminated on six months’ notice, without penalty. If the Company wishes to terminate the contract on shorter notice, the balance of remuneration is payable by way of compensation. Manager Evaluation The Board, through the Management Engagement Committee, conducts a formal evaluation of the performance of, and contractual relationship with, the Manager on an annual basis. The evaluation covers the performance of, and contractual relationship with the Manager, its management processes, investment style, resources and risk controls and the quality of support that the Company receives from the Manager including marketing and investor support, and as AIFM and Company Secretary to the Company. As part of this process and under normal circumstances, the Board completes a due diligence visit of the Manager’s operations in New York each year. The latest evaluation of the Manager, Investment Manager and the Portfolio Managers was carried out in early 2025 by way of a questionnaire that was facilitated by an external provider, which provided a report on the outcome of the evaluation, including a summary of strengths and areas for improvement. As a result of that process, the Management Engagement Committee concluded, that in its opinion, the continuing appointment of the Manager on the terms agreed was in the interests of shareholders as a whole. The Alternative Investment Fund Managers Directive (AIFMD) JPMF is the Company’s alternative investment fund manager (AIFM). It is approved as an AIFM by the FCA. For the purposes of the AIFMD the Company is an alternative investment fund (AIF). JPMF has delegated responsibility for the day to day management of the Company’s portfolio to JPMAM. The Company has appointed Bank of New York Mellon (International) Limited (BNY) as its depositary. BNY has appointed JPMorgan Chase Bank, N.A. as the Company’s custodian. BNY is responsible for the oversight of the custody of the Company’s assets and for monitoring its cash flows. The AIFMD requires certain information to be made available to investors in AIFs before they invest and requires that material changes to this information be disclosed in the annual report of each AIF. An Investor Disclosure Document, which sets out information on the Company’s investment strategy and policies, leverage, risk, liquidity, administration, management, fees, conflicts of interest and other shareholder information is available on the Company’s website at www.jpmussmallercompanies.co.uk . There have been no material changes (other than those reflected in these Financial Statements) to this information requiring disclosure. Any information requiring immediate disclosure pursuant to the AIFMD will be disclosed to the London Stock Exchange through a primary information provider. As an authorised AIFM, JPMF will make the requisite disclosures on remuneration levels and polices to the FCA at the appropriate time. The Company’s leverage and JPMF’s remuneration disclosures are set out on page 97. 48 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Directors’ Report Directors’ Report Management Fee The Management Engagement Committee has responsibility for the review of the management fee, which it reviews annually. In the year under review, the annual investment management fee was 70bps per annum on all gross assets (excluding any holding in the JPM Liquidity Fund). Disclosure of information to Auditor In the case of each of the persons who are Directors of the Company at the time when this report was approved: (a) so far as each of the Directors is aware, there is no relevant audit information (as defined in the Companies Act 2006) of which the Company’s Auditor is unaware; and (b) each of the Directors has taken all the steps that he/she ought to have taken as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Company’s Auditor is aware of that information. The above confirmation is given and should be interpreted in accordance with the provisions of Section 418(2) of the Companies Act 2006. Independent Auditor BDO LLP was appointed as Auditor of the Company with effect from 19th August 2020. BDO LLP has expressed its willingness to continue in office as Auditor to the Company and the Board has proposed a resolution in the Notice of the Company’s Annual General Meeting to be held on 17th June 2025 proposing the reappointment of BDO LLP, to hold office until the conclusion of the next Annual General Meeting at which accounts are laid before the Company and authorising the Directors to determine their remuneration. Further details may be found in the Audit Committee Report on page 60. Companies Act 2006 Requirements The following disclosures are made in accordance with Section 992 Companies Act 2006: Capital Structure The Company’s capital structure is summarised on the inside front cover of this report. Details of share repurchases have been disclosed in the Strategic Report on page 34. Voting Rights in the Company’s shares Details of the voting rights in the Company’s shares as at the date of this report are given in note 17 to the Notice of Annual General Meeting on page 103. Dividends Details of the Company’s dividend payments are given on page 85. Financial Instruments Details of the Company’s financial instruments are given in note 21 of the financial statements. Notifiable Interests in the Company’s Voting Rights At the financial year end the Board has been advised that the following shareholders owned 3% or more of the issued share capital of the Company as at 31st December 2024: Number of Shareholders voting rights % 1 Rathbones Group PLC 6,505,747 9.9 RBC Brewin Dolphin 2,776,245 4.8 1 Based on the number of shares in issue on the date of the shareholders’ latest notifications to the Company. The information above is derived from the Company’s internal records based on the TR1 disclosures provided to the Company, as well as disclosures received pursuant to the Disclosure and Transparency Rules. No changes have been notified since the year end to the date of this report. Miscellaneous Information The rules concerning the appointment and replacement of Directors, amendment of the Articles of Association and powers to issue or repurchase the Company’s shares are contained in the Articles of Association of the Company and the Companies Act 2006. There are no restrictions concerning the transfer of securities in the Company; no special rights with regard to control attached to securities; no agreements between holders of securities regarding their transfer known to the Company; no agreements which the Company is party to that affect its control following a takeover bid; and no agreements between the Company and its Directors concerning compensation for loss of office. Listing Rule 6.6.4R Listing Rule 6.6.4R requires the Company to include certain information in a single identifiable section of the Annual Report and Financial Statements or a cross reference table indicating where the information is set out. The Directors confirm that there are no disclosures to be made in this regard. Annual General Meeting Note: This section is important and requires your immediate attention. If you are in any doubt as to the action you should take, you should seek your own personal financial advice from your stockbroker, bank manager, solicitor or other financial adviser authorised under the Financial Services and Markets Act 2000. The notice covering the Annual General Meeting of the Company to be held on Tuesday, 17th June 2025 is given on pages 100 to 103. Resolutions relating to the following items of special business will be proposed at the forthcoming Annual General Meeting (AGM): Directors’ Report J.P. Morgan Asset Management 49 Directors’ Report (i) Continuation Vote (Resolution 11) The Directors recommend that the Company continues in existence as an investment trust for a further five year period. The resolution on the continuation of the Company is put to shareholders every five years. The Directors’ recommendation on this Resolution is explained in the Chair’s Statement on page 10. They unanimously recommend that shareholders vote in favour of the Company’s continuation. (ii) Authority to allot new shares and to disapply statutory pre-emption rights (resolutions 12 and 13) The Directors will seek authority at the Annual General Meeting to issue up to 6,025,275 new ordinary shares for cash up to an aggregate nominal amount of £150,632, such amount being equivalent to 10% of the present issued share capital (excluding Treasury shares, if any or, if different, the number of ordinary shares which is equal to 10% of the Company’s issued share capital (excluding Treasury shares) as at the date of the passing of the resolution). This authority will expire at the Annual General Meeting in 2026 or the date occurring 18 months from the date on which this resolution is passed, whichever is the earlier, unless renewed, revoked or varied by the Company at a general meeting prior to such time. It is advantageous for the Company to be able to issue new shares (or to sell Treasury shares) to investors when the Directors consider that it is in the best interests of shareholders to do so. As such, issues are only made at prices greater than the net asset value, they increase the assets underlying each share and spread the Company’s administrative expenses, other than the management fee which is charged on the value of the Company’s assets, over a greater number of shares. The issue proceeds are available for investment in line with the Company’s investment policies. (iii) Authority to allot further new Ordinary shares and to disapply statutory pre-emption rights (resolutions 14 and 15) In addition to any authorities granted by resolutions 12 and 13 above, the Directors will seek renewal of the authority at the AGM to issue new Ordinary shares for cash on a non pre-emptive basis up to an aggregate nominal amount of £150,632 such amount being equivalent to 10% of the present issued Ordinary share capital (excluding Treasury shares) as at the last practicable date before the publication of the Notice of Meeting or, if different, the number of ordinary shares which is equal to 10% of the Company’s issued share capital (excluding Treasury shares) as at the date of the passing of the resolution. This authority will expire at the conclusion of the Company’s AGM in 2026 or the date occurring 18 months from the date on which this resolution is passed, whichever is the earlier, unless renewed, revoked or varied by the Company at a general meeting prior to such time. The full text of the resolutions 12 to 15 is set out in the Notice of Annual General Meeting on pages 100 and 101. If each of resolutions 12 to 15 are passed, the Company will have the ability to issue, on a non pre-emptive basis, up to 20% of its issued share capital (excluding shares held in Treasury) as at the date of the passing of the resolutions. (iv) Authority to repurchase the Company’s shares (resolution 16) At the Annual General Meeting held on 22nd April 2024, shareholders gave authority to the Company to purchase up to 14.99% of its then issued share capital. This authority will expire at the conclusion of the Company’s AGM in 2025 or the date occurring 18 months from the date on which this resolution is passed, whichever is the earlier, unless renewed, revoked or varied by the Company at a general meeting prior to such time. and could be renewed by shareholders at any time at a General Meeting of the Company. The Board remains committed to a strong/disciplined discount management policy, but there is a need to balance the short term of buying shares back for cancellation or holding in Treasury with the long term liquidity implications. It will seek shareholder approval to renew the authority at the forthcoming Annual General Meeting. The full text of the resolution (to be proposed as a special resolution) to renew the share repurchase authority is set out as Resolution number 16 in the Notice of Meeting on page 101. (v) Authority to hold general meetings (resolution 17) A general meeting, other than an Annual General Meeting, may be called on not less than 14 clear days’ notice. Recommendation (resolutions 11 to 17) The Board considers that resolutions 11 to 17 are likely to promote the success of the Company and are in the best interests of the Company and its shareholders as a whole. The Directors unanimously recommend that you vote in favour of the resolutions as they intend to do in respect of their own beneficial holdings which amount in aggregate to 18,750 shares representing approximately 0.03% of the voting rights in the Company. Other Information The recommended final dividend, as well as information on acquisition of the Company’s own shares and greenhouse gas emissions, can be found in the Business Review. Financial risk management objectives and policies, with information on exposure to price, credit and liquidity risk, can be found in note 21 to the Financial Statements. Information on post balance sheet events can be found in note 23. Corporate Governance Statement Compliance The Board is committed to high standards of corporate governance. It has considered the principles and provisions of the AIC Code of Corporate Governance published in 2019 (the ‘AIC Code’), which addresses the principles and provisions set out in the UK Corporate Governance Code (the ‘UK Code’) published in 2018, as they apply to investment trust companies. It considers that reporting against the AIC Code, therefore, Corporate Governance Statement 50 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Directors’ Report provides more appropriate information to the Company’s shareholders. Through ongoing advice from the Company Secretary and the use of a detailed checklist, the Board confirms that the Company has complied with the principles and provisions of the AIC Code, in so far as they apply to the Company’s business, throughout the year under review. As all of the Company’s day-to-day management and administrative functions are outsourced to third parties, it has no executive directors, employees or internal operations and therefore has not reported in respect of the following: • the role of the executive directors and senior management; • executive directors’ and senior management remuneration; • internal audit; and • the workforce. Copies of the UK Code and the AIC Code may be found on the respective organisations’ websites: www.frc.org.uk and www.theaic.co.uk In January 2024, the Financial Reporting Council (‘FRC’) updated the UK Code. This new UK Code will apply to financial years beginning on or after 1st January 2025. In August 2024, the AIC updated the AIC Corporate Governance Code (the ‘2024 AIC Code’), which incorporates changes to the UK Code by the FRC in January 2024. The 2024 AIC Code applies to accounting periods beginning on or after 1st January 2025, with the exception of new Provision 34. Provision 34 is applicable for accounting periods beginning on or after 1st January 2026. The Company will be reporting against the new 2024 AIC Code in accordance with the time frame set out above. Role of the Board A management agreement between the Company and JPMF sets out the matters over which the Manager has authority. This includes management of the Company’s assets and the provision of accounting, company secretarial, administrative services and some marketing services. All other matters are reserved for the approval of the Board. A formal schedule of matters reserved to the Board for decision has been approved. This includes determination and monitoring of the Company’s investment objectives and policy and its future strategic direction, gearing policy, management of the capital structure, appointment and removal of third party service providers, review of key investment and financial data and the Company’s corporate governance and risk control arrangements. At each Board meeting, Directors’ interests are considered. These are reviewed carefully, taking into account the circumstances surrounding them, and, if considered appropriate, are approved. It was resolved that there were no actual or indirect interests of a Director which conflicted with the interests of the Company which arose during the year. The Board has procedures in place to deal with potential conflicts of interest and, following the introduction of The Bribery Act 2010, has adopted appropriate procedures designed to prevent bribery. It confirms that the procedures have operated effectively during the year under review. The Board meets at least quarterly during the year and additional meetings are arranged as necessary. Full and timely information is provided to the Board to enable it to function effectively and to allow Directors to discharge their responsibilities. There is an agreed procedure for Directors to take independent professional advice if necessary and at the Company’s expense. This is in addition to the access that every Director has to the advice and services of the Company Secretary, JPMF, which is responsible for ensuring that the Board complies with applicable rules, regulations and Board procedures. Board Composition and Chair At the financial year-end, the Board consisted of four non-executive Directors, chaired by Dominic Neary, all of whom are regarded by the Board as independent of the Company’s Manager, including the Chair. Given the size of the Board, all Directors are members of the Nomination, Remuneration, Management Engagement and Audit Committees. The Directors have a breadth of investment, business and financial skills and experience relevant to the Company’s business. The Board is well diversified in terms of gender, ethnicity and experience. Brief biographical details of each Director are set out on page 47. There have been no changes to the Chair’s significant commitments during the year under review. In order to provide a balance of skills, experience, length of service and ages, it is the Board’s policy to introduce new Directors to provide an orderly succession over time. The Board’s policy on diversity, including gender and ethnicity, is to take account of the benefits of this during the appointment process. The Board remains committed to appointing the most appropriate candidate and seeks to ensure that it does not unwittingly exclude any group. A review of Board composition and balance is included as part of the annual performance evaluation of the Board. Senior Independent Director The Senior Independent Director, Christopher Metcalfe, leads the evaluation of the performance of the Chair and is available to shareholders if they have concerns that cannot be resolved through discussion with the Chair. Board Diversity and Inclusion When recruiting a new Director, the Board’s policy is to appoint individuals on merit. Diversity is important in bringing an appropriate range of skills and experience to the Board and an assessment is made of the qualities and skills of the existing Board before appointing new Directors. Having Corporate Governance Statement J.P. Morgan Asset Management 51 Directors’ Report recently completed a review of the skills and experience of Directors, the Board believes that it is equipped with the necessary attributes required for the sound stewardship of the Company and that their knowledge sets allow for lively and engaging debates. Please refer to page 54 for more information on the workings of the Nomination Committee. Full details of the skills and experience of the Directors can be found on page 47. At 31st December 2024, there were two male Directors and two female Directors on the Board. The following disclosures are provided in respect of the FCA Listing rules targets: (i) 40% of a board should be women; (ii) at least one senior role should be held by a woman; and (iii) at least one board member should be from a non-white ethnic background, as defined by the Office of National Statistics (ONS) criteria. As an externally managed investment company with no chief executive officer (CEO) or chief financial officer (CFO), the roles which qualify as senior under FCA guidance are Chair and Senior Independent Director (SID). The Board also considers the Audit Committee Chair to represent a senior role within this context. At 31st December 2024, the Board met the target on gender diversity criteria, female representation in a senior role and ethnic representation on the Board. The small size of the Board with only non-executive Directors can present challenges to ensuring targeted diversity in Board appointments. Although the Board does not consider it appropriate to set targets, it ensures that long lists include diverse candidates of appropriate experience and merit. In accordance with Listing Rule 6.6.6 (9), the Board has provided the following information in relation to its diversity based on the position at the Company’s financial year ended 31st December 2024: Number of Percentage Number of Board of Board Senior Gender Members Members Roles 1 Men 2 50.0 2 2 Women 2 50.0 1 3 Prefer not to say 0 0 0 Number of Percentage Number of Board of Board Senior Ethnicity Members Members Roles 1 White British (or any other white background) 3 75.0 3 Mixed/Multiple Ethnic Groups 1 25.0 0 Prefer not to say 0 0 0 1 The roles of Chair of the Board of Directors, Audit Committee Chair and Senior Independent Director are classified as senior positions. The role of Audit Committee Chair is not currently defined as a senior position under the Listing Rules. However the Board believes that, for an investment trust company, it should be regarded as such as it is broadly equivalent to the Chief Financial Officer of a trading company. 2 Dr. Neary in the role of the Chair and Mr. Metcalfe in the role of Senior Independent Director. 3 Ms. Donald in the role of the Chair of the Audit Committee. The data in the above tables was collected through self-reporting by the Directors, who were asked to indicate which of the categories specified in the prescribed tables were most applicable to them. All Board appointments are subject to a formal, rigorous and transparent process. The Board, through the Nomination Committee, has reviewed the Company’s succession plan and it is intended that alongside finding candidates who have skills which are complementary to those of other members of the Board, gender and ethnicity considerations will be important factors when considering future Board appointments. Reappointment of Directors The Directors of the Company and their brief biographical details are set out on page 47 The skills and experience that each Director brings to the Board, and why their contributions are important to the long term success of the Company, are summarised below. All Directors will stand for reappointment at the forthcoming Annual General Meeting. For details of current directorships, please refer to page 47 of the Report. Resolution 5 is for the reappointment of Mandy Donald. She joined the Board in January 2022 and has served as a Director for two years. Mandy is a Chartered Accountant and has extensive experience in audit and risk management. She chairs the Audit Committee. For details of current directorships, please refer to page 47 of the Report. Resolution 6 concerns the reappointment of Christopher Metcalfe. He joined the Board in January 2019 and has served for five years as a Director. Christopher has extensive US equity management and investment trust experience. He is the Senior Independent Director. For details of current directorships, please refer to page 47 of the Report. Resolution 7 concerns the reappointment of Dominic Neary. He joined the Board in January 2019 and has served for five years as a Director. Dominic managed US and global equity portfolios over his 20-year investment career, and has been involved with investment trusts throughout this time. For details of current directorships, please refer to page 47 of the Report. Resolution 8 concerns the reappointment of Shefaly Yogendra. She joined the Board in November 2016 and has served for seven years as a Director. Shefaly is a risk and decision-making specialist and has spent her career working with technology investors and start-ups. She chairs the Remuneration Committee. For details of current directorships, please refer to page 47 of the Report. The Board confirms that each of the Directors standing for reappointment at the forthcoming AGM continue to contribute Corporate Governance Statement 52 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Directors’ Report effectively and recommends that shareholders vote in favour of their reappointment. Tenure Directors are initially appointed until the following Annual General Meeting when, under the Company’s Articles of Association, it is required that they be reappointed by shareholders. Subject to the performance evaluation carried out each year, the Board will agree whether it is appropriate for Directors to seek annual reappointment. The Board has adopted corporate governance best practice and has a succession plan in place. All Directors must stand for annual reappointment. The Board believes in regular refreshment of the Board and its Committees and in the benefits of having a diverse range of experience, skills, length of service and backgrounds (see our diversity policy on page 51). The Board is also of the view that length of service will not necessarily compromise the independence or contribution of directors of an investment trust company or, indeed, its chair. Continuity and experience can add significantly to the strength of the board especially in times of market turbulence. The Board has noted the inference of provisions in the UK Corporate Governance Code that non-executive directors who have served for more than nine years should be presumed not to be independent. However, the AIC does not believe that this presumption is necessarily appropriate for investment companies and therefore does not recommend that long-serving directors be prevented from forming part of an investment trust board. However, in normal circumstances the Chair and Directors are expected to serve for a nine-year term, but this may be adjusted for reasons of flexibility and continuity. The table below details the tenure of Directors, who are standing for reappointment, as at the forthcoming Annual General Meeting and projected forward to 2028. The average tenure of a Director is less than six years. The terms and conditions of Directors’ appointments are set out in formal letters of appointment, copies of which are available for inspection on request at the Company’s registered office and at the Annual General Meeting. With effect from 1st January 2015, any appointment of a new non-executive Director of the Company shall not exceed a nine-year term, in normal circumstances. A schedule of interests for each Director is maintained by the Company and reviewed at every Board meeting. New interests are considered carefully, taking into account the circumstances surrounding them and, if considered appropriate, are approved. A list of potential conflicts of interest for each Director is maintained by the Company. These are considered carefully, taking into account the circumstances surrounding them, and, if considered appropriate, are approved. Induction and Training On appointment, the Manager and Company Secretary provide all Directors with induction training. Thereafter, regular briefings are provided on changes in law and regulatory requirements that affect the Company and the Directors. Directors are encouraged to attend industry and other seminars covering issues and developments relevant to investment trust companies. Regular reviews of the Directors’ training needs are carried out by the Nomination Committee by means of the evaluation process described below. Meetings and Committees The Board delegates certain responsibilities and functions to committees. Details of membership of committees are shown with the Directors’ profiles on page 47. All Directors are members of the Committees. The table below details the number of meetings attended by each Director out of those available to be attended. During the financial year there were six Board meetings, including a private meeting of the Directors to evaluate the Manager, three Audit Committee meetings, one Nomination Committee meeting, one Remuneration Committee meeting and one Management Engagement Committee meeting. Audit Board Committee Meetings Meetings Director Attended Attended M Donald 6 3 C Metcalfe 6 3 D Neary 1 6 3 D Ross 2 3 1 S Yogendra 6 3 1 Following his appointment as Chair in April 2024, Dominic Neary is not a member of the Audit Committee but he is invited to attend meetings. 2 David Ross is not a member of the Audit Committee but he is invited to attend meetings. Retired on 22nd April 2024. Key – tenure  0-6 years  7-9 years Mandy Donald Christopher Metcalfe Dominic Neary 04/01/2022 01/01/2019 01/01/2019 Shefaly Yogendra 01/11/2016 2025 AGM 2026 AGM 2027 AGM 2028 AGM n/a n/a J.P. Morgan Asset Management 53 Directors’ Report Corporate Governance Statement Management Nomination Remuneration Engagement Committee Committee Committee Meetings Meetings Meeting Director Attended Attended Attended M Donald 1 1 1 C Metcalfe 1 1 1 D Neary 1 1 1 D Ross 1 1 1 S Yogendra 1 1 1 As well as the formal meetings detailed above, the Board communicates frequently by email or telephone to deal with matters as they arise. In addition, there was regular contact between the Directors and the Manager and Company Secretary throughout the year. The Board visits New York annually to meet members of the JPMF team, some of the investee companies, industry experts and business leaders. Board Committees Nomination Committee The Nomination Committee, chaired by Dominic Neary, meets at least annually to ensure that the Board has an appropriate balance of skills and experience to carry out its fiduciary duties and to select and propose suitable candidates for appointment when necessary. The appointment process takes account of the benefits of diversity, including gender and ethnicity. The Board’s policy on diversity, is set out on page 51. Ahead of the retirement of Shefaly Yogendra in 2026, and as part of the long-term succession programme, the Board intends to appoint a new Non-Executive Director in late 2025. Accordingly, the Board is in the process of appointing an external executive search company, to find a suitable candidate for this position. The Committee conducts an annual performance evaluation of the Board, its committees and individual Directors to ensure that all Directors have devoted sufficient time and contributed adequately to the work of the Board and its Committees. The evaluation of the Board considers the balance of experience, skills, independence, corporate knowledge, its diversity and how the Board works together as a group. Questionnaires, drawn up by the Board, with the assistance of the Manager and external consultant BoardForms Ltd, are completed by each Director. The responses are collated and then discussed by the Committee. The evaluation of individual Directors is led by the Chair. The Senior Independent Director, Christopher Metcalfe, leads the evaluation of the Chair’s performance. The Nomination Committee is cognisant of the FCA’s rules announced in April 2022 on diversity and inclusion on company boards. Remuneration Committee The Remuneration Committee, chaired by Shefaly Yogendra, reviews Directors’ fees and makes recommendations to the Board as and when appropriate in relation to remuneration policy and implementation. This takes into account the level of fees paid to the directors of the Company’s peers and within the investment trust industry generally to ensure that high quality people are attracted and retained. Management Engagement Committee The Management Engagement Committee, chaired by Dominic Neary, consists of all of the Directors and meets annually to review the performance of the Manager and the third party service providers of the Company. The Committee conducts a formal evaluation of the Manager on an annual basis. The evaluation includes consideration of the investment strategy and process of the Investment Manager, noting outperformance of the benchmark over the long term, and the quality of support that the Company receives from JPMF. The Committee also reviews the Company’s agreements with other major service providers. As a result of the evaluation process, the Board confirms that it is satisfied that the continuing appointment of the Manager is in the interests of shareholders as a whole. Audit Committee The report of the Audit Committee, which is chaired by Mandy Donald, is set out on pages 58 to 60. Terms of Reference The Nomination, Remuneration, Management Engagement and Audit Committees have written terms of reference which define clearly their respective responsibilities, copies of which are available for inspection on the Company’s website and on request at the Company’s registered office and at the Annual General Meeting. Going Concern The Directors’ statement on going concern is detailed on page 59. Relations with Shareholders The Board regularly monitors the shareholder profile of the Company. It aims to provide shareholders with a full understanding of the Company’s activities and performance and reports formally to shareholders two times a year by way of the Annual Report and Financial Statements, and Half Year Report. This is supplemented by the daily publication, through 54 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Directors’ Report Corporate Governance Statement the London Stock Exchange, of the net asset value of the Company’s shares and the Company’s level of gearing and the monthly publication of a Company factsheet. Shareholders can also register to receive regular electronic updates about the Company. All shareholders have the opportunity, and are encouraged, to attend the Company’s Annual General Meeting at which the Directors and representatives of the Manager are available in person to meet with and answer shareholders’ questions. In addition, a presentation is given by the Portfolio Managers who review the Company’s performance. During the year the Company’s broker and the Manager held regular discussions with larger shareholders. The Directors are made fully aware of their views. In addition, on a regular basis the Board invites the Company’s brokers, who are independent of the manager, to present to the Directors and also asks them to canvass shareholder views when appropriate. Through them, the Board not only receives an independent and well informed report on shareholder views, but also is able to offer shareholders meetings with the Chair or the Directors as and when required to address any queries. The Directors may be contacted through the Company Secretary whose details are shown on page 110 or via the Company’s website. All communications from shareholders that are intended for the Board are forwarded in full directly to the Chair for his response. The Company’s Annual Report and Financial Statements is published in time to give shareholders at least 20 working days’ notice of the AGM. Shareholders wishing to raise questions in advance of the meeting are encouraged to submit questions via the Company’s website or write to the Company Secretary at the address shown on page 110. A formal process is in place for all letters to the Chair or other Directors to be forwarded immediately. As part of this process, any feedback from shareholders is also communicated to the Board. Details of the proxy voting position on each resolution will be published on the Company website shortly after the AGM. Risk Management and Internal Control The AIC Code requires the Directors, at least annually, to review the effectiveness of the Company’s system of risk management and internal control and to report to shareholders on that review. This encompasses a review of all controls, which the Board has identified as including business, financial, operational, compliance and risk management. The Directors are responsible for the Company’s system of risk management and internal control which is designed to safeguard the Company’s assets, maintain proper accounting records and ensure that financial information used within the business, or published, is reliable. However, such a system can only be designed to manage rather than eliminate the risk of failure to achieve business objectives and therefore can only provide reasonable, but not absolute, assurance against fraud, material misstatement or loss. Since investment management, custody of assets and all administrative services are provided to the Company by the Manager and its associates, the Company’s system of risk management and internal control mainly comprises monitoring the services provided by the Manager and its associates, including the operating controls established by them, to ensure they meet the Company’s business objectives. There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company (see Principal and Emerging Risks on pages 36 to 40). This process has been in place for the year under review and up to the date of the approval of the annual report and financial statements and it accords with the Financial Reporting Council’s guidance. Given the foregoing, and in common with most investment trust companies, the Company does not have an internal audit function of its own. The Manager’s internal audit department conducts regular and rigorous reviews of the various functions within its asset management business. Any significant findings that are relevant to the Company and/or the Manager’s investment trust business are reported to the Board. The key elements designed to provide effective internal control are as follows: • Financial Reporting Regular and comprehensive review by the Board of key investment and financial data, including management accounts, revenue projections, analysis of transactions and performance comparisons. • Management and Depositary Agreements Appointment of a manager and depositary regulated by the FCA, whose responsibilities are clearly defined in a written agreement. • Management Systems The Manager’s system of risk management and internal control includes organisational agreements which clearly define the lines of responsibility, delegated authority, control procedures and systems. These are monitored by JPMAM’s Compliance department which regularly monitors compliance with FCA rules and reports to the Board. • Investment Strategy Authorisation and monitoring of the Company’s investment strategy and exposure limits by the Board. The Board, either directly or through the Audit Committee keeps under review the effectiveness of the Company’s system of risk management and internal control by monitoring the operation of the key operating controls of the Manager and its associates as follows: J.P. Morgan Asset Management 55 Directors’ Report Corporate Governance Statement • the Board, through the Management Engagement Committee and Audit Committee, reviews the terms of the management agreement and receives regular reports from JPMorgan’s Compliance department; • the Board reviews a report, which is also independently reviewed, on the internal controls and the operations of its custodian, JPMorgan Chase Bank; • the Board reviews every six months a report from the Company’s Depositary, Bank of New York Mellon (International) Limited, which summarises the activities performed by the Depositary during the reporting period; and • the Board reviews every six months an independent report on the internal controls and the operations of JPMF’s investment trust department. The Board has appointed BNYM as Depositary, with responsibilities for safe keeping of custodial assets and oversight of the records and cash flows. Through the procedures set out above, the Board confirms that it has reviewed the effectiveness of the Company’s system of risk management and internal control for the year ended 31st December 2024 and to the date of approval of this Annual Report and Financial Statements. During the course of its review of the system of risk management and internal control, the Board has not identified nor been advised of any failings or weaknesses which it has determined to be significant. Therefore, a confirmation in respect of necessary actions has not been considered appropriate. Corporate Governance and Voting Policy The Company delegates responsibility for voting to JPMAM through the Manager. The following is a summary of JPMAM’s policy statements on corporate governance and voting, which has been reviewed and noted by the Board. Details on Environmental, Social and Governance considerations are included in the Strategic Report on pages 18 to 27. Corporate Governance We believe that there is a strong positive correlation between high governance standards and superior shareholder returns. Governance is about ensuring the quality of the decision-making process, which can determine the success and failure of the company. Effective corporate governance features transparency, accountability, oversight and respect for shareholders. We evaluate governance starting with a company’s board composition, structure and performance, looking for independence, relevant skillsets and board dynamics. Importantly, it is the mandate of a company’s board to oversee whether the corporate strategy is aligned with the purpose and value of the company. The board oversees management’s execution against the company’s capital, liquidity, strategic and financial operating plans in achieving its set objectives. Capital allocation issues are judged in terms of alignment with long-term strategy and value creation at the applicable company. Boards are also responsible for overseeing the management of financially material environmental and social matters, which could affect the longevity of the company. Proxy Voting We vote shares held in our clients’ portfolios in a prudent and diligent manner, based on our reasonable judgement of what will best serve the long-term interests of our clients. To help ensure that proxies are voted in the best interests of clients, J.P. Morgan Asset Management has adopted detailed, regional, proxy voting guidelines that incorporate comprehensive guidelines for voting proxies on specific types of issues, and these are publicly available on our websites. We aim to keep abstentions to a minimum. In certain instances, however, it may be in a client’s best interests to intentionally refrain from voting. Stewardship/Engagement Engaging investee companies in dialogue and encouraging sound environmental, social and governance (ESG) practices is an important component of how we deliver our investment stewardship strategy. Our engagement is based on our in-depth investment research on companies, alongside our assessment of macroeconomic drivers, sector-specific factors and financially material ESG themes. This research insight enables us to act proactively and encourage investee companies to acknowledge issues and improve practices before risks are realised and opportunities are missed. This is how we seek to drive impact in our investment stewardship activity and advocate for sound practices at our investee companies. We believe this will ultimately preserve and enhance asset value. Our engagement model is built on an investor-led, expert-driven approach and leverages the knowledge of more than 1,000 investment professionals around the world, working in close collaboration with investment stewardship specialists. Our engagement process benefits from the longstanding relationships our investment teams have with local investee companies, through regular interactions with board directors and chairs, senior executives, and CEOs. We believe this collaborative, well-resourced approach enables us to recognise significant risks early and identify new opportunities, supporting our goal of generating attractive risk-adjusted returns. Combining our ESG research capability with the experience and skill of our investment teams and the expertise of our investment stewardship specialists gives us a deep understanding of the risks and opportunities facing different sectors, industries, and geographies. By integrating this expertise into a global common platform, we seek to maintain a consistently high standard of engagement, 56 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Directors’ Report Corporate Governance Statement considering the myriad of nuances a responsible investor needs to embrace. We have identified six Investment Stewardship Priorities that we believe can be broadly applied in our engagement efforts and will remain relevant through market cycles. These priorities address the ESG issues that pose the most significant long-term material financial risks to our investments, while also presenting the greatest opportunities. Engaging on these topics is therefore important to delivering value to our clients: • governance; • strategy alignment with the long term; • human capital management; • stakeholder engagement; • climate change; and • natural capital and ecosystems. Within each priority area, we have identified related sub-themes that we are seeking to address over a shorter timeframe (18-24 months). These subthemes will evolve, over time, as we engage with investee companies to understand issues and promote best practices. This combination of priorities and evolving themes provides a structured and targeted framework for engagement for our investors and Investment Stewardship team globally. JPMAM’s Voting Policy and Corporate Governance Guidelines are available on request from the Company Secretary or can be downloaded from JPMAM’s website: https://am.jpmorgan.com/content/dam/jpm-am- aem/global/en/sustainable-investing/investment- stewardship-report.pdf By order of the Board Lucy Dina, for and on behalf of JPMorgan Funds Limited, Company Secretary 27th March 2025 J.P. Morgan Asset Management 57 Directors’ Report Corporate Governance Statement I am pleased to present the Audit Committee Report for the year ended 31st December 2024. Composition The Audit Committee, chaired by Mandy Donald, comprises all of the Directors (except for Dominic Neary who attends by invitation) and meets at least twice each year. In addition, the Audit Committee meets the Auditor at least annually, without any other party present, for a private discussion. The members of the Committee consider that they have the requisite skills and experience to fulfil the responsibilities of the Committee and are satisfied that at least one member (Mandy Donald) of the Audit Committee has recent and relevant financial experience and that the Committee as a whole has competency relevant to the sector in which the Company operates. The constitution and performance of the Audit Committee are reviewed on a regular basis. Role and Responsibility The Committee reviews the actions and judgements of the Manager in relation to the Half Year, Annual Report and Financial Statements, formal announcements and the Company’s compliance with the AIC Code. It examines the effectiveness of the Company’s internal control systems. It monitors the Company’s key risks and controls relating to those risks. It is responsible for reviewing and scrutinising reports from the Depositary and the ISAE/AAF and SSAE16 reports or their equivalent from the Manager, the Custodian and Registrar. It also receives information from the Manager’s compliance department and reviews the scope and effectiveness of the external audit, and approves the external Auditor’s remuneration and terms of engagement. The Audit Committee reviews the independence and objectivity of the Auditor and is satisfied that the Auditor is independent. The Audit Committee is also responsible for making recommendations to the main Board on the appointment, reappointment and removal of the external Auditor. It is also responsible for reporting any significant financial reporting issues to the Board and for providing review and challenge of key areas of judgement, including any assumptions used, in support of the going concern and Viability statements. Financial Statements and Significant Accounting Matters During its review of the Company’s financial statements for the year ended 31st December 2024, the Audit Committee considered the following significant issues, including those communicated by the Auditor during their reporting: Significant issue How the issue was addressed The valuation of investments is undertaken in accordance with the financial statements policies, disclosed in note 1 to the financial statements on page 80. Discussions have been held with the Manager about the valuation process, existence of the investments and the systems in place for the valuation of the Company’s portfolio. The Company has appointed Bank of New York Mellon (International) Limited (BNY) as its depositary. BNY has appointed JPMorgan Chase Bank, N.A., as the Company’s custodian. BNY remains responsible for the oversight of the custody of the Company’s assets. The recognition and completeness of investment income is undertaken in accordance with accounting policy note 1(d) to the financial statements on page 81. The Board reviews the Manager’s controls regarding the recognition of income and regularly reviews the Manager’s report on the treatment of special dividends and agrees their accounting treatment. The management fee is calculated in accordance with the Investment Management Agreement. The Board reviews the controls reports, expense schedules and the management fees payable to the Manager. Valuation existence and ownership of investments Recognition and completeness of investment income The Committee has reviewed the appropriateness of the adoption of the Going Concern basis in preparing the accounts. The Committee recommended that the adoption of the Going Concern basis is appropriate (see Going Concern statement below). The Committee also assessed the Long Term Viability of the Company as detailed on page 41 and recommended to the Board its expectation that the Company would remain in operation for the five year period of the assessment. Going Concern/ Long Term Viability Approval for the Company as an investment trust under Sections 1158 and 1159 has been obtained and ongoing compliance with the eligibility criteria is monitored on a regular basis. Compliance with Sections 1158 and 1159 Calculation of management fee The Audit Committee has reviewed the impact of market volatility related to the war between Ukraine and Russia and more recently the conflict in the Middle East, tensions between USA and China on the Company’s portfolio, and trade wars following the imposition of US tariffs, and receives regular updates on portfolio performance from the portfolio manager. The Audit Committee has also reviewed recent portfolio liquidity and updated revenue and expense forecasts in light of the impact of market volatility on portfolio liquidity, revenue and market valuations and considers that the Company’s business model remains viable and that the Company has sufficient resources to continue in operation and to meet all liabilities as they fall due. The Audit Committee has further reviewed the Company’s borrowing facility and considers that the Company has continually met its financial covenants in respect of these facilities and has a wide margin before any relevant thresholds are reached. The Audit Committee is confident that the Company has appropriate controls and processes in place to manage the principal risks and uncertainties identified above and to maintain its operating model. The Audit Committee has received representations and updates from the Company’s key service providers in respect of their business continuity plans and is confident that all such providers will be able to continue to provide the required level of service for the foreseeable future. The risk that the global economic disruption and market volatility caused by the war between Ukraine and Russia and more recently the conflict in the Middle East, and geopolitical tensions between USA and China will affect the Company’s ability to continue in operation due to the impact on the share price of portfolio companies or the ability of key service providers (including the Manager, the Depositary, the Custodian, the Fund Accountants, the Brokers and the Registrar) to maintain business continuity and continue to provide appropriate service levels. 58 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Directors’ Report Audit Committee Report The Board was made fully aware of any significant financial reporting issues and judgements made in connection with the preparation of the financial statements. Internal Audit The Committee continues to believe that the Company does not require an internal audit function, as it delegates its day-to-day operations to third parties from whom it receives internal control reports. The Committee considers it sufficient to rely on the internal audit department of the Manager and the Auditor obtains an understanding of the internal controls in place at the Manager by reviewing the relevant internal control reports issued by its independent Auditor. Going Concern In accordance with The Financial Reporting Council’s guidance on going concern and liquidity risk, the Directors have undertaken a rigorous review of the Company’s ability to continue as a going concern.The Directors believe that having considered the Company’s investment objective (see page 32), risk management policies (see pages 90 and 94), capital management policies and procedures (see page 94), the nature of the portfolio and expenditure projections, the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence to 31st March 2026, being at least 12 months from the date of approval of these financial statements. In particular, the Board has considered the ongoing impact of the war between Ukraine and Russia and more recently the conflict in the Middle East, and the tensions between the USA and China and recent trade wars and believes that this will have a limited financial impact on the Company’s operational resources and existence. The Board is made fully aware of any significant financial reporting issues and judgements made in connection with the preparation of the financial statements. Given the current volatile market conditions, the covenants associated with the Company’s gearing facility are calculated and reviewed on a daily basis. All covenants were complied with during the year. The most relevant of these covenants require: 1. that the adjusted asset value of the Company (calculated to exclude certain assets from the Company’s total assets) exceed four times the value of the drawn gearing (adjusted asset value of £291.8 million represents 10.8x the value of the drawn gearing of £27.0 million as at 25th March 2025). 2. that the Company’s net asset value does not fall below £140.0 million (net asset value of £264.7 million as at 25th March 2025). The Directors therefore believe that the Company has significant headroom versus its covenants at this time. The Board has taken into account the fact that the Company has a continuation vote to be considered by shareholders at the Company’s 2025 AGM and the likelihood of shareholders voting in favour of continuation, having consulted the Company’s major shareholders through the remit of its advisers. The Company’s assets, all of which are investments in quoted securities which are readily realisable, exceed its liabilities under all stress test scenarios reviewed by the Board and reviews of the impact of market factors, structural and financial factors and operating factors. The Company’s key third party suppliers, including its Manager, are not experiencing any operational difficulties to adversely affect their services to the Company. For these reasons, the Directors consider that there is reasonable evidence to continue to adopt the going concern basis in preparing the Financial Statements. They have not identified any material uncertainties in the Company’s ability to continue to do so over a period of at least 12 months from the date of approval of these Financial Statements. The Audit Committee assesses the Company’s ability to continue as a going concern to 31st March 2026 and makes recommendations to the Board to approve the going concern concept for preparation of the Financial Statements. The Company’s longer-term viability is considered in the Viability Statement on page 41. Risk Management and Internal Control The Committee examines the effectiveness of the Company’s internal control systems, receives information from the Manager’s Compliance department and also reviews the scope and results of the external audit, its cost effectiveness and the independence and objectivity of the external auditor. In the Directors’ opinion the Auditor is independent. A risk matrix has been developed which covers all emerging and principal risks the Company faces, the likelihood of their occurrence and their potential impact, how these risks are monitored and mitigating controls in place. The Board has delegated to the Committee the responsibility for the review and maintenance of the risk matrix and the risks are monitored on a regular basis. The Directors’ statement on the Company’s system of internal control is set out on page 59. The Committee has also examined the potential risks posed by climate change to the Company’s operations. As a company with no employees or physical offices, the direct risk is negligible. However, there is embedded risk in the Company’s investment holdings. The Board receives ESG reports from the Manager on the portfolio and the way financially material ESG considerations are integrated into the investment decisions making process so as to mitigate this risk at the level of stock selection and portfolio construction. Furthermore, since the investments are diversified between sectors, the risk is further mitigated. As a listed investment trust, the Company is exempt from The Task Force on Climate-Related Financial Disclosures (‘TCFD’) disclosures; however, in accordance with the requirements of the TCFD, the Investment Manager has provided product level reports for the investment trusts it manages, including the Company. The Investment Manager published its first UK TCFD Report for the Company in respect of the year ended 31st December 2023 on 30th June 2024. J.P. Morgan Asset Management 59 Directors’ Report Audit Committee Report The report discloses the portfolio’s climate-related risks and opportunities according to the FCA Environmental, Social and Governance Sourcebook and the TCFD Recommendations. The report is available on the Company’s website: https://am.jpmorgan.com/content/dam/jpm-am- aem/emea/regional/en/regulatory/esg-information/jpm-us- smaller-companies-investment-trust-plc-tcfd-report-uk-per.pdf This is the first report under the new guidelines and disclosure requirements and the Board will continue to monitor as these reports evolve. Auditor Objectivity and Independence The Committee has implemented safeguards to ensure that the provision of non-audit services does not impair the Auditor’s objectivity or independence. All non-audit fees are approved by the Committee prior to engagement. There were no non-audit services provided in the year. Effectiveness of Audit The Committee reviewed the audit planning, scope of the audit plan, materiality level and the standing, skills and experience of the firm and the audit team. The Committee also considered the independence of BDO LLP (‘BDO’) and the objectivity of the audit process. BDO has confirmed that it is independent of the Company and has complied with relevant auditing standards. No modifications were required to the external audit approach. The Committee received a presentation of the audit plan from BDO prior to the commencement of the 2024 audit and a presentation of the results of the audit following completion of the main audit testing. Additionally, the Committee received feedback from the Manager regarding the effectiveness of the external audit process. The Committee considers the audit fee and whether the audit provides value and effectiveness.Details of the Auditor’s fees paid for audit services are disclosed in note 6 on page 83. Auditor Appointment and Tenure The Audit Committee has the primary responsibility for making recommendations to the Board on the reappointment and the removal of the external auditor. Regulations currently in force require the Company to conduct a tender at least every ten years and rotate auditors at least every 20 years. BDO LLP was appointed as the Company’s Auditor with effect from 19th August 2020. The audit engagement partner rotates at least every five years in accordance with ethical guidelines and this is the fifth year for the current partner. The Committee acknowledges that rotating the audit partner provides a fresh perspective on the audit responsibilities for the Company. This year ended 31st December 2024 is the current partner’s fifth year of a five year maximum term and therefore a new audit partner will be introduced following the 2024 audit. In July 2024 the FRC published its annual assessment of quality among the Tier 11 audit firms. Our external auditor, BDO is one of the six Tier 11 audit firms, and was therefore subject to a review by the Financial Reporting Council’s Audit Quality Review team. The FRC’s report identified a number of areas for improvement for BDO, and in response to these findings, BDO has implemented an action plan. The Audit Committee discussed the FRC’s findings along with BDO’s action plan in detail with BDO. BDO have confirmed that they remain committed to maintaining the highest standards of audit quality and will continue to work closely with the FRC to address any areas of concern. Representatives of the Company’s Auditor attended the Audit Committee meeting at which the draft Annual Report and Financial Statements were considered and also engage with Directors as and when required. Having reviewed the performance of the external Auditor, including assessing the quality of work, timing of communications and work with the Manager, the Committee considered it appropriate to recommend their reappointment. The Board supported this recommendation which will be put to shareholders at the forthcoming Annual General Meeting. BDO has confirmed its willingness to continue in office. The Board reviews and approves any non-audit services provided by the independent auditors and assesses the impact of any non-audit work on the ability of the auditors to remain independent. No non-audit work was carried out by the Auditor this year. The Committee confirms that the Company is in compliance with the requirements of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014. This order relates to the frequency and governance of tenders for the appointment of the auditor and the setting of the policy on the provision of non-audit services. Committee Evaluation The activities of the Committee were considered as part of the externally facilitated Board evaluation process. The evaluation found that the Committee functioned well, with the appropriate balance of membership, skills and challenge. Fair, Balanced and Understandable Having taken all available information into consideration and having discussed the content of the Annual Report and Financial Statements with the AIFM, the Investment Manager, the Company Secretary and other third party service providers, the Committee has concluded that the Annual Report and Financial Statements for the year ended 31st December 2024, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position and performance, business model and strategy, and has reported on these findings to the Board. The Board’s conclusions in this respect are set out in the Statement of Directors’ Responsibilities on page 67. Mandy Donald Chair of the Audit Committee By order of the Board Lucy Dina For and on behalf of JPMorgan Funds Limited Company Secretary 27th March 2025 Audit Committee Report 60 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Directors’ Report Directors’ Remuneration Report Route 66, Amboy, California, United States Directors’ Remuneration Report 62 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Directors’ Remuneration Report Statement from the Chair I am pleased to present the Directors’ Remuneration Report for the year ended 31st December 2024, which has been prepared in accordance with the requirements of Section 421 of the Companies Act 2006 as amended. The law requires the Company’s auditor to audit certain of the disclosures provided. Where disclosures have been audited, they are indicated as such. The Auditor’s opinion is included in their report on page 69. All of the Directors are non-executive. We have therefore not reported on those aspects of remuneration that relate to executive directors. In 2018 the Board established a Remuneration Committee. This Committee considers the level of Directors’ fees annually and makes recommendations to the Board. Directors’ Remuneration Policy The law requires that the Directors’ Remuneration Policy Report is subject to a triennial binding vote. However, the Board has resolved that for good governance purposes, the policy will be put to shareholders every year. Accordingly, a resolution to approve this policy will be put to shareholders at the forthcoming Annual General Meeting. The policy subject to the vote, is set out in full below and is currently in force. The Board’s policy for this and subsequent years is that Directors’ fees should properly reflect the time spent by the Directors on the Company’s business and should be at a level to ensure that candidates of a high calibre are recruited to the Board. The Chair of the Board, the Chair of the Audit Committee and the Senior Independent Director are paid higher fees than other Directors, reflecting the greater time commitment involved in fulfilling those roles. The Remuneration Committee, comprising all Directors, reviews Directors’ fees on a regular basis and makes recommendations to the Board as and when appropriate. Reviews are based on information provided by the Manager, and includes research carried out by third parties on the level of fees paid to the directors of the Company’s peers and within the investment trust industry generally. The involvement of remuneration consultants has not been deemed necessary as part of this review. All of the Directors are non-executive. There are no performance-related elements to their fees and the Company does not operate any type of incentive, share scheme, award or pension scheme and therefore no Directors receive bonus payments or pension contributions from the Company or hold options to acquire shares in the Company. Directors are not granted exit payments and are not provided with compensation for loss of office. No other payments are paid to Directors, other than the reimbursement of reasonable out-of-pocket expenses incurred in attending the Company’s business. During the year under review, Directors’ fees were paid at the following rates: £43,000 per annum for the Chair; £36,250 per annum for the Chair of the Audit Committee; £32,500 per annum for the Senior Independent Director; and £30,500 per annum for each other Directors. In January 2025, the Board agreed with the recommendation of the Remuneration Committee that, commencing 1st January 2025, the Directors’ fees be increased to the following rates: £45,000 per annum for the Chair; £38,000 per annum for the Audit Committee Chair; £34,000 per annum for the Senior Independent Director; and £32,000 per annum for each of the other Directors. Fees for any new Director appointed will be made on the above basis. The Company’s existing Articles of Association stipulate that aggregate Directors’ fees must not exceed £250,000 per annum. Any increase in this the maximum aggregate amount requires both Board and shareholder approval. The total amount of Directors’ fees paid in the year under review was £151,719. The Company has no Chief Executive Officer and no employees and therefore there was no consultation with employees, and there is no employee comparative data to provide, in relation to the setting of the remuneration policy for Directors. During the year, the Board did not seek shareholder views on the Company’s remuneration policy. However, the policy is subject to shareholder approval at the AGM. The Remuneration Committee considers any comments received from shareholders on remuneration policy on an ongoing basis and will take account of these views if appropriate. It has not received any views from shareholders in respect of the levels of Directors’ remuneration during the financial year. The Directors do not have service contracts with the Company. The terms and conditions of Directors’ appointments are set out in formal letters of appointment which are available for review at the Company’s Annual General Meeting and the Company’s registered office. Details of the Board’s policy on tenure are set out on page 53. Directors’ Remuneration Policy Implementation The Directors’ Remuneration Policy Implementation Report, which includes details of the Directors’ remuneration policy and its implementation, is subject to an annual advisory vote and therefore an ordinary resolution to approve this report will be put to shareholders at the forthcoming Annual General Meeting. There have been no changes to the policy compared with the year ended 31st December 2023 and no changes are proposed for the year ending 31st December 2025. Voting at the Annual General Meeting The Directors’ Remuneration Policy and Remuneration Report for the year ended 31st December 2023 were approved by shareholders at the Annual General Meeting held on 22nd April 2024. Directors’ Remuneration Report J.P. Morgan Asset Management 63 Directors’ Remuneration Report The votes cast by proxy were as follows: Remuneration Policy Number of Votes % of votes cast For 18,876,863 99.7 Against 61,622 0.3 Total votes cast 18,938,485 100.0 Number of votes withheld 30,711 — Remuneration Report Number of Votes % of votes cast For 18,876,605 99.7 Against 61,622 0.3 Total votes cast 18,938,227 100.0 Number of votes withheld 30,969 — * A vote withheld is not a vote in law and is not counted in the calculation of the votes for and against a resolution. Details of voting on both the Remuneration Policy and the Directors’ Remuneration Policy Implementation Report from the 2025 Annual General Meeting will be given in the Annual Report for the year ending 31st December 2025. Details of the implementation of the Company’s remuneration policy are given below. No advice from remuneration consultants was received during the year under review. Single total figure of remuneration The single total figure of remuneration for the Board as a whole for the year ended 31st December 2024 was £154,471. The single total figure of remuneration for each Director is detailed below together with the prior year comparative. There are no performance targets in place for the Directors of the Company and there are no benefits for any of the Directors which will vest in the future. There are no benefits (other than those detailed below), pension, bonus, long term incentive plans, exit payments or arrangements in place on which to report. Single Total Figure Table 1 2024 2023 Taxable Taxable Fees expenses 2 Total Fees expenses 2 Total Directors’ Name £ £ £ £ £ £ Mandy Donald 36,250 — 36,250 34,500 — 34,500 Christopher Metcalfe 32,500 — 32,500 31,000 — 31,000 David Ross 3 13,349 1,806 15,155 41,000 2,741 43,741 Dominic Neary 4 39,120 946 40,066 29,000 1,827 30,827 Shefaly Yogendra 30,500 — 30,500 29,000 — 29,000 Total 151,719 2,752 154,471 164,500 4,568 169,068 1 Audited information. Other subject headings for the single figure table as prescribed by regulation are not included because there is nothing to disclose in relation thereto. 2 Taxable travel and subsistence expenses incurred in attending Board and Committee meetings. 3 Retired on 22nd April 2024. 4 Appointed as Chair on 22nd April 2024. Directors’ Remuneration Report 64 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Directors’ Remuneration Report Annual Percentage Change in Directors’ Remuneration The following table sets out the annual percentage change in Directors’ fees, excluding taxable expenses, for the year to 31st December 2024: % change for the year to 31st December Directors’ name 2024 2023 2022 2021 2020 David Ross 1 n/a 6.5 4.1 13.5 31.7 Christopher Metcalfe 2 4.8 6.9 9.7 — 5.1 Dominic Neary 3 34.9 5.5 5.8 — 5.1 Shefaly Yogendra 5.2 5.5 5.8 — 5.1 Mandy Donald 5.1 6.2 n/a n/a n/a 1 Retired on 22nd April 2024. 2 Assumed role of Senior Independent Director on 25th April 2022. This role pays a higher fee. 3 Assumed role of Chair on 22nd April 2024. This role has a higher fee. A table showing the total remuneration for the Chair over the five years ended 31st December 2024 is below: Remuneration for the Chair over the five years ended 31st December 2024 Year ended 31st December Fees 2024 £43,000 2023 £41,000 2022 £38,500 2021 £37,000 2020 £37,000 Directors’ Shareholdings 1 There are no requirements pursuant to the Company’s Articles of Association for the Directors to own shares in the Company. The beneficial shareholdings of the Directors who held office at the year end are detailed below. 31st December 31st December Director 2024 2023 Mandy Donald nil nil Christopher Metcalfe 6,000 6,000 Dominic Neary 11,750 9,750 David Ross 2 n/a 25,000 Shefaly Yogendra 1,000 1,000 Total 18,750 41,750 1 Audited information. 2 Retired on 22nd April 2024. As at the last practicable date before the publication of this document, there have been no further changes to the Directors’ shareholdings since the year end. The Directors have no other share interests or share options in the Company and no share schemes are available. No amounts (2023: nil) were paid to third parties for making available the services of Directors. Company Performance A comparison of the Company’s performance over the last ten years is set out on the graph below. In accordance with the Companies Act 2006, a graph showing the Company’s share price total return compared with its benchmark, the Russell 2000 Index total return with dividends reinvested, in sterling terms, over the last ten years is shown below. The Board believes this Index is the most representative comparator for the Company. Ten Year Share Price and Benchmark Total Return Performance to 31st December 2024 Source: Morningstar. Relative importance of spend on pay The table below sets out, in respect of the financial year ended 31st December 2024 and the preceding financial year, the total remuneration paid to Directors and distributions to shareholders and the percentage change between the two periods. This is provided to enable shareholders to assess the relative importance of expenditure on Directors’ remuneration. It compares the remuneration against the shareholder distributions of dividends and share buybacks. 50 100 150 200 250 300 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Share price Benchmark Directors’ Remuneration Report J.P. Morgan Asset Management 65 Directors’ Remuneration Report Expenditure by the Company on remuneration and distributions to shareholders Year ended 31st December 2024 2023 % change Remuneration paid to all Directors £154,471 £169,068 (8.6)% Distribution to shareholders — by way of dividend £1,890,000 £1,615,000 17.0% — by way of share repurchases £12,242,000 £3,502,000 249.6% For and on behalf of the Board Shefaly Yogendra Chair of the Remuneration Committee 27th March 2025 Statement of Directors’ Responsibilities Turret arch through the North Window at Arches National Park in Utah, United States Statement of Directors’ Responsibilities J.P. Morgan Asset Management 67 Statement of Directors’ Responsibilities The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations. Company law requires the Directors to prepare the Annual Report and Financial Statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and applicable law). Under Company law the Directors must not approve the Financial Statements unless they are satisfied that taken as a whole, the Annual Report and Financial Statements are fair, balanced and understandable, provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the net return or loss of the Company for that period. In order to provide these confirmations, and in preparing these financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business. and the Directors confirm that they have done so. 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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Financial Statements are published on the www.jpmussmallercompanies.co.uk website, which is maintained by the Manager. The maintenance and integrity of the website maintained by the Manager is, so far as it relates to the Company, the responsibility of the Manager. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditor accepts no responsibility for any changes that have occurred to the accounts since they were initially presented to the website. The accounts are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions. Under applicable law and regulations the Directors are also responsible for preparing a Directors’ Report and Directors’ Remuneration Report that comply with that law and those regulations. Each of the Directors, whose names and functions are listed on page 47 confirm that, to the best of their knowledge: • the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and return or loss of the Company; and • the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal and emerging risks and uncertainties that it faces. The Board confirms that it is satisfied that the Annual Report and Financial Statements taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy. The Board also confirms that it is satisfied that the Strategic Report and Directors’ Report include a fair review of the development and performance of the business, and the Company, together with a description of the principal risks and uncertainties that it faces. For and on behalf of the Board Dominic Neary Chair 27th March 2025 Independent Auditor’s Report Mountain Landscape in Colorado Rocky Mountains, Colorado, United States Independent Auditor’s Report J.P. Morgan Asset Management 69 Independent Auditor’s Report Opinion on the financial statements In our opinion the financial statements: • give a true and fair view of the state of the Company’s affairs as at 31st December 2024 and of its profit for the year then ended; • have been properly prepared in accordance with United Kingdom Accounting Standards, including Financial Reporting Standard FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland; and • have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements of JPMorgan US Smaller Companies Investment Trust plc (the ‘Company’) for the year ended 31st December 2024 which comprise the Statement of Comprehensive Income, the Statement of Changes in Equity, the Statement of Financial Position, the Statement of Cash Flows and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to the audit committee. Independence Following the recommendation of the audit committee, we were appointed by the Board of Directors on 19th August 2020 to audit the financial statements for the year ended 31st December 2020 and subsequent financial periods. The period of total uninterrupted engagement is 5 years, covering the years ended 31st December 2020 to 31st December 2024. We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Company. Conclusions relating to going concern In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included: • Evaluating the appropriateness of the Directors’ method of assessing the going concern in light of economic and market conditions by reviewing the information used by the Directors in completing their assessment; • Assessing the appropriateness of the Directors’ assumptions and judgements made by comparing the prior year forecasted costs to the actual costs incurred to check that the projected costs are reasonable; • Assessing the appropriateness of the Directors’ assumptions and judgements made in their base case and stress tested forecasts including consideration of the available cash resources relative to forecast expenditure and commitments; • Discussion with the Directors’ concerning their assessment of the likelihood of the passing of the upcoming continuation vote, including consideration of engagement with major shareholders and company performance; • Challenging the Directors’ assumptions and judgements made in their forecasts by performing an independent analysis of the liquidity of the portfolio; and • Reviewing the loan agreement to identify the covenants and assessing the likelihood of them being breached based on the Directors’ forecasts and our sensitivity analyses. 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. Overview 2024 2023 Key audit matters Valuation and ownership of quoted investments a a Materiality Company financial statements as a whole £2.9m (2023:£2.7m) based on 1% (2023: 1%) of Net assets Independent Auditor’s Report to the members of JPMorgan US Smaller Companies Investment Trust plc Independent Auditor’s Report 70 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Independent Auditor’s Report An overview of the scope of our audit Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. How the scope of our audit addressed the Key audit matter key audit matter We responded to this matter by testing the valuation and ownership of the whole portfolio of quoted investments. We performed the following procedures: • Confirmed the year-end bid price was used by agreeing to externally quoted prices; • Assessed if there were contra indicators, such as liquidity considerations, to suggest bid price is not the most appropriate indication of fair value by considering the realisation period for individual holdings; • Recalculated the valuation by multiplying the number of shares held per the statement obtained from the custodian by the valuation per share; and • Obtained direct confirmation of the number of shares held per equity investment from the custodian regarding all investments held at the balance sheet date. We also considered the completeness, accuracy and clarity of investment-related disclosures against the requirements of relevant accounting standard. Key observations: Based on our procedures performed we did not identify any matters to suggest the valuation or ownership of the quoted equity investments was not appropriate. The investment portfolio at the year-end comprised of quoted equity investments. There is a risk that the prices used for the listed investments held by the Company are not reflective of fair value and the risk that errors made in the recording of investment holdings result in the incorrect reflection of investments owned by the Company. Therefore, we considered the valuation and ownership of quoted investments to be the most significant audit area as the quoted investments also represent the most significant balance in the financial statements and underpin the principal activity of the entity. Furthermore, we consider the valuation disclosures to be a significant area as they are expected to be a key area of interest for the users of the financial statements. For these reasons and the materiality of the balance in relation to the financial statements as a whole, we considered this to be a key audit matter. Valuation and ownership of quoted investments (Note 1 and 11 of notes to accounts in the annual report) Independent Auditor’s Report J.P. Morgan Asset Management 71 Independent Auditor’s Report Our application of materiality We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows: Company financial statements Reporting threshold We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £145,000 (2023:£135,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report & financial statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Corporate governance statement The UK 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. 2023 £m 2024 £m 2.7 2.9 Materiality 1 % of Net assets Basis for determining materiality As an investment trust, the net asset value is the key measure of performance for users of the financial statements. Rationale for the benchmark applied 2.0 2.2 Performance materiality 75% of materiality Basis for determining performance materiality The level of performance materiality applied was set after having considered a number of factors including the expected total value of known and likely misstatements and the level of transactions in the year. Rationale for the percentage applied for performance materiality Independent Auditor’s Report 72 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Independent Auditor’s Report Other Companies Act 2006 reporting Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below. Responsibilities of Directors As explained more fully in the Statement of Directors’ responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they 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. 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. Strategic report and Directors’ report In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. Directors’ remuneration 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, 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. Matters on which we are required to report by exception • Directors' statement on fair, balanced and understandable (set out on page 60); • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks (set out on page 36); • The section of the annual report that describes the review of effectiveness of risk management and internal control systems (set out on page 55); and • The section describing the work of the audit committee (set out on page 59). Other Code provisions • 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 59); and • The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate (set out on page 59). Going concern and longer-term viability Independent Auditor’s Report J.P. Morgan Asset Management 73 Independent Auditor’s Report could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Extent to which the audit was capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Non-compliance with laws and regulations Based on: • Our understanding of the Company and the industry in which it operates; • Discussion with the Investment Manager and Administrator and those charged with governance; • Obtaining an understanding of the Company’s policies and procedures regarding compliance with laws and regulations. We considered the significant laws and regulations to be Companies Act 2006, the FCA listing and DTR rules, the principles of the AIC Code of Corporate Governance, industry practice represented by the AIC SORP, the applicable accounting framework, and qualification as an Investment Trust under UK tax legislation as any non-compliance of this would lead to the Company losing various deductions and exemptions from corporation tax. Our procedures in respect of the above included: • Agreement of the financial statement disclosures to underlying supporting documentation; • Enquiries of management and those charged with governance relating to the existence of any non-compliance with laws and regulations; • Reviewing minutes of meeting of those charged with governance throughout the period for instances of non- compliance with laws and regulations; and • Reviewing the calculations in relation to Investment Trust compliance to check that the Company was meeting its requirements to retain their Investment Trust Status. Fraud We assessed the susceptibility of the financial statement to material misstatement including fraud. Our risk assessment procedures included: • Enquiry with management and those charged with governance regarding any known or suspected instances of fraud; • Obtaining an understanding of the Company’s policies and procedures relating to: o Detecting and responding to the risks of fraud; and o Internal controls established to mitigate risks related to fraud. • Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; • Discussion amongst the engagement team as to how and where fraud might occur in the financial statements. Based on our risk assessment, we considered the areas most susceptible to be management override of controls. Our procedures in respect of the above included: • In addressing the risk of management override of controls, we: o Performed a review of estimates and judgements applied by management in the financial statements to assess their appropriateness and the existence of any systematic bias; o Considered the opportunity and incentive to manipulate accounting entries and target tested any adjustments made in the period end financial reporting process; o Reviewed for significant transactions outside the normal course of business; and o Performed a review of unadjusted audit differences, if any, for indications of bias or deliberate misstatement. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, who were deemed to have the appropriate competence and capabilities, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilitie s . This description forms part of our auditor’s report. Use of our report This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Vanessa-Jayne Bradley For and on behalf of BDO LLP, Statutory Auditor London, UK 27th March 2025 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). Independent Auditor’s Report 74 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Independent Auditor’s Report Financial Statements Hoover Dam viewed from the Pedestrian Walkway, Arizona, United States 76 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Statement of Comprehensive Income Financial Statements For the year ended 31st December 2024 2024 2023 Revenue Capital Total Revenue Capital Total Notes £’000 £’000 £’000 £’000 £’000 £’000 Gains on investments held at fair value through profit or loss 3 – 28,833 28,833 — 10,889 10,889 Net foreign currency (losses)/gains – (383) (383) — 825 825 Income from investments 4 3,466 97 3,563 3,865 381 4,246 Interest receivable 4 579 – 579 500 — 500 Gross return 4,045 28,547 32,592 4,365 12,095 16,460 Management fee 5 (407) (1,626) (2,033) (401) (1,602) (2,003) Other administrative expenses 6 (572) – (572) (520) — (520) Net return before finance costs and taxation 3,066 26,921 29,987 3,444 10,493 13,937 Finance costs 7 (256) (1,021) (1,277) (304) (1,218) (1,522) Net return before taxation 2,810 25,900 28,710 3,140 9,275 12,415 Taxation 8 (489) – (489) (573) (57) (630) Net return after taxation 2,321 25,900 28,221 2,567 9,218 11,785 Return per share 9 3.74p 41.72p 45.46p 3.98p 14.30p 18.28p Dividend declared in respect of the financial year ended 31st December 2024 total 3.1p (2023: 3.0p) per share amounting to £1,879,000 (2023: £1,913,000). Further information on dividends is given in note 10 on page 85. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. The ‘Total’ column of this statement is the profit and loss account of the Company and the ‘Revenue’ and ‘Capital’ columns represent supplementary information prepared under guidance issued by the Association of Investment Companies. Net return after taxation represents the profit for the year and also Total Comprehensive Income. The notes on pages 80 to 95 form an integral part of these financial statements. J.P. Morgan Asset Management 77 Statement of Changes in Equity Financial Statements For the year ended 31st December 2024 Called up Capital share Share redemption Capital Revenue capital premium reserve reserves 1 reserve 1 Total £’000 £’000 £’000 £’000 £’000 £’000 At 31st December 2022 1,638 45,758 1,851 221,271 2,539 273,057 Repurchase of shares into Treasury — — — (3,502) — (3,502) Net return — — — 9,218 2,567 11,785 Dividend paid in the year (note 10) — — — — (1,615) (1,615) At 31st December 2023 1,638 45,758 1,851 226,987 3,491 279,725 Repurchase of shares into Treasury — — — (12,242) — (12,242) Repurchase and cancellation of forfeited shares 2,3 (3) — 3 (42) — (42) Net return — — — 25,900 2,321 28,221 Dividends paid in the year (note 10) — — — — (1,890) (1,890) Forfeiture of unclaimed dividends (note 10) 2 — — — — 17 17 At 31st December 2024 1,635 45,758 1,854 240,603 3,939 293,789 1 Part of these reserves form the distributable reserves of the Company and may be used to fund distributions to shareholders. Further details can be found in note 15 on page 88. 2 During the period, the Company undertook an Asset Reunification Program to reunite inactive shareholders with their shares and unclaimed dividends. In accordance with the Company’s Articles of Association, the Company exercised its right to forfeit the shares belonging to untraced shareholders for a period of 12 years or more. These shares were bought back by the Company and cancelled. The proceeds, net of costs, were returned to the Company. In addition, any unclaimed dividends older than 12 years from the date of payment of such dividend were forfeited and returned to the Company. 3 The Company repurchased and subsequently cancelled forfeited shares at a total cost of £400,000. The amount due on these forfeited shares was £358,000, leading to a net cost of £42,000. The notes on pages 80 to 95 form an integral part of financial statements. 78 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Statement of Financial Position Financial Statements As at 31st December 2024 2024 2023 1 Notes £’000 £’000 Fixed assets Investments held at fair value through profit or loss 11 316,510 283,986 Current assets 12 Debtors 265 308 Current assets investments 1 1,265 19,195 Cash at bank 1 10 42 1,540 19,545 Current liabilities Creditors: amounts falling due within one year 13 (24,261) (23,806) Net current liabilities (22,721) (4,261) Total assets less current liabilities 293,789 279,725 Net assets 293,789 279,725 Capital and reserves Called up share capital 14 1,635 1,638 Share premium 15 45,758 45,758 Capital redemption reserve 15 1,854 1,851 Capital reserves 15 240,603 226,987 Revenue reserve 15 3,939 3,491 Total shareholders’ funds 293,789 279,725 Net asset value per share 16 484.6p 438.6p 1 For the year ended 31st December 2023, the ‘Cash and cash equivalents’ line item in the Statement of Financial Position has been revised to ‘Cash at bank’ and ‘Current asset investments.’ This revision separately reports the £19,195,000 investment in the JPMorgan USD Liquidity Fund as ‘Current asset investments’ in accordance with the statutory format required by the Companies Act 2006. This adjustment does not affect any other line items in the Statement of Financial Position or the total current assets. The financial statements on pages 76 to 95 were approved and authorised for issue by the Directors on 27th March 2025 and were signed on their behalf by: Dominic Neary Chair The notes on pages 80 to 95 form an integral part of these financial statements. Company registration number: 552775. J.P. Morgan Asset Management 79 Statement of Cash Flows Financial Statements For the year ended 31st December 2024 2024 2023 Notes £’000 £’000 Cash flows from operating activities Net return before finance costs and taxation 29,987 13,937 Adjustment for: Net gains on investments held at fair value through profit or loss 3 (28,833) (10,889) Net foreign currency losses/(gains) 383 (825) Dividend income 4 (3,563) (4,246) Interest income 4 (579) (500) Realised gains/(losses) on foreign exchange transactions 44 (1) Realised exchange losses on liquidity fund (464) (344) Decrease in accrued income and other debtors 1 10 Increase in accrued expenses 62 77 Net cash outflow from operations before dividends, interest and taxation (2,962) (2,781) Dividends received 3,009 3,469 Interest received 657 447 Overseas withholding tax recovered 29 116 Net cash inflow from operating activities 733 1,251 Purchases of investments (120,370) (70,750) Sales of investments 116,679 89,062 Net cash (outflow)/inflow from investing activities (3,691) 18,312 Dividends paid 10 (1,890) (1,615) Refund from forfeiture of unclaimed dividends 10 17 — Net cost of repurchasing and cancelling forfeited shares 2 (42) — Repurchase of shares into Treasury (12,242) (3,502) Repayment of bank loan (7,850) — Draw down of bank loan 7,888 — Loan interest paid (1,305) (1,625) Net cash outflow from financing activities (15,424) (6,742) (Decrease)/increase in cash and cash equivalents 1 (18,382) 12,821 Cash and cash equivalents at start of year 1 19,237 6,652 Exchange movements 420 (236) Cash and cash equivalents at end of year 1 1,275 19,237 Cash and cash equivalents consist of 1 : Cash at bank 10 42 Current asset investments in JPMorgan USD Liquidity Fund 1,265 19,195 Total 1,275 19,237 1 The term ‘cash and cash equivalents’ is used for the purposes of the Statement of Cash Flows. 2 The Company repurchased and subsequently cancelled forfeited shares at a total cost of £400,000. The amount due on these forfeited shares was £358,000, leading to a net cash outflow of £42,000. The notes on pages 80 to 95 form an integral part of these financial statements. For the year ended 31st December 2024 1. Accounting policies (a) General information and basis of accounting The financial statements are prepared under the historical cost convention, modified to include fixed asset investments at fair value, and in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (UK GAAP), including ‘the Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102) and with the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (the ‘SORP’) issued by the Association of Investment Companies in July 2022. All of the Company’s operations are of a continuing nature. The Directors believe that having considered the Company’s investment objective (see page 32), risk management policies (see pages 55 and 56), capital management policies and procedures (see page 94), the nature of the portfolio and expenditure projections, the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence up to 31st March 2026 which is at least 12 months from the date of approval of these financial statements. In particular, the Board has considered the ongoing impact of the war between Ukraine and Russia and more recently the conflict in the Middle East, and the tensions between the USA and China and believes that this will have a limited financial impact on the Company’s operational resources and existence. The Directors have a reasonable expectation that the Company’s shareholders will vote in favour of continuation at the AGM in 2025. Furthermore, the Company has in place a US$35 million (with a US$5 million accordion option) loan facility, renewed on 14th March 2025. For these reasons, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing the Company’s financial statements. They have not identified any material uncertainties to the Company’s ability to continue as a going concern. The policies applied in these financial statements are consistent with those applied in the preceding year. (b) Valuation of investments The Company has adopted Sections 11 and 12 of FRS 102 in respect of financial instruments. The Company’s business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. The portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment strategy and information is provided internally on that basis to the Company’s Board of Directors. Upon initial recognition the investments are treated by the Company as ‘held at fair value through profit or loss’. They are included initially at fair value which is taken to be their cost, excluding expenses incidental to purchase which are written off to capital at the time of acquisition. Subsequently the investments are valued at fair value, which are quoted bid prices for investments traded in active markets. For investments which are not traded in active markets, unlisted and restricted investments, the Board takes into account the latest traded prices, other observable market data and asset values based on the latest management accounts. (c) Accounting for reserves Capital reserve – realised gains and losses Gains and losses on sales of investments including the related foreign exchange gains and losses, realised exchange gains and losses on foreign currency, management fee and finance costs allocated to capital and any other capital charges, are included in the Statement of Comprehensive Income and dealt with in the capital reserve ‘Gains and losses on sales of investments’. Capital reserve – investment holding gains and losses Increases and decreases in the valuation of investments held at the year end including the related foreign exchange gains and losses, unrealised gains and losses on forward foreign currency contracts, are included in the Statement of Comprehensive Income and dealt with in the capital reserve ‘Investment holding gains and losses’. Share premium Amounts received in excess of the par value of issued shares are held in Share premium. For shares that have been reissued from Treasury, the excess amount of the sales proceeds over the purchase price of those shares, will be transferred to share premium. 80 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Notes to the Financial Statements Financial Statements J.P. Morgan Asset Management 81 Notes to the Financial Statements Financial Statements Capital redemption reserve Par value of shares repurchased and cancelled by the Company are transferred from Called up share capital to the Capital redemption reserve. Revenue reserve Net revenue return after taxation for the year is accounted for in the Revenue reserve. (d) Income Dividends receivable from equity shares are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend is capital in nature, in which case it is included in capital. Overseas dividends are included gross of any withholding tax. Special dividends are looked at individually to ascertain the reason behind the payment. This will determine whether they are treated as revenue or capital. Where the Company has elected to receive scrip dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised in revenue. Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital. Deposit interest receivable is taken to revenue on an accruals basis. (e) Expenses All expenses are accounted for on an accruals basis. Expenses are allocated wholly to the revenue with the following exceptions: – the management fee is allocated 20% to revenue and 80% to capital, in line with the Board’s expected long term split of revenue and capital return from the Company’s investment portfolio. – expenses incidental to the purchase and sale of an investment are charged to capital. These expenses are commonly referred to as transaction costs and comprise brokerage commission and stamp duty. Details of transaction costs are given in note 11 on page 86. (f) Finance costs Finance costs are accounted for on an accruals basis using the effective interest method. Finance costs are allocated 20% to revenue and 80% to capital, in line with the Board’s expected long term split of revenue and capital return from the Company’s investment portfolio. (g) Financial instruments Cash at bank may comprise cash including demand deposits which are short term. Current asset investments will include highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. The Company invests in JPMorgan Liquidity funds, money market funds, which are considered current asset investments or cash equivalent as they are held for short term cash management purposes, as an alternative to cash, which are readily realisable to a known amount of cash with low volatility NAV. Bank loans are classified as financial liabilities at amortised cost. They are initially measured at proceeds net of direct issue costs and subsequently measured at amortised cost. Interest payable on bank loans is accounted for on an accruals basis in the Statement of Comprehensive Income. The amortisation of direct issue costs are accounted for on an accruals basis in the Statement of Comprehensive Income using the effective interest method. Other debtors and creditors do not carry any interest, are short term in nature and are accordingly stated at nominal value, with debtors reduced by appropriate allowances for estimated irrecoverable amounts. (h) Taxation Approved investment trusts are exempt from tax on capital gains made within the company. Current tax is provided at the amounts expected to be paid or recovered. Deferred tax is provided on all timing differences that have originated but not reversed by the balance sheet date. Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is more likely than not that taxable profits will be available against which those timing differences can be utilised. 1. Accounting policies (continued) (h) Taxation (continued) Tax relief is allocated to expenses charged to capital on the ‘marginal basis’. On this basis, if taxable income is capable of being entirely offset by revenue expenses, then no tax relief is transferred to the capital column. Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on an undiscounted basis. (i) Value Added Tax (‘VAT’) Withholding tax is recognised as a revenue expense, if it is not recoverable. Expenses are disclosed inclusive of the related irrecoverable VAT. Recoverable VAT is calculated using the partial exemption method based on the proportion of zero rated supplies to total supplies. (j) Functional currency The Company is required to identify its functional currency, being the currency of the primary economic environment in which the Company operates. The Board, having regard to the currency of the Company’s share capital and the predominant currency in which its shareholders operate, has determined that sterling is the functional currency. Sterling is also the currency in which the financial statements are presented. Transactions denominated in foreign currencies are converted at actual exchange rates at the date of the transaction. Monetary assets and liabilities and equity investments held at fair value denominated in foreign currencies at the year end are translated at the rates of exchange prevailing at the year end. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in revenue or capital, depending on whether the gain or loss is of a revenue or capital nature. (k) Dividends payable Dividends are included in the financial statements in the year in which they are approved by shareholders. (l) Repurchase of shares into Treasury The cost of repurchasing shares into Treasury, including the related stamp duty and transaction costs is charged to capital reserves and recognised in the Statement of Changes in Equity. Share repurchase transactions are accounted for on a trade date basis. Where shares held in Treasury are subsequently cancelled, the nominal value of those shares is transferred out of called up share capital and into capital redemption reserve. (m) Issuance of new Ordinary shares The nominal value of new Ordinary shares is included under Called Up Share Capital. Any amount in excess of the nominal value is included under Share Premium. For shares re-issued from Treasury the sales proceeds will be treated as a realised profit up to the amount of the purchase price of those shares and will be transferred to realised capital reserves. The excess of the sales (issue) proceeds over the purchase price will be transferred to share premium. 2. Significant accounting judgements, estimates and assumptions The preparation of the Company’s financial statements on occasion requires the Directors to make judgements, estimates and assumptions that affect the reported amounts in the primary financial statements and the accompanying disclosures. These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the current and future periods, depending on circumstance. The Company holds mainly US dollar denominated investments. However, the Company’s shareholders are predominantly based in the United Kingdom and the majority of its expenditure is in Sterling. Therefore, the Directors believe that it is appropriate for the Company’s presentational and functional currency to be Sterling. Apart from the functional currency, the Directors do not believe that any significant accounting judgements or estimates have been applied to this set of financial statements, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year. 82 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Notes to the Financial Statements Financial Statements J.P. Morgan Asset Management 83 Notes to the Financial Statements Financial Statements 3. Gains on investments held at fair value through profit or loss 2024 2023 £’000 £’000 Realised gains/(losses) on sale of investments 25,255 (423) Net change in unrealised gains on investments 3,588 11,319 Other capital charges (10) (7) Total capital gains on investments held at fair value through profit or loss 28,833 10,889 4. Income 2024 2023 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Income from investments Overseas dividends 3,313 — 3,313 3,735 — 3,735 Special dividends 153 97 250 130 381 511 3,466 97 3,563 3,865 381 4,246 Interest receivable and similar income Deposit interest 1 — 1 — — — Interest from JPMorgan USD Liquidity Fund 578 — 578 500 — 500 579 — 579 500 — 500 Total income 4,045 97 4,142 4,365 381 4,746 5. Management fee 2024 2023 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Management fee 407 1,626 2,033 401 1,602 2,003 6. Other administrative expenses 2024 2023 £’000 £’000 Administration expenses 335 270 Directors’ fees 1 152 165 Depositary fees 28 36 Auditor’s remuneration for audit services 2 57 49 572 520 1 Full disclosure is given in the Directors’ Remuneration Report on page 63. Excludes taxable directors expenses which are included within administration expenses. 2 Included in Auditor’s remuneration is additional costs of £3,000 (2023: nil) in respect of the 2023 audit and out of pocket expenses. 7. Finance costs 2024 2023 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Bank loans and overdraft interest 256 1,021 1,277 304 1,218 1,522 8. Taxation (a) Analysis of tax charge for the year 2024 2023 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Overseas withholding tax 489 — 489 573 57 630 Total tax charge for the year 489 — 489 573 57 630 (b) Factors affecting the total tax charge for the year The tax charge for the year is lower (2023: lower) than the Company’s applicable rate of corporation tax of 25.00% (2023: 23.52%). The factors affecting the total tax charge for the year are as follows: 2024 2023 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Net return before taxation 2,810 25,900 28,710 3,140 9,275 12,415 Net return before taxation multiplied by the standard rate of corporation tax of 25.00% (2023: 23.52%) 703 6,475 7,178 739 2,181 2,920 Effects of: Non taxable overseas dividends (740) (24) (764) (785) — (785) Non Taxable capital gains — (7,113) (7,113) — (2,844) (2,844) Unrelieved expenses 55 662 717 128 663 791 Income taxed in different years — — — (5) — (5) Overseas withholding tax 489 — 489 573 57 630 Brought forward excess expenses utilised — — — (46) — (46) Double taxation relief expensed (18) — (18) (31) — (31) Total tax charge for the year 489 — 489 573 57 630 (c) Deferred taxation The Company has an unrecognised deferred tax asset of £10,929,000 (2023: £10,255,000) in respect of cumulative excess management expenses and loan relationships totalling £43,735,000 (2023: £40,866,000). This is based on a prospective corporation tax rate of 25% (2023: 25%) as enacted by the Finance Act 2021. The deferred tax asset has arisen due to the cumulative excess of deductible expenses over taxable income. Given the composition of the Company’s portfolio, it is not likely that this asset will be utilised in the foreseeable future and therefore no asset has been recognised in the financial statements. Due to the Company’s status as an investment trust company and the intention to continue meeting the conditions required to maintain such status in the foreseeable future, the Company has not provided for deferred tax on any capital gains or losses arising on the revaluation or disposal of investments. 84 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Notes to the Financial Statements Financial Statements J.P. Morgan Asset Management 85 Notes to the Financial Statements Financial Statements 9. Return per share 2024 2023 £’000 £’000 Revenue return 2,321 2,567 Capital return 25,900 9,218 Total return 28,221 11,785 Weighted average number of shares, excluding Treasury shares, in issue during the year 62,082,503 64,460,117 Revenue return per share 3.74p 3.98p Capital return per share 41.72p 14.30p Total return per share 45.46p 18.28p 10. Dividends (a) Dividends paid and declared 2024 2023 Pence £’000 Pence £’000 Dividend paid Final dividend in respect of prior year 3.0 1,890 2.5 1,615 Total dividends paid in the year 3.0 1,890 2.5 1,615 Forfeiture of unclaimed dividends over 12 years — (17) — — Net dividends 3.0 1,873 2.5 1,615 Dividend declared in respect of the year Final dividend 3.1 1,879 3.0 1,913 All dividends paid and declared in the period have been funded from the Revenue Reserve. The dividend proposed in respect of the year ended 31st December 2023 amounted to £1,913,000. However, the amount paid amounted to £1,890,000 due to shares repurchased after the balance sheet date but prior to the record date. The final dividend has been declared in respect of the year ended 31st December 2024. In accordance with the accounting policy of the Company, this dividend will be reflected in the accounts for the year ending 31st December 2025. (b) Dividends for the purposes of Section 1158 of the Corporation Tax Act 2010 (‘Section 1158’) The requirements of Section 1158 are considered on the basis of dividends declared in respect of the financial year, shown below. The revenue available for distribution by way of dividend for the year is £2,321,000 (2023: £2,567,000). 2024 2023 Pence £’000 Pence £’000 Final dividend 3.1 1,879 3.0 1,913 Total dividend for Section 1158 purposes 3.1 1,879 3.0 1,913 11. Investments 2024 2023 £’000 £’000 Opening book cost 234,536 253,591 Opening investment holding gains 49,450 38,132 Opening valuation 283,986 291,723 Movements in the year: Purchases at cost 120,370 70,265 Sales proceeds (116,689) (88,898) Gains on investments 28,843 10,896 Closing valuation 316,510 283,986 Closing book cost 263,472 234,536 Closing investment holding gains 53,038 49,450 Total investments held at fair value through profit or loss 316,510 283,986 The Company received £116,689,000 (2023: £88,898,000) from investments sold in the year. The book cost of these investments when they were purchased was £91,434,000 (2023: £89,320,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments. Transaction costs on purchases during the year amounted to £39,000 (2023: £26,000) and on sales during the year amounted to £34,000 (2023: £35,000). These costs comprise mainly brokerage commission. 12. Current assets 2024 2023 £’000 £’000 Debtors Dividends and interest receivable 223 265 Other debtors 42 43 265 308 The Directors consider that the carrying amount of debtors approximates to their fair value. Cash at bank Cash bank comprise bank balances and short term deposits. The carrying amount of these represents their fair value. 13. Current liabilities 2024 2023 £’000 £’000 Creditors: amounts falling due within one year Bank Loan 23,954 23,533 Bank Loan interest and fees payable 52 80 Other creditors and accruals 255 193 24,261 23,806 The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value. On 29th October 2021, the Company renewed its US$30 million revolving loan facility with The Bank of Nova Scotia, London Branch (new entity of the previous Scotiabank) for a further two years. Under the terms of this agreement, the Company could draw down up to US$30 million loan facility (with an accordion facility of an additional US$10 million), at an interest rate of 86 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Notes to the Financial Statements Financial Statements J.P. Morgan Asset Management 87 Notes to the Financial Statements Financial Statements compounded SOFR (Secured Overnight Financing Rate) (in respect of Dollar denominated loans), as offered in the market for the relevant currency and loan period, plus a margin of 0.9% (Dollar denominated loans) and plus ‘Mandatory Costs’, which are the lender’s costs of complying with certain regulatory requirements of the Bank of England and the Financial Conduct Authority. The Company’s multicurrency revolving unsecured loan facility with Scotiabank was due to be renewed on 27th October 2023. However, the facility was extended to 15th March 2024 to allow time to finalise the loan renewal documentation, the delay being caused by the move from unsecured to secured. On 15th March 2024 the Board renewed the facility with Scotiabank, the new facility being a secured 364 day facility for a reduced amount of US$20 million (plus an accordion facility of an additional US$10 million) at an interest rate of compounded SOFR plus a margin of 1.05% (Dollar denominated loans). The Company then elected to utilise the US$10 million accordion facility in Nov 2024, taking the total commitment to US$30 million. Following the year-end, on 14th March 2025 the Company renewed its loan facility with a new loan provider, Bank of America. Under the terms of this current agreement, the Company may draw down up to US$40 million loan facility (including an accordion facility of US$5 million), at an interest rate of compounded SOFR plus a margin of 1.00% (Dollar denominated loans). The new facility is a 360 day evergreen facility. Commitment fees are also payable on the facility. The facility is subject to the following covenants and restrictions: • The Company’s adjusted asset coverage must not fall below 4:1; • The Company’s net asset value must not be less than £140 million; and • The Company’s maximum borrowing limit cannot be exceeded at any time. These covenants and restrictions are customary for a credit facility of this nature. All of the covenants and restrictions have been met during the year and continue to be met. As at 31st December 2024, the Company had drawn down US$30.0 million (£24.0 million) on this facility. 14. Called up share capital 2024 2023 Number Number of shares £’000 of shares £’000 Authorised ordinary shares allotted and fully paid: Opening balance of Ordinary shares excluding shares held in Treasury 63,770,149 1,595 64,745,622 1,619 Repurchase of Ordinary shares into Treasury (3,047,895) (76) (975,473) (24) Repurchase of shares for cancellation (99,990) (3) — — Closing balance of Ordinary shares of 2.5p each excluding shares held in Treasury 60,622,264 1,516 63,770,149 1,595 Shares held in Treasury 4,784,011 119 1,736,116 43 Closing balance of shares of 2.5p each including shares held in Treasury 65,406,275 1,635 65,506,265 1,638 Further details of transactions in the Company’s shares are given in the Strategic Report on page 34. 15. Capital and reserves 2024 Capital reserves Gains and Investment Called up Capital losses on holding share Share redemption sales of gains and Revenue capital premium reserve investments 1 losses reserve 1 Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 Opening balance 1,638 45,758 1,851 181,740 45,247 3,491 279,725 Realised gains on sale of investments — — — 25,255 — — 25,255 Net change in unrealised gains and losses on investments — — — — 3,588 — 3,588 Repurchase of shares into Treasury — — — (12,242) — — (12,242) Repurchase of shares for cancellation (3) — 3 (400) — — (400) Capital special dividend received — — — 97 — — 97 Realised currency losses on repayment of loans — — — (1,244) — — (1,244) Unrealised currency gains on loans — — — — 861 — 861 Management fee and finance costs charged to capital — — — (2,647) — — (2,647) Other capital charges — — — (10) — — (10) Proceeds from share forfeiture 2 — — — 358 — — 358 Retained revenue for the year — — — — — 2,321 2,321 Dividends paid in the year — — — — — (1,890) (1,890) Forfeiture of unclaimed dividends 2 — — — — — 17 17 Closing balance 1,635 45,758 1,854 190,907 49,696 3,939 293,789 2023 Capital reserves Gains and Investment Called up Capital losses on holding share Share redemption sales of gains and Revenue capital premium reserve investments 1 losses reserve 1 Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 Opening balance 1,638 45,758 1,851 188,750 32,521 2,539 273,057 Net foreign currency losses on cash and cash equivalents — — — (581) — — (581) Realised losses on sale of investments — — — (423) — — (423) Net change in unrealised gains and losses on investments — — — — 11,319 — 11,319 Repurchase of shares into Treasury — — — (3,502) — — (3,502) Capital special dividend received — — — 381 — — 381 Withholding tax on capital special dividends — — — (57) — — (57) Unrealised currency gains on loans — — — — 1,407 — 1,407 Management fee and finance costs charged to capital — — — (2,821) — — (2,821) Other capital charges — — — (7) — — (7) Retained revenue for the year — — — — — 2,567 2,567 Dividends paid in the year — — — — — (1,615) (1,615) Closing balance 1,638 45,758 1,851 181,740 45,247 3,491 279,725 1 These reserves form the distributable reserves of the Company and may be used to fund distributions to investors. 2 During the period, the Company undertook an Asset Reunification Program to reunite inactive shareholders with their shares and unclaimed dividends. In accordance with the Company’s Articles of Association, the Company exercised its right to forfeit the shares belonging to untraced shareholders for a period of 12 years or more. These shares were bought back by the Company and cancelled. The proceeds, net of costs, were returned to the Company. In addition, any unclaimed dividends older than 12 years from the date of payment of such dividend were forfeited and returned to the Company. 88 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Notes to the Financial Statements Financial Statements J.P. Morgan Asset Management 89 Notes to the Financial Statements Financial Statements 16. Net asset value per share 2024 2023 Net assets (£’000) 293,789 279,725 Number of shares in issue 60,622,264 63,770,149 Net asset value per share 484.6p 438.6p 17.Contingent liabilities and capital commitments At the balance sheet date there were no contingent liabilities or capital commitments (2023: same). 18a. Transactions with the Manager Details of the management contract are set out in the Directors’ Report on page 48. The management fee payable to the Manager for the year was £2,033,000 (2023: £2,003,000) of which £2,000 (2023: £nil) was outstanding at the year end. Included in administration expenses in note 6 on page 83 are safe custody fees amounting to £3,000 (2023: £3,000) payable JPMorgan Chase Bank N.A. of which £nil (2023: £1,000) was outstanding at the year end. The Company also holds cash in the JPMorgan USD Liquidity Fund, which is managed by JPMorgan Asset Management (Europe) S.à r.l. At the year end this was valued at £1.3 million (2023: £19.2 million). Income amounting to £578,000 (2023: £500,000) was receivable during the year of which £nil (2023: £nil) was outstanding at the year end. The JPMorgan USD Liquidity Fund does not charge a fee and the Company does not invest in any other investment fund managed or advised by JPMorgan. Handling charges on dealing transactions amounting to £10,000 (2023: £7,000) were payable to JPMorgan Chase Bank N.A during the year of which £2,000 (2023: £2,000) was outstanding at the year end. At the year end, total cash of £10,000 (2023: £42,000) was held with JPMorgan Chase Bank N.A. A net amount of interest of £1,000 (2023: £nil) was receivable by the Company during the year from JPMorgan Chase Bank, N.A of which £nil (2023: £nil) was outstanding at the year end. 18b. Transactions with related parties Full details of Directors’ remuneration and shareholdings can be found on pages 62 to 65 and in note 6 on page 83. 19. Disclosures regarding financial instruments measured at fair value The Company’s financial instruments within the scope of FRS 102 that are held at fair value comprise its investment portfolio and derivative financial instruments. The investments are categorised into a hierarchy consisting of the following three levels: Level 1: The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date Level 2: Inputs other than quoted prices included within Level 1 that are observable (i.e.: developed using market data) for the asset or liability, either directly or indirectly Level 3: Inputs are unobservable (i.e.: for which market data is unavailable) for the asset or liability 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 asset. Details of the valuation techniques used by the Company are given in note 1(b) on page 80. The following table sets out the fair value measurements using the FRS 102 hierarchy at 31st December. 2024 2023 Assets Liabilities Assets Liabilities £’000 £’000 £’000 £’000 Level 1 316,510 — 283,986 — Total 316,510 — 283,986 — There were no transfers between Level 1, 2 or 3 during the year (2023: none). 20. Financial instruments’ exposure to risk and risk management policies As an investment trust, the Company invests in equities and other securities for the long term so as to secure its investment objective stated on the ‘Features’ page. In pursuing this objective, the Company is exposed to a variety of financial risks that could result in a reduction in the Company’s net assets or a reduction in the profits available for dividends. These financial risks include market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. The Directors’ policy for managing these risks is set out below. The objectives, policies and processes for managing the risks and the methods used to measure the risks that are set out below, have not changed from those applying in the comparative year. The Company’s classes of financial instruments are as follows: – investments in US equity shares, which are held in accordance with the Company’s investment objective; – cash held within a liquidity fund; – short term debtors, creditors and cash arising directly from its operations; and – bank loans and overdrafts, the purpose of which is to finance the Company’s operations. (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. This market risk comprises three elements – currency risk, interest rate risk and other price risk. Information to enable an evaluation of the nature and extent of these three elements of market risk is given in parts (i) and (iii) of this note, together with sensitivity analysis where appropriate. The Board reviews and agrees policies for managing these risks and these policies have remained unchanged from those applying in the comparative year. The 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. (i) Currency risk The majority of the Company’s assets and income are denominated in currencies other than sterling which is the Company’s functional currency and the currency in which it reports. As a result, movements in exchange rates will affect the sterling value of those items. Management of currency risk The Manager monitors the Company’s exposure to foreign currencies on a daily basis and reports to the Board, which meets on at least six occasions each year. The Manager measures the risk to the Company of the foreign currency exposure by considering the effect on the Company’s net asset value and income of a movement in the rates of exchange to which the Company’s assets, liabilities, income and expenses are exposed. Foreign currency borrowing may be used to limit the Company’s exposure to anticipated changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments. This borrowing is limited to currencies and amounts commensurate with the asset exposure to those currencies. Income denominated in foreign currencies is converted to sterling on receipt. The Company may use short term forward currency contracts to manage working capital requirements. No such contracts were used during the year. Foreign currency exposure The fair value of the Company’s monetary items that have foreign currency exposure at 31st December are shown below. Where the Company’s equity investments (which are not monetary items) are priced in a foreign currency, they have been included separately in the analysis so as to show the overall level of exposure. 2024 2023 £’000 £’000 Current assets: Cash and debtors 1,497 19,489 Current liabilities (including short term bank loans) (24,006) (23,613) Foreign currency exposure on net monetary items (22,509) (4,124) Investments held at fair value through profit or loss 316,510 283,986 Total net foreign currency exposure 294,001 279,862 The above year end amounts are broadly representative of the exposure to foreign currency risk during the current and comparative year. 90 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Notes to the Financial Statements Financial Statements J.P. Morgan Asset Management 91 Notes to the Financial Statements Financial Statements Foreign currency sensitivity The following table illustrates the sensitivity of net return after taxation for the year and net assets with regard to the Company’s financial assets and financial liabilities and exchange rates. The sensitivity analysis is based on the Company’s financial instruments held at each balance sheet date and the income receivable in foreign currency and assumes a 10% (2023: 10%) appreciation or depreciation in sterling against the US Dollar which is considered to be a reasonable illustration based on the volatility of exchange rates during the year. 2024 2023 If sterling If sterling If sterling If sterling strengthens weakens strengthens weakens by 10% by 10% by 10% by 10% £’000 £’000 £’000 £’000 Statement of Comprehensive Income Change in revenue return after taxation (405) 405 (437) 437 Change in capital return after taxation (29,400) 29,400 (27,986) 27,986 Total return after taxation (29,805) 29,805 (28,423) 28,423 Net assets (29,805) 29,805 (28,423) 28,423 In the opinion of the Directors, the above sensitivity analysis is broadly representative of the whole year. (ii) Interest rate risk Interest rate movements may affect the level of income receivable on cash deposits, the liquidity fund and the interest payable on the Company’s variable rate cash borrowings. The Company has no exposure to fair value interest rate risk as it has no fixed interest investments and borrowings. Management of interest rate risk The Company does not normally hold significant cash balances. The Company may finance part of its activities through borrowings at levels approved and monitored by the Board. The Board’s policy is to limit gearing within the range of 5% net cash to 15% geared (+/–2.5%). Derivatives are not used to hedge against the exposure to interest rate risk. Interest rate exposure The exposure of financial assets and liabilities to floating interest rates, giving cash flow interest rate risk when rates are reset, is shown below. 2024 2023 £’000 £’000 Exposure to floating interest rates: Cash and short term deposits 10 42 JPMorgan USD Fund 1,265 19,195 Bank loan (23,954) (23,533) Total exposure (22,679) (4,296) Interest receivable on cash balances, or paid on overdrafts, is at a margin below or above compounded SOFR (Secured Overnight Financing Rate) in respect of Dollar denominated loans (2023: same). The target interest earned on the JPMorgan USD Fund is the 7 day US$ London Interbank Bid Rate. Details of the bank loan are given in note 13 on page 86. 20. Disclosures regarding financial instruments measured at fair value (continued) (a) Market risk (continued) (ii) Interest rate risk (continued) Interest rate sensitivity The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 1.0% (2023: 4.0%) increase or decrease in interest rates in regards to the Company’s monetary financial assets and financial liabilities. This level of change is considered to be a reasonable illustration based on observation of current market conditions and the increase in interest rates over the past year. The sensitivity analysis is based on the Company’s monetary financial instruments held at the balance sheet date with all other variables held constant. 2024 2023 1.0% increase 1.0% decrease 4.0% increase 4.0% decrease in rate in rate in rate in rate £’000 £’000 £’000 £’000 Statement of Comprehensive Income Change in revenue return after taxation (35) 35 581 (581) Change in capital return after taxation (192) 192 (753) 753 Total return after taxation for the year (227) 227 (172) 172 Net assets (227) 227 (172) 172 In the opinion of the Directors, this sensitivity analysis may not be representative of the Company’s future exposure to interest rate changes due to fluctuations in the level of cash balances, cash held in the liquidity fund and amounts drawn down on the Company’s loan facilities. (iii) Other price risk Other price risk includes changes in market prices, other than those arising from interest rate risk or currency risk, which may affect the value of equity investments. Management of other price risk The Board considers on a regular basis the asset allocation of the portfolio and the risk associated with particular industry sectors. The investment management team has responsibility for monitoring the portfolio, which is selected in accordance with the Company’s investment objectives and seeks to ensure that individual stocks meet an acceptable risk/reward profile. Other price risk exposure The Company’s total exposure to changes in market prices at 31st December comprises its holdings in equity investments as follows: 2024 2023 £’000 £’000 Investments held at fair value through profit or loss 316,510 283,986 The above data is broadly representative of the exposure to other price risk during the current and comparative year. Concentration of exposure to other price risk A list of the Company’s investments is given on pages 30 and 31. This shows that all of the investments are listed in the USA. Accordingly there is a concentration of exposure to that country. However it should be noted that an investment may not be entirely exposed to the economic conditions in the USA. Other price risk sensitivity The following table illustrates the sensitivity of the return after taxation for the year and net assets to an increase or decrease of 20% (2023: 20%) in the market values. This level of change is considered to be a reasonable illustration based 92 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Notes to the Financial Statements Financial Statements J.P. Morgan Asset Management 93 Notes to the Financial Statements Financial Statements on observation of current market conditions. The sensitivity analysis is based on the Company’s equities, adjusting for changes in the management fee but with all other variables held constant. 2024 2023 20% increase 20% decrease 20% increase 20% decrease in fair value in fair value in fair value in fair value £’000 £’000 £’000 £’000 Statement of Comprehensive Income Change in revenue return after taxation (89) 89 (80) 80 Change in capital return after taxation 62,948 (62,948) 56,479 (56,479) Total return after taxation for the year 62,859 (62,859) 56,399 (56,399) Net assets 62,859 (62,859) 56,399 (56,399) (b) Liquidity risk This is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Management of the risk Liquidity risk is not significant as the Company’s assets comprise mainly readily realisable securities, which can be sold to meet funding requirements if necessary. Short term flexibility is achieved through the use of overdraft and bank loan facilities. The Board’s policy is for the Company to remain fully invested in normal market conditions and that short term borrowings be used to manage short term liabilities and working capital and to gear the Company as appropriate. Liquidity risk exposure Contractual maturities of the financial liabilities based on the earliest date on which payment can be required are as follows: 2024 2023 More than More than Three three months Three three months months but less than months but less than or less one year Total or less one year Total £’000 £’000 £’000 £’000 £’000 £’000 Creditors: Other creditors and accruals 255 — 255 193 — 193 Bank loan, including interest 24,278 — 24,278 23,701 — 23,701 24,533 — 24,533 23,894 — 23,894 The liabilities shown above represent future contractual payments and therefore differ from the amounts shown in the Statement of Financial Position. (c) Credit risk Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligations under that transaction could result in loss to the Company. Management of credit risk Portfolio dealing The Company invests in markets that operate Delivery Versus Payment (DVP) settlement. The process of DVP mitigates the risk of losing the principal of a trade during the settlement process. The Manager continuously monitors dealing activity to ensure best execution, a process that involves measuring various indicators including the quality of trade settlement and incidence of failed trades. Counterparty lists are maintained and adjusted accordingly. 20. Disclosures regarding financial instruments measured at fair value (continued) (c) Credit risk (continued) Cash at bank Counterparties are subject to regular credit analysis by the Manager and deposits can only be placed with counterparties that have been approved by JPMAM’s Counterparty Risk Group. The Board regularly reviews the counterparties used by the Manager. Exposure to JPMorgan Chase JPMorgan Chase Bank, N.A. is the custodian of the Company’s assets. The Company’s assets are segregated from JPMorgan Chase’s own trading assets. Therefore these assets are designed to be protected from creditors in the event that JPMorgan Chase were to cease trading. The Depositary, Bank of New York Mellon (International) Limited, is responsible for the safekeeping of all custodial assets of the Company and for verifying and maintaining a record of all other assets of the Company. However, no absolute guarantee can be given on the protection of all the assets of the Company. Credit risk exposure The amounts shown in the Statement of Financial Position under debtors and cash and cash equivalents represent the maximum exposure to credit risk at the current and comparative year ends. (d) Fair values of financial assets and financial liabilities All financial assets and liabilities are either included in the Statement of Financial Position at fair value or the carrying amount in the Statement of Financial Position is a reasonable approximation of fair value. 21. Capital management policies and procedures The Company’s debt and capital structure comprises the following: 2024 2023 £’000 £’000 Debt: Bank loans 23,954 23,533 Equity: Equity share capital 1,635 1,638 Reserves 292,154 278,087 293,789 279,725 Total debt and equity 317,743 303,258 The Company’s capital management objectives are to ensure that it will continue as a going concern and to maximise the income and capital return to its equity shareholders through an appropriate level of gearing. The Board’s policy is to utilise liquidity and borrowings to remain invested within a maximum gearing limit of 15% geared (+/–2.5% if as a result of market movements). 2024 2023 £’000 £’000 Investments held at fair value through profit or loss 316,510 283,986 Net assets 293,789 279,722 Gearing 7.7% 1.5% 94 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Notes to the Financial Statements Financial Statements J.P. Morgan Asset Management 95 Notes to the Financial Statements Financial Statements The Board, with the assistance of the Investment Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This review includes: – the planned level of gearing, which takes into account the Investment Manager’s views on the market; – the need to buy back equity shares, either for cancellation or to hold in Treasury, which takes into account the share price discount or premium; and – the opportunity for issues of new shares, including issues from Treasury. 22. Analysis of changes in net debt As at As at 31st December Other non-cash 31st December 2023 Cash flows charges 2 2024 £’000 £’000 £’000 £’000 Cash at bank and current asset investments Cash at bank 42 (452) 420 10 Current asset investments 1 19,195 (17,930) — 1,265 19,237 (18,382) 420 1,275 Borrowings Debt due within one year (23,533) — (421) (23,954) Net debt (4,296) (18,382) (1) (22,679) 1 Entirely invested in JPMorgan USD Liquidity Fund, a AAA rated money market fund which seeks to achieve a return in line with prevailing money market rates whilst aiming to preserve capital consistent with such rates and to maintain a high degree of liquidity. 2 Other non cash charges include foreign exchange movements. 23. Subsequent events The Directors have evaluated the period since the year end and have not identified any subsequent events other than those described. Regulatory Disclosures Central Park, New York, United States Regulatory Disclosures J.P. Morgan Asset Management 97 Regulatory Disclosures Alternative Investment Fund Managers Directive (‘AIFMD’) Disclosures (Unaudited) Leverage For the purposes of the Alternative Investment Fund Managers Directive (AIFMD), leverage is any method which increases the Company’s exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company’s exposure and its net asset value and is calculated on a gross and a commitment method, in accordance with AIFMD. Under the gross method, exposure represents the sum of the Company’s positions without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated after certain hedging and netting positions are offset against each other. The Company is required to state its maximum and actual leverage levels, calculated as prescribed by the AIFMD (see Glossary of Terms and Alternative Performance Measures on pages 104 to 106), as at 31st December 2024, which gives the following figures: Gross Commitment Method Method Leverage Exposure Maximum limit 200% 200% Actual 108% 108% AIFMD Remuneration disclosures JPMorgan Funds Limited (the ‘Management Company’) is the authorised manager of JPMorgan US Smaller Companies Investment Trust plc (the ‘Company’) and is part of the J.P. Morgan Chase & Co. group of companies. In this section, the terms ‘J.P. Morgan’ or ‘Firm’ refer to that group, and each of the entities in that group globally, unless otherwise specified. This section of the annual report has been prepared in accordance with the Alternative Investment Fund Managers Directive (the ‘AIFMD’), the European Commission Delegated Regulation supplementing the AIFMD, and the ‘Guidelines on sound remuneration policies’ issued by the European Securities and Markets Authority under the AIFMD. The information in this section is in respect of the most recent complete remuneration period (‘Performance Year’) as at the reporting date. This section has also been prepared in accordance with the relevant provisions of the Financial Conduct Authority Handbook (FUND 3.3.5). JPMorgan Funds Limited (the ‘Management Company’) is the authorised manager of JPMorgan US Smaller Companies Investment Trust plc (the ‘Company’) and is part of the J.P. Morgan Chase & Co. group of companies. In this section, the terms ‘J.P. Morgan’ or ‘Firm’ refer to that group, and each of the entities in that group globally, unless otherwise specified. This section of the annual report has been prepared in accordance with the Alternative Investment Fund Managers’ Directive (the ‘AIFMD’), the European Commission Delegated Regulation supplementing the AIFMD, and the ‘Guidelines on sound remuneration policies’ issued by the European Securities and Markets Authority under the AIFMD. The information in this section is in respect of the most recent complete remuneration period (‘Performance Year’) as at the reporting date. This section has also been prepared in accordance with the relevant provisions of the Financial Conduct Authority Handbook (FUND 3.3.5). Remuneration Policy A summary of the Remuneration Policy applying to the Management Company (the ‘Remuneration Policy’) can be found at https://am.jpmorgan.com/gb/en/asset- management/gim/per/legal/emea-remuneration-policy (the ‘Remuneration Policy Statement’). This Remuneration Policy Statement includes details of how remuneration and benefits are calculated, including the financial and non-financial criteria used to evaluate performance, the responsibilities and composition of the Firm’s Compensation and Management Development Committee, and the measures adopted to avoid or manage conflicts of interest. A copy of this policy can be requested free of charge from the Management Company. The Remuneration Policy applies to all employees of the Management Company, including individuals whose professional activities may have a material impact on the risk profile of the Management Company or the Alternative Investment Funds it manages (‘AIFMD Identified Staff’). The AIFMD Identified Staff include members of the Board of the Management Company (the ‘Board’), senior management, the heads of relevant Control Functions, and holders of other key functions. Individuals are notified of their identification and the implications of this status on at least an annual basis. The Board reviews and adopts the Remuneration Policy on an annual basis, and oversees its implementation, including the classification of AIFMD Identified Staff. The Board last reviewed and adopted the Remuneration Policy that applied for the 2024 Performance Year in July 2024 with no material changes and was satisfied with its implementation. Quantitative Disclosures The table overleaf provides an overview of the aggregate total remuneration paid to staff of the Management Company in respect of the 2024 Performance Year and the number of beneficiaries. These figures include the remuneration of all staff of JP Morgan Asset Management (UK) Ltd (the relevant employing entity) and the number of beneficiaries, both apportioned to the Management Company on an AUM weighted basis. Due to the Firm’s structure, the information needed to provide a further breakdown of remuneration attributable to the Company is not readily available and would not be relevant or reliable. However, for context, the Management Company manages 24 Alternative Investment Funds (with 4 sub-funds) and 2 UCITS (with 42 sub-funds) as at 31st December 2024, with a combined AUM as at that date of £25.6 billion and £21.3 billion respectively. Fixed Variable Total Number of remuneration remuneration remuneration beneficiaries All staff| ($’000s) 25,131 17,434 42,565 150 No carried interest was paid to any employees by JPMorgan US Smaller Companies Investment Trust plc in the year. The aggregate 2024 total remuneration paid to AIFMD Identified Staff was US$143.4 million of which US$7.9 million relates to Senior Management and US$135.5 million relates to other Identified Staff 1 . 1 For 2024, the identified staff disclosures includes employees of the companies to which portfolio management has been formally delegated in line with the latest ESMA guidance. Securities Financing Transactions Regulation Disclosure (Unaudited) The Company does not engage in Securities Financing Transactions (as defined in Article 3 of Regulation (EU) 2015/2365, securities financing transactions include repurchase transactions, securities or commodities lending and securities or commodities borrowing, buy-selling back transactions or sell-buy back transactions and margin lending transactions) or Total Return Swaps. Accordingly, disclosures required by Article 13 of the Regulation are not applicable for the year ended 31st December 2024. Regulatory Disclosures 98 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Regulatory Disclosures Shareholder Information Wind River Range Wyoming, United States Notice of Annual General Meeting 100 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Shareholder Information Important information: This document is important and requires your immediate attention. If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, it is recommended that you seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other appropriate independent professional adviser duly authorised pursuant to the Financial Services and Markets Act 2000 (as amended) if you are in the United Kingdom or, if not, from another appropriately authorised independent adviser. If you have sold or otherwise transferred all of your shares in the Company, please forward this document at once to the purchaser or transferee or to the stockbroker, banker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. This document should not, however, be forwarded or transmitted in or into any jurisdiction in which such act would constitute a violation of the relevant laws in such jurisdiction. If you have sold or transferred only part of your holding of shares, you should retain this document. Notice is hereby given that the sixty-eighth Annual General Meeting of JPMorgan US Smaller Companies Investment Trust plc will be held at 60 Victoria Embankment, London EC4Y 0JP on Tuesday, 17th June 2025 at 2.30 p.m. for the following purposes: 1. To receive the Directors’ Report and Financial Statements and the Auditor’s Report for the year ended 31st December 2024. 2. To approve the Directors’ Remuneration Policy. 3. To approve the Directors’ Remuneration Report for the year ended 31st December 2024. 4. To approve a final dividend of 3.1 pence per share. 5. To reappoint Mandy Donald as a Director of the Company. 6. To reappoint Christopher Metcalfe as a Director of the Company. 7. To reappoint Dominic Neary as a Director of the Company. 8. To reappoint Shefaly Yogendra as a Director of the Company. 9. To reappoint BDO LLP as Auditor to the Company. 10. To authorise the Directors to determine the Auditor’s remuneration. Special Business To consider the following resolutions: Continuation Vote – Ordinary Resolution 11. That the Company continues in existence as an investment trust for a further five year period. Authority to allot new ordinary shares – Ordinary Resolution 12. THAT the Directors of the Company be and they are hereby generally and unconditionally authorised, (in substitution of any authorities previously granted to the Directors), pursuant to and in accordance with Section 551 of the Act to exercise all the powers for the Company to allot shares in the Company and to grant rights to subscribe for, or convert any security into, shares in the Company (‘Rights’) up to an aggregate nominal amount of £150,632 (representing approximately 10% of the Company’s issued Ordinary share capital (excluding shares held in Treasury) or, if different, the number of ordinary shares which is equal to 10% of the Company’s issued share capital (excluding Treasury shares) as at the date of the passing of the resolution, provided that this authority shall expire at the Annual General Meeting of the Company to be held in 2025, or the date occurring 18 months from the date on which this resolution is passed, whichever is the earlier, unless renewed, revoked or varied by the Company at a general meeting prior to such time, save that the Company may before such expiry make offers or agreement which would or might require shares to be allotted on Rights to be granted after such expiry and so that the Directors of the Company may allot shares and grant Rights in pursuance of such offers or agreements as if the authority conferred hereby had not expired. Authority to disapply pre-emption rights on allotment of new ordinary shares – Special Resolution 13. THAT, subject to the passing of Resolution 11 set out above, the Directors of the Company be and they are hereby empowered pursuant to Sections 570 and 573 of the Companies Act 2006 (the ‘Act’) to allot equity securities (within the meaning of Section 560 of the Act) for cash pursuant to the authority conferred by Resolution 12 or by way of a sale of Treasury shares as if Section 561(1) of the Act did not apply to any such allotment or sale, provided that this power shall be limited to the allotment of equity securities and the sale of Treasury shares for cash up to an aggregate nominal amount of £150,632 (representing approximately 10% of the issued Ordinary share capital (excluding shares held in Treasury) of the Company as at the date of this notice at a price of not less than the net asset value per share and shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2026, or the date occurring 18 months from the date on which this Resolution is passed, whichever is the earlier, unless renewed at a general meeting prior to such time, save that the Company may before such expiry make offers, agreements or arrangements which would or might require equity securities to be allotted after such expiry and so that the Directors of the Company may allot equity securities in pursuance of such offers, agreements or arrangements as if the power conferred hereby had not expired. Authority to allot further new Ordinary shares – Ordinary Resolution 14. THAT, in addition to any authority granted by Resolution 12 above, the Directors of the Company be and they are Notice of Annual General Meeting J.P. Morgan Asset Management 101 Shareholder Information hereby generally and unconditionally authorised, pursuant to and in accordance with Section 551 of the Companies Act 2006 (the ‘Act’) to exercise all the powers of the Company to allot Ordinary shares in the Company and to grant rights to subscribe for, or to convert any security into, Ordinary shares in the Company (‘Rights’) up to an aggregate nominal amount of £150,632 (representing approximately 10% of the Company’s issued Ordinary share capital (excluding shares held in Treasury) or, if different, the number of ordinary shares which is equal to 10% of the Company’s issued share capital (excluding Treasury shares) as at the date of the passing of the resolution, provided that this authority shall expire at the conclusion of the next Annual General Meeting of the Company to be held in 2025, or the date occurring 18 months from the date on which this resolution is passed, whichever is the earlier, unless renewed, revoked or varied by the Company at a general meeting prior to such time, save that the Company may before such expiry make offers or agreements which would or might require Ordinary shares to be allotted or Rights to be granted after such expiry and so that the Directors of the Company may allot Ordinary shares and grant Rights in pursuance of such offers or agreements as if the authority conferred hereby had not expired. Authority to disapply pre-emption rights on allotment of further relevant securities – Special Resolution 15. THAT, subject to the passing of Resolution 14 set out above, and in addition to any authority granted by Resolution 13 above, the Directors of the Company be and they are hereby empowered pursuant to Sections 570 and 573 of the Companies Act 2006 (the ‘Act’) to allot equity securities (within the meaning of Section 560 of the Act) for cash pursuant to the authority conferred by Resolution 14 or by way of a sale of Treasury shares as if Section 561(1) of the Act did not apply to any such allotment or sale, provided that this power shall be limited to the allotment of equity securities and the sale of Treasury shares for cash up to an aggregate nominal amount of £150,632 (representing approximately 10% of the issued Ordinary share capital (excluding shares held in Treasury) of the Company as at 26th March 2025, this being the latest practicable date prior to the publication of this notice) at a price of not less than the net asset value per share and shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2026, or the date occurring 18 months from the date on which this Resolution is passed, whichever is the earlier, unless renewed at a general meeting prior to such time, save that the Company may before such expiry make offers, agreements or arrangements which would or might require equity securities to be allotted after such expiry and so that the Directors of the Company may allot equity securities in pursuance of such offers, agreements or arrangements as if the power conferred hereby had not expired. Authority to repurchase the Company’s shares – Special Resolution 16. THAT the Company be generally and subject as hereinafter appears unconditionally authorised in accordance with Section 701 of the Companies Act 2006 (the ‘Act’) to make market purchases (within the meaning of Section 693 of the Act) of its issued ordinary shares on such terms and in such manner as the Directors may from time to time determine. PROVIDED ALWAYS THAT (i) the maximum number of ordinary shares hereby authorised to be purchased shall be 9,031,887 or, if less, that number of ordinary shares which is equal to 14.99% of the Company’s issued share capital (less shares held in Treasury, if any) as at the date of the passing of this resolution; (ii) the minimum price which may be paid for an ordinary share shall be 2.5p; (iii) the maximum price which may be paid for an ordinary share shall be an amount equal to: (a) 105% of the average of the middle market quotations for an ordinary share taken from and calculated by reference to the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the ordinary share is purchased; or (b) the price of the last independent trade; or (c) the highest current independent bid; (iv) any purchase of ordinary shares will be made in the market for cash at prices below the prevailing net asset value per ordinary share (as determined by the Directors), at a sufficient discount to ensure shareholder value accretion; (v) the authority hereby conferred shall expire at the conclusion of the next annual general meeting of the Company to be held in 2026 or the date occurring 18 months from the date on which this Resolution is passed, whichever is the earlier, or at any other general meeting prior to such time; and (vi) the Company may make a contract to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority and may make a purchase of ordinary shares pursuant to any such contract notwithstanding such expiry. Authority to hold general meetings – Special Resolution 17. THAT, a general meeting, other than an Annual General Meeting, may be called on not less than 14 clear days’ notice. By order of the Board Lucy Dina, for and on behalf of JPMorgan Funds Limited, Company Secretary 27th March 2025 Notice of Annual General Meeting 102 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Shareholder Information Notes These notes should be read in conjunction with the notes on the reverse of the proxy form. 1. If law or Government guidance so requires at the time of the Meeting, the Chair of the Meeting will limit, in his sole discretion, the number of individuals in attendance at the Meeting. In addition, the Company may still impose entry restrictions on certain persons wishing to attend the AGM in order to secure the orderly and proper conduct of the Meeting. 2. A member entitled to attend and vote at the Meeting may appoint another person(s) (who need not be a member of the Company) to exercise all or any of his rights to attend, speak and vote at the Meeting. A member can appoint more than one proxy in relation to the Meeting, provided that each proxy is appointed to exercise the rights attaching to different shares held by him. 3. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Your proxy could be the Chair, another Director of the Company or another person who has agreed to attend to represent you. Details of how to appoint the Chair or another person(s) as your proxy or proxies using the proxy form are set out in the notes to the proxy form. If a voting box on the proxy form is left blank, the proxy or proxies will exercise his/their discretion both as to how to vote and whether he/they abstain(s) from voting. Your proxy must attend the Meeting for your vote to count. Appointing a proxy or proxies does not preclude you from attending the Meeting and voting in person. However, please note that in the current circumstances, your vote may not be counted where a proxy other than the Chair of the Meeting is appointed as additional third parties may not be permitted entry to the meeting. 4. Any instrument appointing a proxy, to be valid, must be lodged in accordance with the instructions given on the proxy form no later than 2.30 p.m. two business days prior to the Meeting (i.e. excluding weekends and bank holidays). 5. You may change your proxy instructions by returning a new proxy appointment. The deadline for receipt of proxy appointments also applies in relation to amended instructions. Any attempt to terminate or amend a proxy appointment received after the relevant deadline will be disregarded. Where two or more valid separate appointments of proxy are received in respect of the same share in respect of the same Meeting, the one which is last received (regardless of its date or the date of its signature) shall be treated as replacing and revoking the other or others as regards that share; if the Company is unable to determine which was last received, none of them shall be treated as valid in respect of that share. 6. To be entitled to attend and vote at the Meeting (and for the purpose of the determination by the Company of the number of votes they may cast), members must be entered on the Company’s register of members as at 6.30 p.m. two business days prior to the Meeting (the ‘specified time’). If the Meeting is adjourned to a time not more than 48 hours after the specified time applicable to the original Meeting, that time will also apply for the purpose of determining the entitlement of members to attend and vote (and for the purpose of determining the number of votes they may cast) at the adjourned Meeting. If, however, the Meeting is adjourned for a longer period then, to be so entitled, members must be entered on the Company’s register of members as at 6.30 p.m. two business days prior to the adjourned Meeting or, if the Company gives notice of the adjourned Meeting, at the time specified in that notice. Changes to entries on the register after this time shall be disregarded in determining the rights of persons to attend or vote at the Meeting or adjourned Meeting. 7. Entry to the Meeting will be restricted to shareholders and their proxy or proxies, with guests admitted only by prior arrangement. 8. A corporation, which is a shareholder, may appoint an individual(s) to act as its representative(s) and to vote in person at the Meeting (see instructions given on the proxy form). In accordance with the provisions of the Companies Act 2006, each such representative may exercise (on behalf of the corporation) the same powers as the corporation could exercise if it were an individual member of the Company, provided that they do not do so in relation to the same shares. It is therefore no longer necessary to nominate a designated corporate representative. Representatives should bring to the Meeting evidence of their appointment, including any authority under which it is signed. 9. Members that satisfy the thresholds in Section 527 of the Companies Act 2006 can require the Company to publish a statement on its website setting out any matter relating to: (a) the audit of the Company’s accounts (including the Auditor’s report and the conduct of the audit) that are to be laid before the AGM; or (b) any circumstances connected with Auditors of the Company ceasing to hold office since the previous AGM, which the members propose to raise at the Meeting. The Company cannot require the members requesting the publication to pay its expenses. Any statement placed on the website must also be sent to the Company’s Auditors no later than the time it makes its statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has been required to publish on its website pursuant to this right. 10. Pursuant to Section 319A of the Companies Act 2006, the Company must cause to be answered at the AGM any question relating to the business being dealt with at the Notice of Annual General Meeting J.P. Morgan Asset Management 103 Shareholder Information AGM which is put by a member attending the Meeting except in certain circumstances, including if it is undesirable in the interests of the Company or the good order of the Meeting or if it would involve the disclosure of confidential information. 11. Under Sections 338 and 338A of the 2006 Act, members meeting the threshold requirements in those sections have the right to require the Company: (i) to give, to members of the Company entitled to receive notice of the Meeting, notice of a resolution which those members intend to move (and which may properly be moved) at the Meeting; and/or (ii) to include in the business to be dealt with at the Meeting any matter (other than a proposed resolution) which may properly be included in the business at the Meeting. A resolution may properly be moved, or a matter properly included in the business unless: (a) (in the case of a resolution only) it would, if passed, be ineffective (whether by reason of any inconsistency with any enactment or the Company’s constitution or otherwise); (b) it is defamatory of any person; or (c) it is frivolous or vexatious. A request made pursuant to this right may be in hard copy or electronic form, must identify the resolution of which notice is to be given or the matter to be included in the business must be accompanied by a statement setting out the grounds for the request, must be authenticated by the person(s) making it and must be received by the Company not later than the date that is six clear weeks before the Meeting, and (in the case of a matter to be included in the business only) must be accompanied by a statement setting out the grounds for the request. 12. A copy of this notice has been sent for information only to persons who have been nominated by a member to enjoy information rights under Section 146 of the Companies Act 2006 (a ‘Nominated Person’). The rights to appoint a proxy can not be exercised by a Nominated Person: they can only be exercised by the member. However, a Nominated Person may have a right under an agreement between him and the member by whom he was nominated to be appointed as a proxy for the Meeting or to have someone else so appointed. If a Nominated Person does not have such a right or does not wish to exercise it, he may have a right under such an agreement to give instructions to the member as to the exercise of voting rights. 13. In accordance with Section 311A of the Companies Act 2006, the contents of this notice of meeting, details of the total number of shares in respect of which members are entitled to exercise voting rights at the AGM, the total voting rights members are entitled to exercise at the AGM and, if applicable, any members’ statements, members’ resolutions or members’ matters of business received by the Company after the date of this notice will be available on the Company’s website www.jpmussmallercompanies.co.uk . 14. The register of interests of the Directors and connected persons in the share capital of the Company and the Directors’ letters of appointment are available for inspection at the Company’s registered office during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted). it will also be available for inspection at the Annual General Meeting. No Director has any contract of service with the Company. 15. You may not use any electronic address provided in this Notice of Meeting to communicate with the Company for any purposes other than those expressly stated. 16. As an alternative to completing a hard copy Form of Proxy, you can appoint a proxy or proxies electronically by visiting www.investorcentre.co.uk/eproxy . You will need the Control Number, Shareholder Reference Number and PIN which are set out on your proxy form or the electronic broadcast you received from Computershare. 17. As at 26th March 2025 (being the latest business day prior to the publication of this Report and Accounts), the Company’s issued share capital consists of 65,406,275 ordinary shares (of which 5,153,521 are held in Treasury), carrying one vote each. Therefore, the total voting rights in the Company are 60,252,754. Electronic appointment – CREST Members and Proxymity CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the Meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual. See further instructions on the proxy form. In order for a proxy appointment or instruction 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 & International Limited’s 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 Company’s Registrar (CREST ID is 3RA50) by the latest time(s) for receipt of proxy appointments specified in the notice of the 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 Application Host) from which the Company’s agent is liable 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. If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform. For further information regarding Proxymity, please go to www.proxymity.io . Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy. Glossary of Terms and Alternative Performance Measures (‘APMs’) (Unaudited) 104 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Shareholder Information Alternative Performance Measure (APM) Alternative Performance Measures (APMs) are numerical measures of current, historical or future financial performance, financial position or cash flow that are not GAAP measures. APMs are intended to supplement the information in the financial statements, providing useful industry-specific information that can assist shareholders to better understand the performance of the Company. Where a measure is labelled as an APM, a definition and reconciliation to a GAAP measure is set out below: Return on share price (APM) Total return to the shareholder, on a last traded price to last traded price basis, assuming that all dividends received were reinvested, without transaction costs, into the shares of the Company at the time the shares were quoted ex-dividend. Year ended Year ended 31st December 31st December Total return calculation Page 2024 2023 Opening share price (p) 8 404.0 391.0 (a) Closing share price (p) 8 476.0 404.0 (b) Total dividend adjustment factor 1 1.007853 1.006545 (c) Adjusted closing share price (p) (d = b x c) 479.7 406.6 (d) Total return on share price (e = d / a – 1) +18.7% +4.0% (e) 1 The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the last traded price quoted at the ex-dividend date. Return on Net Assets (APM) Total return on net asset value (‘NAV’) per share, on a bid value to bid value basis, assuming that all dividends paid out by the Company were reinvested, without transaction costs, into the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend. Year ended Year ended 31st December 31st December Total return calculation Page 2024 2023 Opening cum-income NAV per share (p) 8 438.6 421.7 (a) Closing cum-income NAV per share (p) 8 484.6 438.6 (b) Total dividend adjustment factor 1 1.006979 1.005995 (c) Adjusted closing cum-income NAV per share (p) (d = b x c) 488.0 441.2 (d) Total return on net assets (e = d / a – 1) +11.3% +4.6% (e) 1 The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the cum-income NAV at the ex-dividend date. In accordance with industry practice, dividends payable which have been declared but which are unpaid at the balance sheet date are deducted from the NAV per share when calculating the total return on net assets. Benchmark return Total return on the benchmark, on a closing-market value to closing-market value basis, assuming that all dividends received were reinvested, without transaction costs, in the shares of the underlying companies at the time the shares were quoted ex-dividend. The benchmark is a recognised index of stocks which should not be taken as wholly representative of the Company’s investment universe. The Company’s investment strategy does not follow or ‘track’ this index and consequently, there may be some divergence between the Company’s performance and that of the benchmark. Net asset return relative to benchmark return This is the difference in the return on net assets compared to the benchmark return over the respective periods. Glossary of Terms and Alternative Performance Measures (‘APMs’) (Unaudited) J.P. Morgan Asset Management 105 Shareholder Information Gearing/(Net Cash) (APM) Gearing represents the excess amount above shareholders’ funds of total investments, expressed as a percentage of the shareholders’ funds. If the amount calculated is negative, this is shown as a ‘net cash’ position. As at As at 31st December 31st December 2024 2023 Gearing calculation (excluding effect of futures) Page £’000 £’000 Investments held at fair value through profit or loss 78 316,510 283,986 (a) Net assets 78 293,789 279,725 (b) Gearing (c = (a / b) – 1) 7.7% 1.5% (c) Ongoing charges (APM) The ongoing charges represent the Company’s management fee and all other operating expenses excluding finance costs payable, expressed as a percentage of the average of the daily cum-income net assets during the year and is calculated in accordance with guidance issued by the Association of Investment Companies. Year ended Year ended 31st December 31st December 2024 2023 Ongoing charges calculation Page £’000 £’000 Management Fee 76 2,033 2,003 Other administrative expenses 76 572 520 Total management fee and other administrative expenses 2,605 2,523 (a) Average daily cum-income net assets 283,072 270,757 (b) Ongoing charges (c = a / b) 0.92% 0.93% (c) Share Price Discount/Premium to Net Asset Value (‘NAV’) per Share (APM) If the share price of an investment trust is lower than the NAV per share, the shares are said to be trading at a discount. The discount is shown as a percentage of the NAV per share. The opposite of a discount is a premium. It is more common for an investment trust’s shares to trade at a discount than at a premium (page 8). 31st December 31st December 2024 2023 Share price (p) 8 476.0 404.0 (a) Net asset value per share (p) 8 484.6 438.6 (b) Discount to net asset value (c = a – b) / b) (1.8)% (7.9)% (c) Performance attribution Analysis of how the Company achieved its recorded performance relative to its benchmark. Performance Attribution Definitions: Asset allocation Measures the impact of allocating assets differently from those in the benchmark, via the portfolio’s weighting in different countries, sectors or asset types. Stock selection Measures the effect of investing in securities to a greater or lesser extent than their weighting in the benchmark, or of investing in securities which are not included in the benchmark. Glossary of Terms and Alternative Performance Measures (‘APMs’) (Unaudited) 106 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Shareholder Information Gearing/(net cash) Measures the impact on returns of borrowings or cash balances on the Company’s relative performance. Management fee/Other expenses The payment of fees and expenses reduces the level of total assets, and therefore has a negative effect on relative performance. Share Buyback Measures the enhancement to net asset value per share of buying back the Company’s shares for cancellation at a price which is less than the Company’s net asset value per share. Investing in the Company J.P. Morgan Asset Management 107 Shareholder Information You can invest in the Company’s shares and other J.P Morgan investment trusts through the following: 1. Via a third party provider Third party providers include: Please note this list is not exhaustive and the availability of individual trusts may vary depending on the provider. These websites are third party sites and J.P. Morgan Asset Management does not endorse or recommend any. Please observe each site’s privacy and cookie policies as well as their platform charges structure. 2. Through a professional adviser Professional advisers are usually able to access the products of all the companies in the market and can help you to find an investment that suits your individual circumstances. An adviser will let you know the fee for their service before you go ahead. You can find an adviser at unbiased.co.uk . You may also buy investment trusts through stockbrokers, wealth managers and banks. To familiarise yourself with the Financial Conduct Authority (FCA) adviser charging and commission rules, visit fca.org.uk . 3. Voting on Company Business and Attending the AGM The Board encourages all of its shareholders to exercise their rights by voting at general meetings and attending if able to do so. If you hold your shares on the Company’s main register, please refer to the notes to the AGM on page 103 and your form of proxy. If your shares are held through a platform, platform providers often provide shareholders with the ability to receive company documentation, to vote their shares and to attend general meetings, at no cost. Please refer to your investment platform for more details, or visit the Association of Investment Companies’ (‘AIC’) website at www.theaic.co.uk/aic/shareholder-voting-consumer- platforms for information on which platforms support these services and how to utilise them. AJ Bell Investcentre Barclays Smart investor Bestinvest Charles Stanley Direct Close brothers A.M. Self Directed Service Fidelity Personal Investing Freetrade Halifax Share Dealing Hargreaves Lansdown iDealing IG Interactive investor IWeb ShareDeal active Willis Owen X-O.co.uk Share Fraud Warning 108 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Shareholder Information Investment and pension scams are Be a ScamSmart investor and spot the warning signs Fraudsters will often: • contact you out of the blue • apply pressure to invest quickly • downplay the risks to your money • promise tempting returns that sound too good to be true • even ask you to not tell anyone else about it How to avoid investment and pension scams Y contacting our Consumer Helpline on 0800 111 6768 or using our reporting form using the link below. If you’ve lost money in a scam, contact Action Fraud on 0300 123 2040 or www.actionfraud.police.uk Scammers usually cold call, but contact can also come by email, post, word of mouth investment out of the blue, chances are it’s a high risk investment or a scam. Check the FCA Warning List Use the FCA Warning List to check the risks of a potential investment – you can also search our authorisation. Get impartial advice before investing – don’t use Be ScamSmart and visit 1 2 3 Information About the Company J.P. Morgan Asset Management 109 Shareholder Information Financial Conduct Authority (‘FCA’) Regulation of ‘non-mainstream pooled investments’, MiFID II ‘complex investments’ The Company currently conducts its affairs so that the shares issued by the Company can be recommended by independent financial advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an investment trust. The Company’s ordinary shares are not considered to be ‘complex instruments’ under the FCA’s ‘Appropriateness’ rules and guidance in the COB sourcebook. Consumer Duty Value Assessment The Manager conducted an annual value assessment on the Company in line with FCA rules set out in the Consumer Duty regulation. The assessment focuses on the nature of the product, including benefits received and its quality, limitations that are part of the product, expected total costs to clients and target market considerations. Within this, the assessment considers quality of services, performance of the Company (against both benchmark and peers), total fees (including management fees and entry and exit fees as applicable to the Company), and also considers whether all consumers, including vulnerable consumers, are able to receive fair value from the product. The Manager has concluded that the Company is providing value based on the above assessment. Task Force on Climate-related Financial Disclosures As a listed Investment Trust, the Company is exempt from reporting against the Task Force on Climate-related Financial Disclosures (‘TCFD’). However, in accordance with the requirements of the TCFD, in June 2024, the Investment Manager published its second UK TCFD Report for the Company in respect of the year ended 31st December 2023. The report discloses estimates of the portfolio’s climate-related risks and opportunities according to the FCA Environmental, Social and Governance Sourcebook and the TCFD Recommendations. The report is available on the Company’s website: www.jpmussmallercompanies.co.uk or visit tinyurl.com/JUSC-Home Gearing The Company has a secured US$35 million borrowing facility (with a US$5 million accordion option) in place, which is available for the Portfolio Managers to utilise within guidelines set by the Board. At 31st December 2024, US$30 million (£24.0 million) was drawn down on the facility with the gearing level being 7.7% at that date. Environmental, Social and Governance The Company considers financially material Environmental, Social and Governance factors in its investment analysis and when making investment decisions, with the goal of enhancing long-term, risk-adjusted financial returns. For further information, please refer to the Company’s website and the latest annual report. Information can also be found on the AIC website – www.theaic.co.uk Information About the Company 110 JPMorgan US Smaller Companies Investment Trust plc – Annual Report & Financial Statements 2024 Shareholder Information A member of the AIC History JPMorgan US Smaller Companies Investment Trust plc was incorporated in 1955 as Atomic Securities Trust Limited. It was dormant until 1962 when it changed its name to Fledgeling Investments Limited and began operations as an unquoted investment company. The trust was wholly owned by a number of Fleming investment trusts and invested in listed and unlisted companies in the UK and US which for reasons of small size, illiquidity or risk, were unsuitable for direct investment. In 1982, with assets of £9.2 million, it obtained a listing on the London Stock Exchange and gained investment trust status. At that time it changed its name to The Fleming Fledgeling Investment Trust plc and gradually broadened its investment scope into Europe and the Asian markets. In April 1998, the Company changed its name to The Fleming US Discovery Investment Trust plc and then again to JPMorgan Fleming US Discovery Investment Trust plc in May 2002. The Company adopted its present name in April 2010. Directors Dominic Neary (Chair) Mandy Donald (Audit Committee Chair) Christopher Metcalfe (Senior Independent Director) Shefaly Yogendra (Remuneration Committee Chair) Continuation Vote At the Annual General Meeting of the Company held in April 2020 a resolution of the shareholders approved the continuation of the Company until the Annual General Meeting to be held in 2025. Company Numbers Company registration number: 552775 London Stock Exchange number: JUSC LN ISIN: GB00BJL5F346 Bloomberg code: JUSC LN LEI: 549300MDD7SOXDMBN667 Reuters: JUSC.L Market Information The Company’s net asset value (NAV) per share is published daily via the London Stock Exchange. The Company’s shares are listed on the London Stock Exchange. The market price is shown daily in the Financial Times and on the J.P. Morgan internet site at www.jpmussmallercompanies.co.uk , or visit tinyurl.com/JUSCHome , where the share price is updated every 15 minutes during trading hours. Website www.jpmussmallercompanies.co.uk or visit tinyurl.com/JUSCHome Share Transactions The Company’s shares may be dealt in directly through a stockbroker or professional adviser acting on an investor’s behalf. Manager and Company Secretary JPMorgan Funds Limited Company’s Registered Office 60 Victoria Embankment London EC4Y 0JP Telephone: 0800 20 40 20 or +44 1268 44 44 70 email: jpmam.investment.trusts@jpmorgan.com For Company Secretarial and administrative matters, please contact Lucy Dina Depositary The Bank of New York Mellon (International) Limited 160 Queen Victoria Street London EC4V 4LA The Depositary has appointed JPMorgan Chase Bank, N.A. as the Company’s custodian. Custodian JPMorgan Chase Bank, N.A. 25 Bank Street Canary Wharf London E14 5JP Registrar (with effect from 15th July 2024) Computershare Investor Services PLC The Pavilions Bridgwater Rd Bristol BS99 6ZZ United Kingdom Telephone + 44 (0) 370 707 1423 Lines open 8.30 a.m. to 5.30 p.m. Monday to Friday Shareholders can manage their shareholding online by visiting the Investor Centre at www.investorcentre.co.uk , Shareholders just require their Shareholder Reference Number, which can be found on any communications previously received from Computershare. Independent Auditors BDO LLP Statutory Auditor 55 Baker Street London W1U 7EU Brokers Deutsche Numis 45 Gresham Street London EC2V 7BF GB A105 | 03/25 CONTACT 60 Victoria Embankment London EC4Y 0JP Freephone: 0800 20 40 20 Calls from outside the UK: +44 1268 44 44 70 Website: www.jpmussmallercompanies.co.uk