Final Results

RNS Number : 3465Y

JPMorgan Asian Investment Tst PLC

05 December 2017

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN ASIAN INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER 2017

Legal Entity Identifier: 5493006R74BNJSJKCB17

Information disclosed in accordance with the DTR 4.1.3

The Directors of JPMorgan Asian Investment Trust plc announce the Company's results for the year ended 30th September 2017.

chairman's statement

Performance

I am pleased to report that in the year to 30th September 2017 the Company's return on net assets was +21.5%, representing an outperformance of 2.7 percentage points over the benchmark, the MSCI AC Asia ex Japan Index, which returned +18.8% in sterling terms. The return to shareholders was +29.8%, reflecting a very welcome narrowing of the Company's discount from 13.4% to 8.0%. Most of the outperformance stemmed from good stock selection. The Investment Managers' report below gives more detail on the positioning of the portfolio, actions taken and performance attribution, together with their views on the outlook for the region.

Continuing Appointment of the Manager

At the Company's Annual General Meeting held on 2nd February 2017, shareholders voted overwhelmingly in favour of the Company's continuation as an investment trust for a further three year period. It is therefore pleasing that shareholders have been rewarded for their ongoing support.

Having delivered three consecutive years of strong relative performance, the Company's long term performance record is well ahead of both the benchmark and the average of its open-ended and investment trust peer group over one, three and five years and it is in the top quartile over three years. It is also worth noting that this Company has the lowest ongoing charges ratio of all its peers in the Asia ex-Japan investment trust sector.

The performance of the investment managers has also been acknowledged within the industry, with the Company recently being awarded best Asia Pacific Equities Investment Trust at the inaugural Citywire Investment Trust Performance Awards 2017. The awards were presented to investment trusts with the best underlying, risk-adjusted returns against their benchmarks over three years, highlighting the performance of investment managers who have done a good job with the assets in their care over that time. Based on the Board's evaluation of this performance record, the investment strategy and process, and the support that the Company receives from JPMF and JPMAM, the Board confirms that is it satisfied that the continuing appointment of the Manager is in the best interests of shareholders.

Dividend Policy and Discount Management

Following approval from shareholders, the Company has implemented a new dividend policy. This revised dividend policy aims to pay, in the absence of unforeseen circumstances, a regular quarterly dividend equivalent to 1% of the Company's NAV on the last business day of each financial quarter, being the end of December, March, June and September. These dividends will be paid from a combination of net revenue and capital reserves. However, this change in dividend policy is not accompanied by a change in the investment policy of the Company, with the Manager mandated to maximise total return to shareholders. In respect of the quarters to 31st December 2016, 31st March 2017, 30th June 2017 and 30th September 2017 dividends of 3.1p, 3.4p, 3.6p and 3.8p respectively were declared.

It is pleasing to report that the improvement in performance and the new dividend policy have contributed to a narrowing of the Company's discount, reducing it by 5.4 percentage points since the end of September 2016. Although the discount is now in line with its comparable peers, the Board would still like to see further reductions in the discount. It is hoped that once the Company's higher dividend is more fully recognised within the industry, a further re-rating of the Company will occur. Over the year the Company has conducted a small number of share buybacks, repurchasing a total of 965,500 shares when the discount widened beyond acceptable levels. The Company will conduct further buybacks as and when deemed necessary, with the aim of the Company's share price trading at a discount no wider than between 8% to 10%.

For full details of the rationale behind both the change of distribution policy and the use of the buyback powers, shareholders should refer to my predecessor's statement within the Company's financial statements for the year ended 30th September 2016. This is available on the Company's website.

Gearing

In December 2016, the Company put in place a new £40 million three year multi currency loan facility with Scotiabank, with the option of further increasing the facility to £60 million. The investment managers use this facility to gear the portfolio in periods when they believe this leverage will enhance shareholder returns. The Company was not geared at the end of the reporting period.

Board of Directors

Following many years of service to the Company, James Long retired as a Director and Chairman at the conclusion of the Annual General Meeting held in February this year. James Strachan also made the decision to retire at this juncture. I was appointed Chairman at the conclusion of the Annual General Meeting and the Board as it currently stands comprises four Directors with an appropriate balance of tenure and experience.

All Directors will retire at the Company's 2018 Annual General Meeting and, being eligible, will offer themselves for reappointment. The Nomination Committee, having considered their qualifications, performance and contribution to the Board and its committees, confirms that each Director continues to be effective and demonstrates commitment to the role and the Board recommends to shareholders that they be reappointed.

Annual General Meeting

The Company's 2018 Annual General Meeting will be held at 60 Victoria Embankment, London EC4Y 0JP on Monday, 26th February 2018 at 12.30 p.m. In addition to the formal proceedings, shareholders will have the opportunity to meet with the investment management team, who will be presenting and will be available to respond to questions on the Company's portfolio, the investment team's strategy and the outlook for Asian markets. Following the Meeting there will be an opportunity for shareholders to meet the Board, investment management personnel and other Company advisers informally and I look forward to seeing as many of you as possible.

Outlook

Asian equities have had a period of significant market improvement over the last year and the results of your Company reflect both that market change and the Manager's success in stock selection. Looking ahead, economic forecasts suggest a broadly positive environment and forecast earnings for companies in the region remain on a positive trajectory. Valuations in the region have increased to reflect this positive outlook, however, on balance, the Managers and your Board feel confident regarding further progress in the year ahead.

Bronwyn Curtis OBE

Chairman

5th December 2017

Investment managers' report

Summary

During the year under review, the Company's return on net assets was +21.5%, outperforming Asian stock markets, as measured by the MSCI AC Asia ex Japan Index, which delivered a +18.8% return in sterling terms. In this report, we discuss the market backdrop, examine the drivers of the Company's performance, and then consider the outlook for Asian stock markets in 2018.

Market Review

Asian equities rose over the 12 months to 30th September 2017; however, the period was characterised by high levels of volatility. The surprise victory of Donald Trump on 8th November 2016 resulted in higher US dollar and US bond yields, sending all Asian markets into negative territory in absolute terms. The US 10-year bond yield increased from 1.9% pre-election to 2.4%, and the decline in bond prices led to capital outflows and US dollar weakness. The threat of trade conflict was another source of negative sentiment towards Asia. Other major events during the last quarter of 2016 include the passing of Thailand's King Bhumibol, and the surprise announcement by the government of India to demonetise INR500 and INR 1000 banknotes.

The first quarter of 2017 saw Asian equities rallying strongly, registering one of the strongest starts in many years, with all markets and sectors posting positive absolute returns. Economic momentum extended gains from the second half of 2016, while the dollar modestly weakened as expectations for pro-growth policies from the US softened, while corporate earnings revisions continued to accelerate. The positive momentum carried through into the second and third quarters, supported by a rebound in exports and the broadening of positive earnings revisions.

China was the top performing market over the review period, boosted by positive cyclical momentum and strong corporate results as well as resilient macro data. Specifically, companies in the technology, financials and consumer sectors continued to report earnings strength, as the pass-through from upstream industrial price pressure to downstream sectors seemed to have been limited. At the same time, the Chinese government surprised the market in its effort to reduce excessive capacity in basic materials industries, which helped iron ore and metal prices rebound this year. In June, MSCI announced a 5% inclusion of A-shares, which is an acknowledgement of the effort China has made in its overall capital market liberalisation process.

Korea was the second best performing market, led by technology and materials stocks. Semiconductor names continued to benefit from the strong demand/supply dynamics in the NAND and DRAM memory markets as well as smartphone product cycles, while materials performed well on the back of rising commodity prices, partly as a result of Chinese supply-side reform measures. In politics, President Park was finally impeached in March, followed by the election of Moon Jae-in in May, resulting in the dissipation of political uncertainty, which boosted market confidence. The geopolitical tensions between the US and North Korea intensified over the summer; however, the market remained well supported by positive earnings momentum.

In contrast, India lagged behind the broader region as growth momentum in the economy softened, with agriculture and manufacturing being the key sources of weakness. This was also evident in corporate results, which were in aggregate below expectations, largely due to margin pressures. However, reform efforts continued to make progress with the implementation of the goods and services tax bill in July - the most significant change in the tax landscape in several decades. Despite the short-term disruptions, this is likely to be a significant positive in the long-term as the sustainable growth rate of the economy is expected to rise, with the formal sector gaining share from the informal economy. The RBI also announced a plan to resolve the problem of the non-performing loans of the top 12 defaulters, who account for approximately 25% of overall stressed loans. Whilst this could inevitably lead to higher provisions in the near term, it will also expedite the resolution process and pave the way for a new investment cycle in the long term.

Performance

For the Company's financial year ended 30th September 2017, the portfolio outperformed its benchmark index. Positive relative performance was primarily driven by stock selection, with positions in China and Korea being the standout contributors.

PERFORMANCE ATTRIBUTION

FOR THE YEAR ENDED 30TH SEPTEMBER 2017

	%	%
Contributions to total returns
Benchmark return		+18.8
Stock selection	+3.9
Currency effect	-0.1
Gearing/(net cash)	-0.4
Investment Manager contribution		+3.4
Dividends/residual	0.0
Portfolio return		+22.2
Management fee/other expenses	-0.8
Structural effects
Share buyback / issuance	0.1
Return on net assets		+21.5
Effect of movement in discount over the year		+8.3
Return to shareholders		+29.8

In China, a number of our core holdings in the information technology sector performed well over the period under review, including Alibaba, Tencent and AAC Technologies. These companies consistently delivered on earnings, and we continue to believe they are well positioned for further growth. Ping An Insurance was the top contributor at the stock level, as it benefited from intensified government scrutiny of Tier 2 players, coupled with strong growth in new business and improving underwriting standards. Elsewhere, consumer discretionary holdings such as Brilliance China Automotive and JD.com outperformed on the back of a new BMW model cycle for the former, and a positive surprise on margins and strong execution for the latter. CSPC Pharmaceutical was another notable contributor, with sales of its flagship stroke treatment, NBP, continuing to post strong growth. Finally, zero exposure to China Mobile also added to our relative performance as the stock continued to lag behind the overall market.

In Korea, overweight positions in two Samsung Group companies, Samsung Electronics and Samsung BioLogics, were the primary drivers for returns. Samsung Electronics continues to benefit from the strong demand for DRAM memory chips, while maintaining its leadership position over its peers in the NAND memory market, where the underlying demand is likely to remain strong. Samsung BioLogics, a global leading player in contract manufacturing outsourcing, was listed in November 2016, and returned more than 100% over the review period. Contract manufacturing for biologics is more complex than chemical manufacturing, thereby creating higher barriers to entry. At the same time, the economies of scale enjoyed by contract manufacturers are expected to drive growth at a faster rate than its in-house alternative. Samsung BioLogics will be doubling its capacity by the fourth quarter of 2018, moving from the third largest in this sector to the largest in the world.

On the negative side, stock selection was poor in Hong Kong, with our position in CK Hutchison underperforming for a variety of reasons, including the negative impact from the weaker sterling exchange rate on its UK investments and losses from the Indonesian telecom business due to the delay in rolling out the 4G network. AIA Group, which announced a change in CEO in the first quarter, also lagged over the review period as the market has been taking a wait-and-see approach towards the new management team. At the stock level, KEPCO was the largest detractor, as the company faced multiple headwinds including higher coal prices, uncertainties over tariffs and the construction of its two nuclear plants. Other notable detractors include IMAX China and Hyundai Glovis. IMAX China disappointed on box office sales, while Hyundai Glovis underperformed mainly due to concerns over potential tighter regulation by the new government and restructuring within the Hyundai Motor Group.

We have kept gearing at a low level throughout the year and actually had a small net cash position at the end of the reporting period. The model that we developed to assist with gearing decisions has provided no clear valuation signal to raise the level of gearing and despite retaining a positive view on equities, gearing is likely to remain at low levels with Asian equities no longer trading below average valuations.

Outlook

Asian equities have performed well since the beginning of 2017, supported by both a benign macro-economic environment and strong growth in corporate earnings. The global growth and reflation picture continues to improve, while the weaker US dollar has been beneficial for the Asian region. In addition to these positive external factors, a pick-up in intra-regional trade and better domestic consumption are driving GDP growth, translating into rising corporate earnings. Following this strong period of performance, Asian equities are no longer trading below average valuations, with trailing price to book close to its 10-year average. Nevertheless, we continue to find numerous opportunities for growth throughout the region.

From the country perspective, Korea continues to appeal, as valuations remain attractive whilst earnings momentum is strong, particularly in sectors such as financials and technology. We have trimmed our exposure to China to neutral over the review period, following its strong performance. There are concerns over high levels of debt and its government's ability to successfully implement lasting structural reforms; at the same time, growth rates are trending lower, though economic data has been generally strong, as are earnings trends.

We have moved to an underweight position in India as the number of short-term risks to growth increase. At the same time valuations levels have become extended while the underlying earnings trend remains lacklustre. Looking further ahead we retain a positive view on the longer-term outlook, as a number of reform measures such as the implementation of the Goods and Services Tax are on track but do not believe this will be reflected in returns for some time.

Technology remains a key sector, especially in areas such as e-commerce/ internet, semiconductor and in hardware components such as sensors and camera lenses. The turnaround in domestic consumption should also benefit discretionary spending, fueling Asian brands' ambition to take on multinationals in their own categories. Insurance continues to be an interesting area given the wide protection gap in countries such as China and India, while the current level of commodity prices may indicate company specific opportunities in selected names in materials and energy sectors.

Richard Titherington

Ayaz Ebrahim

Investment Managers

5th December 2017

Principal Risks

The Directors confirm that they have carried out a thorough assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. Three key risks have been identified and the ways in which they are managed or mitigated are summarised as follows:

Investment and Strategy: An inappropriate investment decision, in areas such as asset allocation or the level of gearing, may lead to underperformance against the Company's benchmark index and peer companies, and may result in the Company's shares trading on a wider discount. The Board seeks to mitigate these risks by diversification of investments through its investment restrictions and guidelines which are monitored and reported on by the Manager. The Manager provides the Directors with timely and accurate management information, including performance data and attribution analysis, revenue estimates and shareholder analysis. The Board monitors the implementation and results of the investment process with the investment managers, who attend all Board meetings, and reviews data which show statistical measures of the Company's risk profile. The Manager employs the Company's gearing tactically, within a strategic range set by the Board. The Board holds a separate meeting devoted to strategy each year.

Political and Economic: Changes in financial or tax legislation, may adversely affect the Company. The Manager makes recommendations to the Board on accounting, dividend and tax policies and the Board seeks external advice where appropriate. In addition, the Company is subject to political risks, such as the imposition of restrictions on the free movement of capital.

Operational Risk and Cybercrime: Disruption to, or failure of, the Manager's accounting, dealing or payments systems or the custodian's records could prevent accurate reporting and monitoring of the Company's financial position. Details of how the Board monitors the services provided by the Manager and its associates and the key elements designed to provide effective internal control are included with the Internal Control section of the Corporate Governance report on page 24 of the Annual Report. The threat of cyber attack, in all its guises, is regarded as at least as important as more traditional physical threats to business continuity and security. The Company benefits directly or indirectly from all elements of JPMorgan's Cyber Security programme. The information technology controls around the physical security of JPMorgan's data centres, security of its networks and security of its trading applications are tested by PricewaterhouseCoopers LLP and reported every six months against the AAF Standard.

The following risks, although not viewed as critical, have also been identified as important in our risk matrix:

Change of Corporate Control of the Manager: The Board holds regular meetings with senior representatives of JPMF and JPMAM in order to obtain assurance that the Manager continues to demonstrate a high degree of commitment to its investment trusts business through the provision of significant resources.

Market: Market risk arises from uncertainty about the future prices of the Company's investments. It represents the potential loss that the Company might suffer through holding investments in the face of negative market movements. 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.

Loss of Investment Team: A sudden departure of several members of the investment management team could result in a deterioration in investment performance. 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.

Financial: The financial risks faced by the Company include market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk, credit risk and the failure of any counterparty. Further details are disclosed in note 21 on pages 52 to 58 of the Annual Report.

Transactions with the Manager and related parties

Details of the management contract are set out in the Directors' Report on page 20 of the Annual Report. The management fee payable to the Manager for the year was £1,639,000 (2016: £1,277,000) of which £nil (2016: £nil) was outstanding at the year end.

During the year £36,000 (2016: £41,000), was payable to the Manager for the administration of savings scheme products, of which £23,000 (2016: £nil) was outstanding at the year end.

Safe custody fees amounting to £161,000 (2016: £131,000) were payable to JPMorgan Chase Bank N.A. during the year of which £43,000 (2016: £27,000) was outstanding at the year end.

The Manager may carry out some of its dealing transactions through group subsidiaries. These transactions are carried out at arm's length. The commission payable to JPMorgan Securities Limited for the year was £9,000 (2016: £15,000) of which £nil (2016: £nil) was outstanding at the year end.

Handling charges on dealing transactions amounting to £36,000 (2016: £41,000) were payable to JPMorgan Chase Bank N.A. during the year of which £8,000 (2016: £7,000) was outstanding at the year end.

During the year the Company held cash in the JPMorgan US Dollar Liquidity Fund, which is managed by JPMorgan. At the year end this was valued at £2,236,000 (2016: £nil). Interest amounting to £6,000 (2016: £4,000) was receivable during the year of which £2,000 (2016: £nil) was outstanding at the year end.

At the year end, total cash of £2,451,000 (2016: £1,065,000) was held with JPMorgan Chase Bank N.A. A net amount of interest of £1,000 (2016: £nil) was receivable by the Company during the year of which £nil (2016 £nil) was outstanding at the year end.

Full details of Directors' remuneration and shareholdings can be found on page 29 and in note 6 on page 45 of the Annual Report.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

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

•   select suitable accounting policies and then apply them consistently;

•   state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;

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

•   prepare the financial statements on the 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 enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006.

The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Under applicable law and regulations the Directors are also responsible for preparing a Strategic Report, a Directors' Report and Directors' Remuneration Report that comply with the law and those regulations.

Each of the Directors, whose names and functions are listed in Directors' Report confirm that, to the best of their knowledge:

•   the Company's financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

•   the Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

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

For and on behalf of the Board
Bronwyn Curtis OBE
Chairman

5th December 2017

statement of comprehensive income

for the year ended 30th September 2017

	2017			2016
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss	-	60,256	60,256	-	87,626	87,626
Net foreign currency losses	-	(839)	(839)	-	(1,700)	(1,700)
Income from investments	6,509	-	6,509	5,965	-	5,965
Interest receivable and similar income	7	-	7	4	-	4
Gross return	6,516	59,417	65,933	5,969	85,926	91,895
Management fee	(1,639)	-	(1,639)	(1,277)	-	(1,277)
Other administrative expenses	(754)	-	(754)	(737)	-	(737)
Net return on ordinary activities before finance costs and taxation	4,123	59,417	63,540	3,955	85,926	89,881
Finance costs	(224)	-	(224)	(292)	-	(292)
Net return on ordinary activities before taxation	3,899	59,417	63,316	3,663	85,926	89,589
Taxation	(181)	-	(181)	(356)	-	(356)
Net return on ordinary activities after taxation	3,718	59,417	63,135	3,307	85,926	89,233
Return per share	3.93p	62.87p	66.80p	3.48p	90.40p	93.88p

A fourth quarterly dividend of 3.8p (2016 final: 3.0p) per share has been proposed in respect of the year ended 30th September 2017, totalling £3,575,000 (2016: £2,851,000).

Details of dividends paid and proposed are given in note 3 below.

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.

The net return on ordinary activities after taxation represents the profit for the year and also the total comprehensive income.

Statement of Changes in equity

for the year ended 30th September 2017

	Called up		Exercised	Capital
	share	Share	warrant	redemption	Capital	Revenue
	capital	premium	reserve	reserve	reserves1	reserve1	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2015	23,762	31,646	977	25,121	132,198	4,752	218,456
Net return on ordinary activities	-	-	-	-	85,926	3,307	89,233
Dividends paid in the year (note 3)	-	-	-	-	-	(2,376)	(2,376)
At 30th September 2016	23,762	31,646	977	25,121	218,124	5,683	305,313
Repurchase of shares into Treasury	-	-	-	-	(2,892)	-	(2,892)
Net return on ordinary activities	-	-	-	-	59,417	3,718	63,135
Dividends paid in the year (note 3)	-	-	-	-	(2,988)	(9,401)	(12,389)
At 30th September 2017	23,762	31,646	977	25,121	271,661	-	353,167

¹ These reserves form the distributable reserves of the Company and may be used to fund distribution of profits to investors via dividend payments.

statement of financial position

at 30th September 2017

	2017	2016
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	349,053	319,185
Current assets
Derivative financial assets	-	1
Debtors	526	2,475
Cash and cash equivalents	4,687	1,065
	5,213	3,541
Current liabilities
Creditors: amounts falling due within one year	(1,099)	(17,413)
Net current assets/(liabilities)	4,114	(13,872)
Total assets less current liabilities	353,167	305,313
Net assets	353,167	305,313
Capital and reserves
Called up share capital	23,762	23,762
Share premium	31,646	31,646
Exercised warrant reserve	977	977
Capital redemption reserve	25,121	25,121
Capital reserves	271,661	218,124
Revenue reserve	-	5,683
Total shareholders' funds	353,167	305,313
Net asset value per share	375.4p	321.2p

statement of cash flows

for the year ended 30th September 2017

	2017	2016
	£'000	£'000
Net cash outflow from operations before dividends and interest	(2,721)	(1,935)
Dividends received	5,654	5,197
Interest received	5	4
Overseas tax recovered	473	164
Interest paid	(203)	(294)
Net cash inflow from operating activities	3,208	3,136
Purchases of investments	(161,805)	(124,394)
Sales of investments	193,140	112,291
Settlement of forward currency contracts	8	113
Net cash inflow/(outflow) from investing activities	31,343	(11,990)
Repurchase of shares into Treasury	(2,892)	-
Dividends paid	(12,389)	(2,376)
Repayment of bank loans	(15,602)	(10,000)
Drawdown of bank loans	-	13,273
Net cash (outflow)/inflow from financing activities	(30,883)	897
Increase/(decrease) in cash and cash equivalents	3,668	(7,957)
Cash and cash equivalents at start of year	1,065	9,017
Exchange movements	(46)	5
Cash and cash equivalents at end of year	4,687	1,065
Increase/(decrease) in cash and cash equivalents	3,668	(7,957)
Cash and cash equivalents consist of:
Cash and short term deposits	2,451	1,065
Cash held in JPMorgan US Dollar Liquidity Fund	2,236	-
Total	4,687	1,065

Notes to the financial statements 

for the year ended 30th September 2017

1. Accounting policies

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 FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in November 2014 and updated in January 2017.

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

The financial statements have been prepared on a going concern basis. The disclosures on going concern on page 27 of the Directors' Report in the Annual Report form part of these financial statements.

The policies applied in these financial statements are consistent with those applied in the preceding year.

2. Return per share

		2017	2016
		£'000	£'000
	Revenue return	3,718	3,307
	Capital return	59,417	85,926
	Total return	63,135	89,233
	Weighted average number of shares in issue during the year	94,511,001	95,046,993
	Revenue return per share	3.93p	3.48p
	Capital return per share	62.87p	90.40p
	Total return per share	66.80p	93.88p

3. Dividends

(a)   Dividends paid and proposed

		2017	2016
		£'000	£'000
	Dividend paid
	2016 final dividend of 3.0p (2015: 2.5p)	2,851	2,376
	First quarterly dividend of 3.1p (2016: nil)	2,947	-
	Second quarterly dividend of 3.4p (2016: nil)	3,204	-
	Third quarterly dividend of 3.6p (2016: nil)	3,387	-
	Total dividends paid in the period	12,389	2,376
	Dividend proposed
	Fourth quarterly dividend proposed of 3.8p (2016 final: 3.0p) per share	3,575	2,851

As of 1st October 2016, the Company adopted a new distribution policy. Further details can be found on page 16 of the Annual Report.

A fourth quarterly dividend of 3.8p has been declared and was paid on 7th November 2017 for the financial year ended 30th September 2017. In accordance with the accounting policy of the Company, this dividend will be reflected in the financial statements for the year ending 30th September 2018.

(b)  Dividend 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 the dividend proposed in respect of the financial year, shown below. The aggregate of the distributable reserves is £271,661,000 (2016: Revenue reserve £5,683,000. At the time only the revenue reserve was distributable).

		2017	2016
		£'000	£'000
	First quarterly dividend of 3.1p (2016: nil)	2,947	-
	Second quarterly dividend of 3.4p (2016: nil)	3,204	-
	Third quarterly dividend of 3.6p (2016: nil)	3,387	-
	Fourth quarterly dividend proposed of 3.8p (2016 final: 3.0p)	3,575	2,851
		13,113	2,851

The aggregate of the distributable reserves after the payment of the final dividend will amount to £268,086,000 (2016: Revenue reserve £2,832,000. At the time only the revenue reserve was distributable).

4. Net asset value per share

		2017	2016
	Net assets (£'000)	353,167	305,313
	Number of shares in issue	94,081,493	95,046,993
	Net asset value per share	375.4p	321.2p

5. Status of results announcement

2016 Financial Information

The figures and financial information for 2016 are extracted from the Annual Report and Accounts for the year ended 30th September 2016 and do not constitute the statutory accounts for the year. The Annual Report and Accounts include the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Register of Companies in due course.

2017 Financial Information

The figures and financial information for 2017 are extracted from the published Annual Report and Accounts for the year ended 30th September 2017 and do not constitute the statutory accounts for that year. The Annual Report and Accounts has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

5th December 2017

For further information:

Alison Vincent

JPMorgan Funds Limited                                

020 7742 4000

ENDS

A copy of the annual report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM

The annual report will shortly be available on the Company's website at www.jpmasian.co.uk where up-to-date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

JPMORGAN FUNDS LIMITED

 

END

 

 

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