Final Results

RNS Number : 0742T

JPMorgan Chinese Inv Tst PLC

07 December 2012

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN CHINESE INVESTMENT TRUST PLC

ANNOUNCEMENT OF FINAL RESULTS

The Directors of JPMorgan Chinese Investment Trust plc announce the Company's results for the year ended 30th September 2012.

Chairman's Statement

Performance

During the period, the Company's return to Ordinary shareholders, which includes the final dividend of 1.3p paid in December 2011, increased by 7.9%, which was a welcome improvement on last year's decline of 20.4%. The Company's total return on net assets, which comprises the change in net asset value ('NAV') with the dividend reinvested, increased by 13.9%. This was a marginal underperformance against the Company's benchmark, the MSCI Golden Dragon Index, which increased by 14.9% over the same period.

Revenue and Dividends

The revenue for the year, after taxation, was £1,313,000 (2011: £ 1,073,000). The revenue return per share, calculated on the average number of shares in issue, was 1.69 pence (2011: 1.38 pence).

The Board is recommending a dividend of 1.60 pence (2011: 1.30 pence) per share in respect of the financial year ended 30th September 2012 given the Company's return on its Revenue Account. Subject to shareholders' approval at the Annual General Meeting, this dividend will be paid on 29th January 2013 to shareholders on the register at the close of business on 21st December 2012.

As previously stated, shareholders should note that the Company's objective remains that of long term capital growth and dividends will vary from year to year accordingly.

Gearing

In January 2012 the Company renewed its £20 million facility with Scotiabank for a further 364 day period. The renewed facility included a decrease in the applicable margin for the Renewal Period (from the existing 1.75% to 1.00%) and a decrease in the commitment fees.

During the year the Company's gearing ranged from 5% to 12% geared and, at the time of writing, was 10%. The facility matures on 24th January 2013 at which point the Board will consider another gearing facility. The current facility allows the Investment Managers the flexibility to manage the gearing tactically within a range set by the Board of 10% net cash to 15% geared.

Subscription Shares

The Company issued Subscription shares to qualified shareholders on the basis of one Subscription share for every five Ordinary shares held on 16th April 2008. As a result of Class and General Meetings of Subscription shareholders and Ordinary shareholders held in June 2010 respectively, Subscription shareholders can choose to exercise their Subscription shares at a price of 168 pence per share at any time up to and including 15th May 2013, whereupon the rights under the Subscription shares will lapse. Since the Subscription shares were issued and up to the date of this report, 12,717,754 Subscription shares have been exercised into Ordinary shares raising proceeds of £4,640,750. Further details on the Subscription shares, including the apportionments for capital gains tax purposes and how they may be exercised, can be found on the Company's website at www.jpmchinese.co.uk.

Share Issues and Repurchases

The Directors have authority to issue new Ordinary shares for cash and to repurchase shares in the market for cancellation or to hold in Treasury.

During the year, the Company has issued 4,237 new Ordinary shares following the exercise of Subscription shares for a total consideration of £7,000.

The Company repurchased 1,225,338 shares during the year at prices below the prevailing net asset value per share and holds them in Treasury in accordance with the Board's policy. The Company will re-issue shares held in Treasury only at a premium to NAV.

The Board believes that its policy of share issuance and repurchases has helped to reduce discount volatility and recommends that the authorities be kept in place. Accordingly, it is seeking approval from shareholders to renew the share issue and repurchase authorities at the forthcoming Annual General Meeting.

Review of services provided by the Manager

During the year the Board carried out a thorough review of the investment management, secretarial and marketing services provided to the Company by the Manager, JPMorgan Asset Management (UK) Limited ('JPMAM'). 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 as a whole.

The fees payable to the Manager comprise a fixed basic annual management fee of 1% of total assets per annum and a performance related fee of 15% of any outperformance of the NAV total return over the benchmark. The amount of the latter fee actually payable to the Manager is capped at 1% of the net asset value in any one year, with any excess being carried forward and either paid out (subject to the 1% cap) or absorbed by any underperformance in subsequent years.

As the Company underperformed its benchmark in the financial year ended 30th September 2012 no performance fee was earned or paid to the Manager.

The Company's Ongoing Charges for the financial year, as a percentage of the average of the daily net assets during the year, were 1.41% before accounting for the performance fee payable and 1.41% after doing so.

Board of Directors

In July 2012, the Board through its Nomination Committee carried out the annual evaluation of the Directors, the Chairman, the Board itself and its committees. The evaluation was comprehensive and covered a range of topics including size and composition of the Board, Board information and processes, shareholder engagement and training and accountability, as well as the effectiveness of the Audit Committee, the Nomination and Remuneration Committee, the Chairman and the Directors. The report confirmed the efficacy of the Board.

As part of the evaluation process, the Board considered succession planning and, in light of the retirement of Nigel Melville and the resignation of Madam Yujiang Zhao due to ill-health, it resolved to appoint John Misselbrook to the Board with effect from 23rd July 2012. John has a wealth of investment experience and given his accountancy qualification and background in finance, the Board has also agreed that he will assume the responsibility as Chairman of the Audit Committee at the conclusion of the 2012 year end process. Having been appointed during the financial year and in accordance with the Company's Articles of Association, John will stand for appointment at the forthcoming Annual General Meeting.

The Nomination and Remuneration Committee discussed the matter of annual reappointment of Directors and in accordance with best practice under the UK Corporate Governance Code, all remaining Directors will stand for reappointment.

Continuation Vote

Included in the agenda for this year's Annual General Meeting is a resolution to continue the Company's existence as an investment trust for a further five years. The Board believes that the Greater China region remains an exciting area in which to invest and that the focus of JPMorgan Asset Management's dedicated China investment team under the leadership of Howard Wang, with its investment offices in Hong Kong, Shanghai and Taipei can continue to identify good investment opportunities for the Company. Accordingly, the Board has no hesitation in recommending continuation and would urge shareholders to vote in favour of this resolution.

Annual General Meeting

This year's Annual General Meeting will be held at The Armourers' Hall, 81 Coleman Street, London, EC2R 5BJ on Tuesday, 22nd January 2013 at 11.00 a.m. In addition to the formal proceedings, there will be a presentation by a representative of the investment management team, who will also be available to respond to questions on the Company's portfolio and investment strategy. I look forward to seeing as many of you as possible at the meeting. If you have any detailed questions, you may wish to raise these in advance with the Company Secretary. Shareholders who are unable to attend the Annual General Meeting in person are encouraged to use their proxy votes. Shareholders who hold their shares through CREST are able to lodge their proxy votes electronically.

Outlook

Investment sentiment towards China has swung from euphoria to bearishness which has created an attractive entry point for medium-term investors. The bear case for China suggested that over-investment and a property bubble would unwind creating a non-performing loan problem for the banking sector. The Board however sees mounting evidence that China is at the bottom of a U-shaped business cycle. The property market is correcting and manufacturing activity is showing an improving trend. Longer term rebalancing of the economy from investment to consumption is proceeding leading to a more sustainable model for growth. We believe that this provides the environment for the A-Share market to rebound and we are also optimistic about Taiwan where increasingly interesting companies may be found growing off the closer economic co-operation with the mainland.

William Knight

Chairman

7th December 2012

Investment Managers' Report

Over the 12 month period ended 30th September 2012, the Company achieved a total return on net assets of +13.9%, underperforming the benchmark return of +14.9% by 1.0%. In aggregate, stock selection for the Company was a positive contributor, whereas country allocation detracted from performance. The Company's underperformance was primarily driven by the holding in A-Share funds as onshore Chinese equities continued to underperform all three Greater China markets on weak domestic sentiment. However, strong stock selection in Hong Kong and Chinese H-Shares helped offset the negative impact of the A-Share holding in the portfolio.

China Review

In the last quarter of 2011, offshore-listed Chinese equities (MSCI China) rose by 8.1%. With growth slowing down, we saw initial signs of policy easing, evidenced by a Reserve Requirement Ratio ('RRR') cut of 0.5% on 30th November 2011, which subsequently led to a strong market rebound in December 2011. After almost two years of tightening monetary policy, this was a significant change in Government stance in reaction to falling inflation and increasing fears that this policy had added to the risk of a hard landing for the economy.

Chinese equities continued their upward trend in the first quarter of 2012, rising in the first two months on another RRR cut in late February and then fading in March on the lack of demand pick-up post Chinese New Year, as well as generally disappointing fourth quarter 2011 results. Over the next few months Chinese equities gave back most of their gains on continuing weak China economic data, renewed concerns surrounding the European debt crisis and a slowing US economy. The market, again, was volatile, rising slightly in April in anticipation of better seasonal demand recovery only to be disappointed by much worse than expected April and May data, driving the index down by double digits in May and June. However, Government policy was increasingly turning more pro-growth with further RRR cuts in May, interest rate cuts, home appliance subsidies, as well as accelerated approval of infrastructure projects.

In the third quarter of 2012 Chinese equities had still not recovered the gains made at the beginning of the year and offshore-listed Chinese equity (MSCI China) were only up 4.6% quarter-on-quarter, underperforming the broader region. Weak interim earnings and lack of further domestic policy easing was holding the market back. However, larger than expected quantitative easing by the European and US Central Banks, as well as National Development and Reform Commission's ('NDRC') approval of a large batch of Fixed Asset Investment related projects have lowered the market risk premium, supporting a September rebound. On the economic front, demand readings continued to be weak but showed some stabilisation, indicating that the Government's efforts to stimulate the economy via infrastructure projects as well as improving property sector fundamentals are slowly having an impact.

China A-Shares

Over the review period, China A-Shares performed considerably worse than their offshore-listed counterparts, with the CSI 300 underperforming the MSCI China Index by over 25%. Performance began to diverge in December 2011, with domestic investors' lackluster reaction to the RRR cut in November 2011.

It was only towards the end of the second quarter of 2012 that the performance gap began to widen. China A-Shares outperformed their H-Share counterparts until May, but this trend reversed in June when despite the interest rate cut, A-Shares lost almost 7% as economic indicators pointed to a further modest contraction in the Chinese economy.

This trend continued well into the third quarter and while many overseas markets have seen year-to-date or historical highs, the domestic A-Share market kept making new lows with the CSI 300 down 5.1% quarter-on-quarter. The market continued to decline despite China's economic data showing some signs of stabilisation and China's ruling party finally announcing the date for its party congress that will effect its once-in-a-decade leadership transition. The CSI 300 Index is now trading 8.1x 2013 price earnings with earnings per share growth at 14.6% - a level close to the September 2008 trough.

China Outlook

While negative earnings revisions may constitute a headwind, market expectations are generally muted for China given the lack of meaningful signals in recent months. We attribute the lack of policy response to a combination of the leadership transition and the recovering property market. Nonetheless, we continue to take a constructive stance on Chinese equities given the abundance of central bank support for asset prices coupled with undemanding valuations. We think external environments remain the key to risk appetite until completion of China's political transition (ending the policy vacuum period) while more visibility of earnings recovery may be required for a more sustainable market rally.

Hong Kong Review

Towards the end of 2011, Hong Kong equities, like their Chinese counterparts, staged a partial rebound on the back of improving sentiments in the global economy as well as decreasing fears of a 'hard landing' in China. Specifically, with inflation abating in China, the market is expecting more policy easing.

The rally in MSCI Hong Kong continued into the Chinese New Year on the back of improving global economic momentum coupled with lessening fears of a 'hard landing' in China. However, the rally was halted by the election of CY Leung to the Hong Kong Chief Executive post on a more populist platform. Moreover, the arrest of the two co‑chairmen of Sun Hung Kai Properties on potential corruption charges exacerbated market concerns.

Hong Kong equities gave back much of their first quarter gains as European debt concerns and declining growth momentum in the Chinese economy weighed on sentiment, but still outperformed the other two Greater China markets. While tourist arrivals continued to hold up, overall retail sales growth slowed given the high base effect and a drop in average spending per tourist hurt consumer stocks.

Hong Kong equities posted a strong move upwards in September 2012 led by the surging property sector, further spurred on by global easing in both the US and Europe. As expected, the incoming government administration introduced multiple measures to cool down the property market. However, the incremental near-term impact of these measures is limited given the rigidity of short-term land supply and already tight borrowing conditions. On the economic front, retail sales growth continued to slow down, especially for luxury products. August retail sales year‑on‑year growth came in below expectations at 4.5%.

Hong Kong Outlook

The persistent favourable global liquidity regime should provide support for asset pricing, which will be particularly positive for Hong Kong equities. However, this round of quantitative easing may have a smaller incremental impact. To note, market turnover on the Hong Kong market peaked at the beginning of September but appears to have settled back to the low level prior to the quantitative easing announcement. Policy easing in China has been held up due to the leadership transition and resilient property demand.

Taiwan Review

The MSCI Taiwan remained almost flat for the last quarter of 2011 as most investors took a wait and see approach as the race for January 2012 Presidential election remained very tight, with the incumbent KMT's President Ma only slightly ahead of the DPP's Tsai in various polls.

In the first three months of 2012, the TWSE Index gained 14.5% (in US$ terms). The market's response to President Ma's re-election was initially disappointing as investors were reluctant to participate ahead of a long, post-election Chinese New Year break. However, the Taiwan market played catch up after the break, driven by KMT victories in the presidential and legislative elections, which should result in steady progress in cross‑strait relations with China. Strong results from Apple, better global economic data and the European Central Bank boosting liquidity helped to lift the market in the first two months of the quarter.

Much like the other two Greater China markets, the TWSE Index gave back much of the year-to-date gains in the second quarter. Domestically, the proposed energy price hikes and capital gain tax for equity trading were in the spotlight over the quarter. This, coupled with increasingly negative news flow on the European debt crisis and weaker than expected data points from the US, weighed on markets. Taiwan exports growth had stalled and this was expected to remain so for the rest of the year due to falling demand from Europe.

For the three months ended 30th September 2012, the market rose strongly thanks to the announcement concerning further monetary easing. The TWSE Index achieved a total return of 11.5% over the quarter in US$ terms. Both retail and institutional buyers were aggressive in adding to their positions. News surrounding the launch of the iPhone 5 dominated the headlines. A supply constraint of key components have constituted a bottleneck for the iPhone 5, leading to disappointing sales (on already high expectations) during the first weekend after launch.

Taiwan Outlook

After the launch of the iPhone 5 and the new iPad Mini, other new tablets are expected to be introduced soon. At the same time, low-end smart-phones in China are gaining very strong momentum and the supply chain should benefit from this trend. The non-technology space has seen positive earning revisions in sectors such as financials, property and tourism.

Greater China Outlook

We continue to take a constructive stance on Greater China markets given the abundance of central bank support for asset prices coupled with the nascent housing market recoveries in China and the US. Furthermore, China's growth momentum - held back by aggressive policy tightening domestically - may soon see evidence of re-acceleration or stabilisation, following a shift in policy stance and the end of the political transition period.

Howard Wang

Emerson Yip

Shumin Huang

William Tong

Investment Managers

7th December 2012

Principal Risks

Investors should note that there can be significant economic and political risks inherent in investing in emerging economies. As such, the Greater China markets can exhibit more volatility than developed markets and this should be taken into consideration when evaluating the suitability of the Company as a potential investment.

With the assistance of the Manager, JPMorgan Asset Management (UK) Limited ('JPMAM'), the Board has drawn up a risk matrix, which identifies the key risks to the Company. These key risks fall broadly under the following categories:

•   Investment Underperformance: An inappropriate investment strategy, for example asset allocation or the level of gearing, may lead to underperformance against the Company's benchmark index and peer companies, resulting in the Company's shares trading on a wider discount. The Board manages these risks by diversification of investments through its investment restrictions and guidelines which are monitored and reported on by the Manager. JPMAM provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, transaction reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the investment managers, who attend all Board meetings, and review data which show statistical measures of the Company's risk profile. The investment managers employ the Company's gearing within a strategic range set by the Board. The Board holds a separate Board meeting devoted to strategy each year.

•   Loss of Investment Team: A sudden departure of several members of the investment management team could result in a short-term 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.

•   Discount: A disproportionate widening of the discount relative to the Company's peers could result in a loss of value for Shareholders. In order to manage the Company's discount, which can be volatile, the Company operates a share repurchase programme.

•   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 JPMAM. The Board monitors the implementation and results of the investment process with the Manager.

•   Political and Economic: Changes in financial or tax legislation, including in the European Union, 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 administrative risks, such as the imposition of restrictions on the free movement of capital. These risks are discussed by the Board on a regular basis.

•   Accounting, Legal and Regulatory: In order to qualify as an investment trust, the Company must comply with Section 1158 of the Corporation Tax Act 2010 ('Section 1158'). Were the Company to breach Section 1158, it may lose investment trust status and, as a consequence, gains within the Company's portfolio would be subject to Capital Gains Tax. The Section 1158 qualification criteria are continually monitored by JPMAM and the results reported to the Board each month. The Company must also comply with the provisions of the Companies Act 2006 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules and Disclosure and Transparency Rules ('DTRs'). A breach of the Companies Act 2006 could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules or DTRs could result in the Company's shares being suspended from listing which in turn would breach Section 1158. The Board relies on the services of its Company Secretary, JPMAM, and its professional advisers to ensure compliance with the Companies Act 2006, the UKLA Listing Rules and DTRs.

•   Corporate Governance and Shareholder Relations: Details of the Company's compliance with Corporate Governance best practice, including information on relations with shareholders, are set out in the Corporate Governance section of the Annual Report.

•   Operational: Disruption to, or failure of, JPMAM'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 JPMAM and its associates and the key elements designed to provide effective internal control are included with the Risk Management and Internal Control section of the Corporate Governance statement.

•   Financial: The financial risks faced by the Company include market risk, liquidity risk and credit risk. Further details are disclosed in note 22 of the Annual Report.

Related Parties Transactions

During the financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company during the year.

Directors' Responsibilities

The Directors each confirm to the best of their knowledge that:

a)         the financial statements have been prepared in accordance with applicable UK accounting standards, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

b)         the Annual Report, to be published shortly, 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 they face.

For and on behalf of the Board

William Knight
Chairman
7th December 2012

Income Statement

for the year ended 30th September 2012

	2012			2011
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments held at fair value through profit or loss	-	12,133	12,133	-	(23,762)	(23,762)
Net foreign currency gains/(losses)	-	244	244	-	(171)	(171)
Income from investments	3,431	-	3,431	3,546	-	3,546
Other interest receivable and similar income	-	-	-	1	-	1
Gross return/(loss)	3,431	12,377	15,808	3,547	(23,933)	(20,386)
Management fee	(1,095)	-	(1,095)	(1,285)	-	(1,285)
Performance fee writeback	-	-	-	-	346	346
Other administrative expenses	(451)	-	(451)	(487)	-	(487)
Net return/(loss) on ordinary activities before  finance costs and taxation	1,885	12,377	14,262	1,775	(23,587)	(21,812)
Finance costs	(214)	-	(214)	(269)	-	(269)
Net return/(loss) on ordinary activities before  taxation	1,671	12,377	14,048	1,506	(23,587)	(22,081)
Taxation	(358)	-	(358)	(433)	-	(433)
Net return/(loss) on ordinary activities after taxation	1,313	12,377	13,690	1,073	(23,587)	(22,514)
Return/(loss) per Ordinary share (Note 3)	1.69p	15.90p	17.59p	1.38p	(30.33)p	(28.95)p

A dividend of 1.60p (2011: 1.30p) per Ordinary share has been proposed in respect of the year ended 30th September 2012, totalling £1,226,000 (2011: £1,012,000). Further details are given in note 2.

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. The Total column represents all the information that is required to be disclosed in a Statement of Total Recognised Gains and Losses ('STRGL'). For this reason a STRGL has not been presented.

.

Reconciliation of Movements in Shareholders' Funds

	Called up share capital	Share premium	Exercised warrant reserve	Capital redemptionreserve	Other reserve	Capital reserves	Revenuereserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2010	19,455	12,281	3	581	37,392	52,454	1,603	123,769
Issue of Ordinary shares to the market	125	760	-	-	-	-	-	885
Exercise of Subscription shares into Ordinary shares	(1)	1	-	-	-	-	-	-
Issue of Ordinary shares on exercise of Subscription shares	15	81	-	-	-	-	-	96
Net (loss)/return on ordinary activities	-	-	-	-	-	(23,587)	1,073	(22,514)
Dividends appropriated in the year	-	-	-	-	-	-	(1,166)	(1,166)
At 30th September 2011	19,594	13,123	3	581	37,392	28,867	1,510	101,070
Issue of Ordinary shares on exercise of Subscription shares	1	6	-	-	-	-	-	7
Repurchase of Ordinary shares into Treasury	-	-	-	-	-	(1,535)	-	(1,535)
Net return from ordinary activities	-	-	-	-	-	12,377	1,313	13,690
Dividends appropriated in the year	-	-	-	-	-	-	(1,012)	(1,012)
At 30th September 2012	19,595	13,129	3	581	37,392	39,709	1,811	112,220

Balance Sheet

at 30th September 2012

	2012	2011
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	125,194	104,414
Current assets
Debtors	138	3,372
Cash and short term deposits	691	2,813
	829	6,185
Creditors: amounts falling due within one year	(13,803)	(9,529)
Net current liabilities	(12,974)	(3,344)
Total assets less current liabilities	112,220	101,070
Net assets	112,220	101,070
Capital and reserves
Called up share capital	19,595	19,594
Share premium	13,129	13,123
Exercised warrant reserve	3	3
Capital redemption reserve	581	581
Other reserve	37,392	37,392
Capital reserves	39,709	28,867
Revenue reserve	1,811	1,510
Total equity shareholders' funds	112,220	101,070
Net asset value per Ordinary share (Note 4)	146.4p	129.8p

Company registration number: 02853893.

Cash Flow Statement

for the year ended 30th September 2012

		2012	2011
		£'000	£'000
Net cash inflow/(outflow) from operating activities		1,256	(312)
Returns on investments and servicing of finance
Interest paid		(215)	(268)
Net cash outflow from returns on investments and servicing of finance		(215)	(268)
Capital expenditure and financial investment
Purchases of investments		(110,901)	(140,080)
Sales of investments		105,834	140,510
Other capital charges		(96)	(48)
Net cash inflow/(outflow) from capital expenditure and financial investment		(5,163)	382
Dividend paid		(1,012)	(1,166)
Net cash outflow before financing		(5,134)	(1,364)
Financing
Net drawdown of short term loan		3,239	1,728
Issue of Ordinary shares to the market		-	885
Repurchase of Ordinary shares into Treasury		(80)	-
Issue of Ordinary shares on exercise of Subscription shares		7	96
Net cash inflow from financing		3,166	2,709
Net (decrease)/increase in cash for the year		(1,968)	1,345

Notes to the Accounts

for the year ended 30th September 2012

1.  Accounting policies

     Basis of accounting

     The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the AIC in January 2009.

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

     The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments at fair value through profit or loss.

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

2.  Dividends

     (a)Dividends paid and proposed

		2012	2011
		£'000	£'000
	2011 Final dividend paid of 1.3p (2010: 1.5p)	1,012	1,166
	Final dividend proposed of 1.6p (2011: 1.3p)	1,226	1,012

     The final dividend proposed in respect of the year ended 30th September 2012 is subject to shareholder approval at the forthcoming Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the accounts for the year ending 30th September 2013.

(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, as follows:

		2012	2011
		£'000	£'000
	Final dividend proposed of 1.6p (2011: 1.3p)	1,226	1,012

The revenue available for distribution by way of dividend for the year is £1,313,000 (2011: £1,073,000).

3.  Return/(loss) per Ordinary share

     The revenue return per share is based on the revenue return attributable to the Ordinary shares of £1,313,000 (2011: £1,073,000) and on the weighted average number of shares in issue during the year of 77,848,220 (2011: 77,769,707) excluding shares held in Treasury.

     The capital gain per share is based on the capital gain attributable to the Ordinary shares of £12,377,000 (2011: £23,587,000 loss) and on the weighted average number of shares in issue during the year of 77,848,220 (2011: 77,769,707) excluding shares held in Treasury.

     The total gain per share is based on the total gain attributable to the Ordinary shares of £13,690,000(2011: £22,514,000 loss) and on the weighted average number of shares in issue during the year of 77,848,220 (2011: 77,769,707) excluding shares held in Treasury.

     The Company has in issue 12,729,550 Subscription shares which are convertible into Ordinary shares at a price of 168 pence at any time up to and including 15th May 2013, whereupon the rights under the Subscription shares will lapse. There was no dilution of the return per Ordinary share in respect of the exercise rights attaching to the Subscription shares (year ended 30th September 2011: no dilution).

4.  Net asset value per Ordinary share

     The net asset value per share is based on the net assets attributable to the Ordinary shareholders of £112,220,000 (2011: £101,070,000) and on the 76,643,520 (2011: 77,864,621) Ordinary shares in issue at the year end excluding 1,225,338 (2011: nil) shares held in Treasury.

5. Status of results announcement

2011 Financial Information

The figures and financial information for 2011 are extracted from the published Annual Report and Accounts for the year ended 30th September 2011 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.

2012 Financial Information

The figures and financial information for 2012 are extracted from the Annual Report and Accounts for the year ended 30th September 2012 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.

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

JPMORGAN ASSET MANAGEMENT (UK) LIMITED

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.jpmchinese.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 ASSET MANAGEMENT (UK) LIMITED

 

END

 

 

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