Final Results

RNS Number : 1766U

JPMorgan Russian Securities PLC

16 December 2011

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN RUSSIAN SECURITIES PLC

FINAL RESULTS FOR THE YEAR ENDED 31ST OCTOBER 2011

Chairman's Statement

Investors in emerging market equities worldwide have had a difficult year as values have dropped sharply, especially in the August to October period of 2011. JPMorgan Russian has not been immune from this turbulence and during the financial year to 31st October 2011, the Company's net asset value total return was -17.0% and the return to Shareholders was -16.7%. These returns compare unfavourably with the return from the benchmark MSCI Russian 10/40 Equity Indices Index which fell by 2.9%. Our Investment Managers maintained their long-held underweight portfolio position in the energy sector vs. the benchmark index with a correspondingly high weighting in consumer investments. Although this stance has led to the Company outperforming the benchmark in recent years, it did not prove to be effective in the year just ended. Oil and gas stocks in the energy sector rose with the strong oil price whereas many of the consumer and financial stocks in the portfolio underperformed largely through lower valuation rather than any fundamental change. Notwithstanding the difficult year, it was encouraging to note that in October 2011, Kalina Concern, one of the long-standing consumer sector investments in the portfolio justified its long term retention by becoming the subject of an agreed takeover from Unilever at a substantial premium to its market value.

The Board has undertaken a thorough review of the Company's affairs covering performance together with a number of factors, including the current management arrangements, fees, discount control, secondary market liquidity of the Shares and the investment and portfolio construction approach. In conducting the review the Board has consulted external advisers and solicited the views of Shareholders owning over 50 per cent. of the Shares of the Company. The Board has made a number of amendments which we believe will benefit all Shareholders and these are detailed below.

Management Fee and Investment Approach

The Board has agreed with JPMorgan Asset Management (UK) Limited, that the Company's management fee be reduced from 1.5% to 1.2% on net assets with effect from 1st November 2011. As part of the review carried out, the Board and Investment Managers have agreed that market experience of the last year has led to a higher than anticipated divergence from the benchmark. In future the Investment Managers will limit the amount by which aggregate sector positions in the portfolio can deviate from the benchmark index and will also introduce a maximum overweight position against the benchmark index. We believe that these limits are a sensible risk mitigation approach and will continue to allow the Investment Management team to operate with a high degree of conviction. The Board is convinced that the investment strategy of the manager is appropriate and should lead both to good investment performance and the mitigation of the political and corporate governance risks that attend investment in emerging markets and particularly in Russia.

Discount Control

During the year the Company repurchased 160,000 shares for cancellation at an average discount to net asset value of 9.9%. The Board's objective remains to use the share repurchase authority to assist in managing any imbalance between supply and demand for the Company's shares, thereby reducing the volatility of the discount. The Board regularly reviews the level of discount at which the Company will repurchase its shares for cancellation. The Board has already expressed the view that they would like the Company's Shares to continue to trade at a discount of less than 10% and has implemented a new policy under which the Company intends, subject to market conditions, to buy in Shares at discounts of between 8% and 10% to achieve this. The market capitalisation and liquidity of the Shares are of paramount importance to our Shareholders and the Board believes that active management of the discount via share buybacks is the best mechanism to achieve this.

The Board will only repurchase shares at a discount to their prevailing net asset value, and issue shares when they trade at a premium to their net asset value, so as not to prejudice existing shareholders. The Board will be seeking authority to renew the Company's share issuance and buyback powers at the forthcoming Annual General Meeting.

Board of Directors

As part of its discussions regarding the composition of the Board, the Company's phased programme of renewal to refresh the Board's membership will shortly be completed. Following the appointment of Robert Jeens and Gill Nott this year, two of the founding Directors of the Company, Patrick Gifford and James Nicholson, will be retiring from the Board at the forthcoming Annual General Meeting. I would like to thank both Patrick and James for their immense contribution to the Company and wish them well for the future. Robert Jeens will be taking over the role of Chairman of the Audit Committee from James Nicholson. I too will be stepping down from the Board in the following months after the AGM. I am very pleased to report that the Board has agreed that Lysander Tennant should take over as Chairman once I step down. Lysander has considerable experience of the Russian market and the Directors are confident this will benefit Shareholders. I have very much enjoyed the stewardship of this Company and I am confident that it has been left in safe hands with the newly constituted Board.

In compliance with the UK Corporate Governance Code, all continuing Directors will be standing for re-election at the forthcoming Annual General Meeting. Further to this year's evaluations of the Directors, the Chairman, the Board and its Committees, the Board recommends to shareholders that, taking into account the Board's collective investment experience, knowledge of the Russian market and contribution to the Board's deliberations, all Directors be re-elected. Having been appointed during the year, Robert Jeens and Gillian Nott are required to seek election to the Board. It is also recommended that their appointments be supported.

Revenue and Earnings

The revenue loss after taxation for the year to 31st October 2011 was £350,000 which equates to a loss per share of 0.63p.

Continuation Vote

Following the review referred to above, the Board has resolved to introduce a continuation vote every 5 years and will propose the first continuation resolution at a General Meeting to follow the Annual General Meeting on 27th January 2012. The Directors believe that the changes the Board has introduced will benefit Shareholders and therefore recommends that Shareholders support the continuation of the Company. As the introduction of a continuation vote is not normal business that can be agreed at an Annual General Meeting, a Circular has been prepared and has been sent with this Annual Report. The Circular sets out in further detail the background to and reasons for the continuation vote proposal.

The Board firmly supports the Investment Management team in its investment stance and believes that the Company offers a valuable service to investors by providing a pure exposure to Russian equities in the form of a closed-end fund structure with a competitive fee. In 2012 the Company will mark the 10th Anniversary of its listing on the London Stock Exchange. Since launch the value of the Shares has increased from 100p to 480p (the price at the close of business on 12th December 2011).

Annual General Meeting and General Meeting

The Company's ninth Annual General Meeting will be held on Friday 27th January 2012 at 2.30 p.m., at 20 Moorgate, London, EC2R 6DA. The Annual General Meeting will be followed by a General Meeting, at which the Continuation Vote, referred to above will be voted on by Shareholders. In addition to the formal part of these meetings, there will be a presentation from the Investment Managers who will answer questions on the portfolio and performance. There will also be an opportunity to meet the Board, the Investment Managers and representatives of JPMAM. I look forward to seeing as many of you as possible at this meeting. Shareholders are asked to submit in writing any detailed or technical questions that they wish to raise at the AGM in advance to the Company Secretary at Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ. Alternatively you can lodge questions on the Company's website at www.jpmrussian.co.uk.

Outlook

Against a background of uncertainty in markets we believe that the current investment portfolio offers access to a range of attractive, well-run companies that will deliver good returns to Shareholders from what are now relatively low valuations. The ongoing volatility in the Russian market has also given the Investment Management team a number of interesting buying opportunities. This will be my last report as Chairman of the Company and I look forward to the Company's continuing success.

Pamela Idelson Smith

Chairman      

16th December 2011

Investment Managers' Report

Market Review and Performance

Having enjoyed a strong recovery in assets during 2009 and 2010 we saw a substantial fall in the net assets of the Company in the financial year to 31st October 2011. The Company's net asset value fell by 17.0% and underperformed the benchmark index which fell by 2.9% in the corresponding period.  The Russian stock-market in 2011 started off with three quarters of gently rising share prices followed by a sharp setback in August and September. The market's initial strong performance was on the back of a rising oil price, which is consistent with past patterns. The sharp falls experienced in the last three months of our financial year were unusual in that the oil price stayed strong whilst the market, particularly in the consumer and financial sectors fell. This is the first time we have witnessed this and it obviously affects the valuation of the energy dominated Russian equity market. Long-standing Shareholders will know our investment stance but we think it would be worthwhile to re-iterate our position. Our fundamental philosophy is:

•   We are long-term investors in structural growth companies with robust corporate governance and strong balance sheets. We believe these companies will outperform cyclical companies with weak balance sheets, poor free cash flow and poor governance.

•   We believe that Russia will "normalise", taking into account a range of factors such as the development of the legal system, the efficiency and transparency of trading and settlement, the role of local investors and the attitude towards minority investors.

We have reviewed in detail the market events of the last few months and believe that our investment stance is still appropriate. We want to invest for the long-term in high quality companies, which we believe will deliver the growth we and Shareholders expect. This position has lead us to hold a lower position in the energy sector than the benchmark index as we continue to have concerns over free cash flow in a number of Russian energy stocks. Correspondingly we have positioned the portfolio in a number of quality consumer and financial stocks where we have confidence in their future performance. There were three major reasons for the underperformance of the Company as compared to our benchmark index:

•   A contraction of valuation multiples across small and medium cap companies. Examples of this in our portfolio include Mostotrest, a transport and infrastructure company and Cherkizovo, the meat and poultry producer.

•   Earnings disappointments, although minor and temporary, led to a big de-rating of some consumer names. Examples of this would be Magnit, the discount supermarket operator and the second largest holding in the portfolio and Mobile Telesystems.

•   The global sell-off in markets and underperformance of materials, Novolipetsk Iron and Steel and Magnitogorsk Iron and Steel were prime examples of this.

We had previously believed that the most significant risk for the company was the large underweight position in the energy sector. However, it was the very weak performance of our active positions in some of our chosen portfolio companies that weighed heaviest on performance this year. On a positive note the biggest contribution to performance came from Kalina Concern. We have held a large position in this cosmetics company for a number of years and have now been rewarded with an agreed take-over by Unilever plc. The stock price rose from Rub 2,200 to Rub 4,000 on this news.

We have agreed with the Board of Directors that we will seek to improve portfolio construction and control risk in the future by limiting the amount by which sectors in the portfolio can deviate from the benchmark index. We have also introduced a maximum overweight stock position against the benchmark index.

In the current uncertain economic environment, we believe it is paramount to maintain a longer-term view on Russian equities. This makes it possible to see the real potential of an investment, rather than being influenced by short term market issues. With this in mind, we have set out our long-term outlook for the Russian market.

Long-term Russian Outlook           

Over the last decade, Russia has been transformed into one of the world's leading economies and markets. Total GDP has risen from USD 300 billion in 2001 to USD 1.7 trillion in 2011. Government debt to GDP is down to 10%, foreign exchange reserves have been built up, inflation has been running for an extended period at under 10% and the banking sector has assets of over USD 800 billion. A political elite surrounding Mr. Putin, many linked to the security services, has established control over the political system and many oligarchs have been jailed or have left the country. While some aspects of the outcome may be debatable, Russian society had undoubtedly been looking for greater political stability and was supportive of a leader with a 'strong hand'.

Russia has adopted new technology, such as mobile phones and the internet, and now has the largest number of subscribers in Europe for both of these. The Russian equity market has reached a capitalisation of nearly USD 1 trillion and trades USD 6 billion a day. Almost all listed companies now meet international financial reporting standards on their accounts and dividend yields are nearly at the same level as in the rest of the emerging markets.

Russia has come a long way over the last decade. However, it clearly still faces many challenges. In our view the key goal for Russia over the next decade is to reduce its oil dependency and increase the economy's natural growth rate. In order to accomplish this, we believe Russia's policymakers will increasingly need to focus on four key challenges:

•   Reduce the size of the state: In our view the size and the structure of the Russian state are heavy ballast for the economy. The simple and straight forward solution, reducing the size of the state, requires decentralisation and privatisation. The transfer of state assets into private ownership is currently hindered by the lack of a functioning legal system which is able to guarantee property rights.

•   Allow debate: Society has to change its passive status and demand more scrutiny of state policy. This is a normal evolution for young societies, and Russia is a very young state if you consider it was only reincarnated in 1992. A more powerful opposition would reduce social tensions and encourage an improvement in the operations of government. A powerful and free media would provide the much needed feedback to the state from citizens. As we write, Russia is experiencing a wave of political protests and it will be fascinating to see how this movement develops.

•   Invest in infrastructure: Russia's vast geographic scale is more of a liability than an asset for the state today. Upgrading infrastructure is a huge task. However, these changes could be powerful drivers for growth as they would unlock the country's potential and create opportunities for business as well as individuals. The development in the Far East and Black Sea area of Russia has demonstrated the potential of such large projects to the government; as such we expect to see more projects in future.

•   Reform the savings system: Trust is an important issue for the pension and banking system. Russia has a painful legacy from the 1990's, when the old Soviet savings system was dismantled. Building trust will take time, but it is crucial for the stability of economic growth. Development of the savings industry will provide support for privatisation (reduce the size of the state) and provide long-term funds (for investment in infrastructure).

We believe Mr. Putin is the most likely candidate to succeed Mr. Medvedev as president in May 2012. While we believe in the evolutionary development of the political system, we acknowledge that reforms along the lines above are likely to take a lot of time and effort. Ultimately, the framework for the evolution of the Russian system will be heavily influenced, as it was in the past decade, by the commodity markets. With oil prices currently at around USD 100/bbl, the need and pressure for reform is clearly lower than if prices were to drop below USD 50/bbl. We cannot know the exact trajectory of oil or any other commodity over the next decade, but we believe prices will be volatile, and reforms and developments in Russia will mirror that volatility.

The outlook for the future is therefore significantly dependent on the direction of the oil price which will itself influence the likelihood of economic and political reforms. If the reforms discussed above take place over the next decade we have no doubt that Russia will secure its place amongst the most powerful economies in the world and it will have been a fascinating period to observe.

Conclusion

Changes in Russia have and will continue to open up opportunities for investors in the Russian equity market. We continue to believe that investing in structural growth themes is a better approach than trying to outsmart the commodity cycle. This is the belief which drove the success of the Company over the last ten years and we believe it will deliver superior performance over the coming ten years. We are confident in the ability of the companies in the portfolio to achieve this.

Timing the Russian market is very difficult, if not impossible, owing to its volatility. We believe that the solution to this issue has three parts: understand the risks, understand valuations and extend the investment horizon. The closed-ended structure of the company addresses the last point, and having a global player with local expertise and presence addresses the first two. We believe the Russian market is currently attractively priced and offers compelling opportunities for long-term investors.

Oleg I. Biryulyov

Vitaly N. Kazakov

Investment Managers

16th December 2011

Principal Risks

With the assistance of the Manager 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 and Strategy: 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 to NAV. 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, liquidity 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 reviews data which show statistical measures of the Company's risk profile. The investment managers employ the Company's gearing tactically, within a strategic range set by the Board. However, currently the Company has no loan facility in place.

•   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.

•   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'). Details of the Company's approval are given under "Business of the Company" above. Were the Company to breach Section 1158, it might lose investment trust status and, as a consequence, capital gains within the Company's investment 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, as its shares are listed on the London Stock Exchange, the UKLA Listing Rules. 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 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 and the UKLA Listing Rules.

•   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 within the Internal Control section of the Corporate Governance report.

•   Financial: The financial risks faced by the Company include market price risk, interest rate risk, foreign currency risk, liquidity risk and credit risk. Further details are disclosed in note 19 of the Annual Report.

•   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.

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.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the annual report and accounts in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards 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 these financial statements, the Directors are required to:

•   select suitable accounting policies and then apply them consistently; and

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

•   state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Directors are responsible for keeping proper 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 accounts are published on the www.jpmrussian.co.uk website, which is maintained by the Company's Manager, JPMorgan Asset Management (UK) Limited ('JPMAM'). The maintenance and integrity of the website maintained by JPMAM is, so far as it relates to the Company, the responsibility of JPMAM. The work carried out by the auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the auditors accept no responsibility for any changes that have occurred to the accounts since they were initially presented on 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 in the Directors' Report 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 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.

For and on behalf of the Board

Pamela Idelson Smith

Chairman

16th December 2011

Income Statement

for the year ended 31st October 2011

		2011			2010
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments held at fair value through profit or loss		-	(63,520)	(63,520)	-	119,491	119,491
Net foreign currency gains/(losses)		-	(327)	(327)	-	73	73
Income from investments		7,548	-	7,548	6,033	-	6,033
Other interest receivable and similar income		2	-	2	1	-	1
Gross return/(loss)		7,550	(63,847)	(56,297)	6,034	119,564	125,598
Management fee		(5,760)	-	(5,760)	(4,828)	-	(4,828)
Other administrative expenses		(1,170)	-	(1,170)	(770)	-	(770)
Net return/(loss) on ordinary activities before  finance costs and taxation		620	(63,847)	(63,227)	436	119,564	120,000
Finance costs		(1)	-	(1)	(1)	-	(1)
Net return/(loss) on ordinary activities before  taxation		619	(63,847)	(63,228)	435	119,564	119,999
Taxation		(969)	-	(969)	(817)	-	(817)
Net return/(loss) on ordinary activities after taxation		(350)	(63,847)	(64,197)	(382)	119,564	119,182
Return/(loss) per share (note 2)		(0.63)p	(115.53)p	(116.16)p	(0.69)p	215.74p	215.05p

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 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

for the year ended 31st October 2011

	Called up		Capital
	share	Other	redemption	Capital	Revenue
	capital	reserve	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 31st October 2009	559	52,397	42	211,207	(4,168)	260,037
Repurchase of the Company's own shares for cancellation	(6)	(3,116)	6	-	-	(3,116)
Net return/(loss) on ordinary activities	-	-	-	119,564	(382)	119,182
At 31st October 2010	553	49,281	48	330,771	(4,550)	376,103
Repurchase of the Company's own shares for cancellation	(2)	(799)	2	-	-	(799)
Net loss on ordinary activities	-	-	-	(63,847)	(350)	(64,197)
At 31st October 2011	551	48,482	50	266,924	(4,900)	311,107

Balance Sheet

at 31st October 2011

		2011	2010
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		304,496	364,854
Investment in liquidity fund held at fair value through profit or loss		7,666	6,395
Total investment portfolio		312,162	371,249
Current assets
Debtors		319	1,986
Cash and short term deposits		102	2,998
		421	4,984
Creditors: amounts falling due within one year		(1,476)	(130)
Net current assets/(liabilities)		(1,055)	4,854
Total assets less current liabilities		311,107	376,103
Net assets		311,107	376,103
Capital and reserves
Called up share capital		551	553
Other reserve		48,482	49,281
Capital redemption reserve		50	48
Capital reserves		266,924	330,771
Revenue reserve		(4,900)	(4,550)
Total equity shareholders' funds		311,107	376,103
Net asset value per share (note 3)		564.4p	680.3p

Cash Flow Statement

for the year ended 31st October 2011

		2011	2010
		£'000	£'000
Net cash inflow/(outflow) from operating activities		1,453	(1,769)
Returns on investments and servicing of finance
Interest paid		(1)	(1)
Capital expenditure and financial investment
Purchases of investments		(76,764)	(174,458)
Sales of investments		73,827	182,635
Other capital charges		(285)	(382)
Net cash inflow/(outflow) from capital expenditure and financial investment		(3,222)	7,795
Net cash inflow/(outflow) before financing		(1,770)	6,025
Financing
Repurchase of the Company's own shares for cancellation		(799)	(3,116)
Net cash outflow from financing		(799)	(3,116)
Increase/(decrease) in cash for the year		(2,569)	2,909

 Notes to the Accounts

for the year ended 31st October 2011

1.  Accounting policies

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 Association of Investment Companies in January 2009. All of the Company's operations are of a continuing nature.

The accounts have been prepared on a going concern basis. In particular, in determining that the going concern basis is appropriate, the Directors have considered the continuation vote to be proposed to the shareholders at the General Meeting on 27th January 2012. Based on the indicative responses received from a significant proportion of the Company's investors as at the date of authorising these accounts, the Directors have no reason to believe that the proposal will not be passed.

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

2.  Return/(loss) per share

The revenue loss per share is based on the revenue loss attributable to the ordinary shares of £350,000 (2010: £382,000 loss) and on the weighted average number of shares in issue during the year of 55,263,230 (2010: 55,419,350).

The capital loss per share is based on the capital loss attributable to the ordinary shares of £63,847,000 (2010: £119,564,000 return) and on the weighted average number of shares in issue during the year of 55,263,230 (2010: 55,419,350).

The total loss per share is based on the total loss attributable to the ordinary shares of £64,197,000 (2010: £119,182,000 return) and on the weighted average number of shares in issue during the year of 55,263,230 (2010: 55,419,350).

3.  Net asset value per share

The net asset value per share is based on the net assets attributable to the ordinary shareholders of £311,120,000 (2010: £376,103,000) and on the 55,124,312 (2010: 55,284,312) shares in issue at the year end.

4.  Status of announcement

2010 Financial Information

The figures and financial information for 2010 are extracted from the published Annual Report and Accounts for the year ended 31st October 2010 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.

2011 Financial Information

The figures and financial information for 2011 are extracted from the Annual Report and Accounts for the year ended 31st October 2011 and do not constitute the statutory accounts for the year. The Annual Report and Accounts includes 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 Registrar of Companies in due course.

Annual Report and Accounts

The Annual Report and Accounts will be posted to shareholders on or around 16th December 2011 and will shortly be available on the Company's website (www.jpmrussian.co.uk ) or in hard copy format from the Company's Registered Office, Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ. 

JPMORGAN ASSET MANAGEMENT (UK) LIMITED

Please note that up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can be found at www.jpmrussian.co.uk.

For further information please contact:

David Barron /Craig Cleland 

 JPMorgan Asset Management (UK) Limited, 0207 742 6000

Will Rogers/Charlie Ricketts

Cenkos Securities plc    0207 397 1920/1910

Tony Langham /Louise Marriott

Press/Media Contacts, Lansons Communications 07979 692287/07723 075515

16th December 2011

- ENDS -

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.

 

END

 

 

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