Final Results

RNS Number : 0942W

JPMorgan Indian Invest Trust PLC

20 December 2013

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN INDIAN INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER 2013

The Directors of JPMorgan Indian Investment Trust plc announce the Company's results for the year ended 30th September 2013.

Chairman's Statement

The Year Under Review

The year to 30th September 2013 has been an extremely difficult one for investors in the Indian stockmarket. The Company under-performed its benchmark, the MSCI India Index (in sterling terms), providing a diluted net asset value ('NAV') return of -13.7% compared with the benchmark return of -12.7%. The return to shareholders was

-17.6%, reflecting a widening of the discount, from 10.8% to 14.8%, over the year.

Our Investment Managers set out the key factors affecting the Indian market and the Company's performance during the financial year, and the prospects for the future, in their report.

Gearing

The Company has renewed its one year floating rate US$25 million loan facility with the Royal Bank of Scotland plc to provide the Investment Managers with the flexibility to gear the portfolio should it be deemed appropriate. As at the date of this report, the facility is undrawn.

Board of Directors

Peter Sullivan will retire from the Board at the conclusion of the forthcoming Annual General Meeting, due to his other business commitments.

Rosemary Morgan was appointed a Director on 1st December 2013. Rosemary brings considerable investment experience to the Board, having spent much of her career managing Japanese equity portfolios at AIB Govett. She is also an independent non-executive director of Schroder Asia Pacific Fund plc, a director of Landau Forte Charitable Trust, which is a sponsor of academy schools, and a trustee of the London Library Pension Fund.

During the year, an independent external evaluation of the Board and its Committees was conducted. It concluded that the composition of the Board is appropriate and that it works in a collegiate and effective manner. In accordance with corporate governance best practice, all of the Directors will retire at this year's Annual General Meeting and, aside from Mr Sullivan, will offer themselves for reappointment.

Investment Manager

The Board has reviewed the investment management, company secretarial and marketing services provided to the Company by JPMorgan Asset Management (UK) Limited ('JPMAM'). This annual review included their performance record, management processes, investment style, resources and risk control mechanisms. The Board was satisfied with the results of the review and therefore in the opinion of the Directors, the continuing appointment of JPMAM for the provision of these services, on the terms agreed, is in the best interests of shareholders as a whole.

AIFMD

The implementation of the Alternative Investment Fund Managers Directive ('AIFMD') heralds significant regulatory change. The Company must comply with the AIFMD no later than July 2014. The Board is taking independent legal advice on this matter, but has agreed in principle to appoint JPMAM as its Alternative Investment Fund Manager. Directors' duties under company law and the London Stock Exchange rules will remain but there will be additional reporting requirements and the Company will need to appoint a depositary to oversee the Company's custody and cash management operations. We expect to provide more information to shareholders when the next half year report is published in May 2014.

Continuation of the Company

In accordance with the Company's articles of association, an ordinary resolution will be put to shareholders at the forthcoming Annual General Meeting that the Company continue in existence as an investment trust for a further five year period.

On 29th November 2013, the Board announced that, following consultation with the Company's large shareholders and its advisers, it planned to introduce, subject to the passing of the resolution in favour of the Company's continuation, a reduction in the management fee from 1.2% to 1.0% of total assets; a reduction in the notice period to six months (for performance reasons, 12 months for all other reasons); and an obligation on the Board to make a tender offer to shareholders at net asset value less costs if, over the next three years (from the start of the current financial year, being 1st October 2013), the Company underperforms its benchmark. Should it be required to implement such a tender, it would be for up to 25% of the Company's issued share capital. The Board believes these measures are in shareholders' interests as they will reduce operating costs and further incentivise the Manager to produce outperformance.

The Board believes that the long term outlook for India remains favourable, despite some near term challenges. Equally it believes that JPMAM has the resources and process to deliver better results for shareholders. Accordingly, the Board believes that the continuation of the Company is in the best interests of all shareholders and strongly recommends that shareholders vote in favour of the resolution, as they intend to do in respect of their own holdings. Given the importance of this resolution, shareholders are encouraged to vote, either in person at the Annual General Meeting, or by completing a Form of Proxy/Voting Instruction Form.

If the resolution is not passed, the Company's articles of association require that the Directors shall within four months of the Annual General Meeting convene a General Meeting of the Company at which a special resolution will be proposed, designed to result in the holders of shares in the Company receiving, in lieu of their shares, units in a unit trust scheme (or equivalent) or in the reorganisation of the Company's share capital in some other manner or which shall be a resolution requiring the Company to be wound up voluntarily.

Share Issues and Repurchases

At the Annual General Meeting in January 2013 shareholders granted the Directors authority to repurchase up to 14.99% of the Company's shares for cancellation or into Treasury. The Company repurchased 10,313,000 shares into Treasury during the year and your Board believes that such a facility is an important tool in the management of discount volatility and is, therefore, seeking approval from shareholders to renew the authority at the forthcoming Annual General Meeting. Purchases of shares to be held in Treasury will be made in accordance with the Listing Rules of the UK Listing Authority and the Companies (Acquisitions of Own Shares) (Treasury Shares) Regulations 2003 as amended and any reissue from Treasury would only be at a premium to NAV.

Shareholders also granted the Directors authority to issue new Ordinary shares. At times over recent years, the Company's Ordinary shares have traded at a premium to NAV, which has enabled the issue of new Ordinary shares at various levels of premium. The Board has established guidelines relating to the issue of shares and if these conditions are met, this authority will be utilised to enhance the Company's NAV per share and therefore benefit existing shareholders. To supplement this authority, the Board proposes to reissue shares from Treasury when appropriate. Issuing shares out of Treasury would be cheaper since this avoids the necessity of the Company paying listing fees to the London Stock Exchange and the UK Listing Authority. The Board will only buy back shares at a discount to their prevailing NAV, and issue new shares, or reissue Treasury shares, when they trade at a premium to their NAV, so as not to prejudice remaining shareholders.

Subscription Shares

In November 2008, the Company issued 21,001,937 Subscription shares to shareholders on the basis of one Subscription share for every five Ordinary shares held. Each Subscription share confers the right (but not the obligation) to subscribe for one Ordinary share on any business day during the period from 2nd January 2009 to 2nd January 2014, after which the rights under the Subscription shares will lapse.

The Company's Ordinary share price has traded above the current exercise price of 291p per Subscription share for most of the year. Since their issue in November 2008, 15,548,305 Subscription shares (74% of those issued) have been converted, raising proceeds of more than £38.5 million.

All Subscription shareholders will recently have received a letter explaining that the final deadline for exercising their right to convert their Subscription shares into Ordinary shares in the Company is 2nd January 2014 and further details can be found in the annual report to be published shortly and on the Company's website at www.jpmindian.co.uk

Annual General Meeting

This year's Annual General Meeting will be held at Trinity House, Tower Hill, London EC3N 4DH on Thursday, 30th January 2014 at 12.00 noon. As in previous years, in addition to the formal part of the meeting, there will be a presentation from a representative of the Manager, who will answer questions on the portfolio and performance. There will also be an opportunity to meet the Board and representatives of JPMorgan.

As we did at the last Annual General Meeting, in order to prevent overcrowding, guests will not be admitted to the Meeting. Entry will be restricted to shareholders only and no exceptions will be made.

If you have any detailed or technical questions, it would be helpful if you could raise them in advance with the Company Secretary at Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ. Shareholders who are unable to attend the AGM are encouraged to use their proxy votes.

Hugh Bolland

Chairman                                                                                                                                             

20th December 2013

Investment Managers' Report

The Company's financial year was an extremely disappointing one for investors in the Indian stock market. The diluted return on net assets in JPMorgan Indian was -13.7%, slightly worse than the underlying benchmark, which fell by 12.7%. The negative return from the market was due to the weaknesss of the currency. Our report looks back at the financial year, analyses the drivers of performance and then discusses the outlook.

Review

Inflation eased in the first half of the financial year, with the rate of increase in wholesale prices halving to less than 5%. This led to the central bank easing monetary policy by making three cuts, totaling 75 basis points, in interest rates. However, inflation rebounded in the second half, as food prices and the cost of imports rose sharply. The rise in import costs was largely the result of a steep fall in the Indian rupee in the wake of a rise in US yields in the expectation of a reduction (the so-called 'tapering') in the US Federal Reserve's quantitative easing policy. Other emerging market currencies were also affected by this but the Reserve Bank of India's response was to tighten liquidity dramatically, leading to a sharp rise in interest rates. Measures to encourage foreign currency inflows from non-resident Indians were also announced. In the event, there was no tapering by the US Federal Reserve and there was a sharp rebound in risk assets towards the end of the financial year, with the rupee rallying by 8% and equities rebounding by 14% from the trough in August. This was not enough, however, to offset the earlier decline in the Indian currency. In sterling terms, the MSCI India index, which was up 4% in rupee terms, fell by 12.7% over the year.

Meanwhile, growth momentum in the economy continued to decelerate as investment spending ground to a halt due to policy inaction and poor sentiment, while consumption was impacted by rising interest rates and declining real incomes. GDP for the June quarter grew at the slowest pace in four years at 4.4% year-on-year, which is the Indian equivalent of a full blown recession. Not surprisingly, earnings growth also slowed to mid single digits.

Politics continued to be gridlocked through the year although the threat of a sovereign rating downgrade had jolted the government into action in the beginning of the financial year. However, the realities of coalition politics meant that the government was unable to make much headway in reviving investment spending. To make matters worse, the Food Security and Land Acquisition bills were enacted, with an eye on the upcoming national elections. This only worsened sentiment since both are considered to be populist legislation, which will add to the fiscal burden and delay recovery in investment activity in the economy. On the other hand, the poor performance of the Congress party in some key state elections and opinion polls indicating rising support for Mr Narendra Modi, who is the prime ministerial candidate of the main opposition party, the B.J.P, boosted sentiment in the equity markets due to his track record in the state of Gujarat, where he has been Chief Minister for more than a decade.

Among the biggest positive surprises of the year was the inflow from foreign portfolio investors. Despite the utterly miserable news flow out of India, Foreign Institutional Investors invested over 14 billion sterling in equities in the financial year. While a material reversal in this flow could pose a meaningful challenge in the short term, perhaps it also reflects the quality and breadth of the bottom up investment opportunities in India, macro challenges notwithstanding.

Performance

The Company modestly underperformed the benchmark as our buy and hold, long term approach suffered in the highly volatile environment during the year. The overweight position in Infrastructure Development Finance Corporation was among the key detractors, as it bore the brunt of the sharp slowdown in infrastructure lending and the volatility in interest rates. The overweight position in cement stocks also detracted from performance as the slowdown in the economy impacted the demand for cement. The underweight position in technology, which is among the very few beneficiaries of a weak rupee, was another negative influence as the sector benefitted from an improvement in the outlook for the developed world. These negative factors were offset by the underweight position in banks such as State Bank of India, Axis Bank and ICICI Bank, which contributed positively to relative performance as asset quality concerns hurt those stocks. The overweight position in Tata Motors also contributed positively as their international business, Jaguar Land Rover, continued to grow rapidly on the back of strong demand in key markets such as China.

In an extremely macro-driven environment, bottom up stock selection can be very challenging. That said, we continue to maintain our disciplined approach, with a strong preference for quality. This implies that we steer away from poorer quality names. This approach has worked well in the past, and, we believe it will deliver strong performance in the long term.

Outlook

In the near term, the outlook is very uncertain; the market remains hyper sensitive to global and domestic macro economic developments. The inevitable tapering of the quantitative easing programme in the US will have an impact on emerging markets currencies and equities. India remains vulnerable in that context. The upcoming national election, due in May 2014, is creating uncertainty. Historically, markets have been extremely volatile during pre-election periods. However, looking beyond the very short term, we are optimistic for the following reasons:

1.  The negatives with regard to the macro economic picture in India are well known. This is also evident in the fact that growth expectations are, without exception, very modest.

2.  Valuations, on a variety of parameters, suggest that equities are cheap. While headline price/earnings ratios for the main indices are at or slightly below long term averages, there is a great degree of polarization, with a host of small and mid cap stocks trading at decadal low multiples.

3.  India's long term growth story remains intact and compelling: a young and growing population, expanding employment and income opportunities, an enormous infrastructure deficit that needs to be addressed, supported by dynamic entrepreneurship and management that will grab these opportunities, funded by the large and growing pool of domestic savings. Short term headwinds notwithstanding, we believe these will return to the fore in the medium term.

Rukhshad Shroff, CFA

Rajendra Nair, CFA

Investment Managers                                                                                                                          

20th December 2013

Strategic Report

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 under-performance 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 by the Manager JPMorgan Asset Management (UK) Limited ('JPMAM'). 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 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.

•   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 would lose its 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 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules. A breach of the Companies Act 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 to ensure compliance with The Companies Act and the UKLA Listing Rules.

•   Any change in the taxation legislation or taxation regime applicable to the Mauritian Subsidiary could affect the value of the investments held by the Group, affect the Company's ability to provide returns to Shareholders or alter the post-tax returns to Shareholders. In particular, it is expected that the Mauritian Subsidiary will continue to benefit from the India/Mauritius Double Tax Treaty. Future changes to Mauritian or Indian law or to the India/Mauritius Double Tax Treaty, or the interpretations given to them by the regulatory authorities, could impose additional costs or obligations on the activities of the Mauritian Subsidiary, which in turn may have adverse effects on the performance of the Company. The terms of the India/Mauritius Double Tax Treaty were challenged in India but were upheld by the Supreme Court of India in October 2003. However, more recently, there have been discussions between the Indian and Mauritian authorities with regard to a re-negotiation of the Treaty. Adverse tax consequences would result if the Mauritian Subsidiary ceased to qualify for the benefits under the India/Mauritius Double Tax Treaty (for example, if it were held that the Mauritian Subsidiary was not a resident of Mauritius). There can be no assurance that the Mauritian Subsidiary will continue to qualify for or receive the benefits of the India/Mauritius Double Tax Treaty or that the terms of the India/Mauritius Double Tax Treaty will not be changed. Such an event may require the Mauritian Subsidiary to pay or provide for tax liabilities that would reduce the net asset value of the Ordinary Shares.

•   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 report.

•   Operational: Loss of key staff by JPMAM, such as the Investment Managers, could affect the performance of the Company. 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 Internal Control section of the Corporate Governance report.

•   Financial: The financial risks faced by the Company include market price risk, interest rate risk, liability risk and credit risk.

•   Political and Economic: 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 the financial statements 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 are required to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and Article 4 of the IAS Regulation and have also chosen to prepare the Parent Company financial statements under IFRS as adopted by the EU. Under company law the Directors must not approve the accounts unless they are satisfied that, taken as a whole, the annual report and accounts provide the information necessary for shareholders to assess the Company's performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the total return or loss of the Company for that period. In order to provide these confirmations, and in preparing these financial statements, the Directors must be satisfied that, taken as a whole, the annual report and accounts are fair, balanced and understandable; and the Directors are required to:

•   select suitable accounting policies and then apply them consistently;

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

•   state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; 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 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.jpmindian.co.uk website, which is maintained by the Company's Manager, 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 Annual Report since they were initially presented on the website. The Annual Report is prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

Each of the Directors, whose names and functions are listed on in the annual report, confirms that, to the best of his or her 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

Hugh Bolland

Chairman , 20th December 2013

Group Income Statement

for the year ended 30th September 2013

		2013			2012
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Investment income		5,885	-	5,885	6,294	-	6,294
Other income		1	-	1	39	-	39
(Losses)/gains from investments held at
fair value through profit or loss		-	(66,546)	(66,546)	-	21,291	21,291
Foreign exchange losses		-	(127)	(127)	-	(114)	(114)
Total income/(loss)		5,886	(66,673)	(60,787)	6,333	21,177	27,510
Management fee		(5,614)	-	(5,614)	(5,477)	-	(5,477)
Other administrative expenses		(1,345)	-	(1,345)	(1,346)	-	(1,346)
(Loss)/profit before finance costs
and taxation		(1,073)	(66,673)	(67,746)	(490)	21,177	20,687
Finance costs		(224)	-	(224)	(277)	-	(277)
(Loss)/profit before taxation		(1,297)	(66,673)	(67,970)	(767)	21,177	20,410
Taxation		-	-	-	-	-	-
Net (loss)/profit		(1,297)	(66,673)	(67,970)	(767)	21,177	20,410
(Loss)/earnings per Ordinary share -
undiluted		(1.21)p	(62.18)p	(63.39)p	(0.66)p	18.28p	17.62p
(Loss)/earnings per Ordinary share -
diluted		(1.21)p	(62.18)p	(63.39)p	(0.65)p	18.13p	17.48p

The Group does not have any income or expense that is not included in the net loss for the year. Accordingly the 'Net (loss)/profit' for the year, is also the 'Total comprehensive income' for the year, as defined in IAS1 (revised) and no separate Statement of Comprehensive Income has been presented.

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 represents the Group's Income Statement, prepared in accordance with IFRS. The 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies and Venture Capital Trusts.

All income is attributable to the equity shareholders of JPMorgan Indian Investment Trust plc, the Company. There are no non-controlling interests.

Group and Company Statements of Changes in Equity

for the year ended 30th September 2013

	Group
	2013
	Called up			Exercised		Capital
	share	Share	Other	warrant	Capital	redemption	Revenue
	capital	premium	reserve	reserve	reserves	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2012	30,032	82,000	41,929	5,886	337,232	6,362	(15,236)	488,205
Exercise of Subscription shares into
Ordinary shares	(4)	4	-	-	-	-	-	-
Issue of Ordinary shares on
conversion of Subscription shares	96	1,015	-	-	-	-	-	1,111
Repurchase of shares into Treasury	-	-	-	-	(38,705)	-	-	(38,705)
Loss for the year	-	-	-	-	(66,673)	-	(1,297)	(67,970)
At 30th September 2013	30,124	83,019	41,929	5,886	231,854	6,362	(16,533)	382,641
	Group
	2012
	Called up			Exercised		Capital
	share	Share	Other	warrant	Capital	redemption	Revenue
	capital	premium	reserve	reserve	reserves	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2011	29,486	76,903	41,929	5,886	327,620	6,362	(14,469)	473,717
Exercise of Subscription shares into
Ordinary shares	(23)	23	-	-	-	-	-	-
Issue of Ordinary shares on
conversion of Subscription shares	569	5,074	-	-	-	-	-	5,643
Repurchase of shares into Treasury	-	-	-	-	(11,565)	-	-	(11,565)
Profit/(loss) for the year	-	-	-	-	21,177	-	(767)	20,410
At 30th September 2012	30,032	82,000	41,929	5,886	337,232	6,362	(15,236)	488,205

	Company
	2013
	Called up			Exercised		Capital
	share	Share	Other	warrant	Capital	redemption	Revenue
	capital	premium	reserve	reserve	reserves	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2012	30,032	82,000	41,929	5,886	341,899	6,362	(19,903)	488,205
Exercise of Subscription shares into
Ordinary shares	(4)	4	-	-	-	-	-	-
Issue of Ordinary shares on
conversion of Subscription shares	96	1,015	-	-	-	-	-	1,111
Repurchase of shares into Treasury	-	-	-	-	(38,705)	-	-	(38,705)
Loss for the year	-	-	-	-	(67,166)	-	(804)	(67,970)
At 30th September 2013	30,124	83,019	41,929	5,886	236,028	6,362	(20,707)	382,641
	Company
	2012
	Called up			Exercised		Capital
	share	Share	Other	warrant	Capital	redemption	Revenue
	capital	premium	reserve	reserve	reserves	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2011	29,486	76,903	41,929	5,886	332,489	6,362	(19,338)	473,717
Exercise of Subscription shares into
Ordinary shares	(23)	23	-	-	-	-	-	-
Issue of Ordinary shares on
conversion of Subscription shares	569	5,074	-	-	-	-	-	5,643
Repurchase of shares into Treasury	-	-	-	-	(11,565)	-	-	(11,565)
Profit/(loss) for the year	-	-	-	-	20,975	-	(565)	20,410
At 30th September 2012	30,032	82,000	41,929	5,886	341,899	6,362	(19,903)	488,205

Group and Company Balance Sheets

at 30th September 2013

		Group	Group	Company	Company
		2013	2012	2013	2012
		£'000	£'000	£'000	£'000
Non current assets
Investments held at fair value through profit or loss		372,521	477,377	372,641	488,069
Investment in liquidity fund held at fair value
through profit or loss		7,000	10,000	7,000	-
Total investments		379,521	487,377	379,641	488,069
Current assets
Other receivables		99	2,377	27	2,274
Cash and cash equivalents		3,752	3,404	3,504	2
		3,851	5,781	3,531	2,276
Current liabilities
Other payables		(731)	(4,936)	(531)	(2,123)
Bank Overdraft		-	(14)	-	(14)
Financial liability: Derivative financial instruments		-	(3)	-	(3)
Net current assets		3,120	828	3,000	136
Total assets less current liabilities		382,641	488,205	382,641	488,205
Net assets		382,641	488,205	382,641	488,205
Equity attributable to equity holders
Called up share capital		30,124	30,032	30,124	30,032
Share premium		83,019	82,000	83,019	82,000
Other reserve		41,929	41,929	41,929	41,929
Exercised warrant reserve		5,886	5,886	5,886	5,886
Capital reserves		231,854	337,232	236,028	341,899
Capital redemption reserve		6,362	6,362	6,362	6,362
Revenue reserve		(16,533)	(15,236)	(20,707)	(19,903)
Total equity shareholders' funds		382,641	488,205	382,641	488,205
Net asset value per Ordinary share - undiluted		365.5p	426.0p	365.5p	426.0p
Net asset value per Ordinary share - diluted		361.6p	419.1p	361.6p	419.1p

Company registration number: 2915926

Group and Company Cash Flow Statements

for the year ended 30th September 2013

	Group	Group	Company	Company
	2013	2012	2013	2012
	£'000	£'000	£'000	£'000
Operating activities
(Loss)/profit before taxation	(67,970)	20,410	(67,970)	20,410
Add back interest	224	278	178	1
Add back losses/(gains) on investments held at fair value
through profit or loss	66,546	(21,291)	67,143	(20,989)
Unrealised foreign exchange (losses)/gains	(3)	2	(4)	2
Net sales/(purchases) of investments held at fair value
through profit or loss	41,310	(5,762)	(8,714)	1,413
Decrease/(increase) in prepayments, VAT and other receivables	19	82	(12)	6
Decrease/(increase) in amounts due from brokers	2,259	(513)	2,259	(2,259)
(Decrease)/increase in other payables	(366)	364	7	13
(Decrease)/increase in amounts due to brokers	(2,240)	2,240	-	-
Net cash inflow/(outflow) from operating activities before
interest and taxation	39,779	(4,190)	(7,113)	(1,403)
Interest paid	(224)	(278)	(178)	(1)
Net cash inflow/(outflow) from operating activities	39,555	(4,468)	(7,291)	(1,404)
Investing activities
Sale of subsidiary shares	-	-	50,000	-
Net cash inflow from investing activities	-	-	50,000	-
Financing activities
Net proceeds from the issue of Ordinary shares	1,111	5,643	1,111	5,643
Repurchase of shares	(40,304)	(9,553)	(40,304)	(9,553)
(Decrease)/increase in bank overdraft	(14)	14	(14)	14
Drawdown of short term loans	25,500	6,000	21,300	-
Net repayment of short term loans	(25,500)	(6,000)	(21,300)	-
Net cash outflow from financing activities	(39,207)	(3,896)	(39,207)	(3,896)
Increase/(decrease) in cash and cash equivalents	348	(8,364)	3,502	(5,300)
Cash and cash equivalents at the start of the year	3,404	11,768	2	5,302
Cash and cash equivalents at the end of the year	3,752	3,404	3,504	2

Notes to the Accounts

for the year ended 30th September 2013

1.    Principal activity

      The principal activity of the Company is that of an investment holding company within the meaning of Section 1158 of the Corporation Tax Act 2010. The principal activity of its subsidiary company, JPMorgan Indian Investment Company (Mauritius) Limited, is that of an investment company.

2.   Accounting policies

(a)  Basis of accounting

      The Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS'), which comprise standards and interpretations approved by the International Accounting Standards Board ('IASB'), the International Accounting Standards and Standing Interpretations Committee and interpretations approved by the International Accounting Standards Committee ('IASC') that remain in effect and to the extent that they have been adopted by the European Union.

      The accounts have been prepared on the going concern basis. The disclosures on going concern in the Directors' Report on page 20 form part of these financial statements. The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies ('AIC') in January 2009 is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

      The Company's share capital is denominated in sterling and this is the currency in which its shareholders operate and expenses are generally paid. The Directors have therefore determined the functional currency to be sterling.

3. (Loss)/earnings per Ordinary share	Group
	2013	2012
	£'000	£'000
(Loss)/earnings per Ordinary share is based on the following:
Revenue loss	(1,297)	(767)
Capital (loss)/return	(66,673)	21,177
Total (loss)/return	(67,970)	20,410
Weighted average number of Ordinary shares in issue during the year
used for the purpose of the undiluted calculation	107,223,518	115,815,283
Weighted average number of Ordinary shares in issue during the year
used for the purpose of the diluted calculation	107,223,518	116,793,906
Undiluted
Revenue loss per share	(1.21)p	(0.66)p
Capital (loss)/return per share	(62.18)p	18.28p
Total (loss)/return per share	(63.39)p	17.62p
Diluted
Revenue loss per share	(1.21)p	(0.65)p
Capital (loss)/return per share	(62.18)p	18.13p
Total (loss)/return per share	(63.39)p	17.48p

      The diluted (loss)/earnings per Ordinary share represents the (loss)/earnings on ordinary activities after taxation divided by the weighted average number of Ordinary shares in issue during the year as adjusted in accordance with the requirements of IAS 33, 'Earnings per Share'. In 2013, there was an antidilution, due to loss per share.

4.   Net asset value per Ordinary share

	2013	2012
Undiluted
Ordinary shareholders funds (£'000)	382,641	488,205
Number of Ordinary shares in issue excluding shares held in Treasury	104,683,965	114,615,313
Net asset value per Ordinary share (pence)	365.5	426.0
Diluted
Ordinary shareholders funds assuming exercise of Subscription shares (£'000)	399,373	506,048
Number of potential Ordinary shares in issue excluding shares held in Treasury	110,433,755	120,746,755
Net asset value per Ordinary share (pence)	361.6	419.1

      The diluted net asset value per Ordinary share assumes that all outstanding Subscription shares were converted into Ordinary shares at the year end. The Company will only re-issue shares held in Treasury at a premium and therefore these shares have no dilutive potential.

5.   Status of results announcement

2012 Financial Information

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

2013 Financial Information

The figures and financial information for 2013 are extracted from the Annual Report and Accounts for the year ended 30th September 2013 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.jpmindian.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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