Interim Results

JP Morgan Fleming Indian IT PLC 17 June 2002 JPMorgan Fleming Indian Investment Trust plc Stock Exchange Announcement Interim Report for the six months ended 31st March 2002 The Board of the JPMorgan Fleming Indian Investment Trust plc announce the unaudited results for the six months ended 31st March 2002 as follows. Chairman's Interim Statement Performance summary The Company's net asset value rose 28.5% in sterling terms over the six months to 31st March 2002, compared to a 32.4% increase in sterling terms for the benchmark - the Bombay Stock Exchange National 100 Share Index. The Company's share price rose by 31.8% over the same period, reflecting the increase in net asset value and a decrease in discount from 20% to 17.9%. Market recovers strongly from September lows The market recovered sharply from the lows reached immediately after September's US terrorist attacks, supported by significant strength in second line stocks and robust performance from public sector stocks. However, investors were constrained by a constant flow of market-negative news throughout the review period, such as the US-led military intervention in Afghanistan, India's continuing military stand-off with Pakistan over Kashmir and the Ayodhya temple controversy. Further investor nervousness resulted from an upsurge of communal violence in Gujarat, humiliating defeats for the ruling coalition in provincial elections and the continuing problems for the public sector mutual fund, the Unit Trust of India. Meanwhile, proposals to increase corporate and dividend tax rates announced in February's Budget sparked a market correction. However, there were some long-term positives for investors, such as the phased deregulation of the farming sector. Despite the generally poor news flow during the period, the market was invigorated by hopes that the government would place a greater emphasis on privatisation. Investor enthusiasm increased after a legal challenge to the government's privatisation programme was settled in the government's favour, while the deregulation of petroleum marketing led to hopes that India's petrol production industry was being readied for privatisation. However, in the light of previous experience, the investment managers were initially sceptical over the government's commitment to privatisation. Therefore, the Company's portfolio was not positioned to benefit from the government's subsequent resolve to press ahead with its privatisation programme in the face of significant political opposition. The result was some underperformance for the trust over the review period. Corporate results are encouraging The market's heavyweight stocks performed well in the fiscal year ended March 2002. Although a slowing economy led to anaemic levels of top-line growth, lower interest rates and cost cutting programmes contributed to improved corporate performance. Meanwhile, regulatory changes further improved Indian corporate governance. In fact, with the derivatives market becoming increasingly popular and the near total dematerialisation of listed stocks, the market's infrastructure has now evolved to almost international standards. In addition, Indian industry continued to consolidate at a brisk pace, with hectic merger and acquisition, open offer and buy-back activity seen throughout the review period. Outlook Despite some recent aberrations, the Reserve Bank of India continues to favour softer interest rates. The market's valuation, at around 10 times one-year forward earnings, represents a record high yield-gap in favour of equities. This low valuation also reflects the high level of risk aversion among investors, despite the fact that the market is now trading at a 40% discount to its average over the last five years. There is, therefore, a fundamental valuation argument for the market to rally from current years' levels. There are also some signs of an economic revival from the industrial slump experienced in the 2002 financial year. At the moment, the tense military confrontation with Pakistan, potential political instability and the continued communal tensions in Gujarat continue to constrain the market. Provided these issues quieten down there should be a renewal of investment interest in the Indian market. We believe the portfolio is well poised to benefit from such a move. Michael Cannan Chairman 17th June 2002 JPMorgan Fleming Indian Investment Trust plc Unaudited figures for the six months ended 31st March 2002 Statement of Total Return (Unaudited) Six months to 31st March 2002 Period to 31st March 2001 Period to 30th September 2001 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Realised gains/(losses) on - 4,082 4,082 - (5,880) (5,880) - (14,335) (14,335) investments Net change in unrealised gains/ - 8,823 8,823 - (12,242) (12,242) - (17,648) (17,648) (losses) Currency translation differences - 2,565 2,565 3,174 3,174 476 476 Currency gains/ (losses) on cash and short-term deposits held during the - 18 18 (94) (94) - (158) (158) period Exchange adjustments - (1,097) (1,097) - (78) (78) - (12) (12) Realised currency (loss)/gains on repayment of intercompany loan - (36) (36) - - - - 10 10 Unrealised exchange loss on - - - - - - - 50 50 intercompany loan Other capital charges - (6) (6) - (2) (2) - (77) (77) Overseas dividends 96 - 96 95 - 95 826 - 826 Oversea interest 11 - 11 - - - 58 - 58 Deposit interest 15 - 15 69 - 69 115 - 115 _______ ________ _______ ______ _______ ________ _______ _______ _______ Gross return 122 14,349 14,471 164 (15,122) (14,958) 999 (31,694) (30,695) Management fee (338) - (338) (475) - (475) (830) - (830) Other administrative expenses (191) - (191) (190) - (190) (531) (531) Interest payable (31) - (31) (87) - (87) (60) - (60) _______ _______ _______ ______ _______ _______ _______ _______ _______ Return before taxation (438) 14,349 13,911 (588) (15,122) (15,710) (422) (31,694) (32,116) Taxation 1 - 1 - - - (1) - (1) ______ _______ _______ ______ _______ ______ _______ _______ _______ Return attributable to ordinary (437) 14,349 13,912 (588) (15,122) (15,710) (423) (31,694) (32,117) shareholders Return per ordinary share (0.56)p 18.36p 17.80p (0.74)p (19.11)p (19.85)p (0.54)p (40.09)p (40.63)p JPMorgan Fleming Indian Investment Trust plc Unaudited figures for the six months ended 31st March 2002 BALANCE SHEET Six months to 31st Period to 31st Period to 30th March 2002 March 2001 September 2001 £'000 £'000 £'000 Investments at valuation 65,376 59,957 51,554 Net current (liabilities) / assets (2,356) 6,200 (2,102) ______ _______ _______ Total net assets 63,020 66,157 49,452 ===== ===== ===== Net asset value per ordinary share 80.72p 83.59p 62.84p CASH FLOW STATEMENT 2002 2001 2001 £'000 £'000 £'000 Net cash outflow from operating activities (429) (353) (142) Net cash outflow from returns on investments and (28) (123) (97) servicing of finance Total tax recovered 8 - - Net cash inflow/ (outflow) from capital expenditure and 250 (1,575) (9,145) financial investments Net cash inflow from financing 1,587 718 614 _______ ______ ______ Increase/(decrease) in cash for the period 1,388 (1,333) (8,770) ===== ==== ==== The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. Statutory accounts for the year end 30 September 2001 have been delivered to the Registrar of Companies. J.P. MORGAN FLEMING ASSET MANAGEMENT (UK) LIMITED 17th June 2002 This information is provided by RNS The company news service from the London Stock Exchange

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