Interim Results

RNS Number : 4440V

JPMorgan Indian Invest Trust PLC

28 May 2008

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN INDIAN INVESTMENT TRUST PLC

PRELIMINARY ANNOUNCEMENT OF HALF YEAR RESULTS

The Directors of JPMorgan Indian Investment Trust plc announce the Company's results for the period ended 31st March 2008.

Chairman's Statement 

Performance

In this, my first report as Chairman, I have to report on a six months that has been an extremely volatile one for the Indian markets. Having rallied strongly during the last quarter of 2007, the MSCI India Index fell heavily in January 2008, eventually finishing the period down by 7.7% in sterling terms. The Company underperformed the Index, producing a decline in net assets of 12.4%. The decline in the Company's share price total return was somewhat less severe at 4.6%, reflecting the move from a discount of 7.2% to a premium of 1.1%. 

Discount Management

The Board has guidelines in place with regard to the management of any discount/premium that may develop between the Company's share price and its net asset value per share. During the six months under review 765,000 ordinary shares were bought into treasury and, under current guidelines, may only be reissued at a premium to the prevailing net asset value at the time of reissue.

Outlook

Notwithstanding the Indian market's spectacular performance over the last five years and the more challenging environment witnessed over recent months, the Company's Investment Managers remain positive as to the prospects for the medium to long term. However, the global credit crisis, combined with domestic concerns over inflation and interest rates and political uncertainty have all weighed on investor sentiment and could impact on economic growth. Over the short term therefore returns are expected to be volatile.

Hugh Bolland

Chairman

28th May 2008

Interim Management Report 

The Company is required to make the following disclosures in its half year report:

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company fall into five broad categories: investment and strategy; accounting, legal and regulatory; corporate governance and shareholder relations; operational; and financial. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 30th September 2007.

Related Parties Transactions

During the first six months of the current 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 period.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

i)    the condensed set of financial statements contained within the half yearly financial report has

      been prepared in accordance with the Accounting Standards Board's Statement 'Half-Yearly

      Financial Reports'; and

ii)    the interim management report includes a fair review of the information required by 4.2.7R

       and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

For and on behalf of the Board

Hugh Bolland

Chairman

28th May 2008

Investment Managers' Report 

Market Review

The half year to 31st March 2008 was a turbulent period for the Indian stock markets with the indices rallying strongly in fourth quarter and peaking in early January before a combination of global and domestic macro concerns led to a sharp fall in the first quarter of 2008 and MSCI India Index declined by almost 8% for the review period. 

IT and Telecoms were the key underperformers, while the defensive sectors of Healthcare and Consumer Staples outperformed the benchmark. 

The Financials sector severely underperformed in February and March due to escalating concerns over the marked to market losses on foreign exchange derivative positions of corporate India and the consequent potential losses to the banking sector.

In October the government announced regulations to phase out the issuance of offshore derivative instruments. These regulations were meant to achieve the twin objectives of moderating inflows in the short term and increasing transparency in the long term (with investors expected to access the market directly by getting their individual Foreign Institutional Investor ('FII') registration). Initial feedback suggests that the regulator is following through on its commitment to expedite the FII registration process. 

In February, with elections looming, the Finance Minister tried to appease the electorate with a populist budget. Apart from tax sops for individuals and increased spending on education, the Finance Minister also announced a waiver of loans to farmers to the tune of $15bn.

Inflation rose unexpectedly in March with the Wholesale Price Index registering a rise of above 6% for the first time in almost a year due to a sharp jump in food and commodity prices. Inflation, currently over 7%, is well above the Reserve Bank of India's comfort level of 5-5.5%. This resulted in the central bank hiking the cash reserve ratio in April. The government also banned the export of food grains and cement and imposed export taxes on steel to contain inflationary pressures.

The Index of Industrial Production ('IIP') is signaling a slowdown in the rate of growth in the economy. In the period from April 2007 to March 2008, IIP grew by 8.3% as against 14.7% in the financial year to March 2007. 

Company Reviews

The Company had a poor first half of the year underperforming the benchmark as our key overweight in Financials detracted value. This was mitigated by our overweight in Industrials - Bharat Heavy Electricals Limited and Larsen & Toubro - and our underweight in Information Technology. 

Outlook 

The results for the March quarter declared so far seem to have allayed some concerns, with the numbers being broadly in line with expectations. Besides, contrary to some expectations, the banking sector did not disclose large losses on account of losses on foreign exchange derivatives sold by banks to corporates. Nonetheless, the risk to estimates for the financial year in 2009 remains on the downside, although earnings growth in the region of 15% should be achievable.

Politics will also contribute to the uncertainty with elections to the centre due before May 2009 as well as some important state elections to be held through 2008. Overall the outlook in the short term remains hazy but the long term story remains intact. The concerns on inflation, interest rates and politics could have a moderating impact on growth but are unlikely to derail the momentum of the economy. 

Edward Pulling 

Rukhshad Shroff 

Rajendra Nair 

Investment Managers 

28th May 2008

For further information please contact:

Andrew Norman 

JPMorgan Asset Management (UK) Limited, Secretary

0207 742 6000 

JPMorgan Indian Investment Trust plc

Group Income Statement  

for the six months ended 31st March 2008

	(Unaudited) Six months ended  31st March 2008			(Unaudited) Six months ended  31st March 2007			(Audited) Year ended 30th September 2007
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Investment income	754	-	754	1,149	-	1,149	3,519	-	3,519
Other income	160	-	160	142	-	142	240	-	240
	_______	________	_______	_______	_______	_______	_______	________	_______
	914	-	914	1,291	-	1,291	3,759	-	3,759
(Losses)/gains from investments held at fair value through profit or loss	-	(50,376)	(50,376)	-	19,875	19,875	-	148,193	148,193
Foreign exchange (losses)/gains	-	(270)	(270)	-	(39)	(39)	-	61	61
	_______	________	_______	_______	_______	_______	_______	________	_______
Total income/(loss)	914	(50,646)	(49,732)	1,291	19,836	21,127	3,759	148,254	152,013
Expenses
Management fee	(2,921)	-	(2,921)	(1,984)	-	(1,984)	(4,321)	-	(4,321)
Other administrative expenses	(695)	-	(695)	(631)	-	(631)	(1,254)	-	(1,254)
	_______	________	_______	_______	_______	_______	_______	________	_______
(Loss)/profit before finance costs and taxation	(2,702)	(50,646)	(53,348)	(1,324)	19,836	18,512	(1,816)	148,254	146,438
Finance costs	(395)	-	(395)	(272)	-	(272)	(668)	-	(668)
	_______	________	_______	_______	_______	_______	_______	________	_______
(Loss)/profit before taxation	(3,097)	(50,646)	(53,743)	(1,596)	19,836	18,240	(2,484)	148,254	145,770
Taxation	-	-	-	-	-	-	(124)	-	(124)
	_______	_______	_______	_______	_______	_______	_______	_______	_______
Net (loss)/profit	(3,097)	(50,646)	(53,743)	(1,596)	19,836	18,240	(2,608)	148,254	145,646
	=====	=====	=====	=====	=====	=====	=====	=====	=====
(Loss)/earnings per share (note 2)	(2.96)p	(48.44)p	(51.40)p	(1.52)p	18.93p	17.41p	(2.49)p	141.79p	139.30p
	=====	=====	=====	=====	=====	=====	=====	=====	=====

The 'Total' column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary

'Revenue' and 'Capital' columns are both prepared under guidance published by the Association of Investment Companies. 

All items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

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

JPMorgan Indian Investment Trust plc

Group Statement of Changes in Equity

for the six months ended 31st March 2008                                

(Unaudited)

Six months ended 31st March 2008

	Called up share capital £'000	Share premium £'000	Other reserve £'000	Exercised warrant reserve £'000	Capital reserves £'000	Capital redemption reserve £'000	Revenue reserve £'000	Total £'000
Balance as at  30th September 2007	26,202	50,914	41,929	5,886	312,958	6,348	(8,051)	436,186
Purchase of shares into treasury	-	-	-	-	(3,234)	-	-	(3,234)
Repurchase and cancellation of shares	(14)	-	-	-	(274)	14	-	(274)
Loss for the period	-	-	-	-	(50,646)	-	(3,097)	(53,743)
	_______	_______	_______	_______	_______	_______	_______	_______
Balance as at 31st March 2008	26,188	50,914	41,929	5,886	258,804	6,362	(11,148)	378,935
	=====	=====	=====	=====	=====	=====	=====	=====

(Unaudited)

Six months ended 31st March 2007

	Called up share capital £'000	Share premium £'000	Other reserve £'000	Exercised warrant reserve £'000	Capital reserves £'000	Capital redemption reserve £'000	Revenue reserve £'000	Total £'000
Balance as at  30th September 2006	26,177	50,636	41,929	5,886	168,670	6,348	(5,443)	294,203
Shares issued	25	278	-	-	-	-	-	303
Profit/(loss) for the period	-	-	-	-	19,836	-	(1,596)	18,240
	_______	_______	_______	_______	_______	_______	_______	_______
Balance as at  31st March 2007	26,202	50,914	41,929	5,886	188,506	6,348	(7,039)	312,746
	=====	=====	=====	=====	=====	=====	=====	=====

(Audited)

Year ended 30th September 2007

	Called up share capital £'000	Share premium £'000	Other reserve £'000	Exercised warrant reserve £'000	Capital reserves £'000	Capital redemption reserve £'000	Revenue reserve £'000	Total £'000
Balance as at  30th September 2006	26,177	50,636	41,929	5,886	168,670	6,348	(5,443)	294,203
Shares issued	25	278	-	-	-	-	-	303
Purchase of shares into treasury	-	-	-	-	(3,966)	-	-	(3,966)
Profit/(loss) for the year	-	-	-	-	148,254	-	(2,608)	145,646
	_______	_______	_______	_______	_______	_______	_______	_______
Balance as at  30th September 2007	26,202	50,914	41,929	5,886	312,958	6,348	(8,051)	436,186
	=====	=====	=====	=====	=====	=====	=====	=====

JPMorgan Indian Investment Trust plc

Group Balance Sheet

as at 31st March 2008                        

	(Unaudited) 31st March  2008	(Unaudited) 31st March 2007	(Audited) 30th September  2007
	£'000	£'000	£'000
Non current assets
Investments held at fair value through profit or loss	375,695	312,903	439,249
Current assets
Other receivables	2,083	657	1,192
Derivative financial instruments	2	-	-
Cash and cash equivalents	6,040	10,371	8,159
	_______	_______	_______
	8,125	11,028	9,351
Current liabilities
Other payables	(4,885)	(11,185)	(12,414)
	_______	_______	_______
Net current assets/(liabilities)	3,240	(157)	(3,063)
	_______	_______	_______
Net assets	378,935	312,746	436,186
	=====	=====	=====
Equity attributable to equity holders
Called up share capital	26,188	26,202	26,202
Share premium	50,914	50,914	50,914
Other reserve	41,929	41,929	41,929
Exercised warrant reserve	5,886	5,886	5,886
Capital reserves	258,804	188,506	312,958
Capital redemption reserve	6,362	6,348	6,348
Revenue reserve	(11,148)	(7,039)	(8,051)
	_______	_______	_______
Total equity	378,935	312,746	436,186
	=====	=====	=====
Net asset value per share (note 3)	368.7p	298.4p	421.1p

JPMorgan Indian Investment Trust plc

Group Cash Flow Statement

for the six months ended 31st March 2008

	(Unaudited) Six months ended 31st March  2008	(Unaudited) Six months ended 31st March 2007	(Audited) Year ended 30th September  2007
	£'000	£'000	£'000
Operating activities
(Loss)/profit before taxation	(53,743)	18,240	145,770
Add back interest paid	395	272	668
Losses/(gains) on investments held at fair value through profit or loss	50,376	(19,875)	(148,193)
Foreign exchange gain/(loss)	146	(29)	-
Net sales of investments held at fair value through profit or loss	13,177	731	2,442
Decrease/( increase) in other receivables	158	825	(207)
(Increase)/decrease in amounts due from brokers	(1,049)	2,222	213
Increase/(decrease) in other payables	180	(2,707)	58
Decrease in amounts due to brokers	-	(858)	(858)
	_______	_______	_______
Net cash inflow/(outflow) from operating activities before interest payable and taxation	9,640	(1,179)	(107)
Interest paid	(408)	(232)	(657)
Tax paid	-	-	(58)
	_______	_______	_______
Net cash inflow/(outflow) from operating activities	9,232	(1,411)	(822)
	=====	=====	=====
Financing activities
Net proceeds from the issue of shares	-	303	303
Repurchase of shares	(3,507)	-	(3,966)
Net (repayment)/drawdown of short term loans	(7,844)	7,226	8,391
	_______	_______	_______
Net cash (outflow)/inflow from financing activities	(11,351)	7,529	4,728
(Decrease)/increase in cash and cash equivalents	(2,119)	6,118	3,906
Cash and cash equivalents at start of period	8,159	4,253	4,253
	_______	_______	_______
Cash and cash equivalents at end of period	6,040	10,371	8,159
	=====	=====	=====

JPMorgan Indian Investment Trust plc

Notes to the Group Accounts

for the six months ended 31st March 2008

1. Accounting policies

The Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB) and interpretations issued by the International Reporting Interpretations Committee of the IASB.

Where presentational guidance set out in the Statement of Recommended Practice ('the SORP') for investment trusts issued by the Association of Investment Companies in December 2005 is consistent with the requirements of IFRS, the financial statements have been prepared on a basis compliant with the recommendations of the SORP.

2. (Loss)/earnings per share	(Unaudited) Six months ended 31st March  2008	(Unaudited) Six months ended 31st March 2007	(Audited) Year ended 30th September  2007
	£'000	£'000	£'000
Revenue loss	(3,097)	(1,596)	(2,608)
Capital (loss)/profit	(50,646)	19,836	148,254
	_______	_______	_______
Net (loss)/profit	(53,743)	18,240	145,646
	=====	=====	=====
Weighted average number of shares in issue during the period	103,000,182	104,764,354	104,562,209
Revenue loss per share	(2.96)p	(1.52)p	(2.49)p
Capital (loss)/profit per share	(48.44)p	18.93p	141.79p
	_______	_______	_______
Net (loss)/earnings per share	(51.40)p	17.41p	139.30p
	=====	=====	=====

3. Net asset value per share	(Unaudited) Six months ended 31st March  2008	(Unaudited) Six months ended 31st March 2007	(Audited) Year ended 30th September  2007
Shareholders funds (£'000)	378,935	312,746	436,186
Number of shares in issue at each period end excluding share held in treasury	102,769,874	104,806,662	103,591,874
	_______	_______	_______
Net asset value per share	368.7p	298.4p	421.1p
	=====	=====	=====

4. Publication of non-statutory accounts

The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the six months ended 31st March 2008 and 2007 has not been audited. 

5. Comparative information

The information for the year ended 30th September 2007 has been extracted from the latest published audited financial statements. Those accounts have been delivered to the Registrar of Companies and included the Report of the Auditors which was unqualified and did not contain a statement under either section 237(2) or 237 (3) of the Companies Act 1985. 

JPMORGAN ASSET MANAGEMENT (UK) LIMITED

28TH MAY 2008

 

END

 

 

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