Final Results

RNS Number : 7420X

JPMorgan Asian Investment Tst PLC

10 December 2010

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN ASIAN INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER 2010

Chairman's Statement

Performance

I am pleased to be able to report that the Company has delivered solid performance in both absolute and relative terms for the full year. You may recall that performance in the first half was less satisfactory, but our investment managers remained firm in their convictions, including a number of country and stock specific overweights and underweights against the benchmark index which delivered very strong out-performance in the last few months of the financial year.

The Company's portfolio returned +23.9 per cent., net of management fees and expenses, outperforming the benchmark index by 2.6 percentage points. The Company's diluted net asset value ('NAV') total return (which assumes that the 11.9 million Subscription shares outstanding at 30th September 2010 were all exercised at 176p per share) was +24.0 per cent. and the return to Ordinary shareholders was +22.7 per cent. Please refer to the investment managers' report for a full review of the portfolio's performance.

Revenue and Dividends

Revenue per share for the year amounted to 1.76p (on an undiluted basis) and the Directors are recommending a final dividend of 1.70p which, if approved by shareholders, will be payable on 11th February 2011 to shareholders on the register at the close of business on 7th January 2011.

Discount Management

The Board closely monitors the level of discount at which the Company's Ordinary shares trade relative to their NAV. During the year the Company bought back a total of 3,119,610 Ordinary shares in nine separate transactions, representing 1.9 per cent. of the Ordinary shares in issue at the start of the year. These buybacks were executed at an average weighted discount to the diluted ex-income NAV of 10 per cent. The Board believes that the discount should, in normal market circumstances, be maintained as far as possible at less than 10 per cent. relative to the diluted ex-income NAV, and uses the Company's buyback powers to pursue this objective. Over the year the average daily discount, using the diluted ex-income NAV, was 9.2 per cent. The Board also believes that, as well as providing liquidity, it is important that buybacks should bring an uplift in NAV per share for continuing investors (as a result of those shares being acquired at a discount to their NAV). This will continue to be the Board's policy for the year ahead and the Directors will therefore propose a resolution at the forthcoming Annual General Meeting ('AGM') to authorise the Company to repurchase its Ordinary and Subscription shares.

In addition, and as part of its armoury to manage the discount, the Directors intend to convene a General Meeting in February 2011 to propose introducing conditional semi-annual tender offers. Each tender offer would be for up to 5 per cent. of the Company's Ordinary shares in issue at the relevant date, at a 2 per cent. discount to diluted ex-income NAV, less the costs of effecting the tender. The first such tender would be in respect of the six month period ending 30th September 2011 and would be implemented if the Company's Ordinary shares have traded at an average daily discount of more than 9 per cent. relative to their diluted ex-income NAV over that period. Thereafter, and subject to receiving the necessary shareholder approvals at each AGM, such tenders would be conducted on the same basis in respect of the financial periods ending 31st March and 30th September each year. Shareholders should note that these tender offers will, however, remain at the discretion of the Board and be subject to prevailing market conditions at the time, so they should place no expectation on these tender offers being implemented in the future.

Proposed One-Off Tender Offer

The Board has also decided, following recent meetings with a number of the Company's major shareholders, to implement a one-off tender offer for up to 5 per cent. of the Ordinary shares in issue on the Record Date of 8th December 2010 and to allow Subscription shareholders to participate  in this tender if they exercise their conversion rights by 7th January 2011. Subscription shareholders on the register on the Record Date and who exercise their Subscription shares by 7th January 2011 will be deemed to have held the Ordinary shares resulting from the exercise on the Record Date.

This tender offer is designed to enable those shareholders (other than restricted shareholders) who wish to realise their Ordinary shares to do so (subject to the overall limits of the tender offer). Shareholders who successfully tender their Ordinary shares will receive a tender price per Ordinary share which will be equal to the diluted ex-income NAV per Ordinary share (inclusive of undistributed revenue reserves) on the calculation date, from which the direct costs and expenses of the tender offer (including stamp duty and realisation costs), together with a further 2 per cent. discount, have been deducted.

Under the terms of this tender offer, shareholders (other than restricted shareholders) will be entitled to tender up to 5 per cent. of the Ordinary shares they hold, as at the Record Date (their 'Basic Entitlement'). Such shareholders will also be able to tender additional Ordinary shares, but such excess tenders will only be satisfied to the extent that other Shareholders tender less than their aggregate Basic Entitlement and will be satisfied on a pro rata basis. Tender applications will be rounded down to the nearest whole number of Ordinary shares.

A circular in respect of this tender offer (and the semi-annual tender offers detailed above) is expected to be despatched to shareholders in the first half of January 2011. This one-off tender offer will be conditional on shareholders approving the Company's continuation resolution at the AGM on 31st January 2011, as more fully described below.

Subscription Shares

The Company issued 32,000,805 Subscription shares as a bonus issue to qualifying shareholders on the basis of one Subscription share for every five Ordinary shares held in February 2009. Each Subscription share confers the right (but not the obligation) to subscribe for one Ordinary share at predetermined prices on any business day during the period from 1st April 2009 until 31st March 2014, after which the rights on the Subscription shares will lapse. Between 1st October 2009 and 30th September 2010, 19,669,626 Subscription shares were converted into Ordinary shares, raising proceeds of £26,972,000. As at the date of this Report, a further 27,641 Subscription shares have been converted, meaning that a total of £27,641,000 has been raised for investment by the Company since the Subscription shares were issued, with 63 per cent. of the original allotment of Subscription shares being converted.

On 1st April 2010, the exercise price stepped up from an initial 137p per Subscription share to 176p per share. Since this increase, the Company's Ordinary share price, which is 237p at the time of writing, has remained above the revised exercise price. The next and final step-up in exercise price, to 203p per share, will take place on 1st April 2012.

Further details on the Subscription shares, including their exercise prices, the apportionments for capital gains tax purposes and how they may be exercised, can be found on the Company's website at www.jpmasian.co.uk and in the Company's Report & Accounts.

Manager

The Board has carried out its formal annual review of the investment management, company secretarial and marketing services provided to the Company by JPMorgan Asset Management (UK) Limited ('JPMAM'). This review encompassed their performance record, management processes, investment style, resources and risk control mechanisms. After full consideration, the Board concluded that the continued appointment of JPMAM for provision of these services on the terms agreed is in the interests of shareholders as a whole.

Performance Fee

This year, for the first time since 2008, a performance fee is payable to the Manager. Despite the Company having outperformed its benchmark index in the two years up to 30th September 2010 the fee amounts to a relatively modest £53,000, as the carried forward negative balance of £1.193m (incurred largely in respect of poor performance in the year ended 30th September 2008) had to be covered before a performance fee could again be paid. The Board is pleased that the Manager's investment performance relative to our benchmark index has improved to such an extent that it has earned this additional fee. Details in relation to the calculation of the performance fee may be found in the Directors' Report in the Company's Report & Accounts.

Borrowing Facilities

The Company has a £25 million five year multi-currency loan facility with Lloyds Banking Group, which expires in May 2011. In August the Board was able to renegotiate the Company's 364 day multi-currency facility with ING Bank and increased the expiring facility from £20 million to £30 million and for a term of three years.

Board

This year the Directors commissioned Trust Associates, an independent consultancy firm, to facilitate the annual evaluation of the Board. The evaluation covered a range of topics including size and composition of the Board, Board information and processes, shareholder engagement and training and accountability, as well as the effectiveness of the Audit Committee, the Chairman and the Directors. This was a very worthwhile and revealing exercise and actions have been taken in respect of the findings and recommendations.

As part of its commitment to effective succession planning, the Board has resolved to recruit a new non-executive director in 2011, in anticipation of the retirement of Mr Alun Evans at the AGM in 2012.

Continuation Vote

The Articles of Association of the Company provide that the Directors must propose an Ordinary resolution for the continuation of the Company in its current form at the forthcoming AGM. The Board has confidence in the Company's ability to benefit from the opportunities for long term capital growth offered by Asia ex Japan stockmarkets and, having also consulted a number of its larger shareholders, has no hesitation in recommending that shareholders vote in favour of the resolution, as the Directors intend to do with their own shares. This will enable the Company to continue as an investment trust for a further three years until the AGM to be held in 2014.

Annual General Meeting

This years Meeting will again be held at The Salters' Hall, 4 Fore Street, London EC2Y 5DE on Monday 31st January 2011 at 12.00 noon. In addition to the formal proceedings, there will be a presentation by Joshua Tay, one of your investment managers, who will also be available to respond to questions on the Company's portfolio, investment strategy and the outlook for Asia generally. Following the Meeting there will be an opportunity for shareholders to meet the Board and the investment manager over a buffet lunch and I look forward to seeing as many of you as possible.

Outlook

At the time of writing Asia ex Japan stock markets are strong, supported by healthy company balance sheets and reasonable valuations and our investment managers remain positive for now. Nevertheless, we have seen recent interest rate increases from China, Australia and India as these countries' central banks seek to moderate growth to avoid excessive inflation. For now the portfolio remains geared but our investment managers are keeping a very close eye on equity market valuations.

James M Long

Chairman

10th December 2010

Investment Managers' Report

Market Review

The twelve months to 30th September 2010 has been a period of continued, but volatile, recovery in Asian markets. The MSCI AC Asia ex Japan Index rose 21.3 per cent. in sterling terms over this period. During the last quarter of 2009, Asia's stock markets rose as their economies continued to benefit from both global and regional stimulus. However, this trend quickly reversed at the start of 2010 as markets retreated following concerns over Chinese economic policy tightening, the risk of a Greek debt default, fears over changes in US bank regulation and rising inflation worries. In addition, after a strong 2009, Asian stock markets were no longer as attractively valued and therefore susceptible to profit taking. A brief respite in February and March 2010 saw markets rise again thanks to a recovery in US consumption data. Again this trend was short lived.

As we went into the second quarter of 2010, momentum ebbed as fears over European sovereign debt and further Chinese tightening measures resurfaced once again. Asian markets recovered from July onwards, and indeed rose very strongly in September, as investment flowed back into the region following a return of risk appetite and as concerns faded over a double dip recession in the US. Global central banks signalling possible further quantitative easing measures also provided momentum to the equity market rally.

Over the twelve month review period, south Asian countries performed markedly better than their northern counterparts. In particular, small, non-export dependent countries, such as the Philippines, Thailand and Indonesia outperformed the region. Indian equities also performed well as the country's profit cycle restarted and economic indicators posted strong growth. The Greater China markets (China, Hong Kong and Taiwan) posted mixed performance; China and Taiwan lagged the broader region as Hong Kong outperformed. In Hong Kong, the continued talk of the globalisation of the renminbi and the concomitant liquidity benefits that this would bring this territory (as China's international financial centre), buoyed local bank and property stocks. Taiwan and Korea underperformed over the review period as weak demand from the developed world weighed on their export-exposed economies. Both China's A and H share markets lagged the region as investors awaited clarity on how far policy tightening measures would go and whether the economy would achieve a soft landing.

Performance

Over the twelve months ended 30th September 2010, the Company's portfolio returned +23.9 per cent, net of management fees and expenses, outperforming the benchmark index by 2.6 percentage points. Over the course of the year we employed gearing of approximately 5 per cent. on average. Both asset allocation and stock selection contributed to positive returns. In terms of asset allocation, our decision to overweight Thailand and Indonesia contributed positively to performance.

Conversely, our underweight in Hong Kong and having no exposure in Malaysia, detracted from performance. At the stock level, selection was strongest in Singapore, Thailand, Korea and India. In Singapore the portfolio's holding of consumption stocks such as Genting Singapore and GMG Global, and our overweight in Keppel Land were key contributors to performance. Genting Singapore's shares posted strong gains, especially in the third quarter of 2010, as its newly opened integrated casino registered robust growth. GMG Global, an operator of rubber plantations, benefited from an increase in rubber prices due to supply constraints and significant demand growth, especially from China.

Encouraging home sales in Singapore and China benefited Keppel Land but further policy action remains a risk with the Singapore government keeping a close eye on the city-state's property prices. The two largest contributors to performance were two Thai stocks; namely Siam Cement and Banpu. Siam Cement's shares posted strong gains on the back of increasing demand for both cement and chemicals and Banpu's shares rose due to the positive long term outlook for coal demand, especially from China and India. In Korea, the portfolio benefited from our decision to overweight Samsung Engineering, whose order book looked increasingly robust. In India, consumer discretionary names were also strong, especially our holding of Tata Motors which surged 72 per cent. following increased demand for its passenger cars. Conversely, stock selection in Taiwan, especially within the information technology sector, detracted from performance. Our decision to overweight RichTek Technology and underweight HTC cost performance. HTC's share price rose as evidence emerged that concerns over the degree and speed of pricing and margin contraction were exaggerated, and in July the company launched its own brand devices in China. In contrast, RichTek's share price struggled from May onwards on concerns over rising competition and margin pressure.

Portfolio Activity/Positioning

At the end of 2009, it became increasingly clear to us that, with US rates remaining low, Asia would remain strong and liquidity would continue to flow into the region. Earnings expectations were reasonable which supported valuations and, with recovering demand from the OECD, the market's momentum would be maintained into the second half of 2010. Although we were cognisant of the headwinds (property tightening, banking sector overhang) facing Chinese equities, we started 2010 with overweight positions in China, Hong Kong, Indonesia and Thailand. We turned positive on India and took an overweight position in that market in March on the back of its strong earnings outlook. In Thailand, where exports, consumer and investment indicators continued to show very strong growth, we remained overweight despite concerns over the impact that the political protests would have on the Thai economy.

In Indonesia, however, we turned more cautious as valuations became stretched and inflation expectations accelerated. In July, it became apparent China would achieve a soft landing for its economy and we decided to increase our overweight as we gained more confidence.

The underlying theme of our portfolio strategy remains unchanged; namely to favour domestic consumption stocks in Asia, at the expense of exporters, with India and China remaining our key overweight markets. In India, where the portfolio remains overweight in financials and other domestic consumption related names, the outlook in the medium to long term continues to be very positive from a bottom-up perspective, as fundamentals continue to improve. In China, where we are looking for signs of a peak in policy risk before we see further market upside, we have recently taken profits on some of the cyclical stocks which have performed well. Despite the possibility of the introduction of capital controls in Thailand and some other ASEAN countries, we continue to favour South Asia over the more OECD-export-exposed North Asian countries.

Market Outlook

US Dollar weakness and a flattening of developed world growth have been the main features of the final quarter. Momentum in markets accelerated in October with growing QE2 speculation (a second bout of quantitative easing was announced on 3rd November) but there was disquiet about the effect of low rates and a weak US Dollar on the success of U.S. Treasury auctions. Thanks to renewed fears about the weaker Eurozone nations (Ireland in particular) and tensions between North and South Korea, markets have corrected since the beginning of November. There are concerns too about possible speculative or bubble effects resulting from keeping rates at record low levels (gold bubbles, bond bubbles), the bursting of which might further damage already weak financial institutions. These concerns aside, the easing of export growth rates from Asia is indicating a weak year-end shopping season. This is not surprising given the structural factors behind what are likely to prove permanent job losses in the U.S. and Europe.

China is trying to protect domestic jobs from too fast an appreciation in its currency and wishes to move smoothly, not disruptively, up the value-added curve. Over the third quarter, the A-share market had recognised the possible end of administrative measures and there is plenty of room for the laggard domestic market to catch up with its Hong Kong-listed counterparts. More recently however, as China's near term growth concern fades, policymakers are turning their focus to inflation. The surprisingly strong pickup in October CPI inflation caused obvious jitters in the market and we expect to see inflation headlines dominating news-flow until after Chinese New Year (Feb 2011). We expect the central bank to continue to focus on liquidity management, through intensified sterilisation, reserve requirement ratio hikes, and further credit controls in the coming months, in addition to closer monitoring of capital inflows, all of which will continue to cause uncertainty in the market. Additionally, should CPI continue to stay at elevated levels, the probability of the government allowing the renminbi to appreciate faster than previously anticipated is rising. India, on the other hand, will be supported by a strong monsoon, good earnings growth and foreign inflows. As indicated, some concern exists on capital controls in the region, and we prefer South Asia over the more OECD-export-exposed North Asia. That said, there will still be companies in Korea and Taiwan which offer good exposure to growth both in China and in those products still seeing growth in the OECD.

Valuations are now at mid-cycle levels at 2.2x Trailing Price/Book and 13.4x 2011 Price/Earnings for MSCI Asia ex-Japan. Liquidity is abundant in Asia driving prices higher and earnings revisions are coming through to sustain multiples. However, the quality of those upgrades needs rigorous scrutiny.

Joshua Tay

Pauline Ng

Investment Managers

10th December 2010

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 Underperformance: An inappropriate investment strategy, for example asset allocation, the level of gearing or the degree of portfolio risk, could lead to underperformance against the Company's benchmark index and peer companies, resulting in the Company's shares trading on a wider discount. The Board manages these risks by diversification of investments and through a set of investment restrictions and guidelines which are monitored and reported on by the Manager. JPMorgan Asset Management (UK) Limited ('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 Manager, who attends all Board meetings, and reviews data which show statistical measures of the Company's risk profile.

•   Political and Economic: Administrative risks, such as the imposition of restrictions on the free movement of capital.

•   Loss of Investment Team or Investment Manager: A sudden departure of the investment manager or several members of the investment management team could result in a short-term deterioration in investment performance. The Manager takes steps to reduce the likelihood of such an event by ensuring appropriate succession planning and the adoption of a team based approach, as well as special efforts to retain key personnel.

•   Discount: A disproportionate widening of the discount relative to the Company's peers could result in loss of value for shareholders. The Board regularly discusses discount policy - please refer to the Chairman's Statement for details on the Board's proposed changes to its discount control policies.

•   Change of Corporate Control of the Manager: The Board holds regular meetings with senior representatives of JPMAM in order to obtain assurance that the Manager continues to demonstrate a high degree of commitment to its investment trusts business through the provision of significant resources.

•   Accounting, Legal and Regulatory: In order to qualify as an investment trust, the Company must comply with Section 1158 of the Income and 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, gains within the Company's portfolio would be subject to Capital Gains Tax. The Section 1158 qualification criteria are continually monitored by JPMAM and the results reported to the Board each month. The Company must also comply with the provisions of the Companies Act 2006 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules. 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, and its professional advisers to ensure compliance with the Companies Act 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 and credit risk. Further details are disclosed in note 23 of the Annual Report.

Related Parties Transactions

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

Directors' Responsibilities

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

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

b)         the Annual Report, to be published shortly, includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face.

For and on behalf of the Board

James Long

Chairman

10th December 2010

Income Statement

for the year ended 30th September 2010

		2010			2009
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss		-	83,627	83,627	-	98,117	98,117
Net foreign currency (losses)/gains		-	(1,529)	(1,529)	-	1,723	1,723
Income from investments		7,241	-	7,241	5,306	-	5,306
Other interest receivable and similar income		15	-	15	57	-	57
Gross return		7,256	82,098	89,354	5,363	99,840	105,203
Management fee		(2,413)	-	(2,413)	(1,637)	-	(1,637)
Performance fee		-	(53)	(53)	-	-	-
Other administrative expenses		(792)	-	(792)	(607)	-	(607)
Net return on ordinary activities before  finance costs and taxation		4,051	82,045	86,096	3,119	99,840	102,959
Finance costs		(540)	-	(540)	(191)	-	(191)
Net return on ordinary activities before  taxation		3,511	82,045	85,556	2,928	99,840	102,768
Taxation		(514)	-	(514)	(451)	-	(451)
Net return on ordinary activities after taxation		2,997	82,045	85,042	2,477	99,840	102,317
Return per Ordinary share - diluted	3	1.75p	47.90p	49.65p	1.52p	61.13p	62.65p
Return per Ordinary share - undiluted	3	1.76p	48.20p	49.96p	1.55p	62.35p	63.90p

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

	Called up		Exercised	Capital
	share	Share	warrant	redemption	Other	Capital	Revenue
	capital	premium	reserve	reserve	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2008	40,002	4,347	977	3,009	106,481	83,633	3,163	241,612
Bonus issue of Subscription shares	320	(320)	-	-	-	-	-	-
Subscription shares' issue costs	-	(352)	-	-	-	-	-	(352)
Exercise of Subscription shares into Ordinary shares	(5)	5	-	-	-	-	-	-
Issue of Ordinary shares on exercise of Subscription shares	113	507	-	-	-	-	-	620
Net return on ordinary activities	-	-	-	-	-	99,840	2,477	102,317
Dividends appropriated in the year	-	-	-	-	-	-	(2,720)	(2,720)
At 30th September 2009	40,430	4,187	977	3,009	106,481	183,473	2,920	341,477
Repurchase of the Company's own Ordinary shares for cancellation	(780)	-	-	780	(6,045)	-	-	(6,045)
Exercise of Subscription shares into Ordinary shares	(197)	197	-	-	-	-	-	-
Issue of Ordinary shares on exercise of Subscription shares	4,918	22,054	-	-	-	-	-	26,972
Net return on ordinary activities	-	-	-	-	-	82,045	2,997	85,042
Dividends appropriated in the year	-	-	-	-	-	-	(2,444)	(2,444)
At 30th September 2010	44,371	26,438	977	3,789	100,436	265,518	3,473	445,002

Balance Sheet

at 30th September 2010

		2010	2009
	Note	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		462,427	358,728
Current assets
Debtors		7,602	2,125
Cash and short term deposits		31,496	14,985
		39,098	17,110
Creditors: amounts falling due within one year		(37,480)	(9,351)
Derivative financial instruments held at fair value through profit or loss		(5)	-
Net current assets		1,613	7,759
Total assets less current liabilities		464,040	366,487
Creditors: amounts falling due after more than one year		(19,038)	(25,010)
Total net assets		445,002	341,477
Capital and reserves
Called up share capital		44,371	40,430
Share premium		26,438	4,187
Exercised warrant reserve		977	977
Capital redemption reserve		3,789	3,009
Other reserve		100,436	106,481
Capital reserves		265,518	183,473
Revenue reserve		3,473	2,920
Total shareholders' funds		445,002	341,477
Net asset value per Ordinary share - diluted	4	246.7p	200.4p
Net asset value per Ordinary share - undiluted	4	251.4p	212.8p

Cash Flow Statement

for the year ended 30th September 2010

		2010	2009
		£'000	£'000
Net cash inflow from operating activities		2,729	2,797
Returns on investments and servicing of finance
Interest paid		(551)	(180)
Taxation paid		(120)	(341)
Capital expenditure and financial investment
Purchases of investments		(487,561)	(578,441)
Sales of investments		471,978	542,930
Settlement of futures contracts		2	31
Other capital charges		(84)	(47)
Net cash outflow from capital expenditure and financial investment		(15,665)	(35,527)
Dividends paid		(2,444)	(2,720)
Net cash outflow before financing		(16,051)	(35,971)
Financing
Subscription shares' issue costs		-	(352)
Repurchase of the Company's own Ordinary shares for cancellation		(6,045)	-
Issue of Ordinary shares on exercise of Subscription shares		26,972	620
Bank loans drawn down		11,958	31,928
Net cash inflow from financing		32,885	32,196
Increase/(decrease) in cash for the year		16,834	(3,775)

Notes to the Accounts

for the year ended 30th September 2010

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' (the 'SORP') issued by the AIC in January 2009. All of the Company's operations are of a continuing nature.

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

2.  Dividends

(a) Dividends paid and proposed

	2010	2009
	£'000	£'000
2009 final dividend paid of 1.50p (2008: 1.70p)	2,444	2,720
2010 final dividend proposed of 1.70p (2009: 1.50p)	3,009	2,407

     The final dividend proposed in respect of the year ended 30th September 2010 is subject to approval at the forthcoming Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the accounts for the year ending 30th September 2011.

		2010	2009
		£'000	£'000
3.	Return per Ordinary share
	Return per Ordinary share is based on the following:
	Revenue return	2,997	2,477
	Capital return	82,045	99,840
	Total return	85,042	102,317
	Weighted average number of Ordinary shares in issue during the year used for the purpose of the diluted calculation	171,274,043	163,311,137
	Weighted average number of Ordinary shares in issue during the year used for the purpose of the undiluted calculation	170,217,959	160,122,194
	Diluted
	Revenue return per Ordinary share	1.75p	1.52p
	Capital return per Ordinary share	47.90p	61.13p
	Total return per Ordinary share	49.65p	62.65p
	Undiluted
	Revenue return per Ordinary share	1.76p	1.55p
	Capital return per Ordinary share	48.20p	62.35p
	Total return per Ordinary share	49.96p	63.90p

     The diluted return per Ordinary share represents the return on ordinary activities after taxation divided by the weighted average number of Ordinary shares in issue during the year as adjusted in accordance with Financial Reporting Standard 22 'Earnings per share'.

		2010	2009
4.	Net asset value per Ordinary share
	Diluted
	Ordinary shareholders' funds assuming exercise of Subscription shares (£'000)	465,907	384,698
	Number of potential Ordinary shares in issue	188,888,349	192,007,959
	Net asset value per Ordinary share (pence)	246.7	200.4
	Undiluted
	Ordinary shareholders' funds (£'000)	445,002	341,477
	Number of Ordinary shares in issue	177,010,090	160,460,074
	Net asset value per Ordinary share (pence)	251.4	212.8

     The diluted net asset value per Ordinary share assumes that all outstanding Subscription shares were converted into Ordinary shares at the year end.

5. Status of announcement

2009 Financial Information

The figures and financial information for 2009 are extracted from the published Annual Report and Accounts for the year ended 30th September 2009 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 237(2) or section 237(3) of the Companies Act 1985.

2010 Financial Information

The figures and financial information for 2010 are extracted from the Annual Report and Accounts for the year ended 30th September 2010 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 21st December 2010 and will shortly be available on the Company's website (www.jpmasian.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.jpmasian.co.uk.

For further information please contact:

Alison Vincent

For and on behalf of

JPMorgan Asset Management (UK) Limited, Secretary - 020 7742 6000

10th December 2010

 

END

 

 

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