Final Results (Replacement)

RNS Number : 8401H

JPMorgan Chinese Inv Tst PLC

10 November 2008

 



The following replaces announcement 8291H released to the London Stock Exchange at 14.20 p.m. on Monday 10th November 2008.

Please note that the Company's return on net assets, as disclosed in the first sentence of the Investment Managers' Report, was -36.3% and not -6.3% as previously stated.

All other details remain unchanged. 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN CHINESE INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER 2008

    Chairman's Statement

Performance

The year to 30th September 2008 proved a difficult one for investors globally, as economic conditions continued to deteriorate in a period of unprecedented volatility. The Greater China markets were of no exception, with negative returns offsetting most of the positive performance of the previous year. It is disappointing to report that the Company's total return on net assets, which comprises the percentage change in net asset value ('NAV') with the net dividend reinvested, was -36.3%, underperforming the Company's benchmark, the MSCI Golden Dragon Index (in sterling terms), which returned -32.3%. The Company's share price return of -34.7% was marginally better, reflecting a narrowing of the discount from 6.7% to 4.8%.

Revenue and Dividends

Revenue for the year, after taxation, was £364,000 (2007: £386,000) and earnings per share, calculated on the average number of shares in issue during the year, was 0.51 pence (2007: 0.52 pence).

Given the Company's surplus on its Revenue Account, the Board is recommending a dividend of 0.5 pence (2007: 0.5 pence) per share in respect of the financial year ended 30th September 2008. Subject to shareholders' approval at the Annual General Meeting, the dividend will be paid on 19th December 2008 to shareholders on the register at close of business on 21st November 2008.

Whilst it is the Company's policy to distribute substantially all the available income each year, shareholders should note that the Company's objective remains that of long term capital growth and dividends will vary accordingly.

Gearing

The Company has an £8 million revolving credit facility with Lloyds TSB Bank, which matures at the end of January 2010. This facility gives the Investment Managers the ability to gear tactically. The Board has given the Investment Managers the flexibility to set gearing within the range of 90% to 115% invested. At the time of writing, the Company was 93% invested, reflecting the Investment Managers' cautious approach to current market conditions.

Bonus Issue of Subscription Shares

At the Company's General Meeting held on 14th April 2008, shareholders approved the bonus issue of subscription shares as described in the Company's prospectus dated 18th March 2008, with the aim of enlarging the Company. A total of 14,136,407 subscription shares were listed and trading commenced on 16th April 2008. Subscription shares were issued to qualifying 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 15th May 2009 and at the end of each 12 month period thereafter until 15th May 2013. The conversion prices of the subscription shares, calculated as at the close of business on 11th April 2008 and based on the Company's net asset value of 129.19 pence, are as follows: 131 pence if subscription share rights are exercised in May 2009; 143 pence if subscription share rights are exercised in May 2010; and 168 pence if subscription share rights are exercised in May 2011, 2012 or 2013. 

Continuation Vote

At the General Meeting held in April 2008, shareholders also resolved that the Company continue as an investment trust for the period until the end of the Annual General Meeting to be held in 2013. The continuation vote was brought forward in line with the five year life of the subscription shares, to ensure that the subscription share rights were not affected by the Company's five yearly continuation vote schedule.

Companies Act and New Articles of Association

In order to comply with the provisions of the Companies Act 2006, shareholders approved the Company's adoption of new Articles of Association at the General Meeting held on 14th April 2008. The new Act is being introduced in stages and is expected to be fully enacted by 1st October 2009. Details of the changes to the Company's Articles were provided in the notes to the Shareholder Circular dated 18th March 2008. 

Share Issues and Repurchases

The Directors consider it to be in the interests of shareholders that the Company's share price reflects, as closely as possible, the NAV per share. At the General Meeting held on 14th April 2008, shareholders gave the Board authority to issue up to approximately 50 million new ordinary shares in the Company. In addition, the authority to repurchase up to 14.99% of the Company's issued ordinary share capital was renewed. As previously stated, repurchases will only be made in the market at prices below the prevailing NAV per share. At the time of writing, no shares have been repurchased and cancelled under this authority.

However, during the year to 30th September 2008, 663,000 shares were bought back and held in Treasury to be re-issued at a premium when market conditions suit, or subsequently cancelled if no demand is forthcoming. The Board is seeking shareholder authority to disapply pre-emption rights on the sale of shares held in Treasury at the forthcoming Annual General Meeting.

At the General Meeting held on 14th April 2008, shareholders also gave the Board authority to buy back up to 14.99% of the issued subscription share capital. Repurchase of subscription shares will be made at the discretion of the Board and only when market conditions are appropriate.

The Board believes that its active policy of share issuance and share buybacks has helped to reduce discount volatility and recommends that the buyback authorities be kept in place. Accordingly, we are seeking approval from shareholders to renew these buyback authorities at the forthcoming Annual General Meeting.

Corporate Governance

The Company operates in accordance with corporate governance best practice and the Board is committed to the highest standards of corporate governance applicable under the Combined Code and the Association of Investment Companies ('AIC') Code of Corporate Governance for Investment Trusts. 

In August 2008, the Nomination Committee of the Board met and carried out an evaluation of the Directors, the Chairman, the Board itself and its committees, the results of which were satisfactory. The Board takes this review seriously and views it as an effective means of evaluating the continuing efficacy of the Board.

Review of services provided by the Manager

During the year the Board carried out a thorough review of the services provided by the Manager, noting in particular the performance against the benchmark in both the past year and over the longer term. Following this review, the Board has concluded that the continued appointment of the Manager on the terms agreed is in the interests of the shareholders as a whole.

The fees payable to the Manager comprise a fixed basic management fee of 1% of total assets per annum and a performance related fee of 15% of any outperformance of the NAV total return over the benchmark. The amount of the latter fee actually payable to the Manager is capped at 1% in any one year, with any excess being carried forward and either paid out (subject to the 1% cap) or absorbed by any underperformance in subsequent years.

The underperformance in this financial year has absorbed £579,000 of the £3,613,000 performance fee carried over from the previous year. In accordance with the terms of the arrangement, a performance fee of £3,034,000 remains payable, of which, under the cap arrangement, £997,000 is payable now and £2,037,000 is carried forward.

The Company's expenses for the financial year as a percentage of the average of the opening and closing net assets (the 'Total Expense Ratio') was 1.88% before accounting for the performance fee. This ratio has increased as a result of the Company's reduction in NAV, although still compares favourably with those of similar funds.

Board of Directors

In accordance with the Company's Articles of Association, Sir Andrew Burns will retire by rotation at the forthcoming Annual General Meeting and offers himself for re-election. In addition, having served as a Director for more than nine years, I offer myself for re-election on an annual basis. The Board does not believe that length of service in itself should disqualify a Director from seeking re-election and, in proposing my re-election, it has taken into account the ongoing requirements of the Combined Code, including the need to refresh the Board and its Committees. The Nomination Committee has met to consider the attributes and contributions of the individuals concerned and, following this review, has no hesitation in recommending their re-elections at the Annual General Meeting.

Annual General Meeting

This year's Annual General Meeting will be held on Tuesday 16th December 2008 at 11.00 a.m. at the Armourers' Hall, 81 Coleman Street, London EC2R 5BJ. 

Post Balance Sheet Event

Since the year end and at the date of this report, global economic conditions have continued to deteriorate, resulting in a reduction to the Company's NAV from 95.4 pence per share at 30th September 2008 to 85.7 pence per share at 7th November 2008. 

Outlook

For the short term at least, economic conditions will remain challenging for Greater China equity markets, with the impact of tightening credit, financial system de-leveraging and slowing growth likely to weigh heavily on investor sentiment. Despite these difficulties, the Board remains confident in the long term growth potential of Greater China region companies and in the Investment Managers' ability to deliver outperformance.

Nigel Melville

Chairman

10th November 2008

Investment Managers' Report

In the 12 months ended 30th September 2008, the Company produced a total return on net assets of - 36.3% against a benchmark return of -32.3%, an underperformance of 4.0%. This underperformance follows a period of strong relative and absolute performance for the Company in each of the previous three financial years.

Within the Greater China markets in which we invest, the MSCI China Index fell 40.5% in sterling terms during the year to 30th September 2008, whilst the domestic A-Share market measured by CSI 300 Index fell 51.1%, Hong Kong's Hang Seng Index declined 23.9% and Taiwan's TWSE Index lost 29.4%.

At the portfolio level, our decision to be overweight in China relative to Hong Kong and Taiwan detracted from performance. The Company's gearing, which averaged 102.3% over the financial year, also contributed marginally to underperformance.

At the individual stock level, Chinese shares listed in Hong Kong contributed positively to relative performance but Taiwan and Hong Kong stock selection proved to be big detractors. Our decision to be overweight in Chinese financials resulted in positive returns, with our holdings in China Construction Bank, China Merchants Bank as well as China's largest life insurance provider, China Life, all reporting positive earnings. China Construction Bank for example, posted a 51% increase in second half profits on higher lending margins.

The Company's holding in the JF China Pioneer 'A' Share Fund was the largest detractor at the stock level. The mainland based A-Share market corrected sharply as risk aversion among retail investors in China rose, causing a flight to cash. Our decision not to own some defensive utility stocks in Hong Kong - where valuations are at a premium to the broader index coupled with slower long-term growth propsects - also hurt performance, as did our stock selection within the China property sector. Near term volatility will continue in sectors such as real estate, where property demand in Chinese cities has as much as halved since the government raised minimum down payment requirements and increased mortgage rates to cool home prices earlier this year. Given the worsening global credit crisis, we expect the Chinese Government to introduce more positive stimulus initiatives to help the domestic market recover. We continue to believe that urbanisation and regeneration trends in urban China will continue to drive long-term domestic demand and hence we are maintaining our position in select, quality mainland names.

China

Market Performance

China's market rally, which began as far back as March 2007, continued into the third quarter of 2007 on the back of strong macroeconomic growth as well as encouraging corporate earnings data. Chinese equities began to sell-off, however, when plans to allow domestic Chinese retail investors to invest directly into Hong Kong stocks, the so-called 'through train' arrangements, were delayed by the mainland government. Sentiment in subsequent quarters became driven by profit-taking and lingering concerns over the impact of the US sub-prime crisis on the region, as well as China's rising inflation and domestic credit tightening. During the winter, China continued to struggle with inflation as snow storms and damaged crops caused infrastructure bottlenecks, prompting the government to issue price controls on some consumer staples. Inflation accelerated to 8%, mainly driven by higher prices of food, petroleum and raw materials.

Equities continued to consolidate in the second quarter of 2008 with a mild rebound in April and a subsequent sell-off triggered by the devastating earthquake in Sichuan. However, inflation began to abate and the economy showed some signs of cooling off.

In the three months to 30th September 2008, Chinese equity markets deteriorated dramatically (the MSCI China Index fell almost 17%), along with other global bourses. Concerns shifted from rising inflation to doubts over the sustainability of Chinese GDP growth running above 10% in the future. Economic data in August showed materially slower growth in China, reflecting the results of the government's tightening measures adopted over the past year, as well as the Olympics-related restrictions. Now facing slower growth and easing inflation pressure (the change in Consumer Price Index fell notably to 4.9% from the peak of 8.7% in February), the Chinese government has clearly reorientated towards a pro-growth stance. For example, China has recently implemented a number of policies to support the domestic A-Share markets, hoping to limit the extent of the panic sell-off. 

Market Outlook

Economic conditions remain challenging globally given the combination of tight credit, financial system de-leveraging and slowing growth. China equity markets will be operating against these global headwinds and as a result, absolute share price performance will likely be more linked to global capital flows than domestic economies or corporate earnings. We continue to expect slowing Chinese inflation as food prices moderate, which should underpin the relatively stronger case for Chinese equities in 2009. Valuations of China now are around 8x price/earnings ('P/E') with 14% earnings growth forecasted for 2009. On P/E to growth measures, China still looks very solid compared to its peers. In addition, our expectation remains that further policy actions could come from the mainland government in the fourth quarter of 2008 in an attempt to offset the inevitability of slowing export and domestic growth. China continues to have more fiscal and monetary policy flexibility at its disposal than almost any other country in the world.

Hong Kong

Market Performance

In Hong Kong, strong demand for China stocks pushed the stock market significantly higher until October 2007 when the China market started to correct. The traditional Chinese New Year rally in February proved to be shortlived and risk aversion prevailed. Investors were briefly comforted by a positive and expansionary government budget on the back of a HK$116 billion fiscal surplus for the year 2007-2008. Inflationary worries in China dampened investor sentiment but the local property market remained robust. An improving job market helped to hold up domestic demand while a lower unemployment rate led to a modest wage increase. Rising inflation brought negative real interest rates into sharper focus.

Volatility prevailed into the second quarter of 2008 and like China, Hong Kong experienced a moderate rebound in April. Hong Kong's economic growth appeared to remain resilient despite the slowing US economy and the cooling-off of China's growth. Property launches were still receiving strong take-ups, but stocks began to see heavy sell-offs as investors took a more cautious view of global growth and the expanding credit crisis.

During the third quarter of 2008, property market activity in Hong Kong turned negative in the face of weak investor sentiment. With the difficulty of replenishing land banks at favorable prices, the major developers slowed down their property releases to wait for better times. The moderation in Hong Kong's economic performance was also a cause of concern resulting in the Hang Seng Index dropping 18.5% in the 3 months ended 30th September 2008.

Market Outlook

Hong Kong may see another downturn given its economic reliance on financial services, global trade and property prices, all of which are likely to weaken further. However, household and corporate balance sheets are strong with high levels of savings and corporate cash. We are yet to see any positive catalysts for real estate prices, although some property stocks appear to be overly discounted. Economic growth is slowing rapidly after the 1.4% contraction in the second quarter of 2008. Trade figures are likely to be sluggish and the recent negative developments in the job market are worrisome. Domestic demand in Hong Kong is likely to weaken further.

Taiwan

Market Performance

The Taiwan market fell modestly in the fourth quarter of 2007, but the new year began on a positive note as fourth quarter 2007 GDP growth rose 6.4% year on year, lifted by strong exports. The market continued to rally in February 2008 after the Kuomintang party won the legislative elections and their candidate Ma Ying-Jeou secured the presidential election by a landslide vote against the Democratic Progressive Party. The new Government had big plans to reform cross-straits relations, which investors believed would have a positive effect on the domestic Taiwanese economy.

From mid May 2008, the stock market fell sharply as oil prices reached new highs and investors worried about the economy entering 'stagflation'. The new government cut energy subsidies which caused inflation to spike and investors realised that improving cross-straits ties with China would take years, rather than months, to impact the broader economy.

In the three months ended 30th September 2008, the Taiwan market continued to weaken, despite the Government's decision to cut the discount rate by 12.5bps to 3.5% (the first rate cut in four years) and tighten the rules for shorting stocks. The Taiwan technology sector performed better than expected, mainly because the earnings downgrades were already reflected in equity prices and companies continue to pay out high proportions of their cash as dividends. However, the broader market remained very weak, influenced by global events and the increasing likelihood of an OECD-led recession.

Market Outlook

We expect domestic property prices and the volume of transactions to fall further in addition to the weak stock market. The credit tightening cycle worldwide will hurt companies with high gearing and those that require additional capital. In the handset and desktop PC sectors, growth will certainly decelerate. However, certain new product introductions such as 'netbook', a low-price notebook optimised for few specific tasks, especially internet access, should see strong demand because of its attractive price points. We expect the corporate sector to send conservative indications for the fourth quarter of 2008 and first quarter of 2009 and analysts should follow to revise down their earnings forecasts further into 2009. At that point investors may see valuations of the Taiwanese stock market close to the bottom. We continue to focus on companies with better earnings quality and strong balance sheets.

Howard Wang 

Emerson Yip 

Kevin Chan

Shumin Huang 

Investment Managers

10th November 2008

Principal Risks and Uncertainties

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. 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 employs the Company's gearing, within a strategic range set by the Board. The Board holds a separate Board meeting devoted to strategy each year. 

Discount: In order to manage the Company's discount which can very volatile, the Company employs a share issuance and repurchase programme.

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 842 of the Income and Corporation Taxes Act 1988 ('Section 842'). Details of the Company's approval are given under 'Business of the Company' above. Were the Company to breach Section 842, it may lose investment trust status and, as a consequence, gains within the Company's portfolio could be subject to Capital Gains Tax. The Section 842 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 Acts and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules. A breach of the Companies Acts 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 842. The Board relies on the services of its Company Secretary, JPMAM to ensure compliance with the Companies Acts, and the UKLA Listing Rules. 

Corporate Governance and Shareholder Relations: The Company is committed to high standards of corporate governance. The shareholder profile for the Company is regularly monitored. The Board aims to provide shareholders with a full understanding of the Company's activities and performance and reports formally to shareholders four times a year.

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. 

Financial: The financial risks faced by the Company include market price risk, interest rate risk, liquidity risk and credit risk. The Board meets regularly to consider these risks and manage them as appropriate.

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

A detailed explanation of principal risks and uncertainties can be found in the Annual Report and Accounts for the year ended 30th September 2008, which will be available on the Company's website shortly.

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 period.

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

Nigel Melville

Chairman

10th November 2008

For further information please contact:

Christopher Legg, 

JPMorgan Asset Management (UK) Limited…………..020 7742 6000

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.jpmchinese.co.uk  

JPMorgan Chinese Investment Trust plc

Audited figures for the year ended 30th September 2008

Income Statement

				(Audited)  year ended 30th September 2008					(Audited)  year ended 30th September 2007
		Revenue			Capital	Total		Revenue		Capital	Total
		£’000			£’000	£’000		£’000		£’000	£’000
(Losses)/gains from investments held at fair value through profit or loss		—			(39,414)	(39,414)		—		53,523	53,523
Net foreign currency gains		—			103	103		—		194	194
Income from investments		2,306			—	2,306		1,880		—	1,880
Other interest receivable and similar income		30			—	30		7		—	7
Gross return/(loss)		2,336			(39,311)	(36,975)		1,887		53,717	55,604
Management fee		(933)			—	(933)		(740)		—	(740)
Performance fee		—			627	627		—		(4,533)	(4,533)
Other administrative expenses		(705)			—	(705)		(379)		—	(379)
Net return/(loss) on ordinary activities before finance costs and taxation		698			(38,684)	(37,986)		768		49,184	49,952
Finance costs		(150)			—	(150)		(232)		—	(232)
Net return/(loss) on ordinary activities before taxation		548			(38,684)	(38,136)		536		49,184	49,720
Taxation		(184)			—	(184)		(150)		—	(150)
Net return/(loss) on ordinary activities after taxation		364			(38,684)	(38,320)		386		49,184	49,570
Return/(loss) per share (basic and diluted) (note 2)		0.51p			(54.64)p	(54.13)p		0.52p		66.67p	67.19p

A final dividend of 0.5p per share (2007: 0.5p per share) is proposed in respect of the year ended 30th September 2008, costing £353,000 (2007: £357,000). 

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.

  JPMorgan Chinese Investment Trust plc

Audited figures for the year ended 30th September 2008

Reconciliation of Movements in Shareholders' Funds (Audited)

	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 2006	18,497	7,560	3	581	37,476	(4,537)	928	60,508
Shares issued	369	1,152	—	—	—	—	—	1,521
Repurchase of shares into Treasury	—	—	—	—	(4,112)	—	—	(4,112)
Net return from ordinary activities	—	—	—	—	—	49,184	386	49,570
Dividends appropriated in the year	—	—	—	—	—	—	(518)	(518)
At 30th September 2007	18,866	8,712	3	581	33,364	44,647	796	106,969
Bonus issue of subscription shares	141	(141)	—	—	—	—	—	—
Repurchase of shares into Treasury	—	—	—	—	(857)	—	—	(857)
Net (loss)/return from ordinary activities	—	—	—	—	—	(38,684)	364	(38,320)
Dividends appropriated in the year	—	—	—	—	—	—	(357)	(357)
At 30th September 2008	19,007	8,571	3	581	32,507	5,963	803	67,435

  JPMorgan Chinese Investment Trust plc

Audited figures as at 30th September 2008

Balance Sheet

		2008	2007
		£'000	£'000
Fixed assets
Investments at fair value through profit or loss		67,179	114,016
Current assets
Debtors		685	523
Cash and short term deposits		3,478	787
		4,163	1,310
Creditors: amounts falling due within one year		(1,870)	(4,705)
Net current assets/(liabilities)		2,293	(3,395)
Total assets less current liabilities		69,472	110,621
Provisions for liabilities and charges
Deferred tax		-	-
Performance fee		(2,037)	(3,652)
Total net assets		67,435	106,969
Capital and reserves
Called up share capital		19,007	18,866
Share premium		8,571	8,712
Exercised warrant reserve		3	3
Capital redemption reserve		581	581
Other reserve		32,507	33,364
Capital reserves		5,963	44,647
Revenue reserve		803	796
Shareholders' funds		67,435	106,969
Net asset value per share (note 3)		95.4p	149.9p

  JPMorgan Chinese Investment Trust plc

Audited figures for the year ended 30th September 2008

Cash Flow Statement

	2008	2007
	£'000	£'000
Net cash (outflow)/inflow from operating activities	(386)	380
Net cash outflow from returns on investments and servicing of finance
Interest	(159)	(222)
Taxation paid	-	(66)
Capital expenditure and financial investment
Purchases of investments	(126,382)	(97,597)
Sales of investments	134,215	98,340
Settlement of futures contracts	221	-
Other capital charges	(75)	(58)
Net cash inflow from capital expenditure and financial investment	7,979	685
Dividend paid	(357)	(518)
Net cash inflow before financing	7,077	259
Financing
(Repayment)/increase in short term loans	(3,776)	1,823
Issue of ordinary shares	-	1,521
Repurchase of shares into Treasury	(857)	(4,112)
Net cash outflow from financing	(4,633)	(768)
Increase/(decrease) in cash in the year	2,444	(509)

Notes to the Accounts

1. Accounting policies 

The accounts are prepared in accordance with the Companies Act 1985, United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' issued by the AIC in December 2005. All of the Company's operations are of a continuing nature.

2. Return per ordinary share

	(Audited) 30th September 2008	(Audited) 30th September 2007
	£'000	£'000
Return per share is based on the following:
Revenue return	364	386
Capital (loss)/return	(38,684)	49,184
Total (loss)/return	(38,320)	49,570
Weighted average number of shares in issue	70,791,482	73,770,886
Revenue return per ordinary share	0.51p	0.52p
Capital (loss)/return per ordinary share	(54.64)p	66.67p
Total (loss)/return per ordinary share	(54.13)p	67.19p

3. Net asset value per ordinary share

The net asset value per share is based on the net assets attributable to ordinary shareholders of £67,435,000 (2007: £106,969,000) and on 70,683,001 (2007: 71,346,001) shares in issue at the year end, excluding shares held in Treasury.

4. Status of preliminary announcement

The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The comparative financial information is an extract from the statutory accounts for the year ended 30th September 2007. Those accounts, upon which the auditors issued an unqualified opinion and which contained no statement under section 237(2) and Section 237(3) of the Companies Act 1985, have been delivered to the Registrar of Companies.  The accounts for the year ended 30th September 2008 will be delivered to the Registrar of Companies in due course.

JPMORGAN ASSET MANAGEMENT (UK) LIMITED

 

END

 

 

FR ILFIELALILIT