Final Results

RNS Number : 0441W

JPMorgan Chinese Inv Tst PLC

11 November 2010

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN CHINESE INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER 2010

Chairman's Statement

Performance

The Greater China equity markets continued to rise in the year to 30th September 2010, albeit at a moderated pace. This is a pleasing outcome, particularly against an uncertain backdrop which included concerns over the sovereign debt markets in Southern Europe, the sustainability of the global economic recovery and inflationary pressures in China. The latter of these concerns was partially offset as the Chinese government's tightening measures proved less draconian than first anticipated. To date, the policies of the Chinese government have been effective in preventing overheating whilst allowing growth to continue.

During the period, the Company's total return on net assets, which comprises the change in net asset value ('NAV') with the dividend reinvested, increased by 17.2%, marginally outperforming the Company's benchmark, the MSCI Golden Dragon Index, with net dividends reinvested (in sterling terms), which increased by 16.5%. Over the same period, the Company's Ordinary share price rose by 12.9%, which, when compared against the total return on net assets (+17.2%), reflects a widening of the Company's discount from 1.6% to 5.1%.

Board of Directors

During the year, the Board, through its Nomination Committee, carried out an evaluation of the Directors, the Chairman, the Board itself and its committees. This is an important process and an effective means of evaluating the continuing efficacy of the Board. As part of the evaluation process, the Board considered succession planning and, in light of my intended retirement at the Company's AGM in 2011, it resolved to appoint Kathryn Matthews to the Board with effect from 1st July 2010. Kathryn has a wealth of investment experience and is a welcome addition to the Board. The Board has resolved that, upon my departure, William Knight will assume the role of Chairman of the Company.

In accordance with the Company's Articles of Association, Irving Koo and Madam Zhao will retire by rotation at the forthcoming Annual General Meeting. In accordance with the Combined Code, having served as a Director for more than nine years, I will offer myself for re-election. The Board does not believe that length of service in itself should disqualify a Director from seeking re-election. In addition, Kathryn Matthews, having been appointed during the financial year, will stand for election at the Annual General Meeting.

Revenue and Dividends

Revenue for the year, after taxation, was £1,181,000 (2009: £1,094,000) and the Company's return per share, calculated on the average number of shares in issue during the year, was 1.55 pence (2009: 1.53 pence).

Given the Company's return on its Revenue Account, the Board is recommending a dividend of 1.50 pence (2009: 1.50 pence) per share in respect of the financial year ended 30th September 2010. Subject to shareholders' approval at the Annual General Meeting, this dividend will be paid on 17th December 2010 to shareholders on the register at close of business on 26th November 2010.

As previously stated, shareholders should note that the Company's objective remains that of long term capital growth and dividends will vary from year to year accordingly.

Gearing

The Company has an £8 million revolving credit facility with Lloyds TSB Bank which gives the Investment Managers the ability to gear tactically. During the year the Company's gearing ranged from 99% to 105% and, at the time of writing, was 107%. The facility matures at the end of January 2011 and is in the process of being renewed. The Board has given the Investment Managers the flexibility to gear the portfolio within the range of 90% to 115% invested.

Subscription Shares

On 16th April 2008 the Company issued Subscription shares to qualified shareholders on the basis of one Subscription share for every five Ordinary shares held. On 28th June 2010, the Company held a Class Meeting of Subscription shareholders and a General Meeting of Ordinary shareholders to approve a variation of Subscription Share Rights. As a result of these meetings, Subscription shareholders can choose to exercise their Subscription shares at a price of 168 pence per share at any time up to and including 15th May 2013, whereupon the rights under the Subscription shares will lapse. Since the Subscription shares were issued and up to the date of this report, 1,351,567 Subscription shares have been exercised into Ordinary shares raising proceeds of £3,643,000. Further details on the Subscription shares, including the apportionments for capital gains tax purposes and how they may be exercised, can be found on the Company's website at www.jpmchinese.co.uk.

Articles of Association

At a General Meeting held on 28th June 2010, shareholders approved the adoption of new Articles of Association for the Company. The new Articles of Association reflect the changes in Company law brought about by the Companies Act 2006 (the 'Act'), which came into effect on 1st October 2009, changes made to the Act in August 2009 (designed principally to implement the EU Shareholder Rights Directive in the UK) and some minor technical or clarifying changes.

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. The Directors have authority to issue new Ordinary shares for cash and to repurchase shares in the market for cancellation or to hold in treasury.

During the year and up to the date of this report, the Company has issued 2,904,000 Ordinary shares out of treasury for a total consideration of £4,200,000 at a weighted average premium to NAV of 2.96%. In addition, the Company has issued 800,000 new Ordinary shares in the market for a total consideration of £1,275,000 at a weighted average premium of 2.59%. During the same period, the Company has issued 1,266,420 new Ordinary shares following the exercise of Subscription shares for a total consideration of £1,813,000. The Company has not repurchased any shares during this period.

As previously stated, repurchases will only be made in the market at prices below the prevailing net asset value per share and the Board's policy is to hold any repurchased shares in treasury. The Company will re-issue shares held in treasury only at a premium to NAV.

The Board believes that its policy of share issuance and repurchases has helped to reduce discount volatility and recommends that the authorities be kept in place. Accordingly, it is seeking approval from shareholders to renew the share issue and repurchase authorities at the forthcoming Annual General Meeting.

Review of services provided by the Manager

During the year the Board carried out a thorough review of the investment management, secretarial and marketing services provided to the Company by the Manager, JPMorgan Asset Management (UK) Limited ('JPMAM'). 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% of the net asset value 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 outperformance in this financial year has earned the Manager a performance fee of £110,000 which is added to the performance fee of £1,535,000 carried forward from the previous year. In accordance with the terms of the arrangement, a performance fee of £1,645,000 is payable, which, under the cap arrangement, £1,158,000 is payable now and £487,000 is carried forward.

The Company's Total Expense Ratio for the financial year, as a percentage of the average of the month-end net assets during the year, was 1.41% before accounting for the performance fee and 2.46% after doing so. These ratios compare favourably with those of similar funds.

Annual General Meeting

This year's Annual General Meeting will be held at the Armourers' Hall, 81 Coleman Street, London EC2R 5BJ on Tuesday 14th December 2010 at 11.00 a.m.

Outlook

The Greater China markets offer a promising future with excellent growth opportunities. China's economy continues to expand at a rapid pace, primarily driven by 'urbanisation' (people moving from rural areas into cities) increased consumer spending and technological upgrading. It is revealing that a recent analysis from The Boston Consulting Group found that "By 2020, there will be nearly 800 urban locations [in China] with real disposable income per capita greater than Shanghai's today."¹ Whilst the growth opportunities are clear to see, investors will be mindful of the uncertain global economic backdrop and concerns over inflationary and house price pressures in China. Whilst volatility is set to continue for the near term at least, the Board remains confident about the future prospects of the Greater China region and the ability of the investment managers to add value to shareholders' returns.

Nigel Melville

Chairman

11th November 2010

1 "The Keys to the Kingdom - Unlocking China's Consumer Power", The Boston Consulting Group, 2010.

Investment Managers' Report

In the twelve months ended 30th September 2010, the Company produced a total return on net assets of +17.2% against a benchmark return of +16.5%, an outperformance of 0.7%. Overall, our investment decisions in Hong Kong and China contributed to positive returns relative to the benchmark but these were detracted in Taiwan.

China

Market Review

The MSCI China Index rose nearly 10% (in local currency terms) along with the global markets in the last quarter of 2009, shrugging off concerns over the proposed rescheduling of a December bond payment by the quasi-sovereign DubaiWorld and capital raisings by Chinese banks. Apprehension surrounding the suspension of selective stimulus measures for the property sector remained minimal. Initial public offering and placement activities were buoyant despite mixed results in first-day performance, reflecting plenty of liquidity and a renewed risk appetite. China's economic data continued to improve through November, despite limited signs of

export recovery.

During the first quarter of 2010, Chinese equities reversed their course and fell by 1.6% (in local currency terms) quarter on quarter in a period of volatile trading, as jitters about the solvency of the Greek government dominated global financial news headlines, while investors remained concerned over China's potential tightening measures. At the National People's Congress in March, the government reaffirmed its 'pro-growth' stance with a focus on the 'structure re-balancing' to curb redundant investments and stimulate domestic consumption. The overhang of the banking sector eased after guidance on capital-raising plans was issued together with measures to control loans to local government-related projects.

The downward trend continued into the second quarter of 2010, as Chinese equities fell further due to more intensified efforts by the Chinese government to cool down the domestic property market and enforce stringent management of local government financing platforms. Renewed eurozone sovereign debt uncertainty further added to concerns over the sustainability of China's growth prospects.

In the third quarter of 2010, Chinese equities finally rebounded (both the MSCI China Index and domestic A-shares) in a quarter of volatile trading as China showed signs of a soft landing with encouraging interim results (for the first half of 2010). Meanwhile, developed market economic indicators stabilised and markets attempted to price in another round of quantitative easing by the US Federal Reserve. Despite policy headwinds, the September Purchasing Managers Index ('PMI') came in above expectations at 53.8%, suggesting robust economic activity despite the government's intensified efforts to conserve energy by rationing power supply across various industries.

Market Outlook

We believe the re-balancing of China's economic structure from an investment-driven to an increasingly consumption-driven growth model could accelerate, supported by renminbi revaluation, the government's efforts to improve its social safety net (education, healthcare, public housing, etc.), as well as rising wages and household incomes. However, this transition could cause some growth pain in the short term as China's GDP growth could moderate towards 8% from the past ten-year average of 10%.

China is heading for a soft landing and equity valuations of Chinese equities are attractive relative to the growth opportunities. We continue to position the portfolio toward China's domestic growth although the market may remain volatile in the short term given the overhanging concerns surrounding issues such as inflation, property

prices and the assessment on the banking exposure to local government financing vehicles.

Hong Kong

Market Review

After a strong start to the fourth quarter in 2009, the Hong Kong market retreated owing to concerns over tightening monetary policy in China and a strengthening U.S. dollar. There was also a brief pullback due to negative news surrounding Dubai World. Furthermore, the Hong Kong Monetary Authority proposed measures aimed at sharply slowing down rising property prices. However, the overall liquidity situation continued to prevail. While third quarter GDP figures came in lower than expected, there were continuing signs of a domestic rebound in the real economy.

In the first quarter of 2010, Hong Kong equities continued on a downward slide, weighed down by ongoing concerns over incremental tightening in China and a strengthening U.S. dollar, as well as the sovereign debt crisis in Greece. Property counters in particular were hit by liquidity related concerns. However, the market bottomed in early February 2010 before rising to recoup most of the losses on the back of rising global risk appetite, helped by positive news about measures to support Greece. Land auctions were coming in above expectations and continued strength in the physical property market provided further support over the quarter.

Hong Kong, although the best performer among the Greater China markets in the second quarter of 2010, was weighed down in the following quarter by heightened global risk aversion and incrementally tighter liquidity. The primary reasons for the market's weakness were the uncertain global macro economic backdrop and selective tightening measures undertaken by the Chinese government, notably in the property sector. Given the causes of this downturn, Hong Kong's property and export sectors were predictably the hardest hit. For the third quarter, the Hang Seng Index fell 3.5%, with the property sub index falling 9.2%. However, economic indicators in Hong Kong remained robust.

The MSCI Hong Kong continued to be the strongest of the three Greater China markets in the third quarter of 2010, led by property counters due to confidence that government cooling measures would not derail the investment attractiveness of physical properties. Investor sentiment improved amidst continued talks of the internationalisation of the renminbi and the concomitant liquidity benefits for Hong Kong, as China's international financial center.

Market Outlook

Uncertainty remains on the domestic policy front, though the base case is that additional property measures, if any, will not be stringent enough to alter the supply-demand picture meaningfully. Within the banking sector, we are seeing increased lending activity arising from a recovery in the real economy, though both loan and treasury yields remain under pressure due respectively to competition and the current global monetary regime. Share prices are reflecting the potential of further renminbi internationalisation translating into greater business opportunities for Hong Kong banks.

Taiwan

Market Review

After a slow start, the Taiwanese Taiex increased in the fourth quarter of 2009, to close at a year high of 8188 index points. This was as a result of major merger and acquisition announcements within the technology sector, strong IT demand and improved cross-strait relations with China. Technology stocks outperformed in the quarter, especially the opto-electronic (TFT/LED) and components sectors. End demand for technology stocks remained strong with robust sales for the holiday seasons in the US and China.

After outperforming China and Hong Kong by a wide margin in the second half of 2009, the Taiwanese market was under profit taking pressure in the first quarter of 2010 amidst the delay of the Economic Cooperation Framework Agreement ('ECFA' - a preferential trade agreement between China and Taiwan), contagion from sovereign debt default worries and potential interest rate increases in China. Technology stocks in general underperformed, while commodity sectors (e.g. plastic and glass) continued to outperform on better supply discipline as well as strong demand from China.

Despite generally good results and upbeat guidance in the second quarter of 2010, the uncertainty in Europe hurt sentiment in Taiwan. Indeed, the MSCI Taiwan Index was the worst performing Greater China market, declining 9.3% over the quarter. Higher risk technology stocks underperformed, with opto-electronics and hardware suffering the most. The ECFA was officially signed at the end of June, but the market reaction was tepid.

In the third quarter of 2010, the MSCI Taiwan Index rose almost 15% as investors began pricing an end to the corrections in semiconductor and LCD panel inventories. Following notable weakening in the previous two months, Taiwan's August export orders showed signs of improvement, led by better demand from Western economies. Benefits associated with the ECFA, also drove the market. Non-technology sectors like tourism, consumption, retail and China-related stocks outperformed in the quarter.

Market Outlook

We continue to look positively on the Taiwan market because of the long-term benefits that the ECFA could bring to Taiwan. Our portfolio positioning will continue to focus on stocks that can take advantage of the increased spending power in China and a consumption recovery in Taiwan.

For the technology sector, many of the concerns, such as uncertain demand in the US and Europe, are likely already to be priced in. Worries that Apple's iPad sales might cannibalise regular notebooks seem overblown, but if they do materialise they would have a negative impact on the Taiwanese technology sector. We are cognizant of these concerns and will be selective in our technology selection as disparity in sub-sector performance could widen in the future.

Howard Wang

Emerson Yip

Shumin Huang

William Tong

Investment Managers

11th November 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 managers, who attends all Board meetings, and reviews data which show statistical measures of the Company's risk profile. The Board holds a separate meeting devoted to strategy each year.

• Loss of Investment Team or Investment Manager: A sudden departure of 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.

• Discount: A disproportionate widening of the discount relative to the Company's peers could result in loss of value for shareholders. In order to manage the Company's discount, which can be volatile, the Company operates 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 1158 of the Income and Corporation Taxes Act 2010 ('Section 1158'). Details of the Company's approval are provided in the Annual Report. 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 2006 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, and its professional advisers to ensure compliance with the Companies Act 2006 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 report within 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 within the Annual Report.

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

• Political and Economic: Changes in financial or tax legislation, including in the European Union, may adversely effect the Company. The Manager makes recommendations to the Board on accounting, dividend and tax policies, and seeks external advice where appropriate. In addition, the Company is subject to administrative risks, such as the imposition of restrictions on the free movement of capital.  These risks are discussed by the board on a regular basis.

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

Nigel Melville

Chairman

11th November 2010

 

Income Statement

for the year ended 30th September 2010

			2010			2009
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss		-	17,011	17,011	-	30,065	30,065
Net foreign currency (losses)/gains		-	(317)	(317)	-	166	166
Income from investments		3,223	-	3,223	2,445	-	2,445
Other interest receivable and similar income		1	-	1	26	-	26
Gross return		3,224	16,694	19,918	2,471	30,231	32,702
Management fee		(1,098)	-	(1,098)	(741)	-	(741)
Performance fee		-	(110)	(110)	-	(324)	(324)
Other administrative expenses		(462)	-	(462)	(426)	-	(426)
Net return on ordinary activities before  finance costs and taxation		1,664	16,584	18,248	1,304	29,907	31,211
Finance costs		(127)	-	(127)	(35)	-	(35)
Net return on ordinary activities before  taxation		1,537	16,584	18,121	1,269	29,907	31,176
Taxation		(356)	-	(356)	(175)	-	(175)
Net return on ordinary activities after taxation		1,181	16,584	17,765	1,094	29,907	31,001
Return per Ordinary share (note 3)		1.55p	21.83p	23.38p	1.53p	41.88p	43.41p

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. 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	19,007	8,571	3	581	32,507	5,963	803	67,435
Re-issue of Ordinary shares from Treasury	-	333	-	-	1,856	-	-	2,189
Exercise of Subscription shares into Ordinary shares	(1)	1	-	-	-	-	-	-
Issue of Ordinary shares on exercise of Subscription shares	20	84	-	-	-	-	-	104
Net return on ordinary activities	-	-	-	-	-	29,907	1,094	31,001
Dividends appropriated in the year	-	-	-	-	-	-	(355)	(355)
At 30th September 2009	19,026	8,989	3	581	34,363	35,870	1,542	100,374
Issue of Ordinary shares to the market	125	612	-	-	-	-	-	737
Re-issue of Ordinary shares from Treasury	-	1,171	-	-	3,029	-	-	4,200
Exercise of Subscription shares into Ordinary shares	(13)	13	-	-	-	-	-	-
Issue of Ordinary shares on exercise of Subscription shares	317	1,496	-	-	-	-	-	1,813
Net return on ordinary activities	-	-	-	-	-	16,584	1,181	17,765
Dividends appropriated in the year	-	-	-	-	-	-	(1,120)	(1,120)
At 30th September 2010	19,455	12,281	3	581	37,392	52,454	1,603	123,769

Balance Sheet

at 30th September 2010

		2010	2009
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		130,880	104,180
Current assets
Debtors		2,338	643
Cash and short term deposits		1,360	947
		3,698	1,590
Creditors: amounts falling due within one year		(10,322)	(3,861)
Net current liabilities		(6,624)	(2,271)
Total assets less current liabilities		124,256	101,909
Provisions for liabilities and charges
Performance fee		(487)	(1,535)
Total net assets		123,769	100,374
Capital and reserves
Called up share capital		19,455	19,026
Share premium		12,281	8,989
Exercised warrant reserve		3	3
Capital redemption reserve		581	581
Other reserve		37,392	34,363
Capital reserves		52,454	35,870
Revenue reserve		1,603	1,542
Total shareholders' funds		123,769	100,374
Net asset value per Ordinary share (note 4)		160.1p	138.2p

Cash Flow Statement

for the year ended 30th September 2010

		2010	2009
		£'000	£'000
Net cash inflow from operating activities		290	45
Returns on investments and servicing of finance
Interest paid		(127)	(35)
Net cash outflow from returns on investments and servicing of finance		(127)	(35)
Capital expenditure and financial investment
Purchases of investments		(106,923)	(102,581)
Sales of investments		96,545	96,471
Other capital charges		(102)	(98)
Net cash outflow from capital expenditure and financial investment		(10,480)	(6,208)
Dividend paid		(1,120)	(355)
Net cash outflow before financing		(11,437)	(6,553)
Financing
Drawdown of short term loan		5,055	1,529
Issue of Ordinary shares to the market		737	-
Re-issue of Ordinary shares from Treasury		4,200	2,189
Issue of Ordinary shares on exercise of Subscription shares		1,813	104
Net cash inflow from financing		11,805	3,822
Net increase/(decrease) in cash for the year		368	(2,731)

1.  Accounting policies

     Basis of accounting

     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 and Venture Capital Trusts' (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 through profit or loss.

2.  Dividends

     Dividends paid and proposed

	2010	2009
	£'000	£'000
2009 Final dividend paid of 1.5p (2008: 0.5p)	1,120	355
Final dividend proposed of 1.5p (2009: 1.5p)	1,160	1,090

     For the year ended 30th September 2009, the Company declared a dividend of £1,090,000 but the final dividend paid amounted to £1,120,000 due to share issues after the balance sheet date but prior to the share register record date.

     The final dividend proposed in respect of the year ended 30th September 2010 is subject to shareholder 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.

3.  Return per Ordinary share

     The revenue return per share is based on the revenue earnings attributable to the Ordinary shares of £1,181,000 (2009: £1,094,000) and on the weighted average number of shares in issue during the year of 75,958,289 (2009: 71,418,199) excluding shares held in Treasury.

     The capital return per share is based on the capital earnings attributable to the Ordinary shares of £16,584,000 (2009: £29,907,000) and on the weighted average number of shares in issue during the year of 75,958,289 (2009: 71,418,199) excluding shares held in Treasury.

     The total return per share is based on the total earnings attributable to the Ordinary shares of £17,765,000(2009: £31,001,000) and on the weighted average number of shares in issue during the year of 75,958,289  (2009: 71,418,199) excluding shares held in Treasury.

     The Company has in issue 12,790,527 Subscription shares which are convertible into Ordinary shares at a price of 168 pence at any time up to and including 15th May 2013, whereupon the rights under the Subscription shares will lapse. There was no dilution of the return per Ordinary share in respect of the conversion rights attaching to the Subscription shares (year ended 30th September 2009: no dilution).

4.  Net asset value per Ordinary share

     The net asset value per share is based on the net assets attributable to the Ordinary shareholders of £123,769,000 (2009: £100,374,000) and on the 77,307,881 shares in issue at the year end (2009: 72,637,461 excluding shares held in Treasury).

5.  Status of results 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 498(2) or section 498(3) of the Companies Act 2006.

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 Financial Statements include the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Register of Companies in due course.

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.jpmchinese.co.uk.

For further information please contact:

Christopher Legg

For and on behalf of

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

11th November 2010

 

END

 

 

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