Final Results

JPMorgan Russian Securities PLC 26 January 2007 LONDON STOCK EXCHANGE ANNOUNCEMENT JPMORGAN RUSSIAN SECURITIES PLC FINAL RESULTS The Year Under Review The Company has produced another year of excellent returns for shareholders with a total return of +62.3% being achieved from net assets compared to a return of +61.7% (in sterling terms) from the benchmark, the CSFB Russian ROS Index. This marks the fourth successive year that net assets have outperformed the benchmark index since the Company first listed on the London Stock Exchange in December 2002. The Company's share price rose by 62.4% during the year to 31st October 2006 with the discount to net asset value standing at 7.7% at the year-end. Revenue and Earnings The revenue loss after taxation for the year to 31st October 2006 was £753,000 with a loss per share of 1.34p. Authority to Repurchase the Company's Shares During the year under review the Company repurchased 150,000 shares for cancellation at a discount of 10.6%. The Board continues to believe that a facility to reduce discount volatility is important, and is therefore seeking approval from shareholders to renew the authority at the forthcoming Annual General Meeting. JPMorgan Asset Management The Board has reviewed the investment management, secretarial and marketing services provided to the Company by JPMorgan Asset Management (UK) Limited. This annual review has included their performance record, management processes, investment style, resources and risk control mechanisms. The Board was satisfied with the results of the review and therefore in the opinion of the Directors, the continuing appointment of JPMAM for the provision of these services is in the interests of shareholders as a whole. Board of Directors The Directors retiring by rotation are James Nicholson and Lysander Tennant. A Nomination Committee of the Board, consisting of those Directors who are not standing for re-election by rotation, has met to consider the attributes and contribution of each individual to the Board's deliberations. Following this review, the Board recommends to shareholders that, given their investment experience and contribution to the Board, both Directors should be re-elected. Outlook The Russian market has performed extremely well since the launch of your Company, so that stock market valuations are no longer below those in comparable emerging markets. The future performance of your Company is therefore more dependent upon stock selection and Russia's ability to provide an environment in which companies can thrive. Russia is still an economy driven mainly by commodity prices and as this influence wanes or strong commodity price trends reverse, the weaknesses that still exist in the legal structure and the efficiency of state-controlled companies will need to be addressed, if they are not to hamper economic development and the continued health of the private sector. Despite government policies giving unwelcome messages at times which can lead to significant setbacks, the Russian economy is set on a sustainable path towards higher living standards. The market therefore continues to be an attractive, if volatile, investment over the medium term. Benchmark The Board has reviewed the Company's benchmark, as it considers that the CSFB Russian ROS Index (in sterling terms) is an unsatisfactory index due to the very high weightings of several energy companies, notably Gazprom, well beyond either investment prudence or HM Revenue and Customs limits under which the company operates. Following a detailed review, it was agreed that the benchmark should be changed to the newly created MSCI 10/40 Equities Indices Index with effect from 1st November 2006. The main advantage of this benchmark is that it applies weight constraints which ensure that individual stocks do not dominate the index. This has been discussed with the major shareholders who have agreed to the benchmark change. However, for comparative purposes, both benchmarks will be used over the next year. Annual General Meeting The Company's fourth Annual General Meeting will be held at JPMorgan's offices, 60 Victoria Embankment (entrance located on John Carpenter Street), London EC4Y 0JP on Thursday 1st March 2007 at 2.00 p.m. Pamela Idelson Smith Chairman 26th January 2007 For further information, please contact: Hilary Lowe For and on behalf of JPMorgan Asset Management (UK) Limited - Secretary 020 7742 6000 JPMorgan Russian Securities plc Audited figures for the year ended 31st October 2006 Income Statement 2006 2005 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains from investments held at fair value through profit or loss - 102,441 102,441 - 49,632 49,632 Net foreign currency gains/(losses) - 853 853 - (472) (472) Income from investments 4,137 - 4,137 2,692 - 2,692 Other interest receivable and similar 251 - 251 149 - 149 income Gross return 4,388 103,294 107,682 2,841 49,160 52,001 Management fee (3,511) - (3,511) (1,989) - (1,989) Other administrative expenses (554) - (554) (373) - (373) Net return on ordinary activities before finance costs and taxation 323 103,294 103,617 479 49,160 49,639 Finance costs (502) - (502) (822) - (822) Net (loss) / return on ordinary activities before taxation (179) 103,294 103,115 (343) 49,160 48,817 Taxation (574) - (574) (527) - (527) Net (loss) / return on ordinary activities after taxation (753) 103,294 102,541 (870) 49,160 48,290 (Loss) / Return per share (1.34)p 184.14p 182.80p (1.55)p 87.53p 85.98p 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. JPMorgan Russian Securities plc Audited figures for the year ended 31st October 2006 Reconciliation of Movements in Shareholders' Funds Called up Capital redemption share Other reserve Capital Revenue capital reserve reserve £'000 reserve Total £'000 £'000 £'000 £'000 £'000 At 31st October 2004 562 53,361 39 62,049 (36) 115,975 Total return/(loss) from ordinary activities - - - 49,160 (870) 48,290 At 31st October 2005 562 53,361 39 111,209 (906) 164,265 Adjustment to opening shareholders' funds at 1st November 2005 to reflect the adoption of bid prices - - - (1,276) - (1,276) Shares bought back and cancelled (2) (548) 2 - - (548) Total return/(loss) from ordinary activities - - - 103,294 (753) 102,541 At 31st October 2006 560 52,813 41 213,227 (1,659) 264,982 JPMorgan Russian Securities plc Audited figures for the year ended 31st October 2006 Balance Sheet 2006 2005 £'000 £'000 Fixed Assets Investments at fair value through profit or loss 274,807 170,163 Current assets Debtors 1,439 3,619 Cash and short term deposits 1,491 14,549 2,930 18,168 Creditors: amounts falling due within one year (12,755) (24,066) Net current liabilities (9,825) (5,898) Total assets less current liabilities 264,982 164,265 Total net assets 264,982 164,265 Capital and reserves Called up share capital 560 562 Other reserve 52,813 53,361 Capital redemption reserve 41 39 Capital reserve 213,227 111,209 Revenue reserve (1,659) (906) Shareholders' funds 264,982 164,265 Net asset value per share 473.1p 292.5p Cash Flow Statement For the year ended 31st October 2006 2006 2005 £'000 £'000 Net cash (outflow)/inflow from operating activities (561) 698 Returns on investments and servicing of finance Interest paid (525) (822) Capital expenditure and financial investment Purchases of investments (174,588) (58,942) Sales of investments 169,886 65,756 Other capital charges (67) (50) Net cash (outflow) / inflow from capital expenditure and financial investment (4,769) 6,764 Net cash (outflow) / inflow before financing (5,855) 6,640 Financing Net (repayment)/draw down of loans (6,953) 5,145 Repurchase of ordinary shares (548) - Net cash (outflow)/inflow from financing (7,501) 5,145 (Decrease)/increase in cash for the year (13,356) 11,785 Notes 1. Accounting policies The Company has adopted certain new accounting policies following the issue of new financial reporting standards (FRS) and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' as issued by the AIC in December 2005. The only material change to the accounts is as follows: Investments are designated as held at fair value through profit or loss in accordance with FRS 26: 'Financial Instruments: Measurement'. Listed investments are valued at bid market prices. This represents a change in accounting policy. However, in accordance with paragraph 108D of FRS26, comparatives have not been restated. In prior periods, listed investments were valued at last trade prices. The adoption of bid prices on 1st November 2005 decreased the value of investments by £1,276,000. 2. Comparative figures 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 31st October 2005. The accounts for the years ended 31st October 2005 and 31st October 2006, upon which the auditors' have issued an unqualified opinion, have been delivered to the Registrar of Companies. The auditors' reports contain no statement under Section 235 of the Companies Act 1985. JPMORGAN ASSET MANAGEMENT (UK) LIMITED This information is provided by RNS The company news service from the London Stock Exchange BSSDGGRL

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