Final Results

RNS Number : 8209T

JPMorgan Glb Emerging Mkts Inc Tst

08 October 2014

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN GLOBAL EMERGING MARKETS INCOME TRUST PLC

ANNOUNCEMENT OF FINAL RESULTS

The Directors of JPMorgan Global Emerging Markets Income Trust plc announce the Company's results for the year ended 31st July 2014.

Chairman's Statement

Performance

For the year ended 31st July 2014 the Company recorded a total return on net assets of 1.3%. This compares with a return on the benchmark index, the MSCI Emerging Markets Index with net dividends reinvested (in sterling), of 3.6%. After some years of decent relative performance, our lag this year was the result of a) the currency effect associated with country allocations and b) a few specific holdings. The Investment Managers' Report reviews the Company's performance in detail. It also addresses current strategy and portfolio construction. The total return to shareholders including dividends was 3.6%, as whilst the Company's share price decreased from 123.0p to 122.0p over the year, the dividend income was maintained.

Revenue and Dividends

Gross return for the year amounted to £17.4 million (2013: £13.7 million) and net revenue return £13.9 million (2013: £10.9 million). Net revenue return per Ordinary share for the year, calculated on the average number of shares in issue, was 5.41p (2013: 5.45p).

In the current financial year the Board has paid three interim dividends of 1.0p per share. On 4th August 2014 it announced the payment of a fourth interim dividend of 1.9p per share, payable on 29th October 2014 to shareholders on the register of members as at the close of business on 22nd August 2014. This brings the total dividend for the year to 4.9p, unchanged from last year. The Board continues to follow the policy of paying four interim dividends, reflecting the support we have received from shareholders for a regular and timely income stream.

The Company receives dividends in the currencies of developing countries and US dollars, but pays dividends in sterling. As such, the value of dividends payable by the Company will fluctuate with exchange rates. During the year, the pound strengthened against these currencies with a net impact of -2.2% on investment returns relative to the benchmark as measured in sterling.

Share Capital

During the year, the Company issued a total of 44.1 million new shares at a weighted average premium to the cum income net asset value of 1.7%. Since the year end, the Company has issued a further 6.4 million shares.

The Board notes that some shareholders have voiced concern about the number of shares being issued by the Company, the potential impact on the Company's net asset value and on its ability to pay dividends. The Company issues shares only at a premium to the cum income net asset value. That premium, which is booked to the capital account, is designed to cover the costs of the issuance and the costs of investing the proceeds. For the year ended 31st July 2014, the impact of share issuance on the net asset value has been a positive +0.3%, which exceeds the minor dilution to earnings per share.

The Company's shareholders include regular savers and holders who reinvest their dividends in new shares. The Board believes that it is important not to allow the premium of the Company's share price to net asset value to rise too high, as this adversely affects those shareholders.

The Board is seeking shareholder authority at the forthcoming Annual General Meeting to issue a further 10% of the Company's issued share capital. The intention is to use this authority to meet the ongoing demand for the Company's shares when they are trading at a premium to net asset value. If this is insufficient to last until the 2015 Annual General Meeting, the Board may look to issue a prospectus to increase the authority available.

Key Performance Indicators ('KPIs')

The Board tracks a series of KPIs. Further details may be found in the Annual Report and Accounts. The Board pays particular attention to investment performance, income available to pay dividends, investment risk and ongoing charges.

Gearing

The Company repaid its US$20 million loan facility with ING at its maturity in November 2013. Loans with National Australia Bank now total US$40 million.

Corporate Governance

In accordance with corporate governance best practice, all Directors will seek reappointment at this year's Annual General Meeting.

Shareholders who wish to contact the Chairman or other members of the Board may do so through the Company Secretary or the Company's website, details of which appear below. Shareholders are assured that all such communications are forwarded to the Chairman accordingly.

Regulatory Changes

Pursuant to recent regulatory changes, this Chairman's Statement now forms part of the new Strategic Report. Shareholders will also note other changes to the format of the annual report which have been implemented as a result of these new regulatory requirements.

There is now a requirement for more bespoke reporting from the Independent Auditor and I would encourage shareholders to read the new format Independent Auditor's Report.

Alternative Investment Fund Managers Directive ('AIFMD')

As required under AIFMD, with effect from 1st July 2014, the Company appointed JPMorgan Funds Limited as its Alternative Investment Fund Manager under a new investment management agreement. Portfolio management is delegated by JPMorgan Funds Limited to JPMorgan Asset Management (UK) Limited, thus retaining previous portfolio management arrangements. The management fee, performance fee and notice period arrangements remain unchanged. The Company appointed BNY Mellon Trust & Depositary (UK) Limited to act as the Company's Depositary, a new requirement under AIFMD. JPMorgan Chase Bank, NA remains the Company's Custodian, but as a delegate of the Depositary. JPMorgan Funds Limited was also appointed as Company Secretary to the Company on 1st July 2014.

Annual General Meeting

The Annual General Meeting will be held at a new venue this year, namely 60 Victoria Embankment, London EC4Y 0JP on Thursday, 27th November 2014 at 2.00 p.m. The meeting will include a presentation from the Investment Managers on investment policy and performance. There will also be an opportunity for shareholders to meet the Board and representatives of JPMorgan after the meeting. It would be helpful if shareholders seeking answers to detailed questions put them in writing beforehand, addressed to the Company Secretary at JPMorgan Funds Limited, 60 Victoria Embankment, London EC4Y 0JP. Alternatively, questions may be submitted via the Company's website (www.jpmglobalemergingmarketsincome.co.uk) and I am pleased that a number of shareholders took the opportunity to do so last year. Shareholders who are unable to attend the Annual General Meeting in person are encouraged to use their proxy votes. Proxy votes may be lodged electronically, whether shares are held through CREST or in certificate form and full details are set out on the form of proxy.

Outlook

The outlook for the Company's investments is far from clear. As the Investment Managers' report explains, the operating environment in emerging market economies is tough. The confluence of prospectively tighter US monetary policy, political developments and economic slowdown make it harder for companies to grow and even to maintain profits and dividends. While the Company has reported sufficient net income to maintain the amount of dividend paid for the year, the possibility that companies that are held in the portfolio cut their dividends should not be underestimated. The Board carefully monitors the Manager's projections for future income for each and every holding in the portfolio.

Currency movements also have a bearing on both the net asset value and earnings per share available for distribution. The Manager's forecasts indicate that the currencies in which the Company's investments are denominated - and income is received - are about fairly valued against both the US dollar and pound sterling. It is not the Company's policy to hedge currency exposures; and, in most cases, the costs associated with any such hedging are prohibitive.

The Investment Managers invest in companies in developing markets that are both willing and able to pay dividends. Many of these companies also have good long term growth prospects. Inevitably, the Company's income orientation leads to meaningful divergences of holdings and performance from a broad emerging market index. The strategy's inherent volatility, both in absolute terms and relative to the emerging market index, calls for patience and endurance, but the Board believes that those virtues will, in time, be rewarded.

Andrew Hutton

Chairman

8th October 2014

Investment Managers' Report

For the financial year, the Company achieved a total NAV return of 1.3%. This meant that the Company underperformed the index against which it is measured, the MSCI Emerging Markets Index, which rose 3.6% in the year in sterling terms. We were able to maintain the total dividend for the Company. This was a reasonable result considering the downturn in profits and dividends experienced by many emerging market companies during the year. The factors behind the Company's performance are explained in more detail below.

Market Overview

The modest return from emerging markets over the financial year masked a relatively turbulent period for emerging markets as a whole. There were three key reasons for this volatility.

First, the second half of 2013 was dominated by market fears over the looming withdrawal of economic stimulus measures by the US Federal Reserve. Along with worries about higher US interest rates, these concerns had a knock-on effect on many emerging markets, causing currency weakness in markets like India, South Africa and Turkey.

In a globalised world, the US interest rate cycle has an impact far beyond America's own economy. The threat of higher interest rates and the withdrawal of economic stimulus had a particularly negative impact on those emerging economies that are most dependent on short term capital flows to fund large current account deficits. As those capital flows began to reverse in anticipation of higher US interest rates, investors became much more concerned about the potential for a serious financial problem to arise in one or more emerging markets.

Emerging market share prices (and currencies) have recovered in recent months as the feared financial crisis failed to materialise. The absence of a major financial shock suggests that emerging markets are now much more resilient than during previous periods of economic stress.

The second cause of market volatility in the financial year was politics. Typically, we make our investment decisions based on the outlook for individual stocks, rather than politics. But for this financial year, a wide range of political developments had a significant impact on markets. These developments included the victory of Narendra Modi (and a crushing defeat for the Congress Party) in India's general election in May, a high-profile anti-corruption campaign in China, elections in South Africa and Indonesia and the start of an important presidential election campaign in Brazil. An escalation of the conflict in eastern Ukraine and the western sanctions imposed on Russia also had a major negative effect on investor sentiment towards emerging markets in the financial year.

The third reason for volatility in emerging markets was a continued squeeze on company profits, caused by a slowdown in emerging market economic growth and weak consumer demand. This squeeze on profits was evident both from our meetings with company management teams as well as from reported results. It has therefore been a difficult period in which to find companies that are able to grow their profits.

Through all this, we continued to focus on finding attractive stocks from a dividend perspective, looking for companies that offer a stable dividend and have the potential to grow their dividends over time. The recent volatility in emerging markets is a good reminder of why concentrating on dividends is a positive approach. As dividends are the most stable component of returns from company shares, a focus on dividend-paying stocks means that the shareholders are able to benefit from a longer term view, allowing them to ride out volatile periods with greater confidence.

Clearly, the past year's performance is disappointing, but longer term returns still look positive. Looking at the portfolio today, we are confident that it can generate an attractive and sustainable income for shareholders. Combined with the strong underlying outlook for the stocks held in the portfolio, shareholders should be able to look forward to a better level of returns as emerging market economies recover and company profits improve.

Performance Contributors:

Country

Differences in country positioning had a material impact on the performance of the Company compared to the benchmark index. Typically, we would expect stock selection to drive returns, but over this period, given broader political and economic themes, country positioning was more important than usual. The negative impact from the Company's country positions was mainly seen through currency returns. Over the period, Emerging Markets currencies in aggregate depreciated versus sterling, as discussed above. The Company had higher exposure to those markets whose currencies fell more than average (e.g. South Africa, Turkey, Indonesia), which explains the negative 2.2% currency effect relative to the benchmark over the financial year.

We have a low exposure in the Company's portfolio to India, with a single holding in Coal India. This meant that the Company was not in a position to benefit from the very positive performance of the Indian stock market in the financial year. The run-up to the Indian general election was a strong period for Indian stocks, as the anticipated victory of Narendra Modi sparked expectations for economic reform and stronger economic growth. The Company's holding in Coal India performed very well, but the contribution to overall returns from our Indian exposure was constrained compared to the Company's benchmark index because the amount of the Company's portfolio allocated to Indian stocks was lower than India's weighting in the benchmark. We continue to have a low portfolio exposure to the Indian stock market, where we are finding few attractive dividend opportunities.

Similarly, the Company's underweight position in South Korea hurt performance compared to the benchmark index. Korea is not a natural market for dividend investing as Korean stocks historically have not tended to pay out a large proportion of their profits in the form of dividends. We therefore have a significantly lower allocation towards the Korean market in the portfolio than in the benchmark index. This positioning was negative for the Company's performance compared to the benchmark in the financial year, as Korea performed strongly.

The Russian stock market, meanwhile, produced poor returns in the financial year, mainly due to instability in eastern Ukraine and concerns over the impact of western sanctions on the Russian economy. However, while the Russian market performed poorly, our Russian stock holdings performed strongly - in particular, the Company's position in Norilsk Nickel was a key positive contributor to returns. As a result, our Russian holdings actually improved the Company's performance overall compared to its benchmark index. The investment environment in Russia today is clearly a difficult one, but we continue to hold our positions, as share prices have fallen to attractive levels and dividends are continuing to be paid to shareholders.

Positive country contributors included the Company's overweight positions compared to the benchmark in Taiwan, United Arab Emirates (which moved into the MSCI Emerging Markets Index from the MSCI Frontier Index in the financial year) and Indonesia. Underweight positions in Mexico and Chile also had a positive impact on the Company's returns compared to the benchmark.

Sector

From a sector perspective, the Company's positioning only had a small impact on returns, with the main impact coming from the individual stocks we picked. Our sector positioning is quite different from that of the index. For example, we have a larger position in the industrials sector and a smaller position in the financials sector than the benchmark. However, our individual stock selection within sectors was a greater driver of returns in the financial year, as we would expect given our investment process, which focuses on identifying the most attractive dividend-paying stocks.

Stock

A variety of stocks from different countries and sectors drove the Company's performance in the financial year. Positive examples included Wynn Macau (a Chinese gaming company), Cielo (a Brazilian credit card merchant acquirer) and Delta Electronics (a Taiwanese company involved in power equipment and industrial automation). These stocks have individual reasons for their strong performance, but they were all boosted by healthy growth in dividends in the financial year.

One disappointing area in terms of stock selection was South Africa. This market is generally a fruitful area for dividend investing, in our view, with companies generally striking a good balance between paying dividends to shareholders and reinvesting cash into the business. However, during the financial year, we suffered from a few stock specific negatives in South Africa. Firstly, our holding in Kumba Iron Ore was a negative for performance as the company's operational numbers worsened, suggesting a structurally poorer cash flow profile than we had predicted. This meant the stock performed poorly, dragging down portfolio performance. Secondly, we do not hold Naspers, the internet and media company: this stock rose strongly in the period as investors focused on the prospects for internet growth across Emerging Markets. Therefore the Company suffered on a relative basis by not owning it. Over the year we thoroughly reviewed our holdings in South Africa and have made a few changes in terms of stock holdings (e.g. selling out of Kumba) - we are confident that we have satisfactorily corrected the issues around South African stock selection.

Dividends

In general, dividends from our holdings behaved as expected in terms of actual payouts to shareholders. We are always keen to understand management's attitude to dividend payouts before investing in a stock. We realise that dividends can fluctuate in the short term based on company profits, but want to ensure that this is not exacerbated by unpredictable payout policies.

In the financial year, we had one dividend payout disappointment. Ford Otomotiv, a Turkish manufacturing company, failed to pay its 2013 dividend. This was frustrating as we specifically discussed the dividend at a recent meeting with the company's management. While there were clear signs that the dividend would be under pressure due to weak domestic economic conditions in Turkey, there was no indication that the dividend would not be paid. Due to this lack of clarity on dividend policy, we sold the stock.

Portfolio Changes

Portfolio changes over the year have been modest. This is consistent with our objective of investing for the long term and benefiting from the compound growth of dividend payments.

Sales (whether outright or position size reduction) during the year fall into three main types:

1.   Dividend disappointments, as detailed above: over this period, only one company.

2.   Names where our fundamental view on dividend sustainability or growth deteriorated relative to other opportunities. One example of this was Tiger Brands. The company does not seem to be delivering on fundamentals and there are question marks over management's execution.

3.   Names where our view on dividends remained positive, but valuations had increased to the extent that the stocks looked less attractive - for example, reducing our holding in Delta Electronics.

Purchases have been very much driven by individual stock opportunities, but overall we have not made dramatic changes to the portfolio. We continue to find many attractive dividend-paying companies in emerging markets. New names added to the portfolio include: CNOOC (China, energy), OTP (Hungary, financials) and Cheng Shin Rubber (Taiwan, consumer discretionary).

As an example, we have followed CNOOC for a long time and have rated the management and quality of the business. But the valuation had not previously been sufficiently attractive for us to buy the stock. This changed earlier this year when the share price declined significantly as the market worried about near term production numbers. Our overall fundamental view remained positive and as the valuation improved, we took the share price decline as an opportunity to buy.

Outlook

The portfolio continues to focus on more stable sectors, such as consumer discretionary, telecommunications and utilities, rather than sectors that are sensitive to the economy, such as natural resources. We have diversified our investments by stock, country and sector consistently and expect to continue to invest in 60 to 80 companies over the coming year.

We aim to have broad exposure to emerging markets, but this does not mean that we invest close to the benchmark index. The Company's 'active share' (the percentage of a portfolio that differs from an index) is currently close to 90%, meaning that the portfolio is very different from the benchmark. This is a desirable characteristic, which we would like to maintain.

Emerging markets equities continue to look attractive from a valuation standpoint - but it is also clear that companies are still experiencing cyclical pressure which is weighing on earnings.  The portfolio's investments are not immune from this pressure in the short term. Although they will be relatively more protected due to our focus on free cash flow generation and strong balance sheets, the outlook for dividend growth amongst our companies over the next year is certainly a challenging one.

Looking further out we remain very constructive: the portfolio contains companies with high returns on capital which can support long term growth in the underlying businesses, trading at attractive dividend yields. With payouts remaining at healthy levels, we continue to see an attractive long term dividend stream for the Company going forward.

Richard Titherington

Investment Manager

Omar Negyal

Deputy Investment Manager

8th October 2014

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 into the following categories:

• Investment Strategy: an inappropriate investment strategy, for example asset allocation or the level of gearing, may lead to underperformance against the Company's benchmark index and peer companies, resulting in the Company's shares trading on a narrower premium or a wider discount. The Board manages these risks by diversification of investments through its investment restrictions and guidelines, which are monitored and reported on by the Manager. The Manager 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 Board meetings, and reviews data which show statistical measures of the Company's risk profile. The Investment Managers employ the Company's gearing strategically, within a range set by the Board.

• Income: insufficient income generation leading to a cut in the dividend. The Board regularly reviews the Company's income statement and receives forecasts prepared by the Manager on future dividends of investments in the portfolio. The Investment Managers monitor continuously the Company's level of income.

• Foreign Currency: the majority of the Company's assets, liabilities and income are denominated in currencies other than sterling (the Company's functional currency and the currency in which it reports). As a result, movements in exchange rates may affect the sterling value of these items. Cash assets are mainly held in US dollars, the currency of the loans held by the Company. Therefore, there is an inherent risk from movements in the exchange rates between US dollars and other currencies. No foreign currency hedging is undertaken and this is kept under review by the Board. Further details about the foreign currency risk may be found in note 23 to the Accounts.

• Going concern: pursuant to the Sharman Report, Boards are now advised to consider going concern as a potential risk, whether or not there is an apparent issue arising in relation thereto. Going concern is considered on an ongoing basis and the Board's statement on going concern is detailed in the Annual Report and Accounts.

• Financial: the financial risks faced by the Company include market price risk, interest rate risk, liquidity risk and credit risk. Further details are disclosed in note 23 to the Accounts.

• Accounting, Legal and Regulatory: in order to qualify as an investment trust, the Company must comply with Section 1158 of the 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 would lose its investment trust status and, as a consequence, gains within the Company's portfolio could be subject to Capital Gains Tax. The Section 1158 qualification criteria are continually monitored by the Manager and the results reported to the Board each month. The Company must also comply with the provisions of the Companies Act and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules and the Disclosure & Transparency Rules ('DTRs'). 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 or DTRs 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, the Manager and its professional advisers to ensure compliance with the Companies Act, the UKLA Listing Rules, DTRs and the Alternative Investment Fund Managers Directive.

Related Party 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.

Each of the Directors, whose names and functions are listed in the Directors' Report, confirms that, to the best of their knowledge:

(a)    the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards) and applicable law, give a true and fair view of the assets, liabilities, financial position and return or loss of the Company;

(b)   the annual report and accounts taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the strategy and business model of the Company;

(c)    the Strategic Report and Directors' Report in the Annual Report, to be published shortly, include 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 it faces.

For and on behalf of the Board

Andrew Hutton, Chairman  8^th October 2014

Income Statement

for the year ended 31st July 2014

		2014			2013
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments held at
fair value through profit or loss		-	(9,342)	(9,342)	-	21,718	21,718
Net foreign currency gains/(losses)		-	2,617	2,617	-	(1,104)	(1,104)
Income from investments		17,359	-	17,359	13,711	-	13,711
Other interest receivable and similar income		2	-	2	2	-	2
Gross return/(loss)		17,361	(6,725)	10,636	13,713	20,614	34,327
Management fee		(878)	(2,048)	(2,926)	(721)	(1,681)	(2,402)
Performance fee		-	-	-	-	(597)	(597)
Other administrative expenses		(673)	-	(673)	(550)	-	(550)
Net return/(loss) on ordinary activities before
finance costs and taxation		15,810	(8,773)	7,037	12,442	18,336	30,778
Finance costs		(246)	(573)	(819)	(236)	(551)	(787)
Net return/(loss) on ordinary activities
before taxation		15,564	(9,346)	6,218	12,206	17,785	29,991
Taxation		(1,622)	75	(1,547)	(1,257)	-	(1,257)
Net return/(loss) on ordinary activities
after taxation		13,942	(9,271)	4,671	10,949	17,785	28,734
Net return/(loss) per share (note 3)		5.41p	(3.60)p	1.81p	5.45p	8.85p	14.30p

All revenue and capital items in the above statement derive from continuing operations. No operations were discontinued during 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.

Statement of Total Recognised Gains and Losses

for the year ended 31st July 2014

	2014			2013
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Movement in fair value of the cash flow hedge	-	50	50	-	52	52
Net return/(loss) on ordinary activities	13,942	(9,271)	4,671	10,949	17,785	28,734
Total recognised gains/(losses) for the year	13,942	(9,221)	4,721	10,949	17,837	28,786

Reconciliation of Movement in Shareholders' Funds

for the year ended 31st July 2014

	Called up	Capital
	share	redemption	Share	Other	Capital	Revenue
	capital	reserve	premium	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 31st July 2012	1,737	13	74,011	101,276	12,613	5,001	194,651
Issue of Ordinary shares	607	-	74,578	-	-	-	75,185
Expenses of new share issue	-	-	(400)	-	-	-	(400)
Net return from ordinary activities	-	-	-	-	17,785	10,949	28,734
Movement in fair value of the cash flow hedge	-	-	-	-	52	-	52
Dividends appropriated in the year	-	-	-	-	-	(9,695)	(9,695)
At 31st July 2013	2,344	13	148,189	101,276	30,450	6,255	288,527
Issue of Ordinary shares	441	-	51,554	-	-	-	51,995
Expenses of new share issue	-	-	(150)	-	-	-	(150)
Net (loss)/return from ordinary activities	-	-	-	-	(9,271)	13,942	4,671
Movement in fair value of the cash flow hedge	-	-	-	-	50	-	50
Dividends appropriated in the year	-	-	-	-	-	(12,876)	(12,876)
At 31st July 2014	2,785	13	199,593	101,276	21,229	7,321	332,217

Balance Sheet

at 31st July 2014

	2014	2013
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	348,174	309,721
Investment in Liquidity Fund held at fair value through profit or loss	136	1,748
Total investments	348,310	311,469
Current assets
Debtors	2,830	1,942
Cash and short term deposits	5,559	3,874
	8,389	5,816
Creditors: amounts falling due within one year	(788)	(15,516)
Financial liability: derivative financial instrument	(1)	(50)
Net current assets/(liabilities)	7,600	(9,750)
Total assets less current liabilities	355,910	301,719
Creditors: amounts falling due after more than one year	(23,693)	(13,192)
Provision for liabilities and charges
Performance fees	-	-
Net assets	332,217	288,527
Capital and reserves
Called up share capital	2,785	2,344
Capital redemption reserve	13	13
Share premium	199,593	148,189
Other reserve	101,276	101,276
Capital reserves	21,229	30,450
Revenue reserve	7,321	6,255
Total equity shareholders' funds	332,217	288,527
Net asset value per share (note 4)	119.3p	123.1p

Company registration number: 7273382

Cash Flow Statement

for the year ended 31st July 2014

	2014	2013
	£'000	£'000
Net cash inflow from operating activities	8,860	8,514
Returns on investments and servicing of finance
Interest paid	(873)	(757)
Net cash outflow from returns on investments and servicing of finance	(873)	(757)
Taxation
Overseas tax recovered	94	37
Total tax recovered	94	37
Capital expenditure and financial investment
Purchases of investments	(169,587)	(226,963)
Sales of investments	124,098	145,216
Other capital charges	(37)	(23)
Net cash outflow from capital expenditure and financial investment	(45,526)	(81,770)
Dividends paid	(12,876)	(9,695)
Net cash outflow before financing	(50,321)	(83,671)
Financing
Proceeds of issue of Ordinary shares	52,246	74,679
Costs of subsequent issue of Ordinary shares	(166)	(379)
Repayment of short term loans	(12,415)	-
Drawdown of loan	12,556	12,393
Net cash inflow from financing	52,221	86,693
Increase in cash for the year	1,900	3,022

Notes to the Accounts

for the year ended 31st July 2014

1.    Accounting policies

(a)  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.

2.   Dividends

(a)  Dividends paid and declared

		2014	2013
		£'000	£'000
	2013 Fourth interim dividend paid of 2.10p (2012: 2.15p)	5,005	3,760
	First interim dividend paid of 1.00p (2013: 0.90p)	2,544	1,732
	Second interim dividend paid of 1.00p (2013: 0.90p)	2,603	1,908
	Third interim dividend paid of 1.00p (2013: 1.00p)	2,724	2,295
	Total dividends paid in the year	12,876	9,695
	Fourth interim dividend declared of 1.90p (2013: 2.10p)	5,292	4,922

      The fourth interim dividend declared in respect of the year ended 31st July 2013 amounted to £4,922,000. However, the actual payment amounted to £5,005,000 due to share issuances after the Balance Sheet Date, but prior to the share register Record Date.

3.   Net return/(loss) per share

      Return/(loss) per share is based on the following:

		2014	2013
		£'000	£'000
	Revenue return	13,942	10,949
	Capital (loss)/return	(9,271)	17,785
	Total return	4,671	28,734
	Weighted average number of Ordinary shares in issue during the year	257,623,359	200,902,726
	Revenue return per share	5.41p	5.45p
	Capital (loss)/return per share	(3.60)p	8.85p
	Total return per share	1.81p	14.30p

4.   Net asset value per share

      The net asset value per share is based on the net assets attributable to the Ordinary shareholders of £332,217,000 (2013: £288,527,000) and on the 278,514,438 (2013: 234,369,438) Ordinary shares outstanding at 31st July 2014.

5.   Status of results announcement

2013 Financial Information

The figures and financial information for 2013 are extracted from the published Annual Report and Accounts for the year ended 31st July 2013 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.

2014 Financial Information

             The figures and financial information for 2014 are extracted from the Annual Report and Accounts for the year ended 31st July 2014 and do not constitute the statutory accounts for the year.  The Annual Report and Accounts 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.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

JPMORGAN FUNDS LIMITED

ENDS

A copy of the annual report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM

The annual report will also shortly be available on the Company's website at www.jpmglobalemergingmarketsincome.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

JPMORGAN FUNDS LIMITED

 

END

 

 

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