Annual Financial Report

RNS Number : 8255Z

JPMorgan Indian Invest Trust PLC

15 December 2014

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN INDIAN INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER 2014

The Directors of JPMorgan Indian Investment Trust plc announce the Company's results for the year ended 30th September 2014.

Chairman's Statement

The Year Under Review

The year to 30th September 2014 was an excellent one for investors in the Indian stock market and the Company outperformed its benchmark, the MSCI India Index (in sterling terms), with a return on net assets of +38.9%, compared with the benchmark return of +37.5%. The return to shareholders was +44.4%, reflecting a narrowing of the discount, from 14.8% to 11.4%, over the year.

Our Investment Managers set out the key factors affecting the Indian market and the Company's performance during the financial year, and the prospects for the future, in their report below.

Gearing

The Company has a one year floating rate US$85 million loan facility with ING Bank in place to provide the Investment Managers with the flexibility to gear the portfolio when they believe it is appropriate. As at the date of this report, US$36 million is drawn and the gearing level is approximately 3%.

Board of Directors

I will retire from the Board at the conclusion of the forthcoming Annual General Meeting, having served as a Director for ten years, the past seven as Chairman. Richard Burns, who has been a Director since 2006, will succeed me.

Jasper Judd has been appointed a Director with effect from 1st January 2015. Jasper is a qualified chartered accountant who most recently spent 10 years working at Brambles Limited in senior finance and strategy roles, including global head of strategy and was a member of the global Executive Committee until 2012. Brambles Limited is an Australian headquartered multinational listed on the Australian Stock Exchange and formerly on the London Stock Exchange.He will succeed Richard Burns as Chairman of the Audit Committee.

In accordance with corporate governance best practice, all of the Directors will retire at the Annual General Meeting and, aside from myself, will offer themselves for reappointment.

AIFMD

As I have explained previously, the implementation of the Alternative Investment Fund Managers Directive ('AIFMD') in July this year brought significant regulatory change. To ensure compliance with the AIFMD, the Company entered into a new management agreement with JPMorgan Funds Limited ('JPMF'), an affiliate of the previous manager, JPMorgan Asset Management (UK) Limited, and appointed Bank of New York Mellon as its depositary, with effect from 1st July 2014. However, the manner in which the Company's portfolio is managed remains unchanged.

Investment Manager

The Board has reviewed the investment management, company secretarial, sales and marketing services provided to the Company by JPMF. This annual review 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 JPMF for the provision of these services, on the terms agreed, is in the best interests of shareholders as a whole. As I reported last year, the Board negotiated a reduction in the management fee payable to JPMF, from 1.2% to 1.0%, effective 1st October 2013. This is chiefly responsible for the reduction in the ongoing charges ratio, from 1.5% to 1.3%, this year.

Share Issues and Repurchases

At the Annual General Meeting in January 2014 shareholders granted the Directors authority to repurchase up to 14.99% of the Company's shares for cancellation or into Treasury. The Company repurchased 4,330,000 shares into Treasury during the year. There are now 19,909,788 shares held in Treasury. The Board believes that such a facility is an important tool in the management of discount volatility and is, therefore, seeking approval from shareholders to renew the authority at the forthcoming Annual General Meeting.

Shareholders also granted the Directors authority to issue new Ordinary shares. At various times in the past, the Company's Ordinary shares have traded at a premium to NAV, which has enabled the issue of new shares. The Board has established guidelines relating to the issue of shares and if these conditions are met, this authority will be utilised to enhance the Company's NAV per share and therefore benefit existing shareholders.

To supplement this authority, the Board will reissue shares from Treasury when appropriate. Issuing shares out of Treasury would be cheaper than issuing new shares since it avoids the necessity of the Company paying listing fees to the London Stock Exchange and the UK Listing Authority. The Board will only buy back shares at a discount to their prevailing NAV, and issue new shares, or reissue Treasury shares, when they trade at a premium to their NAV, so as not to prejudice remaining shareholders.

During the year, a total of 5,353,833 new Ordinary shares were issued on the conversion of Subscription shares, for proceeds totalling £15.6m. The right to convert lapsed on 2nd January 2014 and all remaining Subscription shares capable of conversion were converted.

Auditors

Deloitte have served the Company very well as Auditors since 2002 and I would like to take this opportunity to thank them for their work. During the year, the Audit Committee conducted a tender and recommended to the Board that, following the rotation of the current audit engagement partner this year, PricewaterhouseCoopers LLP be appointed as Auditors to the Company with effect from the close of the forthcoming Annual General Meeting. Deloitte will retire and are not seeking reappointment. The first audit by PricewaterhouseCoopers LLP will be in respect of the year ending 30th September 2015.

Annual General Meeting

This year's Annual General Meeting will be held at JPMorgan's office at 60 Victoria Embankment, London EC4Y 0JP on Thursday, 29th January 2015 at 12.00 noon. As in previous years, in addition to the formal part of the meeting, there will be a presentation from a representative of the Manager, who will answer questions on the Company's portfolio and performance. There will also be an opportunity to meet the Board and representatives of JPMorgan.

As we have done at previous Annual General Meetings, in order to prevent overcrowding, guests will not be admitted to the meeting. Entry will be restricted to shareholders only and no exceptions will be made.

Outlook

The election of the BJP party, led by Narendra Modi, in May 2014 was well received by the Indian market. His position has been strengthened following recent state elections and prospects for Indian equities remain positive. Our Investment Managers believe that the Company's portfolio is positioned well to benefit from this continuing momentum and your Board has confidence that their stock picking skills will enhance returns for our shareholders.

Hugh Bolland

Chairman

15th December 2014

Investment Managers' Report

The Company's financial year was a rewarding one for investors in the Indian stock market. The Company produced a total return on net assets of +38.9%, outperforming the benchmark index which returned +37.5%. Our report reviews the financial year, analyses the drivers of performance and discusses the outlook.

Review

Politics dominated the news flow for the Indian equity market over the year to 30th September 2014, with the Indian election that was held in May 2014 ending years of coalition governments, many of which struggled to rule effectively. The market rallied significantly following the election, with investors hoping that Narendra Modi, the new Prime Minister, can effect a similar economic revolution to that he engineered in the State of Gujarat which he led from 2001 to 2014. Sentiment was already improving at the start of the financial year as, during the last quarter of 2013, the Congress party had been comprehensively defeated in four out of the five state elections that were held. Those results, coupled with opinion polls, indicated growing popularity for the Bharatiya Janata Party ('BJP'), led by Modi. Thus market sentiment was boosted ahead of the national elections and Indian equities had begun to appreciate, led by strong inflows from foreign portfolio investors.

Following the rally in the fourth quarter, markets corrected in January before rebounding to all-time highs, as increasingly investors started to factor in a victory for a BJP‑led coalition in the national elections. Activity levels in the economy, on the other hand, continued to be sluggish with growth continuing to be below 5%. Concerns over inflation, which was running at approximately 8%, continued to be highlighted by the central bank.

The result of the national election in May 2014 surpassed even the most optimistic expectations, as a full majority government was elected for the first time in 30 years. Modi got a decisive mandate for reform and growth and the market rose.

At the beginning of the last quarter of the Company's financial year, the momentum following the election results continued, but it seemed to ebb towards the end of the quarter over the perceived slow start by the new government. The Indian rupee corrected over 2% from the high following the elections, as the US dollar strengthened in September. On the positive side, GDP for the June quarter accelerated to 5.7%, which was the fastest pace in over two years. This was better than expected and both manufacturing and services sectors grew strongly. There were also distinct signs of inflation easing, with wholesale price index inflation decelerating to a five‑year low in August to 3.7%, while the consumer price index inflation also eased.

Performance

The Company outperformed the benchmark index over the financial year. The bulk of the positive contribution came from our stock selection in the automobile and bank sectors. In the automobile sector, our overweight exposures to Maruti Suzuki India and Tata Motors were the most successful, as the share prices of those stocks significantly outperformed on the back of improvement in four‑wheeler sales volumes. In the bank sector, we maintained significantly overweight exposure to several privately owned banks, which proved to be successful. The largest positive contributors were our overweight positions in HDFC Bank, Indusind Bank, Axis Bank, IDFC Ltd and Kotak Mahindra Bank. The share prices of these banks significantly outperformed the market on the back of strong loan growth.

On the negative side, our underweight positions in the construction & engineering sector and in the domestic defensive sectors, such as IT services, pharmaceuticals and tobacco, detracted from performance.

Outlook

We believe that a stable, reform-oriented and determined government is a very positive development. The bottom-up outlook for India continues to improve steadily. Although global uncertainties may weigh on markets in the near term, we remain resolutely bullish from a medium to long term perspective as we believe that the new government has the potential to influence the fundamental drivers of equity returns.

The Company's portfolio is positioned for a continuing bull market in India. We have exposure in cyclical companies to benefit from the improving Indian economy. We have holdings in domestic‑oriented sectors, such as cement and autos, and we are maintaining a large overweight position in the financial sector. We believe that this puts the Company in a good position to capture the upside in the Indian equity market over the cycle.

Rukhshad Shroff, CFA

Rajendra Nair, CFA

Investment Managers

15th December 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. In the year under review, there were no significant changes in the risks identified. These key risks fall broadly under the following categories:

•   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. 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 all Board meetings, and review data which show statistical measures of the Company's risk profile. The Investment Managers employ the Company's gearing, within a strategic range set by the Board.

•   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 the Manager. 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 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 would 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. A breach of the Companies Act could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules could result in the Company's shares being suspended from listing which in turn would breach Section 1158. The Board relies on the services of its Company Secretary to ensure compliance with the Companies Act and the UKLA Listing Rules.

•   Any change in the taxation legislation or taxation regime applicable to the Mauritian Subsidiary could affect the value of the investments held by the Group, affect the Company's ability to provide returns to Shareholders or alter the post-tax returns to Shareholders. In particular, it is expected that the Mauritian Subsidiary will continue to benefit from the India/Mauritius Double Tax Treaty. Future changes to Mauritian or Indian law or to the India/Mauritius Double Tax Treaty, or the interpretations given to them by the regulatory authorities, could impose additional costs or obligations on the activities of the Mauritian Subsidiary, which in turn may have adverse effects on the performance of the Company. The terms of the India/Mauritius Double Tax Treaty were challenged in India but were upheld by the Supreme Court of India in October 2003. However, more recently, there have been discussions between the Indian and Mauritian authorities with regard to a re-negotiation of the Treaty. Adverse tax consequences would result if the Mauritian Subsidiary ceased to qualify for the benefits under the India/Mauritius Double Tax Treaty (for example, if it were held that the Mauritian Subsidiary was not a resident of Mauritius). There can be no assurance that the Mauritian Subsidiary will continue to qualify for or receive the benefits of the India/Mauritius Double Tax Treaty or that the terms of the India/Mauritius Double Tax Treaty will not be changed. Such an event may require the Mauritian Subsidiary to pay or provide for tax liabilities that would reduce the net asset value of the Ordinary Shares.

•   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.

•   Operational: Loss of key staff by the Manager, such as the Investment Managers, could affect the performance of the Company. Disruption to, or failure of, the Manager'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 the Manager and its associates and the key elements designed to provide effective internal control are included with the Internal Control section of the Corporate Governance report.

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

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

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and Article 4 of the IAS Regulation and have also chosen to prepare the Parent Company financial statements under IFRS as adopted by the EU. Under company law the Directors must not approve the accounts unless they are satisfied that, taken as a whole, the annual report and accounts provide the information necessary for shareholders to assess the Company's performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the total return or loss of the Company for that period. In order to provide these confirmations, and in preparing these financial statements, the Directors must be satisfied that, taken as a whole, the annual report and accounts are fair, balanced and understandable; and the Directors are required to:

•   select suitable accounting policies and then apply them consistently;

•   make judgements and accounting estimates that are reasonable and prudent;

•   state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•   prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;

and the Directors confirm that they have done so.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The accounts are published on the www.jpmindian.co.uk website, which is maintained by the Company's Manager. The maintenance and integrity of the website maintained by the Manager is, so far as it relates to the Company, the responsibility of the Manager. The work carried out by the auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the auditors accept no responsibility for any changes that have occurred to the Annual Report since they were initially presented on the website. The Annual Report is prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

Under applicable law and regulations the Directors are also responsible for preparing a Strategic Report, a Directors' Report and Directors' Remuneration Report that comply with that law and those regulations.

Each of the Directors, whose names and functions are listed in the annual report, confirms that, to the best of his or her knowledge 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.

The Board confirms that it is satisfied that 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.

For and on behalf of the Board
Hugh Bolland
Chairman

15th December 2014

Group Income Statement

for the year ended 30th September 2014

	2014			2013
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment income	6,678	-	6,678	5,885	-	5,885
Other income	-	-	-	1	-	1
Gains/(losses) from investments held at fair value through profit or loss	-	147,005	147,005	-	(66,546)	(66,546)
Foreign exchange losses	-	(206)	(206)	-	(127)	(127)
Total income/(loss)	6,678	146,799	153,477	5,886	(66,673)	(60,787)
Management fee	(4,454)	-	(4,454)	(5,614)	-	(5,614)
Other administrative expenses	(1,333)	-	(1,333)	(1,345)	-	(1,345)
Profit/(loss) before finance costs and taxation	891	146,799	147,690	(1,073)	(66,673)	(67,746)
Finance costs	(327)	-	(327)	(224)	-	(224)
Profit/(loss) before taxation	564	146,799	147,363	(1,297)	(66,673)	(67,970)
Taxation	(2)	-	(2)	-	-	-
Net profit/(loss)	562	146,799	147,361	(1,297)	(66,673)	(67,970)
Earnings/(loss) per Ordinary share - undiluted	0.53p	139.12p	139.65p	(1.21)p	(62.18)p	(63.39)p
Earnings/(loss) per Ordinary share - diluted	0.53p	139.12p	139.65p	(1.21)p	(62.18)p	(63.39)p

The Group does not have any income or expense that is not included in the net profit for the year. Accordingly the 'Net profit/(loss)' for the year, is also the 'Total comprehensive income' for the year, as defined in IAS1 (revised) and no separate Statement of Comprehensive Income has been presented.

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 represents the Group's Income Statement, prepared in accordance with IFRS. The 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies and Venture Capital Trusts.

All income is attributable to the equity shareholders of JPMorgan Indian Investment Trust plc, the Company. There are no non‑controlling interests.

Group and Company Statements of Changes in Equity

for the year ended 30th September 2014

	Group
	2014
	Called up			Exercised		Capital
	share	Share	Other	warrant	Capital	redemption	Revenue
	capital	premium	reserve	reserve	reserves	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2013	30,124	83,019	41,929	5,886	231,854	6,362	(16,533)	382,641
Cancellation of Subscription shares	(4)	4	-	-	-	-	-	-
Conversion of Subscription shares into Ordinary shares	(54)	54	-	-	-	-	-	-
Issue of Ordinary shares on conversion of Subscription shares	1,338	14,241	-	-	-	-	-	15,579
Repurchase of shares into Treasury	-	-	-	-	(14,733)	-	-	(14,733)
Expenses in relation to share conversions	-	(2)	-	-	-	-	-	(2)
Profit for the year	-	-	-	-	146,799	-	562	147,361
At 30th September 2014	31,404	97,316	41,929	5,886	363,920	6,362	(15,971)	530,846

	Group
	2013
	Called up			Exercised		Capital
	share	Share	Other	warrant	Capital	redemption	Revenue
	capital	premium	reserve	reserve	reserves	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2012	30,032	82,000	41,929	5,886	337,232	6,362	(15,236)	488,205
Conversion of Subscription shares into Ordinary shares	(4)	4	-	-	-	-	-	-
Issue of Ordinary shares on conversion of Subscription shares	96	1,015	-	-	-	-	-	1,111
Repurchase of shares into Treasury	-	-	-	-	(38,705)	-	-	(38,705)
Loss for the year	-	-	-	-	(66,673)	-	(1,297)	(67,970)
At 30th September 2013	30,124	83,019	41,929	5,886	231,854	6,362	(16,533)	382,641

	Company
	2014
	Called up			Exercised		Capital
	share	Share	Other	warrant	Capital	redemption	Revenue
	capital	premium	reserve	reserve	reserves	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2013	30,124	83,019	41,929	5,886	236,028	6,362	(20,707)	382,641
Cancellation of Subscription shares	(4)	4	-	-	-	-	-	-
Conversion of Subscription shares into Ordinary shares	(54)	54	-	-	-	-	-	-
Issue of Ordinary shares on conversion of Subscription shares	1,338	14,241	-	-	-	-	-	15,579
Repurchase of shares into Treasury	-	-	-	-	(14,733)	-	-	(14,733)
Expenses in relation to share conversions	-	(2)	-	-	-	-	-	(2)
Profit/(loss) for the year	-	-	-	-	148,154	-	(793)	147,361
At 30th September 2014	31,404	97,316	41,929	5,886	369,449	6,362	(21,500)	530,846

	Company
	2013
	Called up			Exercised		Capital
	share	Share	Other	warrant	Capital	redemption	Revenue
	capital	premium	reserve	reserve	reserves	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2012	30,032	82,000	41,929	5,886	341,899	6,362	(19,903)	488,205
Conversion of Subscription shares into Ordinary shares	(4)	4	-	-	-	-	-	-
Issue of Ordinary shares on conversion of Subscription shares	96	1,015	-	-	-	-	-	1,111
Repurchase of shares into Treasury	-	-	-	-	(38,705)	-	-	(38,705)
Loss for the year	-	-	-	-	(67,166)	-	(804)	(67,970)
At 30th September 2013	30,124	83,019	41,929	5,886	236,028	6,362	(20,707)	382,641

Group and Company Balance Sheets

at 30th September 2014

	Group	Group	Company	Company
	2014	2013	2014	2013
	£'000	£'000	£'000	£'000
Non current assets
Investments held at fair value through profit or loss	557,474	372,521	530,385	372,641
Investment in liquidity fund held at fair value through profit or loss	-	7,000	-	7,000
Total investments	557,474	379,521	530,385	379,641
Current assets
Other receivables	4,310	99	23	27
Cash and cash equivalents	779	3,752	561	3,504
	5,089	3,851	584	3,531
Current liabilities
Other payables	(1,817)	(731)	(123)	(531)
Bank loans	(29,900)	-	-	-
Net current (liabilities)/assets	(26,628)	3,120	461	3,000
Total assets less current liabilities	530,846	382,641	530,846	382,641
Net assets	530,846	382,641	530,846	382,641
Equity attributable to equity holders
Called up share capital	31,404	30,124	31,404	30,124
Share premium	97,316	83,019	97,316	83,019
Other reserve	41,929	41,929	41,929	41,929
Exercised warrant reserve	5,886	5,886	5,886	5,886
Capital reserves	363,920	231,854	369,449	236,028
Capital redemption reserve	6,362	6,362	6,362	6,362
Revenue reserve	(15,971)	(16,533)	(21,500)	(20,707)
Total equity shareholders' funds	530,846	382,641	530,846	382,641
Net asset value per Ordinary share - undiluted	502.2p	365.5p	502.2p	365.5p
Net asset value per Ordinary share - diluted	502.2p	361.6p	502.2p	361.6p

Company registration number: 2915926

Group and Company Cash Flow Statements

for the year ended 30th September 2014

	Group	Group	Company	Company
	2014	2013	2014	2013
	£'000	£'000	£'000	£'000
Operating activities
Profit/(loss) before taxation	147,363	(67,970)	147,363	(67,970)
Add back interest	327	224	84	178
Deduct (gains)/add losses on investments held at fair value through profit or loss	(147,005)	66,546	(148,132)	67,143
Unrealised foreign exchange losses	-	(3)	-	(4)
Net (purchases)/sales of investments held at fair value through profit or loss	(30,948)	41,310	(2,612)	(8,714)
(Increase)/decrease in prepayments, VAT and other receivables	(59)	19	4	(12)
(Increase)/decrease in amounts due from brokers	(4,152)	2,259	-	2,259
Increase/(decrease) in other payables	47	(366)	5	7
Increase/(decrease) in amounts due to brokers	1,452	(2,240)	-	-
Net cash (outflow)/inflow from operating activities before interest and taxation	(32,975)	39,779	(3,288)	(7,113)
Interest paid	(327)	(224)	(84)	(178)
Tax paid	(2)	-	(2)	-
Net cash (outflow)/inflow from operating activities	(33,304)	39,555	(3,374)	(7,291)
Investing activities
Sale of subsidiary shares	-	-	-	50,000
Net cash inflow from investing activities	-	-	-	50,000
Financing activities
Net proceeds from the issue of Ordinary shares	15,579	1,111	15,579	1,111
Repurchase of shares	(15,146)	(40,304)	(15,146)	(40,304)
Decrease in bank overdraft	-	(14)	-	(14)
Drawdown of short term loans	34,800	25,500	3,000	21,300
Net repayment of short term loans	(4,900)	(25,500)	(3,000)	(21,300)
Expenses in relation to share conversions	(2)	-	(2)	-
Net cash inflow/(outflow) from financing activities	30,331	(39,207)	431	(39,207)
(Decrease)/increase in cash and cash equivalents	(2,973)	348	(2,943)	3,502
Cash and cash equivalents at the start of the year	3,752	3,404	3,504	2
Cash and cash equivalents at the end of the year	779	3,752	561	3,504

Notes to the Accounts

for the year ended 30th September 2014

1.    Principal activity

The principal activity of the Company is that of an investment holding company within the meaning of Section 1158 of the Corporation Tax Act 2010. The principal activity of its subsidiary company, JPMorgan Indian Investment Company (Mauritius) Limited, is that of an investment company.

2.   Accounting policies

(a)  Basis of accounting

The Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS'), which comprise standards and interpretations approved by the International Accounting Standards Board ('IASB'), the International Accounting Standards and Standing Interpretations Committee and interpretations approved by the International Accounting Standards Committee ('IASC') that remain in effect and to the extent that they have been adopted by the European Union.

The accounts have been prepared on the going concern basis. The disclosures on going concern in the Directors' Report on page 19 of the Annual Report and Accounts form part of these financial statements. The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies ('AIC') in January 2009 is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

The Company's share capital is denominated in sterling and this is the currency in which its shareholders operate and expenses are generally paid. The Directors have therefore determined the functional currency to be sterling.

3.   Earnings/(loss) per Ordinary share

	Group
	2014	2013
	£'000	£'000
Earnings/(loss) per Ordinary share is based on the following:
Revenue return/(loss)	562	(1,297)
Capital return/(loss)	146,799	(66,673)
Total profit/(loss)	147,361	(67,970)
Weighted average number of Ordinary shares in issue during the year used for the purpose of the undiluted calculation	105,522,093	107,223,518
Weighted average number of Ordinary shares in issue during the year used for the purpose of the diluted calculation	105,522,093	107,223,518
Undiluted
Revenue loss per share	0.53p	(1.21)p
Capital return/(loss) per share	139.12p	(62.18)p
Total profit/(loss) per share	139.65p	(63.39)p
Diluted1
Revenue earnings/(loss) per share	0.53p	(1.21)p
Capital return/(loss) per share	139.12p	(62.18)p
Total profit/(loss) per share	139.65p	(63.39)p

1        The Company's Subscription shares expired and the rights lapsed on 2nd January 2014.

The diluted earnings/(loss) per Ordinary share represents the earnings/(loss) on ordinary activities after taxation divided by the weighted average number of Ordinary shares in issue during the year as adjusted in accordance with the requirements of IAS 33, 'Earnings per Share'. In 2013, there was an antidilution, due to loss per share.

4.   Net asset value per Ordinary share

	2014	2013
Undiluted
Ordinary shareholders funds (£'000)	530,846	382,641
Number of Ordinary shares in issue excluding shares held in Treasury	105,707,798	104,683,965
Net asset value per Ordinary share (pence)	502.2	365.5
Diluted1
Ordinary shareholders funds assuming exercise of Subscription shares (£'000)	530,846	399,373
Number of potential Ordinary shares in issue excluding shares held in Treasury	105,707,798	110,433,755
Net asset value per Ordinary share (pence)	502.2	361.6

1        The Company's Subscription shares expired and the rights lapsed on 2nd January 2014.

The diluted net asset value per Ordinary share assumes that all outstanding Subscription shares were converted into Ordinary shares at the 2013 year end. The Company will only re-issue shares held in Treasury at a premium and therefore those shares have no dilutive potential.

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 30th September 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 30th September 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 shortly be available on the Company's website at www.jpmindian.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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