Annual Financial Report

RNS Number : 1426J

JPMorgan Indian Invest Trust PLC

15 December 2015

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN INDIAN INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED
30TH SEPTEMBER 2015

Chairman's Statement

Results

After its stellar performance in the year to 30th September 2014, when it rose by nearly 40%, the Indian stock market was a disappointment in the year ended 30th September 2015. Returns to investors, as measured by the MSCI India Index (in sterling terms), were only marginally positive, at 0.7%. This was despite a very encouraging return of 14.3% in the first six months. In the second half, with sentiment towards emerging markets turning increasingly negative and the new Indian government under Mr Modi finding it more difficult than businessmen and investors had expected to push its legislative proposals through parliament, corporate profits failed to grow as anticipated and virtually all this performance was given back.

However, I am very pleased to report that the Company did much better than the index, producing a return on net assets of 14.0% over the year. The return to shareholders was a little less than this, at 12.9%, reflecting a slight widening of the discount from 11.4% to 12.3% over the year. This is by a large margin the best relative performance your Company has achieved in the last decade and I would like to congratulate our Investment Managers on the results they have achieved this year.

They set out the key factors affecting the Indian economy and equity market as well as the portfolio's performance over the financial year and give their view of the prospects for the future in their report below.

Gearing

The Company has a three year floating rate £70 million loan facility with Scotiabank to provide the Investment Managers with the flexibility to gear the portfolio when they believe it is appropriate. At the end of the financial year £23 million was drawn and the portfolio was 1.9% geared. As at the date of this report, the gearing level is approximately 4.4%.

Investment Manager

The Board has reviewed the investment management, company secretarial, sales and marketing services provided to the Company by JPMorgan Funds ('JPMF'). This annual review included the 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.

Share Issues and Repurchases

At the Annual General Meeting in January 2015 shareholders granted the Directors authority to repurchase up to 14.99% of the Company's shares for cancellation or into Treasury. The Company did not repurchase any shares during the year. There are a total of 19,909,788 shares held in Treasury. The Board believes that this facility is an important tool in the management of discount volatility and is, therefore, seeking approval from shareholders to renew the authority to repurchase the Company's shares 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 shares have traded at a premium to net asset value ('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 continuing shareholders.

Annual General Meeting

This year's Annual General Meeting will be held at JPMorgan's office at 60 Victoria Embankment, London EC4Y 0JP on Wednesday, 27th January 2016 at 12.00 noon. As in previous years, in addition to the formal part of the meeting, there will be a presentation from one of the Investment Managers, 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, entry will be restricted to shareholders only and guests will not be admitted to the meeting.

If you have any detailed or technical questions, it would be helpful if you could raise them in advance with the Company Secretary at 60 Victoria Embankment, London EC4Y 0JP or via the 'Ask a Question' link on the Company's website. Shareholders who are unable to attend the AGM are encouraged to use their proxy votes.

Outlook

The short term prospects for the Indian stock market are unusually uncertain. The economy, and with it corporate profits, has not picked up in the way that we had hoped a year ago and it may be that the imminent rise in US interest rates, which is very widely anticipated, will serve to increase the rate at which overseas investors are withdrawing funds from Indian bond and equity markets. On the other hand, as our Investment Managers point out in their review, the Modi government has already achieved a considerable amount in laying the foundations for much needed investment in infrastructure, most notably in the power and transport sectors. India has tremendous potential for growth and a thriving entrepreneurial culture and I fully share the Investment Managers' optimism for the medium and long term prospects for the Indian market and thus for our Company.

Richard Burns

Chairman

15th December 2015

Investment Managers' Report

The Company's financial year was yet another volatile one, but rewarding for shareholders. While the market was largely unchanged for the year, the Company substantially outperformed, delivering a total return on net assets of +14%. Our report reviews the financial year, analyses the drivers of performance and considers the outlook.

Emerging markets in general were volatile through the year as a combination of the sharp slowdown in the Chinese economy and the imminent reset in monetary policy by the US Federal Reserve cast a shadow over the entire asset class: equities, currencies and debt. In India, politics remained in focus as Mr Narendra Modi completed one year in office, following the historic verdict in the national elections in mid 2014. The initial euphoria faded as the B.J.P suffered electoral reverses in state elections in Delhi and Bihar. That said, the government did initiate a host of reforms to kick-start economic growth. Among the key ones were:

•   A comprehensive plan to restructure loans of the state electricity boards in the power sector;

•   A substantial increase in the state governments' share of central government revenues, to engineer a paradigm shift in centre-state relations;

•   The auction of key assets such as coal mines and radio spectrum, which increased transparency and raised substantial resources for the government;

•   A substantial increase in government capital expenditure in areas such as roads and railways to kick-start a new investment cycle; and

•   Tentative steps to ease onerous labour regulations by empowering individual state governments.

However, notwithstanding the above, the biggest challenge for the Modi government has been the inability to pass key legislation (such as the Goods and Services Tax Bill), due to the lack of a majority in the upper house of Parliament. This is likely to remain an ongoing challenge as achieving bi-partisan consensus remains very difficult in the complex political landscape.

Despite the efforts of the government, the domestic macro environment remained frustratingly sluggish, though there are some indications of a recovery. Headline GDP growth hovered around 7% (which roughly equates to 5% under the old calculation method). However, high frequency indicators such as industrial production, auto sales and cement demand suggested a much slower pace. The sluggish environment was also evident in the earnings of corporate India, estimates of which were cut steadily through the year.

The collapse in commodity prices, especially oil, helped three key macro pain points for the economy: (1) the current account deficit, a source of much stress in 2013, improved and could well come into balance in 2016; (2) the fiscal deficit reduced as the government took the opportunity to further dismantle fuel subsidies; and (3) finally inflation eased.

This sharp drop in inflation was the trigger for the Reserve Bank of India to cut interest rates. Interest rates were progressively cut by a cumulative 125 bps, with more to come, in our view.

Performance

The Company substantially outperformed the benchmark as the key overweight position in domestic cyclicals - financials such as HDFC Bank, Kotak Bank and Indusind Bank; auto stocks such as Maruti Suzuki and Ashok Leyland - contributed to performance. The underweight in global cyclicals - metals and energy stocks such as Vedanta, ONGC and Cairn India - also contributed to relative performance. On the flip side, the overweight in Tata Motors detracted from performance as the slowdown in the Chinese economy hurt its international business Jaguar Land Rover. The overweight in Mahindra & Mahindra Financial Services also hurt performance as weakness in the rural economy impacted its asset quality. The underweight in healthcare stocks, such as Dr Reddy's, and consumer staples such as Hindustan Unilever and Godrej Consumer Products, also detracted from relative performance.

Outlook

In the near term, the imminent reset in monetary policy in the US could lead to an acceleration of recent outflows from emerging markets. This could be particularly relevant for India, to the extent that inflows from foreign portfolio investors in equities and debt have been extremely strong over the past five years.

But, as investors are aware, our focus remains on the long term. And, on a three to five year horizon, we remain optimistic for the following reasons:

•   We remain convinced that the policy actions of the Modi government are designed to create a stable foundation for India's growth and development;

•   The Indian economy remains cyclically depressed and is likely to gradually recover to a more sustainable 9% rate of growth (which is equivalent to 7% under the previous calculation methodology);

•   As the economy recovers, so too will corporate earnings. Our research shows that almost all companies, across all sectors, have under-utilised earnings power that will at some point be unleashed;

•   Falling interest rates will be a key catalyst of this revival. It is worth noting that, while interest rates have been cut by 125 bps thus far, lending rates have been cut by much less (approximately 70 bps);

•   Valuations are reasonable at around their long term averages. However, this is on earnings forecasts, as mentioned, which we believe are cyclically depressed. In fact, acceleration in earnings growth is likely to be the key driver for equity returns over the next 3-5 years; and

•   Our confidence that the bottom-up opportunity set is diverse and large enough for us to construct a portfolio of well managed, high quality growth companies.

The Company's portfolio remains positioned for this view, with a distinct tilt towards domestic cyclicals such as financials, consumer discretionary and building materials at the expense of global cyclicals and defensives such as consumer staples.

Rukhshad Shroff, CFA

Rajendra Nair, CFA

Investment Managers

15th December 2015

Principal Risks

The Directors confirm that they have carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The risks identified and the ways in which they are managed or mitigated are summarised as follows.

With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to the Company. In assessing risks and how they can be mitigated, the Board has given particular attention to those risks that might threaten the viability of the Company. 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. JPMF 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 Investment Managers.

•   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 and Disclosure and 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 and its professional advisers to ensure compliance with the Companies Act and the UKLA Listing Rules and DTRs.

•   Taxation: Any change in the taxation legislation or taxation regime applicable to the Mauritian subsidiary company 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 company 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 company, 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. 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 company ceased to qualify for the benefits under the India/Mauritius Double Tax Treaty (for example, if it were held that the Mauritian subsidiary company was not a resident of Mauritius). There can be no assurance that the Mauritian subsidiary company 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 company to pay or provide for tax liabilities that would reduce the net asset value of the Company's shares. The Board monitors closely developments in this area through the Manager, the Mauritian administrator and its professional advisers.

•   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 on pages 22 to 26 of the Annual Report and Accounts.

•   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 depositary's or custodian's records could prevent accurate reporting and monitoring of the Company's financial position. This includes the risk of cybercrime and consequent potential threat to security and business continuity. 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 in the Risk Management and Internal Control section of the Corporate Governance report on pages 25 to 26 of the Annual Report and Accounts.

•   Financial: The financial risks faced by the Company include market price risk, interest rate risk, liability risk, credit risk and borrowing default risk. Further details are disclosed in note 19 on pages 51 to 58 of the Annual Report and Accounts.

•   Political and Economic: The Company faces risks from possible policy changes including 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 IFRSs as adopted by the European Union 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 on pages 18 and 19 of the Annual Report and Accounts, confirms that, to the best of his or her knowledge the financial statements, which have been prepared in accordance with IFRS 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

Richard Burns

Chairman, 15th December 2015

Group Statement of Comprehensive Income

for the year ended 30th September 2015

	2015			2014
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment income	6,136	-	6,136	6,676	-	6,676
Other income	1	-	1	-	-	-
Gains from investments held at fair value   through profit or loss	-	76,601	76,601	-	147,005	147,005
Foreign exchange losses	-	(155)	(155)	-	(206)	(206)
Total income	6,137	76,446	82,583	6,676	146,799	153,475
Management fee	(6,151)	-	(6,151)	(4,454)	-	(4,454)
Other administrative expenses	(1,462)	-	(1,462)	(1,333)	-	(1,333)
(Loss)/profit before finance costs and   taxation	(1,476)	76,446	74,970	889	146,799	147,688
Finance costs	(759)	-	(759)	(327)	-	(327)
(Loss)/profit before taxation	(2,235)	76,446	74,211	562	146,799	147,361
Taxation	(105)	-	(105)	-	-	-
Net (loss)/profit	(2,340)	76,446	74,106	562	146,799	147,361
(Loss)/earnings per share (note 3)	(2.21)p	72.32p	70.11p	0.53p	139.12p	139.65p

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).

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 Statement of Comprehensive Income, prepared in accordance with IFRS. The 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies. Details of revenue and capital items, together with the associated reserves, are contained in note 14 of the Annual Report and Accounts.

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 2015

	Group
	Called up			Exercised	Capital
	share	Share	Other	warrant	redemption	Capital	Revenue
	capital	premium	reserve	reserve	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2013	30,124	83,019	41,929	5,886	6,362	231,854	(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	6,362	363,920	(15,971)	530,846
Profit/(loss) for the year	-	-	-	-	-	76,446	(2,340)	74,106
At 30th September 2015	31,404	97,316	41,929	5,886	6,362	440,366	(18,311)	604,952

	Company
	Called up			Exercised	Capital
	share	Share	Other	warrant	redemption	Capital	Revenue
	capital	premium	reserve	reserve	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2013	30,124	83,019	41,929	5,886	6,362	236,028	(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	6,362	369,449	(21,500)	530,846
Profit/(loss) for the year	-	-	-	-	-	74,819	(713)	74,106
At 30th September 2015	31,404	97,316	41,929	5,886	6,362	444,268	(22,213)	604,952

Group and Company Statement of Financial Position

at 30th September 2015

	Group	Group	Company	Company
	2015	2014	2015	2014
	£'000	£'000	£'000	£'000
Non current assets
Investments held at fair value through profit or loss	614,242	557,474	598,338	530,385
Investment in liquidity funds held at fair value through profit or loss	9,741	-	5,941	-
	623,983	557,474	604,279	530,385
Current assets
Other receivables	2,718	4,310	47	23
Cash and cash equivalents	1,603	779	733	561
	4,321	5,089	780	584
Current liabilities
Other payables	(352)	(1,817)	(107)	(123)
Bank loans	-	(29,900)	-	-
Net current assets/(liabilities)	3,969	(26,628)	673	461
Total assets less current liabilities	627,952	530,846	604,952	530,846
Creditors: amounts falling due after more than one year	(23,000)	-	-	-
Net assets	604,952	530,846	604,952	530,846
Amounts attributable to equity holders
Called up share capital	31,404	31,404	31,404	31,404
Share premium	97,316	97,316	97,316	97,316
Other reserve	41,929	41,929	41,929	41,929
Exercised warrant reserve	5,886	5,886	5,886	5,886
Capital redemption reserve	6,362	6,362	6,362	6,362
Capital reserves	440,366	363,920	444,268	369,449
Revenue reserve	(18,311)	(15,971)	(22,213)	(21,500)
Total equity shareholders' funds	604,952	530,846	604,952	530,846
Net asset value per share (note 4)	572.3p	502.2p	572.3p	502.2p

The Company's net profit for the financial year to 30th September 2015 was £74,101,764.

Company registration number: 2915926.

Group and Company Statement of Cash Flows

for the year ended 30th September 2015

	Group	Group	Company	Company
	2015	2014	2015	2014
	£'000	£'000	£'000	£'000
Operating activities
Profit before taxation	74,211	147,361	74,106	147,361
Deduct dividends received	(6,136)	(6,676)	(264)	(146)
Deduct bank interest received	(1)	-	-	-
Add back interest	759	327	3	84
Deduct gains on investments held at fair value through profit or loss	(76,601)	(147,005)	(74,731)	(148,132)
Decrease/(increase) in prepayments, VAT and other receivables	61	(59)	(24)	4
Decrease/(increase) in amounts due from brokers	1,531	(4,152)	-	-
(Decrease)/increase in other payables	(13)	47	(16)	5
(Decrease)/increase in amounts due to brokers	(1,452)	1,452	-	-
Net cash outflow from operating activities before interest   and taxation	(7,641)	(8,705)	(926)	(824)
Interest paid	(759)	(327)	(3)	(84)
Tax paid	(105)	-	-	-
Dividends received	6,136	6,676	264	146
Bank interest received	1	-	-	-
Net cash outflow from operating activities	(2,368)	(2,356)	(665)	(762)
Investing activities
Purchases of investments held at fair value through profit or loss	(177,148)	(175,195)	(7,255)	(18,166)
Sales of investments held at fair vale through profit or loss	187,240	144,247	8,092	15,554
Net cash inflow/(outflow) from investing activities	10,092	(30,948)	837	(2,612)
Financing activities
Net proceeds from the issue of Ordinary shares	-	15,579	-	15,579
Repurchase of shares	-	(15,146)	-	(15,146)
Drawdown of ING short term loans	37,200	34,800	-	3,000
Drawdown of Scotiabank long term loans	23,000	-	-	-
Repayment of ING short term loans	(67,100)	(4,900)	-	(3,000)
Expenses in relation to share conversions	-	(2)	-	(2)
Net cash (outflow)/inflow from financing activities	(6,900)	30,331	-	431
Increase/(decrease) in cash and cash equivalents	824	(2,973)	172	(2,943)
Cash and cash equivalents at the start of the year	779	3,752	561	3,504
Cash and cash equivalents at the end of the year	1,603	779	733	561

Certain comparatives have been amended to be in line with the current presentation adopted. There was no impact on the comparative net profit or net assets as a result of the new presentation.

Notes to the Financial Statements

for the year ended 30th September 2015

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 financial statements have been prepared on the going concern basis. The disclosures on going concern in the Directors' Report on page 24 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.   (Loss)/earnings per share

The revenue loss per share is based on the earnings attributable to the ordinary shares of £2,340,000 (2014: £562,000 return) and on the weighted average number of shares in issue during the year of 105,707,798 (2014: 105,522,093).

The capital return per share is based on the capital return attributable to the ordinary shares of £76,446,000 (2014: £146,799,000) and on the weighted average number of shares in issue during the year of 105,707,798 (2014: 105,522,093).

Total return per share is based on the total return attributable to the ordinary shares of £74,106,000 (2014: £147,361,000) and on the weighted average number of shares in issue during the year of 105,707,798 (2014: 105,522,093).

4.   Net asset value per share

Net asset value per share is based on total shareholders' funds of £604,952,000 (2014: £530,846,000) and on the 105,707,798 (2014: 105,707,798) shares in issue at the year end, excluding shares held in Treasury.

5.   Status of results announcement

2014 Financial Information

The figures and financial information for 2014 are extracted from the published Annual Report and Accounts for the year ended 30th September 2014 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.

2015 Financial Information

The figures and financial information for 2015 are extracted from the Annual Report and Accounts for the year ended 30th September 2015 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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