Final Results to 30th September 2023

JPMorgan Indian Invest Trust PLC

13 December 2023

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN INDIAN INVESTMENT TRUST PLC

(the 'Company')

FINAL RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER 2023

Legal Entity Identifier: 549300OHW8R1C2WBYK02

Information disclosed in accordance with the DTR 4.1.3

CHAIRMAN'S STATEMENT

Performance

This will be my last Chairman's Statement before I step down after the Annual General Meeting (AGM) in February next year. It has been a privilege to be a Director of the Company since 2013 and Chairman for the last three years and I am pleased to present the Company's annual results for the year ended 30th September 2023.

I would like to begin this statement by thanking shareholders for their patience, in what has been an uncertain and volatile time for investors. An unusually large number of adverse influences conspired to undermine global financial market sentiment and generate volatility over the review period. Inflation remained stubbornly high in large parts of the world and geo-political tensions intensified. However, the Benchmark still managed to realise a small gain of 0.7% (in GBP terms) over the year.

It is pleasing to be able to report that the Company's Portfolio Managers successfully navigated the volatility generated by these disparate forces to outperform the index over the year. The Company's total return on net assets was 1.2% (in GBP terms), while the share price return of 2.2% reflected a small narrowing of the share price discount to net asset value from 20.1% at the end of the previous financial year to 19.3% as at 30th September 2023.

Given the long-term focus of the Company's investment approach, it is important for shareholders to also consider performance over a longer timeframe. And on this basis, absolute returns have been strong. The Company has made an average annualised return of 11.3% on an NAV basis and 10.7% in share price terms over the ten years to end September 2023. This compares with a Benchmark return of 12.9%.

The Portfolio Managers' report below provides a clear review of the market environment, the Company's performance, portfolio adjustments and the outlook for the year ahead. The Portfolio Managers also outline the reasons for their optimism about India's very favorable long-term prospects, and the positive implications this has for the Company's portfolio.

Discount and Share Repurchases

At the AGM held in February 2023, shareholders gave approval for the Company to renew the Directors' authority to repurchase up to 14.99% of the Company's shares for cancellation or into Treasury on an ongoing basis.

Whilst the Board would like to see the Company's shares trading at narrower discount levels, it recognises that in general, the investment trust sector as a whole, and single country funds in particular have been impacted by recent markets during which discounts have significantly widened and have also been more volatile. The discount at which the Company's shares trade versus its NAV narrowed slightly to 19.3% over the review period (2022: 20.1%). The Board constantly weighs the merits of buying back shares, in line with the Company's share buyback policy, to manage the absolute level and volatility of the discount. Pursuant to this policy, the Company repurchased 2,767,119 shares during the reporting period at a cost of £22,609,000 and since the financial year end, a further 694,512 shares have been bought back at a cost of £5,990,000 and an average discount of 18.8%. As shares are only re-purchased at a discount to the prevailing net asset value, share buybacks benefit shareholders as they increase the net asset value per share of remaining shares.

The Board believes that the share buyback 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 AGM in February 2024. The Board is optimistic that the discount will narrow once the economic outlook and market sentiment improve.

Gearing

The Board regularly discusses gearing with the Portfolio Managers. The Company's two-year, £30 million loan facility matured in August 2022, but as it was not being utilised, the Board did not deem it appropriate to renew or replace the facility. Therefore, the Company currently does not have a debt facility in place, although the Board will seek to arrange a facility as and when it considers it appropriate to do so. As at 30th September 2023, the Company's portfolio held 0.6% net cash, i.e.it was 99.4% invested.

Board and Corporate Governance

The Board reviews its composition on a regular basis, taking into account the need to refresh its membership and maintain diversity, whilst also ensuring the necessary degree of continuity of Board experience. As previously announced, I will be stepping down as Chairman of the Company at the conclusion of the AGM in February 2024. I will be succeeded by Jeremy Whitley, the current Senior Independent Director. Vanessa Donegan will take over the role of Senior Independent Director from Jeremy Whitley at the conclusion of the 2024 AGM. The Board has asked Jasper Judd, the Chairman of the Audit and Risk Committee, who will have been on the Board for nine years by the 2024 AGM, to stay on till the conclusion of the 2025 AGM to ensure a smooth transition. With this in mind, as part of its succession planning, the Board, led by the Nomination Committee, has already commenced a formal recruitment search for a new Non-executive Director who would be able to take on the chairmanship of the Audit and Risk Committee after an appropriate handover period.

The Board recognises the value and importance of diversity in the boardroom. The Board is pleased to report that it fulfils the recommendations of the Parker Review by having at least one Director from a minority ethnic background. It also meets the recommendations of the FTSE Women Leaders Review, which build on the work of the former Hampton-Alexander and Davies Reviews, in respect of female board representation. The Board, through the Nomination Committee, has a succession plan that aims to continue meeting these recommendations as the Board undergoes future refreshment.

The Board supports the annual re-election for all Directors, as recommended by the AIC Code of Corporate Governance, and therefore all of the Directors, except for me, will stand for re-election at the forthcoming AGM.

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.

Continuation Vote and Conditional Tender Offer

The Company's Articles require that at the AGM to be held in 2024, and at every fifth year thereafter, the Directors propose a resolution that the Company continues as an investment trust for a further five-year period. If the resolution is not passed, the Company's articles of association require that the Directors shall, within four months of the AGM, convene a General Meeting of the Company at which a special resolution will be proposed, designed to result in the holders of shares in the Company receiving, in lieu of their shares, units in a unit trust scheme (or equivalent), or in the reorganisation of the Company's share capital in some other manner, or which shall be a resolution requiring the Company to be wound up voluntarily.

The Board believes that the long-term outlook for India remains positive and that JPMAM has the resources and investment process to deliver returns for shareholders consistent with the Company's investment objectives. Accordingly, the Board believes that the continuation of the Company is in the best interests of all shareholders and strongly recommends that shareholders vote in favour of the resolution, as they intend to do in respect of their own holdings. 

As announced on 26th January 2021, a tender offer will be made to shareholders for up to 25% of the Company's outstanding share capital, at NAV less costs if, over the five years from 1st October 2020, the Company's NAV total return in sterling on a cum income basis does not exceed the total return of the benchmark index plus 0.5% per annum over the five-year period on a cumulative basis. If the tender offer is triggered, it will be subject to shareholder approval at the relevant time.

The Company's Benchmark does not take any account of actual or potential tax on gains. In contrast, the Company is required to pay capital gains tax on long-term and short-term capital gains at the headline current rates of 10% and 15%, respectively, plus associated surcharges of approximately 1-1.5%. For the avoidance of doubt, in order to ensure that the terms of the conditional tender offer correctly reflects the Investment Manager's performance in calculating whether the tender offer has been triggered, the NAV per share will be adjusted to add back all Indian capital gains tax paid or accrued, plus any surcharge and cess in respect of realised and unrealised gains made on investments. The NAV performance since 1 October 2020 without the impact of capital gains tax stood at 59.6% as at 30th November 2023, compared to 60.5% for the Benchmark.

Any tender offer will also be conditional on shareholders approving the Company's continuation vote in 2024. Accordingly, the Board believes that the continuation of the Company is in the best interests of all shareholders and strongly recommends that shareholders vote in favour of the resolution at the AGM on 13th February 2024, as the Directors intend to do in respect of their own holdings.

Mauritius Subsidiary and Taxation

As reported during the last financial period, following the amendment to the India-Mauritius treaty, the Company had transferred its holdings from its Mauritius subsidiary to the parent company. A cash balance was maintained in the Mauritian subsidiary to fund its dissolution expenses. The Company's Mauritian subsidiary was placed into liquidation on 31st August 2022, with IQEQ (Mauritius) engaged as the liquidator. For this reason, there are no longer any supplemental information or reconciliations to the statutory financial statements to include in the notes to the Financial Statements.

Environmental, Social and Governance Considerations

Whilst the Portfolio Managers select stocks based primarily on company fundamentals, they also consider the potential impact of financially material ESG factors on a company's ability to deliver shareholder value.

Throughout the investment process, a company's strategy is assessed according to its ability to deal with these important factors and the consequent risks they may generate. The analysis helps determine whether relevant ESG factors are financially material and, if so, whether they are reflected in the valuation of the company. Such analysis may influence not only the Portfolio Managers' decision to own a stock, but also, if they do, the size of that position within the portfolio. Further information on the Manager's ESG process and engagement is set out in the ESG section on pages 18 to 23 of the Annual Report and Financial Statements.

Task Force on Climate-related Financial Disclosures

As a regulatory requirement for the Company's Manager, on 30th June 2023, JPMAM published its first UK Task Force on Climate-related Financial Disclosures ('TCFD') Report for the Company in respect of the year ended 31st December 2022. The report discloses estimates of the Company's portfolio climate-related risks and opportunities according to the Financial Conduct Authority ('FCA') Environmental, ESG Sourcebook and the TCFD. The report is available on the Company's website under the ESG documents section: UK TCFD Product Report and ESG Fund Report.

This is the first report under the new guidelines and disclosure requirements. The Board is aware that best practice reporting under TCFDs is still evolving in regard to metrics and input data quality, as well as the interpretation and implications of the outputs produced, and will continue to monitor developments as they occur.

 

Stay Informed

The Company delivers email updates on the Company's progress with regular news and views, as well

as the latest performance. If you have not already signed up to receive these communications and you

wish to do so you can opt in via https://tinyurl.com/d95jkrzx or by scanning the QR code on this page of the Chairman's Statement in the Annual Report and Financial Statements.

Annual General Meeting

The Company's thirtieth AGM will be held at 60 Victoria Embankment, London EC4Y 0JP on 13th February 2024 at 2.00 p.m.

We are delighted to invite shareholders to join us in person for the Company's AGM, to hear directly from the Portfolio Managers. Their presentation will be followed by a question-and-answer session. Shareholders wishing to follow the AGM proceedings but choosing not to attend in person will be able to view proceedings live and ask questions (but not vote) through conferencing software. Details on how to register, together with access details, will be available shortly on the Company's website at www.jpmindian.co.uk or by contacting the Company Secretary at [e-mail]

My fellow Board members, representatives of JPMorgan and I look forward to the opportunity to meet and speak with shareholders after the formalities of the meeting have been concluded.

As is best practice, all voting on the resolutions will be conducted on a poll. Your Board encourages all shareholders to support the resolutions proposed. Please note that shareholders viewing the meeting via conferencing software will not be able to vote on the poll and we therefore encourage all shareholders, and particularly those who cannot attend physically, to exercise their votes in advance of the meeting by completing and submitting their proxy. Proxy votes can be lodged in advance of the AGM either by post or electronically: detailed instructions are included in the Notes to the Notice of Annual General Meeting on pages 100 to 102 of the Annual Report and Financial Statements.

If there are any changes to the above AGM arrangements, the Company will update shareholders through an announcement to the London Stock Exchange, and on the Company's website.

Outlook

Despite the numerous concerns - inflation, high interest rates, slowing growth and geopolitical uncertainties - currently pervading global financial markets, the Board shares the Portfolio Managers' conviction that the long-term prospects for the Indian market continue to improve, supported by the country's demographics, increased capital expenditure, government reforms and the huge potential for structural change and technological advancement.

Given this, and the Portfolio Managers' focus on good quality companies capable of benefiting most from India's promising future and thus outperforming over the long run, the Board is optimistic about the Company's prospects, and we share the Portfolio Managers' confidence in their ability to continue delivering attractive levels of capital growth to shareholders over the long-term.

I would like to conclude by thanking my fellow Directors and the team at JPMorgan for their support and contribution during my time on the Board, and I would also like to extend my thanks to our shareholders for their ongoing support. I wish the Company well for the future.

Rosemary Morgan

Chairman

12 December 2023

PORTFOLIO MANAGER'S REPORT

The year in review

During the 12 months to end September 2023, the MSCI India Index produced a small positive return of 0.7%. It was a year of two halves, the first half weak and the second half catching up strongly. As we wrote in the Interim Report, in our opinion, two factors contributed to weakness in the Indian market during the first half. One was China's sudden decision to abandon its zero covid policy, which presented investors with another investment destination for capital. The other factor was a short seller report on the Adani Group companies, which triggered concerns regarding the overall Indian market. In contrast, the second half of the year saw a strong rebound, driven by a buoyant domestic economy led by capital formation on the back of government investment in infrastructure and a revival in capex (discussed further in this review). To a lesser extent, the markets were helped by investor disappointment when China's economic recovery lost momentum.

Against this backdrop, over the year your Company made a positive outright return of 1.2% on a net asset value basis, which also includes the adverse impact of capital gains tax, detracting 1.4 percentage points from performance. The share price return over the period was 2.2%, reflecting some narrowing of the discount to NAV. 

In this report we review the main drivers of recent performance, portfolio positioning and consider the long-term outlook for Indian equities.

Performance review

Stock selection in Utilities and Financials were the main driver of the positive relative return during the year. Having no exposure to the Adani Group companies was the key contributor in the Utilities sector. Our position in Power Grid Corporation also helped enhance returns, thanks to the government's focus on power related infrastructure spending. Within financials, our position in Shriram Finance, which mainly provides loans for used commercial vehicles, was also a positive contributor. The overhang on the stock price came off following the exit by a private equity investor and the company also delivered strong asset growth and credit performance given cyclical recovery in the vehicle financing segment. In addition, our holding in MCX, the leading commodities exchange in India, performed well, as the company completed the transition to a new tech platform, and average values traded on its exchanges continued to grow.

Detractors during the review period came mainly from the Industrial, Discretionary and Energy sectors. Not owning Larsen & Toubro, an engineering and construction company, was a material detractor given its exposure to the upswing in India's capex cycle. In addition, our holdings in companies focused on business process outsourcing (BPO), including Genpact and WNS, were perceived to be at risk of disruption by artificial intelligence-based tools, following recent advancement in AI-based products, and their share prices came under pressure accordingly. We remain constructive on our BPO holdings and believe that the market is overestimating the potential negative impact of generative AI on their defensive business model. Amongst our Discretionary holdings, not owning Tata Motors and being underweight Mahindra & Mahindra, a conglomerate with several auto and farm equipment businesses, detracted due to (1) its personal and commercial vehicle businesses benefitting from an upcycle and market share gains and (2) restructuring of the group following arrival of a new Chief Executive Officer (more on this later in the report). Within the Energy sector, our underweight to Reliance Industries, a conglomerate with material exposure to the oil and gas sector, was the main detractor - the stock price outperformed due to positive expectations in the company's other divisions including retail, telecom, and a separate listing of its financial services subsidiary.

However, beyond these stock-specific impacts on performance, another notable adverse influence on returns over the past year was the style rotation within the Indian market. Our process is focused on owning high quality businesses that compound earnings over a long period of time. Markets may move in cycles, but we believe this investment approach creates value for investors over the long term. However, over the last 12 months, value and lower quality names have performed materially better than the higher quality parts of the market which we favour. For example, state-owned banks have outperformed private sector banks, and real estate and energy sectors have outperformed the more defensive consumer businesses. But while this environment presented a headwind for our performance, it also gave us the opportunity to make some changes to better align the portfolio with our long-term views. These are detailed below.

Performance Attribution

		12 mths to 30th September 2023
	%	%
Benchmark Total Return		0.7
Stock and sector allocation	1.9
Currency Effect	0.1
Gearing/cash	0.1
Investment Manager contribution		2.1
Impact of Capital Gains Tax1		(1.4)
Portfolio Total Return		1.4
Management Fees and Other Expenses		(0.8)
Share Buy-Back		0.6
Net Asset Value Total Return		1.2
Ordinary Share Price Total Return		2.2

Source: Factset, JPMAM and MorningStar. All figures are on a total return basis.

Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark index which does not take into account the effect of
capital gains Tax.

Spotlight on stocks and portfolio activity

Given opportunities created by the rotation away from quality names, it is not surprising that turnover for the year was relatively higher than what you should expect over the medium to long term, although it was more modest in the second half of the year, once we had made the desired changes. We expect turnover to be lower going forward. In our half yearly report, we wrote about changes we had made in the first half of the year. We detail below the changes made over the last six months.

New initiations

Mahindra & Mahindra (M&M) - Founded in 1945, M&M is an Indian conglomerate with a diverse portfolio of businesses, the largest tractor manufacturer (by volume) in the world, the leading manufacturer of light commercial vehicle makers in India, and the country's fastest growing SUV maker. Its material holdings also include a non-bank finance company and an IT services business.

Over recent years, M&M's CEO, Dr. Anish Shah, has divested or closed several businesses that had little chance of improving their return or growth potential. The remaining businesses have been required to outline a credible path to above inflation growth and a return on equity of at least 18%. This improvement in the conglomerate's portfolio discipline is one reason we found M&M appealing as an investment.

In addition, better capital allocation discipline has led to a more effective focus on growth and profitability which has further enhanced M&M's appeal. We see scope for further improvement in operating performance if M&M sustains its focus on sensible resource allocation and conglomerate discipline, and if it executes well to realise the growth potential of successful businesses and raise profitability in the underperforming ones.

Tube Investments of India (TII) -TII is a flagship company of the renowned Murugappa Group, one of India's leading conglomerates. Established in 1900, with its headquarters in Chennai, the group has 29 businesses, with ten listed companies trading on local exchanges.

TII is one of India's leading manufacturers of a wide range of precision engineered and metal formed products for major industries such as automotive, railway, construction, agriculture, etc. The company is also among the leading manufacturers of bicycles in India. The acquisition of CG Power and Industrial Solutions Limited, a major manufacturer of motors, transformers, switch gears and railway parts, marked a major step-up for the company, amplifying its scale, returns and scope of operations.

Following recent meetings, we believe that TII has all the hallmarks of a high-quality business - a long growth runway, strong and improving economics and excellent governance. The company benefits from its chairman Vellayan Subbiah's focus on efficient and value-creating capital allocation, both organically and through acquisitions, which is a rare skill.

Cholamandalam Investment and Finance Company (Chola) - Chola was incorporated in 1978 as the financial services arm of the Murugappa Group. Headquartered in Chennai, India, it is the largest of 29 businesses in the conglomerate by market capitalisation. While Chola commenced business as an equipment financing company, it is now a comprehensive financial services provider offering vehicle finance, home loans, loan against property, SME loans, secured business personal loans (SBPL), consumer & small enterprises loans (CSEL) and is now expanding into unsecured personal loans.

Chola is the third largest non-bank vehicle financier in the country, thanks to consistent and successful expansion into adjacent product categories while retaining focus on middle of the pyramid customers and providing loans which support livelihoods as opposed to funding discretionary consumption. The company has successfully deployed data-driven underwriting by constantly calibrating its credit models by product segments and micro-market to assess risk and make pricing decisions. This has ensured stable through cycle credit costs. We expect the company to benefit from both (1) strong growth in its core vehicle financing business due to expansion of manufacturing/industrial component of GDP and (2) successful expansion into new segments while keeping credit costs under check.

EXLS - EXLS is a Business Process Outsourcing (BPO) company focused on insurance, healthcare, and analytics. It is a high-quality business in a services sub-sector with secular tailwinds given low penetration of BPO. The business should remain resilient over the coming years as the industry tends to benefit in periods of economic pressure. This is because its business model is geared towards providing cost savings and efficiencies to its clients through outsourcing of business processes.

The business process outsourcing (BPO) industry enables its customers to outsource non-core processes by providing headcount and process expertise, thereby allowing them to focus on work which is mission critical. Customers not only benefit from labour arbitrage, but also knowledge of process 'best practice' across industries and ongoing investment into technology and automation made by the BPOs. This means that BPOs should be able to drive ongoing efficiencies for its customers beyond the initial 30% cost saving typically seen in year one. Given this focus, the industry has historically been counter cyclical. Once a business outsources work it is rare that it insources it again, so client churn tends to be limited.

Complete sales

Embassy REIT - We sold this real estate investment trust given the lower growth outlook for the business relative to alternatives.

HCL Tech - We consolidated our IT services industry holdings into companies where we see the sector's strongest long term growth opportunities.

Apollo - We followed our valuation signal, selling out of this hospital chain as we expect the company to deliver lower returns going forward.

Shriram Finance - We sold our position, taking profits following the company's strong return and replacing it with a higher quality vehicle financier.

Hero Motocorp - We exited the business given low expected returns, due to strong performance and a consolidation of our two-wheeler holdings into Bajaj Auto and Eicher Motors.

Aarti - We sold this position due to a deterioration in the long-term attractiveness of the business, because of the pressure on long term margins and higher capital intensity.

Lemon Tree - We sold this cyclical business, which has done well, as the higher valuation materially lowered our expected return.

Portfolio objectives

As we had laid out in our report last year, we want to ensure shareholders understand what we are trying to achieve and the type of companies the Company invests in.

For every investment, we ask ourselves "Is this a great business we want to own?" But what is a great business?

1) The typical characteristics of the businesses we seek include:

-   High returns on capital

-   Low capital intensity or high capital efficiency

-   Pricing power and scope to capture inflation

-   Secular long-term growth

-   Free cash flow generation

-   Low or no leverage

-   Competitive advantages or high barriers to entry

2)  Then we take a view on the management team.

As Philip Fisher, the highly regarded American strategist and long-term buy and hold investor, said, "In evaluating a common stock, the management is 90%, industry is 9% and all other factors are 1%."

We think that many investors underestimate the importance of good management teams but, in our view, this is one of the most important drivers of corporate value creation. Assessing management quality requires time, and deep scrutiny of a management's track record and alignment with shareholders, both in terms of integrity and capital allocation. We are also very wary of both new companies and aggressive/ambitious management teams.

3)  Lastly, valuations:

Our preference is always to invest in a great company at a fair price, rather than an average company at a cheap price. For us, it is corporate quality, not the share price, that determines idea generation.

That means while we meet many companies, we spend more time saying no than accepting optimistic or even aggressive views from corporate management.

The last year has seen an increase in IPOs and secondary market sell-downs. We have avoided this part of the market given shorter history and higher valuations, although we have used the opportunity to keep meeting new businesses, as the market landscape evolves.

The key for us remains to stay true to our core investment beliefs. As a team, we spend a lot of time ensuring we avoid a mission drift, guarding against seemingly small, immaterial deviations that collectively could divert unwary investors from our strategic objectives.

Outlook

Over the last 12 months, the investment case for India has become a lot more credible, for several reasons. India's growth catalysts are multiplying and broadening, and the country is set to become the world's fourth largest economy in 2025.

Capex spending and economic reforms are transforming the economy

Perhaps the most compelling aspect of India's transformation is the rapid growth in capital spending, which will also help balance the mix of GDP, which is currently skewed to services, more into manufacturing. As we noted in our last report, India has under-invested in capital formation over the last decade, but both the government and the private sector have now realised that capex is essential if the country is to achieve its target of 6% GDP growth over the next decade. The government has prioritised capex spending accordingly - almost doubling capital expenditure as a percentage of budget from 12% in the last decade, to 22% currently - and progress has been remarkable. Highway construction has grown by nearly 60% in the last nine years, from an already high base. Additionally, rail investments have increased more than fourfold in the last six years, port capacity has climbed by more than 80%, reducing turnaround times, and the country boasts 73 new airports. Metro rail has risen three and a half times, with more cities now benefiting from metro services.

The government has also implemented economic reforms to put the private sector on a solid footing. It has formalised the industrial sector by introducing a nationwide goods and services tax, reduced the corporate tax rate, lowered real lending rates, and introduced subsidies to incentivise domestic manufacturing. These measures, combined with buoyant demand, have improved the financial health of private companies, which are now at peak profitability and have sufficient firepower to fund investment without depending too much on external financing.

The government's encouragement of domestic manufacturing is paying off. Companies are improving their cost competitiveness by upgrading existing facilities, stepping up automation and electrification, and switching to renewable energy. These efforts have reduced the cyclicality in earnings inherent in the manufacturing sector, and India is now winning new business, replacing China in parts of the global supply chain, as multinational companies seek to diversify and secure supply in the wake of recent geopolitical events.

The Company's portfolio has exposure to these dramatic changes via investments in businesses such as Ultratech Cement, Tube Investments, Kajaria Ceramics, Triveni Turbines, Supreme Industries and Power Grid.

The Demographic Dividend is driving domestic consumption

India has recently overtaken China as the most populous country in the world and the age distribution is weighted towards more working age groups. This growing working age population, and the associated rise in incomes, should continue to fuel the growth in India's middle class and underpin and sustain consumption spending and housing demand for decades. 

Our portfolio is set to benefit from rising consumer demand via positions in personal and household products suppliers Colgate India and Hindustan Unilever, packaged foods supplier, Britannia industries, drinks company United Spirits, and auto makers Bajaj Auto, Eicher Motors and Maruti Suzuki.

Financial inclusion and digitalisation are increasing access to many services. The value of money transferred though India's instant real-time digital payment system through mobiles, UPI (Unified Payment Interface), has exploded from roughly $110bn or 3% of GDP in 2019 to $1trn or 19% of GDP in 2022.

Government efforts to increase financial inclusion have been very successful in ensuring Indian consumers have greater access to banking and financial services. The number of individuals with bank accounts has increased from 35% of the population in 2011, to over 77% by 2021, thanks to the Jan Dhan scheme designed to provide citizens with basic bank accounts, deposits and other financial services. Around 500 million Jan Dhan accounts have been opened since 2014, dramatically improving access to government benefits payments and simplifying everyday transactions for hundreds of millions of people. 

These developments have coincided with the trend towards digital empowerment - another Indian success story which has drastically transformed the digital landscape in the past decade. The number of internet users in the country more than tripled from c240 million in 2014 to 759 million in 2022 - reaching a penetration level of 52% of the population. Moreover, the lead has come from rural areas, which now have more internet users than cities (399 million vs 360 million). Additionally, over 190,000 village panchayats, usually elderly and respected community leaders, now have optical fibre connections, compared to only 60 in 2014. This enhanced connectivity has increased consumers' access to e-commerce, online banking and other fintech services.

But this is just the beginning. The potential for future growth in both financial and digital services is massive. As just a couple of examples, the percentage of the population that owns a credit card is still less than 5%, and the spend per capita on insurance is less than $100. This compares to the UK, where credit card ownership is 80% and insurance spending per capita is approximately £4,000.

The Company's portfolio has access to these trends through its positions in HDFC Bank, ICICI, Axis Bank, HDFC Life and HDFC Asset Management. The change in our holding in HDFC Bank appears significant due to the merger of HDFC Bank and HDFC Ltd this year. Given both these businesses were core holdings for us prior to the merger, there has been no increase in our underlying exposure.

Politics

Lastly, given the proximity of India's next general election, which is expected by May 2024, it would be remiss of us not to mention this event, at least briefly, if only to relay our view that whatever the result, it will have limited implications for long term investors. Our view is based on several considerations. First, we expect successive governments of whatever ilk to carry on the reform process, which will ensure the country continues to attract long-term capital. Furthermore, the government's share of GDP of 12.7% isn't that large. The Indian economy is driven more by individuals and private enterprise than government spending. Lastly, Indian corporates have long experience in dealing with the country's chaotic political governance.

Valuations

India's huge growth potential has been, and will continue to be, reflected in market returns. We are often asked about market valuations and whether we think the India equity market is expensive. As we noted in the half year report, part of the answer to this question lies with investors' time horizon. But also, more fundamentally, according to the theoretical framework which we use to analyse and value individual stocks, the key components that drive the value of any business, or by extension, the entire market, are its return on equity (ROE) and its growth rate. The Indian equity market has consistently delivered an attractive combination of a high, and relatively stable, average ROE, coupled with high long-term growth. This provides ample justification for higher long-term multiples, and we do not view market valuations as out of sync with the long-term opportunity.

When considering valuations, it is also important to note that India offers investors significant diversification benefits, as the market has low correlations with the rest of world - 0.4 to China and 0.6 to the MSCI World. This should reduce portfolio volatility in unsettled times.

Summary

As we look forward, we see a lot to be very positive about on the long-term opportunity for the Indian market. While the economy has averaged a real GDP growth rate of around 6% for 3 decades, this has also translated into strong equity market returns. This doesn't hold true for many markets around the world, and we would say over that period the political shifts that have happened have not stood in the way of that outcome. While we would never rule out market volatility driven by political events, we would also expect that, as in the past, these would not change the outcome of economic growth.

In our opinion, we now have the backdrop where all the stars have aligned and we can look forward to probably the most attractive decade ahead. We have spoken plenty about the demographic dividend and the opportunity that brings; the impact of financial inclusion and the access to every part of the Indian market; and now a capex cycle which has been dormant for a decade. The combination of all these things provides a powerful tailwind to the Indian equity market for the foreseeable future.

Amit Mehta

Sandip Patodia

Ayaz Ebrahim

Portfolio Managers

12 December 2023

PRINCIPAL AND EMERGING RISKS

The Board has overall responsibility for reviewing the effectiveness of the Company's system of risk management and internal control. The Board is supported by the Audit and Risk Committee in the management of risk. The risk management process is designed to identify, evaluate, manage, and mitigate risks faced. Although the Board believes that it has a robust framework of internal controls in place, this can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk.

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. With the assistance of the Manager, the Audit and Risk Committee has drawn up a risk matrix, which identifies the principal and emerging risks to the Company. These are reviewed and noted by the Board through the Audit and Risk Committee, which includes the ways in which these risks are managed or mitigated.

The Board considers that the risks detailed below are the principal risks facing the Company currently. These are the risks that could affect the ability of the Company to deliver its strategy.

Principal Risk	Description	Mitigation/Control	Movement in risk status in year to 30th September 2023
Investment and Strategy
Appropriateness and effective execution of strategy	An inappropriate investment strategy, or poor execution of that strategy, for example stock selection, asset allocation or the level of gearing, may lead to under-performance against the Company's benchmark index and competitor funds.	The Board manages these risks by diversification of investments through its investment restrictions and guidelines which are monitored and reported by the Investment Manager. The Investment Manager adheres to the investment risk appetite and parameters, including gearing and the use of derivatives set by the Board and 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 where appropriate, challenges the results of the investment process with the Investment Manager, who attend all Board meetings, and review data which show statistical measures of the Company's risk profile.
ESG Requirements from investors	The Company's policy on ESG may be out of line with ESG practices which investors are looking to invest in accordance with.	The Manager's investment process integrates consideration of environmental, social and governance factors into decisions on which stocks to buy, hold or sell. The Investment Managers have set out the way in which environmental, social and governance issues are incorporated into their investment process on pages 18 to 23 of the Annual Report and Financial Statements and this is regularly discussed with the Board.
Regulatory Risks
Legal and Regulatory	Loss of its investment trust status and, as a consequence, gains within the Company's portfolio could be subject to capital gains tax. A breach of the Companies Act 2006 could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the FCA Listing Rules or Disclosure, Guidance & Transparency Rules ('DTRs') could result in the Company's shares being suspended from listing which in turn would breach Section 1158.	The Section 1158 qualification criteria are continuously monitored by the Manager and the results reported to the Board at each Board meeting. The Board relies on the services of its Company Secretary, the Manager and its professional advisers to ensure compliance with the Companies Act 2006, the FCA Listing Rules, DTRs and the Alternative Investment Fund Managers' Directive.
Corporate Governance & Shareholder Relations
Share Discount	Investment trust shares often trade at discounts to their underlying NAVs. Discounts can fluctuate considerably leading to volatile returns for shareholders.	The Board monitors the Company's discount to NAV daily and compare to peers/sector. The Board reviews sales and marketing activity designed to increase demand for the Company's shares. The Company also has authority to buy back its existing shares to enhance the NAV per share for remaining shareholders and to reduce the absolute level of discount and discount volatility.
Operational
Cyber Crime	The threat of cyber-attack is regarded as at least as important as more traditional physical threats to business continuity and security. In addition to threatening the Company's operations, such an attack is likely to raise reputational issues which may damage the Company's share price and reduce demand for its shares.	The Company benefits directly and/or indirectly from all elements of JPMorgan's Cyber Security programme. The information technology controls around physical security of JPMorgan's data centres, security of its networks and security of its trading applications, are tested by independent auditors and reported every six months against the AAF Standard.
Broadscale external factors	Pandemics and geographically extensive weather conditions etc. put at risk the Managers' and/or other suppliers' ability to operate.	The Board receives reports on the business continuity plans of the Manager and other key service providers. The effectiveness of these measures was assessed throughout the course of the COVID-19 pandemic and the Board will continue to monitor developments in general and seek to learn lessons which may be of use in the event of future pandemics.
Taxation	As a result of the amendment to the India/Mauritius Double Tax Treaty in May 2016, in June/July 2021, the Company sold down all of its listed investments held through the Mauritian subsidiary company and bought them back in the UK parent company's portfolio leading to 100% of the Group's investments being held directly by the parent company. The Company is subject to risks, such as increased tax liability and incorrect calculation of capital gains tax, as a result of the re-structuring of the parent company/Mauritian subsidiary.	The Board has taken external specialist advice and adequate processes have been established to move assets to the parent company. Capital gains tax is calculated by specialist advisors and verified by the Manager. On the 31st August 2022, the Mauritian subsidiary was put into liquidation, formally completing the re-structuring exercise and mitigating most of the associated risks.
Financial
Market and geopolitical tensions	The investments of the Company and their pricing are subject to the risk of changes in market sentiment, which may be driven by geopolitical factors. These factors currently include the conflicts in Ukraine and the Middle East and the relationships between China and the USA, Taiwan and India. Volatility in inflation, energy prices, global supply chains also present potential risks to the market's assessment of value. These risks represent the potential loss the Company might suffer through holding investments in the face of negative market movements.	This risk is managed to some extent by diversification of investments and by regular communication with the Manager on matters of investment strategy and portfolio construction which will directly or indirectly include an assessment of these risks. The Board receives regular reports from the Manager regarding market outlook and gives the Investment Managers discretion regarding acceptable levels of gearing and/or cash. The Board monitors the implementation and results of the investment process with the Manager.
Monetary	The Company is faced by such risks as market price risk, currency risk, interest rate risk, liability risk, credit risk and borrowing default risk. The intensity of these risks has been heightened by the current volatile market caused by factors like the geopolitical conflict in Middle East, Russia and Ukraine and the sudden sharp rise in interest rates in the US, UK and Europe.	Details of how the Company mitigates and controls these risks are disclosed in note 21 on pages 87 to 93 of the Annual Report and Financial Statements.
Environmental
Climate Change	Climate change is one of the most critical issues confronting asset managers and their investors today. Climate change may have a disruptive effect on the business models, sustainability and even viability of individual companies in India, and indeed, whole sectors. Perception of risk associated with climate change may adversely affect the valuation of the Company's holdings. India in particular is prone to severe weather conditions, including extreme heat, changing rainfall patterns and droughts  The Board is also mindful of the risk posed by the direct impact of climate change on the operations of the Manager and other major service providers.	The Manager's investment process integrates consideration of environmental, social and governance factors into decisions on which stocks to buy, hold or sell. This includes the approach investee companies take to recognising and mitigating climate change risks. The Board ensures that consideration of climate change risks and opportunities is an integral part of the Investment Manager's investment process. It recognises that given the portfolio stocks are all quoted investments, the relevant environmental risks are reflected in their share price over time by the market. Where appropriate, the Board challenges the Investment Manager on the investment process considerations and investment decisions, and receives updates from the Investment Manager on the evolution of its ESG work and policies. The Investment Manager aims to influence the management of climate related risks through engagement and voting and is a participant of Climate Action 100+ and a signatory of the United Nations Principles for Responsible Investment.

Emerging Risks

The AIC Code of Corporate Governance also requires the Audit and Risk Committee to put in place procedures to identify emerging risks. Emerging risks, which are not deemed to represent an immediate threat, are considered by the Audit and Risk Committee as they come into view and are incorporated into the existing review of the Company's risk register. However, since emerging risks are likely to be more dynamic in nature, they are considered on a more frequent basis, through the remit of the Board when the Audit and Risk Committee does not meet. The Board considers the following to be an emerging risk:

Political and Economic - an escalation of the geopolitical tensions/conflicts, for example, between China and Taiwan, Ukraine and Russia, and in the Middle East could lead to extreme market volatility and de-rating.

TRANSACTION WITH THE MANAGER AND RELATED PARTIES

Details of the management contract are set out in the Directors' Report on page 46 of the Annual Report and Financial Statements.

The management fee payable to the Manager for the year was £4,974,000 (2022: £4,920,000) of which £nil (2022: £nil) was outstanding in the financial statements at the year end.

Included in other administration expenses in note 6 on page 80 of the Annual Report and Financial Statements are safe custody fees payable to JPMorgan Chase Bank, N.A. as custodian of the Company amounting to £511,000 (2022: £584,000) of which £213,000 (2022: £129,000) was outstanding at the year end.

The Manager carries out some of its dealing transactions through group subsidiaries. These transactions are carried out at arms' length. The commission payable to JPMorgan Securities for the year by the Company was £50,000 (2022: £51,000) of which £nil (2022: £nil) was outstanding in Company's financial statements at the year end.

Handling charges payable on dealing transactions undertaken by overseas sub custodians on behalf of the Company amounted to £14,000 (2022: £18,000) during the year, of which £3,000 (2022: £4,000) was outstanding at the year end.    

The Company also holds cash in the JPMorgan Sterling Liquidity Fund. At 30th September 2023, the holding in JPMorgan Sterling Liquidity Fund was valued at £21,210,000 (2022: £44,000,000). During the year, the Company made purchases in this fund amounting to £128,000,000 (2022: £164,700,000) and sales on this fund amounting to £150,790,000 (2022: £141,300,000). Income receivable from this fund amounted to £663,000 (2022: £139,000) of which £nil (2022: £nil) was outstanding at the year end. JPMorgan earns no management fee on this fund.

At the year end, the Company held bank balances of £834,000 with JPMorgan Chase Bank, N.A. (2022: £13,247,000). A net amount of interest of £5,000 (2022: £nil) was receivable by the Company during the year, of which £nil (2022: £nil) was outstanding at the year end.

Prior to being put into liquidation on 31 August 2022, the subsidiary bought back nil (2022: 22,561) shares from the Company (see note 10c in the Annual Report and Financial Statements for details).

Details of the Directors' shareholdings and the remuneration payable to Directors are given in the Directors' Remuneration Report on page 59 of the Annual Report and Financial Statements.

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 financial statements in accordance with UK-adopted international accounting standards and the requirements of the Companies Act 2006. Under company law the Directors must not approve the financial statements unless they are satisfied that, taken as a whole, the annual report and financial statements 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 financial statement are fair, balanced and understandable; and the Directors are required to:

·     select suitable accounting policies and then apply them consistently;

·     state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;

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

·     state whether applicable UK-adopted international 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 adequate 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 and the Directors' Remuneration Report 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 annual report and financial statements 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 auditor 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 Directors' Report confirm that, to the best of their knowledge:

·     the Company's financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

·     the Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The Board confirms that it is satisfied that the annual report and financial statements taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the position and performance, business model and strategy of the Company.

For and on behalf of the Board

Rosemary Morgan

Chairman

12 December 2023

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30TH SEPTEMBER 2023

		2023			2022
		Revenue £'000	Capital £'000	Total £'000	Revenue1 £'000	Capital1 £'000	Total £'000
Gains from investments held at fair value  through profit or loss		-	9,650	9,650	-	36,867	36,867
Net foreign currency (losses)/gains		-	(367)	(367)	-	98	98
Income from investments		11,461	-	11,461	9,403	-	9,403
Interest receivable and similar income		668	-	668	139	-	139
Total income		12,129	9,283	21,412	9,542	36,965	46,507
Management fee		(4,974)	-	(4,974)	(4,920)	-	(4,920)
Other administrative expenses		(1,100)	-	(1,100)	(1,133)	-	(1,133)
Profit before finance costs and taxation		6,055	9,283	15,338	3,489	36,965	40,454
Finance costs		(4)	-	(4)	(142)	-	(142)
Profit before taxation		6,051	9,283	15,334	3,347	36,965	40,312
Taxation		(1,314)	(11,063)	(12,377)	(319)	4,117	3,798
Net profit/(loss)		4,737	(1,780)	2,957	3,028	41,042	44,110
Earnings/(loss) per share		6.34p	(2.38p)	3.96p	3.94p	53.45p	57.39p

¹ An adjustment to the 30th September 2022 taxation figures has been made to reflect an amount of £1,750,000 in respect of withholding tax on Indian income from investments, which had been incorrectly credited against capital gains tax for the two years ended 30 September 2022.

The Company 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 Company's Statement of Comprehensive Income, prepared in accordance with IFRS.

The supplementary 'Revenue' and 'Capital' columns are prepared under guidance published by the Association of Investment Companies.

Details of revenue and capital items, together with the associated reserves are contained in note 16 in the Annual Report and Financial Statements.

All of the profit and total comprehensive income is attributable to the equity shareholders of JPMorgan Indian Investment Trust plc, the Company. There are no minority interests.

.

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30TH SEPTEMBER 2023

	Called up share capital £'000	Share premium £'000	Exercised warrant reserve £'000	Capital redemption reserve £'000	Capital reserve1 £'000	Revenue reserve1 £'000	Total £'000
At 30th September 2021	24,868	97,316	5,886	12,898	645,480	(22,535)	763,913
Repurchase of shares into Treasury	-	-	-	-	(12,774)	-	(12,774)
Profit for the year	-	-	-	-	41,082	3,028	44,110
At 30 September 2022	24,868	97,316	5,886	12,898	673,788	(19,507)	795,249
Repurchase of shares into Treasury	-	-	-	-	(22,609)	-	(22,609)
(Loss)/profit for the year	-	-	-	-	(1,780)	4,737	2,957
At 30th September 2023	24,868	97,316	5,886	12,898	649,399	(14,770)	775,597

¹ An adjustment to the 30th September 2022 taxation figures has been made to reflect an amount of £1,750,000 in respect of withholding tax on Indian income from investments, which had been incorrectly credited against capital gains tax for the two years ended 30 September 2022.

STATEMENT OF FINANCIAL POSITION

AT 30TH SEPTEMBER 2023

		2023 £'000	20221 £'000
Non current assets
Investments held at fair value through profit or loss		770,957	749,959
		770,957	749,959
Current assets
Other receivables		817	6,076
Cash and cash equivalents		22,044	57,255
		22,861	63,331
Current liabilities
Other payables		(571)	(8,246)
Net current assets		22,290	55,085
Total assets less current liabilities		793,247	805,044
Non current liabilities
Provision for capital gains tax		(17,650)	(9,795)
Net assets		775,597	795,249
Amounts attributable to shareholders
Called up share capital		24,868	24,868
Share premium		97,316	97,316
Exercised warrant reserve		5,886	5,886
Capital redemption reserve		12,898	12,898
Capital reserves		649,399	673,788
Revenue reserve		(14,770)	(19,507)
Total shareholders' funds		775,597	795,249
Net asset value per share		1,058.5p	1,045.8p

¹ An adjustment to the 30th September 2022 taxation figures has been made to reflect an amount of £1,750,000 in respect of withholding tax on Indian income from investments, which had been incorrectly credited against capital gains tax for the two years ended 30 September 2022.  

Registered in England. No: 2915926.

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30TH SEPTEMBER 2023

		2023 £'000	20221 £'000
Operating activities
Profit before taxation		15,334	40,312
Deduct dividends receivable		(11,461)	(9,403)
Deduct interest receivable		(668)	(139)
Add interest paid		4	142
Deduct gains on investments held at fair value through profit or loss		(9,650)	(36,867)
Add losses/(deduct gains) on net foreign currency		367	(98)
Decrease/(increase) in prepayments, VAT and other receivables		14	(64)
Increase in other payables		127	43
Net cash outflow from operating activities before interest and taxation		(5,933)	(6,074)
Interest paid		(4)	(141)
Income tax paid		(1,421)	(415)
Dividends received		11,383	10,675
Interest received		668	139
Capital gains tax paid		(3,208)	(7,137)
Net cash inflow/(outflow) from operating activities		1,485	(2,953)
Investing activities
Purchases of investments held at fair value through profit or loss		(189,558)	(219,128)
Sales of investments held at fair value through profit or loss		175,665	260,838
Sales of investment in subsidiary held at fair value through profit or loss		-	4,800
Net cash (outflow)/inflow from investing activities		(13,893)	46,510
Financing activities
Repurchase of shares into Treasury		(22,436)	(12,774)
Net cash outflow from financing activities		(22,436)	(12,774)
(Decrease)/Increase in cash and cash equivalents		(34,844)	30,783
Cash and cash equivalents at the start of the year		57,255	26,374
Exchange movements		(367)	98
Cash and cash equivalents at the end of the year		22,044	57,255

¹ An adjustment to the 30th September 2022 taxation figures has been made to reflect an amount of £1,750,000 in respect of withholding tax on Indian income from investments, which had been incorrectly credited against capital gains tax for the two years ended 30 September 2022.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30TH SEPTEMBER 2023

1.   Principal Activity

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

2.    Basis of Preparation

       Basis of accounting

On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The Company transitioned to UK-adopted International Accounting Standards in its company financial statements on 1 January 2021. This change constitutes a change in accounting framework. However, there is no impact on recognition, measurement or disclosure in the period reported as a result of the change in framework. The financial statements of the Company have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

The financial statements have been prepared on the going concern basis. The disclosures on going concern in the Audit and Risk Committee's Report on page 55 of the Annual Report and Financial Statements form part of these financial statements. The Board has, in particular, considered the impact of heightened market volatility since the Russian invasion of Ukraine, the conflict between Israel and Palestine, the persistent inflationary environment, rising interest rates and other geopolitical risks, and does not believe the Company's going concern status is affected. 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 July 2022 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.

In preparing these financial statements the Directors have considered the impact of climate change risk as a principal risk as set out on page 36 of the Annual Report and Financial Statements and have concluded that there was no further impact of climate change to be taken into account as the investments are valued based on market pricing, which incorporates the market's perception of climate risk.

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 share

	2023 £'000	20221 £'000
Earnings per share is based on the following:
Revenue profit	4,737	3,028
Capital (loss)/profit	(1,780)	41,082
Total profit	2,957	44,110
Weighted average number of shares in issue	74,711,625	76,852,573
Revenue earnings per share	6.34p	3.94p
Capital (loss)/earnings per share	(2.38p)	53.45p
Total earnings per share2	3.96p	57.39p

¹ An adjustment to the 30th September 2022 taxation figures has been made to reflect an amount of £1,750,000 in respect of withholding tax on Indian income from investments,
 which had been incorrectly credited against capital gains tax for the two years ended 30 September 2022.

² Represents both the basic and diluted earnings per share and excludes shares held in Treasury.

4.    Net asset value per share

	2023	2022
Net assets (£'000)	775,597	795,249
Number of shares in issue excluding shares held in Treasury	73,272,730	76,039,849
Net asset value per share	1,058.5p	1,045.8p

5.    Status of results announcement

2023 Financial Information

The figures and financial information for 2023 are extracted from the published Annual Report and Accounts for the year ended 30th September 2023 and do not constitute the statutory accounts for that year. The Annual Report and Accounts include 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. The Annual Report and Accounts will be delivered to the Register of Companies in due course.

2022 Financial Information

The figures and financial information for 2022 are extracted from the Annual Report and Accounts for the year ended 30th September 2022 and do not constitute the statutory accounts for the year. The Annual Report and Accounts include 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.

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.

12 December 2023

For further information, please contact:

Divya Amin

For and on behalf of JPMorgan Funds Limited,

Company Secretary

020 7742 4000

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 be submitted to the FCA's National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

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.

 

END