Half-year Report

JPMorgan Indian Invest Trust PLC

09 June 2023

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN INDIAN INVESTMENT TRUST PLC

Half Year Report & FINANCIAL STATEMENTS

for the six months ended 31st MARCH 2023

Legal Entity Identifier: 549300OHW8R1C2WBYK02

Information disclosed in accordance with DTR 4.2.2

CHAIRMAN'S STATEMENT

Performance

The Indian markets started the six-month period ended 31st March 2023 on a strong note, rising broadly through October into mid-December but gave up the gains towards the latter part of the period as rising inflation led to fears that central banks would continue to raise interest rates and a global recession was predicted for the near term. However, despite the headwinds in the latter part of the six months period, the Company's portfolio outperformed its benchmark index, the MSCI India Index (in sterling terms). This was mainly due to the portfolio's structural underweight position in Utilities & Industrials and strong stock selection in Financials.

The Company produced a total return on net assets of -8.3% in the period. Albeit it is always disappointing to report a decrease in net asset value ('NAV'), I am pleased to inform that the Company outperformed its benchmark by 5.5%. The total return to shareholders was -6.7% during the period. The Company's discount to NAV at which the Company's shares trade, narrowed from 20.1% at the previous financial year end to 18.6% at the half year end.

The Investment Managers provide a detailed commentary on these figures and discuss performance, activity and the outlook for the Indian market in their report on page 13 of the Half Year Report.

Gearing

The Board regularly discusses gearing with the Investment Managers. On reflection of the fact that the Company's
2-year £30 million loan facility which matured in August 2022 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 and the Board will seek to arrange a facility at a time it considers appropriate. As at 31st March 2023, the Company's portfolio held 0.5% net cash, i.e. was 99.5% invested. At the time of writing, the Company's portfolio is approximately 0.2% net cash.

Discount and Share Repurchases

The Board has guidelines in place with regard to the management of the discount to net asset value at which the Company's shares trade. At the Annual General Meeting ("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.

The Board constantly weighs the merits of buying back shares in order to manage the level and volatility of the discount and will buy back shares, in line with the Company's investment policy, if the discount is out of line with the peer group and markets are orderly. The Company repurchased 1,262,194 shares into Treasury during the reporting period. Since the half year end, 687,904 shares have been bought back for holding in Treasury.

Conditional Tender Offer

Shareholders are reminded that 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 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%, which the Company's benchmark does not take into account. Therefore, for the avoidance of doubt, in order to ensure that the terms of the conditional tender offer more correctly reflect the Investment Managers' performance in calculating whether the tender offer has been triggered, the NAV per share will be adjusted to add back all such taxes paid or accrued. For the benefit of the Company's shareholders, the Company publishes on a monthly basis through a Regulatory Information Service platform the Company's adjusted NAV per share. The Company's adjusted NAV per share as at 30th September 2020 was 689.24 pence and as at 31st March 2023 it stood at 982.75 pence, equating to a NAV performance (without the impact of capital gains tax) of 42.6% since 1st October 2020.

It must, however, be noted that any tender offer will also be conditional on shareholders approving the Company's continuation vote in 2024.

The Board

As announced last year, I will be stepping down as Chairman of the Company at the conclusion of the AGM in February 2024 and will be succeeded by Jeremy Whitley. As part of its long-term succession planning, the Board intends to commence a formal recruitment search for a new Non-executive Director later in the year. Led by the Nomination Committee, the search will focus on finding candidates that have skills which are complementary to those of other members of the Board and in line with the Company's investment strategy and objective. The Board also acknowledges the importance of maintaining diversity on the Board.

Manager Changes

In September 2022, the Board welcomed Amit Mehta and Sandip Patodia to co-manage the Company's portfolio alongside Ayaz Ebrahim following Rajendra Nair's departure from JPMAM. The Board has been working very closely with the new portfolio management team since the appointment of Amit and Sandip and it is pleasing to see their appetite and enthusiasm for achieving the goals and ambitions for the Company.

Following discussions with the Investment Managers, the Board has agreed a minor change to the Company's investment policy to permit investment in companies where a material part of their economic activity is undertaken in India but whose shares are listed on a stock exchange outside of India. This allows the Investment Managers to pursue opportunities they are currently unable to invest in.

Outlook

The economic forces in India remain supportive. Beyond the domestic story, India is seeing a geopolitical windfall which may add further tailwinds, as more companies seek to diversify their exposure from China. The Board believes the long-term growth story for the Indian economy remains strong and is less concerned about the near-term volatility that has been seen over the latter part of the six months period. Moreover, the Board remains confident that the portfolio management team continues to be focused on bolstering the overall quality of the portfolio.

Rosemary Morgan
Chairman

8th June 2023

INVESTMENT MANAGERS' REPORT

Market Review

During the six months to end of March 2023, MSCI India declined 13.8%. This compares to a return of 7.4% for MSCI China, 2.9% for MSCI Emerging Markets Index and 4.2% for the S&P 500. This was clearly a much more challenging period for the Indian equity markets relative to other markets around the world. However, this performance follows several years of particularly high returns for the Indian market, during which it significantly outpaced gains in other markets. In the three years to end March 2023, the Indian market made an average annualised return of over 22%, compared to gains of over 18% for the S&P 500, over 8% for MSCI Emerging Markets and a decline of greater than 2% per annum for MSCI China.

In our view, there were two material contributing factors that were responsible for the relative underperformance of the Indian equity market. Firstly, the shift in zero COVID policy by the Chinese government meant that, within Emerging Markets, there was now a new destination for capital to move towards. India had benefited from many areas over the last couple of years due to better and counter-intuitive monetary and fiscal policies during the COVID period; a more stable political environment; lesser geopolitical risk; stronger growth recovery; and a more resilient economy driven by domestic consumption. Some of these relative tailwinds became less relevant over the last six months hence we saw some short-term underperformance. The second material factor was much more specific to the Indian equity market. This was the release of a short seller report on the Adani group companies, which led to a more negative sentiment towards the market, amidst concerns about contagion risk to the broader market. We didn't share the same concerns around contagion risk, nor have we changed our long-term positive stance on the opportunity the Indian equity market presents. In fact, it has strengthened our belief that India remains a large and one of the most compelling opportunities for equity investors.

Performance review

Over the six-month period to 31 March 2023, the Company's assets fell by 8.3%. While this amounts to an outperformance relative to the MSCI India benchmark of 5.5%, this result is nonetheless disappointing. However, as is the case for the Indian market, this performance follows several years of high absolute returns. Over the three years to end March 2023, the Company delivered an average annual return of 20.7%.  

There were two key contributors to relative performance: firstly the lack of exposure to any of the Adani group companies. Their underperformance was driven by a short seller report by a US based firm, called Hindenburg, citing issues relating to stock manipulation, account manipulation, convoluted corporate structure, excessive leverage, and more. We have no opinion on the allegations. In our last annual report, we had highlighted our rationale for not owning shares in this group, namely: high capital intensity and high levels of leverage for the underlying businesses within the group. Our views remain the same. Secondly, positive stock selection in the financial sector contributed specifically through the combination of the Company's underweight in Bajaj Finance due to high valuations, and the material overweight in HDFC Bank and Axis Bank, driven by robust outlook on credit demand.

The key detractors over the period were our underweight in Larsen & Toubro, which performed well because of the positive sentiment on capital expenditure growth, and our exposure to healthcare services in Metropolis and Dr Lal Pathlabs, which were sold down because of a perceived increase in competitive intensity in the market. We continue to believe that the competition will be short-lived, and the incumbent players will emerge as the long-term winners in a structurally attractive industry.

Portfolio changes

Before we go to the changes in the portfolio, a reminder of what the focus of the investment strategy is: to invest in great businesses, run with the right mindset at an attractive valuation. We think about our investments in that order, trying to answer the simple question about corporate quality, before considering the valuation merit. The market volatility over this period has allowed us to initiate positions in several new businesses. Our comprehensive research process classifies companies into four main categories of Premium, Quality, Trading and Structurally Challenged. Premium is the highest quality business and Structurally Challenged, the lowest. Our preference is to own Premium or Quality businesses, but we also recognise it is important to ensure that you are not also overpaying for those businesses so we consider the classification in conjunction with the return we expect to make on the investment. As Buffett once said: "…. you do get an occasional opportunity to get into a wonderful business that's being run by a wonderful manager. And, of course, that's hog heaven day. If you don't load up when you get those opportunities, it's a big mistake." With that in mind, we made the following portfolio changes over the 6-month period.

New initiations

Colgate India - A Premium company with a relatively attractive expected return. Colgate is a dominant consumer company in a highly attractive category of oral care leading to best-in-class economics of over 20%+ earnings before interest and taxes ('EBIT') margin and 50%+ return on equity ('ROE'). We believe Colgate retains its competitive moats of strong brand, distribution and strong links with dental practices which should help it maintain/gain market share. In addition, Colgate ticks most of the boxes when it comes to Governance with a high-quality independent Board, strong local management and noteworthy ESG initiatives.

HDFC Asset Management - A Quality company with an attractive expected return. HDFC Asset Management is currently one of India's four listed fund managers and is ranked second in the country by assets under management. Its economics are excellent as it has high ROE, growth, and cash generation. Regulatory changes and a period of investment underperformance have been minor detractors in recent years, yet financial performance has still been consistently impressive. Duration is also excellent - India's mutual fund industry is primed for long-term structural growth as financial sophistication rises and savings continue to shift from physical to financial assets. Governance is also a strength, with the HDFC Group behind it, experienced management, board members and a track-record of sensible capital allocation.

ITC - A Quality business with an attractive expected return. We believe despite operating in a highly regulated environment, it dominates its key business segment of cigarettes (more than 80% of EBIT) which provides it with the requisite pricing power to sustain its strong economics for foreseeable duration. The underlying businesses - Tobacco, fast-moving consumer goods and hotels - all have solid economics, strong duration and sound governance.

Info Edge - A Premium company with a relatively attractive expected return for its core business and potential value in earlier stage investments. Its core business is in recruitment classifieds where it enjoys a monopoly position with ~80% market share. There is ample cash generated in this business which is used to fund three other classifieds businesses in different business segments and to fund Info Edge's venture arm, which had notable success backing Zomato and PolicyBazaar. Sanjeev Bikhchandani, founder, and former CEO, remains in the business as an investor, Vice Chairman and Advisor with significant influence, still owning 28% of Info Edge. Sanjeev is very highly respected in India in the entrepreneurial and business community, known for conservatism, strong ethics, a long-term view, and cost consciousness. He has instilled this ethos in the business, and ceded control where necessary - most notably by stepping aside in 2010 as CEO to make room for Hitesh Oberoi, former COO, and taking on more of an advisory role. Capital allocation has been strong, and although the appropriateness of the use of cash can be debated, past returns from deployment of such have been solid.

Coforge - A Quality business with a reasonable expected return. Coforge is a mid-sized Indian IT services company.  The portfolio already has a reasonable exposure to the IT Services industry, but Coforge can grow at a higher rate given higher revenue potential and margin improvements. We remain positive about the long-term structural opportunities in the broader IT Services sector given the deep pool of talent in the market and the cost advantages of India software engineers.

Triveni Turbine - A Quality business with an attractive expected return. Triveni, a leading manufacturer of Turbines, offers diversified and long-duration growth in a capex-dependent business that is expanding into new sub-segments, particularly in the high margin and sticky aftermarket services business that reduces the cyclicality inherent in this business, along with good track-record on capital allocation and clean family-run governance with long-term mindset.

United Spirits - A Quality business with a relatively attractive expected return. United Spirits is the largest player in the Indian spirits' market. We believe the company's market cap remains relatively low ($6.6bn) in the context of the potential size of the pie India offers. In addition, the high ROCE that the company makes on the distribution of brands imported from parent Diageo into India and its increasing focus on the premium+ portfolio, will deliver attractive growth rates.

Complete sales

Motilal Oswal - A Trading business which offers broking and other financial services. The attractiveness of the investment case for this stock has diminished in a sector where there are plenty of alternatives.

ICICI Prudential Life - A Quality business where we have consolidated our insurance holdings into HDFC Life, believing it is better placed than ICICI Prudential to capture the long-term opportunities in the industry given strong support from the HDFC group.

Jubilant - This company operates several restaurant franchises including Domino's Pizza. We sold given a materially lower expected return relative to other consumer businesses and concerns on new growth areas.

Larsen and Toubro - A Trading business. This company is more capital-intensive than our typical investment and our preference is to own more product-related businesses as highlighted above. 

Indusind Bank - We consolidated our exposure into higher quality banks. Our recent interaction with the company highlighted a less acceptable risk appetite. In addition, this Trading business offered little differentiation in return expectations relative to peers.

Godrej Properties - A Trading business where we exited a small position in favour of more attractive alternatives.

Team activity

It's been a busier than usual period for the team. Investment travel has recommenced, and it is great to be back on the road. Our team of fund managers and analysts spent nearly two weeks in India in February this year with the wider investment team on the ground, combined with investment meetings and getting back to business as usual. Being on the ground in Mumbai provided the team with the opportunity to conduct a further deep dive of the Indian market. The team met circa 130 companies comprising a combination of existing holdings and new businesses. During this time, we also took the opportunity to hold our first India offsite in J.P. Morgan's Mumbai office bringing together from around the world all our analysts covering Indian securities. We have always believed that our team possesses a great balance between global industry expertise and local knowledge, and this was affirmed in the time we all spent together. But more than that, it served to confirm the many compelling opportunities this market has to offer for those willing to take a long-term view. 

Outlook - On the Cusp?

In our view the short-term weakness of Indian markets relative to other equity markets is just that - short term. Markets, like stocks, rarely move in one direction. There are some natural bumps along the way, but we believe the long-term outlook continues to remain attractive. As an economy, India continues to tick the key top-down factors most investors care about - namely a strong democracy; fair and independent institutions; strong banking system; low leverage and economic growth expectations materially above any other global economy. 

For these reasons, we believe India is on the cusp of being able to deliver a high rate of economic growth over multiple decades driven by strong local demand, an increase in in investment not only domestically but also from overseas as it is becoming a globally attractive investment destination. The advantage of land and labour is on the cusp of meeting demand both domestically and globally.

As most developed and emerging countries globally continue to struggle to expand their economies, our expectations are for India to remain one of the fastest growing. We estimate real GDP growth at around 7% for 2023 coming down to around 6% in 2025 but, encouragingly, being able to sustain this level of growth for many years beyond this. It's difficult to find any other economy around the world that comes close to that. India has already overtaken the UK to become the fifth largest economy and based on estimates will likely become the third largest economy in the next decade.

Demographic Dividend

Many readers will be aware that India's population has recently overtaken China's to become the most populous country in the world. The fact that the age distribution in India is more weighted to economically active age groups underpins the structural opportunities in many sectors of the Indian economy. This, combined with the increase in income for lower-earning households, will, in our opinion, continue to drive higher demand from consumers. The combination of rapid urbanisation, a growing population, rising household affluence and improving accessibility of goods and services will drive the twin engines of consumer demand in India - staple goods and discretionary products - where we can find attractive investment opportunities. 

Capital Expenditure meets demand

Post the global financial crisis, it's fair to say that India missed a significant capex cycle (phase 4 to 5) and the chart on page 16 in the Half Year Report highlights that more acutely in terms of the drop in gross fixed asset formation. 

We have previously described this as the lost decade. However, that is only one part of the story. Over that period the government has made significant strides in terms of getting the foundation laid to allow for a new cycle which can be a much longer and more sustainable period of investment-led growth. This all comes at the same time as growing demand from international companies looking to have a balanced and diversified manufacturing base to ensure long term security. India offers an abundance of natural resources and a growing labour pool, which is highly skilled and low-cost. Many readers will have already read about Apple's plans to switch manufacturing of iPhones to India. This, in our view, is just the beginning. In addition, we are starting to see a material pick-up in investment in areas like railways and road transportation, as well as in the manufacturing side. The combination of all these factors, gives us confidence about the outlook for growth. The banking system, that will be so important to be able to support this growth, remains in a sound position to be able to provide lines of credit as required.

IT Services

While this area, undoubtedly, is more connected to global growth expectations than other areas of the Indian economy, we still believe the long-term opportunity here remains extremely attractive. The talent pool mentioned above means that there is really no alternative for global corporates thinking about digital or cloud. Moreover the low cost of this talent pool means the opportunity here remains robust though with some level of cyclicality. We are less concerned with the noise around the short term. If anything, this is where investors like us, that can take longer-term views, will see the biggest opportunities present themselves.

Valuations

We are often asked about market valuations and whether we think the India equity market is expensive. Part of the answer to this question lies with investors' time horizon. But also, more fundamentally according to a theoretical framework which we use to analyse and value individual stocks, the key components that drive the value of any business are its growth rate and the return on equity (ROE). Using the same lens for the market, we have long argued about the much longer and higher duration for the India equity universe. However, on top of that the Indian equity market has consistently delivered the attractive combination of a much higher average ROE and a lower variation around that coupled with the higher long-term growth. This provides ample justification for higher long-term multiples. We don't view market valuations to be out of sync with the long-term opportunity.

In addition to the above, the long-term opportunity for any market is a function of two main drivers: 1) Dispersion - the difference between the best and worst performing stocks i.e., the ability to add value in stock selection and 2) Opportunity set. The India equity universe combines a high dispersion within the opportunity set with a large universe in which to invest. Hence the best backdrop for return generation.

So, all in all, there are many reasons to be optimistic about the long-term prospects of the Indian equity markets. Volatility such as the market experienced over the past six months is to be expected at times, although it is never comfortable. But we view investing as a marathon, not a sprint, and we remain confident that the Indian market offers just reward for patient investors willing to stay in the race.

Amit Mehta
Sandip Patodia
Ayaz Ebrahim
Investment Managers

8th June 2023

INTERIM MANAGEMENT REPORT

The Company is required to make the following disclosures in its Half Year Report.

Principal and Emerging Risks and Uncertainties

The principal and emerging risks and uncertainties faced by the Company fall into the following broad categories: investment and strategy; environmental regulatory risks; corporate governance and shareholder relations; financial and operational, including cyber crime and taxation. Information on each of these areas is given in the Business Review within the Annual Report and Financial Statements for the year ended 30th September 2022.

Related Parties Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company during the period.

Going Concern

The Directors believe, having considered the Company's investment objective, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operational existence for at least twelve months from the date of the approval of this half yearly financial report. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i)   the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with the Accounting Standards Board's Statement 'Half Yearly Financial Reports' and gives a true and fair view of the state of affairs of the Company and of the assets, liabilities, financial position and net return of the Company, as at 31st March 2023, as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and

(ii)  the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

·    select suitable accounting policies and then apply them consistently;

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

·    state whether applicable UK-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.

For and on behalf of the Board
Rosemary Morgan
Chairman

8th June 2023

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31ST MARCH 2023

	(Unaudited) Six months ended 31st March 2023			(Unaudited) Six months ended 31st March 2022			(Audited) Year ended 30th September 2022
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
(Losses)/gains on investments held   at fair value through profit or loss	-	(67,618)	(67,618)	-	(20,071)	(20,071)	-	36,867	36,867
Net foreign currency (losses)/gains	-	(77)	(77)	-	28	28	-	98	98
Income from investments	4,354	-	4,354	3,218	-	3,218	9,403	-	9,403
Interest receivable and similar income	287	-	287	19	-	19	139	-	139
Total income/(loss)	4,641	(67,695)	(63,054)	3,237	(20,043)	(16,806)	9,542	36,965	46,507
Management fee	(2,532)	-	(2,532)	(2,457)	-	(2,457)	(4,920)	-	(4,920)
Other administrative expenses	(558)	-	(558)	(613)	-	(613)	(1,133)	-	(1,133)
Profit/(loss) before finance costs and   taxation	1,551	(67,695)	(66,144)	167	(20,043)	(19,876)	3,489	36,965	40,454
Finance costs	(4)	-	(4)	(80)	-	(80)	(142)	-	(142)
Profit/(loss) before taxation	1,547	(67,695)	(66,148)	87	(20,043)	(19,956)	3,347	36,965	40,312
Taxation	(473)	(1,392)	(1,865)	(1,062)	4,995	3,933	(2,069)	5,867	3,798
Net profit/(loss)	1,074	(69,087)	(68,013)	(975)	(15,048)	(16,023)	1,278	42,832	44,110
Earnings/(loss) per share (note 4)	1.42p	(91.47)p	(90.05)p	(1.26)p	(19.45)p	(20.71)p	1.66p	55.73p	57.39p

The Company does not have any income or expense that is not included in the net profit/(loss) for the period. Accordingly the 'Net profit/(loss) for the period, is also the 'Total comprehensive income' for the period, 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 period.

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.

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

This is the Company's Statement of Comprehensive Income. Since the Mauritius Subsidiary is in liquidation since 31 August 2022, it is no longer a group company and accordingly no supplementary information is provided.

CONDENSED STATEMENT OF CHANGES IN EQUITY

Called up share capital £'000		Share premium £'000	Exercised warrant reserve £'000	Capital redemption reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total £'000
Six months ended 31st March 2023 (Unaudited)
At 30th September 2022	24,868	97,316	5,886	12,898	675,538	(21,257)	795,249
Repurchase of shares into Treasury	-	-	-	-	(10,325)	-	(10,325)
(Loss)/profit for the period	-	-	-	-	(69,087)	1,074	(68,013)
At 31st March 2023	24,868	97,316	5,886	12,898	596,126	(20,183)	716,911
Six months ended 31st March 2022 (Unaudited)
At 30th September 2021	24,868	97,316	5,886	12,898	645,480	(22,535)	763,913
Repurchase of shares into Treasury	-	-	-	-	(6,635)	-	(6,635)
Loss for the period	-	-	-	-	(15,048)	(975)	(16,023)
At 31st March 2022	24,868	97,316	5,886	12,898	623,797	(23,510)	741,255
Year ended 30th September 2022 (Audited)
At 30th September 2021	26,868	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	-	-	-	-	42,832	1,278	44,110
At 30th September 2022	24,868	97,316	5,886	12,898	675,538	(21,257)	795,249

CONDENSED STATEMENT OF FINANCIAL POSITION

AT 31ST MARCH 2023

	(Unaudited) At 31st March 2023 £'000	(Unaudited) At 31st March 2022 £'000	(Audited) At 30th September 2022 £'000
Non-current assets
Investments held at fair value through profit or loss	713,459	727,567	749,959
Investments in subsidiaries held at fair value through profit or loss1	-	4,917	-
Total non-current assets	713,459	732,484	749,959
Current assets
Financial assets: Derivative financial instruments	-	8	-
Other receivables	1,693	3,626	6,076
Cash and cash equivalents	13,308	22,262	57,255
	15,001	25,896	63,331
Current liabilities
Other payables2	(671)	(1,071)	(8,246)
Net current assets	14,330	24,825	55,085
Total assets less current liabilities	727,789	757,309	805,044
Non-current liabilities
Provision for capital gains tax	(10,878)	(16,054)	(9,795)
Net assets	716,911	741,255	795,249
Amounts attributable to shareholders
Called up share capital	24,868	24,868	24,868
Share premium	97,316	97,316	97,316
Exercised warrant reserve	5,886	5,886	5,886
Capital redemption reserve	12,898	12,898	12,898
Capital reserves	596,126	623,797	675,538
Revenue reserve	(20,183)	(23,510)	(21,257)
Total shareholders' funds	716,911	741,255	795,249
Net asset value per share (note 5)	958.7p	965.0p	1,045.8p

¹ As at 31 March 2022 the Company owned a subsidiary, JPMorgan Indian Investment Company (Mauritius) Limited which comprised of £5 million net of cash and other payables.
  This was put into liquidation on 31 August 2022.

² Included in other payables is an amount of £228,000 (31st March 2022: nil; 30th September 2022: nil) for repurchase of shares awaiting settlement.

CONDENSED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31ST MARCH 2023

	(Unaudited) Six months ended 31st March 2023 £'000	(Unaudited) Six months ended 31st March 2022 £'000	(Audited) Year ended 30th September 2022 £'000
Operating activities
Net (loss)/return before finance costs and taxation	(66,148)	(19,956)	40,312
Deduct dividends received	(4,354)	(3,218)	(9,403)
Deduct bank interest received	(287)	(19)	(139)
Add interest paid	4	80	142
Add losses/(deduct gains) on investments held at fair value   through profit or loss	67,618	20,071	(36,867)
Add losses/(deduct gains) on net foreign currency	77	-	(98)
Decrease/(increase) in prepayments, VAT and other receivables	19	(12)	(64)
Increase/(decrease) in other payables	35	(51)	43
Net cash outflow from operating activities before Interest and taxation	(3,036)	(3,105)	(6,074)
Interest paid	(4)	(77)	(141)
Tax paid	(893)	(849)	(2,165)
Dividends received	4,404	4,342	10,675
Interest received	287	19	139
Capital gains tax paid	(309)	-	(5,387)
Net cash inflow/(outflow) from operating activities	449	330	(2,953)
Investing activities
Purchases of investments held at fair value through profit or loss	(98,144)	(108,864)	(219,128)
Sales of investments held at fair value through profit or loss	63,922	110,863	260,838
Settlement of foreign currency contracts	-	(1)	-
Sales of investment in subsidiary held at fair value through   profit or loss	-	-	4,800
Net cash (outflow)/inflow from investing activities	(34,222)	1,998	46,510
Financing activities
Repurchase of shares into Treasury	(10,097)	(6,432)	(12,774)
Net cash outflow from financing activities	(10,097)	(6,432)	(12,774)
Decrease in cash and cash equivalents	(43,870)	(4,104)	30,783
Cash and cash equivalents at the start of the period	57,255	26,366	26,374
Exchange movements	(77)	-	98
Cash and cash equivalents at the end of the period	13,308	22,262	57,255

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31ST MARCH 2023

1.  Principal activity

The principal activity of the Company is that of an investment trust company within the meaning of Section 1158 of the Corporation Tax Act 2010.

2.    Financial Statements

The financial information for the six months ended 31st March 2023 and 2022 has not been audited or reviewed by the Company's auditors.

The financial information contained in these half year financial statements does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

The information for the Company for the year ended 30th September 2022 has been extracted from the latest published audited financial statements. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either Section 498(2) or 498(3) of the Companies Act 2006.

3.    Accounting policies

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.

Where presentational guidance set out in the Statement of Recommended Practice (the 'SORP') for investment trusts issued by the Association of Investment Companies in July 2022 is consistent with the requirements of IFRS, the financial statements have been prepared on a basis compliant with the recommendations of the SORP.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 30th September 2022.

The Company had a 100% ownership interest in JPMorgan Indian Investment Company (Mauritius) Limited ('the subsidiary') which is incorporated, in Mauritius. The subsidiary was put into liquidation on 31st August 2022, therefore the entity is no longer considered a group company and as a result, group supplemental information is no longer provided.

4.    Earnings/(loss) per share

		(Unaudited) Six months ended 31st March 2023 £'000	(Unaudited) Six months ended 31st March 2022 £'000	(Audited) Year ended 30th September 2022 £'000
	Earnings/(loss) per share is based on the following:
	Revenue profit/(loss)	1,074	(975)	1,278
	Capital (loss)/return	(69,087)	(15,048)	42,832
	Total (loss)/profit	(68,013)	(16,023)	44,110
	Weighted average number of shares in issue	75,527,225	77,370,486	76,852,573
	Revenue earnings/(loss) per share	1.42p	(1.26)p	1.66p
	Capital (loss)/earnings per share	(91.47)p	(19.45)p	55.73p
	Total (loss)/earnings per share	(90.05)p	(20.71)p	57.39p

5. Net asset value per share

		(Unaudited) Six months ended 31st March 2023	(Unaudited) Six months ended 31st March 2022	(Audited) Year ended 30th September 2022
	Net assets (£'000)	716,911	741,255	795,249
	Number of shares in issue excluding shares held in Treasury	74,777,655	76,817,359	76,039,849
	Net asset value per share	958.7p	965.0p	1,045.8p

The Company will only re-issue shares held in Treasury at a premium and therefore these shares have no dilutive potential.

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 ASSET MANAGEMENT (UK) LIMITED

ENDS

A copy of the half year report will be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The half year will also 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