LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN INDIAN INVESTMENT TRUST PLC
PRELIMINARY ANNOUNCEMENT OF HALF YEAR RESULTS
The Directors of JPMorgan Indian Investment Trust plc announce the Company's results for the period ended 31st March 2008.
Chairman's Statement
Performance
In this, my first report as Chairman, I have to report on a six months that has been an extremely volatile one for the Indian markets. Having rallied strongly during the last quarter of 2007, the MSCI India Index fell heavily in January 2008, eventually finishing the period down by 7.7% in sterling terms. The Company underperformed the Index, producing a decline in net assets of 12.4%. The decline in the Company's share price total return was somewhat less severe at 4.6%, reflecting the move from a discount of 7.2% to a premium of 1.1%.
Discount Management
The Board has guidelines in place with regard to the management of any discount/premium that may develop between the Company's share price and its net asset value per share. During the six months under review 765,000 ordinary shares were bought into treasury and, under current guidelines, may only be reissued at a premium to the prevailing net asset value at the time of reissue.
Outlook
Notwithstanding the Indian market's spectacular performance over the last five years and the more challenging environment witnessed over recent months, the Company's Investment Managers remain positive as to the prospects for the medium to long term. However, the global credit crisis, combined with domestic concerns over inflation and interest rates and political uncertainty have all weighed on investor sentiment and could impact on economic growth. Over the short term therefore returns are expected to be volatile.
Hugh Bolland
Chairman
28th May 2008
Interim Management Report
The Company is required to make the following disclosures in its half year report:
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Company fall into five broad categories: investment and strategy; accounting, legal and regulatory; corporate governance and shareholder relations; operational; and financial. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 30th September 2007.
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.
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
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.
For and on behalf of the Board
Hugh Bolland
Chairman
28th May 2008
Investment Managers' Report
Market Review
The half year to 31st March 2008 was a turbulent period for the Indian stock markets with the indices rallying strongly in fourth quarter and peaking in early January before a combination of global and domestic macro concerns led to a sharp fall in the first quarter of 2008 and MSCI India Index declined by almost 8% for the review period.
IT and Telecoms were the key underperformers, while the defensive sectors of Healthcare and Consumer Staples outperformed the benchmark.
The Financials sector severely underperformed in February and March due to escalating concerns over the marked to market losses on foreign exchange derivative positions of corporate India and the consequent potential losses to the banking sector.
In October the government announced regulations to phase out the issuance of offshore derivative instruments. These regulations were meant to achieve the twin objectives of moderating inflows in the short term and increasing transparency in the long term (with investors expected to access the market directly by getting their individual Foreign Institutional Investor ('FII') registration). Initial feedback suggests that the regulator is following through on its commitment to expedite the FII registration process.
In February, with elections looming, the Finance Minister tried to appease the electorate with a populist budget. Apart from tax sops for individuals and increased spending on education, the Finance Minister also announced a waiver of loans to farmers to the tune of $15bn.
Inflation rose unexpectedly in March with the Wholesale Price Index registering a rise of above 6% for the first time in almost a year due to a sharp jump in food and commodity prices. Inflation, currently over 7%, is well above the Reserve Bank of India's comfort level of 5-5.5%. This resulted in the central bank hiking the cash reserve ratio in April. The government also banned the export of food grains and cement and imposed export taxes on steel to contain inflationary pressures.
The Index of Industrial Production ('IIP') is signaling a slowdown in the rate of growth in the economy. In the period from April 2007 to March 2008, IIP grew by 8.3% as against 14.7% in the financial year to March 2007.
Company Reviews
The Company had a poor first half of the year underperforming the benchmark as our key overweight in Financials detracted value. This was mitigated by our overweight in Industrials - Bharat Heavy Electricals Limited and Larsen & Toubro - and our underweight in Information Technology.
Outlook
The results for the March quarter declared so far seem to have allayed some concerns, with the numbers being broadly in line with expectations. Besides, contrary to some expectations, the banking sector did not disclose large losses on account of losses on foreign exchange derivatives sold by banks to corporates. Nonetheless, the risk to estimates for the financial year in 2009 remains on the downside, although earnings growth in the region of 15% should be achievable.
Politics will also contribute to the uncertainty with elections to the centre due before May 2009 as well as some important state elections to be held through 2008. Overall the outlook in the short term remains hazy but the long term story remains intact. The concerns on inflation, interest rates and politics could have a moderating impact on growth but are unlikely to derail the momentum of the economy.
Edward Pulling
Rukhshad Shroff
Rajendra Nair
Investment Managers
28th May 2008
For further information please contact:
Andrew Norman
JPMorgan Asset Management (UK) Limited, Secretary
0207 742 6000
JPMorgan Indian Investment Trust plc
Group Income Statement
for the six months ended 31st March 2008
|
(Unaudited) Six months ended 31st March 2008 |
(Unaudited) Six months ended 31st March 2007 |
(Audited) Year ended 30th September 2007 |
|
|
||||||
|
Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
||
Investment income |
754 |
- |
754 |
1,149 |
- |
1,149 |
3,519 |
- |
3,519 |
||
Other income |
160 |
- |
160 |
142 |
- |
142 |
240 |
- |
240 |
||
|
_______ |
________ |
_______ |
_______ |
_______ |
_______ |
_______ |
________ |
_______ |
||
|
914 |
- |
914 |
1,291 |
- |
1,291 |
3,759 |
- |
3,759 |
||
(Losses)/gains from investments held at fair value through profit or loss |
- |
(50,376) |
(50,376) |
- |
19,875 |
19,875 |
- |
148,193 |
148,193 |
||
Foreign exchange (losses)/gains |
- |
(270) |
(270) |
- |
(39) |
(39) |
- |
61 |
61 |
||
|
_______ |
________ |
_______ |
_______ |
_______ |
_______ |
_______ |
________ |
_______ |
||
Total income/(loss) |
914 |
(50,646) |
(49,732) |
1,291 |
19,836 |
21,127 |
3,759 |
148,254 |
152,013 |
||
Expenses |
|
|
|
|
|
|
|
|
|
||
Management fee |
(2,921) |
- |
(2,921) |
(1,984) |
- |
(1,984) |
(4,321) |
- |
(4,321) |
||
Other administrative expenses |
(695) |
- |
(695) |
(631) |
- |
(631) |
(1,254) |
- |
(1,254) |
||
|
_______ |
________ |
_______ |
_______ |
_______ |
_______ |
_______ |
________ |
_______ |
||
(Loss)/profit before finance costs and taxation |
(2,702) |
(50,646) |
(53,348) |
(1,324) |
19,836 |
18,512 |
(1,816) |
148,254 |
146,438 |
||
Finance costs |
(395) |
- |
(395) |
(272) |
- |
(272) |
(668) |
- |
(668) |
||
|
_______ |
________ |
_______ |
_______ |
_______ |
_______ |
_______ |
________ |
_______ |
||
(Loss)/profit before taxation |
(3,097) |
(50,646) |
(53,743) |
(1,596) |
19,836 |
18,240 |
(2,484) |
148,254 |
145,770 |
||
Taxation |
- |
- |
- |
- |
- |
- |
(124) |
- |
(124) |
||
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
||
Net (loss)/profit |
(3,097) |
(50,646) |
(53,743) |
(1,596) |
19,836 |
18,240 |
(2,608) |
148,254 |
145,646 |
||
|
===== |
===== |
===== |
===== |
===== |
===== |
===== |
===== |
===== |
||
(Loss)/earnings per share (note 2) |
(2.96)p |
(48.44)p |
(51.40)p |
(1.52)p |
18.93p |
17.41p |
(2.49)p |
141.79p |
139.30p |
||
|
===== |
===== |
===== |
===== |
===== |
===== |
===== |
===== |
===== |
The 'Total' column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary
'Revenue' and 'Capital' columns are both prepared under guidance published by the Association of Investment Companies.
All items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.
All income is attributable to the equity shareholders of JPMorgan Indian Investment Trust plc, the Company. There are no minority interests.
JPMorgan Indian Investment Trust plc
Group Statement of Changes in Equity
for the six months ended 31st March 2008
(Unaudited)
Six months ended 31st March 2008
|
Called up share capital £'000 |
Share premium £'000 |
Other reserve £'000 |
Exercised warrant reserve £'000 |
Capital reserves £'000 |
Capital redemption reserve £'000 |
Revenue reserve £'000 |
Total £'000 |
Balance as at 30th September 2007 |
26,202 |
50,914 |
41,929 |
5,886 |
312,958 |
6,348 |
(8,051) |
436,186 |
Purchase of shares into treasury |
- |
- |
- |
- |
(3,234) |
- |
- |
(3,234) |
Repurchase and cancellation of shares |
(14) |
- |
- |
- |
(274) |
14 |
- |
(274) |
Loss for the period |
- |
- |
- |
- |
(50,646) |
- |
(3,097) |
(53,743) |
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
Balance as at 31st March 2008 |
26,188 |
50,914 |
41,929 |
5,886 |
258,804 |
6,362 |
(11,148) |
378,935 |
|
===== |
===== |
===== |
===== |
===== |
===== |
===== |
===== |
(Unaudited)
Six months ended 31st March 2007
|
Called up share capital £'000 |
Share premium £'000 |
Other reserve £'000 |
Exercised warrant reserve £'000 |
Capital reserves £'000 |
Capital redemption reserve £'000 |
Revenue reserve £'000 |
Total £'000 |
Balance as at 30th September 2006 |
26,177 |
50,636 |
41,929 |
5,886 |
168,670 |
6,348 |
(5,443) |
294,203 |
Shares issued |
25 |
278 |
- |
- |
- |
- |
- |
303 |
Profit/(loss) for the period |
- |
- |
- |
- |
19,836 |
- |
(1,596) |
18,240 |
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
Balance as at 31st March 2007 |
26,202 |
50,914 |
41,929 |
5,886 |
188,506 |
6,348 |
(7,039) |
312,746 |
|
===== |
===== |
===== |
===== |
===== |
===== |
===== |
===== |
(Audited)
Year ended 30th September 2007
|
Called up share capital £'000 |
Share premium £'000 |
Other reserve £'000 |
Exercised warrant reserve £'000 |
Capital reserves £'000 |
Capital redemption reserve £'000 |
Revenue reserve £'000 |
Total £'000 |
Balance as at 30th September 2006 |
26,177 |
50,636 |
41,929 |
5,886 |
168,670 |
6,348 |
(5,443) |
294,203 |
Shares issued |
25 |
278 |
- |
- |
- |
- |
- |
303 |
Purchase of shares into treasury |
- |
- |
- |
- |
(3,966) |
- |
- |
(3,966) |
Profit/(loss) for the year |
- |
- |
- |
- |
148,254 |
- |
(2,608) |
145,646 |
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
Balance as at 30th September 2007 |
26,202 |
50,914 |
41,929 |
5,886 |
312,958 |
6,348 |
(8,051) |
436,186 |
|
===== |
===== |
===== |
===== |
===== |
===== |
===== |
===== |
JPMorgan Indian Investment Trust plc
Group Balance Sheet
as at 31st March 2008
|
(Unaudited) 31st March 2008 |
(Unaudited) 31st March 2007 |
(Audited) 30th September 2007 |
|
£'000 |
£'000 |
£'000 |
Non current assets |
|
|
|
Investments held at fair value through profit or loss |
375,695 |
312,903 |
439,249 |
|
|
|
|
Current assets |
|
|
|
Other receivables |
2,083 |
657 |
1,192 |
Derivative financial instruments |
2 |
- |
- |
Cash and cash equivalents |
6,040 |
10,371 |
8,159 |
|
_______ |
_______ |
_______ |
|
8,125 |
11,028 |
9,351 |
Current liabilities |
|
|
|
Other payables |
(4,885) |
(11,185) |
(12,414) |
|
_______ |
_______ |
_______ |
Net current assets/(liabilities) |
3,240 |
(157) |
(3,063) |
|
_______ |
_______ |
_______ |
Net assets |
378,935 |
312,746 |
436,186 |
|
===== |
===== |
===== |
Equity attributable to equity holders |
|
|
|
Called up share capital |
26,188 |
26,202 |
26,202 |
Share premium |
50,914 |
50,914 |
50,914 |
Other reserve |
41,929 |
41,929 |
41,929 |
Exercised warrant reserve |
5,886 |
5,886 |
5,886 |
Capital reserves |
258,804 |
188,506 |
312,958 |
Capital redemption reserve |
6,362 |
6,348 |
6,348 |
Revenue reserve |
(11,148) |
(7,039) |
(8,051) |
|
_______ |
_______ |
_______ |
Total equity |
378,935 |
312,746 |
436,186 |
|
===== |
===== |
===== |
|
|
|
|
Net asset value per share (note 3) |
368.7p |
298.4p |
421.1p |
|
|
|
|
JPMorgan Indian Investment Trust plc
Group Cash Flow Statement
for the six months ended 31st March 2008
|
(Unaudited) Six months ended 31st March 2008 |
(Unaudited) Six months ended 31st March 2007 |
(Audited) Year ended 30th September 2007 |
|
£'000 |
£'000 |
£'000 |
Operating activities |
|
|
|
(Loss)/profit before taxation |
(53,743) |
18,240 |
145,770 |
Add back interest paid |
395 |
272 |
668 |
Losses/(gains) on investments held at fair value through profit or loss |
50,376 |
(19,875) |
(148,193) |
Foreign exchange gain/(loss) |
146 |
(29) |
- |
Net sales of investments held at fair value through profit or loss |
13,177 |
731 |
2,442 |
Decrease/( increase) in other receivables |
158 |
825 |
(207) |
(Increase)/decrease in amounts due from brokers |
(1,049) |
2,222 |
213 |
Increase/(decrease) in other payables |
180 |
(2,707) |
58 |
Decrease in amounts due to brokers |
- |
(858) |
(858) |
|
_______ |
_______ |
_______ |
Net cash inflow/(outflow) from operating activities before interest payable and taxation |
9,640 |
(1,179) |
(107) |
|
|
|
|
Interest paid |
(408) |
(232) |
(657) |
Tax paid |
- |
- |
(58) |
|
_______ |
_______ |
_______ |
Net cash inflow/(outflow) from operating activities |
9,232 |
(1,411) |
(822) |
|
===== |
===== |
===== |
Financing activities |
|
|
|
Net proceeds from the issue of shares |
- |
303 |
303 |
Repurchase of shares |
(3,507) |
- |
(3,966) |
Net (repayment)/drawdown of short term loans |
(7,844) |
7,226 |
8,391 |
|
_______ |
_______ |
_______ |
Net cash (outflow)/inflow from financing activities |
(11,351) |
7,529 |
4,728 |
|
|
|
|
(Decrease)/increase in cash and cash equivalents |
(2,119) |
6,118 |
3,906 |
Cash and cash equivalents at start of period |
8,159 |
4,253 |
4,253 |
|
_______ |
_______ |
_______ |
Cash and cash equivalents at end of period |
6,040 |
10,371 |
8,159 |
|
===== |
===== |
===== |
JPMorgan Indian Investment Trust plc
Notes to the Group Accounts
for the six months ended 31st March 2008
1. Accounting policies
The Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB) and interpretations issued by the International Reporting Interpretations Committee of the IASB.
Where presentational guidance set out in the Statement of Recommended Practice ('the SORP') for investment trusts issued by the Association of Investment Companies in December 2005 is consistent with the requirements of IFRS, the financial statements have been prepared on a basis compliant with the recommendations of the SORP.
2. (Loss)/earnings per share |
(Unaudited) Six months ended 31st March 2008 |
(Unaudited) Six months ended 31st March 2007 |
(Audited) Year ended 30th September 2007 |
|
£'000 |
£'000 |
£'000 |
|
|
|
|
Revenue loss |
(3,097) |
(1,596) |
(2,608) |
Capital (loss)/profit |
(50,646) |
19,836 |
148,254 |
|
_______ |
_______ |
_______ |
Net (loss)/profit |
(53,743) |
18,240 |
145,646 |
|
===== |
===== |
===== |
Weighted average number of shares in issue during the period |
103,000,182 |
104,764,354 |
104,562,209 |
|
|
|
|
Revenue loss per share |
(2.96)p |
(1.52)p |
(2.49)p |
Capital (loss)/profit per share |
(48.44)p |
18.93p |
141.79p |
|
_______ |
_______ |
_______ |
Net (loss)/earnings per share |
(51.40)p |
17.41p |
139.30p |
|
===== |
===== |
===== |
3. Net asset value per share |
(Unaudited) Six months ended 31st March 2008 |
(Unaudited) Six months ended 31st March 2007 |
(Audited) Year ended 30th September 2007 |
|
|
|
|
Shareholders funds (£'000) |
378,935 |
312,746 |
436,186 |
Number of shares in issue at each period end excluding share held in treasury |
102,769,874 |
104,806,662 |
103,591,874 |
|
_______ |
_______ |
_______ |
Net asset value per share |
368.7p |
298.4p |
421.1p |
|
===== |
===== |
===== |
4. Publication of non-statutory accounts
The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the six months ended 31st March 2008 and 2007 has not been audited.
5. Comparative information
The information for the year ended 30th September 2007 has been extracted from the latest published audited financial statements. Those accounts 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 237(2) or 237 (3) of the Companies Act 1985.
JPMORGAN ASSET MANAGEMENT (UK) LIMITED
28TH MAY 2008