Final Results

RNS Number : 8947W

JPMorgan Japanese Inv. Trust PLC

12 November 2014

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN JAPANESE INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED
30TH SEPTEMBER 2014

Chairman's Statement

Investment Performance

In the year to 30th September 2014, the Company's net assets fell by 4.4% in sterling terms, compared with the Tokyo Stock Exchange First Section (TOPIX) Index (our benchmark), which rose by 0.9%. The returns are calculated on a total return basis in sterling terms and were impacted by the movement in the yen/sterling rate from yen 158.9 at the beginning of the year to yen 177.8 at its conclusion. The share price of your Company fell by 7.4% during the year, assuming the reinvestment of the dividend. The results for the year to 30th September 2014 are disappointing though, over the two, three and five years ended 30th September 2014, the portfolio has outperformed the benchmark in sterling terms.

Revenue and Dividends

Income received during the year fell with earnings per share for the full year falling to 2.46p (2013: 2.78p). However, in light of an apparent upward trend in dividend payments by Japanese companies, the Board proposes, subject to shareholders' approval at the Annual General Meeting, to pay an unchanged final dividend of 2.80p per share (2013: 2.80p) on 23rd December 2014 to shareholders on the register at the close of business on 28th November 2014 (ex-dividend date 27th November 2014). The objective of the Company is capital growth, any dividend paid being a residual of the portfolio structure and, in the event that this revenue increase is not forthcoming, it would be difficult to continue to maintain the dividend at this level. Income received by the Company is subject to certain distribution requirements that must be met in order to retain the Company's investment trust status.

Gearing

The Board of Directors sets the overall strategic gearing policy and guidelines, reviewing these at each meeting. The Investment Manager then manages the gearing within these agreed levels. On 30th September 2014, the Company had a gearing level of 12.7%. This level of gearing at the end of the financial year reflected the confidence of the Investment Manager in the individual companies held in the portfolio. The management of gearing has also been active during the year with the level ranging between geared positions of 11% and 15% (month end figures).

The funds available to be drawn down by the Company are ¥12 billion and the loan facility provides for additional capacity to increase gearing to ¥15 billion, should market conditions allow.

Investment Manager

The Company's objective is to provide shareholders with capital growth from a portfolio of investments in Japanese companies and on a longer term view your Investment Manager has achieved this outperformance against our benchmark, equally through stock selection and gearing.

Board of Directors

Having been a Director since 1996, I am retiring at the conclusion of the Annual General Meeting. Over the time I have served on the Board Japan has faced both global and domestic economic difficulties but, despite this, I remain convinced that the country will offer continuing investment opportunities for your portfolio.

I am delighted that Andrew Fleming, a Director since 2004, will be appointed Chairman in my place.

In selecting a new Director, an outside consultant, Trust Associates, was appointed. Following interviews with all members of the Board, Christopher Samuel is to be appointed as a Director following the close of the Annual General Meeting on 19th December 2014. Christopher was previously Chief Executive Officer of Ignis Asset Management and will bring to the Board considerable experience of the investment management industry as well as Japan where he was based earlier in his career.

In accordance with the Company's Articles of Association, Andrew Fleming and Keith Percy, having served on the Board for more than nine years, are retiring and seeking reappointment. Alan Barber will also retire and seek reappointment to comply with the Company's Articles of Association which requires a third of the Board to retire by rotation (excluding those with tenure in excess of nine years).

Alan, Andrew and Keith all bring a wealth of experience to the Board and I have no hesitation in recommending their reappointment.

Authority to Repurchase the Company's Shares

At last year's Annual General Meeting, shareholders granted the Directors' authority to repurchase up to 14.99% of the Company's shares. No shares have been repurchased for cancellation during the year (2013: 70,000). The Directors continue to believe that the power to repurchase shares is of ongoing benefit to shareholders and therefore propose that the authority be renewed for a further period. Share repurchases continue to be a useful tool for decreasing discount volatility and this approach will be used when considered to be appropriate by the Board.

Alternative Investment Fund Managers Directive ('AIFMD')

As required under AIFMD, with effect from 1st July 2014, the Company appointed JPMorgan Funds Limited as its Alternative Investment Fund Manager under a new investment management agreement. Portfolio management is delegated by JPMorgan Funds Limited to JPMorgan Asset Management (UK) Limited, thus retaining previous portfolio management arrangements. The management fee and notice period arrangements remain unchanged. The Company appointed BNY Mellon Trust & Depositary (UK) Limited to act as the Company's Depositary, a new requirement under AIFMD. JPMorgan Chase Bank, NA remains the Company's Custodian, but as a delegate of the Depositary. JPMorgan Funds Limited was also appointed as Company Secretary to the Company on 1st July 2014.

Independent Auditors

These accounts are the first to be audited by PricewaterhouseCoopers LLP. You will find their first audit report to shareholders in the annual report.

Annual General Meeting

This year's Annual General Meeting will be held on Friday, 19th December 2014 at 2.00 p.m. at 60 Victoria Embankment, London EC4Y 0JP. As in previous years, in addition to the formal part of the meeting, there will be a presentation from the Investment Manager who will answer questions on the portfolio and performance. There will also be an opportunity to meet the Board, the Investment Manager and representatives of JPMorgan after the meeting. I look forward to welcoming as many of you as possible to this meeting.

If you have any detailed or technical questions, it would be helpful if you could raise these in advance of the meeting with the Company Secretary at 60 Victoria Embankment, London EC4Y 0JP. Alternatively, questions may be submitted via the Company's website (www.jpmjapanese.co.uk). Shareholders who are unable to attend the Annual General Meeting are encouraged to use their proxy votes. Proxy votes may be lodged electronically, whether shares are held through CREST or in certificate form, and full details are set out on the form of proxy.

Prospects

While it is disappointing that, to date, Prime Minister Abe has not made as much progress with his programme of revitalisation as initially expected, the recent decision by the Bank of Japan to reinforce the process of monetary easing was a surprise to most observers. It perhaps reflects an opportunity for the Government to push forward their aim of improved economic growth coupled with an element of inflation.

Your Investment Manager has laid out the areas where he believes opportunities will arise for your portfolio and I continue to think the well-managed and entrepreneurial companies in these sectors will provide investment opportunities for the future.

Jeremy Paulson-Ellis

Chairman

12th November 2014

Investment Manager's Report

The benchmark TOPIX index rose by around 1% in sterling terms during the year ended 30^th September 2014 with the Company's NAV falling 4.4%. Over three years the Company has returned 37% versus 25% for the index. Over five years 46% versus 29% for the index.

Review

Prime Minister Abe remained popular which is remarkable in a country that has become accustomed to a revolving door of prime ministers.  This stability is positive.  The global economic recovery, led by the United States, continued. The yen weakened and, perhaps most importantly of all from a stock market perspective, corporate earnings were strong while progress was made with corporate governance.

Economic data was mixed. On the positive side land prices rose, office vacancy rates fell and the unemployment rate hit a multi-year low of 3.5%. However, although there has been wage growth this has not kept pace with inflation. The consumption tax hike in April, from 5% to 8%, led to weak GDP numbers in the second quarter and so far the recovery from this has been tepid.  This is one reason why the Bank of Japan added to its stimulus measures at the end of October 2014.  Export data has also been lacklustre despite the weaker yen. We attribute this softness to the ongoing shift of production overseas by Japanese companies and the loss of competitiveness in certain industries such as consumer electronics.

The yen weakened substantially. The sharp depreciation at the end of the fiscal year was driven by the belief that the US Federal Reserve will gradually tighten policy due to the improving economy while the Bank of Japan will continue its monetary easing program. This view was cemented when the Bank of Japan announced its second round of quantitative easing in October 2014. Monetary policy in Japan is now more aggressive than in other developed markets. The weaker yen is a tailwind for most of corporate Japan but we have to monitor closely the impact on everyday lives which have been affected by rising import prices.

Corporate earnings continue to be the major positive. Earnings have been strong and analyst projections for 2014 and 2015 have been revised up. This pattern continued during the interim results season in November 2014 and shareholder returns are improving. In the first half of the year almost 250 companies set up share repurchase programs for a total value of Y1.85 trillion, the highest tally since the first half of 2008. Some companies increased their dividends including a few which had previously eschewed substantial shareholder returns. A total of 160 institutional investors, including J.P. Morgan Asset Management, have signed up to a new stewardship code which aims to boost transparency and improve corporate governance. One notable point in the October Bank of Japan easing was its announcement to buy Exchange Traded Funds (ETFs) including an ETF linked to the JPX 400 index, an index that places emphasis on companies with high and improving returns on equity amongst other factors. We hope that progress with corporate governance is the start of a long-term structural trend.

Portfolio Performance

The underperformance versus the benchmark over the year was due to poor stock selection.  However, gearing was positive. At the sector allocation level the major positive contributors were the overweight in electric appliances (technology companies engaged in activities such as factory automation and electronics in cars) and the non-ownership of electric power, steel and securities. The overweight positions in real estate, services and other financials detracted. The top five stock contributors were Nippon Shinyaku (pharmaceuticals), Shimano (bicycle parts), Casio (electronics), Daikin (air conditioning) and Ono Pharmaceutical.  The bottom five were Sanrio (consumer goods), Digital Garage (internet), Kakaku.com (internet), Sega Sammy (gaming) and Rakuten (internet).

We are reassured by the much improved long term performance of the Company but any period of underperformance is disappointing. The portfolio strategy is covered in detail below but we take multi-year views on companies and sectors. We carefully analyse each investment case and decide if the reason for the investment still stands. Internet related stocks, such as Kakaku.com Digital Garage and Rakuten have many years of growth ahead and we have confidence in the management teams. We do not believe anything has happened to alter that view. By contrast, our expectation that legislation permitting casinos would be quickly passed and fundamentally change the long-term earnings outlook for a number of stocks was wrong and we have sold positions in related companies such as Sega Sammy. Similarly the investment case for Sanrio, the owner of the Hello Kitty character, changed and therefore we sold the position. 

Portfolio Strategy

At J.P. Morgan Asset Management we use a bottom-up process, centred around meetings with companies, to pick the very best stocks for the portfolio.  There are different reasons why we choose to invest in any particular company and these are often specific to each investment. However, it is possible to look at the portfolio in terms of some of the broad themes we are trying to capture.

l The ageing population. The Japanese population has already started to fall and the percentage of elderly is increasing. This is negative for some companies but it is a following wind for others. As such, we expect to see substantial consolidation as small companies with no successor disappear. This is why we own Nihon MA Center which advises companies how to deal with this issue.

l The importance of Asia. Japan is fortunate that by geographic chance it is located in one of the fastest growing regions in the world. Over the last thirty years the percentage of exports that is destined for Asia has increased from roughly 25% to 55%. Rising incomes and the growing middle class mean greater demand for some Japanese products. This is the reason we own companies such as air-conditioner maker Daikin. There is still low penetration of air-conditioning in hot Asian countries and higher incomes make this product more affordable.  The flip side of rising wages is that it is becoming more expensive to manufacture throughout Asia. There is, therefore, a trend towards automation of factories.  Japan has many world class companies in this field and we own several, such as Fanuc.

l The increasing use of electronics in cars. Ultimately cars may be able to drive themselves but even now there is an increasing proliferation of electronics in cars. For example, the headlights of some cars already automatically switch from full beam to dipped. We own shares in several companies that stand to benefit, including Murata.

l New Japanese brands. Twenty years ago Japanese consumer electronics companies were global leaders with very valuable brands. Now, their products have become commoditised and they have been surpassed by low-cost manufacturers in Taiwan, Korea and China.  However, Japan remains very strong in other areas. Shimano is dominant in gears for bicycles, Kikkoman in soy sauce.

l Ecommerce. The percentage of online retail in Japan, at around 4% of total retail sales, is very much lower than other developed countries such as the United Kingdom where the equivalent figure is well over 12%. There is no basic reason why this should be the case and growth is strong. This is one reason why we continue to hold the number one ecommerce company Rakuten.  

l The growth in inbound tourism. For the first time ever the number of tourists coming to Japan has outnumbered Japanese going overseas. There are two reasons for this.  First, visa restrictions for some nationalities have been lifted. Second, Japan has become much cheaper following the depreciation of the yen. Retailer Don Quijote, which is a popular shopping destination for tourists, is one example of a company we hold that is benefitting from this.

At JPMorgan we have a large team based on the ground in Tokyo trying to identify significant changes in sectors and companies. Being based locally is increasingly unusual and we expect this to be a source of continued competitive advantage. Overall, we are positive on the outlook for the economy, market, active fund management and the performance of the Company.

Nicholas Weindling

Investment Manager

12th November 2014

Principal Risks

With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to the Company. These key risks fall broadly under the following categories:

•     Investment Underperformance and Strategy: An inappropriate investment strategy, for example asset allocation, the level of gearing or the degree of portfolio risk, may lead to underperformance against the Company's benchmark index and peer companies, resulting in the Company's shares trading on a wider discount.

      The Board manages these risks by diversification of investments and through its investment restrictions and guidelines, which are monitored and reported on by the Manager. The Manager provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, liquidity reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Investment Manager, who attends all Board meetings, and reviews data which show statistical measures of the Company's risk profile. The Investment Manager employs the Company's gearing tactically, within a strategic range set by the Board. The Board holds a separate meeting devoted to strategy each year.

•     Market and Currency: Market risk arises from uncertainty about the future prices of the Company's investments. It represents the potential loss the Company might suffer through holding investments in the face of negative market movements. The Board considers asset allocation, stock selection and levels of gearing on a regular basis and has set investment restrictions and guidelines which are monitored and reported on by the Manager. The Board monitors the implementation and results of the investment process with the Manager. The majority of the Company's assets, liabilities and income are denominated in Yen rather than in the Company's functional currency of Sterling (in which it reports). As a result, movements in the Yen : Sterling exchange rate may affect the Sterling value of those items. Therefore, there is an inherent risk from these exchange rate movements. No foreign currency hedging is undertaken. Further details about the foreign currency risk may be found in note 22 in the annual report.

•     Political, Economic and Governance: Administrative risks, such as the imposition of restrictions on the free movement of capital. These risks are discussed by the Board on a regular basis.

•     Loss of Investment Team or Investment Manager: A sudden departure of the Investment Manager or several members of the investment management team could result in a short term deterioration in investment performance. The Manager takes steps to reduce the likelihood of such an event by ensuring appropriate succession planning and the adoption of a team based approach, as well as special efforts to retain key personnel.

•     Discount: A disproportionate widening of the discount relative to the Company's peers could result in loss of value for shareholders. The Board regularly discusses discount policy and has set parameters for the Manager and the Company's broker to follow.

•     Change of Corporate Control of the Manager: The Board holds regular meetings with senior representatives of the Manager in order to obtain assurance that the Manager continues to demonstrate a high degree of commitment to its investment trust business through the provision of significant resources.

•     Accounting, Legal and Regulatory: In order to qualify as an investment trust, the Company must comply with Section 1158 of the Corporation Tax Act 2010 ('Section 1158'). Details of the Company's approval are given under 'Business of the Company' above. Were the Company to breach Section 1158, it may lose investment trust status and, as a consequence, gains within the Company's portfolio would be subject to Capital Gains Tax. The Section 1158 qualification criteria are continually monitored by the Manager and the results reported to the Board each month. The Company must also comply with the provisions of the Companies Act 2006 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules, Disclosure and Transparency Rules ('DTRs') and, as an investment trust, the Alternative Investment Fund Managers Directive ('AIFMD'). A breach of the Companies Act could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules or DTRs could result in the Company's shares being suspended from listing which in turn would breach Section 1158. The Board relies on the services of its Company Secretary, the Manager and its professional advisers to ensure compliance with the Companies Act 2006, the UKLA Listing Rules, DTRs and AIFMD.

•     Corporate Governance and Shareholder Relations: Details of the Company's compliance with Corporate Governance best practice, including information on relations with shareholders, are set out in the Corporate Governance Statement in the annual report.

•     Operational: Disruption to, or failure of, the Manager's accounting, dealing or payments systems or the Depositary or Custodian's records may prevent accurate reporting and monitoring of the Company's financial position. Details of how the Board monitors the services provided by JPMF and its associates and the key elements designed to provide effective risk management and internal control are included within the Risk Management and Internal Controls section of the Corporate Governance Statement in the annual report.

•     Going concern: Pursuant to the Sharman Report, Boards are now advised to consider going concern as a potential risk, whether or not there is an apparent issue arising in relation thereto. Going concern is considered rigorously on an ongoing basis and the Board's statement on going concern is detailed in the annual report.

•     Financial: The financial risks faced by the Company include market price risk, liquidity risk and credit risk. Further details are disclosed in note 22 in the annual report.

Related Party Transactions

During the 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 year.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the annual report and accounts 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 have elected to prepare the financial statements in accordance with United Kingdom generally accepted accounting practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that, taken as a whole, the annual report and accounts are fair, balanced and understandable, 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 are required to:

•     select suitable accounting policies and then apply them consistently;

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

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

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

and the Directors confirm that they have done so.

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

The accounts are published on the www.jpmjapanese.co.uk website, which is maintained by the Company's Manager. The maintenance and integrity of the website maintained by the Manager is, so far as it relates to the Company, the responsibility of the Manager. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditors accept no responsibility for any changes that have occurred to the accounts since they were initially presented on the website. The accounts are 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 Directors' Report, Strategic Report, Statement of Corporate Governance and Directors' Remuneration Report that comply with that law and those regulations.

Each of the Directors, whose names and functions are listed in the annual report, confirms that, to the best of their knowledge:

•     the financial statements, which have been prepared in accordance with United Kingdom generally accepted accounting practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and return or loss of the Company; and

•     the Strategic 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 accounts taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the strategy and business model of the Company.

The Board also confirms that it is satisfied that the Strategic Report and Directors' Report include 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 the Company faces.

For and on behalf of the Board

Jeremy Paulson-Ellis

Chairman

12th November 2014

Income Statement

for the year ended 30th September 2014

		2014			2013
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments held at fair value   through profit or loss		-	(26,100)	(26,100)	-	124,427	124,427
Net foreign currency gains		-	5,933	5,933	-	9,302	9,302
Income from investments		5,715	-	5,715	6,041	-	6,041
Gross return/(loss)		5,715	(20,167)	(14,452)	6,041	133,729	139,770
Management fee		(525)	(2,099)	(2,624)	(459)	(1,835)	(2,294)
Other administrative expenses		(506)	-	(506)	(519)	-	(519)
Net return/(loss) on ordinary activities before finance   costs and taxation		4,684	(22,266)	(17,582)	5,063	131,894	136,957
Finance costs		(149)	(596)	(745)	(151)	(605)	(756)
Net return/(loss) on ordinary activities before taxation		4,535	(22,862)	(18,327)	4,912	131,289	136,201
Taxation		(572)	-	(572)	(432)	-	(432)
Net return/(loss) on ordinary activities after taxation		3,963	(22,862)	(18,899)	4,480	131,289	135,769
Return/(loss) per share (note 2)		2.46p	(14.18)p	(11.72)p	2.78p	81.40p	84.18p

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 is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies. The Total column represents all the information that is required to be disclosed in a Statement of Total Recognised Gains and Losses ('STRGL'). For this reason a STRGL has not been presented.

Reconciliation of Movements in Shareholders' Funds

	Called up	Capital
	share	redemption	Other	Capital	Revenue
	capital	reserve	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2012	40,330	8,632	166,791	78,012	8,369	302,134
Repurchase and cancellation of the Company's own shares	(18)	18	-	(139)	-	(139)
Net return on ordinary activities	-	-	-	131,289	4,480	135,769
Dividend paid in the year	-	-	-	-	(5,888)	(5,888)
At 30th September 2013	40,312	8,650	166,791	209,162	6,961	431,876
Net (loss)/return on ordinary activities	-	-	-	(22,862)	3,963	(18,899)
Dividend paid in the year	-	-	-	-	(4,515)	(4,515)
At 30th September 2014	40,312	8,650	166,791	186,300	6,409	408,462

Balance Sheet

at 30th September 2014

		2014	2013
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		459,633	487,941
Current assets
Debtors		13,201	5,623
Cash and short term deposits		15,463	3,737
		28,664	9,360
Creditors: amounts falling due within one year		(79,835)	(2,494)
Net current (liabilities)/assets		(51,171)	6,866
Total assets less current liabilities		408,462	494,807
Creditors: amounts falling due after more than one year		-	(62,931)
Net assets		408,462	431,876
Capital and reserves
Called up share capital		40,312	40,312
Capital redemption reserve		8,650	8,650
Other reserve		166,791	166,791
Capital reserves		186,300	209,162
Revenue reserve		6,409	6,961
Total equity shareholders' funds		408,462	431,876
Net asset value per share (note 4)		253.3p	267.8p

Company registration number: 223583

Cash Flow Statement

for the year ended 30th September 2014

		2014	2013
		£'000	£'000
Net cash inflow from operating activities		2,352	3,738
Returns on investments and servicing of finance
Interest paid		(735)	(757)
Capital expenditure and financial investment
Purchases of investments		(132,450)	(264,472)
Sales of investments		136,596	226,068
Other capital charges		(3)	(3)
Net cash inflow/(outflow) from capital expenditure and financial investment		4,143	(38,407)
Dividend paid		(4,515)	(5,888)
Net cash inflow/(outflow) before financing		1,245	(41,314)
Financing
Net drawdown of loans		12,204	41,420
Repurchase and cancellation of the Company's own shares		-	(139)
Net cash inflow from financing		12,204	41,281
Increase/(decrease) in cash and cash equivalents		13,449	(33)

Notes to the Accounts

for the year ended 30^th September 2014

1.    Accounting policies

      Basis of accounting

      The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the AIC in January 2009. They have also been prepared on the assumption that approval as an investment trust will continue to be granted.

      All of the Company's operations are of a continuing nature.

      The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments and derivative financial instruments at fair value.

      The policies applied in these accounts are consistent with those applied in the preceding year.

2.   Dividend

(a)  Dividends paid and proposed

	2014	2013
	£'000	£'000
Dividend paid
2013 final dividend of 2.80p (2012: 3.65p)	4,515	5,888
Dividend proposed
2014 final dividend of 2.80p (2013: 2.80p)	4,515	4,515

The final dividend proposed in respect of the year ended 30th September 2014 is subject to approval at the forthcoming Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the accounts for the year ending 30th September 2015.

(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act 2010 ('Section 1158')

The proposed dividend of £4,515,000 (2013: £4,515,000) is the amount on which the requirements of Section 1158 are considered. The revenue available for distribution by way of dividend is £3,963,000 (2013: £4,480,000).

3.   Return/(loss) per ordinary share

The revenue return per share is based on the revenue earnings attributable to the ordinary shares of £3,963,000 (2013: £4,480,000) and on the weighted average number of shares in issue throughout the year of 161,248,078 (2013: 161,282,215).

The capital loss per share is based on the capital loss attributable to the ordinary shares of £22,862,000 (2013 return: £131,289,000) and on the weighted average number of shares in issue throughout the year of 161,248,078 (2013: 161,282,215).

The total loss per share is based on the total loss attributable to the ordinary shares of £18,899,000 (2013 return: £135,769,000) and on the weighted average number of shares in issue throughout the year of 161,248,078 (2013: 161,282,215).

4.   Net asset value per share

The net asset value per share is based on the net assets attributable to the ordinary shareholders of £408,462,000 (2013: £431,876,000) and on the 161,248,078 (2013: 161,248,078) shares in issue at the year end.

5.   Status of results announcement

2013 Financial Information

The figures and financial information for 2013 are extracted from the published Annual Report and Accounts for the year ended 30^th September 2013 and do not constitute the statutory accounts for that year.  The Annual Report and Accounts has been delivered to the Registrar of Companies and included the Report of the IndependentAuditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2014 Financial Information

             The figures and financial information for 2014 are extracted from the Annual Report and Accounts for the year ended 30^th September 2014 and do not constitute the statutory accounts for the year.  The Annual Report and Accounts include the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Register of Companies in due course.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

JPMORGAN FUNDS LIMITED

ENDS

A copy of the annual report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM

The annual report will also shortly be available on the Company's website at www.jpmjapanese.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

JPMORGAN FUNDS LIMITED

 

END

 

 

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