Annual Financial Report

RNS Number : 4123P

JPMorgan Emerging Mkts Invest Trust

03 October 2011

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN EMERGING MARKETS INVESTMENT TRUST PLC

ANNOUNCEMENT OF FINAL RESULTS

The Directors of JPMorgan Emerging Markets Investment Trust plc announce the Company's results for the year ended 30th June 2011.

Chairman's Statement

Having just passed the 20th anniversary of its launch, I am pleased to report that the Company has produced another year of strong performance in the 12 months to 30th June 2011, especially given the continuing volatility in equity markets. Again the Manager added considerable value through outperformance against our benchmark index, the MSCI Emerging Markets Free Index.

As I explained last year, following the successful issue of Subscription shares in 2009, we now report our net asset value on a diluted basis to reflect the potential dilution to net asset value assuming full conversion of the Subscription shares to Ordinary shares. Until expiry of the Subscription shares, this gives a somewhat misleading impression of the Company's underlying portfolio performance as it has a negative effect on the net asset value calculation. I would again emphasise that it is not the basis on which we judge the performance of the Manager, which we continue to do excluding the dilution effect of the Subscription shares converted during the year.

Accordingly, I am happy to report that the portfolio return net of fees and expenses was +22.3% before adjustments, against a rise of 19.1% in the benchmark. Allowing for the dilution effect of those Subscription shares that were actually exercised in the year, this adjusts to a rise in net asset value of 21.4%, while the rise on a fully diluted basis was 21.0%. This outperformance was driven by active stock selection as the Manager details in his report, continuing the traditional source of added value in the Manager's performance over many years. It also gives rise to a performance fee payment due to the Manager of £1.9 million. Long term shareholders who have retained both their ordinary and Subscription shares have enjoyed a 'unit' return of +21.9% over the year.

We do of course pay as much attention to the share price as we do the underlying net asset value and therefore to the fluctuations in the discount of our share price to underlying asset value. The ordinary share price rose 19.5% through the year, from 500p to 597.5p at the year end. The Subscription shares rose almost 77% over the year, from 76.3p to 135p. The discount on the Ordinary shares ranged between 4.3% and 10.7%, averaging 7.5% through the year and no shares were repurchased. Hitherto, the Board's policy on discount management has been to be prepared to buy back shares if the fully diluted discount touches or exceeds 10% for some time, is out of line with our peer group and market conditions are orderly. The average discount has remained comfortably below this level and we would like the Company's shares to continue to trade at a discount of less than 10%. Therefore we are amending our policy and are now prepared to buy in shares at discounts of between 8% and 10% to achieve this, but again only if the discount is out of line with our peer group and market conditions are orderly.

Income after expenses rose by more than 20% and we are proposing to pay an increased dividend of 3.5p. Our investment policy is aimed at maximising capital growth and does not focus on income, hence the Company only pays dividends to the extent necessary to maintain investment trust status. Accordingly, dividends may fluctuate from year to year according to our income position.

The Board continues to take seriously its governance obligations and we comply fully with the AIC Code of Corporate Governance and the new UK Corporate Governance Code. We also support the general drive to diversity in terms of board representation as recommended in the Davies Report.

We continue to monitor our Manager carefully through the Management Engagement Committee. We confirm that we are fully satisfied that the Manager is the right manager for the Company, not only in terms of investment performance but also in terms of risk management, administration, controls and compliance.

The Board itself has remained stable in terms of composition over the year. As previously, we carry out a review of the Board and separately the Board reviews my role as Chairman. I am pleased to say no major concerns were raised and I would like to thank my colleagues for their continuing support.

In his report, the Investment Manager comments on the outlook for emerging markets and also draws attention to the fact that the Company has now been in existence for 20 years. Looking back, it is striking to note that the Company was launched in 1991 with assets of £60 million, at a share price of £1. At the end of the latest financial year the Company had assets of just under £800 million and the share price was close to £6. It has not been a smooth ride, but anyone who has remained invested throughout that period has been very well rewarded for taking a long term view and the Board recommends that shareholders approve the Company's continuation for a further three years at the forthcoming AGM.

Alan Saunders

Chairman        

3rd October 2011

Investment Manager's Report

Results

During the Company's financial year ended on 30th June 2011, the portfolio produced a total return of 22.3%, after fees and expenses; the total return from the share price was 20.1%; if the Subscription shares issued two years ago are taken into account, that return increases slightly to 21.9%. For reference, the MSCI Emerging Markets Index gave a return of 19.1% over the year.

As usual, the various effects contributing to these results are detailed in the Annual Report; this shows that the differential investment returns from the portfolio have been entirely a result of stock selection.

The Past Year

The numbers above make this look like a good year for equity markets, but the two months since the Company's financial year ended in June have put the year in a rather different light. For much of the 12 months after June 2010 the central case implied by the behaviour of markets seemed to be a weak and slow recovery for Western economies, but not a second major downturn. The travails of Greece and the euro area as a whole gave rise to periodic concern, but not a complete loss of confidence. In emerging markets, investors worried mostly about inflation, the unintended consequence of loose global monetary policy, and about the possibility of another spike in oil prices following the political revolutions in parts of the Middle East. But in the last two months, political antagonism in the USA and the appearance of continued disarray in European economic policy have brought renewed concerns about the prospects for Western economies. It is beginning to look as though the great financial crisis of 2008 was not resolved by government action, merely nationalised, transferring the issue to sovereign bond markets. More thoughts on the future and on the positioning of the Company's portfolio are offered below.

Within emerging markets, both India and China fared relatively poorly this past year, producing returns close to zero in sterling terms. In both cases there have been salutary reminders of some of the risks of emerging markets. In India, corruption and an apparent inability of government to make progress have become something of a leitmotiv in our discussions with companies. In China, state intervention continues to loom large over the equity market; the state is omni-present in the corporate sector, as, variously, owner, supplier, customer, regulator and competitor; like most, if not all other governments, it tends to see economic stability and control of inflation as a higher priority than the earning of profits to reward private capital.

In Latin America, Brazil has been a relatively difficult place to make money; the currency has been very strong, domestic prices for goods and services are extremely high and there is little sign of the deregulation and liberalisation of the economy that will be required to drive efficiency and productivity gains. Without it, the lack of investment that has been a feature of the economy in recent decades seems set to continue and this means that temporary rises in demand are likely to produce inflation.

But elsewhere there have been better conditions for investment returns; markets in South East Asia have remained largely unaffected by external conditions and indeed many of the smaller markets in Latin America and Europe have also performed well, though it is hard to generalise about the causes; Chile, South Africa, Thailand, Korea, and Poland were among the best places in which to be invested during the last year.

In reality, however, most of our time is spent concentrating not on countries, but on individual companies and their share prices, where the picture is infinitely more varied. For the managers whose companies we own, the rest of the world is sometimes a distant concern; they are concerned with finding new sites for expansion, with negotiating with suppliers, with increasing productivity and controlling costs, or battling against competitors. Two examples in the next section may serve better to illustrate the nature of really stock-specific investing which remains our principal activity.

The Portfolio Today

A trained eye should, I think, be able to read most of what you might want to know about an investment manager, and his or her approach and opinions, merely by looking at a portfolio over time. What would such an observer notice when looking at the Company's portfolio today? I would suggest three major characteristics.

The first attribute is continuity: the portfolio does not change much; I wrote at length on this aspect in last year's annual report. During the last twelve months we changed 18% of the investments by value, a fairly typical level of activity. We continue to try to find and own the kind of companies about whose long term prospects we can have most confidence and thereby avoid the need to keep changing the portfolio. As a company observed to me recently, one thing you can control is your operating costs, and in investment, transaction-related expenses are simply a type of operating cost which detracts from the eventual return.

The second feature is a continued bias towards stock-specific investing, often in companies linked to domestic demand and the longer term evolution of emerging economies. There are, very broadly speaking, four economic sectors that we invest in: consumer businesses; financial services; industrial and manufacturing companies; and commodity producers. The first two have certain characteristics in common - they are by their very nature highly localised (you do not bank in another country, or buy food far from home); they are to some extent protected by local factors, including regulation in the case of financial services, and arguably the need to be able to meet local preferences. The second two sectors are more globalised; commodities are sold across borders, are subject to a large extent to global pricing trends and as the term commodity indicates, are not easily differentiated. The industrial sector in emerging markets is far from homogenous, but significant parts of it are still concentrated on producing products for export, largely to the developed world. It is not an accident that the portfolio is biased towards the first two sectors (especially when compared to our benchmark), which accounted for over 60% of its overall value at the end of June. It would be too simplistic to say that this is all stems from an overwhelming macro-economic view of the world; rather, we find it much easier to identify companies whose value can rise sustainably over the long term in some places than in others. Growth in intrinsic value requires several factors, but two of the more important are a rising desire to purchase (and a rising ability to pay for) goods and services, leading to growth in an industry overall; and the ability to outperform other companies and thereby outgrow the industry as well. The developed world does not, at least for a while, look likely to produce much of the first of these, while the emerging countries mostly can. Moreover, the corporate landscape is still very immature in many parts of the world that we look at, and should offer major market share opportunities for the winners. We are especially interested in companies where the investment case rests on factors which are highly specific to the individual company, rather than exogenous to it; these features, I would argue, are generally easier to identify in fragmented industries (and harder to find in businesses whose value is driven by significant external factors, like commodity prices or currency rates, which are wholly outside the control and influence of management); such investments are truly diversified, because their success or failure is unrelated to all other opportunities.

Two examples from the portfolio may illustrate what we mean. One of the consumer companies we own is Wumart Stores, the leading supermarket retailer in the Beijing area of China; its sales in 2010 were just under 2 billion US dollars, while Chinese retail sales in total were well over one trillion dollars. Wumart is a truly private sector Chinese company; if it remains the competently managed business that we judge it to be, it is hard to see why this company cannot become significantly larger in the long run as incomes in China rise and the retail industry continues to consolidate. Wumart is expanding its store network steadily, and has approached the challenge of moving beyond its core market with due caution; in 2010 its sales were 20% higher than in 2009, a growth rate that has continued in the first part of 2011, with profits moving in tandem. Our discussions with this company reveal an organisation that is completely focused on competitiveness; for its managers, the opportunity is never in doubt; what matters is to run a company that can match or better the competitors; the daily challenges of recruitment and training, of inventory management, IT systems and efficiency are what command attention.

A second example which serves to illustrate the point about immaturity is United Breweries. This company is the leading beer producer in India, with a market share exceeding 50% (and a higher share of industry profits). Its sales in the last financial year were 600 million US dollars and its profit margin is still well below the industry norm because it has yet to achieve economies of scale. Beer is not an easy business to run in India and the effects of government regulation and involvement have suppressed the industry's development in the past; yet when we first invested in this company it was valued at less than one billion dollars; today it is valued at roughly twice that. Again, if the company executes competently (the presence of Heineken as a significant shareholder is encouraging), it is hard to believe that in one of the world's most populous countries, half of the beer market will not be worth much, much more eventually. The current profitability of the company seems unrelated to its potential earnings because so many factors, from the cost of bottles to the size of individual breweries work to the detriment of profits today. Growth in demand and output can eventually deal with these challenges, and in a country where 120 million people reach legal drinking age in the next five years, it seems hard to imagine that demand cannot rise in the long run.

Only an unusual level of access to detailed information would reveal the third characteristic, which relates to the businesses owned on a 'look through' basis. We want to own good businesses without paying too much for them. Through the portfolio, the Company's shareholders own portions of companies whose underlying performance is not immediately visible; the change in the net asset value of the portfolio tells the story of their share prices every year, but not of their underlying results. At a time of uncertainty, the exercise of looking through to the underlying businesses should I hope provide shareholders with reassurance about the degree of risk being run by these companies, and about the valuations we are paying for them. What follows is not a comprehensive analysis, but an attempt to draw out some of the more salient features of the portfolio today on a look-through basis.

In financial services the portfolio has 17 investments in 11 countries, accounting for 28% of the total. Most of these are banks and other lending businesses; at a time of stress for the global banking system, shareholders should note that our investments in lending businesses make, collectively, over 25% returns on equity; we are paying a small premium above the average bank valuation for this, but well-capitalised balance sheets and strong profit generation are characteristics that remain very desirable over the long term; as the recent crisis has shown, survival is all in banking.

In the consumer sector we have 24 investments spread across nine countries; they are very diverse, ranging from beer producers to pharmacy retail and from carmakers to tobacco. Profitability, steady growth and free cash flow are the key features that we look for; our food and beverage companies have no debt and make returns on equity of more than 30%; the general retailers that we own make 24% returns, also without any aggregate debt. Such companies do not come cheap, though their average price-earnings ratio of 21x should be seen in the context of a future that we expect will see continuing growth in consumer incomes (a larger pie), supplemented by a consolidation trend that has many years to run (a bigger slice for successful companies).

In the industrial and manufacturing sectors, we own four capital goods producers (valued at 10x earnings and yielding 3.4%), and six companies whose business is related to the technology industry, either through software services and production, or through hardware manufacturing; these technology companies are again debt free and all saw double digit growth in earnings per share during the last year.

We do not hold many investments in the primary commodity sectors: the portfolio contains two oil companies and two mining companies; one of our oil investments is an exploration company just breaking into profit; the three other primary producers yield over 4% and trade at multiples that are low enough to suggest peak profitability may be occurring. In the materials sector, where we also own steel and cement companies, our investments yield 3.7% and trade at 7.5x earnings.

The above is not an exhaustive analysis by any means and does not cover the whole portfolio; but an overall perspective can be gained by looking at a summary of the portfolio's underlying characteristics. In aggregate, the companies owned have little debt; net borrowings account for 15% of shareholders' funds of the non-financial businesses; taken as a whole, the companies you own through this portfolio make a return on equity of 23%. The dividend yield on the portfolio at the time of writing is 2.5%, covered more than three times by profits; I expect that dividends paid by these companies will continue to grow in the future more or less regardless of the general global background.

Twenty Years in Emerging Markets

Finally, a brief word to mark the fact that this is the twentieth annual report that we have produced since the Company's inception in July 1991. Over that period the share price has risen by 535%, and the net assets by 611%, an annualised rate of 10.5%. These numbers already include the effects of share issuance and costs; the overall gross investment return has been 11.9% annualised. As long term shareholders will know, these returns have not come in a smooth way; there have been times when the value of the Company's assets has fallen sharply in a couple of months and others when it has risen just as quickly. Our ability to produce returns ahead of the benchmark index is not consistent either; sometimes we struggle to match it, sometimes we do significantly better. I have tried over the years to make good returns while diversifying risk across the portfolio; others will judge the extent to which this has been achieved. I would like to conclude this year's commentary by thanking all who have contributed to this over the years and in particular in by thanking shareholders for their willingness to look at the long term in an asset class that has been through enough volatility to satisfy the most hardened risk-taker. Over the last twenty years, emerging market equities have produced returns that are higher than both the MSCI World Index, and the UK stock market; and our efforts have managed to add something more on top. The challenge now, as ever, is to continue this.

Austin Forey

Investment Manager

3rd October 2011

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: An inappropriate investment strategy, for example asset allocation, the level of gearing or the degree of portfolio risk, could 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 a set of investment restrictions and guidelines which are monitored and reported on by the Manager. JPMorgan Asset Management (UK) Limited ('JPMAM') 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.

•   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 JPMAM in order to obtain assurance that the Manager continues to demonstrate a high degree of commitment to its investment trusts 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'). Were the Company to breach Section 1158, it might 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 JPMAM 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 and Disclosure and Transparency Rules ('DTRs'). A breach of the Companies Act could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules or DTRs could result in the Company's shares being suspended from listing which in turn would breach Section 1158. The Board relies on the services of its Company Secretary, JPMAM, and its professional advisers to ensure compliance with the Companies Act and the UKLA Listing Rules and DTRs.

•   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 section of the annual report.

•   Operational: Disruption to, or failure of, JPMAM's accounting, dealing or payments systems or the custodian's records could prevent accurate reporting and monitoring of the Company's financial position. Details of how the Board monitors the services provided by JPMAM and its associates and the key elements designed to provide effective internal control are included within the Internal Control section of the Corporate Governance report.

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

Related Parties 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.

Directors' Responsibilities

The Directors each confirm to the best of their knowledge that:

a)         the financial statements have been prepared in accordance with applicable UK accounting standards, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

b)         the Annual Report, to be published shortly, 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 they face.

For and on behalf of the Board

Alan Saunders

Chairman

3rd October 2011

Income Statement

for the year ended 30th June 2011

		2011			2010
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair
value through profit or loss		-	138,790	138,790	-	179,076	179,076
Net foreign currency gains		-	372	372	-	78	78
Income from investments		15,905	-	15,905	12,333	-	12,333
Other interest receivable and
similar income		7	-	7	2	-	2
Gross return		15,912	139,162	155,074	12,335	179,154	191,489
Management fee		(7,394)	-	(7,394)	(5,770)	-	(5,770)
Performance fee		-	(1,941)	(1,941)	-	(712)	(712)
Other administrative expenses		(1,182)	-	(1,182)	(1,038)	-	(1,038)
Net return on ordinary activities
before finance costs and taxation		7,336	137,221	144,557	5,527	178,442	183,969
Finance costs		(6)	-	(6)	(2)	-	(2)
Net return on ordinary activities
before taxation		7,330	137,221	144,551	5,525	178,442	183,967
Taxation		(1,132)	-	(1,132)	(473)	-	(473)
Net return on ordinary activities
after taxation		6,198	137,221	143,419	5,052	178,442	183,494
Return per Ordinary share - undiluted (note 3)		5.43p	120.28p	125.71p	4.56p	161.21p	165.77p
Return per Ordinary share - diluted (note 3)		5.26p	116.52p	121.78p	4.47p	157.94p	162.41p

A dividend of 3.5p (2010: 3.2p) per Ordinary share has been proposed in respect of the year ended 30th June 2011, totalling £4,003,000 (2010: £3,558,000). Further details are given in note 2.

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	Share	redemption	Other	Capital	Revenue
		capital	premium	reserve	reserve	reserves	reserve	Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th June 2009		27,796	70,579	1,665	69,939	272,162	6,019	448,160
Subscription shares' issue costs
written back		-	5	-	-	-	-	5
Exercise of Subscription shares into
Ordinary shares		(9)	9	-	-	-	-	-
Issue of Ordinary shares on exercise
of Subscription shares		223	3,545	-	-	-	-	3,768
Net return on ordinary activities		-	-	-	-	178,442	5,052	183,494
Dividends appropriated in the year		-	-	-	-	-	(3,532)	(3,532)
At 30th June 2010		28,010	74,138	1,665	69,939	450,604	7,539	631,895
Exercise of Subscription shares into
Ordinary shares		(32)	32	-	-	-	-	-
Issue of Ordinary shares on exercise
of Subscription shares		793	12,611	-	-	-	-	13,404
Net return on ordinary activities		-	-	-	-	137,221	6,198	143,419
Dividends appropriated in the year		-	-	-	-	-	(3,658)	(3,658)
At 30th June 2011		28,771	86,781	1,665	69,939	587,825	10,079	785,060

Balance Sheet

At 30th June 2011

		2011	2010
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		744,489	621,354
Investment in liquidity fund held at fair value through profit or loss		22,439	3,496
Total investments		766,928	624,850
Current assets
Debtors		2,294	7,515
Cash and short term deposits		18,350	469
		20,644	7,984
Creditors: amounts falling due within one year		(2,512)	(939)
Net current assets		18,132	7,045
Total assets less current liabilities		785,060	631,895
Net assets		785,060	631,895
Capital and reserves
Called up share capital		28,771	28,010
Share premium		86,781	74,138
Capital redemption reserve		1,665	1,665
Other reserve		69,939	69,939
Capital reserves		587,825	450,604
Revenue reserve		10,079	7,539
Total equity shareholders' funds		785,060	631,895
Net asset value per Ordinary share (note 4)
Undiluted		686.4p	568.3p
Diluted		655.7p	544.9p

Company registration number: 2618994.

Cash Flow Statement

for the year ended 30th June 2011

		2011	2010
		£'000	£'000
Net cash inflow from operating activities		4,452	5,286
Returns on investments and servicing of finance
Interest paid		(6)	(2)
Net cash outflow from returns on investments and servicing
of finance		(6)	(2)
Taxation
Taxation recovered		-	8
Capital expenditure and financial investment
Purchases of investments		(145,788)	(202,308)
Sales of investments		149,332	197,248
Other capital charges		(227)	(235)
Net cash inflow/(outflow) from capital expenditure and
financial investment		3,317	(5,295)
Dividend paid		(3,658)	(3,532)
Net cash inflow/(outflow) before financing		4,105	(3,535)
Financing
Issue of Ordinary shares on exercise of Subscription shares		13,404	3,768
Subscription shares' issue costs		-	(198)
Net cash inflow from financing		13,404	3,570
Increase in cash in the year		17,509	35

Notes to the Accounts

for the year ended 30th June 2011

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.

                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 at fair value through profit or loss.

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

2.             Dividends

	2011	2010
	£'000	£'000
Dividends paid and proposed
Dividend paid
2010 Final dividend of 3.2p (2009: 3.2p)1	3,658	3,532
Dividend proposed
Final dividend proposed of 3.5p (2010: 3.2p)	4,003	3,558

                1The final dividend proposed in respect of the year ended 30th June 2010 amounted to £3,558,000. However the actual payment amounted to £3,658,000 due to shares issued after the balance sheet date but prior to the share register record date.

                The final dividend proposed in respect of the year ended 30th June 2011 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 June 2012.

3.             Return per Ordinary share

	2011	2010
	£'000	£'000
Return per Ordinary share is based on the following:
Revenue return	6,198	5,052
Capital return	137,221	178,442
Total return	143,419	183,494
Weighted average number of Ordinary shares in issue during the year
used for the purpose of the undiluted calculation	114,086,175	110,690,361
Weighted average number of Ordinary shares in issue during the year
used for the purpose of the diluted calculation	117,768,751	112,979,623
Undiluted
Revenue return per share	5.43p	4.56p
Capital return per share	120.28p	161.21p
Total return per share	125.71p	165.77p
Diluted
Revenue return per share	5.26p	4.47p
Capital return per share	116.52p	157.94p
Total return per share	121.78p	162.41p

                The diluted return per Ordinary share represents the return on ordinary activities after taxation divided by the weighted average number of Ordinary shares in issue during the year as adjusted in accordance with the requirements of Financial Reporting Standard 22 'Earnings per share'.

4.             Net asset value per Ordinary share

	2011	2010
Undiluted
Ordinary shareholders funds (£'000)	785,060	631,895
Number of Ordinary shares in issue	114,365,583	111,196,525
Net asset value per Ordinary share (pence)	686.4	568.3
Diluted
Ordinary shareholders funds assuming exercise of Subscription shares (£'000)	867,851	721,220
Number of potential Ordinary shares in issue	132,363,525	132,363,525
Net asset value per Ordinary share (pence)	655.7	544.9

The diluted net asset value per Ordinary share assumes that all outstanding Subscription shares were converted into Ordinary shares at the prevailing price of 460p at the year end.

5.             Status of results announcement

2010 Financial Information

The figures and financial information for 2010 are extracted from the published Annual Report and Accounts for the year ended 30th June 2010 and do not constitute the statutory accounts for that year.  The Annual Report and Accounts has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2011 Financial Information

The figures and financial information for 2011 are extracted from the Annual Report and Accounts for the year ended 30th June 2011 and do not constitute the statutory accounts for the year.  The Annual Report and Financial Statements 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 ASSET MANAGEMENT (UK) 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.hemscott.com/nsm.do

The annual report will shortly be available on the Company's website at www.jpmemergingmarkets.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 ASSET MANAGEMENT (UK) LIMITED

 

END

 

 

FR DKNDQCBDKCKK