Final Results

JPMorgan Indian Invest Trust PLC 17 December 2007 JPMORGAN INDIAN INVESTMENT TRUST plc Stock Exchange Announcement The Board of JPMorgan Indian Investment Trust plc is pleased to announce the Company's results for the year ended 30th September 2007. Commenting on the results the Chairman has made the following statement: Year Under Review It is very pleasing to report that, for a fifth consecutive year, the Company has provided substantial absolute returns to its shareholders. Over the year to 30th September 2007, the Company produced a total return on net assets of 49.9%, marginally outperforming the total return of our benchmark, the MSCI India Index (in Sterling terms), of 49.6%. The return to shareholders over the period was somewhat lower, at 44.1%, reflecting the widening of the discount to net asset value of the Company's shares from 3.6% to 7.2. Indeed, the Company's net asset value has increased by 581.0% over the five years to 30th September 2007, compared to the rise in the Company's benchmark index of 455.5%. Despite the concerns engendered by the turmoil in global capital markets, the Indian economy continued to strengthen over the course of the year and this strength, combined with unprecedented levels of direct foreign investment, has meant that the Stockmarket again performed strongly. The Company's investment managers remain confident about the long term prospects for the Indian market and have maintained the themes of infrastructure and capital projects and high quality domestic consumer investments whilst avoiding global cyclicals. Board of Directors As I indicated in my Statement last year, the Board has been conscious of the need to refresh its membership. As part of a phased programme of renewal, Iain Saunders retired as a Director in January 2007 and David Baker and I committed ourselves to stand down in January 2008. Therefore, of the Directors retiring by rotation at the Company's Annual General Meeting, Vijay Joshi, will seek re-election, whilst David Baker and I will not seek re-election. In addition, Peter Sullivan, a former CEO of Standard Chartered Bank (Hong Kong) Limited, who was identified as a suitable Director during the course of the year and appointed on 1st October 2007, will stand for election to the Board. Following my retirement, it has been agreed that Hugh Bolland will assume the Chairmanship of the Company and that Richard Burns will become Chairman of the Audit Committee. I would like to take this opportunity to thank David Baker for his considerable contribution to the success of the Company over the last 13 years and to formally welcome Peter Sullivan to the Board. It has been an honour to chair the Company over the last five years and indeed to serve as a Director since the Company's inception in 1994. I believe we have the right people in place on the Board to ensure that the Company continues to flourish and I wish the Board every success in the future. Investment Manager The Board has reviewed the investment management, secretarial and marketing services provided to the Company by JPMorgan Asset Management (UK) Limited (' JPMAM'). This annual review has included their performance record, management processes, investment style, resources and risk control mechanisms. The Board was satisfied with the results of the review and therefore in the opinion of the Directors, the continuing appointment of JPMAM for the provision of these services, on the terms agreed, is in the best interests of shareholders as a whole. Share Capital At the Annual General Meeting in January 2007, shareholders granted the Directors authority to repurchase up to 14.99% of the Company's shares. Whilst the Company did not repurchase any shares for cancellation during the year, the Company did purchase 1,214,788 shares to be held in treasury. The Board believes that a facility to reduce discount volatility is important and is, therefore, seeking approval from shareholders to renew the authority at the forthcoming Annual General Meeting. Shares repurchased in this way might not be cancelled but rather held as treasury shares. Purchases of shares to be held in treasury will be made in accordance with the Listing Rules of the UK Listing Authority and the Companies (Acquisitions of Own Shares) (Treasury Shares) Regulations 2003 as amended. Shareholders also granted the Directors authority to issue new ordinary shares. At times during the year, the Company's ordinary shares traded at a premium to net asset value ('NAV') and, consequently, 100,000 new ordinary shares were issued at a premium of 1.9%. The Board has established guidelines relating to the issue of shares and if the conditions are met, this authority will be utilised to enhance the Company's NAV per share and therefore benefit existing shareholders. To supplement this authority the Board proposes to issue treasury shares when appropriate, as issuing shares out of treasury would be cheaper since they will avoid the necessity of the Company paying listing fees to the London Stock Exchange and the UK Listing Authority. The Board will only buy back shares at a discount to their prevailing net asset value, and issue shares when they trade at a premium to their net asset value, so as not to prejudice remaining shareholders. The Board believes that the judicious use of share repurchase and issuance powers can minimise discount volatility by enabling the repurchase of shares at a discount and the issuance of new shares at a premium to their NAV. By undertaking such a programme the Board expects that the share price will move in a reasonable range around NAV, which the Directors believe is in the best interests of shareholders as a whole. Annual General Meeting This year's Annual General Meeting will be held at Salters' Hall, 4 Fore Street, London EC2Y 5DE at 12 noon on Thursday 24th January 2008. As in previous years, in addition to the formal part of the meeting, there will be a presentation from representatives of the Manager, Ted Pulling and Rukhshad Shroff, who will answer questions on the portfolio and performance. Philip Daubeney Chairman 17th December 2007 Commenting on the results the Investment Managers have made the following statement: Review The financial year ended 30th September 2007 was another stellar year for Indian equities with the MSCI India Index rising by almost 50% in sterling terms. As in previous years, there were phases during the year (e.g. February and August) when markets corrected due to macro global concerns, however, ultimately these turned out to be irrelevant and the exceptional bottom up fundamentals prevailed. Foreign investors continued to drive liquidity into the markets with 2007 to date witnessing inflows of $17bn which is more than twice the inflows of 2006. On the other hand domestic mutual funds only invested around $1bn over the same period which is less than a third of their investments in the previous year. The sharp jump in foreign capital flows, and US$ Dollar weakness, caused the Indian rupee to rise by over 10% during the year which hurt exporters (such as IT services and Textiles). This prompted the Reserve Bank of India ('RBI') to take several measures to moderate the inflows, the most significant of which were the regulations to phase out the issuance of offshore derivative instruments. These are used by investors (mainly hedge funds) who do not have direct access to the market and account for 40% of the total foreign portfolio investments. While this is ostensibly intended to improve transparency (as investors are expected to access the market directly by obtaining a Foreign Institutional Investor ('FII') registration) it is also expected to moderate incremental inflows to some extent, at least in the short term. On the macro front the economy has continued to forge ahead with GDP growth in the region of 9%. Inflation (WPI), which had risen to 6.5% at the beginning of the year, dropped to around 3% due to the base affect and in response to RBI's tightening measures. As a result interest rates, which had risen by 2-3% earlier this year, are expected to roll over early next year. Earnings continued to surprise positively as corporate India capitalised on the macro tailwind to deliver profit growth in excess of 30% in financial year 2007. Telecoms, Industrials and Financials were the key contributors to the strong results. Overall earnings are expected grow at 18-20% over the next couple of years. Politics also threatened to spoil proceedings during the year as the communists, who are an important part of the ruling coalition threatened to withdraw support to the government over the Indo-US Nuclear treaty, which proposes to give India access to nuclear fuel and technology for civilian purposes. However, they backed down after the government bought time by effectively delaying implementation of the deal. While this proved marginally negative it seems to have reduced the possibility of early elections which are scheduled to be held in the first half of 2009. Equity issuance by corporate India rose sharply during the year. In fact, issuance during 2007 has almost doubled to $14.7bn (2006: $7.4bn). The other key development in the capital markets during the year was the emergence of the property sector with the listing of India's largest developer-DLF Limited. This is a sector which hitherto was largely unorganised and had very little transparency. However, with a cumulative market capitalization of over $80bn the sector already accounts for 5% of the total market. Performance The fund marginally outperformed the benchmark for the year with the key overweights in stocks such as Larsen & Toubro, Bharat Heavy Electrical, Bharti Airtel, and Housing Development Finance Corporation contributing to relative performance. On the other hand the structural underweight in Reliance Industries detracted value, although we have been steadily increasing the fund's exposure in the stock over the past few months and now are just under the maximum exposure limit. Reliance's outstanding performance has been due to the better than expected performance of its core businesses- petrochemicals and refining and the increasing value attributed to its upstream business, although the quantum of its oil & gas reserves remains unclear due to ongoing exploration activity. While valuations at current levels are undeniably rich they are likely to remain well supported by the company's excellent track record in delivering strong growth. Outlook We remain positive on India from a long term perspective notwithstanding the spectacular performance over the past four years. This is borne out of a strong belief that the economy can grow at around 8% over the next 3-5 years, driven by rising Infrastructure spending and the growing level of consumption in the economy, resulting from rising income levels. To appreciate the opportunity in the Infrastructure sector consider this: the government intends to channel investments to the tune of almost $500bn into infrastructure over the next five years. This will be 2.5 times the investments made over the past five years and, while the execution of such an ambitious goal will remain a key challenge, the experience in roads a few years back and more recently in airports and power has shown that it is possible to attract foreign and domestic private sector investment if the government can create a conducive policy environment. Needless to say the multiplier effect of this on the overall economy can be substantial. In the near term however, the markets are admittedly pricing in a fair bit of this growth with valuations at around 21-23 times financial year 2008 & 17-19 times financial year 2009 earnings estimates. This could result in a period of consolidation for the markets. Besides, ongoing concerns in the global credit markets and the concomitant impact on US & global economic growth could also affect market sentiment. The news flow on politics will increase next year with elections to be held in the first half of 2009, if not earlier. Whilst this will inevitably result in higher volatility we are not too concerned about it as past experience has shown that the policy agenda of the government in power has been fairly consistent regardless of the ideologies of the various political parties. Besides, predicting election outcomes in India has been notoriously difficult and is therefore a futile exercise in our opinion. For our portfolio strategy we continue to prefer sectors dependent on infrastructure spending and consumption demand such as Industrials, Financials, Telecoms and Utilities, whilst on the margin we have been adding selectively to the fund's exposure in energy, commodities and property. Edward Pulling, Rukhshad Shroff and Rajendra Nair Investment Managers 17th December 2007 For further information, please contact: Andrew Norman JPMorgan Asset Management (UK) Limited - Company Secretary 020 7742 6000 JPMorgan Indian Investment Trust plc Unaudited figures for the year ended 30th September 2007 Group Income Statement (Unaudited) (Audited) Year ended 30th September 2007 Year ended 30th September 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Investment income 3,519 - 3,519 2,790 - 2,790 Other income 240 - 240 132 - 132 _______ ________ _______ _______ _______ _______ 3,759 - 3,759 2,922 - 2,922 Gains from investments held at fair value through profit or loss - 148,193 148,193 - 69,172 69,172 Foreign exchange gain/(loss) - 61 61 - (404) (404) _______ ________ _______ _______ _______ _______ Total income 3,759 148,254 152,013 2,922 68,768 71,690 Expenses Management fee (4,321) - (4,321) (3,165) - (3,165) Other administrative expenses (1,254) - (1,254) (967) - (967) _______ ________ _______ _______ _______ _______ (Loss)/profit before finance costs and taxation (1,816) 148,254 146,438 (1,210) 68,768 67,558 Finance costs (668) - (668) (107) - (107) _______ ________ _______ _______ _______ _______ (Loss)/profit before taxation (2,484) 148,254 145,770 (1,317) 68,768 67,451 Taxation (124) - (124) (19) - (19) _______ _______ _______ _______ _______ _______ Net (loss)/profit (2,608) 148,254 145,646 (1,336) 68,768 67,432 ======= ======= ======= ======= ======= ======= (Loss)/earnings per share (note 2) (2.49)p 141.79p 139.30p (1.31)p 67.29p 65.98p ======= ======= ======= ======= ======= ======= The 'Total' column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary 'Revenue' and 'Capital' columns are 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 during the year. 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 and Company Statement of Changes in Equity Unaudited figures for the year ended 30th September 2007 Group (Unaudited) Year ended 30th September 2007 Called up Exercised Capital share Share Other warrant Capital redemption Revenue capital premium reserve reserve reserves reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'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 ======= ======= ======= ======= ======= ======= ======= ======= Group (Audited) Year ended 30th September 2006 Called up Exercised Capital share Share Other warrant Capital redemption Revenue capital premium reserve reserve reserves reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance as at 30th September 2005 24,091 30,450 41,929 5,886 100,566 6,272 (4,107) 205,087 Shares issued 2,162 20,186 - - - - - 22,348 Repurchase and cancellation of (76) - - - (664) 76 - (664) shares Profit/(loss) for the year - - - - 68,768 - (1,336) 67,432 _______ _______ _______ _______ _______ _______ _______ _______ Balance as at 30th September 2006 26,177 50,636 41,929 5,886 168,670 6,348 (5,443) 294,203 ======= ======= ======= ======= ======= ======= ======= ======= JPMorgan Indian Investment Trust plc Group and Company Statement of Changes in Equity (continued) Unaudited figures for the year ended 30th September 2007 Company (Unaudited) Year ended 30th September 2007 Called up Exercised Capital share Share Other warrant Capital redemption Revenue capital premium reserve reserve reserves reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance as at 30th September 2006 26,177 50,636 41,929 5,886 171,930 6,348 (8,703) 294,203 Shares issued 25 278 - - - - - 303 Purchase of shares into treasury - - - - (3,966) - - (3,966) Profit/(loss) for the year - - - - 148,215 - (2,569) 145,646 _______ _______ _______ _______ _______ _______ _______ _______ Balance as at 30th September 2007 26,202 50,914 41,929 5,886 316,179 6,348 (11,272) 436,186 ======= ======= ======= ======= ======= ======= ======= ======= Company (Audited) Year ended 30th September 2006 Called up Exercised Capital share Share Other warrant Capital redemption Revenue capital premium reserve reserve reserves reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance as at 30th September 2005 24,091 30,450 41,929 5,886 103,256 6,272 (6,797) 205,087 Shares issued 2,162 20,186 - - - - - 22,348 Repurchase and cancellation of (76) - - - (664) 76 - (664) shares Profit/(loss) for the year - - - - 69,338 - (1,906) 67,432 _______ _______ _______ _______ _______ _______ _______ _______ Balance as at 30th September 2006 26,177 50,636 41,929 5,886 171,930 6,348 (8,703) 294,203 ======= ======= ======= ======= ======= ======= ======= ======= JPMorgan Indian Investment Trust plc Group and Company Balance Sheets Unaudited figures for the year ended 30th September 2007 (Unaudited) (Audited) (Unaudited (Audited) Group Group Company Company 30th September 30th September 30th September 30th September 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Non current assets Investments held at fair value through profit or loss 439,249 293,498 438,170 291,283 Current assets Other receivables 1,192 1,198 104 41 Cash and cash equivalents 8,159 4,253 1,024 3,851 _______ _______ _______ _______ 9,351 5,451 1,128 3,892 Current liabilities Other payables (12,414) (4,746) (3,112) (972) _______ _______ _______ _______ Net current (liabilities)/assets (3,063) 705 (1,984) 2,920 _______ _______ _______ _______ Net assets 436,186 294,203 436,186 294,203 ======= ======= ======= ======= Equity attributable to equity holders Called up share capital 26,202 26,177 26,202 26,177 Share premium 50,914 50,636 50,914 50,636 Other reserve 41,929 41,929 41,929 41,929 Exercised warrant reserve 5,886 5,886 5,886 5,886 Capital reserves 312,958 168,670 316,179 171,930 Capital redemption reserve 6,348 6,348 6,348 6,348 Revenue reserve (8,051) (5,443) (11,272) (8,703) _______ _______ _______ _______ Total equity 436,186 294,203 436,186 294,203 ======= ======= ======= ======= Net asset value per share (note 3) 421.1p 281.0p 421.1p 281.0p JPMorgan Indian Investment Trust plc Group and Company Cash Flow Statements Unaudited figures for the year ended 30th September 2007 (Unaudited) (Audited) (Unaudited) (Audited) Group Group Company Company 30th September 30th September 30th September 30th September 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Operating activities Profit before taxation 145,770 67,451 145,646 67,432 Add back interest 668 107 124 28 Gains on investments held at fair value through profit or loss (148,193) (69,172) (148,151) (69,275) Foreign exchange gain/(loss) - (37) - (37) Net sales/(purchases) of investments held at fair value through profit or loss 2,442 (16,736) 1,265 74 Gifted money to subsidiary company - - - (14,407) (Increase)/decrease in other receivables (207) 1,017 (63) (33) Decrease/(increase) in amounts due from brokers 213 (95) - - Increase/(decrease) in other payables 58 (778) (6) (5) (Decrease)/increase in amounts due to (858) (3,013) (858) (1,963) brokers _______ _______ _______ _______ Net cash outflow from operating activities before interest payable and taxation (107) (21,256) (2,043) (18,186) Interest paid (657) (107) (121) (28) Tax paid (58) (29) - - _______ _______ _______ _______ Net cash outflow from operating activities (822) (21,392) (2,164) (18,214) ======= ======= ======= ======= Financing activities Net proceeds from the issue of shares 303 22,348 303 22,348 Repurchase of shares (3,966) (664) (3,966) (664) Net drawdown of short term loans 8,391 3,536 3,000 37 _______ _______ _______ _______ Net cash inflow/(outflow) from financing activities 4,728 25,220 (663) 21,721 Increase/(decrease) in cash and cash equivalents 3,906 3,828 (2,827) 3,507 Cash and cash equivalents at start of year 4,253 425 3,851 344 _______ _______ _______ _______ Cash and cash equivalents at end of year 8,159 4,253 1,024 3,851 ======= ======= ======= ======= Notes 1. Accounting policies The Group and Company financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS'), which comprise standards and interpretations approved by the International Accounting Standards Board (' IASB'), International Accounting Standards and Standing Interpretations Committee and interpretations approved by the International Accounting Standards Committee ('IASC') that remain in effect and to the extent that they have been adopted by the European Union. The Preliminary Announcement is prepared on the basis of the accounting policies as stated in the previous year's financial statements. 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) (Audited) Year ended Year ended 30th September 2007 30th September 2006 £'000 £'000 Revenue loss attributable to equity shareholders (2,608) (1,336) Capital profit attributable to equity shareholders 148,254 68,768 ___________ ___________ Net profit attributable to equity shareholders 145,646 67,432 =========== =========== Weighted average number of shares in issue during the 104,562,209 102,202,688 year Revenue loss per share (2.49)p (1.31p) Capital profit per share 141.79p 67.29p ___________ ___________ Net profit per share 139.30p 65.98p =========== =========== 3. Net asset value per share (Unaudited) (Audited) Year ended Year ended 30th September 2007 30th September 2006 Shareholders funds (£'000) 436,186 294,203 Number of shares in issue at the year end 103,591,874 104,706,662 ___________ ___________ Net asset value per share 421.1p 281.0p =========== =========== 4. Status of preliminary announcement The financial information set out in this preliminary announcement does not constitute the Group's statutory accounts for the years ended 30th September 2007 or 2006. The financial information for the year ended 30th September 2006 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 30th September 2007 will be finalised on the basis of the information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the approval of the accounts by the Board of Directors. Whilst the financial information included in this preliminary announcement has been computed in accordance with IFRS, this announcement does not in itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRS following the approval of the Accounts by the Board of Directors JPMORGAN ASSET MANAGEMENT (UK) LIMITED 17th DECEMEBER 2007 This information is provided by RNS The company news service from the London Stock Exchange

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