Final Results
JPMorgan Indian Invest Trust PLC
20 December 2006
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 2006. Commenting on the
results the Chairman has made the following statement:
Year Under Review
Over the year to 30th September 2006, the Company produced a total return on net
assets of 32.0%, marginally underperforming the total return of the benchmark,
the MSCI India Index (in Sterling terms), of 33.0%. The return to shareholders
over the period was 24.1%, reflecting the movement of the Company's shares from
a 2.6% premium to a 3.6% discount. Whilst relative performance weakened slightly
in the second half of the year, I am very pleased that, for a fourth consecutive
year, the Company has provided substantial absolute returns to its shareholders.
Reassuringly, sentiment has strengthened again since the financial year end and,
as at the time of writing, the Company's shares have again reached an all time
high.
The continued strong growth of the Indian economy, combined with the high levels
of direct foreign investment and a surge in the level of domestic fundraising,
meant that markets, despite setbacks in October 2005 and again in May/June 2006,
moved forward positively over the year. The Managers remain upbeat about the
prospects for the forthcoming year and have maintained the themes of
infrastructure and capital projects, high quality domestic consumer investments
whilst avoiding global cyclicals.
International Financial Reporting Standards ('IFRS')
In common with other UK companies that publish consolidated accounts, the
Company was required to adopt IFRS last year and these are the first financial
statements to reflect the new reporting standards. The main difference to prior
years is that our investments are now described as 'held at fair value through
profit or loss' and, as such, are held at bid price rather than last trade
price. The effect on the value of the Company's investments is a reduction of
£1,083,000 (or 0.5%) at 30th September 2005.
Board of Directors
As Chairman, I have been very well supported by the Company's Board, several of
whom, like myself, have been Directors since the company's inception in 1994.
Whilst seeking to balance the demands of the various corporate governance codes
with the need for experienced and independent Directors, the Board has been
conscious of the need to refresh its membership from time to time and, to this
end, has embarked on a phased programme of renewal. Of the Directors retiring by
rotation at the Company's Annual General Meeting in January 2007, Hugh Bolland,
Chairman of the Audit Committee and a Director since 2004, will seek
re-election, whilst Iain Saunders, who was appointed in 1994, is to stand down.
Furthermore, both David Baker and I will stand down at the Company's AGM in
January 2008. As part of the transition process, the Board identified Richard
Burns, former joint Senior Partner and Head of Investment at Baillie Gifford &
Co, as a potential Director and he was duly appointed on 1st December 2006. An
additional Director will be appointed in due course.
I would like to take this opportunity to thank Iain Saunders for his
considerable contribution to the success of the Company over the last 12 years
and to formally welcome Richard Burns to the Board.
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 2006, shareholders granted the
Directors authority to repurchase up to 14.99% of the Company's shares for
cancellation. Although only 305,000 shares were repurchased during the year, 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.
For much of the year, the Company's ordinary shares traded at a premium to net
asset value ('NAV') and, consequently, 8,646,270 new ordinary shares were issued
at an average premium of 2.6%. 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 believe 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 25th January 2007.
Philip Daubeney
Chairman 20th December 2006
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 2006
Consolidated Income Statement
Year ended 30th September 2006 Year ended 30th September 2005
(Restated)
Revenue Capital Total Revenue Capital Total
Return Return Return Return Return Return
£'000 £'000 £'000 £'000 £'000 £'000
Investment Income 2,790 - 2,790 2,163 - 2,163
Other income 132 - 132 77 - 77
2,922 - 2,922 2,240 - 2,240
Gains on investments held
at fair value through
profit or loss - 69,172 69,172 - 76,954 76,954
Foreign exchange
(losses)/gains - (404) (404) - 3,178 3,178
Total Income 2,922 68,768 71,690 2,240 80,132 82,372
Expenses
Management fee (3,165) - (3,165) (1,862) - (1,862)
Other administration
expenses (967) - (967) (718) - (718)
(Loss)/profit before
finance costs and taxation (1,210) 68,768 67,558 (340) 80,132 79,792
Finance costs (107) - (107) (29) - (29)
(Loss)/profit before
taxation (1,317) 68,768 67,451 (369) 80,132 79,763
Taxation (19) - (19) (26) - (26)
Net (loss)/profit (1,336) 68,768 67,432 (395) 80,132 79,737
(Loss)/earnings per share (1.31)p 67.29p 65.98p (0.45)p 89.19p 88.74p
The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS.
The supplementary revenue return and capital return 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 Parent Company. There are no minority interests.
JPMorgan Indian Investment Trust plc
Unaudited figures for the year ended 30th September 2006
Consolidated Statement of Changes in Equity
Year ended 30th September 2006
Exercised Other Capital
Capital
Share Share Other warrant reserves redemption Revenue
capital reserve
premium reserve reserve £'000 reserve Total
£'000 £'000
£'000 £'000 £'000 £'000 £'000
Balance at 30th September
2005 (as restated) 24,091 30,450 41,929 5,886 100,566 6,272 (4,107) 205,087
Shares issued 2,162 20,186 - - - - - 22,348
Shares bought back and
cancelled (76) - - - (664) 76 - (664)
Profit/(loss) for the year - - - - 68,768 - (1,336) 67,432
Balance at 30th September
2006 26,177 50,636 41,929 5,886 168,670 6,348 (5,443) 294,203
Year ended 30th September 2005
Exercised Other Capital
Capital
Share Share Other warrant reserves redemption Revenue
capital reserve
premium reserve reserve £'000 reserve Total
£'000 £'000
£'000 £'000 £'000 £'000 £'000
Balance at 30th September
2004 (as restated) 20,985 12,600 41,929 5,886 20,477 6,272 (3,755) 104,394
Foreign exchange - - - - (43) - 43 -
adjustment
Shares issued 3,106 17,850 - - - - - 20,956
Profit/(loss) for the year - - - - 80,132 - (395) 79,737
Balance at 30th September
2005 24,091 30,450 41,929 5,886 100,566 6,272 (4,107) 205,087
Consolidated Balance Sheet 30th September 30th September
at 30th September 2006 2005
2006 (Restated)
£'000 £'000
Non current assets
Investments held at fair value through profit or loss 293,498 207,592
Current assets
Other receivables 1,198 2,120
Cash and cash equivalents 4,253 425
5,451 2,545
Currents liabilities
Other payables (4,746) (5,050)
Net current assets/(liabilities) 705 (2,505)
Net assets 294,203 205,087
Equity attributable to equity holders
Called up share capital 26,177 24,091
Share premium 50,636 30,450
Other reserve 41,929 41,929
Exercised warrant reserve 5,886 5,886
Other capital reserves 168,670 100,566
Capital redemption reserve 6,348 6,272
Revenue reserve (5,443) (4,107)
Total equity 294,203 205,087
Net asset value per share 281.0p 212.8p
JPMorgan Indian Investment Trust plc
Unaudited figures for the year ended 30th September 2006
Consolidated Cash Flow Statement
for the year ended 30th September 2006
Year ended 30th Year ended 30th
September 2006 September 2006
£'000 (Restated)
£'000
Operating activities
Profit before taxation 67,451 79,763
Add back interest paid 107 29
Gains on investments held at fair value through profit or loss
(69,172) (76,954)
Foreign exchange gains (37) (3,222)
Net purchases of investments held at fair value through profit or
loss (16,736) (24,320)
Decrease/(increase) in other receivables 1,017 (602)
(Increase)/decrease in amounts due from brokers (95) 235
(Decrease)/ increase in other payables (778) 498
(Decrease)/increase in amounts due to brokers (3,013) 2,443
Net cash outflow from operating activities before interest payable
and taxation (21,256) (22,130)
Interest paid (107) (29)
Tax paid (29) (17)
Net cash outflow from operating activities (21,392) (22,176)
Financing activities
Net proceeds from the issue of ordinary shares 22,348 20,956
Repurchase of shares for cancellation (664) -
Drawdown of short term loans 9,327 109
Repayment of short term loans (5,791) (1,365)
Net cash inflow from financing activities 25,220 19,700
Increase/(decrease) in cash and cash equivalents 3,828 (2,476)
Cash and cash equivalents at start of year 425 2,901
Cash and cash equivalents at end of year 4,253 425
Notes
1. Accounting policies
The financial statements have been prepared in accordance with International
Financial Reporting standards (IFRS) adopted by the International Accounting
Standards Board.
These are the first financial statements prepared in accordance with IFRS.
Previously the financial statements were prepared in accordance with UK
Generally Accepted Accounting Practice (UK GAAP) including the Statement of
Recommended Practice 'Financial Statements of Investment Trust Companies' (the
SORP).
Where presentational guidance set out in the SORP, as revised 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.
The material adjustments to the accounts resulting from the transition from UK
GAAP to IFRS are given in note 4.
2. (Loss)/earnings per share
Group Group (Restated - see note 4)
2006 Revenue 2006 Capital 2006 Total 2005 Revenue 2005 Capital 2005 Total
Return Return Return Return Return Return
£'000 £'000 £'000 £'000 £'000 £'000
(Loss)/profit attributable
to equity shareholders (1,336) 68,768 67,432 (395) 80,132 79,737
(Loss)/earnings per
ordinary share1 (1,31)p 67.29p 65.98p (0.45)p 89.19p 88.74p
1The (loss)/earnings per share is based on the profit for the year after
taxation and on 102,202,688 shares, being the weighted average number of shares
in issue during the year (2005: 89,848,732).
3. Net asset value per share
The net asset value per share is based on the net assets attributable to the
ordinary shareholders of £294,203,000 (2005: £205,087,000 as restated) and on
the 104,706,662 (2005: 96,365,392) shares in issue at the year end.
The Company has no securities in issue that could dilute the net asset value per
share.
4. Explanation of transition to IFRS
(a) Restatement of operating balances at 30th September 2004
The Company has adopted International Financial Reporting Standards in respect
of the year ended 30th September 2006. In accordance with IFRS 1 First Time
Adoption of International Financial Reporting Standards the following is a
reconciliation of the figures at 30th September 2004 previously reported in
accordance with UK Generally Accepted Accounting Practice and with the Statement
of Recommended Practice.
Consolidated
Previously reported Restated
30th September 2004 30th September 2004
Adjustments
£'000 £'000 £'000
Fixed assets
Investments1 103,520 (417) 103,103
Net current assets/(liabilities) 1,291 - 1,291
Net assets 104,811 (417) 104,394
Capital and reserves
Ordinary called up share capital 20,985 - 20,985
Share premium account 12,600 - 12,600
Other reserve 41,929 - 41,929
Exercised warrant reserve 5,886 - 5,886
Other capital reserves1 20,894 (417) 20,477
Capital redemption reserve 6,272 - 6,272
Revenue reserve (3,755) - (3,755)
104,811 (417) 104,394
Net asset value per ordinary share 124.9p (0.5)p 124.4p
Note to the reconciliation
1Investments held by the Group are classified as held at fair value under IFRS
and at the year end this amounted to £103,103,000. Quoted investments are
carried at bid prices and whereas they were previously carried at last traded
prices. The resultant difference of £417,000 is included in other capital
reserves.
4. Explanation of transition to IFRS (continued)
(b) Restatement of opening balances at 30th September 2005
The Company has adopted International Financial Reporting Standards in respect
of the year ended 30th September 2006. In accordance with IFRS 1 First Time
Adoption of International Financial Reporting Standards the following is a
reconciliation of the figures at 30th September 2005 previously reported under
the applicable UK Accounting Standards and with the Statement of Recommended
Practice.
Consolidated
Previously reported Restated
30th September 2005 30th September 2005
£'000 Adjustments £'000
£'000
Fixed assets
Investments1 208,675 (1,083) 207,592
Net current liabilities (2,505) - (2,505)
Net assets 206,170 (1,083) 205,087
Capital and reserves
Ordinary called up share capital 24,091 - 24,091
Share premium account 30,450 - 30,450
Other reserve 41,929 - 41,929
Exercised warrant reserve 5,886 - 5,886
Other capital reserves1 101,649 (1,083) 100,566
Capital redemption reserve 6,272 - 6,272
Revenue reserve (4,107) - (4,107)
206,170 (1,083) 205,087
Net asset value per ordinary share 214.0p (1.2)p 212.8p
Note to the reconciliation
1Investments held by the Group are classified as held at fair value under IFRS
and at the year end this amounted to £207,592,000. Quoted investments are
carried at bid prices and whereas they were previously carried at last traded
prices. The resultant difference of £1,083,000 is included in other capital
reserves.
(c) Reconciliation of the Statement of Total Return to the Income Statement for
the year ended 30th September 2005
Under IFRS the Income Statement is the equivalent of the Statement of Total
Return as reported previously.
Consolidated
Per share
£'000 p
Total transfer to reserve per Statement of Total Return as
previously reported 80,403 89.48
Change from mid to bid basis at 30th September 20041 417 0.46
Change from mid to bid basis at 30th September 20051 (1,083) (1.20)
Net profit per Income Statement - restated 79,737 88.74
Note to the reconciliation
1Portfolio investments at 30th September 2004 and 30th September 2005 are
required to be valued at fair value under IFRS. These values differ from the
previous valuations by £417,000 and £1,083,000 respectively.
(d) Reconciliation of the Cash Flow Statement for the year ended 30th September
2005
Consolidated
Effect of
transition to
Previously Adjusted cash
reported cash flows IFRS flows
2005 2005
£'000 £'000 £'000
Net cash outflow from operating activities123 (443) (21,733) (22,176)
Returns on investments and servicing of finance1 (29) 29 -
Taxation2 (17) 17 -
Net cash inflow from financial investment3 (21,642) 21,642 -
Net cash inflow before financing (22,131) (45) (22,176)
Financing 19,700 - 19,700
Increase in cash (2,431) (45) (2,476)
Notes to the reconciliation
1 Bank interest paid is now shown under operating activities rather than
servicing of finance
2 Taxation recovered is now disclosed in operating activities
3 Purchases and sales of investments are now disclosed under operating
activities
5. 2006 Accounts
These preliminary figures for the year ended 30 September 2006 are an extract
from the Group's draft accounts for the year. The financial information included
in this preliminary announcement has been prepared in accordance with IFRS,
however this announcement does not in itself contain sufficient information to
comply with IFRS. The Company expects to publish full financial statement on or
around 19th December 2006.
6. 2005 Accounts
The figures and financial information for the year ended 30 September 2005 are
an extract of the latest published accounts and do not constitute the statutory
accounts for that year. Those accounts have been delivered to the Registrar of
Companies and included the report of the auditors which was unqualified and did
not contain a statement under either section 237(2) or section 237(3) of the
Companies Act 1985.
7. Annual report and AGM
The full annual report and accounts will be posted to shareholders in December
2006 and copies will be available thereafter from the Secretary at the Company's
Registered Office, Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ.
The Annual General Meeting will be held on Thursday, 25 January 2007 at 12.00
noon.
--------------------------
20TH DECEMBER 2006
JPMORGAN ASSET MANAGEMENT (UK) LIMITED
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