JPMorgan Indian Inv - Half-year Report
07/06/2024 07:00
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RNS Number : 4843R JPMorgan Indian Invest Trust PLC 07 June 2024
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN INDIAN INVESTMENT TRUST PLC
UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31ST MARCH 2024
Legal Entity Identifier: 549300OHW8R1C2WBYK02
Information disclosed in accordance with DTR 4.2.2
CHAIRMAN'S STATEMENT
I became Chairman of the Company following the conclusion of the AGM in
February 2024, having joined the Board in 2020. I took over from Rosemary
Morgan who had been a Director of the Company since 2013 and Chairman since
2020. I would like to take this opportunity on behalf of the Board to thank
Rosemary for her leadership and wise counsel in her time first as a Director
and then as Chairman of the Company.
Performance
During the six months period ended 31st March 2024, it has been pleasing to
see the MSCI India Index increasing by 14.7% and outperforming both the MSCI
Emerging Markets Index and the MSCI China Index. This has come about
notwithstanding the ongoing worldwide geopolitical conflicts and tensions. The
Company produced a total return on net assets of 6.2% in the period although
this, disappointingly, underperformed its benchmark by 8.5%. In broad terms
this underperformance is attributable to lower quality sectors of the market
doing well, whereas your Portfolio Managers have favoured higher quality
corporate names, a number of whose share prices have disappointed. In
addition, some areas of the market are now experiencing high valuations which
have precluded your Portfolio Managers from participating to any meaningful
extent. In their report on pages 13 to 17 of the Half Year Report, the
Portfolio Managers provide a detailed and frank commentary on this
performance. They also discuss portfolio activity and their outlook for the
Indian market.
Discount and Share Repurchases
The Company's discount to NAV at which the Company's shares trade marginally
widened from 19.3% at the previous financial year end to 19.6% at the half
year end.
The Board constantly weighs the merits of buying back shares, in line with the
Company's share buyback policy, to manage the absolute level and volatility of
the discount. The Company repurchased 2,012,975 shares into Treasury during
the reporting period, equating to 2% of the Company's share capital. Since the
half year end, a further 827,781 shares have been bought back for holding in
Treasury.
Continuation Vote and Conditional Tender Offer
As stipulated by the Company's Articles of Association, at the AGM held on
13th February 2024, the resolution to continue the Company as an investment
trust for a further five years was put to shareholders and duly passed with
96.2% of votes cast in favour.
Shareholders are reminded that a tender offer will be made to shareholders for
up to 25% of the Company's outstanding share capital (excluding shares held in
Treasury) at NAV less costs if, over the five years from 1st October 2020, the
Company's NAV total return in sterling on a cum income basis does not exceed
the total return of the benchmark index plus 0.5% per annum over the five-year
period on a cumulative basis. If the tender offer is triggered, it will be
subject to shareholder approval at the relevant time.
The Company is required to pay capital gains tax on long-term and short-term
capital gains at the headline current rates of 10% and 15%, respectively, plus
associated surcharges of approximately 1-1.5%, which the Company's benchmark
does not take into account. Therefore, for the avoidance of doubt, in order to
ensure that the terms of the conditional tender offer correctly reflect the
Investment Manager's performance in calculating whether the tender offer has
been triggered, the NAV per share will be adjusted to add back all such taxes
paid or accrued. For the benefit of the Company's shareholders, the Company
publishes on a monthly basis through a Regulatory Information Service platform
the Company's unaudited adjusted NAV per share. The NAV performance since 1st
October 2020 without the impact of capital gains tax stood at 71% as at 31st
March 2024, compared to 84% for the Benchmark.
Stay Informed
The Company delivers email updates on its progress with regular news and
views, as well as the latest performance. If you have not already signed up to
receive these communications and you wish to do so you can opt in via
https://tinyurl.com/d95jkrzx or by scanning the QR code in the Half Year
Report. Shareholders are also encouraged to visit the Company's website at
www.jpmindian.co.uk which contains detailed information on the Company's
performance, monthly commentaries as well as interviews and recordings with
the Portfolio Managers.
Board
As announced in February 2024, I am pleased to report that following an
external recruitment search process, Charlotta Ginman will be appointed to the
Board with effect from 1st August 2024. Charlotta is a qualified Chartered
Accountant and an experienced Non-executive Director. My fellow Directors and
I are delighted that Charlotta has agreed to join the Board and look forward
to welcoming her in the coming months. It is intended that Charlotta will take
on the Chairmanship of the Audit and Risk Committee from Jasper Judd who is
retiring at the conclusion of the Company's AGM in 2025.
Furthermore, at the conclusion of the Company's AGM held on 13th February
2024, Vanessa Donegan took over the role of Senior Independent Director from
me.
Portfolio Manager Personnel Changes
The Board was informed that Ayaz Ebrahim, one of the Company's Portfolio
Managers, would be stepping down as Portfolio Manager to the Company with
effect from 1st April 2024 due to taking up a new position within JPMorgan
Asset Management as CEO of JPMAM Singapore and South East Asia. Amit Mehta and
Sandip Patodia, who have been the Company's joint Portfolio Managers since
30th September 2022, will continue to manage the assets of the Company.
On behalf of the Board, I would like to express our sincere gratitude to Ayaz
for his contribution to the management of the Company's portfolio.
Outlook
With the Indian general election concluded, the largest electorate in the
world seems to have voted for a continuation of the economic policies that
have brought to so many of them an improvement in their living standards and
taken India to the position of the fifth largest economy in the world.
Nonetheless, seasoned investors will know that there is seldom a close
correlation between a country's headline economic growth and the performance
of its stock market. Successful investors need to identify companies that are
well positioned and sensibly managed to take advantage of the opportunities on
offer in India. This requires a disciplined investment process, one that
analyses the fundamentals of the corporate to assess its prospects and yet is
patient enough to invest for a sustainable and reasonable return over the
medium and long term.
Whilst your Portfolio Managers have succeeded in providing a positive return
for shareholders in recent years, they have also been quite open in explaining
the reasons for the underperformance of the portfolio in comparison to the
Indian market as a whole. In particular, given the recent strong gains made in
certain parts of the market, they have not wanted to overpay for any of their
positions. Whilst this focus on valuations is to be welcomed, it is still the
case that on behalf of you, the shareholder, the Board will continue to assess
the success or otherwise of the Portfolio Managers' investment process in
realising the many positive opportunities of investing in the Indian stock
market.
Jeremy Whitley
Chairman
6th June 2024
INVESTMENT MANAGER'S REPORT
The six months in review
During the six months to end March 2024, the MSCI India Index climbed 14.7%,
compared to MSCI Emerging Markets Index which rose 6.6%, the MSCI China Index,
which fell 9.5% and the S&P 500, which jumped 19.4%. The MSCI India mid
cap and small cap indices climbed 21.0% and 13.0% respectively during the same
period. These latest results extend India's track record of outperformance
against both China and emerging markets more generally - the Indian market has
delivered 13.0% annualised returns over both five- and ten-year periods,
handsomely outpacing the Chinese and Emerging Markets indices. Most of the
market's gains over the past six months were led by cyclical and lower quality
sectors. Real estate, oil and gas, power and state-owned companies were the
largest contributors, while fast moving consumer goods and private sector
banks were the main underperformers.
Market sentiment was aided by the ruling party's strong showing in state
elections. This cemented expectations of victory in the national elections.
The market also welcomed the interim budget, which focused on fiscal
consolidation rather than distributing pre-election freebies.
India continues to witness strong economic growth, mainly driven by government
and household capex. Q423 GDP growth surprised on the upside, rising 8.4%.
Growth was supported by investment, while private consumption remained muted,
partly owing to weakness in employment in IT services and rural softness. Tax
revenues remain buoyant, led by strong growth in direct tax collections. The
current account deficit to GDP ratio was steady at 1.2% during Q423.
Average inflation at 5.3% during the five months to February 2024 was within
the Central Bank's target 4-6% range, but nonetheless, the central bank pulled
liquidity from the system and remains hawkish. The RBI governor has been
emphasising the need to restrict inflation to around 4%, on the low side of
the Bank's target.
The review period saw increased action by the financial regulator on several
fronts:
(1) Rules governing personal loans and credit cards were tightened by
raising capital requirements for loans to non-bank financial companies (NBFCs)
in November 2023.
(2) Mutual funds were advised to limit flows in mid-cap and small-cap
funds on fears that financial markets were overheating; and
(3) Mutual funds were asked to undergo stress testing to determine the
liquidity of their holdings.
The central bank also took regulatory actions against three institutions:
(1) IIFL Finance whose gold loans were banned.
(2) JM Finance was banned from financing shares or debentures; and
(3) Paytm Payments Bank was prohibited from taking deposits.
In our view, all these actions, combined with the Central Bank's relatively
hawkish stance, are positive for financial stability.
Performance review
Over the six-month period to 31st March 2024, your Company delivered an
absolute NAV performance of 6.2%. This however amounted to an underperformance
of 8.5% vs the benchmark return of 14.7%. The extent of this underperformance
is disappointing. It is accounted for by three main factors:
1. Companies exposed to the ongoing capex and real estate upcycle
and lower quality cyclicals outperformed during the period. On the other hand,
our biggest sector exposures - financials, IT, and consumer staples -
underperformed. Since taking over as Portfolio Managers in October 2022, we
have been adding names with greater exposure to the domestic economy, higher
growth, and small and mid-cap names. However, our efforts have been hindered
to some extent by demanding valuations.
2. Around 30% of the underperformance was attributable to our
three largest single stock detractors, namely HDFC Bank, WNS and Hindustan
Unilever. HDFC Bank experienced tepid deposit collection due to liquidity
tightening by the Central Bank. This impacted HDFC disproportionately because
of its recent merger with the housing financing business HDFC Limited, and the
need for deposits to replace wholesale funding on which HDFC was dependent.
This issue is likely to be transitory for HDFC, but the impact on the Company
during the period was significant, as HDFC Bank was one of our highest
overweights. WNS is an IT services company which was impacted by deteriorating
sentiment towards the business process outsourcing (BPO) sector, on
expectations that Generative AI may have a negative effect on their business
model. The sell-off in WNS was further exacerbated by a one-off client loss.
Finally, Hindustan Unilever underperformed during the period due to a slowdown
in consumer spending and increased competition from smaller unorganised
players whose input costs have started to moderate.
3. Our decision not to hold high growth names like Zomato, an
online food delivery and quick commerce business, and Trent, which operates
fashion retail stores, detracted, as they performed strongly during the
period. High starting valuations have precluded us from adding exposure, even
though these names look attractive on a fundamental basis.
We acknowledge that the Company lacked sufficient exposure to higher growth
and smaller-mid-cap names and was over-exposed to a few names which faced
transitory issues. We would expect to claw back most of the relative
performance lost over time, as the operational performance of our portfolio
companies starts to improve.
Spotlight on stocks and portfolio activity
Before we talk about changes in the portfolio, a reminder of what the focus of
the investment strategy is - invest in great businesses, run with the right
mindset, and purchased at an attractive valuation. We think about our
investments in that order, with a view to determining corporate quality,
before considering the valuation. With this in mind, we made the following
portfolio changes over the six-month period.
New initiations
Syngene - We initiated a position in one of India's largest integrated
contract research & development and manufacturing organisation (CRDMO),
given significant industry tailwinds, especially in the outsourcing of
manufacturing of biologic drugs. The company is well positioned to deliver
strong growth on the back of heavy investments it is making on the
manufacturing front.
Delhivery - The largest independent logistics company in India by a factor of
>2x with an innovative network design. It provides end-to-end logistics
services for express and part truck load parcels and operates in a notoriously
challenging and inefficient market, where scale is everything. Delhivery
should continue to win market share and grow profits due to its focus on
owning the lowest cost infrastructure, sharing the savings with its customers,
and using a very efficient logistics networks for its clients.
Havells - The poster child for India's consumer electrical equipment sector.
Havells is the only player in the industry to successfully transition from
being a B2B focused supplier of cables, wires and switchgears, to becoming a
diversified B2C focused business, with a presence in small appliances and now
in large appliances via its acquisition of Lloyd in 2018. This acquisition
represented a move into high-quality consumer durables, at an acceptable
valuation, and we expect the move to generate value. The company's core
business remains well positioned.
Bajaj Finance - India's fifth largest consumer lender and one of the largest
non-bank financial companies. It is a well-run business that has delivered
strong growth and shareholder value over the last ten years. Significant
recent underperformance provided us with the opportunity to reduce our
underweight. We funded this acquisition by reducing our position in Axis Bank.
Cera Sanitaryware - The country's largest supplier of sanitaryware. It is a
high quality business with exposure to the domestic real-estate cycle and a
long growth runway in a consolidated marketplace. The company also benefits
from high barriers to entry. Cera is financially conservative with a prudent
management team.
Complete sales
Power Grid - While demand for power undoubtedly remains strong, and investment
in the sector will increase accordingly, Power Grid's valuations were not
offering any margins of safety, which led us to exit the position.
Genpact - This BPO company has had a recent change in management and WNS and
ExService, its competitors in the BPO sector, had derated so we consolidated
our BPO exposure in these two names.
Reductions:
Infosys - Given that the slowdown in discretionary spending impacts Infosys
disproportionately, we reduced our position in the company to moderate our
exposure to the IT services sector and use it as a funding source.
Axis Bank - We reduced holdings in Axis Bank and consolidated our holdings in
the banking sector. Axis has been one of the best performing private banks,
although the quality of earnings has been relatively poor, so we continue to
reduce our exposure.
Outlook
As we noted in the Company's latest Annual Report, the investment case for
India has become more credible for a multitude of reasons. The catalysts for
growth, discussed below, are multiplying in number, and increasing in scale.
Sustained growth
Since Narendra Modi's government took power in 2014, India's GDP has grown at
a compound annual growth rate of around 7% per year, to $3.6 trillion, and the
economy's global ranking by size has jumped from seventh to fifth. This has
been to a large extent driven by several fundamental structural reforms
including simplification of the tax regime and reduced tax burdens for those
already in the system. In addition, a bankruptcy law has been introduced, the
banking system has been cleaned up, and the real estate sector is now subject
to regulation. All these reforms, coupled with stricter and more effective
inflation targeting, favourable demographic trends, the build-up of digital
and physical infrastructure, strong corporate balance sheets and political
stability, are allowing the country to realise its potential to deliver a more
sustainable growth.
Next year India is expected to become the fourth largest economy and the
government has set a target to reach third place by 2028. This ambition stands
out in a world where most large economies are expected to see growth rates
decline in coming years.
Blue collar job creation
Of the three main components of GDP growth - labour, capital, and productivity
- India has historically benefited from the contributions made by white collar
labour and productivity increases driven by technology and outsourced
services. However, over the past three decades, manufacturing's contribution
to GDP has fallen from near 20% to 15% in FY2023, which is roughly half that
of China.
More than 40% of India's workforce is still employed in agriculture, which
compares with much lower levels in China (25%), Indonesia (29%) and the
developed world (less than 5%). The poor performance of India's manufacturing
sector has meant tepid blue collar job creation, which has prevented excess
labour capacity in agriculture from being absorbed by the industrial sector.
However, the government appears to have recognised the need to create an
estimated 9-11m jobs in more capital-intensive sectors such as construction
and manufacturing, to absorb both: (1) new labour coming into the market; and
(2) migration from agriculture to more remunerative employment. Job creation
of this scale is essential to ensure that India's demographic dividend pays
off and boosts productivity accordingly.
Fixed capital formation
India is still in the early stages of diversifying its GDP to increase the
proportion of fixed capital formation from sectors such as manufacturing and
construction in its GDP mix. India's fixed capital formation as a percentage
of GDP has started to trend up and this increase in capital intensity should
translate into a further uptick in private capex. As such, we believe rising
fixed capital expenditure formation will be a structural theme for India over
the medium- to long-term. This will ensure more broad-based growth, as opposed
to the current over-reliance on consumption and services.
Premium and discretionary consumption
Historically, India has largely been a bottom-of-the-pyramid consumption
economy, with 225 million households earning less than $8,000 per annum. Forty
million of these households live below the poverty line. Even as India has
delivered strong GDP growth in the last ten years, GDP per capita has lagged.
Its GDP per capita, currently at $2,379, has not improved dramatically and
stands below countries like Bangladesh and Sri Lanka.
We expect this to change as investment-led growth not only accelerates wealth
creation at the top of the pyramid, but also allows more households at the
bottom of the pyramid to start consuming beyond subsistence living, thanks to
more blue-collar job creation. This should drive consumption by both those at
the bottom of the pyramid looking for basic 'value' products, and by
top-of-the-pyramid households seeking 'premium' brands and discretionary goods
in categories like clothing, eating out, jewellery and consumer durables. As
an illustration of the potential impact of such a transformation, if the ratio
of retail spending to total GDP rises from 25%, to match China's 40%, India's
retail sector could expand from $650-700 billion at present, to $2 trillion
over the next five years.
Risks to monitor
Although the macro picture and outlook for India is overwhelmingly positive,
we are aware of inherent risks that emanate from several quarters: dependence
on imports for oil/energy needs; low agricultural productivity; India's heavy
reliance on global capital inflows to support growth; a dependence on global
growth to support foreign demand for Indian goods and services; and
complacency among policymakers.
Summary
Despite these risks, India's long-term macro-economic and political story is
on a strong footing, and we believe the market offers one of the best
prospects for equity investors globally over the medium to long term. The
recent rally in markets, particularly in the small and mid-cap space, has,
however, left valuations looking expensive across sectors in general. So,
although we like a lot of companies from a fundamental perspective, we have
been mindful not to overpay for names we would like to own. Nonetheless, over
the past six months we have been able to strengthen the portfolio, moving up
the quality curve to some extent, and we will use any opportunities generated
by market pull-backs to continue down the same path, in the belief that it
will provide greater exposure to India's growth story and lift performance
over time.
For and on behalf of
JPMorgan Asset Management
Investment Manager
Amit Mehta
Sandip Patodia
Portfolio Managers
6th June 2024
INTERIM MANAGEMENT REPORT
The Company is required to make the following disclosures in its Half Year
Report.
Principal and Emerging Risks and Uncertainties
The principal and emerging risks facing the Company are substantially
unchanged since the date of the Annual Report for the financial period ended
30th September 2023 and continue to be as set out in that report on pages 32
to 37. Risks faced by the Company include, but are not limited to,
appropriateness and effective execution of strategy, ESG requirements from
investors, legal and regulatory, share discount, cybercrime, broadscale
external factors, taxation, market and geopolitical tensions, monetary and
climate change.
Related Parties Transactions
During the first six months of the current financial year, no transactions
with related parties have taken place which have materially affected the
financial position or the performance of the Company during the period.
Going Concern
The Directors believe, having considered the Company's investment objective,
risk management policies, capital management policies and procedures, nature
of the portfolio and expenditure projections, that the Company has adequate
resources, an appropriate financial structure and suitable management
arrangements in place to continue in operational existence for the foreseeable
future and more specifically, that there are no material uncertainties
pertaining to the Company that would prevent its ability to continue in such
operational existence for at least 12 months from the date of the approval of
this half yearly financial report. For these reasons, they consider there is
reasonable evidence to continue to adopt the going concern basis in preparing
the accounts.
Directors' Responsibilities
The Board of Directors confirms that, to the best of its knowledge:
(i) the condensed set of financial statements contained within the
half yearly financial report has been prepared in accordance with
International Accounting Standards 34 'Interim Financial Reporting' and gives
a true and fair view of the state of affairs of the Company and of the assets,
liabilities, financial position and net return of the Company, as at 31st
March 2024, as required by the UK Listing Authority Disclosure and
Transparency Rules 4.2.4R; and
(ii) the interim management report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the UK Listing Authority
Disclosure and Transparency Rules.
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-adopted international accounting
standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the 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.
For and on behalf of the Board
Jeremy Whitley
Chairman
6th June 2024
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments
held at fair value through
profit or loss - 54,565 54,565 - (67,618) (67,618) - 9,650 9,650
Net foreign currency
gains/(losses) - 45 45 - (77) (77) - (367) (367)
Income from investments 2,826 - 2,826 4,354 - 4,354 11,461 - 11,461
Interest receivable and similar
income 524 - 524 287 - 287 668 - 668
Total income/(loss) 3,350 54,610 57,960 4,641 (67,695) (63,054) 12,129 9,283 21,412
Management fee (2,593) - (2,593) (2,532) - (2,532) (4,974) - (4,974)
Other administrative expenses (616) - (616) (558) - (558) (1,100) - (1,100)
Profit/(loss) before finance
costs and taxation 141 54,610 54,751 1,551 (67,695) (66,144) 6,055 9,283 15,338
Finance costs - - - (4) - (4) (4) - (4)
Profit/(loss) before taxation 141 54,610 54,751 1,547 (67,695) (66,148) 6,051 9,283 15,334
Taxation (332) (11,083) (11,415) (473) (1,392) (1,865) (1,314) (11,063) (12,377)
Net profit/(loss) (191) 43,527 43,336 1,074 (69,087) (68,013) 4,737 (1,780) 2,957
Earnings/(loss) per share
(note 4) (0.26)p 60.16p 59.90p 1.42p (91.47)p (90.05)p 6.34p (2.38)p 3.96p
The Company does not have any income or expense that is not included in the
net profit/(loss) for the period. Accordingly the 'Net profit/(loss) for the
period, is also the 'Total comprehensive income' for the period, as defined in
IAS1 (revised).
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the period.
The 'Total' column of this statement represents the Company's Statement of
Comprehensive Income, prepared in accordance with IFRS.
The supplementary 'Revenue' and 'Capital' columns are prepared under guidance
published by the Association of Investment Companies.
All the profit/(loss) and total comprehensive income is attributable to the
equity shareholders of JPMorgan Indian Investment Trust plc, the Company.
CONDENSED STATEMENT OF CHANGES IN EQUITY
Called up Exercised Capital
share Share warrant redemption Capital Revenue
capital premium reserve reserve reserves(1) reserve(1) Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months ended 31st March 2024 (Unaudited)
At 30th September 2023 24,868 97,316 5,886 12,898 649,399 (14,770) 775,597
Repurchase of shares into Treasury - - - - (18,166) - (18,166)
Profit/(loss) for the period - - - - 43,527 (191) 43,336
At 31st March 2024 24,868 97,316 5,886 12,898 674,760 (14,961) 800,767
Six months ended 31st March 2023 (Unaudited)
At 30th September 2022 24,868 97,316 5,886 12,898 673,788 (19,507) 795,249
Repurchase of shares into Treasury - - - - (10,325) - (10,325)
(Loss)/profit for the period - - - - (69,087) 1,074 (68,013)
At 31st March 2023 24,868 97,316 5,886 12,898 594,376 (18,433) 716,911
Year ended 30th September 2023 (Audited)
At 30th September 2022 24,868 97,316 5,886 12,898 673,788 (19,507) 795,249
Repurchase of shares into Treasury - - - - (22,609) - (22,609)
(Loss)/profit for the year - - - - (1,780) 4,737 2,957
At 30th September 2023 24,868 97,316 5,886 12,898 649,399 (14,770) 775,597
1 A reclassification adjustment to the 30th September 2022
capital reserves and revenue reserve figures, has been made in respect of
£1,750,000 of withholding tax on Indian income from investments, which had
been incorrectly credited against capital gains tax for the two years ended
30th September 2022. No adjustment has been made to the six month period ended
31st March 2023.
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
At At At
31st March 31st March 30th September
2024 2023 2023
£'000 £'000 £'000
Non-current assets
Investments held at fair value through profit or loss 801,171 713,459 770,957
Current assets
Other receivables 2,366 1,693 817
Cash and cash equivalents 23,056 13,308 22,044
25,422 15,001 22,861
Current liabilities
Other payables(1) (605) (671) (571)
Net current assets 24,817 14,330 22,290
Total assets less current liabilities 825,988 727,789 793,247
Non-current liabilities
Provision for capital gains tax (25,221) (10,878) (17,650)
Net assets 800,767 716,911 775,597
Amounts attributable to shareholders
Called up share capital 24,868 24,868 24,868
Share premium 97,316 97,316 97,316
Exercised warrant reserve 5,886 5,886 5,886
Capital redemption reserve 12,898 12,898 12,898
Capital reserves 674,760 594,376 649,399(2)
Revenue reserve (14,961) (18,433) (14,770)(2)
Total shareholders' funds 800,767 716,911 775,597
Net asset value per share (note 5) 1,123.7p 958.7p 1,058.5p
1 Included in other payables is an amount of £361,000
(31st March 2023: £228,000; 30th September 2023: £173,000) for repurchase of
shares awaiting settlement.
2 A reclassification adjustment to the 30th September 2022
capital reserves and revenue reserve figures, has been made in respect of
£1,750,000 of withholding tax on Indian income from investments, which had
been incorrectly credited against capital gains tax for the two years ended
30th September 2022. No adjustment has been made to the six month period
ended 31st March 2023.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 31st March 30th September
2024 2023 2023
£'000 £'000 £'000
Operating activities
Net return/(loss) before finance costs and taxation 54,751 (66,148) 15,334
Deduct dividends receivable (2,826) (4,354) (11,461)
Deduct bank interest receivable (524) (287) (668)
Add interest paid - 4 4
(Deduct gains)/add losses on investments held at fair value
through profit or loss (54,565) 67,618 (9,650)
(Deduct gains)/add losses on net foreign currency (45) 77 367
(Increase)/decrease in prepayments, VAT and other receivables (1) 19 14
Decrease/(increase) in other payables (148) 35 127
Net cash outflow from operating activities before dividends,
Interest and taxation (3,358) (3,036) (5,933)
Interest paid (6) (4) (4)
Tax paid (297) (893) (1,421)
Dividends received 2,957 4,404 11,383
Interest received 435 287 668
Capital gains tax paid (3,513) (309) (3,208)
Net cash (outflow)/ inflow from operating activities (3,782) 449 1,485
Investing activities
Purchases of investments held at fair value through profit or loss (71,775) (98,144) (189,558)
Sales of investments held at fair value through profit or loss 94,502 63,922 175,665
Net cash inflow/(outflow) from investing activities 22,727 (34,222) (13,893)
Financing activities
Repurchase of shares into Treasury (17,978) (10,097) (22,436)
Net cash outflow from financing activities (17,978) (10,097) (22,436)
Increase/(decrease) in cash and cash equivalents 967 (43,870) (34,844)
Cash and cash equivalents at the start of the period 22,044 57,255 57,255
Exchange movements 45 (77) (367)
Cash and cash equivalents at the end of the period 23,056 13,308 22,044
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
For the six months ended 31st March 2024
1. Principal activity
The principal activity of the Company is that of an investment trust company
within the meaning of Section 1158 of the Corporation Tax Act 2010.
2. Financial Statements
The financial information for the six months ended 31st March 2024 and 2023
has not been audited or reviewed by the Company's auditors.
The financial information contained in these half year financial statements
does not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006.
The information for the Company for the year ended 30th September 2023 has
been extracted from the latest published audited financial statements. Those
financial statements 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 498(2) or 498(3) of the Companies Act 2006.
3. Accounting policies
On 31st December 2020, IFRS as adopted by the European Union at that date was
brought into UK law and became UK-adopted International Accounting Standards,
with future changes being subject to endorsement by the UK Endorsement Board.
The Company transitioned to UK-adopted International Accounting Standards in
its company financial statements on 1st January 2021. This change constitutes
a change in accounting framework. However, there is no impact on recognition,
measurement or disclosure in the period reported as a result of the change in
framework. The financial statements of the Company have been prepared in
accordance with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards.
Where presentational guidance set out in the Statement of Recommended Practice
(the 'SORP') for investment trusts issued by the Association of Investment
Companies in July 2023 is consistent with the requirements of IFRS, the
financial statements have been prepared on a basis compliant with the
recommendations of the SORP.
The accounting policies applied to this condensed set of financial statements
are consistent with those applied in the financial statements for the year
ended 30th September 2023.
4. Earnings/(loss) per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
£'000 £'000 £'000
Earnings/(loss) per share is based on the following:
Revenue (loss)/profit (191) 1,074 4,737
Capital profit/(loss) 43,527 (69,087) (1,780)
Total profit/(loss) 43,336 (68,013) 2,957
Weighted average number of shares in issue 72,348,779 75,527,225 74,711,625
Revenue (loss)/ earnings per share (0.26)p 1.42p 6.34p
Capital earnings/(loss) per share 60.16p (91.47)p (2.38)p
Total earnings/(loss) per share 59.90p (90.05)p 3.96p
5. Net asset value per share
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
Net assets (£'000) 800,767 716,911 775,597
Number of shares in issue excluding shares held
in Treasury 71,259,755 74,777,655 73,272,730
Net asset value per share 1,123.7p 958.7p 1,058.5p
The Company will only re-issue shares held in Treasury at a premium and
therefore these shares have no dilutive potential.
6. Disclosures regarding financial instruments measured at fair value
The disclosures required by the IFRS 13: 'Fair Value Measurement' are given
below. The Company's financial instruments within the scope of IFRS 13 that
are held at fair value comprise its investment portfolio.
The investments are categorised into a hierarchy consisting of the following
three levels:
Level 1 - valued using unadjusted quoted prices in active markets for
identical assets and liabilities.
Level 2 - valued by reference to valuation techniques using other observable
inputs not included within Level 1.
Level 3 - valued by reference to valuation techniques using unobservable
inputs.
The recognition and measurement policies for financial instruments measured at
fair value are consistent with those disclosed in the last annual financial
statements.
The following tables set out the fair value measurements using the IFRS 13
hierarchy at the relevant period end:
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31st March 2024 31st March 2023 30th September 2023
Assets Liabilities Assets Liabilities Assets Liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Level 1 801,171 - 713,459 - 770,957 -
Total 801,171 - 713,459 - 770,957 -
JPMORGAN FUNDS LIMITED
7th June 2024
For further information, please contact:
Sachu Saji
For and on behalf of
JPMorgan Funds Limited
Telephone: 0800 20 40 20 or +44 1268 44 44 70
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.
ENDS
A copy of the half year will be submitted to the National Storage Mechanism
and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The half year will also shortly be available on the Company's website
at www.jpmindian.co.uk (http://www.jpmindian.co.uk/) where up to date
information on the Company, including daily NAV and share prices, factsheets
and portfolio information can also be found.
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