Half Year R epor t JPMor gan Asian Investmen t Trust plc hal… · 2 JPMorgan Asian Investment...

JPMorgan Asian Investment Trust plc

Half Year Report & Accounts for the six months ended 31st March 2010

Half Year Report2010

Features

Contents

About the Company

1 Half Year Performance2 Chairman’s Statement4 Investment Managers’ Report

Investment Review

6 Ten Largest Investments7 Portfolio Analyses

Accounts

8 Income Statement9 Reconciliation of Movements in

Shareholders’ Funds10 Balance Sheet11 Cash Flow Statement12 Notes to the Accounts

Shareholder Information

15 Subscription Shares15 Rollover Apportionments16 Interim Management Report17 Glossary of Terms and Definitions21 Information about the Company

Objective

Capital growth, primarily from investing in equities quoted on the stockmarkets ofAsia, excluding Japan

Investment Policies

- To have a diversified portfolio of Asian stocks.

- To have a portfolio comprising 50 to 80 investments.

- To use borrowings from time to time to gear the portfolio within a range of90%–120% invested.

Benchmark

MSCI AC Asia ex Japan Index with net dividends reinvested, expressed in sterlingterms.

Capital Structure

The Company has an authorised share capital of 720,000,000 Ordinary shares of25p each (of which 163,781,834 were in issue at 31st March 2010) and 32,000,805Subscription shares of 1p each (of which 27,466,125 were in in issue at 31st March2010).

Continuation Vote

In accordance with the Company’s Articles of Association, the Directors are requiredto propose a resolution that the Company continue as an investment trust at theAnnual General Meeting in 2011 and every third year thereafter.

Management Company

The Company employs JPMorgan Asset Management (UK) Limited (‘JPMAM’ or the‘Manager’) to manage its assets.

Financial Data31st March 30th September %

2010 2009 change

Total net assets (£’000) 389,819 341,477 +14.2

Number of Ordinary shares in issue 163,781,834 160,460,074 +2.1

Number of Subscription shares in issue* 27,466,125 31,547,885 -12.9

Diluted net asset value per Ordinary share† 223.5p 200.4p +11.5

Undiluted net asset value perOrdinary share 238.0p 212.8p +11.8

Ordinary share price 204.8p 184.0p +11.3

Subscription share price 47.8p 41.5p +15.1

Ordinary share price discount todiluted net asset value‡ 8.4% 8.2%

JPMorgan Asian Investment Trust plc. Half Year Report & Accounts 2010 1

Half Year Performance

Total Returns (includes dividends reinvested)

+14.6%Portfolio return less fees and

expenses1,2

+12.2%Return to Ordinary

shareholders5

+13.1%Diluted return on net assets1,4

+13.8%Benchmark return3

*Details of the subscription rights conferred by these shares are given on page 15.†Net asset value assuming that all outstanding Subscription shares were converted into Ordinary shares at the periodend.

‡The discount at 30th September 2009, based on the diluted net asset value after the deduction of the 1.5p finaldividend, is 7.5%.

A glossary of terms and definitions is provided on page 17.

1Source: J.P.Morgan.2Return on net assets, that is net of management fees and administration expenses, but excluding the effect ofSubscription shares which have been converted during the year and the dilutive impact of Subscription shares in issueat the period end.

3Source: MSCI. The Company’s benchmark is the MSCI Asia ex Japan Index with net dividends reinvested, expressed insterling terms.

4Return on net assets calculated using the diluted net asset value, which assumes that all outstanding Subscriptionshares were converted into Ordinary shares at the period end.

5Source: Morningstar.

JPMorgan Asian Investment Trust plc. Half Year Report & Accounts 20102

Chairman’s Statement

PerformanceAsian stock markets continued to advance in the six months to 31st March 2010.Against this backdrop the Company’s portfolio returned 14.6%, net of managementfees and expenses, outperforming our benchmark index (the MSCI AC Asia Pacific exJapan Index), which rose 13.8%. The Company’s diluted net asset value total return(which assumes that the 27.5 million Subscription shares outstanding at 31st March2010 were all exercised at 137p per share) was 13.1% and the return to Ordinaryshareholders was 12.2%. A full review of portfolio performance and a breakdown ofthe elements contributing to it are set out in the investment managers’ report onpages 4 and 5.

Subscription SharesThe Company issued 32,000,805 Subscription shares as a bonus issue to qualifyingshareholders on the basis of one Subscription share for every five Ordinary sharesheld in February 2009. Each Subscription share confers the right (but not theobligation) to subscribe for one Ordinary share at predetermined prices on anybusiness day during the period from 1st April 2009 until 31st March 2014, after whichthe rights on the Subscription shares will lapse. Between 1st October 2009 and 31stMarch 2010, 4,081,760 Subscription shares were converted into Ordinary shares,raising proceeds of £5,592,000. As at the date of this Report, a further 15,545,805Subscription shares have been converted, meaning that a total of £27,518,035 hasbeen raised for investment by the Company since the Subscription shares wereissued, with 63% of the original allotment of Subscription shares being converted.

From 1st April 2010, the initial exercise price of 137p per Subscription share increasedto 176p per share. Following this increase, the Company’s Ordinary share price whichis 200p at the time of writing, remains above the revised exercise price. The next andfinal step-up in exercise price, to 203p per share, takes place on 1st April 2012.

Further details on the Subscription shares, including their exercise prices, theapportionments for capital gains tax purposes and how they may be exercised, canbe found on the Company’s website at www.jpmasian.co.uk and on page 15 of thisReport.

Discount VolatilityThe Board continually monitors the discount at which the Company’s Ordinary sharestrade to their net asset value and uses the buyback powers granted by shareholderswhen it is deemed appropriate. Towards the end of the review period, and as theSubscription shares approached their exercise price step-up, the discount widened inabsolute terms and relative to our immediate peer group and the Board respondedby authorising the repurchase of 760,000 Ordinary shares. These shares were boughtback and cancelled for a total consideration of £1,491,000 at an average weighteddiscount of 10.6%.


GearingThroughout the period the portfolio employed average gearing of approximately106%, which proved to be a good investment decision in rising markets. The Boardhas a policy of keeping gearing within the range of 90-120% invested.

OutlookIn the first week of May we were reminded that Asian stock markets are not immuneto the fallout from economic events in other parts of the world. Our benchmark indexfell 4.4% in sterling and 5.9% in local terms as investors reacted to the developingEurozone sovereign debt crisis. Markets rebounded immediately following theannouncement of the EU’s emergency loan package for Greece, but neverthelessremain volatile. Our investment managers, therefore, sound a somewhat cautiousnote, whilst continuing to pick individual companies that they believe have soundfundamentals in a region with good long term growth prospects.

James M LongChairman 19th May 2010


Investment Managers’ Report

Market Review

The MSCI AC Asia ex Japan Index rose 13.8% in sterling terms in the six months ended31st March 2010, although it was not all plain sailing. Concerns over the contagioneffect of potential defaults from Dubai World and Greece, fears that Chinese policytightening would hurt growth in the region and worries over rising inflation in Asia alldampened sentiment at various points during the review period. In addition, after thesharp rebound earlier in 2009, Asian markets were no longer as attractively valuedcompared with the start of 2009 and they were vulnerable to profit taking.Nevertheless, Asian markets recovered after each sell-off, thanks to a recovery in USconsumption, signs of stabilisation of the global economy and continued stronggrowth in the region.

The top performing markets in Asia were Indonesia and Thailand. These marketswere buoyed by strong foreign investment inflows and earnings upgrades in thestocks listed in these markets. India also performed well following a positive reactionto upgrades in GDP growth to 8.2% for the current fiscal year, on the back of robustindustrial production numbers and improved crop yields. China underperformed theregion due to concerns over monetary tightening, regulatory measures to controlspeculation in the property market and concerns over capital raising by the bankingsector. The Taiwanese market was weighed down by the poor performance of itstechnology sector.

Performance

At portfolio level, the Company outperformed our benchmark index by 1.3%.Throughout the period we employed gearing of approximately 106%. This decisionwas a large contributor to outperformance.

If we look at the underlying stock selection, the most significant contributor toperformance over the period was the overweight position in Thailand’s Banpu, a coalstock. Siam Cement, another Thai company also performed strongly over the period.These cyclical stocks were well placed to benefit from China’s and India’s increasingcommodity demands. Within our Indonesian exposure, United Tractors, aconstruction machinery company and contract mining service, continued to supportpositive performance. This stock is held predominantly due to its solid growthprospects and leverage to increasing mining capital expenditure spending.

In India our overweight positions in materials stocks such as Hindalco and AmbujaCement also positively contributed to performance. These stocks rose strongly on theback of a recovery in industrial production and GDP growth in India. Furthermore ouroverweight position in Indian infrastructure related stocks, such as Mundra Port,assisted performance due to optimism over infrastructure roll-out plans in India. Theportfolio’s holdings exposed to strong consumption growth in China performed wellover the period. This included pork distributor China Yurun Food Group, beveragecompany Yantai Changyu Pioneer Wine Co., and casino operators such as WynnMacau and Sands China.

By contrast, the major detractors to performance during the period were ouroverweight positions in Chinese property and materials stocks, which fell due toconcerns over monetary tightening and over regulatory measures to control theproperty market. This included stocks such as Yanlord Land, China Resources Cementand Aluminium Corp of China, which all corrected sharply and detracted fromperformance.

Pauline Ng

Joshua Tay


The portfolio’s overweight position in Taiwanese financials such as Taishin FinancialHolding Company, hurt performance as the sector was weighed down by concernsover asset quality and the delay in signing the Financial Memorandum ofUnderstanding between China and Taiwan. Other asset plays such as TaiwanFertilizer, also detracted from performance, as the stock suffered from profit takingafter performing well earlier in 2009 on the back of strong expectations of asset re-flation in Taiwan. In Korea, the portfolio performance was adversely affected by ouroverweight position in financials, such as Hana Financial Group, KB Financial Groupand in insurance company Samsung Fire and Marine. After a strong third quarter in2009, Korean financial stocks generally suffered from profit taking in the subsequentquarters. In addition, Korean banks were further affected due to concerns over theintroduction of regulatory measures aimed to curb excessive lending in Korea.

Market Outlook

The recent sovereign debt concerns in Europe caused a significant correction in Asianequity markets, although they have recovered following the announcement of arescue package for Greece, this issue highlights how Asian equity markets continue tobe dependent on global risk appetite and capital flows. In the short-term, it would bedifficult for Asian equities to register strong positive gains against a global backdropof de-risking and rising risk aversion, and thus we would look to opportunisticallylock in profit, lower gearing and/or raise cash if we believe that negative sentimentsurrounding risk assets will persist. However, in terms of fundamentals, Asiancorporates, and especially the stocks that we own in our portfolios, have very lowlevels of exposure to Greece, Portugal, Spain and other potentially vulnerablecountries in the Eurozone. In addition, the sovereign debt concerns in Europe serveto highlight the strength of Asia’s balance sheets, both at the sovereign andhousehold levels. We believe that in the mid-long term, the balance sheet strengthof Asia will be increasingly recognised and rewarded by investors.

Given global debt concerns, it is almost certain that liquidity will remain buoyant froma global perspective despite tightening moves underway by major central banks inChina, India and Australia. This is ultimately positive in the mid-long term for Asianequities. We continue to expect a strengthening in macro data in both the US(underpinning export order books in Taiwan and China) and China (led byconsumption), paired with continued economic and monetary policy normalisationacross the region.

Valuations in Asia are acceptable; essentially the same as global emerging markets.The course of Asian equities in the second half of 2010 will be directed primarily bythe trajectory of earnings growth estimates for the rest of this year and 2011.

We remain optimistic about domestic consumption and infrastructure across Asiaand the portfolio is consequently positioned to gain exposure to these longer-termtrends. Importantly, we believe that India’s role in driving commodity markets willincrease as the momentum of infrastructure roll-out continues to accelerate.Valuations are now just under 2x Price/Book and 14x Price/Earnings for MSCI AC Asiaex-Japan. However, we are continuing to see earnings upgrades, providing somesupport for valuations.

Joshua TayPauline NgInvestment Managers 19 May 2010

Investment Managers’ Reportcontinued

Performance attribution for the sixmonths to 31st March 2010

% %

Contributions to total returns

Benchmark total return 13.8

Stock selection 0.7Gearing/cash 0.8Currency effect –0.2

Investment managercontribution 1.3

Portfolio total return 15.1

Management fees/other expenses –0.5

Portfolio total return, net of fees and expenses 14.6

Conversion of Subscriptionshares –1.2

Net asset value total return– undiluted 13.4

Subscription share dilution –0.3

Net asset value total return– diluted 13.1

Source: FactSet, JPMAM and Morningstar.All figures are on a total return basis.

Performance attribution analyses howthe Company achieved its recordedperformance relative to its benchmarkindex.

A glossary of terms and definitions isprovided on page 17.


ActiveValuation Portfolio Benchmark Position

Company Country Sector £’000 %1 % %

Ping An Insurance Hong Kong & China Financials 15,585 3.8 0.5 +3.3

Samsung Electronics South Korea Information Technology 14,077 3.4 3.6 -0.2

Siam Cement Thailand Materials 12,470 3.0 0.1 +2.9

Hon Hai Precision Taiwan Information Technology 10,418 2.5 1.5 +1.0

Poly (Hong Kong) Investments Hong Kong & China Financials 10,066 2.4 0.1 +2.3

United Tractors Indonesia Industrials 9,847 2.4 0.1 +2.3

Olam International Singapore Consumer Staples 9,733 2.3 0.1 +2.2

China Construction Bank Hong Kong & China Financials 9,689 2.3 1.6 +0.7

Maruti Suzuki India India Consumer Discretionary 9,672 2.3 0.1 +2.2

Larsen & Toubro India Industrials 9,556 2.3 0.3 +2.0

Total2 111,113 26.7 8.0

1Based on total assets less current liabilities of £416.2m.2At 30th September 2009, the value of the ten largest investments amounted to £86.9m representing 23.7% of total assets less current liabilities.

Ten Largest Investmentsat 31st March 2010


Portfolio Analyses

Geographical Analysis31st March 2010 30th September 2009

Active ActivePortfolio Benchmark Position Portfolio Benchmark Position

%1 % % %1 % %

Hong Kong & China 37.7 37.1 +0.6 36.3 36.6 -0.3India 15.9 11.4 +4.5 11.1 10.9 +0.2South Korea 15.3 19.1 -3.8 14.9 19.9 -5.0Singapore 11.6 6.5 +5.1 10.1 6.6 +3.5Taiwan 9.1 15.9 -6.8 13.0 16.9 -3.9Indonesia 7.5 3.0 +4.5 8.1 2.7 +5.4Thailand 5.6 2.2 +3.4 4.4 1.9 +2.5Malaysia — 4.2 -4.2 — 3.9 -3.9Philippines — 0.6 -0.6 — 0.6 -0.6Net current (liabilities)/assets (2.7) — -2.7 2.1 — +2.1

Total 100.0 100.0 100.0 100.0

1Based on total assets less current liabilities of £416.2m (30th September 2009: £366.5m).

Sector Analysis31st March 2010 30th September 2009

Active ActivePortfolio Benchmark Position Portfolio Benchmark Position

%1 % % %1 % %

Financials 30.8 31.2 –0.4 38.5 32.1 +6.4Industrials 23.4 10.4 +13.0 20.2 10.3 +9.9Materials 19.1 8.0 +11.1 12.8 7.6 +5.2Information Technology 10.2 19.0 –8.8 6.5 19.0 –12.5Consumer Discretionary 8.1 7.4 +0.7 5.3 6.8 –1.5Consumer Staples 7.4 4.4 +3.0 7.4 4.1 +3.3Energy 2.3 8.2 –5.9 5.5 8.2 –2.7Utilities 1.4 4.0 –2.6 1.7 4.0 –2.3Telecommunication Services — 6.7 –6.7 — 7.4 –7.4Healthcare — 0.7 –0.7 — 0.5 –0.5Net current (liabilities)/assets (2.7) — –2.7 2.1 — +2.1

Total 100.0 100.0 100.0 100.0

1Based on total assets less current liabilities of £416.2m (30th September 2009: £366.5m).


Income Statementfor the six months ended 31st March 2010

(Unaudited) (Unaudited) (Audited)Six months ended Six months ended Year ended31st March 2010 31st March 2009 30th September 2009

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 — 48,482 48,482 — (9,617) (9,617) — 98,117 98,117

Net foreign currency (losses)/gains — (1,371) (1,371) — 2,449 2,449 — 1,723 1,723Income from investments 1,390 — 1,390 1,696 — 1,696 5,306 — 5,306Other interest receivable and

similar income 5 — 5 49 — 49 57 — 57

Gross return/(loss) 1,395 47,111 48,506 1,745 (7,168) (5,423) 5,363 99,840 105,203Management fee (1,105) — (1,105) (699) — (699) (1,637) — (1,637)Other administrative expenses (358) — (358) (650) — (650) (607) — (607)

Net (loss)/return on ordinary activities before finance costs and taxation (68) 47,111 47,043 396 (7,168) (6,772) 3,119 99,840 102,959

Finance costs (244) — (244) (43) — (43) (191) — (191)

Net (loss)/return on ordinaryactivities before taxation (312) 47,111 46,799 353 (7,168) (6,815) 2,928 99,840 102,768

Taxation (114) — (114) (186) — (186) (451) — (451)

Net (loss)/return on ordinary activities after taxation (426) 47,111 46,685 167 (7,168) (7,001) 2,477 99,840 102,317

(Loss)/return per Ordinary share – diluted (note 4) (0.2)p 27.7p 27.5p 0.1p (4.5)p (4.4)p 1.5p 61.1p 62.6p

(Loss)/return per Ordinaryshare – undiluted (note 4) (0.3)p 29.0p 28.7p 0.1p (4.5)p (4.4)p 1.5p 62.4p 63.9p

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired ordiscontinued in the period.

The ‘Total’ column of this statement is the profit and loss account of the Company and the ‘Revenue’ and ‘Capital’ columnsrepresent supplementary information prepared under guidance issued by The Association of Investment Companies. The Totalcolumn 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 inShareholders’ Funds

Called up Exercised CapitalSix months ended share Share warrant redemption Other Capital Revenue31st March 2010 capital premium reserve reserve reserve reserves reserve Total(Unaudited) £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

At 30th September 2009 40,430 4,187 977 3,009 106,481 183,473 2,920 341,477Repurchase of Ordinary shares for

cancellation (190) — — 190 — (1,491) — (1,491)Exercise of Subscription shares into

Ordinary shares (41) 41 — — — — — —Issue of Ordinary shares on exercise of

Subscription shares 1,021 4,571 — — — — — 5,592Net return/(loss) on ordinary activities — — — — — 47,111 (426) 46,685Dividends appropriated in the period — — — — — — (2,444) (2,444)

At 31st March 2010 41,220 8,799 977 3,199 106,481 229,093 50 389,819

Called up Exercised CapitalSix months ended share Share warrant redemption Other Capital Revenue31st March 2009 capital premium reserve reserve reserve reserves reserve Total(Unaudited) £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

At 30th September 2008 40,002 4,347 977 3,009 106,481 83,633 3,163 241,612Net (loss)/return on ordinary activities — — — — — (7,168) 167 (7,001)Dividends appropriated in the period — — — — — — (2,720) (2,720)

At 31st March 2009 40,002 4,347 977 3,009 106,481 76,465 610 231,891

Called up Exercised CapitalYear ended share Share warrant redemption Other Capital Revenue30th September 2009 capital premium reserve reserve reserve reserves reserve Total(Audited) £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

At 30th September 2008 40,002 4,347 977 3,009 106,481 83,633 3,163 241,612Bonus issue of Subscription shares 320 (320) — — — — — —Subscription shares’ issue costs — (352) — — — — — (352)Exercise of Subscription shares into

Ordinary shares (5) 5 — — — — — —Issue of Ordinary shares on exercise of

Subscription shares 113 507 — — — — — 620Net return on ordinary activities — — — — — 99,840 2,477 102,317Dividends appropriated in the year — — — — — — (2,720) (2,720)

At 30th September 2009 40,430 4,187 977 3,009 106,481 183,473 2,920 341,477


Balance Sheetat 31st March 2010

(Unaudited) (Unaudited) (Audited)31st March 2010 31st March 2009 30th September 2009

£’000 £’000 £’000

Fixed assetsInvestments held at fair value through profit or loss 427,499 225,607 358,728

Current assetsDebtors 1,941 6,437 2,125Cash and short term deposits 7,265 5,453 14,985Derivative financial instruments — 8 —

9,206 11,898 17,110Creditors: amounts falling due within one yearBank loans (13,185) — (6,253)Other creditors (7,330) (5,543) (3,098)Derivative financial instruments (1) — —

Net current (liabilities)/assets (11,310) 6,355 7,759

Total assets less current liabilities 416,189 231,962 366,487

Creditors: amounts falling due after more than one yearBank loans (26,370) — (25,010)

Provisions for liabilities and chargesDeferred tax — (71) —

Total net assets 389,819 231,891 341,477

Capital and reservesCalled up share capital 41,220 40,002 40,430Share premium 8,799 4,347 4,187Exercised warrant reserve 977 977 977Capital redemption reserve 3,199 3,009 3,009Other reserve 106,481 106,481 106,481Capital reserves 229,093 76,465 183,473Revenue reserve 50 610 2,920

Shareholders’ funds 389,819 231,891 341,477

Net asset value per Ordinary share – diluted (note 5) 223.5p 143.6p 200.4p

Net asset value per Ordinaryshare – undiluted (note 5) 238.0p 144.9p 212.8p


Cash Flow Statementfor the six months ended 31st March 2010

(Unaudited) (Unaudited) (Audited)Six months ended Six months ended Year ended

31st March 2010 31st March 2009 30th September 2009£’000 £’000 £’000

Net cash (outflow)/inflow from operating activities (note 6) (532) 229 2,797

Net cash outflow from returns on investments and servicing of finance (229) (43) (180)

Taxation paid (58) — (341)

Net cash outflow from capital expenditure and financial investment (15,480) (12,156) (35,527)

Dividends paid (2,444) (2,720) (2,720)

Net cash inflow from financing 10,737 — 32,196

Decrease in cash for the period (8,006) (14,690) (3,775)

Reconciliation of net cash flow to movement in net funds/debt

Net cash movement (8,006) (14,690) (3,775)Loans drawn down (6,636) — (31,928)Exchange movements (1,369) 2,441 1,723

Changes in net funds/debt arising from cash flows (16,011) (12,249) (33,980)Net (debt)/funds at the beginning of the period (16,278) 17,702 17,702

Net (debt)/funds at the end of the period (32,289) 5,453 (16,278)

Represented by:Cash and short term deposits 7,265 5,453 14,985Bank loans (39,554) — (31,263)

Net (debt)/funds at the end of the period (32,289) 5,453 (16,278)


Notes to the Accountsfor the six months ended 31st March 2010

1. Financial statements

The information contained within the Financial Statements in this Half Year Report has not been audited or reviewed by theCompany’s auditors.

The figures and financial information for the year ended 30th September 2009 are extracted from the latest publishedAccounts of the Company and do not constitute statutory accounts for that year. Those Accounts have been delivered to theRegistrar of Companies and included the report of the auditors which was unqualified and did not contain a statement undereither section 498(2) or 498(3) of the Companies Act 2006.

2. Accounting policies

The accounts have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (‘UK GAAP’)and with the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies’ issued in January2009.

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

The accounting policies applied in these Half Year Accounts are consistent with those applied in the Accounts for the yearended 30th September 2009.

3. Dividends



Final dividend paid in respect of the year ended30th September 2009 of 1.50p (2008: 1.70p) 2,444 2,720 2,720

No interim dividend has been declared in respect of the six months ended 31st March 2010 (2009: nil).


4. (Loss)/return per share



(Loss)/return per share is based on the following:Revenue (loss)/return (426) 167 2,477Capital return/(loss) 47,111 (7,168) 99,840

Total return/(loss) 46,685 (7,001) 102,317

Weighted average number of Ordinary shares in issue during the period used for the purpose of the diluted calculation 169,930,441 160,007,154 163,311,137

Weighted average number of Ordinary shares in issue during the period used for the purpose of the undiluted calculation 162,727,424 160,007,154 160,122,194

DilutedRevenue (loss)/return per Ordinary share (0.2)p 0.1p 1.5pCapital return/(loss) per Ordinary share 27.7p (4.5)p 61.1p

Total return/(loss) per Ordinary share 27.5p (4.4)p 62.6p

UndilutedRevenue (loss)/return per Ordinary share (0.3)p 0.1p 1.5pCapital return/(loss) per Ordinary share 29.0p (4.5)p 62.4p

Total return/(loss) per Ordinary share 28.7p (4.4)p 63.9p

The diluted (loss)/return per Ordinary share represents the (loss)/return on ordinary activities after taxation divided by theweighted average number of Ordinary shares in issue during the period as adjusted in accordance with the requirements ofFinancial Reporting Standard 22: ‘Earnings per share’.


5. Net asset value per Ordinary share


31st March 2010 31st March 2009 30th September 2009

DilutedOrdinary shareholders’ funds assuming exercise of

Subscription shares (£’000) 427,448 275,732 384,698Number of potential Ordinary shares in issue 191,247,959 192,007,959 192,007,959Net asset value per Ordinary share (pence) 223.5 143.6 200.4

UndilutedOrdinary shareholders’ funds (£’000) 389,819 231,891 341,477Number of Ordinary shares in issue 163,781,834 160,007,154 160,460,074Net asset value per Ordinary share (pence) 238.0 144.9 212.8

The diluted net asset value per Ordinary share assumes that all outstanding Subscription shares were converted into Ordinaryshares at the period end.

6. Reconciliation of net return/(loss) on ordinary activities before finance costs and taxation to net cash (outflow)/inflow fromoperating activities



Net return/(loss) on ordinary activities before finance costsand taxation 47,043 (6,772) 102,959

Add back capital (return)/loss before finance costs and taxation (47,111) 7,168 (99,840)

Scrip dividends received as income — (6) (133)Increase in accrued income (260) (207) (5)(Increase)/decrease in other debtors (8) (3) 61(Decrease)/increase in accrued expenses (82) 195 25Overseas taxation (114) (146) (270)

Net cash (outflow)/inflow from operating activities (532) 229 2,797

7. Post balance sheet event

At the end of the period, notice was received from the holders of 15,525,881 Subscription shares who wished to exercise theirrights to subscribe for Ordinary shares at a price of 137 pence per share. The new Ordinary shares were duly allotted in twotranches on 9th April 2010 (CREST holders) and 16th April 2010 (certificated holders) and therefore these transactions havenot been included in these accounts prepared as at 31st March 2010.

From 1st April 2010 the conversion price of the Subscription shares increased to 176 pence per share. If the above transactionhad been brought into account and assuming the remaining Subscription shares were converted into Ordinary shares at thenew price of 176p, the diluted NAV per share would be 225.9p share, compared with the diluted NAV of 223.5p per sharedisclosed in these accounts.

Notes to the Accounts continued


Subscription Shares

On 4th February 2009 the Company issued Subscription sharesas a bonus issue to the Ordinary shareholders on the basis ofone Subscription share for every five Ordinary shares held.Each Subscription share conferred the right (but not theobligation) to subscribe for one Ordinary share on any businessday during the period from 1st April 2009 until 31st March2014, after which the rights on the Subscription shares willlapse.

For the purposes of UK taxation, the issue of Subscriptionshares is treated as a reorganisation of the Company’s sharecapital. Whereas such reorganisations do not trigger achargeable disposal for the purposes of the taxation of capitalgains, they do require shareholders to reallocate the base costof their Ordinary shares between Ordinary shares andSubscription shares received.

At the close of business on 5th February 2009 the middlemarket prices of the Company’s Ordinary shares andSubscription shares were as follows:

Ordinary shares: 127.5 pence

Subscription shares: 21.25 pence

Accordingly an individual investor who on 4th February 2009held five Ordinary shares (or a multiple thereof) would havereceived a bonus issue of one Subscription share (or therelevant multiple thereof) and would apportion the base cost ofsuch holding 96.77% to the five Ordinary shares and 3.23% tothe Subscription shares.

The conversion prices of the Subscription shares are as follows:

If Subscription share rights are exercised on any day between and including 1st April 2010 and 31 March 2012, 176 pence.

If Subscription share rights are exercised on any day between and including 1st April 2012 and 31st March 2014, 203 pence.

Notice of the exercise of the Subscription share rights may be given at any time until 31st March 2014 and the Ordinary sharesarising on conversion will be issued within ten business days of the first business day of the calendar month following the monthin which the relevant notices are received by the registrars. For further details on how to exercise the Subscription share rightsplease refer to the Company’s website at www.jpmasian.co.uk or contact the Company Secretary on 020 7742 6000.

Rollover Apportionments

For shareholders who rolled their investment in The Fleming Far Eastern Investment Trust plc into the Company, the Capital GainsTax apportionments are shown below. The apportionment of the original base cost will depend upon which option under theFleming Far Eastern reconstruction scheme was chosen.

Option 1 All share option JPMorgan Asian Ordinary shares 0.95853JPMorgan Asian Warrants 0.04147

Option 2 Share and Japanese unit option JPMorgan Asian Ordinary shares 0.64066JPMorgan Asian Warrants 0.02772S&P Japanese Units 0.33162

Option 3 Share and cash option JPMorgan Asian Ordinary shares 0.25082JPMorgan Asian Warrants 0.01085S&P Cash Units 0.73833


Interim Management Report

The Company is required to make the following disclosures inits Half Year Report.

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company fallinto six broad categories: investment and strategy; market;accounting, legal and regulatory; corporate governance andshareholder relations; operational; and financial. Informationon each of these areas is given in the Business Review withinthe Annual Report and Accounts for the year ended30th September 2009.

Related Party Transactions

During the first six months of the current financial year, notransactions with related parties have taken place which havematerially affected the financial position or the performance ofthe Company during the period.

Directors’ Responsibilities

The Board of Directors confirms that, to the best of itsknowledge:

(i) the condensed set of financial statements contained withinthe half yearly financial report has been prepared inaccordance with the Accounting Standards Board’sStatement ‘Half-Yearly Financial Reports’; and

(ii) the interim management report includes a fair review ofthe information required by 4.2.7R and 4.2.8R of the UKListing Authority Disclosure and Transparency Rules.

For and on behalf of the BoardJames M LongChairman

19th May 2010


Glossary of Terms and Definitions

Portfolio returnReturn on net assets, that is net of management fees andadministration expenses, but excluding the effect ofSubscription shares which have been converted during theyear and the dilutive impact of Subscription shares in issue atthe period end.

Return to Ordinary shareholdersTotal return to the Ordinary Shareholder on a mid-market priceto mid-market price basis, assuming that all dividends receivedwere reinvested, without transaction costs, in the Ordinaryshares of the Company at the time the shares were quoted ex-dividend.

Diluted net asset value (‘NAV’) per Ordinary shareThe diluted NAV per Ordinary share assuming that alloutstanding Subscription shares were converted into Ordinaryshares at the period end.

Diluted return on net assetsReturn on the diluted NAV, on a bid value to bid value basis,assuming that all dividends paid out by the Company werereinvested in the shares of the Company at the diluted NAV pershare at the time the shares were quoted ex-dividend.

In accordance with industry practice, dividends payable whichhave been declared but which are unpaid at the balance sheetdate are deducted from the diluted NAV when calculating thediluted return on net assets.

Undiluted return on net assetsReturn on the undiluted NAV per share, on a bid value to bidvalue basis, assuming that all dividends paid out by theCompany were reinvested in the shares of the Company at theundiluted NAV per share at the time the shares were quoted ex-dividend.

In accordance with industry practice, dividends payable whichhave been declared but which are unpaid at the balance sheetdate are deducted from the undiluted NAV when calculatingthe undiluted return on net assets.

Benchmark total return Total return on the benchmark, on a mid-market value tomid-market value basis, assuming that all dividends receivedwere reinvested in the shares of the underlying companies atthe time the shares were quoted ex-dividend.

The benchmark is a recognised index of stocks which shouldnot be taken as wholly representative of the Company’sinvestment universe. The Company’s investment strategy doesnot follow or ‘track’ this index and consequently, there may be

some divergence between the Company’s performance andthat of the benchmark.

Share price discount/premium to diluted NAV per Ordinary shareIf the share price of an investment company is lower than theNAV per share, the shares are said to be trading at a discount.The discount is shown as a percentage of the NAV. The oppositeof a discount is a premium. It is more common for aninvestment company’s shares to trade at a discount than at apremium.

Active position The active position shows the difference between theCompany’s holding of an individual stock, sector or countrycompared with that stock, sector or country’s weighting in theCompany’s benchmark. A positive number indicates an activedecision by the investment manager to own more of (i.e. beoverweight) a particular stock, sector or country versus thebenchmark and a negative number indicates a decision to holdless of (i.e. be underweight) a particular stock, sector or countryversus the benchmark.

Performance attribution definitions:

Stock selection Measures the effect of investing in securities to a greater orlesser extent than their weighting in the benchmark, or ofinvesting in securities which are not included in thebenchmark.

Currency effect Measures the impact of currency exposure differencesbetween the company’s portfolio and its benchmark.

Gearing/cash Measures the impact on returns of borrowings or cashbalances on the Company’s relative performance.

Management fees/other expenses The payment of fees and expenses reduces the level of totalassets and therefore has a negative effect on relativeperformance.

Conversion of Subscription shares The conversion of Subscription shares into Ordinary shares hasa dilutive effect on the undiluted net asset value per Ordinaryshare.

Subscription share dilution effectMeasures the dilutive effect of the potential conversion of alloutstanding Subscription shares at the year end.


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History

The Company was launched in September 1997 as a rollover vehicle forshareholders in The Fleming Far Eastern Investment Trust plc. TheCompany adopted its present name following approval fromshareholders at the Annual General Meeting in February 2006.

Directors

James M Long TD (Chairman) Alun Evans CMGRonald GouldJames StrachanAndrew Sykes

Company Numbers

Company registration number: 3374850

Ordinary Shares

London Stock Exchange Sedol number: 0132077ISIN: GB0001320778Bloomberg ticker: JAI LN

Subscription Shares

London Stock Exchange Sedol number: B3KHYY3ISIN: GB00B3KHYY38Bloomberg ticker: JAIS LN

Market Information

The Company’s Ordinary and Subscription shares are listed on theLondon Stock Exchange. The market price of the Ordinary shares isshown daily in the Financial Times, The Times, The Daily Telegraph,The Scotsman and The Independent. The market price of theSubscription shares is listed in the Financial Times. The Share priceof both the Ordinary and Subscription shares are on the JPMorganinternet site at www.jpmasian.co.uk where the prices are updatedevery fifteen minutes during trading hours.

Website

www.jpmasian.co.uk

Share Transactions

The Company’s shares may be dealt in directly through a stockbrokeror professional adviser acting on an investor’s behalf. They may also bepurchased and held through the J.P. Morgan Investment Account,J.P. Morgan ISA and J.P. Morgan SIPP. These products are all availableon the online wealth manager service, J.P. Morgan WealthManager+available at www.jpmorganwealthmanagerplus.co.uk

Manager

JPMorgan Asset Management (UK) Limited.

Company’s Registered Office

Finsbury Dials20 Finsbury StreetLondon EC2Y 9AQTelephone number: 020 7742 6000

For company secretarial and administrative matters, please contactAlison Vincent.

Registrars

EquinitiReference 1357Aspect HouseSpencer RoadLancingWest Sussex BN99 6DATelephone: 0871 384 2373

Notifications of changes of address and enquiries regarding sharecertificates or dividend cheques should be made in writing to theRegistrar quoting reference 1357.

Registered shareholders can obtain further details on individualholdings on the internet by visiting www.shareview.co.uk.

Auditors

PricewaterhouseCoopers LLP Hay’s Galleria 1 Hay’s Lane London SE1 2RD

Brokers

Cenkos Securities plc 6, 7, 8 Tokenhouse Yard London EC2R 7AS

Savings Product Administrators

For queries on the J.P. Morgan Investment Account, J.P. Morgan ISA andJ.P. Morgan SIPP, see contact details on the back cover of this report.

Information about the Company

Financial CalendarFinancial year end 30th SeptemberFinal results announced NovemberHalf year end 31st MarchHalf year results announced MayInterim Management Statement announced February and JulyDividend on Ordinary shares paid (if any) FebruaryAnnual General Meeting January/February

A member of the AIC


JPMorgan HelplineFreephone 0800 40 30 30 or +44 (0)20 7742 9995

Your telephone call may be recorded for your security

www.jpmasian.co.uk

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