JPMor Glob EM IncTst JEMI Annual Financial Report

  JPMor Glob EM IncTst (JEMI) - Annual Financial Report

RNS Number : 5093O
JPMorgan Glb Emerging Mkts Inc Tst
11 October 2012




                      LONDON STOCK EXCHANGE ANNOUNCEMENT

                                      

              JPMORGAN GLOBAL EMERGING MARKETS INCOME TRUST PLC



                        ANNOUNCEMENT OF FINAL RESULTS



The Directors of JPMorgan  Global Emerging Markets  Income Trust plc  announce 
the Company's results for the year ended 31st July 2012.



Chairman's Statement



Performance

I am pleased to report on another strong performance in the year to 31stJuly
2012. The Company recorded a total return on net assets of +4.0%,
outperforming the benchmark index, the MSCI Emerging Markets Index with net
dividends reinvested (insterling terms), which produced a total return of
-9.8%. The Investment Manager's Report reviews the Company's performance and
gives details on the investment strategy and portfolio construction. The total
return to shareholders was +5.7%, as the Company's share price increased from
112.25p to 114.25p over the year.



Revenue and Dividends

Gross revenue for the year amounted to £10.5 million (2011: £8.5 million) and
net total revenue after finance costs, administrative expenses and taxation
amounted to £8.5million (2011: £6.9 million). Revenue return per Ordinary
share for the year, calculated on the average number of shares in issue, was
5.41p(2011:5.76p).



The Company targeted an initial gross dividend yield of at least 4% based on
the initial issue price of 100p per share. In the period from launch until
31stJuly 2011, the Company paid a total dividend of 4.7p. In the current
financial year the Board has moved to paying quarterly dividends and, to date,
three payments of 0.9p per share have been paid. The Board is pleased to
recommend a final dividend of 2.15pper share. Subject to shareholders'
approval at the Annual General Meeting on 21st November 2012, the dividend
will be paid on 28thNovember 2012 to shareholders on the register as at the
close of business on 2ndNovember 2012. Thiswill bring the total dividend for
the year to 4.85p, an increase of3.2%.



Gearing

The Company's assets have grown substantially since launch and in order to
maintain the flexibility to use gearing appropriately, a second three year
loan facility of US$20million has been taken out and drawn down in full
subsequent to the year end.



Share Capital

During the year, the Company issued a total of 31.1million new shares at a
premium to net asset value. On 10thMay 2012, shareholders granted authority
to issue up to a further 30% of the then issued share capital. This authority
will expire at the forthcoming Annual General Meeting and the Board will seek
shareholder approval for its renewal. However, in order to comply with the
UKLA Listing Rules, the 30% limit will be reset to 10% of the issued share
capital on 13thMay 2013, when the prospectus issued on 14thMay 2012 will
expire. More details are given in the Annual Report.



The Board

On 1stAugust 2011 Pablo Forero resigned as a Director from the Company. On
1stDecember 2011, Richard Robinson was appointed a Director. He is Investment
Director at the Paul Hamlyn Foundation and was previously Group Head of
Charities & Foundations at Schroders plc. He had previously held a number of
senior positions at Rothschild Asset Management and was formerly a director of
Aurora Investment Trust plc.



In accordance with corporate governance best practice, all Directors will seek
reappointment at this year's Annual General Meeting.



Annual General Meeting

The Annual General Meeting will be held at Holborn Bars, 138-142 Holborn,
LondonEC1N 2NQ on Wednesday 21stNovember 2012 at2.00 p.m. The meeting will
include a presentation from the Investment Manager on investment policy and
performance. There will also be an opportunity for shareholders to meet the
Board and representatives of JPMorgan after the meeting.



It would be helpful if shareholders seeking answers to detailed questions put
them in writing beforehand, addressed to the Company Secretary at Finsbury
Dials, 20Finsbury Street, London EC2Y 9AQ. Alternatively, questions may be
submitted via the Company's website
(www.jpmglobalemergingmarketsincome.co.uk). Shareholders who are unable to
attend the AGM in person are encouraged to use their proxy votes. Proxy votes
may be lodged electronically, whether shares are held through CREST or in
certificate form and full details are set out on the form of proxy.



Outlook

History tells us that when price-to-book ratios of companies in emerging
markets stand at levels of 1.5x to 1.6x, as they do now, future returns tend
to be quite good. Allelse being equal, one might feel very optimistic about
the prospects for these markets. But all else is not equal. The trajectory of
the Chinese economy is not at all clear; and the outturn for China will
materially influence profits and dividends for many companies. Coupled with a
global economic malaise, currency tensions and an unstable political
landscape, the investment outlook for emerging equity markets is even foggier
than usual. That being said, the valuation data are comforting.
Dividendyields are attractive relative to many other asset classes and long
term growth prospects remain superior.



Andrew Hutton

Chairman, 11th October 2012





Investment Manager's Report



During its second year, it is pleasing that the Company has again achieved its
income target as well as producing a rise in net asset value of 4.0%,
outperforming the benchmark, the MSCI Emerging Markets Index, which fell by
9.8%, all this despite very volatile market conditions. The Company has
followed on from last year, delivering a steady income stream from a
diversified portfolio of high quality companies and despite the difficult
market conditions, we continue to find attractive ideas.



Excess returns have come largely from stock selection, with the Thai mobile
phone service provider Advanced Info Service being the single largest stock
level contributor, along with significant contributions from Brazilian IT
company Cielo and Turkish bank Arcelik, more than countering underperformers
such as KT Corporation, Asia Cement and Oriflame Cosmetics.



Over the year, currency has boosted performance to a small degree. By
continuing to have a broad range of exposure at a country level, this
diversifies our currency exposure across the asset class and across the two
groups of emerging market currencies: those which are producers of raw
materials, and therefore have currencies affected by commodity prices, and
those of consumer-led markets. Weexpect that although emerging market
currencies will remain volatile, the overall trend against sterling will
remain positive.



Portfolio changes over the year have been modest, with overall turnover of
close to30%. This is consistent with our desire to be a long term investor
and benefit from the compound growth of dividends, which is expected to
average over 10-12% per annum in coming years.



The emphasis of the portfolio, favouring stable growth in sectors such as
consumer, telecommunications and utilities over the cyclicality of natural
resources, has remained constant. Diversification by stock, country and sector
is an important part of the portfolio and the Company is expected to continue
to hold 60-70 individual holdings over the coming year.



Disappointments, of which there were few, tended to be stock specific.
Forinstance, we sold out of a position in an Indian auto-manufacturer during
the year when they cut their dividend, not through anything company specific,
but due to the management's view that they were paying more than their peers.
Understandably, this affected our confidence in the company and the level of
transparency behind the dividend policy. We believe it is critical to
understand the difference between a value trap, whose profitability is
deteriorating for structural reasons, and a value opportunity whose long term
prospects are obscured by cyclical issues, and that this will continue to be
the key to adding performance through stock selection.



Our customary emerging markets valuation metric, the price-to-book ratio,
remains in the 1.5x to 1.6x range, sitting at the lower end of its historical
trading range of 1.5x to 2.5x. This is partly due to the risk aversion of
investors, which stems from macro economic uncertainties. It may also be
attributable to the double dip in earnings due to cost pressures, which
resulted in earnings expectations being cut for both 2012 and 2013. We believe
we are at the tail end of this cycle and, given the supportive liquidity
backdrop, that emerging markets equity valuations look to be at relatively
attractive levels.



Richard Titherington

Investment Manager, 11th October 2012



Principal Risks

With the assistance  of the Manager,  the Board  has drawn up  a risk  matrix, 
which identifies the key  risks to the Company.  These key risks fall  broadly 
under the following categories:



· Investment  and  Strategy:  An  inappropriate  investment  strategy,  for 
example asset allocation or the level of gearing, may lead to underperformance
against the Company's  benchmark index  and peer companies,  resulting in  the 
Company's shares trading on a wider discount. The Board manages these risks by
diversification  of  investments  through  its  investment  restrictions   and 
guidelines, which are monitored and reported on. JPMAM provides the  Directors 
with timely and  accurate management information,  including performance  data 
and attribution analysis, revenue estimates, liquidity reports and shareholder
analyses. The Board monitors the implementation and results of the  investment 
process with  the  Investment Manager  who  attends all  Board  meetings,  and 
reviews data which show  statistical measures of  the Company's risk  profile. 
The Investment Manager  is free  to employ the  Company's gearing  tactically, 
within a strategic range set by the Board.

•   Foreign Currency:  Certain  of the  Company's assets,  liabilities  and 
income are  denominated  in  currencies other  than  sterling  (the  Company's 
functional currency  and the  currency  in which  it  reports). As  a  result, 
movements in exchange rates may affect the sterling value of these items.

•  Financial: The financial risks faced by the Company include market price
risk, interest rate risk, liquidity risk and credit risk. Further details are
disclosed in note 23 of the Company's Annual Report.

•  Accounting, Legal and Regulatory:  In order to qualify as an  investment 
trust, the Company must comply with  Section 1158. Were the Company to  breach 
Section 1158, it  might lose investment  trust status and,  as a  consequence, 
gains within the Company's  portfolio could be subject  to Capital Gains  Tax. 
The Section 1158 qualification criteria are continually monitored by JPMAM and
the results reported  to the Board  each month. The  Company must also  comply 
with the provisions of the Companies Act 2006 and, since its shares are listed
on the  London Stock  Exchange,  the UKLA  Listing  Rules and  Disclosure  and 
Transparency Rules ('DTRs'). A breach of the Companies Act could result in the
Company  and/or  the  Directors  being  fined  or  the  subject  of   criminal 
proceedings. Breach of  the UKLA  Listing Rules or  DTRs could  result in  the 
Company's shares  being suspended  from  listing which  in turn  would  breach 
Section 1158. The Board relies on the services of its Company Secretary, JPMAM
to ensure compliance with  the Companies Act 2006  and the UKLA Listing  Rules 
and DTRs.

•  Corporate Governance and Shareholder Relations: Details of the Company's
compliance with Corporate Governance  best practice, including information  on 
relations with shareholders, are set out in the Annual Report.

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





Related Parties Transactions



During the year, no transactions with  related parties have taken place  which 
have materially  affected the  financial position  or the  performance of  the 
Company.



Directors' Responsibilities



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



a)    the  financial   statementshave  been  prepared  in   accordance 
withapplicableUK accounting  standards,and give  a true  and fair  view  of 
theassets, liabilities,financial position and profit or lossof the Company;
and



b) theAnnual Report, to be published shortly,includes a fair  review 
of the development  and performance of  the business and  the position of  the 
Company,  together   with   a  description   of   the  principal   risks   and 
uncertaintiesthat they face.



For and on behalf of the Board

Andrew Hutton

Chairman

11th October 2012



Income Statement

for the year ended 31st July 2012

                                        2012                   2011^1
                               Revenue Capital   Total Revenue Capital   Total
                                 £'000   £'000   £'000   £'000   £'000   £'000
Gains on investments held at
fair value through profit or
loss                                 -   4,496   4,496       -  13,520  13,520
Net foreign currency
(losses)/gains                       - (1,035) (1,035)       -     500     500
Income from investments         10,530       -  10,530   8,459       -   8,459
Other interest receivable and
similar income                       2       -       2       8       -       8
Gross return                    10,532   3,461  13,993   8,467  14,020  22,487
Management fee                   (501) (1,170) (1,671)   (398)   (928) (1,326)
Performance fee                      - (2,838) (2,838)       -   (897)   (897)
Other administrative expenses    (450)       -   (450)   (398)       -   (398)
Net return/(loss) on ordinary
activities before finance
costs and taxation               9,581   (547)   9,034   7,671  12,195  19,866
Finance costs                    (128)   (298)   (426)   (102)   (149)   (251)
Net return/(loss) on ordinary
activities before taxation       9,453   (845)   8,608   7,569  12,046  19,615
Taxation                         (971)       -   (971)   (706)       -   (706)
Net return/(loss) on ordinary
activities after taxation        8,482   (845)   7,637   6,863  12,046  18,909
Return/(loss) per share (note
3)                               5.41p (0.54)p   4.87p   5.76p  10.11p  15.87p



^1 For the period from incorporation on 4th June 2010 to 31st July 2011.



All revenue and capital items in the above statement derive from continuing
operations. No operations were discontinued during the year.

The 'Total' column of this statement is the profit and loss account of the
Company and the 'Revenue' and 'Capital' columns represent supplementary
information prepared under guidance issued by the Association of Investment
Companies.



Statement of Total Recognised Gains and Losses

for the year ended 31st July 2012

                                          2012                  2011^1
                                  Revenue Capital Total Revenue Capital  Total
                                    £'000   £'000 £'000   £'000   £'000  £'000
Movement in fair value of the
cash flow hedge                         -      19    19       -   (121)  (121)
Net return/(loss) on ordinary
activities                          8,482   (845) 7,637   6,863  12,046 18,909
Total recognised gains/(losses)
for the year                        8,482   (826) 7,656   6,863  11,925 18,788



^1 For the period from incorporation on 4th June 2010 to 31st July 2011.





Reconciliation of Movements in Shareholders' Funds

for the year ended 31st July 2012

               Called
                   up    Capital
                share redemption      Share    Other  Capital  Revenue
              capital    reserve    premium  reserve reserves  reserve    Total
                £'000      £'000      £'000    £'000    £'000    £'000    £'000
At 4th June
2010^1              -          -          -        -        -        -        -
Issue of
Management
shares            13          -          -        -        -        -      13
Repurchase
and
cancellation
of Management
shares          (13)        13          -        -    (13)        -    (13)
Issue of
Ordinary
shares
following
placing and
offer for
subscription   1,040          -   102,960        -        -        - 104,000
Expenses of
placing and
offer for
subscription        -          -   (1,712)        -        -        - (1,712)
Issue of
Ordinary
shares           156          -    17,137        -        -        -  17,293
Additional
share issue
expenses            -          -     (310)        -        -        -   (310)
Redesignation
of share
premium             -          - (101,276) 101,276        -        -        -
Issue of
Ordinary
shares on
conversion of
'C' shares       230          -    23,762        -   1,527       -  25,519
Movement in
fair value of
the cash flow
hedge               -          -          -        -   (121)        -   (121)
Net return on
ordinary
activities          -          -          -        -  12,046   6,863  18,909
Dividends
appropriated
in the period       -          -          -        -        - (3,798) (3,798)
At 31st July
2011            1,426         13     40,561  101,276   13,439    3,065  159,780
Issue of
Ordinary
shares           311          -     33,748        -        -        -  34,059
Expenses of
new share
issue               -          -     (298)        -        -        -   (298)
Net
(loss)/return
from ordinary
activities          -          -          -        -   (845)   8,482   7,637
Movement in
fair value of
the cash flow
hedge               -          -          -       -       19        -      19
Dividends
appropriated
in the year         -          -          -        -        - (6,546) (6,546)
At 31st July
2012            1,737         13     74,011  101,276   12,613    5,001  194,651



^1 Date of incorporation.





Balance Sheet

at 31st July 2012

                                                                 2012     2011
                                                                £'000    £'000
Fixed assets
Investments held at fair value through profit or loss         207,152  169,227
Investment in liquidity fund held at fair value through
profit or loss                                                  2,904      579
Total investments                                             210,056  169,806
Current assets
Debtors                                                         1,830    1,235
Cash and short term deposits                                      729    2,117
                                                                2,559    3,352
Creditors: amounts falling due within one year                (3,649)  (1,087)
Financial liability: derivative financial instrument            (102)    (121)
Net current (liabilities)/assets                              (1,192)    2,144
Total assets less current liabilities                         208,864  171,950
Creditors: amounts falling due after more than one year      (12,757) (12,170)
Provision for liabilities and charges
Performance fees                                              (1,456)        -
Net assets                                                    194,651  159,780
Capital and reserves
Called up share capital                                         1,737    1,426
Capital redemption reserve                                         13       13
Share premium                                                  74,011   40,561
Other reserve                                                 101,276  101,276
Capital reserves                                               12,613   13,439
Revenue reserve                                                 5,001    3,065
Total equity shareholders' funds                              194,651  159,780
Net asset value per share (note 4)                             112.0p   112.0p





Company registration number: 7273382





Cash Flow Statement

for the year ended 31st July 2012

                                                                2012    2011^1
                                                               £'000     £'000
Net cash inflow from operating activities                      6,084     4,876
Returns on investments and servicing of finance
Interest paid                                                  (419)     (250)
Finance costs paid relating to 'C' shares                          -     (795)
Net cash outflow from returns on investments and servicing
of finance                                                     (419)   (1,045)
Taxation
Overseas tax recovered                                            19         -
Total tax recovered                                               19         -
Capital expenditure and financial investment
Purchases of investments                                   (130,736) (223,292)
Sales of investments                                          97,035    67,342
Other capital charges                                           (18)     (305)
Net cash outflow from capital expenditure and financial
investment                                                  (33,719) (156,255)
Dividends paid                                               (6,546)   (3,798)
Net cash outflow before financing                           (34,581) (156,222)
Financing
Proceeds of placing and offer for subscription                     -   104,000
Expenses of placing and offer for subscription                     -   (1,712)
Proceeds of issue of ordinary shares                          33,945    17,293
Costs of subsequent issue of ordinary shares                   (298)     (310)
Drawdown of loan                                                   -    12,562
Loan arrangement fees paid                                         -      (18)
Gross proceeds of 'C' share issue                                  -    26,402
Net cash inflow from financing                                33,647   158,217
(Decrease)/increase in cash for the year                       (934)     1,995



^1 For the period from incorporation on 4th June 2010 to 31st July 2011.







Notes to the Accounts

for the year ended 31st July 2012

1. Accounting policies

 Basis of accounting

 The accounts are prepared in accordance with the Companies Act 2006,
United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the
Statement of Recommended Practice 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' (the 'SORP') issued by the AIC in
January 2009.

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

 The accounts have been prepared on a going concern basis.



2. Dividends

 Dividends paid and proposed

                                                      2012  2011
                                                     £'000 £'000
 2011 Final dividend paid of 1.45p                   2,198     -
 First interim dividend paid of 0.90p (2011: 1.00p)  1,380 1,164
 Second interim dividend paid of 0.90p (2011: 2.25p) 1,449 2,634
 Third interim dividend paid of 0.90p (2011: Nil)    1,519     -
 Total dividends paid in the year                    6,546 3,798
 Final dividend proposed of 2.15p (2011: 1.45p)      3,735 2,069



3. Return/(loss) per share

 Return/(loss) per share is based on the following:

                                                              2012        2011
                                                             £'000       £'000
 Revenue return                                              8,482       6,863
 Capital (loss)/return                                       (845)      12,046
 Total return                                                7,637      18,909
 Weighted average number of Ordinary shares in issue
 during the year                                       156,827,362 119,152,531
 Revenue return per share                                    5.41p       5.76p
 Capital (loss)/return per share                           (0.54)p      10.11p
 Total return per share                                      4.87p      15.87p



4. Net asset value per share

 The net asset value per share is based on the net assets attributable to
the ordinary shareholders of £194,651,000 (2011: £159,780,000) and on the
173,719,438 (2011: 142,655,853) ordinary shares outstanding at 31st July 2012.



5.  Status of results announcement



2011FinancialInformation

The figures and financial information for 2011are extractedfrom
thepublishedAnnual Report and Accountsforthe period ended 31st July
2011and do not constitute the statutory accountsfor that year.TheAnnual
Report and Accountshasbeen delivered to the Registrar of Companies and
included theReport of theIndependent Auditors which was unqualified and did
not contain a statement under either section 498(2) or section 498(3) of the
Companies Act 2006.



2012FinancialInformation

 The figures and financial information for 2012are
extractedfromtheAnnual Report and Accountsfor the yearended 31st July
2012and do not constitutethestatutory accountsfor the year.TheAnnual
Report andAccountsincludetheReport of theIndependent Auditors which is
unqualified anddoesnot contain a statement under either section498(2)or
section498(3) of the Companies Act2006. TheAnnual Report andAccountswill
be delivered to the Register of Companies in due course.



Neither the contents of the Company's website nor the contents of any  website 
accessible from hyperlinks on the Company's website (or any other website)  is 
incorporated into, or forms part of, this announcement.



JPMORGAN ASSET MANAGEMENT (UK) LIMITED



ENDS



A copy of the annual report will shortly be submitted to the National  Storage 
Mechanism and will be available for inspection at www.hemscott.com/nsm.do



The annual report will also shortly  be available on the Company's website  at 
www.jpmglobalemergingmarketsincome.co.uk where up to  date information on  the 
Company, including  daily  NAV  and share  prices,  factsheets  and  portfolio 
information can also be found.



JPMORGAN ASSET MANAGEMENT (UK) LIMITED

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


ACSFFUFEFFESEIS -0- Oct/11/2012 13:00 GMT