JPMorgan Japanese Regulatory News (JFJ)

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN JAPANESE INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 30th SEPTEMBER 2019

Legal Entity Identifier: 549300JZW3TSSO464R15

Information disclosed in accordance with the DTR 4.1.3

CHAIRMAN'S STATEMENT

Investment Performance

Equity returns for the year to 30th September 2019 were poor in Japan. Disappointingly, after strong investment performance in the preceding financial year, the Company's net asset total return for the financial year underperformed the Company's benchmark, the TOPIX index in sterling terms, by some 2.3% (being a return of -3.0% compared with a total return from the benchmark of -0.7%).

The share price total return for the financial year also underperformed the benchmark but by a slightly smaller 1.8% (being a return of -2.5% compared to the benchmark return of -0.7%) as the discount narrowed slightly.

As highlighted in the Half Year Report, equity markets in Japan and around the world declined in the fourth quarter of 2018 (which is the first quarter of the Company's financial year). High growth companies of the sort favoured by the Manager's investment approach (which is set out on page 9) and which therefore constitute the majority of the Company's portfolio, were particularly badly affected and this resulted in the portfolio underperforming the benchmark in the fourth quarter of 2018 by 9.0%. This was partially offset by outperformance in the first calendar quarter of 2019 of 7.2% as markets and the stocks in the portfolio recovered. When taking the six months to 31st March 2019 in totality net asset total return underperformance was -3.7%.

I am pleased to report that in the second half of the year, the six months to 30th September 2019, the Company's portfolio has continued to outperform its benchmark by +2.0%. The net asset total return underperformance for the financial year to 30th September 2019 was -2.3% compared to -3.7% for the half year period.

On a further positive note, since the year end the net asset total return as at 30th November 2019 has outperformed the benchmark by 1.85%; the share price total return as at 30th November 2019 has similarly outperformed by some 6.36%.

Given the investment approach taken by your Manager, there will be periods of short term underperformance of the sort experienced in the fourth quarter of 2018 and it is therefore important also to focus on the long term performance track record which your Board believes is very encouraging. The Company's annualised net asset total return over three, five and ten years amounts to +10.5%, +16.0% and +11.9%, respectively, an annualised outperformance of +3.1%, +7.0% and +8.2% compared to the benchmark index over these periods. The share price total returns for the same periods are similar.

The Investment Managers' Report below reviews the markets and provides more detail on the Managers' investment approach and process, the resulting investment performance, the investment rationale for many of the stocks in which the Company is invested along with details of the stocks that have contributed and detracted most from performance.

Revenue and Dividends

Income received during the year was essentially unchanged, with earnings per share for the full year falling slightly to 5.52p (2018: 5.53p).

The Board's dividend policy is to pay out the majority of the revenue available each year. The Board therefore proposes, subject to shareholders' approval at the Annual General Meeting, to pay a final dividend of 5.00p per share (2018: 5.00p) on 24th January 2020 to shareholders on the register at the close of business on 27th December 2019 (ex-dividend date 24th December 2019).

Gearing and Long Term Debt

The Board reviews the Company's gearing policy and guidelines regularly. These remained unchanged, so that in normal market conditions the gearing should be within the range of 5% net cash to 20% geared. At the beginning of the year the gearing level was 14.7% and at the end of the year was 13.1%, averaging 12.0% over the year.

The Company's borrowings are made up of two elements; the Yen 13 bn Senior Secured Loan Notes and a Yen 11 bn revolving credit facility. The revolving credit facility, previously with National Australia Bank, was renewed earlier this month with Scotiabank. Further details are set out in the Annual Report.

Discount Management

During the period under review the discount to net asset value at which the shares trade ranged between 12.8% and 4.4%, with a one year average of 9.0%. This compared to the peer group average range of 8.9% to 0.8% (2018: 0.0% to 6.8%) and a one year average of 5.4% (2018: 3.8%).

The Board remains focused on the discount and is working closely with the Manager to increase the Company's marketing efforts to help reduce the discount.

Environmental, Social and Governance Issues

The Board believes that the Managers have long had a constructive and thorough approach to environmental, social and governance ('ESG') issues, not only in the way in which ESG considerations are incorporated into their investment decisions but also in the way in which they continue to engage with companies in the portfolio on important ESG matters. The Board believes that effective stewardship can help create sustainable value for clients.

As investors take ever greater account of ESG issues when deciding on which and investment vehicle to use and as the industry moves towards greater disclosure of its engagement with investee companies, the Board believes that JPMorgan's deep experience in integrating its dedicated ESG resource with its team of fund managers and analysts based in Japan, supported by a dedicated local ESG resource, provides competitive advantage for the Company.

In this report we have added to the more comprehensive material included in the 2019 Half Year Report and in particular provided further details on the Managers' ESG processes.

Management Evaluation and Fees

During the year the Management Engagement Committee undertook a review of the Manager which took account, amongst other things, of the Manager's investment performance record, investment team and processes, investment style, resources and risk control mechanisms.

The Board also conducted its annual detailed review of management fees during the year. It concluded that the current Ongoing Charges rate of 0.68% is competitive compared to the Company's peer group.

The Board

Sally Macdonald was appointed as a Director following the 2018 Annual General Meeting in December and has proved an excellent addition to the Board.

During the year the Board undertook an externally facilitated evaluation of itself and its Board committees in accordance with good corporate governance practice and concluded that the Board retains the various skills and experience it needs and works well together.

As outlined in the Half Year Report, the Board's retirement schedule suggests that we would not currently anticipate any Board changes until 2022. However, the Board attaches great importance to the principles on diversity included in the Hampton-Alexander Review and is very well advanced with its plans to be in full conformity with its recommendations on diversity by the end of 2020.

Foreign Exchange and Foreign Trade Act

Japan's parliament has recently passed a bill amending the Foreign Exchange and Foreign Trade Act. While the full impact of the amendments remains unclear, the Manager sets out details of what is known and their current thinking on what this could mean for the Company, in the Investment Managers' report below.

Annual General Meeting

This year's Annual General Meeting will be held on Friday, 17th January 2020 at 12.30 p.m. at 60 Victoria Embankment, London EC4Y 0JP.

As in previous years, in addition to the formal part of the meeting there will be a presentation from the Investment Managers who will answer questions on the portfolio and investment performance. There will also be an opportunity to meet the Board and representatives of JPMorgan Asset Management after the meeting.

If you have any detailed or technical questions, it would be helpful if you could raise these in advance of the meeting with the Company Secretary at 60 Victoria Embankment, London EC4Y 0JP. Alternatively, questions may be submitted via the Company's website (www.jpmjapanese.co.uk).

Shareholders who are unable to attend the AGM 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.

I look forward to welcoming as many of you as possible to this meeting.

Outlook

The Investment Managers have set out their views on the outlook for Japanese equities below in the Investment Managers' Report.

Christopher Samuel

Chairman 13th December 2019

INVESTMENT MANAGERS' REPORT

Performance

In the 12 months to 30th September 2019 the Company produced a total return on net assets of -3.0%, in sterling terms and shareholders received a total return of -2.5%. These compare with a total return of -0.7% from the Company's benchmark index, the TOPIX Index in sterling terms. Over the three and five years to the end of September 2019 the Company's annualised net assets have returned +10.5% and +16.0% respectively, compared to +7.9% and +11.9% for the benchmark, also all in sterling, with a share price return of +10.9% and +16.5% over the same periods. The average level of gearing over the 12 month period to 30th September 2019 was 12.0%, which detracted from returns given the overall decline in the market.

Investment Philosophy and Process

Our investment approach emphasises individual stock selection to build a portfolio of quality growth stocks with strong future growth prospects. This means that, within some broad portfolio risk limits, the Company's portfolio is likely to differ materially from the benchmark index as we will usually avoid companies and sectors that face structural issues even if they are a large constituent of the benchmark index.

The opportunity to find attractive opportunities is enhanced by the fact that the Japanese market is under-researched when compared with other developed equity markets. With well over 50% of the constituents of the Company's benchmark index being covered by no more than one provider of broker research, there are significant opportunities to identify sources of return from Japanese equities that are not well known. Against the background of a market with poor sell-side coverage, we have the resources in Japan to carry out our own research and identify attractive investment themes and companies. Our Tokyo-based investment team consists of 24 investment professionals who have carried out over 4,000 company visits in the past year.

A combination of desk-based research and company meetings contribute to our rating of a company. We consider the growth opportunity for the industry overall before considering the company's competitive positioning and management. This allows us to assess the company's potential for growth. We then look at financial metrics with a focus on cash flow and balance sheet strength to assess the overall economics of the business. We also consider governance issues such as shareholder returns, management strength and the track record on environmental and social issues. This allows us to assign a strategic classification to each company. The highest rating is 'Premium' followed by 'Quality' and then 'Trading'. We assign the lowest rating, Trading, to approximately 80% of the TOPIX index, whereas for the Company over 75% of portfolio companies are classified as either Premium or Quality as shown by the chart below. Only then do we consider valuations - we do not buy a company where the short term valuation looks low unless it has a strong long term growth outlook. In addition, for a company to attract a 'Premium' rating it must also survive a positive 'ESG' vetting process because in our experience a company that scores poorly in ESG terms may well also carry business risks we would seek to avoid. For further information on ESG please see pages 20 to 25 in this report which discusses our ESG approach and activities.

The work carried out in looking through the under-researched parts of the market helps us build a portfolio that is comprised of a number of high conviction holdings which we expect to hold for long periods of time. At the year end the portfolio held 61 different stocks, compared to over 2,000 benchmark constituents. 27 stocks, representing over 62% of the portfolio, have been held continuously for more than three years; 13 stocks, representing over 30% of the portfolio, have been held continuously for more than five years.

PERFORMANCE ATTRIBUTION

YEAR ENDED 30TH SEPTEMBER 2019

Investment Performance

The themes to which the portfolio is exposed have not changed during the year under review. The financial characteristics of the portfolio are also unchanged from last year: balance sheets and free cash flows are stronger; earnings growth faster and return on equity higher than the market as a whole. For example, as at 30th September 2019 the holdings in the portfolio generated an average return on equity of 16.6%, compared to the benchmark return on equity of 11.3%. The portfolio valuation metrics, such as the price earnings ratio, are also higher than the market average but we believe the strong long-term growth prospects of the companies we own more than justify this.

We also have a bias to mid and smaller sized companies reflecting the fact that coverage of these companies by analysts is poor. This provides us with the opportunity to identify investments overlooked by the broader market. These companies also tend to have more focused business models. Investors should expect to continue to see these characteristics in the portfolio over the economic cycle.

Over the year under review, we made some changes to the portfolio although annualised turnover was reasonably low at 18%. The number of holdings was unchanged at 61 stocks. Taking advantage of the closed end nature of the Company means we do not have to worry about daily liquidity and therefore we increased exposure to some smaller companies. The portfolio can invest in the very best Japanese companies across the entire market cap range. The gearing level moved from 14.7% to 13.1% compared to a year ago.

The largest new purchases were Fast Retailing and Oriental Land, with additions to our holdings in Kao, OBIC and Pan Pacific International Holdings (formerly named Don Quijote).

The most significant sales were Mitsubishi UFJ Financial Group, Trend Micro and Komatsu, with reductions to Cyber Agent and Pigeon.

The Company underperformed the benchmark over the review period. This was primarily due to a sell-off in growth stocks in October 2018, the first month of the Company's financial year and gearing at that time. Both growth stocks, which tend to trade on higher short-term valuations, and stocks which had previously performed well following good results, were weak. The Company has high exposure to stocks in both of these categories as we believe that the outstanding long-term growth profiles of portfolio companies more than justify their valuations. We do not have a short term trading approach and believe that a recent relative increase in share price is an insufficient reason to sell a stock - there are several examples of stocks we hold that have increased several fold during our ownership.

The market volatility mentioned in the previous paragraph arose largely as a result of uncertainty around rising interest rates in the US, concerns over global economic growth and a potential trade war between China and the US. During the remainder of the financial year the Company's performance significantly improved as concerns over rising interest rates dissipated. In this environment investors sought out high quality companies with strong balance sheets and free cash flows with growth that does not depend on the global economic cycle. These are exactly the types of stocks the Company is exposed to in the portfolio. We continue to have confidence in the long-term attractions of these companies.

During the year the top contributing stocks included Pan Pacific, Hikari Tsushin, Tokio Marine, M3 and Keyence. Three of these companies are discussed above. The remaining two top contributors to stocks were:

• Tokio Marine (Investment Theme - Corporate Governance), Japan's number one non-life insurance company, remains a significant position in the Company's portfolio. The top three companies in this sector have an overwhelming 90% domestic market share. There are significant improvements in corporate governance in this sector. Tokio Marine has increased its dividend per share fivefold over the last 10 years while buybacks have resulted in the number of shares outstanding decreasing by over 10%.

• Pan Pacific International Holdings (Investment Theme - Stock Specific) (formerly named Don Quijote) operates a chain of discount stores. It is a major 'disruptor' in the Japanese retail industry with a low cost structure that allows it consistently to beat incumbents. It adjusts merchandise depending on the prevailing economic trend and has proved successful in both inflationary and deflationary environments. The company is also increasingly successful in new areas such as food and products for tourists. For example the percentage of sales to tourists has increased from roughly 1% five years ago to over 10% now. During the period the company announced its acquisition of competitor, Uny. Stores that have completed their conversion into Don Quijote stores have seen sales rise almost two-fold. The company has a strong track record on such acquisitions, having bought Nagasakiya in 2007.

The largest detractors to performance were:

• Cyber Agent (Investment Theme - Internet) is Japan's number one online advertising agency. It also operates games for mobile phones and is investing in online television. The penetration of online advertising in Japan is much lower than other developed markets and CyberAgent continues to increase its share. The shares have struggled following the company's downward revision to its earnings projection due to poor sales in its mobile game business.

• Pigeon (Investment Theme - Japan Brand) is a manufacturer of baby goods with 75% of the Japanese baby bottle market. It is expanding rapidly across the Asian region. The shares have performed strongly over several years and were caught in the general market weakening in Autumn 2018 rather than there being a particular reason for the underperformance.

• Zenrin (Investment Theme - Internet) is Japan's number one producer of maps. The company is shifting its business model to focus on recurring revenues selling its high-precision content to businesses. The shares underperformed after a partnership with Google was terminated. We continue to monitor this company.

• Makita (Investment Theme - Stock Specific) manufactures power tools. The company is expanding into the outdoor power equipment market. This is attractive because the market is twice the size of its core business. Tougher emission regulations are a tailwind for the adoption of battery powered equipment. The shares underperformed because of concerns the slowing global economy would impact short-term earnings.

• Toyota Motor (Not Held) is the world's largest car company. It has enjoyed relatively robust earnings over the past year. However, we believe it faces structural headwinds and competitive pressures in the long-term and continue not to own the shares.

At the end of September 2019, the largest overweight positions compared to the TOPIX index were in M3, Shiseido, Keyence, Kao and Fast Retailing.

Foreign Exchange and Foreign Trade Act

As discussed in the ESG report on the following pages, there has been continued improvement in corporate governance over the last year in Japan, as evidenced by rising dividends and increasing share buybacks. However, Japan's parliament has recently passed a bill amending the Foreign Exchange and Foreign Trade Act. The revision has attracted attention as it lowers the pre-disclosure threshold from the current 10% to 1% for investments by foreign investors in sensitive industries. The full impact of the amendments is as yet unknown, with further clarification required, for example, on the scope of foreign investors exempt from the rules. Draft rules are expected to be published in February 2020, followed by a period of public consultation before the law becomes operational in Spring 2020. Concerns have been raised by some investors over the potential corporate governance implications, in particular for activist investors, as exemptions will not apply to foreign investors who make 'important proposals' to companies. Based on our interpretation of the information available at the current time, we believe the amendments will not impact the stewardship activities of JPMAM and its ability to invest on behalf of the Company, as the definition of the 'important proposal' provision relates to limited types of action by shareholders, such as the tabling of a shareholder proposal to nominate a director. We will monitor developments and report further in more detail in the Company's Interim Report.

Market review and outlook

The Company focuses on individual stocks rather than trying to predict the direction of the global economy. However, there have been important events during the year.

The Japanese market is more cyclical than other developed markets and can thus be commensurately more impacted by global economic developments, both positively and negatively. Over the last year concerns about the trade war between the US and China have continued, together with the effect this may have on corporate earnings. Indeed, companies have already lowered forecasts because of these concerns. In Japan, the ruling Liberal Democratic Party convincingly won the Upper House election in July while key economic and political measures, such as the lowest unemployment rate for twenty years, remain robust. In October 2019 the consumption tax rate was increased from 8% to 10%. We await to see the effect of this decision. The Rugby World Cup was highly successful in terms of impeccable organization, high attendance and boosting Japan's profile; and we can look forward to something similar with the Olympics in 2020.

The companies we have invested in have strong structural growth outlooks, competitive positions and balance sheets and we believe they will perform well in the long-term regardless of the performance of the wider global economy. The level of gearing currently deployed reflects our conviction in the companies that we own.

Nicholas Weindling

Shoichi Mizusawa

Investment Managers

Tokyo 13th December 2019

PRINCIPAL RISKS

The Directors confirm that they have carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The risks identified have changed over the year under review, and the ways in which they are managed or mitigated are summarised as follows.

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 Underperformance and Strategy

An inappropriate investment strategy, for example as to thematic exposure, sector allocation, undue concentration of holdings, factor risk exposure or the degree of total portfolio risk, 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 and through its investment restrictions and guidelines, which are monitored and reported on by the Manager. The Manager provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, liquidity reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Investment Managers, at least one of whom usually attends all Board meetings, and reviews data which show measures of the Company's risk profile. The Investment Managers employ the Company's gearing tactically, within a strategic range set by the Board. The Board holds a separate meeting devoted to strategy each year.

• Market and Currency

Market risk arises from uncertainty about the future prices of the Company's investments. It represents the potential loss the Company might suffer through holding investments in the face of negative market movements. The Board considers thematic and factor risks, stock selection and levels of gearing on a regular basis and has set investment restrictions and guidelines which are monitored and reported on by the Manager.

The Board monitors the implementation and results of the investment process with the Manager. The majority of the Company's assets, liabilities and income are denominated in yen rather than in the Company's functional currency of sterling (in which it reports). As a result, movements in the yen:sterling exchange rate may affect the sterling value of those items and therefore impact on reported results and/or financial position. Therefore, there is an inherent risk from these exchange rate movements. It is the Company's policy not to undertake foreign currency hedging. Further details about the foreign currency risk may be found in note 22 in the Annual Report.

• Loss of Investment Team or Portfolio Manager

A sudden departure of a Portfolio Manager or several members of the investment management team could result in a short term deterioration in investment performance.

The Board seeks assurance that the Manager takes steps to reduce the risk arising from such an event by ensuring appropriate succession planning and the adoption of a team based approach, as well as special efforts to retain key personnel. The Board engages with the senior management of the Manager in order to mitigate this risk.

• Discount

A disproportionate widening of the discount relative to the Company's peers could result in loss of value for shareholders.

The Board regularly discusses discount policy.

• Change of Corporate Control of the Manager

The Board holds regular meetings with senior representatives of the Manager in order to obtain assurance that the Manager continues to demonstrate a high degree of commitment to its asset management and investment trust business.

• Accounting, Legal and Regulatory

In order to qualify as an investment trust, the Company must comply with Section 1158 of the Corporation Tax Act 2010 ('Section 1158'). Details of the Company's approval are given under Management of the Company on page 35. Were the Company to breach Section 1158, it may lose investment trust status and, as a consequence, gains within the Company's portfolio would be subject to Capital Gains Tax. The Section 1158 qualification criteria are continually monitored by the Manager 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, Market Abuse Regulation ('MAR'), Disclosure Guidance and Transparency Rules ('DTRs') and, as an investment trust, the Alternative Investment Fund Managers Directive ('AIFMD'). 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, the Manager and its professional advisers to ensure compliance with the Companies Act 2006, the UKLA Listing Rules, DTRs, MAR and AIFMD.

• 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 Corporate Governance Statement in the Annual Report.

• Operational

Disruption to, or failure of, the Manager's accounting, dealing or payments systems or the Depositary or Custodian's records may prevent accurate reporting and monitoring of the Company's financial position.

Details of how the Board monitors the services provided by JPMF and its associates and the key elements designed to provide effective risk management and internal control are included within the Risk Management and Internal Controls section of the Corporate Governance Statement in the Annual Report.

• Cyber Crime

The threat of cyber attack, in all guises, is regarded as at least as important as more traditional physical threats to business continuity and security. The Company benefits directly and/or indirectly from all elements of JPMorgan's Cyber Security programme. The information technology controls around physical security of JPMorgan's data centres, security of its networks and security of its trading applications, are tested by independent auditors and reported every six months against the AAF Standard.

• Financial

The financial risks faced by the Company include market price risk, liquidity risk and credit risk. Further details are disclosed in note 22 in the Annual Report.

TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES

Details of the management contract are set out in the Directors' Report in the Annual Report. The management fee payable to the Manager for the year was £4,401,000 (2018: £4,527,000) of which £nil (2018: £nil) was outstanding at the year end.

Included in administration expenses in note 6 on page 63 are safe custody fees amounting to £96,000 (2018: £111,000) payable to JPMorgan Chase Bank, N.A., of which £18,000 (2018: £19,000) was outstanding at the year end.

The Manager may carry out some of its dealing transactions through group subsidiaries. These transactions are carried out at arm's length. The commission payable to JPMorgan Securities for the year was £1,000 (2018: £11,000) of which £nil (2018: £nil) was outstanding at the year end.

Handling charges on dealing transactions amounting to £5,000 (2018: £1,000) were payable to JPMorgan Chase Bank N.A. during the year of which £1,000 (2018: £2,000) was outstanding at the year end.

At the year end, total cash of £3,073,000 (2018: £7,278,000) was held with JPMorgan Chase. A net amount of interest of £nil (2018: £nil) was receivable by the Company during the year from JPMorgan Chase of which £nil (2018: £nil) was outstanding at the year end.

Stock lending income amounting to £1,140,000 (2018: £293,000) was receivable by the Company during the year. JPMAM commissions in respect of such transactions amounted to £141,000 (2018: £52,000).

Full details of Directors' remuneration and shareholdings can be found in note 6 in the Annual Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the annual report and financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with United Kingdom generally accepted accounting practice (United Kingdom Accounting Standards) including FRS 102 'The Financial Reporting Standards applicable in the UK and Republic of Ireland' and applicable laws. Under company law the Directors must not approve the financial statements unless they are satisfied that, taken as a whole, the annual report and financial statements are fair, balanced and understandable, provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the total return or loss of the Company for that period. 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 Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on a 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.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The accounts are published on the www.jpmjapanese.co.uk website, which is maintained by the Company's Manager. The maintenance and integrity of the website maintained by the Manager is, so far as it relates to the Company, the responsibility of the Manager. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditors accept no responsibility for any changes that have occurred to the accounts since they were initially presented on the website. The accounts are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

Under applicable law and regulations the Directors are also responsible for preparing a Directors' Report, Strategic Report, Statement of Corporate Governance and Directors' Remuneration Report that comply with that law and those regulations.

Each of the Directors, whose names and functions are listed in the Annual Report, confirms that, to the best of their knowledge:

• the financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, and applicable law), (United Kingdom Generally Accepted Accounting Practice) give a true and fair view of the assets, liabilities, financial position and net return or loss of the Company; and

• the Strategic Report 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 uncertainties that the Company faces.

The Board confirms that it is satisfied that the annual report and financial statements taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the total return or loss of the Company for that period.

For and on behalf of the Board

Christopher Samuel

Chairman 13th December 2019

STATEMENT OF COMPREHENSIVE INCOME

for the year ended 30th september 2019

1. Foreign currency losses are due to Yen denominated loan notes and bank loans.

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30TH SEPTEMBER 2019

1. This reserve forms the distributable reserve of the Company and may be used to fund distributions to investors via dividend payments.

STATEMENT OF FINANCIAL POSITION

at 30th september 2019

The financial statements were approved and authorised for issue by the Directors on 13th December 2019 and were signed on their behalf by:

Christopher Samuel

Chairman

STATEMENT OF CASH FLOWS

For the year ended 30th September 2019

NOTES TO THE FINANCIAL STATEMENTS

1. Accounting policies

Basis of accounting

The financial statements are prepared under the historical cost convention, modified to include fixed asset investments at fair value, in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in November 2014 and updated in February 2018. The revised SORP issued in October 2019 is applicable for accounting periods beginning on or after 1st January 2019. The Company has chosen not to early adopt the revised SORP.

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

The financial statements have been prepared on a going concern basis. The disclosures on going concern in the Annual Report form part of these financial statements.

The policies applied in these financial statements are consistent with those applied in the preceding year.

2. Return/(loss) per share

3. Dividends

(a) Dividends paid and proposed

All dividends paid and proposed in the year are and will be funded from the revenue reserve.

The dividend proposed in respect of the year ended 30th September 2019 is subject to shareholder approval at the forthcoming Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the financial statements for the year ending 30th September 2020.

(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act 2010 ('Section 1158')

The requirements of Section 1158 are considered on the basis of the dividend proposed in respect of the financial year, shown below. The revenue available for distribution by way of dividend for the year is £8,904,000 (2018: £8,913,000). The revenue reserve after payment of the final dividend will amount to £5,360,000.

4. Net asset value per share

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 FUNDS 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.morningstar.co.uk/uk/NSM

The annual report will shortly be available on the Company's website at www.jpmjapanese.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 FUNDS LIMITED

13th December 2019