Annual Financial Report

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN ELECT PLC

ANNUAL RESULTS FOR THE YEAR ENDED 31ST AUGUST 2019

Legal Entity Identifier: 549300FIUYKKL39ILD07

Information disclosed in accordance with DTR 4.1.3

CHAIRMAN'S STATEMENT

I am pleased to present the Company's results for the year ended 31st August 2019. It was a challenging year for investment with a variety of macro factors resulting in significant volatility. However, it is disappointing to report that both the Managed Growth and Managed Income share classes underperformed their respective benchmarks in the year under review.

The Board was also concerned to learn that there had been technical errors in the payment of certain historic dividends by the Company; more detail is set out in the following paragraphs. The Board has been working closely with the Manager to ensure that lessons are learned and that processes have been enhanced to avoid a recurrence.

On a positive note, we were delighted that the scheme of reconstruction of El Oro Ltd. took effect in July, resulting in the Company acquiring approximately £26.2 million of assets from El Oro in consideration for the issue of 676,160 Managed Growth Shares, 17,599,322 Managed Income Shares and 773,996 Managed Cash Shares. This is the third roll-over we have completed in the last four years. These transactions have helped the Company to grow, in particular, the Managed Income share class, allowing fixed costs to be spread across a larger asset base. We welcome the new shareholders to the Company and hope to see as many as possible at the AGM.

In February this year, you voted to change the investment objective and policy of the Managed Cash share class. This was required to take the assets attributable to the Managed Cash shares outside the scope of the new European Money Market Funds Regulation, which allowed you to continue to have access to a lower risk share class. In line with the new investment objective, the Managed Cash share class portfolio is now invested in the JPMorgan Funds - Sterling Managed Reserves Fund. We expect that this will allow us to modestly increase the dividends paid by the Managed Cash share class in future years.

Dividend Payments

As outlined above, the Board has been notified by the Company's Manager of a technical issue in respect of a number of historic dividends paid by the Company. This issue arose as a result of the Manager, acting on behalf of the Company, inadvertently not having followed a procedural requirement under the Companies Act 1985 and Companies Act 2006 (the 'Acts') to file its interim accounts at Companies House in order to demonstrate that sufficient distributable reserves were available, prior to payment of those dividends.

It is important to note that the Company has had sufficient distributable profits at the time each relevant dividend was paid. In other words, the Company did not pay out by way of dividends more income than it had, and no payments were made out of capital.

To rectify the inadvertent breach, a special resolution will be put to shareholders at a general meeting immediately prior to the AGM, which will have the effect of putting all parties, namely the Company, the shareholders who received the relevant dividends and both current and past Directors, in the position they would have been in had the relevant dividends been made in full compliance with the Acts. Full details will be set out in a circular to shareholders to be published shortly, which will include the notice convening the General Meeting. I would like to emphasise that shareholders who have received dividends paid in breach of the Acts will not be required to repay those dividends.

As part of the business to be proposed at the AGM, the Board is seeking approval from shareholders for the adoption of new Articles of Association. Previously, the rules governing investment trust companies prescribed that the articles of association of an investment company must prohibit the distribution of capital profits of the company. This is no longer a legal requirement. Whilst the Board has no present intention to enhance dividend payments through the utilisation of capital reserves, your Directors wish to take advantage of the amended rules to provide the Company with this flexibility. The new Articles of Association therefore remove the prohibition on distribution of capital profits by the Company.

The Board were extremely disappointed to discover that the Company had failed to follow the appropriate procedures in the filing of accounts and subsequent dividend payments. Having taken advice, we believe that these proposals are the best way to resolve the historic breaches and avoid the risk of future errors. JPMF has enhanced its procedures relating to all dividends which will ensure that, in the future, relevant legal requirements are complied with at all times.

Managed Growth

The Managed Growth portfolio has delivered a total return on net assets of +0.2%, compared with the portfolio's benchmark which returned +3.6%. Over the medium and longer term, performance remains well ahead of benchmark.

The objective of this share class is long term capital growth delivered by investing in a range of investment trusts and open-ended funds managed principally by JPMorgan Asset Management. At the year-end, 29.7% of the portfolio was invested in non-JPMorgan funds.

For the year ended 31st August 2019, the Board declared dividends of 15.5p per Managed Growth share compared to 13.1p for the year ended 31st August 2018. Shareholders are reminded that this share class is a growth vehicle. Any net income generated during the year is generally distributed to shareholders and investment decisions are not made with the objective of maintaining or growing income.

Managed Income

The objective of the Managed Income share class is growing income return with potential for long term capital growth. I am pleased to report that dividends for the year ended 31st August 2019 totalled 4.65p per share (2018: 4.5p per share). Dividend growth of 3.3% is consistent with our aim to increase the total dividends by at least inflation. However, the portfolio delivered a disappointing total return on net assets of -4.4%, compared with the portfolio's benchmark index which returned +0.4%. In the absence of unforeseen circumstances, the Board intends to declare the first three interim dividends for the year ending 31st August 2020 at 1.10 pence per share. The level of the fourth interim dividend will be determined by the Board towards the end of the Company's 2019/20 financial year and will depend on the level of dividends received and expected by the Company. It is the Board's aim to pay not less than the dividend paid for the year ended 31st August 2019 (4.65p) and increase the total dividends each year by at least inflation.

Managed Cash

As mentioned above, the investment objective and policy for Managed Cash changed in February 2019. The portfolio's objective and policy is now to achieve a return in excess of sterling money markets by investing primarily in GBP denominated short-term debt securities through investment in JPMorgan Funds - Sterling Managed Reserves Fund (JSMRF). The investment policy of JSMRF is to invest primarily in GBP denominated short- term debt securities. The Managed Cash share class returned +1.8% on net assets and an interim dividend of 0.40p per share was paid for the year ended 31st August 2019.

The Board considers this class to be an asset allocation tool which continues to benefit shareholders of the Company's other share classes, offering the opportunity to switch into a safer share class in times of market volatility.

The Investment Managers' reports provide more detail on the positioning and performance of the three separate share class portfolios.

Conversions and Redemptions

During the year, shareholders took the opportunity to convert between share classes. This resulted in a decrease in the Managed Growth share class shares in issue of 1,058,904, an increase in the Managed Income share class shares in issue of 15,340,631 and a decrease in the Managed Cash share class shares in issue of 2,366,537. In addition, 1,555,803 Managed Cash shares were redeemed.

The Board

As reported in our half year report earlier this year, Roger Yates stepped down from the Board at the conclusion of the AGM in December 2018 following nine years as a Director. Rupert Dickinson was appointed to the Board on 19th December 2018 and was appointed by the shareholders at the AGM on the same date. There have been no further changes to the composition of the Board during the year.

Annual General Meeting

The Company's AGM will be held on Monday, 20th January 2020 at 12.30 p.m. at 60 Victoria Embankment, London EC4Y 0JP. In addition to the formal part of the meeting, there will be presentations from the Investment Managers of the Managed Growth and Managed Income share classes and a question and answer session.

If you have any detailed technical questions, it would be helpful if you could raise them in advance with the Company Secretary at 60 Victoria Embankment, London EC4Y 0JP or via the 'Ask a Question' link on the Company's website. Shareholders who are unable to attend the AGM are encouraged to use their proxy votes.

Outlook

For the time being, extraordinarily low interest rates have continued to outweigh the wide range of political and economic uncertainties. Equities still appear fairly valued when compared to most other investment alternatives, particularly in the UK. Against this backdrop, our Managed Growth portfolio is quite neutrally positioned, invested with good managers and ready to benefit from global equity returns, but not strongly over or under committed in any geographic region. Our Managed Income portfolio is positioned to benefit from a pick-up in domestic UK focused stocks and to continue to deliver a higher than market dividend yield. After a difficult year in 2018/19, the Board is monitoring performance particularly closely in the current period.

Alan Hodson

Chairman

12th December 2019

INVESTMENT MANAGERS' REPORT - MANAGED GROWTH

Performance Review

The Managed Growth portfolio underperformed its benchmark for the year to the end of August, returning +0.2% versus the benchmark return of +3.6%. The share price discount widened, resulting in a total return of -0.4% to shareholders.

The key driver of the portfolio's underperformance was stock selection.

Performance was mixed across the holdings, with our overweight position in North America and global strategies delivering positive returns. JPM US Equity All Cap Fund was a notable performer and positively contributed to performance. However, a key driver behind underperformance were our holdings in Europe and the UK, which underperformed in absolute and relative terms. JPM UK Dynamic Fund particularly detracted from performance, driven by geopolitical uncertainty from Brexit. Our holdings in Japan also detracted from absolute performance.

Relative performance across the period was mixed, with 12 strategies outperforming, whilst 20 strategies underperformed their benchmark. The Finsbury Growth and Income Trust was a notable outperformer, particularly as it is one of our ten largest holdings. Our holding in JPMorgan Emerging Markets Investment Trust performed well, in spite of the underperformance of emerging markets relative to developed markets.

PERFORMANCE ATTRIBUTION

FOR THE YEAR ENDED 31ST AUGUST 2019

Source: JPMAM and Morningstar. All figures are on a total return basis. Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark index.

A Alternative performance measure ('APM').

A glossary of terms and APMs is provided in the annual report.

Portfolio Activity

At the end of August 2019, 41% of the portfolio was invested in JPMorgan-managed investment trusts, 29% in JPMorgan-managed open-ended funds and 29% in investment trusts managed by third party managers. The balance of the portfolio was held in futures and cash.

We have gradually spread the risk across regions. In the UK, we maintained an underweight position for most of the year until August when we increased our holding and ended the financial year slightly overweight compared to the benchmark. In Japan, we stayed neutral to slightly positive before introducing an underweight position at the end of the year. We have reduced our US overweight position.

We like the robust economic outlook, noting further economic expansion may be supported by the strength in consumer data and further interest rate cuts from the US Federal Reserve. However, we recognise increasing risks from weakness in manufacturing data and the respective spill-over from continued trade tensions. In Europe, economic data continues to disappoint, driven by weakness in German manufacturing data which feeds into the slowing growth outlook for the region. However, the European Central Bank turning increasingly dovish, cutting interest rates and reintroducing quantitative easing, should provide some support and extend the business cycle. We increased our position in the UK, which now seems to be one of the most attractively valued developed markets. The UK offers attractive dividend yields and is more defensive in its sector exposure. Finally, trade tensions are still weighing meaningfully on markets, meaning we continue to maintain our moderated view on Japan, Emerging Markets and Europe ex UK equities.

Outlook

Although near-term US recession risk remains elevated by historical standards, our base-case expectation is for the expansion to roll on for at least another year, supported by solid consumer and labour market data. The weak spots in the economy are concentrated in US and European manufacturing which continue to experience a broad based decline and the markets will be paying close attention to global service indices. Trade tensions are expected to weigh on the economic outlook going into 2020. Markets will therefore continue to assess how much damage has been caused to business confidence from the trade tensions and the extent to which easing central bank policy will extend and support the cycle.

Equity valuations are not at extreme levels and we expect economic growth to be sustained, albeit at a lower level than 2018.

Katy Thorneycroft

Simin Li

Peter Malone

Investment Managers

12th December 2019

INVESTMENT MANAGERS' REPORT - MANAGED INCOME

Dividend Review

The UK stock market registered underlying dividend growth of 5% in the twelve months to 31st August 2019, down on the 15.3% growth delivered in 2018. The largest 100 companies in the FTSE Index delivered dividend growth of 5.7% while mid cap companies (those in the FTSE 250) grew their dividends by 0.8%. The difference in growth rates between the two reflects the greater sensitivity of the top 100 companies to changes in the value of sterling as a large share of their profits are earned overseas. As a result, half of the UK market dividend growth was due to the fall in the value of sterling over the period.

Headline dividend growth was much higher at 14.5% as this figure includes special dividends. However, special dividends are volatile, irregular and difficult to forecast so we focus on the underlying growth trends detailed above when framing dividend growth forecasts. Just three companies account for the majority of our special dividends; the international mining giant, Rio Tinto paid a record interim dividend of $3.5 billion of which one-third was a special following exceptional profit growth due to higher iron ore prices; Micro Focus, which is a software services business, distributed the proceeds from the sale of a business; and RBS distributed surplus capital as a special dividend as it resumed dividend payments following a decade-long suspension. The banking sector registered a 40% rise in dividends, with the resumption of dividends by RBS, Barclays doubling its final dividend and Standard Chartered also increasing its pay-out. An increase in oil companies' dividends was largely attributable to exchange rate movements.

On the downside, dividends from the retail and property sectors fell as the ongoing shift to on-line shopping continued to negatively impact established high street brands and shopping centres.

The outlook for underlying dividend growth is less positive. There have been high profile dividend cuts by Vodafone and Marks & Spencer whilst Aviva has changed its dividend policy in order to reduce debt resulting in lower future payments than previously forecast. Based on third party analysis, we expect dividend growth of 2.9% over the next 12 months (7.6% including special dividends), of which two-thirds is due to weaker sterling with banks, mining and oil & gas companies accounting for 75% of the growth. Given the rally in sterling since its September lows, there is a risk that dividend growth will be lower than expected.

At the time of writing the dividend yield of the FTSE All Share Index is 4.3%.

Performance Review

During the Company's financial year ended 31st August 2019 the Managed Income portfolio delivered a total return of -4.4%, in comparison to the benchmark's return of 0.4%.

PERFORMANCE ATTRIBUTION

FOR THE YEAR ENDED 31ST AUGUST 2019

Source: JPMAM and Morningstar. All figures are on a total return basis. Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark index.

A Alternative performance measure ('APM').

A glossary of terms and APMs is provided in the annual report.

Our holdings in Rio Tinto, Games Workshop and Spirent all contributed positively to the portfolio's relative performance. Unfortunately, these were more than offset by losses elsewhere. At a sector level, our active positions in Financials and in Telecommunications did not work for us and detracted from relative performance.

A poorly timed purchase of BT hurt performance as we did not own the stock when it was rallying in the early part of the period and subsequent to our purchase the stock performed weakly. Irish banking group AIB was also a meaningful detractor from returns. The share price fell following increasing competition in the Irish mortgage market which put pressure on earnings. In addition, the fear that the Irish economy may be significantly impacted from a 'no deal' Brexit put further pressure on the share price.

Other detractors from performance included Aviva and Mondi. Following the appointment of a new chief executive Aviva has lowered dividend growth; the direction of the company's strategy is still unclear and it is being buffeted by Brexit headwinds. Mondi's shares fell as its paper and packaging revenues slowed due to lower global economic growth. However, we have retained our positions in both companies as we believe the fall in their share prices is greater than is warranted by any near term concerns.

Portfolio Review

We made modest use of the Company's borrowing facility over the course of the financial year. As at 31st August 2019 the equity exposure of the Managed Income portfolio was 100.5% with the level of gearing primarily influenced by individual stock opportunities.

We assess individual investment opportunities on a number of parameters: whether earnings estimates are being revised up, whether the valuation is attractive and whether the balance sheet and forecast cash flows allow for dividend growth. As such, portfolio construction is determined by bottom up stock selection with a focus on potential and sustainable dividend growth.

The largest sector exposure in the portfolio continues to be Financials. Our holdings in life insurance and general insurance companies account for much of this. Our holdings include Aviva, Legal & General and Phoenix Group, offering dividend yields of 8.2%, 7.5% and 6.9% respectively. We believe that these companies have the capital strength to maintain current dividend policies. The Consumer Goods sector includes the portfolio's holding in housebuilders such as Persimmon and Taylor Wimpey. Both companies have a forward dividend yield of 11.4% which is backed up by strong cash flow generation and robust balance sheets. We also have a large position in Basic Materials. Companies in the sector such as Rio Tinto and BHP have seen strong profit growth and management are committed to enhancing shareholder value as evidenced by large dividend payments during the Company's financial year.

New acquisitions for the portfolio included Computacenter, Next and Spirent Communications.

Computacenter is an IT infrastructure and services provider. The company is set to benefit from the shift from Windows 7 to Windows 10 which provides the potential for material growth as companies adopt the new operating system. At the same time a strategic acquisition made in the US should allow for additional growth opportunities. The shares have a dividend yield of 2.4%. We bought Next as there was evidence that Q1 trading would be strong. The company is very cash flow generative and has a history of capital management that has included both share buy backs and special dividends; the current dividend yield is 3%. Spirent Communications is set to benefit from the roll out of 5G and other technology innovations; the balance sheet is sufficiently strong to enable the company to pay a special dividend if it chooses.

We sold out of three holdings; Costain, Workspace and Just Group. Costain was sold as the future growth profile has moderated following the completion of large capital projects such as the renewal of London Bridge railway station. We sold Workspace as the outlook for the London office market is looking weaker. Just Group was sold as regulatory changes to assumptions embedded in equity release mortgages increased the amount of capital required to deliver the company's growth targets.

Outlook

Since the Brexit referendum in 2016, the UK has experienced levels of political turmoil not seen for generations. At the time of writing, the prospect of a no-deal exit appears to have diminished though we still face the uncertainty of the outcome of the pending General Election. We believe that any form of certainty, be it deal, no deal or no Brexit, would be better than the current lack of clarity. So far the UK has avoided falling into a recession, though it is a close run thing with business investment and confidence indicators falling.

In that context it is no surprise that overseas investors have avoided investing in UK equities and that the FTSE All Share has underperformed other regional markets. Companies with a high sales exposure to the UK have performed particularly poorly. Recent analysis by HSBC concluded that the most domestically exposed companies have underperformed the most internationally exposed by 28% since the referendum, though we must note that some of that underperformance has reversed as we have seen a modest rally in domestic exposed names as the prospect of a no-deal Brexit has faded.

Given the backdrop, it is understandable that the valuation of the UK market is at a discount to most other markets. However, we believe that, at current levels, the long term prospects of UK equities are not being appropriately valued. We believe this most strongly for those stocks we own that are typically characterised by earnings visibility, strong balance sheets and sound dividends. We are confident that the blend of stocks in the Managed Income portfolio should continue to maintain the track record of dividend growth with the potential for capital growth in the long run.

John Baker

Katen Patel

Investment Managers

12th December 2019

INVESTMENT MANAGERS' REPORT - MANAGED CASH

Objective

During the year, shareholders approved a change in investment policy for the Company's Managed Cash share class. This was required to take the assets attributable to the Managed Cash shares outside the scope of the new European Money Markets Funds Regulation, which allows shareholders to continue to have access to a lower risk share class. The objective is now to achieve a return in excess of sterling money markets by investing primarily in GBP denominated short-term debt securities through investment in JPMorgan Funds - Sterling Managed Reserves Fund ('JSMRF'). The primary objective of JSMRF is to invest in a blend of money market securities and short term bonds, in a highly diversified way, to outperform liquidity or the 3 month bills benchmark.

Performance

JSMRF returned 1.37% on a trailing 1 year gross basis which was 0.63% over the benchmark of 3 month government bills (as at 31st August 2019).

JPMorgan Asset Management

Investment Manager

12th 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.

With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to the Company. In assessing the risks and how they can be mitigated, the Board has given particular attention to those issues that threaten the viability of the Company. These key risks fall broadly under the following categories:

• Investment underperformance against benchmark

An inappropriate investment strategy or poor performance may lead to underperformance against the relevant benchmark index and peer companies, resulting in the Company's shares trading on a wider discount. The Board monitors the implementation and results of the investment process with the Investment Managers, who attend all board meetings. In addition, to ensure the investment strategy remains relevant the Board regularly reviews whether the rationale for each share class is still appropriate.

• Fraud and Cybercrime

The Manager is committed to combatting fraud and financial crime and devotes significant resources to its cyber and fraud protection systems. It performs ongoing internal monitoring of processes and controls, including daily reconciliations and monthly compliance reporting. The threat of cyber-attack, in all its guises, is regarded as at least as important as more traditional physical threats to business continuity and security. The Board has received the cyber security policies for its key third party service providers and the Company benefits directly or indirectly from all elements of JPMorgan's cyber security programme

• Dividends

Insufficient income may be generated by the Managed Income portfolio to enable the Company to meet the Managed Income class's objective of achieving a growing income return. The Board regularly reviews the income generated by the Managed Income portfolio and discusses the appropriate dividend policy at least annually.

• Accounting, Legal and Regulatory

Political or regulatory considerations, for example changes in financial or tax legislation, may reduce the attractiveness or marketability of the Company. The Board receives regular briefings from the Manager on any changes which could impact the Company's ability to implement its strategy and adopts revised policies, where required.

• Business Strategy

A share class may fall beneath a viable size, resulting in limited liquidity for the shares or a high ongoing charges ratio. The Manager monitors the fund sizes, providing detailed financial information to the Board and advising the Board, as appropriate.

• Board loses confidence in Investment Manager

The Board may lose confidence in the Investment Manager's ability to generate returns following ongoing underperformance in any of the classes. The Board meets with the Investment Managers at each board meeting to understand the reasons for performance and monitors performance against the Company's objectives and its peers. The Board will discuss any performance concerns with senior representatives of the Manager.

• Borrowing

The Managed Income share class may utilise borrowing to achieve its investment exposure. The Investment Manager makes investment decisions within parameters set by the Board which monitors borrowing levels on a monthly basis.

The Board also monitors closely the level of indirect borrowing through the underlying investments.

• Third Party Risk

Inadequate controls maintained by the Manager, JPMorgan Asset Management, the Depositary or the Custodian could prevent accurate reporting and monitoring of the Company's financial position. The Board acknowledges the risks inherent from having outsourced or sub-contracted relationships with its critical service providers and has put in place policies to obtain confirmation that the relevant controls are exercised by third parties. Under the terms of its agreement, the Depositary has strict liability for the loss or misappropriation of assets held in custody. Details of how the Board monitors the services provided by JPMF and its associates and the key elements designed to provide effective internal controls are included within the Risk Management and Internal Control section of the Corporate Governance Statement in the annual report.

TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES

Details of the management contracts is set out in the Directors' Report in the annual report.. The total amount payable to the Manager for the year in respect of these contracts was £1,486,000 (2018: £1,514,000) net of rebates, of which £nil (2018: £nil) was outstanding at the year end. In addition £82,000 (2018: £26,000) was payable to the Manager for the administration of savings scheme products of which £nil (2018: £17,000) was outstanding at the year end.

Included in other administration expenses in note 6 on page 74 are safe custody fees amounting to £4,000 (2018: £5,000) payable to JPMorgan Chase of which £1,000 (2018: £1,000) 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. Commission amounting to £nil (2018: £18,000) was payable to JPMorgan Securities Limited for the year of which £nil (2018: £nil) was outstanding at the year end.

The Company holds investments in funds managed by JPMAM. At 31st August 2019 these were valued at £190.2 million (2018: £207.7 million) and represented 53.12% (2018: 56.64%) of the Company's investment portfolio. During the year the Company made £13.2 million purchases of such investments (2018: £20.9 million) and sales with a total value of £23.8 million (2018: £26.8 million). Income amounting to £4.0 million (2018: £3.8 million) was receivable from these investments during the year of which £775,000 (2018: £940,000) was outstanding at the year end.

The Managed Growth and Income pools also hold cash in JPM Sterling Liquidity Fund, managed by JPMorgan. At the year end this was valued at £5.5 million (2018: £4.1 million). Interest amounting to £60,000 (2018: £26,000) was receivable during the year of which £5,000 (2018: £nil) was outstanding at the year end.

Stock lending income amounting to £15,000 (2018: £5,000) was receivable by the Company during the year. JPMAM commissions in respect of such transactions amounted to £2,000 (2018: £1,000).

Handling charges on dealing transactions amounting to £12,000 (2018: £9,000) were payable to JPMorgan Chase during the year of which £2,000 (2018: £1,000) was outstanding at the year end.

At the year end, total net cash of £304,000 (2018: £1,928,000) was held with JPMorgan Chase. A net amount of interest of £5,000 (2018: £nil) was receivable by the Company during the year from JPMorgan Chase of which £nil (2018: £nil) was outstanding at the year end.

Full details of Directors' remuneration and shareholdings can be found in the annual report..

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the annual report and accounts 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 Standard applicable in the UK and Republic of Ireland, and applicable law. Under company law, the Directors must not approve the financial statements unless they are satisfied that, taken as a whole, the annual report and accounts are fair, balanced and understandable, provide the information necessary for shareholders to assess the Company's 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 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.jpmelect.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 Auditor does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditor accepts 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 on page 41, confirms that, to the best of their knowledge:

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

• the Strategic Report and Directors' Report include 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 it faces.

The Board confirms that it is satisfied that the annual report and accounts taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the strategy and business model of the Company.

For and on behalf of the Board

Alan Hodson

Chairman

12th December 2019

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31ST AUGUST 2019

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31ST AUGUST 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 31ST AUGUST 2019

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31ST AUGUST 2019

1 Excluding in-specie stocks of 25,503,000 as a result of Company rollover.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST AUGUST 2019

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, and 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 adopt the revised SORP early.

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

The financial statements for the Company comprise the Statement of Comprehensive Income, the Statement of Changes in Equity, the 'Total' column of the Statement of Financial Position, the Statement of Cash Flows, and the 'Total' column within the Notes to the financial statements.

The Managed Growth, Managed Income and Managed Cash Statement of Financial Position, together with the notes to those statements are not required under UK GAAP or the SORP, and have not been audited but have been disclosed to assist shareholders' understanding of the net assets and liabilities, and income and expenses of the different share classes.

The financial statements have been prepared on a going concern basis. The disclosures on going concern on page 49 of the Directors' 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 per share

3. Dividends

(a) Dividends paid

In respect of dividends paid during the year ended 31st August 2019:

The 2018 4th interim dividends were paid on 21st September 2018 to shareholders on the register as at the close of business on 24th August 2018.

The 1st interim dividends were paid on 21st December 2018 to shareholders on the register as at the close of business on 23rd November 2018.

The 2nd interim dividends were paid on 21st March 2019 to shareholders on the register as at the close of business on 15th February 2019.

The 3rd interim dividends were paid on 21st June 2019 to shareholders on the register as at the close of business on 24th May 2019.

(b) Dividends declared

In respect of the dividends declared, but not paid, during the year ended 31st August 2019, the dividends were paid on 19th September 2019 to shareholders on the register as at the close of business on 16th August 2019.

All dividends in the year have been funded from the revenue reserve.

(c) Dividends 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 dividends paid and declared in respect of the financial year, as follows:

The revenue available for distribution by way of dividend for the year is £8,882,000 (2018: £8,314,000). The revenue reserve after payment of the final dividends will amount to £4,994,000 (2018: £4,476,000).

(d) Dividends made otherwise than in accordance with the Companies Act

Following the year end, the directors became aware that certain dividends paid in the financial years 2004, 2005 and 2008 to 2019 totalling £39.9 million (the 'relevant dividends') had been made otherwise than in accordance with the Companies Act 1985 and Companies Act 2006 (the 'Acts') because the necessary interim financial statements required to demonstrate that sufficient distributable reserves were available prior to payment of those dividends had not been filed at Companies House.

To rectify these breaches, a special resolution will be proposed at a General Meeting of the Company's shareholders to be held on 20th January 2020, to authorise the appropriation of distributable profits to the payment of the relevant dividends and remove any right for the Company to pursue shareholders or directors (the 'Director Release') for repayment. The Director Release will constitute a related party transaction under the Listing Rules of the UK Listing Authority and under UK GAAP. The overall effect of the special resolution being passed will be to return all parties to the position they would have been in had the relevant dividends been made in full compliance with the Acts.

The amounts included within the financial statements have not been restated for the effect of the unlawful dividends as the financial resources had left the Company and the intention of the resolution to be passed will be to remove any right for the Company to pursue shareholders or directors for repayments. The transactions as undertaken, were correctly accounted for in the relevant period in which the distributions of resources were made and therefore no restatements have been recorded.

4. Net asset value per share

The net asset values per share are calculated as follows:

5. Status of results announcement

2018 Financial Information

The figures and financial information for 2018 are extracted from the Annual Report and Accounts for the year ended 31st August 2018 and do not constitute the statutory accounts for the year. The Annual Report and Accounts include the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2019 Financial Information

The figures and financial information for 2019 are extracted from the published Annual Report and Accounts for the year ended 31st August 2019 and do not constitute the statutory accounts for that year. The Annual Report and Accounts include the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will 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 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.jpmelect.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