Annual Report2010 JPMorgan European Investment Trust plc Annual Report & Accounts Year Ended 31st March 2010 GROW TH SHARES Growth ShareGrowth Class Financial Results 2 dividend of2.5p) (2009: 7.0p, plusspecial Dividend 4. (2009: –43.1%) shareholders Return to +62.4% 85p JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 Ordinar 1 y 3 2 1 A Sour (total return). Europe (ex UK)Index insterling terms AllWorld Developed Source: portfolio’s TheGrowth FTSE. benchmarkistheFTSE J.P. Morgan. Source: +53.7% lsayo em n eiiin spoie npg 92. oftermsanddefinitionsisprovided onpage glossary for periodsended31stMarch 2010 Long Term Performance (2009: –37.5%) Return onnetassets –20 –10 4 60 3 50 20 70 10 ce: Morningstar. 0 0 0 Benchmark re JPMorg JPMorg 6 an an 2.4 Europ Europ One y 5 turn 3.7 ean Gro ean Gro ear 3 4 7.4 wth – wth – wth Ret Ret 2 –10.8 urn onnetass urn to sh T hree y –5.3 areholde ears 4.0 ets 1 rs 1 (2009: –31.1%) Benchmark return +47.4% 5 6.2 Five yea 4 9.5 rs 57.9 4 6.7 3 T en 38.3 yea rs 3 6.9

Income Share Class Financial Results +64.2% dividend of1.15p) (2009: 4.0p, plusspecial Dividend 4. (2009: –33.9%) shareholders Return to 0p Ordinar y 1 JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 3 2 1 A Source: Morningstar. ore MSCI.TheIncome portfolio’s benchmarkistheMSCIEurope Index insterling terms(totalreturn). Source: Source:Morgan. J.P. glossar +60.2% Performance (2009: –30.5%) Return onnetassets –10 40 60 30 50 2 70 10 0 0 Benchmark re JPMorg JPMorg y of termsanddefinitionsispr 6 an an 4.2 Eur Eur One y 6 opea opea turn 0.2 ear 3 n n 47.5 Incom Incom e e – – 2 Re Re o ie npg 92. vided onpage 8 tur tur .4 n n wo Two o t o n 1 1.3 sh yea net areholde rs a s 2 se .4 ts 1 rs 1 (2009: –30.5%) Benchmark return +47.5% – 1.8 Three y 2 .6 ears 1 .2 1 2nd A 4.0 Sinc 3 e ugu 20.3 i ncep st 2006 tio 1 4.6 n, 3

INCOME SHARES THE COMPANY 95 9Listof Investments 29 6Boardof Directors 36 58 Balance Sheet 56 2CapitalStructureandConversion 82 34 5Balance Sheet 35 7CashFlowStatement 57 5Reconciliation of Movements in 55 92 Glossary of Glossary Terms andDefinitions 92 Appendix 88 Notice of AnnualGeneral Meeting 85 shares Shareholder Analysis –Income 84 shares Shareholder Analysis–Growth 83 27 54 Income Statement 53 IndependentAuditors’ Report 52 Directors’ Responsibilities inRespect 51 2 of Summary Results 25 23 Listof Investments 19 Ten Largest EquityInvestments 16 Ten Year Financial Record 15 1 Investment Managers’ Report 9 Chairman’s Statement 5 Financial Results 2 4 CorporateGovernance 45 37 4Balance Sheet 24 17 Portfolio Analyses Portfolio 17 7Directors’ Report 37 4 Summary of Summary Results 4 4 6 9 Shar and Losses between Share Classes Information abouttheCompany Statement o of theAccounts Notes totheA Growth Shares Investment Review A Contents Shar Accounts Directors’ Report Income Shares Inc Analyses Portfolio T Income Statement Business Review Dir en L bout theCompany ectors’ RemunerationReport ome Statement eholder Information eholders JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 ar gest EquityInvestments f T ’ c F otal Rec counts unds ognised Gains - Features ‘Manag The Company employs JPMorgan AssetManagementLimited(‘JPMAM’ (UK) or the Management Company in Income shares were 56,113,668 shares Growth and 117,622,068 theyear end At each and114,142,765 each. Income shares of 2.5p The Company hasanauthorisedshare capitalof 354,328,617 Growthshares of 5p C Indexinsterlingterms(totalreturn). The MSCIEurope Income Europe Indexinsterlingterms(totalreturn). (exUK) AllWorld Developed The FTSE Growth Benchmarks - - Income - - - - Growth Investment Policies from of adiversified portfolio investments inpan-European stockmarkets. To provide agrowing income together thepotentialfor with long-term capitalgrowth Income communicated toshareholders. taking carefully controlled risksthrough aninvestment methodthat isclearly outperformance of thebenchmarkandarisingshare price over thelonger termby Capital growthfrom ContinentalEuropean investments, byconsistent G Objectives - apital S T growth. T pan-European stockmarkets. To invest of inadiversified portfolio investments in UK listedinvestment companies (includinginvestment trusts). To invest nomore than15%of theassetsshares attributabletotheGrowth inother To toincrease useborrowings potentialreturns toshareholders. dividend willfluctuate. To ratherthanincome, emphasisecapitalgrowth withthelikelyresult thatthe Europe. Continental To invest of inadiversified portfolio investments inthestockmarketsof UK listedinvestment companies (includinginvestment trusts). T rowth rowth issu o o o manag pr in vest nomore than15% of theassetsattributabletoIncome shares inother e o er . vide agrowing income together withthepotentialfor long-term capital tructure ’) tomanag e liquidity andborr e its assets. owing s to incr ease r eturns toshareholders. Chairman’s Statement JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 contribution thisyear frominbothportfolios. stockselection f13% over thattwentyyears period.Thereview alsoshowed, however, thatthe of out-performance 12.7%.Narrowing discounts lifted interms of returns to of fthree years andlonger. of But mor table appreciation. Nonetheless, itisreassuring tonote, intheperformance attribution This year’s out-performance has come during aperiodof significantmarket under growth/value companies thatare thefocus of systemsometimes thestockselection average of 0.63% perannumbetween1989 and2008–equaltoanoutperformance the longrun.Thetotalreturn thebenchmarkindexbyan onnetassetsoutperformed under-performance in2007/8 –showedthattheprocess wasfundamentallyrobust in As shareholders willrecall, areview process of thestockselection –following the i shareholders even more substantially; thustheGrowthshares their outperformed F underperformance, of 3.7% and0.6% respectively. year, thethree andfive year periodsending31stMarch 2010stillshow debacle of 2008/09. despitetheportfolio’s Italsoshowsthat, out-performancethis As canbeseen,theCompany wellover performed therolling periodsabove untilthe 1 5 3 respectively, isshowninthetablebelow: performance), over rolling three andfive year periodssince 2000and1998, The Growthportfolio’s relative performance (value-added compared withbenchmark The Growth Portfolio a Developed Europe index,anout-performance (exUK) of 6.3%. TheIncome portfolio produced atotalreturn onassetsof 53.7% versus 47.4% intheFTSEAllWorld r I Performance por five-year relative performance record willonce againbeachieved bytheGrowth will require similarout-performance in2011as2010before apositive three- and has out-performed itsbenchmarksinthelong-term, definedasover rolling periods Source: Morningstar/JPMAM. NAV out-performance relative tobenchmark. ndex by15.0% andtheIncome shares by16.7%. espective benchmarksintheyear to31stMarchespective 2010. TheGrowthportfolio am very pleased to report that both portfolios handsomely outperformed their handsomelyoutperformed thatbothportfolios pleasedtoreport am very ppreciated versus by60.2% 47.5% intheMSCIEurope index,anout-performance igur Y rNVvleadd11 .%19 .%26 .%(.) (3.7)% (3.4)% 0.8% 2.6% 1.9% 1.9% 2.3% 1.1% Yr NAV value-added (annualised) (annualised) r tf NA olio. nteIvsmn aaes eoto ae 1ad1,thesignificant intheInvestment Managers’ onpages11and12, report s es appearingintheT -perform the market over short periods,especiallyduringsevere-perform themarketover bearmarkets. short V e au-de .%38 .%18 .%10 16%(0.6)% (1.6)% 1.0% 2.8% 1.8% 1.2% 3.8% 2.1% value-added impor 1 1 tant thanperformance over onlyoneyear iswhethertheCompany Mar nYa iaca eodtbeo ae1 suggest thatit 15 en Year Financial Record tableonpage 0320 0520 0720 092010 2009 2008 2007 2006 2005 2004 2003 ch Mar ch Mar ch ac ac ac ac March March March March March 5

THE COMPANY THE COMPANY Chairman’s Statement continued 6 JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 while continuing to seek net asset growth as its primary discount controlwhile continuing asitsprimary toseeknetassetgrowth mechanism. the previous two years. in 2010, following gearing’s over negative contribution (alongwithstock selection) is fiendishlydif valuable thisy S au-de ic neto 29%(.) 0.7% (1.9)% (2.9)% — Value-added since inception It ther out-performance of theindexalone, irrespective of whetherthemarketrisesorfalls. Y Discount positiv markets andalways negative inbearmarkets,irrespective thus of stockselection; past y c relative performance. In2010gearing contributed 4.3%of out-performance Along withstockselec Gearing * 3 1 s 0.7% 0.6%, andatanannualisedrateof 31st March 2010atanannualisedrateof performance thisyear hasproduced out-performance over thethree years ending A hasonlybeeninexistenceThe Income for portfolio oneperiodof three years. The Income Portfolio those withalong ago. Discount volatility for isamore short-term materialfactor investors thanfor gr It But isthebest means tonarrowasset valuesfasterthanthemarket, thediscount also. Thus y disc good performance bytheManager isnotdissipatedfor shareholders byawidening lar unc the price andtoprovide liquidity. Asteadydiscount isnotalways easytoachieve in our ince inception. ompar fr our Boardis,of course, aware thatshareholders seekshare price gains,ratherthan rNVvleadd07*(.) .%8.6% 0.0% (6.3)% 0.7%* Yr NAV value-added fter a slow start ineachof theyears to31stMarch slowstart 2008and2009, itsexcellent a fter rNVvleadd———0.6% — — — Yr NAV value-added will eater than10%orso o g (annualised) (annualised) m c er est buybackssinc ount buy backsatdisc e: Mornin inc tain markets,however, recently, difficult andithasbeenparticularly despitethe ther ears becauseo ef our Boardbeliev e eption to31stMar ed with3. or markets andpositiv . Y ef e g our Board’s target isnottoletthediscountwiden on eachportfolio star keeps acloseey or e ear / ficult, soitisgoodficult, toseetheInvestment Managers returning toform JPMAM. NAV out-performance relative tobenchmark. c niu oprotectthe discounts through buy-backs asnecessary, ontinue to -term view 8% fr , even atarelatively management lowlevel. Thetactical of gearing c h f ounts raisetheassetvaluefor remaining shareholders. 200 e economic uncertainties. Gearingisalways positiveeconomic inbull uncertainties. tion, g , om stockselec es thatpr the disc by buyingshar 7 , e e earing isnormallythestr to whomgrowthinnetassetvalueismore important. on theshar stock selec ount c edic ac ac March March March March 0720 09 2010 2009 2007 2008 table long tion, despiteitbeingatalowerlev ontr es inthemarketatbelowthatlev tion hasmadetheg e ol mechanismwasintroduced four years pric e -term out ’s discount tonetassetvalue, sothat ongest contributor towards -performance, bygrowing earing par ticularly el thanin el tosuppor t JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 tend toenlar 20 hl iudt noefl rm£. ilo o£700 hspoue eunofwhile liquidityincome fell from £0.5millionto£47,000. Thisproduced areturn in It wouldbehelpfulifshareholders seekinganswers todetailedquestionsputthem managers for more informal conversation. shareholders, whoare always mostwelcome, canmeetthe Directorsandinvestment presentation bytheinvestment managers, followed lunchwhere byabuffet a be 15th Julyat12.00 noon.Inadditiontotheformal proceedings there will,asusual, Trinity House, Tower Hill,London EC3N 4DHonThursday at The AGM willtakeplace Annual General Meeting L Dividends categorised as high risksimplybecauseof theirabilitytogear. Thesechanges should poorer long-term performance. Furthermore, investment trustswillnolonger be its underthecurrentthan theinvestment trustindustry remuneration regime, despite shareholders. hasgrown Theunittrustindustry tobecome someseven-times larger discourages salesanddeprives investment trustsof aready supplyof new This lowersexpenses(andimproves performance) relative tounittrusts,but commissions toencourage salesthrough intermediaries,investment trustsrarely do. Whereas unittrusts,themaincompetitors toinvestment trusts,nowpay hefty I IFAs willnolonger beabletocharge commissions onsalesof financialproducts. should come intoforce in2012/13. TheFinancial Authority Services isproposing that p ofhelp lowerthatproportion thediscount thatfollows from illiquidity)isthe thatmay improve factor liquidity(andhencequantities, thattheywish.Animportant I toshareholders. factor The Boardrecognises important thatliquidityisalsoavery Liquidity 4. 3.92p pershare. Your dividendat tomaintaintheordinary Boardfelt itwasimportant In theInc r 4.85p from 7.00p in2009(in addition,in2009,dropped to Growthshareholders o 10 companies. companies inEurope, whereas intheUK57%of dividendsare provided byjust 500 70%of dividends are provided bysome secure, thanthosefrom theUK; more isthatdividendsfrom Europe are betterdiversified, and hence potentially note respectively. and4.2%, yielded2.6% 94.5p pointto Animportant at Income shares 183.75p andthe at On thebasisof thosedividends,attheyear shares endtheGrowth up therevenue deficiency. million to£0 million to£8 from dividendsisdownfrom £15.0 portfolio, IntheGrowth income bothportfolios. in nstead, theirremuneration mustbecharged intheform offees. bespokeadvisory wantstoencourage thepossibilityfor shareholders todealwhen,andinthe t ec ower lev f roposed change inregulations for IndependentFinancial Advisers (‘IFAs’) which 0p pershar writing beforehand, addressed totheCompany SecretaryatFinsburyDials, inter F eiv insbur ed aspecialdividendo est oncashliquidity ome por els o y Str . .3 million.ThustheCompan g 8 e e f million and therefore transferred 0.08p from tomake theRevenue Reserve eet dividend inc the marketf tfolio dividend receipts alsofell, from £3.8 millionto£3.0 million , London, EC2Y 9AQ. Alternatively, questionsmay besubmitted via , while inc , ome fr or in has hadasignificantimpac f 2 . ome 5p, resulting from therepayment of VAT). vestmenttrusts andhence improve liquidity. om por fr om liquidinvestments isdownfrom £2.9 y ’s shares totaldividendontheGrowth has tf olio c ompanies, together withlowerrates t on total revenues thisyear, 7

THE COMPANY THE COMPANY Chairman’s Statement continued 8 JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 Chairman Andrew Murison exposed to‘ since GermanandFrench(and alsohitgrowthandearnings) banksare sogreatly the loanswillbeforgiven (‘re-structured’), whichcould unleashanothercredit crisis en their extreme concern For over thecurrent eitherausteritywillbebelatedly outlook. laws of economics willalways prevail over –are faultypolitical constructs justifiedin debtor nationswere for seekingthem.Logical investors –thosewhobelieve thatthe ‘hard’ creditor nationsandtheirbanksasguiltyfor makingtheloansas‘soft’ broken, notleastbyFrance andGermany, thefirstcountries todoso, withthese present problems could have hasbeencomprehensively beenavoided. ButthePact orhaditenforced Pact, Growth uponthem,limitingbudget deficitsto3%of GDP, the weakness haslongbeennoted.Hadmemberstatesadhered totheStabilityand s TheEurozone uncertain. systeminwhichnation isasinglemonetary particularly the problems of theEurozone makecurrent predictionsof marketdirection p Company of duringbullmarketsthanbearmarkets,thedirection marketsisof andgearingGiven thatpositive stockselection isnotablymore productive inyour O to lodge theirproxy votes electronically. the Company’s website. Shareholders whoholdtheirshares through CREST are able least Although UKcommentators over rarely thelasttwentyyears acknowledge at thefact, unc real alongthispath.Untiltheydo, conviction thefuture canonlyremain worryingly yet Euro politicianshave yet todemonstrate thancontinued laxity course of action some periodsinpur advantag composed of theContinent’s strongest companies; theyhave globalcompetitive in Europe So howwillcontinuing uncertainty your Company?are Itsportfolios affect underperformed sofarin2010. weakness inthebothEuro andinEuropean stockmarkets,whichhave therefore outperformed theUKby75%).Butpresent wavering hasproduced simultaneous uncertain, equitymarketsarounduncertain, theworld. thanlesspredictablestrategiesinother, equally- often inthelongrun returns solidly ‘thebestofdemonstrated capacity–toidentify valueandthebestof growth’, from your Boardcontinuesconsiderable uncertainties, tobeconfident thattheManager’s tates operateindependentfiscalandbudgetaryregimes. Thispotentialstructural articular significance totherelativearticular performance of your Company. Butatpresent utlook f or ertain. ertain. , ced or bythecreditors andearnings, to protecttheirloans,whichwillhitgrowth E -capitalised businesseswithstr ur opean stockmarketsha e and ar so t uooepbi et moe utrt slkl ob less-costly a Eurozone Imposedausterityislikelytobe publicdebt. ft’ e not reliant onEuropean marketsalone. Thus,despitethe e market termsalso–between1 v e outper ong positionsinworldmarkets–promises safer formed theUK in sterlingterms(andfor 996 and2000European markets 9th June2010 Alexander Fitzalan Howard Stephen Macklow-Smith Investment Managers’Report JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 Source: Bloomberg abo lendtoeachotherandwhichduringthecrisishadspikedasubstantialpremium to looking attheway inwhichinterbankrates,indicatethewillingnessof banks succeeded inrestoring confidence tothefinancialsystemandwecanseethisby response from theauthoritiesallaround theworldwasmassive. Thisstimulus system tothebrinkof collapse inlate2008andearly2009thescaleof the We inprevious theevents reports thatledtheglobalfinancial atlength analysed Mark wher costs involved inrunningthe Company, includinginvestment management charges, of theTMTfrenzy. Itgoes withoutsaying thatourperformance isshownnetof all at 3. compound annualgrowthrateof 3.3%againstabenchmarkwhichhascompounded ten years theshare price andNAV have intheGrowthportfolio bothshowna in theCompany’s tofocus onEurope since itstarted history intheearly1990s. Over thattheNAVwould observe andshare price return to31stMarch 2010were thebest we part our For hasalready discussedperformance inhisreport. Chairman The rallydevelop.markets backfrom powerful thebrinkandwesawavery p investable moneyremained onthesidelinesinmoneymarketfundsearningavery thatagreat dealof valuationandthefact corporate balance sheets,thesupportive t and whenwewrote lastyear wewere thisreport intheearlystages of whatproved the systemicshocksof 2007and2008succeeded instabilisingthefinancialsystem r If ourlastfinancialyear wasayear of crisis,theyear underreview wasayear of Performance to alevel signallingadegree of bankingnormality. rates–inotherwordsbackdown pushing interbankratesbackdowntowardspolicy European CentralBankandothercentral banksaround theworldsucceeded in Lehman Brothers tofail.From of thatpointon,emergency injections liquiditybythe theUSgovernment comes four allowed weeksafter banks. Thepeakinthechart thestressesroughly buildinginthewholesalefundingsystemfor depicts Eurozone The pictureshowsthespread betweeninterbankratesandswaps–inotherwordsit 0.0% 2.0% 0 beasizeablestockmarketrecovery. At of thetimewetalkedaboutstrength o 1.0% 2.5% ecovery. Themeasures authoritiestoaddress putinplace bypoliticalandmonetary 1.5% oor return. stimulus,pulledequity Thesecatalysts,alliedtoahuge monetary 31 .5% /0 3 v 2% andthismarkstenyears since March 2000, whichwasmore orlessthepeak

/ et Ba e 0 eas theperformance of thebenchmarkisnothampered bythosecharges. 3 6

0 rates,thennormalised. policy /0 6 / 0 ck 6 30 /0 gr 9 /0 ound 6 3 1/ 12 /0 6 31 /0 3 /0 7 30 /0 6 /0 7 30 /0 9 /0 3 7 1/ 12 /0 7 31 /0 3 /0 8 30 /0 6 /0 8 30 /0 9 /0 3 8 1/ 12 /0 8 31 /0 3 /0 9 30 /0 6 /0 9 30 /0 9 /0 3 9 1/ 12 /0 9 31 /0 3/ 31 10 /0 9 5/ 10

THE COMPANY THE COMPANY continued Investment Managers’Report 10 JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 the previous peak. Forthe previous Europe peak. thepictureiseven more marked:margins in2007set post-2000 recession andcurrentis that profitability expectation in2010will exceed decline wassubstantiallylesssevere thanintherecessions intheearly1990s orthe US margins more orlessachieved theirprevious peakin2007, butthesubsequent non-financial andtheorange barsshowtheUSnumbersfor sector comparison. thebluebarsshowEuropeanIn thischart pre-tax profitability for thequoted RedburnPartners Source: * was theextraordinarilyr sec As investors, wefocus agreat dealonanalysingwhatishappeninginthecorporate Source: Bloomberg more orlesscoincided withthelowpointfor stockmarkets. l showstheway inwhichconfidencechart amongmanufacturers,whichcollapsed in negative territory. Once thisfaded,however, confidence tore-build andthis started i industrial sector. of thefinancialcrisis wasamassive Theimmediateafter-effect This stabilityinthebankingsystemhadaknock-on toconfidence effect inthe changing situation.Inacrisiso r o pr 15 12 nventory liquidation,whichinturnpushedratesofnventory intosubstantially GDPgrowth ate 2008, climbedsteadilythrough thesecond halfof 2009:indeed,thelowpoint emarkable 0 6 9

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1 hit to 1 M * a 20 r 1 -1 2 M 0 * a y- 10 Share price totalreturn Net assetvaluetotalreturn O Contributions toTotal Returns pr of glossary termsanddefinitionsis A benchmark achiev Growth portfolio attribution analyseshowthe All figures are onatotalreturn basis.Performance Source: Xamin/JPMAM/AIC/Morningstar. Manag totalreturnPortfolio Investment Manager Benchmark totalreturn f attributionGrowth performance or theyear to31stMarch 2010 ther effects o hr eucae 1.0 repurchases Share urny0.2 contribution 4.3 3.8 Currency –1.9 Gearing/cash Stock selection Asset allocation vided onpag ed itsrecorded performance relative toits te xess–1.1 other expenses ement fees/ . e 92. %% 62.4 53.8 53.7 47.4 –0.1 6.4 JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 dramatic dr the2008financialcrisiscauseda but inmostcasesthelevel of downturninGDPafter with lar between thenor withasuddendivergenceThe stormstarted inthelevels of yieldongovernment debt and highlevel of household savings. receipts) asaresult healthy of anditalsohasavery householdsector along-standing government expenditure excluding interest payments iscovered bycurrent tax one of thefew Eurozone surplus (inotherwordscurrent countries withaprimary too, emphasisingthatItalyis isviewedbysomeasvulnerable, althoughitisworth andSpain,whichalsohave highlevelsIreland, of Italy, very Portugal householddebt. debtinsomeofpublic sector thesmallerEurozone economies, namelyGreece, value of theEuro againsttheUSDollar. Concerns centre on theburgeoning levels of by huge volatility inEuropean bondmarketsandhasalsoseenasharpfallinthe turbulence. atatimeofwriting thisreport extraordinary Early2010hasbeenmarked Turning for totheprospects European stockmarketsinthenextfew years, weare Market Outlook cheap stockswer positive catalystsonlyinthehigher-yielding endof In2007and2008 themarket. In theIncome portfolio, theinvestment process focuses stockswith onselecting Income Shares gearing combined have madeapositive contribution. gearing contributed tothisperformance. Over and thelastfive years stockselection and showsfor thatbothstockselection data inthisreport portfolio theGrowth consequently ourinvestment process out-performed. Theperformance attribution inmarketbehaviour and fundamentals played part amuchmore important s pay muchattentiontoprofitability, more worrying aboutwhetherthefinancial shape of improving profitability relative In2008investors tothemarket. ceased to p companies aswellcompanies whichare already showinggood stock-price The basisof ourinvesting istobuycheap philosophy portfolio intheGrowth G 2009 wasactually a and sinc contributedin theIncome positively, portfolio Over asdidthegearing. three years, again, withgreater process attentionbeinggiven tofundamentals, thestockselection asset classeslookuninviting bycomparison. higher yieldingstockswillfindfa this.For theIncomeinparticular, portfolio thatitspreference wewouldexpect for to total returnandgearing have basis, andbothstockselection contributed positively ystem itselfwouldsurvive. However, whenconfidence returned, in2009, company rowth Shares erformance, aslonginbothcasesthere isacatalystfor future performance inthe new alltimerecord andalthoughtheyfell in2008and2009, thetrough margin in g e e launch inA fiscal deficits.Thecauseo op intaxreceipts. weaknesses The Chairmanhasalludedtothestructural thern E e higher out o ugust 2006 urozone countries (especially Germany) andthosecountries f fa than ithadbeenatthepeakof theprevious in2000. cycle vour, butinthemarketrallytheyout-performed and v , the NAV hasout-performed thebenchmarkona our with the market, since currentour withthemarket, returns onother f these deficitsvariesfr om c ountry tocountry,ountry 11

THE COMPANY THE COMPANY continued Investment Managers’Report 12 Contributions toTotal Returns rvddo ae92. provided onpage of glossary termsanddefinitionsis A benchmark achieved itsrecorded performance relative toits Income portfolio attribution analyseshowthe All figures are onatotalreturn basis.Performance Sour Share price totalreturn Net assetvaluetotalreturn effects Other totalreturnPortfolio Investment Manager Benchmark totalreturn f Income attribution performance or theyear to31stMarch 2010 efrac e –0.3 Shar Performance fee 1.0 Manag contribution 7.3 5.4 Currency 0.1 Gearing/cash Stock selection Asset allocation c e: Xamin/ te xess–1.3 other expenses eucae 0.5 repurchases e JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 . ement fees/ JPMAM/ AIC / Morning star %% . 60.2 64.2 47.5 61.3 13.8 –1.1 2010 aretogrow expected byaround 14% 26%, andbyafurther in2011. and itisthisthathashelpedustopickwinnersinthelasty companies whoseprofitability isgrowing fasterthanthatof themarketasawhole high thisyear. of ourinvestment Part process isspecificallydesignedtoidentify mar companies willremain of healthyEBIT andthisisamplydemonstratedbythechart isthataslongthisrecovery profits remains growthfor intact, our sense Our slowly pickeditselfupfr we have seen theirabilitytoreap anadvantage from this as theworldeconomy has growth inEuropean thanthehealthof GDPare globaltradeand muchlessimportant same asquotedEurope. For thecompanies ratesof inwhichweinvest, headline Political Europe isnotthesameaseconomic Europe andeconomic Europe isnotthe operating leverage. precious competitive advantage atatimewhentheyare enjoying alarge amountof of ourinvestingpart universe, hasboughtthemavery thisfallinthecurrency countries. For theEuropean companies whichmakeupsuchanimportant exporting is anef great andthatisthefallinvalueof theEuro importance againsttheUSDollar For allthetalkof aEuro crisis,itseemsthatcommentators are missingsomethingof towork. made unpalatable policiescanbe Germany post-reunification andIreland inthelastyear have allshownthat of the1992Italy intheaftermath ERMcrisis,France inthelate1980s andearly1990s, fiscalreformremembering when onethinksaboutstructural thatthishasprecedents: harmonisation. We theoutcome cannotpredict of thisdebate, butitisworth by thisepisodeandwillhave todecidewhetherpursueagreater degree of fiscal reform,structural buttheEurozone itselfwillhave tolookatthefaultlinesexposed During thisperiodnotonlywillindebtedc austerity andfiscalr truth isthatifeventual defaultistobeavoided aperiodof deepandunpleasant money hasbeenallayed, butdoubtsremain aboutlonger-term durabilityandthe For twoorthree years thethreat thataEurozone government willsimplyrunoutof core Eurozone yieldsremains. To ourway of thinkingthepackages have boughttime. on highlyindebtedcountries have fallenfrom theircrisislevels, even ifapremium to countries aswell.Itistooearlytojudge notingthatyields theirsuccess, butitisworth specifically for Greece, whilethesecond, totalling750billionEuros, isopentoother andremedyto try thecrisis.Thefirstpackage, totalling110billionEuros, is T instigation of France andGermany whentheywere atriskof breaking it. accumulation of large deficitsintheEurozone, wasrelaxed atthe earlierthiscentury n that nomechanismexistsfor makingfiscaltransfers from onearea toanother. Itdoes thattheEurozoneremain andthefact ratherthanafiscalunionmeans isamonetary t summarising thisistosay thatdespitetheprocess laiddownintheMaastrichttreaty in theEurozone whichthiscrisishaslaidbare: perhapstheeasiestway of o he European Union,together withtheIMF, hascome upwithtwoseparatepackages ot help that the Stability and Growth Pact, whichwasdevisedtoprevent the Pact, ot helpthattheStabilityandGrowth encourage convergence differences economies, important betweenparticipating issonearlier, inwhichEuropean profitability isforecast tohitanewalltime gins shown f ective devaluation,ofective atypewhichissupposedlyimpossiblefor Eurozone etr enchment isinevitable om the canvas after beingfloored bythefinancialcrisis. om thecanvas after ountries beunderpressure toimplement . ear. European profits in JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 Investment Managers 9th June2010 9th Investment Managers A Stephen Macklow-Smith behalf of ourshareholders. t improving onasolidandsustainablebasiswillallowustocontinue toout-perform steady adherence totheprincipleof findingcompanies whoseprofitability is t the dividendyieldonEuropean indexexceeds theyieldonEurozone bondsand The valuationof European that asshownbythefact stockmarketsisnotdemanding, he stockmarketasawholeandwewillcontinue toapplyourselves diligently on thatdividendsarehis despitethefact forecast togrow thisyear. We believe that lexander Fitzalan Howard 13

THE COMPANY GROW TH SHARES Shares inissue Share price 3 Net revenue attributable toshareholders(£’000) Net assetvalue pershare 5 4 2 1 A T A Total dividendspershare dividends Ordinary Dividend pershare: R Gross revenue return (£’000) R tonetassetvalue Share price discount Total netassets(£’000) Net AssetValue, Share Price andDiscount Benchmark return Return onnetassets Return toshareholders Total Returns (capitalplusincome) –Growth ofResults Summary Special dividend 14 ore Morningstar. Source: aaeetfe n l te prtn xessexcluding interest, expressed asapercentage oftheaverage oftheopening andclosing netassets. Management fees andallotheroperating expenses Source: FTSE. ore J.P. Morgan. Source: A otal ExpenseRa eturn pershare evenue ctual Gearing Factor ta ern ersnsivsmnsexcluding expressed fundholdings, liquidity asapercentage oftotalnetassets. gearing representsctual investments lsayo em n eiiin spoie npg 92. ofglossary termsanddefinitionsisprovided onpage JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 f or theyear ended31stMarch ti 3 o 2 5 1 at 31stMar ch 4 for theyear ended31stMarch t3s ac %change at 31stMarch 117,622,068 243,696 +62.4% 183.75p +47.4% 10 +53.7% 207.2p 1 11.3% 4.85p 4.85p 4 9,146 . 3.6% 5,913 2 08 .79p 010 % — 126,799,002 1.0 +57.7 116.50p 8,7 +35.3 180,176 105 –43.1% –37.5% –31.1% 274–53.6 12,734 4.p+45.8 142.1p 18.0% 788–48.8 17,858 0 9.50p 2.50p 9 2 .0 –30.7 7.00p . 5p–49.8 .54p 009 81 .7% % 2 7 6 5 4 3 18.0 8.3 1 A 6.0 7.5 Benchmar 13.3 R 17.2 17,858 13,799 15,111 R 21.6 15,004 12,148 12.4 11,315 R 12,898 9.6 13,326 11,171 8,751 (%) 14.6 Total expense ratio Dividend pershare (p) Revenue pershare (p) Gross revenue return (£’000) Year ended31stMarch Actual gearing (%) factor (%) Discount Share price (p) Net assetvalue pershare (p) T A Ten Year Financial Record ordinary shares priortothereorganisation.ordinary ifthereorganisation hadnotbeenimplemented. Theinvestment objective, investment policy, benchmarkandmanagement fee arrangements haveas remained thesameasfor the maintained materiallythesameeconomic exposure Income shares. Thefinancialrecord above shares pool theGrowth because for periodspriortothatdateisoftheordinary theirshares into shareholderstoreclassify shares eitherGrowth elected or ordinary sharesThe Growth were created following reorganisation acapital on2ndAugust 2006when Management fees andallotheroperating expenses excluding interest, expressed asapercentage oftheaverage oftheopening andclosing netassets. Investments excluding expressed fundholdings liquidity asapercentage oftotalnetassets. A ore TE h rwhprflosbnhaki h TEAlWrdDvlpdErp e K ne insterling terms(totalreturn). Index Europe (ex UK) AllWorld Developed Source: portfolio’s TheGrowth FTSE. benchmarkistheFTSE Source: Morningstar. Includes aspecialdividendof2 tlast escretlaiiis(m 1. 4. 2. 7. 5. 0. 3. 5. 2. 272.3 420.0 454.1 633.3 508.0 453.1 375.4 522.5 542.9 614.0 otal assetslesscurrent liabilities(£m) eturn onnetassets eturn toshar ebased to100a s djusted f glossar at 31stMarch or y the onef k o 7 f terms anddefinitionsispr eholder 2 or five share subdivisionon2ndAugust 2006. t 31st Mar 6 2 s 2 5 6 .5p. 3 ch 2000 2 vddo ae92. ovided onpage JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 2 100 100 100 0. 0. 0. 0. 1. 1. 0. 0. 1. 105.7 117.0 105.1 100.5 111.1 117.4 101.4 108.9 109.5 106.5 5. 4. 2. 71137100232238290116.5 219.0 233.8 203.2 140.0 113.7 77.1 128.7 142.4 153.0 7. 5. 4. 83173115297288288142.1 238.8 248.8 219.7 161.5 137.3 98.3 145.9 157.6 179.2 .008 .409 .405 .058 .39.50 6.33 5.80 3.50 0.52 0.14 0.98 0.64 0.88 0.40 0 0120 0320 0520 0720 2009 2008 2007 2006 2005 2004 2003 2002 2001 000 .407 .510 .407 .206 .50.81 1.05 0.69 0.92 0.78 1.14 1.03 0.75 0.70 0.74 .108 .409 .405 .857 .79.54 5.07 5.71 3.98 0.53 0.14 0.99 0.64 0.89 0.41 . . . 858. 387. 6717511614892.9 134.8 131.6 117.5 86.7 73.4 53.8 81.9 88.5 0 0 0 88 9 3 .3 .2 84 8 . 567. 2516316013990.0 143.9 146.0 126.3 92.5 78.3 55.6 2.1 .3 51.1 7 . 3916814518690.3 158.6 164.5 136.8 93.9 6.2 1 4 9,146 103.6 183.8 1 207.2 136 138 2 3 4.79 4 1.08 010 15.7 4.85 11.3 6 . .3 . 9 7 15

GROW TH SHARES GROW TH SHARES 3 2 oatsSizradHealthcare Switzerland Telecommunications Services 1 Consumer Goods Total Europe Micro Cap JPMorgan Spain Switzerland Novartis Financials Oil&GasProducers Healthcare Telefonica Spain Description France Nestlé France Credit Suisse Banco Santander Country BASF Sanofi-Aventis Total Company at 31stMarch Investments Equity Ten Largest PognEuropean JPMorgan 16 Based ontotalinvestments of£252.4m (2009:£190.5m), whichincludesinvestment ofany borrowings andexcludes togeartheportfolio fund holdings andnetcurrent liquidity assets. Not includedintenlargest investments at31stMarch 2009. t3s ac 09 h au ftetnlreteut investments amounted to£55.0m representing 28.9% oftotalinvestments equity of£190.5m. At 31stMarch 2009, thevalue ofthetenlargest Trust Fledgeling Investment 2 3 2 JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 2 2 uoenFnsFinancials European Funds Financials European Funds Financials BasicMaterials Switzerland Germany 97223.7 59,722 ’0 % £’000 ,8 1.9 4,689 ,0 2.0 5,008 6,492 2.6 2.6 6,492 ,8 2.8 7,084 ,2 2.2 5,520 ,7 3.4 8,675 ,5 2.2 5,559 5,702 2.3 2.3 5,702 ,2 2.1 5,322 ,7 2.2 5,671 Valuation 2 010 1 ’0 % £’000 ,4 4.7 8,944 ,0 1.7 3,309 ,0 3.0 5,708 3,926 2.1 2.1 3,926 ,8 2.8 5,381 ,9 2.8 5,291 ,5 1.7 3,152 ,2 0.8 1,522 ,0 4.1 7,707 5 0.5 954 Valuation 2 009 1 Luxembourg Eur Netherlands Spain Italy 1 Total Portfolio Poland Hun Por Belgium S F Germany France Geographic Analyses Portfolio Ir Greece Norway Denmark Austria Switzerland Based ontotalin inland weden eland opean Funds tugal gar y vestments of£252.4m (2009:£190.5m), whichincludesinvestment ofany borrowings andexcludes togeartheportfolio fundholdingsandnetcurrent liquidity assets. JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 otoi Benchmark Portfolio 100.0 100.0 20.3 24.0 31st March 2010 14.3 16.9 19.3 17.1 8.8 9.3 0 0.5 0.9 0.5 1.3 5.4 5.65.4 3.3 2.1 2.1 3.3 5 4 3 1.5 2.41.5 0.81.5 9.1 7.6 % 1 1.1 1.9 .3 — .2 .7 5.9 —— — . . 1 1 1 0.9 2 0 % . . — 6 7 otoi Benchmark Portfolio 0. 100.0 100.0 22.5 24.3 15.0 17.0 31st March 2009 15.5 17.3 11.0 10.4 6.3 5.7 4 0.2 — 0.9 0.7 0.9 0.7 5 2 2.9 2.0 2.9 2.0 1.0 1.7 1.5 1.1 1.2 7.3 7.9 % .0 4.9 . .2 — 0.5 — — — 6 1 0 0 0 2 % . .3 .5 .9 .9 8 17

GROW TH SHARES GROW TH SHARES Sector C Basic Materials Consumer Goods 1 Total Portfolio Technology T Utilities Healthcare Oil &GasProducers Industrials Financials AnalysescontinuedPortfolio 18 Based ontotalinvestments of£252.4m (2009:£190.5m), whichincludesinvestment ofany borrowings andexcludes togeartheportfolio fundholdings andnetcurrent liquidity assets. elecommunications Services onsumer Services JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 otoi Benchmark Portfolio 0. 100.0 100.0 8324.9 28.3 4013.3 14.0 31st March 2010 5215.2 15.2 6 . 7.5 9.6 5 4 . 3.8 2.1 . 6.9 7.3 . 9.2 7.2 % 05.3 .0 . 76.6 .7 6 1 7 % .3 otoi Benchmark Portfolio 0. 100.0 100.0 4812.3 14.8 31st March 2009 4121.3 24.1 1010.3 11.0 8 . 3.9 3.4 8.9 8.0 8.0 8.9 8.7 14.6 14.6 8.7 7 . 6.4 5.7 7 % .0 5.8 5.8 .0 . .6 8.7 8.7 .6 8 1 8 % . 7 ia 224 228 307 328 371 300 Alten Vicat Ipsos M6-Metropole Television Rexel Vivendi Groupe Steria I 632 504 638 656 829 881 897 897 Cimen 1,109 Publicis Groupe 1,173 SEB 1,184 C BIC Alstom Dior Christian Bouy 1,197 1,300 V 1,225 1,256 1,821 1,573 Atos Origin Vallourec 2,119 Rhodia France Telecom Peugeot 8,675 4,297 Schneider Elec T 7,084 Valeo CNP 2,792 SCOR £’000 Legrand Promesse Société Genéralé Credit Agricole Renault Carrefour LVMH Technip Compagnie deSaint-Gobain BNP Paribas Sanofi-Aventis Total F Company at 31stMarch 2010 List ofInvestments ele rance sn ucadPrahn519 asino Guichard-Perrachon ni819 inci vision F us693 gues ts F r ancais acie962 rancaise tric JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 V aluation 900 889 506 427 216 ekl2,598 2,704 2,973 3,794 4,071 3,306 6,492 107 157 151 176 197 Lanx Henkel RWE Daimler £’000 Deutsche Bank Allianz E.ON BASF Germany Total France Natixis JC Decaux Bull Eurazeo Rallye Company Hanno rlic 238 248 303 318 352 429 539 527 473 746 1,207 Drillisch Bertrandt 726 1,295 Aixtron Bechtle 1,810 1,519 SAP Freenet 1,810 Continental In Dialog Semiconductor BMW Fuchs Petrolub Tognum ProSiebenSat.1 Media 2,087 Aurubis Metro MTU A Siemens Rheinmetall Bilfinger Berger K&S Munchener Ruckversicherungs fineon T ess r nie 1,258 ero Engines v er Rueck echnologies v er ihrns2,127 sicherungs V aluation 51,216 2 346 479 46 ,151 7 19

GROW TH SHARES GROW TH SHARES 20 aos 349 419 301 682 453 722 931 1,323 1,494 1,649 1,761 V Swiss Reinsurance Helv Baloise Geberit Kuoni Reisen Sika Swisscom A Sonova GAM Swatch UBS Clariant R aeru 183 Total Switzerland Gategroup 5,008 5,559 5,671 3,188 96 132 159 171 172 199 203 C Zurich Financial Services Novartis 229 Nestlé £’000 Credit Suisse Switzerland Total Germany GEA Sixt Bauer Krones Leoni Software Hochtief Asian Bamboo Company List ofInvestments continued ompagnie F alor oche ec 851 decco ta343 etia a JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 inancier e ihmn 2,611 Richemont V aluation 48,754 35,949 2 ,204 2 47 srnt123 222 225 234 293 375 360 Esprinet 301 Gruppo E 554 Benet 508 501 631 Recordati Credem 626 Yoox 715 742 DiaSorin Banca Gener &C Piaggio Autostrada Torino-Milano 1,268 Buzzi Unic Telecom Italia 877 1,911 Iride 2,934 1,558 4,494 A Pr 1,047 Maire Tecnimont Danieli &C. Indesit £’000 Finmeccanica ENI Parmalat Azimut Davide Campari-Milano Compagnie IndustrialiRiunite Mediaset Intesa Sanpaolo Unicredit Saipem ENEL I Company sad 85 154 Total Italy Astaldi Banca Mon Brembo taly tlan ysmian tia o 172 ton ditoriale m317 em te deiP l 259 ali aschi diSiena V aluation 22,866 408 396 258 1 1 4 71 7 oa 162 197 171 266 572 122 629 Or Royal BoskalisWestminster Mediq Vopak Delta Lloyd TNT ING C.S.M Imtech Netherlands SL101 702 Total Netherlands ASML 2,426 1,690 2,488 Nutr Randstad 280 Ahold R 428 182 Ar 118 Unilever 486 DSM 680 Philips Electronics 219 510 1,175 367 T Fomento deConstruciones yContratas Dur 5,520 V 784 Lain Obrascon Huarte 1,747 Construcciones YAuxiliar DeFerr 5,702 Abengoa £’000 Viscofan Envolturas Celulosicas 3,786 Endesa EBRO Puleva Gas Natural SDG Mapfre Prosegur Compania Seguridad Repsol Industria deDisenoTextil Banco BilbaoVizcaya Argentaria Telefonica Banco Santander S Company otal Spain pain ylDthSel1,179 oyal DutchShell uelin c dina elorMit o ec F g elguer o Airlines a 1,273 tal a JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 V aluation 2 13,705 2 ,246 7 140 7 145 122 11 64 01 7 roaK 224 296 463 495 1,146 1,924 2,197 Oriola-KD Cargotec 3,400 4,689 M-R F Orion £’000 Tieto YIT Sampo Kone Metso Finland Total European Funds 5,322 Europe Fund JPM Micro Cap JPM European Fledgeling Investment Trust JPMorgan E Company eb94 Total Sweden Peab K S Total Finland Huh knk 104 774 Skanska 1,423 JM NCC Elec Svenska Handelsbanken S oie 178 236 297 240 364 475 C Boliden Hoganas L KappAhl TeliaSonera Axfood Tele2 Industrivarden oomis or esaCluoa1,492 venska Cellulosa w ar uropean Funds inne eden do tum eal aai212 tamaki rlx864 trolux vik In v estmen t V aluation 10,292 13,411 9,360 2,623 1,5 409 6 30 202 18 162 96 76 3 3 21

GROW TH SHARES GROW TH SHARES ools 92 101 527 1,579 666 Total Denmark Coloplast 2,272 208 211 Jyske Bank D 142 Flsmidth &Co D 237 141 Novo-Nordisk Denmark 607 277 626 Total Austria 642 Raiffeisen International Bank 1,056 ImmobilienInvest Conwert 1,441 Er OMV Voest-Alpine 1,611 A 1,520 £’000 Omega Pharma CFE Euronav Agfa Gevaert Bekaert Nyrstar D’Ieteren Umicore Delhaize Anheuser-Busch InBev Belgacom B Company List ofInvestments continued Total Belgium 22 / ustria nk ak1,063 anske Bank elgium t ru ak489 ste Group Bank S Nor den JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 V aluation 8,300 3,808 3,846 446 nrisD otgl1,141 1,390 182 316 328 215 757 623 385 Cimpor Cimen Energias DePortugal £’000 Telecom Portugal Portugal Total Norway Golden Ocean Questerre Energy Veidekke Ementor TGS NopecGeophysical Telenor DnB N Company lni 155 98 220 T 260 190 273 T JPM Eur Liquidit Total Ireland 143 Paddy Power 1,225 Glanbia 270 Kerry Ireland Total Greece Titan Cement JUMBO Motor Oil(Hellas)Corinth Refineries OPAP F Gr Total Luxembourg Acergy Tenaris Luxembourg Total Portugal otal P otal Liquidit liFli 318 olli Follie orway eece or o y t Liquidit F f und olio y tos DePor F unds y F und tugal V aluation 271 19,165 2,806 1 1,368 2,655 9,165 1,311 ,531 473 124 A recoverable VAT All r R Net Taxation Net F Net Other administrative expenses Management fee Gross return/(loss) Other interest receivable andsimilarincome Income from investments gains/(losses) Net foreign currency investments heldatfairvalue through Gains/(losses) on for theyear ended31stMarch 2010 (unaudited) Income Statement inanc eturn/(loss) perGr profit orloss af bef finance costs and taxation ev return/(loss) on ordinary activities return/(loss) onordinary activities return/(loss) onordinary activities beforereturn/(loss) onordinary ter tax ore taxation enue andcapitalitemsintheabo e costs ation o w th shar e ve statementderive from continuing operations. JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 eeu aia Total Capital Revenue 169 7 (938) 671 (1,609) ,4 29291,020 82,972 8,048 ’0 ’0 £’000 £’000 £’000 ,4 8,849 — 8,849 .9 68p71.61p 66.82p 4.79p ,4 41293,318 84,172 9,146 ,1 24688,329 82,416 5,913 ,2 17589,267 81,745 7,522 54 (584) — (584) (52 54 120 (1,714) (1,200) (514) 9 297 — 297 ,8 1,384 1,384 82,788 82,788 — — ——— 6) 127 (1,753) (1,227) 2 010 eeu aia Total Capital Revenue 494—14,954 — 14,954 903(3,2)(115,951) (135,024) 19,073 12 788(3,7)(118,121) (135,979) 17,858 ’0 ’0 £’000 £’000 £’000 487 ,2 (1,796) 3,021 (4,817) (1,522) 1 ,0 2,904 — 2,904 9 ,2 ,0 4,230 2,003 2,227 49 108 (1,497) (1,048) (449) ,5 1856 (121,025) (138,576) 7,551 53 (563) — (563) .54p , 3 1555 (122,821) (135,555) 734 537 (5,357) (5,357) (130,622) — (130,622) — (101.52)p (3 2 009 52 (5,074) ,552) (91. 9 8)p 23

GROW TH SHARES GROW TH SHARES 24 Cash and short termdeposits andshort Cash Net assetvalue perGrowth share Total assets net Bank loans Creditors: T Net current assets Creditors: Debtors Current assets fixed assetinvestments Total Investments fundsheldatfairvalue inliquidity through profit orloss Investments heldatfairvalue through profit orloss Fixed assets at 31stMarch 2010 (unaudited) Balance Sheet otal assetslesscurr JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 amounts more falling thanoneyear dueafter amounts falling duewithinoneyear en t liabilities 243,696 252,366 315 271,531 (71,955) 44,120 44 43,961 207.2p 19,165 £’000 2 (605) ,651 ,725 764 010 272 204,237 190,527 180,176 (92,130) 68,069 (11,753) 79 79,219 142.1p 13,710 £’000 2 ,306 009 ,822 603 Shares inissue Share price 3 hr rc icuttonetassetvalue Share price discount 5 4 2 1 A T Total dividendspershare Gross revenue return (£’000) R Net assetvalue pershare Total netassets(£’000) Net AssetValue, Share Price andDiscount Benchmark return Return onnetassets Return toshareholders Total Returns (capitalplusincome) –Income ofResults Summary Special dividend dividends Ordinary Dividend pershare: R Net revenue attributable toshareholders(£’000) A ore Morningstar. Source: Management fees and all other operating expenses excluding interest and performance fees, andperformance expressed asapercentage oftheaverage oftheopening andclosing netassets. excluding interest Management fees andallotheroperating expenses ore MSCI. Source: Source: J.P. Morgan. J.P. Source: A otal ExpenseRa eturn pershare evenue ctual Gearing Factor ta ern ersnsivsmnsexcluding expressed fundholdings, liquidity asapercentage oftotalnetassets. gearing representsctual investments lsayo em n eiiin spoie npg 92. ofglossary termsanddefinitionsisprovided onpage f or theyear ended31stMarch ti 3 o 2 5 1 at 31stMar ch 4 for theyear ended31stMarch JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 t3s ac %change at 31stMarch 56,113,668 105 94.50p 106.3p 59,656 64.2% 60.2% 1 47.5% 2,249 2,986 3 8.8% .2 2 4.0p 4.0p .92p .3% 010 6 % — 58,502,745 104 –30.5% –30.5% –33.9% 02p+56.8 60.25p 105+45.3 41,045 1.1 14.1% ,8 –31.9 4,382 5 2 02 +51.4 70.2p ,8 –31.5 3,285 5.15p 1.15p .p— 4.0p 4p–28.5 .48p 009 .3% 9% 25

INCOME SHARES INCOME SHARES 26 3 2 lxSihln KHealthcare services Telecommunications UK 1 Financials Total Energy UK GlaxoSmithKline Banc Energy Novartis UK Roche UK Description Vodafone Total UK Nestle Country HSBC Royal DutchShell BP Company at 31stMarch Investments Equity Ten Largest assets/(liabilities). Based ontotalinvestments of£62.8m (2009:£42.8m), whichincludesinvestment ofany borrowings andexcludes togeartheportfolio fundholdingsandnetcurrent liquidity Not heldinthepor t3s ac 09 h au ftetnlreteut investments amounted to£10.3m representing 24.2% oftotalinvestments of£42.8m. equity 31stMarch 2009, thevalue ofthetenlargest At 2 o 3 2 2 San 2 JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 adrSanFinancials Spain tander t f olio at 31stMar ch 2009 wteln Healthcare Healthcare Switzerland Energy Switzerland Consumer Staples France Switzerland . 42122.6 14,201 ’0 % £’000 ,5 1.7 1,058 ,7 2.0 1,270 ,6 2.8 1,764 ,8 2.8 1,786 ,9 2.1 1,297 ,5 2.8 1,756 1 ,5 2.8 1,759 ,1 1.9 1,218 ,7 1.9 1,173 , 2 1.8 120 Valuation 2 010 1 ’0 % £’000 ,6 2.5 1,063 ,3 3.8 1,639 ,7 3.7 1,576 ,9 2.8 1,193 7 2.3 979 722 Valuation —— —— —— —— 2 009 1. 7 1 Austria Belgium Italy France Spain 1 T Denmark Gr Portugal Norway Netherlands F Sweden Germany Switzerland United Kingdom Geographic Analyses Portfolio Ireland Based ontotalinvestments of£62.8m (2009:£42.8m), whichincludesinvestment ofany borrowings andexcludes togeartheportfolio fundholdingsandnetcurrent liquidity liabilities. otal Por inland eec e t f olio JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 otoi Benchmark Portfolio 100 40.8 32.3 31st March 2010 8.8 12.2 6.6 11.9 0.5 0.5 2.0 1.1 5 9.3 16.3 9.3 6.0 1 5.3 4.3 3 1.9 1.5 1.2 0.41.2 1.5 0.41.5 3 % .0 5.0 5.0 .0 . . . —1.4 .1 4.1 4.1 .1 0 0 7 1 100 0.7 0.7 1 % .0 . 9 otoi Benchmark Portfolio 100 45.6 31.7 31st March 2009 0.4 0.5 8.8 12.3 4 0.9 0.6 0.9 0.6 6.9 6.6 5 2.4 1.4 3 5 5.3 16.0 0.7 12.6 3.9 3.5 0.1 1.3 3.7 1.1 1.8 0.5 % . .8 4.1 .3 .5 .9 5.1 0 1 100 0.8 0.8 1. % .0 9 27

INCOME SHARES INCOME SHARES 28 Sector Energy 1 Total Portfolio Materials In Utilities T Healthcare Consumer Discretionary Consumer Staples Industrials Financials AnalysescontinuedPortfolio Based ontotalinvestments of£62.8m (2009:£42.8m), whichincludesinvestment ofany borrowings andexcludes togeartheportfolio fundholdingsandnetcurrent liquidity liabilities. elecommunications Services formation Technology JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 otoi Benchmark Portfolio 0. 100.0 100.0 22.0 23.8 31st March 2010 14.3 10.0 11.4 11.0 11.1 12.1 4 8 8.7 10.2 3.9 9.8 9.1 7.4 7 % .0 3.0 3.0 .0 .3 .2 6.7 1 6 % . 0 otoi Benchmark Portfolio 0. 100.0 100.0 23.2 19.3 13.8 12.8 31st March 2009 15.9 9.4 13 4.6 11.9 9.6 7.8 7.8 9.6 2 3.2 12.7 6.1 7.4 % 7 .6 3.2 . .1 8.3 9 1 7 % .2 ria141 144 145 148 147 147 146 152 Standar Arriva Half Melrose Intercontinental Hotels Land Securities Sage Sainsbur mts160 165 168 163 221 182 292 A Go- 297 Smiths 319 496 International Power 595 United Utilities 379 L Marks &Spenc 708 Keller Next 169 A 1,759 Broadcasting British Sky 1,270 1,786BT 1,058 768 Pear C Prudential 1,764 BAE Systems National Grid £’000 Imperial Tobacco Diageo Tesco AstraZeneca British AmericanTobacco Unilever 912 GlaxoSmithKline Vodafone HSBC Royal DutchShell BP U Company at 31stMarch 2010 List ofInvestments etuat135 137 BB Restaurant British Land gl&Gnrl165 egal &General en ia179 viva dmir nited Kingdom A ha 158 Ahead trica rs143 ords A son viation al d y Lif (J) e er 168 JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 V aluation 22 275 138 13 155 151 4 3 oetWsmnDiis 107 Stagec Wiseman Dairies Robert G109 109 110 112 115 115 110 115 C Hender Pennon IG Segro Jardine Lloyd Thompson Davis Service Meg ICAP Rexam Water Northumbrian Hammer rgs117 117 118 118 118 117 125 121 122 126 127 128 Home R 129 128 Daily Mail&General Trust 129 Morgan Crucible Crest Dairy £’000 Chesnara Premier Farnell Thomas Cook 125 IMI WPP Senior New BritainPalm Oil Bunzl 129 Inmarsat Experian Company eze 98 100 100 101 100 102 Beazley 106 Sthr Hays 99 F McBride Brothers Close Amlin KCOM Aberdeen AssetManagement Finance International Personal irstGroup 99 arillion ee it113 gitt oach o 108 son etail son V aluation 108 10 116 116 113 99 7 29

INCOME SHARES INCOME SHARES 30 enr73 75 73 76 77 85 86 85 89 89 Cr 88 Fenner 93 90 Headlam 93 Brown (N) 94 92 Eur 94 C 94 Spirax Sarco Engineering Petrofac 95 WH Smith 96 Babc T 97 97 Foods Northern Whitbread Informa Atkins (WS) Hargreaves Lansdown £’000 98 98 Kier Greene King Tate &Lyle Halma 94 Filtrona Ashtead Smith (DS) Ashmore Severn Trent Interserve International International Charter Company List ofInvestments continued icx48 54 59 65 69 63 69 Domino Prin C ITE Moneysupermarket.Com 55 Provident Financial Devro William Hill F Clarkson Diploma tbr 46 46 Stobart London &Stamford Property ullet iber omputac acr49 haucer d nentoa 72 oda International mny80 omoney ock In w t rbn88 Prebon eb JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 ne 81 enter ternational tin g V aluation 46 6 8 71 9 7 nea83 81 88 94 97 89 98 Sociedad Gener Banco EspanolDeCredito Endesa Laboratorios Almirall Occidente Grupo Catalana Duro Felguera Indr Bankinter Tecnicas Reunidas ngs123 137 154 149 110 183 280 165 377 Z Fomento deConstruciones yContratas An Enagas 19 Mapfre 12 Banco PopularEspanol 570 184 Gas Natural SDG Infraestructuras Abertis 22 21 29 Criteria C Red Electrica ACS Actividades deConstruccion yServicios 30 Repsol 35 Iberdrola 33 Banco BilbaoVizcaya Argentaria 30 37 Spain 38 Total UnitedKingdom £’000 Braemar 888 Smiths News Chloride Wincanton 29 RPC GAME The Vitec WSP Cranswick Hill &Smith Company ossyMrao 67 Total Spain Bolsas yMercados T Banc elef ar ea3Tlvso 110 tena 3Television do a onica o Sistemas y San a ts105 Otis ia173 aixa tander al A guas deBar eoa68 celona V aluation 25,616 5,851 1,120 1, 051 95 E D 74 70 95 62 103 105 106 C Financiere Marc deLacharriere Generale Location SES FDR T Cimen Rallye Tour Eiffel M6 CNP Assurances ABC Arbitrage Rubis evta117 131 190 1,173 1,218 V Helvetia Baloise Banque C Swisscom Z Novartis Roche Nestle 1,756 Switzerland 126 Total France 128 Pierr 131 174 210 135 132 154 282 357 270 1,297 851 377 SC ICADE Silic Gecina £’000 Guichard-Perrachon Casino Fonciere desRegions Suez Environnement PPR Bouygues Credit Agricole Unibail Vinci Schneider Electric Sanofi-Aventis Total F Company tlGbn80 otal Gabon rc iaca evcs481 urich Financial Services rance nlPu 53 anal Plus on OR MtooeTlvso 105 -Metropole Television tobel e sFaci 88 ts Francais & V an acanc tonale V s33 es uos 133 audoise JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 V aluation 5,833 10 12 112 3 3 onm108 131 148 437 240 651 125 651 404 90 Hugo Bos 72 Tognum Hannover Rueckversicherungs Delticom 62 £’000 Brenntag Deutsche Post Deutsche Telekom RWE BASF Allianz Germany Total Switzerland Liechtenstein Landesbank EMS-Chemie Valora Company ee 176 199 230 379 24 Tele2 Skanska Svenska Handelsbanken T Hennes &Mauritz S Total Germany Bertrandt I se 51 62 55 55 62 84 89 71 91 100 92 Gerr DIC Asset Bech Deutsche Euroshop Cewe Color Sixt Alstria Office Generali Deutschland Bilfin Douglas Pfeiffer Drillisch Wincor Nixdorf Symrise Ax ec 37 Gesco eliaSoner w el Sprin eden y l 52 tle e egr83 ger Berger W eber In s ger a ternational V aluation 4,156 5,526 10 102 2 48 3 3 7 31

INCOME SHARES INCOME SHARES dsn58 100 99 109 118 109 146 Edison Benet 154 Mediolanum AEM Maire Tecnimont 66 Iride Recordati F Parmalat Trasmissione Elettricita Rete Nazio Know It Duni 66 K nl452 189 655 224 63 72 A Snam Rete Gas 74 Mediaset 77 Telecom Italia 91 Enel 97 ENI 98 90 Italy 81 Total Sweden 100 Unibet 106 100 113 126 131 W 131 129 Klovern Industrivarden Intrum Justitia Angpanne Foreningen 173 HiQ International £’000 Peab Axfood Ratos Orc Software Mekonomen Betsson Fabege Securitas Hufvudstaden NCC Cardo Svenska Cellulosa Company List ofInvestments continued 32 inmec appahl tlan ihlbor tia ton canica g JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 atgee 72 Fastigheter V aluation 3,346 164 120 193 6 9 9 2 pnr79 56 84 83 Lassila &Tikan Uponor Alma Media Kesko icbn 121 C 107 100 Binckbank 119 120 116 156 200 215 677 40 Huh K 38 54 Tietoenator Sonoma Pohjola Bank £’000 Orion Elisa Wartsila Fortum Sampo Nokia Finland Total Italy Credito Artigiano Marr Ascopiave Company A ak56 66 64 95 105 99 112 110 KAS Bank Smit Internationale 113 Fugro TKH Beter Bed C 21 D Delta Lloyd Accell Vastned Offices/Industrial Vastned Retail Royal BoskalisWestminster W KPN Netherlands Total Finland Technopolis orio onecr .S M97 SM olter .M tamaki s anes -Kluw r136 er V aluation 2,323 3,114 352 120 94 96 96 79 rs 124 136 163 169 47 57 64 35 Brisa Banco EspiritoSanto 40 104 155 Energias dePortugal Telecom Portugal 85 Portugal 193 Total Belgium Elia System Operator Warehousing 30 &DistributionDePauw RTL Arseus C.M.B. GIMV EVS Broadcast Equipment C 43 75 75 72 T Euronav 106 Solvay 92 154 KB 185 Belgacom Belgium 337 T Ekornes 31 Spar Bonheur ASA 12 ABG SundalCollier Fred OlsenEnergy Stolt-Nielsen £’000 Frontline Marine Harvest 53 Veidekke Seadrill Telenor Statoilhydro Macintosh Retail Exact Eurocommercial Property Company Norway Total Netherlands essenderlo C otal Nor ofinimmo C169 ebanken Nor wa y hemie d Nor ge JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 V aluation 1,238 1,917 1,211 99 9 36 65 3 8 3 C 87 52 97 290 100 106 59 35 85 108 Total Produce DCC £’000 59 United Drug Irish Continental CRH Ireland Total Portugal Mota Engil Sonae Redes Energeticas Nacionais Banco BPI CIMPOR Company M 148 T 12 Total Funds Liquidity 62 JPM Eur 69 FundLiquidity T 43 89 Semperit Flughaf 77 OMV Austria Total Greece FreeDuty Shops 85 Hellenic T A Thessaloniki Water Supply Metka OP Fourlis Hellenic Exchanges Motor Oil(Hellas)Corinth Refineries JUMBO Hellenic Petr Gr T otal Portfolio otal A otal Ir egean Airlines eec P67 AP e ustria eland en W o elec iudt ud4,668 Fund Liquidity ien oleum om. Or aiain30 ganisation V aluation 67,461 4,668 660 938 332 7 90 94 94 32 32 33

INCOME SHARES Income Statement (unaudited) for the year ended 31st March 2010

2010 2009 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000

Gains/(losses) on investments held at fair value through profit or loss — 21,527 21,527 — (21,988) (21,988) Net foreign currency gains/(losses) — 211 211 — (1,219) (1,219) Income from investments 2,939 — 2,939 3,832 — 3,832 Other interest receivable and similar income 47 — 47 550 — 550 Gross return/(loss) 2,986 21,738 24,724 4,382 (23,207) (18,825) Management fee (209) (313) (522) (220) (329) (549) Performance fee — (409) (409) ———

S VAT recoverable ———472 332 804 Other administrative expenses (113) — (113) (109) — (109) E Net return/(loss) on ordinary activities before R finance costs and taxation 2,664 21,016 23,680 4,525 (23,204) (18,679)

A Finance costs (157) (236) (393) (387) (581) (968)

H Net return/(loss) on ordinary activities before taxation 2,507 20,780 23,287 4,138 (23,785) (19,647) S Taxation (258) 92 (166) (853) 553 (300) Net return/(loss) on ordinary activities

E after taxation 2,249 20,872 23,121 3,285 (23,232) (19,947) M Return/(loss) per Income share 3.92p 36.37p 40.29p 5.48p (38.78)p (33.30)p O

C All revenue and capital items in the above statement derive from continuing operations. N I

34 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 Balance Sheet (unaudited) at 31st March 2010

2010 2009 £’000 £’000

Fixed assets Investments held at fair value through profit or loss 62,793 42,804 Investments in liquidity funds held at fair value through profit or loss 4,668 3,146 Total fixed asset investments 67,461 45,950

Current assets Debtors 696 321 Cash and short term deposits 9,253 16,089 9,949 16,410 Creditors: amounts falling due within one year (438) (21,315) S

Derivative financial instruments (64) — E

Net current assets/(liabilities) 9,447 (4,905) R Total assets less current liabilities 76,908 41,045 A Creditors: amounts falling due after more than one year

Bank loans (16,979) — H Provision for liabilities and charges S Performance fees (273) — Total net assets 59,656 41,045 E Net asset value per Income share 106.3p 70.2p M O C N I

JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 35

THE COMPANY 36 Board ofDirectors JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 membership are many years’ experience of European finance andindustry. of boththeinstitutionalandprivateclientmarkets. for experience Boardmembershipare of practical investment inEurope andknowledge UK EquityStrategy. Heiscurrently Investment atRufferLLP. Director His qualifications Manag Spent eleven years atSLC AssetManagement (nowCSAM), mostnotablyasFund A Stephen Russell NM A S with longexperience of investment. other companies. Hisqualificationsfor Boardmembershipare asaqualifiedaccountant Finance of director TheAshfield Land Group Property of andadirector anumberof A oftheAudit(Chairman Committee) Robin Faber m Board membershipare longexperience of financial,investment andstrategic and Hg CapitalTrust Hisqualificationsfor plc. Maven Income andGrowth VCT 3plc of director Previously SeniorBursarof Peterhouse, University of Cambridge andcurrently a A oftheBoard(Chairman andNomination Committee) Andrew Murison All Directors areAll Directors oftheAudit members andNominationCommittees andare considered independent oftheManager. the US investment fundsin Virtus Director of anumberof Continental European companies and A Ferdinand Verdonck (Belgian) H aaeet eisadirectorof Cavendish AssetManagement Limited. He Management. team Head of Management theUK Portfolio andtheEuropean Management ClientPortfolio tephen Goldman a Dir Dir Director since 2000 Director since Chairmansince 2002, 2003 Director since 1998 anagement. s Rothschild AssetManag a ec ec tJMra n edo qiisfrteErpa einatCredit SuisseAsset andHeadof Equitiesfor theEuropean Region atJPMorgan s wide experienc A er of £5bnof equities,before joiningHSBCInvestment BankasHeadof Europe & tor since 2005 tor sinc . F ormerly ManagingDir e September 2008 e o f investing inEuropean having equities, spent12years at ement ec , tor o wher f the AlmanijGroup. Hisqualificationfor Board e eldteU qiyRsac em Formerly theUKEquityResearch team. led he netetMngr’Rpr npgs9t 13. to 9 Investment Managers’ onpages Report andinthe 8 to 5 the Chairman’s Statementonpages A close company for taxation purposes. 2006. TheCompany isnota 833 of theCompaniesAct Section The Company isaninvestment company withinthemeaningof - - In shar consistent out-performance of thebenchmarkandarising capital gr The in Investment Objective Growth Portfolio str investment managers basedinLondon,bya40 supported assets. Onaday-to-day basistheassetsare managed bythree JPMAM isr Investment Objectives, Policies andRiskManagement Corporation T r Appr each year. of 842 theIncome andCorporationTaxesSection 1988 Act qualify. TheCompany willcontinue toseekapproval under sothatitshouldcontinue to itsaffairs subsequently conducted 2009. Intheopinionof theDirectors,Company has C 1158of the (nowSection Corporation Taxes Act1988 oftrust inaccordance theIncome 842 and withSection w The Company carriesonbusinessasaninvestment trustand Business oftheCompany B March 2010. 31st The Directors’ Report communicated toshareholders. risks thr and guidelines. Company’s riskbyimposingvariousinvestment restrictions eview shouldthere under beany subsequentenquiry likely result thatthelevel of dividendswillfluctuate. To ratherthanincome, emphasisecapitalgrowth withthe stockmarkets of ContinentalEurope. To invest of inadiversified portfolio investments inthe roainTxsAt21)for theyear ended31stMarch orporation Taxes Act2010) usiness Review as approved byHMRevenue &Customsasaninvestment vestment Policies r ong E eview o Directors present for theirreport theyear ended e oval for theyear ended31stMarchto 2009issubject pric v estment objective of istoprovideestment objective theGrowthportfolio ough anin ur ow e opean equityteam.TheBoardseekstomanag f esponsible for management of theCompany’s over thelonger termbytaking carefully controlled the Compan th fr ax SelfAssessment om ContinentalE v estment methodthatisclearly y’s andprospectsisgiven in activities . ur opean in JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 vestments by e the pan-European stockmarkets. capital growthfrom adiversifiedof portfolio investments in gr ------I - - Investment Restrictions andGuidelines - - Investment Policies The in Investment Objective Inc - nvestment Restrictions andGuidelines transactions and todosorequirestransactions priorBoard approval. doesnotnormally enterintoderivative The portfolio investments and todosorequires priorBoard approval. doesnotnormallyinvestThe portfolio inunquoted market conditions. shar To manage liquidityandborrowingstoincrease returns to listed investment companies. themselves may invest more than15%of gross assetsinUK not invest more than10%of itsgross assetsincompanies that gross assetsin other UKlistedinvestment companies andwill Authority, willnotinvest theportfolio more than15%of its In accordance withthe ListingRulesof theUKListing risk r curr Howev andtodosorequirestransactions priorBoardapproval. doesnotnormallyenterintoderivative The portfolio i doesnotnormallyinvestThe portfolio inunquoted market conditions. willbenomoreThe portfolio than120%invested innormal any oneindividualstockatthetimeof acquisition. willnotinvestThe portfolio more than15%of theassetsin The por one individualstockatthetimeof acquisition. willnotinvestThe portfolio more than6%of theassetsinany long T European stockmarkets. To invest of inadiversified portfolio investments inpan shareholders. To manage liquidityandborrowingstoincrease returns to nvestments andtodosorequires priorBoardapproval. owing inc o ome Portfolio ome Portfolio pr ency hedging transactions inordertomitigatecurrency hedgingtransactions ency eholders. -term capitalgr v elative tothebenchmarkindex. ovide agrowing income together withthepotentialfor estment objec er, theInvestment Managerout hasauthoritytocarry tf olio willbenomor ome together with thepotentialfor long-term ow tiv e th. o f the Inc e than 120%in m otoi st provide a isto ome portfolio vested in normal 37

THE COMPANY THE COMPANY 38 +5 +60 reported totheBoardonamonthlybasis. reported guidelines ismonitored continuously bytheManager andis Compliance withtheBoard’s investment restrictionsand to invest inpooledfunds. appropriate exposure, theInvestment Managers are permitted number of investments intheCompany’s To portfolios. gainthe The Boardhassetnominimumormaximumlimitsonthe - £16 deduc after return millionloss)andnettotal £118.1 (2009: million £93.3 for theyear amounted to totalreturn Gross Growth: inc £111. other administrativ deduc (2009: million £118.0 for theyear amountedto return Gross total Company: T withintheCompany’son investment activity portfolios. review of developments duringtheyear aswellinformation includesa 13 to 9 The Investment Managers’ onpages Report million. £67.5 Company’s was Income portfolio the +47.5%. Asat31stMarch 2010, thevalueof index of return onnetassetsof anda +64.2% return toshareholders of In theyear to31stMarch 2010, theIncome produced portfolio a Income: r In theyear to31stMarch 2010, produced portfolio theGrowth a Growth: P continued Directors’ Report Gr theCompany’s +47.4%. Asat31stMarch 2010, thevalueof of eturn toshar otal R l themselves may invest more than15%of gross assetsinUK not invest more than10%of itsgross assetsincompanies that g Authority, willnotinvest theportfolio more than15%of its In accordance withtheListingRulesof theUKListing r inordertomitigatecurrency currency hedgingtransactions However, theInvestment Managerout hasauthoritytocarry er isted investment companies. isk relative tothebenchmarkindex. ow 3. ross assetsinotherUKlistedinvestment companies andwill ome f f . . 0 ormanc 7 2%. Thiscompares with thereturn onthebenchmark ilo 20:£142.8 millionloss).Distributable million(2009: 5 %. Thisc th por million). eturn, Revenue andDividends ting inter igitrs,mngmn xess other ting interest,management expenses, 169mlinls)adntttlrtr after return £136.9 millionloss) andnettotal JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 or they e tf olio was eholders o ompares withthe return onthebenchmarkindex est ear amountedto , e manag expenses andtax £ 2 15million. 71.5 f +62 ement expenses,per . 4 % and a £8 2million (2009: .2 ation amountedto return onnetassets of formance fee, . ec,pu pca iiedo . ec)perGrowth pence) aspecialdividendof 2.5 pence,plus 7.0 £ allowingfor thesedividendsamounts to reserve after millionandtherevenue £6.0 These distributionscost s (2009: pence 4.85 million).Dividendstotalling £12.7 i £122.8millionloss).Distributable million(2009: £88.3 to administrative expensesandtaxation amounted af millionandtherevenue reserve £2.3 These distributionscost Inc per aspecialdividendof 1.15pence) plus pence, 4.0 (2009: pence 4.0 million(2009:£3.3million).Dividendstotalling £2.2 millionloss).Distributableincome for theyear totalled £19.9 million(2009: £23.1 expenses andtaxation amountedto management expenses,performance fee, otheradministrative interest, deducting after return millionloss)andnettotal £18.8 (2009: million £24.7 for theyear amountedto totalreturn Gross Income: Figures have beenrebased to100at31stMarch 2000 Performance Relative toBenchmarkIndex G • assess theperformance of theCompany. TheprincipalKPIsare: The Boardusesanumberof financialKPIstomonitorand Key Performance (‘KPIs’) Indicators 100 130 120 110 cm o h erttle 59million(2009: £5.9 ncome for theyear totalled 90 80 aewr elrdinrespectof theyear underreview. declared hare were . million. 0.4 rowth: 20 ter allowingf ome shar 0 Benchmark R JPMor JPMor judged. KPIbywhichperformance is This isthemostimportant Sour Performance against the benchmarkindex: 0 c 2 e: g g 0 an E an E 01 Mornin ur ur e eturn 20 opean Gr opean Gr wer g or thesedividendsamountsto 02 star/FTSE e 20 paid inr owth –Netassetvalueowth pershare –Shareowth price 03 2 0 04 espect ofespect theyear underreview. 20 05 20 06 20 07 £0 20 .3 08 million. 20 09 201 0 100 F Performance Since Inception Figures have beenrebased to100atinception Sinc Performance Relative toBenchmarkIndex Income: 20 Figures have beenrebased to100at31stMarch 2000 Ten Year Performance 100 130 1 105 120 1 110 60 90 90 80 80 00 igur 70 95 85 5 J J 50

u u 2 0 l l 0 0 0 0 Benchmark Return JPMorgan European Income – Netassetvalue pershare JPMorgan European Income – Share price Benchmark Return JPMorgan European Growth–Netassetvalue pershare JPMorgan European Growth–Share price The benchmarkindex isrepresented by thegrey horizontal line JPMorgan European Income –Netassetvalue pershare JPMorgan European Income –Share price Source: Morningstar/FTSE Source: Morningstar/FTSE Source: Morningstar/FTSE 0 6 es ha 6 N N 0 e ov ov v 0 0 20 Inc 6 e 6 01 been rebased to100atinception M M a a

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0 0 09 9 9 M M a a r r 2 10 10 01 0 Discount tonetassetvalue (‘NAV’) • • Performance against theCompany’s peers • Discount History G –20 –10 –25 –15 –5 rowth: rowth: 20 0 0 PognErpa Growth–Discount JPMorgan European 6 14.1% and (withdebtvaluedatpar)ranged between shares 10.0% andthediscount on theIncome 18.0% and sharesGrowth (withdebtvaluedatpar)ranged between trade. Intheyear to31stMarch 2010, thediscount onthe level of thediscount toNAV atwhichtheCompany’s shares market andthereby minimisethevolatility andabsolute for theCompany’s shares withinthe supplyanddemand in repurchase programme thatseekstoaddress imbalances The Boardhasf 12. and 11 onpages Report March 2010are given intheInvestment Managers’ 31st Details of theattributionanalysesfor theyear ended components suchasassetallocationandstockselection. each portfolio’s relative performance of thevarious to itsbenchmarkindex,i.e. on tounderstandtheimpact achieved itsperformanceassess howeachportfolio relative The purposeof performance attributionanalysisisto broad range of competitor funds. monitors theperformance of relative bothportfolios toa f is toprovide agrowing income together withthepotential of Theprincipalobjective theIncome portfolio benchmark. c of istoachieveThe principalobjective theGrowthportfolio Source: Datastream Performance attribution or long-term However, capitalgrowth. theBoardalso 0 apital growthbyconsistent outperformance of the .9%. 20 01 2 0 02 20 or several years operateda share 03 20 04 2 0 05 20 06 20 07 20 08 20 09 2 01 39 0

THE COMPANY THE COMPANY 40 end. 5,2 Income shares have beenrepurchased for cancellation. 353,124 at thef shareholders willbeput to cancellation repurchase shares for Sinc Treasury duringtheyear. cancelled from, T During they £1,1 shares inthemarket for cancellation atatotalconsideration of Income 1,475,616 andatotalof £15,552,000 consideration of Gr 9,633,138 During theyear, theCompany repurchased atotalof r andto The Company hasauthoritytoissuenewshares Share Capital Total expense ratio (‘TER’) • Discount History Income: continued Directors’ Report out intheNotic R No newshares were issuedduringtheyear, orsince theyear epur r e -15 -12 easur

owth sharesowth inthemarketfor cancellation atatotal A - - solutio u - 6 9 g 3 30,000. peers. the Compan r ended 31st 1.08% (2009:0.81%). TheIncome TERfor theyear was assets. TheGr per finance costs, expressed asa operating expenses,excluding JPMorgan European Income – Discount The TERr Source: Datastream 0 e S

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f n 10 its M ar 10 • Investment Aninappropriate andStrategy: investment • These keyrisksfallbr risk matrix,whichidentifiesthekeyriskstoCompany. With theassistance of theManager, theBoardhasdrawnupa Principal Risks 2 September 15th During theyear, conversions tookplace on 82. given onpage a without suchconversions beingtreated, undercurrent law, as shareholdings intoshares of theCompany’s othershare class o The Company’s capitalstructureallowsshareholders the Conversions aia f9341shares. 913,461 capital of intheIncome issuedshare adecrease shares, and 456,204 of issuedshare intheGrowth capital anincrease conversions was 0 n n1t March 2010. Thenetresult of those 15th andon 009 pportunity, twice eachyear, orallof their part toconvert disposal for UKcapitalgainstaxpurposes.More detailsare the implementationandr monitored onbyJPMAM.TheBoardmonitors andreported set in andlevels ofselection gearing onaregular basisandhas movements. The Boardconsiders assetallocation,stock holding in the potentiallossCompany through mightsuffer future prices of theCompany’s investments. Itrepresents Market: Marketriskarisesfromaboutthe uncertainty eachyear.strategy Board. TheBoardholdsaseparatemeetingdevoted to the Company’s gearing withinastrategicrange setbythe Company’s riskprofile. TheInvestment Manager employs and reviews data whichshowsstatisticalmeasures of the the Investment Managers, whoattendallBoardmeetings, implementation andresults of theinvestment process with shareholder analyses. TheBoardmonitorsthe analyses, r information, includingperformance dataandattribution Directors withtimelyandaccurate management bytheManager.and reported JPMAMprovides the investment restrictionsandguidelineswhichare monitored and bydiv prospects process stockswiththebest designedtoidentify TheBoardmanagesdiscount. theserisksbyaninvestment r Company’s benchmarkindexandpeercompanies, maygearing, leadtounder-performance againstthe with theManag strateg esulting intheCompan vestment andguidelineswhichare restrictions y , f or example asset allocationorthelevel of vestments intheface of negative market ersification of investments through its ev enue estimates, liquidity reports and enue estimates,liquidityreports er . oadly underthefollowing categories: y’s shares trading onawider esults o f the in v estment pr oc ess Financial: Thefinancialrisksfaced bytheCompany include • Operational:Disruptionto, orfailure of, JPMAM’s • ics h ulo nterrpr npgs1 o13. to 11 onpages discuss theoutlookintheirreport equity marketdev for inthelightofstrategy thetwoportfolios economic and dependent uponthesuccess of theCompany’s investment Clearly thefutur Future Developments CorporateGovernance andShareholder Relations:Details • Accounting, Legal asan Inordertoqualify andRegulatory: • F risk andotherprice risk),liquidityriskandcredit risk. interest rate risk(whichcomprises currencyrisk, market 47. onpage report Internal Controlof section theCorporateGovernance monitoring o custodian’s records could prevent and accurate reporting ac pr and itsassociatesthekeyelementsdesignedto providedhow theBoardmonitorsservices byJPMAM r shareholders, are setoutintheCorporateGovernance best prac o with TheCompaniesA JPMAM, anditsprofessional adviserstoensure compliance Board r fr could result intheCompany’s shares beingsuspended criminalproceedings. Breach of theUKLAListingRules of Company and/orthe Directorsbeingfinedorsubject Rules. Abreach of could theCompanies Act result inthe listed ontheLondon StockExchange, theUKLAListing provisions of TheCompaniesActand,since itsshares are each month.TheCompany mustalsocomply withthe monitored byJPMAMandtheresults totheBoard reported T Company’s toCapitalGainsTax. could besubject portfolio trust statusand,asaconsequence, gainswithinthe C under ‘Businessof above. theCompany’ Were the Detailsof 842’). theCompany’s(‘Section approval are given 8 theCompanyinvestment mustcomply withSection trust, epor ur he Section 842 qualificationcriteriaare continually 842 he Section f ompany to breach Section 842, itmightloseinvestment ompany 842, tobreach Section 42 of42 theIncome andCorporationTaxes 1988 Act om listingwhichinturnwouldbr o counting, dealingorpayments systemsorthe counting, the Compan hrdtisaedslsdi oe2 npgs7 o80. to 74 onpages 23 ther detailsare disclosedinnote vide ef t on pag elies ontheser tic fective internalcontrol are includedwithinthe e, includinginformation onrelations with e f e development of theCompany ismuch the Company’s financialposition.Detailsof elopments. TheInvestment Managers y s ’ s 45 c omplianc o48. to c vices of itsCompany Secretary, t and TheUKLAListingRules. e with CorporateGovernance each Sec JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 tion 84 2 . The any performance fee canbe paid. If NA calculation andther companies, thoseinvestments are excluded from the managed oradvised byJPMAMorany of itsassociated Management andPerformance Fees Company receives from JPMAM. thatthe andthesupport andprocessstrategy of theManager arriving atthisview, theBoardconsidered theinvestment the Manager isintheinterests of shareholders asawhole. In confirms thatitissatisfiedthecontinuing appointmentof The Boardhasevaluatedtheperformance of theManager and totheCompany.dealing andcustodianservices w ofJPMAM isawhollyownedsubsidiary JPMorgan ChaseBank compensation. t notice, onshorter Company wishestoterminatethecontract terminable ononeyear’s notice, withoutpenalty. Ifthe ( The Manager andSecretaryisJPMorgan AssetManagement Management oftheCompany paid monthlyinarr annum onassetslesscurrent liabilitiesandiscalculated The management fee ischarged attherateof 0.45% per Growth ShareClass £30 of andtherefore anegative balance Company’s financialyear beginningof the wasbrought atthe forward £2,446,000 of per rise toanincrease inthebasemanagement fee to0.6% anda thebenchmarktotalreturn. Thisgave outperformed return In they be fullyoffsetbefore any performance fee canbepaid. calculated at20%o theevent of this,aperformance fee isalsopayable andis In management fee inany oneyear risesto0.6% for thatyear. under with acapo per benchmarktotalreturn plusahurdleof 0.5%.Any the (or unpaid performance fee untilpaidinfull iscarriedforward UK) Limited(‘JPMAM’).UK) JPMAMisemployed underacontract he balance of remuneration ispayable byway of hich, through othersubsidiaries,alsoprovides banking, o f f 2 rac e f£2,144,000. Anegative performance fee ormance fee of ormance fee earnedisspread evenly over three years, ffset againstsubsequentunder-performance).ffset Any V 00i are owr.Ti mustbefullyoffsetbefore This iscarriedforward. ,000 - return exceeds benchmarkreturn plus0.5%,thebase per ear to31stMar f ormanc f 1% o f e total gr ears. IftheCompan f ef is offset at the first opportunity andmust is offsetatthefirstopportunity the ex ore nofee. attract ch 2010, the Growth portfolio’s Growth NAV total ch 2010, the oss assetsinan c ess o f the NA y in V y vests infunds total r one y ear eturn over . Any 41

THE COMPANY THE COMPANY 42 no outstandingtradecr abide bythoseterms.Asat31stMarch 2010, theCompany had which businesswilltakeplace anditistheCompany’s to policy In g business andtherefore there are nostandardpayment terms. It istheCompany’s toobtainthebesttermsfor policy all P (see pag 37),riskmanagement policies investment (seepage objectives The Goin future underperformance. against offset balance of tobepaidinfullor iscarriedforward £273,000 £409,000, of which £136,000 isimmediatelypayable. The performance fee earned thisyear. Thisgives aprovision of againstthe whichmustbeoffset Company’s financialyear wasbrought atthebeginningof forward the £694,000 of £1,103,000. Anegative performance fee performance fee of r Income portfolio’s NAV total In theyear to31stMarch 2010, the performance fee can bepaid. before andmustbefullyoffset first opportunity any under-performance). Any under-performance isoffsetatthe againstsubsequent untilpaidinfull(oroffset carried forward gross assetsinany oneyear. Any unpaidperformance fee is is spread evenly over three years, withacapof 0.75% of total total return hurdle. plusthe0.5% Any performance fee earned 15% of theexcess of theNAV totalreturn over thebenchmark 0 benchmark performance plus If NAV performance exceeds the calculation andtherefore nofee. attract c managed oradvisedbyJPMAMany of itsassociated paid monthlyinarrears. IftheCompany invests infunds a The management fee ischarged attherateof 0.75% per Income ShareClass continued Directors’ Report preparing theaccounts. evidence tocontinue toadoptthegoing concern basisin F continue inoperationalexistence for theforeseeable future. structure andsuitablemanagement arrangements inplace to Compan the nature of andexpenditure theportfolios projections, 81), capital management policiesandprocedures (see page eturn outperformed the benchmark. Thisgave risetoa thebenchmark. outperformed eturn ompanies, thoseinvestments are excluded from the nnum onassetslesscurrent liabilitiesandiscalculated or theser ayment Policy .5%, aperformance fee isalsopayable andiscalculatedat .5%, eneral theCompan g ietr eiv ht having considered theCompany’s Directors believe that, C oncern e y JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 has adequater 8,liquidityrisk(seenote23(b)onpages 78 to79), 78), easons, theyconsider thatthere isreasonable y editors (2009:nil). agrees withitssuppliersthetermson esources, anappropriate financial F S 1,826further Income shares. tpe oda ,0 5,000 2,050 2,867 5,050 5,000 2,171 M 3,036 5,050 and uptothedateof signingtheaccounts. There were nochanges totheBoardof duringtheyear Directors Stephen Goldman Ferdinand Verdonck Stephen Russell Andrew Murison R Directors shares,Growth are given below: y The Directorsof theCompany whoheldoffice attheendof the Directors Compan In Disclosure ofinformation toAuditors shar at theendo a sofaraseachof theDirectorsisaware, there isnorelevant (a) An insuranc be re-elected. the role andthe Boardrecommends toshareholders thatthey continues anddemonstratescommitment tobeeffective confirms thateachDirector Board anditscommittees, their qualifications,performance andcontribution tothe TheNominationCommittee, having considered for re-election. r Dir V andFerdinand RobinFaber, Andrew Murison will be Directors retiring byrotation attheAnnualGeneralMeeting In accordance withtheCompany’s of Associationthe Articles indemnifies theDir c ofliabilities arisingintheconduct theirduties.There isno e o ear, together withtheirbeneficialinterests intheCompany’s erdinand V inc bnFbr 00010,000 10,000 obin Faber erdonc r - ver against fraudulent or dishonest actions. ver against fraudulentordishonestactions. the caseof eachof thepersonswhoare of Directors the lcin l he ietr,bigeiil,offer themselves Allthree Directors,beingeligible, election. cosfrmr hnnn er,sadfor annual for more thannineyears, stand ectors Murison alsohada which theCompan audit information of (asdefinedintheCompaniesAct) e es h ered nrwMrsn StephenRusselland Andrew Murison, the year end, , 1 y 3 k . at thetimewhenthisr Gr rFbradM Verdonck, having as served Mr Faber andMr f e erdonck ha ow the y polic th shar a andsince theyear endhasacquired a ear y ec is maintainedbytheCompany which tors o beneficial inter y’s auditorsare unaware, and sad1 Growthshares respectively. 18 and es v e ac f the Compan quir 31st March eport wasapproved:eport ed afur es 2010 t the in y against c 114Income shares 11,174 r 5, 0 Growth 000 er tain 1st April 2009

2 JPMor 1 L Nominees Chase 160 Shar A Notifiable Interests intheCompany’s Voting Rights pag totheNotice of AGM on 15 date of are thisreport given innote Details of thevoting rightsintheCompany’s shares asatthe V this report. of 4 The Company’s capitalstructureissummarisedonpage StructureCapital 992 2006. CompaniesAct The following disclosures are madeinaccordance withSection S 2006. Act of theCompanies 418 accordance withtheprovision of Section T ought eachof theDirectorshastakenallstepsthathe (b) notifiable inter to theshar Dir atralAvsr ru n 3.9 Tattersall Group Inc Advisory noesae:1.063 2.078 Income shares: shares:Growth as follows: c powers toissueorbuybacktheCompany’s shares are Companies The percentage of totalvoting rightsiscalculatedbyreference T Held onbehalfofJPMAMInvestment Account, ISAandSIPPparticipants. Non-beneficial. ontained intheAr egal &Gener ection 992 Companies Act 2006 otin he above confirmation isgiven andshould beinterpreted in he rulesc t the dateo ec 7 information. establish thattheCompany’s Auditors are aware of that o aware to have takenasaDirectorinordertomakehimself e eholder g f aia atesLC 16.0 LLC Partners Capital tors, amendmento 8 gan AssetManagemen any relevant auditinformation (asdefined)andto Righ 7. 7. ts intheC e onc A v s f c tn ubr hc sa 1tMarch 2010were oting numberswhichasat31st al In this r t erning theappointmentandreplacement of est intheCompany’s voting rights: 2006 1,2 v estmen epor ticles o ompany’s shares . t f , the following had declared a the Ar f t Association of theCompany andthe Management 3.8 t ticles o f Association and JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 V otin % g of Total Righ 13.0 7 ts . 8 shar equivalent to5%of thepresent issuedshare capitalof each respectively suchamountbeing and£69,700 £290,744 ensuing year willbeputtoshareholders attheAGM. authorise theDir in office asauditorsandaresolution tore-appoint themand Ernst &Young LLPhave expressed theirwillingnesstocontinue Independent Auditors 48. TheCompany hasnoemployees. issues issetoutonpage Information onenvironmental matters,socialandcommunity E Inc new 2,788,027 shares newGrowth and 5,814,875 issue upto The Directorswillseekrenewal of theauthorityatAGM to Authority toallotnew shares andtodisapplystatutory (i) will beproposed AnnualGeneralMeeting: attheforthcoming Resolutions relating tothefollowing itemsof specialbusiness 2000.Markets Act authorisedundertheFinancialfinancial adviser and Services advice from your stockbroker, bankmanager, solicitororother you take, should you shouldseekyour ownpersonalfinancial IMMEDIATE ATTENTION. Ifyou are inany doubtastotheaction NO Annual General Meeting to doso. Assuchissues are onlymade atprices greater than Directors consider thatitisinthebestinterests of shareholders andalsotootherinvestors products savings whenthe shar It isadvantageous for theCompany tobeableissuenew at apriorgeneral meeting. c 85. Thisauthoritywillexpire atthe Notice of Meetingonpage of Thefulltext theresolutions thisdocument. issetoutinthe loss of office. the Company anditsdirectorsconcerning compensation for c its tothataffects agreements whichtheCompany isparty securities regarding theirtransfer knowntotheCompany; no a in theCompany; nospecialrightswithregard tocontrol There are norestrictionsconcerning thetransfer of securities onclusion of theAGM of theCompany in2011unlessrenewed ontrol following atakeover bid;andnoagreements between nvironmental Matters,and CommunityIssues Social ttached tosecurities;noagreements betweenholdersof ome shar TE: THISSECTIONTE: ISIMPORTANT ANDREQUIRES YOUR pr e es to participants purchasing shares toparticipants through theJPMorgan es e class asatthelastprac -emption rights (resolutions 7and8) es for cashupto anaggregate nominalamountof ec tors todeterminetheirr ticable datebefore thepublication emuneration f or the 43

THE COMPANY THE COMPANY 44 shar andresolutions,meetings theCompany’s constitution and proposed tobeadoptedatthe2010AGM relate toshareholder The principalchang changes.minor technicalorclarifying EU Shar and changes inAugust madetotheAct 2009toimplementthe 2009 on1stOctober whichcameintoeffect about bytheAct association toreflectthechanges incompany lawbrought These incorporateof amendmentstothecurrent articles ofThe Company proposes association. toadoptnewarticles ofAssociation(iv) Adoption(resolution ofNew11) Articles Company. intheformcontract approved atageneral meetingof the these shar sheet manageable. BylawtheCompany canonlypurchase they ha Deferred shares are repurchased for nominal consideration (as 2006. The CompaniesAct of the 694 requirements of Section shares intothe otherclassof shares. Thisresolution follows the shares arisingon conversion of any of theGrowthorIncome This resolution gives theCompany authoritytobuyitsdeferred 10) Authority tomake off-market purchases (resolution (iii) Repur resolution isset outintheNotice of 85 Meetingonpages to86. has beenacquired, whichever istheearlier. Thefulltextof the 2012oruntilthewhole of the14.99% January will lastuntil14th shareholder approval attheAGM torenew thisauthority, which NAV of theremaining shares. TheBoardwilltherefore seek the repurchase of shares atadiscount toNAV enhances the the authorityisininterests of shareholders asawhole AGM.forthcoming TheDirectorsconsider thattherenewal of w AGM, issued share capital,grantedbyshareholders atthe2009 The authoritytorepurchase up to14.99% of theCompany’s ( Company’s investment policies. issue proceeds are available for investment inlinewiththe t and spread theCompany’s administrative expenses,otherthan the netassetvalue(the‘NAV’), theyincrease theNAV pershare continued Directors’ Report NA will onlybemadeinthemarketatprices belowtheprevailing shar A In A i uhrt orprhs h opn’ hrs(eouin9) Authority torepurchase theCompany’s Shares (resolution ii) he management fee, over agreater numberof shares. The c l xieo 5hJnay21 unlessrenewed atthe 2011 ill expire January on15th t V on c ugust 2009, changes were madetotheprovisions inthe e es, asandwhenmarketc per shar capital. chases willbemadeatthediscr ve noeconomic value)inordertokeepthebalance eholder RightsDir ompan JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 es off-market ifsuchpurchase ispursuanttoa e , y ther meetings byThe Companies(Shareholders’meetings eby enhancingtheNA es in the new articles of association es inthenewarticles ective in the UK, aswell assome intheUK, ective onditions ar etion o V e appropriate. o f f the Board,and the r emaining appr whichamountinaggregatebeneficial holdings to the resolutions astheyintendtodoinrespectof theirown Dir interests of theCompany anditsshareholders asawhole. The promote thesuccess of theCompany andare inthebest The Boardc Recommendation the AGM, for 15minutespriorto, theAGM. andduring, T up untilthecloseof theAGM. Copieswillalso beavailable at of JPMAM,Finsbury Dials,20FinsburyStreet,London EC2Y 9AQ (Saturda be available forduringnormalbusinesshours inspection of associationthatreflecttheseamendments will new articles A pag amendments pleaserefer totheAppendixthisdocumenton F 28 from undersection of itsarticles. theAct, articles of bedeemedtoform theCompany’s part would otherwise statement clauseortheauthorisedsharecontain theobjects capital of associationwhichdonot By adoptingthenewarticles company toplace limits onitsauthorisedshare capital. TheActremovescapital statement. therequirement for a 2009 isther ofdeemed toform theCompany’s part from 1stOctober articles One of theotherkeyprovisions of thememorandumwhichis willbeunrestricted. objects acompany’s stateotherwise, provides unlessthearticles that, forunder theAct TheAct acompany tosetoutitsobjects. byspecialresolution. Itisnotnecessary amending thearticles p of theCompany’spart 2009. from 1stOctober articles Itis clause,but mostsignificantlytheobjects are deemedtoform U the Shareholders’ RightsRegulations). toensure withtheAct(asamendedby meetings consistency T to implementtheEUShareholder RightsDirective intheUK. Rights) Regulations2009(‘Shareholders’ RightsRegulations’) rinity House or amor he new articles incorporate amendmentsinrelationhe newarticles to ossible forclausetoberemoved theobjects oramendedby nder the Act allprovisionsnder theAct of theCompany’s memorandum, c ec opy o e o s tors unanimouslyrecommend thatyou vote infavour of iaey0.03% of thevoting rightsof theCompany. ximately 88 ys, Sunda f the current articles ofthe current associationandtheproposed articles t e , o the Compan detailed explanationo onsiders thatr 91. estriction createdestriction bytheexistingauthorisedshare , Tower Hill,London EC3N 4DH,being theplace of ys andpublicholidays excepted) attheoffices y will remove theseprovisions, which sltos7t 1are likelyto 11 to 7 esolutions f these andother complied with. ar r ofadvice and services theCompany Secretary, JPMAM,whichis This isinadditiontotheaccess Directorhastothe thatevery pr There isanagreed procedure for Directorstotakeindependent responsibilities. andtoallowDirectorsdischargeeffectively their information isprovided totheBoardenableit function areadditional meetings arranged asnecessary. Full andtimely duringtheyear and The Boardmeetsatleastquarterly c review of keyinvestment andfinancialdatatheCompany’s appointment andremoval providers, service of thirdparty direction, gearing policy, management of thecapitalstructure, anditsfutureinvestment strategic andpolicy objectives includes determinationandmonitoringo reserved totheBoardfor decisionhasbeenapproved. This for theapproval of theBoard.Aformal scheduleof matters and somemarketingser provision of company accounting, secretarial, administrative, includes management of theCompany’s assetsandthe Board asindependentof theCompany’s Manager, includingthe non-executive Directors,all of whomare regarded bythe The Board,chaired byAndrew Murison,consists of five Board Composition sets outthematterso A Role oftheBoard and theAICCodethroughout theyear underreview. Code, insofar astheyare relevant totheCompany’s business, provisionscomplied withthebestpractice of theCombined corporate governance andconsiders thattheCompany has The Boardisresponsible for ensuring theappropriate level of framework of for bestpractice investment trusts. C Code’) andtheAIC’s Codeof CorporateGovernance, (the‘AIC CouncilCombinedCode(the‘CombinedFinancial Reporting C 51,indicateshowthe Directors’ Responsibilitiesonpage governance. together Thisstatement, withtheStatementof T Compliance Corporate Governance esponsible totheBoardfor ensuringthatBoardprocedures orporate g he ode’), whichcomplements theCombinedCodeandprovides a the ompany hasappliedtheprinciplesof good governance of management agreement betweentheCompany andJPMAM e o fessional andattheCompany’s advice ifnecessary expense. f Company iscommitted tohighstandardsof corporate ollowed andthatapplicablerulesr overnance andriskcontrol arrangements. v er whichtheManag vic es. Allothermattersare reserved f JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 the Company’s er hasauthority. This egulations ar e o A 36. details of eachDirectorare setoutonpage r knowledge, businessandfinancialexperienceskills Chairman. TheDirectorshave abreadth of investment through discussionwiththeChairman. to shareholders iftheyhave concerns thatcannotberesolved evaluation of theperformance of theChairmanandisavailable However, theChairmanof theAudit Committeeleadsthe non-executive atpresent. directors,thisisunnecessary c a which may befound below. TheBoardhasconsidered whether year’s AGM. Verdonck whoretire byrotation atthis Murison andFerdinand RobinFaber, Andrew there-electionof The Boardrecommends office andattheAGM. available onrequest for inspection attheCompany’s registered out informal copies letters of of appointment, whichare The termsandconditions of Directors’ appointmentsare set nine y years. for Any Directorwhohasserved aperiodof more than r and itsCommittees.TheCompany’s of Association Articles the CombinedCode, includingtheneedtorefresh theBoard the Boardwilltakeintoaccount theongoing requirements of whenmakingarecommendation,from seekingre-election but, of initselfnecessarily disqualifiesaDirector service that length Director toseekanadditionalterm.TheBoarddoesnotbelieve year, theBoardwillagree whetheritisappropriate for the totheperformance evaluationcarriedouteach years. Subject Ther Association, itisrequired byshareholders. thattheybeelected General Meetingwhen,undertheCompany’s of Articles Dir Tenure c The Boarddelegatesc Meetings andCommittees the DirectorstoevaluateManager andaseparatemeeting were includingaprivatemeetingof five fullBoardmeetings, attendedbyeachDirector.meetings Duringtheyear there The tablebelowdetailsthenumberof BoardandCommittee 36. with theDirectors’ profiles onpage elevant totheCompany’s businessandbriefbiographical equire thatDirectors standfor three re-electionatleastevery oncluded that, astheBoardcomprises entirelyoncluded that, of ommittees. Detailso f senior independentdirectorshouldbeappointedandhas review of Boardcomposition andbalance isincludedaspart the annualperformance evaluationof theBoard,detailsof ectors areectors initiallyappointeduntilthefollowing Annual eafter, aDirector’s appointmentwillrunfor atermof three ears willstandfor annualre-electionthereafter. f ertain responsibilitiesto andfunctions ertain membership o f c ommittees ar e shown 45

THE COMPANY THE COMPANY 46 The NominationCommittee Nomina Board Committees own performance andthatof itscommittees. performance. TheBoard asawholeevaluatestheManager, its of theAudit Committeeleadstheevaluationof theChairman’s individual DirectorsisledbytheChairman,andChairman Theevaluationofthen discussedataprivatemeeting. 1 c 1 Dir 1 own performance andof thatof itscommittees andindividual The Boardc 1 2 issues anddevelopments relevant toinvestment trusts. 2 2 encouraged andotherseminarscovering toattendindustry that af 2 arebriefings provided onchanges inregulatoryrequirements 5 Thereafter, training. all Directorswithinduction regular 4 5 theManagerOn appointment, andCompany Secretaryprovide 5 F attended attendedattended Stephen Russell Stephen Goldman Robin Faber Andrew Murison Directors d andonemeetingofmeetings theNominationCommittee devoted tostrategy. There were alsotwoAudit Committee continued Directors’ Report experienc ensure thatthe Boardhasanappropriate balance of skillsand consists of allof theDirectorsandmeetsatleastannuallyto c A propose suitablecandidatesfor appointmentwhennecessary. recommendations totheBoardasandwhenappropriate. Board. TheCommitteealsoreviews Directors’ fees andmakes timeandcontributed adequatelytotheworkofsufficient the to ensure thatallmembersof theBoardhave devoted anannualperformance evaluation The Committeeundertakes candidates isconsidered. Training andAppraisal ompleted byeachDirector. Theresponses are collated and onsultants, ma riadVroc 521 2 5 erdinand Verdonck uring theyear. variety of sources, includingtheuseof externalsearch ec tors. Questionnair f ec tion Committee JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 t e the Compan to carr onducts aformalonducts evaluationof theManager, its y be usedtoensur y out itsfiduciar y es, drawnupbytheBoard,ar and Dir m , eetings meetings chair Board Committee Committee ectors. Directorsareectors. ed byAndr e y that awiderang duties andtoselec Audit Nomination ew Murison, e e of t and make themselves available asandwhenrequired toaddress ha Both theNominationCommitteeandAudit Committee c The Directors’ statement ontheCompany’s systemof internal andaccounts annual report are considered.at whichthedraft the Company’s auditorsattendtheAudit Committeemeeting the auditorsare considered Representatives independent. of ofobjectivity theexternalauditors;inDirectors’ opinion, andtheindependence itscost and effectiveness audit, andreviews thescopedepartment andresults of theexternal receives information from theManagers’ Compliance ofeffectiveness theCompany’s internalcontrol systems, t reviews the Company’s compliance withtheCombinedCode. It Manager inrelation totheinterim andannualaccounts andthe T fulfil theresponsibilities of the Committee. consider thattheyhave therequisite skillsandexperience to t The Audit Committee, chaired byRobinFaber, meetsatleast Audit Committee Annual GeneralMeetingatwhichtheDir All shareholders are encouraged toattendtheCompany’s shares. Stock Exchange, of thenetassetvalueof theCompany’s supplemented bythedailypublication,through theLondon Thisis andaccountsannual report andthehalfyear Report. formallyand reports toshareholders twice ayear byway of the understanding of theCompany’s andperformance activities Company. Itaimstoprovide shareholders withafull The Boardr R made fullyawar r Company’s brokers, theInvestment Managers andJPMAMhold who r addition, apr meet withshareholders andanswertheirquestions.In representatives of theManagers are available inpersonto General Meeting. Compan attheCompany’sinspection website, onrequest atthe respective responsibilities, copies of whichare available for erms of themanagement agreement andexamines the wice eachyear. Themembersof theAudit Committee egular discussionswithlarger shareholders. TheDirectorsare ontrol issetout below. he Committeereviewsandjudgements theactions of the ela v e tions withShar written termsof reference whichdefineclearlytheir eview theCompan y’s registered office andattheCompany’s Annual egularly monitorstheshar esentation isgiven bytheInvestment Managers e o eholder f their views.TheChairmanandDir y s ’ s per formance. Duringtheyear the eholder profile of the ec tors and ec tors internal c The operational, c This encompasses areview of allcontrols; business,financial, control toshareholders andtoreport thattheyhave doneso. review of theeffectiveness theCompany’s systemof internal The CombinedCoderequires theDirectors,atleastannually, to Internal Control General Meeting. p Details of theProxy voting positiononeachresolution willbe 95. theCompany Secretaryattheaddress shownonpage to q Shareholdersthe AnnualGeneralMeeting. wishingtoraise time togive shareholders atleast20workingdays’ notice of T 95. the Company whosedetailsare Secretary shownonpage shareholder through queries.TheDirectorsmay becontacted Sinc mis-statement or loss. but notabsolute andthereforebusiness objectives canonlyprovide reasonable, manage rather thaneliminatetheriskof failure toachieve is financial information usedwithinthebusiness,orpublished, assets, maintainproper accounting records andensure that agreement. whose responsibilities are clearlydefinedinawritten custodian regulated bytheFinancial Authority Services (‘FSA’), Management Agreement –Appointmentof amanager and transac management accounts, revenue analysis of projections, including the Boardof keyinvestment andfinancialdata, F internalcontroleffective are asfollows: of JPMAM.Thekeyelementsdesignedto providedepartment ofaudit function itsown,butrelies ontheinternal audit TheCompany doesnothavebusiness objectives. aninternal established bythem,toensure theymeettheCompany’s JPMAManditsassociates,includingtheoperatingcontrols by control mainlycomprises provided monitoringtheservices JPMAM anditsassociates,theCompany’s systemof internal administrativ inancial Repor he ublished ontheCompany’s theAnnual after websiteshortly uestions inadvance of themeetingare encouraged towrite r eliable. However, suchasystemcanonlybedesignedto e Directors are responsible for theCompany’s system of Company’s andAccounts AnnualReport ispublishedin in tions andperformance comparisons. v estment manag ontr e ol whichisdesignedtosaf ompliance andriskmanagement. ser ting –Regularandcomprehensive review by , assurance againstfraud,material vices are provided totheCompany by ement , custody o eguard theCompany’s f JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 assets andall The Compan Corporate Governance andVoting Policy By themeanso review theDirectors sixmonths anindependent every • The f • theBoard,through theAudit Committee, reviews theterms • follows: operating controls of theManagers anditsassociatesas of internalcontrol bymonitoringtheoperationof thekey keeps underreview of theeffectiveness theCompany’s system The Board,eitherdirectlyorthrough theAudit Committee, B Company’s andexposure investment strategy limitsbythe –AuthorisationInvestment Strategy andmonitoringof the w whichregularlyCompliance monitorscompliance department procedures andsystems.Theseare monitored byJPMAM’s d control includesorganisational agreements whichclearly Management Systems –TheManager’s systemof internal approval andAccounts. of thisAnnualReport control for theyear ended31stMarch 2010, andtothedateof reviewed of theeffectiveness theCompany’s systemof internal confirms thatinaccordance withtheTurnbull guidance, ithas by theBoard.Thefullpolic corporate governance whichhasbeennoted andvoting policy c corporate governance of principlesandpractices the the drivers of investment performance isanassessmentof the per “JPMAM iscommitted todelivering superiorinvestment on CorporateGo within the“ to www.jpmorganassetmanagement.co.uk/institutional and r equest ompanies inwhichwe efine thelinesof responsibility, delegatedauthority, control oard. ith FSA rules. f JPMAM. ontheinternalcontrolsreport andtheoperationsof the Boardr fromreports JPMAM’s Compliance department; of themanagement agreement andreceives regular which isitselfindependentlyr the operationsof itscustodian,JPMorgan ChaseBank, ormance toitsclientsworldwide. We believe thatoneof ollowing isasummar , or canbedownloaded Commentary &Analysis”Commentary tabyou willfindasection y delegates r eviews ther f v the pr ernanc ocedures setoutabove, theBoard e esponsibility for voting toJPMAM. vest our clients’ assetsandweexpect . y y epor o is a f JPMAM’ fr vailable from JPMAM on t on theinternalcontrols and om theinternetasf eviewed; and s polic y statement on ollows: go 47

THE COMPANY THE COMPANY 48 Board: corporate socialresponsibility whichhasbeennotedbythe The f Corporate Responsibility Social into ac makes allof its voting decisionsonacasebybasis,taking voting decisions,althoughitshouldbenotedthatJPMAM issues (seebelow).Theseguidelinesf structures, remuneration, aswellsocialandenvironmental transparency, boardcomposition andindependence, control corporate governance issues,includingdisclosure and each region, whichsetoutourstance onavarietyof key In ordertodothiswehave formulated detailedguidelinesfor calledbycompanies inwhichwearemeetings invested. c judgement of thefinancialinterests whatwillbestserve of our and diligent manner, basedexclusively onourreasonable a voting rightsof theshares entrustedtousaswewouldmanage process, andweviewseriouslyourobligationtomanage the P in themanagement of theirbusiness. those companies todemonstratehighstandardsof governance continued Directors’ Report lients. So far as is practicable wewillvote atalloflients. Sofarasispracticable the ny other asset. It is the policy of Itisthepolicy JPMAMtovote inaprudent ny otherasset. roxy voting is an important part ofroxy thecorporate governance part voting isanimportant ollowing isasummar count theindividualcircumstances of eachvote.” JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 y of JPMAM’s statementon policy orm thebasisof ourproxy t June2010 9th Secr JPMorgan AssetManagementLimited, (UK) Jonathan Latter, for andonbehalfof By orderof theBoard decision.” of intoaccount any investment aspart take thesefactors e customers, tobehave ethicallyandtohave regard tothe relationshipseffectively withitsemployees, suppliersand l can have andthatany aneconomiccompany impact runinthe non-financial issues,suchassocialandenvironmental issues, c interests of ourclientsandto achieve good financialreturns “We inthebestfinancial dutytoact believe itisourprimary ong-term interests of itsshareholders willneedtomanage onsistent with an acceptable level of risk. Weonsistent withanacceptable level of recognise risk. that nvironment andsocietyasawhole. Ourinvestment managers etary etary the ser Andrew Murison Stephen Goldman Stephen Russell As allo those roles. thegreaterreflecting timecommitment involved infulfilling Audit Committeeare paidhigher fees than theotherDirectors, Board. TheChairmanof theBoardandChairmanof the to ensure thatcandidatesof ahighcalibre are recruited tothe Directors ontheCompany’s businessandshouldbeatalevel Dir the ser forNo amountswere makingavailable payable tothirdparties respectively. fees have beenincreased to£30,000, £24,000 and£20,000 Dir andtheother £20,000 perannum; Committee Chairman Audit £27,000 perannum; following Chairman rates: In they 3 2 1 T Ale Robin Faber Director’s Name D 52. onpage their report they are indicatedassuch.Theauditors’ opinionisincludedin d The lawrequires theCompany’s of the auditorstoauditcertain AnnualGeneralMeeting. members attheforthcoming o 2006. An theCompaniesAct of 421 Section requirements of The Boardhasprepared inaccordance thisreport withthe Directors’ Remuneration Report Ferdinand Verdonck established aRemunerationCommittee The Board’s for thisandsubsequentyears policy isthat A Appoin R otal rdinary resolutionrdinary toapprove willbeputtothe thisreport isclosures provided. Where disclosures have beenaudited irectors’ Remuneration udited information etired from theBoard on31stDecember 2008. ectors’ fees shouldproperly reflect thetimespentby £18,000 from perannum.With effect 1stApril2010, ectors x ander EZ ted aDirector on1stSeptember2008. vic vices of (2009: £47,000, Directors for makingavailable f ear underr the Dir es o agor f two Dir ec tors are non-executive, theBoardhasnot 2 eo eview Dir s 3 ec 1 tors). cos eswr adatthe ectors’ fees were paid 101,000 20,000 18,000 18 18,000 27,000 2010 ,000 . Instead, the — £ JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 10 20,000 18,000 18 10,500 27,000 13 7 2009 ,000 ,000 ,500 £ compared withthe relevant benchmarkare shown below. Graphs showingeachportfolio’s share price totalreturn attending theCompan reasonable out-of-pocket expensesincurred with inconnection Return to31stMarch 2010 F Growth: 100 made toDir pa pension schemeandtherefore noDirectorsreceive bonus The Company doesnotoperateany typeof incentive or 45. Details of theBoard’s ontenure are policy setoutonpage appointments are setoutinformal lettersof appointment. AGM.the forthcoming Thetermsandconditions of Directors’ of of theadoptionof Associationat annum aspart newArticles proposed thatthemaximumlimitbeincreased to£175,000 per amount requires bothBoard and shareholder approval. Itis £ not performance-related. Inaggregate, fees mustnotexceed generally.the investment trustindustry TheDirectors’ fees are f research onthelevel ofindustry carriedoutbythirdparties Manager, JPMorgan AssetManagementLimitedand (UK) the a makes recommendations totheBoardasandwhen Nomination Committeereviews fees onaregular basisand paid c options toacquire shares intheCompany. Directorsare not 140 160 180 120 ees paidtothedirectorsof theCompany’s peersandwithin 80 150,000 perannum.Any increase inthemaximumaggregate ppropriate. Reviewsare basedoninformation provided by ive Year Share Price andBenchmarkTotal 20 yments orpensionc Shar Benchmark T 05 Sour ompensation f e c e: Pric Mornin e ec T 20 otal R otal R tors, otherthanther gstar/FTSE 06 eturn eturn or y ontributions fr loss o ’ s 20 business. 07 f o f fic e eimbursement of . 20 No otherpayments are om theCompan 08 20 09 y or hold 2 01 49 0

THE COMPANY THE COMPANY 50 100 t June2010 9th Secretary JPMor Jonathan Latter, for of andonbehalf By orderof the Board from Inception to31stMarch 2010 Share Price andBenchmarkTotal Return Income: continued Directors’ Remuneration Report 1 6 8 20 2 0 0 0 06 B S Source: Morningstar/MSCI hare Price Total Return enchmark Total Return gan AssetManag JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 20 07 ement (UK) Limited, ement (UK) 20 08 2 0 09 201 0 fthetotalreturn orlossof theCompany for thatperiod. of statewhetherapplicable UKAccounting Standardshave • other irr reasonable steps for theprevention of anddetection fraudand safeguarding the assetsof theCompany andhence for taking Companies A ensure thatthe financialstatementscomply withthe the financialpositionof theCompany andenablethemto anddisclosewithreasonable atany time transactions accuracy records thatare toshowandexplaintheCompany’s sufficient The Respect ofthe Accounts Directors’ Responsibilities in makejudgmentsandaccounting estimatesthatare • suitableaccounting policiesandthenapplythem select • required to: preparing thesefinancialstatements,theDirectorsare In trueandfairviewof thestateof affairs theCompany and a financial statementsunlesstheyare satisfiedthattheygive U (United KingdomAccounting Standardsandapplicablelaw). with UnitedKingdomGenerallyAccepted Accounting Practice h statements for eachfinancialyear. UnderthatlawtheDirectors Company lawrequires thedirectorstoprepare financial a andthefinancialstatementsinaccordance with Report The Directors areThe Directors responsible for preparing theDirectors’ pplicable lawandregulations. ave elected toprepareave elected thefinancialstatementsinaccordance nder company mustnotapprove lawtheDirectors the been f and explainedinthefinancialstatements. r c Directors are responsible for keepingadequateaccounting easonable andprudent; onsistently; egularities. ollowed, subjec c t 2006. Theyare alsoresponsible for t to an y material depar JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 tur es disclosed t June2010 9th Chairman Andr For andonbehalfof theBoard includesafairreview of thisAnnualReport the (b) o JPMAM is,sofarasitrelates totheCompany, theresponsibility maintenance andintegrityof thewebsitemaintainedby J website, whichismaintainedbytheCompany’s Manager, The accounts are publishedonthewww.jpmeuropean.co.uk from legislationinotherjurisdictions. prepared inaccordance withUKlegislation,whichmay differ were initiallypresented onthe website. Theaccounts are f website and,accordingly, theauditorsaccept noresponsibility involve consideration of themaintenance andintegrityof this (a) The Directorseachconfirm tothebestof theirknowledge that: Statement undertheDisclosure &Transparency Rules 4.1.12 or any changes thathave occurred totheaccounts since they PMorgan AssetManagementLimited(‘JPMAM’). (UK) The f JPMAM. Theworkcarriedoutbytheauditorsdoesnot principal risks and uncertainties thattheyface.principal risksanduncertainties position of the Company together withadescriptionof the development andperformance of thebusinessand o o applicable ac the financialstatements,prepared inaccordance with ew Murison f f the Compan the assets,liabilities,financialpositionandpr counting standards,give atrueandfairview y ; and o fit orloss 51

THE COMPANY THE COMPANY t give atrueandfairviewof thestateof theCompany’s • In ouropinionthefinancialstatements: Opinion onfinancialsta disclosur An Sc to auditthefinancialstatementsinac satisfied thattheygive atrueandfairview. Ourresponsibility is the preparation of thefinancialstatementsandfor being 51,theDirectorsare responsible for Statement setoutonpage As explainedmore fullyintheDirectors’ Responsibilities Respective responsibilities ofdirectorsandauditors W European Investment Trust plc Independent Auditors’ ofJPMorgan Reporttothemembers Independent Auditors’ Report work, for this report, orfor for the opinionswehave thisreport, formed. work, Company andtheCompany’s membersasabody, for ouraudit ac purpose. To thefullestextentpermitted bylaw, wedonot required tostatetheminanauditor’s andfor report noother might statetotheCompan sothatwe 2006.Act Ourauditworkhasbeenundertaken body, inaccordance 16of withChapter3of theCompanies Part ismadesolelytotheCompany’sThis report members,asa Accounting Practice). Accounting Standards(UnitedKingdomGenerallyAccepted in theirpreparation isapplicablelawandUnitedKingdom t theCashFlowStatementandrelatedBalance notes1 Sheet, Reconciliation of Movements inShareholders’ Funds, the ended 31stMarch 2010whichcomprise theIncome Statement, European Investment Trust plc(the‘Company’) for theyear Prac Those standardsrequire ustocomply withtheAuditing law andInternationalStandardsonAuditing (UKandIreland). statements. the Directors;andoverall presentation of thefinancial r have beenconsistently appliedandadequatelydisclosed;the policies are appropriate totheCompany’s circumstances and This includesanassessmento from whethercausedbyfraudorerror. materialmisstatement, reasonable assurance thatthefinancialstatementsare free 52 eSaeeto oa eonsdGisadLse,the he Statementof Total Recognised GainsandLosses, 24. frameworkthathasbeenapplied Thefinancialreporting o easonableness o e ope oftheauditfinancialsta cept orassumeresponsibility toanyone otherthanthe audit involves obtaining evidence abouttheamountsand have auditedthefinancialstatementsof JPMorgan year thenended; asat31st March 2010and ofaffairs itsnetreturn for the tic es Board’s (APB’s) Ethical Standardsfor Auditors. JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 es inthefinancialstatementssuf f significant accounting estimatesmadeby tements y’s membersthosemattersweare f: whethertheac temen c ordance withapplicable ts ficient togiv counting e • • Under theListingRulesweare required toreview: wehave notreceived alltheinformation andexplanations • • of theDirectors’ thefinancialstatements andthepart • • you if, inour opinion: • have beenproperly prepared inaccordance withUnited • Under theCompaniesA We have of inrespect nothingtoreport thefollowing: Matters onwhichwe are by required exception toreport theinformation for given intheDirectors’ the Report • of tobe theDirectors’ thepart RemunerationReport • I Opinion onothermatters prescribed by theCompanies Act 2006 t June2010 9th L Ernst &Young LLP, Auditor Statutory for andonbehalfof J J n u u ondon l l our opinion: i i a a June 2008CombinedCodespecifiedfor ourreview. the Company’s compliance withthenineprovisions of the of thecorporate governancethe part statementrelating to going concern; and the Dir we require for ouraudit. law are notmade; or disclosures ofcertain Directors’ remuneration specifiedby with theaccounting records andreturns; or tobeauditedare notinagreementRemuneration Report branches notvisitedbyus;or returns adequate for ouraudithave notbeenreceived from adequate ac of 2006. theCompaniesAct have beenprepared inaccordance withtherequirements Kingdom GenerallyAccepted Accounting and Practice; prepared isconsistent withthefinancialstatements. financial year for whichthefinancialstatementsare 2006;and Companies Act audited hasbeenproperly prepared inaccordance withthe n n

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( ( S S e e c ’ n n ounting r statement, set out on page 42, inrelation to 42, setoutonpage statement, i i o o r r

s s t t a a c t t t u u 2006 wear ecords or have notbeen kept, t t o o r r y y

a a u u d d i i t t o o e r r ) ) required to toreport A eoeal 4 4 recoverable VAT 3 Performance fee Income from investments gains/(losses) Net foreign currency The notesonpag represent information supplementary prepared underguidance issuedbythe Associationof Investment Companies. Company andthe‘Revenue’ and‘Capital’ 7 columns The ‘Total’ column of thisstatementistheprofit andlossaccount of the discontinued intheyear. All revenue andcapitalitemsintheabove statementderive from continuing operations.Nooperationswere acquired or Income share 6 Growth share Return/(loss) pershare: Net Taxation Net 4 5 Finance costs Net Other administrative expenses Management fee Gross return/(loss) Other interest receivable and investments heldat Gains/(losses) on for theyear ended31stMarch 2010 Income Statement iia noe3 2 similar income fair value through profit orloss af bef and taxation activities before finance costs r r r ter taxation eturn/(loss) onor eturn/(loss) onor eturn/(loss) onor or e tax a tion e s 58 to 81 form an integral part of form these accounts. anintegralpart 81 to 58 dinar dinar dinary y y a a ctivities ctivities JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 Notes 9 9 eeu aia Total Capital Revenue 10 178—11,788 — 11,788 0721398114,700 103,988 10,712 187 6 (1,104) 763 (1,867) 2121590118,042 105,910 12,132 ’0 ’0 £’000 £’000 £’000 .9 68p71.61p 66.82p 4.79p ,6 0,8 111,450 103,288 8,162 .2 63p40.29p 36.37p 3.92p 63 143 (2,146) (1,463) (683) 67 (697) — (697) , 73 153 (2,236) (1,513) (723) 4 344 — 344 0 91255112,554 102,525 29 ,9 1,595 1,595 104,315 104,315 — — 49 (409) (409) ——— — 2 010 eeu aia Total Capital Revenue 220(5,8)(136,946) (159,186) 22,240 358(5,2)(134,630) (158,228) 23,598 21, 876—18,786 — 18,786 16 560 ,7 (2,096) 3,574 (5,670) 199 413 (6,042) (4,133) (1,909) ’0 ’0 £’000 £’000 £’000 ,5 3,454 — 3,454 ,9 ,3 5,034 2,335 2,699 .4 115) (91.98)p (101.52)p 9.54p .8 3.8p(33.30)p (38.78)p 5.48p 69 137 (2,046) (1,377) (669) 62 (672) — (672) 09(5,8)(142,768) (158,787) ,019 68 ——— (6,576) (6,576) (152,610) (152,610) — — 9 (162 2 009 ,361) (1 40 , 672) 53

THE COMPANY THE COMPANY 54 The notes on pages 58 to 81 form an integral part of form theseaccounts. anintegralpart 81 to 58 The notesonpages gains/(losses) Total recognised onordinary return/(loss) Net value ofcashflow thefair Movement in for theyear ended31stMarch 2010 and Losses Statement ofTotal Recognised Gains eg uigteya ,4 2,044 2,044 — (142,768) (158,787) — 16,019 111,450 — 103,288 8,162 — taxation after activities hedge during theyear for theyear JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 eeu aia Total Capital Revenue ’0 ’0 £’000 £’000 £’000 ,6 0,8 1,5 609(5,4)(140,724) (156,743) 16,019 111,450 103,288 8,162 2 010 eeu aia Total Capital Revenue ’0 ’0 £’000 £’000 £’000 2 009 S At 31stMarch 2009 eauto fcs lwhde————204— (15,103) — 2,044 — — of form theseaccounts. anintegralpart 81 to 58 The notesonpages — — — — 31stMarch 2010 At D — — — — flowCash hedgeallocatedtofinance Net (4,349) — — — 128 R 897 Dividends appropriated intheyear 4,225 Revaluation ofcashflow hedge — (4) flowCash hedgeallocatedtofinance ordinary on Net (loss)/return (897) Share conversions during theyear Cancellation ofshares heldinTreasury the Repurchase andcancellation of At 31stMarch 2008 Shareholders’ Funds Reconciliation ofMovements in har prhs n aclaino the epurchase andcancellation of ividends appr opn’ w hrs(2)—52(662 — — — 16,019 274 — (16,682) — 522 (158,787) — — — — — (522) — — c — (23,437) — 724 shares Company’s own — costs during theyear (724) activities shares Company’s own ssdrn h er————31— 331 — — — — osts during theyear r e eturn on c on v er in uigteya ,9 3(,7)—— — (3,072) 73 2,999 — sions during theyear or opriated inthey dinar y ac tivities ear C le pCapital alled up aia rmu eev eevsrsrereserve reserve reserves reserve premium capital ’0 ’0 ’0 ’0 ’0 £’000 £’000 £’000 £’000 £’000 £’000 JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 hr hr eepinCptlOhrRevenue Other Capital redemption Share share ,9 1091,4 7,1 74 7,718 (724) 174,410 10,942 21,079 7,796 ,2 6849133093(,4)6,802 (3,042) 360,983 9,193 16,854 9,421 ,7 4081,3 5,4 33 2,912 (393) 257,944 11,537 24,078 7,274 — (12,968) — — — — — 0,8 8,162 — 103,288 — — (142,768) 400,211 303,352 (16,682) 111 (23,437) (12 221,221 (15,103) £’000 2,044 Total , , 9 4 274 3 68) 50 31 — — — 55

THE COMPANY THE COMPANY 56 Cash and short termdeposits andshort Cash Stephen Russell eiaiefnnilisrmns–forwardforeign currency Derivative financialinstruments te eev 16 Other reserve aia eevs16 reserves Capital C eeu eev 16 JPMor of form theseaccounts. anintegralpart 81 to 58 The notesonpages Director 15 behalf June2010 andare signedon their 9th were approved and authorisedfor on issue bytheDirectors 81 to 53 The accounts onpages share perIncome Net assetvalue Net assetv Net assetv Shar Revenue reserve upshareCalled capital andreserves Capital Total netassets P Creditors: Total assetslesscurrent liabilities Net current assets Cr Current assets fixed assetinvestments Total Investments heldatfairvalue through profit orloss Fixed assets at 31stMarch 2010 Balance Sheet Investments fundsheldatfairvalue inliquidity through profit hr rmu 16 Share premium Debtors Debtors Registration number: 237958 apital r r editor ovision for liabilitiesandcharges contracts heldatfairvalue through profit orloss or loss eholder g by an E edemption r JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 s: : mut aln u fe oeta n er 13 amounts more falling thanoneyear dueafter amoun ur alue alues: s opean Investment Trust plc ’ funds e rwhshare per Growth ts fallin eser v g e due withinoney ear Notes 10 16 1 12 1 11 4 7 uadtd uadtd Total (unaudited) (unaudited) 2 4,9 966303,352 59,656 243,696 5,6 273315,159 62,793 252,366 rwhIncome Growth 1,5 698392,559 76,908 315,651 7,3 741338,992 67,461 271,531 1,7 021257,944 40,271 217,673 7,5)(699 (88,934) (16,979) (71,955) 4 41094753,567 9,447 44,120 47599954,674 9,949 44,725 39192353,214 9,253 43,961 10 91546823,833 4,668 19,165 ’0 ’0 £’000 £’000 £’000 ,9 966303,352 59,656 3,696 ,8 ,2 2,912 1,228 1,684 ,8 ,9 7,274 1,392 5,882 ,5 59424,078 15,924 8,154 ( 30 7)(393) (73) (320) , 605 6 9 1,460 696 764 6 2 6)(64) (64) — — 3 ) 2 010 (4 ( 1 11,537 914 7)(273) 273) 3 )(1,043) 8) 106.3p 207.2p (3 250,187 233,331 174,410 313,351 (92,130) 221,221 221,221 95,308 63,164 96,232 16,856 10 21,079 1 £’000 3 2009 70.2p 42 7,796 Total 7,718 , (724) , 068) 942 924 .1p — — Settlement offutures contracts Sales ofinvestments The notes on pages 58 to 81 form an integral part of form theseaccounts. anintegralpart 81 to 58 The notesonpages intheyear incash (Decrease)/increase N R termloans Net repayment ofshort Financing Net Dividends paid Net Other capitalcharges Purchases ofinvestments expenditureCapital andfinancialinvestment Taxation recovered Interest rate swap breakage costs paid Interest paid Returns oninvestments offinance and servicing Net for theyear ended31stMarch 2010 FlowCash Statement epur et c cash inflowcash before financing c inflowcash from operating activities ash out ash inflo chase and canc flow from financing w fr om c ellation oftheC apital e xpenditure andfinancialinvestment ompan JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 y’ s o wn shar es Notes 18 19 (276,050) (30,346) 291,435 (38,269) ( (12 (47,332) 16 15,245 £’000 (1,745) 9,063 7,900 2 (140) , ,968) 9 010 631 86 — — ) (285,055) 362,446 (2 (2 22,084 (15 (6,040) 53,895 77,887 £’000 77 2 3 3 (724) 009 , , ,10 (118) 992) 99 359 ,311 38 — 3) 2) 57

THE COMPANY

THE COMPANY 58 d Expenses (d) Income (c) Valuation ofinvestments (b) Basisofaccounting (a) Accounting policies 1. for theyear ended31stMarch 2010 Notes totheAccounts ahdvdn srcgie nthecapitalcolumn. isrecognised in cash dividend recognised asincome. Any excess inthevalueof theshares received over theamountof the the cashdividendforegone is Where toreceive theCompany haselected scripdividendsintheform of additionalshares ratherthanincash,theamountof except where, intheopinionof theBoard,dividendiscapitalinnature, inwhichcaseitistakentocapital. Dividends r o ex Compan on thatbasistotheCompan ac and capitalgr The Compan 73. amendment toFRS29inrespectof fairvaluedisclosures anddetailsof thisare given innote22onpage T The accounts have beenprepared onagoing concern basis. J Associationof Investment Companies(‘AIC’) in andVenture CapitalTrusts’ issuedbythe (the‘SORP’) Companies andwiththeStatementof ‘Financial Recommended Practice Statementsof (‘UKGAAP’) Practice Investment Trust T shar share withtheother class, are charged directlytothat share class Expenses charged totheCompany inrelation toaspecific the monthendimmediatelypreceding thedateonwhichcost istobeaccounted for. astheirnetassetsat inthesameproportion are allocated share classes Expenses charged totheCompany common toboth shareholders of theCompany. maximum of 2%of thevalueof theshares Any beingconverted. costs inexcess of this capwillbebornebyallthe Shareholders someorallof converting theirshares intoshares of theotherclasswillbearcosts of theconversion uptoa Gains andlossesonsaleso markets. ‘Unrealised reserve’. are accounted for inan reserves within‘Holdinggainsandlossesoninvestments’. Unrealised foreign losses currency y reserves within‘Gains andlossesonsalesof investments’. Increases anddecreases inthevaluationof investments held atthe exchange gainsandlossesoncashdepositbalances andothercapitalreceipts andpayments are dealtwithincapital Stock lendinginc UK dividendsar All of theCompany’s operationsare of acontinuing nature. All expensesar Investments are recognised orderecognised onthetradedate. anuary 2009. anuary ear end,includingther he policiesappliedintheseaccounts are consistent withthoseappliedinthepreceeding year. There hasbeenan 2006, UnitedKingdomGenerallyAccepted Accounting he accounts are prepared inaccordance withtheCompaniesAct f cordance andinformation withthedocumentedinvestment strategy abouttheinvestment isprovided portfolio internally cluding expensesincidentaltothe ac e quisition. Subsequentlythein JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 class y s‘eda fairvaluethrough profit orloss’. Theyare included initiallyatfairvaluewhichistakentobetheircost, ‘heldat as ec r emaining unaf ’ uiesi netn nfnnilast ihave opoiigfo hi totalreturn intheform of income y’s businessisinvesting infinancialassetswithaviewtoprofiting from their owth. This portfolio of Thisportfolio financialassetsismanagedowth. anditsperformance evaluatedonafairvaluebasisin eivable fr e e accounted for onanaccruals basis. ome andinter included neto om equityshar elated gainsandlossesarisingfrom changes inforeign exchange rates,are dealtwithincapital etd osso n hr ls are notborne bytheother. share class fected. Losses of one f y’s Boardof Directors.Accordingly, uponinitialrecognition, theinvestments are designatedbythe in v est r estments includingtherelated foreign exchange gainsandlossesof acapitalnature, foreign f tax credits. Overseas dividendsare includedgross of any withholdingtax. v ec smnsaevle tfi au,wihare quotedbidprices for stockstradedinactive fairvalue, which estments are valued at pur eivable ar es ar chase whichar e included inther e included inther e written o evenue column of theincome statementonanex-dividend basis evenue column onanaccruals basis. f f in thecapitalc olumn of theincome statementatthetime

g Taxation (g) Financial instruments (f) Finance costs (e) The Compan term innature and are accordingly statedatcost as reduced byappropriate allowances for estimatedirrecoverable amounts. and aretoinsignificantriskof subject changes invalue.receivables any Other interest,are andpayables donotcarry short termdepositscomprises cashanddemanddepositswhichare readily andshort toaknownamountof convertible cash Cash Presentation’ andFRS26 ‘Financial Instruments:Measurement’. interestaccruals basisusingtheeffective methodandinaccordance withtheprovisions of FRS25‘Financial Instruments: Finance costs, includingany premium payable onsettlementorredemption anddirectissuecosts, are accounted for onan entirely byrevenue offset expenses,thennotaxrelief istransferred tocapital. Tax relief isallocated toexpensescharged tocapital onthe‘marginal basis’. Onthisbasis,iftaxable income is capableof being inthetaxablesavings poolwillbetransferred tothenontaxable pool. benefit from theexcess ofexpenses intheotherpool.Inthisinstance compensation amountingtohalf thetax taxdeductible poolseparately. Apoolwhichgenerates taxable revenues inexcess ofexpensesmay taxdeductible Tax iscomputed for each pr liabilities are recognised for alltaxable timingdifferences butdeferred taxassetsare onlyrecognised totheextentthatitis Def cr shown intheReconciliation of Movements inShareholders’ Funds andare accounted for inthe‘Otherreserve’, whichwas accordance withthe provision of FRS26. Gainsorlossesarisingonthefairvalueof cashflowhedges duringtheyear are cashflowhedges designatedaseffective in were swaps were designated as‘heldatfairvaluethrough profit orloss’ and lif ‘Financial Instruments: measurement’. unr are currencycontracts valuedatfairvalue, termforward whichisthenet Derivative financialinstruments,includingshort Interest bearing bank loans and overdrafts areInterest initiallyrecorded bearing bankloansandoverdrafts attheproceeds received netof directissuecosts. Finance costs ontheGrowthpoolof assetsare allocated30%totherevenue column and70%tothecapitalcolumn inline – expensesincidentaltothepurchase of aninvestment are charged tothecapitalcolumn. Theseexpensesare commonly – themanagement fees of theIncome poolof assetsare allocated40%totherevenue column and60%tothecapital – – inbothpools. thecapitalcolumn Manager are allocated100% to performance fees payable tothe – Expenses are allocatedwhollytotherevenue column of theincome statementwiththefollowing exceptions: Deferred taxisaccounted for inaccordance withFRS19: ‘Deferred Tax’. Finance costs ontheIncome poolof assetsare allocated40%totherevenue column and60%tothecapitalcolumn inline – e eated specificallyf obable thattaxable profits willbeavailable againstwhichthosetimingdifferences canbeutilised. err ealised gainorlossandar o with theBoard’ rnato ot srqie n a efudi oe10. costs isrequiredtransaction andcanbefound innote r c column inlinewiththeBoard’s splitof expected revenue andcapitalreturn from theGrowthinvestment portfolio. the management fees of poolof theGrowth assetsare allocated30%totherevenue column and70% tothecapital with theBoard’ eferred costs andcomprise mainlybrokerage toastransaction commission. Inaccordance withtheSORP, disclosure of olumn inlinewiththeBoard’s splitof expected revenue andcapitalreturn from theIncome investment portfolio. f the existingdebtfinanc ed taxispr y has used o vided onalltimingdif s s expec expec or thatpurpose inter ted splito ted splito est rateswapstohedg e e nlddi urn seso urn iblte nteBlneSeti codnewt R 26: theBalance Sheetinaccordance withFRS in included incurrent assetsorcurrent liabilities facility . f f The amount recognised in Other Reserve is amortised totheIncome Statementover the isamortised The amountrecognised Reserve inOther r r . evenue andcapitalreturn from investment theGrowth portfolio. ev JPMorgan European Investment Trust AnnualReport&Accounts plc. 2010 ferences thathave originatedbutnotreversed bythebalance sheetdate. Deferred tax enue andcapitalr e the cashflowriskarisingfrom Allinterest interest rate ratefluctuations. eturn from the Income investment portfolio. 59

THE COMPANY Notes to the Accounts continued

1. Accounting policies continued (h) Foreign currency In accordance with FRS23: ‘The effects of changes in Foreign Currency Exchange Rates’, the Company is required to nominate a functional currency, being the currency in which the Company predominantly operates. The Board, having regard to the currency of the Company’s share capital and the predominant currency in which its shareholders operate, has determined that sterling is the functional currency. Sterling is also the currency in which the accounts are presented. Transactions denominated in foreign currencies are converted at actual exchange rates as at the date of the transaction. Assets and liabilities denominated in foreign currencies at the year end are translated at the rates of exchange prevailing at the year end. Foreign exchange gains and losses on cash and deposit balances are dealt with in capital reserves within ‘Gains and losses on sales of investments’. Gains and losses on investments held at the year end arising from changes in foreign exchange rates are included in capital reserves within ‘Holding gains and losses on investments’. Y (i) Dividends payable

N In accordance with FRS 21: ‘Events after the Balance Sheet Date’, final dividends are included in the accounts in the year in which they are approved by shareholders. A (j) VAT P Expenses are disclosed inclusive of the related irrecoverable VAT. The basis on which it has been calculated is the partial exemption method using the proportion of taxable supplies to non taxable supplies. M 2010 2009

O £’000 £’000 C 2. Gains/(losses) on investments held at fair value through profit or loss Losses on sales of investments held at fair value through profit or loss based on

E historical cost (3,122) (44,914) Amounts recognised in investment holding gains and losses in the previous year H in respect of investments sold during the year 39,109 (32,601)

T Gains/(losses) on sales of investments based on the fair value at the previous balance sheet date 35,987 (77,515) Realised gains on close out of futures — 13 Net movement in investment holding gains and losses 68,465 (74,997) Other capital charges (137) (111) Total capital gains/(losses) on investments held at fair value through profit or loss 104,315 (152,610)

60 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 .Mngmn and 4. Management fee performance 3. Income Stock lending fees Scrip dividendsfrom investments listedoverseas Dividends fromfunds liquidity Dividends from investments listedintheUK Details o 1 recoverable VAT P Management fee 1 T In Deposit interest interest receivable andsimilarincome Other O Dividends from investments listedoverseas Income from investments Scrip dividendsfrom investments listedintheUK Property income distribution Property such fees. onmanagement fees following fees andperformance This representspaidinthe past, HMRevenue VAT &Customs acceptance in2007 thatVAT recovered isnotchargeable on This represents interest onVAT 4below. recovered during theprioryear. detailsare Further given innote otal inc erformance fee v ter erseas fixederseas interest income est onV ome f the manag A T recovered 1 ement andper 1 f ormanc JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 e esaegvni h ietr’Rpr npgs4 n 42. and 41 fees are onpages given intheDirectors’ Report eeu aia Total Capital Revenue £’ 000 2 ,1 2,236 1,513 723 2 ,2 2,645 2,645 1,922 1,922 723 723 ——— — 2010 £’ 000 0 409 409 £’ 000 11,788 12,132 £ 9,789 eeu aia Total Capital Revenue 2010 1,167 ’000 344 206 6 138 174 200 98 (2,988) (958) (2,030) 269 235 (5,034) (2,335) (2,699) 05 £’ 23 23 — 7 000 6 ,7 2,046 2,046 1,377 1,377 669 669 — 2009 £’ 000 —— 22 16,708 18,786 £ £’ 3,454 1,060 2009 1,624 1,1 ’000 ,2 000 660 960 40 7 37 21 — — 0 61

THE COMPANY Notes to the Accounts continued

2010 2009 £’000 £’000

5. Other administrative expenses Other administration expenses 431 400 Directors’ fees1 101 107 Savings scheme expenses2 129 131 Auditors’ remuneration for audit services3 27 26 Auditors’ remuneration for all other services 9 8 697 672

1Full disclosure is given in the Directors’ Remuneration Report on pages 49 and 50. Y 2These fees were paid to JPMAM for the administration and marketing of savings products. 3Includes £4,000 (2009: £4,000) irrecoverable VAT. N

A 2010 2009 Revenue Capital Total Revenue Capital Total

P £’000 £’000 £’000 £’000 £’000 £’000

M 6. Finance costs Interest on bank loans and overdrafts 577 1,238 1,815 1,889 4,091 5,980 O Amortisation of cash flow hedge 106 225 331 20 42 62

C 683 1,463 2,146 1,909 4,133 6,042 E H T

62 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 b Factors current affecting taxcharge for theyear (b) Analysisoftaxcharge intheyear (a) Taxation 7. ex The Compan thecurrent taxchangeaffecting for theyear are asfollows: The taxassessedfor theyear islower(2009:lower)thanthestandardrateof corporation taxintheUK of 28%. Thefactors disposal of investments. lossesarisingontherevaluation or obtain approval, theCompany hasnotprovided deferred taxonany capitalgainsor Giv likely thatthisassetwillbeutilisedinthef Non taxable overseas dividends Non taxable capital (gains)/losses urn a hrefrteya ,6 73 1,104 (763) 1,867 Current taxcharge for theyear Tax attributable toexpenses charged tocapital 28%) UK corporation taxat28% (2009: Overseas withholding tax Relief for overseas tax Movement inexcess expenses Non taxable scrip dividends Excess capitalexpenses arising intheyear Net r D Tax attributable toexpenses charged tocapital Non taxable UKdividend income of:Effect Net r Income taxed indifferent periods Overseas withholding tax ouble taxation relief c corporation taxof28% (2009:28%) Company’s applicablerate of before taxation multipliedby the eoetxto 0091255112,554 102,525 10,029 before taxation en theCompan ess o eturn/(loss) onor eturn/(loss) onor f deduc y has anunr t i ble y ’s statusasan investment trustcompany, andtheintentiontocontinue meetingthe conditions required to dinar expenses o dinary activities dinary y ec ac ognised def tivities ver taxable income inprior years. Noassethasbeenrecognised intheaccounts asitisnot JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 err oreseeable future. dtxasto 24400(09 23400.Thishasarisendue tothecumulative (2009:£2,354,000). ed taxassetof£2,404,000 eeu aia Total Capital Revenue Total Capital Revenue ’0 ’0 £’000 £’000 £’000 £’ ,0 87731,515 28,707 2,808 ,0 1,104 — 1,104 ,0 1,104 — 1,104 ,6 73 1,104 (763) 1,867 99 (909) — (909) ( 79 (709) — (709) 37 (327) — (327) 000 92 (912) — (912) 0 709 — 709 0)—(709) — 709) 6 73 — (763) 763 6 73 — (763) 763 3—53 — 53 4 (4) — (4) 4 948 948 — 2,5)(29,655) (29,655) — 2010 2010 £’ 000 £’ 000 eeu aia Total Capital Revenue Total Capital Revenue 169(6,6)(140,672) (162,361) 21,689 ( 224 (2,204) — (2,204) 366 (3,656) — (3,656) ’0 ’0 £’000 £’000 £’000 £’ ,9 2,096 — 2,096 ,9 2,096 — 2,096 ,0)—(2,204) — 2,204) ,0 2,204 — 2,204 ,7 4,6)(39,388) (45,461) 6,073 ,7 354 2,096 (3,574) 5,670 ,7 354 2,096 (3,574) 5,670 ,7 354 — (3,574) 3,574 ,7 354 — (3,574) 3,574 000 27 (297) — (297) 0—90 — 90 6 (6) — (6) 45244,572 889 44,572 889 — — ——— 2009 2009 £’ 000 £’ 000 63

THE COMPANY Notes to the Accounts continued

8. Dividends (a) Dividends paid and declared 2010 2009 £’000 £’000

Dividends paid Unclaimed European Growth dividends refunded to the Company (16) — European Growth 2009 final dividend of 2.0p (2008: 3.33p) 2,568 4,677 European Growth 2009 special dividend 2.5p (2008: nil) 3,210 — European Growth interim dividend of 3.75p (2008: 5.0p) 4,653 6,735 European Income 2009 final dividend of 1.0p (2008: 3.0p) 572 1,893 European Income 2009 special dividend of 1.15p (2008: nil) 657 — Y European Income interim dividend of 2.3p (2008: 3.0p) 1,324 1,798

N Total dividends paid in the year 12,968 15,103

A Dividends declared European Growth final dividend of 1.1p (2009: 2.0p) 1,305 2,568 P European Growth special dividend of nil (2009: 2.5p) — 3,210 European Income final dividend of 1.7p (2009: 1.0p) 966 572 M European Income special dividend of nil (2009: 1.15p) — 657

O Total dividends payable1 2,271 7,007 C 1In accordance with the accounting policy of the Company, these dividends will be reflected in the accounts for the following year.

E (b) Dividend for the purposes of Section 842 of the Income and Corporation Taxes Act 1988 The requirements of Section 842 of the Income and Corporation Taxes Act 1988 are considered on the basis of dividends

H declared in respect of the financial year, as follows:

T 2010 2009 £’000 £’000

European Growth interim dividend of 3.75p (2009: 5.0p) 4,653 6,735 European Growth final dividend of 1.1p (2009: 2.0p) 1,305 2,568 European Growth special dividend of nil (2009: 2.5p) — 3,210 European Income interim dividend of 2.3p (2009: 3.0p) 1,324 1,798 European Income final dividend of 1.7p (2009: 1.0p) 966 572 European Income special dividend of nil (2009: 1.15p) — 657

Total1 8,248 15,540

1The revenue available for distribution by way of dividend for the year is £8,162,000 (2009: £16,019,000).

64 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 .Return/(loss) pershare 9. oa eun(os e hr 71.61p 88,329 pershare return/(loss) Total pershare return/(loss) Capital return/(loss) Total return/(loss) Capital Revenue return Return/(loss) pershare isbasedon thefollowing: Growth share oa eun(os 23,121 T pershare return/(loss) Capital return/(loss) Total return/(loss) Capital Revenue return Return/(loss) per share isbasedonthefollowing: Income share Revenue return pershare Weighted average numberofshares inissue Revenue return pershare Weighted average numberofshares inissue tlrtr/ls)prsae40.29p pershare return/(loss) otal JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 123,341,761 57,392,988 66.82p 20,872 36.37p 82,416 £ 4.79p 2,249 3.92p 5,913 2010 ’000 133,519,490 59,896,747 (101.52)p (3 (135,555) (38.78)p (91.98)p (122,821) (23,232) (19,947) 3.30)p 12,734 £ 9.54p 5.48p 2009 3,285 ’000 65

THE COMPANY Notes to the Accounts continued

10. Investments

2010 2009 £’000 £’000

Investments listed on a recognised investment exchange 338,992 250,187

Listed Listed in UK overseas Total £’000 £’000 £’000

Opening book cost 25,056 270,462 295,518

Y Opening investment holding losses (2,154) (43,177) (45,331)

N Opening valuation 22,902 227,285 250,187 Movement in the year:

A Purchases at cost 19,911 256,462 276,373 Sales – proceeds (23,675) (268,345) (292,020) P Gains on sales based on the fair value at the previous balance sheet date 4,348 31,639 35,987 Net movement in investment holding gains and losses 7,452 61,013 68,465 M 30,938 308,054 338,992 O Closing book cost 22,491 254,258 276,749

C Closing investment holding gains 8,447 53,796 62,243 30,938 308,054 338,992 E

During the year, prior year investment holding losses amounting to £39,109,000 were transferred to ‘Gains and losses on sales H of investments’, as disclosed in note 16. T Transaction costs on purchases during the year amounted to £552,000 (2009: £574,000) and on sales during the year amounted to £353,000 (2009: £382,000). These costs comprise mainly brokerage commission.

2010 2009 £’000 £’000

11. Current assets Debtors Securities sold awaiting settlement 608 23 Dividends and interest receivable 497 400 Other debtors 355 501 1,460 924

The Directors consider that the carrying amount of debtors approximates to their fair value.

Cash and short term deposits Cash and short term deposits comprises bank balances and short term deposits. The carrying amount of these represents their fair value. Cash balances in excess of a predetermined amount are placed on short term deposit at market rates of interest.

66 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 1 1 Creditors: 12. 3 4 . . acasBn l,whichwasrepaid inMay 2009. Barclays Bankplc, Euro 35 milliondrawndownonaloanagreement with at31stMarch 2009comprised a The foreign currencybankloan h oeg urnyfotn aent ‘R’ opie niseo uo10mlin eaal n6hJn 01 TheFRNis The foreign currencyfloatingratenote(‘FRN’)comprises anissueof Euro 100million,repayable on6thJune2011. Foreign bankloan currency P settlement awaiting oftheCompany’sown shares Repurchases Pr amountofThe Directorsconsider creditors thatthecarrying fallingduewithinoneyear approximates totheirfairvalue. Performance fee settlement awaiting Securities purchased efrac e rvso are owr tteedo h er273 42. and 41 Details of the performance fees are given onpages intheDirectors’ Report Performance fee provision at theendofyear forward carried Amoun Performance fee provision brought forwardatthebeginning oftheyear F Cr secur Other creditorsandaccruals oreign floating currency rate note er editor o omnefecharge formance fee visions f ed byafloatingchar t r s: amounts fallingmore thanoneyear dueafter ealised inthey amounts falling duewithinoneyear or liabilitiesandcharges ear g e o v rteast fteCmay ute eal r ie nnt 3a(i npg 76. 23(a)(ii)onpage er theassetsof theCompany. Further detailsare given innote JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 88 £’000 £ £’000 1,043 2010 2010 2010 2010 ’000 ,934 (1 409 630 277 136 3 — — — 6 ) 33,068 9 32,421 £’000 £’000 £ 2009 2009 2009 2009 2,130 ’000 304 343 — — — — — — 67

THE COMPANY Notes to the Accounts continued

2010 2009 £’000 £’000

15. Share capital Authorised 354,328,617 (2009: 354,328,617) Growth shares with an initial nominal value of 5p each1 17,716 17,716 114,142,765 (2009: 114,142,765) Income shares with an initial nominal value of 2.5p each1 2,854 2,854 20,570 20,570

1The nominal values of these shares may vary from time to time in accordance with the provisions of the Articles of Association.

2010 2009

Y £’000 £’000 N Growth shares

A Opening balance of 126,799,002 (2008: 138,578,428) shares 6,042 6,932 Repurchase of 9,633,138 (2009: 10,573,500) shares for cancellation (483) (529) P Net conversion increase of 456,204 (2009: decrease of 1,205,936) shares 19 (60) Adjustment to nominal value on conversion 304 (301) M Closing balance1 5,882 6,042 O

1Represented by 117,622,068 (2009: 126,799,002) shares. C

During the year, the Company made market purchases of 9,633,138 Growth shares, with a nominal value of £483,000, for cancellation, representing 7.6% of the Growth shares outstanding at the beginning of the year. The consideration paid for E these shares amounted £15,552,000 and the reason for the purchases was to seek to manage the volatility of the share price

H discount to net asset value. 2010 2009 T £’000 £’000

Income shares Opening balance of 58,502,745 (2008: 63,909,137) shares 1,449 1,494 Repurchase of 1,475,616 (2009: 7,790,000) shares for cancellation (39) (195) Net conversion decrease of 913,461 (2009: increase of 2,383,608) shares (22) 56 Adjustment to nominal value on conversion 4 94

Closing balance1 1,392 1,449

1Represented by 56,113,668 (2009: 58,502,745) shares. During the year, the Company made market purchases of 1,475,616 Income shares, with a nominal value of £39,000, for cancellation, representing 2.5% of the Income shares outstanding at the beginning of the year. The consideration paid for these shares amounted £1,130,000 and the reason for the purchases was to seek to manage the volatility of the discount of the share price to net asset value.

68 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 15. Share capital Share capital 15. 2008 Issueof674,054 shares of0.059p each 2008 Repurchase of125,087 shares of0.039p eachfor cancellation 2008 R 2008 Repurchase of62,994,576 shares of0.155p eachfor cancellation 2010 Issueof249,987 shares of0.036p each 2009 Repurchase of323,864 shares of0.199p eachfor cancellation 2009 Issueof323,864 shares of0.199p each 2008 Issueof134,012,874 shares of0.039p each 2008 Repurchase of125,087 shares of0.208p eachfor cancellation 2010 Issueof948,343 shares of0.013p each 2 2009 Issueof123,584,638 shares of0.146p each 2009 Repurchase of127,179,832 shares of0.237p eachfor cancellation 2009 Opening balance of127,179,832 shares of0.237p each Deferred Growth shares 2010 Closingbalance of249,987 shares of0.036p each 2009 Issueof1,230,941 shares of0.349p each 2009 Repurchase of1,230,941 shares of0.349p eachfor cancellation 2009 Opening balance of1,230,941 shares of0.349p each Deferred Income shares 2010 Closingbalance of948,343 shares of0.013p each 2009 Issueof127,179,832 shares of0.237p each 009 R (2008: 125,087 shares of0.208p each) (2008: 62,994,576 shares of0.155p each) 20:12091sae f039 ah — 3 (2009: 1,230,941 shares of0.349p each) (2009: 127,179,832 shares of0.237p each) epurchase of674,054 shares of0.059p eachfor cancellation epurchase of123,584,638 shares of0.146p eachfor cancellation continued JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 £’000 2 ( (301) 010 180 180) 301 (4) (1) — — — — — — — — — 4 3 1 £’000 2 009 301 301 (98) (52) 98 52 — — — — — — — — — — — — 4 4 69

THE COMPANY Notes to the Accounts continued

Capital reserves Gains and Holding Called up Capital losses on gains and share Share redemption sales of losses on Unrealised Other Revenue capital premium reserve investments investments reserve reserve reserve Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

16. Reserves

Opening balance 7,796 21,079 10,942 259,994 (45,331) (40,253) (724) 7,718 221,221 Gains on sales of investments based on the fair value at the previous balance sheet date — — — 35,987 — — — — 35,987 Net movement in investment holding gains and losses — — — — 68,465 — — — 68,465 Transfer on disposal of investments — — — (39,109) 39,109 — — — — Y Net foreign currency exchange losses on cash and short term deposits N held during the year — — — (3,825) — — — — (3,825)

A Unrealised foreign currency gains on loans — — — — — 3,409 — — 3,409 Realised gains on repayment of loans — — — 2,075 — — — — 2,075

P Brought forward unrealised foreign currency losses on loans, now realised — — — (14,431) — 14,431 — — —

M Repurchase and cancellation of the Company’s own shares (522) — 522 (16,682) — — — — (16,682)

O Share conversions during the year — 2,999 73 (3,072) — — — — — Management fee and finance costs C charged to capital — — — (2,976) — — — — (2,976) Other capital charges — — — (137) — — — — (137) Unrealised losses on foreign currency contracts — — — — — (64) — — (64) E Performance fee charge — — — — — (409) — — (409) Performance fee realised in the year — — — (136) — 136 — — — H Cash flow hedge allocated to finance costs in the year — — — — — — 331 — 331 T Dividends appropriated in the year — — — — — — — (12,968) (12,968) Tax relief on expenses charged to capital — ——763————763 Retained revenue for the year — — — — — — — 8,162 8,162

Closing balance 7,274 24,078 11,537 218,451 62,243 (22,750) (393) 2,912 303,352

17. Net asset values

Net asset value per Growth share is calculated by dividing Growth shareholders’ funds of £243,696,000 (2009: £180,176,000) by the 117,622,068 Growth shares in issue at the year end (2009: 126,799,002 shares, excluding shares in Treasury).

Net asset value per Income share is calculated by dividing Income shareholders’ funds of £59,656,000 (2009: £41,045,000) by the 56,113,668 Income shares in issue at the year end (2009: 58,502,745 shares, excluding shares held in Treasury).

70 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 20 18. Reconciliation of net return/(loss) on ordinary activities before onordinary finance costs return/(loss) net Reconciliation of 18. 9 Analysisofchanges innetdebt 19. . C Scrip dividendsincludedinincome Expenses charged tocapital prepayments in Decrease I oa e eun(os before finance costs andtaxation return/(loss) Total net ahadsottr eois 538(829 385 — — (3,825) (38,269) 2,075 95,308 30,346 A 7,900 (32,421) Net debt more dueafter floating rate notes Foreign currency duewithinoneyear Foreign bankloan currency termdeposits andshort Cash inflowNet cash from operating activities VAT recovered includedincapital (Increase)/decrease inaccrued income Effective interest rate adjustment onbonds Overseas withholding tax d akcptl(eun/osbefore finance costs andtaxation capital(return)/loss Add back ncr on t than oney and taxation inflow tonetcash from operating activities the balance sheetdatethere were nocontingent liabilitiesorcapitalcommitments (2009:none). ae(erae inaccrued expenses ease/(decrease) tin gen t liabilities andc ear apital commitments JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 31st Mar (29 (9 ’0 ’0 ’0 £’000 £’000 £’000 £’000 2009 ,3)—349(213) 3,409 — 2,130) ,2 4 ch At )(,2)169(213) 1,659 (7,923) 3) C ash flo w movement movements Ex (103,988) 114,700 chan (1,593) £ (1,213) 2010 ’000 (46) 1 (97) ge 3 — 3 3 1 Other 31st Mar (134,630) (88 (35 158,228 22,084 53,214 £’000 (2,656) £ (1,377) 2009 2,335 2010 ’000 , , ( 9 720) 377 138) (58) 34) ch At — — 3 71

THE COMPANY Notes to the Accounts continued

21. Transactions with the Manager

Details of the management contract are set out in the Directors’ Report on page 41. The total management fee payable to JPMorgan Asset Management (UK) Limited (‘JPMAM’) for the year was £2,236,000 (2009: £2,046,000), of which £428,000 (2009: £nil) was outstanding at the year end .

Details of the performance fee agreement are set out in the Directors’ Report on pages 41 and 42. The performance fee payable to JPMorgan Asset Management (UK) Limited (‘JPMAM’) for the year amounted to £136,000 (2009: £nil) and the whole of this amount was outstanding at the year end.

During the year £114,000 (2009: £114,000) excluding VAT was payable to JPMAM for the administration and marketing of savings products, of which £nil (2009: £nil) was outstanding at the year end.

Included in other administration expenses in note 5 on page 62 are safe custody fees amounting to £65,000 (2009: £75,000) payable to third party custodians by JPMorgan Chase & Co on behalf of the Company of which £19,000 (2009: £19,000) was Y outstanding at the year end.

N JPMAM may carry out some of its dealing transactions through group subsidiaries. These transactions are carried out at arm’s length. The commission payable in the year was £11,000 (2009: £27,000) of which £nil (2008: £nil) was outstanding at the year A end.

P Handling charges on dealing transactions amounting to £137,000 (2009: £115,000) were payable to JPMorgan Chase & Co. during the year of which £18,000 (2009: £21,000) was outstanding at the year end. M The Company holds investments in funds managed by JPMAM. At 31st March 2010 these were valued at £40.3 million

O (2009: £24.8 million) and represented 11.9% (2009: 9.9%) of the Company’s investment portfolio. During the year the Company made purchases of such investments with a total value of £21.0 million (2009: £29.2 million) and sales with a total value of C £13.7 million (2009: £51.2 million). Income amounting to £0.2 million (2009: £1.0 million) was receivable from these investments during the year of which £1,000 (2009: £4,000) was outstanding at the year end.

E The Company received £138,000 (2009: £660,000) from stock lending transactions during the year. Commissions amounting to £29,000 (2009: £140,000) were receivable by JPMAM during the year in respect of these transactions of which £4,000 H (2009: £1,000) was outstanding at the year end.

T At the year end, a bank balance of £53.2 million (2009: £95.3 million) was held with JPMorgan Chase & Co. A net amount of interest of £206,000 (2009: £1,092,000) was receivable by the Company during the year from JPMorgan Chase & Co. of which £9,000 (2009: £1,000) was outstanding at the year end.

72 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 2 Disclosures regarding financialinstruments measured at fairvalue 22. Derivative financialinstruments –forwardforeign currency The following table setsoutthefairvaluemeasurements usingtheFRS29hierarchy: Details o value measurement of therelevant asset. Categorisation withinthehierarchy hasbeendeterminedonthebasisof thelowestlevel inputthatissignificanttothefair valuedbyreference tovaluationtechniquesusinginputsthataremarketdata notbasedonobservable – Level 3 valuedbyreference inputsotherthanquotedmarketprices included tovaluationtechniquesusingobservable – Level 2 L The investments are categorised intoahierarchy consisting of thefollowing three levels: foreign comprising forward contracts. currency and derivative financialinstruments T The disclosures required bytheamendmenttoFRS29:‘Improving Disclosures aboutFinancial Instruments’ are given below. oa 3,2 338,928 — — Ther Total 338,928 In E F quit inancial vl1–valuedusingquotedpricesmarketsfor inactive identical assets – evel 1 he Company’s financialinstrumentswithinthescope of FRS29thatare heldatfairvaluecomprise itsinvestment portfolio v c smnsi iudt ud 383——23,833 — — 23,833 funds estments inliquidity or lossat 31stMarch 2010 on y e tr in were notransfers betweenLevels 1,2or3duringtheyear. ac v estmen f instrumen ts h auto ehiusue yteCmayaegvni oe1b npg 58. onpage 1(b) the valuationtechniquesusedbyCompany are given innote w ithin Level 1 ts shl tfi au hog profit heldat fairvalue through ts JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 1,5 315,159 — — 315,159 ee ee ee Total 3 Level Level 2 Level 1 £' 000 6)——(64) — — (64) '0 '0 £'000 £'000 £'000 73

THE COMPANY Notes to the Accounts continued

23. Financial instruments’ exposure to risk and risk management policies

As an investment trust, the Company invests in equities and other securities for the long term so as to secure its investment objective stated on the Features page for each share class. In pursuing this objective, the Company is exposed to a variety of risks that could result in a reduction in the Company’s net assets or a reduction in the profits available for dividends. These risks include market risk (comprising currency risk, interest rate risk and market price risk), liquidity risk and credit risk. The Directors’ policy for managing these risks is set out below. The Company Secretary, in close cooperation with the Board and the Manager, coordinates the Company’s risk management.

The objectives, policies and processes for managing the risks and the methods used to measure the risks that are set out below, have not changed from those applying in the comparative year.

The Company’s financial instruments may comprise the following:

– investments in Continental European equity shares, collective investment funds with Continental European exposure and Y liquidity funds which are all held in accordance with the Company’s investment objective;

N – short term debtors, creditors and cash arising directly from its operations;

A – short term forward currency contracts for the purpose of managing exposure to fluctuations in the value of short term liabilities; and P – an issue of floating rate notes denominated in Euros, the main purpose of which is to finance the Company’s operations.

M (a) Market risk The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market O prices. This market risk comprises three elements - currency risk, interest rate risk and other price risk. Information to enable

C an evaluation of the nature and extent of these three elements of market price risk is given in parts (i) to (iii) of this note, together with sensitivity analyses where appropriate. The Board reviews and agrees policies for managing these risks and these policies have remained unchanged from those applying in the comparative year. The Manager assesses the exposure to

E market risk when making each investment decision and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis. H (i) Currency risk T The majority of the Company’s assets, liabilities and income are denominated in currencies other than sterling which is 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 those items.

Management of currency risk The Manager monitors the Company’s exposure to foreign currencies on a daily basis and reports to the Board, which meets on at least four occasions each year. The Manager measures the risk to the Company of the foreign currency exposure by considering the effect on the Company’s net asset value and income of a movement in the rates of exchange to which the Company’s assets, liabilities, income and expenses are exposed. Foreign currency borrowing is used to limit the Company’s exposure to anticipated changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments. This borrowing is limited to currencies and amounts commensurate with the asset exposure to those currencies. Income denominated in foreign currencies is converted to sterling on receipt. The Company may use short term forward currency contracts to manage working capital requirements.

74 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 Compan netassetswithregard tothe taxation for theyear and after return The following tables illustratethesensitivityof risk duringtheyear. In theopiniono they have beenincludedseparatelyintheanalysissoastoshowoverall level of exposure. s cost of theCompany’sThe fairvalueoramortised itemsthathave foreign monetary currencyexposure at31stMarch are the volatility of exchange ratesduringtheyear. and theothercurr ateachbalance (2009:10%)appreciation sheetdateandassumesa10% ordepreciation of sterlingagainsttheEuro held financialinstruments foreign currency monetary overseas income and The sensitivityanalysisisbasedontheCompany’s Foreign items exposure currency onnetmonetary Net current assets Net assets taxation after return Total returnCapital Revenue return taxation: after return Income statement 294.0 62.6 231.4 sensitivity currency Foreign Total netforeign currencyexposure Floating rate noteinissue/bank loan Investments heldatfairvalue through profit or exposure currency Foreign Investments heldatfairvalue through profit or If sterlinghadweakenedthiswouldha hown below. Where theCompany's equityinvestments items)are (whichare priced notmonetary inforeign currency, loss that are monetary items loss thatare monetary loss thatare equities y ’ s monetar f the Dir nist hc h opn sepsd hc sconsidered tobeareasonable illustrationbasedon encies towhichtheCompany isexposed,which y financial assetsandliabilitiesex ectors, theabove yearectors, endamountsare broadly representative of theexposure toforeign currency JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 v e had thef ollowing ef 2. 22284.2 62.2 222.0 8.)—(88.9) — (88.9) E 38—23.8 — 23.8 450474.9 0.4 74.5 ’ ’ £’m £’m £’m r te Total Other uro . . 9.8 0.4 9.4 f ect: chang 2010 e rates. 2010 £’ 2.2 2 1.0 1.2 m .2 146 (124.6) — (124.6) 0. . 210.5 4.6 205.9 9. . 197.9 4.6 193.3 E 1.)—(12.6) — (12.6) 51—95.1 — 95.1 69—16.9 — 16.9 ’ ’ £’m £’m £’m r te Total Other uro 2009 2009 £’ (1.3) 0 0.5 1.8 m .5 75

THE COMPANY Notes to the Accounts continued

23. Financial instruments’ exposure to risk and risk management policies continued

(a) Market risk continued (i) Currency risk continued Conversely, if sterling had strengthened this would have had the following effect:

2010 2009 £’m £’m

Income statement return after taxation: Revenue return (1.0) (1.8) Capital return (1.2) 1.3 Total return after taxation (2.2) (0.5) Y Net assets (2.2) (0.5) N

In the opinion of the Directors, the above sensitivity analysis is broadly representative of the whole year. A (ii) Interest rate risk P Interest rate movements may affect the level of income receivable on cash deposits, the fair value of fixed interest rate securities and the interest payable on variable rate cash borrowings. The Company has no investment in fixed interest rate

M securities.

O Management of interest rate risk The Company finances part of its activities through borrowings at levels approved and monitored by the Board. C The Company has issued Euro 100 million Floating Rate Notes, repayable on 6th June 2011. The interest rate payable on these notes is based on the interbank offered rate for three month Euro deposits plus a margin of 0.53%. For part of the comparative year, the interest rate on 80% of this loan had been fixed under the terms of a swap agreement which was E broken during that year.

H At the comparative year end, the Company had drawn down Euro 35 million on a loan agreement with RBS. This agreement expired during the year. The loan was repaid and not renewed. For part of the comparative year, the interest T rate of 80% of this loan had been fixed under the terms of a swap agreement which was broken during that year. Interest rate exposure The exposure of financial assets and financial liabilities to floating rates, giving cash flow interest rate risk when rates are re-set, is as follows:

2010 2009 £’000 £’000

Exposure to floating interest rates: Cash and short term deposits 53,214 95,308 Investments in liquidity funds 23,833 16,856 Foreign currency floating rate note (88,934) (92,130) Foreign currency bank loan — (32,421) Total exposure (11,887) (12,387)

Interest receivable on cash balances is at a margin below LIBOR (2009: same).

76 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 (iii) to interest rate changesincashbalances andinvestments duetofluctuations in liquidityfunds. stocks meetanacceptable riskreward profile. inaccordanceportfolio, which isselected withtheCompany’s investment and seekstoensure objectives thatindividual associated withpar The Boardmeetsonatleastfour occasions eachyear toconsider theassetallocationof andtherisk theportfolio assetsorliabilitiesheldbytheCompany. other thevalueofmay affect equityinvestments and price riskincludeschangesOther which inmarketprices, otherthanthosearisingfrom interest risk, rateriskorcurrency Company’s future exposure representative of the be not may In theopinionof theDirectors,above sensitivityanalysis the balance sheetdate, withallothervariablesheldconstant. sensitivity analysisisbasedontheCompany’s totalexposure of financialassetsandliabilitiestofloatingratesat lev increase ordecrease ininterest ratesinregards totheCompany’s financialassetsandliabilities.This monetary netassetstoa1%(2009:1%) taxation for theyear and after return The following tableillustratesthesensitivityof the a balances andinvestments Themaximumandminimumexposures inliquidityfundshave duringtheyear, fluctuated. The above year endexposures are notrepresentative of theexposure tointerest ratesduringtheyear asthecash Management of other price risk risk price other of Management Other price risk Net assets T C R taxation: after return Income statement – sensitivity rate Interest M Maximum interest rate exposure tofloating rates The target interest earnedontheliquidityfundsis7day Euro London InterbankBidRate. otal return after taxation for after the year return otal apital r rising from cashbalances andliquidityfunds,were asfollows: e inimum interest rate exposure tofloating rates v lo hnei osdrdt eareasonableof current illustrationbasedonobservation marketconditions. The el of change isconsidered tobe enue r eturn etur n ticular industr y JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 sec tors. Thein v estment management teamhasresponsibility for the monitoring %Ices 1% Decrease 1% Increase nrt inrate in rate ’0 £’000 £’000 (40 6 2 (221) 221 2 2 1(221) 21 3 2) 2010 100,174 4 £’000 2010 1,171 (6 40 2 2 3) %Ices 1% Decrease 1% Increase nrt inrate in rate ’0 £’000 £’000 (84 (12 (12 72 4 )123 123 3) 3) 7) 2009 112,164 6 £’000 2009 1,037 (72 84 4) 77 7

THE COMPANY Notes to the Accounts continued

23. Financial instruments’ exposure to risk and risk management policies continued

(a) Market risk continued (iii) Other price risk continued Other price risk exposure The Company’s total exposure to other changes in market prices at 31st March comprises its holdings in equity investments as follows:

2010 2009 £’000 £’000

Equity investments held at fair value through profit or loss 315,159 233,331

Y The above data is broadly representative of the exposure to other price risk during the year.

Concentration of exposure to other price risk N A list of the Company’s investments is given on pages 19 to 22 and pages 29 to 33. This shows that the majority of the

A investment portfolios’ value is in European equities but there is no concentration of exposure to any one European country. It should also be noted that an investment may not be entirely exposed to the economic conditions in its country

P of domicile or of listing.

Other price risk sensitivity M The following table illustrates the sensitivity of the return after taxation and net assets to an increase or decrease of 10% (2009: 10%) in the fair value of equity investments. This level of change is considered to be a reasonable illustration based O on observation of current market conditions. The sensitivity analysis is based on the Company’s equities and adjusting for

C change in the management fee, but with all other variables held constant.

2010 2009 10% Increase 10% Decrease 10% Increase 10% Decrease E in fair value in fair value in fair value in fair value

H £’000 £’000 £’000 £’000 T Income statement – return after taxation: Revenue return (51) 51 (23) 23 Capital return 31,412 (31,412) 23,174 (23,174) Total return after taxation for the year and net assets 31,361 (31,361) 23,151 (23,151)

(b) Liquidity risk This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Management of the risk Liquidity risk is not significant as the Company’s assets comprise readily realisable securities, the liquidity of which in normal markets is frequently tested by the Manager and which can be sold to meet funding requirements if necessary. Short term flexibility is achieved through the use of overdraft facilities.

The Board’s policy is for the Company to remain fully invested in normal market conditions and that short term borrowings be used to manage short term liabilities and working capital requirements.

78 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 c Credit risk (c) eucae oftheCompany’sown shares Repurchases Creditors: amountsmore falling dueafter F oreign bankloan currency wiigsettlement awaiting than oney incidenc ensur risk of losingthe principalof atradeduringthesettlementprocess. TheManager to continuously monitorsdealingactivity protected from creditors in the event thatJPMorgan Chasewere tocease trading. Therefore theseassetsare designedtobe The Company's assetsare clearlyring-fenced inclientdesignated accounts. a Counterpar The Compan result inlossto theCompany. failstodischarge whichcould toatransaction itsobligationsunderthattransaction thecounterparty Credit riskisthe riskthat as follows: financialliabilitiesattheyear end,basedontheearliestdatewhichpayment canberequired are maturitiesof Contractual euiisprhsdaatn settlement awaiting Securities purchased Creditors: amounts falling duewithinoneyear Exposure to JPMorgan Chase JPMorgan to Exposure Cash dealing risk credit Portfolio of Management Foreign floating currency rate note Derivative financialinstruments feesPerformance Other creditorsandaccruals minimum credit ratingof A1/P1from Standard&Poor'sandMoody'srespectively. e best ex e ear o f ties ar failed trades.Counterpar y in ecution, apr v ests inmarketsthatoperateD e subjec t oc to dailycredit analysisbytheManager thathave andtradescanonlybeplaced withcounterparties ess thatinvolves measuring variousindicatorsincludingthequalityof tradesettlementand ty listsar JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 e otsta one than months VP (Deliv o maintained andadjustedac ’0 ’0 £’000 £’000 £’000 he More Three r ,0 92790,314 89,207 1,107 3 630 — 630 esya Total year less 7 277 — 277 3 7 409 273 136 4—64 — 64 — ——— —88,93488,934 er y 2 V 010 ersus Pa —— yment) settlement. Theprocessyment) settlement. of DVP the mitigates c ordingly otsta n hnone onethan than months o ’0 ’0 ’0 £’000 £’000 £’000 £’000 he o oe More notmore Three r . 0 304 — — 304 4 2419,3 125,198 92,130 32,421 647 4 343 — — 343 esya erTotal year year less — — 21092,130 92,130 — — ———— ———— m More than onths but 241—32,421 — 32,421 three ——— 2 009 79

THE COMPANY Notes to the Accounts continued

23. Financial instruments’ exposure to risk and risk management policies continued

(c) Credit risk continued Credit risk exposure The maximum exposure to credit risk at the year end was as follows:

2010 2009 Balance Maximum Balance Maximum sheet exposure sheet exposure £’000 £’000 £’000 £’000

Fixed assets – investments held at fair value through profit or loss 315,159 — 233,331 —

Y – investments in liquidity funds held at fair value through profit or loss 23,833 — 16,856 — Current assets

N Debtors – securities sold awaiting settlement, dividends and interest receivable and other debtors 1,460 1,460 924 924 A Cash and short term deposits 53,214 53,214 95,308 95,308

P 393,666 54,674 346,419 96,232 M Cash and short term deposits comprises balances held at banks that have a minimum credit rating of A1/P1 from Standard &

O Poor’s and Moody’s respectively (2009: same).

C The aggregate value of securities on loan at 31st March 2010 amounted to £13,037,000 (2009: £1,778,000) and the maximum value of stock on loan during the year amounted to £13,209,000 (2009: £97,207,000). Collateral is obtained by JPMorgan Asset Management and is called in on a daily basis to a value of 102% of the value of the securities on loan if that collateral is

E denominated in the same currency as the securities on loan and 105% if it is denominated in a different currency. Collateral acceptable under the Stock Lending Agreement may comprise cash in sterling, euros or US dollars, Eurozone government H securities, UK government securities and US government securities.

T (d) Fair values of financial assets and financial liabilities All financial assets and liabilities are either included in the balance sheet at fair value or the carrying amount in the balance sheet is a reasonable approximation of fair value.

80 JPMorgan European Investment Trust plc. Annual Report & Accounts 2010 24. Capital management policiesandprocedures Capital 24. ongoing basis. This review includes: The Board,withtheassistance of theManager, monitorsandreviews thebroad structureof theCompany’s capitalonan ex The inc The Company’s capitalmanagement are objectives toensure thatitwillcontinue asagoing concern andtomaximisethe Reserves Equity share capital Equity F Foreign bankloan currency Debt The Company’s capitalcomprises thefollowing: Net assets Investments heldatfairvalue excluding fundholdings liquidity Total capital Gearing h edfrise fnwsae,icuigsaleof shares from Treasury. theneedfor issuesof newshares, including – – theplannedlevel of whichtakesintoaccount gearing, theManager’s viewsonthemarket; – oreign floating currency rate note cluding liquidityfundholding ome andcapitalr discount orpremium; and the needtobuybackequityshar Board’s istolimitgearing policy withintherange 90%to120%.Gearingfor thispurposeisdefinedasinvestments, eturn toitsIncome share andGrowth classesthrough anappropriate level of gearing. s, expr es, eitherf essed asaper JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 or cancellation ortoholdinTreasury, whichtakesintoaccount theshare price c entag e o f net assets. 392,286 296,081 303,352 303,352 103.9% 315,159 88,934 8 £’000 £’ 8,934 2 2010 7,271 000 010 — 345,772 213,425 233,331 105.5% 124,551 221,221 221,221 9 32,421 £’ £’000 2009 2 2,130 7,796 000 009 81

THE COMPANY

THE COMPANY 82 for any of theabove conversions. The Company, oritsManager, makesnoadministrative charge conversion datewillmove tothenextbusinessday). and 15thMarch (ifsuchadateisnotbusinessday, thenthe Conversion sixmonthson15thSeptember dates ariseevery a investment profile tomatchtheirchanginginvestment needs in The c law, asadisposalfor UKcapitalgainstaxpurposes. classes withoutsuchc someorallofconvert theirshares intoshares of theother Shareholders in eitherof thetwoshare classes are ableto Conversion Opportunities investments inpan-european stockmarkets. long-term from capital growth adiversifiedof portfolio To provide agrowing income together potentialfor Income withthe Shares • communicated toshareholders. risks through aninvestment methodthatisclearly share price over thelonger termbytakingcarefully controlled consistent out-performance of thebenchmarkandarising C Growth Shares • manner. m Stock Exchange. Thiscapitalstructuremeansthatshareholders Each share classislistedseparatelyandtradedontheLondon i The Company hastwoshare classes,eachwithdistinct StructureCapital Sharebetween Classes StructureCapital andConversion nvestment andunderlyingassetpools. policies,objectives apital growthfrom ContinentalEuropean investments, by tax ay benefit from greater investment flexibilityinatax-efficient -efficient manner.-efficient on v JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 ersion mechanismallowsshar on v ersion beingtreated, undercurrent eholders toaltertheir S Those whoholdshares through theJPMInvestment Trust Conversion between theshare classes a www.jpmeuropean.com. for CREST Instructions holderscan conversion form whichcanbefound instruction at w instruc Mor share class. determined onthebasisof therelative netassetvaluesof each The numberof shares thatwill ariseuponconversion willbe March conversions. September conversions andinthemonthof February for I conversion notice printedonthereverse of theircertificate. form onthemainregistercertificated mustcomplete the nstructions mustbereceivednstructions inthemonthof August for lso befound atthisaddress. Those whoholdshares in hare Plan/PEP/ISA orPensionAccount mustsubmita w w e . jpmeur details concerning conversion datesandconversion tion forms can be found ontheCompany’s website: opean. c o .uk. .uk. Source: ThomsonFinancial. niiul nteIvsmn rs S ,0,2 3.1 3,609,529 13.0 15,396,970 Individuals intheInvestment Trust ISA Individuals intheInvestment Trust Investment Account rvt letBoes3,7,6 26.1 0.6 3.4 10.1 11.6 30,670,763 744,460 4,016,947 11,907,157 13,675,976 3 2 1 N T T Individuals intheInvestment Trust SIPP Retail investors holding shares directly orthrough nomineeaccounts Private Brokers Client Total Institutions Charities Insurance Companies Investment Trusts Other Institutions Pension Funds Unit Trusts at 31stMarch 2010 ShareGrowth Class Shareholder Analysis Include Includes shares below threshold of10,000 shares. Sa ominee accounts have totheirappropriate beenallocated category. otal Shar otal R vin gs products managedbygs JPMorgan. s 4 etail Holdin , 85 9 es inissue , 16 shares heldby JPMorgan plc. Elect 7 1 g s JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 2 N me fsae %Holding umber ofshares 1,2,6 100.0 117,622,068 9441642.1 49,484,196 8178257.9 68,137,872 4228312.2 14,292,803 ,8,5 4.2 4,884,950 7761015.1 17,716,150 0,6 0.6 706,363 83

THE COMPANY THE COMPANY 84 Source: ThomsonFinancial. te ntttos503039.0 5,023,033 Investment Trusts Other Institutions niiul nteIvsmn rs S 9,6 0.7 393,869 6.5 3,620,843 Individuals intheInvestment Trust ISA Individuals intheInvestment Trust Investment Account nuac opne 0,9 0.5 300,898 Insurance Companies niiul nteIvsmn rs IP1,2 0.0 32.1 15,021 18,024,068 17.5 9,816,449 3 2 1 N T T Individuals intheInvestment Trust SIPP Retail investors holding shares directly orthrough nomineeaccounts Private Brokers Client Total Institutions Charities Unit Trusts Pension Funds at 31stMarch 2010 Income Share Class Shareholder Analysis Include Includes shares below threshold of10,000 shares. Sa ominee accounts have totheirappropriate beenallocated category. otal Shar otal R vin gs products managedbygs JPMorgan. s 1 etail Holdin , 44 JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 5 es inissue ,500 shar 1 es heldby JPMorgan plc. Elect g s 2 N me fsae %Holding umber ofshares 8806851.4 28,840,668 7230048.6 27,273,000 61368100.0 56,113,668 ,1,0 4.7 2,610,500 ,6,8 10.6 5,969,387 ,2,0 9.1 5,120,401 ,1,9 9.3 5,219,199

To re-appoint Ernst&Young LLPasauditorstothe 6 of aDirector theCompany. Ferdinand Verdonck To re-elect 5 aDirectorof theCompany. Andrew Murison To re-elect 4 aDirectorof theCompany. RobinFaber re-elect To 3 8 securities –SpecialResolution Authority todisapplypre-emption rights onallotment ofrelevant THAT theDirectorsof theCompany beandtheyare hereby 7 A To consider thefollowing resolutions: Special Business To approve for theDirectors’ the RemunerationReport 2 1 purposes: 2010at12.00 noonfor thefollowingThursday, 15th July h Meeting of JPMorgan European Investment Trust plcwillbe eighty-first Annual General Notice ishereby given thatthe AnnualGeneral Meeting Notice of uthorit l tTiiyHue oe il odnE3 D on EC3N 4DH Trinity House, Tower Hill,London eld at an r Company todeterminetheir andtoauthorisetheDirectors 5% o nominal amounto shares intheCompany (‘Rights’) uptoanaggregate rights tosubscribefor, any ortoconvert securityinto, the Company toallotshares intheCompany andtogrant Companies A pursuant toandinaccordance 551of withSection the the Directorsof theCompany beandtheyare hereby THAT tothepassingof Resolution7setoutabove, subject g y the Auditors’ for theyear ended31stMarch Report 2010. To receive theAnnualAccounts theDirectors’ and Report, the c o classesof theCompany asatthedateof thepassing share her such offers or agreements as iftheauthorityconferred bef meeting priortosuchtime Company tobeheldin2011unlessrenewed atageneral Compan granted af or mightrequire shares tobeallottedorRights emuneration f ear ended31stMarch 2010. enerally andunc f y this r or eby hadnotexpir authorities pr y onclusion o f e to allot new shares – Ordinary Resolutionto allotnew shares –Ordinary the issuedshar such expir esolution, pr y ma ter suchexpir c y t allot shar or theensuingy 2006 (the‘ f y the AnnualGeneralMeetingo eviously grantedtotheDirectors), onditionally authorised,(insubstitutiono f make o £ ovided thatthisauthorityshallexpire at 360,444, representing approximately ed. e capital o y es andgrantRightsinpursuanc and sothattheDirectorsof the A f , f sa c ers oragreements whichwould t’) toexercise allthepowersof ve that the Company may ear f the Gr . JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 ow th andInc f the ome e o f f THAT theCompany begenerally ashereinafter and,subject 9 Authority toRepurchase theCompany’s Shares –SpecialResolution l providedany suchallotment, thatthispowershallbe of theActdid not applyto 561(1) Resolution 7asifSection t allot equitysecurities(withinthemeaningof560 Section of theActto empowered 570and573 pursuanttoSections shar shares andIncome shares (bothbeing classesof ordinary 693 of theAct)of itsissuedGrowth the meaningof Section tomakemarketpurchases (within Act of the 701 Section appears, unconditionally authorisedinaccordance with a theallotmentof equitysecuritiesintheCompany by (a) (b) the allotment (otherwise thanpursuanttosub theallotment(otherwise (b) i themaximumnumberof andIncome Growth shares (i) PROVIDED ALWAYS THAT imited to: he Act) forhe Act) cashpursuanttotheauthorityconferred by ex requirements of, any bodyorany regulatory stock problemsor practical underthelawsof, orthe expedient inrelationentitlementsorlocal tofractional arrangements or astheBoardmay deemnecessary shares tosuchexclusions heldbythemsubject orother the respective numbersof Growthshares andIncome sharesGrowth andIncome shares are to proportionate securities respectively attributabletotheinterests of all o way of rightsissue, toholders openoffer orotherwise such expir 7above, save thattheCompany may before Resolution of thegeneral expiry authorityconferred by the netassetvaluepershare; andshallexpire upon the June2010)ataprice notlessthan 8th capital asat (being approximately 5%of thetotalissuedshare aggregate nominal valueof approximately £360,444 paragraph (a)above) of equitysecuritiesuptoan and/or the issuedshar 14.99% of andIncomeGrowth shares whichisequalto o her expir such might require equitysecuritiestobeallottedafter the dateo conferred hereby hadnotexpired. pursuance of suchoffers oragreements asifthepower es inthecapitalo f r chang Growth shares andIncome shares where theequity 8 b uhrsdt eprhsdsalb 17,432,996eby authorisedtobepurchased shallbe ,358 y and theBoardmay allotequitysecuritiesin , e 0 respectively, or, thatnumberof ifdifferent, 505 f or an y the passingo make offers oragreements whichwouldor e y capital of therelevant share classasat territor f the Company) y f this Resolution; or otherwise howsoever; or otherwise 85

THE COMPANY THE COMPANY 86 (i) THAT 11 ofAssociation –SpecialResolutionAdoption ofnew Articles 10 continued Notice ofAnnual General Meeting Authority tomake off-market purchases –SpecialResolution and theCompan and initialledbytheChairman,beishereby approved intheform produced atthemeeting Act of the 694 Section the Ar o Investment Trust plctoenabletheCompany tomake SecuritiesLimitedandJPMorganWinterflood European THA da authority conferred bythisresolution shallexpire onthe butsothattheapproval and and performsuchcontract, Memorandum o deleting allthepr Annual GeneralMeetingof theCompany. thepassingof thisresolution or,after ifearlier, thenext of theCompany’s of Association; and Articles o (vi) v theauthorityhereby conferred shallexpire on (v) any purchase of orIncome Growth shares willbemade (iv) ( theminimumprice whichmay bepaidfor any Growth (ii) i)themaximumprice whichmay bepaidfor any ordinary iii) f f f-market purchases of itsownsecuritiespursuantto y the CompaniesA notwithstanding suchexpiry. prior totheexpir or Income shares undertheauthorityhereby conferred the Compan other general meeting priortosuchtime;and Company’s AnnualGeneralMeetingin2011oratany pur 1 sev by theDirectors)atdatefollowing notmore than asset valueperGrowthorIncome share (asdetermined in themarketfor cashatprices belowtheprevailing net independent bid; thehighestcurrentlast independenttrade;or(c) t business days immediatelypreceding theday onwhich London StockExchange Listfor DailyOfficial thefive s of themiddlemarketquotationsfor orIncome aGrowth share shallbeanamountequalto105%of theaverage respectively; or Income share shallbe5por2.5p immediately pr T he ordinary sharehe ordinary ispurchased or(b)theprice of the 4 hare takenfrom andcalculated byreference tothe JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 the proposed Contingent Purchase between contract th ticles o en days before thedateof purchase: chase o January 2012 unlesstheauthorityisrenewed 2012 atthe January f Association o f y shar f y Association which,byvir ma ovisions formerly intheCompany’s be andisher eceding thedatewhichis18months c es pursuanttoany suchcontract t y y 2006 o make ac f such authorityandma , f ar the Compan e eby authorisedtoenterinto ontract topurchaseontract Growth to betr eated aspr y tue o be amendedby f y Sec make a o visions tion 28 .Amemberentitledtoattendandvote attheMeetingmay appoint 1. reverse of theproxy form. These notesshouldberead withthenoteson inconjunction Notes .To beentitledtoattendand vote attheMeeting(andfor the 5. .You may change your proxy byreturning instructions anewproxy 4. Any instrumentappointingaproxy, tobevalid,mustlodged in 3. Aproxy does notneedtobeamemberof theCompany butmust 2. t June2010 9th Secretary. J Jonathan Latter, for andonbehalfof By orderof theBoard of Associationproduced theArticles tothemeetingand (ii) PMorgan AssetManagementLimited, (UK) Meeting ex another person(s)(whoneednotbeamemberof theCompany) to v purpose of thedeterminationbyCompany of thenumberof shar received, noneof themshallbetreated asvalidinrespectof that that share; iftheCompany isunabletodeterminewhichwaslast treated asreplacing andrevoking theotherorothersasregards received (regardless of itsdateortheof its signature) shallbe the existing Articles of Association. the existingArticles of theCompany insubstitutionfor, andtotheexclusion of, i initialled bythechairmanof themeetingfor thepurposeof separate appointmentso relevant deadlinewillbedisregarded. Where twoormore valid terminate oramendaproxy the appointmentreceived after applies inr Thedeadlineforappointment. receipt of proxy appointmentsalso accordance given ontheproxy withtheinstructions form. appointment willautomaticallybeterminated. person. Ifyou attendtheMeetinginperson,your proxy does notpreclude you from attendingtheMeetingandvoting in the Meetingfor your Appointingaproxy vote tocount. orproxies whether he proxies willexercise his/their discretion bothastohowvote and form. Ifavoting boxtheproxy ontheproxy or blank, form isleft pr appoint theChairmanoranotherperson(s)asyour proxy or who hasagr Chairman, anotherDir attend theMeetingtorepresent you. Your proxy could bethe rights attachingtodifferent shares heldbyhim. providedthe Meeting, thateachproxy isappointedtoexercise the r same shar dentification be adopted as the new Articles of Association dentification beadoptedasthenewArticles egister of membersasat6.00 p.m. twodays priortotheMeeting otes theyma o er xies usingtheproxy form are setoutinthenotestoproxy e. e. cise alloran . A e elation toamendedinstruc member canappointmore thanoneproxy inrelation to /they abstain(s)from Your voting. proxy mustattend in r eed toattendrepresent you. Detailsof howto y espec cast), membersmustbeenter y o f his rightstoattend,speakandv t ec of theonewhichislast thesameMeeting, tor o f pr o f xy ar the Compan e r ec tions. Any attemptto eived inrespectof the y or anotherperson ed ontheCompan ote atthe y’s 6. Entry totheMeetingwillberestrictedshareholders Entry andtheir 6. .Acorporation, whichisashareholder, may appointanindividual(s) 7. 10. Under Sections 338 and 338A of the 2006 Act, membersmeeting 338and338Aof UnderSections the2006Act, 10. 9 8. Members that satisfy thethresholds527of Members thatsatisfy inSection the 8. . or determining therightsof personstoattendorvote attheMeeting thistimeshallbedisregarded in entries ontheregister after atthetimespecifiedinthatnotice.adjourned Meeting, Changes to to theadjournedMeetingor, iftheCompany gives notice of the the Company’s register of membersasat6.00 p.m. twodays prior longer periodthen,tobesoentitled,membersmustentered on If,adjourned Meeting. however, theMeetingisadjournedfor a purpose of determiningthenumberof votes theymay cast)atthe t thattimewillalsoapplyforMeeting, thepurposeof determining thespecifiedtimeapplicableto original than 48hoursafter (the ‘specified time’). IftheMeetingisadjournedtoatimenotmore pr to ac c may exercise (onbehalfof thecorporation) thesamepowersas provisions of theCompaniesAct2006, eachsuchrepresentative given ontheproxy(see instructions form). Inaccordance withthe mo which thosemembersintendtomove (andwhichmay properly be entitled toreceive notice ofnotice of theMeeting, aresolution require theCompany: (i)to give, tomembersof theCompany the threshold requirements have therightto inthosesections information. of theMeetingorifitwouldinvolve thedisclosure of confidential it isundesirableintheinterests of theCompany orthegood order attending theMeetingexcept circumstances, incertain includingif business beingdealtwithattheA must causetobeanswer shar Company, provided thattheydonotsoinrelation tothesame included inthebusinessunless:(a) (inthecaseof aresolution only) AresolutionMeeting. may properly bemoved, oramatterproperly resolution) whichmay properly beincludedinthebusinessat dealt withattheMeetingan Pursuant toSec appointment Representatives shouldbringtotheMeetingevidence of their designated corporate representative. r the AGM includesany statementthattheCompany hasbeen a Companies A Compan statement placed onthewebsitemustalsobesentto members requesting thepublicationtopay itsexpenses.Any pr ceasing toholdoffice since theprevious AGM, whichthemembers (b) an and thec audit of theCompany’s accounts (includingtheAuditors’ report statement onitswebsitesettingoutan he entitlementof memberstoattendandvote (andfor the equir orporation c vailable onthewebsite oxy orproxies, withguestsadmittedonlybypriorarrangement. opose to raise at the Meeting. TheCompany cannotrequireopose toraiseattheMeeting. the adjourned Meeting. v es. Itisther ed) attheMeeting t y as itsrepresentative(s) andtovote inpersonattheMeeting ed topublishonitswebsitepursuantthisright cir y onduc ’ cumstanc s A uditors nolaterthanthetimeitmakesitsstatement , c ould ex including an t 2006 canr t ef tion 31 of theaudit)thatare tobelaidbefore theAGM; or or es c e ercise ifitwere anindividualmemberof the no longer tonominatea necessary 9A of 2006, theCompaniesAct theCompany ; onnec and/ . ed attheAGM any questionrelating tothe The businesswhichmay bedealtwithat equir y y authority underwhichitissigned. or (ii)toincludeinthebusinessbe matter (otherthanaproposed ted withA e the Compan GM whichisputbyamember y uditors o matter relating to:(a)the JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 y to publisha f the Compan . y the CRES and any adjournment(s)thereof byusingtheprocedures describedin CREST electronicproxy may appointment service dosofor theMeeting CREST memberswhowishtoappointaproxy orproxies byutilisingthe Electr 1 Inaccordance 311Aof 2006, withSection theCompaniesAct the 12. Acopy of thisnotice hasbeensentfor information onlytopersons 11. 1 1 4. 3. 5 Compan (Income). Therefore thetotalvoting rightsinthe 1.063 and (Growth) 2.078 voting numberswhich,asat31st March 2010, were shares. Voting rightsare calculatedbyreference totheshare Income 55,760,544 shares Growth and 116,297,508 consists of publication of thisNotice), theCompany’s issuedshare capital June2010(beingthelatestbusinessday priortothe 8th As at Y than thoseexpressly stated. Meeting tocommunicate withtheCompany for any purposesother members exercise attheAGM and,ifapplicable, any members’ statements, rights attheAGM, thetotalvoting rightsmembersare entitledto shar contents of thisnotice ofdetails meeting, thetotalnumberof the exercise of voting rights. under suchanagreement tothememberas togive instructions such arightordoesnotwishtoexercise hemay have it, aright someone elsesoappointed.IfaNominatedPersondoesnotha nominated tobeappointedasaproxy for theMeetingortohave agreement betweenhimandthememberbywhomhewas However, aNominatedPersonmay have arightunderan Nominated Person:theycanonlybeexercised bythemember. Person’). Therightstoappointaproxy cannotbeexercised bya rights underSec who have beennominatedbyamembertoenjoy information statement settingoutthegrounds for therequest. included inthebusinessonly)mustbeaccompanied bya clear weeksbefore and(inthecaseof theMeeting, amattertobe must bereceived bytheCompany notlaterthanthedatethatissix the request,mustbeauthenticatedbyperson(s)makingitand must beaccompanied byastatementsettingoutthegrounds for notice istobegiven orthemattertobeincludedinbusiness, copy orelectronicform, theresolution mustidentify of which v of itisfrivolous or (b)itisdefamatory any person;or(c) otherwise); ortheCompany’s withanyinconsistency enactment constitution or (whetherbyreasonit would,ifpassed,beineffective of any has any contract ofhas any withtheCompany. contract service the shar The register of interests of personsin andconnected theDirectors a (Saturda registered office duringusualbusinesshoursonany weekday appointment ar Compan thedateof thisnotice willbeavailable onthe by theCompany after exatious. Arequest madepursuanttothisrightmay beinhard vailable f ou ma onic appointment –CREST members es inr T Manual. See further instructions ontheproxy instructions Manual. Seefurther form. y e y y ys, Sunda not usean ’s websitewww.jpmclaverhouse.co.uk. ’ capital of theCompany andtheDirectors’ lettersof ar or inspec espec resolutions ormembers’ mattersof businessreceived e 300 e t tion 146 of 2006(a‘Nominated theCompaniesAct a o , ys andpublicholida 939,679. vailable forattheCompany’s inspection f tion at the Annual General Meeting. NoDirector tion attheAnnualGeneralMeeting. y which membersar elec tr onic addr ess pr ys ex e entitled toexercise voting ovided inthisNotice of c epted). Itwillalsobe ve 87

THE COMPANY THE COMPANY 88 o Resolution 11c 2009. on1stOctober articles Asnotedinparagraph1above, statement isautomaticallytr members o longer contains aclause statingthattheliabilityof the Under the2006A 2 The 2006A TheCompany’s objects 1. b which willreflectthechanges incompany lawbrought about of Association(the Company‘Articles’) isadoptingnewArticles c provisions of of the2006Actrelating theCompany tomeetings the Shareholders’ RightsRegulations whichamendedcertain s 1985Companies Act (the‘1985 hasbeenimplementedin Act’) 2006(the‘2006Act’),whichreplacedThe CompaniesAct the Appendix summar of theCompany’s are current based.Setoutbelowisa articles replaced theTable underthe1985 Aarticles onwhichmany Act Regulations2008(the‘model form which Articles) articles’), companies contained inSchedule3totheCompanies(Model tracking thewordingof for thenewmodelform public articles where appropriate, amendments,including, clarificatory 2009. alsoincludesomeothermodernisingand TheArticles onorbeforeof whichcameintoeffect the2006Act 1stOctober significanc Ar confirms theremoval of theseprovisions andadoptsthenew of 2009. associationasofarticles 1stOctober Resolution11 with allotherprovisions of itsmemorandumwhich,byvirtue Company isproposing toremove clausetogether itsobjects other provisions provide byspecial resolution. Unlessthearticles from 2009buttheCompany canremove 1stOctober these memorandum ar clauseandall other provisions theobjects inthe Act, agr subscribers andthenumbero clauseandsimplyrecordscontains anobjects thenamesof the association. Underthe2006A in bothitsmemorandumo governing theoperationsof theCompany are currently setout tages butwasfullyinforce from2009. 1stOctober Inaddition, ame intoforce inAugust 2009. UnderResolution11,the . f the 2006 Act, are treated the2006Act, of asforming theCompany’s part f y ticles. the Shareholders’ RightsRegulations andbytheprovisions eed totakeintheCompany. 28 Undersection of the2006 Limited liabilit wise, theCompany’s willbeunrestricted.The objects y JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 o e f f c o the principalchang a t f significantly r c on a ompany islimited.For existingcompanies, this c e y firms theremoval, from theCompany’s ompany’s memorandum.Theprovisions c (Article 3) (Article treated as part of the articles witheffect oftreated thearticles aspart t , the memorandumo f educ association anditsar eated asha f c shar t, thememorandumnolongert, es. es thec es whicheachsubscriber onstitutional ving mo f association alsono v ticles o ed intothe f have therefore beenremoved from thenewArticles. Ref r shareholders’ authorisationinordertoallotshares, except in Directorswillstillneedtoobtaintheusual maximum amount. ofwill have removing theeffect thisprovision relating tothe Company. bytheCompany Theadoptionof thenewArticles the maximumamountof shares thatmay beallottedbythe a capital. For existingcompanies, thisstatementisdeemedtobe longer contains astatementof theCompany’s authorisedshare a abolishestheconceptThe 2006Act of authorisedshare capital Authorised shareandunissuedshares capital 3. specific authorisations in their articles of associationto specific authorisationsintheirarticles publiccompanies donot requirecapital. Underthe2006Act, consolidate orsub-divideitsshares andtoreduce itsshare of associationtopurchasein itsarticles itsownshares, to Under the1985 acompany required Act, specific authorisations Authority topurchase own shares, consolidate andsub-divide 7. no abilityunderthe2006A one year hasbeenremoved asthere from is thenewArticles of transfers of shares for periodsnotexceeding 30days inany The pr Transfer 36and37) of shares (Articles 6. articles. consolidated shareinlinewiththemodelform certificates, contain newprovisionsThe newArticles for theissueof 18) (Article Share certificates 5. such authorisation. contain ThenewArticles authorised todosobythearticles. redemption of redeemable shares provided theyare dir the termsonwhichredeemable shares may beredeemed. The of associationneednotinclude thearticles Under the2006Act, 4 o memorandum of associationwhichare treated asforming part of association,ofarticles theprovisions of theCompany’s i liability. Anexplicitstatementof themembers’ liability limited whichincludesthestatementofof limited the2006Act, s espec nd under the 2006 Act, thememorandumof associationno nd underthe2006Act, . f provision of theCompany’s of associationsettingout articles therefore includedinthenewArticles. the Company’s of28 of section associationbyvirtue articles ectors may determinetheterms,conditions andmannerofectors erences toauthorisedshare capitalandtounissuedshares shares, and reduce share capital (Article 46)shares, and reduce share(Article capital Redeemable 11) shares (Article o t vision whichgave theabilitytosuspendregistration o f emplo yee share schemes. c t to closetheregister. hands shouldapplytodiscretionarypowers. how theprovisions giving aproxy asecond vote onashowof c member hasonevote onashowof hands.ThenewArticles behalf, eachrepresentative dulyappointedbyacorporate member appointsr member tovote againsttheresolution. Where acorporate one membertovote for theresolution andbymore thanone one vote againstiftheproxy hasbeenappointedbymore than than onememberinwhichcasetheproxy hasonevote for and vote onashowof hands unlesshehasbeenappointedbymore proxy hasbeendulyappointedbyonemember, hehasone in respectof resolutions takenonashowof hands.Where a powers of proxies andrepresentatives of corporate members The Shareholders’ thevarious RightsRegulationsclarify Voting 68) rights (Article 11. in thenewArticles. equality of votes. Accordingly, thisprovision hasbeenremoved allowthechairmantohave acastingvote intheevent of an to Rights Regulations,atradedc Pursuant tochanges brought aboutbytheShareholders’ Removal ofchairman’s vote casting 10. tomakethemconsistent withthisnewrequirement.meetings amendments totheprovisions dealingwithnotice of adjourned be giv adjourned duetolackof quorum,atleasttendays’ notice must whichrequires2006 Act whenageneral that, meetingis The Shar 59) Adjournments (Article 9. by any meansof otherelectronic participation. not onlybyattendance atsatellitemeetinglocations,butalso being held.Theamendmentsallowfor memberstoparticipate present inpersonattheprincipalplace where themeetingis of inmeetings theCompany even iftheyareparticipate not a include ofThenewArticles conducting electronicmeetings. Rights Regulationsspecificallyprovide for theholdingand A Participation inmeetingsat different places andby electronic 8. r required. to Amendmentshave beenmadetothenewArticles butshareholder theseactions; authorityisstill undertake eflect thesechanges.eflect ontain provisions theserightsandalsoclarify whichclarify mendments toprovide greater scope for membersto mendments made to the 2006 Act bytheShareholders’mendments madetothe2006Act means (Article 57) means (Article en to reconvene the meeting. The new Articles include en toreconvene ThenewArticles themeeting. eholders’ Rights Regulationsaddaprovision tothe epresentatives onits toattend meetings ompany isnolonger permitted JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 ac representative willbevalideven ifhehasnotvoted in The accordance given tothembymembers. withinstructions Regulations, proxies are expressly required tovote in Following theimplementation of theShareholders’ Rights Validity ofvotes73) (Article 13. introduced bytheShareholders’ RightsRegulations. provision isinlinewitharequirement for listedcompanies to have Thisnew therighttoattendorvote atthemeeting. a ( not more than48hoursbefore thetimeof themeeting when convening ameetingtheCompany atime, may specify m attend orvote atageneral of meeting theCompany andhow with themethodfor determiningwhichpersonsare allowedto p includeanewprovision whichwasnot The newArticles Voting record 69) date (Article 12. director (otherthanthechairman)whohasheldoffice for more 88requires thanthree years. Article any non-executive all with CombinedCodeprovision A.7.1 which recommends that forre-election 87 continues otherreasons. tocomply Article ex retire beingthenumbernearest toone-third of theboard, number of retiring directorseachyear, withthenumberto provision clearer andtoensure (asfaraspossible) aregular inordertomakethis have beenredrafted The newArticles Retirement 87 ofdirectorsby rotation (Articles and88) 16. powers. his resolution appointing himbefore permittinghimtoexercise corporate representative toproduce copy of acertified the The newAr Corporate representatives 81) (Article 15. Rights Regulations. should beinwritingasthisisrequired bytheShareholders’ 79provides thattheterminationofArticle aproxy’s authority Termination ofproxy 79) (Article authority 14. giv r is notrequired toenquire whetheraproxy orcorporate excluding of aday any thatisnotaworkingday), part bywhich epr reviously intheCompany’s of association,dealing articles person mustbeentered ontheregister of membersinorder any Underthisnewprovision, votes eachpersonmay cast. c cluding thosedirectorswhoare retiring andseeking directors should be subject to re-election at intervals of atintervals no tore-election directors shouldbesubject en ordanc esentativ new Ar to himandthatv e ticles c ticles pr with hisinstruc e has v ontain apr ovide thattheCompany canrequire a oted inac otes castbyaproxy orcorporate tions. ovision statingthattheCompany c ordanc e with instructions 89

THE COMPANY THE COMPANY 90 annum. directors’ aggregate fees from £150,000 to£175,000 per in 107,Article whichistheprovision for dealingwithconflicts 21 Ar 20 delegate astheydecideappropriate. adopted inthemodelf 102 followsArticle thenew, simplifiedapproach todelegation 102) orcommittees Delegation topersons (Article 19. amount inthecalculationof theCompany’s borrowings. Company’s share capitalandreserves andtoincludesuch o of thiswordingistoexcludetreatment. Theeffect theamount equity. Theadditionalwordingincludedreflectsthisaccounting tr powers. UnderIFRSandUKGAAPpreference shares are now issuedshouldbetreated for thepurposesof theborrowing be howanyand 100(5)(i)toclarify preference shares thatmight 100(4)(a)(iii)Additional wordinghasbeenincludedinArticles Borrowing 100) powers (Article 18. asthedirectorwhoappointedhim. restrictions 9 regarding removal of Article directors,toalternatedirectors. provision appliestheprovisions whicheffectively 92, of Article t 94 nowclarifiesthatanalternative directorisentitled Article 94, Alternate 96 directors(Articles and98) 17. p annual generalThisisinlinewithCombinedCode meeting. years ormore toputhimselfupfor re-electionateach nine Appendix continued nbreach of dutyifaconflict of interest orpotentialconflict in a c beenamendedsothatitcontains provisions relating to has andtheprovisionsaccordance of withthearticles theActs, inter interested ina body corporate inwhichthecompany is andtobeanofficer of transactions oremployed byor in bepaidexpenses(butnotdirectors’ 96isanew fees). Article o onfidential information, and attendance atboardmeetings vailability o f 8(c) makes it clear that an alternate is subject tothesame makesitclearthatanalternateissubject 8(c) rovision A.7.2. eated asadebtoncompany’s ratherthan balance sheet, . . ticle 10 our curr any preference share capitalfrom thecalculationof the (Article 107) (Article Directors’ appointments, interests andconflicts ofinterest Dir ested pr ector JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 3 ent articles, allowingdirectorstobeinterested ent articles, has beenamendedtoincrease thecapon s ’ f ovided that hehasdisclosedhisinterest in r board paperstopr emuneration (Article 103)emuneration (Article orm articles, allowingthedirectorsto orm articles, otec t a dir ector fromector being finterest arises.Theseprovisions willonlyapplywhere the of or resolutions to beconsidered orvoted onatthemeeting. counted) buthemay count inthequorumfor theothermatters on whichheisnotentitledtovote (orwhenhisvote cannotbe director cannotcount inthequorumfor amatterorresolution quorum requirement clarifiesthata for boardmeetings, The pr 113) Quorum(Article 23. been counted) onaresolution atameeting. would have beenentitledtovote (andwhosevote wouldhave the directorsentitledtoreceive notice of themeetingandwho asifithadbeenpassedatameeting if executedeffectual byall writing byalldirectors,aresolution inwritingwillbevalidand ratherthanreferringbeen amendedsothat, toaresolution in procedure for writtenresolutions 112has of directors,Article United Kingdomhave the alsobeenclarified.Inordertoclarify r by telephone, inhardcopy form. orinelectronic The clear thatnotice of aboardmeetingmay begiven personally, T Procedures regarding board meetings&resolution inwriting 22. the isavailable againwithinseven postalservice days of the newspapers andsendsaconfirmatory hardcopy notice if as who receive notices viaelectronicmeans,provided that, suchcircumstances notices onlyonthosemembers toserve in of apostalstrike. IthasbeenamendedtoallowtheCompany 134covering of service Article isthearticle notice intheevent Notice whenpostnotavailable 134) (Article 25. companies toinclude. exception hasbecome acommon exception for listed given arrangements onsubstantiallythesameterms.This pr funding for expenditure incurred indefending proceedings resolution whichrelates togivinghimanindemnityor a 114Article tovote has been amendedtoallowadirector on Permitted interests andvoting 114) (Article 24. s position givingrisetothepotentialconflict fallswithinthe equirements for givingnotice todirectorswhoare notinthe ituations covered 107. byArticle he provisions 109have of beenamendedtomakeit Article o before, intwonational theCompany alsoputsanadvert vided alltheotherdirectorshave beengiven orare tobe (Articles 109&112) (Articles meeting. oposed amendment to Article 113,oposed amendmenttoArticle whichdealswiththe Company’s name. enablethedirectorstopassaresolution tochangeArticles the Tofor byitsarticles. takeadvantage of thisprovision, thenew a i 1985,Under theCompaniesAct acompany could onlychange 146) Changeofname(Article 27. a by oneauthorisedpersoninthepresence of awitness,in than sharetowhichthesealisaffixed tobesigned certificates) s 143Article provides analternative option(intheabsence of 143 Theseal(Articles and144) 26. ts namebyspecialresolution. 2006 UndertheCompaniesAct pecific instructions from forpecific instructions thedirectors) documents(other ddition to either two directors or a director the secretary.ddition toeithertwodirectorsoradirectorthe company isabletochange itsnamebyothermeansprovided JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 91

THE COMPANY THE COMPANY 92 NAV pershare atthetimeshares were quotedex-dividend. Company were reinvested intheshares of theCompany atthe discount thanatapremium. for aninvestment company’s shares totradeata common NAV. Theoppositeof adiscount isapremium. Itismore Thediscount isshownasapercentageat adiscount. of the NAV pershare, theCompany’s shares are saidtobetrading the If theshare price of aninvestment company islowerthan Share Price Discount/Premium toNetAssetValue opening andclosingnetassets. inter Management fees andallotheroperatingexpensesexcluding T por gearing onthe net assetvalueifthemarketof the a Investments, excluding holdinginliquidityfunds,expressed as A underlying c wer mid-market valuebasis,assumingthatalldividendsreceived T Benchmark Return t Total return onnetassetvalue(‘NAV’) pershare, onabidvalue R Company atthetimeshares were quotedex-dividend. were reinvested, costs, intheshares withouttransaction of the m Total return totheinvestor, onamid-marketprice to Return toShareholders ofTermsGlossary andDefinitions that of thebenchmark. some divergence betweentheCompany’s performance and not followthisindexandconsequently, or‘track’ there may be investment universe. TheCompany’s does investment strategy not betakenaswhollyrepresentative of theCompany’s The benchmarkisarecognised indexof stockswhichshould ex-dividend. o otal ExpenseRa otal return on the benchmark, onamid-marketvalueto otal return onthebenchmark, eturn onNetAssets ctual Gearin percentage of shareholders’ of funds.Thisshowstheeffect id-market price basis,assumingthatalldividendsreceived bid valuebasis,assumingthatalldividendspaidoutbythe tf e est, expressedest, asapercentage of theaverage of the lowr oices y100%. olio were toincrease by reinvested, costs, intheshares withouttransaction of the JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 ompanies atthetimeshar g F a ti ctor o es wer e quoted balances ontheCompany’s relative performance. Measur Effect Gearing/Cash benchmark. the whichare notincludedin investing insecurities orof lesser extentthantheirweightinginthebenchmark, ofMeasures investing theeffect insecuritiestoagreater or Stock Effect Selection c viatheportfolio’sthe benchmark, weightingindifferent M Asset AllocationEffect Performance Attribution Definitions: p Analysis of howtheCompany achieved itsrecorded Performance Attribution number of shares inissue. onrelativeMeasures theeffect performance of decreasing the Share Repurchases ofMeasures aperformance theeffect fee charge orwriteback. Fee Performance r assets,andtherefore on hasanegative effect the level of total The payment of management fees andotherexpenses reduces Managemen the Company’s anditsbenchmark. portfolio Measur Currency ltv performance. elative ountries, sectors orassettypes. ountries, sectors erformance relative toitsbenchmark. easures of allocatingassetsdifferently theimpact tothosein es theimpac es the effect of currencyexposurees theeffect differences between t F ees/ Other Expenses t on r eturns o f borrowings orcash every fifteen minutesduringtradinghours. fifteen every www.jpmeuropean.co.uk, where theshare prices are updated JPMorgan AssetManagementLimited (UK) Manager andC They ma stockbroker orprofessional on aninvestor’s adviseracting behalf. The Company’s shares may bedealt indirectlythrough a Share Transactions www.jpmeuropean.co.uk Website Independent andontheCompan Times, ThetheDailyTelegraph, TheScotsman, The Stock Exchange. Themarketprices are showndailyintheFinancial Stock Exchange. TheCompany’s shares are listedontheLondon The Company’s netassetvalueispublisheddaily, viaTheLondon Market Information Gr ISIN numbers: Income: B17XWW4 Gr London StockExchange Sedolnumbers: Compan Company Numbers name inAugust 2006. this specialisation.TheCompany adopteditscurrent and structure investments. In1992 shareholders approved aformal adoptionof the Boarddecidedtoconcentrate on ContinentalEuropean became more internationallyinvested untilNovember 1988, when Fleming Universal Investment Trust. Underthisnametheportfolio investment trustuntil1982 whenthenamewaschanged to The The London andHolyrood Trust Limitedandwasageneral JPMorgan European Investment Trust plcwasformed in1929 as History Information abouttheCompany J products are allavailable ontheonlinewealthmanager service, Investment Account, J.P. Morgan ISA andJ.P. Morgan SIPP. These Bloomber Income: GB00B17XWW44 Inc JETGGrowth: LN w .P ww.jpmorganwealthmanagerplus.co.uk iied aal rwhadIcm AprilandOctober July/January Annual GeneralMeeting Dividends payable andIncome –Growth Interim Management Statementsannounced Half year results announced Half year end Final results announced Financial year end Financial Calendar ow B18JK16 owth: . ome: JETILN Mor th: GB00B18JK166 gan W y y g r also bepur egistration number:237958 Codes: ealthManag ompan y chased andheldthr S ecr er+ a etar y vailable at y website at ough theJ JPMorgan European Investment Trust AnnualReport &Accounts plc. 2010 .P. Morgan Register Registrars quotingreference 1080. ordividendchequesshouldbemadeinwritingtothe certificates Notifications of changes of address andenquiriesregarding share Telephone 3842319 number:0871 West SussexBN996DA Lancing Spencer Road Aspec Reference 1080 Equiniti Registrars administrativ JonathanLatterPlease contact for company secretarial and Telephone number:0207 742 6000 London EC2Y 9AQ 20 FinsburyStreet Finsbury Dials Company’s Registered Office T London EC4R 2GA 25 DowgateHill Cannon Bridge The A Winterflood Securities Brokers London SE12AF 1 Ernst &Young LLP A and J For queriesontheJ.P. Morgan Investment Account, J.P. Morgan ISA Savings Product Administrators on theinternetbyvisitingwww.shareview.co.uk. report. elephone 0 uditors More London Place .P trium Building t . House Mor ed shar gan SIPP 20 7 e matters. eholders canobtainfur 621 0004 A member of theAIC , see c ontac t details onthebackcover of this ther detailsontheirholdings September 31st March November June July 95

THE COMPANY

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