JPMorgan Russian Securities plc Half Year Report & Financial Statements for the six months ended 30th April 2021 KEY FEATURES Your Company Investment Objective To maximise total return to shareholders from a diversified portfolio of investments primarily in quoted Russian securities. Investment Policies To maintain a diversified portfolio of investments primarily in quoted Russian securities, or other companies which operate principally in Russia. The Company may also invest up to 10% of its gross assets in companies that operate, or are located in, former Soviet Union Republics. Investment Limits and Restrictions The Board seeks to manage some of the Company’s risks by imposing various investment limits and restrictions. • No more than 10% of the Company’s gross assets are to be invested in companies that operate, or are located in, former Soviet Union Republics. • The Company will not normally invest in unlisted securities. • At the time of purchase, the maximum permitted exposure to each individual company is 15% of the Company’s gross assets. • The Company will not normally invest in derivatives. • The Company will utilise liquidity and borrowings in a range of 10% net cash to 15% geared, in typical market conditions. • No more than 15% of gross assets are to be invested in other UK listed investment companies (including investment trusts). Benchmark The RTS index in sterling terms.1 Capital Structure At 30th April 2021, the Company’s share capital comprised 42,273,400 ordinary shares of 1p each. Continuation Vote and Tender A resolution that the Company continue as an investment trust will be put to Shareholders at the Annual General Meeting in 2022 and every five years thereafter. If the next continuation vote in 2022 is approved, the Board has committed to making a tender offer to shareholders for up to 20% of the outstanding share capital at NAV less costs, and less a discount of 2% if, over the five years from 1st November 2016, the Company’s net asset value total return in sterling on a cum income basis is below the total return of the benchmark in sterling terms. Discount Control Subject to market conditions the Board will buyback at least 6% of its issued share capital per annum. Management Company and Company Secretary The Company employs JPMorgan Funds Limited (‘JPMF’ or the ‘Manager’) as its Alternative Investment Fund Manager. JPMF delegates the management of the Company’s portfolio to JPMorgan Asset Management (UK) Limited (‘JPMAM’). FCA regulation of ‘non-mainstream pooled investments’ The Company currently conducts its affairs so that the shares issued by JPMorgan Russian Securities plc can be recommended by independent financial advisers to ordinary retail investors in accordance with the Financial Conduct Authority (FCA) rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an investment trust. Association of Investment Companies (AIC) The Company is a member of the AIC. www.theaic.co.uk Website The Company’s website, which can be found at www.jpmrussian.co.uk, includes useful information on the Company, such as daily prices, factsheets, current and historic half year and annual reports and how to buy shares in this Company. 1 See Glossary on page 26 for further details of the Company’s benchmark. JPMORGAN RUSSIAN SECURITIES PLC. HALF YEAR REPORT & FINANCIAL STATEMENTS 2021 CONTENTS Half Year Performance Financial Statements 3 Financial Highlights 17 Statement of Comprehensive Income 18 Statement of Changes in Equity 19 Statement of Financial Position Chairman’s Statement 20 Statement of Cash Flows 6 Chairman’s Statement 21 Notes to the Financial Statements Investment Review Interim Management 10 Investment Managers’ Report 24 Report 14 Sector Analysis 15 List of Investments Shareholder Information 26 Glossary of Terms and Alternative Performance Measures (‘APMs’) 28 Where to buy J.P. Morgan Investment Trusts 29 Information about the Company CONTENTS Half Year Performance FINANCIAL HIGHLIGHTS TOTAL RETURNS (INCLUDING DIVIDENDS REINVESTED) TO 30TH APRIL 2021 From 3 Years 5 Years 10 Years 1st November 4 6 Months Cumulative Cumulative Cumulative 2016 Return to shareholders1,A +23.0% +57.1% +135.2% +39.8% +79.5% Return on net assets2,A +25.0% +48.9% +122.5% +41.7% +67.1% Benchmark return1,3 +31.5% +52.0% +112.1% +39.7% +65.7% Net asset return compared to benchmark return +1.4% –6.5% –3.1% +10.4% +2.0% 1 Source: Morningstar. 2 Source: Morningstar/J.P. Morgan, using cum income net asset value per share. 3 The Company’s benchmark is the RTS index in sterling terms. Prior to 1st November 2016, the Company’s benchmark was the MSCI Russian 10/40 Equity Indices Index in sterling terms. 4 1st November 2016 is the date that the Company adopted the RTS index in sterling terms and the commencement date for the tender offer performance period. See Continuation Vote and Tender on Key Features page for further details. A Alternative Performance Measure (‘APM’). A glossary of terms and APMs is provided on page 26. HALF YEAR PERFORMANCE | 3 FINANCIAL HIGHLIGHTS SUMMARY OF RESULTS 30th April 31st October % 2021 2020 change Shareholders’ funds (£’000) 319,578 266,099 20.1 Net asset value per shareA 756.0p 613.4p 23.21 Share price 660.0p 545.0p 21.12 Share price discount to net asset value per shareA 12.7% 11.2% Shares in issue 42,273,400 43,378,912 Revenue return per share 5.58p 34.01p Net cash 2.5% 1.6% Ongoing chargesA 1.23% 1.29% 1 % change, excluding dividends paid. Including dividends, the returns would be 25.0%. 2 % change, excluding dividends paid. Including dividends, the return would be 23.0%. A Alternative Performance Measure (‘APM’). A glossary of terms and APMs is provided on page 26. HISTORIC DIVIDENDS Pence per Share 2013 2014 2015 2016 2017 2018 2019 2020 Interim — — — 6.0 15.0 20.0 25.0 25.0 Final 15.3 13.0 17.0 8.0 6.0 6.0 10.0 10.0 Total 15.3 13.0 17.0 14.0 21.0 26.0 35.0 35.0 4 | JPMORGAN RUSSIAN SECURITIES PLC. HALF YEAR REPORT & FINANCIAL STATEMENTS 2021 Chairman’s Statement CHAIRMAN’S STATEMENT Performance and Overview The turmoil in global financial markets caused by the Coronavirus (Covid-19) pandemic has thankfully subsided to a considerable extent and I am pleased to say that the performance of the Company has improved significantly in the reporting period. During the six months ended 30th April 2021 the Company’s net asset value on a total return basis increased by 25.0%, however this was 6.5% lower than the Company’s benchmark (RTS index, in sterling terms) which increased 31.5%. The Company’s total return to shareholders was +23.0%, taking into account the stock price movement and dividend paid over the period. Gill Nott The positive returns are very welcome with asset values returning nearer to pre-Covid-19 levels. Chairman The Board are pleased to have recently announced that following a review, the Company’s investment management fee arrangements with JPMorgan Funds Limited (‘JPMF’) will change. With effect from 1st November 2021, the annual investment management fee will be charged at a rate of 0.9% (previously 1.0%) on the net asset value of the Company’s portfolio. During the period a further lockdown was introduced in the UK and the majority of JPMorgan’s staff continued to work from home. The whole team at JPMorgan continued to function effectively through this very difficult period as did the Board who met remotely both formally and informally on a regular basis. The Russian economy has weathered the storm of the pandemic better than many. A rapid and effective lockdown enabled the country to open up in the Autumn of 2020 and movement and business resumed at near normal levels by year end. Worryingly, cases have been rising recently. Russia was the first country to develop and approve a vaccine, the Sputnik V vaccine, but so far only approximately 10% of the population has been vaccinated due to low take up. It remains to be seen what impact this will have in the event of any further outbreaks of Coronavirus, and the government is considering making vaccination mandatory for certain key workers. The Russian economy has benefitted from the recovery in the price of oil since the lows experienced in 2020. Government support for both businesses and families, whilst at a much lower level than in Western countries, has also helped. Inflation is now running at about 5% p.a. but the outlook for economic growth is positive at 3.8% p.a. for this year and next. The new US administration strengthened its rhetoric against Russia’s involvement in the Crimea and Ukraine and in April 2021 introduced further economic sanctions for a range of alleged malign activities, including cyberattacks and the treatment of Kremlin critic, Alexei Navalny. None of the newly introduced sanctions directly impacted the Company. The level of growth in the Company’s assets, whilst pleasingly substantial, was disappointingly well below the index. This was largely due to the portfolio being invested in quality companies with strong revenue earnings and longer term growth prospects, at a time when the market moved sharply in favour of value stocks that responded rapidly and more directly to the economic upturn. More details are given in the Investment Managers’ Report on page 10. Continuation Vote and Tender If the performance of the Company’s NAV falls short of that of the benchmark over the five years to 31st October 2021, then the Company is committed to holding a tender offer in the circumstances as detailed in the Key Features page.