TIDMCCJI
RNS Number : 3627Q
CC Japan Income & Growth Trust PLC
28 June 2022
CC JAPAN INCOME & GROWTH TRUST PLC
LEI: 549300FZANMYIORK1K98
HALF-YEARLY FINANCIAL REPORT ANNOUNCEMENT
FOR THE SIX MONTHSED 30 APRIL 2022
INVESTMENT OBJECTIVE, FINANCIAL INFORMATION AND PERFORMANCE
SUMMARY
INVESTMENT OBJECTIVE
The investment objective of the Company is to provide
shareholders with dividend income combined with capital growth,
mainly through investment in equities listed or quoted in
Japan.
FINANCIAL INFORMATION
At At
30 April 31 October
2022 2021
--------------------------------------------------- ----------- ------------
Net assets (millions) GBP217.0 GBP222.9
--------------------------------------------------- ----------- ------------
Net asset value ("NAV") per Ordinary Share
("Share") (1) 161.1p 165.4p
--------------------------------------------------- ----------- ------------
Share price 145.3p 154.0p
--------------------------------------------------- ----------- ------------
Share price discount to NAV(2) 9.8% 6.9%
--------------------------------------------------- ----------- ------------
Transferable Subscription Share price 2.00p 3.50p
--------------------------------------------------- ----------- ------------
Annualised Ongoing charges(2) 1.04% 1.05%
--------------------------------------------------- ----------- ------------
Gearing (net)(2) 20.7% 21.1%
--------------------------------------------------- ----------- ------------
(1) Measured on a cum income basis .
(2) This is an Alternative Performance Measure ('APM'). Definitions
of APMs used in this report, together with how these measures have been
calculated are disclosed in the half-yearly report.
PERFORMANCE SUMMARY
For the six For the six months
months to to
30 April 30 April
2022 2021
% change % change
NAV ex-income total return per Share(1,2) -2.1% +17.0%
---------------------------------------------- ------------- -------------------
NAV cum-income total return per Share(1,2) -0.7% +15.5%
---------------------------------------------- ------------- -------------------
Share price total return(1,2,3) -3.7% +24.0%
---------------------------------------------- ------------- -------------------
Tokyo Stock Exchange Price Index ("Topix")
total return(1) -7.8% +8.8%
---------------------------------------------- ------------- -------------------
Revenue return per Share(1) 2.37p 2.22p
---------------------------------------------- ------------- -------------------
First interim dividend per Share(1) 1.40p 1.40p
---------------------------------------------- ------------- -------------------
(1) Total returns are stated in GBP sterling, including dividend reinvested.
(2) These are APMs.
CHAIRMAN'S STATEMENT
Performance
The first half of the financial year to 30 April 2022
represented a challenging period for equities globally and Japan
was no exception. The TOPIX total return fell 7.8% over the period.
The Company outperformed the reference benchmark with the Ordinary
Share price falling by 3.7% as measured by total return, which
includes the second interim dividend distribution of 3.35p per
Ordinary Share paid to Shareholders during the period. The cum
income Net Asset Value ("NAV") declined marginally, by 0.7%.
Over the 12 month period to 30 April 2022, the cum income NAV
rose by 7.1% and the Ordinary Share price rose by 3.5%, while the
TOPIX total return fell by 5.1%. Our investment objective is to
provide Shareholders with dividend income combined with capital
growth. Since inception in December 2015, the cum income NAV has
risen by 88.4% while the Ordinary Share price, including dividends
distributed, has risen by 69.3%. Dividends paid over the
six-and-a-half-year period amount to 24.05p per Ordinary Share with
the level of dividend paid rising by 58.3% over that time.
Our mandate is differentiated from our competitors by our income
bias within the Japanese investment trust peer group. Shareholders
enjoy a respectable yield, currently in excess of 3%, covered by
revenue, while the performance of the Company over its life to date
justifies the design of the mandate and investment objective.
Income and capital returns have been enhanced through our use of
structural gearing. Richard Aston's disciplined investment approach
to stock selection and portfolio construction has rewarded
Shareholders since inception. True, we had a very difficult year in
2020, when the domestic economy in Japan all but shut down in the
wake of the Covid-19 pandemic. However, the durability of the
investment approach can be seen by examining the overall returns to
Shareholders over the Company's life, outperforming the TOPIX total
return by 44.5% over the same period.
Global equities have had to combat the fallout from the Russian
invasion of Ukraine, the economic dislocation of further lockdowns
in China and the prospect of a trajectory of tightening monetary
policy led by the US Federal Reserve to counter inflationary
pressures. Japan has not been immune to these pressures. Another
Covid-19 lockdown to tackle the Omicron variant during the first
half of our financial year further delayed the reopening of the
domestic economy. Given these conditions, discounts to NAV have
tended to widen across the peer group with our discount closing at
9.8% as of 30 April 2022, compared to 6.9% as at the financial year
ended 31 October 2021. The discount has averaged 7.6% over the six
months to 30 April 2022.
Income & Interim Dividend
Net revenue increased by nearly 7% in the first half of the
year, compared with the same period last year. This reflects a
steadily improving dividend profile for many of the portfolio
holdings. Conversely, a steep decline of the Yen against the US$
impacts the Yen / GBP cross rate and potentially reduces the
Sterling value of revenue converted from Yen on receipt.
The Board has declared an unchanged first interim dividend of
1.40p per Ordinary Share which is payable on 5 August 2022 to those
Shareholders recorded on the register as at 8 July 2022, with an
ex-dividend date of 7 July 2022.
Transferable Subscription Shares
The Company issued Transferable Subscription Shares ("TSS") as a
1 for 5 free bonus to Ordinary Shareholders in February 2021 with a
two-year life that expires on the last business day of February
2023. These can be exercised into Ordinary Shares on a 1:1 basis at
a Subscription Price of GBP1.61 PER Ordinary Share on a quarterly
basis on the last day of August and November 2022, and in February
2023. The issue was designed as an opportunity for Shareholders to
participate in any post Covid-19 normalisation of the Japanese
economy. Unfortunately, subsequent world events have conspired
against the scheme which could potentially raise GBP40 million for
the Company. While the Ordinary Share price has briefly exceeded
the Subscription Price level putting the TSS "in the money", the
level has never been sustained to facilitate their exercise.
However, the portfolio is well positioned to benefit from cyclical
recovery from any rally in Japanese equities which might create an
opportunity to TSS holders to convert their entitlements.
Outlook
Concurrent geopolitical hurdles have seemed insurmountable at
times and very frustrating for Richard Aston and the team at
Coupland Cardiff. They remain confident in the investments in the
portfolio which they believe offer the prospect of promising total
returns from both capital and income potentially bolstered by the
reopening of domestic Japanese economy in the wake of Covid-19. The
Bank of Japan ("BOJ"), as distinct from other Central Banks
continues to run loose monetary policy. If the long period of low
inflation is finally coming to an end in Japan as energy costs and
the BOJ's policies stoke price rises - the April 2022 CPI print was
2.5% YOY - and businesses are raising consumer prices (for example
by Asahi Breweries and Lawson Foods) this, in turn, ushers in the
prospect of wage rises and a change in household savers'
behaviour.
Inflation could encourage some movement of Japan's huge pool of
household savings to finally start coming back to their own
domestic equity market. Since 1989, it has largely been like
Waiting for Godot! A major attraction for Japanese domestic
depositors is that TOPIX index companies now yield 2.7%, higher
than inflation and with an earnings yield of over 8% compared to
zero from deposits. There is a significant amount of headroom for
Japanese companies to raise dividends and share buybacks
particularly given the profusion of excess cash on balance sheets.
Making a recent speech in London, Prime Minister Kishida signalled
that he intends to introduce "a new form of capitalism" including
policy measures to encourage households to move bank deposits into
investments. We shall see.
The confluence of recent geopolitical events not least China's
net zero Covid-19 policy has created considerable supply chain
disruption besides pricing and capacity issues. As the world is
pressed to realign its supply chains, this presents a major
opportunity for Japanese industry, which is well placed to step
into the breach equipped with cutting-edge technologies, production
efficiencies, strong balance sheets and a competitive foreign
exchange rate. Any uptick in international trade and sourcing to
Japan to stimulate demand can filter through to the domestic
economy. Equally, as Japan reopens its borders to travel, the weak
currency should also encourage the return of tourists, a major
driver of the economy pre Covid-19.
I reiterate that continuing corporate governance reforms and
increased shareholder activism should see greater recognition of
the inherent value in Japanese equities accompanied by increased
distributions to Japanese company shareholders notwithstanding the
uncertain global economic outlook.
Harry Wells
Chairman
27 June 2022
INVESTMENT MANAGER'S REPORT
Performance Review
The NAV of the Company declined 0.7% on a total return basis
during the period between 1 November 2021 and 30 April 2022. This
includes the second interim dividend payment of 3.35p, which
represented an increase of 4.7% over the payment of the previous
year. The dividend paid was fully covered by the income received
from the underlying holdings in the portfolio and reflects the
financial health and resilience of the individual companies. This
has been achieved despite the sluggish economic performance of
Japan which has been subject to a series of Covid-19 containment
measures until April 2022 and is evidence, we believe, of the
favourable trends that underpin this strategy.
The period under review has seen a dramatic reversal of the
underlying characteristics of companies leading the performance of
the Japanese equity market. Similar trends can be identified across
equity markets worldwide and have been simplified to an
outperformance of 'value' over 'growth'. The divergence between the
two has become more pronounced following clear indications from the
US Federal Reserve in November 2021 that it intends to take steps
to end the easy monetary policy that has arguably bolstered
valuations in certain sectors.
Portfolio attribution has been positive in this environment, and
it is especially pleasing to see the strong share price performance
of long-standing holdings in the financial sector (Mitsubishi UFJ
Financial Group, Tokio Marine Holdings and Sumitomo Mitsui
Financial Group), wholesale sector (Itochu Corp, Mitsubishi Corp)
and telecommunications sector (Nippon Telegraph & Telephone).
These holdings have made significant positive contributions to
performance. Despite facing considerable operational challenges
during the past two years, these companies have continued to
improve their returns to shareholders with increases in annual
dividends and share buyback programmes for which they are now being
recognised.
The reintroduction of a quasi-state of emergency in December
2021 slowed progress for a number of domestically focussed
businesses with the likes of Technopro, Open House and DIP
Corporation giving up the capital gains made earlier in the year.
More positively however, Nippon Parking Development, which operates
theme park and ski resort businesses along-side its parking
management business, performed well after demonstrating robust
operating performance and highlighting the opportunities once
activity normalises.
Portfolio Positioning
While macro-economic considerations help define our investment
universe, our decision making is very much on a bottom-up basis
taking into account the fundamental business growth opportunities
combined with the potential for these companies to generate an
attractive total return for their shareholders. We believe that
consistent distribution via dividends and share buybacks are key
components of this return and we have been yet again encouraged by
the trends within Japan in this regard even during the tough
challenges presented by the Covid-19 pandemic.
This underlying progress combined with the recent share price
volatility within the market continues to create competitive
opportunities for the capital within the Company. New positions
have been established in a number of small companies such as Intage
(marketing research), TRE Holdings (waste treatment and recycling)
and SB Technology (IT services and cloud solutions) after
identifying notable changes in their consideration of shareholders
and attractive valuations. We expect these companies to benefit
from a pick-up in domestic economic activity but importantly
believe that they have significant long term growth
opportunities.
Toyota Motor and Hitachi are two large capitalisation companies
that have been added to the portfolio. The former continues to
establish itself as a leader in the auto industry and reap the
rewards of years of investment in advanced technologies. Hitachi in
many ways represents one of the best examples of the transformation
of capital efficiency and corporate governance sought by former
Prime Minister Abe's series of reforms. Having effectively
restructured and refocused its sprawling and cumbersome business
empire, the company revealed a new mid-term business plan giving
significantly greater emphasis to capital allocation and
shareholder return which we believe has created a substantially
more attractive investment proposition.
The changing business environment has created new opportunities
for some companies but different challenges for others. In this
environment we exited holdings in Exeo (telecommunication
infrastructure), Hikari Tsushin (small company services) and Japan
Exchange Group (Tokyo and Osaka Stock Exchange). We also sold our
entire position in West Holdings after a strong period of sustained
performance.
Outlook
We believe that the underlying investment strategy has
demonstrated a strong recovery from the unexpected consequences of
the Covid-19 pandemic and the detrimental impact this had on some
of the portfolio holdings at the time. We have resolutely continued
to focus on high quality companies with attractive long term
business growth prospects and we are encouraged by the attention
awarded to shareholders from these companies as they announce their
results for fiscal year 2021 and make projections for the coming
year.
In the near term investors will continue to focus on the
knock-on impact to Japan of a number of international developments
- both financial and geopolitical. The most immediate repercussion
of these has been the sharp fall in the Yen against other
international currencies. The Yen's fall from Yen115/USD$ at the
beginning of March 2022 to over Yen133/USD$ is particularly
significant. This 15% decline presents both challenges and
opportunities for a country which is reliant on international
trade. The current situation has developed as a result of notably
different inflationary dynamics and monetary policy in Japan
compared to other developed regions. These factors will influence
the path of the post pandemic recovery of the Japanese economy and
potentially therefore the relative attractiveness of different
investment opportunities for this strategy.
However, these shorter-term economic developments should not
distract investors from the real and fundamental improvements in
corporate governance and shareholder return that have created the
strongest argument for holding Japanese equities over the long term
whatever the path of recovery. Corporate adherence to the more
favourable shareholder paradigm encouraged under former Prime
Minister Abe has been evident in the resilient performance during
the last two years and the rapid return to growth of both dividends
and share buybacks to complement business growth strategies offers
an exciting investment backdrop.
Richard Aston
Coupland Cardiff Asset Management LLP
27 June 2022
TOP TEN SECTORS AND HOLDINGS
AS AT 30 APRIL 2022
TOP 10 SECTORS % of net
Sector assets
------------------------------ ----------
Information & Communications 17.2
Chemicals 10.9
Banks 9.9
Electrical Appliances 9.2
Real Estate 8.6
Wholesale 7.4
Services 7.4
Transport Equipment 6.3
Insurance 5.8
Securities & Commodities 5.0
Other Sectors 10.8
Other net assets 1.5
------------------------------ ----------
Total 100.0
------------------------------ ----------
TOP 10 EQUITY HOLDINGS
% of net
Company Sector assets
------------------------------ ------------------------------ ---------
Mitsubishi UFJ Financial
Group Banks 5.1
Nippon Telegraph & Telephone Information & Communications 4.9
Sumitomo Mitsui Financial
Group Banks 4.9
DIP Corporation Services 3.9
Mitsubishi Wholesale 3.7
Itochu Corp Wholesale 3.7
Toyota Electron Transport Equipment 3.7
Softbank Corp Information & Communications 3.6
Sompo Holdings Insurance 3.4
SBI Holdings Securities & Commodities 3.3
Other equity holdings n/a 58.3
------------------------------ ------------------------------ ---------
Total holdings 98.5
Other net assets 1.5
-------------------------------------------------------------- ---------
Total 100.0
-------------------------------------------------------------- ---------
TOP TEN CONTRACTS FOR DIFFERENCE (CFDs)
Absolute
Absolute value Market
as a %
value of Value
Company Sector GBP'000 net assets GBP'000
------------------------------ ----------------------------- --------- ----------- ---------
Mitsubishi UFJ Financial
Group Banks 2,213 1.0 264
Nippon Telegraph & Telephone Information & Communications 2,117 1.0 390
Sumitomo Mitsui Financial
Group Banks 2,105 1.0 (12)
DIP Corporation Services 1,688 0.8 39
Mitsubishi Wholesale 1,608 0.7 284
Itochu Corp Wholesale 1,587 0.7 243
Toyota Electron Transport Equipment 1,586 0.7 65
Softbank Corp Information & Communications 1,555 0.7 (21)
Sompo Holdings Insurance 1,487 0.7 88
SBI Holdings Securities & Commodities 1,423 0.7 (62)
Top Ten CFDs 17,369 8.0 1,278
------------------------------------------------------------- -------- ----------- ---------
Other CFDs n/a 25,428 11.7 (626)
------------------------------ ----------------------------- --------- ----------- ---------
Total 42,797 19.7 652
------------------------------------------------------------- --------- ----------- ---------
INTERIM MANAGEMENT REPORT
The Directors are required to provide an Interim Management
Report in accordance with the Financial Conduct Authority ("FCA")
Disclosure Guidance and Transparency Rules. The Chairman's
Statement and the Investment Manager's Report in this half-yearly
report provide details of the important events which have occurred
during the period and their impact on the financial statements. The
following statements on related party transactions, going concern
and the Directors' Responsibility Statement, together, constitute
the Interim Management Report for the Company for the six months
ended 30 April 2022. The outlook for the Company for the remaining
six months of the year ending 31 October 2022 is discussed in the
Chairman's Statement and the Investment Manager's Report.
PRINCIPAL AND EMERGING RISKS AND UNCERTAINTIES
The Board is responsible for the management of risks faced by
the Company and delegates this role to the Audit and Risk Committee
(the "Committee"). The Committee carries out, at least annually, a
robust assessment of principal and emerging risks and uncertainties
and monitors the risks on an ongoing basis.
The Committee has a dynamic risk management register in place to
help identify key risks in the business and oversee the
effectiveness of internal controls and processes. The risk
management register and associated risk heat map provide a visual
reflection of the Company's identified principal and emerging
risks. These key risks fall into four categories:
-- Strategic and business risks, including risks associated with the economy;
-- Financial risks;
-- Operational risks, including business interruption due to Covid-19; and
-- Regulatory and compliance risks.
The Committee considers both the impact and the probability of
each risk occurring and ensures appropriate controls are in place
to reduce risk to an acceptable level. A detailed explanation of
the principal and emerging risks and uncertainties to the Company
are detailed in the Company's most recent Annual Report for the
year ended 31 October 2021, which can be found on the Company's
website at www.ccjapanincomeandgrowthtrust.com .
Since the publication of the 2021 Annual Report and Accounts on
11 February 2022, there continues to be increased risk levels
within the global economy as a result of the disruptive impact and
continued uncertainty caused by the Covid-19 pandemic. The Russian
invasion of Ukraine and the subsequent impact on global economies
and international relations combined with increasing levels of
inflation worldwide and the potential for rising interest rates has
undoubtedly raised investment risk. The Board has considered the
impact of the continued uncertainty on the Company's investment
objectives, investment portfolio and shareholders and, continues to
monitor the situation closely to assess and mitigate any
impact.
RELATED PARTY TRANSACTIONS
The Company's Investment Manager is Coupland Cardiff Asset
Management LLP. Coupland Cardiff Asset Management LLP is considered
a related party under the Listing Rules. The Investment Manager is
entitled to receive a management fee payable monthly in arrears at
the rate of one-twelfth of 0.75% of Net Asset Value per calendar
month. Investment management fees paid during the six-month period
to 30 April 2022 were GBP836,000. There is no performance fee
payable to the Investment Manager. There have been no changes to
the related party transactions that could have a material effect on
the financial position or performance of the Company since the year
ended 31 October 2021.
GOING CONCERN
The Board has a reasonable expectation that the Company has
adequate resources to continue in operational existence for at
least twelve months from 27 June 2022. In reaching this conclusion,
the Directors have considered the liquidity of the Company's
portfolio of investments as well as its cash position, income, and
expense flows. The Company's net assets as at 30 April 2022 were
GBP217.0 million (30 April 2021: GBP208.6 million). As at 30 April
2022, the Company held GBP213.9 million (30 April 2021: GBP207.0
million) in quoted investments. In addition, as at 30 April 2022,
the Company had gross exposure to Contracts for Difference of
GBP42.8 million (30 April 2021: GBP41.4 million). The total
expenses (excluding finance costs and taxation) for the six months
ended 30 April 2022 were GBP1.2 million (30 April 2021: GBP1.1
million). The Company has a GBP12 million (or its equivalent in
Japanese yen) bank overdraft facility with Northern Trust Company
and as at 30 April 2022, GBP1.9 million (30 April 2021: GBP2.7
million) had been utilised on the Japanese yen bank account.
As part of their assessment, the Board has performed stress
testing and liquidity analysis on the Company's portfolio of
investments, giving careful consideration to the consequences for
the Company of continuing uncertainties in the global economy. The
Russian invasion of Ukraine and the ongoing Covid-19 pandemic
including further lockdowns in Japan, have created significant
supply chain disruption, exacerbating inflationary pressures
worldwide. A prolonged and deep stock market decline would lead to
a fall in investment values and potential interruptions to cash
flow.
The Company currently has sufficient liquidity available to meet
any future obligations.
DIRECTORS' STATEMENT OF RESPONSIBILITY FOR THE HALF-YEARLY
REPORT
The Directors confirm to the best of their knowledge that:
-- The condensed set of financial statements contained within
the half-yearly financial report has been prepared in accordance
with FRS 104 Interim Financial Reporting.
-- The Interim Management Report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the FCA's Disclosure
Guidance and Transparency Rules.
Harry Wells
Chairman
For and on behalf of the Board of Directors
27 June 2022
UNAUDITED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
SIX MONTHS TO 30 APRIL 2022
Six months to 30 Six months to 30 Year ended 31 October
April 2022 April 2021 2021*
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Losses)/gains
on investments - (3,791) (3,791) - 26,199 26,199 - 39,373 39,373
Currency gains - 55 55 - 415 415 - 734 734
Income 4 4,141 - 4,141 3,861 - 3,861 8,241 - 8,241
Investment
management
fee (167) (669) (836) (156) (624) (780) (318) (1,273) (1,591)
Other expenses (327) - (327) (305) - (305) (634) - (634)
Return on ordinary
activities before
finance costs
and taxation 3,647 (4,405) (758) 3,400 25,990 29,390 7,289 38,834 46,123
Finance costs 5 (43) (98) (141) (28) (82) (110) (61) (161) (222)
Return on ordinary
activities before
taxation 3,604 (4,503) (899) 3,372 25,908 29,280 7,228 38,673 45,901
Taxation 6 (414) - (414) (386) - (386) (824) - (824)
Return on ordinary
activities after
taxation 3,190 (4,503) (1,313) 2,986 25,908 28,894 6,404 38,673 45,077
--------------------- ----- -------- -------- -------- -------- -------- -------- --------
Return per Ordinary
Share - undiluted 10 2.37p (3.34)p (0.97)p 2.22p 19.23p 21.45p 4.75p 28.70p 33.45p
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Return per Ordinary
Share - diluted 10 1.97p (2.79)p (0.82)p 2.22p 19.23p 21.45p 3.96p 23.92p 27.88p
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
*Audited
The total column of the Income Statement is the profit and loss account
of the Company. All revenue and capital items in the above statement derive
from continuing operations.
Both the supplementary revenue and capital columns are prepared under guidance
from the Association of Investment Companies. There is no other comprehensive
income and therefore the return for the period is also the total comprehensive
income for the period.
The Company's "Ordinary Share - diluted" is due to the potential dilutive
effect through exercise of 26,946,122 Transferable Subscription Shares issued
on 18 February 2021.
UNAUDITED CONDENSED STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2022
30 April 30 April 31 October
2022 2021 2021*
Note GBP'000 GBP'000 GBP'000
------------------------------------------------------- ------ ----------- ------------ --------------------
Fixed assets
Investments at fair value through profit
or loss 3 213,896 207,036 220,271
------------------------------------------------------- ------ ----------- ------------ --------------------
Current assets
Cash collateral in respect of Contracts
for Difference ("CFDs") 43 - -
Amounts due in respect of CFDs 2,311 5,534 443
Other debtors 3,260 3,121 3,264
5,614 8,655 3,707
------------------------------------------------------- ------ ----------- ------------ --------------------
Creditors: amounts falling due within
one year
Cash and cash equivalents - Bank overdraft (226) (5,346) (48)
Cash collateral in respect of CFDs - (242) (18)
Amounts payable in respect of CFDs (1,659) (1,226) (738)
Other creditors (581) (304) (304)
(2,466) (7,118) (1,108)
------------------------------------------------------- ------ ----------- ------------ --------------------
Net current assets 3,148 1,537 2,599
------------------------------------------------------- ------ ----------- ------------ --------------------
Total assets less current liabilities 217,044 208,573 222,870
------------------------------------------------------- ------ ----------- ------------ --------------------
Net assets 217,044 208,573 222,870
------------------------------------------------------- ------ ----------- ------------ --------------------
Capital and reserves
Share capital 8 1,348 1,348 1,348
Share premium 98,067 98,067 98,067
Special reserve 64,671 64,671 64,671
Capital reserve
-Revaluation gains on investment held
at period end 19,673 23,243 26,628
-Other capital reserve 27,665 15,833 25,213
Revenue reserve 5,620 5,411 6,943
Total Shareholders' funds 217,044 208,573 222,870
------------------------------------------------------- ------ ----------- ------------ --------------------
NAV per share - Ordinary Shares -
undiluted (pence) 11 161.09p 154.81p 165.42p
------------------------------------------------------- ------ ----------- ------------ --------------------
NAV per share - Ordinary Shares -
diluted (pence) 11 161.08p 155.84p 164.68p
------------------------------------------------------- ------ ----------- ------------ --------------------
*Audited
Approved by the Board of Directors and authorised for issue on 27 June
2022 and signed on their behalf by:
Harry Wells
Director
CC Japan Income & Growth Trust plc is incorporated in England and Wales
with registration number 9845783.
UNAUDITED CONDENSED STATEMENT OF CHANGES IN EQUITY
SIX MONTHS TO 30 APRIL 2022
Share Share Special Capital Revenue
capital premium reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --- --------- --------- ------------ --------------- ----------- --------
Balance at 1 November
2021 1,348 98,067 64,671 51,841 6,943 222,870
Return on ordinary
activities after taxation - - - (4,503) 3,190 (1,313)
Dividends paid - - - - (4,513) (4,513)
Balance at 30 April
2022 1,348 98,067 64,671 47,338 5,620 217,044
--------------------------------- --------- --------- ------------ --------------- ----------- --------
SIX MONTHS TO 30
APRIL 2021
Share Share Special Capital Revenue
capital premium reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --- --------- --------- ------------ --------------- ----------- --------
Balance at 1 November
2020 1,348 98,437 64,671 13,168 6,736 184,360
Return on ordinary
activities after taxation - - - 25,908 2,986 28,894
Dividends paid - - - - (4,311) (4,311)
Transferable Subscription
Share issue costs - (370) - - - (370)
Balance at 30 April
2021 1,348 98,067 64,671 39,076 5,411 208,573
--------------------------------- --------- --------- ------------ --------------- ----------- --------
Year ended 31 October
2021 (Audited)
Share Share Special Capital Revenue
capital premium reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --- --------- --------- ------------ --------------- ----------- --------
Balance at 1 November
2020 1,348 98,437 64,671 13,168 6,736 184,360
Return on ordinary
activities after taxation - - - 38,673 6,404 45,077
Dividends paid - - - - (6,197) (6,197)
Transferable Subscription
Share issue costs - (370) - - - (370)
Balance at 31 October
2021 1,348 98,067 64,671 51,841 6,943 222,870
--------------------------------- --------- --------- ------------ --------------- ----------- --------
The Company's distributable reserves consist of the Special reserve,
Revenue reserve and Capital reserve attributable to realised profits.
UNAUDITED CONDENSED STATEMENT OF CASH
FLOWS
SIX MONTHS TO 30 APRIL 2022
Six months Six months Year ended
to 30 April to 30 April 31 October
2022 2021 2021*
GBP'000 GBP'000 GBP'000
---------------------------------------------- ------------- ------------- ------------
Operating activities cash flows
Return on ordinary activities before finance
costs and taxation** (758) 29,390 46,123
Adjustment for:
Losses/(gains) on investments 4,631 (18,381) (28,306)
Movement in CFD transactions (1,008) (5,980) (1,601)
Decrease/(increase) in other debtors 31 (84) (293)
Increase in other creditors 132 87 89
Tax withheld on overseas income (414) (386) (824)
------------- ------------- ------------
Net cash flow from operating activities 2,614 4,646 15,188
---------------------------------------------- ------------- ------------- ------------
Investing activities cash flows
Purchases of investments (18,053) (58,804) (100,687)
Proceeds from sales of investments 19,912 51,139 89,778
Net cash flow from/ (used in) investing
activities 1,859 (7,665) (10,909)
---------------------------------------------- ------------- ------------- ------------
Financing activities cash flows
Transferable Subscription Share issue
costs paid - (370) (370)
Equity dividends paid (4,513) (4,311) (6,197)
Finance costs paid (138) (109) (223)
Net cash used in financing activities (4,651) (4,790) (6,790)
Decrease in cash and cash equivalents (178) (7,809) (2,511)
------------- ------------- ------------
Cash and cash equivalents at the beginning
of the period (48) 2,463 2,463
Cash and cash equivalents at the end
of the period (226) (5,346) (48)
---------------------------------------------- ------------- ------------- ------------
*Audited
** Cash inflow from dividends was GBP3,758,000 (30 April 2021: GBP3,418,000
and 31 October 2021: GBP7,083,000).
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. GENERAL INFORMATION
CC Japan Income & Growth Trust plc (the "Company") was
incorporated in England and Wales on 28 October 2015 with
registered number 9845783, as a closed-ended investment company.
The Company commenced its operations on 15 December 2015. The
Company intends to carry on business as an investment trust within
the meaning of Chapter 4 of Part 24 of the Corporation Tax Act
2010.
The Company's investment objective is to provide Shareholders
with dividend income combined with capital growth, mainly through
investment in equities listed or quoted in Japan.
The principal activity of the Company is that of an investment
trust company within the meaning of section 1158 of the Corporation
Tax Act 2010.
The Company's shares were admitted to the Official List of the
UK Listing Authority with a premium listing on 15 December 2015. On
the same day, trading of the Ordinary Shares commenced on the
London Stock Exchange.
The Company's registered office is 6(th) Floor, 125 London Wall,
London, EC2Y 5AS.
2. ACCOUNTING POLICIES
The interim financial statements have been prepared in
accordance with FRS 104 Interim Financial Reporting and the
Statement of Recommended Practice "Financial Statements of
Investment Trust Companies and Venture Capital Trusts" issued by
the Association of Investment Companies in April 2021.
This half-yearly Financial Report is unaudited and does not
include all the information required for full annual financial
statements. The half-yearly Financial Report should be read in
conjunction with the Annual Report and Accounts of the Company for
the year ended 31 October 2021. The Annual Report and Accounts for
the year ended 31 October 2021 were prepared in accordance with FRS
102 The Financial Reporting Standard applicable in the UK and
Republic of Ireland ("FRS 102") and received an unqualified audit
report. The financial information for the year ended 31 October
2021 in this half-yearly Financial Report has been extracted from
the audited Annual Report and Accounts for that year end. The
accounting policies in this Half-yearly Financial Report are
consistent with those applied in the Annual Report and Accounts for
the year ended 31 October 2021.
The interim financial statements have been presented in GBP
sterling (GBP).
3. INVESTMENTS
As at 31
As at 30 As at 30 October
April 2022 April 2021 2021
(Unaudited) (Unaudited) (Audited)
------------------------------------ -------- ------------ ------------ ----------
GBP'000 GBP'000 GBP'000
------------------------------------ -------- ------------ ------------ ----------
Investments listed on a recognised
overseas investment exchange 213,896 207,036 220,271
------------------------------------ ------------ ----------
213,896 207,036 220,271
------------------------------------ -------- ------------ ------------ ----------
Fair Value Measurements of Financial Assets and Financial Liabilities
The financial assets and liabilities are either carried in the balance
sheet at their Fair Value, or the balance sheet amount is a reasonable
approximation of Fair Value (due from brokers, dividends receivable,
accrued income, due to brokers, accruals and cash and cash equivalents).
The valuation techniques for investments and derivatives used by the
Company are explained in the accounting policies notes 2 (b and c) in
the Annual Report and Accounts for the year ended 31 October 2021.
The table below sets out fair value measurements using fair value hierarchy.
Level 1 Level 2 Level 3 Total
30 April 2022 (Unaudited) GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- ------------ ------------ ----------
Assets:
Equity investments 213,896 - - 213,896
CFDs - Fair Value gains - 2,311 - 2,311
Liabilities:
CFDs - Fair Value losses - (1,659) - (1,659)
------------------------------------ -------- ------------ ------------
Total 213,896 652 - 214,548
------------------------------------ -------- ------------ ------------ ----------
Level 1 Level 2 Level 3 Total
30 April 2021 (Unaudited) GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- ------------ ------------ ----------
Assets:
Equity investments 207,036 - - 207,036
CFDs - Fair Value gains - 5,534 - 5,534
Liabilities:
CFDs - Fair Value losses - (1,226) - (1,226)
------------------------------------ -------- ------------ ------------
Total 207,036 4,308 - 211,344
------------------------------------ -------- ------------ ------------ ----------
Level 1 Level 2 Level 3 Total
31 October 2021 (Audited) GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- ------------ ------------ ----------
Assets:
Equity investments 220,271 - - 220,271
CFDs- Fair Value gains - 443 - 443
Liabilities:
CFDs - Fair Value losses - (738) - (738)
------------------------------------ -------- ------------ ------------ ----------
Total 220,271 (295) - 219,976
------------------------------------ -------- ------------ ------------ ----------
There were no transfers between levels during the period (2021: same).
Categorisation within the hierarchy has been determined on the basis
of the lowest level input that is significant to the Fair Value measurement
of the relevant asset as follows:
Level 1 - valued using quoted prices in active markets for identical
assets.
Level 2 - valued by reference to valuation techniques using observable
inputs including quoted prices.
Level 3 - valued by reference to valuation techniques using inputs that
are not based on observable market data. There are no Level 3 investments
as at 30 April 2022 (30 April 2021: nil and 31 October 2021: nil).
4. INCOME
Six months Six months Year ended
to 30 April to 30 April 31 October
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
------------------------------ ----------- ------------- ------------- -------------
GBP'000 GBP'000 GBP'000
------------------------------------------- ------------- ------------- -------------
Income from investments:
Overseas dividends 4,141 3,861 8,241
------------- ------------- -------------
Total 4,141 3,861 8,241
------------------------------------------- ------------- ------------- -------------
Overseas dividend income is translated into sterling on receipt.
5. FINANCE COSTS
Six months Six months Year ended
to 30 April to 30 April 31 October
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
--------------------------------- ----------- ------------- ------------- ------------
GBP'000 GBP'000 GBP'000
---------------------------------------------- ------------- ------------- ------------
Interest paid - 100% charged to revenue 19 8 21
CFD finance cost and structuring fee -
20% charged to revenue 24 20 39
Structuring fees - 20% charged to revenue - - 1
------------- ------------- ------------
43 28 61
---------------------------------------------- ------------- ------------- ------------
CFD finance cost and structuring fee -
80% charged to capital 96 80 157
Structuring fees - 80% charged to capital 2 2 4
------------- ------------- ------------
98 82 161
---------------------------------------------- ------------- ------------- ------------
Total finance costs 141 110 222
---------------------------------------------- ------------- ------------- ------------
6. TAXATION
Six months to 30 Six months to 30
April 2022 April 2021
(Unaudited) (Unaudited)
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- -------- -------- -------- --------
Analysis of tax charge in the
period:
Overseas withholding tax 414 - 414 386 - 386
-------- -------- -------- -------- --------
Total tax charge for the period 414 - 414 386 - 386
--------------------------------- -------- -------- -------- -------- -------- --------
Year ended 31 October
2021
(Audited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- --------
Analysis of tax charge in the
year:
Overseas withholding tax 824 - 824
-------- --------
Total tax charge for the year 824 - 824
--------------------------------- -------- -------- --------
7. INTERIM DIVID
During the six months ended 30 April 2022, the Company paid a second
interim dividend of 3.35p per Ordinary Share in respect of the year
ended 31 October 2021. This was paid in substitution for a final dividend.
These interim financial statements have been prepared in accordance
with the requirements of section 838 of the Companies Act 2006 and constitute
the Company's interim accounts for the purpose of justifying the payment
of an interim dividend for the year ending 31 October 2022.
The Directors have declared an interim dividend for the six months ended
30 April 2022 of 1.40p (2021: 1.40p) per Ordinary Share. The dividend
will be paid on 5 August 2022, to Ordinary Shareholders on the register
at the close of business on 8 July 2022. The Ordinary Shares will go
ex-dividend on 7 July 2022 and the dividend will be funded from the
Company's Revenue reserve.
8. SHARE CAPITAL
Share capital represents the nominal value of shares that have been
issued. The share premium includes any premiums received on issue of
share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium.
As at 30 April 2022 As at 30 April 2021
(Unaudited) (Unaudited)
No. of shares GBP'000 No. of shares GBP'000
-------------------------------- -------------- -------- -------------- --------
Allotted, issued & fully paid:
Ordinary Shares of 1p
Opening balance 134,730,610 1,348 134,730,610 1,348
-------------- -------- -------------- --------
Closing balance 134,730,610 1,348 134,730,610 1,348
-------------------------------- -------------- -------- -------------- --------
As at 31 October
2021 (Audited)
No. of shares GBP'000
-------------------------------- -------------- --------
Allotted, issued & fully paid:
Ordinary Shares of 1p
Opening balance 134,730,610 1,348
-------------- --------
Closing balance 134,730,610 1,348
-------------------------------- -------------- --------
Since the period end, the Company has issued no further Ordinary Shares,
with 134,730,610 Ordinary Shares in issue as at 27 June 2022. There
have been no shares subscribed for by Subscription Shareholders.
9. FINANCIAL COMMITMENTS
As at 30 April 2022 there were no commitments in respect of unpaid calls
and underwritings (30 April 2021: nil and 31 October 2021: nil).
10. RETURN PER ORDINARY SHARE
Total return per Ordinary Share is based on the return on ordinary activities,
including income, for the period after taxation of GBP1,313,000 (30 April
2021: GBP28,894,000 and 31 October 2021: GBP45,077,000).
Based on the weighted average number of Ordinary Shares-undiluted in issue
for the period to 30 April 2022 of 134,730,610 (30 April 2021: 134,730,610
and 31 October 2021: 134,730,610) and Ordinary Shares-diluted 161,676,732
(30 April 2021: 134,730,610 and 31 October 2022: 161,676,732) in issue
for the period to 30 April 2022. The Company's Ordinary Shares-diluted
is due to the issuance of 26,946,122 Transferable Subscription Shares.
The returns per Ordinary Share were as follows:
As at 30 April As at 30 April As at 31 October
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
--------------------- -------- -------- -------- ---------- -------- ------- -------- -------- -------
Return per Ordinary
Share-undiluted 2.37p (3.34)p (0.97)p 2.22p 19.23p 21.45p 4.75p 28.70p 33.45p
--------------------- -------- -------- -------- ---------- -------- ------- -------- -------- -------
Return per Ordinary
Share-diluted 1.97p (2.79)p (0.82)p 2.22p 19.23p 21.45p 3.96p 23.92p 27.88p
--------------------- -------- -------- -------- ---------- -------- ------- -------- -------- -------
11. NET ASSET VALUE PER SHARE
Total shareholders' funds and the net asset value ("NAV") per share attributable
to the Ordinary Shareholders at the period end calculated in accordance
with the Articles of Association were as follows:
NAV per Ordinary Share - undiluted
As at 31
As at 30 As at 30 April October
April 2022 2021 2021
(Unaudited) (Unaudited) (Audited)
----------------------------------------- ------------------ --------------- ------------ --------------
GBP'000 GBP'000 GBP'000
------------------------------------------------------ ----------------- ----------------- --------------
Net Asset Value (GBP'000) 217,044 208,573 222,870
------------------------------------------------------ ----------------- ----------------- --------------
Ordinary Shares in issue 134,730,610 134,730,610 134,730,610
------------------------------------------------------ ----------------- ----------------- --------------
NAV per Ordinary Share-undiluted 161.09p 154.81p 165.42p
------------------------------------------------------ ----------------- ----------------- --------------
NAV per Ordinary Share - diluted
On 16 February 2021, the Company announced an issue of 26,946,122 TSS
at a price of 161p. The first exercise date for the Transferable Subscription
Shares was 31 May 2021 and quarterly thereafter until the final exercise
date of 28 February 2023. On the assumption that the Transferable Subscription
Shares had been fully exercised and paid for as the period end, the dilutive
effect on the Company's NAV would be as follows:
As at 31
As at 30 As at 30 April October
April 2022 2021 2021
------------------------------------------------------ ----------------- ----------------- --------------
(Unaudited) (Unaudited) (Audited)
------------------------------------- --------------- ----------------- ----------------- --------------
Transferable Subscription shares issued 26,946,122 26,946,122 26,946,122
Proceeds from issue of transferable
subscription shares at issue price
of 161p 43,383 43,383 43,383
Net Asset Value adjusted for transferable
subscription shares 260,427 251,956 266,253
Ordinary Shares - post exercise transferable
subscription shares 161,676,732 161,676,732 161,676,732
------------------------------------------------------ ----------------- ----------------- --------------
NAV per Ordinary Share-diluted 161.08p 155.84p 164.68p
------------------------------------------------------ ----------------- ----------------- --------------
12. RELATED PARTY TRANSACTIONS
Transactions with the Investment Manager and the Alternative
Investment Fund Investment Manager ("AIFM")
The Company provides additional information concerning its
relationship with the Investment Manager and AIFM, Coupland Cardiff
Asset Management LLP. Investment Management fees for the six month
period ended 30 April 2022 were GBP836,000 (30 April 2021:
GBP780,000 and 31 October 2021: GBP1,591,000). The Investment
Management fees outstanding at the period ended 30 April 2022 were
GBP133,000 (30 April 2021: GBP131,000 and 31 October 2021:
GBP141,000).
Research purchasing agreement
The Markets in Financial Instruments Directive II ("MiFID II")
treats investment research provided by brokers and independent
research providers as a form of "inducement" to investment managers
and requires research to be paid separately from execution costs.
In the past, the costs of broker research were primarily borne by
the Company as part of execution costs through dealing commissions
paid to brokers. With effect from 3 January 2018, this practice has
changed, as brokers subject to MiFID II are now required to price,
and charge for, research separately from execution costs. Equally,
the rules require the Investment Manager, as an investment Manager,
to ensure that the research costs borne by the Company are paid for
through a designated Research Payment Account ("RPA") funded by
direct research charges to the Investment Manager's clients,
including the Company.
The research charge for the year 1 January 2021 to 31 December
2021, as agreed between the Investment Manager and the Company, was
GBP28,000 (31 December 2020: GBP30,000). The research charge for
the year 1 January 2022 to 31 December 2022, as budgeted by the
Investment Manager, is GBP34,000.
Directors' fees and shareholdings
Directors' fees are payable at the rate of GBP26,000 per annum
for each Director other than the Chairman, who is entitled to
receive GBP39,000. The Chairman of the Audit and Risk Committee is
also entitled to an additional fee of GBP5,330 per annum and the
Senior Independent Director ("SID") is entitled to an additional
fee of GBP1,040.
The Directors had the following ordinary shareholdings in the
Company, all of which were beneficially owned.
Transferable Transferable Ordinary Transferable
Ordinary Subscription Ordinary Subscription Shares Subscription
Shares Shares* Shares Shares* as at 31 Shares* as
as at 30 as at 30 as at 30 as at 30 October at 31 October
April 2022 April 2022 April 2021 April 2021 2021 2021
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited)
--------------------- ------------ --------------- ------------ --------------- ---------- ----------------
Harry Wells 40,000 58,000 40,000 8,000 40,000 58,000
Kate Cornish-Bowden 40,000 20,000 40,000 8,000 40,000 8,000
Peter Wolton 67,250 13,449 67,250 13,449 67,250 13,449
June Aitken** 40,000 - - - - -
Craig Cleland** 40,000 - - - - -
John Scott*** - - 62,500 12,500 62,500 12,500
--------------------- ------------ --------------- ------------ --------------- ---------- ----------------
* On 18 February 2021 Transferable Subscription Shares were
issued on a 1 for 5 basis to all Shareholders as a free bonus.
**June Aitken and Craig Cleland were appointed to the Board on 1
February 2022.
*** John Scott retired from the Board on 22 March 2022.
13. POST BALANCE SHEET EVENTS
There are no post balance sheet events other than as disclosed
in this half-yearly financial report.
14. STATUS OF THIS REPORT
These interim financial statements are not the Company's
statutory accounts for the purposes of section 434 of the Companies
Act 2006. They are unaudited. The half-yearly financial report will
be made available to the public at the registered office of the
Company.
The report will also be available on the Company's website
www.ccjapanincomeandgrowthtrust.com
The information for the year ended 31 October 2021 has been
extracted from the last published audited financial statements,
unless otherwise stated. The audited financial statements have been
delivered to the Registrar of Companies. The Auditors reported on
those accounts and their report was unqualified, did not draw
attention to any matters by way of emphasis and did not contain a
statement under sections 498(2) or 498(3) of the Companies Act
2006.
GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES ('APM')
Administrator
The Company's administrator, the current such administrator
being Sanne Fund Services (UK) Limited. Sanne Group plc acquired
the PraxisIFM Funds Business and subsequently the name of the
Company's Administrator and Company Secretary changed from
PraxisIFM Fund Services (UK) Limited to Sanne Fund Services (UK)
Limited.
AIC
Association of Investment Companies.
Alternative Investment Fund or "AIF"
An investment vehicle under AIFMD. Under AIFMD (see below) the
Company is classified as an AIF.
Alternative Investment Fund Managers' Directive or "AIFMD"
A European Union Directive which came into force on 22 July 2013
and has been implemented in the UK.
Annual General Meeting or "AGM"
A meeting held once a year, which Shareholders are entitled to
attend, and where they can vote on resolutions to be put forward at
the meeting and ask Directors questions about the Company.
CFD or Contract for Difference
A financial instrument, which provides exposure to an underlying
equity with the provider financing the cost to the buyer with the
buyer receiving the difference of any gain or paying for any
loss.
Custodian
An entity that is appointed to safeguard a company's assets.
Depositary
Certain AIFs must appoint depositaries under the requirements of
AIFMD. A depositary's duties include, inter alia, safekeeping of
the Company's assets and cash monitoring. Under AIFMD the
depositary is appointed under a strict liability regime.
Dividend
Income receivable from an investment in shares.
Discount (APM)
The amount, expressed as a percentage, by which the share price is less
than the NAV per Ordinary Share.
As at 30 April 2022
----------------------------------------- ----------------------- ----------
NAV per Ordinary Share a 161.1
Share price b 145.3
Discount (b÷a)-1 9.8%
------------------------------------------ ------------------------ ----------
Ex-dividend date
The date from which you are not entitled to receive a dividend
which has been declared and is due to be paid to Shareholders.
Financial Conduct Authority or "FCA"
The independent body that regulates the financial services
industry in the UK.
Gearing (APM)
Borrowing to increase exposure designed to increase income and capital
returns, but which can also magnify losses. The Company may be geared
through the CFDs and if utilised, the overdraft facility with The Northern
Trust Company.
As at 30 April 2022 GBP'000
---------------------------------------------- ------------------- -------------
CFD Notional Market Value a 42,797
Non-base cash borrowings b 2,089
NAV c 217,044
Gearing (net) ((a+b)/c) 20.7%
----------------------------------------------- -------------------- -------------
Gross assets (APM)
The Company's total assets including any leverage amount.
Index
A basket of stocks which is considered to replicate a particular
stock market or sector.
In the money
The Transferable Subscription Shares are "In the Money" when the
Ordinary Share price trades at a level that exceeds the
Subscription Price.
Investment trust
A closed end investment company which is based in the UK and
which meets certain tax conditions which enables it to be exempt
from UK corporation tax on its capital gains. This Company is an
investment trust.
Leverage (APM)
Under the Alternative Investment Fund Managers Directive ("AIFMD"),
leverage is any method by which the exposure of an Alternative Investment
Fund ("AIF") is increased through borrowing of cash or securities or
leverage embedded in derivative positions.
Under AIFMD, leverage is broadly similar to gearing, but is expressed
as a ratio between the assets (excluding borrowings) and the net assets
(after taking account of borrowing). Under the gross method, exposure
represents the sum of the Company's positions after deduction of cash
balances, without taking account of any hedging or netting arrangements.
Under the commitment method, exposure is calculated without the deduction
of cash balances and after certain hedging and netting positions are
offset against each other. Under both methods the AIFM has set current
maximum limits of leverage for the Company of 200%.
Gross Commitment
As at 30 April 2022 GBP'000 GBP'000
------------------------------------ --------------- ------------ --------------
Security Market value a 213,896 213,896
CFD Notional market value b 42,797 42,797
Cash and cash equivalents c 2,583 325
NAV d 217,044 217,044
Leverage (a+b+c)/d 119% 118%
------------------------------------- -------------- ------------ --------------
Market liquidity
The extent to which investments can be bought or sold at short
notice.
Net assets
An investment company's assets less its liabilities.
Net Asset Value (NAV) per Ordinary Share
Net assets divided by the number of Ordinary Shares in issue
(excluding any shares held in treasury).
Ordinary Shares
The Company's Ordinary Shares in issue.
Ongoing charges (APM)
A measure, expressed as a percentage of average NAV, of the regular,
recurring annualised costs of running an investment company.
Period ended 30 April 2022
--------------------------------------- ---------------- ----------------
Average NAV a 223,547,138
Annualised expenses b 2,326,000
Ongoing charges (b÷a) 1.04%
---------------------------------------- ----------------- ----------------
Out of the money
The Transferable Subscription Shares are "out of the money" when
the Ordinary Shares trade lower than the Subscription Price.
Portfolio
A collection of different investments constructed and held in
order to deliver returns to Shareholders and to spread risk.
Premium (APM)
The amount, expressed as a percentage, by which the share price
is more than the Net Asset Value per share.
Share buyback
A purchase of a company's own shares. Shares can either be
bought back for cancellation or held in treasury.
Share Price
The price of a share as determined by buyers and sellers on the
relevant stock exchange.
Subscription Price
The Subscription Price is set at GBP1.61 being the price that
holders of the Transferable Subscription Shares can pay to exercise
these shares into New Ordinary Shares of the Company on a quarterly
basis up until the end of February 2023.
Transferable Subscription Shares
A Transferable Subscription Share confers the right (but not the
obligation) to subscribe for one Ordinary Share on exercise of the
rights attached to the Transferable Subscription Share and on
payment of the Subscription Price of GBP1.61 at the end of each
calendar quarter between 31 May 2021 and 28 February 2023.
Treasury shares
A company's own shares held in Treasury account by the Company,
but which are available to be resold in the market.
Total return (APM)
A measure of performance that includes both income and capital returns.
This takes into account capital gains and reinvestment of dividends paid
out by the Company into its Ordinary Shares on the ex-dividend date.
Period ended 30 April 2022 Share price NAV
------------------------------------------ --------- ---------------- ---------
Opening at 1 November 2021 (in
pence) a 119.5 136.8
Closing at 30 April 2022 (in
pence) b 145.3 161.1
Price movement (b÷a)-1 c 21.5% 17.8%
Dividend reinvestment d -25.2% -18.5%
Total return (c+d) -3.7% -0.7%
------------------------------------------ ---------- ---------------- ---------
Volatility
A measure of how much a share moves up and down in price over a
period of time.
COMPANY INFORMATION
DIRECTORS, INVESTMENT MANAGER AND ADVISERS
DIRECTORS INVESTMENT MANAGER
Harry Wells (Chairman) Coupland Cardiff Asset Management
Kate Cornish-Bowden (Audit & Risk LLP
Committee Chair) 31-32 St James's Street
Peter Wolton (Senior Independent Director) London
June Aitken SW1A 1HD
Craig Cleland Website - www.couplandcardiff.com
BROKER REGISTERED OFFICE*
Peel Hunt LLP 6th Floor, 125 London Wall
100 Liverpool Street London
London EC2Y 5AS
EC2M 2AT
DEPOSITARY AND CUSTODIAN COMPANY SECRETARY AND ADMINISTRATOR
Northern Trust Investor Services Limited Sanne Fund Services (UK)
50 Bank Street Limited (formerly PraxisIFM
London Fund Services (UK) Limited)
E14 5NT 6th Floor, 125 London Wall
London
EC2Y 5AS
Website - www.sannegroup.com
REGISTRAR AUDITOR
Link Group Ernst & Young LLP
10th Floor Central Square 144 Morrison Street
29 Wellington Street Edinburgh
Leeds EH38EX
LS1 4DL
LEGAL ADVISER
Stephenson Harwood LLP
1 Finsbury Circus,
London
EC2M 7SH
COMPANY SECURITY INFORMATION AND IDENTIFICATION CODES
WEBSITE www.ccjapanincomeandgrowthtrust.com
ISIN GB00BYSRMH16 (Ordinary Shares) / GB00BM90B010
(Subscription Shares)
SEDOL BYSRMH1 (Ordinary Shares) / BM90B01 (Subscription
Shares)
BLOOMBERG TICKER CCJI LDN (Ordinary Shares) / CCJS LDN (Subscription
Shares)
LEGAL ENTITY IDENTIFIER (LEI) 549 300 FZANMYIORK 1K98
GLOBAL INTERMEDIARY IDENTIFICATION 6 HEK HT - 99 999 -SL - 826
NUMBER (GIIN)
* Registered in England no. 9845783
For further information contact:
Sanne Fund Services (UK) Limited
Tel: 020 3327 9270
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