REG - CC Japan Inc&Growth - Final Results
21/01/2026 07:00
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RNS Number : 6763P CC Japan Income & Growth Trust PLC 21 January 2026
LONDON STOCK EXCHANGE ANNOUNCEMENT
CC JAPAN INCOME & GROWTH TRUST PLC
FINAL RESULTS FOR THE YEAR ENDED 31 OCTOBER 2025
LEI: 549300FZANMYIORK1K98
Information disclosed in accordance with the DTR 4.1.3 - this announcement
contains regulatory information
CC Japan Income & Growth Trust plc ("CCJI" or the "Company") has today
announced its annual financial results for the year ended 31 October 2025.
The statements below are extracted from the Company's Annual Report and
Accounts for the year ended 31 October 2025 (the "2025 Annual Report"). The
2025 Annual Report, which includes the notice of the Company's forthcoming
annual general meeting, will be posted to shareholders at the end of January
2026. Members of the public may obtain copies of the 2025 Annual Report from
Frostrow Capital LLP, 25 Southampton Buildings, London WC2A 1AL or it can be
downloaded from the Company's website
at https://ccjapanincomeandgrowthtrust.com
(https://ccjapanincomeandgrowthtrust.com/) where up to date information on
the Company, including daily NAV, share prices and fact sheets, can also be
found.
The 2025 Annual Report will be submitted to the Financial Conduct Authority
and will shortly be available in full, unedited text for inspection on the
National Storage Mechanism
("NSM"): https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
Strategic Report
Investment Objective
The investment objective of the CC Japan Income & Growth Trust plc (the
"Company" or "CCJI") is to provide shareholders with dividend income combined
with capital growth, mainly through investment in equities listed or quoted
in Japan.
Overview
Financial Information
As at 31 October 2025
£324.0m 240.5p 222.0p 7.7% 1.06% 19.3%
Net assets Net asset value ("NAV") per share(1) Share price Share price discount to NAV(2) Ongoing charges(2) Gearing (net)(2)
(2024: £265.8m) (2024: 197.3p) (2024: 178.8p) (2024: 9.4%) (2024: 1.03%) (2024: 19.2%)
Performance summary
For the year to For the year to
31 Oct 2025 31 Oct 2024
% change % change
NAV cum-income total return per share(1,2,3) 25.2% 16.1%
Share price total return(1,2,3) 27.9% 13.2%
Tokyo Stock Exchange Price Index ("TOPIX") total return 24.1% 13.4%
Revenue return per share 5.92p 5.32p
Dividends per share:
First interim dividend 1.65p 1.60p
Second interim dividend 4.25p 3.85p
Total dividends per share for the year 5.90p 5.45p
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 at the end of this announcement.
3 Total returns are stated in sterling, including dividends
reinvested.
Highlights
CCJI annual performance summary
Year to October unless otherwise stated Launch to 2016(1) 2017 2018 2019 2020 2021 2022 2023 2024 2025
Share price (p) 122.40 152.00 153.00 150.00 119.50 154.00 138.75 162.50 178.75 222.00
Share price total return (%) 23.5 27.2 2.8 0.7 (17.3) 32.7 (7.1) 20.9 13.2 27.9
NAV per share (p) 123.90 146.00 148.60 158.90 136.80 165.40 151.09 174.50 197.31 240.52
NAV total return per share (%) 24.9 20.7 4.1 9.9 (11.1) 24.3 (5.9) 18.9 16.1 25.2
TOPIX total return in sterling (%) 32.7 10.1 (0.4) 7.2 0.3 11.9 (9.5) 12.0 13.4 24.1
Revenue return per share (p) 3.60 4.06 4.55 5.26 5.04 4.75 5.14 5.37 5.32 5.92
Dividends per share (p) 3.00 3.45 3.75 4.50 4.60 4.75 4.90 5.30 5.45 5.90(2)
1 Period from the Company's launch on 15 December 2015 to 31
October 2016.
2 Includes second interim dividend of 4.25p for the year
ended 31 October 2025.
Chairman's Statement
"Since its launch on 15 December 2015 to 31 October 2025, the Company has
comfortably outperformed the TOPIX and has been the best performer in its AIC
peer group, having returned 189.8% and 216.0% on a share price and Net Asset
Value ("NAV") per share total return basis respectively, compared with the
TOPIX which returned 149.1%."
15 December 2025 marked the Company's tenth anniversary since launch, and the
Board was delighted to be joined on this day by the investment management
team, founding Directors, shareholders and advisers to acknowledge this
milestone at the market closing bell ceremony at the London Stock Exchange.
This milestone was worthy of celebration. Since its launch on 15 December 2015
to 31 October 2025, the Company has comfortably outperformed the TOPIX and has
been the best performer in its AIC peer group, having returned 189.8% and
216.0% on a share price and Net Asset Value ("NAV") per share total return
basis respectively, compared with the TOPIX which returned 149.1%.
Furthermore, the Company's dividend has risen every year since inception, and
will achieve a tenth consecutive increase upon the payment of the Company's
second interim dividend for the year ended 31 October 2025 on 2 March 2026
earning the Company a coveted place on the AIC's 'Next Generation Dividend
Heroes' list.
The Company's performance showcases the resilience of the Investment Manager's
quality-led, differentiated approach to investing in Japan. Throughout the ten
years, the investment process has remained consistent. The Investment Manager
focuses on high quality Japanese companies that prioritise growth and
shareholder returns, and trade at reasonable valuations. In addition the
portfolio companies are benefitting from ongoing corporate governance reforms.
This long-term outperformance has largely stemmed from the Investment
Manager's disciplined adherence to process and consistent value added through
careful stock selection.
We thank shareholders for their continued support, which we witnessed at the
Company's Annual General Meeting held in March 2025, where shareholders voted
overwhelmingly in favour of the Company's continuation as an investment trust
for a further three-year period, with 99.9% of votes cast in favour of the
resolution.
The year under review
I am pleased to report that the Company has delivered another year of strong
performance in what has been a volatile market environment. The 12 month
reporting period included a sharp sell-off following "Liberation Day", and
despite the subsequent tariff-related volatility that rattled Japanese
markets, performance for the full year was again ahead of the TOPIX, supported
by strong stock selection, particularly among financials.
For the twelve months to 31 October 2025, the Company's share price total
return was 27.9% and the NAV total return per share was 25.2%. The discount at
which the shares trade relative to NAV narrowed during the year, enhancing
shareholder returns. The TOPIX, a widely used measure of Japanese equity
performance, returned 24.1% in sterling terms and on a total return basis. It
is pleasing that against all the challenges, the Company's disciplined
investment approach has continued to deliver attractive returns for
shareholders.
Discount
The share price discount to NAV ended the year at 7.7% (31 October 2024:
9.4%). The Board did not consider it necessary to undertake share buybacks in
the year, but it continues to monitor the discount closely and will act
quickly and decisively when it judges intervention to be in shareholders' best
interests.
Income and dividends
The Company remains committed to a progressive dividend policy. Net revenue
per share for the year was 5.92 pence, compared with 5.32 pence in the prior
year. The Board has declared total dividends of 5.90 pence per share,
representing an increase of 8.3% over last year.
Having paid an initial first interim dividend of 1.65 pence per share on 1
August 2025, a second interim dividend of 4.25 pence per share will be paid on
2 March 2026 to shareholders on the register as at 30 January 2026, with an
ex-dividend date of 29 January 2026.
We believe the Company remains well positioned to sustain its record of
dividend growth, supported not only by a portfolio of cash-generative
businesses and strong reserves, but also Japan's broader shift towards
improved capital efficiency, governance and shareholder returns.
Gearing
Structural gearing, maintained at approximately 20% of shareholders' funds,
remains a core component of the Company's investment strategy. While gearing
can increase short-term volatility, the Board continues to believe that a
consistent, disciplined use of leverage, whilst amplifying short-term market
movements, can enhance long-term capital and income returns for shareholders,
removing any additional market timing risk.
Investment Manager and company advisers
As a reminder, our Investment Management team has been led by Richard Aston
since the Company's inception. Richard has extensive knowledge of the Japanese
market built over the last three decades, which has seen him cultivate strong
relationships with company managements and establish a respected reputation
among Japanese corporates. Richard is supported by portfolio managers/analysts
Megumi Takayama and Theo Wyld. Megumi, who joined Chikara Investments LLP
("Chikara") in December 2018, specialises in Japanese small and mid-caps, and
brings with her extensive experience in the IPO market. She began her career
at Bloomberg in 2006 before moving into Japanese equity sales at SMBC Nikko
and later Nomura.
We were pleased to welcome Theo to the Company's investment management team in
October 2024, and he is already proving to be a great addition. Before joining
Chikara, Theo spent more than five years at Ruffer, where he was latterly the
co-manager of the Ruffer Japanese Fund. Prior to this, he spent three years as
a research analyst at JM Finn, covering UK and global equities.
Our operational arrangements have also been bolstered this year following a
review completed by the Board in 2024. Frostrow Capital LLP ("Frostrow") was
appointed with effect from 1 January 2025 as the Company's Alternative
Investment Fund Manager ("AIFM"), Administrator and Company Secretary.
Frostrow was also appointed to provide investor relations and marketing
services to the Company, alongside the team at Chikara. This new relationship
will enhance the quality of financial reporting and improve governance
standards by adding an additional layer of independent oversight. It will also
strengthen our marketing and investor relations efforts, enhancing shareholder
communications and generating further demand for the Company's shares.
To this end you will note a higher profile for the Company through various
media to include videos, podcasts and in-person meetings, together with
ongoing interaction with national and investment industry journalists. We will
continue to appraise methods for increasing engagement with shareholders and
disseminating information through various communication channels. We were
pleased to launch the Company's redesigned website in September. The new site
can be found at https://www.ccjapanincomeandgrowthtrust.com
(https://www.ccjapanincomeandgrowthtrust.com)
Annual General Meeting ("AGM")
The Company's tenth AGM will be held at the offices of Stephenson Harwood LLP,
1 Finsbury Circus, London EC2M 7SH at 12 noon on Friday, 27 February 2026. The
Portfolio Managers will give a presentation to shareholders on the Company's
recent performance, notable portfolio changes and their thoughts on the
outlook for the Japanese equity market. Shareholders will have an opportunity
to meet the Directors, the investment management team and other Company
advisers.
We very much look forward to seeing as many shareholders as possible this
year. For those investors who are not able to attend the meeting in person, a
video recording of the Portfolio Manager's presentation will be uploaded to
the website after the meeting. Shareholders can submit questions in advance by
writing to the Company Secretary at cosec@frostrow.com. If shareholders are
unable to attend the meeting in person, they are strongly encouraged to vote
by proxy and to appoint the "Chair of the Meeting" as their proxy. Details of
how to vote, either electronically, by proxy form or through CREST, can be
found in the Notes to the Notice of AGM in the 2025 Annual Report.
Outlook
The Company has outperformed the TOPIX over the past 12 months and remains
well placed to benefit from several supportive trends: high-quality growth
companies using strong balance sheets to allocate capital more efficiently;
the resilience of strong domestic businesses less exposed to global trade
frictions; and the undervalued corporate governance-driven winners emerging
across the market.
Japan's stock market has delivered strong performance over the period since
the Company's inception. The Board and Investment Manager believe that the
economic and regulatory changes in Japan are likely to benefit good domestic
businesses and that Japan will remain a favourable environment for investors.
While the yen is unusually weak by any measure, it is worth remembering that
foreign investors are still significantly underweight the Japanese market.
On behalf of the Board, I would like to thank shareholders for their continued
support.
June Aitken
Chairman
20 January 2026
Portfolio Manager's Report
"The Japanese equity market has continued to build on the strong performance
of recent years, with accelerating corporate reforms and the transition within
the domestic economy from deflation to inflation both contributing
significantly to a robust corporate earnings environment."
Performance review
The NAV per share of CC Japan Income & Growth Trust rose by 25.2% in total
return sterling terms during the year to 31 October 2025. The Japanese equity
market recorded strong returns over the reporting period, with the TOPIX
returning 24.1% (in sterling terms and on a total return basis) despite
extreme volatility at different stages during the year as sentiment towards
equities reflected broader geopolitical discourse and evolving economic
concerns.
The healthy annual return continues the strong performance track record of the
Company in the 10 years since launch on 15 December 2015, with a capital
return of 144.8% complemented by an average 8.0% increase year on year in the
distributable dividend. This attractive long-term return profile is consistent
with the opportunity outlined at the inception of the Company in December
2015.
The Japanese equity market has continued to build on the strong performance of
recent years, with accelerating corporate reforms and the transition within
the domestic economy from deflation to inflation both contributing
significantly to a robust corporate earnings environment. It is encouraging
that these trends have not been derailed by heightened uncertainties over the
direction of the global economy or deteriorating international relations. The
Corporate Governance Code, introduced by the Japanese Financial Services
Agency in 2015, is also approaching its 10th anniversary, and has been a
significant factor in the improving corporate outlook and consistency of
equity market returns. Upcoming amendments to this Code augur well for the
forward-looking investment opportunity.
The top performing holding over the period was Fujikura which is a beneficiary
of the capital expenditure required to deliver artificial intelligence. An
important distinction is that its financial returns are being realised now and
are not based on speculative projections. Fujikura is an industry leading
manufacturer of optical fibre and optical connectors which are vital
components in the construction of datacentres.
SBI Holdings, Japan's leading online financial services company, and Nintendo,
the video game and entertainment company, were also top active contributors.
SBI Holdings gained increasing recognition for its successful transition to a
financial conglomerate at the forefront of exciting domestic opportunities in
banking, venture capital, asset management and cryptocurrency. Nintendo
launched its new hardware model, the Switch 2, to strong acclaim and is set to
further its reputation and financial success as a global entertainment
provider. Despite strong performance Nintendo remains undervalued, having one
of the highest ratios of net cash to equity in Japan.
The widespread pressures to improve capital efficiency and corporate
governance in Japan have accelerated all aspects of corporate reform with
notable examples of consolidation and privatisation. Within the portfolio,
Carta Holdings, a listed subsidiary of marketing giant Dentsu, was subject to
a tender offer by NTT DoCoMo at a premium to the prevailing share price. This
has resulted in the mobile telephone company becoming the largest shareholder
and enhancing its collaboration with Dentsu to accelerate the benefits of
Carta's digital marketing expertise. Additionally, Technopro announced a
management buyout at a significant premium to the share price.
There has been a common theme in the recent quarterly results of the weakest
performers in the portfolio over the last twelve months. Shin-Etsu Chemical,
Shimano and Hamamatsu Photonics had all established world leading positions in
their respective operations but are not immune to industry vagaries. Recent
turbulence in trading activity due to inventory consolidation and capital
investment delays has resulted in a temporary slowdown in demand which has
affected their near-term expectations. The fact that the challenges have
emerged in such a short period of time also suggests that the recovery may
appear just as quickly when the issues subside. The commitment to capacity
investment and shareholder returns at each of these companies confirms our
confidence in their longer-term prospects.
Emphasis on the long-term investment potential remains a key characteristic of
the strategy and the process behind it. An exuberance over artificial
intelligence has been a notable feature over the last few months. While
acknowledging the opportunities this advancing technology presents, it is
important to maintain a disciplined approach to stock selection and to not
compromise on valuation, governance standards or cashflow generation which are
the key facets of our approach.
Portfolio positioning
We believe that the Japanese equity market has become increasingly attractive
to both domestic and international investors, underpinned by the structural
reforms aimed at improving capital efficiency and corporate governance. The
Tokyo Stock Exchange's market restructuring and its 2023 initiative urging
companies to adopt "management conscious of cost of capital and stock price"
have encouraged firms to optimise balance sheets, enhance profitability, and
boost valuations through measures such as share buybacks, dividend hikes and
unwinding of crossholdings. Complementing this, Japan's Financial Services
Agency ("FSA") has reinforced governance standards through revisions to the
Stewardship and Corporate Governance Codes, promoting transparency, board
independence, and shareholder engagement.
But, very importantly, firms are not merely shrinking to realise inherent
value. We see increasing evidence that companies are seeking to create value
and expressing a renewed ambition by allocating resources to strategic areas
for growth such as digital transformation, advanced technologies, and overseas
expansion to strengthen long-term competitiveness. Consequently, our universe
of investment candidates continues to broaden and highlighted below are
recently established holdings new to the strategy.
Fujikura has established a strong global presence in specialist fields
including optical fibre and telecommunication infrastructure. Technological
advances have resulted in a dramatic pick-up in demand in recent years which
has allowed the company to improve its financial standing and reward
shareholders through a significant rise in its annual dividend distribution.
Hoya is a world leader in optical technologies with strong global positions in
the fields of technology and healthcare. The company has indicated an improved
shareholder return policy going forward with progressive dividend increases
and a more tightly defined allocation of the cashflow generated and retained
on its balance sheet. We believe the combination of investment for growth with
a greater consistency of dividend and share buybacks going forward will offer
an attractive total return.
Shimano is a leading global manufacturer of bicycle parts and fishing
equipment. It has experienced an unusually long inventory correction in the
aftermath of the pandemic which is now coming to an end, particularly in
Europe, its main market. The company announced a new mid-term plan with much
clearer commitments on cash allocation and initiatives to improve capital
efficiency which have offered a considerably more attractive investment
proposition.
Noritsu Koki has over the years transitioned from a family run manufacturing
company to an independent investment vehicle with primary interests in a small
number of niche sectors including audio equipment and peripherals, parts and
materials manufacturing, and healthcare and research services. Its operating
businesses are cash generative which, combined with a clear shareholder return
policy, offer the potential of rising returns.
Conversely, some companies face new challenges and the holdings in Noevir,
Tokyo Metro and GMO Internet have been fully exited over the reporting period.
Cosmetic manufacturer Noevir is experiencing new competitive pressures from
Korean makers and consequently a more challenging outlook for its products. We
are concerned that the company management has taken a very conservative stance
which could threaten the long-term track record of dividend increases. The
first mid-term plan released by Tokyo Metro since its IPO disappointingly fell
short of expectations in relation to capital efficiency, cost control and
consequently shareholder return. GMO Internet, a network infrastructure
provider, performed well during the first half of the year in response to
selected business portfolio restructuring, but we believe that the sprawling
parent-subsidiary group structure falls short of the governance standards that
we encourage.
Financial companies feature prominently in the current portfolio. The leading
banks, Sumitomo Mitsui Financial Holdings and Mitsubishi UFJ Holdings, have
been beneficiaries of the Bank of Japan's intention to normalise monetary
policy which has progressed during the last 12 months but has further to go.
Sumitomo Mitsui Trust Holdings, JAFCO, and Japan Securities Finance will
benefit from improving prospects for financial returns as interest rates are
gradually increased.
Outlook
As the Company reaches its 10th anniversary, it is possible to demonstrate how
the combined efforts of the Japanese government, the Tokyo Stock Exchange
("TSE") and the FSA have been the catalyst for a cultural shift in Japanese
corporate responsibilities. This has resulted in considerable benefits to
investors of this Company through a combination of capital appreciation
complemented by a progressive increase in the annual dividend. We believe this
track record serves as the foundation of more to come.
In an interview for the Nikkei newspaper, Hiromi Yamaji, the Chief Executive
Officer of the Japan Exchange Group and the architect of the market reform
initiative, highlighted the substantial progress so far but also suggested
that this represented less than a fifth of the ultimate potential. To this
end, we believe that the speed of change is accelerating and is evident in
data reflecting associated activity such as dividend growth, share buybacks
and unwinding of cross-shareholdings.
A revision of the Corporate Governance Code due in 2026 will encourage
companies to move beyond basic reform and balance sheet optimisation towards
more efficient allocation of resources for strategic expansion. This aligns
closely with the perspectives promoted by Japan's new Prime Minister, Sanae
Takaichi, and indeed the investment principles of this strategy. Such
a strong commitment to sustainable, long-term value creation signals an
additional change in corporate behaviour and enhances the investment
attraction of Japanese equities.
Richard Aston, Portfolio Manager
Chikara Investments LLP
20 January 2026
Top Ten Holdings
Sumitomo Mitsui Financial Group Inc
4.8% of net assets (2024: 7.0%)
Sumitomo Mitsui Financial Group was established through the merger of Sumitomo
Bank and Sakura Bank in 2001. It is one of Japan's leading financial groups
offering services such as commercial banking, leasing, securities, consumer
finance and asset management. The company targets continued growth in
shareholder value by promoting disciplined investment and alliances, sound
financials and progressive shareholder returns.
Fujikura Ltd
4.6% of net assets (2024: nil)
Fujikura is a leading manufacturer of optical fibre, optical components and
other advanced products used across a range of industries. Recent strong
global demand for datacentres and AI infrastructure has driven a dramatic
turnaround in operational performance. The most recent mid-term plan seeks to
capture the opportunity through further growth investment whilst maintaining a
disciplined approach to capital allocation. Consequently, the business
expansion will be accompanied by favourable trends in dividend distribution
and share buybacks.
Nintendo Co Ltd
4.6% of net assets (2024: 4.1%)
Nintendo is an international console and handheld gaming company with leading
positions in both hardware and software production. Initiatives to improve the
financial return on the company's extensive intellectual property are being
accompanied by efforts to bolster its corporate governance. Management has a
clear policy towards dividends and is taking a more proactive stance towards
share buybacks.
Mitsubishi UFJ Financial Group Inc
4.3% of net assets (2024: 4.9%)
Mitsubishi UFJ Financial Group ("MUFJ") was established in 2005 through the
merger of Mitsubishi Tokyo Financial Group and UFJ Holdings. It is now one of
Japan's leading financial services groups with established operations around
the world, most prominently in Asia and North America. This includes a
strategic alliance and a 23% stake in Morgan Stanley. MUFJ continues to
promote a balanced capital management policy maintaining a strong capital
base, appropriate allocations to strategic growth opportunities and enhancing
shareholder returns.
Hoya Corp
4.2% of net assets (2024: nil)
Hoya operates in two main business segments in which it has established world
leading positions. The information technology division, which includes hard
disk drive substrates, extreme ultraviolet mask blanks and image related
products, and the Life Care division which covers healthcare and medical
related products such as eyeglasses. The shareholder return policy prioritises
capital allocation for future growth through organic expansion and M&A
activity but this has been accompanied recently by a clearer focus on balance
sheet efficiency and intent to deliver a more consistent and progressive
dividend.
ITOCHU Corp
4.1% of net assets (2024: 4.4%)
Itochu is one of Japan's leading trading companies involved in a broad range
of businesses from the provision of upstream raw materials to downstream
retail activities. In recent years Itochu has successfully introduced a
business investment strategy based on high levels of capital efficiency and
appropriate cash allocation including increasing returns to shareholders in
the form of dividend and share buybacks.
Mitsubishi Corp
4.0% of net assets (2024: 3.2%)
Mitsubishi Corp is a diversified conglomerate with broad industrial interests
including mineral resources, natural gas, food, automotive and other sectors.
Its business performance has been strengthened by strategic rebalancing of its
business portfolio and improvements in capital efficiency. Management has
raised their distribution targets for shareholders with an emphasis on
progressive increases in dividend distribution and flexible consideration of
dividends.
Tokyo Electron Ltd
3.9% of net assets (2024: 2.0%)
Tokyo Electron is a global supplier of semiconductor production equipment,
holding leading market shares in a number of key segments in the manufacturing
process. It has maintained a proactive shareholder return policy, balancing
financial soundness with investment opportunities and the goal of achieving
strong performance, both operating and investment, through industry cycles.
Shin-Etsu Chemical Co Ltd
3.7% of net assets (2024: 3.7%)
Shin-Etsu Chemical is a manufacturer with top global market share in PVC,
semiconductor silicon wafers and a number of other semiconductor related and
functional materials. The company established a global production base and
developed a list of top tier international customers, which has allowed it to
generate a strong track record of growth despite underlying volatility in
individual markets. The company has, in recent years, given greater attention
to shareholder returns within their capital policy, while maintaining emphasis
on stability and progression.
SoftBank Corp
3.6% of net assets (2024: 4.1%)
SoftBank Corp provides telecommunication and associated network services in
Japan and is a subsidiary of the SoftBank Group. The company continues to
demonstrate strong growth in its business services segment and from its
"beyond carrier" strategy which includes e-commerce leader Yahoo Japan, online
fashion retailer Zozo, social network Line and electronic payment service
PayPay. After a period of significant investment the management expects growth
opportunities to accelerate and enhance returns to shareholders
commensurately.
Holdings in Portfolio
As at 31 October 2025
Company Main business area Tokyo Stock Exchange ("TSE") sector Market value % of net assets
£'000
Sumitomo Mitsui Financial Group Inc Banks Banks 15,429 4.8
Fujikura Ltd Optical technology Other products 14,911 4.6
Nintendo Co Ltd Gaming Other products 14,824 4.6
Mitsubishi UFJ Financial Group Inc Banks Banks 14,044 4.3
Hoya Corp Optical technology Precision instruments 13,639 4.2
ITOCHU Corp Trading company Wholesale 13,243 4.1
Mitsubishi Corp Trading company Wholesale 12,837 4.0
Tokyo Electron Ltd Semiconductor production equipment Electrical appliances 12,641 3.9
Shin-Etsu Chemical Co Ltd Silicon wafers & PVC Chemicals 12,080 3.7
SoftBank Corp Mobile telecoms & services Info & communications 11,513 3.6
Tokio Marine Holdings Inc Insurance Insurance 11,424 3.5
SBI Holdings Inc Financial services & investment Securities & commodities 10,248 3.2
Dexerials Corp Functional materials Chemicals 9,253 2.9
Hamamatsu Photonics KK Optical technology Electrical appliances 9,235 2.8
Chugai Pharmaceutical Co Ltd Pharmaceutical Pharmaceutical 9,023 2.7
JAFCO Group Co ltd Venture capital Other financing business 8,793 2.7
Kyocera Corp Electronic components Electrical appliances 7,954 2.5
Japan Securities Finance Co Ltd Specialist financial services Other financing business 7,773 2.4
Marui Group Co Ltd Retail Retail trade 7,595 2.3
Sompo Holdings Inc Insurance Insurance 7,561 2.3
Sumitomo Mitsui Trust Group Inc Banks Banks 7,104 2.2
Nissan Chemical Corp Functional materials Chemicals 6,692 2.1
Nippon Parking Development Co Ltd Real estate Real estate 6,648 2.0
Shimano Inc Bicycle components Transport equipment 6,006 1.9
Noritsu Koki Co Ltd Manufacturing Precision instruments 5,885 1.8
ARE Holdings Inc Recycling Precious metals 5,876 1.8
Nippon Gas Co Ltd Utilities Retail trade 5,823 1.8
Sinko Industries Ltd Air conditioning systems Machinery 5,712 1.8
Daiichi Sankyo Pharmaceutical Pharmaceutical 5,525 1.7
ZOZO Inc Online fashion retail Retail trade 5,522 1.7
Hitachi Ltd IT & infrastructure Electrical appliances 5,256 1.6
Insource Co Ltd Corporate training Services 5,049 1.5
PILLAR Corp Industrial materials Machinery 4,800 1.5
Kao Corp Cosmetics & toiletries Chemicals 4,345 1.3
Denso Corp Automotive components Transport equipment 4,166 1.3
WingArc1st Inc Data solutions Info & communications 2,487 0.8
Shoei Co Ltd Motorbike helmets Other products 1,694 0.5
Total holdings 312,610 96.4
Other net assets 8,680 2.7
Royal London Short-Term Money Market Fund Cash and cash equivalents - 2,759 0.9
Net asset value 324,049 100.0
Top Ten
As at 31 October 2025
Top Ten (Tokyo Stock Exchange ("TSE") sector)
TSE sector % of net assets
Banks 11.3
Electrical appliances 10.7
Chemicals 10.0
Other products 9.7
Wholesale 8.1
Precision instruments 6.0
Insurance 5.8
Retail trade 5.8
Other financing business 5.1
Pharmaceutical 4.5
Top Ten 77.0
Other sectors(1) 19.4
Other net assets 3.6
Total 100.0
1 Other Sectors comprise seven sectors, which individually,
is less than 4.5% each of the net assets.
Top Ten (main business areas)
Main business area % of net assets
Optical technology 11.6
Banks 11.3
Trading company 8.1
Insurance 5.8
Functional materials 5.0
Gaming 4.6
Pharmaceutical 4.5
Semiconductor production 3.9
Silicon wafers & PVC 3.7
Mobile telecoms & services 3.6
Top Ten 62.1
Other business areas 34.3
Other net assets 3.6
Total 100.0
Top Ten Contracts For Difference ("CFDs")
Company Main business area TSE sector Absolute value £'000 Absolute value Market value
as a % of £'000
net assets
Sumitomo Mitsui Financial Group Inc Banks Banks 3,086 1.0 127
Fujikura Ltd Optical technology Other products 2,982 0.9 649
Nintendo Co Ltd Gaming Other products 2,965 0.9 149
Mitsubishi UFJ Financial Group Inc Banks Banks 2,809 0.9 53
Hoya Corp Optical technology Precision instruments 2,728 0.8 360
ITOCHU Corp Trading company Wholesale 2,649 0.8 116
Mitsubishi Corp Trading company Wholesale 2,567 0.8 92
Tokyo Electron Ltd Semiconductor production equipment Electrical appliances 2,528 0.8 357
Shin-Etsu Chemical Co Ltd Silicon wafers & PVC Chemicals 2,416 0.7 (189)
SoftBank Corp Mobile telecoms & services Info & communications 2,303 0.7 40
Top Ten CFDs 27,033 8.3 1,754
Other CFDs 35,489 11.0 (12)
Total CFDs 62,522 19.3 1,742
Investment Policy, Results and Other Information
Investment policy
The Company invests in equities listed or quoted in Japan. The Company may
also invest in exchange traded funds in order to gain exposure to such
equities. Investment in exchange traded funds shall be limited to not more
than 20 per cent. of gross assets at the time of investment. The Company may
also invest in listed Japanese real estate investment trusts ("J-REITs").
The Company may enter into long only contracts for difference or equity swaps
for gearing and efficient portfolio management purposes.
No single holding (including any derivative instrument) will represent more
than 10 per cent. of gross assets at the time of investment and, when fully
invested, the portfolio is expected to have between 30 to 40 holdings,
although there is no guarantee that this will be the case and it may contain a
lesser or greater number of holdings at any time.
The Company has the flexibility to invest up to 10 per cent. of its gross
assets at the time of investment in unquoted or untraded companies.
The Company is not constrained by any index benchmark in its asset allocation.
Borrowing policy
The Company may use borrowings for settlement of transactions, to meet
on-going expenses and may be geared through borrowings and/or by entering into
long only contracts for difference ("CFDs") or equity swaps that have the
effect of gearing the Company's portfolio to seek to enhance performance. The
aggregate of borrowings and long only CFDs and equity swap exposure will not
exceed 25 per cent. of net asset value at the time of drawdown of the relevant
borrowings or entering into the relevant transaction, as appropriate, although
the Company's normal policy will be to utilise and maintain gearing to a lower
limit of 20 per cent. of net asset value at the time of drawdown of the
relevant borrowings or entering into the relevant transaction, as appropriate.
It is expected that any borrowings entered into will principally be
denominated in yen.
Hedging policy
The Company does not currently intend to enter into any arrangements to hedge
its underlying currency exposure to investments denominated in yen, although
the Investment Manager and the Board may review this from time to time.
Results and dividend
The Company's revenue return after tax for the financial year amounted to
£7,980,000 (2024: £7,173,000). In August 2025, the Company paid an interim
dividend of 1.65p (2024: 1.60p) per share. On 16 January 2026, the Directors
declared a second interim dividend for the year ended 31 October 2025 of 4.25p
(2024: 3.85p) per share, which will be paid on 2 March 2026 to shareholders on
the register at 30 January 2026. Therefore, the total dividend in respect of
the financial year to 31 October 2025 will be 5.90p (2024: 5.45p) per share.
The Company made a capital gain after tax of £57,638,000 (2024: gain of
£30,758,000). The total return, including income, after tax for the year was
a gain of £65,618,000 (2024: gain of £37,931,000).
Risk and Risk Management
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 these 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
fall into three categories:
· Strategic and business risk;
· Financial and operational risk; and
· Regulatory and compliance risk.
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.
The Committee continues to review the processes in place to mitigate risk; and
to ensure that these are appropriate and proportionate in the current market
environment. The principal risks, together with a summary of the processes and
internal controls used to manage and mitigate risks where possible, are
outlined below. There have been no material changes to the principal risks
during the year.
Emerging risks
The Committee considers emerging risks which it defines as potential trends,
sudden events or changing risks which are characterised by a high degree of
uncertainty in terms of occurrence probability and possible effects on the
Company. As the impact of emerging risks is understood, they may be entered on
the Company's risk matrix and mitigating actions considered as necessary. In
assessing the risks and how they can be mitigated, the Board has given
particular attention to those risks that might threaten the viability of the
Company. The Board considers the current global economic environment to be a
factor which exacerbates existing risks, rather than it being a new emerging
risk.
Principal Risks Mitigation Movement during the year
Poor investment performance
The Company's investment performance depends on the Investment Manager's · The Investment Manager has a well-defined investment strategy and ó
ability to identify successful investments in accordance with the Company's process which is regularly reviewed by the Board.
investment policy.
· The Board monitors the Company's investment performance against
The Company's share price may not always reflect underlying net asset value. its peer group over a range of periods.
· Whilst the Company does not have a benchmark, the Board measures
performance for reference purposes against the TOPIX and High Yield indices.
At each meeting, the Board discusses the Japanese investment environment, and
receives reports on the composition of the portfolio, any recent sales and
purchases, and expectations of dividend income.
· The Management Engagement Committee reviews the appointment of
the Investment Manager on an annual basis.
· The Board monitors the share price discount to NAV and has
authority to buy back shares.
Market risk
Changes in the investment, economic or political conditions in Japan, and/ or · The Directors acknowledge that market risk is inherent in the ó
in the countries in which the Company's investee companies operate could investment process. The Company maintains a diversified portfolio of quoted
substantially and adversely affect the Company's prospects. investments.
In addition to changing economic factors such as interest rates, foreign · The Board reviews the impact of economic indicators on the
exchange rates and employment, unpredictable factors such as natural disasters portfolio with the Investment Manager at every Board meeting.
and diplomatic events may impact market risk.
· The Company's investment policy states that no single holding
will represent more than 10 per cent. of the Company's Gross Assets at the
time of investment and the portfolio is expected to have between 30 to 40
holdings in normal circumstances.
· The portfolio is comprised of listed, liquid, realisable
securities.
· In addition to receiving regular market updates from the
Investment Manager and reports at Board meetings, the Board convenes more
often during periods of extreme volatility.
· The Company's policy is not to hedge against any foreign currency
movements. Income received from investee companies is translated into sterling
on receipt.
Geopolitical risk
War and conflict can impact investor confidence and threaten global economic · The Board discusses the impact of geopolitics on the portfolio ó
growth. with the Investment Manager at every Board meeting.
Geopolitical instability in the region may increase volatility, reduce · The Company has built up a revenue reserve and the Board
economic growth, and affect the prospects of the companies in the portfolio. regularly reviews the net income available for distribution using the
Investment Manager's sensitivity analysis of revenue estimates.
· The Company also has a Special Reserve available for distribution
in the event of unforeseen revenue shortfall.
· The Manager's emphasis on companies which can pay sustainable
dividends has helped alleviate the impact.
· The board recognises that the potential for mitigation is likely
to be limited other than through diversification.
Key person risk
Loss of investment manager or key personnel. · The Board ensures that adequate resources are in place to manage ó
the Company.
The departure of any key individuals from the Investment Manager without
adequate succession planning could have a material impact on the Company's · Richard Aston attends all Board meetings, and the Board also
business. meets regularly with other members of the Chikara team, including portfolio
managers/analysts Megumi Takayama and Theo Wyld.
· The Investment Manager's key individuals are significantly
invested in the Company ensuring interests with the Company's shareholders are
aligned.
Excess leverage
The Company uses borrowings to seek to enhance investment returns. · An ability to gear is a unique advantage of closed-end companies ó
and structural gearing is a clearly stipulated component of the Company's
While this has the potential to enhance investment returns in rising markets, investment policy. This is highlighted in shareholder communications.
in falling markets the impact could be detrimental to performance.
· Gearing is monitored and strict restrictions on borrowings are
imposed: gearing continues to operate within a limit of 25% of NAV at the time
of investment.
· The gearing is achieved using derivatives in the form of
Contracts for Difference ("CFDs"). Further information on financial
instruments and risk can be found in Note 2(c) to the Financial Statements and
in Note 16 to the Financial Statements.
Cyber risk
Cyber crime or fraud could impact any of the Company's service providers, the · All key service providers produce annual internal control reports ñ
Investment Manager, the Depositary or the Administrator. for review by the Audit and Risk Committee. These reviews include
consideration of their business continuity plans and the associated cyber
Business interruption could mean service providers are unable to meet their security risks.
contractual obligations or that information is late, misleading or inaccurate,
or data privacy is breached. · Penetration testing is carried out by the Investment Manager.
· The Board reviews the cyber security policies of all service
providers.
Service provider operational risk
Poor performance of appointed services providers including Company Secretary, · The performance of appointed professional service providers is ò
Depositary, Custodian, Administrator and/or Registrar can result in closely monitored by the Board to ensure they meet contractual obligations.
operational disruption, business interruption or reputational damage.
· The Company Secretary provided a summary of internal controls
reports from all service providers.
· During the year under review and after assessing competitive
alternatives, the Board appointed Frostrow Capital LLP to provide
Administration and Company Secretarial services. The new appointment is aimed
at enhancing the accuracy and quality of financial reporting. Frostrow Capital
LLP has also been appointed as the Company's AIFM in accordance with the
Alternative Investment Fund Managers Directive ("AIFMD").
ESG and climate change
Potential reputational damage from non-compliance with regulations or · The Company's ESG Policy, which is updated annually, is published ó
incorrect disclosures. on the Company's website and the AIC website.
Climate change leads to additional costs and risks for portfolio companies. · The Investment Manager's approach is to include ESG factors for
consideration in the investment process, such as climate change, where they
are relevant and have a material impact on stock performance.
· Chikara Investments LLP (the Investment Manager) is a signatory
to the UN Principles of Responsible Investment ("PRI") and reports annually
according to the PRI reporting framework.
· The Investment Manager also complies with the obligations of both
the UK Stewardship Code and the Japan Stewardship Code.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and Accounts in
accordance with applicable laws and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors have elected to prepare the
financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice, including FRS 102, which is the Financial Reporting
Standard applicable to the UK and Republic of Ireland and applicable law.
Under company law, the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
the Company's affairs as at the end of the year and of the net return for the
year. In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and estimates, which are reasonable and
prudent;
· state whether applicable accounting standards have been
followed, subject to any material departures disclosed and explained in the
financial statements;
· prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Company will continue in
business; and
· prepare a directors' report, a strategic report and
directors' remuneration report which comply with the requirements of the
Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and which disclose
with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are also responsible for preparing a Strategic Report,
Directors' Report, Directors' Remuneration Report and Corporate Governance
Statement that comply with applicable laws and regulations.
The Company Reports and Accounts are published on its website at
www.ccjapanincomeandgrowthtrust.com
(http://www.ccjapanincomeandgrowthtrust.com) which is maintained by Frostrow.
The work carried out by the auditor does not involve consideration of the
maintenance and integrity of this website and, accordingly, the auditor
accepts no responsibility for any changes that have occurred to the financial
statements since being initially presented on the website. Legislation in the
United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors' confirmation statement
The Directors each confirm to the best of their knowledge that:
(a) the financial statements, prepared in accordance with United
Kingdom Generally Accepted Accounting Practice, including FRS 102, give a true
and fair view of the assets, liabilities, financial position and profit of the
Company; and
(b) this Annual Report and Accounts includes a fair review of the
development and performance of the business and position of the Company,
together with a description of the principal risks and uncertainties that it
faces.
Having taken advice from the Audit and Risk Committee, the Directors consider
that the Annual Report and Accounts taken as a whole is fair, balanced and
understandable and provides the information necessary for shareholders to
assess the Company's performance, business model and strategy.
For and on behalf of the Board
June Aitken
Chairman
20 January 2026
Financial Statements
Income Statement
For the year ended 31 October 2025
Year ended 31 October 2025 Year ended 31 October 2024
Revenue Capital Total Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments 3 - 60,189 60,189 - 34,432 34,432
Currency losses - (500) (500) - (1,841) (1,841)
Income 4 10,496 - 10,496 9,357 - 9,357
Investment management fee 5 (423) (1,691) (2,114) (400) (1,599) (1,999)
Other expenses 6 (908) - (908) (759) - (759)
Return on ordinary activities before finance costs and taxation 9,165 57,998 67,163 8,198 30,992 39,190
Finance costs 7 (153) (360) (513) (97) (234) (331)
Return on ordinary activities before taxation 9,012 57,638 66,650 8,101 30,758 38,859
Taxation 8 (1,032) - (1,032) (928) - (928)
Return on ordinary activities after taxation 7,980 57,638 65,618 7,173 30,758 37,931
Return per share 13 5.92p 42.78p 48.70p 5.32p 22.83p 28.15p
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 were derived
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 year is also the total comprehensive
income for the year.
The notes below form part of these financial statements.
Statement of Financial Position
As at 31 October 2025
31 October 31 October
2025 2024
Note £'000 £'000
Fixed assets
Investments at fair value through profit or loss 3 315,369 258,478
Current assets
Cash and cash equivalents 4,359 4,006
Cash collateral in respect of Contracts for Difference ("CFDs") 659 413
Amounts due in respect of CFDs 2,860 8,027
Other debtors 10 4,190 4,062
12,068 16,508
Creditors: amounts falling due within one year
Cash collateral in respect of CFDs (1,917) (8,837)
Amounts payable in respect of CFDs (1,119) (17)
Other creditors 11 (352) (291)
(3,388) (9,145)
Net current assets 8,680 7,363
Total assets less current liabilities 324,049 265,841
Net assets 324,049 265,841
Capital and reserves
Share capital 12 1,348 1,348
Share premium 98,067 98,067
Special reserve 64,671 64,671
Capital reserve
- Revaluation gains on equity investments held at year end 3 75,495 35,561
- Other capital reserves 76,023 58,319
Revenue reserve 8,445 7,875
Total shareholders' funds 324,049 265,841
NAV per share - shares (pence) 14 240.52p 197.31p
Approved by the Board of Directors and authorised for issue on 20 January 2026
and signed on their behalf by:
June Aitken
Director
CC Japan Income & Growth Trust plc is incorporated in England and Wales
with registration number 9845783.
The notes below form part of these financial statements.
Statement of Changes in Equity
For the year ended 31 October 2025
Share Share Special Capital Revenue
capital premium reserve reserve reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 November 2024 1,348 98,067 64,671 93,880 7,875 265,841
Return on ordinary activities after taxation - - - 57,638 7,980 65,618
Dividends paid 9 - - - - (7,410) (7,410)
Balance at 31 October 2025 1,348 98,067 64,671 151,518 8,445 324,049
For the year ended 31 October 2024
Share Share Special Capital Revenue
capital premium reserve reserve reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 November 2023 1,348 98,067 64,671 63,122 7,910 235,118
Return on ordinary activities after taxation - - - 30,758 7,173 37,931
Dividends paid 9 - - - - (7,208) (7,208)
Balance at 31 October 2024 1,348 98,067 64,671 93,880 7,875 265,841
The Company's distributable reserves consist of the Special reserve, Revenue
reserve and Capital reserve attributable to realised profits.
The notes below form part of these financial statements.
Statement of Cash Flows
For the year ended 31 October 2025
Year ended Year ended
31 October 31 October
2025 2024
£'000 £'000
Operating activities cash flows
Return on ordinary activities before finance costs and taxation(1) 67,163 39,190
Adjustment for:
Gains on equity investments (49,541) (26,332)
Realised gains on CFDs (16,943) (122)
Movement in CFD balances (897) (11)
Increase in other debtors (367) (73)
Increase/(decrease) in other creditors 49 (52)
Tax withheld on overseas income (1,032) (928)
Net cash flow from operating activities (1,568) 11,672
Investing activities cash flows
Purchases of equity investments (116,996) (63,521)
Proceeds from sales of equity investments 109,885 62,923
Realised gains on CFDs 16,943 122
Net cash flow used in investing activities 9,832 (476)
Financing activities cash flows
Equity dividends paid (7,410) (7,208)
Finance costs paid (501) (322)
Net cash flow used in financing activities (7,911) (7,530)
Increase in cash and cash equivalents 353 3,666
Cash and cash equivalents at the beginning of the year 4,006 340
Cash and cash equivalents at the end of the year 4,359 4,006
1 Inflow from dividends was £9,076,000 (2024: £8,314,000).
The notes below form part of these financial statements.
Notes to the Accounts
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 carries 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 Company's shares were admitted to the Official List of the Financial
Conduct Authority on 15 December 2015. On the same day, trading of the shares
commenced on the London Stock Exchange.
The principal activity of the Company is that of an investment trust within
the meaning of section 1158 of the Corporation Tax Act of 2010.
With effect from 1 January 2025, the Company's registered office changed from
6th Floor, 125 London Wall, London, EC2Y 5AS to 25 Southampton Buildings,
London, WC2A 1AL, following the appointment of Frostrow Capital LLP as AIFM,
Administrator and Company Secretary.
2. Accounting Policies
The principal accounting policies followed by the Company are set out below:
(a) Basis of accounting
The financial statements have been prepared in accordance with FRS 102 ("the
Financial Reporting Standard applicable in the UK and Republic of Ireland")
issued by the Financial Reporting Council, with the Statement of Recommended
Practice "Financial Statements of Investment Trust Companies and Venture
Capital Trusts" issued by the Association of Investment Companies in July 2022
and the Companies Act 2006. The financial statements have been prepared on a
historical cost basis except for the modification to a fair value basis for
certain financial instruments as specified in the accounting policies below.
They have also been prepared on the assumption that approval as an investment
trust will continue to be granted. As required by its Articles of Association,
a vote for the Company's continuation will be put forward at the AGM in 2028,
having last been passed at the AGM on 3 March 2025.
Going concern
The financial statements have been prepared on a going concern basis. In
forming this opinion, the Directors have considered any potential impact of
wars in Ukraine and the Middle East; and the increase in geopolitical tension
between the US and China, on the going concern and viability of the Company.
In making their assessment, the Directors have reviewed income and expense
projections and the liquidity of the investment portfolio, and considered the
mitigation measures which key service providers, including the Investment
Manager, continue to have in place to maintain operational resilience.
The Company's net assets as at 31 October 2025 were £324.0 million (2024:
£265.8 million). As at 31 October 2025, the Company held approximately
£315,369 million in quoted investments (2024: £258.5 million) and had cash
of £4.4 million (2024: £4.0 million). The total expenses (excluding finance
costs and taxation) for the year ended 31 October 2025 were £3.0 million
(2024: £2.8 million), which represented approximately 1.06% (2024: 1.03%) of
average net assets during the year. At the date of approval of this report,
based on the aggregate net assets of investments and cash held, the Company
has substantial operating expenses cover.
The Company's ability to continue as a going concern for the period assessed
by the Directors has been considered over the period to 31 January 2027, which
is at least 12 months from the date the financial statements were authorised
for issue.
The financial statements have been presented in sterling, which is also the
functional currency as this is the currency of the primary economic
environment in which the Company operates. The Board, having regard to the
currency of the Company's share capital and the predominant currency in which
it pays distributions, expenses and its shareholders operate, has determined
that sterling is the functional currency.
In preparing these financial statements the Directors have considered the
impact of ESG and climate change risk as an emerging risk and have concluded
that while climate change impacts operating conditions of portfolio companies
and increases obligations, it does not have a material impact on the value of
the Company's investments. In line with FRS 102, investments are valued at
fair value, which for the Company are quoted bid prices for investments in
active markets at 31 October 2025 and therefore reflect market participants'
view of climate change risk.
(b) Investments
As the Company's business is investing in financial assets with a view to
profiting from their total return in the form of increases in fair value,
financial assets are held at fair value through profit or loss in accordance
with FRS 102 Section 11: 'Basic Financial Instruments', and Section 12: 'Other
Financial Instruments Issues'. The Company manages and evaluates the
performance of these investments on a fair value basis in accordance with its
investment strategy, and information about the investments is provided on this
basis to the Board of Directors.
Upon initial recognition, investments are classified by the Company as "at
fair value through profit or loss". They are recognised on the date they are
traded and are measured initially at fair value, which is taken to be their
transaction price, excluding expenses incidental to purchases which are
expensed to capital on acquisition. Subsequently investments are revalued at
fair value, which is the bid market price for listed investments over the time
until they are sold. Any unrealised gains/losses are included in the fair
value of the investments.
Changes in the fair value of investments held at fair value through profit or
loss and gains or losses on disposal are included in the capital column of the
Income Statement within "gains on investments".
Money market funds are classified as listed investments and are measured at
fair value through profit and loss.
(c) Derivatives
Derivatives comprise Contracts for Difference ("CFDs"), which are measured at
fair value and valued by reference to the underlying market value of the
corresponding security, the valuation of which is detailed in Note 2b. CFDs
are held for investment purposes. Where the fair value is positive the CFD is
presented as a current asset, and where the fair value is negative the CFD is
presented as a current liability. Gains or losses on these derivative
transactions are recognised in the Income Statement.
They are recognised in either the capital or revenue column of the Income
Statement depending on their nature. To the extent that any gains or losses
are of a mixed revenue and capital nature, they are apportioned between
revenue and capital accordingly. The CFD balance is made up of transactions in
relation to the underlying equity held by the Company, with the risks embedded
in the CFDs disclosed in Note 16.
(d) Foreign currency
Transactions denominated in foreign currencies including dividends are
translated into sterling at exchange rates as at the date of the transaction.
Assets and liabilities denominated in foreign currencies at the year end are
reported at the rates of exchange prevailing at the year end. Foreign exchange
movements on investments and derivatives are included in the Income Statement
within gains on investments. Any other gain or loss is included as an exchange
gain or loss to capital or revenue in the Income Statement as appropriate.
(e) Income
Investment income has been accounted for on an ex-dividend basis or when the
Company's right to the income is established. Special dividends are credited
to capital or revenue in the Income Statement, according to the circumstances
surrounding the payment of the dividend. Overseas dividends are included gross
of withholding tax recoverable.
Interest receivable on deposits is accounted for on an accrual basis.
(f) Dividends payable
Interim dividends are recognised when the Company pays the dividend. Final
dividends are recognised in the period in which they are approved by the
shareholders. This year, as was also the case last year, a second interim
dividend is being paid in substitution for a final dividend.
(g) Expenses
All expenses are accounted for on an accruals basis and are charged as
follows:
· the investment management fee is charged 20% to revenue
and 80% to capital;
· CFD finance costs are charged 20% to revenue and 80% to
capital;
· investment transactions costs are allocated to capital;
and
· other expenses are charged wholly to revenue.
(h) Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. The tax currently payable is based on the taxable profit for the year.
Taxable profit differs from net profit as reported in the Income Statement
because it excludes items of income or expenses that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The Company's liability for current tax is calculated using tax
rates that were applicable at the financial reporting date.
Where expenses are allocated between capital and revenue any tax relief in
respect of the expenses is allocated between capital and revenue returns on
the marginal basis using the Company's effective rate of corporation taxation
for the relevant accounting period.
Deferred taxation is recognised in respect of all timing differences that have
originated but not reversed at the financial reporting date, where
transactions or events that result in an obligation to pay more tax in the
future or right to pay less tax in the future have occurred at the financial
reporting date. This is subject to deferred tax assets only being recognised
if it is considered more likely than not that there will be suitable profits
from which the future reversal of the timing differences can be deducted.
Deferred tax assets and liabilities are measured at the rates applicable to
the legal jurisdictions in which they arise.
(i) Other receivables and other payables
Other receivables and other payables do not carry any interest and are short
term in nature and are accordingly stated at their nominal value.
(j) Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business, that of an investment trust, as disclosed in Note 1.
(k) Accounting estimates, judgements and assumptions
The preparation of financial statements requires the Directors to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements. Although these estimates
are based on management's best knowledge of current facts, circumstances and,
to some extent, future events and actions, the Company's actual results may
ultimately differ from those estimates, possibly significantly.
There have not been any instances requiring any significant estimates or
judgements in the year.
(l) Cash and cash equivalents
Cash comprises cash and demand deposits. Cash equivalents, including bank
overdrafts and short-term, highly liquid investments that are readily
convertible to known amounts of cash, are subject to insignificant risks of
changes in value, and are held for the purpose of meeting short-term cash
commitments rather than for investment or other purposes.
(m) Cash collaterals
Cash collaterals are held in segregated accounts on behalf of brokers against
the CFDs. Cash collaterals are accounted for and shown on the Statement of
Financial Position either as a receivable or payable, depending on whether
cash is due from or due to the broker.
(n) Reserves
Capital reserves
Profits/(losses) from selling investments and changes in fair value arising
upon the revaluation of investments that remain in the portfolio are shown in
the capital column of the Income Statement and allocated to the capital
reserve. Capital reserves attributable to realised profits are distributable.
Special distributable reserve
As stated in the Company's prospectus dated 13 November 2015, in order to
increase the distributable reserves available to facilitate the flexibility
and source of future dividends, the Company resolved that, conditional upon
First Admission to listing on the London Stock Exchange and the approval of
the Court, the net amount standing to the credit of the share premium account
of the Company immediately following completion of the First Issue be
cancelled and transferred to a special distributable reserve. This reserve is
distributable.
Revenue reserves
The revenue reserve reflects all income and expenditure recognised in the
revenue column of the Income Statement and is distributable by way of
dividends.
Share premium
The Company's share premium is the excess of the issue price of the share over
its nominal value on shares issued subsequent to the First Issue. The share
premium is not available for distribution.
3. Investments
(a) Summary of valuation
As at As at
31 October 2025 31 October 2024
£'000 £'000
Investments listed on a recognised overseas investment exchange 315,369 258,478
315,369 258,478
(b) Movements
During the year ended 31 October 2025
2025 2024
£'000 £'000
Book cost at the beginning of the year 222,917 207,351
Revaluation gains on equity investments held at beginning of the year 35,561 24,636
Valuation at beginning of the year 258,478 231,987
Purchases at cost 116,996 63,321
Sales:
- proceeds (109,646) (63,162)
- gains on investment holdings sold during the year 9,607 15,407
Movements in revaluation gains on investments held at year end 39,934 10,925
Valuation at end of the year 315,369 258,478
Book cost at end of the year 239,874 222,917
Revaluation gains on equity investments held at year end 75,495 35,561
Valuation at end of the year 315,369 258,478
Transaction costs on investment purchases for the year ended 31 October 2025
amounted to £47,800 (2024: £26,500) and on investment sales for the year
amounted to £46,200 (2024: £27,200).
The Company received £109,646,000 (2024: £63,162,000) from investments sold
during the year. The book cost of these investments when they were purchased
was £100,039,000 (2024: £47,755,000). These investments have been revalued
over time and until they were sold any unrealised gains/losses were included
in the fair value of the investments.
(c) Gains/(Losses) on investments
Year ended Year ended
31 October 2025 31 October 2024
£'000 £'000
Gains on equity investment holdings sold during the year 9,607 15,407
Movements in revaluation gains on investment held at year end 39,934 10,925
Other capital (losses)/gains (26) 3
Total gains on equity investments held at fair value 49,515 26,335
Realised gains on CFD assets and liabilities 16,943 122
Movement in unrealised (losses)/gains on CFD assets and liabilities (6,269) 7,975
Total gains on investments held at fair value 60,189 34,432
4. Income
Year ended Year ended
31 October 2025 31 October 2024
£'000 £'000
Income from investments:
Overseas dividends 10,327 9,278
Money market fund dividends 148 -
Deposit interest 21 79
Total 10,496 9,357
Overseas dividend income is translated into sterling on receipt.
5. Investment Management Fee
Year ended Year ended
31 October 2025 31 October 2024
£'000 £'000
Fee:
20% charged to revenue 423 400
80% charged to capital 1,691 1,599
Total 2,114 1,999
The Company's Investment Manager during the financial year was Chikara
Investments LLP. The Investment Manager is entitled to receive a management
fee payable monthly in arrears which, until 31 October 2024, was payable at
the rate of one-twelfth of 0.75% of net assets per calendar month. With effect
from 1 November 2024, the Company's management fee is calculated on a tiered
basis of 0.75% per annum on the first £300 million of net assets and 0.60% on
net assets in excess of £300 million. There is no performance fee payable to
the Investment Manager.
6. Other Expenses
Year ended Year ended
31 October 2025 31 October 2024
£'000 £'000
Administration and secretarial services(1) 322 171
Other expenses 400 402
Auditor's remuneration - statutory audit services 43 41
Directors' fees 143 145
Other expenses - Revenue 908 759
1 Frostrow Capital LLP was appointed on 1 January 2025 as
Alternative Investment Fund Manager ("AIFM"), Administrator and Company
Secretary, as well as to serve as the Company's investor relations and
marketing adviser.
7. Finance Costs
Year ended Year ended
31 October 2025 31 October 2024
£'000 £'000
Interest paid - 100% charged to revenue 63 39
CFD finance cost and structuring fee - 20% charged to revenue 89 57
Structuring fees - 20% charged to revenue 1 1
153 97
CFD finance cost and structuring fee - 80% charged to capital 356 230
Structuring fees - 80% charged to capital 4 4
360 234
Total finance costs 513 331
8. Taxation
Year ended 31 October 2025 Year ended 31 October 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(a) Analysis of tax charge in the year:
Overseas withholding tax 1,032 - 1,032 928 - 928
Total tax charge for the year (see Note 8 (b)) 1,032 - 1,032 928 - 928
(b) Factors affecting the tax charge for the year:
The effective UK corporation tax rate for the year is 25.0% (2024: 25.0%). The
tax charge for the Company differs from the charge resulting from applying the
standard rate of UK corporation tax for an investment trust company.
The differences are explained below:
Year ended 31 October 2025 Year ended 31 October 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total return before taxation 9,012 57,638 66,650 8,101 30,758 38,859
Effective UK corporation tax at 25.00% (2024: 25.00%) 2,253 14,410 16,663 2,025 7,690 9,715
Effects of:
Overseas withholding tax suffered 1,032 - 1,032 928 - 928
Non-taxable overseas dividends (2,619) - (2,619) (2,320) - (2,320)
Capital gains not subject to tax - (14,922) (14,922) - (8,148) (8,148)
Finance costs not tax deductible 38 90 128 24 59 83
Movement in unutilised management expenses 328 422 750 271 399 670
Total tax charge for the year 1,032 - 1,032 928 - 928
The Company has an unrecognised deferred tax asset of £2,335,000 (2024:
£1,543,000) based on the long-term prospective corporation tax rate of 25%
(2024: 25%). No asset has been recognised in the accounts because, given the
composition of the Company's portfolio, it is unlikely that this asset will be
utilised in the foreseeable future. The Company has not provided for deferred
tax on any tax losses.
9. Dividend
(i) Dividends paid during the financial year
Year ended Year ended
31 October 2025 31 October 2024
£'000 £'000
Second Interim - year ended 31 October 2024 3.85p (2023: 3.75p) 5,187 5,052
Interim dividend - year ended 31 October 2025 1.65p (2024: 1.60p) 2,223 2,156
Total 7,410 7,208
(ii) The dividend relating to the year ended 31 October 2025, which is the
basis on which the requirements of Section 1159 of the Corporation Tax Act
2010 are considered, is detailed below:
Year ended 31 October 2025 Year ended 31 October 2024
Pence per Pence per
Share £'000 Share £'000
Interim dividend 1.65p 2,223 1.60p 2,156
Second interim dividend(1) 4.25p 5,726 3.85p 5,187
5.90p 7,949 5.45p 7,343
1 Not included as a liability in the year ended 31 October
2025 accounts.
The Directors have declared a second interim dividend for the financial year
ended 31 October 2025 of 4.25p per share. The dividend will be paid on 2 March
2026 to shareholders on the register at the close of business on 30 January
2026.
10. Other Debtors
As at As at
31 October 2025 31 October 2024
£'000 £'000
Accrued income 3,955 3,588
Sales for settlement - 239
VAT receivable 156 193
Prepayments 79 42
Total 4,190 4,062
11. Other Creditors
As at As at
31 October 2025 31 October 2024
£'000 £'000
Amounts falling due within one year:
Accrued finance costs 36 24
Accrued expenses 316 267
Total 352 291
12. 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 31 October 2025 As at 31 October 2024
No. of shares £'000 No. of shares £'000
Allotted, issued & fully paid:
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
Since the year end, the Company has not issued any shares and there were
134,730,610 shares in issue as at 20 January 2026.
13. Return per Share
Total return per share is based on the return on ordinary activities,
including income, a profit for the year after taxation of £65,618,000 (2024:
profit of £37,931,000) and the weighted average number of shares in issue for
the year to 31 October 2025 of 134,730,610 (2024: 134,730,610).
The returns per share were as follows:
As at 31 October 2025 As at 31 October 2024
Revenue Capital Total Revenue Capital Total
Return per share 5.92p 42.78p 48.70p 5.32p 22.83p 28.15p
14. Net Asset Value per Share
Total shareholders' funds and the net asset value ("NAV") per share
attributable to shareholders at the year end calculated in accordance with the
Articles of Association were as follows:
NAV per Share
As at As at
31 October 2025 31 October 2024
Net Asset Value (£'000) 324,049 265,841
Shares in issue 134,730,610 134,730,610
NAV per share 240.52p 197.31p
15. Related Party Transactions
Investment Manager Fees
The Company provides additional information concerning its relationship with
the Investment Manager and its former AIFM, Chikara Investments LLP. The fees
for the period are disclosed in Note 5 and amounts outstanding at the year
ended 31 October 2025 were £199,000 (2024: £171,000).
Research purchasing agreement
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 2025 to 31 December 2025, as agreed
between the Investment Manager and the Company, was US $31,000 (31 December
2024: US $31,000). The research charge for the year 1 January 2026 to
31 December 2026, as budgeted by the Investment Manager, is US $31,000.
Directors' fees and shareholdings
The Directors' fees and shareholdings are disclosed in the Directors'
Remuneration Implementation Report in the 2025 Annual Report.
16. Financial Instruments and Capital Disclosures
Risk Management Policies and Procedures
As an investment trust the Company invests in equities and equity related
derivatives for the long term so as to secure its investment objective stated
on the inside front cover. In pursuing its investment objective, the Company
is exposed to a variety of risks that could result in either a reduction in
the Company's net assets or a reduction of the profits available for
dividends.
These risks include market risk (comprising currency risk, interest rate risk,
and other price risk), liquidity risk, and credit risk, and the Directors'
approach to the management of them is set out follows.
The objectives, policies and processes for managing the risks, and the methods
used to measure the risks, are set out below.
(a) Market risk
Economic conditions
Changes in economic conditions in Japan (for example, interest rates and rates
of inflation, industry conditions, competition, political events and other
factors) and in the countries in which the Company's investee companies
operate could substantially and adversely affect the Company's prospects. The
Company is subject to concentration risk as it only invests in Japanese
companies but has diversified investments across the different sectors in the
Japanese market.
Sectoral diversification
The Company has no limits on the amount it may invest in any sector. This may
lead to the Company having significant concentrated exposure to portfolio
companies in certain business sectors from time to time.
Concentration of investments in any one sector may result in greater
volatility in the value of the Company's investments and consequently its NAV
and may materially and adversely affect the performance of the Company and
returns to shareholders.
Unquoted companies
The Company may invest in unquoted companies from time to time. Such
investments, by their nature, involve a higher degree of valuation and
performance uncertainties and liquidity risks than investments in listed and
quoted securities and they may be more difficult to realise. However, the
Company does not currently hold and has never held any unquoted securities.
Management of market risk
The Company is invested in a diversified portfolio of investments. The
Company's investment policy states that no single holding (including any
derivative instrument) will represent more than 10% of the Company's gross
assets at the time of investment and, when fully invested, the portfolio is
expected to have between 30 to 40 holdings although there is no guarantee that
this will be the case and it may contain a lesser or greater number of
holdings at any time. A maximum of 10% of the Company's gross assets at the
time of investment may be invested in unquoted or untraded companies at time
of investment.
The Investment Manager's approach will in most cases achieve diversification
across a number of sectors as shown in the Holdings in Portfolio above.
(b) Currency risk
The majority of the Company's assets will be denominated in a currency other
than sterling (predominantly in yen) and changes in the exchange rate between
sterling and yen may lead to a depreciation of the value of the Company's
assets as expressed in sterling and may reduce the returns to the Company from
its investments and, therefore, negatively impact the level of dividends paid
to shareholders.
Management of currency risk
The Investment Manager monitors the currency risk of the Company's portfolio
on a regular basis. Foreign currency exposure is regularly reported to the
Board by the Investment Manager. The Company does not currently intend to
enter into any arrangements to hedge its underlying currency exposure to
investment denominated in yen, although the Investment Manager and the Board
will keep this approach under regular review.
Foreign currency exposures
An analysis of the Company's assets priced in yen is as follows:
As at As at
31 October 2025 31 October 2024
£'000 £'000
Equity Investments: yen 315,369 258,478
Receivables (due from brokers, dividends, and other income receivable) 3,955 3,827
CFD: yen (absolute exposure) 1,742 8,010
Cash and cash equivalent: yen 2,710 (4,849)
Total 323,776 265,466
Foreign currency sensitivity
If the Japanese yen had appreciated or depreciated by 10% as at 31 October
2025 (2024: 10%) then the value of the portfolio as at that date would have
increased or decreased as shown below.
Increase in Decrease in Increase in Decrease in
Fair Value Fair Value Fair Value Fair Value
As at 31 October As at 31 October As at 31 October As at 31 October
2025 2025 2024 2024
£'000 £'000 £'000 £'000
Impact on capital return - increase/(decrease) 32,378 (32,378) 26,547 (26,547)
Return after taxation - increase/(decrease) 32,378 (32,378) 26,547 (26,547)
(c) Leverage risk
Derivative instruments
The Company may utilise long only CFDs or equity swaps for gearing and
efficient portfolio management purposes. Leverage may be generated through the
use of CFDs or equity swaps. Such financial instruments inherently contain
much greater leverage than a non-margined purchase of the underlying security
or instrument. This is due to the fact that, generally, only a very small
portion (and in some cases none) of the value of the underlying security or
instrument is required to be paid in order to make such leveraged investments.
As a result of any leverage employed by the Company, small changes in the
value of the underlying assets may cause a relatively large change in the Net
Asset Value of the Company. Many such financial instruments are subject to
variation or other interim margin requirements, which may force premature
liquidation of investment positions.
Borrowing risks
The Company may use borrowings to seek to enhance investment returns. While
the use of borrowings can enhance the total return on the shares where the
return on the Company's underlying assets is rising and exceeds the cost of
borrowing, it will have the opposite effect where the return on the Company's
underlying assets is rising at a lower rate than the cost of borrowing or
falling, further reducing the total return on the shares. As a result, the use
of borrowings by the Company may increase the volatility of the Net Asset
Value per share. The Company had no borrowings at the year end.
Any reduction in the value of the Company's investments may lead to a
correspondingly greater percentage reduction in its Net Asset Value (which is
likely to adversely affect the price of a share). Any reduction in the number
of shares in issue (for example, as a result of buy backs) will, in the
absence of a corresponding reduction in borrowings, result in an increase in
the Company's level of gearing.
To the extent that a fall in the value of the Company's investments causes
gearing to rise to a level that is not consistent with the Company's gearing
policy or borrowing limits, the Company may have to sell investments in order
to reduce borrowings, which may give rise to a significant loss of value
compared with the book value of the investments, as well as a reduction in
income from investments.
Management of leverage risk
The aggregate of borrowings and long only CFDs and equity swap exposure will
not exceed 25% of Net Asset Value at the time of drawdown of the relevant
borrowings or entering into the relevant transaction, as appropriate, although
the Company's normal policy will be to utilise and maintain gearing to a lower
limit of 20% of Net Asset Value at the time of drawdown of the relevant
borrowings or entering into the relevant transaction, as appropriate. It is
expected that any borrowings entered into will principally be denominated in
yen.
The Company's level of gearing as at 31 October 2025 is disclosed in the
Alternative Performance Measures section below.
(d) Interest rate risk
The Company is exposed to interest rate risk specifically through its cash
holdings and on positions within the CFD portfolio. Interest rate movements
may affect the level of income receivable from any cash at bank and on
deposits. The effect of interest rate changes on the earnings of the companies
held within the portfolio may have a significant impact on the valuation of
the Company's investments. Movements in interest rates will also have an
impact on the valuation of the CFD derivative contracts. Interest receivable
on cash balances or paid on overdrafts is at fixed rate.
Management of interest rate risk
The possible effects on Fair Value and cash flows that could arise as a result
of changes in interest rates are taken into account when making investment
decisions. Derivative contracts are not used to hedge against the exposure to
interest rate risk.
Interest income earned on deposits and paid on overdraft by the Company is
primarily derived from fixed interest rates, and as such does not have a
material exposure to interest rate risk.
The bank overdraft is an integral part of cash management and the Company has
a legal right of offset and has the intention to settle this at net.
Interest rate exposure
The exposure at 31 October 2025 of financial assets and liabilities to
interest rate risk is shown by reference to floating interest rates - when the
interest rate is due to be reset. Due to the current low interest rate
environment in Japan, no sensitivity analysis is shown as the total impact
will not be material.
As at As at
31 October 2025 31 October 2024
due within one year due within one year
£'000 £'000
Exposure to floating interest rates: CFD derivative contract - (absolute 62,522 51,153
exposure)
Collateral paid in respect of CFDs 659 413
(e) Credit risk
Credit risk is the possibility of a loss to the Company due to the failure of
the counterparty to a transaction discharging its obligations under that
transaction.
Cash and other assets held by the Depositary
The cash and other assets held by the Depositary or its sub-custodians are
subject to counterparty credit risk as the Company's access to its cash could
be delayed should the counterparties become insolvent or bankrupt.
Derivative instruments
The Company's holdings in CFD contracts present counterparty credit risks,
with the risk of the counterparty (Morgan Stanley & Co International plc)
defaulting.
Management of credit risk
Cash and other assets held by the Depositary
Cash and other assets that are required to be held in custody will be held by
the Depositary or its sub-custodians. Cash and other assets may not be treated
as segregated assets and will therefore not be segregated from any custodian's
own assets in the event of the insolvency of a custodian. Cash held with any
custodian will not be treated as client money subject to the rules of the
Financial Conduct Authority ("FCA") and may be used by a custodian in the
course of its own business. The Company will therefore be subject to the
creditworthiness of its custodians. In the event of the insolvency of a
custodian, the Company will rank as a general creditor in relation thereto and
may not be able to recover such cash in full, or at all. The Company has
appointed Northern Trust Investor Services Limited as its Depositary. The
credit rating of Northern Trust was reviewed at time of appointment and will
be reviewed on a regular basis by the Investment Manager and/or the Board. The
Fitch's credit rating of Northern Trust is AA-.
Derivative instruments
Where the Company utilises CFDs or equity swaps, it is likely to take a credit
risk with regard to the parties with whom it trades and may also bear the risk
of settlement default. These risks may differ materially from those entailed
in exchange-traded transactions that generally are backed by clearing
organisation guarantees, daily marking-to-market and settlement, and
segregation and minimum capital requirements applicable to intermediaries.
Transactions entered into directly between counterparties generally do not
benefit from such protections and expose the parties to the risk of
counterparty default. CFD contracts generally require variation margins, and
the counterparty credit risk is monitored by the Investment Manager.
The Investment Manager monitors the Company's exposure to its counterparties
on a regular basis and the position is reviewed by the Directors at Board
meetings. Investment transactions are carried out with a number of brokers,
whose credit-standing is reviewed periodically by the Investment Manager, and
limits are set on the amount that may be due from any one broker.
In summary, the exposure to credit risk as at 31 October 2025 was as follows:
As at As at
31 October 2025 31 October 2024
3 months or less 3 months or less
£'000 £'000
Cash at bank 4,359 4,006
Amounts due in respect of CFDs 2,860 8,027
Collateral paid in respect of CFDs 659 413
Debtors 3,955 4,062
Total 11,833 16,503
None of the above assets or liabilities was impaired or past due but not
impaired.
(f) Other price risk
Other price risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices (other
than those arising from interest rate risk or currency risk), whether those
changes are caused by factors specific to the individual financial instrument
or its issuer, or factors affecting similar financial instruments traded in
the market.
The Company is exposed to market price risk arising from its equity
investments and its exposure to the positions within the CFD portfolio. The
movements in the prices of these investments result in movements in the
performance of the Company.
The Company's exposure to other changes in market prices at 31 October 2025 of
its equity investments was £315,369,000 (2024: £258,478,000). In addition,
the Company's gross market exposure to these price changes through its CFD
portfolio was £62,522,000 through long positions (2024: £51,153,000).
The Company uses CFDs as part of its investment policy. These instruments can
be highly volatile and potentially expose investors to a higher risk of loss.
The low initial margin deposits normally required to establish a position in
such instruments permit a high degree of leverage. As a result, a relatively
small movement in the price of a contract may result in a profit or loss which
is high in proportion to the value of the net exposures in the underlying CFD
positions. In addition, daily limits on price fluctuations and speculative
position limits on exchanges may prevent prompt liquidation of positions
resulting in potentially greater losses.
The Company limits the gross market exposure, and therefore the leverage, of
this strategy to approximately 200% of the Company's net assets. The CFDs
utilised have a linear performance to referenced stocks quoted on exchanges
and therefore have the same volatility profile to the underlying stocks.
Market exposure to derivative contracts is disclosed below.
The Company's exposure to CFDs is the aggregate of Long CFD Positions. The
gross and net market exposure is the same as the Company does not hold Short
CFD Positions.
Exposures are monitored daily by the Investment Manager. The Company's Board
also reviews exposures regularly. The gross underlying notional exposures
within the CFD portfolio as at 31 October 2025 were:
As at 31 October 2025 As at 31 October 2024
% of net % of net
£'000 assets £'000 assets
CFDs - (absolute exposure) 62,522 19.29% 51,153 19.24%
CFDs - (net exposure) 62,522 19.29% 51,153 19.24%
The Board of Directors manages the market price risks inherent in the
investment portfolio by ensuring full and timely access to relevant
information from the Investment Manager. The Board meets regularly and at each
meeting reviews investment performance. The Board monitors the Investment
Manager's compliance with the Company's objective.
Concentration of exposure to other price risk
A sector breakdown of the portfolio can be found above.
Other price risk sensitivity
The following table illustrates the sensitivity of the profit after taxation
for the period to an increase or decrease of 10% in the fair values of the
Company's equities and CFDs. This level of change is considered to be
reasonably possible based on observation of current market conditions. The
sensitivity analysis is based on the notional exposure of the Company's
equities investments and long CFDs.
As at 31 October 2025 As at 31 October 2024
Increase in Decrease in Increase in Decrease in
Fair Value Fair Value Fair Value Fair Value
£'000 £'000 £'000 £'000
Impact on capital return - increase/(decrease) 37,615 (37,615) 30,162 (30,162)
Return after taxation - increase/(decrease) 37,615 (37,615) 30,162 (30,162)
(g) Liquidity risk
The securities of small-to-medium-sized (by market capitalisation) companies
may have a more limited secondary market than the securities of larger
companies. Accordingly, it may be more difficult to effect sales of such
securities at an advantageous time or without a substantial drop in price than
it would be for securities of a company with a large market capitalisation and
broad trading market. In addition, securities of small-to-medium-sized
companies may have greater price volatility as they can be more vulnerable to
adverse market factors such as unfavourable economic reports.
Management of liquidity risk
The Company's Investment Manager monitors the liquidity of the Company's
portfolio on a regular basis.
Liquidity risk exposure
The undiscounted gross cash outflows of the financial liabilities as at 31
October 2025, based on the earliest date on which payment can be required,
were as follows:
As at As at
31 October 2025 31 October 2024
less than 3 months less than 3 months
£'000 £'000
Amounts payable in respect of CFDs 3,036 8,854
Other payables 352 291
Total 3,388 9,145
The Company is exposed to liquidity risks from the leverage employed through
exposure to long only CFD positions. However, timely sale of trading positions
can be impaired by many factors including decreased trading volume and
increased price volatility. As a result, the Company could experience
difficulties in disposing of assets to satisfy liquidity demands. Liquidity
risk is minimised by holding sufficient liquid investments which can be
readily realised to meet liquidity demands. The Company's liquidity risk is
managed on a daily basis by the Investment Manager in accordance with
established policies and procedures in place.
(h) Fair value measurements of financial assets and financial liabilities
The financial assets and liabilities are either carried in the Statement of
Financial Position at their Fair Value, or the Statement of Financial Position
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) below.
The table below sets out Fair Value measurements using Fair Value Hierarchy.
Level 1 Level 2 Level 3 Total
31 October 2025 £'000 £'000 £'000 £'000
Assets:
Equity investments 312,610 2,759 - 315,369
CFDs - Unrealised Fair Value gains - 2,860 - 2,860
Liabilities:
CFDs - Unrealised Fair Value losses - (1,119) - (1,119)
Total 312,610 4,500 - 317,110
Level 1 Level 2 Level 3 Total
31 October 2024 £'000 £'000 £'000 £'000
Assets:
Equity investments 255,765 2,713 - 258,478
CFDs - Unrealised Fair Value gains - 8,027 - 8,027
Liabilities:
CFDs - Unrealised Fair Value losses - (17) - (17)
Total 255,765 10,723 - 266,488
There were no transfers between levels during the year (2024: nil).
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 were no Level 3 investments as at
31 October 2025 (2024: nil).
(i) Capital management policies and procedures
The Company's capital management objectives are:
· to ensure that the Company will be able to continue as a
going concern; and
· to provide dividend income combined with capital growth,
mainly through investment in equities listed or quoted in Japan and by
utilising the leverage effect of CFD.
The key performance indicators are contained in the strategic report in the
2025 Annual Report.
The Company is subject to several externally imposed capital requirements:
· As a public company, the Company has to have a minimum
share capital of £50,000.
· In order to be able to pay dividends out of profits
available for distribution by way of dividends, the Company has to be able to
meet one of the two capital restriction tests imposed on investment companies
by company law.
The Company's capital at 31 October 2025 comprises called up share capital and
reserves totalling £324,049,000 (2024: £265,841,000).
The Board regularly monitors, and has complied with, the externally imposed
capital requirements.
17. Distributable Reserves
The Company's distributable reserves consist of the Special reserve, Revenue
reserve and Capital reserve attributable to realised profits. As at 31 October
2025, the total distributable Capital reserve was £76,023,000 (2024:
£58,319,000), and the total undistributable Capital reserve was £75,495,000
(2024: £35,561,000).
Special reserve: As stated in the Company's prospectus dated 13 November 2015,
in order to increase the distributable reserves available to facilitate the
flexibility and source of future dividends, the Company resolved that,
conditional upon First Admission to listing on the London Stock Exchange and
the approval of the Court, the net amount standing to the credit of the share
premium account of the Company immediately following completion of the First
Issue be cancelled and transferred to a special distributable reserve.
Following approval by the Court, the cancellation became effective on
23 March 2016 and an amount of £64,671,250 was transferred to the above
Special reserve at that time.
The Special reserve is distributable.
As at 31 October 2025, the Company had total distributable reserves of
£149,139,000 (2024: £130,865,000).
18. Post Balance Sheet Events
There were no post balance sheet events other than those already disclosed in
this report.
Other information
Glossary and Alternative Performance Measures
Administrator The Company's administrator, the current such administrator effective 1
January 2025 being Frostrow Capital LLP, and prior to that Apex Listed
Companies 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" The UK version of an European Union Directive which came into force on 22 July
2013 and which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018, as amended by The Alternative Investment Fund Managers (Amendment
etc.) (EU Exit) Regulations 2019.
Alternative Performance Measure or "APM" A financial measure of historical or future financial performance, financial
position, or cash flows, other than a financial measure defined or specified
in the applicable financial reporting framework.
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.
Absolute exposure The absolute difference between the Company's long positions and short
positions.
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 hold and 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. The Company's Depositary is Northern Trust Investor Services
Limited.
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 share.
As at 31 October 2025
NAV per share (pence) a 240.5
Share price (pence) b 222.0
Discount (b÷a)-1 7.7%
As at 31 October 2024
NAV per share (pence) a 197.3
Share price (pence) b 178.8
Discount (b÷a)-1 9.4%
Ex-dividend date The date from which a shareholder is 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) A way to magnify 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 31 October 2025 £'000
CFD notional market value(1) a 62,522
Non-base cash borrowings(2) b -
NAV c 324,049
Gearing (net) ((a+b)/c) 19.3%
As at 31 October 2024 £'000
CFD notional market value(1) a 51,153
Non-base cash borrowings(2) b -
NAV c 265,841
Gearing (net) ((a+b)/c) 19.2%
1 CFD positions in underlying asset value.
2 Non-base cash borrowings represents borrowings in yen.
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.
Gross market exposure The Company's total exposure investment value in the financial market prices.
Gross underlying notional exposure The Company's total exposure value on the underlying asset of its derivatives.
Investment company A company formed to invest in a diversified portfolio of assets.
Investment trust A closed end investment company which is based in the United Kingdom ("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 31 October 2025 £'000 £'000
Security market value a 315,369 315,369
CFD notional market value b 62,522 62,522
Cash and cash equivalents(1) c 5,226 3,100
NAV d 324,049 324,049
Leverage (a+b+c)/d 118% 118%
Gross Commitment
As at 31 October 2024 £'000 £'000
Security market value a 258,478 258,478
CFD notional market value b 51,153 51,153
Cash and cash equivalents(1) c 4,616 4,186
NAV d 265,841 265,841
Leverage (a+b+c)/d 118% 118%
1 Cash and cash equivalents represent gross overdraft and net
overdraft with Northern Trust.
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 or NAV per share Net assets divided by the number of shares in issue (excluding any shares held
in Treasury).
Net exposure The difference between the Company's long positions and short positions.
Ongoing charges (APM) A measure, expressed as a percentage of the regular, recurring annual costs of
running an investment company.
Year end 31 October 2025
Average NAV a 284,089,803
Annualised expenses b 3,013,000
Ongoing charges (b÷a) 1.06%
Year end 31 October 2024
Average NAV a 266,974,122
Annualised expenses b 2,758,000
Ongoing charges (b÷a) 1.03%
Portfolio A composition of different investment holdings constructed and held in order
to deliver returns to shareholders and to spread risk.
Share Premium to Net Asset Value (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 by a company of its 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.
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 takes into account both income and capital
returns.
Year end 31 October 2025 Share price NAV
Opening at 1 November 2024 (in pence) a 178.8 197.3
Closing at 31 October 2025 (in pence) b 222.0 240.5
Price movement (b÷a)-1 c 24.2% 21.9%
Dividend reinvestment(1) d 3.7% 3.3%
Total return (c+d) 27.9% 25.2%
Year end 31 October 2024 Share price NAV
Opening at 1 November 2023 (in pence) a 162.5 174.5
Closing at 31 October 2024 (in pence) b 178.8 197.3
Price movement (b÷a)-1 c 10.0% 13.1%
Dividend reinvestment(1) d 3.2% 3.0%
Total return (c+d) 13.2% 16.1%
1 The dividend reinvestment is calculated on the assumption
that dividends paid out by the Company are reinvested into the shares of the
Company at NAV at the ex-dividend date.
Volatility A statistical measure of how much and how quickly an asset's price changes
over time.
Company Security Information and Identification Codes
WEBSITE www.ccjapanincomeandgrowthtrust.com
(http://www.ccjapanincomeandgrowthtrust.com)
ISIN GB00BYSRMH16
SEDOL BYSRMH1
BLOOMBERG TICKER CCJI LN
LEGAL ENTITY IDENTIFIER (LEI) 549 300 FZANMYIORK 1K98
GLOBAL INTERMEDIARY IDENTIFICATION NUMBER (GIIN) 6 HEK HT-99999-SL-826
REGISTRATION NUMBER Registered in England no. 9845783
Status of Results Announcement
The figures and financial information for 2025 are extracted from the Annual
Report and financial statements for the year ended 31 October 2025 and do not
constitute the statutory accounts for the year. The Annual Report and
financial statements for the year ended 31 October 2025 include the Report of
the Independent Auditor which is unqualified and does not contain a statement
under either section 498(2) or section 498(3) of the Companies Act 2006. The
Annual Report and financial statements have not yet been delivered to the
Registrar of Companies.
The figures and financial information for 2024 are extracted from the
published Annual Report and financial statements for the year ended 31 October
2024 and do not constitute the statutory accounts for that year. The Annual
Report and financial statements for the year ended 31 October 2024 have been
delivered to the Registrar of Companies and included the Report of the
Independent Auditor which was unqualified and did not contain a statement
under either section 498(2) or section 498(3) of the Companies Act 2006.
21 January 2026
Frostrow Capital LLP
Company Secretary
- ENDS -
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
For further information please contact:
AIFM, Administrator and Company Secretary
Frostrow Capital LLP
Email: cosec@frostrow.com (mailto:cosec@frostrow.com)
Tel: 0203 709 2481
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