Half-year Report

ATLANTIS JAPAN GROWTH FUND LIMITED
(“AJGF” or the “Company”)
(a closed-ended investment company incorporated in Guernsey with registration number 30709)

LEI 5493004IW0LDG0OPGL69

Interim Results for the six month financial period ended 31 October 2018
7 December 2018
(Classified Regulated Information, under DTR 6 Annex 1 section 1.2)

The financial information set out below does not constitute the Company's statutory accounts for the financial period ended 31 October 2018.

The financial information for the financial period ended 31 October 2018 noted below is derived from the financial statements delivered to the UK Listing Authority.

The interim report and financial statements for the financial period ended 31 October 2018 will shortly be made available to shareholders on the Company website: www.atlantisjapangrowthfund.com

Introduction

INVESTMENT OBJECTIVE

Atlantis Japan Growth Fund Limited (the “Company”) aims to achieve long term capital growth through investment wholly or mainly in listed Japanese equities.

INVESTMENT POLICY

The Company may invest up to 100 per cent of its gross assets in companies quoted on any Japanese stock exchange including, without limitation, the Tokyo Stock Exchange categorised as First Section, Second Section, JASDAQ, Mothers and Tokyo PRO, or the regional stock exchanges of Fukuoka, Nagoya, Sapporo and Osaka Securities Exchange.

The Company may also invest up to 20 per cent of its Net Asset Value (the “NAV”) at the time of investment in companies listed or traded on other stock exchanges but which are either controlled and managed from Japan or which have a material exposure to the Japanese economy.

The Company may also invest up to 10 per cent of its NAV at the time of investment in securities which are neither listed nor traded on any stock exchange or over-the-counter market.

In general, investment will be through investments in equity shares in, or debt issued by, investee companies.  However, the Company may also invest up to 20 per cent of its NAV at the time of investment in equity warrants and convertible debt.

The Company will not invest in more than 10 per cent of any class of securities of an investee company. The Company will not invest in derivative instruments save for the purpose of efficient portfolio management.

The Company may not invest more than 10 per cent in aggregate, of the value of its total assets in other listed closed-ended investment funds except in the case of investment in closed-ended investment funds which themselves have published investment policies to invest no more than 15 per cent of their total assets in other listed closed-ended investment funds, in which case the limit is 15 per cent.

The Company may borrow, with a view to enhancing capital returns, up to a maximum of an amount not exceeding 20 per cent of NAV at the time of borrowing.

Investment Policy for the Redemption Pool

At each redemption point the Company may (a) notionally allocate assets and liabilities into a separate pool (the "redemption pool") for the purpose of funding valid redemption requests for that redemption point or (b) fund the valid redemption requests from available cash. With regard to the redemption pool, the Company aims to liquidate the necessary assets to meet qualifying redemption requests in a timely manner, and to minimise the impact that such redemptions will have to existing shareholders and the Company as a whole.

INVESTMENT MANAGER AND INVESTMENT ADVISER

Quaero Capital LLP (formally Tiburon Partners LLP) is the Investment Manager and Alternative Investment Fund Manager pursuant to the Alternative Investment Fund Managers Directive.

Atlantis Investment Research Corporation (“AIRC”) established in Tokyo, is the Investment Adviser.

AIRC, established in Tokyo, through Taeko Setaishi and her colleagues, advise the Investment Manager on the day-to-day conduct of the Company’s investment business, the role it has played since the launch of the Company in May 1996.

Chairman’s Statement
For the six month financial period ended 31 October 2018

The first half of the current financial year ended 31 October 2018 has been somewhat more challenging compared to the preceding financial period. In the six months to 31 October 2018, the total return on net assets per share (net of fees and expenses) and in Sterling terms was -9.0%. This compares with the TOPIX Total Return index in Sterling terms, of -2.5%. The return to Ordinary shareholders per share and in Sterling terms was -11.4%.

The current period of weaker performance following the Company’s strong positive performance for the financial year ended April 2018 has been  attributable to the considerable headwinds affecting global financial markets across most asset classes. These include rising US interest rates, decelerating economic growth expectations in Asia and Europe, and corporate earnings uncertainty due to increased US/China trade tensions and implementation of tariffs since early 2018. Despite the current doom and gloom, these headwinds tend to be transient in nature and stock markets generally act as efficient discounting mechanisms. One might suggest that given the market turbulence experienced in October, the Japanese stock market is now discounting some pessimistic outcomes. The team at AIRC are growth investors and Taeko Setaishi is continuing to find individual companies able to take advantage of market opportunities despite the external factors driving short-term market sentiment. The longer-term earning drivers of small to medium sized companies in Japan are being offered at more attractive valuations than they were just over six months ago and the structural improvements within the domestic economy continue to move forward.

With a simplification of the Company’s structure, following the cancellation of the subscription right programme in November 2017, an increase in the market capitalisation and the strong performance of the Company following  Taeko Setaishi’s succession, I remain confident that the Company has a much brighter future, external factors notwithstanding.

Noel Lamb

7 December 2018

Investment Adviser’s Interim Report
For the six month financial period ended 31 October 2018

PERFORMANCE

After a strong start to the financial year, global equity markets cracked in October when investors began to discount the cumulative effects on corporate profits of higher interest rates, rising materials costs, and slower trade flows. In Japan investors were unimpressed by the initial results reported for first half of the fiscal year March 2019 that suggested low single digit profit growth for the financial year. The pedestrian earnings outlook provoked sustained short selling by overseas hedge funds. During October’s final week short sells accounted for a record 48.0% of turnover. Equity market gains achieved during the first five months were wiped away. Consequently, for the financial period under review the TOPIX index denominated in GDP and on a total return basis fell 2.5%. The Company slid 9.0% for the same six month financial period. Smaller indices had a mixed performance with the TSE-2 rising 4.4% but the Nikkei OTC Average losing 5.9%.

The Investment Adviser attributes the Company’s performance to its exposure to growth and a resultant portfolio bias toward small and medium capitalised companies which underperformed large capitalised companies with a value bias. In terms of sector selection throughout the six month financial period, the Company ran overweight positions in the services, machinery, and information/communications sectors which were among the poorer performing sectors. Conversely the Company had no exposure to the better performing food, electric power/gas, bank, and other financing business sectors. Stocks that made a positive contribution to the Company’s performance included the construction machinery leasing firm Kanamoto, Japan Elevator Service, and medical device assembler and distributor Asahi Intecc.

At the end of 31 October 2018, the Company’s borrowings totalled ¥1 billion and cash held was ¥321 million which means the Company had 4.6% net gearing. The Japanese yen ended the financial period at ¥144.17 against Sterling, a gain of 4.2% from the closing rate of ¥150.27 at the end of April 2018.

The Company ended the reviewed financial period with 69 holdings compared with 61 at 30 April 2018. The Company has no exposure to convertible bonds or any other class of equity derivative; neither does it have any foreign exchange hedge in place. Excluding cash, the Company is entirely invested in publicly listed Japanese companies (including one REIT).

MARKET COMMENT AND INVESTMENT STRATEGY

The Investment Adviser believes there is a positive case to be made for investment in Japanese equities. The economy has had to absorb the impact of several severe summer storms and earthquakes but is capable of generating real growth in the 0.5-1.0% range in the first half of the fiscal year March 2019. The growth is well balanced with contributions from private sector capital investment, consumption, and external demand. A major risk to this assumption is an unsatisfactory conclusion to the on-going trade dispute between China and the US; Japan’s two major trading partners.

Corporate guidance for flat medium-term profits is arguably conservative since it is based on a forecast exchange rate of ¥105 to the US dollar versus the current spot rate of ¥113. The Investment Adviser expects pre-tax profits in the current financial year to increase by 5-6%; and by 6-7% in the subsequent financial year. TOPIX is selling on a 14x forward PER and 1.3x PBR. These valuations are below the long-term average ranges and compare favourably with other developed market equity market valuations.

Over the longer-term Japan will be challenged by the socioeconomic effects of a shrinking population, a swelling public sector financial deficit, and heavier welfare expenditure commitments. The Investment Adviser believes these challenges will produce structural changes to the economy and create new investment opportunities in consultant services, robotics, health care, technology and outsourcing.

The Company’s investment strategy will continue to utilize a bottom-up stock-picking style to invest in fundamentally undervalued companies with strong competitive advantages and medium to long term growth potential. This approach does not exclude any company or sector from investment consideration and historically has resulted in a portfolio bias toward smaller and medium sized growth opportunities.

Atlantis Investment Research Corporation

7 December 2018

Directors’ Interim Report and Statement of Directors’ Responsibilities
For the six month financial period ended 31 October 2018

The Directors are pleased to present their Interim Report and the Unaudited Financial Statements of the Company for the six month financial period ended 31 October 2018.

In the opinion of the Company's Directors, the condensed Directors’ Interim Report and Unaudited Financial Statements enable investors to make an informed assessment of the results and activities of the Company for the financial period.

The Interim Report and Financial Statements have not been audited or reviewed by the Company’s auditor.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Directors confirm, to the best of our knowledge, that:

–      the condensed Interim Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting;

–      as required by DTR 4.2.7R of the FCA’s Disclosure and Transparency Rules, the Directors’ Interim Report and Investment Adviser’s Interim Report include a fair review of important events that have occurred during the first six months of the financial year and their impact on the condensed Interim Financial Statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and;

–      the Interim Financial Statements include a fair review of the information concerning related party transactions required by DTR 4.2.8R.

CAPITAL VALUES

At 31 October 2018 the value of net assets available to shareholders was $130,023,920 (30 April 2018: $163,312,565) and the NAV per share was $2.81/£2.21 (30 April 2018: $3.33/£2.42).

PRINCIPAL RISKS AND UNCERTANTIES

As an investment trust, the Company invests in securities for the long term. The financial investments held as assets by the Company comprise equity shares (see the Schedule of Investments for a breakdown). As such, the holding of securities, investing activities and financing associated with the implementation of the investment policy involves certain inherent risks. Events may occur that could result in either a reduction in the Company’s net assets or a reduction of revenue profits available for distribution.

Set out below are the principal risks inherent in the Company’s activities along with the actions taken to manage them. The Directors conduct robust reviews of these risks and agrees policies for their management. These policies have remained substantially unchanged since 30 April 2006.

Performance

The Directors regularly monitor the Company’s investment performance against a number of indices and the Association of Investment Companies (“AIC”) Japanese smaller companies’ sub-sector peer group.

Discount

A disproportionate widening of the discount relative to the Company’s peers could result in loss of value for shareholders. The Directors review the discount level regularly. The introduction of the Redemption Facility has improved the liquidity in the Company’s shares and helps to narrow the discount to the NAV at which the shares trade.

The Company operates a shareholder approved discount control mechanism whereby the Company will hold a continuation vote if the shares have traded, on average, at a discount of more than 10% to the NAV per share during any rolling 90 day period, in normal market conditions. If the obligation to hold a continuation vote is triggered, the vote will be held no later than the next practicable annual general meeting of the Company. As of the date of this report, the continuation vote has not been triggered. 

Regulatory

The Company operates in a complex regulatory environment and faces a number of regulatory risks. Breaches of regulations, such as Section 1158 of the Corporation Tax Act 2010, The Companies (Guernsey) Law, 2008, the UKLA Listing Rules and the DTR, could lead to a number of detrimental outcomes and reputational damage. The Company conforms with the Alternative Investment Fund Managers Directive (“AIFMD”). The Board relies on the services of the Administrator, Northern Trust International Fund Administration Services (Guernsey) Limited, and its professional advisers to ensure compliance with The Companies (Guernsey) Law, 2008, the UKLA Listing Rules and Prospectus Rules, the DTR and the rules of the London Stock Exchange.

Operational

Like most other investment trust companies, the Company has no employees. The Company therefore relies upon the services provided by third parties and is dependent on the control systems of the Investment Manager, Investment Adviser and the Company’s Administrator. The security, for example, of the Company’s assets, dealing procedures, accounting records and maintenance of regulatory and legal requirements depends on the effective operation of these systems. These are regularly tested and monitored.

Market risk

Market risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s business. It represents the potential loss the Company might suffer through holding market positions in the face of price movements.

The market risk is monitored by the Directors on a quarterly basis and on a daily basis by the Investment Manager.

Currency risk

The Company’s results for the financial period and net assets could be significantly affected by currency movements as most of the Company’s assets are denominated in JPY. In order to reduce this risk the Company may hedge its exposure to the JPY. The Company did not have any hedging arrangements in place as at 31 October 2018 and 30 April 2018.

Borrowing and interest rate risk

The Company finances its operations mainly through its share capital and retained profits, including realised and unrealised capital profits. Additional bank borrowings may be used with a view to enhancing capital returns. However, the Company’s Articles of Incorporation provide that borrowing levels should not exceed 20% of NAV at the time any borrowing is affected. The level of net borrowing as at 31 October 2018 was 4.6% (30 April 2018: Nil).

The credit facility for ¥1,000,000,000 was rolled over every three months in accordance with its terms most recently on 7 September 2018.

Liquidity risk and cash flow risk

Assuming a normal market environment, the majority of the Company's assets comprise readily realisable securities, which can be sold to meet funding commitments as necessary. As at 31 October 2018 based on the assumption of one third of the volume for the last three months average volume, 96.9% (31 October 2017: 95.9%) of the Company's assets can be realised within two weeks and the balance of 3.1% (31 October 2017: 4.1%) can be realised in between two weeks and one month.

GOING CONCERN

The Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future. Whilst the Company may be obliged to hold a continuation vote in accordance with its discount control mechanism, the Directors do not believe this should automatically trigger the adoption of a non-going concern basis. This is in line with the AIC’s Statement of Recommended Practice (“SORP”) which states that it is more appropriate to prepare financial statements on a going concern basis unless a continuation vote has already been triggered and shareholders have voted against continuation. Therefore, the Directors believe the use of the going concern basis is appropriate as there are no material uncertainties relating to events or conditions that may cast significant doubt about the ability of the Company to continue to meet its ongoing obligations.

BOARD OF DIRECTORS COMPOSITION

There were no changes to the Board of Directors during the financial period.

Noel Lamb                                             Philip Ehrmann
Chairman                                              Chairman, Audit Committee

7 December 2018

Details of Ten Largest Investments

The ten largest investments comprise a fair value of $35,229,288 (30 April 2018: $46,678,063) representing 27.2% of the NAV (30 April 2018: 28.6%) with details as below:

Nidec (37,000 shares)

Nidec is the world’s leading small precision electric motor maker with particular application in hard disk drives. Through a highly active and successful global M&A strategy Nidec has also become a major supplier of mid and large sized motors. The company has a proven management team focused on creating shareholder value.

Fair value of $4,739,690 representing 3.7% of the Net Asset Value (30 April 2018: 3.6%)

Nittoku Engineering (165,000 shares)

Nittoku Engineering is a major global assembler and distributor of automatic coil winding machines. Demand for coils, and automatic coil winding machines, continues to climb as coil application expands, not only in electrical devices, but also automobiles. The company is diversifying into radio frequency identification cards and tags. Production is largely off-shore and overseas sales are 70% of total.

Fair value of $4,360,031 representing 3.4% of the Net Asset Value (30 April 2018: 3.7%)

Fullcast Holdings (187,000 shares)

Fullcast holds the top market share in short term staffing services. Legislative changes and market contraction have driven most competitors from the field but labour demand remains tight and conditions remain conducive for Fullcast, with its hiring power, to expand market share. Fullcast’s sustained investment in online registration, new outlet openings and a multi-brand strategy is expected to lead to further growth.

Fair value of $3,501,445 representing 2.7% of the Net Asset Value (30 April 2018: 2.5%)

Hikari Tsushin (20,000 shares)

Hikari Tsushin is a 2,000 shop sales organization targeting individuals and SMEs. Hikari has diversified from distributing business equipment and mobile phones to a variety of other products and services including water coolers, electric power, mobile Wi-Fi routers, and insurance.

Fair value of $3,486,717 representing 2.7% of the Net Asset Value (30 April 2018: 2.1%)

Japan Material (280,000 shares)

Japan Material provides management services for special gases, ultra-pure water, and chemicals by dispatching engineers to semiconductor and LCD production facilities. The company also sells these consumable supplies and piping equipment. Clients include most major Japanese semiconductor/LCD makers. Japan Material’s Taiwan subsidiary provides similar services and supplies to major Taiwanese semiconductor manufacturers.

Fair value of $3,274,897 representing 2.5% of the Net Asset Value (30 April 2018: 2.4%)

Asahi Intecc (80,000 shares)

Building on its ultra-fine steel wire manufacturing expertise, Asahi Intecc has become a global leader in distributing angiographic catheters and other circulatory organ related PTCA guidewire products. Asahi remains cost competitive by utilising off-shore production facilities and independent direct sales.

Fair value of $3,263,935 representing 2.5% of the Net Asset Value (30 April 2018: 2.2%)

Benefit One (126,000 shares)

Benefit One creates and administers employee benefit programs for a wide range of corporate and government agency clients. Member organizations prefer to outsource benefit administration for a fixed fee owing to cost and convenience. Benefits include discounted access to leisure facilities and health care check-ups. Benefit One has established branches in China, United States, Germany, and Thailand.

Fair value of $3,235,911 representing 2.5% of the Net Asset Value (30 April 2018: 2.0%)

Creek & River (340,000 shares)

Creek & River specialises in providing temporary staff to content providers, mainly to TV stations, game, web, and advertising firms. Creek & River has widened its staffing rolls to medical professionals, accountants, and fashion.  The company has launched an intellectual property management service.

Fair value of $3,132,034 representing 2.4% of the Net Asset Value (30 April 2018: 2.3%)

Japan Elevator Service Holdings (220,000 shares)

Japan Elevator Service is the leading independent elevator maintenance service provider which has taken advantage of its technical strength (remote low-cost inspections) and marketing capabilities to build share and expand geographic reach to the Kansai region.  The company benefits from elevator manufacturers withdrawing from the maintenance service market and is directing cash flow to acquisitions.

Fair value of $3,123,547 representing 2.4% of the Net Asset Value (30 April 2018: 0.0%)

Nihon M&A Center (130,000 shares)

Nihon M&A provides M&A consulting and advisory services to small and medium sized companies. It seeks to match growth oriented companies looking to expand market share with small and medium sized firms with an uncertain outlook due to succession problems or structural business changes. Employee compensation is largely based on performance. Nihon M&A Center has opened a Singapore office to enhance its cross border capabilities.

Fair value of $3,111,081 representing 2.4% of the Net Asset Value (30 April 2018: 2.3%)

Unaudited Schedule of Investments
As at 31 October 2018

Fair Value
Holdings Investments held at fair value through profit or loss  $'000 % of NAV
Advertising: 0.67% (30 Apr 2018: 1.33%)
120,000 Tow 871 0.67
Auto Parts & Equipment: 0.00% (30 Apr 2018: 0.78%) - -
Chemicals: 4.77% (30 Apr 2018: 5.21%)
75,000 KH Neochem 2,122 1.63
220,900 Mitsubishi Chemical 1,721 1.33
58,000 Tri Chemical Laboratories 2,354 1.81
Commercial Services: 25.28% (30 Apr 2018: 21.76%)
110,000 Aoyama Zaisan Networks 1,527 1.17
126,000 Benefit One 3,236 2.49
340,000 Creek & River 3,132 2.41
119,800 EF-ON 1,145 0.88
187,000 Fullcast Holdings 3,501 2.69
107,500 Funai Soken 2,274 1.75
22,000 Kanamoto 733 0.56
280,000 Link and Motivation 2,743 2.11
130,000 Nihon M&A Center 3,111 2.39
57,000 Outsourcing 721 0.56
57,000 Phil 2,013 1.55
75,000 Recruit Holdings 2,014 1.55
200,000 Riso Kyoiku 2,115 1.63
115,000 S-Pool 1,540 1.18
90,000 TKP 3,063 2.36
Computers: 1.26% (30 Apr 2018: 2.08%)
80,000 BayCurrent Consulting 1,634 1.26
Distribution/Wholesale: 2.03% (30 Apr 2018: 1.69%)
105,000 Trusco Nakayama 2,641 2.03
Diversified Financial Services: 2.04% (30 Apr 2018: 1.94%)
85,000 Japan Investment Adviser 2,656 2.04
Electronics: 6.76% (30 Apr 2018: 9.17%)
90,000 Chino 1,020 0.78
167,000 IDEC 3,032 2.33
37,000 Nidec 4,740 3.65
Engineering & Construction: 0.92% (30 Apr 2018: 0.89%)
70,000 Takasago Thermal Engineering 1,194 0.92
Hand/Machine Tools: 2.06% (30 Apr 2018: 3.22%)
11,000 Disco 1,747 1.34
27,000 Makita 932 0.72

   

Healthcare-Products: 2.51% (30 Apr 2018: 3.15%)
80,000 Asahi Intecc 3,264 2.51
Healthcare-Services: 5.30% (30 Apr 2018: 3.79%)
70,000 Advantage Risk Management 627 0.48
41,000 Elan 1,004 0.77
74,000 PeptiDream 2,424 1.87
270,000 Solasto 2,833 2.18
Home Furnishings: 0.56% (30 Apr 2018: 1.38%)
65,756 Panasonic 726 0.56
Internet: 2.42% (30 Apr 2018: 0.00%)
12,000 Bplats 789 0.60
120,000 Istyle 1,076 0.83
60,000 Uzabase 1,287 0.99
Leisure Time: 2.62% (30 Apr 2018: 1.80%)
70,000 Tosho 2,714 2.09
120,000 Yonex 692 0.53
Lodging: 1.75% (30 Apr 2018: 0.93%)
51,500 Kyoritsu Maintenance 2,281 1.75
Machinery-Construction & Mining: 1.07% (30 Apr 2018: 2.27%)
110,000 Mitsubishi Electric 1,394 1.07
Machinery-Diversified: 14.03% (30 Apr 2018: 11.36%)
57,000 Daifuku 2,449 1.88
32,000 Hirata 1,972 1.52
220,000 Japan Elevator Service Holdings 3,124 2.40
6,000 Keyence 2,933 2.26
165,000 Nittoku Engineering 4,360 3.35
20,000 Optorun 397 0.31
425,000 Yamashin-Filter 3,010 2.31
Metal Fabricate/Hardware: 1.32% (30 Apr 2018: 1.22%)
120,000 Okada Aiyon 1,717 1.32
Real Estate: 1.46% (30 Apr 2018: 5.38%)
55,000 House Do 804 0.62
80,000 Star Mica 1,088 0.84
REITS: 2.61% (30 Apr 2018: 2.72%)
1,480 Industrial & Infrastructure Fund Investment Reits 1,482 1.14
2,500 MCUBS MidCity Investment 1,914 1.47
Retail: 3.28% (30 Apr 2018: 1.24%)
93,000 Convano 1,056 0.81
100,000 Komeda 1,963 1.51
14,000 Monogatari 1,248 0.96

   

Semiconductors: 6.42% (30 Apr 2018: 6.73%)
280,000 Japan Material 3,275 2.52
85,000 Lasertec 2,435 1.87
19,000 Tokyo Electron 2,635 2.03
Software: 4.69% (30 Apr 2018: 4.80%)
55,000 Cresco 1,549 1.19
28,000 CRI Middleware 685 0.53
62,000 Hirayama 1,562 1.20
68,700 Money Forward 2,308 1.77
Telecommunications: 4.78% (30 Apr 2018: 3.51%)
20,000 Hikari Tsushin 3,487 2.68
80,000 Vision Inc/Tokyo Japan 2,733 2.10
Transportation: 3.93% (30 Apr 2018: 4.01%)
75,000 Fuji Kyuko 2,185 1.68
18,000 Hamakyorex 582 0.45
109,000 Naigai Trans Line 1,564 1.20
15,000 Sakai Moving Service 773 0.60
Total Japan (30 Apr 2018: 102.36%) 135,933 104.54
Total Listed Equities (30 Apr 2018: 102.36%) 135,933 104.54
Total Investments held at fair value through profit or loss 135,933 104.54
Cash and cash equivalents (30 Apr 2018: 2.83%) 2,846 2.19
Other net liabilities (30 Apr 2018: (5.19%)) (8,755) (6.73)
Net assets attributable to equity shareholders 130,024 100.00

Unaudited Statement of Comprehensive Income
For the six month financial period ended 31 October 2018

31 October 2018 31 October 2017
Revenue Capital Total Revenue Capital Total
Notes $'000 $'000 $'000 $'000 $'000 $'000
Income
3 Net (losses)/gains on investments held at fair value through profit or loss - (12,050) (12,050) - 33,872 33,872
Net (losses)/gains on foreign exchange - (319) (319) - 105 105
Dividend income 885 - 885 848 - 848
Redeption fee paid to Company 529 - 529 126 - 126
1,414 (12,369) (10,955) 974 33,977 34,951
Expenses
5 Investment management fees (788) - (788) (603) - (603)
6 Depositary fees (66) - (66) (53) - (53)
7 Administration fees (97) - (97) (86) - (86)
Registrar and transfer agent fees (20) - (20) (18) - (18)
8 Directors' fees and expenses (84) - (84) (61) - (61)
Insurance fees (3) - (3) (3) - (3)
Audit fees (26) - (26) (25) - (25)
Printing and advertising fees (11) - (11) (1) - (1)
Legal and professional fees (58) - (58) (54) - (54)
Miscellaneous expenses (38) - (38) (42) - (42)
(1,191) - (1,191) (946) - (946)
Finance cost
Interest expense and bank charges (67) - (67) (76) - (76)
(Loss)/profit before taxation 156 (12,369) (12,213) (48) 33,977 33,929
Taxation (189) - (189) (158) - (158)
(Loss)/profit for the financial period
(33) (12,369) (12,402) (206) 33,977 33,771
Other comprehensive income
Exchange (losses)/gains on translation - - (11,935) - - 2,269
Total comprehensive (loss)/income for the financial period - - (24,337) - - 36,040
9 Basic and diluted (deficit)/earnings per ordinary share
 $(0.001)  $(0.255)  $(0.256)  $(0.005)  $0.756  $0.751

In arriving at the result for the financial period, all amounts above relate to continuing activities.

The total column in this statement represents the Company’s Statement of Comprehensive Income, prepared in accordance with IAS 34. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.

The notes form an integral part of these financial statements.

Unaudited Statement of Changes in Equity
For the six month financial period ended 31 October 2018

Accumulated 
Capital Capital Capital other  
Ordinary Share Share Revenue reserve/ reserve/ reserve/ comprehensive
capital premium reserve realised unrealised exchange income Total
Notes $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balances at 1 May 2018 - - (29,423) 118,447 88,857 (20,961) 6,393 163,313
Movements during the financial period
15 Redemptions - (7,999) - - - - - (7,999)
11 Shares bought into treasury - - (953) - - - - (953)
Transfer to capital reserve from share premium - 7,999 - (7,999) - - - -
3 Net realised gains on investments held at fair value through profit or loss - - (6,452) 6,452 - - - -
3 Net unrealised loss on investments held at fair value through profit or loss - - 18,502 - (18,502) - - -
Net gain on foreign exchange - - 319 - - (319) - -
Exchange gains on translation - - 11,935 - - - (11,935) -
Total comprehensive loss - - (24,337) - - - - (24,337)
Balances at 31 October 2018 - - (30,409) 116,900 70,355 (21,280) (5,542) 130,024

The notes form an integral part of these financial statements.

Accumulated 
Capital Capital Capital other 
Ordinary Share Share Revenue reserve/ reserve/ reserve/ comprehensive
capital premium reserve realised unrealised exchange income Total
Notes $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balances at 1 May 2017 - - (29,286) 98,580 51,665 (21,008) (256) 99,695
Movements during the financial period
14 Subscriptions - 19,360 - - - - - 19,360
15 Redemptions - (3,146) - - - - - (3,146)
Transfer to capital reserve from share premium - (16,214) - 16,214 - - - -
3 Net realised gains on investments held at fair value through profit or loss - - (4,605) 4,605 - - - -
3 Net unrealised gains on investments held at fair value through profit or loss - - (29,267) - 29,267 - - -
Net gain on foreign exchange - - (105) - - 105 - -
Exchange gains on translation - - (2,269) - - - 2,269 -
Total comprehensive income - - 36,040 - - - - 36,040
Balances at 31 October 2017 - - (29,492) 119,399 80,932 (20,903) 2,013 151,949

The notes form an integral part of these financial statements.

Unaudited Statement of Financial Position
As at 31 October 2018

31 October 2018 30 April 2018
Notes $'000 $'000
Non-Current Assets
12 Investments held at fair value through profit or loss 135,933 167,173
Current Assets
Due from brokers - 911
Dividends receivable 378 679
Prepaid expenses and other receivables 8 27
Cash and cash equivalents 2,846 4,626
3,232 6,243
Current Liabilities
Due to brokers - (607)
Payables and accrued expenses (300) (343)
10 Loans payable (8,841) (9,153)
(9,141) (10,103)
Net Current Liabilities (5,909) (3,860)
13 Net Assets                      130,024                      163,313
Equity
Ordinary share capital - -
Share premium - -
Revenue reserve (30,409) (29,423)
Capital reserve 165,975 186,343
Accumulated other comprehensive (loss)/income (5,542) 6,393
Net Assets Attributable to Equity Shareholders                      130,024                      163,313
Net Asset Value per Ordinary Share* $2.81 $3.33

*Based on the NAV at the financial period end divided by the number of shares in issue: 46,252,772 (30 April 2018: 49,012,128) (See Note 13).

Approved by the Board of Directors on 7 December 2018.

The notes form an integral part of these financial statements.

Unaudited Statement of Cash Flows
For the six month financial period ended 31 October 2018

31 October 2018 31 October 2017
$'000 $'000
Notes
Cash flows from operating activities
(Loss)/Profit before taxation (12,213) 33,929
Adjustments to reconcile profit before taxation to net cash flows from operating activities
Interest expense and bank charges 67 76
Net gain/(loss) on investments held at fair value through profit
or loss 12,050 (33,872)
Purchase of investments (47,068) (53,493)
Sale of investments 53,848 43,775
Decrease in due from brokers 911 1,226
Decrease in dividends receivable 301 241
Decrease/(increase) in prepaid expenses and other receivables 19 (40)
(Decrease)/increase in due to brokers (607) 692
(Decrease)/increase in payables and accrued expenses (43) 7
Taxation paid (189) (158)
Net cash inflow/(outflow) from operating activities 7,076 (7,617)
Cash flows from financing activities
Interest paid (47) (58)
14 Subscriptions - 19,360
15 Redemptions (7,999) (3,146)
11 Shares bought into treasury (953) -
Net cash (outflow)/inflow from financing activities (8,999) 16,156
Net (decrease)/increase in cash and cash equivalents (1,923) 8,539
Cash and cash equivalents at beginning of financial period 4,626 1,589
Effect of exchange gains/(losses) on cash and cash equivalents 143 (129)
Cash and cash equivalents at end of financial period 2,846 9,999

The notes form an integral part of these financial statements.

Notes to the Unaudited Financial Statements
For the six month financial period ended 31 October 2018

1.         GENERAL INFORMATION

             Atlantis Japan Growth Fund Limited (the “Company”) was incorporated in Guernsey on
13 March 1996. The Company commenced activities on 10 May 1996. The Company is an authorised closed-ended investment scheme registered in Guernsey. The Company’s equity shares are listed on the London Stock Exchange.

             As an investment trust, the Company is not regulated as a collective investment scheme by the Financial Conduct Authority. However, it is subject to the UKLA Listing Rules, Prospectus Rules, Disclosure Transparency Rules and the rules of the London Stock Exchange.

             The Company’s investment objective is to achieve long term capital growth through investing wholly or mainly in listed Japanese equities.

2.         SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The condensed interim Financial Statements for the six month financial period ended 31 October 2018 have been prepared in accordance with IAS 34 Interim Financial Reporting and the Association of Investment Companies (“AIC”) Statement of Recommended Practice (“SORP”) for Investment Trust Companies and Venture Capital Trusts to the extent it is not in conflict with IAS 34 and the Principal Documents.

The condensed interim Financial Statements do not include all of the information required for annual financial statements, and should be read in conjunction with the Company’s Financial Statements as at and for the financial year ended 30 April 2018 which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). These condensed interim Financial Statements have not been audited or have not been reviewed by the Company’s auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

The significant accounting policies adopted in these condensed interim Financial Statements are consistent with those applied by the Company in its Financial Statements as at and for the year ended 30 April 2018.

3.         NET (LOSSES)/GAINS ON INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

31 October 2018 31 October 2017
$'000 $'000
Realised gains on investments held at fair value through profit or loss                        9,490                        5,469
Realised losses on investments held at fair value through profit or loss (3,038) (864)
Net realised gains on investments held at fair value through profit or loss 6,452 4,605
Unrealised gains on investments held at fair value through profit or loss                        5,964 34,051
Unrealised losses on investments held at fair value through profit or loss (24,466) (4,784)
Net unrealised (losses)/gains on investments held at fair value through profit or loss (18,502) 29,267
Net (losses)/gains on investments held at fair value through profit or loss (12,050) 33,872

4.        RELATED PARTY DISCLOSURES

The Investment Manager, Depositary, Administrator and Directors are considered related parties to the Company under IAS 24 as they have the ability to control, or exercise significant influence over, the Company in making financial or operational decisions. See Notes 5 to 8 for details of transactions with these related parties during the financial period ended 31 October 2018.

Certain Directors had a beneficial interest in the Company by way of their investment in the ordinary shares of the Company.

The details of these interests as at 31 October 2018 and 30 April 2018 are as follows:

Ordinary Shares Ordinary Shares
31 October 2018 30 April 2018
Philip Ehrmann 28,800 28,800
Noel Lamb 14,400 14,400
Richard Pavry 40,000 40,000
Michael Moule 18,000 16,000

The above interests of the Directors were unchanged as at the date of this report.

As at 31 October 2018, a family member of the President of the Investment Adviser held 900,800 (30 April 2018: 900,800) ordinary shares of the Company.

5.         INVESTMENT MANAGEMENT FEES

Under the terms of the Investment Management Agreement, the Investment Manager, Quaero Capital LLP, will continue in office until a resignation is tendered or the contract is terminated. In both circumstances, a resignation or termination must be given with a notice period which must not be less than three months, and be in accordance with the Investment Management Agreement. Fees payable to the Investment Adviser are met by the Investment Manager.

The Company pays to the Investment Manager a fee accrued daily and paid monthly in arrears at the annual rate of 1 per cent of the weekly NAV of the Company.

Redemption Pool Investment Management Fees

The Investment Manager shall also be entitled to receive a fee from the Company of 1 per cent per annum of the daily NAV of any redemption pool together with transaction charges.

For the six month financial period ended 31 October 2018, total investment management fees were $787,975 (31 October 2017: $602,882) of which $124,828 (30 April 2018: $144,138) is due and payable as at that date. Of the total investment management fees, $196,994 (31 October 2017: $150,721) was due to the Investment Manager, with $31,207 (30 April 2018: $36,035) payable as at 31 October 2018, and $452,162 (31 October 2017: $452,161) was due to the Investment Adviser, with $93,621 (30April 2018: $108,104) payable as at 31 October 2018.

6.         DEPOSITARY FEES

Under the terms of the Depositary Agreement, fees are payable to the Depositary, Northern Trust (Guernsey) Limited, monthly in arrears, on the Gross Asset Value of the Company as at the last business day of the month at an annual rate of:

Gross Asset Value                                                    Annual Rate
Up to $50,000,000                                                                          0.035%
$50,000,001 to $100,000,000                                                           0.025%
Thereafter                                                                                      0.015%

The Depositary is also entitled to a global custody fee of 0.03% per annum of the Net Asset Value of the Company, subject to a minimum fee of $20,000, and transaction fees as per the Depositary Agreement.

Redemption Pool Depositary Fees

The Depositary shall also be entitled to receive a fee from the Company of the Gross Asset Value of any redemption pool, together with transaction charges, at an annual rate of:

Gross Asset Value                                              Annual Rate
Up to $25,000,000                                                                    0.035%
$25,000,001 to $50,000,000                                                     0.025%                                   
Thereafter                                                                              0.015%

For the six month financial period ended 31 October 2018, total depositary fees were $66,003 (31 October 2017: $52,645), of which $14,290 (30 April 2018: $14,982) was due and payable as at that date.

7.         ADMINISTRATION FEES

             Under the terms of the Administration Agreement, the Company pays to the Administrator, Northern Trust International Fund Administration Services (Guernsey) Limited, a fee accrued weekly and paid monthly in arrears at the annual rate of:

Net Asset Value                                                            Annual Rate
Up to $50,000,000                                                                                0.18%
$50,000,001 to $100,000,000                                                                0.135%                                   
$100,000,001 to $200,000,000                                                              0.0675%
Thereafter                                                                                         0.02%

Redemption Pool Administration Fees

At each redemption date a charge in respect of the preparatory work for the set-up and calculation of investment and redemption prices of £7,500 will be payable.

An additional fee will be payable on the fair value of the assets of that redemption pool of:

Net Asset Value                                                      Annual Rate
Up to $25,000,000                                                                          0.18%
$25,000,001 to $50,000,000                                                            0.135%                                   
Thereafter                                                                                     0.0675%

For the six month financial period ended 31 October 2018, total administration fees were $96,607 (31 October 2017: $85,751), of which $16,888 (30 April 2018: $38,006) was due and payable as at that date.

8.         DIRECTORS’ FEES AND EXPENSES

Each of the Directors is entitled to receive a fee from the Company, being £33,000 per annum for the Chairman (£30,000 per annum prior to 6 July 2018), £28,500 per annum for the Chairman of the Audit Committee (£27,500 per annum prior to 6 July 2018) and £26,000 per annum for each of the other Directors (£25,000 per annum prior to 6 July 2018). In addition, the Company reimburses all reasonably incurred out-of-pocket expenses of the Directors.

For the six month financial period ended 31 October 2018, total directors’ fees and expenses were $84,517 (31 October 2017: $60,761), of which $14,381 (30April 2018: $12,815) was due and payable as at that date.

9.         BASIC AND DILUTED (DEFICIT)/EARNINGS PER ORDINARY SHARE

The basic and diluted (deficit)/earnings per ordinary share figure is based on the (loss)/profit for the financial period of $(12,402,249) (31 October 2017: $33,770,649) and on 48,520,645 being the weighted average number of shares in issue during the six month financial period ended 31 October 2018 (31October 2017: 44,921,120).

The (deficit)/earnings per ordinary share figure can be further analysed between revenue and capital, as below.

31 October 2018 31 October 2017
$'000 $'000
Net revenue loss (33) (206)
Net capital (loss)/profit (12,369) 33,977
Net total (loss)/profit (12,402) 33,771
Weighted average number of ordinary shares
in issue during the financial period 48,520,645 44,921,120
$ $
Revenue loss per ordinary share (0.001) (0.005)
Capital (loss)/profit per ordinary share (0.255) 0.756
Total (loss)/profit per ordinary share (0.256) 0.751

10.       LOANS PAYABLE

Loan Interest Maturity 31 October 2018 30 April 2018
Amount Rate Date $'000 $'000
3 year committed variable rate
credit facility
Â¥   1,000,000,000 1.16% 8 Dec 2018 8,841 -
Â¥   1,000,000,000 1.14% 6 Jun 2018 - 9,153
Loan due for repayment within one year 8,841 9,153

The credit facility is provided by Royal Bank of Scotland International Limited (“RBSI”). As at 31 October 2018, the Company had drawn down ¥1,000,000,000 ($8,840,560) (30 April 2018: ¥1,000,000,000/$9,152,899) of the ¥1,500,000,000 borrowable under the terms of the facility agreement.

Under the terms of the facility agreement, the Company is required to comply with the following financial covenants:

-       the Company’s portfolio must contain at least 60 investments, of which at least 50 must be in investments quoted on the Tokyo Stock Exchange or any other equivalent exchange approved by RBSI, at all times;

-       the amount of the credit facility drawn down must not exceed 25% of the value of the Company’s portfolio at any time; and

-       the Company’s NAV must not fall below $58,000,000 at any time.

The Company complied with all of the above financial covenants during the six month financial period ended 31October 2018 and the financial year ended 30April 2018.

(Losses)/gains on foreign exchange on the Company’s loan amounted to $(363,684) during the six month financial period ended 31October 2018 (31 October 2017: $338,704).

11.       SHARE CAPITAL AND SHARE PREMIUM

Authorised

The Company is authorised to issue an unlimited number of ordinary shares of no par value.

The Company may also issue C shares being a convertible share in the capital of the Company of no par value. C shares shall not have the right to attend or vote at any general meeting of the Company. The holders of C shares of the relevant class shall be entitled, in that capacity to receive a special dividend of such amount as the Directors may resolve to pay out of the net assets attributable to the relevant C share class and from income received and accrued attributable to the relevant C share class for the period up to the conversion date payable on a date falling before, on or after the conversion date as the Directors may determine. There are no C shares currently in issue.

The rights which the ordinary shares confer upon the holders thereof are as follows:

Voting rights

On a show of hands, every Member who is present shall have one vote; and on a poll, a Member present in person or by proxy shall be entitled to one vote per ordinary share held.

Entitlement to dividends

The Company may declare dividends in respect of the ordinary shares. Treasury shares do not confer an entitlement to any dividends declared.

Rights in a winding-up

The holders of ordinary shares will be entitled to share in the Net Asset Value of the Company as determined by the Liquidator.

Issued Ordinary Shares
Number of Shares Share Capital Share Premium
$’000 $’000
In issue at 31 October 2018 46,252,772 - -
In issue at 30 April 2018 49,012,128 - -

   

Reconciliation of number of shares
Number of Shares Number of Shares
31 October 2018 30 April 2018
Shares of no par value
Issued shares at the start of the financial period 49,012,128 44,139,050
Subscription of shares - 8,598,577
Redemption of shares (2,434,356) (3,725,499)
Purchase of shares into Treasury (325,000) -
Number of shares at the end of the financial period 46,252,772 49,012,128
Shares held in Treasury
Opening balance 3,874,186 3,874,186
Shares bought in to Treasury during the financial period 325,000 -
Number of shares at the end of the financial period 4,199,186 3,874,186

During the financial period ended 31October 2018, there was $952,906 purchase of shares into treasury (30April 2018: $Nil).

Shareholders are entitled to receive any dividends or other distributions out of profits lawfully available for distribution and on winding up they are entitled to the surplus assets remaining after payment of all the creditors of the Company. The shares redeemed in the current financial period were cancelled immediately.

12.       FAIR VALUE HIERARCHY

The fair value of investments traded in active markets (such as publicly traded derivatives and trading securities) are based on quoted market prices at the close of trading on the Statement of Financial Position date. The quoted market price used for investments held by the Company is the last traded price; the appropriate quoted market price for financial liabilities is the current asking price.

A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis.

The fair value of investments that are not traded in an active market is determined by using valuation techniques.

For instruments for which there is no active market, the Company may use internally developed models, which are usually based on valuation methods and techniques generally recognised as standard within the industry. Valuation models may be used primarily to value unlisted equity, debt securities and other debt instruments for which markets were or have been inactive during the financial period. Some of the inputs to these models may not be market observable and are therefore estimated based on assumptions.

The following table sets out fair value measurements using the IFRS 13 fair value hierarchies:

At 31 October 2018
Investments at fair value through profit or loss
Level 1 Level 2 Level 3 Total
$’000 $’000 $’000 $’000
Equity Investments     135,933               -                 -       135,933
    135,933               -                 -       135,933
At 30 April 2018
Investments at fair value through profit or loss
Level 1 Level 2 Level 3 Total
$’000 $’000 $’000 $’000
Equity Investments     167,173               -                 -       167,173
    167,173               -                 -       167,173

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 or liabilities.

Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within level 1.

Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

13.      NET ASSET VALUE

31 October 2018 30 April 2018
Net Asset Value $130,023,920 $163,312,565
Number of Shares in Issue              46,252,772 49,012,128
NAV per Ordinary Share $2.81 $3.33

14.      SUBSCRIPTION RIGHT

The Subscription right mechanism was discontinued on 23 November 2017. The following subscriptions were made during the financial period ended 31 October 2017:

Subscription date Shares issued $’000
31 October 2017 31 October 2017
10 October 2017     8,598,577       19,360
    8,598,577       19,360

During the six month financial period ended 31 October 2018, there was $nil paid by subscribing shareholders (31October 2017: $19,359,644).

15.      REDEMPTION FACILITY

Ordinarily, shareholders have the opportunity to make redemptions of part or all of their shareholding on a six-monthly basis with the Board’s discretion in declining any redemption requests. The following redemptions were made during the financial period:

Redemption date Shares redeemed $’000
31 October 2018 31 October 2018
28 September 2018 2,434,356 7,999
2,434,356 7,999
Redemption date Shares redeemed $’000
31 October 2017 31 October 2017
2 October 2017 1,145,914 3,146
1,145,914 3,146

During the six month financial period ended 31 October 2018, a total of $7,998,731 was paid to redeeming shareholders (31 October 2017: $3,146,073).

16.       DIVIDENDS

All amounts held in the Company’s revenue reserve are distributable to shareholders by way of dividends.

There were no dividends declared by the Board of Directors during the six month financial period ended 31 October 2018 (31 October 2017: $Nil).

17.        EXCHANGE RATES

The following exchange rates were used to translate assets and liabilities into the reporting currency (USD) at 31 October 2018 and 30 April 2018:

31 October 2018 30 April 2018
USD USD
GBP       0.7846       0.7271

The following average exchange rates were used to translate transactions into the reporting currency (USD) during the six month financial period ended 31 October 2018 and 31 October 2017:

31 October 2018 31 October 2017
USD USD
GBP       0.7610      0.7674

18.        CHANGES IN THE PORTFOLIO

A list, specifying for each investment the total purchases and sales which took place during the six month financial period ended 31 October 2018 may be obtained, upon request, at the registered office of the Company.

19.       EVENTS DURING THE FINANCIAL PERIOD

There were no significant events during the financial period ended 31 October 2018 which require adjustment to or additional disclosure in the Financial Statements.

20.       EVENTS AFTER THE FINANCIAL PERIOD

There were no significant events subsequent to the financial period ended 31 October 2018 which require adjustment to or additional disclosure in the Financial Statements.

Appendix 1: Supplementary Information

DISCOUNT MANAGEMENT

During the financial period under review, the Company bought back 325,000 Ordinary shares. At 31 October 2018 there were 4,199,186 Ordinary shares held in Treasury. The discount to NAV per Ordinary share was 12.1% at the end of the financial period compared to 9.6% on 30 April 2018. 

PRIIPS KEY INFORMATION DOCUMENT

We are required by the Packaged Retail and Insurance-based Investment Products (“PRIIPs”) regulations introduced at the beginning of 2018 to provide investors with a key information document (“KID”) which includes performance projections which are the product of prescribed calculations based on the Company’s past performance. Whilst the content and format of the KID cannot be amended under the applicable EU regulations, the Board does not believe that these projections are an appropriate or helpful way to assess the Company’s future prospects.

Accordingly, the Board urges shareholders also to consider the more complete information set out in these interim report and unaudited financial statements, together with the monthly fact sheets and daily net asset value announcements, when considering an investment in the Company’s shares. These documents, together with a link to some useful third party research coverage of the Company are published at www.atlantisjapangrowthfund.com.

Retail distribution of non-mainstream products

The Company currently conducts its affairs so that its shares can be recommended by independent financial advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non- mainstream investment products and intends to continue to do so for the foreseeable future. The Company’s shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an investment trust.

GENERAL DATA PROTECTION REGULATIONS

Changes to our Data Privacy Notice

We have updated our Privacy Notice to align with the new data privacy law in the European Union, known as the General Data Protection Regulation (“GDPR”) to which we are subject. Data protection and the security of your information always has been and remains of paramount importance to us.

Where a data subject's details are provided to the Company as a consequence of an investment in the Company, then the Company, acting as a data controller may itself (or through a third party such as the Administrator, the Registrar or the Investment Manager) process that personal data.  When processing such personal data, there may also be times where the Investment Manager will act as a data controller. 

Changes to our Data Privacy Notice

You are not required to take any action in respect of this notice, but we encourage you to read our Privacy Notice. Our Privacy Notice can be found on our website, www.atlantisjapangrowthfund.com. In the event that you hold your shares as a nominee, we request that you promptly pass on the details of where to find our Privacy Notice to the underlying investors and/or the beneficial owners. 

ALTERNATIVE PERFORMANCE MEASURES

The European Securities and Markets Authority has published guidelines on Alternative Performance Measures (“APMs”). APMs are defined as being 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 accounting framework.” The guidelines are aimed at promoting the usefulness and transparency of APMs included in regulated information and aim to improve comparability, reliability and/or comprehensibility of APMs. The following APMs are used throughout the interim report, financial statements and notes to the financial statements.

Benchmark total return index

A total return index is a type of equity performance index that tracks both the capital gains of a group of stocks over time, and assumes that any cash distributions, such as dividends, are reinvested back into the index.

Discount

The amount, expressed as a percentage, by which the share price is less than the net asset value (‘NAV’) per share.

Gearing

Gearing is the borrowing of cash to buy more assets for the portfolio with the aim of making a gain on those assets larger than the cost of the loan. However, if the portfolio doesn’t perform well the gain might not cover the costs. The more an investment company gears, the higher the risk.

Mid-market price

The mid-market price is the mid-point between the buy and the sell prices.

NAV per share

The NAV is the value of the investment company’s asset less its liabilities. The NAV per share is the NAV divided by the number of shares in issue. The difference between the NAV per share and the share price is known as the discount or premium.

Ongoing charges

Ongoing charges are the total expenses including both the investment management fee and other costs but excluding performance fees, expressed as a percentage of NAV.

Premium

The amount, expressed as a percentage, by which the share price is more than the NAV per share. 

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