Annual Financial Report

RNS Number : 6944L

Atlantis Japan Growth Fund Ld

03 August 2011

Atlantis Japan Growth Fund Limited

Annual Report and Audited Financial Statements

For the year ended 30th April 2011

Introduction

INVESTMENT OBJECTIVE

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, Jasdaq, Tokyo AIM, or the regional stock exchanges of Fukuoka, Nagoya, Osaka and Sapporo or the Japanese over-the-counter market.

The Company may also invest up to 20 per cent of its 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 or 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.

Under UK taxation rules for investment trusts, the maximum amount which may be invested in any one company is 15 per cent of the Company's investments. However, such concentration is unlikely to occur and in practice it would be unusual for more than 10 per cent to be invested in one company.

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

With regard to the redemption pool, the Company aims to liquidate the necessary assets to meet qualifying redemption request in a timely manner, and to minimise the impact that such redemptions will have to existing shareholders and the Company as a whole.

The management and impact of the risk associated with the investment policies are described in detail in the notes to the Financial Statements (Note 16).

MANAGER AND INVESTMENT ADVISER

Atlantis Fund Management (Guernsey) Limited has been appointed as Investment Manager of the Company.

Atlantis Investment Management Limited has been appointed by the Investment Manager as its Investment Adviser. Atlantis Investment Research Corporation, established in Tokyo, will, through Edwin Merner and his colleagues in that office, advise the Investment Adviser on the day-to-day conduct of the Company's investment business.

Chairman's Statement

For the year ended 30th April 2011

The year to 30^th April 2011 was a turbulent year for the Japanese economy and the Tokyo stock market.

PERFORMANCE

The Company's net asset value per share increased 2.62% during the year compared with an increase in the Topix TR Index of 1.99% (figures in US dollars).

Net Asset Value Total Return (US$)	Since Inception	10 Year	5 Year	3 Year	1 Year
Atlantis Japan Growth Fund	+36.44%	+25.32%	-54.69%	-14.61%	+2.62%
Benchmark Return (US$)
Topix TR	-22.64%	+8.50%	-24.32%	-15.38%	+1.99%

Year to 30 April	At Inception	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011
Total Net Assets (US$m)	198	197	173	401	429	610	467	324	185	270	211
NAV per Share (US$)	9.92	9.65	8.46	19.64	21.01	29.87	22.84	15.85	9.04	13.19	1.35*
NAV per Share (US$)*	0.99	0.96	0.84	1.96	2.10	2.98	2.28	1.58	0.90	1.31	1.35

* The Fund was subject to a 10:1 stock split in December 2010 prior year figures have been restated showing the split for comparative purposes.

Source: Atlantis and Bloomberg. As of 29^th April 2011.

In December 2010 the Fund's quote on the London Stock Exchange was changed from US dollars to pounds sterling. The underlying Fund is still denominated in US dollars. The share price returns and peer group comparison data shown below is in pounds sterling:

Share Price Total Return (GBP)	Since Inception	10 Year	5 Year	3 Year	1 Year
Atlantis Japan Growth Fund	+13.36%	+8.96%	-55.25%	+11.18%	+3.16%
Citywire Japanese Smaller Companies Investment Trust universe average	-	-13.44%	-54.14%	-5.92%	+4.40%
Citywire Japan Investment Trust universe average	-	-13.13%	-36.10%	+1.37%	-2.17%

Source: Bloomberg and Citywire. Atlantis Japan Growth Fund returns are as of 29th April 2011. Citywire peer universe returns are as of 4th May 2011.

2010/11 saw an almost flat year in terms of your Company's NAV performance in US dollar terms after a strong prior year. Performance was clearly affected by the terrible earthquake on 11^th March 2011. For the period from the start of the financial year (1^st May 2010) to 10^th March 2011, the Fund's net asset value per share had increased by 6.87% in US dollars. Japanese companies clearly face a very difficult time over the short term but I have every confidence that your Company will benefit from the recovery as it develops. The Company has a track record of outperforming in up-markets as shown by the ten year net asset value return and we look for this as and when the global economic recovery develops further.

MARKET BACKGROUND

Short term forecasts for the Japanese market are more difficult than ever due to the uncertainty following the extraordinary events in March. For the first time in the Manager's years in the industry, many companies have no sales and earnings estimates for the current Japanese fiscal year ended March 2012. The Manager expects a sharp drop in corporate earnings and negative GDP growth for the six months to September 2011 but does anticipate a V-shaped recovery in the second half of the fiscal year to March 2012 and importantly a strong recovery in the following fiscal year.

For the Company's financial year the Tokyo market ended only slightly above where it started and we noted at this point last year that the market was near its lowest level in 20 to 30 years in terms of price to earnings ratio (PER), price to book ratio (PBR) and real dividend yield. An encouraging feature is that Japan is beginning to come back on to investors' radar screens having been somewhat forgotten about during the last few years.

GEARING

At the start of the financial year, the Company had borrowings of Yen 3bn. In October 2010, a facility for Yen 2bn was repaid and not renewed. This reduced the level of borrowing to Yen 1bn. As a result, gearing was reduced from around 11% to around 5% on a net basis. In January 2011 a new loan for Yen 1.5bn was drawn down, taking borrowing back up to Yen 2.5bn. Gearing stood at 10.7% on 30^th April 2011.

CHANGES TO THE COMPANY

At an EGM of shareholders held on 16^th December 2010, the following proposals were approved by shareholders:

1) The implementation of a four-monthly redemption facility

2) The sub-division of Ordinary Shares into ten New Ordinary Shares of no par value, and the redenomination of the New Ordinary Shares from US$ to Sterling.

3) The renewal of the Company's share buyback powers and the ability to hold such bought back shares in treasury

4) The introduction of new classes of C shares which the Board may offer to new investors in the future in order to grow the Company

5) The Board to have the authority to issue new Ordinary and/or C shares and to sell shares from treasury, if demand so warrants and subject to the allotment authority granted by shareholders at the Company's annual meeting

The most significant changes were the introduction of the redemption facility and the switch from a US dollar to a pounds sterling quote for the Fund on the London Stock Exchange. The measures listed above were implemented with the objective of reducing the discount at which the Company has previously traded. During the financial year, the discount reduced from around 15% to around 7% and the Board believes that the changes made to the structure are in large part responsible for this.

REDEMPTION FACILITY

The first operation of the redemption facility took place in February with the first redemption date being 28^th February. Approximately 24% of your Company's shares were tendered including the holding of the significant shareholder group I mentioned in last year's annual report who had been invested since inception. I am pleased to say that all went remarkably smoothly despite the Sendai earthquake, tsunami and Fukushima nuclear outage which occurred two weeks into the redemption process; 84.4% of the redemption pool had been sold by then. We suspended sales for about ten days and then resumed after the market had steadied. The first redemption payment was made 31 days after the redemption date and the second and final payment on 30th June. The value of the disposals achieved in yen before exit, transaction and other fees was only 2.44% less than the 28^th February Yen NAV, despite the Topix Index finishing March 7.7% down from the end of February level and having fallen as much as 19.4% by 15^th March. An analysis of the realisation showed that the market impact of selling this large portfolio of smaller capitalisation equities over the redemption period was only 0.57% (defined as the prices achieved versus the move in the Topix index to the date of each individual sale). Leaving aside broad market movements and exchange rate moves shareholders have been able to exit at approximately 1% less than the NAV before the application of the 4% exit charge. As we move the exit fee down to 2% over the next 12 months we would hope, on this basis, to be able to achieve exit from the fund at around 3% less than the NAV for future redeemers. I have set this out not to encourage redemptions but to outline the company that we are becoming. There is an exit mechanism which, in extremis, safeguards shareholders' value on exit at this level. It is hoped that this will encourage shareholders to buy and sell your company's shares at a discount of little more than 3% between redemption dates and use the market rather than the redemption pool as their entry and exit mechanism.

BOARD COMPOSITION

In the last year Noel Lamb joined the Board as replacement for Chris Jones. Noel spent ten years at Lazard Brothers where he progressed from stock selection to Japanese equities fund management and then Managing Director Lazard Japan. During this period he lived in Tokyo for six years from 1990 to 1996. He subsequently joined Russell Investment Group to establish the company's investment management capability in London. Noel worked for Russell for 11 years becoming Chief Investment Officer North America. Noel holds an MA in Law from Exeter College, Oxford and qualified as a Barrister at Middle Temple. We are delighted to welcome Noel to the Board of your Company.

RESTRUCTURING OF THE MANAGER

In parallel with the restructuring of your Company's share capital, the Board has been working with your Tokyo-based Investment Adviser to strengthen your Company's London support base. After an extended period of discussion and debate, the Board has eventually concluded that the London support operations for the Fund should be transferred to Tiburon Partners LLP. The Tiburon Partners team would support the Tokyo investment team with the necessary compliance and central dealing support. Atlantis' London office will focus on developing their very successful China-focused funds run in Hong Kong by the Atlantis team there. These changes are planned to take place later this year. The parting of the ways with Atlantis' London team has been extremely amicable and I would like to record the Board's great appreciation of the professional service given by them to the Company over many years.

As stated on their website, Tiburon Partners was established in 1999 as a fund management business dedicated to delivering superior absolute return investment performance with effective risk management. The principals of the business are investment professionals, each with many years experience of financial markets gained in successful institutions. In order to achieve its objectives, Tiburon Partners is structured to assist these investment professionals in outperforming their peers and benchmarks through the management of risk and by providing a high quality reporting and information service. The Board believes that Tiburon's objectives are well aligned to those of your Company and consistent with the high level of service that the Board require from the Investment Manager.

PROSPECTS

2010/2011 was a year of significant structural change for the Company which we believe will benefit shareholders. Your Tokyo advisors, Ed Merner and his team, are invigorated by the new arrangements. Performance is improving as markets trend up and as disfavour of Japanese smaller companies (the current emphasis of the Trust) slowly dissipates. As stated on several occasions over the last two years, I believe that your Adviser's style is one that will again reward shareholders considerably over the coming 2 or 3 years as smaller companies return to favour with investors.

Turning more specifically to Japan's equity market, sentiment has recovered since the Sendai and Fukushima disasters. Whilst first half results for many Japanese companies will be badly affected the emerging consensus seems to be that the second half will see good recovery which should carry on through 2012. China remains a key market for Japan and despite the gloomsters its growth remains extraordinarily impressive. Its catch up with the developed economies makes it a great locomotive for the world economy and, as I commented last year, global recovery will be good for all those world beating manufacturers that can be found in Japan. High oil prices may be a brake on the world economy for a while but the Libya and other "Arab spring" problems will pass and the brakes will come off. Likewise I believe that Europe and America's fiscal problems are in fact slowly being addressed and will be effectively dealt with given time. I continue to share your Manager's optimism about the prospects for the Japanese stock market. I believe that the strong markets we foreshadowed a year ago are no more than delayed by the recent disasters and temporary high oil price and I am hopeful that 2012 and 2013 could be good years for the Tokyo markets and your Company. I certainly hope so and I am looking forward to the next 24 months with cautious optimism.

Tim Guinness
Chairman

Investment Manager's Report

For the year ended 30th April 2011

PERFORMANCE

After peaking in the middle of April 2010, the market drifted steadily lower with the Topix, the index favoured by most fund managers, falling steadily until early November. Reasons for the weak market included a rising yen, relatively weak consumer spending and net selling by domestic investors in most months. However, from November the yen seemed to be stabilising, the earnings outlook was improving, some domestic investors returned to the buy side in some weeks and months and overseas investors (who typically account for over 60% of trading) remained substantial net buyers. In March everything suddenly changed for the worse due to an earthquake, tsunami and subsequent meltdown of several nuclear power reactors in Fukushima. In US dollar terms the Fund managed to eke out a small gain of 2.62% for the year versus a total return of 1.99% for the Topix.

Borrowings ended the financial year at US$ 30.6 million and cash stood at US$17.4 million which meant that net gearing was around 10.7%. It should be noted that the 10.7% gearing is calculated net of borrowing and excludes the cash held for the redemption facility.

The yen ended the period at 81.690 to the US dollar compared to 94.465 a year ago, a gain of 15.6%. The Fund has no foreign exchange hedges and none are planned at this time. At present the Fund has no exposure to convertible bonds, warrants, or any kind of derivatives.

MARKET COMMENT

Everything changed after the 11th March earthquake, tsunami and meltdown of several nuclear power generators in Fukushima. Local investors seemed to realise the possible impact and became aggressive net sellers while overseas investors were less pessimistic and viewed the weakness as a buying opportunity.

The earthquake and subsequent events have had a serious impact on the economy and, as already mentioned, investor sentiment. Earnings for the year ended April were negatively impacted and the outlook for the first six months of the current fiscal year ending April 2012 looks bleak. This is due to falling sales for many companies, the continuing strong yen, power shortages which are expected to get worse this summer during the peak demand season, declining industrial production, sagging exports (one of the expected locomotives of recovery), weakening consumer confidence and consequent dull domestic sales of everything from cars to overseas trips to luxury items to housing.

Domestic investors have remained on the sell side and even overseas investors seem to be limiting their net buying as they realise that a sustained market recovery will probably take time to unfold. However, the market now seems to be digesting the negatives and we are hopeful that at some point during the current fiscal year market sentiment will change for the better. Catalysts for this will be improvement in the export outlook, consumer spending bottoming out, emergency government spending beginning to have an impact, private capex beginning to improve and the earnings outlook for the six months ending October 2011 brightening. These factors would result in investors becoming more optimistic on the market and economic prospects for the next fiscal year ending April 2012.

The above should be regarded as a best case scenario and lots could go wrong including a stronger yen, failure of exports to recover, an overly aggressive hike in the consumption tax which would depress consumer spending, government bickering and failure to take aggressive measures to get the economy back on track, further fiscal problems, another downgrade of Japan's credit rating, sharply higher commodity prices, or a slump in the world economy, especially in the Asia. However, at least at this time, we think most of the above unlikely.

PORTFOLIO

Our basic thesis is that there are many attractive Japanese companies and many of these companies, both big and small, seem undervalued. This is especially true if one looks at projected earnings growth and valuations, expected free cash flow and the expected trend of profit margins over the next few years or longer.

Some of the companies we are holding have most of their production and sales outside of Japan. Makita (our largest holding), Shimano and several other holdings are international companies and will be impacted more by the world economy than the Japanese economy.

Other companies in the portfolio are sensitive to the trend of the auto industry or the electronics industry, both of which have been negatively impacted by the recent earthquake and subsequent events. However, we expect a good recovery for many of these holdings during the second half of the current fiscal year and expect high growth next fiscal year ending April 2012. Some examples include Stanley Electric, Dai-ichi Seiko, Usio Electric, Foster Electric and Muro. The portfolio is overweight in auto parts and electronic parts companies.

We also have exposure to niche areas in the domestic economy including storage, domestic mergers and acquisitions, trucking, specialised trading companies and international forwarding companies. Many of these companies are, to a certain extent, sensitive to the trend of the Japanese economy but are also in growing niche areas which should do well, especially over the next two years and beyond. Some examples of holdings in these areas include Nihon M&A, Area Link, Kintetsu Express and Sakai Moving.

We also have exposure to some of the banks and brokers, many of which sell at a discount to book and have good recovery/growth potential over the next few years, especially if one believes that the economy will recover and stocks will eventually rise. We have confidence that despite currently being depressed and out of popularity, these firms, will not only recover but flourish in coming years and will be very rewarding long term investments. Examples include Japan Securities Finance, Mie Bank, Kyokuto Securities and Sumitomo Mitsui Financial Group.

Although we take a bottom up approach, we also look at the big picture which often has a major impact on the market as a whole, corporate earnings and many of the companies we are holding.

PROSPECTS

As we have stressed in previous annual reports, we will continue to seek out undervalued companies that we think are cheap in terms of price to earnings ratio, price to book ration, free cash flow and, most importantly, long term earnings growth prospects. In our opinion the current market represents even better value than a year ago and we are continuing to identify many attractive buy candidates in all kinds of businesses. Perhaps the most important part of our investment process is a busy company visit schedule which includes companies of all sizes in all kinds of business.

Based on our economic and market scenario, we think that the current market provides long term value investors with an unusually attractive investment opportunity despite many of the short term problems the press is so keen on playing up.

Atlantis Fund Management (Guernsey) Limited

25th May 2011

BOARD OF DIRECTORS

TIMOTHY GUINNESS (Chairman, aged 64, appointed to the Board on 26th September 2002), British, graduated from Cambridge University with an MA in Engineering followed by an MBA from the Sloan School M.I.T. He began his investment banking career in Baring Brothers in 1970. He moved to Guinness Mahon in 1977, becoming Senior Investment Director in 1982. He was co-founder of Guinness Flight Global Asset Management in 1987. After its acquisition by Investec Asset Management in 1998, he served as Joint Chairman of Investec Asset Management until 31 March 2003.

He is the Chairman and Chief Investment officer of two investment management companies - Guinness Asset Management and Guinness Atkinson Asset Management since 2003. These companies specialize in investment in equities in three areas - energy; Asia ex Japan; and innovation. He also has a number of non-executive directorships. These include the chairmanship of Brompton Bicycle Company Ltd and directorships of Quayle Munro plc and S R Europe Trust plc.

ERIC BOYLE FCSI (aged 57, appointed to the Board on 17th October 2000), British, is a director of Smith & Williamson Investment Management. He has over 30 years' experience in stockbroking and investment banking with NCL Investments - now part of Smith & Williamson. He became a member of the London Stock Exchange in 1982 and has specialised in Japan and emerging markets since 1989 in particular, by way of country and regional closed or open-ended funds. With the experience gained in studying a variety of companies in this capacity, he has held directorships in a number of companies and funds. During his career, he has raised new money for several groups launching new products investing in both emerging and developed markets.

NOEL LAMB (aged 54) was appointed to the board on 1 February 2011 and is a Barrister-at-law. He joined Lazard Brothers & Co Limited in 1987 and from 1992 to 1997 he was the managing director of Lazard Japan Asset Management where he was the fund manager for their Japanese equities. In 1997, Noel moved to the Russell Investment Group as their Director Portfolio Manager, London. He established the investment management capability of Russell London increasing their assets significantly over a 5 year period. In 2002, Noel was promoted to CIO, North America, a role he held until 2008.

ANDREW MARTIN SMITH (aged 59, appointed to the Board on 26th September 2002), British, graduated from Oxford University with an MA in Politics and Economics. He began his career with Allied Hambro Unit Trust Company and worked in the corporate finance and capital markets divisions of Hambros Bank Limited becoming a director in 1986. He was chief executive of Hambros' fund management activities from 1993 to 1997 prior to the merger with Guinness Flight. He has over 30 years experience in the financial services industry. He now works with Guinness Asset Management on private equity and consultancy matters. He is Chairman of Parmenion Capital Management LLP, and a Director of Church House Investment Management, M & G High Income Investment Trust plc, TR European Growth Trust plc, Runciman Investments Limited and an advisory director of Berkshire Capital Securities.

TAKESHI MURAKAMI (aged 67, appointed to the Board on 29th November 2007), Japanese, graduated from Doshisha University in Kyoto with BA in Economics. He has 38 years of experience in both stock broking and investment management. He started his career at Sanyo Securities, Osaka in 1966 where he was primarily engaged in international business promotion at its New York office for 7 years between 1972-1978 and at its London office for two years between 1982-1984. He then joined Schroder Securities in London in 1984, before moving to its Tokyo office in 1986. He served as Schroder's Tokyo Branch Manager for ten years until he moved to Schroder Investment Management Japan in 1996 as Director, where he promoted the Japanese pension fund management business. Having retired from Schroder's at the age of 60 in 2003, Takeshi resumed his career at Instinet Japan as Chairman in 2004 for a year.

Details of Ten Largest Investments

The ten largest investments comprise a fair value of $75,946,205 (2010 85,874,221) representing 34.6% of Net Asset Value (2010 32.0%) with details as below:

Makita (336,300 shares, cost $9,601,442)

Makita manufactures and sells a wide range of power tools for professional and amateur users worldwide. The company also produces gardening and household products and provides parts, repairs and accessories. During the fiscal year ended March 2010, approximately 83% of Makita's sales were overseas. The company has over 100 service depots outside of Japan, with 28 located in the United States and 19 in China.

(Fair value of $15,232,097 representing 6.9% of the Net Asset Value (2010: 5.6%))

Hamakyorex (348,800 shares, cost $7,473,769)

Hamakyorex is active in two business segments. The company provides third party logistics services including consulting. It is also involved in trucking and covers most of Japan.

(Fair value of $10,025,491 representing 4.6% of the Net Asset Value (2010: 4.5%))

Toyota Tsusho (449,900 shares, cost $4,225,242)

Toyota Tsusho, 21.5% owned by Toyota Motors, is a medium/large scale trader involved in selling steel, autos and auto parts, chemicals, and non-ferrous metals. Overseas sales account for 54% of total turnover.

(Fair value of $7,352,387 representing 3.3% of the Net Asset Value (2010: 3.8%))

Keyence (27,300 shares, cost $5,879,864)

Keyence designs factory automation systems and other related equipment including sensors for factories. Production is subcontracted out. In recent years the company has been growing its overseas business, especially in Asia, which is now becoming an important part of the company's total sales. Most of the company's employees are engineers and Keyence is well known for its high engineering standards. It has some of the highest profit margins in the industry.

(Fair value of $7,061,440 representing 3.2% of the Net Asset Value (2010: 2.7%))

Sumitomo Mitsui Financial (222,000 shares, cost $7,067,705)

Sumitomo Mitsui is one of Japan's leading financial groups and is involved in banking, housing loans, private banking, money management, foreign exchange, etc. The company has a global banking network. Management has been aggressively writing off bad loans, the company is again expanding and it should record good earnings growth in coming years.

(Fair value of $6,777,672 representing 3.1% of the Net Asset Value (2010: N/A))

Kintetsu World Express (188,700 shares, cost $4,145,725)

Kintetsu is a leading Japanese freight forwarder and provides a wide range of services related to importing, exporting and distributing products, especially to and from Japan. The company is concentrating on air freight and is especially strong in business related to Asia and Japan's other leading trade partners. The business is very sensitive to Japanese trade flows which should expand over the longer term.

(Fair value of $6,299,240 representing 2.9% of the Net Asset Value (2010: 2.2%))

Japan Drilling Co. (151,700 shares, cost $5,362,156)

Japan Drilling has a fleet of drilling rigs and is involved in contract drilling and exploration. The company is in a cyclical business but in our opinion should do well over the medium to longer term. There is often a lag in earnings and contract prices which have been rising.

(Fair value of $6,063,172 representing 2.8% of the Net Asset Value (2010: 0.6%))

Bit-Isle Inc. (3,895 shares, cost $3,836,610)

Bit-Isle operates data storage facilities and has been steadily expanding its business and is a beneficiary of Cloud Computing. The company is adding steadily to their storage capacity and the number or racks in operation. We look for continuing expansion in coming years.

(Fair value of $5,983,872 representing 2.7% of the Net Asset Value (2010: 1.3%))

Monotaro (478,300 shares, cost $2,696,440)

Monotaro is a discount trading company which supplies thousands of industrial products including imported products and parts to both companies and individuals. The company has been increasing the number of items and its customer base has been expanding. Sales are mostly via the internet and by fax.

(Fair value of $5,860,917 representing 2.7% of the Net Asset Value (2010: 2.1%))

Adeka Corp. (542,200 shares, cost $5,666,797)

Adeka is a chemical company specialising in fine chemicals, many of which are used in electronics, autos and construction materials. The company also produces oils and fats for margarine and other food products. The company has been impacted by the recent earthquake but should experience good recovery from the second half of the fiscal year.

(Fair value of $5,289,918 representing 2.4% of the Net Asset Value (2010: N/A))

Schedule of Investments

		Fair	Percentage
	Number of	Value	of NAV
	Shares	$'000	%
Auto Parts & Equipment
H-One Co	15,200	121	0.06
Imasen Electric Industrial	80,100	1,029	0.49
Muro Corporation	214,100	1,522	0.72
NGK Spark Plug Co	53,000	728	0.35
Stanley Electric	115,000	1,905	0.90
		5,305	2.52

Banks
Chiba Kogyo Bank	124,700	666	0.32
Mie Bank	695,000	1,778	0.84
Nishi-Nippon City Bank	229,000	636	0.30
Sumitomo Mitsui Financial Group	222,000	6,778	3.22
Suruga Bank	329,000	2,714	1.29
		12,572	5.97

Building Materials
Asahi Glass	382,000	4,793	2.28
Daiken	200,000	700	0.33
Eidai	75,000	359	0.17
		5,852	2.78

Chemicals
ADEKA	542,200	5,290	2.51
Atect	132,600	479	0.23
Chugoku Marine Paints	436,000	3,640	1.73
Kanto Denka Kogyo	294,000	2,213	1.05
Nippon Carbon	150,000	343	0.16
Shikoku Chemicals	153,000	912	0.43
T&K Toka	73,800	917	0.44
Titan Kogyo KK	100,000	528	0.25
Toyo Drilube	13,800	196	0.09
Tri Chemical Laboratories	122,300	449	0.21
		14,967	7.11

Commercial Services
Gakujo	83,200	275	0.13
Nihon M&A Center	225	1,162	0.55
Riso Kyoiku	12,000	589	0.28
		2,026	0.96

Cosmetics/Personal Care
Pola Orbis Holdings	93,700	2,039	0.97
Unicharm	57,300	2,252	1.07
		4,291	2.04

Distribution/Wholesale
Alconix	156,700	4,579	2.17
Toyota Tsusho	449,900	7,352	3.49
		11,931	5.66

		Fair	Percentage
	Number of	Value	of NAV
	Shares	$'000	%
Diversified Financial Services
Japan Securities Finance	607,800	3,735	1.77
Kyokuto Securities	179,600	1,152	0.55
Osaka Securities Exchange	700	3,513	1.67
Sawada Holdings	100,000	956	0.45
Tokai Tokyo Financial Holdings	248,000	729	0.35
		10,085	4.79

Electric
Electric Power Development	35,000	908	0.43

Electrical Computers & Equipment
Nidec	3,800	326	0.15
Ushio	125,000	2,506	1.19
		2,832	1.34

Electronics
Dai-ichi Seiko	90,000	4,556	2.16
Idec	101,700	1,027	0.49
Keyence	27,300	7,061	3.35
Kokusai	240,000	1,728	0.82
Kuroda Electric	150,000	1,647	0.78
Kyosha	76,000	199	0.09
Marubun	100,000	470	0.22
Nihon Dempa Kogyo	88,400	1,329	0.63
Nippon Electric Glass	279,000	4,167	1.98
Omron	100,000	2,707	1.29
River Eletec	25,000	150	0.07
Suzuki	122,300	960	0.46
Toko	75,000	179	0.08
Tokyo Electron Device	764	1,415	0.67
		27,595	13.10

Engineering & Construction
Penta-Ocean Construction	150,000	325	0.15

Food
Calbee	144,700	4,526	2.15

Hand/Machine Tools
Aichi Electric	75,000	277	0.13
A-One Seimitsu	294	846	0.40
Asahi Diamond Industrial	205,000	4,196	1.99
Disco	44,300	2,977	1.41
Makita	336,300	15,231	7.24
Waida Manufacturing	55,100	283	0.13
		23,810	11.30

Healthcare-Products
Asahi Intecc	65,000	1,307	0.62
Mani	92,900	3,219	1.53
		4,526	2.15

		Fair	Percentage
	Number of	Value	of NAV
	Shares	$'000	%
Home Builders
Hinokiya Juutaku	153	275	0.13
Sekisui House	501,000	4,753	2.26
		5,028	2.39

Home Furnishings
Foster Electric	50,000	1,140	0.54


Internet
Bit-isle	3,895	5,984	2.84
Monotaro	478,300	5,861	2.78
		11,845	5.62

Leisure Time
PGM Holdings K K	3,000	1,643	0.78
Shimano	64,700	3,418	1.62
Tosho	61,100	378	0.18
		5,439	2.58

Machinery - Construction & Mining
Aichi	25,000	118	0.06


Machinery - Diversified
Nittoku Engineering	50,000	571	0.27


Media
Tohokushinsha Film	145,500	727	0.35


Metal Fabricate/Hardware
Daiichi Jitsugyo	380,000	1,503	0.71


Mining
Daiki Aluminium Industry	371,000	1,035	0.49


Miscellaneous Manufacturing
Kinugawa Rubber Industrial	338,000	1,618	0.77
Shoei Co Ltd/Taito-ku	50,000	386	0.18
		2,004	0.95

Oil & Gas
Idemitsu Kosan	16,000	1,851	0.88
Japan Drilling	151,700	6,063	2.88
Showa Shell Sekiyu KK	375,000	4,040	1.92
		11,954	5.68

Packaging & Containers
Fuji Seal International	179,400	3,707	1.76

		Fair	Percentage
	Number of	Value	of NAV
	Shares	$'000	%
Pharmaceuticals
Daito Pharmaceutical	30,600	573	0.27
Medical Ikkou	375	809	0.38
		1,382	0.65

Real Estate
Arealink	36,079	1,722	0.82
Fuji	206,400	851	0.40
Nisshin Fudosan	107,500	562	0.27
Sanei Architecture Planning	46,300	626	0.30
Star Mica	695	706	0.34
		4,467	2.12

REITS
Industrial & Infrastructure Fund Investment	252	1,310	0.62
Japan Logistics Fund	229	1,940	0.92
Sekisui House SI Investment	252	1,137	0.54
		4,387	2.08

Retail
Handsman	268,700	2,980	1.41
Hiday Hidaka	229,300	3,399	1.61
Himaraya	71,500	446	0.21
Medical System Network	26,700	193	0.09
Nihon Chouzai	114,640	4,238	2.01
Total Medical Service	20,000	326	0.15
VT Holdings	290,400	907	0.43
		12,489	5.93

Semiconductors
Lasertec	76,400	1,024	0.49

Software
Densan System	8,200	69	0.03
Psc Inc	15,000	182	0.09
		251	0.12

Textiles
Teijin	658,000	3,093	1.47
Tokai	76,700	1,395	0.66
		4,488	2.13

Transportation
AIT	76,900	1,064	0.51
Hamakyorex	348,800	10,025	4.77
Higashi Twenty One	204,300	863	0.41
Kintetsu World Express	188,700	6,299	2.99
Sakai Moving Service	207,700	4,078	1.94
Trancom	230,800	3,995	1.90
		26,324	12.52

Total equities		231,434	109.87

Total Investments		231,434	109.87

Net Current Liabilities		(20,797)	(9.87)

Net Assets		210,637	100.00

Directors' Remuneration Report

The Board has prepared this report, in accordance with the rules covering good communication to Shareholders. An ordinary resolution for the approval of this report will be put to the members at the forthcoming Annual General Meeting.

REMUNERATION COMMITTEE

The Board as a whole fulfils the function of a Remuneration Committee. The Company's financial adviser, corporate broker and company secretary, will be asked to provide advice when the Directors consider the level of Directors' fees.

POLICY ON DIRECTORS' FEES

The Board's policy is that the remuneration of non-executive Directors should reflect the experience of the Board as a whole and be fair and comparable to that of other investment trusts that are similar in size, have a similar capital structure and have a similar investment objective.

The fees for the non-executive Directors are determined within the limits of £200,000 set out in the Company's Articles of Association. The Directors are not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits.

DIRECTORS' SERVICE CONTRACTS

It is the Board's policy that none of the Directors have a service contract. Directors are appointed initially until the following Annual General Meeting when, under the Company's Articles of Association it is required that they be re-elected by shareholders. Thereafter two directors shall retire by rotation, or if only one director is subject to retire by rotation he shall retire. The retiring directors will then be eligible for reappointment having been considered for reappointment by the Chairman and other directors.

COMPANY'S PERFORMANCE

For the purpose of this report the Board is required to select an index against which the Company's performance can be measured. Although performance is not measured against a single benchmark the Topix (US$) and the Tokyo Second Market (US$) have been selected for this purpose. The graphs below show the price total return over five years and from inception (assuming all dividends are reinvested) to Ordinary shareholders against the Topix (US$) on a total return basis until 30th April 2011.

DIRECTORS' EMOLUMENTS FOR THE YEAR

Directors' emoluments are paid in sterling. The Directors who served in the year received the following emoluments in the form of fees:

		Year ended	Year ended
		30-Apr-11	30-Apr-10
Regular fees		GBP	GBP
Timothy Guinness		20,000	20,000
Christopher Jones	(retired 17th November 2010)	8,674	15,000
Noel Lamb	(appointed 1st February 2011)	3,750	-
Eric Boyle		15,000	15,000
Andrew Martin Smith		15,000	15,000
Takeshi Murakami		15,000	15,000
		77,424	80,000

Additional payment in respect of the restructuring of the Company and the implementation of the redemption facility for the year ended 30th April 2011.


Timothy Guinness	7,000	-
Eric Boyle	10,000	-
Andrew Martin Smith	10,000	-
	27,000	-

Total Payment	104,424	80,000

Please see note 20 of the financial statements for details of an increase in directors fees and an additional payments made to directors after 30th April 2011.

APPROVAL

A resolution for the approval of the Directors' Remuneration Report for the year ended 30th April 2011 will be proposed at the Annual General Meeting.

By order of the Board

Andrew Martin Smith Eric Boyle

Director Director

2nd August 2011

Directors' Report

The Directors are pleased to present their fifteenth Report and the Audited Financial Statements of the Company for the year ended 30th April 2011.

PRINCIPAL ACTIVITY

Atlantis Japan Growth Fund Limited ("the Company") is a Guernsey authorised closed ended investment company listed on the London Stock Exchange. Trading in the Company's ordinary shares commenced on 10th May 1996.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing Financial Statements for each financial year which give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that year. In preparing these Financial Statements, the Directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable and prudent;

- state whether applicable accounting standards have been followed subject to any material departures disclosed and explained in the Financial Statements; and

- prepare the Financial Statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

We confirm, to the best of our knowledge, that:

- this Annual Report and Financial Statements, prepared in accordance with International Financial Reporting Standards ("IFRS"), give a true and fair view of the assets, liabilities, financial position and loss of the Company; and

- this Annual Report and Financial Statements includes information detailed in the Directors' Report, the Investment Manager's Report and Notes to the Financial Statements, which provides a fair review of the information required by:

a) DTR 4.1.8 of the Disclosure and Transparency Rules ("DTR") being a fair review of the Company business and a description of the principal risks and uncertainties facing the Company; and

b) DTR 4.1.11 of the DTR being an indication of important events that have occurred since the beginning of the financial year and likely future development of the Company.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the Financial Statements comply with The Companies (Guernsey) Law, 2008. 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 responsible for ensuring that the Directors' Report and other information included in the Annual Report is prepared in accordance with company law applicable in Guernsey. They are also responsible for ensuring that the Annual Report includes information required by the Listing Rules of the Financial Services Authority.

The Directors who held office at the date of the approval of the financial statements confirm that, so far as they are aware:

· There is no relevant audit information of which the Company's auditor is unaware; and

· They have taken all the steps they ought to have taken as Directors to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

The Directors confirm that these Financial Statements comply with these requirements.

BUSINESS REVIEW AND TAX STATUS

The Company is a Guernsey based closed-ended investment company, whose Ordinary Shares are listed on the London Stock Exchange. In the opinion of the Directors, the Company has conducted its affairs so as to be able to seek approved investment trust status from HM Revenue and Customs under section 1158 of Corporation Tax Act 2010 for the accounting year ended 30th April 2011.

Pursuant to arrangements between the Association of Investment Companies and HM Revenue and Customs, who have agreed that written approval of investment trust status can be granted within the Corporation Tax Self Assessment Regime, written approval for all accounting periods to 30th April 2010 has been received.

REDEMPTION FACILITY

At an EGM held on 15th December 2010 shareholders approved the set up of a redemption facility. The purpose of this facility is to permit shareholders to request the redemption of part or all of their shareholding on a four-monthly basis, commencing at the end of February 2011, please refer to Note 18 to the financial statements for more details. The second redemption date was 30th June 2011.

The Directors shall be entitled at their absolute discretion to determine the procedures for the redemption of the New Ordinary Shares (subject to the facilities and requirements of CREST and the Companies Law). Without prejudice to the Directors discretion, it is intended that the procedure described below shall apply.

Redemptions may take place on any redemption point. Upon redemption all new ordinary shares so redeemed shall be cancelled.

Shareholders may request the redemption of all or any of their new ordinary shares on any redemption point, provided that they held the relevant new ordinary shares at the immediately preceding redemption point and continue to be beneficially interested in those shares at all times since that date until the redemption point. For the avoidance of doubt, the lending of shares will be regarded as a disposal of beneficial interest.

In the case of the first redemption point, only shareholders who held existing ordinary shares at close of business on 15th October 2010 were able to request the redemption of all or any of the new ordinary shares arising on the subdivision of such existing ordinary shares provided that they have continued to be beneficially interested in those shares since 15th October 2010

The right of shareholders to request the redemption of all or any of their new ordinary shares on any redemption point shall be exercised by the shareholder delivering to the receiving agent (or to such other person as the Directors may designate for this purpose) a duly completed redemption request. Redemption request forms are available upon request from the Administrator. Redemption requests shall not be valid (unless the Company otherwise agrees) unless they are received by the receiving agent not earlier than 20 days nor later than 10 days before the relevant redemption point.

INVESTMENT POLICY

The Company's investment objective and policy are set out in the Introduction section.

RESULTS

The results for the year are detailed on the Profit and Loss Account.

DIVIDEND

The provisions of section 1158 of Corporation Tax Act 2010 ('s.1158') include a retention test which states that the Company should not retain in respect of any accounting period an amount which is greater than 15% of the income it derives from shares and securities. In general, UK companies are excluded from this condition if they have a negative balance on their revenue reserve, as the Companies Act in the UK does not allow distributions in those circumstances. No dividend is proposed to be paid for the year end 30th April 2011.

CAPITAL VALUES

At 30th April 2011 the value of net assets available to shareholders was $210,637,076 (net of redemption liability) (2010 - $268,624,661) and the Net Asset Value per share was $1.35 (2010 - $1.31(amended for stock split)).

PREPARATION OF FINANCIAL STATEMENTS

The financial statements of the Company have been prepared in accordance with IFRS, which comprise standards and interpretations approved by the European Union, and International Accounting Standards, and Standing Interpretations Committee interpretations approved by the IASC that remain in effect.

DIRECTORS' INTERESTS

Christopher Jones retired from the board on 17th November 2010 and Noel Lamb was appointed to the board with effect on 1st February 2011. The remaining Directors listed on page 8 served throughout the year under review.

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 30th April 2011 and 30th April 2010 are as follows:

	Ordinary Shares		Ordinary Shares
	2011		2010
T. Guinness	100,000	*	10,000
A. Martin Smith	25,000	*	2,500
N. Lamb	10,000		-

*The increase in shares during the year was as a result of the 10:1 stock split which took place in December 2010.

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

There were no relevant contracts in force during or at the end of the year in which any Director had an interest. There are no service contracts in issue in respect of the Company's Directors.

No Directors had a non-beneficial interest in the Company during the year under review.

SIGNIFICANT SHAREHOLDINGS

The Company is required to disclose information on the main shareholders in the Company (but not sub-registers) that exceed 3%. Shareholders of Guernsey companies are not legally required to disclose their shareholdings in the Company, however, the Board have been advised that the following companies that hold shares as nominees, constitute 3% or more of the issued share capital of the Company as at 30th April 2011.

In accordance with the Company's Articles of Association (15th December 2010) the Directors now have the ability to request nominee shareholders to disclose the beneficial shareholders they represents. However, due to the restructuring of the Company and the introduction of the redemption facility in December 2010, the Directors have not utilised this power until after the year end. The Directors are mindful that the disclosure set out below are unhelpful to shareholders and they intend to ensure details of beneficial shareholder information is requested at each accounting period and disclosed in future annual and interim accounts.

Shareholder			%
The Bank of New York (Nominees) Limited			16.18
HSBC Global Custody Nominee (Uk) Limited			14.22
BNP Paribas Arbitrage			10.83
Euroclear Nominees Limited			10.20
Bny Mellon Nominees Limited			8.37

SECRETARY

The Secretary is Northern Trust International Fund Administration Services (Guernsey) Limited.

AUDITORS

Grant Thornton Limited have indicated their willingness to continue in office.

Resolutions re-appointing them and authorising the Directors to fix their remuneration will be proposed at the Annual General Meeting.

PRINCIPAL RISKS AND UNCERTAINTIES

As an investment trust, the Company invests in securities for the long term. The financial investments held as assets by the Company comprise of 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 Board reviews and agrees policies for managing these risks and these policies have remained substantially unchanged since 30th April 2006.

Performance

The Board regularly monitors the Company's investment performance against a number of indices and the peer group.

Discount

A disproportionate widening of the discount relative to the Company's peers could result in loss of value for shareholders. The Board reviews the discount level regularly.

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, Guernsey Company Law and the UKLA Listing Rules, could lead to a number of detrimental outcomes and reputational damage. Section 1158 qualification criteria are continually monitored by Atlantis Investment Management Limited. The Board relies on the services of the Administrator, Northern Trust International Fund Administration Services (Guernsey) Limited and its professional advisors to ensure compliance with Guernsey Company Law and the UKLA Listing Rules.

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 and the Company's service providers. 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.

Financial

The financial risks faced by the Company are disclosed in note 16 to the Financial Statements.

Changes to the Board

Christopher Jones retired from the board on 17th November 2010 and Noel Lamb was appointed on 1st February 2011.

CORPORATE GOVERNANCE AND SHAREHOLDER RELATIONS

Details of the Company's compliance with corporate governance best practice, including information on relations with shareholders, are set out in the Corporate Governance Report on pages 17 to 19 and this statement forms part of the directors' report.

GOING CONCERN

The Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future. The use of the going concern basis is appropriate because there are no material uncertainties relating to events or conditions that may cast significant doubt about the ability of the Company to continue as a going concern.

Andrew Martin Smith Eric Boyle

Director Director

2nd August 2011

Corporate Governance

INTRODUCTION

The following Corporate Governance statement forms part of the Directors' Report on pages 10 to 13 (DTR 7.2.1) The Board has considered the principles and recommendations of the AIC Code of Corporate Governance ("AIC Code" March 2009 version) by reference to the AIC Corporate Governance Guide for Investment Companies ("AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in Section 1 of the Combined Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company.

The Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the Combined Code), will provide better information to shareholders. The Company has complied with the recommendations of the AIC Code and the relevant provisions of Section 1 of the Combined Code, except in relation to the Combined Code provisions relating to:

Ø the role of the chief executive

Ø executive directors' remuneration

Ø the need for an internal audit function

For the reasons set out in the AIC Guide, and in the preamble to the Combined Code, the Board considers these provisions are not relevant to the position of the Company, being an externally managed investment company. The Company has therefore not reported further in respect of these provisions.

THE BOARD

Disclosures under Principle 5 of the AIC Code

The Board is comprised of five independent non-executive directors including the Chairman, Timothy Guinness. The Board does not consider it necessary to appoint a senior independent director.

The Board has not appointed a remuneration committee but being comprised of wholly independent directors, the whole Board considers these matters regularly. The Board considers Agenda Items formally laid out in the Notice and Agenda, which are formally circulated to the Board in advance of the Meeting as part of the Board Papers.

The primary focus at Board Meetings is a review of investment performance and associated matters such as gearing, asset allocation, marketing and investor relations, peer group information and industry issues. There were nine board meetings (2009-2010: 6) and two audit committee meetings (2009-2010: 2) held during the accounting year 1st May 2010 to 30th April 2011. The table below shows the number of formal meetings attended by each director during the accounting year.

Director Board Meetings Attended Audit Committee Meetings Attended

Timothy Guinness 5 2

Christopher Jones * 4 1

Eric Boyle 9 1

Andrew Martin Smith 9 2

Takeshi Murakami 7 n/a

Noel Lamb* 1 0

*Christopher Jones retired on 17th November 2010 and Noel Lamb was appointed on 1st February 2011.

Directors are appointed initially until the following Annual General Meeting when, under the Company's Articles of Association it is required that they be re-elected by shareholders. Thereafter two directors shall retire by rotation, or if only one director is subject to retire by rotation he shall retire. The retiring directors will then be eligible for reappointment having been considered for reappointment by the Chairman and other directors.

The Board evaluates its performance and considers the tenure of each director on an annual basis, and considers that the mix of skills, experience, ages and length of service to be appropriate to the requirements of the Company.

In 2013 the Directors will make arrangements for an independent third party to carry out this evaluation in accordance with principle 7 of the AIC code.

Mr Jones retired from the board on 17th November 2010 and Noel Lamb was appointed on 1st February 2011. Having served on the Board for more than nine years Mr Boyle is subject to annual re-election and Mr Boyle will offer himself for re-election. The Board considers that Mr Boyle continues to be independent of mind and that his length of service and breadth of experience enhances the effective management of the Company. Mr Noel Lamb is being put forward for re-election following his first period in office on the board. In addition Mr Martin Smith and Mr Guinness will retire by rotation and offer themselves for re-election. The Board confirms the performance of both Mr Martin Smith and Mr Guinness has been subject to formal evaluation and that they continue to be effective in their role. The Board firmly recommends to shareholders that all Directors should be re-elected.

There is an agreed procedure for Directors to take independent professional advice if necessary, and at the Company's expense. This is in addition to the access which every Director has to the advice of the Company Secretary.

The Company has taken out Insurance with Heath Lambert in respect of the Directors liability. For the period

1st May 2010 to 30th April 2011 the charge was GBP19,500.

INTERNAL CONTROLS

The Board has delegated the responsibility for the management of the Company's investment portfolio, the provision of custody services and the administration, registrar and corporate secretarial functions including the independent calculation of the Company's Net Asset Value and the production of the Annual Report and Financial Statements which are independently audited. Whilst the Board delegates responsibility, it retains responsibility for the functions it delegates out and is responsible for the systems of internal control. Formal contractual agreements have been put in place between the Company and providers of these services.

The Board of Directors directly on an ongoing basis and via its Audit Committee has implemented a system to identify and manage the risks inherent in such contractual arrangements by assessing and evaluating the performance of the service providers including financial, operational and compliance controls and risk management systems. On an ongoing basis compliance reports are provided at each Board Meeting from the Custodian, Northern Trust (Guernsey) Limited and Administrator, Northern Trust International Fund Administration Services (Guernsey) Limited and the Audit Committee reviews the SAS 70 reports on these service providers.

The extent and quality of the systems of internal control and compliance adopted by the Investment Manager and Investment Adviser, are also reviewed on a regular basis, and the primary focus at each Board Meeting is a review of investment performance and associated matters such as gearing, asset allocations, marketing and investment relations, peer group information and industry issues. The Board also closely monitors the level of discount and has the ability to buy back shares in the market should the discount be substantially greater than that of the Company's peer group.

The Board believes that it has implemented an effective system for the assessment of risk, but the Company has no staff, has no internal audit function and can only give reasonable but not absolute assurance that there has been no material financial misstatement or loss.

COMMITTEES

The Board has established an Audit Committee and a Nomination Committee which are described below.

The Board has not appointed a Management and Engagement Committee but has chosen to assess and review the performance of the contractual arrangements with the manager and investment adviser at each July Board Meeting by the entire Board who are independent non-executive directors. Details of the Investment Management agreement are shown in note 4 to the Financial Statements.

Audit Committee

The Audit Committee operates within defined terms of reference. The Audit Committee's responsibilities include:

- Review of draft Annual and Interim report and financial statements

- Review of independence and objectivity of the Auditors

- Review of audit fees

The Audit Committee is appointed by the Board on and comprises Mr Martin Smith as Chairman, Mr Jones and Mr Guinness. Mr Boyle replaced Mr Jones on the Audit Committee when Mr Jones retired on 17th November 2010. Mr Lamb was appointed to the Audit Committee on joining the Board on 1 February 2011.

The function of the Audit Committee is to ensure that the Company maintains the highest standards of integrity, financial reporting and internal control.

The Audit Committee meets with the Company's external auditors annually to review the Audited Accounts.

The Audit Committee meets at least twice a year and may meet more frequently if the Audit Committee deems necessary or if required by the Company's Auditors.

The Company's Auditors are advised of the timing of the Audit Committee Meetings. The Audit Committee has access to the Compliance officers of the Investment Adviser, the Administrator, and the Custodian.

The Company Secretary is the Secretary of the Audit Committee and attends all Meetings of the Audit Committee.

The Audit Committee is satisfied that auditor objectivity and independence is not impaired by the performance by Grant Thornton UK LLP of non-audit tax services, which cover UK tax compliance services. The Audit Committee considers that the appointment of a third party unfamiliar with the Company to carry out non-audit services of UK tax compliance would not benefit shareholders since they would incur unnecessary additional expense. Grant Thornton UK LLP is UK-based and provides non-audit tax advice to the Company. The auditors are Grant Thornton Limited, based in Guernsey.

The Audit Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

Nomination Committee

The Nomination Committee, comprises the Chairman and all other independent Directors. The Committee meets annually (or more often if necessary) and reviews the balance of skills, knowledge and experience of the Board. It is also responsible for considering and proposing suitable candidates for appointment to the Board where necessary and reviewing annual director performance evaluations.

SHAREHOLDER RELATIONS

The Board monitors the trading activity and shareholder profile on a regular basis and maintains contact with the Company's stock broker to ascertain the views of shareholders. Shareholder sentiment is also ascertained by the careful monitoring of the discount/premium that the shares are traded in the market against the NAV per share when compared to the discounts experienced by the Company's peer group. Shareholders where possible are contacted directly on a regular basis, and shareholders are invited to attend the Company's Annual General Meeting in person and ask questions of the Board of Directors and Investment Manager. Following the Annual General Meeting each year the Investment Manager gives a presentation to the shareholders.

The Company reports to Shareholders twice a year and a proxy voting card is sent to shareholders with the Annual Report and Financial Statements. The Registrar monitors the voting of the shareholders and proxy voting is taken into consideration when votes are cast at the Annual General Meeting. Shareholders may contact the Directors via the Company Secretary.

EVALUATION OF PERFORMANCE OF INVESTMENT MANAGER

The investment performance is reviewed at each regular Board meeting at which representatives of the Investment Manager are required to provide answers to any questions raised by the Board. The Board has instigated an annual formal review of the Investment Manager which includes consideration of:

§ performance compared with benchmark and peer group;

§ investment resources dedicated to the company;

§ investment management fee arrangements and notice period compared with peer group; and

§ marketing effort and resources provided to the Company.

In the opinion of the Directors the continuing appointment of the Manager on the terms agreed is in the interests of the Company's shareholders as a whole.

By order of the Board

Andrew Martin Smith Eric Boyle

Director Director

2nd August 2011

Independent Auditor's Report to the Members of

Atlantis Japan Growth Fund Limited

For the year ended 30th April 2011

We have audited the financial statements of Atlantis Japan Growth Fund Limited for the year ended 30th April 2011 which comprise the Statement of Comprehensive Income, the Statement of Changes in Equity, the Statement of Financial Position, the Statement of Cash Flows, and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the company's members, as a body, in accordance with Section 262 of The Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As described in the Statement of Directors' Responsibilities on page 10 the company's directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements, in accordance with applicable legal and regulatory requirements and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on the financial statements

In our opinion the financial statements:

· give a true and fair view of the state of the company's affairs as at 30th April 2011 and of its profit for the year then ended;

· have been properly prepared in accordance with IFRSs as adopted by the European Union; and

· have been prepared in accordance with the requirements of The Companies (Guernsey) Law, 2008.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where The Companies (Guernsey) Law, 2008 requires us to report to you, if in our opinion:

· the company has not kept proper accounting records; or

· the financial statements are not in agreement with the accounting records and returns; or

· we have not received all the information and explanations, which to the best of our knowledge and belief, are necessary for the purposes of our audit.

Under the Listing Rules we are required to to review:

· the part of the Corporate Governance Statement relating to the Company's compliance with the nine provisions of the June 2008 Combined Code specified for our review: and

· certain elements of the report to the shareholders by the board on directors' remuneration.

Cyril Swale

Senior Statutory Auditor

For and on behalf of

Grant Thornton Limited

Chartered Accountants

St Peter Port, Guernsey, Channel Islands

2nd August 2011

Statement of Comprehensive Income

For the year ended 30th April 2011

		2011			2010

		Revenue	Capital	Total	Revenue	Capital	Total
Notes		$'000	$'000	$'000	$'000	$'000	$'000
	Income
3	Gains on investments held at fair value	-	12,441	12,441	-	89,113	89,113
	Exchange loss	-	(2,669)	(2,669)	-	(2,072)	(2,072)
	Dividend income	5,395	-	5,395	5,391	-	5,391

		5,395	9,772	15,167	5,391	87,041	92,432
	Expenses
4	Investment management fee	3,611	-	3,611	3,673	-	3,673
5	Custodian fees	173	-	173	222	-	222
7	Administration fees	243	-	243	244	-	244
	Reorganisation expenses	-	-	-	256		256
18	Redemption facility expenses	1,176	-	1,176	-	-	-
	Registrar and transfer agent fees	25	-	25	23	-	23
8	Directors' fees and expenses	203	-	203	132	-	132
	Transaction costs	-	485	485	-	604	604
	Insurance fees	31	-	31	27	-	27
	Audit fee	31	-	31	29	-	29
	Printing and advertising fees	35	-	35	50	-	50
	Legal and professional fees	178	-	178	70	-	70
	Listing fees	7	-	7	8	-	8
	Miscellaneous expenses	7	-	7	27	-	27

		5,720	485	6,205	4,761	604	5,365
	Finance cost
	Interest expense and bank charges	524	-	524	709	-	709

	Profit/(Loss) before tax	(849)	9,287	8,438	(79)	86,437	86,358

9	Taxation	(376)	-	(376)	(377)	-	(377)
	Profit/(Loss) and total
	comprehensive income for the year	(1,225)	9,287	8,062	(456)	86,437	85,981

10	Earnings/(Deficit) per ordinary share	$(0.006)	$0.047	$0.041	$(0.002)	$0.422	$0.420

All of the Company's income and expenses are included in the profit/loss for the year and therefore the profit for the year is also the Company's comprehensive income for the year, as defined by IAS 1(revised). In arriving at the result for the year, 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 IFRS. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.

Statement of Changes In Equity

For the year ended 30th April 2011

					Capital	Capital	Capital Reserve/
		Ordinary Share	Share	Revenue	Reserve/	Reserve/	Exchange
		Capital	Premium	Reserve	Realised	Unrealised	Differences	Total
Notes		$'000	$'000	$'000	$'000	$'000	$'000	$'000
	Balances at 1st May 2010	204	192,650	(20,571)	73,750	34,711	(12,119)	268,625
								-
	Movements during the year							-
	Stock split	(204)	204					-
	Redemptions	-	(66,050)	-	-	-	-	(66,050)
3	Gain on investments sold	-	-	(13,899)	13,899	-	-	-
3	Movement on gain on valuation of investments	-	-	1,944	-	(1,944)	-	-
	Loss on foreign exchange	-	-	2,669	-	-	(2,669)	-
	Total comprehensive income	-	-	8,062	-	-	-	8,062

	Balances at 30th April 2011	-	126,804	(21,795)	87,649	32,767	(14,788)	210,637

					Capital	Capital	Capital Reserve/
		Ordinary Share	Share	Revenue	Reserve/	Reserve/	Exchange
		Capital	Premium	Reserve	Realised	Unrealised	Differences	Total
		$'000	$'000	$'000	$'000	$'000	$'000	$'000
	Balances at 1st May 2009	204	192,650	(19,091)	92,127	(72,177)	(10,047)	183,666
								-
	Movements during the year
3	Realised loss on investments sold	-	-	18,377	(18,377)	-	-	-
3	Movement on unrealised gain on revaluation of investments	-	-	(106,888)	-	106,888	-	-
	Loss on foreign exchange	-	-	2,072	-	-	(2,072)	-
	Distribution (Note 19)			(1,022)	-	-	-	(1,022)
	Total comprehensive income	-	-	85,981	-	-	-	85,981
		-	-		-	-	-
	Balances at 30th April 2010	204	192,650	(20,571)	73,750	34,711	(12,119)	268,625

Statement of Financial Position

As at 30th April 2011

		30th April 2011	30th April 2010
Notes		$'000	$'000
	Non Current Assets
2(f) 11	Financial assets at fair value
	through profit or loss	231,434	297,262


	Current Assets
	Due from brokers	1,252	102
2(d)	Dividends and other receivables	2,359	2,305
2(g)	Cash and cash equivalents	17,499	2,043

		21,110	4,450
	Current Liabilities
	Due to brokers	(1,071)	(608)
18	Due to shareholders	(9,513)	-
	Payables and accrued expenses	(719)	(721)
2(h) 12	Loans payable	(30,604)	(21,172)

		(41,907)	(22,501)
	Net Current Liabilities	(20,797)	(18,051)

	Non Current Liabilities
2(h) 12	Loans payable	-	(10,586)

15	Net Assets	210,637	268,625

	Equity
14	Ordinary share capital	-	204
14	Share premium	126,804	192,650
	Revenue reserve	(21,795)	(21,174)
2(l)	Capital reserve	105,628	96,945

17	Net Assets Attributable to Equity Shareholders	210,637	268,625

	Net Asset Value per Ordinary Share*	$1.35	$13.14

*Based on the Net Asset Value at the year end divided by the number of shares in issue:

156,182,220 (30th April 2010 - 20,435,627 price $13.14 before the stock share split and (204,356,270 price $1.31 after the stock share split)

The stock share split which took effect on 16 December 2010 resulted in the issue of ten new ordinary shares of no par value for each existing ordinary share of US$0.01 previously in issue. This resulted in the number of shares in issue at this date of 204,356,270.

Approved by the Board of Directors on 2nd August 2011 and signed on its behalf by:

Andrew Martin Smith Eric Boyle

Director Director

Statement of Cash Flows

For the year ended 30th April 2011

		30th April 2011	30th April 2010
Notes		$'000	$'000
	Reconciliation of profit for the year to net cash flow
	from operating activities
	Profit before taxation	8,438	86,358
3	Gain on investments held at fair value	(12,441)	(89,113)
	Exchange gain	2,669	2,072
	Interest expense	524	709
	(Increase)/decrease in debtors and accrued income	(54)	355
	(Decrease)/increase in creditors	(2)	212
9	Taxation	(376)	(377)

	Net cash flows from operating activities	(1,242)	216

	Investing Activities
	Purchase of investments	(190,587)	(160,366)
	Sale of investments	267,683	162,428

	Net cash inflow from investing activities	77,096	2,062

	Net cash inflow before financing	75,854	2,278

	Cash flows from financing activities
	Interest paid	(481)	(716)
	Redemptions	(56,536)	-
19	Distribution	-	(1,022)
	Net loans repaid	(5,293)	(16,482)


	Net cash outflow from financing activities	(62,310)	(18,220)

	Net increase/(decrease) in cash and cash equivalents	13,544	(15,942)

	Exchange movements	1,912	929

	Movement in cash and cash equivalents in the year	15,456	(15,013)

	Cash and cash equivalents at beginning of year	2,043	17,056

	Cash and cash equivalents at end of year	17,499	2,043

Notes to the Financial Statements

For the year ended 30th April 2011

1. GENERAL

Atlantis Japan Growth Fund Limited (the "Company") was incorporated in Guernsey on
13th March 1996. The Company commenced activities on 10th May 1996.

2. ACCOUNTING POLICIES

a) Statement of Compliance

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS"), which comprise standards and interpretations approved by the European Union and International Accounting Standards, and Standing Interpretations Committee interpretations approved by the IASC that remain in effect.

Basis of accounting

The annual Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities held at fair value through profit and loss, and in accordance with International Financial Reporting Standards (IFRS), The Association of Investment Companies (AIC) and Statement of Recommended Practice (SORP) which are not in conflict with IFRS and the Principal Documents.

The preparation of the Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates.

IFRS 8 requires disclosure of information about the Company's operating segments and replaced the requirement to determine primary (business) and secondary (geographical) reporting segments of the Company. This is disclosed in note 6 to the Financial Statements.

The accounting policies adopted are consistent with those of the previous financial year and are set out below:

New and revised IFRSs applied with no material effect in the financial statements

The following new and revised IFRSs have been applied in the current period and have no material impact on the amounts reported for the current and prior years but may affect the accounting for future transactions or arrangements.

Amendments to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items

The amendments provide clarification on two aspects of hedge accounting: identifying inflation as a hedged risk or portion, and hedging with options.

IFRIC 17 Distributions of Non-cash Assets to Owners

The Interpretation provides guidance on the appropriate accounting treatment when an entity distributes assets other than cash as dividends to its shareholders.

New and revised IFRSs in issue but not yet effective

The Company has not applied the following new and revised IFRSs that have been issued but are not yet effective:

Amendments to IFRS 7 Financial Instruments: Disclosures (as part of Improvements to IFRSs issued in 2010)

The amendments to IFRS 7 clarify the required level of disclosures about credit risk and collateral held and provide relief from disclosures previously required regarding renegotiated loans. The Company has not applied the amendments in advance of their effective date (annual periods beginning on or after 1st January 2011).

New and revised IFRSs in issue but not yet effective (continued)

Amendments to IAS 1 Presentation of Financial Statements (as part of Improvements to IFRSs issued in 2010)

The amendments to IAS 1 clarify that an entity may choose to present the required analysis of items of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements. The Company has not applied the amendments in advance of their effective date (annual periods beginning on or after 1st January 2011).

IFRS 9 Financial Instruments issued in November 2009 and amended in October 2010 introduces new requirements for the classification and measurement of financial assets and liabilities and for derecognition. The Company has not applied the amendments in advance of their effective date (annual periods beginning on or after 1st January 2013).

IAS 24 Related Party Disclosures (as revised in 2009) modifies the definition of a related party and simplifies disclosures for government-related entities. The disclosure exemptions introduced do not affect the Company because the Company is not a government-related entity. However, disclosures regarding related party transactions and balances in these financial statements may be affected when the revised version of the Standard is applied in future accounting periods because some counterparties that did not previously meet the definition of a related party may come within the scope of the Standard.

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

The Interpretation provides guidance regarding the accounting for the extinguishment of a financial liability by the issue of equity instruments. To date, the Company has not entered into transactions of this nature. However, if the Company does enter into any such transactions in the future, the Interpretation will affect the required accounting. In particular, under IFRIC 19, equity instruments issued under such arrangements will be measured at their fair value, and any difference between the carrying amount of the financial liability extinguished and the fair value of equity instruments issued will be recognised in profit or loss.

b) Going Concern

c) Presentation of Statement of Comprehensive Income

In order to better reflect the activities of an investment trust company supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income.

d) Income Recognition

Dividends arising on the Company's investments are accounted for on an ex-dividend basis. Investment income is accounted for gross of withholding tax.

e) Expenses

All expenses are recognised on an accruals basis and have been charged against revenue, with the exception of transaction costs, which have been charged against capital.

f) Investments

The Company's business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment strategy, and information about the portfolio is provided internally on that basis to the Company's Board of Directors and other key management personnel.

Accordingly, upon initial recognition the investments are designated by the Company as 'at fair value through profit or loss'. They are included initially at fair value, which is taken to be their cost (excluding expenses incidental to the acquisition which are written off in the Statement of Comprehensive Income, and allocated to the capital column of the Statement of Comprehensive Income at the time of acquisition). Subsequently, the investments listed overseas are valued at 'fair value', which is bid price (where a bid price is available) or otherwise at fair value based on published price quotations.

Gains and losses on non-current asset investments are included in the Statement of Comprehensive Income as capital.

g) Cash and Cash Equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purposes of the Statement of Cash Flow, cash and cash equivalents consist of cash and cash equivalents, as defined above, net of outstanding bank overdrafts.

h) Loans Payable

All loans are initially recognised at cost, being the fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest bearing loans and borrowings are subsequently measured at amortised cost. Amortised cost is calculated by taking into account discount or premium on settlement. Any costs of arranging any interest-bearing loans are capitalised and amortised over the life of the loan.

i) Foreign Currencies

The Company's investments are predominately denominated in Japanese yen. The Company's obligation to shareholders is denominated in US dollars and when appropriate, the Company may hedge the exchange rate risk from yen to US dollars. Therefore, the functional currency is US dollars, which is also the presentational currency of the Company. Transactions involving currencies other than US dollars, are recorded at the exchange rate ruling on the transaction date. At each Statement of Financial Position date, monetary items and non-monetary assets and liabilities that are fair valued, which are denominated in foreign currencies, are retranslated at the closing rates of exchange.

Exchange differences arising from retranslating at the Statement of Financial Position date:

- investments and other financial instruments measured at fair value through profit or loss; and

- other monetary items;

and arising on settlement of monetary items, are included in the Statement of Comprehensive Income and allocated as capital if they are of a capital nature, or as revenue if they are of a revenue nature.

j) 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 period. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense 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 Statement of Financial Position date.

In line with the recommendations of the AIC SORP, the allocation method used to calculate tax relief on expenses presented against capital returns in the supplementary information in the Statement of Comprehensive Income is the "marginal basis". Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of the Statement of Comprehensive Income, then no tax relief is transferred to the capital return column.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. A deferred tax liability is recognised in full for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Investment trusts which have approval as such under section 1158 of the Corporation Tax Act 2010 are not liable for taxation on capital gains.

The carrying amount of deferred tax assets is reviewed at each Statement of Financial Position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

k) Financial Liabilities

Financial liabilities are recognised when the Company becomes a party to the contractual agreements of the instrument. Trade and other payables are initially recognised at their nominal value and subsequently measured at amortized cost less settlement payments. Financial liabilities are derecognised from the Statement of Financial Position only when the obligations are extinguished either through discharge, cancellation or expiration.

l) Capital Reserve

The capital reserve distinguishes between gains/(losses) on sale or disposals and valuation gains/(losses) on investments. The capital reserve consists of realised gains/(losses) on investments, movement in valuation gains/(losses) on investments and gains/(losses) relating to foreign exchange.

3. GAINS/(LOSSES) ON INVESTMENTS HELD AT FAIR VALUE

	2011	2010
	$'000	$'000

Proceeds from sales of investments	268,833	158,241
Original cost of investments sold	(254,448)	(176,016)

Gains/(losses) on investments sold during the year	14,385	(17,775)

Net valuation (loss)/gain for the year	(1,944)	106,888

Gains on investments held at fair value	12,441	89,113

4. INVESTMENT MANAGEMENT FEE

The Company pays to the Investment Manager a fee accrued weekly and paid monthly in arrears at the annual rate of 1.5 per cent of the weekly Net Asset Value of the Company up to 28th February 2011. Per the side letter dated 14th December 2010 effective 1st March 2011 the annual rate of the Investment Managers' fee was reduced to 1 per cent for the Company and the redemption pool. For the year ended 30th April 2011, total investment management fees were $3,611,010 (2010 - $3,672,564) of which $157,844 (2010 - $327,591) is due and payable as at that date.

Under the terms of the Investment Management Agreement dated 18th March 1996, the Investment Manager, Atlantis Fund Managers (Guernsey) Limited, 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 twelve months, and be in accordance with the Investment Management Agreement. Fees payable to the Investment Adviser are met by the Investment Manager.

5. CUSTODIAN FEES

The Company pays to the Custodian a fee accrued weekly at a rate of 0.03 per cent of the total weekly Net Asset Value of the assets held by the Custodian or Sub-Custodian, together with transaction charges.

Redemption Pool Fees

The custodian shall also be entitled to receive a fee from the Company of 0.03 per cent per annum of the Net Asset Value of any redemption pool together with transaction charges.

For the year ended 30th April 2011, total custodian fees were $172,939 (2010 - $222,347) of which $20,805 (2010- $20,704) is due and payable as at that date.

6. OPERATING SEGMENTS

The Board of Directors makes the strategic resource allocations on behalf of the Company and is responsible for the Company's entire portfolio. The Board is of the opinion that the Company is engaged in a single geographic and economic segment business. The asset allocation decisions are based on a single, integrated investment strategy, and the Company's performance is evaluated on an overall basis.

The internal reporting provided to the Directors for the Company's assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of IFRS.

As required by IFRS 8, the total fair value of the financial instruments held by the Company by each major geographical segment, and the equivalent percentages of the total value of the Company, are reported in the Portfolio Statement.

Revenue earned is reported separately on the face of the statement of comprehensive income as dividend income received from Japanese equities.

7. ADMINISTRATION FEES

The Company pays to the Administrator a fee accrued weekly and paid monthly in arrears at the annual rate of 0.18 per cent of the weekly Net Asset Value up to $50 million and 0.135 per cent between $50 million and $100 million, 0.0675 per cent between $100 million and $200 million and 0.02 per cent above $200 million. In addition, an annual minimum retainer of $1,000 is payable in respect of maintaining the principal register of shareholders.

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 at £7,500 will be payable.

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

Market Value Annual Rate

Up to US$25,000,000 0.18%

US$25,000,001 to US$50,000,000 0.135%

Thereafter 0.0675%

For the year ended 30th April 2011, total administration and registrar fees were $242,065 (2010 - $243,154) of which $19,833 (2010 - $20,773) is 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 £20,000 per annum for the Chairman and £15,000 per annum for each of the other Directors. In addition, the Company reimburses all reasonably incurred out-of-pocket expenses of the Directors. For the year ended 30th April 2011, total directors' fees and expenses were $202,839 (2010 - $131,734) of which $78,596 (2010 -$4,189) is due and payable as at that date.

In addition to the directors' regular annual fee a payment of £7,000 was made to Timothy Guinness and a payment of £10,000 each was made to Eric Boyle and Andrew Martin Smith in relation to the additional work carried out on behalf of the Company in respect of the restructuring of the Company and the implementation of the redemption facility. The Directors are the only key management personnel. The total key management compensation was $104,424 (2010: $80,000) See note 20 for changes made after the year end.

9. TAXATION

The Company is exempt from taxation in Guernsey under the provisions of The Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 and has paid an annual exemption fee of £600, however the Company is subject to UK tax being a UK tax resident to comply with the Section 1158 of the Corporation Tax Act 2010.

	2011	2010
	$'000	$'000

Corporation tax at 27.8% (2010: 28%)	-	-
Irrecoverable overseas tax	376	377
Tax charge in respect of the current year	376	377

Current Taxation

The current taxation charge for the year is different from the standard rate of corporation tax in the UK (28%). The differences are explained below.

	2011	2010
	$'000	$'000
Profit before tax	8,438	86,358
Capital profit for the year	(9,287)	(86,437)
Tax loss for the year	(849)	(79)

Theoretical tax at UK corporation tax rate of 27.8% (2010 - 28%)	(238)	(22)

Effects of:
Relief for losses brought forward	343	128
Relief for overseas tax suffered	(105)	(106)
Overseas tax written off	376	377
Actual current tax charge	376	377

The Company is an investment trust and therefore is not taxable on capital gains.

Factors that may affect future tax charges

The investment trust has excess management expenses of $26,187,182 (2010 - $27,620,222) that are available to offset future taxable revenue. A deferred tax asset has not been recognised in respect of these amounts as they will be recoverable only to the extent that there is sufficient future taxable revenue.

10. EARNINGS/(DEFICIT) PER ORDINARY SHARE

The earnings per ordinary share figure is based on the net profit for the year of $8,061,922 (2010 - $85,981,128) and on 196,173,281 being the weighted average number of shares in issue at 30th April 2011(2010 204,356,270) as adjusted by the stock split during the year.

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

	2011	2010
	$'000	$'000

Net revenue loss	(1,225)	(456)
Net capital profit	9,287	86,437
Net total profit	8,062	85,981

Weighted average number of ordinary shares
in issue during the year	196,173,281	204,356,270

	$	$
Revenue loss per ordinary share	(0.006)	(0.002)
Capital profit per ordinary share	0.047	0.423
Total profit per ordinary share	0.041	0.421

11. FINANCIAL ASSESTS AT FAIR VALUE THROUGH PROFIT OR LOSS

	2011	2010
	$'000	$'000

Cost of investments brought forward	262,551	284,301
Cost of purchase of investments	191,050	154,868
Proceeds on disposal of investments	(268,833)	(158,241)
Gain/(loss) on disposal of investments	13,899	(18,377)
Cost of investments carried forward	198,667	262,551


Cost of investments	198,667	262,551
Gain on valuation	32,767	34,711
Fair value of investments at year end	231,434	297,262

12. LOANS PAYABLE

Loan	Interest	Maturity	2011	2010
Amount	Rate	Date	$'000	$'000

5 year committed fixed rate
credit facility
Y1,500,000,000	2.03%	7th July 2011	18,362	-
Y1,000,000,000	2.05%	31st July 2011	12,242	-
Y2,000,000,000	1.63%	13th October 2010	-	21,172
Loan due for repayment within one year			30,604	21,172
5 year committed fixed rate
credit facility
Y1,000,000,000	2.05%	31st July 2011	-	10,586
Loan due for repayment greater than one year			-	10,586

			30,604	31,758

13. FORWARD CURRENCY CONTRACTS

At 30th April 2011 the following forward currency contract was open. There were no open contracts at 30th April 2010.

Currency Bought		Currency Sold		Maturity Date		Unrealised gain
GBP 14,917		US$ 24,493		03/05/2011		US$352

14. SHARE CAPITAL AND SHARE PREMIUM

	2011	2010
a) Authorised	$'000	$'000

204,356,270 Ordinary Shares of no par value ( 2010 - 24,000,000 of $0.01)	204	240

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 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 convey upon the holders thereof are as follows:

Voting Rights

(i) on a show of hands, every Member who is present shall have one vote; and ii) 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.

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.

b) Issued
Ordinary Shares	Number of Shares	Share Capital		Share Premium
		$'000		$'000

In issue at 30th April 2011	156,182,220	-		126,804

Opening shares 1st May 2010			20,435,627
Stock split 16th December 2010 (10 shares for every 1 share held)			204,356,270
Shares redeemed 28th February 2011			(48,174,050)
Closing Shares 30th April 2011			156,182,220

			Before		After
			stock split		stock split
Opening shares 1st May 2009			20,435,627		204,356,270


Closing Shares 30th April 2010			20,435,627		204,356,270

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 year were cancelled immediately.

15. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS

	2011	2010
	$'000	$'000
Income attributable to equity shareholders	8,062	85,981
Income distribution (note 19)	-	(1,022)
Redemptions (note 18)	(66,050)	-
Shareholders' funds at beginning of year	268,625	183,666
Shareholders' funds at end of year	210,637	268,625

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

In accordance with its investment objectives and policies, the Company holds financial instruments which at any one time may comprise the following:

* securities held in accordance with the investment objectives and policies

* cash and short-term debtors and creditors arising directly from operations

* borrowing used to finance investment activity

* derivative transactions including investment in warrants and forward currency contracts

* options or futures for hedging purposes

The financial instruments held by the Company principally comprise equities listed on the stock market in Japan. The specific risks arising from the Company's exposure to these instruments, and the Manager/Investment Adviser's policies for managing these risks, which have been applied throughout the year, are summarised below.

Capital Management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The Company may not borrow or otherwise use leverage exceeding 20% of its net assets for investment purposes, to settle facilities for specific investments such as bridge financing. In connection with the loan facility agreement with ING Bank N.V. (ING), the Company entered into a Guernsey law security interest agreement in favour of ING over its custody accounts held with Northern Trust (Guernsey) Limited.

The Company does not have any externally imposed capital requirements apart from the fact that it should not retain more than 15% of the income, in order to comply with section 1158 of Corporation Tax Act 2010. The Company has complied with this requirement.

The Company is a closed-ended investment company and thus has fixed capital for investment. The Company's capital is represented by ordinary shares of no par and each share carries one vote. They are entitled to dividends when declared.

No shares were repurchased during the year ended 30th April 2011 (2010: Nil), other than via the new redemption facility, refer to Note 18.

Market Price Risk

The Company's investment portfolio - particularly its equity investments - is exposed to market price fluctuations which are monitored by the Manager/Investment Adviser in pursuance of the investment objectives and policies. Adherence to investment guidelines and to investment and borrowing powers set out in the scheme particulars mitigates the risk of excessive exposure to any particular type of security or issuer.

At 30th April 2011, the Fund's market price risk is affected by three main components: changes in market prices, currency exchange rates and interest rate risk. Currency exchange rate movements and interest rate movements, which are dealt with under the relevant headings below, primarily affect the fair values of the Fund's exposures to equity securities, related derivatives and other instruments. Changes in market prices primarily affect the fair value of the Fund's exposures to equity securities, related derivatives and other instruments.

Exceptional risks associated with investment in Japanese smaller companies may include:

a) greater price volatility, substantially less liquidity and significantly smaller market capitalisation, and

b) more substantial government intervention in the economy, including restrictions on investing in companies or in industries deemed sensitive to relevant national interests.

Market price sensitivity analysis

If the price of each of the equity securities to which the Fund had exposure at 30th April 2011 had increased or decreased by 5% with all other variables held constant, this would have increased or decreased net assets attributable to holders of ordinary shares of the Fund by:

	2011	2010
	+/-	+/-
Net Asset Value	$11,571,699	$14,863,086
Net Asset Value per share	$0.07	$0.07

Foreign Currency Risk

The Company principally invests in securities denominated in currencies other than United States Dollar, the functional currency of the Company. Therefore, the Statement of Financial Position may be affected by movements in the exchange rates of such currencies against the US Dollar. The Manager/Investment Advisor has the power to manage exposure to currency movements by using forward currency contracts. No such instruments were held at the date of these Financial Statements.

It is not the present intention of the Directors to hedge the currency exposure of the Company, but the Directors reserve the right to do so in the future if they consider this to be desirable.

The treatment of currency transactions other than in US Dollars is set out in Note 2(i) to the Financial Statements.

The Company's net currency exposure is as follows:

					Japanese Yen
As at 30th April 2011:					$'000

Assets
Cash and cash equivalents					17,272
Investments held at fair value					231,434
Other assets					3,470
Total assets					252,176

Liabilities
Loans payable					(30,604)
Other liabilities					(1,071)
Total liabilities					(31,675)

Total net assets					220,501

The GBP exposure of the fund is immaterial.

					Japanese Yen
As at 30th April 2010:					$'000

Assets
Cash and cash equivalents					2,007
Investments held at fair value					297,262
Other assets					2,335
Total assets					301,604

Liabilities
Loans payable					(31,758)
Other liabilities					(608)
Total liabilities					(32,366)

Total net assets					269,238

Foreign Currency Sensitivity Analysis

If the exchange rate at 30th April, 2011 between the functional currency and all other currencies had increased or decreased by a 5% currency movement (2010: 5%) this should be a reasonably possible change for a period of one year, or less if the next financial period will be less than one year with all other variables held constant, this would have increased or reduced net assets attributable to holders of ordinary shares of the Company by:

	2011	2010
	+/-	+/-
Net Asset Value	$11,034,726	$13,465,556
Net Asset Value per share	$0.07	$0.07

No benchmark is used in the calculation of the above information.

Interest Rate Risk

Substantially all the Company's financial assets and its liabilities are non-interest bearing except for the two outstanding loans payable detailed in note 12, and any excess cash and cash equivalents are invested at short-term market interest rates.

As at 30th April 2011, the Company has a small exposure to interest rate risk regarding the loan facility and cash and cash equivalents.

Increases in interest rates may increase the costs of the Company's borrowings. The rate of interest on each ING drawdown loan for each interest period is the percentage rate per annum which is the aggregate of the applicable; (i) margin, (ii) LIBOR and (iii) mandatory cost. Interest on the loan is payable monthly in arrears. For the year ended 30th April 2011 the interest accrued on the loan was $115,537 (2010: $72,562)

The following financial assets and liabilities disclosures exclude prepayments and taxation debtors and creditors:

	Cash flow	Fair value
	interest	interest	Total
	rate risk	rate risk
As at 30th April 2011:	$'000	$'000	$'000

Financial assets
Cash and bank balances	17,499	-	17,499

Financial liabilities
Loans payable	-	(30,604)	(30,604)


Net financial assets/(liabilities)	17,499	(30,604)	(13,105)

	Cash flow	Fair value
	interest	interest	Total
	rate risk	rate risk
As at 30th April 2010:	$'000	$'000	$'000

Financial assets
Cash and bank balances	2,043	-	2,043

Financial liabilities
Loans payable	-	(31,758)	(31,758)


Net financial assets/(liabilities)	2,043	(31,758)	(29,715)

The cash flow interest rate risk comprises those financial assets and liabilities with a floating interest rate, for example cash deposits at local market rates. Cash and cash equivalents earn interest at the prevailing market interest rate. Although this portion of the Net Asset Value is not subject to fair value risk as a result of possible fluctuations in the prevailing market interest rates, the future cashflows of the Company could be adversely or positively impacted by decreases or increases in those prevailing market interest rates.

The fair value interest rate risk comprises those financial assets and liabilities with a fixed interest rate, for example loans payable and loan interest payable.

	Weighted average		Weighted average period for
	interest rate		which rate is fixed (years)
	2011	2010	2011	2010
Japanese Yen
Loans payable	2.04%	1.77%	0.21	1.33

Fair Value

All assets and liabilities are carried at fair value with the exception of short term borrowings which are carried at amortised cost using the effective interest rate method.

Short term Debtors and Creditors

Trade and other receivables do not carry interest and are short term in nature. They are stated at amortised cost as reduced by appropriate allowances for irrecoverable amounts in the case of receivables.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter in realising assets or otherwise raising funds to meet financial commitments.

As at 30th April 2011, the Company had drawn down a loan facility of JPY2,5000,000,000 ($30,603,501). In connection with the facility agreement, the Company entered into a Guernsey law security interest agreement in favour of ING over its custody accounts held with Northern Trust (Guernsey) Limited. The loan may only be applied for investment leverage purposes only and must be repaid on the latest of (i) the day falling 364 days from the date of the draw down of the loan, and (ii) any extension date agreed between the Company and ING.

The Company invests primarily in listed securities.

The Company's liquidity risk is managed by the Investment Manager who monitors the cash positions on a regular basis.

The maturity analysis of the Company's financial assets and liabilities (excluding prepayments and tax balances) at 30th April 2011 is as follows

	Up to 1 year		1 to 5		Total
	or on demand		years
As at 30th April 2011:	$'000		$'000		$'000

Financial assets
Cash and bank balances	17,499		-		17,499
Investments held at fair value	231,434		-		231,434
Other financial assets	3,611		-		3,611
Total financial assets	252,544		-		252,544

Financial liabilities
Loans payable	(30,604)		-		(30,604)
Other financial liabilities	(11,303)		-		(11,303)
Total financial liabilities	(41,907)		-		(41,907)

Excess of financial assets over gross contractual liabilities	210,637		-		210,637

	Up to 1 year		1 to 5		Total
	or on demand		years
As at 30th April 2010:	$'000		$'000		$'000

Financial assets
Cash and bank balances	2,043		-		2,043
Investments held at fair value	297,262		-		297,262
Other financial assets	2,407		-		2,407
Total financial assets	301,712		-		301,712

Financial liabilities
Loans payable	(21,172)		(10,586)		(31,758)
Other financial liabilities	(1,702)		(68)		(1,770)
Total financial liabilities	(22,874)		(10,654)		(33,528)

Excess/(deficit) of financial assets over gross contractual liabilities	278,838	(10,654)		268,184

Credit risk

Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Company.

In accordance with the investment restrictions as described in its placing Memorandum, the Company may not invest more than 10% of the Company's gross assets in securities of any one company or issuer. However, this restriction shall not apply to securities issued or guaranteed by a government or government agency of the Japanese or US Governments. In adhering to these investment restrictions, the Company mitigates the risk of any significant concentration of credit risk arising on broker and dividend receivables.

As the Company invests primarily in publicly traded equity securities the Company is not exposed to credit risk from these positions. However, the Company will be exposed to a credit risk on parties with whom it trades and will bear the risk of settlement default. The Company minimises concentrations of credit risk by undertaking transactions with a large number of regulated counterparties on recognised and reputable exchanges. All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of securities sold is only made once the broker has received payment. Payment is made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to meet its obligation. The Company is exposed to credit risk on cash and investment balances held with the Custodian. The Investment Manager regularly reviews concentrations of credit risk.

The Custodian to the Company is Northern Trust Fiduciary Services (Guernsey) Limited, an indirect wholly-owned subsidiary of Northern Trust Corporation ("TNTC"). TNTC is publicly traded and a constituent of the S&P 500. TNTC has a credit rating of AA- from Standard & Poors. Northern Trust Company ("TNTCO") is also wholly owned by TNTC. TNTCO has a credit rating of AA (2010: AA-) from Standard & Poors .

The securities held by the Company are legally held with the Custodian, which holds the securities in segregated accounts, and subject to any security given by the Company to secure its overdraft facilities, the Company's securities should be returned to the Company in the event of the insolvency of the Custodian or its appointed agents, although it may take time to the Company to prove its entitlement to the securities and for them to be released by the liquidator of the insolvent institution. The Company will however only rank as an unsecured creditor in relation to any cash deposited or derivative positions with the Custodian, their related companies and their appointed agents, and is therefore subject to the credit risk of the relevant institution in this respect.

The net assets exposed to credit risk at year end amounted to US$17,679,367 (2010:US$1,537,466).

Fair Value Hierarchy

The fair value of financial assets and liabilities 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 year end date. The quoted market price used for financial assets held by the Company is the current bid price; the appropriate quoted market price for financial liabilities is the current asking price. When the Company holds derivatives with offsetting market risks, it uses mid-market prices as a basis for establishing fair values for the offsetting risk positions and applies this bid or asking price to the net open position, as appropriate. If a significant movement in fair value occurs subsequent to the close of trading on the year end date, valuation techniques will be applied to determine the fair value.

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 financial assets and liabilities 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 are used primarily to value unlisted equity, debt securities and other debt instruments for which markets were or have been inactive during the financial year. 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 7 fair value hierarchies:

Financial assets at fair value through profit or loss
At 30th April 2011
	Total	Level 1	Level 2	Level 3
Atlantis Japan Growth Fund	$'000	$'000	$'000	$'000
Equity Investments	231,434	231,434	-	-

Financial assets at fair value through profit or loss
At 30th April 2010
	Total	Level 1	Level 2	Level 3
Atlantis Japan Growth Fund	$'000	$'000	$'000	$'000
Equity Investments	297,262	297,262	-	-

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.

All the listed equity instruments have been issued by publicly traded companies in Japan. Fair values for these securities have been determined by reference to their quoted bid prices at the reporting date.

17. RECONCILIATION OF NET ASSET VALUE TO PUBLISHED NET ASSET VALUE

	30 April 2011	Per Share
	$'000	$

Published Net Asset Value	211,394	1.35
Loss on revaluation of securities at bid prices	(757)	-
	210,637	1.35

	30 April 2010	Per Share
	$'000	$

Published Net Asset Value	269,530	13.19
Loss on revaluation of securities at bid prices	(905)	(0.05)
	268,625	13.14

Please note that the per share information for 30th April 2010 is after the stock split

In accordance with IFRS the Company's investments have been valued at bid price. However, in accordance with the Company's prospectus for the purposes of determining the daily net asset value per share the investments are valued at mid prices.

18. REDEMPTION FACILITY

At an EGM held on 16th December 2010 the following proposals were passed with the aim to try and increase liquidity in the Company's shares and to minimise the discount.

The key elements of the proposals are described below:

1) the Company retains its investment trust status and remains listed on the London Stock Exchange;

2) the Company's share capital has been reorganised to permit investors to request the redemption of part or all of their shareholding on a four-monthly basis. The redemption value will be based upon the realisation value of the portfolio, less an exit charge set initially at 4% and scaling down to 2% at the fifth redemption opportunity. This charge will be retained by the Company and will enhance the NAV per share for continuing shareholders;

3) the Board has discretion to decline such redemption requests when it considers it is in the interests of shareholders as a whole;

4) the existing Dollar shares have been redenominated into Sterling shares, so as to enable the shares to qualify for inclusion in the UK national indices;

5) the Company has renewed its buy back powers, holding any shares so bought back in treasury;

6) any shares bought into treasury can be sold at a discount narrower than that at which they were bought.

7) the Board has been given authority to issue new shares in the Company, if demand so warrants.

A document was issued to all shareholders on 30th November 2010 detailing how the redemption facility would work and this proposal was agreed at the EGM on 16th December 2010.

Following the approval of these proposals, shareholders have the opportunity to make redemptions of part or all of their shareholding on a four monthly basis with the Board's discretion in declining any redemption requests subject to a limit of 14.99% of the ordinary shares outstanding. The following redemptions were made during the first redemption period:-

Redemption date	Shares redeemed	US$'000
28/02/2011	48,174,050	(66,050)

As at the year ended 30th April 2011, a total of US$56,536,781 was paid to redeeming shareholders. The balance of 9,512,726 is due and payable as at that date.

The costs associated with the funds reorganisation to enable the redemption facility are as follows:-

		US$'000
ING (professional fees re redemption facility)		702
UK Lawyers		228
Guernsey Lawyers		81
Accountants		77
Other professional		20
Printing and postage		19
Registrars		19
Administrators		15
Commitments fees		12
Irish Legal Opinion		3
		1,176

19. DISTRIBUTION

There was no distribution declared for the year ended 30th April 2011.

The following distribution was declared for the year ended 30th April 2010.

Distribution	Date			Date	Amount
per unit	declared	Ex-date	Record Date	paid	US$	Relevant period

$0.05	17th July 2009	12th August 2009	14th August 2009	4th September 2009	1,021,781	1st May 2008 - 30th April 2009

20. SUBSEQUENT EVENTS

An additional payment of GBP 10,000 each has been made to Timothy Guinness, Eric Boyle and Andew Martin Smith on 3rd May 2011 in relation to additional work carried out on behalf of the Company in repect of the set up of the redemption facility.

With effect from 1 May 2011 Directors fees have been increased as follows:-

Chairman: £30,000 per annum

Chairman of the Audit Committee: £27,500 per annum

Director: £25,000 per annum

On 30th June 2011, 43,877,672 shares (approx 28.09% of the total shares in issue) were redeemed by shareholders. Subsequent to the redemption, the Company had 112,304,548 ordinary shares inissue.

There have been no other events subsequent to the year ended 30th April 2011.

Administration

Directors

Timothy Guinness (Chairman)

Eric Boyle

Andrew Martin Smith

Takeshi Murakami

Noel Lamb (appointed 1st February 2011)

Registered Office

Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 3QL, Channel Islands

Investment Manager

Atlantis Fund Management (Guernsey) Limited

P.O. Box 255, Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 3QL, Channel Islands

Custodian

Northern Trust (Guernsey) Limited

Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 3DA, Channel Islands

Investment Adviser

Atlantis Investment Management Limited (regulated by FSA)

5 th Floor, 10 King William Street, London EC4N 7TW

(Telephone no. 020-7877-3377)

Sub Investment Adviser

Atlantis Investment Research Corporation

Hamamatsu-cho Square

Studio 1805

1-30-5 Hamamatsu-cho

Minato-ku

Tokyo 105-0013

Japan

Administrator, Secretary and Principal Registrar

Northern Trust International Fund Administration Services (Guernsey) Limited

Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 3QL, Channel Islands

Jersey Registrar

Computershare Investor Services (Jersey) Limited

P.O. Box 329, Queensway House, Hilgrove Street, St. Helier, Jersey JE4 9XY,

Channel Islands

Corporate Broker (appointed effective 24th November 2010)

Singer Capital Markets Limited

One Hanover Street

London W1S 1YZ

Financial Adviser (from 12th October 2010)

ING Bank NV

60 London Wall

London EC2M 5TQ

Auditors

Grant Thornton Limited

P.O. Box 313, Lefebvre House

Lefebvre Street, St Peter Port, Guernesey, GY1 3TF

Channel Islands

Legal Advisers (as to English law)

Stephenson Harwood

1 Finsbury Circus

London EC2M 7SH

Legal Advisers (as to Guernsey law)

Ogier

Ogier House, St. Julian's Avenue, St Peter Port, Guernsey, GY1 1WA

(Company No. 30709)

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR SSAFLDFFSEIA

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Atlantis Japan Growth Fund Ltd. (AJG)

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