Final Results

RNS Number : 8799N

Baillie Gifford Japan Trust PLC

04 October 2012

 



The Baillie Gifford Japan Trust PLC

Results for the year to 31 August 2012

The Baillie Gifford Japan Trust PLC outperformed its benchmark index over the year to 31 August 2012 by 3.5 percentage points. Net asset value per share, after deducting borrowings at fair value, rose 0.8%, while the benchmark index declined 2.7%. The share price rose 2.4%.

¾ Returns ahead of the Company's benchmark were as a result of good stock selection, particularly in the information, communication and utilities and electricals and electronics sectors. So-Net Entertainment and Endo Lighting being notable contributors.

¾ The Company's JPY borrowings were a small net negative contributor to performance and gearing stood at 19% of shareholders' funds at year end (18% - 31 August 2011). We continue to believe that the growth potential of specific stocks remains fundamentally understated by current share prices so borrowings continue to be invested in the market.

¾ Portfolio turnover over the period was 9% (11% for the year to 31 August 2011) reflecting the Managers' conviction in the current portfolio and long term investment horizon. Six new holdings were made and six holdings sold in entirety.

¾ The Japanese economy is forecast to grow 2% in 2012, significantly higher than the G10 average, driven by domestic demand. Although the macro environment is uncertain, corporate Japan would be well positioned to benefit from progress on deregulation, free trade and a more explicit inflation target. 

¾ The Managers' focus on individual companies and the Company's focus on finding growth internationally, as well as domestically, remain points of differentiation from the index.

The Baillie Gifford Japan Trust PLC aims to achieve long term capital growth principally through investment in medium to smaller sized Japanese companies which are believed to have above average prospects for growth. At 31 August 2012, the Company had total assets of £163.1m (before deduction of bank loans of £28.5m).

Baillie Gifford & Co, the Edinburgh based fund management group with around £82billion under management and advice as at 3 October 2012, is appointed as investment managers and secretaries to The Baillie Gifford Japan Trust PLC.

Past performance is not a guide to future performance. The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares. You should view your investment as long term. You can find up to date performance information about The Baillie Gifford Japan Trust PLC on the Company website at www.japantrustplc.co.uk.

3 October 2012

For further information please contact:

Sarah Whitley, Manager

The Baillie Gifford Japan Trust PLC

Tel: [phone]

Roland Cross, Director

Broadgate Mainland

Tel: [phone]

Chairman's Statement

Over the year your Company's net asset value rose by 0.8%, outperforming the 2.7% loss of the benchmark TOPIX index (in sterling terms) total return. The market level varied by a remarkably small amount over the year (12.1% from high point to low point) given the forces battering Japanese companies: namely a slowdown in China, problems in the eurozone, recovering company profits and a strong yen.

Stock selection over the year was again good but gearing detracted slightly from the performance. Further performance details can be found in the Managers' Report.

Investment income increased by a remarkable 22% over the year reflecting higher dividends. Expenses decreased slightly. Overall revenue gain per share was 1.25p. No dividend is payable as the revenue reserve remains in deficit.

Gearing

Net gearing amounted to 18% of net assets at the start of the year and ended the year at 19%. With the low cost of yen loans we believe that borrowing to invest in Japanese equities is a sensible strategy. Gross borrowings remain at 3.55bn yen.

Share Capital

The Company did not exercise its share buy back powers during the year; however, your Board believes that it is important that the Company retains this power and so, at the Annual General Meeting, it is seeking to renew this facility. The Company also has authority to issue new shares and to reissue any shares held in treasury, up to 5% of the Company's issued share capital, for cash on a non-pre-emptive basis. Shares would only be issued/reissued at a premium to net asset value, thereby enhancing net asset value per share for existing shareholders. The Directors will seek to utilise this authority only if they believe that it will be in the best interests of the Company to do so.

Articles of Association

Statutory rules governing investment trusts and investment companies were amended recently. As a result of this change, there is no longer a requirement for a Company's Articles to prohibit the distribution as a dividend of surpluses arising from the realisation of investments. In light of the amended statutory rules, the Board no longer considers it appropriate to have such a prohibition in the Articles and therefore seeks shareholder approval at the AGM to remove it. The Board believes this will give the Company greater flexibility in the long term as it will allow distributions to be made from any surplus arising from the realisation of an investment. There are no present plans to pay a dividend.

Continuance Vote

Our shareholders have the right to vote annually on whether the Company should continue in business, and will again have the opportunity to do so at the Annual General Meeting to be held on 29 November 2012.

Last year the Company received support for its continuance from 97.4% of those voting. Your Directors are of the opinion that despite the continuing macro economic problems, there remain attractive opportunities in selected, well-run companies.

Given the long-term favourable outlook, my fellow Directors and I intend where possible to vote our own shareholdings in favour of the resolution and hope that shareholders will feel disposed to do likewise.

Board

Your Board is committed to high standards of corporate governance. In particular it recognises the need to have a balance of skills, experience and length of service.  It also believes that membership of the Board should be refreshed over time.  To this end, it will put together a plan over the next year to do so.

Chairman's Statement (ctd)

Outlook

Japanese equities continue to sell at a discount to most other world equity markets and it is difficult to know when investors will recognise this more broadly. In the meantime Japan has many companies which are growing and are expected to continue to do so, the most attractive of which are held by the Company.

Past performance is not a guide to future performance.

Managers' Report

Performance

The net asset value per share, with borrowings deducted at fair value, was little changed over the year rising 0.8% to 216.9p whilst the benchmark index, TOPIX on a total return basis, fell 2.7% in sterling terms. The yen was also effectively flat on a year on year basis, appreciating by only 0.1% against sterling. This impression of stasis however is misleading as both the market and the currency moved significantly at the beginning of 2012. TOPIX rose by 17.3% in the first calendar quarter of 2012 as optimism about the global economy increased and policy measures in Japan seemed supportive. The yen mirrored this move by depreciating sharply during January to March and then appreciating as the concerns about the rest of the developed world re-emerged from April. Japan has again been regarded as a safe haven and the yen has strengthened as global concerns have increased.

In terms of the Japan Trust portfolio, the outperformance is broken down by sector in the Portfolio Performance Attribution table. Although most sectors contributed positively, the information, communication and utilities sector was the largest contributor as our investments in a range of internet stocks performed strongly overall, particularly So-Net Entertainment which was bought out by parent Sony at a 70% premium. Such is the undervaluation of Japanese shares that even that price could be regarded as cheap based on the sum of So-Net's own investments and business. Electrical and electronics also contributed significantly as our stocks did better than a weak industry, with new holding Endo Lighting contributing significantly. The worst sector was retail where one of the strong performers from last year, Start Today, did badly as did Yamada Denki as television sales fell after government subsidies ended and the digital switch-over was completed.

Portfolio

Turnover remained low at below 9% as we continue to invest with a long term outlook. We aim to buy companies based on our assessment of their prospects in three to five years and the continuing low level of trading in the portfolio reflects this long term stance.

Nevertheless we have bought six new holdings and sold six less promising businesses. The purchases range from a LED lighting manufacturer, Endo Lighting, to two further internet related businesses, Kakaku, a price comparison website and Lifenet Insurance, which is selling life insurance online. The use of the internet to disrupt established industries features in our purchase of Lifenet, which is a small company growing rapidly in the mature life insurance industry, whilst Kakaku uses the ability of the internet to disseminate information. Most of our eleven internet related holdings are in the information, communication and utilities sector, but there are several defined as commerce and services. These stocks make up around 12% of the portfolio.

We also bought Sanrio the owner of the Hello Kitty character and Fuji Heavy Industries the maker of Subaru cars. Both Sanrio and Fuji Heavy are thinking about brands in a different way to the majority of Japanese companies and we believe this will boost their long term growth prospects. The final purchase was Industrial and Infrastructure Fund, a JREIT which operates in a distinctive segment of the property market. Further details of these new purchases and the largest holdings are in the Review of Investments on pages 12 to 14 of the Annual Report.

The sales we made were of several companies where developments in corporate governance were negative, notably Olympus and Accordia Golf. Others were where the industry outlook and competitive position had deteriorated such as Ricoh, Askul and Yamaha Motor. Meitec had benefited from post-crash government support however this is finishing, diminishing their immediate growth prospects and so the holding was sold.

Managers' Report (ctd)

Economy

The global economic background has become increasingly less certain as the eurozone crisis has rumbled on and China has seen slower expansion and some political uncertainty. The recovery in the US has also been muted. Perhaps surprisingly against this background the forecasts for Japan are for growth of around 2% in 2012, significantly higher than the G10 average. This is driven by domestic demand, particularly recovery from the earthquake, which is providing its own impetus. Japanese consumers are also experiencing a stronger employment situation than most developed economies and the long awaited shift to spending rather than saving by the key baby boom demographic may be emerging. Consumption figures in Japan have therefore been relatively robust, perhaps also reflecting the length of time since any property boom and the extent of adjustment. Exports though have been weak, in line with the global slowdown and the strength of the yen is putting pressure on Japanese manufacturers to shift production abroad. The Bank of Japan is responding by adopting a more explicit inflation target despite prices still falling. If it is serious about achieving inflation, more monetary easing is likely via the Asset Purchase Programme. This was expanded at the September policy meeting as economic uncertainty increased and the territorial dispute with China erupted. Such expansion may also weaken the yen. Some economic recovery globally, combined with monetary action in Japan, could be very positive for economic growth in 2013, but the core expectation is probably for growth to slow to roughly 1.5%.

Political Developments

Expectations for Mr Noda were low when he was appointed as Prime Minister just over a year ago but he has made progress in three areas. Japan continues to consider participating in talks to join the Trans Pacific Partnership (TPP), a large free trade organisation, the legislation has been passed to raise the consumption tax in 2014 and political pressure has been applied to the Bank of Japan to provide monetary stimulation. However, these achievements are not reflected in any increase in popularity and there is probably going to be a general election in the autumn. A third political force has emerged after the election of Toru Hashimoto as Mayor of Osaka.  The recent election of former Prime Minister Abe as leader of the Liberal Democratic Party and Prime Minister Noda's Cabinet re-shuffle on 1 October make forecasting the direction of policy difficult in what is now a pre-election period acutely affected by the dispute with China over the Senkaku Islands. However, expectations are low and the potential for improvement large whilst there has clearly been a desire for change signalled by the electorate.

Japanese Corporate Developments

Although the commentary in the UK on Japanese corporate governance has been very negative as a result of the fraud at Olympus, there has actually been steady but slow progress. Olympus appears to be an isolated case and the predictions of many more examples of similar egregious abuse have not been justified. The trend of companies to buy in or sell off quoted subsidiaries continues and Japan Trust benefited from this with the tender offer for So-Net Entertainment. Dividends are also rising, as are share buy backs, and the yield on the portfolio is now 2.4% in contrast with 10 year Japanese Government Bond yields of 0.8%. Companies continue to use the strength of the yen to make purchases overseas and these are predominantly in related business areas to build scale internationally. For example Itochu, our largest holding, is expanding its food and consumer goods businesses, Kubota has bought a Norwegian agricultural machinery company, Gree has bought several US games companies and Rakuten has been investing in unquoted but interesting internet start-ups in the US.

Managers' Report (ctd)

Outlook

As in so many previous years the macro-environment remains uncertain and prospects for the medium term economic growth rate in Japan are low. Potential for improvement in Japan remains large if sensible policies are adopted with regard to deregulation or free trade via the TPP, whilst the recent move by the Bank of Japan is encouraging. However our focus on individual companies and the companies' focussing on finding growth internationally, as well as domestically, continue to be points of differentiation from the index. Japan has been out of favour as a market for a considerable time and as a result expectations and valuations are low. The figures shown in the chart on page 11 of the Annual Report demonstrate the superior growth and lack of any premium paid for something that might be considered rare. We believe this is not going to persist indefinitely and are therefore encouraged to be using all the gearing in the market.

Past performance is not a guide to future performance.

Portfolio Performance Attribution for the Year to 31August 2012* (unaudited)

Computed relative to the benchmark (TOPIX total return (in sterling terms)) with net income reinvested

Portfolio breakdown	Benchmark asset allocation		Baillie Gifford Japan asset allocation		Performance†			Contribution attributable to:
					BG Japan %	TOPIX total return %	Contribution to relative return %	Stock selection %	Asset allocation %	Gearing %
	01.09.11 %	31.08.12 %	01.09.11 %	31.08.12 %
Information, communication and utilities	9.6	9.6	13.4	13.1	15.1	(5.5)	2.7	2.7	-	-
Electricals and electronics	13.9	12.2	14.9	12.5	(4.8)	(15.6)	1.5	1.7	(0.2)	-
Chemicals and other materials	13.8	11.9	8.7	7.4	(11.3)	(16.3)	1.2	0.5	0.7	-
Commerce and services	12.3	13.0	22.5	21.9	5.3	2.9	1.1	0.5	0.6	-
Real estate and construction	4.8	5.2	3.6	6.2	22.6	9.6	0.6	0.6	-	-
Manufacturing and machinery	19.4	19.7	11.5	15.5	2.1	(1.5)	0.4	0.5	(0.1)	-
Pharmaceuticals and food	8.4	9.9	7.2	6.9	25.0	14.9	0.1	0.5	(0.4)	-
Financials	13.7	13.9	7.5	8.7	(1.9)	0.9	(0.4)	(0.2)	(0.2)	-
Retail	4.1	4.6	10.7	7.8	(18.1)	11.3	(2.2)	(2.8)	0.6	-
Total (excluding gearing)	100.0	100.0	100.0	100.0	2.1	(2.7)	4.9	3.9	1.0	-
Impact of gearing					(0.3)	-	(0.3)	-	-	(0.3)
Total (including gearing)#					1.8	(2.7)	4.6	3.9	1.0	(0.3)

Past performance is not a guide to future performance.

Source: Statpro/Baillie Gifford & Co.

Contributions cannot be added together, as they are geometric; for example, to calculate how a return of 2.1% against a benchmark return of (2.7%) translates into a relative return of 4.9%, divide the portfolio return of 102.1 by the benchmark return of 97.3, subtract one and multiply by 100. In addition, the total contribution figures include a residual element that relates to changes in weightings mid-month, which cannot be attributed to individual sectors. Consequently, the contributions for the individual sectors do not sum to the total contribution figures.

*      The performance attribution table is based on total assets.

†      The returns are total returns (net income reinvested), calculated on a monthly linked method.

#      The total return performance of 1.8% excludes expenses and, therefore, differs from the NAV return (after deducting borrowings at fair value) of 0.8% as a result.

Income Statement (unaudited)

The following is the unaudited preliminary statement for the year to 31 August 2012 which was approved by the Board on 3 October 2012. No dividend is payable.

	For the year ended 31 August 2012			For the year ended 31 August 2011
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains on investments	-	211	211	-	18,266	18,266
Currency losses (note 2)	-	(108)	(108)	-	(930)	(930)
Income (note 3)	3,251	-	3,251	2,664	-	2,664
Investment management fee	(1,325)	-	(1,325)	(1,331)	-	(1,331)
Other administrative expenses	(279)	-	(279)	(313)	-	(313)
Net return before finance costs and taxation	1,647	103	1,750	1,020	17,336	18,356
Finance costs of borrowings	(642)	-	(642)	(596)	-	(596)
Net return on ordinary activities before taxation	1,005	103	1,108	424	17,336	17,760
Tax on ordinary activities	(228)	-	(228)	(186)	-	(186)
Net return on ordinary activities after taxation	777	103	880	238	17,336	17,574
Net return per ordinary share (note 5)	1.25p	0.17p	1.42p	0.38p	27.99p	28.37p

All revenue and capital items in this statement derive from continuing operations.

A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement.

Balance Sheet (unaudited)

	At 31 August 2012		At 31 August 2011
	£'000	£'000	£'000	£'000
Fixed assets
Investments		160,757		158,284
Current assets
Debtors	1,702		191
Cash and deposits	2,516		4,162
	4,218		4,353
Creditors
Amounts falling due within one year	(7,874)		(419)
Net current (liabilities)/assets		(3,656)		3,934
Total assets less current liabilities		157,101		162,218
Creditors
Amounts falling due after more than one year		(22,514)		(28,511)
Total net assets		134,587		133,707
Capital and reserves
Called up share capital		3,097		3,097
Share premium		22,110		22,110
Capital redemption reserve		203		203
Capital reserve		115,656		115,553
Revenue reserve		(6,479)		(7,256)
Shareholders' funds		134,587		133,707
Net asset value per ordinary share (after deducting borrowings at fair value)		216.9p		215.2p
Net asset value per ordinary share (after deducting borrowings at par value)		217.3p		215.9p
Ordinary shares in issue (note 8)		61,935,000		61,935,000

Reconciliation of Movements in Shareholders' Funds (unaudited)

For the year ended 31 August 2012

	Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 September 2011	3,097	22,110	203	115,553	(7,256)	133,707
Net return on ordinary activities after taxation	-	-	-	103	777	880
Shareholders' funds at 31 August 2012	3,097	22,110	203	115,656	(6,479)	134,587

For the year ended 31 August 2011

	Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 September 2010	3,097	22,110	203	98,217	(7,494)	116,133
Net return on ordinary activities after taxation	-	-	-	17,336	238	17,574
Shareholders' funds at 31 August 2011	3,097	22,110	203	115,553	(7,256)	133,707

*      The capital reserve balance as at 31 August 2012 includes investment holding gains of £35,796,000 (2011 - £36,350,000)

Cash Flow Statement (unaudited)

	At 31 August 2012		At 31 August 2011
	£'000	£'000	£'000	£'000
Net cash inflow from operating activities		1,263		920
Servicing of finance
Interest paid	(641)		(658)
Net cash outflow from servicing of finance		(641)		(658)
Financial investment
Acquisitions of investments	(14,934)		(17,954)
Disposals of investments	12,741		15,688
Exchange differences on settlement of investment transactions	(262)		26
Net cash outflow from financial investment		(2,455)		(2,240)
Net cash outflow before financing		(1,833)		(1,978)
Financing
Bank loans drawn down	-		13,651
Bank loans repaid	-		(13,538)
Net cash inflow from financing		-		113
Decrease in cash		(1,833)		(1,865)
Reconciliation of net cash flow to movement in net debt
Decrease in cash in the year		(1,833)		(1,865)
Net cash inflow from bank loans		-		(113)
Exchange differences on bank loans		(33)		(890)
Exchange differences on cash		187		(66)
Movement in net debt in the year		(1,679)		(2,934)
Net debt at 1 September		(24,349)		(21,415)
Net debt at 31 August		(26,028)		(24,349)
Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities
Net return before finance costs and taxation		1,750		18,356
Gains on investments		(211)		(18,266)
Other exchange differences		75		40
Exchange differences on bank loans		33		890
(Increase)/decrease in accrued income		(158)		23
Increase in other debtors		-		(1)
(Decrease)/increase in creditors		(10)		66
Overseas tax suffered		(216)		(188)
Net cash inflow from operating activities		1,263		920

Twenty Largest Holdings at 31 August 2012 (unaudited)

Name	Business	2012		2011
		Value £'000	% of total assets*	Value £'000
Itochu	Trading conglomerate	6,206	3.8	6,401
Don Quijote	Discount store operator	4,899	3.0	5,667
Japan Tobacco	Tobacco manufacturer	4,655	2.9	4,913
KDDI	Mobile telecommunications	4,485	2.7	4,559
Otsuka Corp	IT solutions for companies	4,455	2.7	3,386
Sysmex	Medical equipment	4,087	2.5	3,269
Rakuten	Internet retailer	3,945	2.4	4,498
Industrial & Infrastructure Fund	Logistics REIT	3,929	2.4	-
Misumi Group	Precision machinery parts distributor	3,862	2.4	3,551
Hitachi High-Technologies	Semiconductor production equipment	3,770	2.3	2,815
Fuji Heavy Industries	Niche car brand	3,398	2.1	-
Mitsubishi UFJ Lease & Finance	Leasing company	3,250	2.0	2,971
HIS	Travel agency	3,209	2.0	3,348
M3	Online drug marketing service	3,199	2.0	2,668
Asics	Sports shoes and clothing	3,153	1.9	3,294
Mitsubishi Electric	Industrial electric conglomerate	3,140	1.9	3,748
Isuzu Motors	Commercial vehicle manufacturer	3,086	1.9	2,635
Tokyo Tatemono	Property leasing and development	3,084	1.9	3,045
Inpex	Oil and gas producer	2,941	1.8	3,400
Osaka Securities Exchange	Stock exchange	2,933	1.8	3,374
		75,686	46.4	67,542

*     Before deduction of bank loans

Notes to the Condensed Financial Statements (unaudited)

1.    

1.    

Capital return per ordinary share is based on the net capital return for the financial year of £103,000 (2011 - £17,336,000), and on 61,935,000 ordinary shares, being the number of ordinary shares in issue throughout each year.

There are no dilutive or potentially dilutive shares in issue.

1.	The financial information within this preliminary announcement has been extracted from the unaudited financial statements for the year to 31 August 2012 and has been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 31 August 2011 In accordance with The Financial Reporting Council's guidance on going concern and liquidity risk, the Directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Company's assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. In accordance with the Company's Articles of Association, shareholders have the right to vote annually at the Annual General Meeting on whether to continue the Company. The Directors have no reason to believe that the continuation resolution will not be passed at the Annual General Meeting. Accordingly, the financial statements have been prepared on the going concern basis as it is the Directors' opinion that the Company will continue in operational existence for the foreseeable future. If the continuation resolution is not passed, the Articles provide that the Directors shall convene a General Meeting within three months at which a special resolution will be proposed to wind up the Company voluntarily. If the Company is wound up, its investments may not be realised at their full market value. The Directors consider the Company's functional currency to be sterling as the Company's shareholders are predominantly based in the UK and the Company is subject to the UK's regulatory environment.
2.	Currency Losses				31 August 2012 £'000			31 August 2011 £'000
	Exchange differences on bank loans				(33)			(890)
	Other exchange differences				(75)			(40)
					(108)			(930)
3.	Income				31 August 2012 £'000			31 August 2011 £'00
	Income from investments and interest receivable				3,251			2,664
4.	No final dividend will be declared.
5.	Net Return per Ordinary Share	2012 Revenue	2012 Capital	2012 Total		2011 Revenue	2011 Capital		2011 Total
	Net return on ordinary activities after taxation	1.25p	0.17p	1.42p		0.38p	27.99p		28.37p
	Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of £777,000 (2011 - £238,000), and on 61,935,000 ordinary shares, being the number of ordinary shares in issue throughout each year.
6.	Bank loans of £28.5 million (¥3.55 billion) have been drawn down under yen loan facilities which are repayable between August 2013 and August 2014 (31 August 2011 - £28.5 million (¥3.55 billion)).
7.	Transaction costs incurred on the purchase and sale of investments are added to the purchase costs or deducted from the sales proceeds, as appropriate. During the year, transaction costs on purchases amounted to £13,000 (31 August 2011 - £14,000) and transaction costs on sales amounted to £14,000 (31 August 2011 - £13,000).
8.	At 31 August 2012 the Company had authority to buy back 9,284,056 shares. No shares were bought back or issued/sold during the year. Under the provisions of the Company's Articles of Association share buy backs are funded from the capital reserve.

Notes to the Condensed Financial Statements (unaudited) (ctd)

9.

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 August 2012. The financial information for 2011 is derived from the statutory accounts for 2011 which have been delivered to the Registrar of Companies. The Auditors have reported on the 2011 accounts, their report was unqualified and did not contain a statement under sections 495 to 497 of the Companies Act 2006. The statutory accounts for 2012 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

10.

The Report and Accounts will be available on the Company's page of the Managers' website www.japantrustplc.co.uk‡ on or around 25 October 2012.

‡      Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

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