Results for the year to 31 August 2013

RNS Number : 5988P

Baillie Gifford Japan Trust PLC

03 October 2013

 



RNS Announcement: Preliminary Results

The Baillie Gifford Japan Trust PLC

Results for the year to 31 August 2013

The Baillie Gifford Japan Trust PLC outperformed its benchmark index* over the year to 31 August 2013 by 22.2 percentage points with net asset value per share rising by 48.9%, while the benchmark index gained 26.7%. In this period the Company's share price rose 61.4%.

¾ Returns ahead of the Company's benchmark were as a result of good stock selection, particularly in the manufacturing and machinery and information, communication and utilities sectors.

¾ Gearing was a positive contributor to performance. Net gearing stood at 16% of shareholders' funds at year end (19% - 31 August 2012). Despite the good performance of many stocks, there remains a number of compelling investment opportunities. Combined with the low cost of JPY loans, the Board and Managers believe that borrowing to invest in Japanese equities is a sensible strategy.

¾ Portfolio turnover over the period was 12% (9% for the year to 31 August 2012) reflecting the Managers' conviction in the current portfolio. Ten new holdings were made and 9 holdings sold in entirety.

¾ During the year the Company issued 3.1m shares, 5% of its pre-existing issued share capital, at a premium to net asset value. Subsequent to the period end, the Company has issued a further 1.2m shares at a premium.

¾ With effect from 1 April 2013, the annual management fee was reduced to 0.95% on the first £50m of net assets and 0.65% on the remainder.

¾ The Board and Managers are of the view that Japanese companies will have very strong earnings growth over the next couple of years.

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 2013, the Company had total assets of £246.0m (before deduction of bank loans of £35.6m).

Baillie Gifford & Co, the Edinburgh based fund management group with around £101 billion under management and advice as at 2 October 2013, 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.

2 October 2013

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

It has been an excellent year for your Company. Over the year net asset value (after deducting borrowings at fair value) rose by 48.9%, compared with a gain of 26.7% in the benchmark TOPIX index (in sterling terms) total return and the share price increased by 61.4%.

Stock selection was excellent and gearing contributed to the returns. Further performance details can be found in the Managers' Report.

Investment income was slightly lower over the year and expenses increased, largely because of the legal costs and arrangement fee for the new loan facility referred to below.

Overall revenue gain per share was 0.22p. No dividend will be paid.

It is also pleasing to note that the Managers have managed to achieve five consecutive years of net asset growth, with compound annual returns of 12.5% versus 4.6% for the benchmark. Ten year relative and absolute performance figures remain excellent.

Management Fee

Earlier this year, the Company was able to agree a reduced management fee with Baillie Gifford. With effect 1 April 2013, the Company's annual management fee payable to its Investment Managers and Secretaries, Baillie Gifford & Co, was reduced from a flat rate of 1% of net assets to 0.95% on the first £50m of net assets and 0.65% on the remainder. It is important to ensure that potential investors are not deterred from investing based on cost. The new fee structure ensures that the Company compares favourably versus other open and closed ended funds.

Gearing

Net gearing amounted to 19% of shareholders' funds at the start of the year and ended the year at 16%. A new fixed rate term loan facility was arranged. A tranche of this replaced a maturing loan and increased the outstanding debt. Further tranches are due to be drawn down as detailed in note 6. Longer term loans than hitherto have become available and combined with the low cost of yen loans means we believe that borrowing to invest in Japanese equities is a sensible strategy. Gross borrowings increased to 5.4bn yen.

Currency Hedging

As I stated two years ago, it is extremely difficult to predict currency movements and currencies can appear cheap or dear for long periods of time.  Your Board has therefore decided that it will not engage in currency hedging.

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 for cash on a non-pre-emptive basis. Shares are only issued/reissued at a premium to net asset value, thereby enhancing net asset value per share for existing shareholders.

During the year to 31 August 2013, 3,096,750 shares were issued at a premium to net asset value raising £10,063,190. The Directors are seeking 10% share issuance authority at the Annual General Meeting. The Directors will only issue shares at a premium to net asset value. This authority will expire at the conclusion of the Annual General Meeting in November 2014.

Chairman's Statement (ctd)

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 27 November 2013.

Last year the Company received support for its continuance from 95.2% of those voting. Your Directors are of the opinion that 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.

Regulation

The Board has been in discussions with the Managers on how best to address the requirements of the EU Alternative Investment Fund Managers Directive. This came into law in July 2013 although the Company has until July 2014 to comply fully with the legislation. The Directive requires the Company to appoint an Alternative Investment Fund Manager (AIFM) who will be responsible for portfolio and risk management and will be regulated under the Directive. Having taken external advice, the Board is currently of the view that Baillie Gifford is best positioned to act as the Company's AIFM. One of the consequences of the Directive is that the Company will have to appoint a depositary. I am afraid that this will cost the Company money with no obvious benefit in return but there is no alternative.

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. I plan to stand down from the Board in November next year and the Directors have agreed that Nick Bannerman will take over from me as Chairman. In the course of 2014 we will recruit a new Director to replace Nick as Chairman of the Audit Committee.

Outlook

The major changes being made by the Government of Shinzo Abe and the Bank of Japan are likely to stimulate growth and inflation in the Japanese economy. In spite of the rise in the equity market Japanese equities still look reasonably valued against other world markets and there are many attractive companies in which our Managers can invest.

Past performance is not a guide to future performance.

Managers' Report

Performance

After an extraordinary period of strength in the Japanese stock market, the NAV per share, with borrowings deducted at fair value, has risen by 48.9% over the year and the share price by 61.4%. The benchmark index, TOPIX total return in sterling terms, increased by 26.7% over the same period as expectations for growth in Japan improved markedly. The portfolio outperformed the stock market significantly and this was the fifth consecutive year of above benchmark performance. The yen weakened by 18% during the year, but the strength of share prices still enabled good returns to be made by sterling based investors.

As can be seen by the Portfolio Performance Attribution table following this Report, there were good returns from all the sectors except financials. The gearing, which was fully invested at the start of the Company's year, was also helpful. It remains the view of the Managers that the positive returns to the Company from gearing when markets rise outweigh negative impacts when markets are weak. Interestingly, the two biggest contributors on an individual stock basis demonstrate two distinct themes in the market, currency sensitivity and domestic recovery. Fuji Heavy Industries, the maker of Subaru cars, is one of the most currency sensitive manufacturers in Japan and the share price has increased by 282% over the year, contributing significantly to performance. The next biggest contributor was Tokyo Tatemono, a property developer in Tokyo, where the recovery in the property market and hopes for domestic reflation has boosted valuations. Some of the companies that had done well in previous years were the main underperformers, such as Endo Lighting and Gree.

Portfolio

The long term outlook of our investment approach continued and turnover was again low at 11.8% during the year. Some turnover was forced upon us with Jupiter Telecom and So-Net Entertainment being sold after bids. In total we bought ten new holdings and sold nine. Significant new purchases, in terms of their impact on performance, were made in Softbank, the entrepreneurially run mobile telecom operator and internet investor, and in Mazda Motor, a car manufacturer that produces predominantly in Japan. We purchased Softbank after it bid for Sprint, the US operator, as we believe that it can make large improvements to Sprint's business. Softbank's holding in Alibaba, a leading Chinese e-commerce business, is also a key attraction. Mazda Motor has developed a technology to increase fuel efficiency and reduce manufacturing costs which is being rolled out across their product range, significantly boosting profits. The company has benefitted enormously from yen weakness and the share price more than tripled from purchase.

The companies we sold were those where we were less confident about the long term prospects, such as Otsuka Holdings the pharmaceutical company or Hitachi High-Technologies, where revival in the parent Hitachi is changing their attitude to the opportunities they allow their subsidiaries and may not be helpful for minority shareholders.

The portfolio has a balance between overseas earners and domestic stocks and we continue to find growth businesses in both areas of the market. The internet arena remains interesting, given the structural growth prospects, and this makes up a significant portion of the portfolio, not all of which is categorised in one industry sector. Automation, whether in factories or fields, is an area where Japanese companies have competitive advantages and can grow their market share and is a significant part of the portfolio. The overall style characteristics of the portfolio demonstrate that high quality growth companies still command no valuation premium in Japan.

Managers' Report (ctd)

Economy

According to consensus estimates of growth the prospects for the Japanese economy have drastically improved over the past year. Growth in 2013 was expected to be 0.7% and is now anticipated to be 1.9%. This is mainly down to the policies of Mr Abe, who was elected Prime Minister in December 2012. Abenomics has three 'arrows', monetary stimulus, fiscal stimulus and deregulation and reform. The aim is to revive the economy, reduce excessive yen strength and escape deflation. Mr Kuroda was appointed as the Governor of the Bank of Japan in April 2013 and has aggressively increased monetary stimulus. The fiscal position is more mixed with the planned rise in the consumption tax coming in Spring 2014, whilst spending on other areas is increased and debate about cutting the corporate tax rate continues. The reform programme is a broad range of developments but includes Japan's negotiations about joining the Trans Pacific Partnership, a large Free Trade Area, reducing labour market restrictions, encouraging female participation in the workforce and allowing new initiatives such as casinos.

GDP growth has already been strong in the first half of 2013 as confidence rose and there are signs that 'animal spirits' have returned to Japan after many years of absence. Exports are recovering and consumer spending is seeing some positive impact from wealth effects as asset markets recover and increased confidence as incomes recover. The CPI is showing positive inflation and, whilst it is likely that the consumption tax rise will impact growth in 2014, the recovery from the global financial crisis that was delayed in Japan now seems clearly to be underway. It will also be supported by global growth. If Japan does tackle some of the longer term structural issues under the guise of the third arrow of Abenomics, then longer term prospects for growth will be improved.

Political Developments

The LDP returned to power in December last year and won a further election victory in July, giving them a majority in both houses of the Diet. This is the first time in five years that a government can act decisively as the so-called 'twisted Diet' is ended and there are no more general elections until 2016. Mr Abe's clear focus on economic revival as his primary policy aim is helpful in changing the mindset of both consumers and corporates and we have been struck in our many company visits by the unanimity of the support for Abenomics. It is also interesting that leading members of the New Economy in Japan, notably Mr Mikitani the President of Rakuten, are members of a key Government Committee on Competitiveness.

The dispute over the Senkaku islands remains a source of tension with China and Japanese brand sales there have been hit. However Japan has also been improving relations with Russia and there is even talk of extending the       Trans-Siberian railway across the sea to Japan.

Japanese Corporate Developments

There has been a shift in the focus of Japanese company investment overseas after the Chinese reaction to the Senkaku dispute and the rising wage levels there. Other Asian countries, such as Thailand and Indonesia, are seeing rising investment from Japan and there is a broadening of the geographic focus. The longer term implications of the worsening of relations with China are difficult to judge; so far areas like factory automation equipment have been least affected and widely felt in consumer brands.

Recently a major Japanese semiconductor equipment company, Tokyo Electron, accepted an offer to merge from, Applied Materials, an American peer. This signals a significant shift in attitudes towards mergers and acquisitions in Japan as there was no crisis to precipitate action and the balance sheet was strong. The detailed disclosure of voting at AGMs in Japan, that is now in its third year, is already putting pressure on managements to focus more on shareholders and we expect this sea-change to be very positive for returns from the stock market in the medium term.

Managers' Report (ctd)

Outlook

Although share prices have risen dramatically in the last year they were starting from extremely cheap valuation levels and remain in line with global peers. In fact the wider adoption of international accounting standards in the medium term should boost reported earnings and make them more comparable. The government is considering cutting the rate of corporate tax and this would also increase reported earnings. Along with the weakening of the yen it seems likely therefore that Japanese companies will have very strong earnings growth over the next couple of years. We expect this to be followed by significant sustained increases in dividend payments.

Whilst it is too early to tell whether Abenomics will be successful, particularly in the inflation targeting, there are clear signs that Japan is now thinking and acting more positively. Tokyo has been awarded the 2020 Olympics and this, along with the possible entry in the Trans Pacific Partnership, will catalyse further positive change. The Baillie Gifford Japan Trust has seen faster NAV growth than the FTSE World index over the past five years and performed better than many of the global trusts reflecting the many attractive companies that we are able to invest in. The gearing is invested in the market reflecting this.

Past performance is not a guide to future performance.

Portfolio Performance Attribution for the Year to 31August 2013* (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 %
	01.09.12 %	31.08.13 %	01.09.12 %	31.08.13 %
Manufacturing and machinery	19.7	21.3	13.9	16.6	80.2	37.3	4.4	4.7	(0.3)	-
Information, communication and utilities	9.6	9.4	13.1	14.4	46.7	29.2	2.0	1.7	0.3	-
Commerce and services	13.0	12.0	21.9	21.9	29.3	13.6	1.7	2.6	(0.9)	-
Real estate and construction	5.2	6.2	6.2	5.5	74.9	46.8	1.6	1.3	0.3	-
Electricals and electronics	12.2	11.3	14.1	13.5	30.5	20.4	0.8	0.9	(0.1)	-
Pharmaceuticals and foods	9.9	8.6	6.9	3.2	(1.3)	8.1	0.3	(0.4)	0.7	-
Retail	4.6	4.3	7.8	6.5	23.4	15.6	0.1	0.3	(0.2)	-
Chemicals and other materials	11.9	11.4	7.4	7.9	20.1	22.7	-	(0.2)	0.2	-
Financials	13.9	15.5	8.7	10.5	36.9	40.6	(0.8)	(0.1)	(0.7)	-
Total assets	100.0	100.0	100.0	100.0	39.9	26.7	10.4	11.3	(0.9)	-
Impact of gearing					7.3	-	7.3	-	-	7.3
Total (including gearing)#					50.1	26.7	18.5	11.3	(0.9)	7.3

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 39.9% against a benchmark return of 26.7% translates into a relative return of 10.4%, divide the portfolio return of 139.9 by the benchmark return of 126.7, 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 50.1% excludes expenses and, therefore, differs from the NAV return (after deducting borrowings at fair value) of 48.9% as a result.

Income Statement (unaudited)

The following is the unaudited preliminary statement for the year to 31 August 2013 which was approved by the Board on 2 October 2013. No dividend is payable.

	For the year ended 31 August 2013			For the year ended 31 August 2012
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains on investments	-	60,873	60,873	-	211	211
Currency gains/(losses) (note 2)	-	4,711	4,711	-	(108)	(108)
Income (note 3)	3,177	-	3,177	3,251	-	3,251
Investment management fee	(1,566)	-	(1,566)	(1,325)	-	(1,325)
Other administrative expenses	(418)	-	(418)	(279)	-	(279)
Net return before finance costs and taxation	1,193	65,584	66,777	1,647	103	1,750
Finance costs of borrowings	(826)	-	(826)	(642)	-	(642)
Net return on ordinary activities before taxation	367	65,584	65,951	1,005	103	1,108
Tax on ordinary activities	(226)	-	(226)	(228)	-	(228)
Net return on ordinary activities after taxation	141	65,584	65,725	777	103	880
Net return per ordinary share (note 5)	0.22p	103.90p	104.12p	1.25p	0.17p	1.42p

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 2013		At 31 August 2012
	£'000	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		244,584		160,757
Current assets
Debtors	1,561		1,702
Cash and deposits	1,860		2,516
	3,421		4,218
Creditors
Amounts falling due within one year	(20,499)		(7,874)
Net current liabilities		(17,078)		(3,656)
Total assets less current liabilities		227,506		157,101
Creditors
Amounts falling due after more than one year		(17,131)		(22,514)
Total net assets		210,375		134,587
Capital and reserves
Called up share capital		3,251		3,097
Share premium		32,019		22,110
Capital redemption reserve		203		203
Capital reserve		181,240		115,656
Revenue reserve		(6,338)		(6,479)
Shareholders' funds		210,375		134,587
Net asset value per ordinary share (after deducting borrowings at fair value)		323.0p		216.9p
Net asset value per ordinary share (after deducting borrowings at par value)		323.5p		217.3p
Ordinary shares in issue (note 8)		65,031,750		61,935,000

Reconciliation of Movements in Shareholders' Funds (unaudited)

For the year ended 31 August 2013

	Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 September 2012	3,097	22,110	203	115,656	(6,479)	134,587
Shares issued	154	9,909	-	-	-	10,063
Net return on ordinary activities after taxation	-	-	-	65,584	141	65,725
Shareholders' funds at 31 August 2013	3,251	32,019	203	181,240	(6,338)	210,375

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

*      The capital reserve balance as at 31 August 2013 includes investment holding gains of £92,369,000 (2012 - £35,796,000)

Cash Flow Statement (unaudited)

	At 31 August 2013		At 31 August 2012
	£'000	£'000	£'000	£'000
Net cash inflow from operating activities		1,119		1,263
Servicing of finance
Interest paid	(834)		(641)
Net cash outflow from servicing of finance		(834)		(641)
Financial investment
Acquisitions of investments	(46,783)		(14,934)
Disposals of investments	24,033		12,741
Exchange differences on settlement of investment transactions	(271)		(262)
Net cash outflow from financial investment		(23,021)		(2,455)
Net cash outflow before financing		(22,736)		(1,833)
Financing
Shares issued	10,063		-
Bank loans drawn down	17,212		-
Bank loans repaid	(4,962)		-
Net cash inflow from financing		22,313		-
Decrease in cash		(423)		(1,833)
Reconciliation of net cash flow to movement in net debt
Decrease in cash in the year		(423)		(1,833)
Net cash inflow from bank loans		(12,250)		-
Exchange differences on bank loans		5,215		(33)
Exchange differences on cash		(233)		187
Movement in net debt in the year		(7,691)		(1,679)
Net debt at 1 September		(26,028)		(24,349)
Net debt at 31 August		(33,719)		(26,028)
Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities
Net return before finance costs and taxation		66,777		1,750
Gains on investments		(60,873)		(211)
Currency(gains)/losses		(4,711)		108
Decrease/(increase) in accrued income		56		(158)
Increase/(decrease) in creditors		99		(10)
Overseas tax suffered		(229)		(216)
Net cash inflow from operating activities		1,119		1,263

Twenty Largest Holdings at 31 August 2013 (unaudited)

Name	Business	2013		2012
		Value £'000	% of total assets*	Value £'000
Fuji Heavy Industries	Subaru cars	9,491	3.9	3,398
Don Quijote	Discount store operator	7,195	2.9	4,899
Itochu	Trading conglomerate	7,134	2.9	6,206
Softbank	Telecom operator and internet investor	6,530	2.6	-
Otsuka Corp	IT solutions for companies	6,269	2.5	4,455
KDDI	Telecom operator	6,162	2.5	4,485
HIS	Travel agency	6,077	2.5	3,209
Rakuten	Internet retailer	5,885	2.4	3,945
Tokyo Tatemono	Property leasing and development	5,705	2.3	3,084
GMO Internet	Internet infrastructure	5,589	2.3	2,293
Sysmex	Medical equipment	5,327	2.2	4,087
Yaskawa Electric	Robots and factory automation	5,272	2.1	2,562
Toyo Tire & Rubber	Tyre manufacturer	5,226	2.1	2,536
M3	Online pharmaceutical drug marketing service	4,879	2.0	3,199
Kyocera	Electronic equipment and components	4,875	2.0	-
Isuzu Motors	Commercial vehicle manufacturer	4,728	1.9	3,086
Japan Exchange Group	Stock Exchange operator	4,710	1.9	-
Mitsui & Co	Trading conglomerate	4,645	1.9	2,328
SMC	Pneumatic control equipment	4,633	1.9	2,886
Mitsubishi UFJ Lease & Finance	Leasing company	4,495	1.8	3,250
		114,827	46.6	59,908

*     Before deduction of bank loans

Notes to the Condensed Financial Statements (unaudited)

1.	The financial information within this preliminary announcement has been extracted from the unaudited financial statements for the year to 31 August 2013 and has been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 31 August 2012. 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 Gains/(Losses)				31 August 2013 £'000			31 August 2012 £'000
	Exchange differences on bank loans				5,215			(33)
	Other exchange differences				(504)			(75)
					4,711			(108)
3.	Income				31 August 2013 £'000			31 August 2012 £'000
	Income from investments and interest receivable				3,177			3,251
4.	No final dividend will be declared.
5.	Net Return per Ordinary Share	2013 Revenue	2013 Capital	2013 Total		2012 Revenue	2012 Capital		2012 Total
	Net return on ordinary activities after taxation	0.22p	103.90p	104.12p		1.25p	0.17p		1.42p
	Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of £141,000 (2012 - £777,000), and on 63,125,072 (2012 - 61,935,000) ordinary shares, being the weighted average number of ordinary shares in issue during each year. Capital return per ordinary share is based on the net capital return for the financial year of £65,584,000 (2012 - £103,000), and on 63,125,072 (2012 - 61,935,000) ordinary shares, being the weighted average number of ordinary shares in issue during each year. There are no dilutive or potentially dilutive shares in issue.
6.	During the year, the Company drew down ¥2.6 billion under a new ¥7.2 billion loan facility with ING which expires on 21 August 2020. The remaining ¥4.6 billion of this facility will be drawn down in four tranches during the year to 31 August 2014, two of these tranches will be used to repay the Scotiabank Europe and ING facilities expiring in May and August respectively. The ¥750 million loan facility with The Royal Bank of Scotland plc matured on 6 August 2013 and the amount drawn down of ¥750 million was repaid in full.

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

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 £29,000 (31 August 2012 - £13,000) and transaction costs on sales amounted to £23,000 (31 August 2012 - £14,000).
8.	At 31 August 2013 the Company had authority to buy back 9,284,056 shares. No shares were bought back during the year. Under the provisions of the Company's Articles of Association share buy-backs are funded from the capital reserve. During the year to 31 August 2013, 3,096,750 (2012 - nil) shares were issued at a premium to net asset value raising proceeds of £10,063,000 (2012 - nil).
9.	The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 August 2013. The financial information for 2012 is derived from the statutory accounts for 2012 which have been delivered to the Registrar of Companies. The Auditors have reported on the 2012 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 2013 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 24 October 2013.

‡      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.

- ends -

 

END

 

 

FR UGGGPUUPWGMP