Annual Report and Accounts
For the year ended 31 December 2025
RISING SUN MANAGEMENT LTD
Nippon Active Value Fund plc
Factsheet/ 28
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1
Contents
Section 1 – Strategic Report
Investment Objective, Financial Information and Performance Summary 2
Chairman’s Statement 3
Investment Adviser’s Report 7
Portfolio 14
Investment Policy, Results and Other Information 15
Risk and Risk Management 19
Section 172 Statement 24
Section 2 – Governance
Directors’ Report 30
Corporate Governance Statement 36
Directors’ Remuneration Implementation Report 44
Report of the Audit Committee 48
Statement of Directors’ Responsibilities 51
Independent Auditor’s Report 52
Section 3 – Financial Statements
Statement of Comprehensive Income 59
Statement of Financial Position 60
Statement of Changes in Equity 61
Statement of Cash Flows 62
Notes to the Accounts 63
Section 4 – Other Information
Alternative Performance Measures (“APMs”) 82
Glossary 84
Company Information 86
Letter from the Chairman 87
Notice of Annual General Meeting (“AGM”) 90
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Investment Objective, Financial Information and
Performance Summary
Investment Objective
The investment objective of Nippon Active Value Fund plc (the “Company” or “NAVF” or “the Fund”) is to provide
Shareholders with attractive long-term capital growth primarily through the active management of a focused portfolio of
quoted companies that have the majority of their operations in, or revenue derived from, Japan, or a majority of whose
consolidated net assets are held in Japan, or that are included in the TOPIX, and that have been identified by the Investment
Adviser as being undervalued.
Financial Information
At
31 December
2025
At
31 December
2024
Net assets – (£’millions)
430.6 365.4
Net asset value (“NAV”) per Ordinary Share (“Share”) – (pence)
1
223.7 193.2
Share price – (pence) 207.0 187.5
Share price discount to NAV (%)
2
(7.5) (3.0)
Ongoing charges (%)
2
1.12 1.18
Performance Summary
For the year ended
31 December
2025
(%)
For the year ended
31 December
2024
(%)
NAV total return per Share
2,3
+17.4 +15.2
Share price total return per Share
2,3
+12.3 +16.8
MSCI Japan Small Cap index
3
+19.8 +6.8
Source: Bloomberg
1 This is measured on a cum income basis.
2 These are Alternative Performance Measures (“APMs”), which is a financial measure of historic or future financial performance, financial position, or
cash other than a financial measure defined or specified in the applicable financial reporting framework. Definition of these and other APMs used in
this report, together with how these APMs have been calculated are disclosed on page 82 of this report.
3 Total returns are stated in GBP, including dividends reinvested.
Section 1 – Strategic Report 3
Chairman’s Statement
Overview of the Year
I am pleased to present the sixth annual report of Nippon Active Value Fund plc, covering the period from 1 January to
31 December 2025.
At the end of the year, net assets were £430.6 million and the net asset value (“NAV”) per share was 223.7p, a rise of +17.4%
over the year and a cumulative increase of +139.7% since the Company’s launch on 21 February 2020. While we do not
target a particular index benchmark, for comparison the MSCI Japan Small Cap Index returned +19.8% in sterling terms over
the year and +46.1% since the launch date. All returns assume dividends were reinvested. Over five-years the Company’s
annualised return is 16.1% in sterling terms; in JPY terms the annualised return is 25.8%, reflecting how Yen weakness has
detracted from the strong underlying performance of the Company.
The closing share price on 31 December 2025 was 207.0p. The share price rose by +12.3% in 2025 and +118.2% since
inception. At the end of December, the shares traded a discount to NAV of -7.5%. The average discount to NAV over the year
was 3.4% and the shares traded in a range of a premium of 1.8% to a discount of -10.1%, with times of periodic enlarged
discounts generally reflecting increased macro uncertainty, most notably in 2025 associated with tariffs and Takaichi’s
political leadership selection. During the year the Company issued 3,373,282 shares, at a premium to the prevailing NAV, to
satisfy investor demand, raising net proceeds of £7.2 million.
The first half of 2025 was dominated by news flow regarding US tariff rates, but by the second half of the year investors seemed
satisfied that the economic impact would be manageable and markets resumed their uptrend. The focus was on stocks with
an involvement in Artificial Intelligence (“AI”) and those that would benefit from increased fiscal expenditure, in particular from
higher defence spending to meet US demands for its allies to make a greater contribution to global defence needs. The Bank
of Japan raised the benchmark interest rate to 0.5%, in early January 2025 and by a further 0.25% in mid-December. The yen
weakened marginally against sterling in 2025, though was less of a drag on performance than in earlier years.
The large cap Japanese indices, TOPIX and the Nikkei 225, rose by +17% and +20.6% respectively in 2025, reaching a historic
high after the appointment of Sanae Takaichi as head of the ruling Liberal Democratic Party (“LDP”) (the senior party in the
coalition government) in October. Her early ratings were strong, and she called a snap election in early February 2026, in
which she won a decisive majority for the LDP. Greater political stability should provide a supportive background for equities.
More recently, the developments in the Middle East have understandably unsettled markets. At the time of writing, it is still
too early to assess precisely the longer-term impact of the hostilities. We all hope for a quick resolution to protect the lives
and livelihoods of those who are immediately affected. Japan, as a major importer of oil, is particularly exposed to moves
in the global price of crude oil and gas. This strategy does not seek to reflect the prospects for the Japanese economy as a
whole or to track the performance of the broad Japanese stock market. Heightened volatility can also produce opportunities
to add to high conviction positions at more attractive valuations. Our Investment Adviser will adjust their investment thesis
where changes in underlying fundamental necessitate, and their trading will continue to reflect long term prospects, rather
than respond to short term sentiment.
NAVF NAV NAVF Share Price MSCI Japan MSCI Japan Small Cap Net Total Return
80.00
130.00
180.00
230.00
280.00
Feb 2020
Apr 2020
Jun 2020
Aug 2020
Oct 2020
Dec 2020
Feb 2021
Apr 2021
Jun 2021
Aug 2021
Oct 2021
Dec 2021
Feb 2022
Apr 2022
Jun 2022
Aug 2022
Oct 2022
Dec 2022
Feb 2023
Apr 2023
Jun 2023
Aug 2023
Oct 2023
Dec 2023
Feb 2024
Apr 2024
Jun 2024
Aug 2024
Oct 2024
Dec 2024
Feb 2025
Apr 2025
Jun 2025
Aug 2025
Oct 2025
Dec 2025
NAVF NAV vs. Share Price in GBP
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NAVF NAV Cumulative Performance:
139.7%
NAVF Share Price Cumulative Performance:
122.6%
MSCI Japan Cumulative Performance:
58.3%
MSCI Japan Small Cap Cumulative Performance:
43.9%
-20%
-15%
-10%
-5%
0%
5%
NAVF Premium or Discount to Net Asset Value (%)
Feb 2020
Apr 2020
Jun 2020
Aug 2020
Oct 2020
Dec 2020
Feb 2021
Apr 2021
Jun 2021
Aug 2021
Oct 2021
Dec 2021
Feb 2022
Apr 2022
Jun 2022
Aug 2022
Oct 2022
Dec 2022
Feb 2023
Apr 2023
Jun 2023
Aug 2023
Oct 2023
Dec 2023
Feb 2024
Apr 2024
Jun 2024
Aug 2024
Oct 2024
Dec 2024
Feb 2025
Apr 2025
Jun 2025
Aug 2025
Oct 2025
Dec 2025
Average DiscountPremium or Discount to NAV
Our Investment Approach
Our Investment Adviser, Rising Sun Management (“RSM”), with its presence on the ground in Tokyo and with the assistance
from its affiliate Dalton KK, continues to identify potential targets and maintains the coverage of portfolio holdings.
As an activist manager RSM is not seeking to reflect the market as a whole or the fundamentals of the broad Japanese
economy. Instead, our Company’s strategy is to invest in a concentrated portfolio of undervalued companies with
fundamentally strong business models. Our Investment Adviser identifies areas in which to engage with management to
improve shareholder returns, particularly around balance sheet management and capital allocation. In order to have some
weight with management they need to build a significant stake, and as a result, the portfolio holdings tend to be in small- to
medium-capitalised stocks. We have memoranda of understanding with other funds advised by RSM and Dalton Investments
with whom we co-invest in opportunities to achieve greater scale, where NAVF as a sole investor would not be able to build
a sufficiently meaningful holding. At the end of 2025, the Company held 27 investments, of which 26 were also owned by
NAVF Select LLC and 15 by other clients of Dalton Investments.
Most of RSM’s engagement with our target companies is through letters and private meetings, though formal proposals are
made at annual general meetings when appropriate, and occasionally, RSM may choose to publicise our engagement. The
public letters are available on the Company’s website (www.nipponactivevaluefund.com) and are flagged on our LinkedIn
page (www.linkedin.com/company/nippon-active-value-fund/). We encourage all our shareholders to view these sites for
details on campaigns and other insights.
Japanese Corporate Governance Developments
Our choice of strategy at the launch of the Company was designed to capitalise on developments in Japanese corporate
governance that have gained pace since the launch of the Corporate Governance Code in 2015.
The regulatory environment continues to provide a supportive background for activist investors. Prime Minister Takaichi is a
protégé of former Prime Minister Abe, whose ‘three arrows’ of policy included corporate governance reforms. To date she
has not given a commitment to further this agenda and while she may call for greater attention to be given to employee
stakeholders, commentators do not expect her to reverse the considerable progress made in corporate governance practices
over the past few years.
Chairman’s Statement continued
Section 1 – Strategic Report 5
In previous reports, we have discussed the importance of the Japan Exchange Group (“JPX”) request, issued in March 2023,
that listed companies have a greater focus on measures to improve mid- to long-term profitability and corporate value. In
their review of 2025, JPX highlighted the progress made in corporate disclosures of their strategy for improving profitability.
Disclosure is voluntary, but over 90% of companies listed on the Prime Market and over 50% of companies in the Standard
Market have complied. JPX is now emphasising the content and quality of the reports. JPX has published 55 named examples
of companies whose disclosures are considered ‘best practice’ as well as some anonymous examples of inadequate
disclosures.
The basic message in the 2025 review is unchanged: for the Japanese equity market to be attractive to international
investors, and remunerative for all stakeholders, listed companies need to show they have a viable business model and are
making efficient use of their capital. Unproductive reserves of cash and securities should be reinvested in profitable business
areas or returned to shareholders. This year’s report stresses the need to implement long-term strategies to support growth,
rather than merely responding to requests to improve shareholder returns with a one-off share buyback or increased
dividend. There is more emphasis given to the importance of investing in growth opportunities, intellectual property and
in human capital, as well as in physical assets and research and development. In other words, employees should benefit
from improved returns on capital as well as shareholders. As our Investment Adviser says in their report below, we agree a
sustainable business needs to recruit and retain a talented workforce.
Japan’s working age population is declining. Small and mid-cap companies often have limited human resources and
difficulties establishing management succession. For them, a thorough redirection of corporate strategy can be best
achieved through strategic discussions with external parties. In June 2025, the Ministry of Economy, Trade and Industry
(“METI”) released the first standardised Limited Partnership Agreement in English. This LPA is aligned with global practices,
whereas previous models were translations of the Japanese versions. This should facilitate greater involvement from global
private equity companies. Indeed, by September 2025 Private Equity firms had announced 38 deals, valued at $81 billion,
compared to a total for the whole of 2024 of $19.9 billion. In 2025, more than 7% of listed companies received a takeover
bid. Ten years ago the equivalent was below 2%.
Share liquidity has been another area of focus for JPX since 2024, especially through long-term cross-shareholdings and
parent-subsidiary listings. JPX has identified two issues: inefficient capital allocation and inadequate protection of minority
shareholders in corporate actions. Last year they announced that they would adjust market capitalisation to remove strategic
cross-shareholdings but allowed companies to reclassify holdings from ‘strategic shareholding’ to ‘pure investment.’ In April
2025, they amended the guidelines to mandate additional disclosure in order to limit tactical re-categorisation. Our Investment
Adviser welcomes the trend to unwind long-term cross-shareholdings, which they expect will improve market liquidity.
Regulatory developments continue to be positive for activist investors. In practice, updated guidelines are not always
followed. In June 2025, Toyota Motor announced a takeover bid for another group company, Toyota Industries (“Tico”),
which would be delisted if the takeover bid (“TOB”) succeeds. The takeover price valued assets at book value, a significant
discount to their market value. In January 2026, the takeover price was increased but still fails to reflect the market value
of Tico’s assets. Foreign shareholders have forcibly expressed their objections, and we hope that the coverage of the
‘take-under’ supports initiatives from JPX and the FSA for independent oversight of management buy-outs (“MBOs”) and
TOBs and greater protection of minority shareholders.
Our Investment Adviser’s report, which follows, includes more details of the investment approach and highlights some of the
key contributors to performance in 2025 as well as examples of engagement over the year.
Dividend
The Company’s objective is to achieve its returns primarily through capital appreciation. In February 2026, the Company
held a General Meeting where shareholders approved the cancellation of the share premium account, which is common
for investment trusts. The Board does not plan to introduce a formal annual dividend target, but this does allow us greater
flexibility in determining dividend levels in any given year. Distributions will continue to be made entirely at the discretion
of the Board, taking into consideration the requirement to ensure the Company’s compliance with the rules relating to
investment trusts.
The Board is pleased to recommend a final dividend of 5.52p per share (2024: 3.25p), equivalent to approximately
2.5% of the Company’s total NAV as at 31 December 2025. Subject to shareholder approval at the Annual General Meeting
on 4 June 2026, the dividend is expected to be payable on 16 July 2026 to shareholders on the register at the close of
business on 19 June 2026, with an ex-dividend date of 18 June 2026.
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Gearing
The Company has a borrowing facility with Northern Trust of £70 million to provide the Company with flexibility to gear
the portfolio if required to facilitate corporate actions. The Company drew down £5 million in March 2025, which had been
repaid by early July. At the end of December 2025, the facility had not been drawn down and the portfolio held £9,947,000
(2024: £19,889,000) in cash. As at 2 April 2026, cash comprised 15.0% of NAVF’s net assets.
Unlisted Holdings
At year-end the Company held two positions in unlisted equities: T&K Toka and Trancom, both of which were delisted
following take-over bids. At the end of the year, the combined value of these holdings was £7.1m. The Board, together
with other Dalton Inc clients, engaged a Tokyo-based firm, Competant Inc., to provide quarterly valuations of the unlisted
portfolio. The appointment process was led by the Tokyo-based teams at Dalton KK and RSM, acting on behalf of the
Company and the Dalton related parties who are also invested in the two respective partnerships through which these
entities are held, with oversight and input from the Board.
Annual General Meeting (“AGM”)
The Board of Directors of the Company value our shareholders and thank you for your continued support, and we welcome
you to attend our AGM to be held at Prince Philip House, 3 Carlton House Terrace, London, SW1Y 5AG on Thursday 4 June
2026 at 12:30 p.m. The event will feature an investor presentation by Paul ffolkes Davis and Gifford Combs of RSM, our
Investment Adviser, and provide an opportunity to meet the Board of Directors informally thereafter.
As part of the Board’s commitment to corporate governance best practice and succession planning, and in line with the Board’s
intention to reduce the number of Directors back to a maximum of five, Claire Boyle will step down from the Board at the AGM,
returning the number of Directors to five. The Board would like to thank Claire for her valuable contribution and service.
The Board strongly encourages all shareholders to exercise their votes by completing their proxy forms. Please note that the
deadline set by retail platforms and Proxy providers may be several days before the meeting. Detailed instruction on “How to
Exercise Your Vote” and “How to Complete a Form of Proxy” can be found on pages 92 and 93 of this document.
Those shareholders who are unable to attend the AGM in person are welcome to submit questions for the Board or their
Investment Adviser either in writing to the Company Secretary at the registered office, 46-48 James Street, London, England,
United Kingdom, W1U 1EZ, or by emailing navf@nsm.group.
The Notice convening the AGM is set out at the end of this document.
Outlook
The Company seeks to continue to take advantage of the corporate governance reforms in Japan introduced over the past
decade, through active engagement with portfolio companies. We were very pleased to have received recognition in the
form of three industry awards last year: the Best Performance - Japan category at the Citywire Investment Trust Awards
2025, the Investors’ Choice Investment Trust Award, and the Overseas Smaller Companies category at the Investment Week
2025 Investment Company of the Year Awards.
While past performance does not guarantee future returns, we believe these awards recognise the validity of NAVF’s
investment thesis and the ability of our Investment Adviser to implement the strategy.
We have a concentrated portfolio of undervalued opportunities where there is potential to unlock value for all shareholders.
Returns tend not to be closely correlated with the overall market, but rather depend on the outcome of our engagement
with our target investments. As you will read in the Investment Advisor’s report below, there remain plenty of new ideas and
as the Company increases in size the opportunity set also increases.
Rosemary Morgan
Chairman
7 April 2026
Chairman’s Statement continued
Section 1 – Strategic Report 7
Performance since Initial Listing
1
Periodic change Cumulative change
Period
JPY
(%)
GBP
(%)
JPY
(%)
GBP
(%)
21 February 2020 to 31 December 2020
10.6 13.6 10.6 13.6
Year Ended December 2021
35.0 22.3 49.3 38.9
Year Ended December 2022
5.3 3.4 57.2 43.7
Year Ended December 2023
39.6 23.1 119.5 76.9
Year Ended December 2024
26.3 15.2 177.2 103.8
Year Ended December 2025
26.0 17.4 249.1 139.7
CAGR
2
Since Inception 21 February 2020 to 31 December 2025
23.5 15.9 249.1 139.7
1 Investment results assume dividends are reinvested.
2 Compound Annual Growth Rate
Introduction
This report provides an overview of key events and themes affecting your Company in 2025. I will address individual holdings
to reflect where they have generated the alpha in our returns or detracted from performance. The driver of success in
this Company is not to buy the cheapest or most undervalued stocks (though it helps), it is to identify businesses where
our hands-on engagement can bring about the greatest change in management practices in order to realise value for
shareholders. We like decent companies that have too many non-operational assets, whether cash, cross-shareholdings or
property, on the balance sheet. Even if these characteristics reflect poor capital allocation, thus making them worthy of our
attention, they also provide comfortable margins of safety, which protect the portfolio until we can make something happen
to unlock value. In addition, we look for open share registers, a lack of third-party brokerage research (especially a lack
of English reporting), and demonstrable under-valuation of a type likely to attract the attention of the regulators who are
seeking to address the capital misallocation of listed companies. This last is most important: we never forget that the largest
shareholder across all Japanese stock exchanges, still owning 11-12% of the markets, is the combination of the Bank of Japan
and the state pension fund, in other words, Japan Inc. When Prime Minister Shinzo Abe began the corporate governance
reform programme in 2014, he did so out of a position of being the largest investor in a long-underperforming stock market
– one could argue his government was motivated by self-interest.
Twelve years later, the reform programme has broadened under an umbrella of guidelines, directions and suggestions
issued by all the financial offices of state including METI, the JPX, and the FSA. The requirement to understand and
embrace modern valuation metrics, as well as more efficient capital allocation methodologies, has taken on a philosophical
dimension; however uncomfortable, corporate managements have understood the need for change. They may not like
it, but those who continue to resist are finding themselves increasingly isolated. The debate about encouraging small
companies to trade at or above book value, or whether they should exist as listed companies at all, continues to rage. As I
wrote last year, this makes sense; the US economy is six times larger than Japan’s, and yet the JPX has more listed companies
than any other exchange in the developed world. Large-scale consolidation and de-listing are inevitable, despite any inertia
of individual salaryman-run companies that have slumbered for thirty years during Japan’s deflationary slump. The FSA
told us recently they expect the current total of around 4,000 listed companies to be half that number in ten years. We
do not think it will take that long. Inflation is back and the current prime minister’s expansionist policies are only likely to
stoke it further. There has been some concern that Takaichi’s promotion of better pay for workers is a move away from
recent investor-friendly legislation. On the contrary, we have always advocated increasing both remuneration and share
ownership amongst employees, and there is no indication that the direction of regulatory travel will change. The drive for
capital efficiency and shareholder recognition is undiminished. NAVF is not running out of road, indeed it has increasing
opportunity. Nevertheless, it is still long and there remain copious quantities of slow-moving, even broken down, vehicles
that need to be hauled over onto the hard shoulder, where roadside assistance in the form of the increasing army of
activists, private equity players and financial advisers generally, can either turbo charge them or take them away on the
flatbed of privatisation. We have several long-running engagements we expect to find resolution to soon, starting with the
Investment Adviser’s Report
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Nippon Active Value Fund plc | Annual Report & Accounts 2025
already completed tender offer for Hogy Medical. This process will replenish our coffers and provide us with ammunition to
direct at our next targets, many of which are already identified.
Performance
In 2025, Japanese equity markets achieved a third consecutive year of strong growth. In local currency terms (JPY),
the Nikkei 225 rose 26% to close above 50,000 for the first time, while the TOPIX increased 22% to record highs. This
performance was driven by AI-related demand, ongoing corporate governance reforms, and expectations of fiscal stimulus
under Prime Minister Sanae Takaichi. Over the same period the MSCI Japan was only 12.6% better (JPY), while the MSCI
Japan Small Cap index was up almost 29%. Happily, in such an exceptional year for the main indices, NAVF kept up, with
NAV (as measured in Yen and assuming all dividends are reinvested) being just over 26% to the better or up 17.4% when
measured in sterling.
Since Takaichi’s appointment as PM and the consequent fear of her fiscal stimulus weakening the Yen, the currency has,
again, cost us considerable performance. Since inception, our cumulative performance, when measured in Yen, is almost
250%. In sterling terms, we have gained 140%.
NAVF GBP NAVF JPY JPY vs GBP
50.00
80.00
110.00
140.00
170.00
200.00
230.00
260.00
290.00
320.00
350.00
380.00
Feb 2020
Apr 2020
Jun 2020
Aug 2020
Oct 2020
Dec 2020
Feb 2021
Apr 2021
Jun 2021
Aug 2021
Oct 2021
Dec 2021
Feb 2022
Apr 2022
Jun 2022
Aug 2022
Oct 2022
Dec 2022
Feb 2023
Apr 2023
Jun 2023
Aug 2023
Oct 2023
Dec 2023
Feb 2024
Apr 2024
Jun 2024
Aug 2024
Oct 2024
Dec 2024
Feb 2025
Apr 2025
Jun 2025
Aug 2025
Oct 2025
Dec 2025
Currency Matters Since Inception
NAVF (GBP) Cumulative Performance:
+139.7%
NAVF (JPY) Cumulative Performance:
+249.1%
JPY/GBP Cumulative Performance:
-31.5%
Investment Adviser’s Report continued
Section 1 – Strategic Report 9
Portfolio Characteristics
30
40
50
60
70
80
Top 10 Concentration
Mar 2020
Apr 2020
Jun 2020
Aug 2020
Oct 2020
Dec 2020
Feb 2021
Apr 2021
Jun 2021
Aug 2021
Oct 2021
Dec 2021
Feb 2022
Apr 2022
Jun 2022
Aug 2022
Oct 2022
Dec 2022
Feb 2023
Apr 2023
Jun 2023
Aug 2023
Oct 2023
Dec 2023
Feb 2024
Apr 2024
Jun 2024
Aug 2024
Oct 2024
Dec 2024
Feb 2025
Apr 2025
Jun 2025
Aug 2025
Oct 2025
Dec 2025
Average Top 10 ConcentrationNAVF Top 10 Concentration
The chart above shows both March 2020 and October 2023 movements in concentrations, which reflect the initial
investment period following the Company’s IPO, and the mergers of assets following AJG and AJIT, respectively.
Market Cap (USD) 31/12/2023 to 31/12/2025
31/12/2023
Portfolio Ending
Weight
(%)
31/12/2024
Portfolio Ending
Weight
(%)
31/12/2025
Portfolio Ending
Weight
(%)
Total 100.0 100.0 100.0
> $2.5bn 13.9 0.0 8.9
$1bn - $2.5bn 10.0 6.0 3.7
$750m - $1bn 5.9 7.6 19.7
$500m - $750m 12.2 11.9 30.6
$250m - $500m 42.7 59.6 25.9
< $250m 5.2 9.0 6.8
Cash 7.6 5.5 2.6
N/A 2.5 0.4 1.9
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Nippon Active Value Fund plc | Annual Report & Accounts 2025
Investment Adviser’s Report continued
Global Industry Classification Standard (“GICS+”) Sector
31/12/2023
Portfolio Ending
Weight
(%)
31/12/2024
Portfolio Ending
Weight
(%)
31/12/2025
Portfolio Ending
Weight
(%)
Total 100.0 100.0 100.0
Communication Services 5.9 8.1 9.8
Consumer Discretionary 9.8 6.5 10.0
Consumer Staples 4.3 0.0 3.6
Energy 0.0 0.0 0.0
Financials 3.1 0.0 0.0
Health Care 12.9 28.9 28.1
Industrials 34.9 39.2 34.1
Information Technology 6.3 1.9 1.6
Materials 15.2 9.5 8.3
Real Estate 0.0 0.0 0.0
Utilities 0.0 0.0 0.0
Cash 7.6 5.5 2.6
Unassigned 0.0 0.4 1.9
Attribution
During the year, the top five contributors to the portfolio, making the largest gains both realised and unrealised, were as follows:
Ticker
Portfolio
Average
Weight (%)
Portfolio
Total Return
(%)
Portfolio
Contribution To
Return (%)
Total
100.0 +19.5 +19.5
4676 Fuji Media Holdings, Inc.
+9.1 +101.9 +7.0
3593 Hogy Medical Co., Ltd.
+11.8 +32.9 +3.3
3302 Teikoku Sen-I Co., Ltd.
+5.2 +32.1 +1.6
1976 Meisei Industrial Co., Ltd.
+7.3 +14.1 +1.4
9357 Meiko Trans Co., Ltd.
+3.0 +29.8 +0.9
The poorest performers were:
4212 Sekisui Jushi Corporation
3.9 -3.3 -0.2
4886 ASKA Pharmaceutical Holdings
6.8 -7.3 -0.2
4109 Stella Chemifa Corporation
2.9 -3.6 -0.2
4956 Konishi Co., Ltd.
0.4 -2.2 -0.1
8291 Nissan Tokyo Sales Holdings Co.
1.4 -6.1 -0.1
Section 1 – Strategic Report 11
Contributors
Fuji Media Holdings
Fuji Media Holdings (“FMH”) shares rose more than 100% in 2025 after the company underwent a complete overhaul
of its management following a sexual abuse scandal. The scandal led to the identification of a broader management and
governance issue, in which an independent third-party report found that Hieda-san, an ex-board member of FMH, operated
above the FMH board, making key personnel decisions, including those of the Chairman and President. Throughout the
first half of 2025, we made multiple public engagements against FMH, which were supported by broader Japanese society
in response to its own #MeToo movement. Our engagement efforts culminated in our nomination of 12 external directors.
We lost in the AGM; however, we left a positive impact as agents of change at FMH and broader Japanese society. On
3rd February 2026, the company agreed to our, and fellow activists’, demands to raise its dividend and start to tackle its
dysfunctional structure by examining how to introduce external capital into the real estate business. More importantly, it
announced the intention to buy back Y235 billion, or around 30% of outstanding shares. This was carried out via the Tostnet
3 mechanism the following day at Y3,839 per share. The amount was carefully calibrated and allowed for NAVF/Dalton, and
other activist critics, to exit. FMH may well celebrate having rid itself of its chief tormentors at a stroke, and, indeed, we
welcome the approximately 150% profit earned on our investment, but we are concerned that this may prove only a pyrrhic
victory. If the stock weakens significantly (and it has already started to), there is nothing to stop us, or others, buying back in,
and starting the process all over again.
Hogy Medical
Hogy Medical shares rose +32% over the year, following a strong rally after Carlyle launched a tender offer bid (“TOB”)
to take the company private. On 20 June 2025, Jamie Rosenwald, Dalton and Rising Sun Management Chief Investment
Officer, was elected to the board at the AGM, with a 52.1% vote in favour. According to public documents, the company
held multiple discussions with management from 4 March 2025 and presented a go-private proposal on 21 April 2025.
Nomura was elected as financial advisor in July 2025. The company held an auction on 29 August 2025, to which Carlyle
and a few others were invited as final bidders. The company’s management and the special committee decided that Carlyle
was the most appropriate partner, given its global network of management resources and expertise to help the company
strengthen its position as a solution provider in the Japanese medical field. The TOB launched on 17 December 2025, with
NAVF’s agreement to tender our shares. NAVF has agreed with the Offering Vehicle that it will reinvest an amount of the
tender offer proceeds in a limited partnership to be formed by Carlyle following the transaction closing in Q1 2026; the
reinvestment will still leave NAVF well within the Company’s unlisted investments limit of 10% of NAV.
Teikoku Sen-I
Teikoku Sen-I rallied by 32.9% in 2025, driven by thematic investments in defence under the Takaichi government. Teikoku
Sen-I provides nuclear-related equipment, national security equipment for airports, and military linen. Teikoku Sen-I is a
partial owner of its own building, which creates some margin of safety. Earnings improved throughout the year, with the
company expecting to achieve an operating profit of Y4.8bn, an improvement from the FY25/3 operating profit of Y3.5bn.
Meisei Industrial
Meisei Industrial rallied modestly by 14.1%. The company provides maintenance services around large chemical plants and
refinery facilities and has alternating peak and trough years as its clients undergo a CapEx cycle every couple of years. FY26/3
is a trough year. We also expect the company to benefit from nuclear restarts in the coming years, as the electricity shortage
arising from AI-driven demand becomes more prevalent.
Meiko Transport
Meiko Transport rallied +29% as the company’s shares continued a modest climb. The company remains cheap, trading
below EV/EBITDA of 5x and sub 1x Price to Book (“PBR”). In May 2025, the company announced its mid-term plan to a)
spend growth CapEx of Y30bn and b) improve return to shareholders through dividends and share repurchase programs.
The company also intends to continue reducing cross-shareholdings as well as borrowing Y12bn to fund future growth and
shareholder returns.
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Investment Adviser’s Report continued
Detractors
Sekisui Jushi
Sekisui Jushi specialises in plastic and resin-based products used in road infrastructure and urban development. The
company under-performed, returning -3% in 2025, significantly lagging the index. The company continues to struggle since
the purchase of the European subsidiary, WEMAS Group. However, it maintains strong cash flows that accumulate on the
balance sheet over time, and we believe that the company is becoming increasingly attractive. Since the acquisition of the
WEMAS Group, we believe that the company remains a good engagement target with a high-quality business.
Aska Pharmaceutical
Aska Pharmaceutical’s operating performance has remained solid, with its core products delivering steady growth and
no material deterioration in underlying fundamentals. Key franchises such as Relumina, Thyradin, and Rifxima continue
to perform well, supported by strong competitive positions - particularly Thyradin and Rifxima, which benefit from
near-monopoly market structures and serve as stable earnings pillars. While some products face medium-term competitive
risks, these are more than offset by the prospective upside from pipeline assets such as AKP-022, leaving the overall business
trajectory firmly positive.
Against this backdrop, the company’s share price total return declined by 7.3% over the period, making Aska one of
the weaker contributors to portfolio returns. We believe this underperformance was driven by market reaction to the
introduction of a poison pill rather than a reflection of weak operating results. Despite sound earnings momentum, the
adoption of a defensive takeover measure was perceived negatively by the market, weighing on investor sentiment and
valuation. Our engagement to bring about change at the company is both long-standing and ongoing.
Stella Chemifa
Stella Chemifa, a leading supplier of high-purity hydrofluoric acid for the semiconductor industry, delivered a total return
of -3.5% during the period, contributing -0.2% to portfolio performance. Stella Chemifa’s recent results showed an
improvement in profitability, as the company raised selling prices by more than the increase in raw material costs, leading to
higher profit margins. In its main semiconductor-related business, AI-related demand was strong, but other areas, such as
power semiconductors, remained weak, resulting in only a modest increase in semiconductor-related sales. In the nuclear
power segment, sales to China are declining; however, the company expects future expansion opportunities in Europe,
even though it may take a while. The company’s share price declined slightly in 2025, influenced not only by its operational
performance but also by overall sentiment toward the semiconductor sector. Since entering 2026, however, the share
price has been rising, supported by strong performance among the company’s key customers, particularly semiconductor
memory manufacturers. The company’s competitive advantage, supported by its largest global market share in high-purity
hydrofluoric acid for semiconductors, has not changed.
Konishi
Konishi, which is engaged in the manufacturing of adhesives as well as infrastructure construction such as repairing bridges,
recorded weak share price performance in CY2025, as the company expects flat operating profit for FY3/26, mainly due
to higher depreciation stemming from upfront investments. However, the company, having generated an average ROIC of
approximately 13% over the past decade, is expected to remain a beneficiary of rising demand for maintaining domestic
infrastructure, such as bridges. Forecasts indicate that approximately 55% of bridges in Japan will be at least 50 years old
by 2030. It is also worth noting that the company has bought back an average of 6% of its outstanding shares over the past
three years, steadily increasing its book value per share. With net cash equivalent to approximately one-third of its market
capitalisation, the company trades at book value and 4.2x EV/EBITDA. Hence, our investment thesis remains intact.
Nissan Tokyo Sales Holdings
Nissan Tokyo Sales Holdings returned -6.1%, significantly underperforming the index. We believe the company remains
extremely attractive as it trades at a sub-3x EV/EBITDA ratio and has a negative enterprise value if we consider the value of
the real estate. In addition, we believe that the company is led by strong management, which is focused on its business and
its customers, although we feel that the shareholders have been somewhat neglected in the process. We will continue to
focus on the company.
Section 1 – Strategic Report 13
Portfolio engagement in 2025
Throughout the year, NAVF, in conjunction with its affiliates NAVF Select and Dalton Investments, continued engaging
with companies where the consortium or ‘concert party’ holds significant stakes. The most notable success came right at
the end of the period when, on 17 December 2025, Hogy Medical announced that the company would be taken private
in a tender offer organised by Carlyle at JPY6,700 per share. This is the successful culmination of the concert party’s
longstanding dialogue with management recommending they pursue this path. The process was accelerated in June 2025
with the election of James Rosenwald III, our CIO, as an external member of the board. NAVF, along with its affiliates, have
the opportunity to continue our support for the company by taking a stake in the new unlisted entity, as we have with
two previous MBOs. Thus, we have achieved a profitable exit, set up the prospect of further returns when the company is
sold or re-listed, while simultaneously freeing up substantial capital for reinvestment in our next targets. The transaction
successfully closed in March 2026.
Outlook
The success with Hogy Medical demonstrates the fruits of our labour. Elsewhere our engagement continues, most obviously
with Aska Pharmaceutical, Eiken Chemical, Bunka Shutter and Stella Chemifa. The concert party owns over 20% of the
outstanding shares, and in Eiken’s case it is approaching 33%. Although several of these are threatening poison pills, we
do not believe the status quo can be sustainably maintained given the winds of change across the Japanese equity market.
Numerous other activists are leading interesting and sometimes overlapping initiatives, and the regulatory overhaul
juggernaut ploughs on, applying ever greater pressure for corporate reform - the prospects for 2026 look positive.
Since the early drafts of this report were prepared, events in the Middle East and the resulting share rise in oil prices have
understandably weighed on market sentiment. While the portfolio is not immune to periods of heightened volatility, we
believe its focus on undervalued companies provides a degree of downside protection. Our analysts continue to identify
attractive opportunities to deploy capital and will adjust their assumptions in corporate fundamentals to reflect any
sustained impact from the conflict.
Paul ffolkes Davis
Rising Sun Management Limited
7 April 2026
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Nippon Active Value Fund plc | Annual Report & Accounts 2025
Portfolio
As at 31 December 2025
Top ten holdings as a percentage of net assets
Company Sector
Percentage
of net assets
(%)
1. Hogy Medical Co Ltd Health Care
14.2
2. Fuji Media Holdings Inc Communication Services
8.9
3. Eiken Chemical Co Ltd Health Care
8.7
4. Meisei Industrial Co Ltd Industrials
7.7
5. Bunka Shutter Co Ltd Industrials
5.6
6. Murakami Corp Consumer Discretionary
5.5
7. Teikoku Sen-I Co Ltd Industrials
5.4
8. ASKA Pharmaceutical Holdings Co Ltd Health Care
5.4
9. Ebara Jitsugyo Co Ltd Industrials
4.3
10. Ezaki Glico Co Ltd Ord Consumer Staples
3.7
Sector breakdown
Portfolio Characteristics
Equity Investments
97.6%
Price/Book
1.3x
EV/EBITDA
9.3x
Adjusted Cash/Market Cap*
28.4%
Net Working Capital/Market Cap**
36.1%
*Adjusted Cash / Market Cap = (Cash + Cross Shareholdings - Debt) / Market Cap
**Net Working Capital / Market Cap = (Cross Shareholdings + Total Current Assets –Total Liabilities) / Market Cap
Industrials Consumer Staples
Information Technology Consumer Discretionary
Materials Health Care
Communication Services Cash and other net current assets
34.2%
3.0%
9.9%
28.2%
10.0%
1.6%
9.4%
3.7%
[●]%
Section 1 – Strategic Report 15
The Company’s investment objective and investment policy (including defined terms) are as set out in its prospectus dated
1 September 2023.
Investment objective
The investment objective of the Company is to provide Shareholders with attractive long-term capital growth primarily
through the active management of a focused portfolio of quoted companies that have the majority of their operations in,
or revenue derived from, Japan, or a majority of whose consolidated net assets are held in Japan, or that are included in the
TOPIX, and that have been identified by the Investment Adviser as being undervalued.
Amendments to the Investment policy during the year
• A minor inconsistency was identified during the year between the Company’s Investment Policy and its Investment
Restrictions. Following legal review, the Board approved a small amendment to align the position and remove the
contradiction. This amendment did not alter the Company’s investment approach and did not require regulatory or
shareholder approval, it simply ensured that the stated investment policy accurately reflects the Investment Restrictions
already in place.
Further, a Board meeting of the Company was held whereby a further amendment to the investment policy of the Company
was approved by the Company’s Board of Directors. This amendment was also considered to be a non-material change,
and the Company was advised by its Broker and Legal Advisers that the amendment did not require FCA and shareholder
approval. The amendment was announced to the market on 19 January 2026:
• No more than 10 per cent. in aggregate of the value of the total assets of the Company may be invested in other listed
closed-ended investment funds, except for those which themselves have stated investment strategies to invest no more
than 15 per cent. of their gross assets in other closed-ended investment funds which are on the Official List.
• Additionally, the Company will itself not invest more than 10% of its gross assets in other investment companies or
investment trusts which are listed on the Official List. This additional restriction is considered to be a non-material
change to the Company’s investment policy. The full investment policy, including changes are outlined below.
Investment policy
Asset allocation
The Company will primarily invest in a highly selective portfolio of shares issued by quoted companies that have the majority
of their operations in, or revenue derived from Japan or a majority of whose consolidated net assets are held in Japan, or
that are included in the TOPIX (“Japanese Shares”), and which the Investment Adviser deems attractive and undervalued
and typically where (i) cash and other liquid investments, real estate and/or tradeable securities constitutes a significant
proportion of the investee company’s market capitalisation; and (ii) the relevant company has no controlling or majority
shareholders.
The Company may also from time to time obtain exposure to Japanese Shares, Derivatives (as defined below), cash, cash
equivalents, exchange traded funds, near cash instruments and money market instruments, which may not necessarily suit
activist management by the Investment Adviser, though this will be opportunistic, including as part of an acquisition of a
broader portfolio, and will not form a core focus for asset allocation on an ongoing basis.
There are no restrictions placed on the market capitalisation of investee companies; but it is expected that the portfolio
will be weighted towards small-cap and mid-cap companies with market capitalisation of up to US$3 billion. The portfolio is
expected to have up to 35 holdings, although there is no guarantee that this will be the case, and it may contain a lesser or
greater number of holdings at any time.
The Company intends to acquire meaningful minority stakes in each investee company. The Company will not, however,
acquire any stake which could cause a change in its status as an investment trust under Chapter 4 of Part 24 of the
Corporation Tax Act 2010.
Apart from the investment restrictions set out below, the Board will not set any limits on sector weightings or stock selection
within the portfolio. The Company will not be constrained by any index benchmark in its asset allocation.
Investment Policy, Results and Other Information
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The Company may use derivatives for efficient portfolio management purposes. Such purposes would include the
management of cash received by the Company upon the occurrence of significant liquidity events (including, without
limitation, the receipt of proceeds of fundraisings, the realisation of Portfolio assets and other cash-generative events such
as the completion of a management buyout by an investee company). Such derivative contracts may, for example, give the
Company exposure to the whole or a sub-section of the Japanese stock market until such time as the Investment Adviser
determines that the Company’s derivative position should be liquidated and invested in an investee company in accordance
with the Investment Policy (the foregoing derivative contracts being, for the purposes of this Investment Policy “Derivatives”).
Additionally, while the Company intends that the majority of its investments will be in quoted companies, it may also
make investments in unquoted companies and the Company may become invested in unquoted companies as a result of
corporate actions or commercial transactions undertaken by quoted companies. The Company will only make investments in
unquoted companies in order to maintain or improve its position in relation to a business which operated through a quoted
entity at the time of the Company’s initial investment in that business.
Investment restrictions
The Board will apply the following restrictions on the size of its investments:
• not more than twenty per cent. (20%) of the Gross Asset Value at the time of investment will be invested in the securities
of a single issuer (such restriction does not, however, apply to investment of cash held for working capital purposes and
pending investment or distribution in near cash equivalent instruments including securities issued or guaranteed by a
government, government agency or instrumentality of any EU or OECD Member State or by any supranational authority
of which one or more EU or OECD Member States are members);
• the Company will only make an investment in an unquoted company if the aggregate interest of the Company in
unquoted companies at the time of such investment is not more than ten per cent. (10%) of the Net Asset Value of the
Company at that time. This will mean if a quoted portfolio company is delisted or an unquoted investment is revalued
with the effect of increasing the Company’s interest in unquoted investments to above ten per cent. (10%) of the
Company’s Net Asset Value at that time, the Company will not be in breach of its Investment Policy and will not have to
divest itself of any unquoted investments. Nevertheless, while the Company’s interest in unquoted investments remains
above ten per cent. (10%) of its Net Asset Value, the Company will not be able to make any further investments in
unquoted companies;
• total net investment Derivative exposure will not exceed twenty per cent. (20%) of Gross Asset Value at the time of
investment; and
• total exposure to any single counterparty which has issued Derivatives to the Company will not exceed twenty per cent.
(20%) of Gross Asset Value at the time of investment.
The Company will comply with the following investment restrictions for so long as they remain requirements of the UK
Listing Rules:
• neither the Company, nor any of its subsidiaries will conduct any trading activity which is significant in the context of the
Group as a whole; and
•
no more than ten per cent. (10%), in aggregate, of the value of the total gross assets of the Company will be invested
in investment companies or investment trusts which are listed on the Official List other listed closed-ended investment
funds (except to the extent that those investment funds have stated investment policies to invest no more than fifteen
per cent. (15%) of their total assets in other investment companies which are listed on the Official List); and
• the Company must, at all times, invest and manage its assets in a way which is consistent with its object of spreading
investment risk and in accordance with the published Investment Policy.
Additionally, the Company will itself not invest more than 10% of its gross assets in other investment companies or
investment trusts which are listed on the Official List.
Investment Policy, Results and Other Information continued
Section 1 – Strategic Report 17
Treasury policy
Until the Company is fully invested, and pending re-investment or distribution of cash receipts, the Company will use
Derivatives, cash, cash equivalents, exchange traded funds, near cash instruments and money market instruments in
accordance with the Investment Policy.
The Company expects to maintain any non-operational cash balances in Japanese yen.
Under the amended Investment Policy, the Company may use Derivatives (as defined in the Investment Policy) for efficient
portfolio management purposes. Such purposes would include the management of cash received by the Company upon
the occurrence of significant liquidity events (including, without limitation, the receipt of proceeds of fundraisings, the
realisation of portfolio assets and other cash generative events, such as the completion of a management buyout by an
investee company). Such derivative contracts may, for example, give the Company exposure to the whole or a sub-section
of the Japanese stock market until such time as the Investment Adviser determines that the Company’s derivative position
should be liquidated and invested in an investee company in accordance with the Investment Policy.
The Board will apply the following restrictions on Derivative exposure:
• total net investment Derivative exposure will not exceed twenty per cent. (20 per cent.) of Gross Asset Value at the time
of investment; and
• total exposure to any single counterparty which has issued Derivatives to the Company will not exceed twenty per cent.
(20 per cent.) of Gross Asset Value at the time of investment.
The Company’s exposure to any investments in Derivatives will be monitored daily by the Investment Adviser and AIFM and,
in the event that any particular Derivative exposure was determined by the Investment Adviser, the AIFM or the Board to
be inappropriately large, that Derivative exposure would be closed out as soon as reasonably practicable and in any event
within three Business Days.
Gearing Policy
The Company may use borrowings and other gearing to seek to enhance investment returns at a level (not exceeding 20
per cent. of the Company’s net assets calculated at the time of drawdown) which the Directors, the AIFM and Rising Sun
consider to be appropriate. It is expected that gearing will primarily comprise bank borrowings, public bond issuance or
private placement borrowings, although overdraft or revolving credit facilities may be used to increase acquisition and cash
flow flexibility.
Hedging Policy
Although the Company does not currently intend to enter into any arrangements to hedge its underlying currency exposure
to investments denominated in Japanese yen, it may in future, at its discretion, enter into currency hedging arrangements
using futures, forwards, swaps or other derivative instruments.
Material breach of investment restrictions
In the event of any breach of the investment restrictions applicable to the Company, Shareholders will be informed of the
actions to be taken by Rising Sun and the Company through a Regulatory Information Service.
Amendment to Investment Policy
No material change will be made to the Investment Policy without the approval of Shareholders by ordinary resolution and
the FCA in accordance with the UK Listing Rules.
Dividend policy
The Company’s intention is to look to achieve its results primarily through capital appreciation. As such, no specific dividend
policy has been established and any distributions will be made entirely at the discretion of the Board.
Distribution policy
The Company believes that the substantial undervaluation of Japanese equities, coupled with an activist strategy designed
to unlock underlying value should allow the Company to achieve significant investment results over time. Given the nature
of this strategy, however, it is possible that such returns could be “lumpy” and unpredictable. Accordingly, the Company will
target results primarily through capital appreciation. No specific dividend policy will be established in the first instance and
any distributions will be made entirely at the discretion of the Board.
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Investment Policy, Results and Other Information continued
Notwithstanding the foregoing, the Company will make such distributions as may be required to ensure compliance with the
rules relating to investment trusts.
Key performance indicators (“KPIs”)
The Board measures the Company’s success in attaining its investment objective by reference to the following KPIs:
(i) Long-term capital growth
The Board considers the NAV and Share price total return figures to be the best indicator of performance over time and this
therefore is the main indicator of performance used by the Board. The NAV and Share price total return for the year ended
31 December 2025 were +17.4% and +12.3% respectively (31 December 2024: +15.2% and +16.8% respectively).
(ii) Revenue return per Share
The Company’s revenue return per Ordinary Share based on the weighted average number of shares in issue during the year
was 4.30p (31 December 2024: 3.27p).
(iii) Discount/premium to NAV
The discount/premium relative to the NAV per Share represented by the share price is closely monitored by the Board. The
average discount to NAV over the year was 3.4% and the shares traded in a range of a premium of 1.8% to a discount of -10.1%.
The share price closed at a 7.5% discount to the NAV as at 31 December 2025 (31 December 2024: discount of 3.0%).
(iv) Control of the level of ongoing charges
The Board monitors the Company’s operating costs carefully. Based on the Company’s average net assets for the year ended
31 December 2025, the Company’s ongoing charges figure calculated in accordance with the AIC methodology was 1.12%
(31 December 2024: 1.18%).
Section 1 – Strategic Report 19
Risk and Risk Management
Principal and emerging risks and uncertainties
The Company has carried out a robust assessment of its principal and emerging risks and the procedures in place to identify
any emerging risks are described below.
Procedures to identify principal or emerging risks
The Board is responsible for the management of risks faced by the Company and delegates the review process of this to
the Audit Committee (the “Committee”). The Committee carries out, at least annually, a robust assessment of principal
and emerging risks and uncertainties and monitors the risks on an ongoing basis. The Committee has a dynamic risk matrix
in place to help identify key risks in the business and oversee the effectiveness of internal controls and processes. The
Committee ensures appropriate controls are in place to reduce risks to an acceptable level.
As part of the risk review, the Committee considered the challenging global economic and geopolitical environment
including, but not limited to, the continuing effects of global trade tariffs, armed conflicts, climate change, inflation and
interest rates. Particular attention was also given to risks arising from minority activist shareholder concentration and
broader market volatility.
The experience and knowledge of the Board is important, as is advice received from the Board’s service providers,
specifically the Alternative Investment Fund Manager (“AIFM”), who is responsible for risk and portfolio management
services. The AIFM outsources the portfolio management to the Investment Adviser. The following is a description of the
work that each service provider highlights to the Board on a regular basis.
1. Investment Adviser: the Investment Adviser provides a report to the Board at least quarterly, or periodically as required,
on industry trends and insight to future challenges in the Japanese equity sector including the regulatory, political and
economic changes likely to impact the sector;
2. AIFM: following advice from the Investment Adviser and other service providers, the AIFM maintains a register of
identified risks including emerging risks likely to impact the Company. The Board reviews the risk register on a quarterly basis
and updates it if necessary;
3. Corporate Broker: provides advice specific to the Company periodically, on the Company’s sector, competitors and the
investment company market whilst working with the Board and Investment Adviser to communicate with shareholders;
4. Company Secretary and Auditor: brief the Board on forthcoming legislation/regulatory change that might impact on the
Company. The Auditor provides their findings at least annually; and
5. Association of Investment Companies (“AIC”): The Company is a member of the AIC, which provides regular technical
updates as well as drawing members’ attention to forthcoming industry and regulatory issues.
Procedure for oversight
The Board is responsible for the management of risks faced by the Company. The principal and emerging risks, together with
a summary of the processes and internal controls used to manage and mitigate risks where possible are outlined below.
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Risk
Possible Consequences
Possible Impact
(post controls) Risk Mitigation
MARKET
The Company may not
meet its investment
objective
HIGH The Investment Adviser has a well-defined investment strategy
and process which is regularly and rigorously reviewed by both the
independent Board of Directors and the AIFM.
The Investment Adviser has a contract in place which defines
the duties and responsibilities of the Investment Adviser and has
safeguards in place including provisions for the termination of the
agreement upon 12 months’ notice, not to be served within the
first 4 years from First Admission.
The Investment Adviser has stated that it will run a diversified
portfolio and the Board reviews the composition and performance
of that portfolio as well as the performance of the Company at
each Board meeting. A review of transactions is performed at each
quarterly Board meeting.
Management Accounts, and Income and expense forecasts are
reviewed at quarterly Board meetings.
The Investment Adviser sends the Board its monthly factsheet and
an investment report on a quarterly basis.
The Board considers the Investment Adviser and the AIFM’s
appointment on an annual basis.
MARKET
Board fails to monitor
whether there is
style drift within the
investment process.
LOW The Investment Adviser provides individual company updates
on both existing and target holdings regularly. These updates
include key metrics that allow the Board to monitor whether these
companies are consistent with the original investment thesis.
Details of the portfolio composition are monitored by the AIFM and
also provided regularly to allow the Board to see if the portfolio
construction is consistent with investment guidelines.
MARKET
The Company’s shares
trade at a discount to
NAV
MEDIUM The Investment Adviser, AIFM and Broker review market conditions
on an ongoing basis.
Shares may trade to their NAV through further issues and buybacks,
as appropriate.
Discount protection mechanism in place whereby the Board will
consider whether, in light of prevailing market conditions, the
Company should purchase its own shares.
MARKET
Board fails to monitor
the Company’s ability
to build the Portfolio
Low The Investment Advisor/AIFM/Broker review market conditions on
an ongoing basis.
Quarterly meetings with the Investment Adviser to discuss market
environment, team and business dynamics and ongoing viability of
the strategy.
The Investment Adviser will inform the AIFM and Board as soon as
they are aware of any issues that might compromise their ability to
deliver vs the strategy.
Risks and Risk Management continued
Section 1 – Strategic Report 21
Risk
Possible Consequences
Possible Impact
(post controls) Risk Mitigation
MARKET
Board fails to monitor
the execution of the
Investment Process
Medium Quarterly meetings with the Investment Adviser that cover
implementation of the Investment Process. The Board relies on the
AIFM to monitor the implementation of individual trades.
If the Investment Adviser considers the opportunity to be
appropriate after their extensive due diligence process, the
Investment Adviser will send an initial recommendation to the Board
and AIFM, to add a target company to the investible universe.
Upon approval of a target company by the Board and AIFM, the
Investment Adviser will send a formal recommendation, outlining
the rationale for the recommendation, along with the size of
investment and forward to the AIFM for consideration.
Upon receipt of approval from the AIFM, the Investment Adviser will
arrange execution.
The Board regularly carries out Investment Process reviews of the
Investment Adviser.
OPERATIONAL
Cyber Security risks
could potentially lead
to breaches
Medium Cyber security policies and procedures are implemented by the
Company’s key service providers.
The AIFM has cyber essentials accreditation, which is reviewed on a
continuous basis.
Penetration testing is carried out by the AIFM and Administrator
every year.
OPERATIONAL
Failure to provide
notification of FEFTA,
FOREX, FIEA threshold
clearances along with
required information
to Hibiya-Nakata to
allow for timely filing
with the appropriate
regulatory bodies
Medium The Investment Adviser is tasked with notifying the AIFM at time of
trade whenever a deal has caused the holding to surpass a threshold.
Filing is delegated to third party specialist Hibiya-Nakata, the
Company’s Tokyo-based legal advisor.
The AIFM performs their own daily review of these limits against
a portfolio that is reconciled to both the Investment Adviser and
Custody records.
Once a deal has surpassed a threshold, the AIFM continue to provide
Hibiya-Nakata with any subsequent trades to ensure their records can
be as up to date as possible, this will allow them to act quickly in the
event that a subsequent threshold is passed.
OPERATIONAL
It may be difficult for
shareholders to realise
their investment and
there may not be a
liquid market in the
shares
Medium Secondary market liquidity can be improved by strong investor
communications and having active broker and market maker. The
Broker monitor and report to the Board as soon as they are aware of
any issues.
Funding liquidity to satisfy redemption rights is not applicable, as
the Company is a closed-ended fund.
Discount protection mechanism in place whereby the Board will
consider whether, in the light of prevailing market conditions, the
Company should purchase its own shares.
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Risk
Possible Consequences
Possible Impact
(post controls) Risk Mitigation
OPERATIONAL
A corporate action
is missed and the
Company suffers a
consequential loss
Medium The Custodian (Northern Trust) and Investment Adviser monitor such
actions.
Northern Trust is a very large and experienced global Custodian and
produces an Internal Controls report which is reported to the Board.
MARKET
Climate change has
recently become one
of the most critical
issues confronting asset
managers and their
investors.
Investors can no longer
ignore the impact that
the world’s changing
climate will have on
their portfolio, with the
inevitable impact on
returns
Low The Board is also considering the threat posed by the impact of
climate change and its effects on the operations of the Investment
Adviser and other major service providers. As climate change’s
impact becomes more common, the resiliency, business continuity
planning and the location strategies of our service providers will
come under more scrutiny.
MARKET
Interest rate / Inflation
Risk / Currency
Medium The Company may use derivative instruments such as futures,
forwards, swaps or other derivative instruments, to protect the
Company from fluctuations in foreign exchange rates.
The AIFM constantly monitors risks and impact on portfolio,
discussing with the Investment Adviser and Board as appropriate.
The AIFM would review any proposal for the use of derivatives
against the requirements of the prospects.
ARTIFICIAL INTELLIGENCE
Risks that the
emergence of
increasingly advanced
AI will lead to new
risks to the Fund,
including but not
limited to, decline in
human autonomy,
increased cybersecurity
vulnerabilities,
algorithm perpetuated
bias through using
historical data,
insufficient training data
to perform correctly
and algorithm driven
price manipulation
EMERGING The Company, its advisers and service providers will aim to utilise
the power of AI to enhance capabilities, rather than fall foul of
the potential pitfalls its emergence presents. Through careful
monitoring of the new technologies being released into the world,
it will be hoped that the Company can utilise artificial intelligence to
its benefit.
Risks and Risk Management continued
Section 1 – Strategic Report 23
Risk
Possible Consequences
Possible Impact
(post controls) Risk Mitigation
GEOPOLITICAL
Act of War;
• Sanctions and
restrictions imposed
• Volatile markets and
general uncertainty
• Potential world
order change and
globalisation
• The global impact
of the re-election of
Donald Trump as the
President of the USA
EMERGING The portfolio is constantly monitored by the Investment Adviser,
ensuring the portfolio avoids any sanction lists and exposures where
possible, together with consideration of any market impacts.
The Board and the AIFM continue to monitor geopolitical
developments and their potential implications for portfolio
companies, market conditions and liquidity. This includes
considering the potential impact of further escalation in the Middle
East, particularly via energy price shocks and broader risk sentiment.
The Registrar monitors payments of dividends to shareholders in
line with regulations, including sanctions-related restrictions.
Viability Statement
The Directors have assessed the viability of the Company for the period to 31 December 2028 (the “Period”). The Board
believes that the Period, being approximately three years, is an appropriate time horizon over which to assess the viability of
the Company, particularly when taking into account the nature of the Company’s investment strategy and the principal risks
outlined above.
In accordance with the Company’s articles, a continuation vote was proposed at the Company’s 2025 AGM, with the next
such vote to be held at the 2027 AGM. This was the first continuation vote for the Company since its inception and passed
with 99.99% of voting in favour. Taking into consideration the Board’s assessment, the Company’s track record over the past
five years and the successful continuation vote in 2025, the Directors have a reasonable expectation that the Company will
be able to continue to operate and to meet its liabilities as they fall due over the Period and that the continuation vote in
2027 will be successful.
In their assessment of the prospects of the Company, the Board considered each of the principal and emerging risks and
uncertainties set out above and the liquidity and solvency of the Company. The Board also considered the Company’s
income and expenditure projections and the fact that the majority of the Company’s investments comprise reasonably
realisable securities, which could, if necessary, be sold to meet the Company’s funding requirements under all stress
scenarios reviewed by the Directors. Portfolio changes, market developments, level of premium/discount to NAV and share
buybacks/share issues are discussed at quarterly Board meetings. The internal control framework of the Company is subject
to a formal review on at least an annual basis.
The level of the ongoing charges is dependent to a large extent on the level of net assets. The Company’s income from
investments and cash realisable from the sale of its investments provide substantial cover to the Company’s operating
expenses, and any other costs likely to be faced by the Company over the Period of their assessment.
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This section of the Annual Report explains how the Board has discharged its duties under section 172(1) of the Companies
Act 2006, namely to promote the success of the Company for the benefit of its members as a whole. In doing so, the Board
has had regard to the likely long-term consequences of its decisions, the interests of the Company’s stakeholders, the need
to maintain high standards of business conduct, and the impact of the Company’s activities on the environment.
The Board recognises that effective engagement with stakeholders is fundamental to sound decision-making and long-
term value creation. As an externally managed investment company, the Company has no employees and instead operates
through a number of external service providers, including the Investment Adviser, Administrator, Company Secretary,
Corporate Broker, Public Relations Adviser, Custodian and banking providers. These service providers are key stakeholders
and play an important role in supporting the Board’s governance responsibilities and its engagement with shareholders and
the wider market.
The Board has identified the Company’s principal stakeholders and considers their interests as part of its ongoing oversight
and strategic decision-making. The Board regularly assesses both the actual and potential impact of its decisions on these
stakeholders, particularly in the context of strategy, performance, risk management and capital allocation. This approach
helps to ensure that stakeholder considerations are embedded within the Board’s deliberations and that decisions are taken
with a view to the Company’s long-term sustainability and success.
Regulators
Alternative
Investment Fund
Manager (AIFM)
Investment
Adviser
Registrar
Corporate Broker
Company
Secretary and
Administrator
The Company
Section 172 Statement
Section 1 – Strategic Report 25
Key Board decisions and developments
The Board seeks to act in the best interests of shareholders as a whole and, in doing so, has regard to the long-term
consequences of its decisions, the Company’s purpose, values, investment objective and policy, and the interests of the
Company’s key stakeholders. The Board considers these factors both in discussions and when making decisions, alongside
regular and detailed reviews of the Company’s portfolio, strategy and performance. Set out below are examples of key
discussions held, and decisions taken by the Board during the financial year to 31 December 2025.
• During the year, the Board approved an interim dividend of 3.25p per Ordinary Share, which was paid to shareholders on
23 May 2025.
• During the year, three members of the Board undertook a visit to Japan to attend the annual CLSA conference, which
has a focus on corporate governance and activism, and to meet the Investment Adviser’s Tokyo based team. The visit
provided the Board with enhanced insight into the local market environment, corporate governance standards and the
strategic positioning of key portfolio holdings, thereby strengthening its oversight of the Company’s investment strategy
and risk profile.
• At the Company’s Annual General Meeting (“AGM”) held in June 2025, shareholders voted overwhelmingly in favour of
the continuation of the Company, with 99.99% of votes cast supporting the resolution. The Board had recommended
that shareholders vote in favour of continuation, having reviewed the Company’s performance and prospects. The next
continuation vote will be held in 2027.
• Mr Noel Lamb resigned from the Board on 5 June 2025, reducing the Board’s size to six. This was part of the already
designated direction of travel communicated to shareholders.
• On 10 September 2025, the Company’s block listing application for 15,000,000 Ordinary Shares with a par value of 1p
each was approved. The shares were admitted to the Official List of the Financial Conduct Authority and for trading on
the London Stock Exchange’s main market. The Board approved the use of this block listing facility to enable the issue
of shares over time to satisfy investor demand, provided that any shares are issued at a price above the prevailing NAV
per share and in the best interests of existing shareholders. During the year to 31 December 2025, 3,373,282 Ordinary
Shares were issued with aggregate proceeds of £7,256,000. Following the year end, the Company has issued 2,300,000
Ordinary Shares for aggregate gross proceeds of £5,685,700.
• The Board approved the continuing appointment of the Investment Adviser and key advisers, following an annual formal
assessment in November 2025. Having expert advisers and consistency in relationships has significant implications for
the long-term success of the Company. Thus far, the Company’s key advisers have served the Company well.
• The Chief Executive Officer of Dalton Investments attended a NAVF Board meeting during the year to provide a
governance-focused update on the management of principal risks. The presentation covered fund resourcing, risk
oversight processes, and the management of potential overlaps between NAVF and other Dalton funds. The functioning
of the memorandum of understanding was also reviewed, including the production of a quarterly schedule identifying
joint investments to ensure transparency and appropriate governance oversight.
• On 17 December 2025, the Company announced participation in a successful tender offer for Hogy Medical, led by
Carlyle, following engagement led by Rising Sun Management (“RSM”). RSM engaged with the Board regarding the
proposed transaction, including the implications of increased portfolio illiquidity arising from the reinvestment structure.
Having carefully considered these factors, the Board concluded that the increased illiquidity was acceptable in the
context of the Company’s strategy and long-term return objectives. Under the transaction, NAVF and co-investors agreed
to tender their 27.58% stake, including NAVF’s 8.58% holding. This transaction, which will take Hogy Medical private
and delist it from the Tokyo Stock Exchange, values NAVF’s holding at approximately £62.4 million, an increase from
its previous valuation of £55.2 million. Following the tender offer, NAVF and co-investors reinvested a portion of their
proceeds for an approximately 10% economic interest in a Carlyle-affiliated acquiring entity.
• The Board provided continuous support for the Investment Adviser’s approach to investment activism (see the
Investment Adviser’s report on pages 7 to 13) ensuring that their activism aligns with the long-term goals for the
Company. The activism is focused on governance improvements, growth strategies and long-term value creation in
Japanese investee companies.
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• On 20 January 2026, the Company restated its investment restrictions to clarify that investments in other listed closed-
ended investment funds will not exceed 10% of total assets. This amendment was made to ensure alignment with
regulatory expectations and market practice, and to provide greater transparency to shareholders regarding portfolio
construction limits. The Board considers this to be a non-material clarification rather than a substantive change to the
Company’s investment policy.
• A General Meeting was held on 5 February 2026 at which shareholders approved the cancellation of the Company’s
share premium account, which stood at £239,056,149 as at 16 January 2026. The Board convened the meeting to
increase the Company’s distributable reserves, thereby providing greater flexibility for potential future distributions to
shareholders. The resolution was passed with 99.98% of votes cast in favour and the cancellation became effective on
12 March 2026.
Importance of engagement Examples of engagement and key decisions
Shareholders
The Board’s principal concern is the interests of the
Company’s shareholders and potential investors and the
Directors have considered this duty when making strategic
decisions during the year that affect shareholders.
The Board maintains open dialogue between shareholders,
the current Investment Adviser and other service providers.
The Investment Adviser and the Company’s Corporate
Broker meet regularly with the Company’s shareholders to
provide Company updates and to foster regular dialogue.
Feedback from meetings is communicated with the Board.
The Chairman and other Directors are always happy to
meet with shareholders, and welcome conversations.
Clear and timely communication of the Company’s
strategy and performance against its objectives enables
shareholders to make informed investment decisions,
taking into account short, medium and longer-term
considerations. Ongoing engagement with shareholders
allows the Board to understand shareholder perspectives,
align decision-making with the interests of shareholders as
a whole, and support the Company’s long-term sustainable
success.
As a public company listed on the London Stock Exchange,
the Company is subject to the Listing Rules and the
Disclosure Guidance and Transparency Rules. The UK Listing
Rules include a listing principle that a listed company must
ensure that it treats all shareholders of the same class of
shares that are in the same position equally in respect of
the rights attaching to such shares.
The Board is pleased to invite shareholders to attend the
AGM on 4 June 2026, with more details included in the
Chairman’s statement.
With the assistance of regular discussions with and the formal
advice of the Company’s Legal Counsel, Secretary and Corporate
Broker, the Board abides by the UK Listing Rules at all times.
The Board considers shareholder engagement to be of
paramount importance and is committed to ensuring
that the AGM is a meaningful and participative forum for
all shareholders. The Company values the feedback and
questions received from shareholders both ahead of and
during the AGM. Where a significant proportion of votes
is cast against any resolution, the Board will engage with
shareholders to understand the reasons for the dissent
and will outline, in the announcement of the AGM results,
the steps it intends to take to consult shareholders further.
Following this consultation, the Board will provide an
update no later than six months after the AGM, and the
subsequent Annual Report will describe how shareholder
feedback has informed the Board’s decision-making and any
actions taken or resolutions proposed.
Shareholders are able to raise concerns directly with the
Chairman or the Board, without the involvement of the
Investment Adviser or Company Secretary, either in person
at the AGM or other events, or in writing via the Company’s
registered office. Any matters raised by shareholders are
noted and considered by the Board as part of its ongoing
engagement and decision-making process.
Section 172 Statement continued
Section 1 – Strategic Report 27
Importance of engagement Examples of engagement and key decisions
The Board and the Investment Adviser regard effective
communication and engagement with shareholders as a key
priority. The Board regularly reviews the Company’s share
register and receives regular reports from the Investment
Adviser and Corporate Broker outlining feedback received
from shareholder meetings.
Shareholders are kept informed through the publication
of annual and half-yearly reports, monthly factsheets and
commentary from the Investment Adviser available via the
Company’s website, as well as attendance at events where
the Investment Adviser presents. The Company’s annual
and half-yearly reports are published on the Company’s
website and circulated to shareholders on request. This
information is supplemented by the daily calculation and
publication of the Company’s NAV, which is released via a
Regulatory Information Service and made available on the
Company’s website.
Investment Adviser
The most significant service provider for the Company’s
long-term success is the Company’s Investment Adviser,
RSM along with that of the AIFM, FundRock in accordance
with the Alternative Investment Fund Managers Directive
(“AIFMD”), for the purpose of providing investment
advisory services to the Company.
The Investment Adviser is responsible for the management
of the Company’s portfolio in accordance with the
Company’s investment policy and the terms of the
Investment Management Agreement.
The Investment Adviser has placed trust in the investee
companies to respond appropriately to operational
challenges and to ensure that high standards of corporate
governance and regard for shareholders are at the forefront
of managerial decision-making.
RSM, has combined capabilities in origination, evaluation
and transaction execution with expertise across equities,
shareholder activism and active portfolio management.
RSM maintains a management committee that is
responsible for reviewing and evaluating potential
investment opportunities. RSM screens investment
opportunities to identify potential investments that meet
the Company’s investment objective and comply with its
investment policy. Through this screening process, RSM
determines whether to proceed with detailed due diligence
and evaluation of the investee company.
The Board monitors the Company’s investment
performance in relation to its objectives and investment
policy and strategy. The Board regularly assesses the
experience and resources of the Investment Management
team and the commitment of the Investment Adviser to
promote the Company and foster shareholder relations,
and to ensure that the Company’s objective of providing
capital growth combined with dividend income for its
investors are met.
During the year, the Board received regular presentations
from the existing Investment Adviser and members of the
wider investment team at each Board meeting, allowing
the Directors to exercise effective oversight of portfolio
performance and strategic direction. The performance
of the Investment Adviser was also reviewed formally
during the Management Engagement Committee meeting.
The last review was undertaken during the Management
Engagement Committee meeting held in November 2025 at
which the Committee agreed that the Investment Adviser’s
service delivery was acceptable.
In addition, the Directors engaged closely with the
Investment Adviser and advisers outside scheduled
meetings on matters relating to portfolio management,
administration and governance oversight, including
relationships with third-party service providers and
engagement with shareholders.
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Importance of engagement Examples of engagement and key decisions
After a potential investment opportunity has been
identified and screened against the target investment
criteria and if it determines to proceed, then RSM performs
a detailed due diligence review of the investee company,
where key risks, including those related to ESG factors,
are assessed. RSM employs a robust due diligence process
applying principles of quantitative analysis to stress test
assumptions, price capital structures, and determine
expected returns in the context of the risks faced.
Where an investment opportunity proceeds to the
execution phase, RSM will manage the transaction process,
including co-ordinating the work of other professional
advisers and service providers, including agents, valuers,
lawyers, accountants, and tax advisers.
The Board considers ongoing engagement with the
Investment Adviser and advisers to be fundamental to
effective oversight, informed decision-making and the
long-term success of the Company. Regular dialogue
enables the Board to assess performance against the
Company’s investment objective and policy, to understand
portfolio positioning and risks, and to ensure that the
Company’s strategic objectives remain appropriate. The
Board also places importance on engagement outside
formal Board meetings, recognising that timely interaction
supports effective governance, accountability and
alignment with shareholders’ interests.
The Board relies upon the AIFM to ensure the obligations
under the Consumer Duty regulations continue to be
adopted appropriately. All communications including the
website, factsheets and other published documentation
are reviewed ahead of publication to ensure they
are appropriate for all end users. A ‘value for money’
assessment is also undertaken annually and is made
available to distributors on request.
Service providers
As an externally managed investment trust, the Company
conducts all its business through its key service providers.
Before the engagement of a service provider, the Board
ensures that the Company’s business outlook as well as its
values are similar to those of the service provider.
A list of the Company’s key service providers can be found
in the Annual Report.
All service providers are subject to an annual performance
review, to ensure reappointment is in the best interests of
the Company’s shareholders.
The Board has strong working relationships with the
Investment Adviser, Broker, Legal Adviser, Company
Secretary, Administrator and Depositary. Experienced and
capable third parties provide the services required to be a
well-functioning Company. Representatives of all the main
service provider functions present regularly to the Board.
The Board receives internal control reports from their
service providers. During the year under review, the Board
sought and received reassurance that all key service
providers had appropriate business continuity plans in
place. All key service providers have maintained a high
standard of service and demonstrate operational resilience.
The Auditor is invited to attend the Audit Committee
meeting twice a year. The Audit Committee Chairman
maintains regular contact with the Audit partner to ensure
the audit process is undertaken effectively.
Section 172 Statement continued
Section 1 – Strategic Report 29
Importance of engagement Examples of engagement and key decisions
Wider community and environment
The Company and its appointed professional suppliers
keep abreast of the rules and regulations affecting the
investment company sector.
The Investment Adviser, as steward of the Company’s
assets, engages with the investee companies to ensure high
standards of governance. The Board, Company Secretary
and AIFM are responsible for ensuring that various
regulatory and statutory obligations are met.
The Board is also conscious of the importance of providing
a vehicle which meets the needs of its shareholders,
including retail investors.
In making investment decisions, the Investment Adviser
considers qualitative measures such as the environmental
and social impact of an investee company as well as
financial and operational measures.
The Investment Adviser takes voting obligations seriously
and there are multiple structures in place to ensure votes
are cast in all investee company shareholder meetings.
While the Investment Adviser evaluates external proxy
agency reports when considering how they might vote, they
do not outsource voting to a third party and are happy to
go against both their recommendations and the wishes of
management, when they consider it important to do so.
The Company Secretary and AIFM regularly report to the
Board any changes in the regulatory environment and
as AIC members, the Board can draw on the resources
available detailing any regulatory changes.
In summary, the Directors are mindful of their duties under section 172 of the Companies Act 2006 and take decisions
with due regard to the long-term consequences for the Company and its key stakeholders. The Board believes that the
Company’s long-term, sustainable success is intrinsically linked to the effective engagement with, and consideration of, those
stakeholders.
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Nippon Active Value Fund plc | Annual Report & Accounts 2025
The Directors are pleased to present their report and financial statements for the year ended 31 December 2025.
Strategic Report
The Directors’ Report should be read in conjunction with the Strategic Report on pages 2 to 29.
Corporate Governance
The Corporate Governance Statement on pages 30 to 58 forms part of this report.
Risks and Risk Management
The Company’s principal and emerging risks and Risk Management Report can be found on pages 19 to 23 of this report.
Legal and taxation status
The Company is an investment company within the meaning of Section 833 of the Companies Act 2006. The Company conducts
its affairs to meet the requirements for approval as an investment trust under section 1158 of the Corporation Tax Act 2010.
The Company has received initial approval as an investment trust and the Company must meet eligibility conditions and
ongoing requirements for investment trust status to be maintained. In the opinion of the Directors, the Company has met the
conditions and requirements for approval as an investment trust for the year ended 31 December 2025.
Market information
The Company’s Ordinary Shares are listed on the Official List of the FCA and trading on the main market of the London Stock
Exchange. The unaudited NAV of the Ordinary Shares of the Company is published daily via RNS.
Retail distribution of investment company shares via financial advisers and other third-party
promoters
As a result of the FCA rules determining which investment products can be promoted to retail investors, certain investment
products are classified as “non-mainstream pooled investment products” and face restrictions on their promotion to retail
investors.
The Company has concluded that the distribution of its shares, being shares in an investment trust, is not restricted because
of the FCA rules described above.
The Company currently conducts its affairs so that the shares issued by the Company can be recommended by financial
advisers to retail investors and intends to continue to do so for the foreseeable future.
Articles of Association
Amendments to the Company’s Articles of Association require a Special Resolution to be passed by the Company’s
shareholders, requiring a majority of at least 75% of the persons voting on the relevant resolution.
Management
The Board
The Board is entirely comprised of independent non-executive Directors who are responsible to shareholders for the overall
management of the Company and is chaired by Rosemary Morgan. Alicia Ogawa acts as Senior Independent Director. The
Board has adopted a Schedule of Matters Reserved for the Board which sets out the division of responsibilities between the
Board and its various Committees, together with the duties of the Board, further details can be found on page 36.
Through the Committees and the use of external independent advisers, the Board manages risk and governance of the
Company.
Appointment and replacement of the Board
The rules concerning the appointment and replacement of Directors are contained in the Company’s Articles of Association
which require that all Directors shall be subject to election at the first AGM after appointment and re-election annually
thereafter. Further details of the Board’s process for the appointment and replacement of Board members can be found on
page 39.
Directors’ Report
Section 2 – Governance 31
Alternative Investment Fund Portfolio Managers Directive (“AIFMD”)
In accordance with the AIFMD, the AIFM must ensure that an annual report containing certain information on the Company
is made available to investors for each financial year. The investment funds sourcebook of the FCA (the “Sourcebook”) details
the requirements of the annual report. All the information required by those rules is included in this Annual Report or will be
made available on the Company’s website.
Alternative Investment Fund Manager (“AIFM”)
The Company is classified as an Alternative Investment Fund under the AIFMD and has appointed FundRock Management
Company (Guernsey) Limited as its AIFM. The AIFM is responsible for portfolio management of the Company, including the
following services:
• Risk management – Portfolio management is delegated to the Investment Adviser;
• Review financial reporting prepared by the Administrator;
• Ensuring compliance with AIFMD regulations and reporting; and
• Monitor and ensure compliance with investment and cash restrictions and debt covenants.
The AIFM is entitled, with effect from First Admission to an annual fee calculated at a rate of 0.04 per cent. per annum
of NAV up to £250 million, plus 0.025 per cent. per annum of NAV in excess of £250 million. The AIFM fee is subject to a
minimum fee of £85,969 per annum and includes an annual adjustment for inflation.
The AIFM Agreement shall continue in force until terminated by either the AIFM or the Company by giving to the other
no less than sixth months’ prior written notice, provided that such notice may not be served earlier than the date being
12 months from the date of the AIFM Agreement. The AIFM Agreement may be terminated earlier by either party with
immediate effect in certain circumstances, including, if the other party shall go into liquidation or an order shall be made or
a resolution shall be passed to put the other party into liquidation or the other party has committed a material breach of any
obligation outlined in the AIFM Agreement, and in the case of a breach which is capable of remedy fails to remedy it within
30 days.
The Company has granted to the AIFM and certain other indemnified parties, a customary indemnity against losses which
may arise in relation to the AIFM’s performance of its duties under the AIFM Agreement.
The Investment Advisory Agreement is governed by the laws of England and Wales.
Investment Adviser
The Company, the AIFM and Investment Adviser entered into the Investment Advisory Agreement on 7 January 2020,
pursuant to which Rising Sun Management Limited will provide investment advisory services to the AIFM and the Company,
and shall be entitled, with effect from First Admission, to receive an annual fee calculated as 0.85 per cent. of the Company’s
net assets (exclusive of VAT) from the Company, in respect of the services provided under the Investment Advisory
Agreement.
Pursuant to the terms of the Investment Advisory Agreement, Rising Sun Management Limited may resign by giving the
Company not less than 12 months’ written notice. Further, the Investment Advisory Agreement may be terminated by
the AIFM and the Company, or the Company by itself, in certain limited circumstances, such as where the Investment
Adviser is in material breach of the Investment Advisory Agreement and such breach is not remedied. The Board, in such
circumstances, must find a replacement investment advisory services provider for the Company and may be unable to
appoint a replacement with the necessary skills and experience on terms acceptable to the Company. If the Investment
Advisory Agreement is terminated and a suitable replacement is not secured in a timely manner, this could have an
adverse effect on the value of the Portfolio, the Company’s financial condition, results of operations and prospects, with a
consequential adverse effect on the returns to shareholders and the market value of the shares.
The Company has delegated responsibility for day-to-day management of the investments comprised in the Company’s
portfolio to the AIFM (which has in turn delegated portfolio management activities to the Investment Adviser).
The Directors have responsibility for exercising supervision of the AIFM and the Investment Adviser.
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Nippon Active Value Fund plc | Annual Report & Accounts 2025
Company Secretary and Administrator
Effective from 1 January 2025, the Board appointed NSM Funds (UK) Limited as the Company Secretary and Administrator.
Custodian
The Northern Trust Company has been appointed by the Company to act as Custodian of certain assets.
Appointment of service providers
The Board has undertaken an annual review of its service providers through the Management Engagement Committee, to
ensure that their continued appointment is in the best long-term interests of the Company’s shareholders. The last review
was held in November 2025.
Capital structure, voting rights and restrictions
At the financial year end, the Company’s issued share capital comprised 192,514,986 Ordinary Shares of 1p nominal value each.
Each Ordinary Share held entitles the holder to one vote. All Ordinary Shares carry equal voting rights and there are no
restrictions on those voting rights. Voting deadlines are stated in the Notice of the AGM and Form of Proxy and are in
accordance with the Companies Act 2006.
Restrictions
There are no restrictions on the transfer of shares, nor are there any limitations or special rights associated with regards to
control attached to the Ordinary Shares. There are no agreements between holders regarding their transfer known to the
Company, no restrictions on the distribution of dividends and the repayment of capital, and no agreements to which the
Company is a party that might affect its control following a successful takeover bid.
Results
The Company’s revenue profit after tax for the year amounted to £8,181,000 (31 December 2024: £6,190,000).
The Company made a capital profit after tax of £55,887,000 (31 December 2024: £42,340,000). Therefore, the total profit
for the year of the Company was £64,068,000 (31 December 2024: £48,530,000).
Substantial Shareholders
As at the year ended 31 December 2025, the Directors have been formally notified of the following interests in the
Company’s Ordinary Shares, comprising 3% or more of the issued share capital of the Company, in accordance with
Disclosure Guidance and Transparency Rule 5.1.2:
Shareholder Holding Percentage Held* Date Notified
Rosenwald Capital Management, Inc. 38,460,001 19.98 2 December 2021
1607 Capital Partners, LLC 14,707,873 7.63 27 October 2023
Azvalor Asset Management SGIIC SA** 9,751,318 5.07 13 October 2025
Evelyn Partners Limited 5,939,664 3.09 12 October 2023
* Based on the number of Ordinary Shares in issue as at 31 December 2025.
** Since the year end, the Company has been notified that as of 5 March 2026, Azvalor Asset Management SGIIC SA held
12,080,321 shares, representing 6.20% of the Company’s issued share capital.
Political donations
There were no donations made during the financial year to 31 December 2025.
Settlement of Ordinary Share transactions
Ordinary Share transactions in the Company are settled by the CREST share settlement system.
Directors’ Report continued
Section 2 – Governance 33
Appointment of auditor
The Company’s Auditor, BDO LLP, having expressed their willingness to continue in office as Auditor, will be put forward
for re-appointment at the Company’s AGM and the Board will seek authority to determine their remuneration for the
forthcoming year.
Going concern
The Directors have adopted the going concern basis in preparing the financial statements.
The Directors do not foresee any immediate material risk to the Company’s investment portfolio, however, a prolonged and
deep market decline could lead to falling values in the underlying business or interruptions to cash flow. The following is a
summary of the Directors’ assessment of the going concern status of the Company.
The Company’s ability to continue as a going concern for the period assessed by the Directors, being at least 12 months from
the date the financial statements were authorised for issue.
In assessing the Company’s ability to continue as a going concern, the Directors undertook a detailed operational and
financial review, including the consideration of the Company’s liquidity and ability to meet its liabilities as they fall due.
The market and operational risks and financial impact faced by the company including those as a result of the continuing
conflicts in Ukraine and the Middle East, and economic uncertainties from changing tariff policies were discussed by the
Board, with updates on operational resilience received from the Investment Adviser, Administrator and other key service
providers. The Board was satisfied that the key service providers have the ability to continue to operate. Further details on
the impact of the market, liquidity and credit risks and how they are managed are disclosed in note 15 to the Accounts.
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence
for at least twelve months from the date of this report. In reaching this conclusion, the Directors have considered the
liquidity of the Company’s portfolio of investments as well as its cash position, income and expense flows under all stress
scenarios. The Company’s net assets at 31 December 2025 were £430,619,000 (31 December 2024: £365,442,000). As at
31 December 2025, the Company held £9,947,000 (31 December 2024: £19,889,000) in cash. The total expenses for the
year ended 31 December 2025 were £4,642,000 (31 December 2024: £4,363,000). The ongoing charges ratio represented
approximately 1.12% (31 December 2024: 1.18%) of average net assets during the year. At the date of approval of this
document, based on the aggregate of investments and cash held, the Company has substantial operating expenses cover.
Auditor information
Each of the Directors at the date of the approval of this report confirms that:
• so far as the Director is aware, there is no relevant audit information of which the Company’s Auditor is unaware; and
• the Director has taken all steps that he/she ought to have taken as Director to make himself/herself aware of any relevant
information and to establish that the Company’s Auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.
Shareholder engagement
The Board is mindful of the importance of engaging with the Company’s shareholders to gauge their views on topics
affecting the Company. The Company reports formally to shareholders twice a year and meetings with key investors are held
as required. The key discussion points of such meetings are relayed for the Board to consider further.
Results of AGMs are announced by the Company promptly after the relevant meeting and published on the Company’s
website. Additionally, other notices and information are provided to shareholders on an ongoing basis through the
Company’s website to assist in keeping shareholders informed, such as the monthly factsheets.
This year, the Company’s AGM will be held on 4 June 2026 and the Chairman’s Statement on page 6 and the enclosed AGM
Notice sets out the arrangements for the meeting.
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Annual General Meeting
The following information is important and requires your immediate attention. If you are in any doubt about the action you
should take, you should seek advice from your stockbroker, bank manager, solicitor, accountant, or other financial adviser
authorised under the Financial Services and Markets Act 2000 (as amended) (“FSMA”) if you are resident in the United
Kingdom or, if not, another appropriately authorised independent financial adviser.
Resolutions relating to the following items of special business will be proposed at the AGM to be held at Prince Philip House,
3 Carlton House Terrace, London, SW1Y 5AG on Thursday 4 June 2026 at 12:30 p.m.
Renewal of general authority to issue Ordinary Shares and to dis-apply pre-emption rights
At the forthcoming AGM, the Board is seeking authority to allot up to a maximum of 38,962,997 Ordinary Shares
(representing approximately 20% of the Ordinary Shares in issue at the date of this document) and to disapply pre-emption
rights when allotting those Ordinary Shares at the forthcoming AGM. Authority granted under both resolutions will expire
at the conclusion of the AGM to be held in 2027 unless renewed prior to this date via a General Meeting. The full text of
resolutions 11 and 13 is set out in the Notice of Meeting on pages 90 and 91.
The authority granted by shareholders to issue Ordinary Shares will provide flexibility to grow the Company and further
expand the Company’s list of assets. Ordinary Shares will only be issued at a premium to the NAV (cum income) after the
costs of issue. Ordinary Share issues are at the discretion of the Board.
During the year ended 31 December 2025 the Company issued 3,373,282 Ordinary Shares.
Renewal of general authority to purchase Ordinary Shares
During the year ended 31 December 2025, the Company did not utilise its authority to purchase its own shares.
The existing authority to make market purchases will expire at the conclusion of the 2026 AGM of the Company. The
Directors recommend that a new authority to purchase up to 29,202,766 Ordinary Shares (subject to the condition that not
more than 14.99% of the Ordinary Shares in issue, excluding treasury shares, at the date of this document are purchased) be
granted and a resolution to that effect will be put to the AGM. Any Ordinary Shares purchased will either be cancelled or, if
the Directors so determine, held in treasury. The full text of resolution 15 is set out in the Notice of Meeting on page 91.
The Companies Act 2006 permits companies to hold shares acquired by way of market purchase as treasury shares,
rather than having to cancel them. This provides the Company with the ability to re-issue Ordinary Shares quickly and cost
effectively, thereby improving liquidity, and providing the Company with additional flexibility in the management of its
capital base. No Ordinary Shares will be sold from treasury at a price less than the (cum-income) NAV per existing Ordinary
Share at the time of their sale unless they are first offered pro rata to existing shareholders. At the period end the Company
did not hold any shares in treasury.
Unless otherwise authorised by shareholders, Ordinary Shares will not be issued at less than NAV and Ordinary Shares held
in treasury will not be sold at less than NAV.
Notice of general meetings
Resolution 16 in the notice to the AGM is required to reflect the requirements of the Shareholder Rights Directive. The
Company is currently able to call General Meetings, other than an AGM, on 14 clear days’ notice and would like to preserve
this ability. To be able to do so, shareholders must have given their prior approval. Such approval, which would be effective
until the Company’s next AGM, when it is intended that a similar resolution will be proposed. The Company will ensure that
it offers the facility for shareholders to vote by electronic means, and that this facility is accessible to all shareholders, if it
is to call general meetings on 14 days’ notice. Short notice of this kind will be used by the Board only under appropriate
circumstances.
Recommendation regarding resolutions
The Directors consider that all the resolutions to be considered at the AGM are in the best interests of the Company and
its shareholders as a whole and are likely to promote its long-term success. The Directors unanimously recommend that
shareholders vote in favour of the resolutions as they intend to do in respect of their own beneficial holdings.
Directors’ Report continued
Section 2 – Governance 35
Regulatory Disclosures – information to be disclosed in accordance with the UK Listing Rule (“UKLR”) 6.6.1
The UKLR requires listed companies to report certain information in a single identifiable section of their Annual Reports or
a cross-reference table indicating where the information is set out. The Directors confirm that there is nothing to disclose in
accordance with UKLR 6.6.1.
Environmental and Social Governance (“ESG”)
The Company is a closed-ended investment company which has no employees therefore its own direct environmental
impact is minimal. The Company consumed less than 40,000kWh of energy during the year in respect of which the
Directors’ Report is prepared and therefore is exempt from disclosure under the Streamlined Energy and Carbon Reporting.
It outsources all of its key operations to reputable, third-party service providers, who are required to comply with all relevant
laws and regulations in the jurisdiction in which they operate, and take account of social, environmental, ethical and human
rights factors, as appropriate.
The Company has no direct greenhouse gas emissions to report from its operations, nor does it have responsibility for any
other emissions-producing sources under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations
2013 (including those within its underlying holdings).
The Board notes that the underlying companies in which the Company invests will have a social and environmental impact
over which the Board has no control. However, it expects its Investment Adviser to be mindful of any associated risks when
making their investments and reviews updated ESG policies from the Investment Adviser annually. The Company aims to
conduct itself responsibly, ethically, and fairly in its investments and dealings with stakeholders.
Modern slavery disclosure
The Company aims to act to the highest standards and is committed to integrating responsible business practices throughout
its operations. The prevention of modern slavery is an important part of good corporate governance. As an investment trust,
the Company does not offer goods or services to consumers and deals predominantly with professional advisers and service
providers in the financial services industry. As such the Board considers that the Company is out of scope of the Modern Slavery
Act 2015 though the Board, as a whole, notes the provisions of this Act and does require all third-party providers to report on
their compliance with the Modern Slavery Act as part of the annual review by the Management Engagement Committee. In
addition, when selecting and retaining portfolio investments, the Investment Adviser assesses modern slavery risks, including
a review for any evidence of human rights violations as part of the ESG risk assessment framework. The Company believes
that it is in shareholders’ interests to consider human rights issues, including modern slavery, when selecting and retaining
investments. Further details can be found in the Company’s environment, social and governance policy.
Anti-bribery and corruption
The Company’s policy is to conduct all its business in an honest and ethical manner. The Company takes a zero-tolerance
approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all its business
dealings and relationships. The Company’s policy and the procedures are designed to support that commitment.
Prevention of the facilitation of tax evasion
The Board has a zero-tolerance approach to the facilitation of tax evasion.
The Report was approved by the Board on 7 April 2026 and signed on its behalf:
By order of the Board
For and on behalf of
NSM Funds (UK) Limited
Company Secretary
7 April 2026
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This Corporate Governance statement forms part of the Directors’ Report.
The UK Listing Rules and the Disclosure Guidance and Transparency Rules of the UK Listing Authority require listed
companies to disclose how they have applied the principles and complied with the provisions of The UK Corporate
Governance Code 2024 (the “UK Code”), as issued by the Financial Reporting Council (“FRC”). The UK Code can be viewed
on the FRC’s website.
The Board has carefully considered the principles and provisions outlined in the AIC Code of Corporate Governance 2024
(referred to as the “AIC Code”). This code addresses matters covered by the UK Code while also providing additional
provisions relevant to the Company’s specific context.
The Board believes that reporting against the AIC Code, which has received endorsement from the Financial Reporting
Council (“FRC”), offers more pertinent information for shareholders.
You can find the AIC Code on the AIC website. It includes an explanation of how the AIC Code adapts the Principles and
Provisions from the UK Code to suit investment companies.
The Company has diligently adhered to the Principles and Provisions set forth in the AIC Code.
Given the Company’s status as an externally managed investment company, the Board has determined that certain provision
such as those related to the role of executive directors, remuneration, and the need for an internal audit function are not
applicable. This is because all day-to-day management and administrative functions are outsourced to third-party service
providers, resulting in the absence of executive directors, employees, or internal operations within the company.
The Board has concluded that the Annual Report for the year ended 31 December 2025, taken as a whole, is fair, balanced
and understandable and provides the information necessary for shareholders to assess the Company’s position and
prospects, performance, business model and strategy.
Governance Structure Snapshot
Shareholders
Board of Directors
(Rosemary Morgan,
Chairman of the Board)
Audit
Management Engagement
Nomination &
Remuneration
Chetan Ghosh (Chair)
Claire Boyle
Rachel Hill
Rosemary Morgan
Alicia Ogawa (SID)
Ayako Weissman
Rosemary Morgan
(Chair)
Claire Boyle
Chetan Ghosh
Rachel Hill
Alicia Ogawa (SID)
Ayako Weissman
Rachel Hill (Chair)
Claire Boyle
Chetan Ghosh
Rosemary Morgan
Alicia Ogawa (SID)
Ayako Weissman
Corporate Governance Statement
Section 2 – Governance 37
The Board
Composition
At the date of this report, and as illustrated above, the Board consists of six non-executive Directors. The intention of the
Board over the longer term is to reduce the number of Directors back to a maximum of five, which the Board believes is
the appropriate number of directors for an investment company of the Company’s nature and size. All of the Directors are
independent of the Investment Adviser and AIFM and are able to allocate sufficient time to the Company to discharge their
responsibilities effectively. The Directors have a broad range of relevant experience to meet the Company’s requirements,
and their biographies are given below.
Rosemary Morgan – Appointed 14 November 2019
Non-Executive Director, Chairman of the Board, and Management Engagement Committee
Until February 2024, Rosemary was an independent director and Chairman of JPMorgan India Growth & Income plc.
Until 2022, she was a Senior Independent non-executive Director of Schroder Asia Pacific Investment Trust, where she was
the Chairman of the Audit and Risk Committee.
Rosemary studied Japanese at the Australian National University in Canberra before being awarded the Monbusho
Scholarship at Kobe University in Japan and then studying for a Master of Arts in Japanese Literature at Harvard University in
the United States.
After university, Rosemary worked as a Japanese equity fund manager for 16 years at John Govett before joining the
institutional client team at Fidelity International and then moving to the Royal Bank of Scotland as Head of Asia and
Emerging Markets (Multi Manager Funds), where she managed long only and alternative funds of funds, specialising in
Japan and Emerging Markets.
Chetan Ghosh – Appointed 22 October 2019
Non-Executive Director and Chair of the Audit Committee
Chetan is a member of the Outsourced Chief Investment Officer (“OCIO”) Solutions Team at Schroders. Before this he was
Chief Investment Officer for the Centrica pension scheme and was responsible for providing support to the directors of the
investment committee. His role covered investment strategy considerations, asset class and manager research, and liaison
with the investment advisers.
In 2022, Chetan and his team joined Schroders to provide a fully tailored OCIO service to the Centrica pension scheme.
Prior to joining Centrica in 2009, Chetan worked in a number of roles, ranging from pensions actuary at Towers Perrin to
investment consultant at Aon Hewitt and Lane Clark & Peacock. Whilst at financial services firm Alexander Forbes, Chetan
developed a fiduciary management offering to improve client governance structures.
Chetan has a first-class degree in Mathematics from Kings College London. He is based in London, UK.
Rachel Hill – Appointed 22 October 2019
Non-Executive Director and Chair of the Nomination and Remuneration Committee
Since 2006, Rachel has been a Director of Dragon Capital Markets (Europe) Limited and has been responsible for the
European marketing of LSE listed Vietnam Enterprise Investments Ltd and the Vietnam Equity (UCITS) fund. Rachel has over
30 years of experience in respect of equity sales in Asian markets.
In addition, Rachel also currently serves on the board of Quaero Capital Luxembourg Fund, a Luxembourg regulated UCITS
platform with various sub funds investing in equities and bonds.
Rachel holds a BA (Hons) MA in Natural Science from Trinity Hall, Cambridge University and is also a Chartered Member of
the Chartered Institute for Securities and Investment. She is based in Bath, UK.
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Corporate Governance Statement continued
Alicia Ogawa – Appointed 14 November 2019
Non-Executive Director and Senior Independent Director
Alicia Ogawa has been a consultant on Japan strategies to two of the largest U.S. based activist hedge funds and is an
advisor to several Japan-focused activist funds. In 2023, she was a member of the New Governance Task Force at KT (Korea
Telecom), and until June 2023, she ran the Project on Japanese Corporate Governance and Stewardship at Columbia
Business School. She was also a director of the Tokyo-based activist fund Misaki Capital.
Alicia is an advisor at Questhub, a Tokyo-based governance advisory firm. She spent a decade as an assistant adjunct
Professor at Columbia’s School of International and Public Affairs running graduate seminars on ESG issues. Alicia acts as
a Senior Advisor to a US-based law firm Squire Patton Boggs and provides guidance to Japanese Companies operating in
the US on strategies to deal with the new US administration. Between 2000-2006, she was managing director at Lehman
Brothers in New York City, where she was responsible for managing the firm’s global equity research product.
Prior to joining Lehman Brothers, Alicia spent 15 years in Tokyo, where she was a top-rated bank analyst and director of
research for Nikko Citigroup.
Alicia is currently a member of the board of directors of the Maureen and Mike Mansfield Foundation, and a member of
the board of directors of Pure Earth, a global NGO dedicated to addressing lead and mercury pollution. She graduated from
Barnard College and earned a master’s degree in international affairs at Columbia University School of International and
Public Affairs. She is based in New York, USA.
Ayako Hirota Weissman – Appointed 14 November 2019
Non-Executive Director
Aya is a Senior Vice President, Senior Portfolio Manager and director of Asia Strategy at Horizon Kinetics LLC. Aya has over
40 years of investment experience managing equity portfolios in the US and Asian markets. Prior to joining Horizon Kinetics
LLC, she was the founder and Chief Investment officer at AS Hirota Capital Management, LLC.
Aya’s prior experiences include acting as a portfolio manager specialising in Japanese securities for Kingdon Capital
Management, LLC, and as a partner and Portfolio Manager of Feirstein Hirota Japan Partners. In addition, Aya was a
Managing Director and Senior Portfolio manager in the US large cap value equity division at Salmon Smith Barney Asset
Management, where she was a founding member.
Aya is a former member of the board of Toshiba Corporation, where she was a chairperson of the compensation committee.
She was also a board member of SBI Holdings.
Aya received an MBA from the International Institute for Management Development (IMD) in Lausanne, Switzerland and a
BA in Liberal Arts from International Christian University (ICU) in Tokyo, Japan. She studied at Chung Chi College at Chinese
University of Hong Kong as a Japanese Ministry of Education Scholar. She is a CFA charter holder.
Claire Boyle – Appointed 10 October 2023
Non-Executive Director
Claire Boyle was an independent non-executive director of Abrdn Japan Investment Trust plc from 1 February 2019 to
10 October 2023 and Chair of the Audit and Risk Committee from October of 2019. She is currently the Chair of Life Science
REIT plc, Chair of Fidelity Special Values plc and a non-executive director and Chair of the Audit and Risk Committee of The
Monks Investment Trust PLC.
Claire is a Fellow of the Institute of Chartered Accountants in England and Wales, qualifying in 1993 whilst working in
litigation support at Coopers & Lybrand. She has over 17 years’ experience working in finance and equity investment
management, working on funds over a wide range of sectors for international corporate, Government, State and retail
clients, including unit and investment trusts. She started her investment career on the UK research desk at Robert Fleming,
was a partner at Oxburgh Partners LLP with responsibility for their European Equity Hedge Fund, and prior to that a
European Equity Fund Manager at American Express Asset Management, where her role included both equity investment
and business development.
Section 2 – Governance 39
Re-election of Directors
As stated in the Prospectus of 2023 and the Annual Report for 2023, the Board had committed to reduce its size to
5 Directors by the AGM in 2026. In line with the Board’s intention to reduce the number of Directors back to a maximum
of five; Claire Boyle will stand down prior to the AGM in 2026, returning the number of Directors to five. The Board
recommends the reappointment of all other Directors for the reasons highlighted above and in the performance appraisal
section of this report.
The Directors have appointment letters which do not provide for any specific term. Copies of the Directors’ appointment
letters are available on request from the Company Secretary. Upon joining the Board, any new Director will receive an
induction, and relevant training is available to Directors on an ongoing basis.
Role of the Board
All Board members are independent non-executive Directors, who continue to be independent of the Investment Adviser.
The Board is responsible for the governance of the Company, notwithstanding any delegation of responsibilities to third
parties. It has oversight over the management and conduct of the Company’s business, strategy and development. The
Board determines the Investment Objective and Investment Policy as well as risk appetite and has overall responsibility for
the Company’s activities, including review of investment activity and performance. The Board ensures the maintenance of
a sound system of internal controls and risk management (including financial, operational and compliance controls) and
reviews the overall effectiveness of systems in place. The Board is responsible for approval of any changes to the capital,
corporate and/or management structure of the Company. The Board Members offer strategic guidance and specialist advice,
whilst providing constructive and effective challenge, especially to the decisions of the Investment Adviser. The Board
scrutinises and assesses the performance of third-party service providers (including the Investment Adviser and AIFM).
The Board’s overriding focus is to promote the sustainable long-term success of the Company, to deliver value for
Shareholders and contribute to wider society. The Board does not routinely involve itself in day-to-day business decisions.
The AIFM is responsible for the risk management of the Company pursuant to AIFMD and the Investment Adviser for
portfolio management.
Board Committees
The Company has three Committees to assist with its operations: the Audit Committee, the Nomination and Remuneration
Committee and the Management Engagement Committee. Each Committee’s delegated responsibilities are clearly defined
in formal terms of reference, which are reviewed at least annually and are available on the Company’s website. The Board
decides upon the membership and chairs of its committees.
Audit Committee
All the Directors are members of the Audit Committee, which is chaired by Chetan Ghosh. A report on pages 48 to 50
provides details of the role and composition of the Audit Committee together with a description of the work of the Audit
Committee in discharging its responsibilities.
Nomination and Remuneration Committee
All of the Directors are members of the Nomination and Remuneration Committee, which is chaired by Rachel Hill. The Nomination
and Remuneration Committee has been established to meet formally on at least an annual basis to consider the fees of the
non-executive Directors and for the purpose of reviewing the performance of the Board and its committees, the remuneration of
Directors and succession planning, including identifying and putting forward candidates for the office of Director of the Company.
In September 2025, an internal performance appraisal process was undertaken by the Nomination and Remuneration Committee
regarding the performance of the Board, its committees and the Board Chairman. The results of the recent performance
evaluation were positive, and no material issues were identified. As stated in the Prospectus of 2023 and the Annual Report for
2023, the Board will reduce its size to 5 Directors by the AGM in 2026. The Nomination and Remuneration Committee considers
job specifications and assesses whether candidates have the necessary skills and time available to devote to the job.
The Board has formulated a succession plan which was reviewed and maintained through the Nomination and
Remuneration Committee to promote regular refreshment and diversity, whilst maintaining stability and continuity of skills
and knowledge on the Board.
The Directors’ Remuneration Implementation Report and Remuneration Policy is included on page 44 of this report.
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Management Engagement Committee
All of the Directors are members of the Management Engagement Committee, which is chaired by Rosemary Morgan. The
Management Engagement Committee has been established to conduct a formal annual review of the Investment Adviser,
assessing investment and other performance, the level and method of the Investment Adviser’s remuneration and the
continued appointment of the Investment Adviser. In 2025, the Management Engagement Committee met and reviewed the
Investment Adviser’s performance and remuneration structure. The conclusion was a recommendation by the Management
Engagement Committee to the Board that it was in the best interests of shareholders to continue with the Investment
Adviser’s engagement, and that the current fee structure remained appropriate (See page 31 for further details).
In addition, the Management Engagement Committee conducted a performance evaluation of the Company’s key service
providers (listed on page 28). No material deficiencies were noted. The Management Engagement Committee reviewed the
fees payable to other service providers to the Company and concluded they remained appropriate.
Meeting attendance
Quarterly Board
Audit
Committee
Management
Engagement
Committee
Nomination and
Remuneration
Committee
Number of meetings held
4 3 1 1
Rosemary Morgan 4 3 1 1
Chetan Ghosh 4 3 1 1
Rachel Hill 4 3 1 1
Alicia Ogawa 4 3 1 1
Ayako Weissman 4 3 1 1
Claire Boyle 4 3 1 1
Noel Lamb* 1 1 N/A N/A
* Retired on 5 June 2025.
During the year, there were ad hoc Board and committee meetings to deal with administrative matters and formal approval
of documents.
Board diversity
The Company’s policy is that the Board should have an appropriate level of diversity in the boardroom, taking into account
relevant skills, experience, gender, social and ethnic backgrounds, cognitive and personal strengths. Brief biographies of
the Directors are shown in the Annual Report. The policy is to ensure that the Company’s Directors bring a wide range of
knowledge, experience, skills, backgrounds and perspectives to the Board. There will be no discrimination on the grounds of
gender, religion, race, ethnicity, sexual orientation, age or physical ability. The overriding aim of the policy is to ensure that
the Board is composed of the best combination of people for ensuring effective oversight of the Company and constructive
support and challenge to the Investment Adviser. Consideration is given to the recommendations of the AIC Code, and the
Board supports the recommendations of the Hampton Alexander Review and the Parker Review.
The Board appraises its collective set of cognitive and personal strengths, independence and diversity on an annual basis,
and especially during the recruitment process, so as to ensure it is aligned with the Company’s strategic priorities. The
performance appraisal process is described below.
The Board takes account of the targets set out in the FCA’s Listing Rules, which are set out below. The Board discloses the
following information in relation to its diversity. As an externally managed investment company, the Board employs no
executive staff and therefore does not have a chief executive officer (CEO) or a chief financial officer (CFO) – both of which
are deemed senior board positions by the FCA. However, the Board considers the Chairman of the Board, the Chairman
of the Audit ‘Committee and the Senior Independent Director to be senior positions; hence the following disclosures are
made on this basis. Furthermore, the Board has resolved that the Company’s year-end date is the most appropriate date for
disclosure purposes. The following information has been provided by each Director.
Corporate Governance Statement continued
Section 2 – Governance 41
As required under UKLR 16.3.29, further detail in respect of the diversity targets as at 30 November 2025 are provided in the
tables below.
Number of
Board members*
Percentage
of the Board
Number of
senior positions
on the Board
Men 1 20% 1
Women 5 80% 2
Prefer not to say – – –
Number of
Board members*
Percentage
of the Board
Number of
senior positions
on the Board
White British or Other White
(including minority-white groups) 4 60% 2
Ethnic minority background* 2 40% 1
Prefer not to say – – –
* Based on UK census data.
Statement
The Board’s composition currently meets the FCA’s new targets:
• two senior positions on the Board are held by women (Board Chairman and Nomination & Remuneration Committee
Chair); and
• two individuals on the Board are from an ethnic minority background.
The Board undertakes an appraisal of its performance, skills as well as independence and diversity, on an annual basis and
believes its current composition is appropriate for such purposes. However, in light of the Board’s succession planning and
tenure policy, or should strategic priorities change, the Board will review and, if required, adjust its composition.
Tenure policy
It is the Board’s policy that all Directors, including the Chairman, shall normally have tenure limited to nine years from
their first appointment to the Board, except that the Board may determine otherwise if it is considered that the continued
participation on the Board of an individual Director, is in the best interests of the Company and its shareholders. This is
also subject to the Director’s re-election annually by shareholders. The Board considers that this policy encourages regular
refreshment and is conducive to fostering diversity.
The Board has adopted Corporate Governance best practice and has a succession plan in place. In line with the Board’s
intention to reduce the number of Directors back to a maximum of five; Claire Boyle will stand down prior to the AGM in
2026, returning the number of Directors to five.
Board and Chairman evaluation
The Directors are aware that they need to monitor and improve Board performance continuously and recognise that this
can be achieved through regular Board evaluation, which provides a valuable feedback mechanism for improving Board
effectiveness.
During the year, the Board conducted an internal evaluation using the services of Board Forms, an external evaluation
consultancy which is independent of the Company. The evaluation was based upon completed questionnaires covering the
Board and its Committees, individual Directors and the Chairman. The responses, including the appraisal of the Chairman,
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were discussed by the Nomination Committee. The conclusion of the internal performance evaluations were positive and
demonstrated that the Board and its Committees were operating effectively.
Following the Company’s year end, the performance of the Board, Committees, and individual directors was evaluated
though an assessment process led by an external facilitator, Fletcher Jones Ltd. Fletcher Jones has not provided any other
services to the Company and does not have any other commercial connections to Nippon Active Value Fund, Dalton
Investments or Rising Sun Management. This review is the first review that Fletcher Jones has conducted for the Company.
The review process was tailored to the specific environment, operating style and strategic goals and challenges faced by
the Company. It involved each Director completing a questionnaire, followed by private one-to-one conversations between
the external reviewer and each Director and with the Company’s Investment Managers, and the Company Secretary. The
Reviewer also observed a Board meeting, as well as a meeting of the Audit Committee. The anonymity of the respondents
was ensured throughout the process, in order to promote an open and frank exchange of views.
The external reviewer provided a formal report of their findings, which was considered by the Board. The report presented
an objective view on the current working of the Board as a whole, as well as the quality of contributions made by individual
Directors. The intention of the review process was to further strengthen the working of the Board by providing an
opportunity for the objective consideration of the Board’s strengths and current skills, any areas for further development,
succession planning, and any potential gaps in its composition. The report also considered the challenges, opportunities
and strategic direction of travel anticipated over the near to medium-term. The report’s finding noted that Board of NAVF
and each Committee operates well with skill and focus on all the areas of importance. The main theme coming through
this evaluation was of a harmonious and supportive Board with a genuinely good and positive working relationship. There
was a full agenda of issues for the Board to consider over the next 12 months, with succession planning and Board rotation,
Manager oversight, dividend policy, the continued growth of the Company and wider strategy considerations being key
themes. Matters relating to risk management and fund oversight were discussed proactively.
Overall, all responses and the observations suggested that this is a well-managed, well run, and effective Board with some
practical refinements suggested, which the Board will carefully consider.
Insurance and indemnity provisions
A policy of insurance against Directors’ and Officers’ liabilities is maintained by the Company. A procedure has been adopted
for Directors, in the furtherance of their duties, to take independent professional advice at the expense of the Company.
Internal control
The AIC Code requires the Board to review the effectiveness of the Company’s system of internal controls. The Board
recognises its ultimate responsibility for the Company’s system of internal controls and for monitoring its effectiveness.
The system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives.
It can provide only reasonable assurance against material misstatement or loss. The Board has undertaken a review of
the aspects covered by the guidance and has identified risk management controls in the key areas of business objectives,
accounting, compliance, operations and secretarial as being matters of particular importance upon which it requires reports.
The Board believes that the existing arrangements, set out below, represent an appropriate framework to meet the internal
control requirements. Through these procedures, the Directors have kept under review the effectiveness of the internal
control systems throughout the period and up to the date of this report.
Although Provision 34 of the AIC Code (relating to an explicit declaration on the effectiveness of material internal controls)
is not yet applicable to the Company, the Board is taking steps to work towards compliance. During the year, the Audit
Committee discussed the Company’s approach to identifying material controls, including those operated by third-party
service providers, with assurance available through controls reports and management confirmations. This work will continue
during the coming year to ensure the Board is well positioned to make the required declaration.
Financial aspects of internal control
These are detailed in the Report of the Audit Committee.
Corporate Governance Statement continued
Section 2 – Governance 43
Other aspects of internal control
The Board holds at least four regular meetings each year, plus additional meetings as required. Between these meetings
there is regular contact with the Investment Adviser and the Company’s Secretary and Administrator.
The Board has agreed policies with the Investment Adviser on key operational issues and the Investment Adviser reports
in writing to the Board on operational and compliance issues prior to each meeting, and otherwise as necessary. The
Investment Adviser reports direct to the Audit Committee concerning the internal controls applicable to the Investment
Adviser’s dealing, investment and general office procedures.
The Directors receive quarterly updates from the Investment Adviser which details the holdings in the portfolio and
investment transactions. The Administrator, Company Secretary and AIFM report separately in writing to the Board
concerning risks and control matters within its purview, including internal financial control procedures and company
secretarial matters. Additional ad hoc reports are received as required and Directors have access at all times to the advice
and services of the corporate Company Secretary, which is responsible to the Board for ensuring that Board procedures are
followed, and that applicable rules and regulations are complied with.
The contacts with the Investment Adviser and the Administrator enable the Board to monitor the Company’s progress
towards its objectives and encompasses an analysis of the risks involved. The effectiveness of the Company’s risk
management and internal controls systems is monitored regularly and a formal review, utilising a detailed risk assessment
programme, takes place at least annually. This includes consideration of relevant service provider internal controls reports.
There are no significant findings to report from the review.
Principal risks
The Directors confirm that they have carried out a robust assessment of the Company’s emerging and principal risks,
including those that would threaten its business model, future performance, solvency or liquidity. The principal risks and
how they are being managed are set out in the Strategic Report.
Voting at Investee Companies AGM or General Meetings
The Company delegates responsibility for voting to Rising Sun Management Limited (“Rising Sun”). During the year, voting
was submitted in respect of 28 investee companies. In the majority of cases, Rising Sun voted in favour of all resolutions. In
certain instances, votes were cast against specific management resolutions where concerns were identified; however, on an
overall basis, Rising Sun’s voting stance for each investee company was supportive.
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Directors’ Remuneration Implementation Report
The Nomination and Remuneration Committee is responsible for reviewing the remuneration payable to the Directors taking into
account the relevant circumstances of the Company, the time commitment and relevant experience and skills of the Board and
the average fees paid to the Board of the Company’s competitors. The Nomination and Remuneration Committee is chaired by
Rachel Hill and consists of all the Directors.
The Remuneration Implementation Report for the period to 31 December 2025 has been prepared in accordance with sections
420-422 of the Companies Act 2006. The law requires the Company’s Auditor to audit certain sections of the Remuneration
Implementation Report; where this is the case, the relevant section has been indicated as such.
AGM approval of the Remuneration policy and remuneration implementation report
In accordance with the requirements of Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008, as amended (the “Regulations”), the Board is required to put forward for shareholder approval at its first AGM,
and on a triennial basis thereafter, a Remuneration Policy. Accordingly, the Remuneration Policy of the Company set out below was
proposed to shareholders via an ordinary resolution which is a binding resolution at the AGM held on 5 June 2025. The resolution
was passed including proxies representing 99.82% of the shares voted in favour of the resolution. Following the passing of the
ordinary resolution, the provisions set out in the below Remuneration Policy will remain in place until they are next submitted for
shareholder approval, expected to be at the Company’s AGM to be held in 2028. In the event of any proposed material variation to
the Remuneration Policy or should the Remuneration Policy or the Remuneration Implementation Report fail at the forthcoming
AGM, shareholder approval will be sought for a proposed revised Remuneration Policy prior to its implementation.
The Remuneration Implementation Report requires approval via an ordinary resolution on an annual basis. This resolution is
put to shareholders on an advisory, non-binding, basis which means that, if the resolution were to fail to attract sufficient votes
in favour, the Board would continue to be entitled to be remunerated and would not be required to amend their contractual
relationship with the Company. However, if the Remuneration Implementation Report were to be voted down by shareholders,
the Board would be required to resubmit the Remuneration Policy to shareholders at the AGM following the AGM at which the
Remuneration Implementation Report failed.
A non-binding ordinary resolution to approve the Directors’ Remuneration Implementation Report contained in the Annual Report
and Accounts for the year ended 31 December 2025 was put forward at the AGM held on 5 June 2025. The resolution was passed
including proxies representing 99.86% of the shares voted in favour of the resolution.
The Board takes an active role in shareholder engagement and particularly voting outcomes. Shareholders have the opportunity
to express their views and ask questions in respect of the Remuneration Policy and Remuneration Implementation Report at the
Annual General Meeting.
Loss of office
There are no agreements in place to compensate the Board for loss of office.
Remuneration Policy
All the Directors are non-executive directors and the Company has no other employees. The components of the
remuneration package for non-executive directors, which are contained in the Remuneration Policy are as detailed below:
Current and future policy
Component Director Purpose of reward Operation
Annual fee Chair of the Board For services as Chair of a Plc
Determined by the Nomination
& Remuneration Committee
Annual fee Other Directors
For services as non-executive
Directors of a Plc
Determined by the Nomination
& Remuneration Committee
Additional fee Chair of Audit Committee
For additional responsibility and
time commitment
Determined by the Nomination
& Remuneration Committee
Expenses All Directors
Reimbursement of expenses incurred in
the performance of duties
Submission of appropriate
documentation
In accordance with the Company’s Articles of Association, Board fees in aggregate cannot exceed £400,000 per annum,
unless shareholders approve via an ordinary resolution at a General Meeting such other sum.
Section 2 – Governance 45
Directors’ Service Contracts
The Directors do not have service contracts with the Company but have letters which outline the terms of their
appointment. In accordance with the Articles and AIC Code, the Board will seek annual re-election.
Fees payable on recruitment
The Board will not pay any incentive fees to any person to encourage them to become a Director of the Company. The Board
may, however, pay fees to external agencies to assist the Board in the search and selection of Directors. No such external
agency was engaged during the period under review.
Effective date
The Remuneration Policy is effective from the date of approval by shareholders.
Remuneration Implementation Report (Audited)
The table below provides a single figure for the total remuneration of each Director for the year ended 31 December 2025:
Directors Fees
to 31 December
2025
(£)
Directors Fees
to 31 December
2024
(£)
Change
from 2024
to 2025
Change
from 2023
to 2024
Change
from 2022
to 2023
Change
from 2021
to 2022
Change
from 2020
to 2021
Rosemary Morgan
47,000 43,800 7.2% 6.9% nil 17.1% nil
Chetan Ghosh 38,000 35,050 8.4% 6.2% nil 10.0% nil
Rachel Hill 31,700 29,535 7.3% 6.2% nil 3.0% nil
Alicia Ogawa 31,700 29,535 7.3% 6.2% nil 3.0% nil
Ayako Weissman 31,700 29,535 7.3% 6.2% nil 3.0% nil
Claire Boyle 31,700 29,535 7.3% 6.2%* n/a n/a n/a
Noel Lamb 11,551** 29,535 7.3% 6.2%* n/a n/a n/a
Total 223,351 226,525 (4.1)% 33.2% nil 7.8% nil
* Appointed on 10 October 2023.
** Resigned on 5 June 2025.
Directors receive fixed fees and are not entitled to receive from the Company:
• Performance related remuneration;
• Any benefits in kind except reasonable travel expenses in the course of travel to attend meetings and duties undertaken
on behalf of the Company;
• Share options;
• Rewards through a long-term incentive scheme;
• A pension or other retirement benefit; or
• Compensation for loss of office.
Fees
With effect from 1 January 2026, the Board remuneration is outlined in the table below:
Position
Fee per annum*
(GBP)
Board Chairman 47,000
Director 33,000
Audit Committee Chair (additional fee) 5,000
* Following a review of the Directors’ fees in November 2025, it was decided that the fees be increased in line with the average market levels for the
Directors with effect from 1 January 2026.
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Directors’ Remuneration Implementation Report continued
Directors’ indemnities
Subject to the provisions of the Companies Act 2006, the Company has agreed to indemnify each Director against all
liabilities which any Director may suffer or incur arising out of or in connection with any claim made or proceedings taken
against him/her, or any application made by him/her, on the grounds of his/her negligence, default, breach of duty or breach
of trust in relation to the Company or any Associated Company.
Performance
The following chart shows the performance of the Company’s NAV and share price (total return) by comparison for the period
since the Company was listed, assuming 100p was invested at the point the Company was listed. The Company does not have a
specific benchmark but has deemed the MSCI Japan Small Cap index to be the most appropriate comparator for its performance.
Relative importance of spend on pay
The following table sets out the total level of Directors’ remuneration compared to the distributions to shareholders by way
of dividends and the operating expenses and Investment Adviser’s fees and operating expenses incurred by the Company.
Year to
31 December
2025
£
Year to
31 December
2024
£
Change
%
Dividend income 11,386,000 9,125,000 24.8
Spend on Directors’ fees 223,351 227,000 (1.5)
Company’s operating expenses and Investment Adviser’s
fees 4,642,000 4,363,000 6.4
Dividends paid and payable to shareholders 10,754,000 6,147,000 74.9
The disclosure of the information in the table above is required under the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 with the exception of operating expenses which have been included
to show the total expenses of the Company.
NAVF NAV NAVF Share Price MSCI Japan MSCI Japan Small Cap Net Total Return
80
130
180
230
280
Feb 2020
Apr 2020
Jun 2020
Aug 2020
Oct 2020
Dec 2020
Feb 2021
Apr 2021
Jun 2021
Aug 2021
Oct 2021
Dec 2021
Feb 2022
Apr 2022
Jun 2022
Aug 2022
Oct 2022
Dec 2022
Feb 2023
Apr 2023
Jun 2023
Aug 2023
Oct 2023
Dec 2023
Feb 2024
Apr 2024
Jun 2024
Aug 2024
Oct 2024
Nov 2024
Dec 2024
Feb 2025
Apr 2025
Jun 2025
Aug 2025
Oct 2025
Nov 2025
Dec 2025
NAVF Stock Price
Section 2 – Governance 47
Directors’ holdings (Audited)
At 31 December 2025 and as at the date of this report, the Directors had the following holdings in the Company. There is no
requirement for Directors to hold shares in the Company. All holdings were beneficially owned.
Director
Ordinary Shares
As at
the date of this
report
Ordinary Shares
As at
31 December
2025
Ordinary Shares
As at
31 December
2024
Rosemary Morgan 41,450 41,450 41,450
Chetan Ghosh 40,000 40,000 40,000
Rachel Hill 115,791 115,791 115,791
Alicia Ogawa 25,000 25,000 25,000
Ayako Weissman 50,000 50,000 50,000
Claire Boyle nil nil nil
Noel Lamb N/A N/A 35,853
Statement
On behalf of the Board and in accordance with Part 2 of Schedule 8 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013, I confirm that the above Remuneration Policy and Remuneration
Implementation Report summarises, as applicable, for the year to 31 December 2025:
• The major decisions on Directors’ remuneration;
• Any substantial changes relating to Directors’ remuneration made during the period; and
• The context in which the changes occurred and decisions have been taken.
Rachel Hill
Chair of the Nomination and Remuneration Committee
7 April 2026
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Role of the Audit Committee
The AIC Code recommends that Boards should establish an audit committee consisting of at least three, or in the case of
smaller companies, two independent non-executive directors. The Board is required to satisfy itself the audit committee as a
whole should have competence relevant to the sector in which the company operates. The main role and responsibilities of
the Audit Committee are set out in the Committee’s terms of reference covering certain matters described in the AIC Code.
The Board considers that the Company has complied with the provisions of the AIC Code relating to the Audit Committee
throughout the year. The terms of reference are available on the Company’s website or on request from the Company
Secretary.
Composition
The Audit Committee comprises all members of the Board and is chaired by Chetan Ghosh. All members of the Audit
Committee are independent non-executive Directors. The Board considers that, given the size of the Board, it is appropriate
for the full Board to act as the Audit Committee. The AIC Code permits the Chairman of the Board to be a member of but
not chair the Audit Committee if they were independent on appointment. The Chairman of the Board was independent
on appointment and continues to be, and as such the Directors feel it is appropriate for the Chairman of the Board to be
a member of the Audit Committee. The Board is satisfied that the Audit Committee as a whole has the necessary skills,
experience and knowledge relevant to the Company’s activities as an investment trust. Chetan Ghosh is considered by the
Board to have recent and relevant financial experience.
Meetings of the Audit Committee
The Audit Committee meets formally at least twice a year for the purpose, amongst other things, of advising the Board on
the appointment, effectiveness, independence, objectivity, and remuneration of the external Auditor. The Audit Committee
monitors the integrity of the financial statements of the Company and any formal announcements relating to the Company’s
financial performance, reviewing significant financial reporting judgements contained in them. The Audit Committee
also reviews the Company’s internal financial controls and its internal control, risk management systems and reviews
the whistleblowing arrangements of the Investment Adviser, AIFM and Administrator. As part of this process, the Audit
Committee reviews reports and assurances received from these service providers, including internal control and assurance
reports, and considers whether any significant control issues have arisen during the year. The provision of non-audit services
by the Auditor are reviewed against the Committees policy described below.
Financial statements and significant accounting matters
The Audit Committee reviewed the financial statements and considered the following significant accounting matters in
relation to the Company’s financial statements for the year ended 31 December 2025.
Valuation and existence of investments
The Company holds the majority of its assets in quoted investments. The existence and valuation of these investments is the
most material matter in the production of the financial statements. The Audit Committee reviewed the procedures in place
for ensuring accurate valuation and existence of investments and discussed the valuation of the Company’s investments at
the period end with the Investment Adviser and reviewed their existence with the Administrator and other service providers.
Investments are valued using independent pricing sources and the holding quantities at the period end were agreed to the
Company’s Custodian’s records.
Recognition of income
Income may not be accrued in the correct period and/or incorrectly allocated to revenue or capital. The Audit Committee
reviewed the Administrator’s procedures for recognition of income and reviewed the treatment of any special dividends
receivable in the year.
Geo-politics
During the financial year under review, the Committee continued to monitor the geopolitical landscape, including the
ongoing conflict in Ukraine, tensions in the Middle East and broader global trade and political developments. Such
events have the potential to heighten market volatility and impact investor sentiment, which in turn may affect Company
performance. The Committee also remained attentive to inflationary pressures, interest rate movements and foreign
exchange volatility. These matters are considered as part of the Committee’s broader risk assessment and its evaluation of
the Company’s ability to achieve its investment objective.
Report of the Audit Committee
Section 2 – Governance 49
The Committee also reviewed the operational resilience of the Company’s key service providers in connection with the
mitigation of the business risks posed by geopolitical events. The Committee is satisfied that service providers have
continued to operate effectively throughout the period, with no disruption to services or significant operational failures. The
Committee has also sought and received confirmation that relevant external providers continue to comply with applicable
sanctions regimes and regulatory requirements.
Financial statement presentation
The Audit Committee obtained assurances from the Investment Adviser and the Company Secretary that the financial
statements had been prepared appropriately.
Going concern
The financial statements could be prepared on an incorrect accounting basis which might result in an incorrect valuation
of financial assets and liabilities. The Audit Committee reviewed the Company’s financial resources and concluded that it is
appropriate for the Company’s financial statements to be prepared on a going concern basis as described in the Directors’
Report on page 33.
Material controls
Although Provision 34 of the AIC Code (relating to an explicit declaration on the effectiveness of material internal controls)
is not yet applicable to the Company, the Board is taking steps to work towards compliance. During the year, the Audit
Committee discussed the Company’s approach to identifying material controls, including those operated by third-party
service providers, with assurance available through controls reports and management confirmations. This work will continue
during the coming year to ensure the Board is well positioned to make the required declaration.
Conclusion with respect to the annual report and financial statements
The Audit Committee has concluded that the annual report for the year ended 31 December 2025, taken as a whole, is fair,
balanced and understandable and provides the information necessary for Shareholders to assess the Company’s position
and performance, business model and strategy. The Audit Committee has reported its conclusions to the Board. The Audit
Committee reached this conclusion through a detailed review of the Annual Report and accounts, consideration of draft
versions of the report, discussions with the Investment Adviser, Administrator and Company Secretary, and review of the
external Auditor’s report and findings.
Auditor
Provision of non-audit services
The Audit Committee has put a policy in place on the supply of any non-audit services provided by the external Auditor. Such
services are considered on a case-by-case basis and may only be provided to the Company if the provision of such services
is at a reasonable and competitive cost and does not constitute a conflict of interest or potential conflict of interest which
would prevent the Auditor from remaining objective and independent.
No non-audit services were provided by the Auditor during the year.
Effectiveness of external audit
BDO LLP has been the Company’s Auditor since inception. The Audit Committee reviewed the audit planning and the
standing, skills and experience of the firm and the audit team. The Audit Committee also considered the independence of
BDO and the objectivity of the audit process. BDO has confirmed that it is independent of the Company and has complied
with relevant auditing standards. No modifications were required to the external audit approach. The Audit Committee
received a presentation of the audit plan from the external Auditor prior to the commencement of the 2025 audit and a
presentation of the results of the audit following completion of the main audit testing. Additionally, the Audit Committee
received feedback from the Investment Adviser and Administrator regarding the effectiveness of the external audit process.
The Audit Committee is satisfied that BDO LLP has provided effective independent challenge in carrying out its
responsibilities. After due consideration, the Audit Committee recommends the re-appointment of BDO LLP, and their
re-appointment will be put forward to the Company’s shareholders at the 2026 AGM.
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Report of the Audit Committee continued
Internal audit
The Audit Committee has considered the requirement for an internal audit function and considers that this is not
appropriate given the nature and circumstances of the Company. The Audit Committee instead places reliance on the
internal control frameworks and internal audit functions of the Investment Adviser, AIFM and Administrator, and receives
regular reports on the operation and effectiveness of those controls. The Audit Committee keeps the need for an internal
function under periodic review. The Investment Adviser reports the key conclusions of their internal audit report to the
Company’s Audit Committee.
Committee evaluation
The Audit Committee’s activities fell within the scope of the review of Board effectiveness performed in the period. Details of
this process can be found under ‘Board and Chairman evaluation’ on page 41.
Chetan Ghosh
Chair of the Audit Committee
7 April 2026
Section 2 – Governance 51
The Directors are responsible for preparing the annual report and the financial statements in accordance with UK adopted
international accounting standards and applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the Directors are
required to prepare the Company’s financial statements in accordance with UK adopted international accounting standards.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the company and of the profit or loss for the company for that period.
In preparing these financial statements, the Directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and accounting estimates that are reasonable and prudent;
• State whether they have been prepared in accordance with UK adopted international accounting standards, subject to
any material departures disclosed and explained in the financial statements;
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will
continue in business; and
• Prepare a Directors’ report, a Strategic report and Directors’ remuneration report which comply with the requirements of
the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company
transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to
ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the annual
report and accounts, taken as a whole, is fair, balanced, and understandable and provides the information necessary for
shareholders to assess the Company’s performance, business model and strategy.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a website.
Financial statements are published on the Company website in accordance with legislation in the United Kingdom governing
the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also
extends to the ongoing integrity of the financial statements contained therein.
Directors’ responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
• The financial statements have been prepared in accordance with the applicable set of accounting standards, and give a
true and fair view of the assets, liabilities, financial position and profit and loss of the company.
• The Annual Report includes a fair review of the development and performance of the business and the financial position
of the company, together with a description of the principal risks and uncertainties that they face.
Directors’ Statement as to the Disclosure of Information to Auditor
All of the current Directors have taken all the steps that they ought to have taken to make themselves aware of any
information needed by the Company’s Auditor for the purposes of their audit and to establish that the Auditor are aware of
that information. The Directors are not aware of any relevant audit information of which the Auditor are unaware.
For and on behalf of the Board
Rosemary Morgan
Chairman of the Board of Directors
7 April 2026
Statement of Directors’ Responsibilities
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Report on the audit of the financial statements
Opinion
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s affairs as at 31 December 2025 and of its profit and cash flows for
the year then ended;
• have been properly prepared in accordance with UK adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Nippon Active Value Fund Plc (the ‘Company’) for the year ended 31 December 2025
which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity,
the Statement of Cash Flows and notes to the accounts, including material accounting policy information. The financial reporting
framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by the FRC’s
Ethical Standard were not provided to the Company and we remain independent of the Company in conducting our audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Company’s
ability to continue to adopt the going concern basis of accounting included:
• Evaluating the appropriateness of the Directors’ method of assessing going concern in light of economic and market
conditions by reviewing the information used by the Directors in completing their assessment;
• Evaluating the sensitivity analysis applied by the Directors in their going concern assessment including the impact of a
significant reduction in the fair value of investments;
• Assessing the appropriateness of the Directors’ assumptions and judgements made in their base case and stress tested forecasts
including consideration of the available cash and liquid assets relative to forecast expenditure and other commitments;
• Challenging the Directors’ assumptions and judgements made in their forecasts by performing an independent analysis
of the liquidity of the portfolio; and
• Reviewing the disclosures in the financial statements relating to going concern to assess whether they are consistent
with the Company’s circumstances.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are authorised for issue. However, because not all future events
or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern.
In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors
considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
Independent Auditor’s report to the members of Nippon
Active Value Fund plc
Section 2 – Governance 53
Overview
Key audit matters Valuation and ownership of quoted investments
Materiality Company financial statements as a whole
£4.3m (2024: £3.6m) based on 1% (2024: 1%) of net assets
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company and its environment, the applicable financial reporting
framework and the system of internal control. We identified and assessed the risks of material misstatement of the financial
statements. We then applied professional judgement to focus our audit procedures on the areas that posed the greatest risk
of material misstatement to the financial statements. We continually assessed risks throughout our audit, revising the risks
where necessary, with the aim of reducing the risk of material misstatement to an acceptable level, to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key audit matter
How the scope of our audit addressed the
key audit matter
Valuation and ownership of
investments
(Note 2 and 3 to the financial
statements)
The investment portfolio at the year-
end comprised 98% of listed equity
investments.
There is a risk that the prices used for the
listed investments held by the Company
are not reflective of fair value and the
risk that errors made in the recording of
investment holdings result in the incorrect
reflection of investments owned by the
Company.
Therefore, we considered the valuation
and ownership of listed investments to
be the most significant audit area as the
listed investments also represent the
most significant balance in the financial
statements and underpin the principal
activity of the Company.
Furthermore, we consider the valuation
disclosures to be a significant area as they
are expected to be a key area of interest
for the users of the financial statements.
For these reasons and the materiality of
the balance in relation to the financial
statements as a whole, we considered this
to be a key audit matter.
We responded to this matter by testing
the valuation and ownership of the whole
portfolio of listed investments. We performed
the following procedures:
1. Confirmed the year-end bid price was used
by agreeing to externally listed prices;
2. Assessed if there were contra indicators,
such as liquidity considerations, to suggest
bid price is not the most appropriate
indication of fair value by considering the
realisation period for individual holdings;
3. Recalculated the valuation by multiplying
the number of shares held per the
statement obtained from the custodian by
the valuation per share; and
4. Obtained direct confirmation of the number
of shares held per equity investment from
the custodian regarding all investments held
at the balance sheet date.
5. We also considered the completeness,
accuracy and clarity of investment-related
disclosures against the requirements of
relevant accounting standard.
Key observations:
Based on our procedures performed we
did not identify any matters to suggest the
valuation or ownership of the listed equity
investments was not appropriate.
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Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence
the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a
lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements
below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Company financial statements
2025
£m
2024
£m
Materiality 4.3 3.6
Basis for determining materiality 1% of net assets
Rationale for the benchmark applied As an investment trust, the net asset value is the key
measure of performance for users of the financial
statements.
Performance materiality 3.2 2.7
Basis for determining performance materiality 75% of materiality
Rationale for the percentage applied for performance
materiality
The level of performance materiality applied was
set after having considered a number of factors
including the expected total value of known and likely
misstatements and the level of transactions in the year.
Reporting threshold
We agreed with the Audit and Risk Committee that we would report to them individual audit differences in excess of
£210,000 (2024: £180,000). We also agreed to report differences below this threshold that, in our view, warranted reporting
on qualitative grounds.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the
Annual Report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The UK Listing Rules sourcebook requires us to review the Directors’ statement in relation to going concern, longer-term
viability and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of
the UK Corporate Governance Code specified for our review.
Independent Auditor’s report to the members of Nippon
Active Value Fund plc continued
Section 2 – Governance 55
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern and
longer-term viability
• The Directors’ statement with regards to the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified set out on page 33;
• The Directors’ explanation as to their assessment of the Company’s prospects, the period
this assessment covers and why the period is appropriate set out on page 23; and
• The Directors’ statement on whether they have a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities set out on page 33.
Other Code provisions • Directors’ statement on fair, balanced and understandable set out on page 49;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on page 23;
• The section of the annual report that describes the review of effectiveness of risk
management and internal control systems set out on page 42; and
• The section describing the work of the audit committee set out on page 48.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by
the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the
financial year for which the financial statements are prepared is consistent with the
financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance
with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment
obtained in the course of the audit, we have not identified material misstatements in
the strategic report or the Directors’ report.
Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been
properly prepared in accordance with the Companies Act 2006.
Matters on which we
are required to
report by exception
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit
have not been received from branches not visited by us; or
• the financial statements and the part of the Directors’ remuneration report to be
audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
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Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
However, the primary responsibility for the prevention and detection of fraud rests with both Those Charged with
Governance of the Company and management.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Company and the industry in which it operates;
• Investment Manager, Administrator and those charged with governance, including the Audit Committee; and
• Obtaining an understanding of the Company’s policies and procedures regarding compliance with laws and regulations
we considered the significant laws and regulations to be the Companies Act 2006, the FCA’s UK Listing and Disclosure
Guidance and Transparency Rules, the principles of the AIC Code of Corporate Governance, industry practice represented by
the AIC SORP, the applicable accounting framework, and qualification as an Investment Trust under UK tax legislation as any
non-compliance of this would lead to the Company losing various deductions and exemptions from corporation tax.
Our procedures in respect of the above included:
• Agreement of the financial statement disclosures to underlying supporting documentation;
• Enquiries of the Investment Manager, Administrator and Those Charged with Governance relating to the existence of any
non-compliance with laws and regulations;
• Reviewing minutes of meetings of Those Charged with Governance throughout the period for instances of non-
compliance with laws and regulations; and
• Reviewing the calculation in relation to Investment Trust compliance to check that the Company was meeting its
requirements to retain their Investment Trust status.
Independent Auditor’s report to the members of Nippon
Active Value Fund plc continued
Section 2 – Governance 57
Fraud
We assessed the susceptibility of the financial statement to material misstatement including fraud.
Our risk assessment procedures included:
• Enquiry with the Investment Manager, Administrator and Those Charged with Governance regarding any known or
suspected instances of fraud;
• Obtaining an understanding of the Company’s policies and procedures relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to fraud.
• Review of minutes of meetings of Those Charged with Governance for any known or suspected instances of fraud; and
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements.
Based on our risk assessment, we considered the area most susceptible to fraud to be management override of controls.
Our procedures in respect of the above included:
• Considered the opportunity and incentive to manipulate accounting entries and reviewed to check if any relevant
adjustments made in the period end financial reporting process; and
• Included an element of unpredictability by testing a sample of low value items.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is
from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the Board of Directors on 27 August 2020 to audit the financial statements for the year ended
31 December 2020.Our total uninterrupted period of engagement is six years, covering the years ended 31 December 2020
to 31 December 2025.
Our audit opinion is consistent with the additional report to the Audit and Risk Committee.
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Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. 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 auditor’s 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.
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.15R - 4.1.18R,
these financial statements will form part of the Electronic Format Annual Financial Report filed on the National Storage
Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides no assurance over
whether the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
Eran Wieder (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
7 April 2026
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Independent Auditor’s report to the members of Nippon
Active Value Fund plc continued
Section 3 – Financial Statements 59
Year ended
31 December 2025
Year ended
31 December 2024
Note
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Gains on investments 3 – 58,885 58,885 – 46,508 46,508
Income 4 11,389 – 11,389 9,132 – 9,132
Foreign exchange losses – (375) (375) – (1,834) (1,834)
Investment adviser fees 5 (656) (2,623) (3,279) (583) (2,334) (2,917)
Other operational expenses 6 (1,363) – (1,363) (1,446) – (1,446)
Profit before finance costs and taxation 9,370 55,887 65,257 7,103 42,340 49,443
Finance costs (51) – (51) – – –
Profit before taxation 9,319 55,887 65,206 7,103 42,340 49,443
Taxation 7 (1,138) – (1,138) (913) – (913)
Profit and comprehensive income for the year 8,181 55,887 64,068 6,190 42,340 48,530
Earnings per Ordinary Share - Basic and diluted 12 4.30p 29.39p 33.69p 3.27p 22.39p 25.66p
There is no other comprehensive income and therefore the ‘Profit and comprehensive income for the year’ is the total
comprehensive income for the year.
The total column of the above statement is the profit and loss account of the Company. All revenue and capital items in the
above statement derive from continuing operations.
The supplementary revenue and capital columns, including the earnings per Ordinary Share, are prepared in accordance
with the Statement of Recommended Practice (“SORP”) issued by the Association of Investment Companies.
The notes on pages 63 to 81 form an integral part of these financial statements.
Statement of Comprehensive Income
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Note
As at
31 December
2025
£’000
As at
31 December
2024
£’000
Non-current assets
Investments held at fair value through profit or loss 3 419,934 345,593
Current assets
Cash and cash equivalents 9,947 19,889
Trade and other receivables 9 1,409 1,270
11,356 21,159
431,290 366,752
Current liabilities
Trade and other payables 10 (671) (1,310)
Total liabilities (671) (1,310)
Net assets 430,619 365,442
Equity
Share capital 11 1,925 1,891
Share premium 239,056 231,834
Capital reserve 180,937 125,050
Revenue reserve 8,701 6,667
Total equity 430,619 365,442
Net asset value per Ordinary Share 13 223.68p 193.21p
Approved by the Board of Directors on 7 April 2026 and signed on their behalf by:
Rosemary Morgan
Chairman
Nippon Active Value Fund plc incorporated in England and Wales with registered number 12275668.
The notes on pages 63 to 81 form an integral part of these financial statements.
Statement of Financial Position
Section 3 – Financial Statements 61
Year ended 31 December 2025 Note
Share
capital
£’000
Share
premium
account
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
£’000
Closing balance as at 1 January 2025 1,891 231,834 125,050 6,667 365,442
Profit and comprehensive income for
the year – – 55,887 8,181 64,068
Issue of Ordinary Shares 11 34 7,397 – – 7,431
Share issue costs – (175) – – (175)
Dividends paid 8 – – – (6,147) (6,147)
Closing balance as at 31 December 2025 1,925 239,056 180,937 8,701 430,619
Year ended 31 December 2024 Note
Share
capital
£’000
Share
premium
account
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
£’000
Opening balance as at 1 January 2024 1,891 231,834 82,710 3,503 319,938
Profit and comprehensive income for
the year – – 42,340 6,190 48,530
Dividends paid 8 – – – (3,026) (3,026)
Closing balance as at 31 December 2024 1,891 231,834 125,050 6,667 365,442
The capital reserve as at 31 December 2025 includes realised gains of £72,211,000 (31 December 2024: realised gains of
£67,021,000).
The revenue reserve and realised element of the capital reserve represents the amount of the Company’s retained and
distributable reserves.
The notes on pages 63 to 81 form an integral part of these financial statements.
Statement of Changes in Equity
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Note
Year ended
31 December
2025
£’000
Year ended
31 December
2024
£’000
Operating activities cash flows
Profit before finance costs and taxation* 65,257 49,443
Adjustment for:
Gains on investments 3 (58,885) (46,508)
Foreign exchange losses 375 1,834
Decrease/(increase) in other receivables 32 (177)
Increase/(decrease) in other payables 40 (56)
Tax withheld on overseas income 7 (1,138) (913)
Net cash flow from operating activities 5,681 3,623
Investing activities cash flows
Purchase of investments 3 (61,400) (163,798)
Sale of investments 3 45,094 162,667
Net cash flow used in investing activities (16,306) (1,131)
Financing activities cash flow
Proceeds from issue of Ordinary Shares 11 7,431 –
Share issue costs (175) –
Dividends paid 8 (6,147) (3,026)
Bank loans drawn 4,957 –
Bank loans repaid (4,814) –
Loan interest and other charges paid (51) –
Effect of foreign exchange movement (143) –
Net cash flow from/(used in) financing activities 1,058 (3,026)
Decrease in cash and cash equivalents (9,567) (534)
Effect of exchange rate changes on cash and cash equivalents (375) (1,834)
Cash and cash equivalents at start of year 19,889 22,257
Cash and cash equivalents at end of year 9,947 19,889
* Cash inflow from dividends received for the year is £10,074,000 (31 December 2024: £7,766,000).
The notes on pages 63 to 81 form an integral part of these financial statements.
Statement of Cash Flows
Section 3 – Financial Statements 63
1. GENERAL INFORMATION
The Company is a closed-ended investment company incorporated on 22 October 2019 in England and Wales with
registered number 12275668 and registered as an investment company under Section 833 of Companies Act 2006, as
amended from time to time. On 21 February 2020, the Company’s shares were admitted to the Specialist Fund Segment
of the Main Market of the London Stock Exchange. On the same day, trading of the Ordinary Shares commenced on the
London Stock Exchange. On 11 October 2023, the Company’s Ordinary Shares were admitted to the Official List of the
FCA and trading on the main market for listed securities of the London Stock Exchange.
The investment objective of the Company is to provide shareholders with attractive long-term capital growth primarily
through the active management of a focused portfolio of quoted companies that have the majority of their operations in,
or revenue derived from, Japan, or a majority of whose consolidated net assets are held in Japan, or that are included in the
TOPIX, and that have been identified by the Investment Adviser as being undervalued.
The principal activity of the Company is that of an investment trust company within the meaning of section 1158 of the
Corporation Tax Act 2010.
FundRock Management Company (Guernsey) Limited acts as the Company’s Alternative Investment Fund Manager (the
“AIFM”) for the purposes of The UK’s implementation of Directive 2011/61/EU of the European Parliament and of the
Council of 8 June 2011 on Alternative Investment Fund Managers, together with Commission Delegated Regulation (EU)
No. 231/2013 which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018, and any transposing
legislation incorporating the same into UK law (including, but not limited to, the UK Alternative Investment Fund Managers
Regulations 2013 (SI 2013/1773), as amended by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit)
Regulations 2019), all as may be amended or supplemented from time to time.
The Company’s Investment Adviser is Rising Sun Management Limited.
NSM Funds (UK) Limited, the Company’s appointed Administrator (the “Administrator”), provides administrative and
company secretarial services to the Company under the terms of an administration agreement between the Company and
the Administrator.
The Company’s registered office is 4th floor, 46-48 James Street, London W1U 1EZ.
2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES
a) Basis of preparation
Statement of compliance
The financial statements have been prepared in accordance with UK adopted international accounting standards.
The financial statements have also been prepared as far as is relevant and applicable to the Company in accordance with the
Statement of Recommended Practice (“SORP”) issued by Association of Investment Companies (“AIC”) in July 2022.
Going Concern
The Directors have adopted the going concern basis in preparing the financial statements. The Directors do not foresee
any immediate material risk to the Company’s investment portfolio, however, a prolonged and deep market decline could
lead to falling values in the underlying business or interruptions to cash flow. The following is a summary of the Directors’
assessment of the going concern status of the Company.
The Directors have assessed the Company’s ability to continue as a going concern for the period under review, being at least
12 months from the date on which the financial statements are authorised for issue.
The assessment took into consideration the risks and impact of actual and emerging risks such as those relating to the
macroeconomic political and geopolitical environment including the continuing conflicts in Ukraine and the Middle East and
trade tariffs. Further details on the impact of the market, liquidity and credit risks and how they are managed are disclosed
in note 15 to the Accounts.
The Company is subject to a continuation vote in 2027. Having regard to the Company’s performance and track record, the
Board are confident that the continuation vote will be passed by the shareholders at the 2027 AGM.
Notes to the Accounts
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Notes to the Accounts continued
2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES continued
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence
for at least twelve months from the date of this report. In reaching this conclusion, the Directors have considered the
liquidity of the Company’s portfolio of investments as well as its cash position, income and expense flows. The Company’s
net assets at 31 December 2025 were £430,619,000 (31 December 2024: £365,442,000). As at 31 December 2025, the
Company held £9,947,000 (31 December 2024: £19,889,000) in cash. The total expenses for the year ended 31 December
2025 were £4,642,000 (31 December 2024: £4,363,000). The ongoing charges ratio represented approximately 1.12%
(31 December 2024: 1.18%) of average net assets during the year. At the date of approval of this document, based on the
aggregate of investments and cash held, the Company has substantial operating expenses cover.
Use of estimates and judgements
The preparation of the financial statements and the manner in which they are presented requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates. See below paragraph for judgement
around determination of the functional and presentation currency.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised
in the year in which the estimates are revised and in any future periods affected.
Fair value measurement and levelling of investments
Investments are measured at fair value in accordance with IFRS 13 and classified within the fair value hierarchy (Levels 1, 2
or 3) based on the lowest level significant input.
Judgement is required in selecting appropriate valuation techniques and determining whether inputs are observable for the
purposes of measurement and classification within the fair value hierarchy.
Where investments are not quoted in an active market, fair value may be determined by reference to quoted prices in
inactive markets or to observable market data for similar instruments (Level 2). Where observable inputs are not available,
valuation techniques incorporating unobservable inputs, such as discount rates, forecast cash flows and credit assumptions,
are applied (Level 3).
Classification within Level 3 involves significant estimation uncertainty, and changes in key assumptions could materially
affect carrying values. Further details of hierarchy classification are disclosed in note 3.
Basis of measurement
The financial statements have been prepared on the historical cost basis except for financial instruments at fair value
through profit or loss, which are measured at fair value.
Functional and presentation currency
The financial statements are presented in sterling, which is the Company’s functional currency. The Company’s investments
are denominated in Japanese yen, however, the Company’s shares are issued in sterling. In addition, a substantial majority
of the Company’s expenses are paid in sterling. It is also expected that the Company’s dividend shall be declared and paid in
sterling. All financial information presented in sterling has been rounded to the nearest thousand pounds.
The Company is required to identify its functional currency, being the currency of the primary economic environment in
which the Company operates. The Board, having regard to the currency of the Company’s share capital and the predominant
currency in which its shareholders operate, has determined that sterling is the functional currency. Sterling is also the
currency in which the financial statements are presented.
New standards, amendments and interpretations adopted from 1 January 2025
The following amendment is effective for the year ended 31 December 2025 and has been adopted by the Company.
Section 3 – Financial Statements 65
Standard, amendment or interpretation
Effective for
annual periods
beginning on or
after
IAS 21 – Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates)
The amendments clarify when a currency is exchangeable into another currency and specify how
an entity estimates the spot exchange rate when exchangeability is lacking, together with related
disclosures. The Directors have assessed the impact of these amendments and concluded that
they did not have a material impact on the Company’s financial statements for the year ended
31 December 2025, as the Company’s transactions and exposures are predominantly denominated in
currencies that are readily exchangeable.
1 January 2025
There are no other standards, amendments to standards or interpretations that are effective for annual reporting periods
beginning on or after 1 January 2025 that have a material effect on the financial statements of the Company.
New Standards, amendments and interpretations issued but not yet effective
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are
not mandatory for 31 December 2025 reporting periods and have not been early adopted by the Company.
Standard, amendment or interpretation
Effective for
annual periods
beginning on or
after
IFRS 18 – Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18 – Presentation and Disclosure in Financial Statements, which
introduces new requirements to improve the presentation and disclosure of financial performance.
The standard introduces defined categories and subtotals in the statement of profit or loss, enhanced
requirements for management-defined performance measures, and more structured principles for
the aggregation and disaggregation of information in the financial statements. IFRS 18 is effective for
annual reporting periods beginning on or after 1 January 2027.
1 January 2027
Amendments to the Classification and Measurement of Financial Instruments – Amendments to
IFRS 9 and IFRS 7
In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial
Instruments (Amendments to IFRS 9 and IFRS 7). The amendments clarify certain aspects of the
classification and measurement requirements in IFRS 9, including the assessment of contractual cash flow
characteristics (SPPI) and the timing of recognition and derecognition of financial assets and liabilities,
and introduce related disclosure requirements in IFRS 7. The amendments also provide an optional
approach for determining the classification of liabilities settled via electronic cash transfer systems. The
amendments are effective for annual reporting periods beginning on or after 1 January 2026.
1 January 2026
IFRS 19 – Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19 – Subsidiaries without Public Accountability: Disclosures. The
standard permits eligible subsidiaries to apply reduced disclosure requirements while applying the
recognition and measurement requirements of IFRS Accounting Standards, with the aim of reducing
disclosure burden without reducing the usefulness of financial information. IFRS 19 is effective for
annual reporting periods beginning on or after 1 January 2027.
1 January 2027
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Notes to the Accounts continued
Standard, amendment or interpretation
Effective for
annual periods
beginning on or
after
Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7
In December 2024, the IASB issued Contracts Referencing Nature-dependent Electricity (Amendments
to IFRS 9 and IFRS 7). The amendments provide clarification on the application of the own-use
requirements, hedge accounting and related disclosure requirements for contracts that reference
nature-dependent electricity. The amendments are effective for annual reporting periods beginning
on or after 1 January 2026.
1 January 2026
Annual Improvements to IFRS Accounting Standards (2024)
In 2024, the IASB issued Annual Improvements to IFRS Accounting Standards (2024), which comprise
a collection of minor amendments to a number of IFRS Accounting Standards intended to clarify
wording or correct relatively minor unintended consequences. The amendments are effective for
annual reporting periods beginning on or after 1 January 2026.
1 January 2026
b) Material accounting policies
The following accounting policies have been applied consistently throughout the reporting year.
Investments
Upon initial recognition, investments are classified by the Company “at fair value through profit or loss”. They are accounted
for on the date they are traded and are included initially at fair value which is taken to be their cost. Subsequently quoted
investments are valued at fair value, which is the bid market price, or if bid price is unavailable, last traded price on the
relevant exchange. Subsequently, investments are revalued at fair value, which is the bid market price for listed investments
over the time until they are sold; any unrealised gains/losses are included in the fair value of the investments. Investments
are derecognised on the trade date of their disposal, which is the point where the Company transfers substantially all the
risks and rewards of the ownership of the financial asset.
Changes in the fair value of investments held at fair value through profit or loss and gains or losses on disposal are included
in the capital column of the Statement of Comprehensive Income within “gains on investments”.
Unquoted investments are classified as Level 3 under IFRS 13 where observable market prices are not available. Such
investments are valued at fair value in accordance with IFRS 13 and recognised valuation techniques.
An independent external valuation agent, appointed by the Board, performs valuations of unquoted holdings. AIFM then
oversees the valuation process, reviews draft valuation reports, challenges key assumptions and methodologies, and
recommends final valuations for inclusion in the Company’s NAV. The Board retains ultimate responsibility for the valuation
framework and oversight of Level 3 investments.
Valuations are performed on a half-yearly basis in line with the Company’s reporting cycle. The valuation agent prepares
reports using recognised valuation methodologies appropriate to the nature and stage of each investee company. These
may include discounted cash flow analysis, comparable company multiples, recent transaction prices (adjusted where
necessary) and net asset value approaches. The methodology selected reflects the availability and reliability of financial
information and relevant market data. The AIFM undertakes a detailed review of each valuation, including analysis of key
inputs and assumptions, assessment of movements compared with prior periods, and consideration of relevant market or
company-specific developments. Material valuation changes, methodological adjustments or significant judgements are
discussed with the valuation agent and, where appropriate, escalated to the Board. At the year end, additional procedures
are performed to assess whether any post-reporting date events or developments require adjustment or disclosure,
ensuring that valuations reflect all material information available up to the date of approval of the financial statements.
2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES continued
Section 3 – Financial Statements 67
The valuation agent operates independently of the investment decision-making process. Any actual or potential conflicts of
interest are identified and appropriately managed. The valuation policy is reviewed at least annually and approved by the
Board.
Taxation
Investment trusts which have approval under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation on
capital gains. The Company has been granted approval as an Investment Trust by HMRC.
Irrecoverable withholding tax is recognised on any overseas dividends on an accruals basis using the applicable rate for the
country of origin.
Segmental reporting
The Chief Operating Decision Maker, which is the Board, is of the opinion that the Company is engaged in a single segment
of business. The financial information used by the Chief Operating Decision Maker to manage the Company presents the
business as a single segment.
Dividends payable
Dividends payable to shareholders are recognised in the year of the ex-dividend date.
Income
Income includes investment income from financial assets at fair value through profit or loss and finance income. Investment
income from financial assets at fair value through profit or loss is recognised in the Statement of Comprehensive Income
within investment income when the Company’s right to receive payments is established.
Dividend income is presented gross of non-recoverable withholding taxes, which are disclosed separately in the Statement
of Comprehensive Income.
Dividends receivable arising from companies within the United Kingdom are classified as UK dividend income and all other
income is classified as overseas dividend income.
Special dividends are assessed on their individual merits and may be credited to the Statement of Comprehensive Income as
a capital item if considered to be closely linked to reconstructions of the investee company or other capital transactions.
Other income comprises interest earned on cash held on deposit. Other income is recognised on a receipt basis.
Expenses
All expenses are accounted for on accruals basis. In respect of the analysis between revenue and capital items presented
within the Statement of Comprehensive Income, the Investment Adviser’s fees are split 20% to revenue and 80% to capital.
All other expenses are recognised as revenue.
Foreign currency
Transactions denominated in foreign currencies are translated into sterling at the exchange rates as at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the period end are reported at the rates
of exchange prevailing at the period end. Any gain or loss arising from a change in exchange rates subsequent to the date of
the transaction is included as an exchange gain or loss to capital or revenue in the Statement of Comprehensive Income as
appropriate. Foreign exchange movements on investments are included in the Statement of Comprehensive Income within
“gains on investments”.
Cash and cash equivalents
Cash and cash equivalents include deposits held at call with banks and other short-term deposits with original maturities of
three months or less.
Trade and other payables
Trade and other payables are initially recognised at fair value, and subsequently re-measured at amortised cost using the
effective interest method where necessary.
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Notes to the Accounts continued
2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES continued
Nature and purpose of equity and reserves:
Share capital and share premium
Share capital represents the 1p nominal value of the issued share capital. Ordinary Shares are classified as equity. Costs
directly attributable to the issue of new shares (that would have been avoided if there had not been a new issue of new
shares) are recognised against the value of the ordinary share premium.
The share premium account arose from the net proceeds of new shares and from the excess proceeds received on the sale
of shares from treasury over the repurchase cost.
Capital reserve
Profits and losses achieved by selling investments, changes in fair value arising upon the revaluation of investments
that remain in the portfolio and other capital expenditure are all charged to the capital column of the Statement of
Comprehensive Income and allocated to the capital reserve. The capital reserve reflects any:
• gains or losses on the disposal of investments;
• exchange movements of a capital nature;
• the increases and decreases in the fair value of investments which have been recognised in the capital column of the
Statement of Comprehensive Income; and
• expenses which are capital in nature.
Any gains in the fair value of investments that are not readily convertible to cash are treated as unrealised gains in the capital
reserve.
Revenue reserve
The revenue reserve reflects all income and expenditure recognised in the revenue column of the Statement of
Comprehensive Income and is distributable by way of dividends.
The Company’s distributable reserve consists of the capital reserve attributable to realised profit and the revenue reserve.
3. INVESTMENTS
(a) Investments held at fair value through profit or loss
Investment at fair value through profit or loss
As at
31 December
2025
£’000
As at
31 December
2024
£’000
Listed on a recognised overseas exchange 412,835 344,150
Unquoted investments 7,099 1,443
Total 419,934 345,593
Section 3 – Financial Statements 69
(b) Movements during year
Year ended
31 December
2025
£’000
Year ended
31 December
2024
£’000
Opening valuation 345,593 295,268
Opening unrealised gains on investments (58,029) (53,543)
Opening book cost 287,564 241,725
Investment purchases, at cost 60,663 164,515
Investment sales, at cost (37,019) (118,676)
Closing book cost 311,208 287,564
Revaluation gains on investments held at year end 108,726 58,029
Closing valuation 419,934 345,593
These investments have been revalued over time and until they were sold any unrealised gains/(losses) were included in the
fair value of the investments.
Transaction costs on investment purchases for the year ended 31 December 2025 amounted to £58,000 (31 December
2024: £125,000) and on investment sales for the year ended 31 December 2025 amounted to £35,000 (31 December 2024:
£109,000).
As at 31 December 2025, the Company held interests of 3% or more of any share class in 16 investee companies
(31 December 2024: 18 investee companies).
Portfolio holdings
Valuation
£’000
% of voting
rights
Helios Techno Holding Co Ltd 11,067 9.7
Eiken Chemical Co Ltd 37,271 9.5
Hogy Medical Co Ltd 61,214 8.6
ASKA Pharmaceutical Holdings Co Ltd 23,086 8.3
Meisei Industrial Co Ltd 33,009 7.5
Nasu Denki Tekko Co Ltd 6,928 7.3
Ebara Jitsugyo Co Ltd 18,603 7.1
Murakami Corp 23,827 5.8
Teikoku Sen-I Co Ltd 23,198 5.4
Teikoku Tsushin Kogyo Co Ltd 6,273 5.0
Sekisui Jushi Corp 15,138 4.7
Stella Chemifa Corp 11,434 4.2
Meiko Trans Co Ltd 12,881 4.0
Nissan Tokyo Sales Holdings 5,264 3.7
Bunka Shutter Co Ltd 24,234 3.5
Noritz Corp 14,178 3.1
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Nippon Active Value Fund plc | Annual Report & Accounts 2025
Notes to the Accounts continued
3. INVESTMENTS continued
(c) Gains/(losses) on investments
Year ended
31 December
2025
£’000
Year ended
31 December
2024
£’000
Realised gains on disposal of investments 8,281 42,256
Net transaction costs (93) (234)
Movement in unrealised gains on investments held 50,697 4,486
Total gains on investments held at fair value 58,885 46,508
Fair Value Measurements of Financial Assets and Financial Liabilities
The financial assets and liabilities are either carried at their fair value, or the amount is a reasonable approximation of
fair value (due from brokers, dividends receivable, accrued income, due to brokers, expense accruals and cash and cash
equivalents).
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the Fair
Value measurement of the relevant asset as follows:
Level 1 – valued using quoted prices in active markets for identical assets.
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices.
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.
The valuation techniques for investments used by the Company are explained in the accounting policies in note 2.
The table below sets out fair value measurements using the Fair Value Hierarchy.
As at 31 December 2025
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Assets:
Equity investments 412,835 – 7,099 419,934
Total 412,835 – 7,099 419,934
As at 31 December 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Assets:
Equity investments 344,150 – 1,443 345,593
Total 344,150 – 1,443 345,593
Section 3 – Financial Statements 71
The movement on the Level 3 unquoted investments during the year is shown below:
Year ended
31 December
2025
£’000
Year ended
31 December
2024
£’000
Opening balance 1,443 –
Additions during the year 1,553 1,443
Disposals during the year (967) –
Unrealised gains/(losses) on investments 5,070 –
Total 7,099 1,443
There were no transfers between the levels during the year (31 December 2024: none)
As at year end, the Company had two unquoted investments; Trancom Co., Ltd and T&K TOKA Corporation (31 December
2024: One unquoted investment).
4. INCOME
Year ended
31 December
2025
£’000
Year ended
31 December
2024
£’000
Income from investments:
Overseas dividends 11,386 9,125
Other income:
Bank interest income 3 7
Total income 11,389 9,132
5. INVESTMENT ADVISER FEES
Year ended
31 December
2025
£’000
Year ended
31 December
2024
£’000
Basic fee:
20% charged to revenue 656 583
80% charged to capital 2,623 2,334
Total: 3,279 2,917
The Company’s Investment Adviser is Rising Sun Management Ltd. The Investment Adviser is entitled to receive an annual
fee from the Company of 0.85% per annum of NAV.
There is no performance fee payable to the Investment Adviser.
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Notes to the Accounts continued
6. OTHER OPERATIONAL EXPENSES
Year ended
31 December
2025
£’000
Year ended
31 December
2024
£’000
Directors' fees and expenses 282 227
Administration & secretarial fees 252 217
Auditor's remuneration
1
58 49
AIFM fees 145 124
Broker retainer fees 68 77
Custodian fees 91 116
D&O Insurance 27 18
Marketing fees 84 75
Legal fees 168 82
UKLA and other regulatory fees 56 21
Miscellaneous expenses 132 440
Total 1,363 1,446
1
This is the Auditor’s fee for the statutory audit of these financial statements excluding VAT of £11,600 (31 December 2024: £9,800) and out of pocket
expenses.
7. TAXATION
(a) Analysis of tax charge in the year:
Year ended
31 December 2025
Year ended
31 December 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Overseas withholding tax 1,138 – 1,138 913 – 913
Total tax charge for the year (see note 7 (b)) 1,138 – 1,138 913 – 913
Section 3 – Financial Statements 73
(b) Factors affecting the tax charge for the year:
The effective UK corporation tax rate for the year is 25% (2024: 25%). The tax charge for the Company differs from the
charge resulting from applying the standard rate of UK corporation tax for an investment trust company. The differences are
explained below:
Year ended
31 December 2025
Year ended
31 December 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Profit before taxation 9,370 55,887 65,257 7,103 42,340 49,443
Effective corporation tax at 25% (2024: 25%) 2,343 13,972 16,315 1,776 10,585 12,361
Effects of:
Overseas withholding tax suffered 1,138 – 1,138 913 – 913
Non-taxable overseas dividends (2,847) – (2,847) (2,281) – (2,281)
Capital gains not subject to tax – (14,721) (14,721) – (11,628) (11,628)
Movement in unutilised management expenses 491 655 1,146 507 584 1,091
Unutilised finance costs 13 – 13 (2) – (2)
Foreign exchange gains/(losses) not subject to tax – 94 94 – 459 459
Total tax charge for the year 1,138 – 1,138 913 – 913
The Company is not liable to UK Corporation tax on capital gains due to its status as an investment trust. The Company has
a total gross tax loss of £16,531,000 (2024: £11,841,000) and as a result an unrecognised deferred UK Corporation tax asset
of £4,133,000 (31 December 2024: £2,960,000) based on the UK corporation tax rate of 25% (2024: 25%). This asset has
accumulated because deductible expenses exceeded taxable income for the year ended 31 December 2025. No asset has
been recognised in the accounts because, given the composition of the Company’s portfolio, it is unlikely that this asset will
be utilised in the foreseeable future.
8. DIVIDEND
(a) Dividends paid during the year
Dividends paid during the respective years are detailed in the below table:
Year ended
31 December 2025
Year ended
31 December 2024
Pence
per Share £’000
Pence
per Share £’000
Interim dividend - paid 23 May 2025 3.25 6,147 – –
Interim dividend - paid 24 May 2024 – – 1.6 3,026
Total 3.25 6,147 1.6 3,026
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Nippon Active Value Fund plc | Annual Report & Accounts 2025
Notes to the Accounts continued
8. DIVIDEND continued
(b) Dividends payable in respect of the financial year, which is the basis on which the requirements
of s1158-1159 of the Corporation Tax Act 2010 are considered
Year ended
31 December 2025
Year ended
31 December 2024
Pence
per Share £’000
Pence
per Share £’000
Interim dividend - payable on 16 July
2026 (2024: paid 23 May 2025) 5.52 10,754 3.25 6,147
The Directors recommend the payment of a final dividend for the year of 5.52p per share. Subject to approval at the
Company’s Annual General Meeting, the dividend will have an ex-dividend date of 18 June 2026 and will be paid on
16 July 2026, to shareholders on the register at 19 June 2026.
9. TRADE AND OTHER RECEIVABLES
As at
31 December
2025
£’000
As at
31 December
2024
£’000
Accrued income 1,143 969
Sales for settlement 173 2
VAT receivable 52 292
Prepayments 41 7
Total 1,409 1,270
10. TRADE AND OTHER PAYABLES
As at
31 December 2025
£’000
As at
31 December 2024
£’000
Amounts falling due within one year:
Purchases for future settlement 507 1,186
Accrued expenses 164 124
Total 671 1,310
Section 3 – Financial Statements 75
11. SHARE CAPITAL
Share capital represents the nominal value of shares that have been issued. The share premium includes any premiums
received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share
premium.
Year ended
31 December 2025
Year ended
31 December 2024
No. of shares £’000 No. of shares £’000
Allotted, issued and fully paid:
Opening balance 189,141,704 1,891 189,141,704 1,891
Ordinary Shares of 1p each ('Ordinary Shares')
issued 3,373,282 34 – –
Closing balance 192,514,986 1,925 189,141,704 1,891
During the year to 31 December 2025, 3,373,282 Ordinary Shares (31 December 2024: Nil) were issued with aggregate
proceeds of £7,256,000 (31 December 2024: £Nil).
There were no share buybacks during the year to 31 December 2025 (31 December 2024: Nil).
Following the year end, the Company has issued 2,300,000 Ordinary Shares for aggregate gross proceeds of £5,685,700.
Rights attaching to the Ordinary Shares
Dividend rights: All Ordinary Shares are entitled to a distribution of dividends, in the event that the Directors resolve to make
such a distribution to shareholders, in the same proportions as capital is attributable to them.
Rights as respect to capital: On a winding-up or a return of capital, in the event that the Directors resolve to make a
distribution to shareholders, all Ordinary Shares are entitled to a distribution of capital in the same proportions as capital is
attributable to them.
Voting rights: Every shareholder shall have one vote for each Ordinary Share held.
12. EARNINGS PER ORDINARY SHARE
Total return per Ordinary Share is based on the return on ordinary activities, including income, for the year after taxation of
£64,068,000 (31 December 2024: profit £48,530,0000).
Based on the weighted average number of Ordinary Shares in issue for the year to 31 December 2025 of 190,155,512
(31 December 2024: 189,141,704), the returns per share were as follows:
Year ended
31 December 2025
Year ended
31 December 2024
Revenue Capital Total Revenue Capital Total
(Loss)/ Profit for the year (£'000) 8,181 55,887 64,068 6,190 42,340 48,530
Return per Ordinary Share 4.30p 29.39p 33.69p 3.27p 22.39p 25.66p
The Company does not have any dilutive securities therefore basic and diluted earnings per share are the same.
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Nippon Active Value Fund plc | Annual Report & Accounts 2025
Notes to the Accounts continued
13. NET ASSET VALUE PER SHARE
Total equity and the NAV per share attributable to the Ordinary Shares at the year end calculated in accordance with the
Articles of Association were as follows:
As at
31 December
2025
As at
31 December
2024
Net Asset Value (£) 430,619,000 365,442,000
Ordinary Shares in issue 192,514,986 189,141,704
NAV per Ordinary Share 223.68p 193.21p
14. RELATED PARTY TRANSACTIONS
Transactions with the Investment Adviser
The fees for the year are disclosed in note 5 with no amounts outstanding at the year ended 31 December 2025.
A key member of the RSM team is a major shareholder of Rosenwald Capital Management, Inc. Further details of Rosenwald
Capital Management, Inc.’s shareholding is disclosed on page 32.
Rosenwald Capital Management, Inc. receives dividends paid by the Company based on its shareholding.
Directors’ fees and shareholdings
During the year ended 31 December 2025, Directors’ fees were paid at a rate of £31,700 (2024: £29,535) per annum for
each Director other than the Chairman, who was entitled to receive £47,000 (2024: £43,830) and the Chair of the Audit
Committee who was entitled to an additional fee of £6,300 (2024: £5,515) per annum.
The Board reviewed the rate of Directors’ fees in November 2025 and decided that the fees for Directors be increased in
line with the average market levels by £1,300 with effect from 1 January 2026, with the fees for the Chair and Audit Chair
remaining unchanged.
Position
Directors’ Fees
per annum for
the year ending
31 December 2025
(GBP)
Directors’ Fees
per annum for
the year ending
31 December 2024
(GBP)
Increase in
line with
market levels
%
Board Chairman 47,000 43,830 7.2
Director 31,700 29,535 7.3
Audit Committee Chair (additional fee) 6,300 5,515 14.2
The Directors had the following shareholdings in the Company, all of which were beneficially owned.
As at
31 December
2025
As at
31 December
2024
Rosemary Morgan 41,450 41,450
Chetan Ghosh 40,000 40,000
Rachel Hill 115,791 115,791
Alicia Ogawa 25,000 25,000
Ayako Weissman 50,000 50,000
Claire Boyle – –
Section 3 – Financial Statements 77
15. FINANCIAL INSTRUMENTS AND CAPITAL DISCLOSURES
Risk Management Policies and Procedures
As an investment trust the Company invests in equities for the long-term in order to achieve its investment objective stated
on page 2. In pursuing its investment objective, the Company is exposed to a variety of risks that could result in either a
reduction in the Company’s net assets or a reduction of the profits available for dividends.
These risks include market risk (comprising currency risk, interest rate risk, and other price risk), liquidity risk, credit risk and
the Directors’ objectives, policies and processes for managing the risks and the methods used to measure the risks, are set
out below.
(i) Market Risk
Economic conditions
Changes in economic conditions in Japan (for example, interest rates and rates of inflation, industry conditions, competition,
political and diplomatic events and other factors) and in the countries in which the Company’s investee companies operate
could substantially and adversely affect the Company’s prospects.
Sectoral diversification
The Company is not subject to restrictions on the amount it may invest in any particular sector. Although the portfolio is
expected to be diversified in terms of sector exposures, the Company may have significant exposure to portfolio companies
from certain sectors from time to time. As there is no hard limit on the amount the Company may invest in any sector
the entire portfolio may, at certain times, be invested solely in one sector. Greater concentration of investments in any
one sector may result in greater volatility in the value of the Company’s investments and consequently its NAV and may
materially and adversely affect the performance of the Company and returns to shareholders.
Management of market risks
The Company is invested in a diversified portfolio of investments.
The Board will not set any limits on sector weightings or stock selection within the portfolio. The Board will apply the
following restrictions on the size of its investments:
• not more than 20 per cent. of the Gross Asset Value at the time of investment will be invested in the securities of a single
issuer; and
• the Company will only make an investment in an unquoted company if the aggregate interest of the Company in
unquoted companies at the time of such investment is not more than 10 per cent. of the Net Asset Value of the
Company at that time.
• total net investment Derivative exposure will not exceed 20 per cent. of Gross Asset Value at the time of investment; and
• total exposure to any single counterparty which has issued Derivatives to the Company will not exceed 20 per cent. of
Gross Asset Value at the time of investment.
(a) Currency risks
The majority of the Company’s assets will be denominated in a currency other than sterling (predominantly in Japanese
yen) and changes in the exchange rate between sterling and Japanese yen may lead to a depreciation of the value of the
Company’s assets as expressed in sterling and may reduce the returns to the Company from its investments and, therefore,
negatively impact the level of dividends paid to shareholders.
Management of currency risks
The Company does not currently intend to enter into any arrangements to hedge its underlying currency exposure to
investment denominated in Japanese yen, although the Investment Adviser and the Board may review this from time to time.
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Notes to the Accounts continued
15. FINANCIAL INSTRUMENTS AND CAPITAL DISCLOSURES continued
Foreign currency exposures
An analysis of the Company’s equity investments that are priced in a foreign currency is:
As at
31 December
2025
£’000
As at
31 December
2024
£’000
Portfolio of investments: yen 419,934 345,593
Trade and other receivables and payables : yen 810 971
Cash: yen 8,342 19,804
Cash: USD 3 –
Total 429,089 366,368
Foreign currency sensitivity
If the Japanese yen had appreciated or depreciated by 10% as at 31 December 2025 then the value of the portfolio as at that
date would have increased or decreased as shown below.
Increase in
Fair Value
As at
31 December
2025
£’000
Decrease in
Fair Value
As at
31 December
2025
£’000
Increase in
Fair Value
As at
31 December
2024
£’000
Decrease in
Fair Value
As at
31 December
2024
£’000
Impact on portfolio - increase/(decrease) 41,993 (41,993) 34,559 (34,559)
Impact on NAV - increase/(decrease) 42,909 (42,909) 36,637 (36,637)
(b) Interest rate risks
The Company is exposed to interest rate risk specifically through its cash holdings. Interest rate movements may affect the
level of income receivable from any cash at bank and on deposits. The effect of interest rate changes on the earnings of the
companies held within the portfolio may have a significant impact on the valuation of the Company’s investments.
Management of interest rate risks
Prevailing interest rates are taken into account when deciding on borrowings.
Interest rate exposure
The exposure at 31 December 2025 of financial assets and liabilities to interest rate risk is shown by reference to floating
interest rates – when the interest rate is due to be reset.
As at
31 December
2025
£’000
As at
31 December
2024
£’000
Exposure to floating interest rates:
Floating rate on cash balance : yen 8,342 19,804
Floating rate on cash balance : USD 3 –
Section 3 – Financial Statements 79
(c) Price risks
Price risk includes changes in market prices, other than those arising from interest rate risk or currency risk, which may
affect the value of equity investments.
Management of price risk
The Board meets on at least four occasions each year where it considers the asset allocation of the portfolio and the
risk associated with particular industry sectors. The Company’s Investment Adviser has responsibility for monitoring the
portfolio, which is selected in accordance with the Company’s investment objective and seeks to ensure that individual
stocks meet an acceptable risk/reward profile.
Price risk exposure
The Company’s total exposure to changes in market prices at 31 December 2025 comprises its holdings in equity
investments as follows:
As at
31 December
2025
£’000
As at
31 December
2024
£’000
Investments held at fair value through profit or loss
419,934 344,150
Market price risk sensitivity
The effect on the portfolio of a 10% increase or decrease in market prices would have resulted in an increase or decrease of
£41,993,400 (31 December 2024: £34,415,000) in the investments held at fair value through profit or loss at the year end
date. This analysis assumes that all other variables remain constant.
The Company’s portfolio of unlisted level 3 investments is not necessarily affected by market performance, however the
valuations may be affected by the performance of the underlying securities in line with the valuation criteria in note 2. The
valuation of the unlisted instruments are not materially sensitive to estimated assumptions at the Statement of Financial
Position date.
(ii) Liquidity risks
The securities of small-to-medium-sized (by market capitalisation) companies may have a more limited secondary market
than the securities of larger companies. Accordingly, it may be more difficult to effect sales of such securities at an
advantageous time or without a substantial drop in price than securities of a company with a large market capitalisation and
broad trading market. In addition, securities of small-to-medium-sized companies may have greater price volatility as they
can be more vulnerable to adverse market factors such as unfavourable economic reports.
Management of liquidity risks
The Company’s Investment Adviser monitors the liquidity of the Company’s portfolio on a regular basis.
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15. FINANCIAL INSTRUMENTS AND CAPITAL DISCLOSURES continued
Liquidity risk exposure
The undiscounted gross cash outflows of the financial liabilities as at 31 December 2025, based on the earliest date on which
payment can be required, were as follows:
As at
31 December
2025
less than
3 months
As at
31 December
2024
less than
3 months
Creditors: amounts falling due within one year
Trade and other payables 671 1,310
Total 671 1,310
Liquidity risk is minimised by holding sufficient liquid investments which can be readily realised to meet liquidity demands.
The Company’s liquidity risk is managed on a daily basis by the Investment Adviser in accordance with established policies
and procedures in place. Liquidity risk is not significant as the majority of the Company’s assets are investments in quoted
equities that are expected to be readily realisable under normal conditions.
(iii) Credit risks
Cash and other assets held by the Custodian
Cash and other assets that are required to be held in custody will be held by the Custodian or its sub-custodians. Cash and
other assets may not be treated as segregated assets and will therefore not be segregated from any custodian’s own assets
in the event of the insolvency of a custodian.
Cash held with any custodian will not be treated as client money subject to the rules of the FCA and may be used by a
custodian in the course of its own business. The Company will therefore be subject to the creditworthiness of its custodians.
In the event of the insolvency of a custodian, the Company will rank as a general creditor in relation thereto and may not be
able to recover such cash in full, or at all.
Management of credit risks
The Company has appointed The Northern Trust Company as its Custodian. The credit rating of Northern Trust was reviewed
at the time of appointment and is reviewed on a regular basis by the Investment Adviser and/or the Board.
The Fitch’s credit rating of Northern Trust as at year end is AA- (31 December 2024: AA-).
The Investment Adviser monitors the Company’s exposure to its counterparties on a regular basis and the position is
reviewed by the directors at Board meetings.
In summary, the exposure to credit risk as at 31 December 2025 was as follows:
As at
31 December
2025
£’000
As at
31 December
2024
£’000
Cash at bank 9,947 19,889
Trade and other receivables 1,409 971
Total 11,356 20,860
Notes to the Accounts continued
Section 3 – Financial Statements 81
(iv) Capital Management Policies and Procedures
The Company’s capital management objectives are:
• to ensure that the Company will be able to continue as a going concern; and
• to provide dividend income combined with capital growth, mainly through investment in equities listed or quoted in
Japan.
The key performance indicators are contained in the strategic report on page 18.
The Company is subject to several externally imposed capital requirements:
• As a public company, the Company has to have a minimum share capital of £50,000.
• In order to be able to pay dividends out of profits available for distribution by way of dividends, the Company has to be
able to meet one of the two capital restriction tests imposed on investment companies by company law.
The Company’s capital at 31 December 2025 comprises called-up share capital and reserves totalling £430,619,000
(31 December 2024: £365,442,000).
The Board regularly monitors, and has complied with, the externally imposed capital requirements.
16. POST YEAR-END EVENTS
Other than those included in these Financial Statements or below, there have been no significant events since the year end
which would require revision of the figures or disclosure in the Financial Statements.
On 17 December 2025, the Company announced participation in a successful tender offer for Hogy Medical, led by Carlyle
as outlined further on page 25. NAVF and co-investors agreed to tender their 27.58% stake, including NAVF’s 8.58% holding.
This transaction, which will take Hogy Medical private and delist it from the Tokyo Stock Exchange, values NAVF’s holding
at approximately £62.4 million, an increase from its previous valuation of £55.2 million. Following the tender offer, NAVF
and co-investors reinvested a portion of their proceeds for an approximately 10% economic interest in a Carlyle-affiliated
acquiring entity.
On 5 February 2026, a General Meeting was held at which shareholders approved the cancellation of the Company’s
share premium account, which stood at £239,056,149 as at 16 January 2026. The Board convened the meeting in order
to increase the Company’s distributable reserves and thereby provide greater flexibility for potential future distributions
to shareholders. The resolution was passed with 99.98% of votes cast in favour and the cancellation became effective on
12 March 2026.
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Alternative Performance Measures (“APMs”)
Discount
The amount, expressed as a percentage, by which the share price is less than the NAV per Ordinary Share.
As at 31 December 2025 Page Pence
NAV per Ordinary Share a 2 223.68
Share price b 2 207.00
Discount (b÷a)-1 (7.5)%
As at 31 December 2024 Page Pence
NAV per Ordinary Share a 2 193.21
Share price b 2 187.50
Discount (b÷a)-1 (3.0)%
Total return
A measure of performance that includes both income and capital returns. This takes into account capital gains and
reinvestment of dividends paid out by the Company into its Ordinary Shares on the ex-dividend date.
Year end 31 December 2025 Page Share price NAV
Opening (pence) a 2 187.50 193.21
Closing (pence) b 2 207.00 223.68
Movement (b÷a)-1 c n/a 10.4% 15.77%
Dividend reinvestment factor d n/a 1.9% 1.63%
Total return (c+d) 12.3% 17.4%
Year end 31 December 2024 Page Share price NAV
Opening (pence) a n/a 162.00 169.20
Closing (pence) b n/a 187.50 193.21
Movement (b÷a)-1 c n/a 15.7% 14.2%
Dividend reinvestment factor d n/a 1.1% 1.0%
Total return (c+d) 16.8% 15.2%
Section 4 – Other Information 83
Ongoing charges
A measure, expressed as a percentage of average NAV, of the regular, recurring annual costs of running an investment
company.
Year end 31 December 2025 Page
Average NAV a n/a 395,449,000
Annualised expenses b 59 4,431,000
Ongoing charges (b÷a) 1.12%
Year end 31 December 2024 Page
Average NAV a n/a 343,210,000
Annualised expenses b 59 4,055,000
Ongoing charges (b÷a) 1.18%
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Glossary
Administrator The Company’s Administrator, the current Administrator being NSM Funds
(UK) Limited.
AIC Association of Investment Companies.
Alternative Investment Fund or “AIF” An investment vehicle under AIFMD. Under AIFMD (see below) the Company
is classified as an AIF.
Alternative Investment Fund Managers
Directive or “AIFMD”
A European Union Directive which came into force on 22 July 2013 and has
been implemented in the UK.
Custodian An entity that is appointed to safeguard a company’s assets.
Depositary Certain AIFs must appoint depositaries under the requirements of AIFMD. A
depositary’s duties include, inter alia, safekeeping of the Company’s assets
and cash monitoring. Under AIFMD the depositary is appointed under a strict
liability regime.
Dividend Income receivable from an investment in shares.
Discount The amount, expressed as a percentage, by which the share price is less than
the Net Asset Value per share.
Ex-dividend date The date from which you are not entitled to receive a dividend which has
been declared and is due to be paid to shareholders.
Financial Conduct Authority or “FCA” The independent body that regulates the financial services industry in the
UK.
Gearing The amount by which asset exposure exceeds shareholders’ funds expressed
as a percentage. A bank loan is a common method of gearing.
Index A basket of stocks which is designed to replicate a particular stock market or
sector.
Investment company A company formed to invest in a diversified portfolio of assets.
Investment trust A closed-end investment company which is based in the UK and which meets
certain tax conditions which enables it to be exempt from UK corporation tax
on its capital gains. This Company is an investment trust.
Liquidity The extent to which investments can be bought or sold at short notice.
Net assets An investment company’s assets less its liabilities.
Net Asset Value (NAV) per Ordinary Share Net assets divided by the number of Ordinary Shares in issue (excluding any
shares held in treasury).
Ordinary Shares Ordinary Shares of £0.01 each in the capital of the Company.
Section 4 – Other Information 85
Ongoing charges A measure, expressed as a percentage of average net assets, of the regular,
recurring annual costs of running an investment company.
Portfolio A collection of different investments constructed and held in order to deliver
returns to shareholders and spread risk.
Share price The price of a share as determined by buyers and sellers on the relevant
stock exchange.
Total return A measure of performance that takes into account both income and capital
returns.
Volatility A measure of how much a share moves up and down in price over a period
of time.
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Company Information
Board of Directors
Rosemary Morgan (Chairman)
Chetan Ghosh (Audit Chair)
Claire Boyle
Rachel Hill
Alicia Ogawa
Ayako Weissman
Registered Office
4th Floor
46-48 James Street
London
W1U 1EZ
Administrator & Company Secretary
NSM Fund (UK) Limited
4th Floor
46-48 James Street
London
W1U 1EZ
Broker
Shore Capital Stockbrokers Limited
Cassini House
57 St. James’ Street
London
SW1A 1LD
Custodian
The Northern Trust Company
50 Bank Street
Canary Wharf
London
E14 5NT
Investment Adviser
Rising Sun Management Limited
c/o Appleby Global Services (Cayman) Limited
71 Fort Street
PO Box 500
George Town, Grand Cayman
KY1-1106, Cayman Islands
Rising Sun Management Team
James B. Rosenwald, III
Gifford Combs
Paul ffolkes Davis
Kazutaka Mizouchi
Alternative Investment Fund Manager
FundRock Management (Guernsey) Limited
1 Royal Plaza Royal Avenue
St Peter Port
Guernsey
GY1 2HL
Auditor
BDO LLP
55 Baker Street London
W1U 7EU
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgewater Road
Bristol
BS13 8AE
Company Security Identifiers
ISIN: GB00BKLGLS10
Ticker: NAVF
SEDOL: BKLGLS1
Website: www.nipponactivevaluefund.com
LEI: 213800JOFEGZJYS21P75
GIIN: WB82JR.99999.SL.826
Section 4 – Other Information 87
Dear Shareholders,
I am pleased to advise that the Annual General Meeting (“AGM”) of the Company will be held at Prince Philip House, 3
Carlton House Terrace, London, SW1Y 5AG on Thursday 4 June 2026 at 12:30 p.m. British Summer Time (BST, GMT+1). The
event will feature an investor presentation by Paul ffolkes Davis and Gifford Combs of RSM, our Investment Advisers. There
will also be an informal lunch and an opportunity to meet the Board of Directors and Investment Advisers. The formal Notice
of the AGM which follows this letter sets out the business to be considered at the meeting.
Business of the Meeting
Shareholders are being asked to vote on 16 resolutions, as explained below. Resolutions 1 to 11 inclusive and Resolution
13 are proposed as ordinary resolutions. This means that, for each of these resolutions to be passed, more than half of the
votes cast must be in favour of the resolution. Resolution 12 and Resolutions 14 to 16 inclusive are proposed as special
resolutions. This means that, for each of these resolutions to be passed, a majority of at least 75 per cent. of the votes cast
must be in favour of the resolution.
Ordinary Resolution 1: Company’s Annual Report and audited financial statements for year ended 31 December 2025
The Directors are required to lay before the Meeting the Annual Report and audited financial statements in respect of the
financial year ended 31 December 2025.
Ordinary Resolutions 2: Approval of the Directors’ Remuneration Report
Shareholders are requested to approve the Directors’ Remuneration Implementation Report which is set out on pages 44
to 47 of the Annual Report. Resolution 2 on the Director’s Remuneration Report is advisory and does not affect the
remuneration payable to any individual Director. However, the Board will take feedback from shareholders regarding
remuneration and incorporate this into any future remuneration discussions.
Ordinary Resolutions 3 to 7 (inclusive): Re-election of Directors
Under the terms of the Company’s Articles of Association, Directors are required to retire and seek re-election annually.
Resolution 3 relates to the re-election of Alicia Ogawa who joined the Board on 14 November 2019. Alicia has extensive
experience in Japan strategies and funds.
Resolution 4 relates to the re-election of Ayako Weissman, who joined the Board on 14 November 2019. Aya has a wealth of
investment experience managing equity portfolios in the US and Asian markets.
Resolution 5 relates to the re-election of Chetan Ghosh, who joined the Board on 22 October 2019. Chetan has extensive
experience in investment strategy, asset class and manager research.
Resolution 6 relates to the re-election of Rachel Hill, who joined the Board on 22 October 2019. Rachel has a wealth of
experience in equity sales in Asian markets.
Resolution 7 relates to the re-election of Rosemary Morgan, who joined the Board on 14 November 2019. Rosemary has
extensive experience in equity funds and is a Japanologist.
Resolutions 3 to 7 inclusive, therefore, relate to the re-election of Alicia Ogawa, Ayako Weissman, Chetan Ghosh, Rachel
Hill and Rosemary Morgan who have all served as Directors during the past year. Claire Boyle will not seek re-election at
the AGM.
Letter from the Chairman
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Letter from the Chairman continued
The Board has reviewed the performance and commitment of the Directors standing for re-election and considers that
each of the Directors should continue to be Directors as they bring wide, current, and relevant business experience that
allows them to contribute effectively to the leadership of the Company. Furthermore, the Board is satisfied that, having
considered each Director’s experience and the nature of, and anticipated demands on his or her time from his or her other
business commitments including other investment trusts, each Director is able to commit the time required to fulfil his or
her responsibilities as a Director of the Company. All the Directors are independent for the purpose of the UK Corporate
Governance Code. The Board has adopted Corporate Governance best practice and in line with the Board’s intention to
reduce the number of Directors back to a maximum of five; Claire Boyle will stand down prior to the AGM in 2026, returning
the number of Directors to five.
Biographical details for the Directors are shown on pages 37 and 38 of the Annual Report.
Ordinary Resolutions 8 and 9: Re-appointment and remuneration of the Auditor
In accordance with Sections 489 and 492 of the Companies Act 2006, shareholders are required to approve the appointment
of the Company’s Auditor each year. In accordance with the provisions of the Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) 2014, Audit
Committees are authorised to determine the Auditor’s remuneration. BDO LLP have expressed their willingness to continue
as Auditor to the Company. Following a satisfactory performance evaluation, the Company is recommending their re-
appointment in respect of the year ending 31 December 2026 and seeking authority for Directors, who would intend to act
by the Audit Committee, to determine their remuneration.
Ordinary Resolution 10: Declaration of final dividend
Resolution 10 seeks shareholder authorisation for the Directors to approve a final dividend of 5.52p per Ordinary Share of
the Company in respect of the year ended 31 December 2025, recommended by the Directors.
Ordinary Resolution 11 and Special Resolution 12: Authority to allot shares and disapply pre-emption rights
Resolution 11 will authorise the Directors to allot unissued share capital up to 10% of the issued share capital, excluding
treasury shares, at the date of the AGM (which at the date of this notice was 194,814,986 Ordinary Shares having an
aggregate nominal value of £194,814.98.
Resolution 12 will authorise the Directors to disapply pre-emption rights in relation to allotment of Ordinary Shares pursuant
to Resolution 11 and/or to sell Ordinary Shares from treasury, in either case for cash.
If renewed, these authorities will expire on the earlier of the date falling 15 months after the passing of the resolutions and
the conclusion of the AGM in 2027.
The Directors do not intend to allot or sell shares pursuant to Resolutions 11 and 12 other than to take advantage of
opportunities in the market as they arise and will only do so if they believe it to be advantageous to the Company’s existing
shareholders and when it would not result in any dilution of net asset value per share (i.e. shares will only be issued or sold
at a premium to net asset value).
Ordinary Resolution 13 and Special Resolution 14: Additional authority to allot shares and disapply pre-emption rights
Resolution 13 is in addition to the authority sought in Resolution 11, and will authorise the Directors to allot unissued share
capital up to a further 10% of the issued share capital, excluding treasury shares, at the date of the AGM (which at the date
of this notice was 194,814,986 Ordinary Shares having an aggregate nominal value of £194,814.98. If Resolutions 11 and 13
are passed the Directors would have authority to allot unissued share capital up to 20% of the issued share capital, excluding
treasury shares, at the date of the AGM.
Resolution 14 will authorise the Directors to disapply pre-emption rights in relation to allotment of Ordinary Shares pursuant
to Resolution 13 and/or to sell Ordinary Shares from treasury, in either case for cash.
If renewed, these authorities will expire on the earlier of the date falling 15 months after the passing of the resolutions and
the conclusion of the AGM in 2027.
Section 4 – Other Information 89
The Directors do not intend to allot or sell shares pursuant to Resolutions 13 and 14 other than to take advantage of
opportunities in the market as they arise and will only do so if they believe it to be advantageous to the Company’s existing
shareholders and when it would not result in any dilution of net asset value per share (i.e. shares will only be issued or sold
at a premium to net asset value).
Special Resolution 15: Repurchase of shares
Share buybacks allow the Company to buy back shares at a discount to net asset value after considering all associated
costs. The purchase of shares, when they are trading at a discount to net asset value per share, result in an increase in
the net asset value per share for the remaining shareholders. This authority, if conferred, will only be exercised if to do so
would result in an increase in the net asset value per share for the remaining shareholders and if it is in the best interests of
shareholders generally. Any purchase of shares will be made within guidelines established from time to time by the Board.
Under the UK Listing Rules, the maximum price that may be paid on the exercise of this authority must not exceed the
higher of:
(i) 105 per cent. of the average of the middle market quotations for the shares over the five business days immediately
preceding the date of purchase; and
(ii) the higher of the last independent trade and the highest current independent bid on the trading venue where the
purchase is carried out.
The minimum price which may be paid is 1 penny per share.
Resolution 15 in the Notice of AGM will renew the authority to purchase in the market a maximum of 14.99 per cent of
shares in issue on 2 April 2026, the latest practicable date before publication of the Notice of AGM, excluding treasury shares
(amounting to 29,202,766 shares) or, if less, the number representing approximately 14.99 per cent. of the issued ordinary
share capital of the Company (excluding treasury shares) as at the date on which this resolution is passed. Such authority
will expire on the conclusion of the 2027 AGM or after a period of 15 months from the date of passing of the resolution,
whichever is earlier.
Special Resolution 16: Notice of General Meetings
Resolution 16 seeks shareholder approval for the Company to hold General Meetings (other than the Annual General
Meeting) on 14 clear days’ notice. The Company will only use this shorter notice period where it is merited by the purpose
of the meeting and will endeavour to give more than 14 working days’ notice if possible, in line with the recommendations
of the UK Corporate Governance Code.
Yours faithfully,
Rosemary Morgan
Chairman
7 April 2026
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Notice of Annual General Meeting (“AGM”)
Notice of AGM
Notice is hereby given that the AGM of Nippon Active Value Fund plc will be held at Prince Philip House, 3 Carlton House
Terrace, London, SW1Y 5AG on Thursday 4 June 2026 at 12:30 p.m. BST for the following purposes:
To consider, and if thought fit, pass the following resolutions of which Resolutions 1 to 11 and resolution 13 will be proposed
as ordinary resolutions and resolution 12 and resolutions 14 to 16 inclusive will be proposed as special resolutions.
1. To receive the Company’s Annual Report and Accounts for the year ended 31 December 2025 (the “Annual Report”).
2. To approve the Directors’ Remuneration Report included in the Annual Report.
3. To re-elect Alicia Ogawa as a Director of the Company.
4. To re-elect Ayako Weissman as a Director of the Company.
5. To re-elect Chetan Ghosh as a Director of the Company.
6. To re-elect Rachel Hill as a Director of the Company.
7. To re-elect Rosemary Morgan as a Director of the Company.
8. To re-appoint BDO LLP as Auditor to the Company, to hold office until the conclusion of the next AGM at which financial
statements are laid before the members.
9. To authorise the Directors to fix the remuneration of the Auditor until the conclusion of the next Annual General Meeting
of the Company.
10. To declare a final dividend of 5.52p per Ordinary Share of the Company in respect of the year ended 31 December 2025.
To consider, and if thought fit to pass, the following resolutions:
11. That the Directors be and are hereby generally and unconditionally authorised (in substitution for all subsisting
authorities to the extent unused) to exercise all powers of the Company to allot 19,481,498 Ordinary Shares of 1 penny
each in the Company (“Ordinary Shares”) (equivalent to 10% of the issued share capital of the Company as at the date
of this notice) provided the issued price for any such allotment shall be at a premium to net asset value per Ordinary
Share, and that this authority shall expire (unless previously varied, revoked or renewed by the Company in general
meeting) at the conclusion of the Annual General Meeting of the Company to be held in 2027 or, if earlier, on the expiry
of 15 months from the passing of this resolution, save that the Company may, at any time prior to the expiry of such
authority, make an offer or enter into an agreement which would or might require the allotment of Ordinary Shares in
pursuance of such an offer or agreement as if such authority had not expired.
12. That, subject to the passing of resolution 11, in substitution for all subsisting authorities under sections 570 and 573 of
the Companies Act 2006 (the “Companies Act”) to the extent unused, but without prejudice to the exercise of any such
power prior to the date hereof, the Directors be and are hereby empowered, pursuant to sections 570 and 573 of the
Companies Act 2006, to allot 19,481,498 Ordinary Shares in each case for cash pursuant to the authority conferred by
resolution 11 provided the issued price for any such allotment shall be at a premium to net asset value per Ordinary
Share, as if section 561 of the Companies Act, did not apply to such allotment or sale and that this power shall expire
(unless previously varied, revoked or renewed by the Company in general meeting) at the conclusion of the Annual
General Meeting of the Company to be held in 2027 or, if earlier, on the expiry of 15 months from the passing of this
resolution, save that the Company may, at any time prior to the expiry of such authority, make an offer or enter into
an agreement which would or might require the allotment or sale of Ordinary Shares in pursuance of such an offer or
agreement as if such authority had not expired.
Section 4 – Other Information 91
13. That, in addition to the authority contained in Resolution 11, the Directors be and are hereby generally and
unconditionally authorised to exercise all powers of the Company to allot a further 19,481,498 Ordinary Shares
(equivalent to 10% of the issued share capital of the Company as at the date of this notice of this Annual General
Meeting) provided the issued price for any such allotment shall be at a premium to net asset value per Ordinary Share,
and that this authority shall expire (unless previously varied, revoked or renewed by the Company in general meeting)
at the conclusion of the Annual General Meeting of the Company to be held in 2027 or, if earlier, on the expiry of 15
months from the passing of this resolution, save that the Company may, at any time prior to the expiry of such authority,
make an offer or enter into an agreement which would or might require the allotment of Ordinary Shares in pursuance of
such an offer or agreement as if such authority had not expired.
14. That, in addition to the authority contained in Resolution 12, but in substitution for all other subsisting authorities under
sections 570 and 573 of the Companies Act to the extent unused, and without prejudice to the exercise of any such
power prior to the date hereof, subject to the passing of resolution 13, the Directors be and are hereby empowered,
pursuant to sections 570 and 573 of the Companies Act, to allot 19,481,498 Ordinary Shares and/or sell Ordinary Shares
from treasury, in each case for cash pursuant to the authority conferred by resolution 13 provided the issued price for
any such allotment shall be at a premium to net asset value per Ordinary Share, as if section 561 of the Companies Act
did not apply to such allotment or sale and that this power shall expire (unless previously varied, revoked or renewed by
the Company in general meeting) at the conclusion of the Annual General Meeting of the Company to be held in 2027
or, if earlier, on the expiry of 15 months from the passing of this resolution, save that the Company may, at any time prior
to the expiry of such authority, make an offer or enter into an agreement which would or might require the allotment or
sale of Ordinary Shares in pursuance of such an offer or agreement as if such authority had not expired.
15. That the Company be and is hereby generally and unconditionally authorised in accordance with section 701 of the
Companies Act to make market purchases (within the meaning of section 693(4) of the Companies Act) of Ordinary
Shares, provided that:
a) the maximum number of Ordinary Shares hereby authorised to be purchased shall be 29,202,766 (representing
14.99% of the Company’s issued share capital of the Company at the date of this notice (excluding treasury shares))
or, if less, the number representing approximately 14.99 per cent. of the issued ordinary share capital of the
Company (excluding treasury shares) as at the date on which this resolution is passed;
b) the minimum price (exclusive of any expenses) which may be paid for an Ordinary Share is 1 penny;
c) the maximum price (exclusive of any expenses) which may be paid for each Ordinary Share is not more than the
higher of (i) 5% above the average of the middle market quotations for the Ordinary Shares for the five business days
immediately before the day on which that Ordinary Share is contracted for purchase and (ii) the higher of the price
of the last independent trade and the highest then current independent bid for the Ordinary Shares on the trading
venue where the purchase is carried out;
d) the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be
held in 2027 or, if earlier, on the expiry of 15 months from the passing of this resolution, unless such authority is
renewed or revoked by the Company prior to such time; and
e) the Company may make a contract to purchase Ordinary Shares under the authority hereby conferred prior to the
expiry of such authority, which will or may be executed wholly or partly after the expiration of such authority and may
purchase Ordinary Shares pursuant to any such contract as if the authority had not expired.
16. That a general meeting of the Company other than an Annual General Meeting may be called on not less than 14 clear
days’ notice, provided that this authority shall expire at the conclusion of the Company’s next Annual General Meeting
after the date of the passing of this resolution.
By order of the Board Registered Office:
4th Floor,
46-48 James Street,
London, W1U 1EZ
For and on behalf of NSM Funds (UK) Limited
Company Secretary
7 April 2026
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Information on the Company’s website
1. Information regarding the meeting, including the information required by section 311A Companies Act 2006, is available at the Company’s
website www.nipponactivevaluefund.com. Investors should note, however, that contents of the Company’s website, and the contents of any
website which can be accessed through links on the Company’s website, do not form part of this notice.
Attend, speak and vote at the AGM
2. Holders of Ordinary Shares of one penny each in the capital of the Company (“shares”) are entitled to attend, speak and vote at the AGM
(“shareholders”). The AGM will be held physically. Only those shareholders registered in the register of members of the Company as at
6.30 p.m. on 2 June 2026 (the “specified time”) shall be entitled to vote at the AGM in respect of the number of shares registered in their
name at that time. Changes to entries on the relevant register of securities after 6.30 p.m. on 2 June 2026 shall be disregarded in determining
the rights of any person to vote at the AGM. If the AGM is adjourned to a time not more than 48 hours after the specified time applicable to
the original meeting, that time will also apply for the purpose of determining the entitlement of shareholders to vote (and for the purpose of
determining the number of votes they may cast) at the adjourned meeting. If, however, the AGM is adjourned for a longer period then, to be
so entitled, shareholders must be entered on the Company’s register of members at the time which is 48 hours before the time fixed for the
adjourned meeting, or if the Company gives notice of the adjourned meeting, at the time specified in that notice.
Appointment of Proxy
3. A shareholder entitled to attend, speak and vote at the AGM may appoint one or more persons as his/her proxy to attend, speak and vote on
his/her behalf at the AGM. A proxy need not be a shareholder of the Company. If multiple proxies are appointed, they must not be appointed
in respect of the same shares. To be effective, the enclosed form of proxy (“Form of Proxy”), together with any power of attorney or other
authority under which it is signed or a certified copy thereof, should be lodged at the office of the Company’s Registrar, Computershare
Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY by no later than 12.30 p.m. BST on 2 June 2026.
4. If you return more than one proxy appointment, either by paper or electronic communication, that validly received last by the Registrar before
the latest time for the receipt of proxies will take precedence. You are advised to read the terms and conditions of use carefully. Electronic
communication facilities are open to all shareholders and those who use them will not be disadvantaged.
5. As an alternative to completing the Form of Proxy, shareholders can appoint a proxy electronically via the Registrar’s online voting portal
www.investorcentre.co.uk/eproxy. For an electronic proxy appointment to be valid, your appointment must be received by the Registrar no
later than 12.30 p.m. BST on 2 June 2026.
6. The appointment of a proxy will not normally prevent a shareholder from attending the AGM, speaking and voting if he/she so wishes. The
Articles provide that (subject to certain exceptions) at the AGM each shareholder present in person or by proxy shall have one vote on a show
of hands and on a poll every shareholder present in person or by proxy shall have one vote for every Share of which he/she is the holder. The
termination of the authority of a person to act as proxy must be notified to the Company in writing by no later than 12.30 p.m. BST on 2 June
2026. Amended instructions must be received by the Registrar by the deadline for receipt of proxies. Where you have appointed a proxy using
the Form of Proxy and would like to change the instructions using another hard-copy Form of Proxy, please contact the Registrar’s helpline on
0370 707 1346 (or +44 370 707 1346 from outside the UK). Lines are open 8.30 a.m. to 5.30 p.m. Monday to Friday (excluding public holidays
in England and Wales).
7. To appoint more than one proxy, shareholders will need to complete a separate Form of Proxy in relation to each appointment, stating clearly
on each Form of Proxy the number of shares in relation to which the proxy is appointed. A failure to specify the number of shares to which
each proxy appointment relates or specifying an aggregate number of shares in excess of those held by the shareholder will result in the proxy
appointment being invalid. Please indicate if the proxy instruction is one of multiple instructions being given. If you require additional Forms of
Proxy, please contact the Registrar’s helpline on 0370 707 1346 (or +44 370 707 1346 from outside the UK). Lines are open 8.30 a.m. to 5.30
p.m. Monday to Friday (excluding public holidays in England and Wales). All Forms of Proxy must be signed and should be returned together in
the same envelope if possible.
8. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the
most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s
register of members in respect of the joint holders (the first named being the most senior).
9. Any person holding 3% or more of the total voting rights of the Company who appoints a person other than the Chair of the meeting as
his/her proxy is to ensure that both he/she and his/her proxy comply with their respective disclosure obligations under the UK Disclosure
Guidance and Transparency Rules.
Crest Members
10. Shareholders who hold their shares electronically may submit their votes through CREST. Instructions on how to vote through CREST can be
found by accessing the following website: www.euroclear.com.
Notice of Annual General Meeting (“AGM”) continued
Section 4 – Other Information 93
11. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the AGM
and any adjournment(s) thereof by following the procedures described in the CREST manual (available via www.euroclear.com). CREST
personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should
refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
12. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy
Instruction”) must be properly authenticated in accordance with Euroclear UK & International Limited’s specifications and must contain the
information required for such instructions, as described in the CREST manual (available via www.euroclear.com). The message, in order to
be valid, must be transmitted so as to be received by the Company’s agent, ID: 3RA50, by the latest time for receipt of proxy appointments
specified in note 3 above. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to
the message by the CREST Applications Host) from which the Company’s agent is able to retrieve the message by enquiry to CREST in the
manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the
appointee through other means.
13. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & International Limited
does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in
relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a
CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his/her CREST sponsor or voting
service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any
particular time.
14. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those
sections of the CREST manual concerning practical limitations of the CREST system and timings.
15. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) (a) of the Uncertificated Securities
Regulations 2001.
Nominated Persons
16. A person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a
“Nominated Person”) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be
appointed (or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such proxy appointment right or does
not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting
rights. The statements of the rights of members in relation to the appointment of proxies in note 3 above do not apply to a Nominated Person.
The rights described in those notes can only be exercised by registered shareholders of the Company. Shareholders and Nominated Persons
are reminded that there are restrictions on attendance at the AGM, as set out in these Notes.
Corporate Representatives
17. Any corporation which is a shareholder may appoint one or more corporate representatives who may exercise on its behalf all of its powers
as a shareholder provided that they do not do so in relation to the same shares. However, before deciding to elect to appoint a corporate
representative, shareholders should take note of the restrictions on attendance at the AGM, as set out in the Notice of AGM. Corporate
shareholders may also appoint one or more proxies in accordance with note 5.
Issued Share Capital
18. As at 2 April 2026 (being the latest practicable date prior to the publication of this report) the Company’s issued share capital amounted to
194,814,986 Ordinary Shares carrying one vote each. No shares were held in treasury. Therefore, the total voting rights of the Company as at
6 April 2026 were 194,814,986.
Shareholder Questions and Answers
19. Shareholders are invited to submit questions in advance by email to NAVF@nsm.group by the close of business on 1 June 2026. The Company
must cause to be answered any question asked by a shareholder relating to the business being dealt with at the meeting unless:
(a) answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information;
(b) the answer has already been given on a website in the form of an answer to a question; or
(c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
Electronic Address
20. Shareholders may not use any electronic address provided either in the Notice of AGM or any related documents (including the Form of Proxy)
to communicate with the Company for any purpose other than those expressly stated.
Factsheet/ 28
th
February 2022