CC Japan Income &
Growth Trust plc
Annual Report and Accounts
for the year ended 31 October 2025
CC Japan Income & Growth Trust plc Annual Report and Accounts for the year ended 31 October 2025
Contents
Strategic report
Investment objective IFC
Financial information and performance summary 1
Highlights 2
Chairman’s Statement 4
Portfolio Manager’s Report 6
Top Ten Holdings 8
Holdings In Portfolio 10
Top Ten Sectors/Business Areas 11
Top Ten Contracts for Difference 12
Approach To Environmental, Social and
Governance (“ESG”) 13
Business Review 16
Risk and Risk Management 19
Stakeholder Engagement 22
Governance
Board of Directors 25
Directors’ Report 26
Corporate Governance 30
Directors’ Remuneration Implementation Report 35
Report of the Audit and Risk Committee 39
Statement of Directors’ Responsibilities 41
Independent Auditor’s Report 42
Financial statements
Income Statement 49
Statement of Financial Position 50
Statement of Changes in Equity 51
Statement of Cash Flows 52
Notes to the Accounts 53
Other information
Glossary and Alternative Performance Measures 70
The Securities Financing Transactions
Regulation (Unaudited) 74
Company Information 76
Notice of Annual General Meeting 77
Notes to the Notice of Annual General Meeting 79
Form of Proxy 83
CC Japan Income
& Growth Trust plc
Investment Objective
The investment objective of the CC Japan
Income & Growth Trust plc (the “Company”
or “CCJI”) is to provide shareholders with
dividend income combined with capital
growth, mainly through investment in
equities listed or quoted in Japan.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 1
£324.0m
Net assets
(2024: £265.8m)
240.5p
Net asset value (“NAV”)
per share
1
(2024: 197.3p)
7.7%
Share price discount to NAV
2
(2024: 9.4%)
1.06%
Ongoing charges
2
(2024: 1.03%)
19.3%
Gearing (net)
2
(2024: 19.2%)
222.0p
Share price
(2024: 178.8p)
Financial Information
As at 31 October 2025
Performance summary
For the year to
31 Oct 2025
% change
For the year to
31 Oct 2024
% change
NAV cum-income total return per share
1,2,3
25.2% 16.1%
Share price total return
1,2,3
27.9% 13.2%
Tokyo Stock Exchange Price Index (“TOPIX”) total return 24.1% 13.4%
Revenue return per share 5.92p 5.32p
Dividends per share:
First interim dividend 1.65p 1.60p
Second interim dividend 4.25p 3.85p
Total dividends per share for the year 5.90p 5.45p
1 Measured on a cum-income basis.
2 This is an Alternative Performance Measure (“APM”). Definitions of APMs used in this report, together with how these measures have been calculated,
are disclosed on pages 70 to 73 of this report.
3 Total returns are stated in sterling, including dividends reinvested.
Source: Frostrow Capital LLP.
Overview
Overview
2 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
CCJI NAV and share price total return since inception
CCJI annual performance summary
Year to October unless
otherwise stated
Launch to
2016
1
2017 2018 2019 2020 2021 2022 2023 2024 2025
Share price (p) 122.40 152.00 153.00 150.00 119.50 154.00 138.75 162.50 178.75 222.00
Share price total return (%) 23.5 27.2 2.8 0.7 (17.3) 32.7 (7.1) 20.9 13.2 27.9
NAV per share (p) 123.90 146.00 148.60 158.90 136.80 165.40 151.09 174.50 197.31 240.52
NAV total
return per share (%) 24.9 20.7 4.1 9.9 (11.1) 24.3 (5.9) 18.9 16.1 25.2
TOPIX total return in sterling (%) 32.7 10.1 (0.4) 7.2 0.3 11.9 (9.5) 12.0 13.4 24.1
Revenue return per share (p) 3.60 4.06 4.55 5.26 5.04 4.75 5.14 5.37 5.32 5.92
Dividends per share (p) 3.00 3.45 3.75 4.50 4.60 4.75 4.90 5.30 5.45 5.90
2
1 Period from the Company’s launch on 15 December 2015 to 31 October 2016.
2 Includes second interim dividend of 4.25p for the year ended 31 October 2025.
Dec
15
Jun
16
Dec
16
Jun
17
Dec
17
Jun
18
Dec
18
Jun
19
Dec
19
Jun
20
Dec
20
Jun
21
Dec
21
Jun
22
Dec
22
Jun
23
Dec
23
Jun
24
Oct
24
80
100
120
140
160
180
200
220
240
260
280
TOPIX total returns (in GBP)CCJI NAV cum income total returns CCJI dividend reinvested share price total returns
Dec
15
Jun
16
Dec
16
Jun
17
Dec
17
Jun
18
Dec
18
Jun
19
Dec
19
Jun
20
Dec
20
Jun
21
Dec
21
Jun
22
Dec
22
Jun
23
Dec
23
Jun
24
Dec
24
Jun
25
Oct
25
TOPIX total returns (in GBP)CCJI NAV cum-income total returns CCJI share price total returns
50
100
150
200
250
300
350
Highlights
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 3
Dividend performance since inception
Comparison of NAV total return performance of the Company with TOPIX total return over five years and since inception
0.00p
1.00p
2.00p
3.00p
4.00p
5.00p
6.00p
2016
2017 2018 2019 2020 2022 2024 2025
Total dividends per share
3.00p
3.45p
3.75p
4.50p
4.60p
4.75p
4.90p
5.30p
2021
2023
5.45p
5.90p
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
YE Oct
2021
YE Oct
2022
YE Oct
2023
YE Oct
2024
YE Oct
2025
5 Years to
Oct 2025
CCJI NAV total return
TOPIX total return
-5.9%
-9.5%
24.3%
18.9%
12.0%
16.1%
13.4%
[●]% [●]%
11.9%
[●]%
[●]%
YE Oct
2021
YE Oct
2022
YE Oct
2023
YE Oct
2024
YE Oct
2025
5 Years to
Oct 2025
Since 2015 inception
to Oct 2025
CCJI NAV total return
TOPIX total return
(5.9)%
(9.5)%
24.3%
18.9%
12.0%
16.1%
13.4%
25.2%
24.1%
11.9%
102.5%
59.6%
216.0%
149.1%
(50.0)%
0.0%
50.0%
100.0%
150.0%
200.0%
250.0%
4 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Strategic Report
Chairman’s Statement
15 December 2025 marked the Company’s tenth anniversary since
launch, and the Board was delighted to be joined on this day by the
investment management team, founding Directors, shareholders and
advisers to acknowledge this milestone at the market closing bell
ceremony at the London Stock Exchange.
This milestone was worthy of celebration. Since its launch on
15December 2015 to 31October 2025, the Company has comfortably
outperformed the TOPIX and has been the best performer in its AIC
peer group, having returned 189.8% and 216.0% on a share price
and Net Asset Value (“NAV”) per share total return basis respectively,
compared with the TOPIX which returned 149.1%.
Furthermore, the Company’s dividend has risen every year since
inception, and will achieve a tenth consecutive increase upon the
payment of the Company’s second interim dividend for the year ended
31 October 2025 on 2 March 2026 earning the Company a coveted
place on the AIC’s ‘Next Generation Dividend Heroes’ list.
The Company’s performance showcases the resilience of the
Investment Manager’s quality-led, differentiated approach to investing
in Japan. Throughout the ten years, the investment process has
remained consistent. The Investment Manager focuses on high quality
Japanese companies that prioritise growth and shareholder returns,
and trade at reasonable valuations. In addition the portfolio companies
are benefitting from ongoing corporate governance reforms. This
long-term outperformance has largely stemmed from the Investment
Manager’s disciplined adherence to process and consistent value
added through careful stock selection.
We thank shareholders for their continued support, which we
witnessed at the Company’s Annual General Meeting held in March
2025, where shareholders voted overwhelmingly in favour of the
Company’s continuation as an investment trust for a further three-year
period, with 99.9% of votes cast in favour of the resolution.
The year under review
I am pleased to report that the Company has delivered another year of
strong performance in what has been a volatile market environment.
The 12 month reporting period included a sharp sell-off following
“Liberation Day”, and despite the subsequent tariff-related volatility
that rattled Japanese markets, performance for the full year was again
ahead of the TOPIX, supported by strong stock selection, particularly
among financials.
For the twelve months to 31 October 2025, the Company’s share price
total return was 27.9% and the net NAV total return per share was
25.2%. The discount at which the shares trade relative to NAV narrowed
during the year, enhancing shareholder returns. The TOPIX, a widely
used measure of Japanese equity performance, returned 24.1% in
sterling terms and on a total return basis. It is pleasing that against all
the challenges, the Company’s disciplined investment approach has
continued to deliver attractive returns for shareholders.
Discount
The share price discount to NAV ended the year at 7.7% (31 October
2024: 9.4%). The Board did not consider it necessary to undertake
share buybacks in the year, but it continues to monitor the discount
closely and will act quickly and decisively when it judges intervention
to be in shareholders’ best interests.
Income and dividends
The Company remains committed to a progressive dividend policy.
Net revenue per share for the year was 5.92 pence, compared with
5.32pence in the prior year. The Board has declared total dividends of
5.90 pence per share, representing an increase of 8.3% over last year.
Having paid an initial first interim dividend of 1.65 pence per share on
1August 2025, a second interim dividend of 4.25 pence per share
will be paid on 2March 2026 to shareholders on the register as at
30January 2026, with an ex-dividend date of 29 January 2026.
We believe the Company remains well positioned to sustain its record
of dividend growth, supported not only by a portfolio of cash-generative
businesses and strong reserves, but also Japan’s broader shift towards
improved capital efficiency, governance and shareholder returns.
Gearing
Structural gearing, maintained at approximately 20% of shareholders’
funds, remains a core component of the Company’s investment
strategy. While gearing can increase short-term volatility, the Board
continues to believe that a consistent, disciplined use of leverage,
whilst amplifying short-term market movements, can enhance long-
term capital and income returns for shareholders, removing any
additional market timing risk.
Investment Manager and company advisers
As a reminder, our Investment Management team has been led by
Richard Aston since the Company’s inception. Richard has extensive
knowledge of the Japanese market built over the last three decades,
which has seen him cultivate strong relationships with company
managements and establish a respected reputation among Japanese
corporates. Richard is supported by portfolio managers/analysts
Megumi Takayama and Theo Wyld. Megumi, who joined Chikara
Investments LLP (“Chikara”) in December 2018, specialises in
“Since its launch on 15 December 2015 to 31 October 2025, the Company has comfortably
outperformed the TOPIX and has been the best performer in its AIC peer group, havingreturned
189.8% and 216.0% on a share price and Net Asset Value (“NAV”) per share total return basis
respectively, compared with the TOPIX which returned 149.1%.”
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 5
Japanese small and mid-caps, and brings with her extensive
experience in the IPO market. She began her career at Bloomberg in
2006 before moving into Japanese equity sales at SMBC Nikko and
later Nomura.
We were pleased to welcome Theo to the Company’s investment
management team in October 2024, and he is already proving to be a
great addition. Before joining Chikara, Theo spent more than five years
at Ruffer, where he was latterly the co-manager of the Ruffer Japanese
Fund. Prior to this, he spent three years as a research analyst at
JMFinn, covering UK and global equities.
Our operational arrangements have also been bolstered this year
following a review completed by the Board in 2024. Frostrow Capital
LLP (“Frostrow”) was appointed with effect from 1 January 2025
as the Company’s Alternative Investment Fund Manager (“AIFM”),
Administrator and Company Secretary. Frostrow was also appointed
to provide investor relations and marketing services to the Company,
alongside the team at Chikara. This new relationship will enhance
the quality of financial reporting and improve governance standards
by adding an additional layer of independent oversight. It will also
strengthen our marketing and investor relations efforts, enhancing
shareholder communications and generating further demand for the
Company’s shares.
To this end you will note a higher profile for the Company through
various media to include videos, podcasts and in-person meetings,
together with ongoing interaction with national and investment industry
journalists. We will continue to appraise methods for increasing
engagement with shareholders and disseminating information through
various communication channels. We were pleased to launch the
Company’s redesigned website in September. The new site can be
found at https://www.ccjapanincomeandgrowthtrust.com, or by
scanning the QR code below.
Annual General Meeting (“AGM”)
The Company’s tenth AGM will be held at the offices of Stephenson
Harwood LLP, 1 Finsbury Circus, London EC2M 7SH at 12 noon
on Friday, 27 February 2026. The Portfolio Managers will give a
presentation to shareholders on the Company’s recent performance,
notable portfolio changes and their thoughts on the outlook for the
Japanese equity market. Shareholders will have an opportunity to
meet the Directors, the investment management team and other
Company advisers.
We very much look forward to seeing as many shareholders as
possible this year. For those investors who are not able to attend
the meeting in person, a video recording of the Portfolio Manager’s
presentation will be uploaded to the website after the meeting.
Shareholders can submit questions in advance by writing to the
Company Secretary at cosec@frostrow.com. If shareholders are
unable to attend the meeting in person, they are strongly encouraged
to vote by proxy and to appoint the “Chair of the Meeting” as their
proxy. Details of how to vote, either electronically, by proxy form or
through CREST, can be found in the Notes to the Notice of AGM on
pages 79 to 81.
Outlook
The Company has outperformed the TOPIX over the past 12months
and remains well placed to benefit from several supportive trends:
high-quality growth companies using strong balance sheets to
allocate capital more efficiently; the resilience of strong domestic
businesses less exposed to global trade frictions; and the undervalued
corporate governance-driven winners emerging across the market.
Japan’s stock market has delivered strong performance over the
period since the Company’s inception. The Board and Investment
Manager believe that the economic and regulatory changes in Japan
are likely to benefit good domestic businesses and that Japan will
remain a favourable environment for investors. While the yen is
unusually weak by any measure, it is worth remembering that foreign
investors are still significantly underweight the Japanese market.
On behalf of the Board, I would like to thank shareholders for their
continued support.
June Aitken
Chairman
20 January 2026
6 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Strategic Report
Portfolio Manager’s Report
Performance review
The NAV per share of CC Japan Income & Growth Trust rose by 25.2%
in total return sterling terms during the year to 31 October 2025. The
Japanese equity market recorded strong returns over the reporting
period, with the TOPIX returning 24.1% (in sterling terms and on a
total return basis) despite extreme volatility at different stages during
the year as sentiment towards equities reflected broader geopolitical
discourse and evolving economic concerns.
The healthy annual return continues the strong performance track
record of the Company in the 10 years since launch on 15 December
2015, with a capital return of 144.8% complemented by an average
8.0% increase year on year in the distributable dividend. This attractive
long-term return profile is consistent with the opportunity outlined at
the inception of the Company in December 2015.
The Japanese equity market has continued to build on the strong
performance of recent years, with accelerating corporate reforms
and the transition within the domestic economy from deflation to
inflation both contributing significantly to a robust corporate earnings
environment. It is encouraging that these trends have not been
derailed by heightened uncertainties over the direction of the global
economy or deteriorating international relations. The Corporate
Governance Code, introduced by the Japanese Financial Services
Agency in 2015, is also approaching its 10th anniversary, and has
been a significant factor in the improving corporate outlook and
consistency of equity market returns. Upcoming amendments to this
Code augur well for the forward-looking investment opportunity.
The top performing holding over the period was Fujikura which is
a beneficiary of the capital expenditure required to deliver artificial
intelligence. An important distinction is that its financial returns are being
realised now and are not based on speculative projections. Fujikura is
an industry leading manufacturer of optical fibre and optical connectors
which are vital components in the construction of datacentres.
SBI Holdings, Japan’s leading online financial services company, and
Nintendo, the video game and entertainment company, were also top
active contributors. SBI Holdings gained increasing recognition for
its successful transition to a financial conglomerate at the forefront
of exciting domestic opportunities in banking, venture capital, asset
management and cryptocurrency. Nintendo launched its new
hardware model, the Switch 2, to strong acclaim and is set to further
its reputation and financial success as a global entertainment provider.
Despite strong performance Nintendo remains undervalued, having
one of the highest ratios of net cash to equity in Japan.
The widespread pressures to improve capital efficiency and corporate
governance in Japan have accelerated all aspects of corporate
reform with notable examples of consolidation and privatisation.
Within the portfolio, Carta Holdings, a listed subsidiary of marketing
giant Dentsu, was subject to a tender offer by NTT DoCoMo at a
premium to the prevailing share price. This has resulted in the mobile
telephone company becoming the largest shareholder and enhancing
its collaboration with Dentsu to accelerate the benefits of Carta’s
digital marketing expertise. Additionally, Technopro announced a
management buyout at a significant premium to the share price.
There has been a common theme in the recent quarterly results of
the weakest performers in the portfolio over the last twelve months.
Shin-Etsu Chemical, Shimano and Hamamatsu Photonics had all
established world leading positions in their respective operations but
are not immune to industry vagaries. Recent turbulence in trading
activity due to inventory consolidation and capital investment delays
has resulted in a temporary slowdown in demand which has affected
their near-term expectations. The fact that the challenges have
emerged in such a short period of time also suggests that the recovery
may appear just as quickly when the issues subside. The commitment
to capacity investment and shareholder returns at each of these
companies confirms our confidence in their longer-term prospects.
Emphasis on the long-term investment potential remains a
key characteristic of the strategy and the process behind it. An
exuberance over artificial intelligence has been a notable feature
over the last few months. While acknowledging the opportunities
this advancing technology presents, it is important to maintain a
disciplined approach to stock selection and to not compromise on
valuation, governance standards or cashflow generation which are
the key facets of our approach.
Portfolio positioning
We believe that the Japanese equity market has become increasingly
attractive to both domestic and international investors, underpinned
by the structural reforms aimed at improving capital efficiency
and corporate governance. The Tokyo Stock Exchange’s market
restructuring and its 2023 initiative urging companies to adopt
“management conscious of cost of capital and stock price” have
encouraged firms to optimise balance sheets, enhance profitability,
and boost valuations through measures such as share buybacks,
dividend hikes and unwinding of crossholdings. Complementing this,
Japan’s Financial Services Agency (“FSA”) has reinforced governance
standards through revisions to the Stewardship and Corporate
Governance Codes, promoting transparency, board independence,
and shareholder engagement.
But, very importantly, firms are not merely shrinking to realise inherent
value. We see increasing evidence that companies are seeking
to create value and expressing a renewed ambition by allocating
resources to strategic areas for growth such as digital transformation,
advanced technologies, and overseas expansion to strengthen
long-term competitiveness. Consequently, our universe of investment
candidates continues to broaden and highlighted overleaf are recently
established holdings new to the strategy.
“The Japanese equity market has continued to build on the strong performance of recent years,
with accelerating corporate reforms and the transition within the domestic economy from
deflation to inflation both contributing significantly to a robust corporate earnings environment.”
Fujikura has established a strong global presence in specialist
fields including optical fibre and telecommunication infrastructure.
Technological advances have resulted in a dramatic pick-up in
demand in recent years which has allowed the company to improve its
financial standing and reward shareholders through a significant rise
in its annual dividend distribution.
Hoya is a world leader in optical technologies with strong global
positions in the fields of technology and healthcare. The company has
indicated an improved shareholder return policy going forward with
progressive dividend increases and a more tightly defined allocation of
the cashflow generated and retained on its balance sheet. We believe
the combination of investment for growth with a greater consistency
of dividend and share buybacks going forward will offer an attractive
total return.
Shimano is a leading global manufacturer of bicycle parts and fishing
equipment. It has experienced an unusually long inventory correction
in the aftermath of the pandemic which is now coming to an end,
particularly in Europe, its main market. The company announced a
new mid-term plan with much clearer commitments on cash allocation
and initiatives to improve capital efficiency which have offered a
considerably more attractive investment proposition.
Noritsu Koki has over the years transitioned from a family run
manufacturing company to an independent investment vehicle with
primary interests in a small number of niche sectors including audio
equipment and peripherals, parts and materials manufacturing, and
healthcare and research services. Its operating businesses are cash
generative which, combined with a clear shareholder return policy,
offer the potential of rising returns.
Conversely, some companies face new challenges and the holdings
in Noevir, Tokyo Metro and GMO Internet have been fully exited over
the reporting period. Cosmetic manufacturer Noevir is experiencing
new competitive pressures from Korean makers and consequently a
more challenging outlook for its products. We are concerned that the
company management has taken a very conservative stance which
could threaten the long-term track record of dividend increases.
The first mid-term plan released by Tokyo Metro since its IPO
disappointingly fell short of expectations in relation to capital efficiency,
cost control and consequently shareholder return. GMO Internet, a
network infrastructure provider, performed well during the first half of
the year in response to selected business portfolio restructuring, but
we believe that the sprawling parent-subsidiary group structure falls
short of the governance standards that we encourage.
Financial companies feature prominently in the current portfolio. The
leading banks, Sumitomo Mitsui Financial Holdings and Mitsubishi
UFJ Holdings, have been beneficiaries of the Bank of Japan’s intention
to normalise monetary policy which has progressed during the last 12
months but has further to go. Sumitomo Mitsui Trust Holdings, JAFCO,
and Japan Securities Finance will benefit from improving prospects
for financial returns as interest rates are gradually increased.
Outlook
As the Company reaches its 10th anniversary, it is possible to
demonstrate how the combined efforts of the Japanese government,
the Tokyo Stock Exchange (“TSE”) and the FSA have been the catalyst
for a cultural shift in Japanese corporate responsibilities. This has
resulted in considerable benefits to investors of this Company through
a combination of capital appreciation complemented by a progressive
increase in the annual dividend. We believe this track record serves as
the foundation of more to come.
In an interview for the Nikkei newspaper, Hiromi Yamaji, the Chief
Executive Officer of the Japan Exchange Group and the architect of
the market reform initiative, highlighted the substantial progress so
far but also suggested that this represented less than a fifth of the
ultimate potential. To this end, we believe that the speed of change
is accelerating and is evident in data reflecting associated activity
such as dividend growth, share buybacks and unwinding of cross-
shareholdings.
A revision of the Corporate Governance Code due in 2026 will
encourage companies to move beyond basic reform and balance
sheet optimisation towards more efficient allocation of resources
for strategic expansion. This aligns closely with the perspectives
promoted by Japan’s new Prime Minister, Sanae Takaichi, and indeed
the investment principles of this strategy. Such a strong commitment
to sustainable, long-term value creation signals an additional change
in corporate behaviour and enhances the investment attraction of
Japanese equities.
Richard Aston, Portfolio Manager
Chikara Investments LLP
20 January 2026
CC Japan Income & Growth Trust plc Annual Report & Accounts 2025 7
8 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Strategic Report
Top Ten Holdings
5
Hoya operates in two main business segments in which it has established world
leading positions. The information technology division, which includes hard disk
drive substrates, extreme ultraviolet mask blanks and image related products, and
the Life Care division which covers healthcare and medical related products such as
eyeglasses.The shareholder return policy prioritises capital allocation for future growth
through organic expansion and M&A activity but this has been accompanied recently by
a clearer focus on balance sheet efficiency and intent to deliver a more consistent and
progressive dividend.
4.2%
of net assets
(2024: nil)
Hoya Corp
1
Sumitomo Mitsui Financial Group was established through the merger of Sumitomo
Bank and Sakura Bank in 2001. It is one of Japan’s leading financial groups offering
services such as commercial banking, leasing, securities, consumer finance and
asset management. The company targets continued growth in shareholder value by
promoting disciplined investment and alliances, sound financials and progressive
shareholder returns.
4.8%
of net assets
(2024: 7.0%)
Sumitomo Mitsui
Financial Group Inc
3
Nintendo is an international console and handheld gaming company with leading positions
in both hardware and software production. Initiatives to improve the financial return on the
company’s extensive intellectual property are being accompanied by efforts to bolster its
corporate governance. Management has a clear policy towards dividends and is taking a
more proactive stance towards share buybacks.
4.6%
of net assets
(2024: 4.1%)
Nintendo Co Ltd
2
Fujikura is a leading manufacturer of optical fibre, optical components and other
advanced products used across a range of industries. Recent strong global demand
for datacentres and AI infrastructure has driven a dramatic turnaround in operational
performance. The most recent mid-term plan seeks to capture the opportunity
through further growth investment whilst maintaining a disciplined approach to capital
allocation. Consequently, the business expansion will be accompanied by favourable
trends in dividend distribution and share buybacks.
4.6%
of net assets
(2024: nil)
Fujikura Ltd
4
Mitsubishi UFJ Financial Group (“MUFJ”) was established in 2005 through the merger
of Mitsubishi Tokyo Financial Group and UFJ Holdings. It is now one of Japan’s
leading financial services groups with established operations around the world, most
prominently in Asia and North America. This includes a strategic alliance and a 23%
stake in Morgan Stanley. MUFJ continues to promote a balanced capital management
policy maintaining a strong capital base, appropriate allocations to strategic growth
opportunities and enhancing shareholder returns.
4.3%
of net assets
(2024: 4.9%)
Mitsubishi UFJ
Financial Group Inc
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 9
8
Tokyo Electron is a global supplier of semiconductor production equipment, holding
leading market shares in a number of key segments in the manufacturing process. It has
maintained a proactive shareholder return policy, balancing financial soundness with
investment opportunities and the goal of achieving strong performance, both operating
and investment, through industry cycles.
3.9%
of net assets
(2024: 2.0%)
Tokyo Electron Ltd
6
Itochu is one of Japan’s leading trading companies involved in a broad range of
businesses from the provision of upstream raw materials to downstream retail activities.
In recent years Itochu has successfully introduced a business investment strategy based
on high levels of capital efficiency and appropriate cash allocation including increasing
returns to shareholders in the form of dividend and sharebuybacks.
4.1%
of net assets
(2024: 4.4%)
ITOCHU Corp
9
Shin-Etsu Chemical is a manufacturer with top global market share in PVC, semiconductor
silicon wafers and a number of other semiconductor related and functional materials.
The company established a global production base and developed a list of top tier
international customers, which has allowed it to generate a strong track record of
growth despite underlying volatility in individual markets. The company has, in recent
years, given greater attention to shareholder returns within their capital policy, while
maintaining emphasis on stability and progression.
3.7%
of net assets
(2024: 3.7%)
Shin-Etsu
Chemical Co Ltd
7
Mitsubishi Corp is a diversified conglomerate with broad industrial interests including
mineral resources, natural gas, food, automotive and other sectors. Its business
performance has been strengthened by strategic rebalancing of its business portfolio
and improvements in capital efficiency. Management has raised their distribution targets
for shareholders with an emphasis on progressive increases in dividend distribution and
flexible consideration of dividends.
4.0%
of net assets
(2024: 3.2%)
Mitsubishi Corp
10
SoftBank Corp provides telecommunication and associated network services in Japan
and is a subsidiary of the SoftBank Group. The company continues to demonstrate
stronggrowth in its business services segment and from its “beyond carrier” strategy
which includes e-commerce leader Yahoo Japan, online fashion retailer Zozo, social
network Line and electronic payment service PayPay. After a period of significant
investment the management expects growth opportunities to accelerate and enhance
returns to shareholders commensurately.
3.6%
of net assets
(2024: 4.1%)
SoftBank Corp
10 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Strategic Report
Holdings in Portfolio
As at 31 October 2025
Company Main business area Tokyo Stock Exchange (“TSE”) sector
Market value
£’000
% of net
assets
Sumitomo Mitsui Financial Group Inc Banks Banks 15,429 4.8
Fujikura Ltd Optical technology Other products 14,911 4.6
Nintendo Co Ltd Gaming Other products 14,824 4.6
Mitsubishi UFJ Financial Group Inc Banks Banks 14,044 4.3
Hoya Corp Optical technology Precision instruments 13,639 4.2
ITOCHU Corp Trading company Wholesale 13,243 4.1
Mitsubishi Corp Trading company Wholesale 12,837 4.0
Tokyo Electron Ltd Semiconductor production equipment Electrical appliances 12,641 3.9
Shin-Etsu Chemical Co Ltd Silicon wafers & PVC Chemicals 12,080 3.7
SoftBank Corp Mobile telecoms & services Info & communications 11,513 3.6
Tokio Marine Holdings Inc Insurance Insurance 11,424 3.5
SBI Holdings Inc Financial services & investment Securities & commodities 10,248 3.2
Dexerials Corp Functional materials Chemicals 9,253 2.9
Hamamatsu Photonics KK Optical technology Electrical appliances 9,235 2.8
Chugai Pharmaceutical Co Ltd Pharmaceutical Pharmaceutical 9,023 2.7
JAFCO Group Co ltd Venture capital Other financing business 8,793 2.7
Kyocera Corp Electronic components Electrical appliances 7,954 2.5
Japan Securities Finance Co Ltd Specialist financial services Other financing business 7,773 2.4
Marui Group Co Ltd Retail Retail trade 7,595 2.3
Sompo Holdings Inc Insurance Insurance 7,561 2.3
Sumitomo Mitsui Trust Group Inc Banks Banks 7,104 2.2
Nissan Chemical Corp Functional materials Chemicals 6,692 2.1
Nippon Parking Development Co Ltd Real estate Real estate 6,648 2.0
Shimano Inc Bicycle components Transport equipment 6,006 1.9
Noritsu Koki Co Ltd Manufacturing Precision instruments 5,885 1.8
ARE Holdings Inc Recycling Precious metals 5,876 1.8
Nippon Gas Co Ltd Utilities Retail trade 5,823 1.8
Sinko Industries Ltd Air conditioning systems Machinery 5,712 1.8
Daiichi Sankyo Pharmaceutical Pharmaceutical 5,525 1.7
ZOZO Inc Online fashion retail Retail trade 5,522 1.7
Hitachi Ltd IT & infrastructure Electrical appliances 5,256 1.6
Insource Co Ltd Corporate training Services 5,049 1.5
PILLAR Corp Industrial materials Machinery 4,800 1.5
Kao Corp Cosmetics & toiletries Chemicals 4,345 1.3
Denso Corp Automotive components Transport equipment 4,166 1.3
WingArc1st Inc Data solutions Info & communications 2,487 0.8
Shoei Co Ltd Motorbike helmets Other products 1,694 0.5
Total holdings 312,610 96.4
Other net assets 8,680 2.7
Royal London Short-Term Money
Market Fund
Cash and cash equivalents – 2,759 0.9
Net asset value 324,049 100.0
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 11
Top Ten
As at 31 October 2025
Top Ten (Main Business Areas)
TSE sector % of net assets
Banks 11.3
Electrical appliances 10.7
Chemicals 10.0
Other products 9.7
Wholesale 8.1
Precision instruments 6.0
Insurance 5.8
Retail trade 5.8
Other financing business 5.1
Pharmaceutical 4.5
Top Ten 77.0
Other sectors
1
19.4
Other net assets 3.6
Total 100.0
1 Other Sectors comprise seven sectors, which individually, is less than 4.5% each of the net assets.
Top Ten (Tokyo Stock Exchange (“TSE”) sector)
Main business area % of net assets
Optical technology 11.6
Banks 11.3
Trading company 8.1
Insurance 5.8
Functional materials 5.0
Gaming 4.6
Pharmaceutical 4.5
Semiconductor production 3.9
Silicon wafers & PVC 3.7
Mobile telecoms & services 3.6
Top Ten 62.1
Other business areas 34.3
Other net assets 3.6
Total 100.0
Top Ten (main business areas)
12 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Strategic Report
Company Main business area
TSE sector
Absolute value
£’000
Absolute value
as a % of
net assets
Market value
£’000
Sumitomo Mitsui Financial Group Inc Banks Banks 3,086 1.0 127
Fujikura Ltd Optical technology Other products 2,982 0.9 649
Nintendo Co Ltd Gaming Other products 2,965 0.9 149
Mitsubishi UFJ Financial Group Inc Banks Banks 2,809 0.9 53
Hoya Corp Optical technology Precision instruments 2,728 0.8 360
ITOCHU Corp Trading company Wholesale 2,649 0.8 116
Mitsubishi Corp Trading company Wholesale 2,567 0.8 92
Tokyo Electron Ltd
Semiconductor production
equipment
Electrical appliances 2,528 0.8 357
Shin-Etsu Chemical Co Ltd Silicon wafers & PVC Chemicals 2,416 0.7 (189)
SoftBank Corp Mobile telecoms & services Info & communications 2,303 0.7 40
Top Ten CFDs 27,033 8.3 1,754
Other CFDs 35,489 11.0 (12)
Total CFDs 62,522 19.3 1,742
Top Ten continued
Top Ten Contracts For Difference (“CFDs”)
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 13
Approach to Environmental, Social
and Governance (“ESG”)
The Board believes that ESG related issues can affect both the
performance and sustainability of an investment portfolio and that
ESG factors can be potential indicators of management quality and
operational performance. Companies with strong, sustainable profiles
will, it believes, have greater potential to grow and survive in all market
conditions.
The Investment Manager is responsible for engagement on ESG
matters and has a structured, yet flexible approach to incorporating
ESG into the investment process. Its fundamental, hands-on research
approach allows it to integrate seamlessly its responsible investing
efforts alongside the Company’s investment strategy in an effective
manner, which the Board believes will achieve the best long-term
results for the Company’s investors.
ESG research
The Investment Manager considers whether ESG factors are relevant
and where they may have a material impact on stock performance.
The factors considered by the Investment Manager vary by the
industry and company under review and may include the following:
• Environmental: Pollution, site management / consideration,
greenhouse gas emissions, climate change, habitat protection,
recycling, water.
• Social: Human/employee rights, working conditions, health and
safety, firm-employee relations, child / forced labour, conflict zones.
• Governance: Board composition, independence, transparency,
compensation and accountability, shareholder rights and relations,
cyber security, protection of personal data, corruption.
The ESG factors are integrated into the Investment Manager’s bottom-
up investment process and these issues are considered alongside
financial and strategic issues during assessment and engagement
with companies. The ESG risks are qualitative factors rather than
quantitative inputs in a financial model.
The investment team conducts its own research which is
complemented by data and research of third parties. Chikara has
engaged a third party ESG and climate data provider, who provides
ESG related metrics and analysis. These reports are reviewed by
the investment team where available and assist them in identifying
potential areas for engagement with companies as it relates to ESG
factors. Third party reporting includes Climate Impact Reporting
and Norms Based Research. The Investment Manager has a policy
that prohibits investment in a list of companies that manufacture
controversial weapons but does not specifically exclude investment in
industries or individual companies on standardised ESG factors.
Engagement and stewardship
A key component of the ESG process is engagement. TheInvestment
Manager dedicates a significant amount of time and resource focusing
on the ESG characteristics of the companies in which the Investment
Manager invests, and monitoring is carried out through investment
reviews.
The strategy of the portfolio has an explicit focus on improving
relationships between corporate managers and shareholders
in Japan. Consequently, corporate governance is a key point of
discussion in every meeting held with company management. The
goal in each case is to help the senior representatives of the company
develop not only an understanding of the role and requirements of
long-term shareholders but also the realisation that their actions must
be consistent with mutually determined objectives.
The team at Chikara typically conducts over 300 meetings and calls a
year with the management of many different companies. Engagement
serves three main purposes as it relates to ESG:
1. Due diligence – engaging with companies, conducting due
diligence, and understanding potential risks and opportunities
relating to the investment.
2. Education – through engagement with companies, sharing best
practices and providing insights into the ESG practices of peers
(e.g., disclosures, targets, and benchmarking).
3. Action – engaging with companies to encourage disclosures and
target setting.
Although the Investment Manager does not seek to agitate
management through aggressive behaviour with public disclosures
or proposals, it does and will vote against resolutions which it believes
are inconsistent with the future growth and development of the
company.
The Investment Manager is also prepared to sell the shareholding if
necessary.
14 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Strategic Report
Japan Stewardship Code: The Investment Manager is a signatory
to the Japan Stewardship Code and its statement of commitment is
set out on its website: https://www.chikarainvestments.com/japan-
stewardship-code.
UK Stewardship Code: The Investment Manager is a signatory to the
UK Stewardship Code and its statement of compliance with the Code
can be found on its website: https://www.chikarainvestments.com/
stewardship-code.
Principles of Responsible Investment (“PRI”): Chikara became a
signatory to the UN-supported PRI on 6 December 2018. The PRI
is a global standard for investment managers’ ESG alignment. As a
signatory to the Principles, the Investment Manager publicly commits
to adopt and implement them, where consistent with its fiduciary
responsibilities. The Principles can be found here: https://www.
unpri.org/about-PRI/what-principles-for-responsible-investment.
The Investment Manager also commits to evaluate the effectiveness
and improve the content of the Principles over time. It believes this
will improve its ability to meet commitments to beneficiaries as well
as better align its investment activities with the broader interests of
society. Chikara reports annually to the PRI on the firm’s responsible
investment initiatives, activities and achievements and seeks to meet
the standards expected by the PRI in doing so.
Approach to Environmental, Social and Governance (“ESG”) continued
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 15
Example of engagement
Financial services company
We engaged with a leading financial company following media reports of a historical harassment incident which,
we believed, had the potential to damage its reputation among institutional investors. The issue, stemming from a
2019 report, escalated into broader governance and workplace culture questions. We sought to understand the
company’s response and its concrete plans for risk mitigation.
The company demonstrated a proactive commitment to raising standards by introducing formal policies, including
regular anti-harassment training, and establishing an external whistleblowing hotline. Crucially, the company has
continued to enhance the measures in place and launched a formal human rights policy in May 2025, filling a major
governance gap. This policy not only demonstrates management commitment to the highest ethical standards
internally but is also an effort to achieve best practice within the industry. We were encouraged by the company’s
comprehensive response, viewing these actions as positive evidence of strengthened social and governance
frameworks, and continue to own the position.
16 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Strategic Report
The aim of the Strategic Report is to provide shareholders with the
ability to assess how the Directors have performed their duty to
promote the success of the Company for the collective benefit of
shareholders. The financial highlights and ten year record together
with the Chairman’s Statement, Portfolio Manager’s Report, Principal
and Emerging Risks, Long Term Viability Statement and Section 172
Statement form part of this Strategic Report.
The Company’s purpose, values and culture
The primary purpose of the Company is to provide shareholders
with dividend income combined with capital growth, mainly through
investment in equities listed or quoted in Japan.
The Company has been investing in Japanese equities since launch
in 2015. Whilst the Company does not have a benchmark, the Board
measures performance against the TOPIX Total Return and High Yield
indices.
The Board of Directors is responsible for employing and overseeing an
investment management company that has the appropriate capability,
resources and controls in place to actively manage the Company’s
assets in order to meet its investment objective.
As the Company has no employees and acts through its service
providers, its culture is represented by the values and behaviour
of the Board and third parties to which it delegates the provision of
services. To ensure that the Company’s purpose, values, strategy and
culture are aligned, the Board comprises independent Non-Executive
Directors, who together bring a wide range of knowledge, skills and
experience. The Board members contribute to a transparent culture
ensuring effective oversight, critical support and challenge to the
Investment Manager, and all other third-party suppliers. For further
information on the Board’s engagement with stakeholders, please
refer to the Company’s Section 172 Statement on pages 22 and 23.
Investment objective
The Company’s investment objective is to provide shareholders
with dividend income combined with capital growth, mainly through
investment in equities listed or quoted in Japan.
Business model
CC Japan income & Growth Trust plc is an investment trust and public
limited company, incorporated in England and Wales, limited by
shares, and listed on the London StockExchange.
In seeking to achieve its objective the Company has engaged Chikara,
as its Investment Manager, to actively manage the Company’s assets.
The Investment Manager has a well-defined investment strategy and
process which is regularly and rigorously monitored and reviewed
by the Board. The Investment Manager identifies companies which
are undervalued, have strong balance sheets, strong business
franchises, and favourable attitudes to shareholder returns in the form
of sustainable and growing dividends and share buyback policies. The
Board has determined an investment policy and related guidelines and
limits, as describedbelow.
The Company is subject to UK and European legislation and
regulations (where EU regulation has been ‘onshored’ into UK law)
including UK company law, UK Financial Reporting Standards, the FCA
Listing, Prospectus, Disclosure Guidance and Transparency Rules,
the UK Market Abuse Regulation, taxation law and the Company’s
own Articles of Association. The Company is an investment company
within the meaning of Section 833 of the Companies Act 2006 and has
been approved by HM Revenue & Customs as an investment trust (for
the purposes of Sections 1158 and 1159 of the Corporation Tax Act
2010). The Directors have no reason to believe that the Company will
not continue to retain its investment trust status. The Company is not
a close company for taxation purposes. A review of the Company’s
activities and prospects is given in the Chairman’s Statement on
pages4 and 5, and in the Portfolio Manager’s Report on pages 6 and 7.
Investment policy
The Company invests in equities listed or quoted in Japan. The
Company may also invest in exchange traded funds in order to gain
exposure to such equities. Investment in exchange traded funds shall
be limited to not more than 20 per cent. of gross assets at the time
of investment. The Company may also invest in listed Japanese real
estate investment trusts (“J-REITs”).
The Company may enter into long only contracts for difference or
equity swaps for gearing and efficient portfolio management purposes.
No single holding (including any derivative instrument) will represent
more than 10 per cent. of gross assets at the time of investment and,
when fully invested, the portfolio is expected to have between 30 to 40
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 has the flexibility to invest up to 10 per cent. of its gross
assets at the time of investment in unquoted or untraded companies.
The Company is not constrained by any index benchmark in its
assetallocation.
Business Review
The Directors present the Strategic Report for the
Company’s year ended 31 October 2025
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 17
Borrowing policy
The Company may use borrowings for settlement of transactions, to
meet on-going expenses and may be geared through borrowings
and/or by entering into long only contracts for difference (“CFDs”) or
equity swaps that have the effect of gearing the Company’s portfolio
to seek to enhance performance. The aggregate of borrowings and
long only CFDs and equity swap exposure will not exceed 25 per cent.
of net asset value at the time of drawdown of the relevant borrowings
or entering into the relevant transaction, as appropriate, although the
Company’s normal policy will be to utilise and maintain gearing to a
lower limit of 20 per cent. of net asset value at the time of drawdown
of the relevant borrowings or entering into the relevant transaction,
as appropriate. It is expected that any borrowings entered into
willprincipally be denominated in yen.
Hedging policy
The Company does not currently intend to enter into any
arrangements to hedge its underlying currency exposure to
investments denominated in yen, although the Investment Manager
and the Board may review this from time to time.
Results and dividend
The Company’s revenue return after tax for the financial year
amounted to £7,980,000 (2024: £7,173,000). InAugust 2025, the
Company paid an interim dividend of 1.65p (2024: 1.60p) per share. On
16January 2026, the Directors declared a second interim dividend
for the year ended 31October 2025 of 4.25p (2024: 3.85p) per share,
which will be paid on 2 March 2026 to shareholders on the register
at 30 January 2026. Therefore, the total dividend in respect of the
financial year to 31 October 2025 will be 5.90p (2024: 5.45p) per share.
The Company made a capital gain after tax of £57,638,000 (2024: gain
of £30,758,000). The total return, including income, after tax for the
year was a gain of £65,618,000 (2024: gain of £37,931,000).
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 Company’s NAV 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 total return
for the year to 31October 2025 was 25.2% (2024: 16.1%) in sterling
terms, and the NAV total return from the Company’s inception on
15December 2015 to 31 October 2025 was 216.0%.
The Chairman’s Statement on pages 4 and 5 incorporates a review
of the highlights during the year. The Portfolio Manager’s Report on
pages6 and 7 gives details on investments made during the year and
how performance has been achieved.
(ii) Revenue return per share and dividends
The Company’s revenue return per share, based on the weighted
average number of shares in issue during the year, was 5.92p (2024:
5.32p). The Company’s proposed total dividend payable in respect
of the year ended 31 October 2025, including an interim dividend of
1.65p per share paid on 1August 2025 and a second interim dividend
of 4.25p payable on 2 March 2026, is 5.90p (2024: 5.45p) pershare.
(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 share price
closed at a 7.7% discount to the NAV as at 31 October 2025 (2024:
9.4% discount).
(iv) Control of the level of ongoing charges
The Board monitors the Company’s operating costs carefully.
Growing the size of the Company offers many benefits, as not all of
the Company’s operating costs increase in line with the Company’s
assets under management. Based on the Company’s average net
assets for the year ended 31 October 2025, the Company’s ongoing
charges figure calculated in accordance with the AIC methodology
was 1.06% (2024: 1.03%). Whilst the ongoing charges figure has
increased this year, the Board has negotiated the inclusion of a tier
into the management fee calculation which reduces the percentage
rate charged when the Company’s net assets grow in excess of
£300million. At the date of this report, the Company’s net assets
remain above £300 million and therefore we expect the ongoing
charges figure to reduce whilst net assets are above this tier level.
Other information
Modern slavery disclosure
The Company considers that it does not fall within the scope
of the Modern Slavery Act 2015, and it is not, therefore, obliged
to make a slavery and human trafficking statement. The
Company considers its supply chains to be of low risk as its
suppliers are typically professional advisers. A statement from
Chikara, the Company’s Investment Manager, on the steps it
takes to investigate and mitigate the risk of modern slavery
and human trafficking can be found on Chikara’s website
(https://www.chikarainvestments.com/modern-slavery-statement).
Greenhouse gas emissions
The Company has no employees, physical assets, property or
operations of its own, does not provide goods or services and does
not have its own customers. It follows that the Company has little to
no direct environmental impact. In consequence, the Company has
limited greenhouse gas emissions to report from its operations, nor
does it have responsibility for any other sources of emissions under
the Companies Act 2006 (Strategic Report and Directors’ Reports)
Regulations 2013. As the Company has no material operations and
therefore has little energy use, it falls below the threshold to produce
an energy and carbon report. The Company’s ESG policy is contained
on pages 13 and 14.
18 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Strategic Report
Employees, social, community, environmental and
humanrights issues
The Company is managed by its Investment Manager, has no
employees and all of its Directors are non-executive. The day to
day activities are carried out by third parties. There are therefore no
disclosures to be made in respect of employees.
Anti-bribery, corruption and tax evasion
It is the Company’s policy to conduct all of its business in an honest
and ethical manner. The Company takes a zero-tolerance approach
to bribery, corruption and tax evasion and is committed to acting
professionally, fairly and with integrity in all its business dealings and
relationships wherever it operates. Taking account of the nature of the
Company’s business and operations, the Board has adopted policies
and procedures that allow it to have reasonable assurance that
persons associated with the Company are prevented from engaging in
bribery, corruption or tax evasion; and has adopted the same standard
of zero tolerance.
Viability statement
The Directors have assessed the viability of the Company for the
period until 31 October 2030 (the “Period’’) taking into account the
long-term nature of the Company’s investment strategy and the
principal risks and emerging risks outlined on pages 19 to 21. The
Board has chosen a five-year period to assess the Company’s viability
because of the expected long-term nature of equity investment, the
Investment Manager’s holding period and the fact that the investment
objective is unlikely to change significantly over this period.
In their assessment of the prospects of the Company, the Directors
have considered each of the principal and emerging risks and
uncertainties set out on pages 19 to 21 and the liquidity and solvency
of the Company. The Directors have considered the Company’s
income and expenditure projections and the fact that the Company’s
investments comprise securities which can be readily realised
and could, if necessary, be sold to meet the Company’s funding
requirements. Portfolio activity and market developments 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 Directors do not expect there to be any material increase in
the annual ongoing charges of the Company over the Period. The
Company’s income from investments and cash that can be realised
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 theirassessment.
The Chairman’s Statement and Portfolio Manager’s Report present a
positive long-term investment case for Japanese equities, which also
underpins the Company’s viability for theperiod.
The continuation of the Company is subject to approval by
shareholders every three years with the next continuation vote due to
be held at the Annual General Meeting in 2028.
The viability assessment also takes into account the impact of the
principal and emerging risks highlighted in the Principal and Emerging
Risks section on pages 19 to 21.
The Directors have a reasonable expectation that the Company will be
able to continue in operation and meet its liabilities as they fall due over
thePeriod.
Outlook
The outlook for the Company is discussed in the Chairman’s Statement
on pages 4 and 5 and the Portfolio Manager’s Report on pages 6 and 7.
Strategic Report
The Strategic Report set out on pages 1 to 23 of this Annual Report and
Accounts was approved by the Board of Directors on 20 January 2026.
June Aitken
Chairman
20 January 2026
Business Review continued
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 19
Risk and Risk Management
Principal and emerging risks and uncertainties
The Board is responsible for the management of risks faced by the
Company and delegates this role to the Audit and Risk Committee (the
“Committee”).
The Committee carries out, at least annually, a robust assessment
of principal and emerging risks and uncertainties and monitors
these risks on an ongoing basis. The Committee has a dynamic risk
management register in place to help identify key risks in the business
and oversee the effectiveness of internal controls and processes.
The risk management register and associated risk heat map provide
a visual reflection of the Company’s identified principal and emerging
risks. These fall into three categories:
• Strategic and business risk;
• Financial and operational risk; and
• Regulatory and compliance risk.
The Committee considers both the impact and the probability of each
risk occurring and ensures appropriate controls are in place to reduce
risk to an acceptable level.
The Committee continues to review the processes in place to mitigate
risk; and to ensure that these are appropriate and proportionate in
the current market environment. The principal risks, together with a
summary of the processes and internal controls used to manage and
mitigate risks where possible, are outlined on the following pages.
There have been no material changes to the principal risks during the
year.
Emerging risks
The Committee considers emerging risks which it defines as potential
trends, sudden events or changing risks which are characterised by
a high degree of uncertainty in terms of occurrence probability and
possible effects on the Company. As the impact of emerging risks is
understood, they may be entered on the Company’s risk matrix and
mitigating actions considered as necessary. In assessing the risks and
how they can be mitigated, the Board has given particular attention to
those risks that might threaten the viability of the Company. The Board
considers the current global economic environment to be a factor which
exacerbates existing risks, rather than it being a new emerging risk.
Strategic Report
20 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Risk and Risk Management continued
Principal Risks Mitigation
Movement
during the year
Poor investment performance
The Company’s investment
performance depends on the
Investment Manager’s ability to
identify successful investments in
accordance with the Company’s
investment policy.
The Company’s share price may
not always reflect underlying net
assetvalue.
• The Investment Manager has a well-defined investment strategy and process which
is regularly reviewed by the Board.
• The Board monitors the Company’s investment performance against its peer group
over a range of periods.
• Whilst the Company does not have a benchmark, the Board measures performance
for reference purposes against the TOPIX and High Yield indices. At each meeting,
the Board discusses the Japanese investment environment, and receives reports on
the composition of the portfolio, any recent sales and purchases, and expectations
of dividend income.
• The Management Engagement Committee reviews the appointment of the
Investment Manager on an annual basis.
• The Board monitors the share price discount to NAV and has authority to
buybackshares.
Market risk
Changes in the investment, economic
or political conditions in Japan, and/
or in the countries in which the
Company’s investee companies operate
could substantially and adversely affect
the Company’s prospects.
In addition to changing economic
factors such as interest rates, foreign
exchange rates and employment,
unpredictable factors such as natural
disasters and diplomatic events may
impact market risk.
• The Directors acknowledge that market risk is inherent in the investment process.
The Company maintains a diversified portfolio of quoted investments.
• The Board reviews the impact of economic indicators on the portfolio with the
Investment Manager at every Board meeting.
• The Company’s investment policy states that no single holding will represent more
than 10 per cent. of the Company’s Gross Assets at the time of investment and the
portfolio is expected to have between 30 to 40 holdings in normal circumstances.
• The portfolio is comprised of listed, liquid, realisable securities.
• In addition to receiving regular market updates from the Investment Manager
and reports at Board meetings, the Board convenes more often during periods of
extremevolatility.
• The Company’s policy is not to hedge against any foreign currency movements.
Income received from investee companies is translated into sterling on receipt.
Geopolitical risk
War and conflict can impact investor
confidence and threaten global
economic growth.
Geopolitical instability in the region
may increase volatility, reduce
economic growth, and affect the
prospects of the companies in
theportfolio.
• The Board discusses the impact of geopolitics on the portfolio with the Investment
Manager at every Board meeting.
• The Company has built up a revenue reserve and the Board regularly reviews the net
income available for distribution using the Investment Manager’s sensitivity analysis
of revenue estimates.
• The Company also has a Special Reserve available for distribution in the event of
unforeseen revenue shortfall.
• The Manager’s emphasis on companies which can pay sustainable dividends has
helped alleviate the impact.
• The board recognises that the potential for mitigation is likely to be limited other than
through diversification.
Key person risk
Loss of investment manager or
keypersonnel.
The departure of any key individuals
from the Investment Manager
without adequate succession planning
could have a material impact on the
Company’s business.
• The Board ensures that adequate resources are in place to manage the Company.
• Richard Aston attends all Board meetings, and the Board also meets regularly with
other members of the Chikara team, including portfolio managers/analysts Megumi
Takayama and Theo Wyld.
• The Investment Manager’s key individuals are significantly invested in the Company
ensuring interests with the Company’s shareholders are aligned.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 21
Principal Risks Mitigation
Movement
during the year
Excess leverage
The Company uses borrowings to
seek to enhance investment returns.
While this has the potential to enhance
investment returns in rising markets,
in falling markets the impact could be
detrimental to performance.
• An ability to gear is a unique advantage of closed-end companies and structural
gearing is a clearly stipulated component of the Company’s investment policy. This is
highlighted in shareholder communications.
• Gearing is monitored and strict restrictions on borrowings are imposed: gearing
continues to operate within a limit of 25% of NAV at the time of investment.
• The gearing is achieved using derivatives in the form of Contracts for Difference
(“CFDs”). Further information on financial instruments and risk can be found in
Note 2(c) to the Financial Statements on page 54 and in Note 16 to the Financial
Statements beginning on page 61.
Cyber risk
Cyber crime or fraud could impact any
of the Company’s service providers, the
Investment Manager, the Depositary or
the Administrator.
Business interruption could mean
service providers are unable to meet
their contractual obligations or that
information is late, misleading or
inaccurate, or data privacy is breached.
• All key service providers produce annual internal control reports for review by the
Audit and Risk Committee. These reviews include consideration of their business
continuity plans and the associated cyber security risks.
• Penetration testing is carried out by the Investment Manager.
• The Board reviews the cyber security policies of all service providers.
Service provider operational risk
Poor performance of appointed
services providers including
Company Secretary, Depositary,
Custodian, Administrator and/or
Registrar can result in operational
disruption, business interruption or
reputationaldamage.
• The performance of appointed professional service providers is closely monitored by
the Board to ensure they meet contractual obligations.
• The Company Secretary provided a summary of internal controls reports from all
service providers.
• During the year under review and after assessing competitive alternatives, the
Board appointed Frostrow Capital LLP to provide Administration and Company
Secretarial services. The new appointment is aimed at enhancing the accuracy and
quality of financial reporting. Frostrow Capital LLP has also been appointed as the
Company’s AIFM in accordance with the Alternative Investment Fund Managers
Directive(“AIFMD”).
ESG and climate change
Potential reputational damage from
non-compliance with regulations or
incorrect disclosures.
Climate change leads to additional
costs and risks for portfolio companies.
• The Company’s ESG Policy, which is updated annually, is published on the
Company’s website and the AIC website.
• The Investment Manager’s approach is to include ESG factors for consideration in
the investment process, such as climate change, where they are relevant and have a
material impact on stock performance.
• Chikara Investments LLP (the Investment Manager) is a signatory to the UN Principles
of Responsible Investment (“PRI”) and reports annually according to the PRI reporting
framework.
• The Investment Manager also complies with the obligations of both the UK
Stewardship Code and the Japan Stewardship Code.
Strategic Report
This section of the Annual Report and Accounts covers the Board’s
considerations and activities in discharging their duties under
Section172(1) of the Companies Act 2006, in promoting the success of
the Company for the benefit of its members as a whole.
This statement includes consideration of the likely consequences of
the decisions of the Board in the longer term, how the Board has taken
wider stakeholders’ needs into account and the impact of the Company’s
operations on the environment.
The Board, together with the Investment Manager, sets an overall
investment strategy and reviews this on an ongoing basis. In order to
ensure good governance of the Company, the Board has set various
limits on the investments in the portfolio, including the size of individual
holdings and the level of gearing. These limits and guidelines are
regularly monitored.
The Board is ultimately responsible for all stakeholder engagement.
As an externally managed investment company, the Company does
not have any employees; rather it employs external suppliers to fulfil
a range of functions, including investment management, secretarial,
administration, public and investor relations, corporate broking,
depositary and banking services. All these service providers, who are
stakeholders in the Company themselves, help the Board to fulfil its
responsibility to engage with the shareholders and other stakeholders.
The aim of the Board is to ensure the long-term sustainable success of
the Company and in doing so, it has identified the following as the major
stakeholders in the Company’s business.
The Directors are cognisant of their duties laid out under Section 172
of the Companies Act 2006 to make decisions taking into account the
long-term consequences of all the Company’s key stakeholders and
reflect the Board’s belief that the long-term sustainable success of the
Company is linked directly to its key stakeholders.
For and on behalf of the Board
June Aitken
Chairman
20 January 2026
Stakeholder Engagement
Shareholders Investment Manager Service providers Wider community and environment
Why it is important to engage Why it is important to engage Why it is important to engage Why it is important to engage
The Board places great importance on maintaining an open dialogue with
shareholders who own the Company. This engagement is critical to the
continuing successful existence of the Company. The Investment Manager
along with the Company’s corporate broker regularly meets with the Company’s
shareholders to provide Company updates and to foster regular dialogue.
Feedback from meetings between the Investment Manager, the AIFM and
shareholders is communicated to the Board. A fundamental consideration
of the Board is whether the investment objective of the Company is
continuing to meet shareholder expectations.
Chikara is the Company’s appointed Investment Manager. The Investment
Manager 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.
As an externally managed investment trust, the Company conducts all its
business through its key service providers. The Board ensures that the
appropriate capability, resources, controls and performance record are in
place to deliver the required services. Before the engagement of a service
provider, the Board ensures that the service provider’s business outlook
as well as its values are similar to those of the Company.
The Company and its appointed professional suppliers keep abreast of
the rules and regulations affecting the investment company sector.
The Investment Manager, Chikara, as steward of the Company’s
assets, engages with investee companies to ensure high standards
of governance. The investment strategy of the Company is predicated
upon the improving standards of shareholder governance in Japan
and the commitment of investee companies to act in the interests of
allstakeholders.
Engagement and key Board decisions Engagement and key Board decisions Engagement and key Board decisions Engagement and key Board decisions
The principal forum for communicating with shareholders is the
Company’s Annual General Meeting (“AGM”), where shareholders have
the opportunity to meet with the Board and the Investment Manager.
The Board has appointed an independent research consultancy, Kepler,
to ensure that information and news about the Company is regularly
available for existing and potential shareholders.
The Board reports formally to shareholders twice a year by way of the
Annual and Half Yearly Reports. This information is supplemented by the
Company’s daily publication of the NAV per share, routine ad hoc regulatory
announcements, monthly factsheets.
The Chairman and Directors are available to meet with shareholders on
request. Shareholders wishing to contact the Board may do so by writing
to the Company Secretary (cosec@frostrow.com).
Key decisions:
During the year the Company’s Broker, Peel Hunt, the AIFM, Frostrow and
the Investment Manager held regular discussions with larger shareholders.
The Company launched a redesigned website to deliver a clearer, more
informative and accessible online experience for shareholders. The website
provides performance data, insights, regulatory news and documents,
shareholder communications, andinvestor tools. The new site can be found at
https://www.ccjapanincomeandgrowthtrust.com.
The Board has declared a total dividend for the 2025 year of 5.90p per
share, an increase of 8.3% on last year’s full year distribution of 5.45p per
ordinary share; paid out of income received. The dividend has risen every
year since inception and since this now covers a period of ten years, the
Company will join the AIC’s Next Generation of Dividend Heroes in 2026.
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 Manager to promote the
Company, foster shareholder relations and to ensure that the Company’s
objective of providing dividend income combined with capital growth for
its investors is met.
An open and active relationship is maintained with the Investment
Manager, at Board meetings, and between meetings as required.
Richard Aston has managed the investment portfolio since launch in
December2015.
During the year, the Board received regular reports from the team at
Chikara and Frostrow who are responsible for marketing the Company.
As AIFM to the Company, representatives from Frostrow attended board
meetings and reported on compliance processes and controls.
Key decisions:
The Management Engagement Committee met during the year and
unanimously endorsed the continued appointment of the Company’s
Investment Manager.
With effect from 1November 2024, the Company’s management
fee has been calculated on a tiered basis of 0.75% per annum on the
first £300million of net assets and 0.60% on net assets in excess of
£300million. This compares with the flat fee arrangement of 0.75% per
annum on net assets which was levied since the Company’sinception.
The continued appointment of all service providers is reviewed by the
Board on an annual basis to ensure that the Company continues to
receive high quality service at a competitive cost.
The Board receives comprehensive annual internal control reports from
key service providers. The Board also seeks annual assurance from
its service providers as regards governance, including whistleblowing,
prevention of tax evasion and anti-bribery policy and cyber
securityprocedures.
Key decisions:
Following a review of the Company’s operational arrangements, the
Board decided to appoint Frostrow Capital LLP to provide Administration,
Company Secretarial and marketing / investor relations services with
effect from 1 January 2025. Frostrow has also been appointed as the
Company’s AIFM in accordance with the Alternative Investment Fund
Managers Directive (“AIFMD”), for the purpose of providing portfolio
management and risk management services to the Company. TheBoard
is confident that these operational changes are in the interests of all
stakeholders and put the Company in a strong position to grow.
At the AGM, shareholders approved the appointment of the Auditor,
Johnston Carmichael LLP who has provided independent audit services
to the Company for the third time this year.
The Company Secretary and AIFM regularly report to the Board any
changes in the regulatory environment. As AIC members, the Board
draws on their resources including the detailing of regulatory changes.
The Company has articulated its policy on ESG factors involved in the
investment decision-making and evidence of constructive engagement
with investee companies. See pages 13 to 15.
The ESG policy is available on both the Company’s website and the
AIC’swebsite.
The Investment Manager is committed to being a responsible investor
and applies, and is a signatory to, the United Nations PRI, which
demonstrates its extensive efforts in terms of ESG integration, active
ownership, investor collaboration andtransparency.
The Investment Manager is a listed signatory to the UK Stewardship Code
2020 and the Japan Stewardship Code. Further information on Chikara’s
approach to the principles and guidance of the 2020 Japan Stewardship
Code can be found on their website: https://www.chikarainvestments.
com/legal-disclosures.
The Board reviews the governance engagement reports and discusses
the voting record with the Investment Manager each year.
22 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Shareholders Investment Manager Service providers Wider community and environment
Why it is important to engage Why it is important to engage Why it is important to engage Why it is important to engage
The Board places great importance on maintaining an open dialogue with
shareholders who own the Company. This engagement is critical to the
continuing successful existence of the Company. The Investment Manager
along with the Company’s corporate broker regularly meets with the Company’s
shareholders to provide Company updates and to foster regular dialogue.
Feedback from meetings between the Investment Manager, the AIFM and
shareholders is communicated to the Board. A fundamental consideration
of the Board is whether the investment objective of the Company is
continuing to meet shareholder expectations.
Chikara is the Company’s appointed Investment Manager. The Investment
Manager 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.
As an externally managed investment trust, the Company conducts all its
business through its key service providers. The Board ensures that the
appropriate capability, resources, controls and performance record are in
place to deliver the required services. Before the engagement of a service
provider, the Board ensures that the service provider’s business outlook
as well as its values are similar to those of the Company.
The Company and its appointed professional suppliers keep abreast of
the rules and regulations affecting the investment company sector.
The Investment Manager, Chikara, as steward of the Company’s
assets, engages with investee companies to ensure high standards
of governance. The investment strategy of the Company is predicated
upon the improving standards of shareholder governance in Japan
and the commitment of investee companies to act in the interests of
allstakeholders.
Engagement and key Board decisions Engagement and key Board decisions Engagement and key Board decisions Engagement and key Board decisions
The principal forum for communicating with shareholders is the
Company’s Annual General Meeting (“AGM”), where shareholders have
the opportunity to meet with the Board and the Investment Manager.
The Board has appointed an independent research consultancy, Kepler,
to ensure that information and news about the Company is regularly
available for existing and potential shareholders.
The Board reports formally to shareholders twice a year by way of the
Annual and Half Yearly Reports. This information is supplemented by the
Company’s daily publication of the NAV per share, routine ad hoc regulatory
announcements, monthly factsheets.
The Chairman and Directors are available to meet with shareholders on
request. Shareholders wishing to contact the Board may do so by writing
to the Company Secretary (cosec@frostrow.com).
Key decisions:
During the year the Company’s Broker, Peel Hunt, the AIFM, Frostrow and
the Investment Manager held regular discussions with larger shareholders.
The Company launched a redesigned website to deliver a clearer, more
informative and accessible online experience for shareholders. The website
provides performance data, insights, regulatory news and documents,
shareholder communications, andinvestor tools. The new site can be found at
https://www.ccjapanincomeandgrowthtrust.com.
The Board has declared a total dividend for the 2025 year of 5.90p per
share, an increase of 8.3% on last year’s full year distribution of 5.45p per
ordinary share; paid out of income received. The dividend has risen every
year since inception and since this now covers a period of ten years, the
Company will join the AIC’s Next Generation of Dividend Heroes in 2026.
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 Manager to promote the
Company, foster shareholder relations and to ensure that the Company’s
objective of providing dividend income combined with capital growth for
its investors is met.
An open and active relationship is maintained with the Investment
Manager, at Board meetings, and between meetings as required.
Richard Aston has managed the investment portfolio since launch in
December2015.
During the year, the Board received regular reports from the team at
Chikara and Frostrow who are responsible for marketing the Company.
As AIFM to the Company, representatives from Frostrow attended board
meetings and reported on compliance processes and controls.
Key decisions:
The Management Engagement Committee met during the year and
unanimously endorsed the continued appointment of the Company’s
Investment Manager.
With effect from 1November 2024, the Company’s management
fee has been calculated on a tiered basis of 0.75% per annum on the
first £300million of net assets and 0.60% on net assets in excess of
£300million. This compares with the flat fee arrangement of 0.75% per
annum on net assets which was levied since the Company’sinception.
The continued appointment of all service providers is reviewed by the
Board on an annual basis to ensure that the Company continues to
receive high quality service at a competitive cost.
The Board receives comprehensive annual internal control reports from
key service providers. The Board also seeks annual assurance from
its service providers as regards governance, including whistleblowing,
prevention of tax evasion and anti-bribery policy and cyber
securityprocedures.
Key decisions:
Following a review of the Company’s operational arrangements, the
Board decided to appoint Frostrow Capital LLP to provide Administration,
Company Secretarial and marketing / investor relations services with
effect from 1 January 2025. Frostrow has also been appointed as the
Company’s AIFM in accordance with the Alternative Investment Fund
Managers Directive (“AIFMD”), for the purpose of providing portfolio
management and risk management services to the Company. TheBoard
is confident that these operational changes are in the interests of all
stakeholders and put the Company in a strong position to grow.
At the AGM, shareholders approved the appointment of the Auditor,
Johnston Carmichael LLP who has provided independent audit services
to the Company for the third time this year.
The Company Secretary and AIFM regularly report to the Board any
changes in the regulatory environment. As AIC members, the Board
draws on their resources including the detailing of regulatory changes.
The Company has articulated its policy on ESG factors involved in the
investment decision-making and evidence of constructive engagement
with investee companies. See pages 13 to 15.
The ESG policy is available on both the Company’s website and the
AIC’swebsite.
The Investment Manager is committed to being a responsible investor
and applies, and is a signatory to, the United Nations PRI, which
demonstrates its extensive efforts in terms of ESG integration, active
ownership, investor collaboration andtransparency.
The Investment Manager is a listed signatory to the UK Stewardship Code
2020 and the Japan Stewardship Code. Further information on Chikara’s
approach to the principles and guidance of the 2020 Japan Stewardship
Code can be found on their website: https://www.chikarainvestments.
com/legal-disclosures.
The Board reviews the governance engagement reports and discusses
the voting record with the Investment Manager each year.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 23
24 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Governance
Board of Directors
The Directors have a broad range of relevant experience to meet the Company’s requirements, and their biographies are given below:
June Aitken
Chairman of the Board and the Management Engagement Committee
Appointed on 1 February 2022
June has over 30 years of experience in Asian and emerging equity markets, and held numerous senior roles at HSBC
Bank plc, London and at UBS AG. June is a Non-Executive Director and Chairman of the Audit Committee of JPMorgan
Asia Growth and Income plc and Schroder Income Growth Fund plc.
June was previously on the board of BBGI Global Infrastructure S.A., HSBC Bank Japan, Aquarius Fund, an Asian fixed income fund,
Australian Securities Exchange listed Emerging Markets Masters Fund and the Asian Masters Fund Limited, Erudine Holdings Ltd, a financial
software consultancy firm and the Shepherds Bush Housing Group. She was a founding partner and investor of Osmosis Investment
Management LLP. June holds a degree in Politics, Philosophy and Economics from Oxford University.
Kate Cornish-Bowden
Director and Chairman of the Audit and Risk Committee
Appointed on 3 September 2018
Kate worked for Morgan Stanley Investment Management for 12years, where she was a Managing Director and head of
Morgan Stanley Investment Management’s Global Core Equity business. Prior to joining Morgan Stanley, Kate worked for
M&G Investment Management as a research analyst. Kate is a Non-Executive Director and Chairman of International Biotechnology Trust plc
and a Non-Executive Director of The European Smaller Companies Trust PLC and Finsbury Growth & Income Trust plc.
Kate was formerly a Non-Executive Director and Senior Independent Director of Schroder Oriental Income Fund Ltd and European Assets Trust
plc. Kate is an Associate of the Institute of Investment Management and Research (formerly AIMR, now Chartered Financial Analyst Institute),
holds a Master’s in Business Administration (MBA), and has completed the Financial Times Non-Executive Director Diploma. She is also a
Mentor for ThePrince’s Trust.
Craig Cleland
Director, Senior Independent Director and Chairman of the Nomination Committee
Appointed on 1 February 2022
Craig has over 35 years of investment trust and fund management experience. Since 2013, he has been Head of
Corporate Development: Investment Trusts (on a part-time basis) at CQS (UK) LLP, a multi-asset asset management
firm in London business with a focus on credit markets. He is also a Non-Executive Director of BlackRock Latin American Investment Trust.
Craig also served as a member of the AIC Technical Committee for 10 years and is an Associate of the Institute of Bankers in Scotland. Craig
was a Managing Director at JPMorgan Asset Management (UK) Limited as a Client Director of their investment trust business. He was also
Director and Senior Company Secretary at Fleming Investment Trust Management, transferring to JPMorgan Chase after the acquisition of
Robert Fleming Holdings Limited. He was formerly a Non-Executive Director of Invesco Global Equity Income Trust plc.
John Charlton-Jones
Director
Appointed on 1 October 2023
John has over 35 years of experience working with institutions who invest in the Japanese stock market, as a
stockbroker working first for James Capel/HSBC, and then for CLSA (UK) Limited, in both cases becoming Managing Director of Japan
equity sales across UK/ Europe for over 15 years. During this time, he spent five years living in Tokyo. John holds a degree in History from
Cambridge University. He is also a Trustee of the Daiwa Anglo-Japanese Foundation.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 25
Strategic report
The Directors’ Report should be read in conjunction with the Strategic
Report on pages 1 to 23.
Corporate governance
The Corporate Governance Statement on pages 30 to 34 forms part 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. In the
opinion of the Directors, the Company has met the conditions and
requirements for approval as an investment trust for the year ended
31October2025 and intends to continue to do so.
Management
Chikara has been appointed as the Company’s Investment Manager.
Chikara is authorised and regulated by the Financial Conduct Authority.
The Investment Management Agreement is subject to not less
than six months’ written notice. There is no compensation payable
on termination of the agreement. The Board has agreed with the
Investment Manager that, with effect from 1 November 2024, the
Company’s management fee is calculated on a tiered basis of
0.75%per annum on the first £300 million of net assets and 0.60% on
net assets in excess of £300million. Thiscompares with the flat fee
arrangement of 0.75%per annum on net assets which has been levied
since the Company’s inception.
In accordance with the Directors’ policy on the allocation of expenses
between revenue and capital, 80% of the management fee is charged to
capital and the remaining 20% to revenue.
The Board reviews this policy on a periodic basis and confirms this
allocation remains consistent with their expectations of future returns
from the portfolio.
Management engagement
The Board carefully reviewed the Investment Manager’s appointment
during the year. The Directors are satisfied that the Investment
Manager has the suitable skills and experience to manage the
Company’s investments and believe that the continuing appointment
of the Investment Manager is in the interests of shareholders as a
whole. Since inception in 2015, the Company has met its objectives set
out in the prospectus in relation to the annual dividend, which has risen
every year.
AIFM, Administrator and Company Secretary
Following a review of the Company’s operational arrangements, the
Board appointed Frostrow Capital LLP (“Frostrow”) with effect from
1January 2025 as its Alternative Investment Fund Manager (“AIFM”),
Administrator and Company Secretary. Frostrow has also been
appointed to provide investor relations and marketing services to the
Company, alongside the team at Chikara. Frostrow’s appointment
will improve the standard of governance by providing an additional
level of independent oversight. In consequence of this appointment,
the Company’s registered office has changed to 25 Southampton
Buildings, London WC2A 1AL.
Alternative Investment Fund Managers Directive
(“AIFMD”)
During the reporting year and until 1 January 2025, Chikara fulfilled the
role as the Company’s AIFM, in accordance with the AIFMD. With effect
from 1January 2025, Frostrow was appointed as the Company’s AIFM.
The AIFM must ensure that an annual report containing certain
information on the Company is made available to investors for each
financial year. The FCA Investment Funds Sourcebook (the “Sourcebook”)
details the requirements of the annual report. All the information
required by those rules is included in this Annual Report and Accounts
or will be made available on the Company’s website: (https://www.
ccjapanincomeandgrowthtrust.com/corporate-information/important-
documents/).
Leverage (under AIFMD)
The AIFM is required to set leverage limits as a percentage of net
assets for the Company utilising methods prescribed under AIFMD.
These methods are known as the gross method and the commitment
method. Under both methods the AIFM has set current maximum limits
of leverage for the Company of 200%. A leverage percentage of 100%
equates to nil leverage.
The Company’s leverage under each of these methods at its year end
is shown below:
Gross
method
1
Commitment
method
1
Maximum leverage limit 200% 200%
Actual leverage at 31October 2025 118% 118%
1 Alternative Performance Measure, see glossary and alternative performance
measures on pages 70 to 73.
Directors’ Report
26 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Dividend policy
The Company pays dividends on a semi-annual basis, with dividends
normally declared in January/ February and June and paid in March
and July/August each year.
In accordance with regulation 19 of the Investment Trust (Approved
Company) (Tax) Regulations 2011, the Company will not (except
to the extent permitted by those regulations) retain more than 15%
of its income (as calculated for UK tax purposes) in respect of an
accounting year.
In order to increase the distributable reserves available to facilitate
the payment of future dividends, the amount standing to the credit of
the share premium account of the Company immediately following
completion of the first issue of shares on 15 December 2015
was cancelled and transferred to a special distributable reserve.
The Company may, at the discretion of the Board, pay all or part of any
future dividends out of this special distributable reserve, taking into
account the Company’s investment objective.
Dividends will normally be funded through distributions from portfolio
companies including dividends and other distributions, taking account
of share buybacks by portfolio companies.
The Company declared an interim dividend of 1.65p per share in June
2025 which was paid on 1 August 2025. On 16 January 2026, the
Directors declared a second interim dividend in respect of the year
ended 31 October 2025 of 4.25p per share, which, will be paid on
2March 2026, to shareholders on the register at 30 January 2026.
General authority to issue shares
A general authority to issue up to 13,473,061 shares and to disapply
pre-emption rights when issuing those shares was granted at the
Company’s last Annual General Meeting. This authority will expire
at the time of the Annual General Meeting to be held in March 2026.
During the year ended 31 October 2025, the Company did not utilise
its authority to issue shares. However, the Board recommends that
the Company is granted a new authority to issue up to a maximum of
13,473,061 shares (representing approximately 10% of the shares in
issue at the date of this document) and to disapply pre-emption rights
when issuing those shares. Resolutions to this effect will be put to
shareholders at the Annual General Meeting.
Any share issues will be issued at a premium to NAV.
Treasury shares
The Companies Act 2006 allows companies to hold shares acquired
by way of market purchases to be held as Treasury shares, rather
than having to cancel them. This would give the Company the ability
to re-issue shares quickly and cost effectively, thereby improving
liquidity and providing the Company with additional flexibility in the
management of its capital base. No shares will be sold from Treasury
at a price less than NAV per existing share at the time of their sale
unless they are first offered pro rata to existing shareholders.
No shares were bought back during the year ended 31 October 2025
and no shares are currently held in Treasury.
Discount management
The Directors recognise the importance to existing shareholders of
the Company’s shares not trading at a significant discount to their
prevailing NAV. To the extent that the shares trade at a significant
discount to their prevailing NAV, the Board will consider whether, in the
light of the prevailing circumstances, the Company should purchase
its own shares, whether pursuant to the general authority referred to
below or pursuant to tender offers made on appropriate terms.
There is, however, no guarantee or assurance that any discount
control mechanisms proposed by the Board will reduce any discount.
The Directors currently have the authority to make market purchases
of up to 20,196,118 shares. The maximum price (exclusive of
expenses) which may be paid for a share must not be more than the
higher of: (i) 5 per cent. above the average of the mid-market values of
the shares for the five Business Days before the purchase is made: or
(ii) the higher of the price of the last independent trade and the highest
current independent bid for the shares. Shares will be repurchased
only at prices below the prevailing NAV per share, which should have
the effect of increasing the NAV per share for remaining shareholders.
It is intended that a renewal of the authority to make market purchases
will be sought from shareholders at each annual general meeting of
the Company and such a resolution will put forward at the forthcoming
Annual General Meeting.
Purchases of shares may be made only in accordance with the
Companies Act, the Listing Rules and the Disclosure Guidance and
Transparency Rules.
Life of the Company
The Company has no fixed life but, pursuant to the Articles of
Association, an ordinary resolution for the continuation of the
Company will be proposed at the Annual General Meeting every
three years. The last continuation vote was in March 2025 and was
supported by 99.9% of those shareholders who voted. The next
continuation vote will be proposed at the Annual General Meeting to
be held in 2028. Upon any such resolution not being passed, within
90days proposals will be put forward to the effect that the Company
be wound up, liquidated, reconstructed or unitised.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 27
Market information
The Company’s shares are admitted to the closed-ended investment
funds category of the Official List of the FCA and are traded on the
main market of the London Stock Exchange. The daily NAV pershare is
published through a regulatory information service.
Bank overdraft facility
The Company has a bank overdraft facility with The Northern Trust
Company. Under the terms of the facility a maximum of £12 million,
or the equivalent in Japanese yen, can be drawn down. As at the
year-end date, none (2024: none) of the overdraft facility was utilised
on the Japanese yen bank account.
Derivatives
The Company may use long only contracts for difference (“CFDs”) or
equity swaps for gearing and efficient portfolio management purposes.
Where the Company uses such instruments, it takes a credit risk
with regard to the parties with whom it trades and may also bear the
risk of settlement default. As at 31 October 2025, the Company held
contracts for difference with an absolute exposure of £62,522,000
(2024: £51,153,000).
Further information on CFDs can be found in Note 2c of the Accounting
Policies, and Note 16 Financial Instruments and Capital Disclosures.
Financial instruments
The financial instruments of the Company generate liquidity risk,
credit risk and market risk. An explanation of these risks and how they
are managed; and the policy and practice with regard to financial
instruments are contained in Note 16 of the financial statements.
Depositary and custodian
The depositary is the entity we are required by regulation to appoint
to carry out certain services in relation to the Company, namely,
safekeeping of the assets, cash monitoring and regulatory oversight.
The trustee and depositary of the Company is Northern Trust Investor
Services Limited (“NTISL”). NTISL is a company established in England
and Wales and is authorised by the FCA to be a trustee and depositary.
Capital structure and voting rights
At the financial year end, the Company’s issued share capital
comprised 134,730,610 shares of 1p nominal value. Each share held
entitles the holder to one vote. All shares carry equal voting rights and
there are no restrictions on those voting rights.
Voting deadlines are stated in the Notice of Annual General Meeting
and Form of Proxy and are in accordance with the Companies Act
2006.
There are no restrictions on the transfer of shares, nor are there any
limitations or special rights associated with the shares.
Significant shareholders
As at 31 October 2025, the Company has been formally notified of the
following shareholdings in the issued share capital of the Company in
accordance with DTR 5 (The Disclosure and Guidance Transparency
Directive):
Significant Shareholders Holding %
1607 Capital Partners LLC 14,915,255 11.1
Rathbone Investment
Management Ltd
13,404,704 9.9
J M Finn Nominees Limited 12,078,743 9.0
Christ Church, Oxford University 8,706,850 6.5
TrinityBridge Limited 6,778,757 5.0
Subsequent to the year end, 1607 Capital Partners LLC notified the
Company that on 19 December 2025 it held 14,818,354 shares in
the Company, representing 10.9% at the time of notification. No other
material changes to the above holdings have been notified.
Settlement of share transactions
Settlement of share transactions in the Company are settled by the
CREST share settlement system.
Political donations
The Company does not make political donations.
Notice of general meetings
For the annual general meeting at least twenty-one days’ notice
shall be given to all the members and to the auditor. All other general
meetings shall also be convened by not less than twenty-one days’
notice to all those members and to the auditor. A special resolution
will be proposed at the forthcoming Annual General Meeting to renew
the authority to reduce the period of notice for general meetings to
fourteen days. Reduced notice will be used only under exceptional
circumstances.
Going concern
The Directors have adopted the going concern basis in preparing the
Company’s accounts. The following is a summary of the Directors’
assessment of the going concern status of the Company, which
should be read in conjunction with the Viability statement on page 18.
The Company’s ability to continue as a going concern is for the period
assessed by the Directors, being the period to 31 January 2027, which
is at least 12 months from the date the financial statements were
authorised for issue.
28 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Directors’ Report continued
The going concern assessment took account of wars in Ukraine and
the Middle East; the increase in geopolitical tension between the US
and China and the potential for increases in global trade tariffs. The
Company’s principal risks are market-related and the recent volatile
market conditions have demonstrated the resilience of the Company
and its investment objective and policy. An explanation of the market,
liquidity and credit risks and how they are managed is contained in
Note 16 to the financial statements.
The Directors have also 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 as at 31 October 2025 were £324.0 million
(2024: £265.8 million). As at 31 October 2025, the Company held
approximately £315.4 million in quoted investments (2024: £258.5 million)
and had cash of £4.4 million (2024: £4.0 million). The results of liquidity
stress tests indicate that even in an extreme stress scenario where the
market falls by 75%, the Company would be able to liquidate 85.7% of
holdings within seven days and 100.0% of holdings within 30 days.
The total expenses (excluding finance costs and taxation) for the year
ended 31 October 2025 were £3.0 million (2024: £2.8 million), which
represented approximately 1.06% (2024: 1.03%) of average net assets
during the year. At the date of approval of this report, based on the
aggregate net assets of investments and cash held, the Company has
substantial operating expenses cover.
The Directors have fully considered and assessed the Company’s
portfolio of investments. A prolonged and deep market decline could
lead to falling values of the investments or interruptions to cash flow.
However, the Company currently has more than sufficient liquidity
available to meet future obligations.
In accordance with the Company’s Articles of Association,
shareholders have the right to vote on the continuation of the
Company as an investment trust every three years and a resolution to
that effect was last approved at the AGM in March 2025. Accordingly,
the next continuation vote will be proposed at the AGM in 2028.
Appointment and replacement of Directors
The rules governing the appointment and replacement of Directors
are contained in the Company’s Articles of Association which require
that Board members retire at every third Annual General Meeting after
appointment. However, the Board has agreed that all Directors will be
subject to annual re-election.
If a Board member does not put themselves forward for re-election
at the Annual General Meeting, or the resolution to re-elect them
to the Board fails, they will step down. Furthermore, the Board may
determine that a Board member may decide to step down at any time.
No Board member is subject to compensation for loss of office.
Articles of Association
Any amendment of the Company’s Articles of Association requires
shareholder approval.
Directors’ indemnities
Details on the Directors’ indemnities in place are provided in the
Directors’ Remuneration Implementation Report.
Auditor information
Each of the Directors at the date of the approval of this report confirms
that:
(i) so far as the Director is aware, there is no relevant audit information
of which the Company’s auditor is unaware; and
(ii) the Director has taken all steps that they ought to have taken as
Director to make themself 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.
In accordance with Section 489 of the Companies Act 2006,
aresolution to re-appoint Johnston Carmichael LLP as the Company’s
auditor will be put forward at the forthcoming Annual General Meeting.
Future trends
Details of the main trends and factors likely to affect the future
development, performance and position of the Company’s business
can be found in the Portfolio Manager’s Report section of this Strategic
Report on pages 6 and 7. Further details as to the risks affecting
the Company are set out in the ‘Principal and Emerging Risks and
Uncertainties’ on pages 19 to 21.
Annual General Meeting
The Company’s forthcoming Annual General Meeting will be held
at 12noon on 27February 2026. The Notice of the Annual General
Meeting can be found on pages 77 to 81 of this Annual Report and
Accounts and downloaded from the website.
By order of the Board
Frostrow Capital LLP
Company Secretary
20 January 2026
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 29
30 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Chairman’s introduction
Corporate governance is the process by which the board looks after
the interests of shareholders and seeks to enhance shareholder
value. Shareholders delegate authority to the Directors to enable
them to manage the Company, and hold the Directors responsible for
the Company’s performance. The Board is ultimately responsible for
setting the Company’s strategy, ensuring itself that this and its culture
are aligned, and for monitoring and managing the risks to which the
Company is exposed. Good governance includes engaging effectively
with shareholders, and the Board is committed to maintaining high
standards of business integrity, transparency and accuracy in financial
reporting.
The Company’s sole business is portfolio investment and in common
with most investment trust companies it has no executive directors or
management, no operating assets and no employees. The Company
delegates the management of its day-to-day activities to third-parties
which are specialists in their fields, the most important of which are
the Investment Manager, the Administrator and Company Secretary,
the Custodian of the Company’s assets and the Depositary. As a result,
much of the work of the Board is the monitoring and supervision of the
services provided to the Company by these third-parties. The division
of responsibilities among these independent third-party service
providers is also a key element of the system of controls the board
uses to check and verify the information provided to it, to protect the
Company’s assets and to manage the risks to which the Company
isexposed.
This statement of corporate governance forms part of the Directors’
Report and explains how the board complies with the Company’s
reporting requirements and how it performs its functions.
Corporate governance compliance statement
The Board is committed to high standards of corporate governance.
It has considered the principles and provisions of the AIC Code of
Corporate Governance published in 2019 (the “AIC Code”), which
addresses the principles and provisions set out in the UK Corporate
Governance Code (the “UK Code”) published in 2018, as they apply
to investment trust companies. It considers that reporting against the
AIC Code, therefore, provides more appropriate information to the
Company’s shareholders. The Board confirms that the Company has
complied with the principles and provisions of the AIC Code, in so far
as they apply to the Company’s business, throughout the year under
review. In January 2024, the Financial Reporting Council updated the
UK Code. The AIC subsequently published an updated AIC Code in
August 2024 (the “new AIC Code”) to reflect the changes made to the
UK Code. The new AIC Code will apply to financial years beginning
on or after 1 January 2025, with the exception to Provision 34 which
is applicable for accounting periods beginning on or after 1 January
2026. The Company will be reporting against the new AIC Code in next
year’s Annual Report and Accounts.
As all of the Company’s day-to-day management and administrative
functions are outsourced to third parties, it has no executive directors,
employees or internal operations and therefore has not reported in
respect of the following:
• the role of the executive directors and senior management;
• executive directors’ and senior management remuneration;
• the workforce; and
• the need for an internal audit function.
Copies of the UK Code and AIC Code may be found on the respective
organisations’ websites: www.frc.org.uk and www.theaic.co.uk.
The Board of Directors
As at 31 October 2025, the Company had four Non-Executive
Directors including the Chairman, comprising two male (50%) and two
female (50%) directors. Biographical details can be found on page25.
All Directors, including the Chairman, June Aitken, are regarded as
independent of the Company’s Investment Manager.
The Board believes that during the year ended 31 October 2025
its composition was appropriate for an investment company of
the Company’s nature, meeting both gender and ethnic diversity
guidelines. Further information can be found on pages 31 and 32.
All of the Directors are able to allocate sufficient time to the Company
to discharge their responsibilities effectively.
Responsibilities of the Chairman, the Board,
and its Committees
The Chairman leads the Board and is responsible for its overall
effectiveness in directing the affairs of the Company. The Company has
adopted a document setting out the responsibilities of theChairman.
Corporate Governance
Tenure, independence and succession
Generally, Directors are initially appointed by the Board, until the
following Annual General Meeting when, as required by the Company’s
Articles of Association, they will stand for election by shareholders. All
Directors will stand for annual re-election on a voluntary basis.
The Board recognises the benefits to the Company of having longer
serving Directors together with progressive refreshment of the Board.
The Board does not believe that length of service in itself necessarily
disqualifies a Director from acting independently.
However, the Board will take into account the requirements of the AIC
Code when making a recommendation for a Director’s reappointment.
Accordingly, the Board may decide to recommend a director with more
than nine years’ service for re-election at the Company’s AGM. In order
to ensure continuity, the Board has adopted corporate governance
best practice and has a succession plan in place that allows for
gradual refreshment.
No Director of the Company has served for nine years or more and all
Directors remain independent of the Company’s Investment Manager.
However, the Board is mindful of when the Board members will reach
their ninth anniversary.
Induction and training
On appointment, each Director receives a complete induction
programme including the opportunity to meet with the Investment
Manager and other service providers. The Directors receive other
relevant training as necessary.
A procedure has been adopted for Directors, in the furtherance of their
duties, to take independent professional advice at the expense of the
Company. Copies of the Directors’ appointment letters are available on
request from the Company Secretary.
Board committees
Audit and Risk Committee
A report on pages 39 and 40 provides details of the role and composition
of the Audit and Risk Committee together with a description of the work
of the Audit and Risk Committee in discharging its responsibilities.
Management Engagement Committee
The Company has a Management Engagement Committee which is
chaired by the Chairman of the Board, June Aitken, and consists of all
the Directors. The Management Engagement Committee’s principal
duties are to consider the terms of appointment of the Investment
Manager and to review annually the appointment and the terms of the
Investment Management Agreement. The Management Engagement
Committee also reviews the continued appointment and performance
of the Company’s other service providers.
Nomination Committee
The Company has a Nomination Committee which is chaired by
the Senior Independent Director, Craig Cleland. The Nomination
Committee is responsible for identifying and proposing candidates
for the office of Director of the Company. The Nomination Committee
also considers and reviews remuneration payable to the Directors and
makes recommendations regarding Directors’ fees to the Board.
The terms of reference for these committees can be found on the
Company’s website: https://ccjapanincomeandgrowthtrust.com.
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
on page 25. 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 Manager. Consideration is given
to the recommendations of the AIC Code and the Board supports
the recommendations of the Hampton Alexander review, the FTSE
Women Leaders 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 believes its composition is
appropriate for the Company’s circumstances. However, in line with
the Board’s succession planning and tenure policy, or should strategic
priorities change, the Board will review and, if required, adjust its
composition.
As at date of this Report, the Board comprises two female and two
male Board members.
The Board takes account of the FCA’s listing rule (UKLR6.6.6R (9)(a))
concerning public disclosures on whether a company has met the
following targets on board diversity:
a) at least 40% of individuals on the board are women;
b) at least one of the senior board positions (defined by the FCA as
either the chair, senior independent director, chief executive or
chief financial officer) is held by a woman; and
c) at least one individual on the board is from a minority ethnic
background.
As at 31 October 2025, the Board meets the criteria of all three targets
as a) 50% of the Board are women, b) the role of Chair of the Board
is held by a woman, and c) one Board member is from a minority
ethnicbackground.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 31
The below tables set out the diversity data required under UKLR6.6.6R (10) as at 31 October 2025. 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 to be senior board positions by the FCA. Although not defined as such under UKLR6.6.6R (9)(a) and therefore not included in the
tables below, the Board considers the Chair of the Audit and Risk Committee to be a senior board position, given the nature of the Company as an
investment trust, the importance of the position and the time it commands. The following information has been provided by each Director. There
have been no changes since 31 October 2025.
Board diversity as at 31 October 2025
Gender
Number
of Board
members
Percentage of
the Board
Number
of senior
positions on
the Board
Men 2 50% 1
1
Women 2 50% 1
2
Prefer not to say – – –
1 Craig Cleland is Senior Independent Director.
2 June Aitken is Chairman of the Board.
Ethnic background
Number
of Board
members
Percentage of
the Board
Number
of senior
positions on
the Board
White British or Other White (including minority-white groups) 3 75% 1
1
Asian/Asian British 1 25% 1
2
Prefer not to say – – –
1 Craig Cleland is Senior Independent Director.
2 June Aitken is Chairman of the Board.
Meeting attendance
The number of formal meetings of the Board and Committees held during the year ended 31 October 2025 was as follows, together with individual
Directors’ attendance at those meetings.
Quarterly
Board
Board Strategy
Meeting
Audit and Risk
Committee
Management
Engagement
Committee
Nomination
Committee
Number of meetings held 4 1 3 1 1
June Aitken 4 1 3 1 1
Kate Cornish-Bowden 4 1 3 1 1
Craig Cleland 4 1 3 1 1
John Charlton-Jones 4 1 3 1 1
Several other ad hoc Board and Committee meetings were held during the year to deal with administrative matters, market updates and approve
documentation.
32 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Corporate Governance continued
Performance appraisal
A performance review of the Investment Manager was undertaken
using a programme of open and closed ended questions from each
of the Board members which were reviewed by the Chairman of
the Management Engagement Committee and discussed with the
Board. The results were discussed and the Board concluded that the
continued appointment of the Investment Manager was in the best
interests of the Company’s shareholders. The Committee separately
considered each of its other service providers.
Directors completed a formal annual appraisal process to review the
performance of the Board, the committees and the individual Directors.
A programme consisting of open and closed-ended questions was
used as the basis for this appraisal. The results were reviewed by
the Chairman of the Nomination Committee and discussed with the
Board. A separate appraisal of the Chairman has been carried out
by the other members of the Board and the results reported back by
the Senior Independent Director to the Chairman. The results of the
performance evaluation were positive and demonstrated that the
Board, Chair, Committee Chairs and individual Directors showed the
necessary commitment and have the requisite experience for the
fulfilment of their duties.
Conflicts of interest
As required by law, a Director must avoid a situation where he or
she has an interest that conflicts with the Company’s interests. The
Company’s Articles of Association provide the Directors authority
to authorise potential conflicts of interest. The Directors are able to
impose limits or conditions when giving authorisation if they think this
is appropriate. The procedure observed by the Board in considering
dealing with conflicted matters is as follows:
• Any Board member so conflicted must recuse themself from the
discussion involving the relevant conflict;
• Only Directors who have no interest in the matter being considered
are able to debate the matter and take the relevant decision; and
• In taking the decision the Directors must act in a way they consider,
in good faith, will be most likely to promote the Company’s success.
The Directors have declared any potential conflicts of interest to the
Company. These are entered into the Company’s register of potential
conflicts, which is reviewed regularly by the Board. The Directors are
obliged to advise the Company Secretary as soon as they become
aware of any potential conflicts of interest.
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 strategic and business risk,
financial risk, operational risk, and regulatory and compliance risk.
The Board believes that the existing arrangements, set out below,
represent an appropriate framework to meet the internal control
requirements. The Directors have kept under review the effectiveness
of the internal control system throughout the year and up to the date of
this report.
Financial aspects of internal control
The Directors are responsible for the internal financial control systems
of the Company and for reviewing their effectiveness. These aim to
ensure the security of the Company’s assets and the accuracy of the
financial information upon which business decisions are taken and
used for publication. The Board reviews the internal control framework
established by the Investment Manager, the Administrator and the
Company’s Custodian to provide reasonable assurance on the
effectiveness of internal financial controls.
The key procedures include a monthly review of the Company’s
management accounts and the daily review of the Net Asset Value
and the monitoring of performance of the key service providers at the
quarterly Board meetings. The Directors also employ an independent
auditor to perform an external audit. The administrative function is
segregated from that of securities and cash custody, and from the
investment management function. Appropriate Directors and Officers
insurance is in place and renewed annually. The Company’s key
service providers report regularly to the Board on their procedures to
mitigate cyber security risks. In addition, procedures have been put in
place for the authorisation of all expense payments.
The Statement of Directors’ Responsibilities in respect of the accounts
is on page 41 and a Statement of Going Concern is on pages 28 and 29.
The Report of the Independent Auditor is on pages 42 to 47.
Other aspects of internal control
The Board holds quarterly meetings, and additional meetings as
required. Between these meetings there is regular contact with the
Investment Manager, the Company Secretary and Administrator.
The Board has agreed policies with the Investment Manager on key
operational issues. The Investment Manager reports in writing to
the Board on operational and compliance issues. The Investment
Manager reports directly to the Audit and Risk Committee concerning
the internal controls applicable to the Investment Manager’s dealing,
investment and general office procedures.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 33
The Board reviews detailed management accounts from the
Administrator, including holdings in the portfolio, transactions, and
other aspects of the financial position of the Company. The Depositary
provides oversight reports detailing performance against key
performance indicators for the quarterly Board meetings. Additional ad
hoc reports are received as required and the Directors have access
at all times to the advice and services of the Company Secretary,
ensuring that Board procedures are followed and that the Board
complies with applicable rules and regulations.
Regular contact with the Investment Manager and the other key
service providers enables 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 and a formal review,
utilising a detailed risk assessment programme has been completed.
This included consideration of the Administrator’s, the Investment
Manager’s, the Depositary’s and the Registrar’s internal controls
reports. There are no significant findings to report from the review.
Principal and emerging risks
The Directors confirm that they have carried out a robust assessment
of the emerging and principal risks facing the Company, 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 on pages 19 to 21.
Shareholder relations
The Notice of Annual General Meeting, beginning on page 77, sets
out the business of the Annual General Meeting. Separate resolutions
are proposed for each substantive issue. The Investment Manager
has a programme of meetings with significant shareholders and
reports back to the Board on its findings. The Chairman and the Board
welcome direct feedback from shareholders.
Exercise of voting powers and stewardship code
The Company and the Investment Manager support the UK Stewardship
Code issued by the Financial Reporting Council. The Investment
Manager is a signatory to the UK Stewardship code 2020 and has
published its proxy voting policy and statement of commitment to the
principles of best practice of the Stewardship Code on its website
at https://www.chikarainvestments.com/stewardship-code It is
also a signatory to the Japan Stewardship Code and has published
its statement of commitment to its principles on its website at
https://www.chikarainvestments.com/japan-stewardship-code.
June Aitken
Chairman
20 January 2026
Corporate Governance continued
34 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
This report has been prepared in accordance with Schedule 8 of the
Large and Medium–sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013.
An Ordinary Resolution will be proposed at the forthcoming Annual
General Meeting (“AGM”) to be held on 27 February 2026 to
re-approve the Remuneration Policy. The Board is required to put
the Remuneration Policy to its shareholders, as a binding vote, at
least at every third AGM. The provisions set out in this policy apply
until they are next put forward for shareholder approval. In the event
of any proposed variation to the policy, shareholder approval will be
sought for the proposed new policy prior to its implementation. It is
the Board’s intention that the proposed Remuneration Policy continue
for three years following the forthcoming AGM to the financial year
ending 31 October 2029. The below stated Remuneration Policy
remains unchanged from the Remuneration Policy last placed before
shareholders at the Company’s AGM held in 2023.
The Directors’ Remuneration Implementation Report is put forward
for approval by shareholders on an annual basis. The result of the
shareholder resolution on the Implementation Report is non–binding
on the Company, although it gives shareholders an opportunity to
express their views, which will be taken into account by the Board.
An ordinary resolution to approve this Directors’ Remuneration
Implementation Report will be put forward for approval at the
Company’s Annual General Meeting to be held on 27 February 2026.
The law requires the Company’s auditor to audit certain of the
disclosures provided. Where disclosures are audited, they are
indicated as such. The auditor’s opinion is on page 42.
Remuneration implementation
The Company currently has four Non–Executive Directors.
The Board has not established a separate Remuneration Committee.
Board fees are considered annually by the Board as a whole through
the Nomination Committee. The Board sets its fees by reference to
other investment trusts of a similar nature to that of the Company, to
RPI and CPI and other inflationary measures, the time commitment
of the Board and the size and the impact to the Company’s ongoing
charges following a rise in fees. Board fees are not considered against
any performance measure.
Directors’ fees, with effect from 1 November 2024, were payable
at the rate of £45,000 for the Chairman of the Board; £36,500 for
the Chairman of the Audit and Risk Committee; £31,000 for the
Senior Independent Director and £30,000 per annum for the other
Boardmembers.
Following the year end, a review was undertaken and after careful
consideration the Board approved with effect from 1 November 2025
an increase in annual Directors’ fees to £47,000 for the Chairman of
the Board; £38,000 for the Chairman of the Audit and Risk Committee;
£33,250 for the Senior Independent Director and £31,250 per annum
for the other Board members.
The Board believes that the level of increase and resulting fees
appropriately reflects prevailing market rates for an investment trust of
the Company’s complexity and size, the increasing level of regulation
and resultant time spent by the Directors on matters, and it will also
enable the Company to continue to attract appropriately experienced
Directors in the future.
Due to the size and nature of the Company, it was not deemed
necessary to use a remuneration consultant although the Nomination
Committee did take into consideration views from external search
consultants on the level of the Company’s fees against prevailing
market rates.
The Directors’ fees and taxable benefits are shown in the table on
page 36.
Directors’ service contracts
The Directors do not have service contracts with the Company. The
Directors are not entitled to compensation on the loss of office and no
payment was made to past directors for loss of office. The Directors
have appointment letters which do not provide for any specific term.
In accordance with best practice the Board put themselves forward
for annual re–election. There are no restrictions on transfers of the
Company’s shares held by the Directors, or any special rights attached
to such shares. The Directors’ letters of appointment can be inspected
at the Company’s registered office.
Directors’ indemnities
As permitted by the Company’s Articles of Association, the Directors
have the benefit of an indemnity, as defined by section 234 of the
Companies Act 2006. It is the Company’s policy to indemnify its
Directors in respect of costs or other liabilities which they may incur
in connection with any claims made against them relating to their
performance as Directors or the performance of the Company. These
indemnities would provide additional financial support if the level
of cover provided by the Directors’ and Officers’ liability insurance
maintained by the Company were exhausted. There is no cover
against fraudulent or dishonest actions.
A policy of insurance against Directors’ and Officers’ liabilities is
maintained by the Company.
Director search and selection fees
No Director search and selection fees were incurred during the year
under review.
Directors’ Remuneration Implementation Report
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 35
Ten year performance
The following chart shows the performance of the Company’s share price by comparison with the TOPIX since inception, on a total return basis.
The Board deems the TOPIX to be the most appropriate comparator for this report.
CCJI Share price TOPIX
Dec-15
Oct-16 Oct-17 Oct-18 Oct-19 Oct-20 Oct-21 Oct-22 Oct-23 Oct-24 Oct-25
Total Return (%)
0
25
50
75
100
125
150
175
200
Directors’ emoluments for the year ended 31 October 2025
The Directors who served during the year ended 31 October 2025 received the following remuneration for qualifying services.
Fees and taxable benefits
Fees
Year ended
31 October
2025
£
Taxable
benefits Total
Fees
Year ended
31 October
2024
£
June Aitken
1
45,000 – 45,000 38,253
Kate Cornish-Bowden 36,500 – 36,500 34,500
Craig Cleland
2
31,000 – 31,000 29,203
John Charlton–Jones 30,000 – 30,000 28,500
Harry Wells
3
– – – 14,836
Total 142,500 – 142,500 145,292
1 June Aitken was appointed as Chairman of the Board on 5 March 2024.
2 Craig Cleland was appointed as Senior Independent Director on 5 March 2024.
3 Harry Wells retired on 5 March 2024.
36 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Directors’ Remuneration Implementation Report continued
In addition to the above, the Company paid no other expenses to the Directors (2024: £3,000). None of the above fees were paid to third parties.
There were no taxable benefits claimed during the years ended 31 October 2025 or 31 October 2024.
The current aggregate remuneration that can be paid to Directors under the Company’s Articles of Association is £500,000 per annum, until
otherwise determined by an Ordinary Resolution of the Company.
Annual percentage change in directors’ remuneration
The table below contains the annual percentage change in remuneration over the five financial years prior to the current year in respect of the
various director roles.
Fee rates:
Year to
31 October
2021
Year to
31 October
2022
Year to
31 October
2023
Year to
31 October
2024
Year to
31 October
2025
Chairman £37,500
0.0%
£39,000
+4.0%
£40,500
+3.8%
£42,750
+5.6%
£45,000
+5.3%
Chair of the Audit and
Risk Committee
£30,125
0.0%
£31,330
+4.0%
£32,500
+3.7%
£34,500
+6.2%
£36,500
+5.8%
Directors £25,000
0.0%
£26,000
+4.0%
£27,000
+3.8%
£28,500
+5.6%
£30,000
+5.3%
Additional fee for SID
role
£1,000
0.0%
£1,040
+4.0%
£1,000
-3.8%
£1,000
0.0%
£1,000
0.0%
A non-binding ordinary resolution to approve the Directors’ Remuneration Implementation Report contained in the Annual Report and Accounts
for the year ended 31 October 2024 was put forward at the Annual General Meeting held on 3 March 2025. The resolution, which is put before
shareholders at each Annual General Meeting, was passed with proxies representing 99.87% of the shareholders voting, voted in favour of the
resolution.
The Directors’ Remuneration Policy was last put forward at the Annual General Meeting held on 1 March 2023. The resolution was passed
with proxies representing 99.99% of the shares voted in favour of the resolution. The Directors’ Remuneration Policy will next be put forward for
approval at the Annual General Meeting to be held on 27 February 2026.
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.
Relative importance of spend on pay
The following table sets out the total level of Directors’ remuneration compared with management fees and other expenses incurred by the
Company and the distributions to shareholders by way of dividends.
Year to
31 October
2025
£’000
Year to
31 October
2024
£’000
Directors’ fees 143 145
Management fees and other expenses 3,059 2,758
Dividends paid and payable to shareholders 7,949 7,343
The information in the table above is required by the regulations with the exception of management fees and other expenses which have been
included to show the total operating expenses of the Company.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 37
Directors’ holdings
The interests of the Directors in the shares of the Company as at 31 October 2025 and at 31 October 2024 were as follows. All share holdings are
beneficially owned.
Shares as at
31 October
2025
Shares as at
31 October
2024
June Aitken 44,011 42,774
Kate Cornish-Bowden 50,412 50,000
Craig Cleland 45,000 45,000
John Charlton-Jones 29,954 22,403
Directors are not specifically required to own shares in the Company.
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 Report on Remuneration Implementation summarises, as applicable, for the year
to 31 October 2025:
(a) the major decisions on Directors’ remuneration;
(b) any substantial changes relating to Directors’ remuneration made during the year; and
(c) the context in which the changes occurred, and decisions have been taken.
June Aitken
Chairman
20 January 2026
38 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Directors’ Remuneration Implementation Report continued
The AIC Code recommends that boards should establish audit
committees consisting of at least three independent non-executive
directors. The Board is required to satisfy itself that at least one
member of the Audit and Risk Committee has recent and relevant
financial experience. The main role and responsibilities of the Audit
and Risk Committee should be set out in written terms of reference
covering certain matters described in the Code. The Company
complies with the AIC Code.
Composition
All the Directors of the Board are members of the Audit and Risk
Committee. Each committee member is independent and together
they bring a variety of relevant and recent investment and financial
expertise. The UK Code recommends that the Chair of the Board
should not be a member of the Audit and Risk Committee. However, as
permitted by the AIC Code, the Directors believe that membership of
the Audit and Risk Committee of the independent Chair of the Board,
June Aitken is appropriate, and welcome her contribution.
The Audit and Risk Committee has formal written terms of reference
and copies of these are available on the Company’s website or on
request to the Company Secretary. The Committee has considered
the need for an internal audit function. Given that the Company has
no employees and outsources all its operating activities to external
providers, the Committee considers that an internal audit function
is not needed. The Committee keeps the need for an internal audit
function under annual review.
Role of the Audit and Risk Committee
The Audit and Risk Committee meets formally at least three times a
year. The responsibilities of the committee include:
• Ensuring integrity, transparency and accuracy of the financial
reports;
• Assisting in the preparation and review of the annual and half year
reports and accounts;
• Considering the appointment, independence and objectivity, and
remuneration of the auditor;
• Considering the effectiveness of the annual audit;
• Reviewing the internal controls of the Company;
• Reviewing the internal controls of the Company’s service providers;
and
• Reviewing the principal and emerging risks, and the Company’s
processes to mitigate risk.
Performance evaluation
In line with best practice, the Audit and Risk Committee is subject to
an annual review of its performance. The evaluation of the Audit and
Risk Committee conducted this year confirmed that the Committee
operates effectively and continues to meet requirements. Further
details of the evaluation of the Committee can be found on page 33.
Internal controls and risk management
The Board has overall responsibility for the Company’s risk
management and systems of internal controls and for reviewing their
effectiveness. In common with most investment trusts, investment
management, accounting, company secretarial, registrar and
depositary services have been delegated to third parties. The
effectiveness of the internal controls of all service providers is
assessed by the Audit and Risk Committee on a continuing basis and
the Committee receives regular assurance reports concerning any
errors and omissions.
Risk management
The Audit and Risk Committee meets at least once during the financial
year to review the key risks facing the company and to ensure the
effectiveness of measures put in place to manage and mitigate risk.
These risks fall into three categories: strategic and business risk,
financial and operational risk, and regulatory and compliance risk.
The outcome of the risk assessment and the details of the Company’s
principal and emerging risks are outlined on page 19.
Meetings
There have been three Audit and Risk Committee meetings in the year
ended 31 October 2025. Meeting attendance is shown on page 32 of
this Annual Report and Accounts.
Financial statements and significant accounting
matters considered during the year
The Committee considered the following significant accounting issues
in relation to the Company’s financial statements for the year ended
31 October 2025.
Valuation and existence of investments
The Company holds its assets in quoted investments, derivatives and
cash. The valuation and existence of these investments is currently
the most material matter in the production of the financial statements.
Investments are valued using independent pricing sources and the
holding quantities at the year end were agreed with the Depositary’s
records. The Committee reviewed the Administrator’s procedures in
place for ensuring accurate valuation and existence of investments.
The Committee also receives and reviews any significant pricing or
custody reconciliation exceptions and reports from the Depositary.
Recognition of income
Income may not be accrued in the correct period and/ or incorrectly
allocated to revenue or capital. The Committee reviewed the
Administrator’s procedures for recognition of income and reviewed
the treatment of any special dividends receivable in the year. The
Committee also reviewed the Administrator’s forecast of revenue
against actual revenue received at each Committee meeting.
Report of the Audit and Risk Committee
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 39
S1158 of the Corporation Tax Act 2010
The Committee considers the reports produced by the AIFM
confirming compliance with the investment trust qualifying rules.
Going concern and viability statements
Having reviewed the Company’s financial position, liabilities, principal/
emerging risks and uncertainties, the Committee recommended to
the Directors that it was appropriate for the Directors to prepare the
financial statements on the going concern basis.
The Committee considered the appropriateness of the assumptions
used in the viability statement and is confident that these are sufficiently
robust. The going concern assessment and viability statements can be
found on pages 28 and 29 and page 18, respectively.
Audit tenure
The appointment of the auditor is reviewed annually by the Committee
and is subject to approval by shareholders. This year will be the third
year that Johnston Carmichael has been the Company’s Auditor.
Shareholders approved the reappointment of Johnston Carmichael as
the Company’s Auditor at the AGM in March 2025.
Effectiveness of external audit
The Audit and Risk Committee is responsible for reviewing the
effectiveness of the external audit process. The Committee met to
discuss the audit plan with the auditor prior to the commencement
of the 2025 audit, and attended a presentation of the results of the
audit following completion of the main audit testing. The Committee
performed a review of the external auditor following the presentation
of the results of the audit. The review included a discussion of the audit
process and the ability of the external auditor to fulfil its role.
I spoke to Richard Sutherland, the partner at Johnston Carmichael, and
his team during the year to discuss feedback from the external auditor
and am pleased to report that no significant issues arose during the
audit process. The Committee is satisfied that Johnston Carmichael
has provided effective independent challenge in carrying out its
responsibilities.
Provision of non-audit services
The Committee has reviewed the FRC’s Guidance on Audit
Committees and has formulated a policy on the provision of non-audit
services by the Company’s auditor. The Committee has determined
that the Company’s appointed auditor will not be considered for the
provision of certain non-audit services, such as accounting and
preparation of the financial statements, internal audit and custody.
Theauditor’s eligibility to provide non-audit services will be judged on
a case- by-case basis; however no non-audit services were provided
during the financial year under review.
Audit fees
The audit fees (excluding VAT) incurred during the year amounted to
£43,300 (2024: £41,000).
Auditor independence
The Committee considered the independence of the auditor and
the objectivity of the audit process and is satisfied that Johnston
Carmichael has fulfilled its obligations to shareholders and as
independent auditor to the Company for the year.
After due consideration, the Committee recommends the re-
appointment of Johnston Carmichael, and their re-appointment will be
put to the Company’s shareholders at the 2026 AGM.
Conclusion with respect to the Annual Report
and Accounts
Following a thorough process of review, the Committee has concluded
that the Annual Report and Accounts for the year ended 31 October 2025,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company’s
business model, strategy and performance. The Committee has reported
its conclusions to the Board of Directors.
Kate Cornish-Bowden
Audit and Risk Committee Chairman
20 January 2026
Report of the Audit and Risk Committee continued
40 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
The Directors are responsible for preparing the Annual Report and
Accounts in accordance with applicable laws and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law, the Directors have elected to
prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice, including FRS 102, which is
the Financial Reporting Standard applicable to the UK and Republic
of Ireland and applicable law. 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 the Company’s affairs as at the
end of the year and of the net return for the year. In preparing these
financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates, which are reasonable and prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
• prepare the financial statements on a 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’s
transactions and which 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 also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and Corporate
Governance Statement that comply with applicable laws and regulations.
The Company Reports and Accounts are published on its website
at www.ccjapanincomeandgrowthtrust.com which is maintained
by Frostrow. The work carried out by the auditor does not involve
consideration of the maintenance and integrity of this website and,
accordingly, the auditor accepts no responsibility for any changes
that have occurred to the financial statements since being initially
presented on the website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Directors’ confirmation statement
The Directors each confirm to the best of their knowledge that:
(a) the financial statements, prepared in accordance with United
Kingdom Generally Accepted Accounting Practice, including
FRS102, give a true and fair view of the assets, liabilities, financial
position and profit of the Company; and
(b) this Annual Report and Accounts includes a fair review of the
development and performance of the business and position of the
Company, together with a description of the principal risks and
uncertainties that it faces.
Having taken advice from the Audit and Risk Committee, the Directors
consider 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.
For and on behalf of the Board
June Aitken
Chairman
20 January 2026
Statement of Directors’ Responsibilities
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 41
Independent Auditor’s Report to the Members of
CC Japan Income & Growth Trust plc
Opinion
We have audited the financial statements of CC Japan Income &
Growth Trust plc (the “Company”), for the year ended 31 October
2025, which comprise the Income Statement, Statement of Financial
Position, Statement of Changes in Equity, Statement of Cash Flows
and Notes to the Accounts, including significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 102
The Financial
Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• Give a true and fair view of the state of the Company’s affairs as at
31 October 2025 and of its return for the year then ended;
• Have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
• Have been prepared in accordance with the requirements of the
Companies Act 2006.
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
responsibilities for the audit of the financial statements section of
our report. We are 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. We believe
that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Our approach to the audit
We planned our audit by first obtaining an understanding of the
Company and its environment, including its key activities delegated by
the Board to relevant approved third-party service providers and the
controls over provision of those services.
We conducted our audit using information maintained and provided by
Chikara Investments LLP (the “Investment Manager”), Frostrow Capital
LLP (the “Alternative Investment Fund Manager”, the “Administrator”
and the “Company Secretary”), Northern Trust Investor Services
Limited (the “Depositary” and the “Custodian”) and MUFG Corporate
Markets ( the “Registrar”) to whom the Company has delegated the
provision of services.
We tailored the scope of our audit to reflect our risk assessment, taking
into account such factors as the types of investments within the Company,
the involvement of the Administrator, the accounting processes and
controls, and the industry in which the Company operates.
The scope of our audit was influenced by our application of materiality.
We set certain quantitative thresholds for materiality. These together
with qualitative considerations, helped us to determine the scope of
our audit and the nature, timing and extent of our audit procedures
on the individual financial statement line items and disclosures and in
the evaluation of the effect of misstatements, both individually and in
aggregate on the financial statements as a whole.
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. These matters included 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, we do not
provide a separate opinion on these matters.
We summarise below the key audit matters in arriving at our audit
opinion above, together with how our audit addressed these matters
and the results of our audit work in relation to these matters.
42 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Key audit matters How our audit addressed the key audit matters and our conclusions
Valuation of investments
(as per page 39 (Report of the Audit and Risk Committee), pages 53
to55 (Accounting Policies) and Note 3).
As at 31 October 2025, the valuation of the level 1, listed investments
portfolio was £312.6m, the valuation of the level 2 money market funds
was £2.8m and the valuation of the level 2 contracts for difference
(“CFDs”) was £1.7m.
As this is the largest component of the Company’s Statement of
Financial Position, and a key driver of the Company’s net assets and total
return, this has been designated as a key audit matter, being one of the
most significant assessed risks of material misstatement due to error.
There is a further risk that the investments held at fair value may not be
actively traded and the quoted prices may not therefore be reflective
of fair value.
We performed a walkthrough of the investment valuation process
at the Administrator to evaluate the design of the process and
implementation of key controls.
We compared market prices and exchange rates applied to all level1
listed investments, level 2 money market funds, and level 2 CFDs
held at 31 October 2025 to an independent third-party source and
recalculated the investment valuations.
We obtained average trading volumes from an independent third-party
source for all listed investments held at year end and assessed
their liquidity. We also assessed trading activity for evidence of an
activemarket.
From our completion of these procedures, we identified no material
misstatements in relation to the valuation of investments.
Revenue recognition, including allocation of special dividends as revenue or
capital returns
(as per page 39 (Report of the Audit and Risk Committee), pages 53
to55 (Accounting Policies) and Note 4).
Investment income recognised for the year to 31 October 2025
was £10.5m, consisting primarily of dividend income from listed
investments and CFDs.
Revenue-based performance metrics are often one of the key
performance indicators for stakeholders. The investment income
received by the Company during the year directly impacts these metrics
and the minimum dividend required to be paid by the Company.
There is a risk that revenue is incomplete, did not occur or is
inaccurate through failure to recognise income entitlements or failure
to appropriately account for their treatment. It has therefore been
designated as a key audit matter, being one of the most significant
assessed risks of material misstatement due to error.
Additionally, there is a further fraud risk of incorrect allocation of
special dividends as revenue or capital returns, as judgement is
required in determining their allocation within the Income Statement.
We performed a walkthrough of the revenue recognition
process, including the process for allocating special dividends,
at the Administrator to evaluate the design of the process and
implementation of key controls.
We evaluated whether income was recognised and disclosed in
accordance with the financial reporting framework, including the
AICSORP and the Company’s accounting policies.
We recalculated 100% of dividends due to the Company, from equity
holdings and CFDs, based on investment holdings throughout the year
and announcements made by investee companies.
We compared exchange rates applied to all overseas dividends
received from the investee companies during the year to an
independent third-party source.
We agreed a sample of dividends received to bank statements.
We assessed the completeness of the special dividend population
with reference to third-party market data and assessed management’s
judgement for allocating special dividends as revenue or capital
returns with reference to the underlying commercial circumstances of
dividend payments.
From our completion of these procedures, we identified no material
misstatements in relation to revenue recognition, including allocation of
special dividends as revenue or capital returns.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 43
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a
reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature and extent of our work and in
evaluating the results of that work.
Materiality measure Value
Materiality for the financial statements as a whole
We have set materiality as 1% of net assets as we believe that net assets is the primary performance measure
used by investors and is the key driver of shareholder value. We determined the measurement percentage to
be commensurate with the risk and complexity of the audit and the Company’s listed status.
£3.24m
(2024: £2.66m)
Performance materiality
Performance materiality represents amounts set by the auditor at less than materiality for the financial
statements as a whole, to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds materiality for the financial statements as a whole.
In setting this we consider the Company’s overall control environment, and our past experience of the audit
that indicates a lower risk of material misstatements. Based on our judgement of these factors, we have set
performance materiality at 75% of our overall financial statement materiality.
£2.43m
(2024: £1.99m)
Specific materiality
Recognising that there are transactions and balances of a lesser amount which could influence the understanding
of users of the financial statements we calculate a lower level of materiality for testing such areas.
Specifically, given the importance of the distinction between revenue and capital for the Company, we also
applied a separate testing threshold for the revenue column of the Income Statement, set as 5% of the net
revenue return on ordinary activities before tax.
We have set a specific materiality in respect of related party transactions and Directors’ remuneration.
We used our judgement in setting these thresholds and considered our past experience of the audit, the history
of misstatements and industry benchmarks for specific materiality.
£0.45m
(2024: £0.41m)
Audit and Risk Committee reporting threshold
We agreed with the Audit and Risk Committee that we would report to them all differences in excess of 5% of
overall materiality in addition to other identified misstatements that warranted reporting on qualitative grounds,
in our view. For example, an immaterial misstatement as a result of fraud.
£0.16m
(2024: £0.13m)
During the course of the audit, we reassessed initial materiality and
found no reason to alter the basis of calculation used at year-end.
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 management’s method of assessing going concern,
including consideration of market conditions and macro-economic
uncertainties;
• Assessing and challenging the forecast cashflows and associated
sensitivity modelling used by management in support of their going
concern assessment by reference to supporting documentation;
• Obtaining and recalculating management’s assessment of the
Company’s ongoing maintenance of investment trust status; and
• Assessing the adequacy of the Company’s going concern
disclosures included in the Annual Report.
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.
44 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Independent Auditor’s Report to the Members of CC Japan Income & Growth Trust plc continued
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.
Our responsibilities and the responsibilities of the Directors with respect
to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the
Annual Report and Accounts other than the financial statements and
our auditor’s report thereon. The Directors are responsible for the
other information contained within the Annual Report and Accounts.
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.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
theaudit::
• 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.
Matters on which we are required to report
byexception
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.
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 by the
Company, 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; or
• A corporate governance statement has not been prepared by
theCompany.
Corporate governance statement
We have reviewed the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the entity’s compliance with the
provisions of the UK Corporate Governance Code specified for our
review by the Listing Rules.
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:
• The Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified set out on pages 28 and 29;
• The Directors’ explanation as to its assessment of the Company’s
prospects, the period this assessment covers and why the period is
appropriate set out on page 18;
• The Directors’ statement on fair, balanced and understandable set
out on page 41;
• The Directors’ statement on whether it has a reasonable
expectation that the Company will be able to continue in operation
and meets its liabilities set out on pages 28 and 29;
• The Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on page 34;
• The section of the Annual Report that describes the review of the
effectiveness of risk management and internal control systems set
out on pages 33 and 34; and
• The section describing the work of the Audit and Risk Committee
set out on pages 39 and 40.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 45
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement
set out on page 41, 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.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website
at: http://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Extent to which the audit was considered 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.
We assessed whether the engagement team collectively had the
appropriate competence and capabilities to identify or recognise non-
compliance with laws and regulations by considering their experience,
past performance and support available.
All engagement team members were briefed on relevant identified
laws and regulations and potential fraud risks at the planning stage
of the audit. Engagement team members were reminded to remain
alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks
that are applicable to the Company and the sector in which it
operates, focusing on those provisions that had a direct effect on the
determination of material amounts and disclosures in the financial
statements. The most relevant frameworks we identified include:
• Companies Act 2006;
• Financial Conduct Authority (“FCA”) listing and Disclosure Guidance
and Transparency Rules (“DTR”);
• The principles of the UK Corporate Governance Code applied by
the AIC Code of Corporate Governance (the “AIC Code”);
• Industry practice represented by the Statement of Recommended
Practice: Financial Statements of Investment Trust Companies and
Venture Capital Trusts (“the SORP”) issued in July 2022;
• The Company’s qualification as an investment Trusts under section
1158 of the Corporation Tax Act 2010; and
• UK Generally Accepted Accounting Practice.
We gained an understanding of how the Company is complying with
these laws and regulations by making enquiries of management and
those charged with governance. We corroborated these enquiries
through our review of relevant correspondence with regulatory bodies
and board meeting minutes.
We assessed the susceptibility of the financial statements to material
misstatement, including how fraud might occur, by meeting with
management and those charged with governance to understand
where it was considered there was susceptibility to fraud. This
evaluation also considered how management and those charged with
governance were remunerated and whether this provided an incentive
for fraudulent activity. We considered the overall control environment
and how management and those charged with governance oversee
the implementation and operation of controls. In areas of the financial
statements where the risks were considered to be higher, we
performed procedures to address each identified risk. We identified a
heightened fraud risk in relation to:
• Management override of controls; and
• Completeness and allocation of special dividends.
Audit procedures performed in response to the risks relating to the
completeness and allocation of special dividends are set out in the section
on key audit matters above, and audit procedures performed in response
to the risk of management override of controls are included below.
In addition to the above, the following procedures were performed to
provide reasonable assurance that the financial statements were free
of material fraud or error:
• Reviewing minutes of meetings of those charged with governance
for reference to: breaches of laws and regulation or for any
indication of any potential litigation and claims; and events or
conditions that could indicate an incentive or pressure to commit
fraud or provide an opportunity to commit fraud;
46 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Governance
Independent Auditor’s Report to the Members of CC Japan Income & Growth Trust plc continued
• Reviewing the level of and reasoning behind the Company’s
procurement of legal and professional services;
• Performing audit procedures over the risk of management
override of controls, including testing of journal entries and
other adjustments for appropriateness, unpredictability testing,
recalculating the investment management fee, evaluating
the business rationale of significant transactions outside the
normal course of business and assessing judgements made
by management in their calculation of accounting estimates for
potential management bias;
• Completion of appropriate checklists and use of our experience to
assess the company’s compliance with the Companies Act 2006
and the Listing Rules; and
• Agreement of the financial statement disclosures to supporting
documentation.
Our audit procedures were designed to respond to the risk of
material misstatements 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 intentional concealment, forgery, collusion, omission
or misrepresentation. 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 would become aware of it.
Other matters which we are required to address
Following the recommendation of the Audit and Risk Committee, we
were appointed by the Board on 1 March 2023 to audit the financial
statements for the year ended 31 October 2023 and subsequent
financial years. The period of our total uninterrupted engagement
is three years, covering the years ended 31 October 2023 to
31October2025.
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.
Our audit opinion is consistent with the additional report to the Audit
and RiskCommittee.
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.
Richard Sutherland (Senior statutory auditor)
For and on behalf of Johnston Carmichael LLP
Statutory Auditor
Edinburgh, United Kingdom
20 January 2026
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 47
48 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 49
Year ended
31 October 2025
Year ended
31 October 2024
Note
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Gains on investments 3 – 60,189 60,189 – 34,432 34,432
Currency losses – (500) (500) – (1,841) (1,841)
Income 4 10,496 – 10,496 9,357 – 9,357
Investment management fee 5 (423) (1,691) (2,114) (400) (1,599) (1,999)
Other expenses 6 (908) – (908) (759) – (759)
Return on ordinary activities before finance
costs and taxation
9,165 57,998 67,163 8,198 30,992 39,190
Finance costs 7 (153) (360) (513) (97) (234) (331)
Return on ordinary activities before taxation 9,012 57,638 66,650 8,101 30,758 38,859
Taxation 8 (1,032) – (1,032) (928) – (928)
Return on ordinary activities after taxation 7,980 57,638 65,618 7,173 30,758 37,931
Return per share 13 5.92p 42.78p 48.70p 5.32p 22.83p 28.15p
The total column of the Income Statement is the profit and loss account of the Company. All revenue and capital items in the above statement were
derived from continuing operations.
Both the supplementary revenue and capital columns are prepared under guidance from the Association of Investment Companies. There is no
other comprehensive income and therefore the return for the year is also the total comprehensive income for the year.
The notes on pages 53 to 68 form part of these financial statements.
Income Statement
For the year ended 31 October 2025
50 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
Note
31 October
2025
£’000
31 October
2024
£’000
Fixed assets
Investments at fair value through profit or loss 3 315,369 258,478
Current assets
Cash and cash equivalents 4,359 4,006
Cash collateral in respect of Contracts for Difference (“CFDs”) 659 413
Amounts due in respect of CFDs 2,860 8,027
Other debtors 10 4,190 4,062
12,068 16,508
Creditors: amounts falling due within one year
Cash collateral in respect of CFDs (1,917) (8,837)
Amounts payable in respect of CFDs (1,119) (17)
Other creditors 11 (352) (291)
(3,388) (9,145)
Net current assets 8,680 7,363
Total assets less current liabilities 324,049 265,841
Net assets 324,049 265,841
Capital and reserves
Share capital 12 1,348 1,348
Share premium 98,067 98,067
Special reserve 64,671 64,671
Capital reserve
– Revaluation gains on equity investments held at year end 3 75,495 35,561
– Other capital reserves 76,023 58,319
Revenue reserve 8,445 7,875
Total shareholders’ funds 324,049 265,841
NAV per share – shares (pence) 14 240.52p 197.31p
Approved by the Board of Directors and authorised for issue on 20 January 2026 and signed on their behalf by:
June Aitken
Director
CC Japan Income & Growth Trust plc is incorporated in England and Wales with registration number 9845783.
The notes on pages 53 to 68 form part of these financial statements.
Statement of Financial Position
As at 31 October 2025
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 51
For the year ended 31 October 2025
Note
Share
capital
£’000
Share
premium
£’000
Special
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
£’000
Balance at 1 November 2024 1,348 98,067 64,671 93,880 7,875 265,841
Return on ordinary activities after taxation – – – 57,638 7,980 65,618
Dividends paid 9 – – – – (7,410) (7,410)
Balance at 31 October 2025 1,348 98,067 64,671 151,518 8,445 324,049
For the year ended 31 October 2024
Note
Share
capital
£’000
Share
premium
£’000
Special
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
£’000
Balance at 1 November 2023 1,348 98,067 64,671 63,122 7,910 235,118
Return on ordinary activities after taxation – – – 30,758 7,173 37,931
Dividends paid 9 – – – – (7,208) (7,208)
Balance at 31 October 2024 1,348 98,067 64,671 93,880 7,875 265,841
The Company’s distributable reserves consist of the Special reserve, Revenue reserve and Capital reserve attributable to realised profits.
The notes on pages 53 to 68 form part of these financial statements.
Statement of Changes in Equity
For the year ended 31 October 2025
52 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
Year ended
31 October
2025
£’000
Year ended
31 October
2024
£’000
Operating activities cash flows
Return on ordinary activities before finance costs and taxation
1
67,163 39,190
Adjustment for:
Gains on equity investments (49,541) (26,332)
Realised gains on CFDs (16,943) (122)
Movement in CFD balances (897) (11)
Increase in other debtors (367) (73)
Increase/(decrease) in other creditors 49 (52)
Tax withheld on overseas income (1,032) (928)
Net cash flow from operating activities (1,568) 11,672
Investing activities cash flows
Purchases of equity investments (116,996) (63,521)
Proceeds from sales of equity investments 109,885 62,923
Realised gains on CFDs 16,943 122
Net cash flow used in investing activities 9,832 (476)
Financing activities cash flows
Equity dividends paid (7,410) (7,208)
Finance costs paid (501) (322)
Net cash flow used in financing activities (7,911) (7,530)
Increase in cash and cash equivalents 353 3,666
Cash and cash equivalents at the beginning of the year 4,006 340
Cash and cash equivalents at the end of the year 4,359 4,006
1 Inflow from dividends was £9,076,000 (2024: £8,314,000).
The notes on pages 53 to 68 form part of these financial statements.
Statement of Cash Flows
For the year ended 31 October 2025
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 53
1. General Information
CC Japan Income & Growth Trust plc (the “Company”) was
incorporated in England and Wales on 28 October 2015 with
registered number 9845783, as a closed-ended investment company.
The Company commenced its operations on 15 December 2015.
The Company carries on business as an investment trust within the
meaning of Chapter 4 of Part 24 of the Corporation Tax Act 2010.
The Company’s investment objective is to provide shareholders
with dividend income combined with capital growth, mainly through
investment in equities listed or quoted in Japan.
The Company’s shares were admitted to the Official List of the
Financial Conduct Authority on 15 December 2015. On the same day,
trading of the shares commenced on the London Stock Exchange.
The principal activity of the Company is that of an investment trust
within the meaning of section 1158 of the Corporation Tax Act of 2010.
With effect from 1 January 2025, the Company’s registered office
changed from 6th Floor, 125 London Wall, London, EC2Y 5AS
to 25 Southampton Buildings, London, WC2A 1AL, following the
appointment of Frostrow Capital LLP as AIFM, Administrator and
Company Secretary.
2. Accounting Policies
The principal accounting policies followed by the Company are set
outbelow:
(a) Basis of accounting
The financial statements have been prepared in accordance with
FRS 102 (“the Financial Reporting Standard applicable in the UK and
Republic of Ireland”) issued by the Financial Reporting Council, with
the Statement of Recommended Practice “Financial Statements of
Investment Trust Companies and Venture Capital Trusts” issued by the
Association of Investment Companies in July 2022 and the Companies
Act 2006. The financial statements have been prepared on a historical
cost basis except for the modification to a fair value basis for certain
financial instruments as specified in the accounting policies below.
They have also been prepared on the assumption that approval as an
investment trust will continue to be granted. As required by its Articles
of Association, a vote for the Company’s continuation will be put
forward at the AGM in 2028, having last been passed at the AGM on
3March 2025.
Going concern
The financial statements have been prepared on a going concern basis.
In forming this opinion, the Directors have considered any potential
impact of wars in Ukraine and the Middle East; and the increase in
geopolitical tension between the US and China, on the going concern
and viability of the Company. In making their assessment, the Directors
have reviewed income and expense projections and the liquidity of the
investment portfolio, and considered the mitigation measures which key
service providers, including the Investment Manager, continue to have
in place to maintain operationalresilience.
The Company’s net assets as at 31 October 2025 were £324.0million
(2024: £265.8 million). As at 31 October 2025, theCompany
held approximately £315,369 million in quoted investments
(2024:£258.5million) and had cash of £4.4 million (2024: £4.0 million).
The total expenses (excluding finance costs and taxation) for the year
ended 31 October 2025 were £3.0 million (2024: £2.8 million), which
represented approximately 1.06% (2024: 1.03%) of average net assets
during the year. At the date of approval of this report, based on the
aggregate net assets of investments and cash held, the Company has
substantial operating expenses cover.
The Company’s ability to continue as a going concern for the period
assessed by the Directors has been considered over the period
to 31January 2027, which is at least 12 months from the date the
financial statements were authorised for issue.
The financial statements have been presented in sterling, which is also
the functional currency as this is 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 it pays distributions, expenses and its shareholders
operate, has determined that sterling is the functional currency.
In preparing these financial statements the Directors have considered
the impact of ESG and climate change risk as an emerging risk as
set out on page 21 and have concluded that while climate change
impacts operating conditions of portfolio companies and increases
obligations, it does not have a material impact on the value of the
Company’s investments. In line with FRS 102, investments are
valued at fair value, which for the Company are quoted bid prices
for investments in active markets at 31 October 2025 and therefore
reflect market participants’ view of climate change risk.
(b) Investments
As the Company’s business is investing in financial assets with a
view to profiting from their total return in the form of increases in fair
value, financial assets are held at fair value through profit or loss in
accordance with FRS 102 Section 11: ‘Basic Financial Instruments’,
and Section 12: ‘Other Financial Instruments Issues’. The Company
manages and evaluates the performance of these investments on
a fair value basis in accordance with its investment strategy, and
information about the investments is provided on this basis to the
Board ofDirectors.
Upon initial recognition, investments are classified by the Company
as “at fair value through profit or loss”. They are recognised on
the date they are traded and are measured initially at fair value,
which is taken to be their transaction price, excluding expenses
incidental to purchases which are expensed to capital on acquisition.
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
theinvestments.
Notes to the Accounts
54 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
Notes to the Accounts continued
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 Income Statement within “gains on investments”.
Money market funds are classified as listed investments and are
measured at fair value through profit and loss.
(c) Derivatives
Derivatives comprise Contracts for Difference (“CFDs”), which are
measured at fair value and valued by reference to the underlying
market value of the corresponding security, the valuation of which is
detailed in Note 2b. CFDs are held for investment purposes. Where
the fair value is positive the CFD is presented as a current asset,
and where the fair value is negative the CFD is presented as a
current liability. Gains or losses on these derivative transactions are
recognised in the Income Statement.
They are recognised in either the capital or revenue column of the
Income Statement depending on their nature. To the extent that any
gains or losses are of a mixed revenue and capital nature, they are
apportioned between revenue and capital accordingly. The CFD
balance is made up of transactions in relation to the underlying equity
held by the Company, with the risks embedded in the CFDs disclosed
in Note 16.
(d) Foreign currency
Transactions denominated in foreign currencies including dividends
are translated into sterling at exchange rates as at the date of the
transaction. Assets and liabilities denominated in foreign currencies
at the year end are reported at the rates of exchange prevailing at
the year end. Foreign exchange movements on investments and
derivatives are included in the Income Statement within gains on
investments. Any other gain or loss is included as an exchange gain or
loss to capital or revenue in the Income Statement as appropriate.
(e) Income
Investment income has been accounted for on an ex-dividend basis
or when the Company’s right to the income is established. Special
dividends are credited to capital or revenue in the Income Statement,
according to the circumstances surrounding the payment of the
dividend. Overseas dividends are included gross of withholding tax
recoverable.
Interest receivable on deposits is accounted for on an accrual basis.
(f) Dividends payable
Interim dividends are recognised when the Company pays the
dividend. Final dividends are recognised in the period in which they
are approved by the shareholders. This year, as was also the case
last year, a second interim dividend is being paid in substitution for a
finaldividend.
(g) Expenses
All expenses are accounted for on an accruals basis and are charged
as follows:
• the investment management fee is charged 20% to revenue and
80% to capital;
• CFD finance costs are charged 20% to revenue and 80% to capital;
• investment transactions costs are allocated to capital; and
• other expenses are charged wholly to revenue.
(h) Taxation
The tax expense represents the sum of the tax currently payable and
deferred tax. The tax currently payable is based on the taxable profit
for the year. Taxable profit differs from net profit as reported in the
Income Statement because it excludes items of income or expenses
that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The Company’s liability for
current tax is calculated using tax rates that were applicable at the
financial reporting date.
Where expenses are allocated between capital and revenue any
tax relief in respect of the expenses is allocated between capital and
revenue returns on the marginal basis using the Company’s effective
rate of corporation taxation for the relevant accounting period.
Deferred taxation is recognised in respect of all timing differences
that have originated but not reversed at the financial reporting date,
where transactions or events that result in an obligation to pay more
tax in the future or right to pay less tax in the future have occurred at
the financial reporting date. This is subject to deferred tax assets only
being recognised if it is considered more likely than not that there
will be suitable profits from which the future reversal of the timing
differences can be deducted. Deferred tax assets and liabilities are
measured at the rates applicable to the legal jurisdictions in which
they arise.
(i) Other receivables and other payables
Other receivables and other payables do not carry any interest
and are short term in nature and are accordingly stated at their
nominalvalue.
(j) Segmental reporting
The Directors are of the opinion that the Company is engaged in a
single segment of business, that of an investment trust, as disclosed
in Note 1.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 55
2. Accounting Policies continued
(k) Accounting estimates, judgements and
assumptions
The preparation of financial statements requires the Directors to
make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements. Although
these estimates are based on management’s best knowledge of
current facts, circumstances and, to some extent, future events and
actions, the Company’s actual results may ultimately differ from those
estimates, possibly significantly.
There have not been any instances requiring any significant estimates
or judgements in the year.
(l) Cash and cash equivalents
Cash comprises cash and demand deposits. Cash equivalents,
including bank overdrafts and short-term, highly liquid investments
that are readily convertible to known amounts of cash, are subject to
insignificant risks of changes in value, and are held for the purpose of
meeting short-term cash commitments rather than for investment or
other purposes.
(m) Cash collaterals
Cash collaterals are held in segregated accounts on behalf of brokers
against the CFDs. Cash collaterals are accounted for and shown on
the Statement of Financial Position either as a receivable or payable,
depending on whether cash is due from or due to the broker.
(n) Reserves
Capital reserves
Profits/(losses) from selling investments and changes in fair value
arising upon the revaluation of investments that remain in the
portfolio are shown in the capital column of the Income Statement
and allocated to the capital reserve. Capital reserves attributable to
realised profits are distributable.
Special distributable reserve
As stated in the Company’s prospectus dated 13 November 2015,
in order to increase the distributable reserves available to facilitate
the flexibility and source of future dividends, the Company resolved
that, conditional upon First Admission to listing on the London Stock
Exchange and the approval of the Court, the net amount standing to
the credit of the share premium account of the Company immediately
following completion of the First Issue be cancelled and transferred to
a special distributable reserve. This reserve is distributable.
Revenue reserves
The revenue reserve reflects all income and expenditure recognised
in the revenue column of the Income Statement and is distributable by
way of dividends.
Share premium
The Company’s share premium is the excess of the issue price of the
share over its nominal value on shares issued subsequent to the First
Issue. The share premium is not available for distribution.
3. Investments
(a) Summary of valuation
As at
31 October 2025
£’000
As at
31 October 2024
£’000
Investments listed on a recognised overseas investment exchange 315,369 258,478
315,369 258,478
56 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
(b) Movements
During the year ended 31 October 2025
2025
£’000
2024
£’000
Book cost at the beginning of the year 222,917 207,351
Revaluation gains on equity investments held at beginning of the year 35,561 24,636
Valuation at beginning of the year 258,478 231,987
Purchases at cost 116,996 63,321
Sales:
– proceeds (109,646) (63,162)
– gains on investment holdings sold during the year 9,607 15,407
Movements in revaluation gains on investments held at year end 39,934 10,925
Valuation at end of the year 315,369 258,478
Book cost at end of the year 239,874 222,917
Revaluation gains on equity investments held at year end 75,495 35,561
Valuation at end of the year 315,369 258,478
Transaction costs on investment purchases for the year ended 31 October 2025 amounted to £47,800 (2024: £26,500) and on investment sales
for the year amounted to £46,200 (2024: £27,200).
The Company received £109,646,000 (2024: £63,162,000) from investments sold during the year. The book cost of these investments when they
were purchased was £100,039,000 (2024: £47,755,000). 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.
(c) Gains/(Losses) on investments
Year ended
31 October 2025
£’000
Year ended
31 October 2024
£’000
Gains on equity investment holdings sold during the year 9,607 15,407
Movements in revaluation gains on investment held at year end 39,934 10,925
Other capital (losses)/gains (26) 3
Total gains on equity investments held at fair value 49,515 26,335
Realised gains on CFD assets and liabilities 16,943 122
Movement in unrealised (losses)/gains on CFD assets and liabilities (6,269) 7,975
Total gains on investments held at fair value 60,189 34,432
Notes to the Accounts continued
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 57
4. Income
Year ended
31 October 2025
£’000
Year ended
31 October 2024
£’000
Income from investments:
Overseas dividends 10,327 9,278
Money market fund dividends 148 –
Deposit interest 21 79
Total 10,496 9,357
Overseas dividend income is translated into sterling on receipt.
5. Investment Management Fee
Year ended
31 October 2025
£’000
Year ended
31 October 2024
£’000
Fee:
20% charged to revenue 423 400
80% charged to capital 1,691 1,599
Total 2,114 1,999
The Company’s Investment Manager during the financial year was Chikara Investments LLP. The Investment Manager is entitled to receive a
management fee payable monthly in arrears which, until 31 October 2024, was payable at the rate of one-twelfth of 0.75% of net assets per
calendar month. With effect from 1 November 2024, the Company’s management fee is calculated on a tiered basis of 0.75% per annum on the
first £300 million of net assets and 0.60% on net assets in excess of £300 million. There is no performance fee payable to the Investment Manager.
6. Other Expenses
Year ended
31 October 2025
£’000
Year ended
31 October 2024
£’000
Administration and secretarial services
1
322 171
Other expenses 400 402
Auditor’s remuneration – statutory audit services 43 41
Directors’ fees 143 145
Other expenses – Revenue 908 759
1 Frostrow Capital LLP was appointed on 1 January 2025 as Alternative Investment Fund Manager (“AIFM”), Administrator and Company Secretary, as well as to
serve as the Company’s investor relations and marketing adviser.
58 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
7. Finance Costs
Year ended
31 October 2025
£’000
Year ended
31 October 2024
£’000
Interest paid – 100% charged to revenue 63 39
CFD finance cost and structuring fee – 20% charged to revenue 89 57
Structuring fees – 20% charged to revenue 1 1
153 97
CFD finance cost and structuring fee – 80% charged to capital 356 230
Structuring fees – 80% charged to capital 4 4
360 234
Total finance costs 513 331
8. Taxation
Year ended 31 October 2025 Year ended 31 October 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
(a) Analysis of tax charge in the year:
Overseas withholding tax 1,032 – 1,032 928 – 928
Total tax charge for the year (see Note 8 (b)) 1,032 – 1,032 928 – 928
(b) Factors affecting the tax charge for the year:
The effective UK corporation tax rate for the year is 25.00% (2024: 25.00%). 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 October 2025 Year ended 31 October 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Total return before taxation 9,012 57,638 66,650 8,101 30,758 38,859
Effective UK corporation tax at 25.00% (2024: 25.00%) 2,253 14,410 16,663 2,025 7,690 9,715
Effects of:
Overseas withholding tax suffered 1,032 – 1,032 928 – 928
Non-taxable overseas dividends (2,619) – (2,619) (2,320) – (2,320)
Capital gains not subject to tax – (14,922) (14,922) – (8,148) (8,148)
Finance costs not tax deductible 38 90 128 24 59 83
Movement in unutilised management expenses 328 422 750 271 399 670
Total tax charge for the year 1,032 – 1,032 928 – 928
Notes to the Accounts continued
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 59
8. Taxation continued
(b) Factors affecting the tax charge for the year: continued
The Company has an unrecognised deferred tax asset of £2,335,000 (2024: £1,543,000) based on the long-term prospective corporation tax rate
of 25% (2024: 25%). Noasset 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. The Company has not provided for deferred tax on any tax losses.
9. Dividend
(i) Dividends paid during the financial year
Year ended
31 October 2025
£’000
Year ended
31 October 2024
£’000
Second Interim – year ended 31 October 2024 3.85p (2023: 3.75p) 5,187 5,052
Interim dividend – year ended 31 October 2025 1.65p (2024: 1.60p) 2,223 2,156
Total 7,410 7,208
(ii) The dividend relating to the year ended 31 October 2025, which is the basis on which the requirements of
Section 1159 of the Corporation Tax Act 2010 are considered, is detailed below:
Year ended 31 October 2025 Year ended 31 October 2024
Pence per
Share
£’000
Pence per
Share
£’000
Interim dividend 1.65p 2,223 1.60p 2,156
Second interim dividend
1
4.25p 5,726 3.85p 5,187
5.90p 7,949 5.45p 7,343
1 Not included as a liability in the year ended 31 October 2025 accounts.
The Directors have declared a second interim dividend for the financial year ended 31 October 2025 of 4.25p per share. The dividend will be paid on 2 March 2026 to
shareholders on the register at the close of business on 30 January 2026.
10. Other Debtors
As at
31 October 2025
£’000
As at
31 October 2024
£’000
Accrued income 3,955 3,588
Sales for settlement – 239
VAT receivable 156 193
Prepayments 79 42
Total 4,190 4,062
60 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
11. Other Creditors
As at
31 October 2025
£’000
As at
31 October 2024
£’000
Amounts falling due within one year:
Accrued finance costs 36 24
Accrued expenses 316 267
Total 352 291
12. 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.
As at 31 October 2025 As at 31 October 2024
No. of shares
£’000
No. of shares
£’000
Allotted, issued & fully paid:
Shares of 1p
Opening balance 134,730,610 1,348 134,730,610 1,348
Closing balance 134,730,610 1,348 134,730,610 1,348
Since the year end, the Company has not issued any shares and there were 134,730,610 shares in issue as at 20 January 2026.
13. Return per Share
Total return per share is based on the return on ordinary activities, including income, a profit for the year after taxation of £65,618,000 (2024: profit of
£37,931,000) and the weighted average number of shares in issue for the year to 31 October 2025 of 134,730,610 (2024: 134,730,610).
The returns per share were as follows:
As at 31 October 2025 As at 31 October 2024
Revenue Capital Total Revenue Capital Total
Return per share 5.92p 42.78p 48.70p 5.32p 22.83p 28.15p
14. Net Asset Value per Share
Total shareholders’ funds and the net asset value (“NAV”) per share attributable to shareholders at the year end calculated in accordance with the
Articles of Association were as follows:
NAV per Share
As at
31 October 2025
As at
31 October 2024
Net Asset Value (£’000) 324,049 265,841
Shares in issue 134,730,610 134,730,610
NAV per share 240.52p 197.31p
Notes to the Accounts continued
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 61
15. Related Party Transactions
Investment Manager Fees
The Company provides additional information concerning its relationship with the Investment Manager and its former AIFM, Chikara Investments
LLP. The fees for the period are disclosed in Note 5 and amounts outstanding at the year ended 31 October 2025 were £199,000 (2024: £171,000).
Research purchasing agreement
MiFID II treats investment research provided by brokers and independent research providers as a form of “inducement” to investment managers
and requires research to be paid separately from execution costs. In the past, the costs of broker research were primarily borne by the Company
as part of execution costs through dealing commissions paid to brokers. With effect from 3 January 2018, this practice has changed, as brokers
subject to MiFID II are now required to price, and charge for, research separately from execution costs. Equally, the rules require the Investment
Manager, as an Investment Manager, to ensure that the research costs borne by the Company are paid for through a designated Research
Payment Account (“RPA”) funded by direct research charges to the Investment Manager’s clients, including the Company.
The research charge for the year 1 January 2025 to 31 December 2025, as agreed between the Investment Manager and the Company, was
US$31,000 (31 December 2024: US $31,000). The research charge for the year 1 January 2026 to 31 December 2026, as budgeted by the
Investment Manager, is US $31,000.
Directors’ fees and shareholdings
The Directors’ fees and shareholdings are disclosed in the Directors’ Remuneration Implementation Report on pages 35 to 38 in this AnnualReport
and Accounts.
16. Financial Instruments and Capital Disclosures
Risk Management Policies and Procedures
As an investment trust the Company invests in equities and equity related derivatives for the long term so as to secure its investment objective
stated on the inside front cover. 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, and credit risk, and the Directors’
approach to the management of them is set out follows.
The objectives, policies and processes for managing the risks, and the methods used to measure the risks, are set out below.
(a) Market risk
Economic conditions
Changes in economic conditions in Japan (for example, interest rates and rates of inflation, industry conditions, competition, political 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. The Company is subject to concentration risk as it only invests in Japanese companies but has diversified investments across the
different sectors in the Japanese market.
Sectoral diversification
The Company has no limits on the amount it may invest in any sector. This may lead to the Company having significant concentrated exposure to
portfolio companies in certain business sectors from time to time.
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.
Unquoted companies
The Company may invest in unquoted companies from time to time. Such investments, by their nature, involve a higher degree of valuation and
performance uncertainties and liquidity risks than investments in listed and quoted securities and they may be more difficult to realise. However,
the Company does not currently hold and has never held any unquoted securities.
62 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
Management of market risk
The Company is invested in a diversified portfolio of investments. The Company’s investment policy states that no single holding (including any
derivative instrument) will represent more than 10% of the Company’s gross assets at the time of investment and, when fully invested, the portfolio
is expected to have between 30 to 40 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. A maximum of 10% of the Company’s gross assets at the time of investment may be invested in unquoted or
untraded companies at time of investment.
The Investment Manager’s approach will in most cases achieve diversification across a number of sectors as shown in the Holdings in Portfolio on
page 10.
(b) Currency risk
The majority of the Company’s assets will be denominated in a currency other than sterling (predominantly in yen) and changes in the exchange
rate between sterling and 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 risk
The Investment Manager monitors the currency risk of the Company’s portfolio on a regular basis. Foreign currency exposure is regularly reported
to the Board by the Investment Manager. The Company does not currently intend to enter into any arrangements to hedge its underlying currency
exposure to investment denominated in yen, although the Investment Manager and the Board will keep this approach under regular review.
Foreign currency exposures
An analysis of the Company’s assets priced in yen is as follows:
As at
31 October 2025
£’000
As at
31 October 2024
£’000
Equity Investments: yen 315,369 258,478
Receivables (due from brokers, dividends, and other income receivable) 3,955 3,827
CFD: yen (absolute exposure) 1,742 8,010
Cash and cash equivalent: yen 2,710 (4,849)
Total 323,776 265,466
Foreign currency sensitivity
If the Japanese yen had appreciated or depreciated by 10% as at 31 October 2025 (2024: 10%) 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 October
2025
£’000
Decrease in
Fair Value
As at 31 October
2025
£’000
Increase in
Fair Value
As at 31 October
2024
£’000
Decrease in
Fair Value
As at 31 October
2024
£’000
Impact on capital return – increase/(decrease) 32,378 (32,378) 26,547 (26,547)
Return after taxation – increase/(decrease) 32,378 (32,378) 26,547 (26,547)
Notes to the Accounts continued
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 63
16. Financial Instruments and Capital Disclosures continued
(c) Leverage risk
Derivative instruments
The Company may utilise long only CFDs or equity swaps for gearing and efficient portfolio management purposes. Leverage may be generated
through the use of CFDs or equity swaps. Such financial instruments inherently contain much greater leverage than a non-margined purchase of
the underlying security or instrument. This is due to the fact that, generally, only a very small portion (and in some cases none) of the value of the
underlying security or instrument is required to be paid in order to make such leveraged investments. As a result of any leverage employed by the
Company, small changes in the value of the underlying assets may cause a relatively large change in the Net Asset Value of the Company. Many
such financial instruments are subject to variation or other interim margin requirements, which may force premature liquidation of investment
positions.
Borrowing risks
The Company may use borrowings to seek to enhance investment returns. While the use of borrowings can enhance the total return on the shares
where the return on the Company’s underlying assets is rising and exceeds the cost of borrowing, it will have the opposite effect where the return
on the Company’s underlying assets is rising at a lower rate than the cost of borrowing or falling, further reducing the total return on the shares. As
a result, the use of borrowings by the Company may increase the volatility of the Net Asset Value per share. The Company had no borrowings at
the year end.
Any reduction in the value of the Company’s investments may lead to a correspondingly greater percentage reduction in its Net Asset Value (which
is likely to adversely affect the price of a share). Any reduction in the number of shares in issue (for example, as a result of buy backs) will, in the
absence of a corresponding reduction in borrowings, result in an increase in the Company’s level of gearing.
To the extent that a fall in the value of the Company’s investments causes gearing to rise to a level that is not consistent with the Company’s
gearing policy or borrowing limits, the Company may have to sell investments in order to reduce borrowings, which may give rise to a significant
loss of value compared with the book value of the investments, as well as a reduction in income from investments.
Management of leverage risk
The aggregate of borrowings and long only CFDs and equity swap exposure will not exceed 25% of Net Asset Value at the time of drawdown of the
relevant borrowings or entering into the relevant transaction, as appropriate, although the Company’s normal policy will be to utilise and maintain
gearing to a lower limit of 20% of Net Asset Value at the time of drawdown of the relevant borrowings or entering into the relevant transaction, as
appropriate. It is expected that any borrowings entered into will principally be denominated in yen.
The Company’s level of gearing as at 31 October 2025 is disclosed in the Alternative Performance Measures section on page 71 of this
AnnualReport and Accounts.
(d) Interest rate risk
The Company is exposed to interest rate risk specifically through its cash holdings and on positions within the CFD portfolio. 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. Movements in interest rates
will also have an impact on the valuation of the CFD derivative contracts. Interest receivable on cash balances or paid on overdrafts is at fixed rate.
Management of interest rate risk
The possible effects on Fair Value and cash flows that could arise as a result of changes in interest rates are taken into account when making
investment decisions. Derivative contracts are not used to hedge against the exposure to interest rate risk.
Interest income earned on deposits and paid on overdraft by the Company is primarily derived from fixed interest rates, and as such does not have
a material exposure to interest rate risk.
The bank overdraft is an integral part of cash management and the Company has a legal right of offset and has the intention to settle this at net.
64 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
Interest rate exposure
The exposure at 31 October 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. Due to the current low interest rate environment in Japan, no sensitivity analysis is shown as the total impact will not
be material.
As at
31 October 2025
due within one year
£’000
As at
31 October 2024
due within one year
£’000
Exposure to floating interest rates: CFD derivative contract – (absolute exposure) 62,522 51,153
Collateral paid in respect of CFDs 659 413
(e) Credit risk
Credit risk is the possibility of a loss to the Company due to the failure of the counterparty to a transaction discharging its obligations under that
transaction.
Cash and other assets held by the Depositary
The cash and other assets held by the Depositary or its sub-custodians are subject to counterparty credit risk as the Company’s access to its cash
could be delayed should the counterparties become insolvent or bankrupt.
Derivative instruments
The Company’s holdings in CFD contracts present counterparty credit risks, with the risk of the counterparty (Morgan Stanley & Co Internationalplc)
defaulting.
Management of credit risk
Cash and other assets held by the Depositary
Cash and other assets that are required to be held in custody will be held by the Depositary 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 Financial Conduct Authority (”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. The Company has appointed Northern Trust Investor Services Limited as its Depositary. The credit rating of Northern Trust was
reviewed at time of appointment and will be reviewed on a regular basis by the Investment Manager and/or the Board. The Fitch’s credit rating of
Northern Trust is AA-.
Derivative instruments
Where the Company utilises CFDs or equity swaps, it is likely to take a credit risk with regard to the parties with whom it trades and may also bear
the risk of settlement default. These risks may differ materially from those entailed in exchange-traded transactions that generally are backed
by clearing organisation guarantees, daily marking-to-market and settlement, and segregation and minimum capital requirements applicable
to intermediaries. Transactions entered into directly between counterparties generally do not benefit from such protections and expose the
parties to the risk of counterparty default. CFD contracts generally require variation margins, and the counterparty credit risk is monitored by the
InvestmentManager.
The Investment Manager monitors the Company’s exposure to its counterparties on a regular basis and the position is reviewed by the Directors
at Board meetings. Investment transactions are carried out with a number of brokers, whose credit-standing is reviewed periodically by the
Investment Manager, and limits are set on the amount that may be due from any one broker.
Notes to the Accounts continued
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 65
16. Financial Instruments and Capital Disclosures continued
(e) Credit risk continued
In summary, the exposure to credit risk as at 31 October 2025 was as follows:
As at
31 October 2025
3 months or less
£’000
As at
31 October 2024
3 months or less
£’000
Cash at bank 4,359 4,006
Amounts due in respect of CFDs 2,860 8,027
Collateral paid in respect of CFDs 659 413
Debtors 3,955 4,062
Total 11,833 16,503
None of the above assets or liabilities was impaired or past due but not impaired.
(f) Other price risk
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices
(other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial
instrument or its issuer, or factors affecting similar financial instruments traded in the market.
The Company is exposed to market price risk arising from its equity investments and its exposure to the positions within the CFD portfolio. The
movements in the prices of these investments result in movements in the performance of the Company.
The Company’s exposure to other changes in market prices at 31 October 2025 of its equity investments was £315,369,000 (2024: £258,478,000).
In addition, the Company’s gross market exposure to these price changes through its CFD portfolio was £62,522,000 through long positions (2024:
£51,153,000).
The Company uses CFDs as part of its investment policy. These instruments can be highly volatile and potentially expose investors to a higher risk
of loss. The low initial margin deposits normally required to establish a position in such instruments permit a high degree of leverage. As a result,
arelatively small movement in the price of a contract may result in a profit or loss which is high in proportion to the value of the net exposures in the
underlying CFD positions. In addition, daily limits on price fluctuations and speculative position limits on exchanges may prevent prompt liquidation
of positions resulting in potentially greater losses.
The Company limits the gross market exposure, and therefore the leverage, of this strategy to approximately 200% of the Company’s net assets. The
CFDs utilised have a linear performance to referenced stocks quoted on exchanges and therefore have the same volatility profile to the underlying stocks.
Market exposure to derivative contracts is disclosed below.
The Company’s exposure to CFDs is the aggregate of Long CFD Positions. The gross and net market exposure is the same as the Company does
not hold Short CFD Positions.
Exposures are monitored daily by the Investment Manager. The Company’s Board also reviews exposures regularly. The gross underlying notional
exposures within the CFD portfolio as at 31 October 2025 were:
As at 31 October 2025 As at 31 October 2024
£’000
% of net
assets £’000
% of net
assets
CFDs – (absolute exposure) 62,522 19.29% 51,153 19.24%
CFDs – (net exposure) 62,522 19.29% 51,153 19.24%
The Board of Directors manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant
information from the Investment Manager. The Board meets regularly and at each meeting reviews investment performance. The Board monitors
the Investment Manager’s compliance with the Company’s objective.
66 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
Concentration of exposure to other price risk
A sector breakdown of the portfolio can be found on page 11.
Other price risk sensitivity
The following table illustrates the sensitivity of the profit after taxation for the period to an increase or decrease of 10% in the fair values of the
Company’s equities and CFDs. This level of change is considered to be reasonably possible based on observation of current market conditions.
The sensitivity analysis is based on the notional exposure of the Company’s equities investments and long CFDs.
As at 31 October 2025 As at 31 October 2024
Increase in
Fair Value
£’000
Decrease in
Fair Value
£’000
Increase in
Fair Value
£’000
Decrease in
Fair Value
£’000
Impact on capital return – increase/(decrease) 37,615 (37,615) 30,162 (30,162)
Return after taxation – increase/(decrease) 37,615 (37,615) 30,162 (30,162)
(g) Liquidity risk
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 it would be for 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 risk
The Company’s Investment Manager monitors the liquidity of the Company’s portfolio on a regular basis.
Liquidity risk exposure
The undiscounted gross cash outflows of the financial liabilities as at 31 October 2025, based on the earliest date on which payment can be
required, were as follows:
As at
31 October 2025
less than 3 months
£’000
As at
31 October 2024
less than 3 months
£’000
Amounts payable in respect of CFDs 3,036 8,854
Other payables 352 291
Total 3,388 9,145
The Company is exposed to liquidity risks from the leverage employed through exposure to long only CFD positions. However, timely sale of
trading positions can be impaired by many factors including decreased trading volume and increased price volatility. As a result, the Company
could experience difficulties in disposing of assets to satisfy liquidity demands. 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 Manager in
accordance with established policies and procedures in place.
Notes to the Accounts continued
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 67
16. Financial Instruments and Capital Disclosures continued
(h) Fair value measurements of financial assets and financial liabilities
The financial assets and liabilities are either carried in the Statement of Financial Position at their Fair Value, or the Statement of Financial Position
amount is a reasonable approximation of Fair Value (due from brokers, dividends receivable, accrued income, due to brokers, accruals and cash
and cash equivalents).
The valuation techniques for investments and derivatives used by the Company are explained in the accounting policies Notes 2 (b and c) on
pages53 and 54.
The table below sets out Fair Value measurements using Fair Value Hierarchy.
31 October 2025
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Assets:
Equity investments 312,610 2,759 – 315,369
CFDs – Unrealised Fair Value gains – 2,860 – 2,860
Liabilities:
CFDs – Unrealised Fair Value losses – (1,119) – (1,119)
Total 312,610 4,500 – 317,110
31 October 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Assets:
Equity investments 255,765 2,713 – 258,478
CFDs – Unrealised Fair Value gains – 8,027 – 8,027
Liabilities:
CFDs – Unrealised Fair Value losses – (17) – (17)
Total 255,765 10,723 – 266,488
There were no transfers between levels during the year (2024: nil).
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 including quoted prices.
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data. There were no Level 3
investments as at 31 October 2025 (2024: nil).
68 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Financial Statements
(i) 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 and by utilising the
leverage effect of CFD.
The key performance indicators are contained in the strategic report on page 17.
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 October 2025 comprises called up share capital and reserves totalling £324,049,000 (2024: £265,841,000).
The Board regularly monitors, and has complied with, the externally imposed capital requirements.
17. Distributable Reserves
The Company’s distributable reserves consist of the Special reserve, Revenue reserve and Capital reserve attributable to realised profits. As at
31 October 2025, the total distributable Capital reserve was £76,023,000 (2024: £58,319,000), and the total undistributable Capital reserve was
£75,495,000 (2024: £35,561,000).
Special reserve: As stated in the Company’s prospectus dated 13 November 2015, in order to increase the distributable reserves available to
facilitate the flexibility and source of future dividends, the Company resolved that, conditional upon First Admission to listing on the London Stock
Exchange and the approval of the Court, the net amount standing to the credit of the share premium account of the Company immediately following
completion of the First Issue be cancelled and transferred to a special distributable reserve. Following approval by the Court, the cancellation
became effective on 23 March 2016 and an amount of £64,671,250 was transferred to the above Special reserve at that time.
The Special reserve is distributable.
As at 31 October 2025, the Company had total distributable reserves of £149,139,000 (2024: £130,865,000).
18. Post Balance Sheet Events
There were no post balance sheet events other than those already disclosed in this report.
Notes to the Accounts continued
Other information
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 69
70 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Other information
Administrator
The Company’s administrator, the current such administrator effective 1 January 2025 being
Frostrow Capital LLP, and prior to that Apex Listed Companies Services (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”
The UK version of an European Union Directive which came into force on 22 July 2013 and which
is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended by The
Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019.
Alternative Performance Measure or“APM”
A financial measure of historical or future financial performance, financial position, or cash flows,
other than a financial measure defined or specified in the applicable financial reporting framework.
Annual General Meeting or “AGM”
A meeting held once a year, which shareholders are entitled to attend, and where they can vote on
resolutions to be put forward at the meeting and ask Directors questions about the Company.
Absolute exposure The absolute difference between the Company’s long positions and short positions.
CFD or Contract for Difference
A financial instrument, which provides exposure to an underlying equity with the provider financing
the cost to the buyer with the buyer receiving the difference of any gain or paying for any loss.
Custodian An entity that is appointed to hold and 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. The Company’s Depositary is Northern Trust
Investor Services Limited.
Dividend Income receivable from an investment in shares.
Discount (APM) The amount, expressed as a percentage, by which the share price is less than the NAV per share.
As at 31 October 2025
NAV per share (pence) a 240.5
Share price (pence) b 222.0
Discount (b÷a)-1 7.7%
As at 31 October 2024
NAV per share (pence) a 197.3
Share price (pence) b 178.8
Discount (b÷a)-1 9.4%
Glossary and Alternative Performance Measures
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 71
Ex-dividend date
The date from which a shareholder is 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 (APM)
A way to magnify income and capital returns, but which can also magnify losses. The Company
may be geared through the CFDs and if utilised, the overdraft facility, with The Northern Trust
Company.
As at 31 October 2025 £’000
CFD notional market value
1
a 62,522
Non-base cash borrowings
2
b –
NAV c 324,049
Gearing (net) ((a+b)/c) 19.3%
As at 31 October 2024 £’000
CFD notional market value
1
a 51,153
Non-base cash borrowings
2
b –
NAV c 265,841
Gearing (net) ((a+b)/c) 19.2%
1 CFD positions in underlying asset value.
2 Non-base cash borrowings represents borrowings in yen.
Gross assets (APM) The Company’s total assets including any leverage amount.
Index A basket of stocks which is considered to replicate a particular stock market or sector.
Gross market exposure The Company’s total exposure investment value in the financial market prices.
Gross underlying notional exposure The Company’s total exposure value on the underlying asset of its derivatives.
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 United Kingdom (“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.
Leverage (APM)
Under the Alternative Investment Fund Managers Directive (“AIFMD”), leverage is any method by
which the exposure of an Alternative Investment Fund (“AIF”) is increased through borrowing of
cash or securities or leverage embedded in derivative positions.
Under AIFMD, leverage is broadly similar to gearing, but is expressed as a ratio between the
assets (excluding borrowings) and the net assets (after taking account of borrowing). Under the
gross method, exposure represents the sum of the Company’s positions after deduction of cash
balances, without taking account of any hedging or netting arrangements. Under the commitment
method, exposure is calculated without the deduction of cash balances and after certain hedging
and netting positions are offset against each other.
Under both methods the AIFM has set current maximum limits of leverage for the Company of 200%.
72 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Other information
Glossary and Alternative Performance Measures continued
As at 31 October 2025
Gross
£’000
Commitment
£’000
Security market value a 315,369 315,369
CFD notional market value b 62,522 62,522
Cash and cash equivalents
1
c 5,226 3,100
NAV d 324,049 324,049
Leverage (a+b+c)/d 118% 118%
As at 31 October 2024
Gross
£’000
Commitment
£’000
Security market value a 258,478 258,478
CFD notional market value b 51,153 51,153
Cash and cash equivalents
1
c 4,616 4,186
NAV d 265,841 265,841
Leverage (a+b+c)/d 118% 118%
1 Cash and cash equivalents represent gross overdraft and net overdraft with Northern Trust.
Market 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 or NAV per share Net assets divided by the number of shares in issue (excluding any shares held in Treasury).
Net exposure The difference between the Company’s long positions and short positions.
Ongoing charges (APM)
A measure, expressed as a percentage of the regular, recurring annual costs of running an
investment company.
Year end 31 October 2025
Average NAV a 284,089,803
Annualised expenses b 3,013,000
Ongoing charges (b÷a) 1.06%
Year end 31 October 2024
Average NAV a 266,974,122
Annualised expenses b 2,758,000
Ongoing charges (b÷a) 1.03%
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 73
Portfolio
A composition of different investment holdings constructed and held in order to deliver returns to
shareholders and to spread risk.
Share Premium to Net Asset Value (APM)
The amount, expressed as a percentage, by which the share price is more than the Net Asset
Value per share.
Share buyback
A purchase by a company of its own shares. Shares can either be bought back for cancellation or
held in Treasury.
Share price The price of a share as determined by buyers and sellers on the relevant stock exchange.
Treasury shares
A company’s own shares held in Treasury account by the company but which are available to be
resold in the market.
Total return (APM) A measure of performance that takes into account both income and capital returns.
Year end 31 October 2025 Share price NAV
Opening at 1 November 2024 (in pence) a 178.8 197.3
Closing at 31 October 2025 (in pence) b 222.0 240.5
Price movement (b÷a)-1 c 24.2% 21.9%
Dividend reinvestment
1
d 3.7% 3.3%
Total return (c+d) 27.9% 25.2%
Year end 31 October 2024 Share price NAV
Opening at 1 November 2023 (in pence) a 162.5 174.5
Closing at 31 October 2024 (in pence) b 178.8 197.3
Price movement (b÷a)-1 c 10.0% 13.1%
Dividend reinvestment
1
d 3.2% 3.0%
Total return (c+d) 13.2% 16.1%
1 The dividend reinvestment is calculated on the assumption that dividends paid out by the Company are reinvested into the shares of the Company at NAV at the
ex-dividend date.
Volatility A statistical measure of how much and how quickly an asset’s price changes over time.
74 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Other information
The Securities Financing Transactions Regulation (“SFTR”) came into effect on 12 January 2016. Article 13 requires information to be provided as
to the use of securities financing transactions (SFTs) and total return swaps (TRS).
A Securities Financing Transaction (“SFT”) is defined as per Article 3 (11) of the SFTR as:
• a repurchase transaction;
• securities or commodities lending and securities or commodities borrowing;
• a buy-sell back transaction or sell-buy back transaction; or
• a margin lending transaction.
As at 31 October 2025 the Company held the following types of SFTs: None (2024: None).
As at 31 October 2025 the Company held the following types of Total Return Swaps: Contracts for Difference (2024 Same).
The amount of securities and commodities on loan as a proportion of total lendable assets (excluding cash and cash equivalents) was 0% as at
31October 2025 (2024: 0%).
GLOBAL DATA:
Type of Asset
Absolute Amount
£’000
Proportion of AUM
%
Security lending 0 0
Repo 0 0
Total return swap (CFDs) 62,522 16.4%
CONCENTRATION DATA:
The largest collateral issuer across all SFTs and Total Return Swaps is as follows:
Collateral Issuers
Volume of the
collateral securities and
commodities
£’000
JPY Cash Collateral 1,258
The top counterparties across all SFTs and Total Return Swaps is as follows:
Counterparty
Gross volume
of outstanding trades
(£’000)
Morgan Stanley & Co Intl Plc 60,780
Macquarie Bank Limited Nil
The Securities Financing Transactions
Regulation (Unaudited)
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 75
AGGREGATE TRANSACTION DATA:
Type of
collateral Quality Currency
Maturity
tenor
(collateral)
Maturity
tenor
(SFTs/Total
Return
Swaps)
Country of
counterparty
establishment
(not collateral)
Settlement
and clearing
Total Return Swap
Morgan Stanley & Co Intl Plc Cash High JPY <1 Day >1 yr UK Bilateral
Macquarie Bank Limited Cash High JPY <1 Day >1 yr Australia Bilateral
REUSE OF COLLATERAL:
The share of collateral that is reused is 0%, this is in comparison with the maximum of 0% as expressed in the prospectus.
The cash collateral reinvestment returns to the company were nil.
SAFEKEEPING – Collateral Received:
Custodian
Collateral assets
safe-kept (£’000)
Northern Trust Global Services Limited 1,258
SAFEKEEPING – Collateral Granted:
The proportion of collateral held in segregated accounts, in pooled accounts or any other accounts is 0%.
RETURN/COSTS:
Type of Asset
Cost
£’000
Absolute
Returns
£’000
% overall
returns of
Transaction Type
Alternative Investment Fund:
Total Return Swaps (445) 18,684 100
Manager of the Alternative Investment Fund:
Third parties: Nil Nil Nil
76 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Other information
DIRECTORS
June Aitken (Chairman)
Kate Cornish-Bowden (Audit and Risk Committee Chairman)
Craig Cleland (Senior Independent Director and Nomination
Committee Chairman)
John Charlton-Jones
BROKER
Peel Hunt LLP
100 Liverpool Street
London
EC2M 2AT
DEPOSITARY AND CUSTODIAN
Northern Trust Investor Services Limited
50 Bank Street
London
E14 5NT
REGISTRAR
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
LEGAL ADVISER
Stephenson Harwood LLP
1 Finsbury Circus
London
EC2M 7SH
INVESTMENT MANAGER
Chikara Investments LLP
5 Bolton Street
London
W1J 8BA
Website – www.chikarainvestments.com
REGISTERED OFFICE*
25 Southampton Buildings
London
WC2A 1AL
AIFM, ADMINISTRATOR and COMPANY SECRETARY
(With effect from 1 January 2025)
Frostrow Capital LLP
25 Southampton Buildings
London
WC2A 1AL
Website – www.frostrow.com
AUDITOR
Johnston Carmichael LLP
7-11 Melville Street
Edinburgh
EH3 7PE
COMPANY SECURITY INFORMATION AND IDENTIFICATION CODES
WEBSITE www.ccjapanincomeandgrowthtrust.com
ISIN GB00BYSRMH16
SEDOL BYSRMH1
BLOOMBERG TICKER CCJI LN
LEGAL ENTITY IDENTIFIER (LEI) 549 300 FZANMYIORK 1K98
GLOBAL INTERMEDIARY IDENTIFICATION NUMBER (GIIN) 6 HEK HT–99999–SL–826
Company Information
* Registered in England no. 9845783
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 77
Notice is hereby given that the Annual General Meeting of CC Japan Income & Growth Trust plc will be held on 27 February 2026 at 12 noon at the
offices of Stephenson Harwood LLP, at 1 Finsbury Circus, London EC2M 7SH, United Kingdom for the following purposes:
To consider and if thought fit pass the following resolutions of which resolutions 1 to 11 will be proposed as ordinary resolutions and resolutions 12to14
will be proposed as special resolutions.
Ordinary resolutions
1. To receive the Company’s Annual Report and Accounts for the year ended 31 October 2025, with the reports of the Directors and auditors
thereon.
2. To approve the Directors’ Remuneration Implementation Report included in the Annual Report and Accounts for the year ended 31 October 2025.
3. To approve the Directors’ remuneration policy report.
4. To re-elect June Aitken as a Director of the Company.
5. To re-elect Kate Cornish-Bowden as a Director of the Company.
6. To re-elect Craig Cleland as a Director of the Company.
7. To re-elect John Charlton–Jones as a Director of the Company.
8. To authorise the Directors to declare and pay dividends on a semi-annual basis.
9. To re-appoint Johnston Carmichael LLP as Auditor to the Company.
10. To authorise the Directors to fix the remuneration of the Auditor until the conclusion of the next Annual General Meeting of the Company.
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 relevant securities (as defined in section 551 of the Companies Act 2006) up to an
aggregate nominal amount equal to £134,730.61 PROVIDED THAT the Directors may not allot relevant securities of an aggregate nominal
amount more than 10% of the nominal value of the issued share capital (excluding Treasury shares) at the date of the Annual General Meeting
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
(the “section 551 period”) but so that the Directors may, at any time prior to the expiry of the section 551 period, make an offer or agreement
which would or might require relevant securities to be allotted after the expiry of the section 551 period and the Directors may allot relevant
securities in the pursuance of such an offer or agreement as if the authority granted by this resolution had not expired.
Special resolutions
12. That, subject to the passing of resolution 11, in substitution for any existing power under section 570 of the Companies Act 2006 but without
prejudice to the exercise of any such power prior to the date hereof, the Directors be and are hereby empowered, pursuant to section 570
of that Act, to allot and make offers or agreements to allot equity securities (as defined in section 560 of that Act) and/or sell equity securities
held as Treasury shares pursuant to section 573 of that Act, in each case for cash pursuant to the authority and for the period of the authority
conferred by resolution 11, up to an aggregate nominal amount of £134,730.61 as if section 561(1) of that Act did not apply to such allotment
(subject to a maximum of 10% of the aggregate nominal value of the issued share capital at the date of this resolution).
13. That the Company be and is hereby generally and unconditionally authorised in accordance with section 701 of the Companies Act 2006
(the“Act”) to make market purchases (within the meaning of section 693(4) of the Act) of its shares of 1p each, provided that:
(a) the maximum number of shares hereby authorised to be purchased shall be 20,196,118 (representing 14.99 per cent of the Company’s issued
share capital (excluding shares held in Treasury) at the date of the notice of this meeting);
(b) the minimum price (exclusive of any expenses) which may be paid for an share is 1p;
(c) the maximum price (excluding expenses) which may be paid for a share is not more than the higher of (i) 5 per cent above the average of
the middle market quotations for the shares for the five business days immediately before the day on which it purchases that share and
(ii) the higher of the price of the last independent trade and the highest current independent bid for theshares;
Notice of Annual General Meeting (“AGM”)
78 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Other information
(d) the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company in 2027 or, if earlier, on the
expiry of 15 months from the passing of this resolution, unless such authority is renewed prior to such time; and
(e) the Company may make a contract to purchase 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 make a purchase of shares pursuant to any such
contract.
14. That a general meeting of the Company other than an Annual General Meeting may be called on not less than 14 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.
Registered Office: By order of the Board
25 Southampton Buildings
London
WC2A 1AL
Frostrow Capital LLP
Company Secretary
20 January 2026
Notice of Annual General Meeting (“AGM”) continued
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 79
Notes to Notice of Annual General Meeting (“AGM”)
Website address
1. Information regarding the meeting, including the information required by section 311A of the Companies Act 2006, is available from
https://ccjapanincomeandgrowthtrust.com.
Entitlement to attend and vote
2. Only those holders of shares registered on the Company’s register of members at close of business on 25 February 2026 or, if this meeting is
adjourned, at close of business on the day two days prior to the adjourned meeting, shall be entitled to vote at the meeting.
Appointment of Proxies
3. Pursuant to Section 324 of the Companies Act 2006, a member entitled to attend and vote at the meeting may appoint more than one proxy,
provided that each proxy is appointed to exercise the rights attached to different shares held by him. A proxy need not be a member of the
Company.
If shareholders are not attending the AGM, shareholders are strongly urged to appoint the Chair as their proxy to vote on their behalf.
Section 324 does not apply to persons nominated to receive information rights pursuant to Section 146 of the Companies Act 2006. Persons
nominated to receive information rights under Section 146 of the Companies Act 2006 have been sent this notice of meeting and are hereby
informed, in accordance with Section 149(2) of the Companies Act 2006, that they may have the right under an agreement with the registered
member by whom they are nominated to be appointed, or to have someone else appointed, as a proxy for this meeting. If they have such right
or do not wish to exercise it, they may have a right under such an agreement to give instructions to the member as to the exercise of voting
rights.
Nominated persons should contact the registered member by whom they were nominated in respect of these arrangements. The statement
of rights of shareholders in relation to the appointment of proxies does not apply to nominated persons.
Proxies’ rights to vote
4. On a vote on a show of hands, each proxy has one vote.
If a proxy is appointed by more than one member and all such members have instructed the proxy to vote in the same way, the proxy will only be
entitled, on a show of hands, to vote “for” or “against” as applicable. If a proxy is appointed by more than one member, but such members have given
different voting instructions, the proxy may, on a show of hands, vote both “for” and “against” in order to reflect the different voting instructions.
On a poll, all or any of the voting rights of the member may be exercised by one or more duly appointed proxies. However, where a member
appoints more than one proxy, Section 285(4) of the Companies Act does not authorise the exercise by the proxies taken together of more
extensive voting rights than could be exercised by the member in person.
Voting on the Resolution will be conducted by way of a poll.
As soon as practicable following the meeting, the results of the voting will be announced via a regulatory information service and also placed
on the Company’s website.
Voting by corporate representatives
5. Corporate representatives are entitled to attend and vote on behalf of the corporate member in accordance with Section 323 of the
Companies Act provided they do not do so in relation to the same shares.
Receipt and termination of proxies
6. The Form of Proxy and any power of attorney (or a notarially certified copy or office copy thereof) under which it is executed must be received
by MUFG Corporate Markets at 12 noon on 25 February 2026 in respect of the meeting. Any Forms of Proxy received before such time will be
deemed to have been received at such time. In the case of an adjournment, the Form of Proxy must be received by MUFG Corporate Markets no
later than 48 hours before the rescheduled meeting. We strongly urge you to appoint the Chair of the meeting as your proxy. On completing the
Form of Proxy, sign it and return it to MUFG Corporate Markets at the address shown on the Form of Proxy in the envelope provided. As postage
has been pre-paid no stamp is required.
80 CC Japan Income & Growth Trust plc Annual Report and Accounts 2025
Other information
Notes to Notice of Annual General Meeting (“AGM”) continued
In order to revoke a proxy instruction you will need to send a signed hard copy notice clearly stating your intention to revoke your proxy
appointment to the MUFG Corporate Markets, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL no later than 12.00 noon
25February 2026. In the case of a shareholder which is a company, the revocation notice must be executed under its common seal or signed
on its behalf by an officer of the company or an attorney for the company. The original of any power of attorney or any other authority under
which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. In
accordance with the Company’s Articles of Association, in determining the time for delivery of proxies, no account shall be taken of any part of
a day that is not a working day.
Shareholders can vote electronically via the Investor Centre, a free app for smartphone and tablet provided by MUFG Corporate Markets
(the company’s registrar). It allows you to securely manage and monitor your shareholdings in real time, take part in online voting, keep your
details up to date, access a range of information including payment history and much more. The app is available to download on both the
Apple App Store and Google Play, or by scanning the relevant QR code below. Alternatively, you may access the Investor Centre via a web
browser at: https://uk.investorcentre.mpms.mufg.com/.
If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform, a process which has been
agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your
proxy must be lodged by 12.00 noon on 25 February 2026 in order to be considered valid or, if the meeting is adjourned, by the time which
is 48hours before the time of the adjourned meeting. Before you can appoint a proxy via this process you will need to have agreed to
Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern
the electronic appointment of your proxy. An electronic proxy appointment via the Proxymity platform may be revoked completely by sending
an authenticated message via the platform instructing the removal of your proxy vote.
Appointment of Proxy through CREST
7. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the meeting
to be held on the above date and any adjournment(s) thereof by using the procedures described in the CREST Manual. 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.
In order for a proxy appointment or instruction made using the CREST service 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. The message, regardless of whether it constitutes the
appointment of a proxy or an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted
so as to be received by the Company’s agent (ID: RA10) by the latest time(s) for receipt of proxy appointments specified in the notice of
meeting. 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 a proxy’s appointee through CREST should be communicated to the appointee through
othermeans.
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 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. 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.
CC Japan Income & Growth Trust plc Annual Report and Accounts 2025 81
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.
All messages relating to the appointment of a proxy or an instruction to a previously appointed proxy, which are to be transmitted through
CREST, must be lodged at 12 noon on 25 February 2026 in respect of the meeting. Any such messages received before such time will be
deemed to have been received at such time. In the case of an adjournment, all messages must be lodged with MUFG Corporate Markets no
later than 48 hours before the rescheduled meeting.
Unless otherwise indicated on the Form of Proxy, CREST, Proxymity or any other electronic voting instruction, the proxy will vote as they think
fit or, at their discretion, withhold from voting.
Nominated Persons
8. If you are a person who has been nominated under section 146 of the Companies Act 2006 to enjoy information rights:
• You may have a right under an agreement between you and the member of the Company who has nominated you to have information
rights (Relevant Member) to be appointed or to have someone else appointed as a proxy for the meeting.
• If you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right under an agreement
between you and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights.
• Your main point of contact in terms of your investment in the Company remains the Relevant Member (or, perhaps, your custodian or
broker) and you should continue to contact them (and not the Company) regarding any changes or queries relating to your personal
details and your interest in the Company (including any administrative matters). The only exception to this is where the Company
expressly requests a response from you.
If you are not a member of the Company but you have been nominated by a member of the Company to enjoy information rights, you do not
have a right to appoint any proxies under the procedures set out in the notes to the form of proxy.
Questions at the Meeting
9. Under section 319A of the Companies Act 2006, the Company must answer any question you ask relating to the business being dealt with at
the meeting unless:
• answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information;
• the answer has already been given on a website in the form of an answer to a question; or
• it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
If shareholders would like to ask any questions prior to the meeting, shareholders are invited to submit their questions to cosec@frostrow.com.
Please note all questions should be submitted by close of business on 25 February 2026.
Issued shares and total voting rights
10. The total number of shares in the Company in respect of which members are entitled to exercise voting rights is 134,730,610 shares of £0.01
each, of which 0 is held in Treasury. The total number of voting rights in relation to the shares in the Company is 134,730,610.
Communication
11. Except as provided above, members who have general queries about the meeting should use the following means of communication (no
other methods of communication will be accepted):
• calling MUFG Corporate Markets shareholder helpline (lines are open from 9:00 a.m. to 5:30 p.m. Monday to Friday, excluding public
holidays in England and Wales) +44 371 664 0300 (calls are charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international rate;
• emailing MUFG Corporate Markets at shareholderenquiries@cm.mpms.mufg.com; or
• in writing to MUFG Corporate Markets at Central Square, 29 Wellington Street, Leeds, LS1 4DL. You may not use any electronic address
provided either in this notice of meeting or in any related documents (including the Form of Proxy for this meeting) to communicate with
the Company for any purposes other than those expressly stated.
I/We .........................................................................................................................................................................................................................................................................................................
of ...............................................................................................................................................................................................................................................................................................................
(BLOCK CAPITALS PLEASE)
being (a) member(s) of CC Japan Income & Growth Trust plc appoint the Chair of the meeting, or .............................................................................................................
(see note 1) ...........................................................................................................................................................................................................................................................................................
of ...............................................................................................................................................................................................................................................................................................................
as my/our proxy and, on a poll, to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on 27 February 2026 at
12noon and any adjournment thereof.
Please indicate with an ‘X’ in the spaces provided how you wish your votes to be cast on the resolutions specified.
Resolution For Against Withheld Discretionary
1. To receive and adopt the Annual Report and Accounts for the year
ended 31 October 2025
2. To approve the Directors’ remuneration implementation report
3. To approve the Directors’ remuneration policy report
4. To re-elect June Aitken as a Director of the Company
5. To re-elect Kate Cornish-Bowden as a Director of the Company
6. To re-elect Craig Cleland as a Director of the Company
7. To re-elect John Charlton-Jones as a Director of the Company
8. To authorise the Directors to declare and pay dividends on a
semi-annual basis
9. To re-appoint Johnston Carmichael LLP as Auditor to the Company
10. To authorise the Directors to fix the remuneration of the Auditor
11. To give authority to allot new shares
12. To give authority to allot new shares free from pre-emption rights
13. To give authority for the Company to purchase its own shares
14. To authorise calling general meetings (other than Annual General
Meetings) on 14 clear days’ notice
Subject to any voting instructions so given the proxy will vote, or may abstain from voting, on any resolution as he may think fit.
Signature ...................................................................................................................................................... Dated this ...................................... day of ...................................... 2026
NOTES
1. If any other proxy is preferred, strike out the words “Chair of the Meeting” and add the name and address of the proxy you wish to appoint and initial the alteration.
The proxy need not be a member.
2. If the appointer is a corporation this form must be completed under its common seal or under the hand of some officer or attorney duly authorised in writing.
3. A vote withheld is not a vote in law and will not be counted in the calculation of the proportion of the votes for or against a resolution.
4. The signature of any one of joint holders will be sufficient, but the names of all the joint holders should be stated.
5. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are
authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy instruction is one of
multiple instructions being given. All forms must be signed and should be returned together in the same envelope.
6. To be valid, this form and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power, must reach the registrars
of the Company, MUFG Corporate Markets not less than forty-eight hours before the time appointed for holding the Annual General Meeting or adjournment as the case
may be.
7. The completion of this form will not preclude a member from attending the Meeting and voting in person.
8. Any alteration of this form must be initialled. Your completed and signed proxy form should be posted, in the enclosed reply paid envelope, to the Company’s
Registrars, MUFG Corporate Markets, PXS 1, MUFG Corporate Markets, Central Square, 29 Wellington Street, Leeds, LS1 4DL, so as to arrive by 12 noon on
25February 2026. Alternatively you can vote via the Investor Center app or via the website https://uk.investorcentre.mpms.mufg.com/.
CC Japan Income & Growth Trust plc
Form of Proxy
✁
CC Japan Income &
Growth Trust plc
www.ccjapanincomeandgrowthtrust.com