Atlantis Japan Growth Fund : Annual audited – April 2021 (incl. notice of AGM 2021)

Atlantis Japan Growth Fund Limited

Annual Report and Financial Statements

for the financial year ended 30 April 2021

AUDITED

ATLANTIS JAPAN GROWTH FUND LIMITED

CONTENTS

	PAGE
FINANCIAL HIGHLIGHTS AND PERFORMANCE	2
INTRODUCTION	4
CHAIRMAN'S STATEMENT	5
INVESTMENT ADVISER'S REPORT	8
ALTERNATIVE INVESTMENT FUND MANAGER'S REPORT	10
DETAILS OF TEN LARGEST INVESTMENTS	11
SCHEDULE OF INVESTMENTS	13
BOARD OF DIRECTORS	16
STRATEGIC REPORT	17
DIRECTORS' REPORT AND STATEMENT OF DIRECTORS' RESPONSIBILITIES	24
DIRECTORS' REMUNERATION REPORT	27
CORPORATE GOVERNANCE	29
AUDIT COMMITTEE REPORT	34
DEPOSITARY STATEMENT	37
INDEPENDENT AUDITORS' REPORT	38
STATEMENT OF COMPREHENSIVE INCOME	48
STATEMENT OF CHANGES IN EQUITY	49
STATEMENT OF FINANCIAL POSITION	51
STATEMENT OF CASH FLOWS	52
NOTES TO THE FINANCIAL STATEMENTS	53
ADMINISTRATION	76
APPENDIX 1: SUPPLEMENTARY INFORMATION	78
NOTICE OF ANNUAL GENERAL MEETING	82
ANNUAL GENERAL MEETING RIDER	85

All references to "USD" or "$" throughout this report are to the currency of the United States. All references to "GBP" or "£" throughout this report are to the currency of the United Kingdom. All references to "JPY" or "¥" throughout this report are to the currency of Japan.

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ATLANTIS JAPAN GROWTH FUND LIMITED

FINANCIAL HIGHLIGHTS AND PERFORMANCE

TO 30 APRIL 2021

Capital performance (GBP '000)

	30 April 2021	30 April 2020	% change
Total net assets	116,501	97,913	19.0%
Ordinary share performance
	30 April 2021	30 April 2020	% change
Net asset value (GBP)	2.79	2.34	19.0%
Net asset value (with dividends added back)*	-	-	22.9%
Middle market share price (GBP)	2.53	2.00	26.5%
Share price total return (with dividends	-	-	31.3%
added back)
Dividends paid (pence)	8.88p	4.74p	-
TOPIX Total Return in GBP (Benchmark)	19.76	17.02	16.1%
Discount to net asset value (%)*	-9.2%	-14.6%	-
Ongoing charges*1	1.58%	1.64%	-

*Alternative performance measures.

1 For further information please see ongoing charges in Appendix 1, page 78.

Fund performance versus benchmark since inception

500%

Atlans Japan Growth Fund (total return) - £ NAV

Atlans Japan Growth Fund (total return) - £ Price

400%

Topix Index (total return) - £ Price

300%

200%

100%

0%

-100%

Apr 96

Apr 97

Apr 98

Apr 99

Apr 00

Apr 01

Apr 02

Apr 03

Apr 04

Apr 05

Apr 06

Apr 07

Apr 08

Apr 09

Apr 10

Apr 11

Apr 12

Apr 13

Apr 14

Apr 15

Apr 16

Apr 17

Apr 18

Apr 19

Apr 20

Apr 21

Fund performance versus benchmark for the three years ended 30 April 2021

50%

Atlans Japan Growth Fund (total return) - £ NAV

40%

Atlans Japan Growth Fund (total return) - £ Price

Topix Index (total return) - £ Price

30%

20%

10%

0%

-10%

-20%

-30%

Apr 18

Jul 18

Oct 18

Jan 19

Apr 19

Jul 19

Oct 19

Jan 20

Apr 20

Jul 20

Oct 20

Jan 21

Apr 21

Note: NAV performance is diluted by historical Subscription Rights.

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ATLANTIS JAPAN GROWTH FUND LIMITED

FINANCIAL HIGHLIGHTS AND PERFORMANCE (continued)

TO 30 APRIL 2021

Net Asset Value Total Return (GBP)		1 Year		3 Years			5 Years			Since		Annualised
					Inception		Return
Atlantis Japan Growth Fund						22.9%			21.2%				98.2%			351.5%			6.2%
Topix TR													16.1%			13.7%				63.8%			79.1%			2.4%
Note: NAV performance is diluted by historical Subscription Rights.
Source: Quaero Capital LLP, Northern Trust and Bloomberg.
Discount trend over the last three years
																																							0%
			Discount trend
																																				-2%
																																							-4%
																																							-6%
																																							-8%
																																							-10%
																																							-12%
																																							-14%
																																							-16%
																																							-18%
																																							-20%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
18	18	18	18	18	18	18	18	18	19	19	19	19	19	19	19	19	19	19	19	19	20	20	20	20	20	20	20	20	20	20	20	20	21	21	21	21

Source: Quaero Capital LLP, Northern Trust and Bloomberg.

Portfolio market capitalisation breakdown in GBP (comparative value as at 30 April 2020)

> 10bn,

< 0.5bn,28%, (20%) 24%, (29%)

0.5-2bn,

29%, (22%)

5-10bn,

13%, (19%)

2-5bn, 6%,

(10%)

Source: Quaero Capital LLP, Northern Trust and Bloomberg.

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ATLANTIS JAPAN GROWTH FUND LIMITED

INTRODUCTION

INVESTMENT OBJECTIVE

Atlantis Japan Growth Fund Limited (the "Company") aims to achieve long term capital growth through investment wholly or mainly in listed Japanese equities.

INVESTMENT POLICY

The Company may invest up to 100 per cent of its gross assets in companies quoted on any Japanese stock exchange including, without limitation, the Tokyo Stock Exchange categorised as First Section, Second Section, JASDAQ, Mothers and Tokyo PRO, or the regional stock exchanges of Fukuoka, Nagoya and Sapporo. The Company's benchmark index is the TOPIX Total Return index "benchmark total return index" and the Company will not be restricted to investing in constituent companies of the benchmark.

The Company may also invest up to 20 per cent of its Net Asset Value (the "NAV") at the time of investment in companies listed or traded on other stock exchanges but which are either controlled and managed from Japan or which have a material exposure to the Japanese economy.

The Company may also invest up to 10 per cent of its NAV at the time of investment in securities which are neither listed nor traded on any stock exchange or over-the-counter market.

In general, investment will be through investments in equity shares in, or debt issued by, investee companies. However, the Company may also invest up to 20 per cent of its NAV at the time of investment in equity warrants and convertible debt.

The Company will not invest in more than 10 per cent of any class of securities of an investee company. The Company will not invest in derivative instruments save for the purpose of efficient portfolio management.

The Company may not invest more than 10 per cent in aggregate, of the value of its total assets in other listed closed-ended investment funds except in the case of investment in closed-ended investment funds which themselves have published investment policies to invest no more than 15 per cent of their total assets in other listed closed-ended investment funds, in which case the limit is 15 per cent.

The Company may borrow, with a view to enhancing capital returns, up to a maximum of an amount not exceeding 20 per cent of NAV at the time of borrowing.

No material change will be made to the investment policy without the approval of shareholders by ordinary resolution.

The management and impact of the risks associated with the investment policies are described in detail in the Notes to the Financial Statements (see Note 15).

INVESTMENT MANAGER AND INVESTMENT ADVISER

Quaero Capital LLP has been the appointed Investment Manager of the Company since 1 August 2014.

Atlantis Investment Research Corporation ("AIRC") has been the appointed Investment Adviser to the Company since 1 August 2014.

AIRC, established in Tokyo, through Taeko Setaishi as lead adviser, and her colleagues, advise the Investment Manager on the day-to-day conduct of the Company's investment business, the role it has played since the launch of the Company in May 1996.

DIVIDEND POLICY

There are regular quarterly dividend payments of 1% of the Company's NAV (based on the average daily NAV in the final month of the financial year). The dividends will be paid out of capital reserves and will be paid in March, June, September and December (please see Dividend Policy on page 18 for further details).

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