Investment Objective, Policy & Restrictions

Investment Objective
The Company’s investment objective is to achieve long¬term capital growth from a portfolio of securities primarily of smaller Japanese companies listed or traded on Japanese Stock Markets. The aim will be to achieve a long¬term capital return on the Company’s portfolio and dividend income will be a secondary consideration in making investment decisions. Although the Company is not managed to a benchmark, it measures its performance against the MSCI Japan Small Cap Index (Total Return) for comparison purposes only.

Investment Policy
The Company’s investment policy is that it will invest mainly in shares, but may also invest in equity related instruments such as convertible bonds or warrants issued by smaller Japanese companies and debt instruments.

It is the intention of the Directors that investments in unlisted securities which are not registered for trading on or quoted on any of the Japanese Stock Markets should only be made where either a listing or an alternative form of realising the investment can be expected within a reasonable period of time. Within these parameters, the assets of the Company may be used to provide venture or start¬up capital (but no investment will carry unlimited liability). The balance of the assets of the Company not invested in securities will normally be invested in short¬term debt securities and money market instruments or placed on deposit.

The assets of the Company will be denominated principally in Japanese Yen. It is not the present intention of the Directors to hedge the currency exposure of the Company, but the Directors reserve the right to do so in the future if they consider this to be desirable.

It is intended that the principal investment objective and policies of the Company as set out above will remain in force until determined by the Directors and any material change in the policies will only be made with shareholder approval.

Investment Restrictions
It is the intention to observe the investment restrictions necessary to maintain a listing for the Company as an investment company on the London Stock Exchange and for the Company to be able to obtain certification as a distributing fund if subject to the applicable United Kingdom taxation legislation (and subject to other conditions of that legislation). For these purposes and for other policy considerations, the Company will not:

(a) invest in securities carrying unlimited liability; or
(b) deal short in securities; or

(c) take legal or management control of investments in its portfolio; or

(d) invest in any commodities, land or interests in land; or

(e) invest or lend more than 25 per cent. of its assets at the time the investment is made in securities of any one company or single issuer (other than obligations of the Japanese Government or its agencies or of the US Government or its agencies); or

(f) invest more than 10 per cent. of its assets at the time the investment is made in closed¬end investment funds which are listed on the Official List maintained by the Financial Conduct Authority (except to the extent that those investment funds have stated investment policies to invest no more than 15 per cent of their total assets in other investment funds which are listed on the Official List) and the Company will not invest more than 15 per cent. of its assets at the time the investment is made in such funds; or

(g) invest in more than 5 per cent. of its assets at the time the investment is made in units of unit trusts or shares or other forms of participation in managed open¬ended investment vehicles; or

(h) commit its assets in the purchase of foreign exchange contracts or financial futures contracts or put or call options or in the purchase of securities on margin other than in connection with or for the purpose of hedging transactions effected on behalf of the Company; or

(i) enter into borrowings in excess of 20 per cent. of net assets at the time the borrowings are drawn down.