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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Jap.Acc.Pf | LSE:JAP | London | Ordinary Share | GB0033788018 | PTG SHS 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 102.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 7799X
Japanese Accelerated Perf Fund Ltd
20 August 2009
Japanese Accelerated Performance Fund Limited
Half-yearly financial report
for the period ended
30 June 2009 (Unaudited)
Japanese Accelerated Performance Fund Limited (the "Company")
ABOUT THE COMPANY
Japanese Accelerated Performance Fund Limited is a Guernsey incorporated,
closed-ended investment company. With the exception of two Management Shares
issued for administrative reasons, the Company's issued share capital comprises
30,000,000 Participating Shares ("Shares") whose performance is designed to
depend upon the performance of the Nikkei 225 Index. The Company has an
unlimited life but the Shares will be redeemed on or around 22 December 2009
(the "Redemption Date").
Investment Objective and Policy
The investment objective of the Company is to provide shareholders, on the
Redemption Date, with five times the capital return of the Nikkei 225 Index, up
to a maximum amount (the "Final Capital Entitlement") of 200p per Share,
comprising a capital growth amount of up to a maximum of 100p per Share and a
capital amount of 100p per Share. The Final Capital Entitlement per Share is
designed to be determined by the performance of the Nikkei 225 Index over the
calculation period from 17 December 2003 to 17 December 2009.
The Shares are Sterling denominated and their value will not be affected by
changes in the Yen / Sterling exchange rate.
In accordance with the Company's investment policy, the net proceeds derived
from the issue of Shares have been invested in a portfolio of debt securities
and over-the-counter derivative instruments at prices based on the closing level
of the Nikkei 225 Index on 17 December 2003 of 10,092.64. Therefore, if the
Nikkei 225 Index rises 20% from its starting level of 10,092.64 on 17 December
2003, which equates to a level of 12,111.17 in December 2009, the Shares are
designed to return growth of 100%.
There is full capital protection if the Nikkei 225 Index has fallen at the end
of the period (December 2009) unless the Nikkei 225 Index has closed more than
50% down during the term to 5046.32. In this case, if the Nikkei 225 Index is
still below 10,092.64 at the end of the Calculation Period, the net asset value
of the Company will fall by an equivalent percentage. If the level of the Nikkei
225 Index has returned above its starting level of 10,092.64 in December 2009,
then the Company will still provide five times the return of the Nikkei 225
Index to a maximum of 100%.
Japanese Accelerated Performance Fund Limited (the "Company")
ABOUT THE COMPANY (Continued)
The Company has invested substantially all of its net assets in medium term loan
notes ("Debt Securities") issued by financial institutions, selected by the
Manager, that, at the date of issue of the relevant Debt Security, had a rating
of at least A- or A3, as determined by Standard & Poor's and/or Moody's Investor
Services Inc. respectively and was either (a) a credit institution as defined in
Article 1 of the Council Directive of 20 March 2000 relating to the taking up
and pursuit of the business of credit institutions (No 2000/12/EC), other than
an institution referred to in Article 2(3) of that Directive, if authorised by
the competent authority of an EU Member State in relation to the credit
institution concerned; (b) a bank authorised in a Member State of the European
Economic Area; or (c) a bank authorised by a signatory state (other than an EU
Member State or a Member State of the European Economic Area) to the Basle
Capital Convergence Agreement of July 1988 (Switzerland, Canada, Japan and the
US).
To avoid over-dependency on any single issuer, the Company has acquired seven
Debt Securities. It is not anticipated that this portfolio of Debt Securities
will be varied prior to the maturity date of the Debt Securities other than in
exceptional circumstances.
Given the recent collapse of various financial institutions around the world and
government bail-outs it is worth commenting on the assets held by the Company.
Your attention is drawn to the Schedule of Investments on pages 26 and 27 of
this Half-Yearly Financial Report, which shows the assets held by the Company,
and note 11b on page 22, which refer to the credit risk of the issuers of these
assets as at the period end.
The Company currently holds seven Debt Securities, the issuers of which, as at
the date of this report, have investment grade credit ratings ranging from Aa1
to Baa1 by Moody's Investor Services and from AA to A- by Standard and Poor's
rating agency.
The Board monitors credit risk and will consider further action if the credit
rating of an issuer falls below A3 or A- as ranked by Moody's and S&P
respectively. In the event of a default by an issuer of a Debt Security
purchased by the Company, the Company would rank as an unsecured creditor in
respect of sums due from the issuer of such Debt Security. In such event, the
Company may (in respect of that Debt Security) receive a lesser amount (if any)
and at a different time than the proceeds anticipated at the maturity of the
Debt Security. Any losses would be borne by the Company and returns to
Shareholders would be significantly adversely affected.
Japanese Accelerated Performance Fund Limited (the "Company")
ABOUT THE COMPANY (Continued)
As part of its investment portfolio, the Company holds a debt security issued by
Yorkshire Building Society ("YBS") with a nominal value of GBP4.3 million and a
market value, as at the reporting date, of GBP5,469,555. This represented 14.27
per cent of the value of the Company's net assets as at the reporting date.
On 14 April 2009 Moody's announced selective rating actions on various UK
mortgage lenders reflecting its concern that the current economic crisis in the
UK and, indeed, globally will lead to significantly higher credit losses than
previously anticipated, particularly among the residential and commercial real
estate assets, to which these mortgage lenders and building societies have a
highly concentrated exposure. The effect of Moody's review was to downgrade or
place on negative watch thirteen financial institutions. YBS' senior debt and
deposit ratings were downgraded two notches to Baa1 from A2 with a negative
outlook. On 27 July 2009 S&P downgraded YBS' long term credit rating to A- from
A with a stable outlook, based on S&P's expectation that the underlying earnings
pressures seen in 2008 would persist, although it was felt that YBS'
capitalization would remain strong. As a result of Moody's downgrade, the Board
considered both the sale and the retention of the YBS debt security, acting in
the best interests of the Company and its shareholders.
The Board reviewed YBS' financial results, including its liquidity and capital
adequacy position, as well as recent research updates from the ratings agencies
which suggest it is performing well, both in the deteriorating economic climate
and relative to its peers. They also considered the historical precedent of
government support for other UK financial institutions which suggested that
should YBS ever need support it would likely be forthcoming.
The Board also considered how the Final Capital Entitlement of the Shares might
be affected by any sale of the YBS debt security and noted that there could be a
significant cost involved, resulting in an irreversible reduction in the
possible returns to the Company's shareholders.
On the basis of the prevailing facts, the Board therefore concluded that it
would not be in the best interests of the Company and Shareholders to sell the
YBS debt security, but will continue to monitor the situation.
Japanese Accelerated Performance Fund Limited (the "Company")
ABOUT THE COMPANY (Continued)
The Company also holds debt securities issued by Irish Life & Permanent and Egg
Banking plc. The senior and dated subordinated debt of Irish Life & Permanent is
now guaranteed by the Republic of Ireland for maturities before 29 September
2010. Moody's and S&P have both equalised their ratings of the IL&P debt
security held with the Irish sovereign debt ratings which, as at the date of
this report, are Aa1 and AA respectively.
On 27 February 2009 Moody's Investors Service lowered the long term senior debt
ratings of Egg Banking plc's parent company, Citigroup Inc, to A3 from A2 with a
stable outlook. The downgrade followed Citigroup's announcement that it is
embarking on a major capital initiative and was driven by Moody's expectation
that, the current level of US government support notwithstanding, Citigroup will
emerge from the current economic crisis with a different mix of core businesses
and a smaller scale, which could diminish its relative importance to the US
banking system over the long run. Standard & Poor's Ratings Services affirmed
its A credit rating on Citigroup Inc. S&P believe that, with completion of the
proposed recapitalisation, there will be a significant boost to Citigroup's
capital adequacy.
The Company has also sold a put option to BNP Paribas, the proceeds of which
sale were used to finance the acquisition of the Debt Securities. The
performance of the put option is linked to the performance of the Nikkei 225
Index. At an Index value of 10,092.64 or above at the close of business on 17
December 2009, or if the Index has never closed below 5,046.32 during the
calculation period from 17 December 2003 to 17 December 2009, the put option
will be worth GBPNil at maturity. If the Index has closed below 5,046.32 over
the calculation period and the Index is still below 10,092.64 on 17 December
2009, the put option will be worth a percentage of the notional value, being
GBP30,000,000, equivalent to the percentage fall in the level of the Nikkei 225
Index over the calculation period, such payment payable to BNP Paribas by the
Company.
The Company has not invested and will not invest in other listed investment
companies (included listed investment trusts).
The Company may borrow up to ten percent of its net asset value for temporary
purposes. It is not, however, the current intention of the Directors to engage
in any borrowing. Without prejudice to the powers of the Company to invest in
transferable securities, the Company may not lend to, nor act as guarantor on
behalf of, third parties.
Japanese Accelerated Performance Fund Limited (the "Company")
MANAGER'S REPORT for the period 30 June 2009
Investment Performance
At launch the net proceeds derived from the issue of Shares of the Company were
invested in a portfolio of debt securities and options at a price based on the
level of the Nikkei 225 Index at the close of business on 17 December 2003,
namely 10,092.64. On 30 June 2009, the Nikkei 225 Index closed at 9,958.44, a
fall of 1.3% since launch and a gain of 12.4% over the reporting period. Over
the same periods, the total market value of the Company's shares rose by 7.0%
and 18.9% respectively.
As the Company's investment portfolio is based upon the Nikkei 225 Index, it is
possible to show the potential capital entitlements available to shareholders
based on the level of the Nikkei 225 Index on the Company's end date of 17
December 2009. These figures are for illustrative purposes only and do not
represent forecasts or take into account any unforeseen circumstances.
As at 17 December 2009:
+----------------------+----------------------+---------------------+
| Final Nikkei 225 | Net Asset Value if | Net Asset Value if |
| Index Level | Nikkei 225 Index | Nikkei 225 Index |
| | never closes below | has closed below |
| | 5,046.32** | 5,046.32** |
+----------------------+----------------------+---------------------+
| 8,000 | 100 | 79 |
+----------------------+----------------------+---------------------+
| 8,500 | 100 | 84 |
+----------------------+----------------------+---------------------+
| 9,000 | 100 | 89 |
+----------------------+----------------------+---------------------+
| 9,500 | 100 | 94 |
+----------------------+----------------------+---------------------+
| 9,958.44* | 100 | 98 |
+----------------------+----------------------+---------------------+
| 10,000 | 100 | 99 |
+----------------------+----------------------+---------------------+
| 10,500 | 120 | 120 |
+----------------------+----------------------+---------------------+
| 11,000 | 144 | 144 |
+----------------------+----------------------+---------------------+
| 11,500 | 169 | 169 |
+----------------------+----------------------+---------------------+
| 12,000 | 194 | 194 |
+----------------------+----------------------+---------------------+
| 12,500 | 200 | 200 |
+----------------------+----------------------+---------------------+
| 13,000 and over | 200 | 200 |
+----------------------+----------------------+---------------------+
* NIKKEI 225 Index level at the end of the reporting period
** On any day from 17 December 2003 to 17 December 2009
Japanese Accelerated Performance Fund Limited (the "Company")
MANAGER'S REPORT for the period 30 June 2009
Manager's Report for the period ended 30 June 2009
Market Review
The Nikkei 225 Index rose 12.4% over the period, rebounding from the recent
large falls amidst optimism the worst of the recession could be over.
The first two and a half months of the period saw the Index falling sharply to
hit a 26-year closing low on 10 March 2009 of 7054.98 as economic data showed
industrial production had plummeted and speculation grew that the economy,
already in recession, was set for a deep and prolonged down-turn.
Japanese Accelerated Performance Fund Limited (the "Company")
MANAGER'S REPORT for the period 30 June 2009
From its low the Index then climbed sharply over the next few weeks as positive
US economic data fanned speculation the range of measures already announced by
governments and central banks was successfully abating the global recession.
The Index traded largely in a narrow band between 8500 and 9000 in April before
jumping higher after the US Treasury Secretary said the results of the stress
tests on US banks would be "reassuring" and that none of the 19 banks tested was
insolvent, demonstrating that the US financial system was sound.
From here, the Index continued to climb, briefly breaking through 10000 in
mid-June, as signs that the pace of economic decline had eased, and that the
worst of the recession might already be over, encouraged buyers back to the
market. Speculation that a recovery could begin by the end of 2009 also helped
to boost sentiment, with the Index ending the reporting period at 9958.44.
The biggest boost to the Index was provided by Tokyo Electron, the world's
second-largest maker of semiconductor equipment, which rose 50.6% on speculation
it would benefit from rising orders. The biggest drag on the Index was mobile
devices company KDDI Corporation which fell 19.4% as it posted a net loss of
31.2 billion yen in the fourth quarter.
Market Outlook
Despite limited exposure to the bad debts that sparked the global financial
crisis, Japan's economy has suffered more than most as demand for its exports
have plummeted. This collapse in exports has had a negative knock-on effect on
domestic demand and consumption, leading to a collapse in GDP. Recent
indications are that exports and production are beginning to level out as
companies make progress with inventory adjustments, suggesting the pace of
deterioration in economic conditions could gradually moderate. The Bank of Japan
has said it expects economic activity in the latter half of 2009 onward to start
recovering. However, the outlook was attended by a significant level of
uncertainty, given that economic activity was likely to be strongly affected by
developments in overseas economies and global financial markets.
Close Investments Limited
20 August 2009
Japanese Accelerated Performance Fund Limited (the "Company")
INTERIM MANAGEMENT REPORT
for the period from 1 January to 30 June 2009
A description of important events that have occurred during the first six months
of the financial year, their impact on the performance of the Company as shown
in the financial statements and a description of the principal risks and
uncertainties for the remaining six months of the financial year is given in the
Manager's Report on pages 5 to 7 and is incorporated hereby reference.
There were no material related party transactions which took place in the first
six months of the financial year.
This half-yearly financial report has not been audited or reviewed by auditors
pursuant to the Auditing Practices Board guidance on Review of Interim Financial
Information.
Going Concern
The performance of the investments held by the Company over the reporting period
and the outlook for the future are described in the Manager's Report. The
Company's financial position, its cash flows and liquidity position are set out
in the financial statements and the Company's financial risk management
objectives and policies, details of its financial instruments and its exposures
to market price risk, credit risk, liquidity risk, portfolio construction risk,
interest rate risk and currency risk are set out at note 11 to the financial
statements.
As highlighted in the section entitled "Investment Objective and Policy", the
Manager's Report and note 11 to the financial statements, during the period
under review, the credit ratings of the issuers of two of the debt securities
held by the Company, being Irish Life & Permanent Plc and Yorkshire Building
Society, were downgraded below the thresholds of A- or A3 as ranked by Moody's
and Standard & Poor's respectively, being the thresholds below which the Board
will consider further action.On the basis of the prevailing facts, the Board has
concluded that it would not be in the best interests of the Company and
Shareholders to seek to sell the debt securities issued by Irish Life &
Permanent Plc and Yorkshire Building Society, but will continue to monitor the
situation.
Japanese Accelerated Performance Fund Limited (the "Company")
INTERIM MANAGEMENT REPORT
for the period from 1 January to 30 June 2009
As the Company's portfolio of debt securities mature in December 2009, being
less than twelve months from the date of this report, in accordance with
International Financial Reporting Standards the financial statements cannot be
prepared on a going concern basis. These financial statements have therefore
been prepared on a realisable value basis. This does not imply that the Company
is insolvent, nor does it imply that returns to shareholders on the Redemption
Date will be impaired.
Responsibility Statement
The Board of directors jointly and severally confirm that, to the best of their
knowledge:
* The financial statements, prepared in accordance with International Financial
Reporting Standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
* This Interim Management Report includes or incorporates by reference:
* an indication of important events that have occurred during the first six months
of the financial year, and their impact on the financial statements;
* a description of the principal risks and uncertainties for the remaining six
months of the financial year;
* confirmation that there were no related party transactions in the first six
months of the current financial year that have materially affected the financial
position or the performance of the Company during that period; and
* confirmation that there have been no changes in the related parties transactions
described in the last annual report that could have a material effect on the
financial position or performance of the Company in the first six months of the
current financial year.
Charles Tracy Christopher Jones
Director Director
Japanese Accelerated Performance Fund Limited (the "Company")
STATEMENT OF OPERATIONS
for the period from 1 January to 30 June 2009
+----------------------------------------+-------+--+------------+--+--------------+
| |Notes | | 1 January | | 1 January to |
| | | | to | | 30 June 2008 |
| | | | 30 June | | GBP |
| | | | 2009 | | |
| | | | GBP | | |
+----------------------------------------+-------+--+------------+--+--------------+
| | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| Net movement in unrealised | 5 | | 2,335,796 | | (1,623,100) |
| appreciation / (depreciation) on | | | | | |
| investments | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| Unrealised depreciation / | | | 2,599,458 | | (246,000) |
| (appreciation) on value of Put option | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| Operating expenses | 2 | | (150,719) | | (140,402) |
+----------------------------------------+-------+--+------------+--+--------------+
| | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| Gain / (loss) on ordinary activities | | | 4,784,535 | | (2,009,502) |
| before taxation | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| Taxation on ordinary activities | | | - | | - |
+----------------------------------------+-------+--+------------+--+--------------+
| | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| Net gain / (loss) for the period | | | 4,784,535 | | (2,009,502) |
| attributable to shareholders | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
| | | | Pence | | Pence |
+----------------------------------------+-------+--+------------+--+--------------+
| Earnings / (loss) per share for the | 4 | | 15.95 | | (6.70) |
| period | | | | | |
| - Basic and Diluted | | | | | |
+----------------------------------------+-------+--+------------+--+--------------+
In arriving at the results for the financial period, all amounts above relate to
continuing operations.
There are no recognised gains or losses for the period other than those
disclosed above.
Reconciliation of earnings / (loss) per Share for investment purposes to
earnings / (loss) per Share per the financial statements:
+----------------------------------------------+--+------------+--+--------------+
| | | Pence | | Pence |
+----------------------------------------------+--+------------+--+--------------+
| | | | | |
+----------------------------------------------+--+------------+--+--------------+
| Earnings / (loss) per Share for investment | | 16.45 | | (6.23) |
| purposes | | | | |
+----------------------------------------------+--+------------+--+--------------+
| | | | | |
+----------------------------------------------+--+------------+--+--------------+
| Adjustment to include expenses on an | | (0.50) | | (0.47) |
| accruals basis | | | | |
+----------------------------------------------+--+------------+--+--------------+
| | | | | |
+----------------------------------------------+--+------------+--+--------------+
| Earnings / (loss) per Share per the | | 15.95 | | (6.70) |
| financial statements | | | | |
+----------------------------------------------+--+------------+--+--------------+
In accordance with International Financial Reporting Standards, expenses should
be attributed to the period to which they relate.
The earnings per Share for investment purposes represents the earnings per Share
attributable to shareholders in accordance with the Prospectus, which recognises
all expenses of the Company up to and including the date that the Final Capital
Entitlement becomes payable.
The notes on pages 14 to 25 form an integral part of these financial statements
Japanese Accelerated Performance Fund Limited (the "Company")
NET ASSET STATEMENT
as at 30 June 2009
+-----------------------------------+--------+--+--+--+--+--+--+------------+--+-------------+
| | Notes | | | | 30 Jun | | 31 Dec 2008 |
| | | | | | 2009 | | GBP |
| | | | | | GBP | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| FIXED ASSETS | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| Unquoted financial assets | 5 | | | | 38,072,847 | | 35,737,051 |
| designated as at fair value | | | | | | | |
| through profit or loss | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| Receivables | 6 | | | | 60,179 | | 119,129 |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| Cash at bank | | | | | 234,494 | | 338,296 |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | 38,367,520 | | 36,194,476 |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| CURRENT LIABILITIES | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| Payables - due within one year | 7 | | | | 8,168 | | 20,201 |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| Financial liabilities - due | 7 | | | | 33,740 | | 2,633,198 |
| within one year | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | 41,908 | | 2,653,399 |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| NET CURRENT ASSETS | | | | | 38,325,612 | | 33,541,077 |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| TOTAL ASSETS LESS CURRENT | | | | | 38,325,612 | | 33,541,077 |
| LIABILITIES | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| NET ASSETS ATTRIBUTABLE TO | | | | | 38,325,612 | | 33,541,077 |
| SHAREHOLDERS | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| SHARES IN ISSUE | | | | | 30,000,000 | | 30,000,000 |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | Pence | | Pence |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| NAV PER SHARE | | | | | 127.75 | | 111.80 |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| NAV PER MANAGEMENT SHARE | | | | | 100.00 | | 100.00 |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| | | | | | | | |
+-----------------------------------+--------+-----+-----+-----+------------+--+-------------+
| Reconciliation of NAV per Share for investment purposes to NAV per Share per the financial |
| statements: |
+--------------------------------------------------------------------------------------------+
| | | | | | Pence | | Pence |
+-----------------------------------+--------+--+-----+-----+---------------+--+-------------+
| NAV per Share for investment | | | | | 126.79 | | 110.34 |
| purposes | | | | | | | |
+-----------------------------------+--------+--+-----+-----+---------------+--+-------------+
| Adjustment for debt issue costs | | | | | 0.18 | | 0.36 |
+-----------------------------------+--------+--+-----+-----+---------------+--+-------------+
| Adjustment to include expenses on | | | | | 0.78 | | 1.10 |
| an accruals basis | | | | | | | |
+-----------------------------------+--------+--+-----+-----+---------------+--+-------------+
| NAV per Share per the financial | | | | | 127.75 | | 111.80 |
| statements | | | | | | | |
+-----------------------------------+--------+--+--+--+--+--+--+------------+--+-------------+
In accordance with International Financial Reporting Standards, expenses should
be attributed to the period to which they relate.
The NAV per Share for investment purposes represents the NAV per share
attributable to shareholders in accordance with the Prospectus, which recognises
all expenses of the Company up to and including the date that the Final Capital
Entitlement becomes payable.
The notes on pages 14 to 25 form an integral part of these financial statements
Japanese Accelerated Performance Fund Limited (the "Company")
STATEMENT OF CASH FLOWS
for the period ended 30 June 2009
+-----------------------------------------------+--+--------------+--+-------------+
| | | 1 January to | | 1 January |
| | | 30 June 2009 | | to 30 June |
| | | GBP | | 2008 |
| | | | | GBP |
+-----------------------------------------------+--+--------------+--+-------------+
| Operating activities | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Net gain / (loss) for the period attributable | | 4,784,535 | | (2,009,502) |
| to shareholders | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Less: Unrealised (appreciation) / | | (2,335,796) | | 1,623,100 |
| depreciation on investments | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Less: Unrealised (depreciation) / | | (2,599,458) | | 246,000 |
| appreciation on value of Put option | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Add: Amortisation of debt issue costs | | 55,737 | | 56,353 |
+-----------------------------------------------+--+--------------+--+-------------+
| Less: Interest received | | (1,000) | | (12,558) |
+-----------------------------------------------+--+--------------+--+-------------+
| Less: Decrease in accrued expenses | | (12,033) | | (2,531) |
+-----------------------------------------------+--+--------------+--+-------------+
| Add: Decrease / (increase) in prepayments and | | 3,213 | | (2,746) |
| accrued income excluding debt issue costs | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Net cash outflow from operating activities | | (104,802) | | (101,884) |
+-----------------------------------------------+--+--------------+--+-------------+
| | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Investing activities | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Interest received | | 1,000 | | 12,558 |
+-----------------------------------------------+--+--------------+--+-------------+
| | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Net cash inflow from investing activities | | 1,000 | | 12,558 |
+-----------------------------------------------+--+--------------+--+-------------+
| | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Cash and cash equivalents at beginning of | | 338,296 | | 520,400 |
| period | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Decrease in cash and cash equivalents | | (103,802) | | (89,326) |
+-----------------------------------------------+--+--------------+--+-------------+
| | | | | |
+-----------------------------------------------+--+--------------+--+-------------+
| Cash and cash equivalents at end of period | | 234,494 | | 431,074 |
+-----------------------------------------------+--+--------------+--+-------------+
The notes on pages 14 to 25 form an integral part of these financial statements
Japanese Accelerated Performance Fund Limited (the "Company")
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS
for the period ended 30 June 2009
+--------------------------------------------+--+--+-------------+--+-------------+
| | | | 1 January | | 1 January |
| | | | to 30 June | | to 30 June |
| | | | 2009 | | 2008 |
| | | | GBP | | GBP |
+--------------------------------------------+--+--+-------------+--+-------------+
| | | | | | |
+--------------------------------------------+--+--+-------------+--+-------------+
| Opening balance | | | 33,541,077 | | 49,750,120 |
+--------------------------------------------+--+--+-------------+--+-------------+
| Net gain / (loss) for the period | | | 4,784,535 | | (2,009,502) |
| attributable to shareholders | | | | | |
+--------------------------------------------+--+--+-------------+--+-------------+
| | | | | | |
+--------------------------------------------+--+--+-------------+--+-------------+
| Closing balance | | | 38,325,612 | | 47,740,618 |
+--------------------------------------------+--+--+-------------+--+-------------+
The notes on pages 14 to 25 form an integral part of these financial statements
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
1ACCOUNTING POLICIES
(a) Basis of Preparation
The financial statements have been prepared in conformity with International
Financial Reporting Standards which comprise standards and interpretations
approved by the International Accounting Standards Board and International
Financial Reporting Interpretations Committee and applicable Guernsey law.
The financial statements have been prepared on a historical cost basis except
for the measurement at fair value of financial instruments.
As the Company's Participating Shares are due for redemption within twelve
months, on or around 22 December 2009, the financial statements have been
prepared on a break up basis. The directors do not anticipate costs of
liquidation to be material. Such costs will be borne out of the Expense
Provision described on note 7 to the financial statements.
Amendments to IFRS 7 were issued by the International Accounting Standards Board
in March 2009, effective for annual periods beginning on or after 1 January
2009. The amendments to IFRS 7 requires fair value to be disclosed by the source
of inputs, using a three-level hierarchy:
Quoted prices (unadjusted) in active markets for identical assets or liabilities
(Level 1);
Inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (as prices) or indirectly (derived from
prices) (Level 2);
Inputs for the asset or liability that are not based on observable market data
(unobservable inputs) (Level 3).
Up to the date of approval of these financial statements, certain other new
standards, interpretations and amendments to existing standards have been
published but are not yet effective for the current reporting period and which
the Company has not adopted early, these being:
New standards
IFRS 3 Business Combinations (revised), effective for periods commencing on or
after 1 July 2009;
Amendments to standards
IAS 27 Consolidated and Separate Financial Statements - consequential amendment
arising from amendments to IFRS 3, effective for periods commencing on or after
1 July 2009;
IAS 28 Investments in Associates - consequential amendment arising from
amendments to IFRS 3, effective for periods commencing on or after 1 July 2009;
IAS 31 Interests in Joint Ventures - consequential amendment arising from
amendments to IFRS 3, effective for periods commencing on or after 1 July 2009;
IAS 39 Financial Instruments: Recognition and Measurement - amendments for
eligible hedged items, effective for periods commencing on or after 1 July 2009;
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
1ACCOUNTING POLICIES (continued)
(a) Basis of Preparation (continued)
Amendments to standards (continued)
IAS 39 Financial Instruments: Recognition and Measurement - amendments for
embedded derivatives when classifying financial instruments, effective for
periods ending on or after 30 June 2009;
New interpretations
IFRIC 17 Distribution of Non-cash Assets to Owners, effective for periods
commencing on or after 1 July 2009;
IFRIC 18 Transfers of Assets from Customers, effective for transfers received on
or after 1 July 2009.
(b) Taxation
The Company has been granted exemption under the Income Tax (Exempt Bodies)
(Guernsey) Ordinance, 1989 from Guernsey Income Tax, and is currently charged an
annual fee of GBP600.
(c) Expenses
All expenses are accounted for on an accruals basis.
(d) Debt Issue Costs
The debt issue costs incurred amounted to GBP675,000. Because the Company's
participating Shares are redeemable on or around 22 December 2009, they are
required to be classified as debt instruments under IAS32. Consequently, issue
costs are amortised over the life of the instrument.
(e) Interest Income
Interest income is accounted for on an accruals basis.
(f) Cash and Cash equivalents
Cash in bank and short term deposits which are held to maturity are carried at
cost. Cash and cash equivalents are defined as call deposits, short term
deposits and highly liquid investments readily convertible to known amounts of
cash and subject to insignificant risk of changes in value. For the purposes of
the Statement of Cash Flows, cash and cash equivalents consist of cash and
deposits at bank.
(g) Investments
All investments have been designated as financial assets at "fair value through
profit and loss". Investments are initially recognised on the date of purchase
at cost, being the fair value of the consideration given, excluding transaction
costs associated with the investment. After initial recognition, investments are
measured at fair value, with unrealised gains and losses on investments and
impairment of investments recognised in the Statement of Operations. Fair value
is the amount for which the financial instruments could be exchanged, or a
liability settled, between knowledgeable willing parties in an arm's length
transaction. Fair value also reflects the credit quality of the issuers of the
financial instruments.
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
1ACCOUNTING POLICIES (continued)
(g) Investments (continued)
Valuations of the investments are based on valuations provided to the Company by
Future Value Consultants Limited, an independent third party. These valuations
are intended to be an indication of the fair value of the Company's investments,
including an issuers' credit risk, designed to reflect the best estimation of
the price at which they could be sold, even though there is no guarantee that a
willing buyer might be found if the Company chose to sell the relevant
investment.
The indicative fair values of the investments are based on an approximation of
the market level of the investments. As at the balance sheet date, an
independent review of the valuations of the investments provided by Future Value
Consultants Limited is performed by the Manager. As the investments are not
traded in an active market, the indicative fair value is determined by using
valuation techniques. Future Value Consultants Limited and the Manager use a
variety of methods and make assumptions that are based on market conditions
existing at the balance sheet date.
Valuation techniques used may include the use of comparable recent arm's length
transactions (where available), discounted cash flow analysis, option pricing
models and other valuation techniques commonly used by market participants. The
techniques used by the Manager are periodically reviewed by experienced
personnel at the Manager.
Models use observable data, to the extent practicable. However, areas such as
credit risk (both own and counterparty), volatilities and correlations require
Future Value Consultants Limited and the Manager to make estimates. Changes in
assumptions about these factors could affect the reported fair value of
financial instruments.
In previous accounting periods, the valuation data was provided by BNP Paribas.
Being cognisant of current market conditions, the Company believes that the
valuations provided by Future Value Consultants Limited comply with the
definition of fair value as defined by International Financial Reporting
Standards and are more appropriate.
The investments will be derecognised on their maturity date, being 21 December
2009. Accordingly, the investments have been reclassified as current assets as
at 30 June 2009. Gains and losses on the sale or maturity of investments will be
taken to the Statement of Operations.
(h) Put Option
The Put option was initially recognised at the fair value of the consideration
received on the date of sale, and included within payables falling due after
more than one year. After initial recognition, the Put option is measured at
fair value with unrealised gains and losses being recognised in the Statement of
Operations. The Put option will be removed from the balance sheet at maturity on
17 December 2009. Accordingly the Put option has been reclassified as a current
liability due with one year.
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
1 ACCOUNTING POLICIES (continued)
(i) Trade Date Accounting
All "regular way" purchases and sales of financial assets are recognised on the
"trade date", i.e. the date that the Company commits to purchase or sell the
asset. Regular way purchases or sales are purchase or sales of financial assets
that require delivery of the asset within the timeframe generally established by
regulation or convention in the market place.
(j) Segmental Reporting
The directors are of the opinion that the Company is engaged in a single segment
of business, being investment business.
2 OPERATING EXPENSES
+---------------------------------------+--+--------------+--+--------------+
| | | 1 Jan 2009 | | 1 Jan 2008 |
| | | to 30 June | | to 30 June |
| | | 2009 | | 2008 |
| | | GBP | | GBP |
+---------------------------------------+--+--------------+--+--------------+
| | | | | |
+---------------------------------------+--+--------------+--+--------------+
| Amortisation of debt issue costs | | 55,737 | | 56,353 |
+---------------------------------------+--+--------------+--+--------------+
| Investment management fees (1) | | 52,069 | | 52,213 |
+---------------------------------------+--+--------------+--+--------------+
| Administration fees | | 9,918 | | 9,945 |
+---------------------------------------+--+--------------+--+--------------+
| Directors' remuneration | | 7,500 | | 7,500 |
+---------------------------------------+--+--------------+--+--------------+
| Registration fees | | 3,716 | | 4,624 |
+---------------------------------------+--+--------------+--+--------------+
| Directors' and Officers' Insurance | | 4,500 | | 4,500 |
+---------------------------------------+--+--------------+--+--------------+
| Audit fees | | 22 | | 5,300 |
+---------------------------------------+--+--------------+--+--------------+
| Other operating expenses | | 18,257 | | 12,525 |
+---------------------------------------+--+--------------+--+--------------+
| | | 151,719 | | 152,960 |
+---------------------------------------+--+--------------+--+--------------+
| | | | | |
+---------------------------------------+--+--------------+--+--------------+
| Less: Interest earned on expense | | (1,000) | | (12,558) |
| provision bank account | | | | |
+---------------------------------------+--+--------------+--+--------------+
| | | | | |
+---------------------------------------+--+--------------+--+--------------+
| | | 150,719 | | 140,402 |
+---------------------------------------+--+--------------+--+--------------+
(1) The Manager is entitled to receive a fee from the Company at an annual rate
of 0.35% of the Initial Gross Proceeds.
3 DIRECTORS' REMUNERATION
The Prospectus provides that each director will be paid a fee of GBP5,000 per
annum by the Company. The remuneration will remain fixed over the life of the
Company. John R Le Prevost, a director of the Company, is also a director of
Anson Fund Managers Limited, the Company's Secretary and of Anson Registrars
Limited the Company's Registrar, Transfer Agent and Paying Agent and a
controlling shareholder of Anson Group Limited, the holding company of the
Company's Secretary and Registrar.
4EARNINGS PER SHARE
The earnings per Share is based on the net gain attributable to shareholders for
the period of GBP4,784,535 (30 June 2008: GBP2,009,502 loss) and on 30,000,000
(30 June 2008: 30,000,000) Shares, being the weighted average number of Shares
in issue during the period.
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
1. EARNINGS PER SHARE (continued)
The earnings per Management Share is based on the net gain for the period of
GBPNil (30 June 2008: GBPNil) and on 2 (30 June 2008: 2) Management Shares,
being the weighted average number of Management Shares in issue during the
period.
5 INVESTMENTS
+----------------------------------------+--+-------------+--+--------------+
| | | 30 Jun 2009 | | 31 Dec |
| | | GBP | | 2008 |
| | | | | GBP |
+----------------------------------------+--+-------------+--+--------------+
| UNQUOTED FINANCIAL ASSETS DESIGNATED | | | | |
| AS AT FAIR VALUE THROUGH PROFIT OR | | | | |
| LOSS | | | | |
+----------------------------------------+--+-------------+--+--------------+
| | | | | |
+----------------------------------------+--+-------------+--+--------------+
| Portfolio cost | | 30,192,200 | | 30,192,200 |
+----------------------------------------+--+-------------+--+--------------+
| | | | | |
+----------------------------------------+--+-------------+--+--------------+
| Unrealised appreciation on valuation | | 5,544,851 | | 19,015,580 |
| brought forward | | | | |
+----------------------------------------+--+-------------+--+--------------+
| | | | | |
+----------------------------------------+--+-------------+--+--------------+
| Unrealised appreciation | | 2,335,796 | | (13,470,729) |
| / (depreciation) on valuation for the | | | | |
| period | | | | |
+----------------------------------------+--+-------------+--+--------------+
| | | | | |
+----------------------------------------+--+-------------+--+--------------+
| Unrealised appreciation on valuation | | 7,880,647 | | 5,544,851 |
| carried forward | | | | |
+----------------------------------------+--+-------------+--+--------------+
| | | | | |
+----------------------------------------+--+-------------+--+--------------+
| Valuation | | 38,072,847 | | 35,737,051 |
+----------------------------------------+--+-------------+--+--------------+
Valuations of investments are based on valuations provided by Future Value
Consultants Limited, which are subject to a review by the Manager. The provided
valuations are derived from proprietary models based upon well-recognised
financial principles and reasonable estimates about relevant future market
conditions.
To comply with the definition of fair value as defined by International
Financial Reporting Standards, Future Value Consultants Limited was engaged to
provide valuations of the investments, taking account of the current
counterparty credit risk of the issuers of the Debt Securities held by the
Company.
All debt securities held by the Company have been classified as Level 2 in
accordance with the fair value hierarchy. There have been no transfers between
Level 1 and Level 2 of the fair value hierarchy during the period under review.
The future performance of the financial assets will be based on the closing
level of the Nikkei 225 Index (the "Index") on 17 December 2009. If on that
date, the Index closes above 10,092.64 the instruments are designed to give a
return of five times the performance of the Index up to a maximum return of 100%
of the capital and subject to minimum returns as described in the Investment
Objective and Policy on pages 1 to 4.
Valuation data provided by Future Value Consultants Limited to the Company is
provided for informational purposes only and does not represent an offer to buy
or sell the debt securities by Future Value Consultants Limited or any other
party. The valuations provided are an indication of market levels and do not
imply that they can be sold at that valuation price. They are based on
assumptions and data Future Value Consultants Limited considers in its judgement
reasonable, but an alternative valuer might arrive at different valuations for
the same investments.
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
6 RECEIVABLES
+------------------------------------------+--+-------------+--+------------+
| | | 30 Jun 2009 | | 31 Dec |
| | | GBP | | 2008 |
| | | | | GBP |
+------------------------------------------+--+-------------+--+------------+
| | | | | |
+------------------------------------------+--+-------------+--+------------+
| Accrued income | | - | | 107 |
+------------------------------------------+--+-------------+--+------------+
| Prepaid debt issue costs | | 52,349 | | 108,086 |
+------------------------------------------+--+-------------+--+------------+
| Prepayments | | 7,830 | | 10,936 |
+------------------------------------------+--+-------------+--+------------+
| | | | | |
+------------------------------------------+--+-------------+--+------------+
| | | 60,179 | | 119,129 |
+------------------------------------------+--+-------------+--+------------+
7 PAYABLES (amounts falling due within one year)
+-----------------------------------------+---+-------------+--+------------+
| | | 30 Jun 2009 | | 31 Dec |
| | | GBP | | 2008 |
| | | | | GBP |
+-----------------------------------------+---+-------------+--+------------+
| | | | | |
+-----------------------------------------+---+-------------+--+------------+
| Accrued administration fees | | 1,644 | | 1,694 |
+-----------------------------------------+---+-------------+--+------------+
| Accrued registration fees | | 452 | | 467 |
+-----------------------------------------+---+-------------+--+------------+
| Accrued audit fees | | - | | 12,500 |
+-----------------------------------------+---+-------------+--+------------+
| Other accrued expenses | | 6,072 | | 5,540 |
+-----------------------------------------+---+-------------+--+------------+
| Expenses provision | | 234,156 | | 366,590 |
+-----------------------------------------+---+-------------+--+------------+
| Less: Prepaid expense provision | | (234,156) | | (366,590) |
+-----------------------------------------+---+-------------+--+------------+
| | | | | |
+-----------------------------------------+---+-------------+--+------------+
| | | 8,168 | | 20,201 |
+-----------------------------------------+---+-------------+--+------------+
+-----------------------------------------+--+--------------+--+------------+
| FINANCIAL LIABILITIES | | 30 June 2009 | | 31 Dec |
| | | GBP | | 2008 |
| | | | | GBP |
+-----------------------------------------+--+--------------+--+------------+
| | | | | |
+-----------------------------------------+--+--------------+--+------------+
| Fair value of the Put option | | 33,740 | | 2,633,198 |
+-----------------------------------------+--+--------------+--+------------+
| | | | | |
+-----------------------------------------+--+--------------+--+------------+
| | | 33,740 | | 2,633,198 |
+-----------------------------------------+--+--------------+--+------------+
The prepaid expense provision represents monies set aside to meet the on-going,
annual and redemption expenses of the Company, as set out in the Prospectus.
If, at the Redemption Date, there is any surplus remaining from the expenses
provision (together with accrued interest thereon), this surplus will revert to
the Manager. In the event of redemption or repurchase of all the shares, or upon
a winding-up of the Company, in each case prior to the Redemption Date, any
balance of the expense provision (together with accrued interest thereon) other
than the investment management fee will also revert to the Manager.
The Put option has been classified as Level 2 in accordance with the fair value
hierarchy. There have been no transfers between Level 1 and Level 2 of the fair
value hierarchy during the period under review.
The performance of the Put option is linked to the performance of the Nikkei 225
Index. At an Index value of 10,092.64 or above at the close of business on 17
December 2009, or if the Index has never closed below 5,046.32 during the
calculation period from 17 December 2003 to 17 December 2009, the Put option
will be worth GBPNil at maturity. If the Index has closed below 5,046.32 over
the calculation period and the Index is still below 10,092.64 at 17 December
2009, the put option will be worth a percentage of the notional value, being
GBP30,000,000, equivalent to the percentage fall in the level of the Nikkei 225
Index over the calculation period.
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
7 PAYABLES (continued)
The put option is not exercisable until the maturity date of 17 December 2009.
The fair value of the Put option is based on the valuation provided by Future
Value Consultants Limited. There is no active market regarding the put option.
BNP Paribas in its capacity as the Put option counterparty, has security over
the financial assets held by the Company for payment of any monies owed upon
maturity or termination of the Put option contract.
The original proceeds from the sale of the Put option were GBP2,565,000.
8 SHARE CAPITAL
+--------------------------------------------+--+-------------+--+------------+
| Authorised | | SHARES | | GBP |
+--------------------------------------------+--+-------------+--+------------+
| | | | | |
+--------------------------------------------+--+-------------+--+------------+
| Unclassified shares of 0.01p each | | 200,000,000 | | 20,000 |
+--------------------------------------------+--+-------------+--+------------+
| Management shares of GBP1.00 each | | 100 | | 100 |
+--------------------------------------------+--+-------------+--+------------+
| | | | | |
+--------------------------------------------+--+-------------+--+------------+
| | | | | 20,100 |
+--------------------------------------------+--+-------------+--+------------+
| | | | | |
+--------------------------------------------+--+-------------+--+------------+
| Issued | | | | SHARES |
+--------------------------------------------+--+-------------+--+------------+
| | | | | |
+--------------------------------------------+--+-------------+--+------------+
| Participating shares ("Shares") - fully | | | | 30,000,000 |
| paid | | | | |
+--------------------------------------------+--+-------------+--+------------+
| Management shares - fully paid | | | | 2 |
+--------------------------------------------+--+-------------+--+------------+
| | | | | |
+--------------------------------------------+--+-------------+--+------------+
| Number of Shares in issue at 31 December | | | | 30,000,002 |
| 2008 and 30 June 2009 | | | | |
+--------------------------------------------+--+-------------+--+------------+
| | | | | |
+--------------------------------------------+--+-------------+--+------------+
| | | | | GBP |
+--------------------------------------------+--+-------------+--+------------+
| Issued capital as at 31 December 2007 and | | | | 3,002 |
| 30 June 2009 | | | | |
+--------------------------------------------+--+-------------+--+------------+
Participating Shares are redeemable on or around 22 December 2009. The Company
is closed-ended and therefore shareholders have no right to request the Company
to repurchase their Shares or to redeem them prior to the redemption date. If
the Company is wound up prior to the redemption date, shareholders will be
entitled to the net asset value of the Shares on the winding up date. No
dividends will be paid on the Shares.
Management shares are not redeemable, do not carry any right to dividends and in
a winding up rank only for a return of the amount of paid up capital after
return of capital on Shares and nominal shares. Given the immateriality of the
Management shares to the net assets of the Company, they have been included in
the net assets attributable to holders of Shares.
9 SHARE PREMIUM
+-----------------------------------------+--+--------------+--+------------+
| | | | | Total |
+-----------------------------------------+--+--------------+--+------------+
| Share premium as at 31 December 2008 | | | | 29,997,000 |
| and 30 June 2009 | | | | |
+-----------------------------------------+--+--------------+--+------------+
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
10 FINANCIAL INSTRUMENTS
The Company's main financial instruments comprise:
(a) Cash and cash equivalents that arise directly from the Company's
operations; and
(b) Debt securities whose performance is based on the performance of the
Nikkei 225 Index. Details of the investments referred to above are shown in the
schedule of investments on pages 26 and 27.
(c) The Company has also sold a put option, whose performance is based on the
Nikkei 225 Index. Details of the put option contract are shown in Note 7.
11 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Company's financial instruments are market price
risk, credit risk, liquidity risk, portfolio construction risk, interest rate
risk and currency risk. The Board regularly reviews and agrees policies for
managing each of these risks and these are summarised below:
(a) Market Price Risk
Market price risk arises mainly from uncertainty about future prices of
financial instruments held. It represents the potential loss the Company might
suffer through holding market positions in the face of price movements. The
Manager actively monitors market prices and reports to the Board as to the
appropriateness of the prices used for valuation purposes. A list of investments
held by the Company is shown in the schedule of investments on pages 26 to 27.
Details of the Company's Investment Objective and Policy are given on pages 1 to
4.
Price sensitivity
The following details the Company's sensitivity to a 10% increase or decrease in
the final market prices of its constituent financial assets and liabilities.
The final redemption value of the Shares is determined by reference to the level
of the Nikkei 225 Index over the calculation period (the "Calculation Period")
from 17 December 2003 (the "Start Date") to 17 December 2009 (the "End Date").
If at the End Date the Index stands below 10,092.64 (the "Start Value"), but has
not closed below 5,046.32 during the Calculation Period, the redemption
entitlement will be equal to 100.00 pence per Share.
On 30 June 2009 the Index stood at 9,958.44, a fall of 1.33% since the Start
Date.
During the period from the Start Date to 30 June 2009 the Index had not closed
below 5,046.32. As the Index would need to decline by more than 49.33% from its
level as at 30 June 2009 for the redemption entitlement to be less than 100.00
pence per Share, the Company had no material sensitivity to a 10% decrease in
the level of the Index, being subject to counterparty default.
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
11 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(a) Market Price Risk (continued)
The Index would need to rise by 1.35% from its level as at 30 June 2009 for the
redemption entitlement due to be more than 100.00 pence per Share, therefore as
at 30 June 2009 the Company had a material sensitivity to a 10% increase in the
level of the Index. If the Index were to rise by 10% between 30 June 2009 and
the End Date, the Index would stand at 10,954.28 and the redemption entitlement
would be equal to 142.69 pence per Share.
(b) Credit Risk
Credit risk is the risk that an issuer or counterparty will be unable or
unwilling to meet a commitment that it has entered into with the Company. At the
date of this report all issuers carried an investment grade credit rating. The
Board monitors credit risk and will consider further action if the credit rating
of an issuer falls below A- or A3 as ranked by S&P and Moody's respectively.
Credit risks are mitigated in the Company because the Medium Term Notes have
been purchased from several different issuers.
The following table details the aggregate investment grade of the debt
instruments in the portfolio, as rated by Moody's Investor Services Inc:
+------------------------+--+--------------+--+------------+--+------------+
| Rating | | 20 Aug 2009 | | 30 Jun | | 31 Dec |
| | | | | 2009 | | 2008 |
+------------------------+--+--------------+--+------------+--+------------+
| | | | | | | |
+------------------------+--+--------------+--+------------+--+------------+
| Aaa | | 0.00% | | 0.00% | | 0.00% |
+------------------------+--+--------------+--+------------+--+------------+
| Aa | | 57.82% | | 57.82% | | 42.24% |
+------------------------+--+--------------+--+------------+--+------------+
| A | | 27.81% | | 27.81% | | 57.76% |
+------------------------+--+--------------+--+------------+--+------------+
| Baa | | 14.37% | | 14.37% | | 0.00% |
+------------------------+--+--------------+--+------------+--+------------+
The credit risk on cash transactions and transactions involving derivative
financial instruments is mitigated by transacting with counterparties that are
regulated entities subject to prudential supervision, or with high
credit-ratings assigned by international credit-rating agencies.
(c) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in
realising assets or otherwise raising funds to meet financial commitments. The
Company's main financial commitments are its ongoing operating expenses and any
cash settlement due to BNP Paribas (the "Put Option Counterparty") on the
maturity of the Put option sold to the Put Option Counterparty, scheduled to
occur on 17 December 2009.
Upon the issue of the Shares in December 2003 the Company created a cash reserve
(the "Expense Provision") for the amount of 3.75% of the amount raised by the
issue of the Shares (the "Initial Gross Proceeds"), such amount being estimated
in the opinion of the directors upon the advice of the Manager to be sufficient
to meet the operating expenses reasonably expected to be incurred over the life
of the Shares.
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
11 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(c) Liquidity Risk (continued)
If at any time during the life of the Company the Expense Provisions exhausted
then, subject to the relevant excess expenses having been agreed by the Manager,
the Manager will make good such shortfall from its own resources, subject to a
maximum in each of the first five annual financial periods of 0.25% of the
Initial Gross Proceeds and in the last financial period preceding the Redemption
Date, of a maximum amount of GBP100,000. Should these expenses exceed this cap
the return to Shareholders will be adversely impacted. The directors do not
anticipate that the expenses will exceed the Expense Provision.
The Debt Securities purchased by the Company mature on 21 December 2009 (the
"Maturity Date") and are due to be redeemed at their notional face value plus
five times the performance increase between 17 December 2003 and 17 December
2009 in the Nikkei 225 Index, capped at an amount equal to 100% of the notional
face value, so that the aggregate maturity proceeds are expected to be between
GBP30,000,000 if the Nikkei 225 Index closes on 17 December 2009 at or below its
starting value on 17 December 2003 of 10,092.64 and a maximum of GBP60,000,000
if the Nikkei 225 Index closes at or above 12,111.17 on 17 December 2009, all
subject to counterparty default.
Provided that none of the issuers of the Debt Securities defaults on its
obligation to pay the maturity proceeds on the Maturity Date, the minimum
maturity proceeds of GBP30,000,000 due are intended to satisfy the maximum
payment due to be made by the Company to the Put Option Counterparty on the
maturity of the Put Option of GBP30,000,000.
The directors and the Manager monitor the credit ratings of all issuers of the
Debt Securities. In the event of any downgrading in the long-term credit rating
of any issuer below A- or A3, as determined by Standard & Poor's and/or Moody's
Investor Services Inc. respectively, the Company may in its absolute discretion
seek to sell the relevant Debt Securities to third party purchasers and to
reinvest the proceeds in the purchase of Debt Securities of another issuer such
that the new Debt Securities will replicate as closely as possible the terms and
conditions of the original Debt Securities. If the purchase of such Debt
Securities is not possible, the Directors may reinvest such proceeds as they see
fit in investments which, in the opinion of the Directors, as nearly as is
practicable, replicate the investment characteristics of the Debt Securities
sold and so that the proceeds are invested, as nearly as is practicable, in
accordance with the Company's stated investment objective. As at the accounting
reference date and the date of this report, all issuers of the Debt Securities
carried an investment grade credit rating.
(d) Portfolio Construction Risk
Portfolio construction risk arises when the intended balance or resultant effect
of movements in value of assets and liabilities is disturbed because of some
unintended external event.
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
11 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
In the case of the Company's investment portfolio there is an intended balance
between the aggregate nominal value of the Debt Securities held and the nominal
value of the Put option and, if one or more of the Debt Security issuers
defaults, in part or in total, there will not be a corresponding reduction in
the value of the Put option. Thus, if such an issuer default does occur and
there is an index barrier breach which causes the Company's contingent liability
under the Put option to take effect, the default will cause an acceleration in
the reduction of the final redemption value of a Share such that it will fall to
zero well before the Index reaches nil. At the date of this report all issuers
carried an investment grade credit rating and the Company has no reason to
expect that any of the issuers of the Debt Securities held by the Company will
default on their obligation upon the maturity of those Debt Securities.
(e)Interest Rate Risk
Interest rate risk is the risk that fluctuations in market interest rates will
result in a reduction in deposit interest earned on cash deposits held by the
Company. The Company holds cash on fixed deposit, the return on which is subject
to fluctuations. All fixed deposits mature within three months.
The weighted average effective interest rate for cash and bank balances for the
period under review was 2.1% (31 Dec 2008: 4.55%).
None of the other assets or liabilities of the Company attract or incur
interest.
Interest rate sensitivity
If interest rates had been 100 basis points higher and all other variables were
held constant, the Company's decrease in net assets attributable for the period
ended 30 June 2009 would have been GBP2,345 lower (31 Dec 2008: GBP3,383) due to
an increase in the amount of interest receivable on the bank balances.
If interest rates had been 100 basis points lower and all other variables were
held constant, the Company's decrease in net assets attributable for the period
ended 30 June 2009 would have been GBP2,345 higher (31 Dec 2008: GBP3,383) due
to a decrease in the amount of interest receivable on the bank balances.
The Company's sensitivity to interest rates is lower in 2009 than in 2008
because of a decrease in the value of cash balances held.
(f) Currency Risk
As both the Shares and the Debt Securities are Sterling-denominated,
Shareholders investing for Sterling returns will not be exposed to direct
currency risk. However the value of the underlying securities comprising the
Nikkei 225 may be affected by changes in the economic, political or social
environment in Japan, as well as globally, including changes in exchange rates.
Japanese Accelerated Performance Fund Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
11 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(g) Capital Management
The investment objective of the Company is to provide shareholders, on the
Redemption Date, with five times the capital return of the Nikkei 225 Index, up
to a maximum amount (the "Final Capital Entitlement") of 200p per Share,
comprising a capital growth amount of up to a maximum of 100p per Share and a
capital amount of 100p per Share. The Final Capital Entitlement per Share is
designated to be determined by the performance of the Nikkei 225 Index over the
calculation period from 17 December 2003 to 17 December 2009.
The Company has an unlimited life but the Shares will be redeemed on or around
22 December 2009. Until then, the Company has a fixed capital.
(h) Collateral
Under the terms of a Credit Support Deed dated 19 December 2003 entered into
between the Company and the Put Option Counterparty, the Company as security for
the Put Option has agreed to mortgage, charge and pledge with full title
guarantee, in favour of Put Option Counterparty by way of first fixed legal
mortgage all posted collateral and has assigned with full title guarantee, the
assigned rights to the Put Option Counterparty absolutely. The collateral is
held by the Custodian in a segregated account. Where there is an event of
default in respect of the company under the Put Option, the Put Option
Counterparty will be entitled to enforce its security over the collateral.
12 RELATED PARTIES
Anson Fund Managers Limited is the Company's Administrator and Secretary, Anson
Registrars Limited is the Company's Registrar, Transfer Agent and Paying Agent
and Anson Administration (UK) Limited is the UK Transfer Agent. John R Le
Prevost is a director and controller of Anson Fund Managers Limited, Anson
Registrars Limited and Anson Administration (UK) Limited. GBP13,634 (30 June
2008: GBP14,569) of costs were incurred by the Company with these related
parties in the period, of which GBP2,096 (31 Dec 2008: GBP2,161) was due to
these related parties as at 30 June 2009.
Japanese Accelerated Performance Fund Limited (the "Company")
SCHEDULE OF INVESTMENTS
as at 30 June 2009
+-------------------------------+--+-------------+--+-------------+--+-------------+
| DEBT SECURITIES PORTFOLIO | | 30 June | | 30 June | | 30 June |
| | | 2009 | | 2009 | | 2009 |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | NOMINAL | | VALUATION | | TOTAL NET |
| | | HOLDINGS | | GBP | | ASSETS |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| Britannia Building Society | | 4,500,000 | | 5,670,918 | | 14.80% |
| plc | | | | | | |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| Caisse Centrale du Credit | | 4,300,000 | | 5,488,937 | | 14.32% |
| Immobillier de France | | | | | | |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| Caixa General de Depositas | | 4,000,000 | | 5,112,884 | | 13.34% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| Egg Banking plc | | 4,300,000 | | 5,410,596 | | 14.12% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| Irish Permanent | | 4,300,000 | | 5,443,524 | | 14.20% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| Royal Bank of Scotland plc | | 4,300,000 | | 5,476,433 | | 14.29% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| Yorkshire Building Society | | 4,300,000 | | 5,469,555 | | 14.27% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | |
+-------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | 38,072,847 | | 99.34% |
+-------------------------------+--+-------------+--+-------------+--+-------------+
The Company has also sold a put option, details of which are shown below.
+-------------------------------+--+--------------+--+-------------+
| | | NOTIONAL | | VALUATION |
| | | HOLDING | | GBP |
+-------------------------------+--+--------------+--+-------------+
| | | | | |
+-------------------------------+--+--------------+--+-------------+
| BNP Paribas Equity Index | | (30,000,000) | | (33,740) |
| Option expiring 17 December | | | | |
| 2009 | | | | |
+-------------------------------+--+--------------+--+-------------+
Japanese Accelerated Performance Fund Limited (the "Company")
SCHEDULE OF INVESTMENTS
as at 31 December 2008
+-------------------------------+--+---------------+--+------------+--+------------+
| DEBT SECURITIES PORTFOLIO | | 31 Dec 2008 | | 31 Dec | | 31 Dec |
| | | NOMINAL | | 2008 | | 2008 |
| | | HOLDINGS | | VALUATION | | TOTAL NET |
| | | | | GBP | | ASSETS |
+-------------------------------+--+---------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| Britannia Building Society | | 4,500,000 | | 5,227,320 | | 15.58% |
| plc | | | | | | |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| Caisse Centrale du Credit | | 4,300,000 | | 5,141,094 | | 15.33% |
| Immobillier de France | | | | | | |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| Caixa General de Depositas | | 4,000,000 | | 4,805,447 | | 14.33% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| Egg Banking plc | | 4,300,000 | | 5,122,846 | | 15.27% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| Irish Permanent | | 4,300,000 | | 5,108,590 | | 15.23% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| Royal Bank of Scotland plc | | 4,300,000 | | 5,180,770 | | 15.45% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| Yorkshire Building Society | | 4,300,000 | | 5,150,984 | | 15.36% |
| 0% Euro-Medium Term Note | | | | | | |
| 21 December 2009 | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| | | | | | | |
+-------------------------------+--+---------------+--+------------+--+------------+
| | | | | 35,737,051 | | 106.55% |
+-------------------------------+--+---------------+--+------------+--+------------+
The Company has also sold a put option, details of which are shown below.
+-------------------------------+--+---------------+--+-------------+
| | | NOTIONAL | | VALUATION |
| | | HOLDING | | GBP |
+-------------------------------+--+---------------+--+-------------+
| | | | | |
+-------------------------------+--+---------------+--+-------------+
| BNP Paribas Equity Index | | (30,000,000) | | (2,633,198) |
| Option expiring 17 December | | | | |
| 2009 | | | | |
+-------------------------------+--+---------------+--+-------------+
Japanese Accelerated Performance Fund Limited (the "Company")
SHAREHOLDER INFORMATION
The Company's Participating Shares are listed on the London Stock Exchange.
Company announcements and daily market closing prices of Shares are available on
the Reuters, Bloomberg and on-line on the web. The ISIN of the Shares is
GB0033788018 and the London Stock Exchange mnemonic is JAP.
Monthly factsheets are issued by the Manager and can be down-loaded from the
Manager's web-site www.closeam.com.
SHARE DEALING
Shares may be dealt in directly through a stockbroker or professional adviser
acting on an investor's behalf. The buying and selling of shares may be settled
through CREST.
SHAREHOLDER ENQUIRIES
The Company's Registrar is Anson Registrars Limited in Guernsey and they can be
contacted on 01481 711301.
Japanese Accelerated Performance Fund Limited (the "Company")
DIRECTORS AND SERVICE PROVIDERS
Japanese Accelerated Performance Fund Limited (the "Company")
Registered in Guernsey No. 41311
+----------------------------------+-------------------------------------------+
| Directors | Charles P G Tracy (Chairman) |
| | Christopher Jones |
| | John R Le Prevost |
+----------------------------------+-------------------------------------------+
| Manager | Close Investments Limited |
| (Authorised and Regulated by | (Authorised and Regulated by the |
| Financial Services Authority) | Financial Exchange Square |
| | Primrose Street |
| | London |
| | England EC2A 2BY |
+----------------------------------+-------------------------------------------+
| Administrator and Secretary | Anson Fund Managers Limited |
| | PO Box 405 |
| | Anson Place |
| | Mill Court |
| | La Charroterie |
| | St Peter Port |
| | Guernsey GY1 3GF |
+----------------------------------+-------------------------------------------+
| Principal Bankers | Royal Bank of Scotland International |
| | Limited |
| | Royal Bank Place |
| | 1 Glategny Esplanade |
| | St Peter Port |
| | Guernsey GY1 4NW |
+----------------------------------+-------------------------------------------+
| Auditor | Ernst & Young LLP |
| | 14 New Street |
| | St Peter Port |
| | Guernsey GY1 4AF |
+----------------------------------+-------------------------------------------+
| Registrar, Transfer Agent | Anson Registrars Limited |
| and Paying Agent | PO Box 426 |
| | Anson Place |
| | Mill Court |
| | La Charroterie |
| | St Peter Port |
| | Guernsey GY1 3WX |
+----------------------------------+-------------------------------------------+
| UK Transfer Agent | Anson Administration (UK) Limited |
| | 3500 Parkway, Solent Business Park |
| | Whiteley, Fareham |
| | Hampshire |
| | EnglandPO15 7AL |
+----------------------------------+-------------------------------------------+
| Registered Office of the Company | Anson Place |
| | Mill Court |
| | La Charroterie |
| | St Peter Port |
| | GuernseyGY1 1EJ |
+----------------------------------+-------------------------------------------+
| Corporate Broker | Matrix Corporate Capital LLP |
| | One Vine Street |
| | London W1J 0AH |
+----------------------------------+-------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PUUGCRUPBGCU
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