INVESCO Japan Discovery Trust plc
Unaudited Preliminary Announcement of Interim Results
for the six months ended 31 January 2003
Performance Statistics
31 January 31 July %
2003 2002 Change
Total assets less current liabilities (�'000) 16,031 22,417 -28.5
Net asset value per ordinary share - basic 55.26 77.28 -28.5
Capital Indices (Sterling adjusted):
- Tokyo Stock Exchange (First Section) 4.17 5.16 -19.2
- Tokyo Stock Exchange (Second Section) 7.67 9.65 -20.5
- Nikkei OTC Average 5.06 6.34 -20.2
Mid-market price per ordinary share 46.8p 64.0p -26.9
Discount per ordinary share
(based on basic net asset value) 15.3% 17.2%
Mid-market price per warrant 4.5 11.0 -59.1
Actual gearing 99 98
Exchange rate (Yen to Sterling) 197.15 187.08 5.4
Chairman's Statement
This is my first statement to shareholders as Chairman, having been appointed
on 7 February 2003 to replace John Morrell who retired on that date. I would
like to take this opportunity to thank John for his sterling work as Chairman
of the Company over the last eight and a half years.
During the period Japanese markets have again performed poorly. Over the six
months to 31 January 2003 the net asset value of the Company fell by 28.5%.
This compares with declines in the Tokyo Stock Exchange First Section (TOPIX)
of 19.2%, the Second Section of 20.5% and the Nikkei OTC of 20.2%. Over this
same period, the Japanese Yen appreciated by 5.4% against Sterling. The
Company, having been hedged for much of the period, profited by around �197,000
from this operation. The portfolio is currently unhedged.
In April 2001, whilst reviewing benchmarks, the Board decided to set a maximum
market capitalisation at the time of purchase, US$1 billion, and to disregard
the Stock Market Index of quotation. The Board, in conjunction with the
Managers, now feel that such a rigid absolute number as US$1 billion could be
disadvantageous. It has been agreed that a revised guideline specifying the
bottom quartile by value of the Japanese market be set.
Corporate restructuring continues to gather pace and to a large extent
valuations are cheap in Japan, but this is largely justified by the poor
domestic situation and the risks that exist globally. Given this background, we
will continue to seek out opportunities amongst small growth-oriented
companies, operating in niche markets, that are not directly affected by the
broader economic environment.
Timothy Kimber
Chairman
30 April 2003
INVESCO Japan Discovery Trust plc
Statement of Total Return
(Incorporating the Revenue Account)
Six months to 31 January 2003
(Unaudited)
Revenue Capital Total
�'000 �'000 �'000
Losses on investments - realised - (3,004) (3,004)
- unrealised - (3,409) (3,409)
Losses on foreign currency - (49) (49)
Gains on foreign currency forwards - 197 197
Income - unfranked investment income 46 - 46
Income - deposit income 14 - 14
Investment management fee - (85) (85)
Other expenses (87) - (87)
Net return before finance costs and (27) (6,349) (6,376)
taxation
Interest payable and similar charges - (3) (3)
Return on ordinary activities before (27) (6,352) (6,379)
taxation
Tax on ordinary activities (7) - (7)
Return on ordinary activities after tax
for the
financial period (attributable to equity
shareholders) (34) (6,352) (6,386)
Return per ordinary share:
Basic - note 1 (0.12)p (21.90)p (22.02)p
Diluted - note 2 n/a
The Revenue column of this statement is the profit and loss account of the
Company. All revenue and capital items in the above statement derive from the
continuing operations. No operations were acquired or discontinued in the year.
The Directors do not recommend payment of an interim dividend (2002: nil)
INVESCO Japan Discovery Trust plc
Statement of Total Return
(Incorporating the Revenue Account)
Year to
Six months to 31 January 2002 31 July
2002
(Unaudited)
(Audited)
Revenue Capital Total Total
�'000 �'000 �'000 �'000
Losses on investments - realised - (4,302) (4,302) (6,877)
- unrealised - (1,116) (1,116) 1,136
Losses on foreign currency - (4) (4) (8)
Gains from foreign currency - 747 747 598
forwards
Income - Unfranked investment 57 - 57 184
income
Income - Deposit income 10 - 10 17
Investment management fee - (137) (137) (243)
Other expenses (183) - (183) (293)
Net return before finance costs and (116) (4,812) (4,928) (5,486)
taxation
Interest payable and similar - (15) (15) (36)
charges
Return on ordinary activities (116) (4,827) (4,943) (5,522)
before tax
Tax on ordinary activities (16) 8 (8) (29)
Return on ordinary activities after
tax for the
financial period (attributable to
equity
shareholders) (132) (4,819) (4,951) (5,551)
Return per ordinary share:
Basic - note 1 (0.49)p (17.84)p (18.33)p (19.14)p
Diluted - note 2 n/a
Reconciliation of Movement in Shareholders' Funds
Six months Year to Six months
to to
31 July
31 January 31 January
2002
2003 2002
(Audited)
(Unaudited) (Unaudited)
�'000
�'000 �'000
Revenue return for the financial period (34) (140) (132)
Capital return for the period (6,352) (5,411) (4,819)
Net movement in Shareholders' funds (6,386) (5,551) (4,951)
Opening Shareholders' funds 22,417 27,968 27,968
Closing Shareholders' funds 16,031 22,417 23,017
INVESCO Japan Discovery Trust plc
Balance Sheet
At At At
31 January 31 July 31 January
2003 2002 2002
(Unaudited) (Audited) (Unaudited)
�'000 �'000 �'000
Fixed Assets
Investments 15,838 21,878 22,585
Current Assets
Amounts due from brokers - 33 6
Pepayments and accrued
income 46 24 36
Tax recoverable 12 9 12
Cash at bank 218 695 620
Unrealised forward currency
profit - 74 288
276 835 962
Creditors: amounts falling due
within one year
Amounts due to brokers - 156 378
Accruals and deferred income 83 140 152
83 296 530
Net current assets 193 539 432
Total assets less current liabilities 16,031 22,417 23,017
Capital and reserves
Called up share capital 1,450 1,450 1,450
Share premium account 12,502 12,502 12,502
Other reserves
Special reserve 15,000 15,000 15,000
Capital reserve - realised (2,887) 61 2,691
Capital reserve - unrealised (9,606) (6,122) (8,160)
Revenue reserve (508) (474) (466)
16,031 22,417 23,017
Net asset value per ordinary share
Basic - note 4 55.26p 77.28p 79.34p
Diluted - note 4 62.56p 81.37p 83.07p
INVESCO Japan Discovery Trust plc
Cash Flow Statement
At At At
31 January 31 July 31 January
2003 2002 2002
(Unaudited) (Audited) (Unaudited)
�'000 �'000 �'000
Cash outflow from operating
activities (164) (370) (263)
Servicing of finance (5) (29) (16)
Capital expenditure and financial
investment
Purchase of investments (4,486) (16,547) (7,008)
Sale of investments 3,955 16,732 7,058
Forward currency gains 272 524 460
Net cash inflow/(outflow) before
management of liquid resources
and financing (428) 310 231
Management of liquid resources 144 28 (228)
Financing
Net debt (repaid)/drawndown - - -
Proceeds from issue of shares - - -
lncrease/(decrease) in cash (284) 338 3
Cash outflow from increase in
liquid resource (144) (28) 228
Cash outflow/(inflow) from
movement in debt - - -
Change in net funds/(debt) resulting
from cashflows (428) 310 231
Translation difference (49) (8) (4)
Movement in net funds/(debt) in
period (477) 302 227
Net funds at beginning
of the period 695 393 393
Net funds at the end of the period 218 695 620
INVESCO Japan Discovery Trust plc
Notes to the interim accounts
1. The basic revenue return per ordinary share has been calculated on revenue
losses of �34,000 (31 January 2002 - �132,000, 31 July 2002 - �140,000) and
29,008,915 (31 January 2002 and 31 July 2002 - 29,008,915) ordinary shares
being the weighted average number of ordinary shares in issue during the
period.
The basic capital return per ordinary share is based on net capital loss on
ordinary activities after taxation of �6,352,000 (31 January 2002 - loss �
4,819,000, 31 July 2002 - loss �5,411,000) and on 29,008,915 (31 January 2002
and 31 July 2001 -29,008,915) ordinary shares being the weighted average number
of ordinary shares in issue during the period.
2. At 31 January 2003, 31 July 2002 and 31 January 2002 as the warrants are
considered non-dilutive, no diluted return per ordinary share has been
calculated.
3. During the period no warrants (2002 - Nil) were exercised for ordinary
shares, leaving 5,562,885 in issue at 31 January 2003 (31 January 2002 and 31
July 2002 - 5,562,885).
4. The basic net asset value per ordinary share has been calculated on net
assets of �16,031,000
(31 July 2002 - �22,417,000, 31 January 2002 - �23,017,000) and on 29,008,915
(31 July 2002 and 31 January 2002 - 29,008,915) ordinary shares in issue.
The diluted return per ordinary share has been calculated on an Articles basis.
5. Amounts of �85,000 (2002 - �137,000) and �3,000 (2002 - �15,000) in respect
of the management fees and loan interest have been charged to capital in
accordance with the Company's accounting policy of charging 100% to capital.
6. It is the intention of the Directors to conduct the affairs of the Company
so that it satisfies the conditions for approval as an investment trust company
set out in section 842 of the Income and Corporation Taxes Act 1988.
7. The foregoing information at 31 July 2002 is an abridged version of the
Company's full accounts which carry an unqualified Auditor's Report and which
have been filed with the Registrar of Companies.
By order of the Board
INVESCO Asset Management Limited
Secretaries
30 April 2003
END