Half-year Report

LEI: 213800JOFEGZJYS21P75

NIPPON ACTIVE VALUE FUND PLC (the "Company")

Half-Year Report

For the six months ended 30 June 2026

Nippon Active Value Fund plc hereby submits its Half-Year Report for the six months ended 30 June 2026 as required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rule 4.2.

The Half-Year Report will be submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The Half Year Report is also being published in hard copy format, and an electronic copy of the document will shortly be available on the Company's website at https://www.nipponactivevaluefund.com/

Enquiries:

Investment Objective

The investment objective of Nippon Active Value Fund plc ("the Company" or "NAVF" or "the Fund") is to provide Shareholders with attractive long-term capital growth primarily through the active management of a focused portfolio of quoted companies that have the majority of their operations in, or revenue derived from, Japan, or a majority of whose consolidated net assets are held in Japan, or that are included in the TOPIX, and that have been identified by the Investment Adviser as being undervalued.

Financial Information

Performance Summary

Source: Bloomberg

1      This is measured on a cum income basis.

2      These are Alternative Performance Measures ("APMs"), which is a financial measure of historic or future financial performance, financial position, or cash other than a financial measure defined or specified in the applicable financial reporting framework. Definition of these and other APMs used in this report, together with how these APMs have been calculated are disclosed in the Interim Report.

3      Total returns are stated using the GBP equivalents, including dividends reinvested.

Chairman's Statement

Performance

I am pleased to present Nippon Active Value Fund's interim report, covering the period from 1 January to 30 June 2026.

Over that period the Company's NAV total return was 5.20% while the share price total return was +9.35%. In comparison, the MSCI Japan Small Cap Index (total return in Sterling terms) increased by +17.69% and the Tokyo Stock Price Index ("TOPIX") by +14.11%. Since the launch of the Company in February 2020, the NAV total return of the Company is +152.26% and the share price +143.40%, compared to a net total return in the MSCI Japan Small Cap index of +70.02% and a rise of +87.64% in the TOPIX. Since the end of the accounting period up to 11 September 2026, being the latest practicable date prior to the publication of this report, the Company's NAV total return is 1.52%, compared to a TOPIX return of 4.54%.

At the end of June, the discount was -3.9%, having ranged between a discount of -7.43% and a premium of +1.59% over the first half of the year.

As was the case in other developed stock markets in the first half of 2026, performance in the Japanese market was led by companies involved in Artificial Intelligence and defence. Neither sector is well represented in our Investment Adviser's universe. Our strategy does not target any index or seek to reflect the Japanese market as a whole. Our focus remains on medium and small capitalised companies, where we can build stakes to facilitate productive engagement with their management. We target companies with a good business, strong cash flow, inefficient capital management and poorer governance structures, usually trading on a low price to book ratio. This results in a relatively concentrated portfolio and returns can vary significantly from both the TOPIX and small cap indices. Our results are driven by the outcome of discussions with our portfolio holdings rather than the fortunes of any sector or market theme. Nonetheless it is disappointing to have lagged the indices by such a wide margin at the half-year stage. Our performance since inception remains comfortably above market returns and we remain confident that our Investment Adviser's strategy, and their ability to execute that strategy, will prove fruitful.

Our Investment Adviser's report which follows discusses some of the major contributors to returns as well as examples of engagement with target companies.

Unlisted Investments

In March this year another of our portfolio holdings, Hogy Medical was delisted, in a takeover bid led by Carlyle. We retain an investment in the delisted entity, which is our third such position. At the end of June, the total exposure to unlisted equities was 2.4% of net assets.

Over the period, in conjunction with Dalton KK and the wider group of Dalton related investors, the Board took the decision to change the independent valuation agency from Competant to Kroll K.K.

Gearing

As I have previously reported, the Company has an £80 million loan facility with Northern Trust. The facility was not drawn down in the first half of the year.

Corporate Governance Developments

Japan is now the second largest market for activist investment, after the US. This year, government agencies have introduced changes to Japanese Company Law, including changes to the TOB rules and the requirements for submitting shareholder proposals. The Ministry of Economy, Trade and Industry ("METI") updated the M&A guidelines in July, and the FSA has made its first revision of the Corporate Governance Code since 2021. Amidst changes to the market, this has resulted in more press and political attention. There have been several instances of companies introducing 'poison pill' defence preparations, including two of our own holdings, as discussed by our Investment Adviser in their report which follows.

The common theme in the regulators' updates and press coverage is that activist campaigns to unlock underutilised corporate assets have tended to benefit shareholders at the expense of other stakeholders. In particular, while corporate management should be held to account and made to justify high levels of cash and poorly performing business sectors, their priority should be to use those assets to support growth in their own business and in the broader community. The regulators' emphasis in the recent updates is on achieving 'growth-oriented governance' beyond 'defensive governance' and sustainable medium to long-term growth above short-term returns. We and our Investment Adviser agree, but stress that when companies do use their cash to invest in their business, they must show shareholders that their strategy is enhancing corporate value.

Importantly, the changes to the Governance Code driven by the Japan Exchange Group ("JPX") have not been reversed. From July 2027 companies will be required to report annually on their compliance. The guidance on the transparency and timing of communications with shareholders has been strengthened (and more material must be provided in English). Annual reports must be available three weeks before the Annual General Meeting; previously they were often not released until after the meeting. Most importantly, the revised code states that corporate boards should 'review the allocation of company business resources… including whether financial assets like cash and real assets are utilised efficiently in growth investments'. Companies must explain and justify a high cash position, underutilised assets such as real estate or underperforming business areas.

Share Capital and Reserves

Over the period, the Company issued 3,859,000 Ordinary Shares via tap issuance at an average price of 244.5p per Ordinary Share. This demand reflects a continued and growing confidence, not only in the longer-term prospects for an activist strategy in Japan, but also in the abilities of the Company to outperform. New shares were issued at a premium to the prevailing NAV. As at 11 September 2026, the Company's issued ordinary share capital comprises 197,403,986 Ordinary Shares, with none held in treasury, and therefore, the total number of Ordinary Shares in the Company with voting rights is 197,403,986. We look forward to continuing to grow the Company both through performance and ad hoc issuance to satisfy market demand.

After receiving approval from shareholders in February, the cancellation of the Company's share premium account became effective on 12 March with £245,000,000 being converted into a special distributable reserve. The cancellation did not affect the Company's net assets or the value of shareholders' interests; it simply converted a reserve that could not previously be distributed into one that can. This gives the Board greater flexibility to return value to shareholders in the future through dividends or share buybacks.

Board Composition

As previously announced, Claire Boyle retired from the Board at the conclusion of the Company's Annual General Meeting on 4 June 2026. Her retirement formed part of the Board's succession planning and returned the Board to its intended size of five Directors. The Board would like to thank Claire for her valuable contribution to the Company during her tenure and wishes her every success for the future.

Outlook

Your board remains confident that the investment thesis presented at the time our launch remains valid. The story is not over: activist investors still have an important role to play in challenging company boards and management to ensure compliance with the Governance Code, particularly in the small and medium cap sectors, where companies are under greater pressure to make changes in order to comply with JPX's listing requirements. There has been a significant improvement in Return on Equity and Price to Book Value for the market as a whole. However there remains a great variance between large and small companies. In June CLSA reported that 43.2% of stocks included in the TOPIX Small index trade below book value, compared to 22.5% of larger TOPIX 500 companies. Smaller companies are also more likely to face challenges in identifying candidates to take on senior management roles and hence in capturing longer term growth opportunities. Small and medium sized companies have been, and will remain, the focus of our Investment Adviser's efforts.

Our Investment Adviser is continuing to find plenty of opportunities, especially while the market focus is elsewhere. We expect that to lead to renewed outperformance over the medium term.

Rosemary Morgan

Chairman

15 September 2026

Investment Adviser's Report

NAVF performance of the Company

Introduction

The first half of 2026 was a historic period for Japanese equities, marked by unprecedented milestones and significant sector polarisation. Fuelled by massive global liquidity and the artificial intelligence (AI) boom, the benchmark Nikkei 225 surged by roughly 40% from year-end levels to shatter the 70,000 threshold, marking its strongest first-half performance in decades. Meanwhile, the broader TOPIX experienced a more subdued - but still robust - gain of about 14.1% in sterling terms.

This stark divergence in performance highlights a lopsided market, as the price-weighted Nikkei 225 became heavily skewed toward a handful of massive, export-heavy semiconductor and tech-related names. A handful of companies supplying AI infrastructure - such as Tokyo Electron, Advantest, and SoftBank Group - drove the lion's share of the gains. Kioxia Holdings became something of a poster child for the move, surging roughly 759% year to date. Happily, Kioxia is one of Stella Chemifa's key clients, which largely explains why Stella is NAVF's top portfolio contributor over the period. Underlying the rally, corporate fundamentals genuinely improved too: Nikkei 225 constituent ROE rose from 8.61% in 2022 to around 12.14% recently, with fiscal 2026 forecasts around 12.37%, while operating margins improved from 7.63% to 13.63% over the same period, reflecting buybacks, price hikes, and reduced cross‑shareholdings.

In contrast, the market-cap-weighted TOPIX reflected a broader, more defensive market, finding underlying support in value-oriented sectors like banking and automotive.

Smaller companies generally told a starkly different story. The TOPIX Small index - the standard gauge for Japan's smaller-cap segment - was up only around 5.5% year-to-date as of early July, a fraction of the gains posted by the large-cap benchmarks. This continues a longer-running pattern: Japanese small caps have structurally lagged large caps since around 2018, and yen weakness has been a key driver, since large-cap exporters earn far more revenue overseas (TOPIX overall draws about 41% of sales from abroad, versus only around 20% for small caps) and so benefit more when the yen depreciates. In these commentaries, we have rehearsed many times how not hedging the currency has muted NAVF performance (as is reflected in the table above). Fund-flow dynamics have reinforced this - individual investors (traditionally more drawn to small caps) have been buying steadily via NISA tax-advantaged accounts, but this has not been enough to offset the concentrated institutional money pouring into AI/semiconductor large caps.

Nevertheless, in the first half of 2026, the MSCI Japan Small Cap Index delivered a strong return, reflecting a YTD performance of approximately 17.69%. This significantly outperformed the broader smaller companies market trend, driven by ongoing corporate governance reforms and attractive valuation gaps in a few stocks targeted by activists. This is the first time since NAVF's inception that we have seen such underperformance compared to the Japanese stock indices; however, we are not generally involved in tech and AI stocks as it is not often compatible with NAVF's strategy and is therefore really not where we play, or, indeed, should play. We always say our performance is uncorrelated and our stock-specific undertakings instead are a driver of performance.

A few cross-currents are worth flagging heading into the second half of the year. Forward P/E and P/B ratios on the Nikkei 225 have risen well above 20x, prompting warnings from strategists about "speed corrections". Similarly, the yen, despite bouts of sharp strength on suspected Bank of Japan interventions, has reached lows not seen since 1986. This was after the BoJ's policy rate was actually raised to its highest level since 1995 - so far, without causing the currency to rally or bolster NAVF's underlying value (see update in NAVF Performance below).

NAVF Performance

The fund's performance during the first six months of 2026 has been a game of two halves. We enjoyed a very strong run-up in the share price in January of 6.8%, which narrowed the discount to Net Asset Value (NAV), and this strength continued into February, when both the NAV and share price reached record highs (both up 10% or more). During this period, the management of Hogy Medical announced it was taking the company private under the auspices of Carlyle, giving us the opportunity to stay invested in the newly delisted entity. Further, Fuji Media Holdings (FMH) launched a buy-back for 30% or ¥235 billion of its outstanding equity, using the Tostnet 3 mechanism to effectively relieve its three most prominent activist investors (ourselves, SBI, and the Murakami family) of most of their stock, and thus relieve itself of our 'unwanted attentions'. Although this provided us with a timely exit from most of our position, as well as a 150% profit on NAVF's investment, we still felt it did little to promote relations with minor shareholders in general.

In March, the start of the Iran war caused a dramatic global market sell-off, with both the Nikkei 225 and the TOPIX indices losing more than NAVF, which was itself off by 10%. At this stage, we were outperforming both major indices for the year. The Hogy Medical and FMH successes led to high cash balances, which we started to deploy in building new and existing holdings in the market. Helios Techno, where our presence on the Board had led to the framing of an agreed acquisition strategy, saw the first fruits of this with the purchase of Honda KK., an industrial lamps manufacturer (no relation to the car company).

From April onwards, the dynamics again changed. The Tech/AI driven rally, which had started in the US, reached Japan and lifted the Nikkei 16.1% in April alone. The TOPIX was up 6.6% over the same period, while NAVF was becalmed. FMH finally announced the intended sale of its property division, Sankei Building, which we had been calling for from our first involvement. This encouraged us to revisit the stock and to start to partially rebuild our holding. May was a rerun of the previous month. The Nikkei was up 11.95%, the TOPIX 6.2%, and NAVF once again trailed. Interestingly, as mentioned earlier, Stella Chemifa, driven again by a concentrated number of AI-related stocks, started to benefit from the enthusiasm surrounding its tech client Kioxia, and rallied 30% during the month.

June marked the third month in a row that the fund's NAV per share moved in a narrow band between 228p and 230p, while there was evidence the tech/AI rally was beginning to run out of steam, with the Nikkei 225 and TOPIX indices only moving 5.3% and 1% higher, respectively. On 5 June, the Nikkei reported that FMH had received 15 offers for Sankei Building, several above ¥1 trillion! This valuation exceeded our expectations and we await the eventual sale with interest.

As is normal course for Japanese equities, June saw the majority of the fund's portfolio companies holding their AGMs. Predictably, none of our proposals passed the voting threshold - which is not unusual for proposals made by external shareholders. Disappointingly however, both Bunka Shutter and Aska Pharma were successful in having their so-called 'Poison Pills' adopted, with even proxy advisory firms, such as ISS, recommending external shareholders vote in favour - in our view, an extraordinary dereliction of their duty to uphold shareholder democracy. More generally, there are clear signs of a potential pushback against activism detectable in some of the recent reports emanating from the METI, FSA and other Japanese regulators. This should come as no surprise; the wind at our backs produced by Shinzo Abe's Corporate Governance Reform Programme has continued unabated for over a decade. Though the opportunity set in the Japanese markets is as attractive as ever, with much shareholder value remaining subject to inefficient balance sheets and capital allocation practices, the means of unlocking it will require ever more nuanced dialogue to constructively work with our portfolio companies. This is all in the nature of the healthy operation of markets. Fundamentally nothing has changed. On 30 July, after the period under review, METI has released its latest clarification of the Corporate Governance Guidelines - these will be examined in detail in NAVF's third quarter review.

Currency

As discussed above, on 16 June, the Bank of Japan finally raised the yen rate to 1%. Since then the currency has weakened to ¥162 to the US dollar, levels not seen for 40 years. Regaining some of the ground we have lost through relative currency movements, is proving to be a very long game. In August, however, after the period under review, there has been co-ordinated intervention by both the Japanese and US authorities to defend the yen. It is not yet clear whether this tactic will work without sustained evidence of the BOJ's willingness to consistently raise rates over time.

Half-year 2026 NAVF Performance Attribution Table

Stella Chemifa Corporation

Stella Chemifa is a leading supplier of high-purity hydrofluoric acid for the semiconductor industry. The share price rally was driven by the company's strong earnings results, as well as the strong earnings and share price performance of semiconductor memory manufacturers, such as Kioxia, which are key customers. We trimmed the position in June as the valuation became less attractive, but still maintain exposure as we believe that the company's competitive advantage, supported by its leading global market share in high-purity hydrofluoric acid for semiconductors, remains unchanged.

Sekisui Jushi Corporation

Sekisui Jushi is a leading manufacturer of infrastructure products, road safety equipment and residential building materials that benefit from long-term public investment and urban renewal. The company shares outperformed the TOPIX, with the company announcing higher dividends and a stronger focus on ROE. The company announced another share repurchase program of 3.3%, as well as the cancellation of shares in the same amount, which was seen favourably by the market.

Meisei Industrial

Meisei Industrial is Japan's leading provider of thermal insulation and maintenance services for refineries, LNG facilities and industrial plants, with a resilient business model supported by recurring maintenance demand. Meisei Industrial's earnings were weaker than the previous fiscal year; however, we remain comfortable with the company's ability to capture maintenance and repair cycles for refineries and chemical plants. Operationally, Meisei Industrial experienced a super cycle in FY25, when the larger refiners conducted once-in-four-year maintenance, boosting the company towards record revenue and profits. We expect a slower year for its Financial Year ending March 2027, as forecast by the company.

Aska Pharmaceutical Holdings

We remain deeply disappointed by ASKA Pharmaceuticals' decision to adopt a takeover defense measure ('Poison Pill' - see prior section above), which we believe is entirely unreasonable and inconsistent with the interests of shareholders. That said, this does not change our positive assessment of the company's underlying business operations. Over the past five years, ASKA has steadily grown revenue from ¥55 billion to ¥71 billion and operating profit from ¥3.6 billion to ¥6.0 billion, demonstrating solid execution in its core specialty pharmaceutical business, particularly in women's health.

We also view the company's newly announced mid-term management plan and long-term vision positively. The FY2028 targets of ¥80-90 billion in revenue, a 10% operating margin, 10% ROE, and a 40% total payout ratio, together with the 2035 targets of ¥150 billion in revenue and a 15% operating margin, represent a more ambitious and concrete framework than the previous plan. In particular, the inclusion of profitability and capital efficiency KPIs is encouraging, as it suggests that management recognises the need to move beyond top-line growth and focus more clearly on shareholder value creation. While the governance issue remains serious, the strategic direction and operating targets themselves are worthy of recognition.

Ebara Jitsugyo

Ebara Jitsugyo supplies environmental equipment, water treatment systems and industrial machinery that benefit from Japan's long-term infrastructure investment and maintenance cycle. Business conditions remained favourable, supported by public infrastructure spending and private-sector environmental investment. The company's high returns on capital and conservative balance sheet continue to make it one of our preferred industrial holdings. As a specialist in water treatment facilities and construction, the company continues to see strong demand for its services, as reflected in its order book, which is up +20% YoY in their most recently reported quarter (end of March 2026).

Murakami Corporation

Murakami is one of the world's leading manufacturers of automotive mirrors. Murakami Corp's share price was largely unchanged in H1 2026, despite overall weak sentiment in the auto sector. However, revenue and earnings have remained steady. The company trades at sub-3x EV/EBITDA, making it one of the cheapest names in the portfolio.

Bunka Shutter

Bunka Shutter is Japan's leading manufacturer of shutters, doors, and building access systems serving both residential and commercial construction markets. Bunka Shutter's shares underperformed the broader market in the period, as it is not a tech stock. In this year's AGM, the company moved forward with a Poison Pill, which shareholders approved. This development had no impact on the firm's overall attitude or structure; however, it does demonstrate to the market that the 79-year-old Chairman is willing to do whatever it takes for self-preservation. This behaviour by Japanese management is not new to us, and, as long-term holders of the company's stock, we will continue to press for better governance.

Fuji Media Holdings

Fuji Media Holdings owns one of Japan's largest television networks, as well as valuable real estate and media assets. In February, FMH conducted a mega share repurchase programme, which looked to buy more than 30% of the outstanding. We participated in the buy back program and fully exited the position in FMH in February. Subsequently, in June, we re-initiated a position in FMH on news that the company had attracted a significant number of bids for its real-estate subsidiary, Sankei Building Co. We continue to enjoy the company's progress in improving its balance sheet, governance, and focus on the media business, which were three items we had requested in a very public engagement campaign. We believe that the completion of the sale of Sankei Building, which we are currently awaiting, could provide further upside for the Company's shares.

Nippon Fine Chemical

Nippon Fine Chemical is a specialty chemicals manufacturer supplying high-value ingredients to the cosmetics, pharmaceuticals, electronic materials and industrial sectors. Having been a strong performer over time, we sold in the period to make room for new additions of cheaper value stocks where we see greater returns potential.

Helios Techno Holdings

Helios Techno develops manufacturing equipment and lighting systems. Helios shares enjoyed a strong rally until March 2026; however, the company then declined more than 30% in the AI vs non-AI market. On a positive note, Helios Techno Holdings completed its first takeover by acquiring Honda KK. Rising Sun Management had signed a Business Alliance Agreement with HTH, appointing RSM members Masumi Nishida and Kazutaka Mizuochi to the board.

Paul ffolkes Davis

Rising Sun Management Limited

15 September 2026

Portfolio

As at 30 June 2026

Top ten holdings as a percentage of net assets

Portfolio characteristics

*       Adjusted Cash / Market Cap = (Cash + Cross Shareholdings - Debt) / Market Cap

**     Net Working Capital / Market Cap = (Cross Shareholdings + Total Current Assets - Total Liabilities) / Market Cap

Interim Management Report

The Directors are required to provide an Interim Management Report in accordance with the Financial Conduct Authority ("FCA") Disclosure Guidance and Transparency Rules ("DTR"). The Directors consider the Chairman's Statement and the Investment Adviser's Report in this half-yearly report provides details of the important events which have occurred during the period and their impact on the financial statements. The following statements on Related Party Transactions, Going Concern and the Directors' Responsibility Statement, together constitute the Interim Management Report of the Company for the period ended 30 June 2026. The outlook for the Company for the remaining six months of the year ending 31 December 2026 is discussed in the Chairman's Statement and the Investment Adviser's Report.

Risks and uncertainties

The principal and emerging risks, together with a summary of the processes and internal controls used to manage and mitigate risks where possible, are outlined in the Annual Report for the year ended 31 December 2025. The Board is responsible for the management of risks and uncertainties faced by the Company. However, it relies on the Investment Adviser and the Alternative Investment Fund Manager ("AIFM"), who seek to mitigate these risks through active asset management initiatives, and by carrying out due diligence work on potential targets before entering into any investments.

The risks, as outlined in the 2025 Annual Report, remain largely unchanged. The Board is of the opinion that these principal and emerging risks and uncertainties remain and are applicable to the remaining six months of the Company's financial year.

Going concern

The Directors have adopted the going concern basis in preparing the financial statements. The Board has a reasonable expectation that the Company has adequate resources to continue in operational existence for at least the following twelve-month period from the date of this report.

The Directors do not foresee any immediate material risk to the Company's investment portfolio; however, a prolonged and deep market decline could lead to falling values in the underlying business or interruptions to cash flow. The Company currently has more than sufficient liquidity available to meet any future obligations. The Company's net assets at 30 June 2026, were £451,580,000 (30 June 2025: £386,822,000; 31 December 2025: £430,619,000). As at 30 June 2026, the Company held £62,712,000 (30 June 2025: £8,079,000; 31 December 2025: £9,947,000) in cash. The total expenses for the period ended 30 June 2026, were £2,816,000 (30 June 2025: £2,258,000; 31 December 2025: £4,693,000). The ongoing charges ratio represented approximately 1.15% (30 June 2025: 1.16%; 31 December 2025: 1.12%) of average net assets during the period. At the date of approval of this document, based on the aggregate of investments and cash held, the Company has substantial operating expenses cover.

As part of their assessment, the Board has fully considered and assessed the Company's portfolio of investments, cash position, income and expense flows, giving careful consideration to the consequences for the Company of continuing uncertainties in the global economy.

Related party transactions

The Company's Investment Adviser is Rising Sun Management ("Rising Sun") and the Company's AIFM is FundRock Management Company (Guernsey) Limited ("FundRock"). The Company, the Investment Adviser and the AIFM entered into the Investment Advisory Agreement on 7 January 2020, pursuant to which Rising Sun provide investment advisory services to FundRock and the Company, and are entitled to receive an annual fee of 0.85% of the Company's net assets (exclusive of VAT), in respect of the services provided under the Investment Advisory Agreement.

Rising Sun is considered a related party under the UK Listing Rules. The total Investment Adviser and AIFM fees for the period to 30 June 2026 are shown in the Statement of Comprehensive Income. There have been no changes to the related party transactions that could have a material effect on the financial position or performance of the Company since the year ended 31 December 2025. Further information can be found in note 10 to the financial statements.

Directors' statement of responsibility for the half-yearly report

The Directors confirm to the best of their knowledge that:

·      The condensed set of financial statements contained within the half-yearly report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".

·      The Interim Management Report includes a fair review of the information required by the FCA's Disclosure Guidance and Transparency Rules ("DTR"):

(a)  DTR 4.2.7R, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b)        DTR 4.2.8R, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could do so.

This half-yearly financial report has not been audited or reviewed by the Company's auditor.

Signed on behalf of the Board of Directors

Rosemary Morgan

Chairman

15 September 2026

Condensed Unaudited Statement of Comprehensive Income

For the six months ended 30 June 2026

*     Audited

There is no other comprehensive income and therefore the "Profit and comprehensive income for the period" is the total comprehensive income for the period.

The total column of the above statement is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations.

The supplementary revenue and capital columns, including the earnings per Ordinary Share, are prepared in accordance with the Statement of Recommended Practice ("SORP") issued by the Association of Investment Companies.

The notes form an integral part of these financial statements.

Condensed Unaudited Statement of Financial Position

As at 30 June 2026

*     Audited

Approved by the Board of Directors on 15 September 2026 and signed on their behalf by:

Rosemary Morgan

Chairman

Nippon Active Value Fund plc is incorporated in England and Wales with registration number 12275668.

The notes form an integral part of these financial statements.

Condensed Unaudited Statement of Changes in Equity

For the six months ended 30 June 2026

*     Audited

The revenue reserve and realised element of the capital reserve represent the amount of the Company's retained and distributable reserves.

The notes form an integral part of these financial statements.

Condensed Unaudited Statement of Cash Flows

For the six months ended 30 June 2026

*       Audited

The notes form an integral part of these financial statements.

Notes to the Condensed Unaudited Financial Statements

1. GENERAL INFORMATION

The Company is a closed-ended investment company incorporated on 22 October 2019 in England and Wales with registered number 12275668 and registered as an investment company under Section 833 of Companies Act 2006, as amended from time to time. On 21 February 2020, the Company's shares were admitted to the Specialist Fund Segment of the Main Market of the London Stock Exchange. On the same day, trading of the Ordinary Shares commenced on the London Stock Exchange. On 11 October 2023, the Company's Ordinary Shares were admitted to the Official List of the FCA and trading on the main market for listed securities of the London Stock Exchange.

The investment objective of the Company is to provide Shareholders with attractive long-term capital growth primarily through the active management of a focused portfolio of quoted companies that have the majority of their operations in, or revenue derived from, Japan, or a majority of whose consolidated net assets are held in Japan, or that are included in the TOPIX, and that have been identified by the Investment Adviser as being undervalued.

The principal activity of the Company is that of an investment trust company within the meaning of section 1158 of the Corporation Tax Act 2010.

FundRock Management Company (Guernsey) Limited acts as the Company's Alternative Investment Fund Manager (the "AIFM") for the purposes of the UK's implementation of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers, together with Commission Delegated Regulation (EU) No. 231/2013 which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018, and any transposing legislation incorporating the same into UK law (including, but not limited to, the UK Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773), as amended by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019), all as may be amended or supplemented from time to time.

The Company's Investment Adviser is Rising Sun Management Limited.

NSM Funds (UK) Limited, the Company's appointed Administrator, (the "Administrator") provides administrative and company secretarial services to the Company under the terms of an administration agreement between the Company and the Administrator.

The Company's registered office is 4th floor, 46-48 James Street, London W1U 1EZ.

2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES

Statement of compliance

The Company's condensed unaudited half-yearly financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and the Disclosure Guidance and Transparency Rules ("DTRs") of the UK's Financial Conduct Authority. When presentational guidance set out in the Statement of Recommended Practice ("SORP") for Investment Companies issued by the Association of Investment Companies ("AIC") in December 2025 is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

The financial statements were approved and authorised for issue by the Board on 15 September 2026. This half-yearly report will be made available to the public at the Company's registered office. It will also be made available on the Company's website: www.nipponactivevaluefund.com

Going Concern

The Directors have adopted the going concern basis in preparing the financial statements. The Board has a reasonable expectation that the Company has adequate resources to continue in operational existence for at least the following twelve-month period from the date of this report. The Directors do not foresee any immediate material risk to the Company's investment portfolio, however, a prolonged and deep market decline could lead to falling values in the underlying business or interruptions to cash flow. Further details on the Directors' considerations of Going Concern can be found in the Interim Report.

Use of estimates and judgements

The preparation of the financial statements and the manner in which they are presented requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. See the below paragraphs for judgements around the determination of the functional and presentation currency.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. There have been no estimates, judgements or assumptions which have had a significant impact on the financial statements for the period.

Fair value measurement and levelling of investments

Investments are measured at fair value in accordance with IFRS 13 and classified within the fair value hierarchy (Levels 1, 2 or 3) based on the lowest level significant input.

Judgement is required in selecting appropriate valuation techniques and determining whether inputs are observable for the purposes of measurement and classification within the fair value hierarchy.

Where investments are not quoted in an active market, fair value may be determined by reference to quoted prices in inactive markets or to observable market data for similar instruments (Level 2). Where observable inputs are not available, valuation techniques incorporating unobservable inputs, such as discount rates, forecast cash flows and credit assumptions, are applied (Level 3).

Classification within Level 3 involves significant estimation uncertainty, and changes in key assumptions could materially affect carrying values. Further details of hierarchy classification are disclosed in note 3.

Basis of measurement

The financial statements have been prepared on the historical cost basis except for financial instruments at fair value through profit or loss, which are measured at fair value.

Functional and presentation currency

The financial statements are presented in sterling, which is the Company's functional currency. The Company's investments are denominated in Japanese yen. However, the Company's Shares are issued in sterling. In addition, a substantial majority of the Company's expenses are paid in sterling. It is also expected that the Company's dividend shall be declared and paid in sterling. All financial information presented in sterling has been rounded to the nearest thousand pounds.

The Company is required to identify its functional currency, being the currency of the primary economic environment in which the Company operates. The Board, having regard to the currency of the Company's share capital and the predominant currency in which its Shareholders operate, has determined that sterling is the functional currency.

Accounting Policies

The accounting policies used by the Company in preparing these half-yearly unaudited financial statements are the same as those applied by the Company in its financial statements as at and for the year ended 31 December 2025.

3. INVESTMENT HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

Investments held at fair value through profit or loss:

Fair Value Measurements of Financial Assets and Financial Liabilities

The financial assets and liabilities are either carried at their fair value, or the amount is a reasonable approximation of fair value (due from brokers, dividends receivable, accrued income, due to brokers, expense accruals and cash and cash equivalents).

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the Fair Value measurement of the relevant asset as follows:

Level 1 - valued using quoted prices in active markets for identical assets.

Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices.

Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

The table below sets out fair value measurements using the Fair Value Hierarchy.

The movement on the Level 3 unquoted investments during the year is shown below:

There were no transfers between the levels during the period (30 June 2025: none; 31 December 2025: none).

At the period end the Company had three unquoted investments; Carlyle ARE Partners II, L.P., Transcom Co. Ltd and T&K TOKA Corporation (31 December 2025: two unquoted investments, 30 June 2025: two unquoted investments).

4. INCOME

5. TAXATION

Analysis of tax charge in the period:

6. DIVIDEND

Dividends paid during the period

The Company does not have a specific dividend policy. Any distributions will be made at the discretion of the Board, taking into consideration the requirement to ensure the Company continues to be approved as an investment trust in accordance with s1158 and s1159 of the Corporation Tax Act 2010. The Board has not declared a dividend for the half year ended 30 June 2026 (2025: Nil).

Dividends paid during the respective periods are detailed in the below table:

7. SHARE CAPITAL

Share capital represents the nominal value of shares that have been issued. The share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.

During the period to 30 June 2026, the Company has issued 3,859,000 Ordinary shares (30 June 2025: nil; 31 December 2025: 3,373,282) for aggregate net proceeds of £9,389,000 (30 June 2025: nil; 31 December 2025: £7,430,000). There were no share buybacks during the period to 30 June 2026 (30 June 2025: nil; 31 December 2025: nil).

Since the period end, the Company has issued 1,030,000 Ordinary shares for aggregate gross proceeds of £2,339,350.

In February 2026, the Company applied to the Court and obtained on 3 March 2026 a judgement to cancel the amount standing to the credit of the share premium account of the Company. The amount of the share premium cancelled and credited to a special distributable reserve was £244,550,123. This reserve may be used to fund dividend/distribution payments and /or buybacks of Ordinary Shares by the Company.

Rights attaching to the Ordinary Shares

Dividend rights: All Ordinary Shares are entitled to a distribution of dividends, in the event that the Directors resolve to make such a distribution to Shareholders, in the same proportions as capital is attributable to them.

Rights in respect to capital: On a winding-up or a return of capital, in the event that the Directors resolve to make a distribution to Shareholders, all Ordinary Shares are entitled to a distribution of capital in the same proportions as capital is attributable to them.

Voting rights: Every Shareholder shall have one vote for each Ordinary Share held.

8. EARNINGS PER ORDINARY SHARE

Total return per Ordinary Share is based on the return on ordinary activities, including income, for the period after taxation of £22,413,000 (30 June 2025: profit £27,527,000; 31 December 2025: profit £64,068,000).

Based on the weighted average number of Ordinary Shares in issue for the period to 30 June 2026 of 194,619,069 (30 June 2025: 189,141,704; 31 December 2025: 190,155,512), the returns per share were as follows:

The Company does not have any dilutive securities, therefore basic and diluted earnings per share are the same.

9. NET ASSET VALUE PER SHARE

Total equity and the NAV per share attributable to the Ordinary Shareholders at the period end calculated in accordance with the Articles of Association were as follows:

10. RELATED PARTY TRANSACTIONS

Transactions with the Investment Adviser

Total Investment Adviser and AIFM fees for the period to 30 June 2026 are shown in the Statement of Comprehensive Income. As at 30 June 2026, £13,000 of AIFM fees were outstanding.

A key member of the RSM team is a major shareholder of Rosenwald Capital Management, Inc. As at 30 June 2026, Rosenwald Capital Management, Inc. had notified the Company of its shareholding which remains unchanged as disclosed in the 2025 Annual Report.

Directors' fees and shareholdings

Directors' fees are payable at the rate of £33,000 per annum for each Director other than the Chair, who is entitled to receive £47,000 and the Chair of the Audit Committee who was entitled to an additional fee of £5,000 per annum.

The Directors had the following shareholdings in the Company, all of which were beneficially owned.

11. PRINCIPAL RISKS AND CAPITAL MANAGEMENT

Risk management policies and procedures

As an investment trust the Company invests in equities for the long-term in order to achieve its investment objective stated in the Interim Report. In pursuing its investment objective, the Company is exposed to a variety of risks that could result in either a reduction in the Company's net assets or a reduction of the profits available for dividends.

These risks, include market risk (comprising currency risk, interest rate risk, and other price risk), liquidity risk, credit risk, and the Directors' objectives, policies and processes for managing the risks and the methods used to measure the risks, are set out below.

Market Risk

Economic conditions

Changes in economic conditions in Japan (for example, interest rates and rates of inflation, industry conditions, competition, political and diplomatic events and other factors) and in the countries in which the Company's investee companies operate, could substantially and adversely affect the Company's prospects.

Sectoral diversification

The Company is not subject to restrictions on the amount it may invest in any particular sector. Although the portfolio is expected to be diversified in terms of sector exposures, the Company may have significant exposure to portfolio companies from certain sectors from time to time. As there is no hard limit on the amount the Company may invest in any sector, the entire Portfolio may, at certain times, be invested solely in one sector. Greater concentration of investments in any one sector may result in greater volatility in the value of the Company's investments and consequently its NAV and may materially and adversely affect the performance of the Company and returns to Shareholders.

Management of market risks

The Company is invested in a diversified portfolio of investments.

The Board will not set any limits on sector weightings or stock selection within the portfolio. The Board will apply the following restrictions on the size of its investments:

·     not more than 20 per cent. of the Gross Asset Value at the time of investment will be invested in the securities of a single issuer;

·     the Company will only make an investment in an unquoted company if the aggregate interest of the Company in unquoted companies at the time of such investment is not more than 10 per cent. of the NAV of the Company at that time;

·      total net investment Derivative exposure will not exceed 20 per cent. of Gross Asset Value at the time of investment; and

·      total exposure to any single counterparty which has issued Derivatives to the Company will not exceed 20 per cent. of Gross Asset Value at the time of investment.

(a) Currency risks

The majority of the Company's assets will be denominated in a currency other than sterling (predominantly in Japanese yen) and changes in the exchange rate between sterling and Japanese yen may lead to a depreciation of the value of the Company's assets as expressed in sterling and may reduce the returns to the Company from its investments and, therefore, negatively impact the level of dividends paid to Shareholders.

Management of currency risks

The Company does not currently intend to enter into any arrangements to hedge its underlying currency exposure to investment denominated in Japanese yen, although the Investment Adviser and the Board may review this from time to time.

(b) Interest rate risks

The Company is exposed to interest rate risk specifically through its cash holdings. Interest rate movements may affect the level of income receivable from any cash at bank and on deposits. The effect of interest rate changes on the earnings of the companies held within the portfolio may have a significant impact on the valuation of the Company's investments.

Management of interest rate risks

Prevailing interest rates are taken into account when deciding on borrowings.

(c) Price risks

Price risk includes changes in market prices, other than those arising from interest rate risk or currency risk, which may affect the value of equity investments.

Management of price risk

The Board meets on at least four occasions each year where it considers the asset allocation of the portfolio and the risk associated with particular industry sectors. The Company's Investment Adviser has responsibility for monitoring the portfolio, which is selected in accordance with the Company's investment objective and seeks to ensure that individual stocks meet an acceptable risk/reward profile.

(d) Liquidity risks

The securities of small-to-medium-sized (by market capitalisation) companies may have a more limited secondary market than the securities of larger companies. Accordingly, it may be more difficult to effect sales of such securities at an advantageous time or without a substantial drop in price than securities of a company with a large market capitalisation and broad trading market. In addition, securities of small-to-medium-sized companies may have greater price volatility as they can be more vulnerable to adverse market factors such as unfavourable economic reports.

Management of liquidity risks

The Company's Investment Adviser monitors the liquidity of the Company's portfolio on a regular basis.

Liquidity risk is minimised by holding sufficient liquid investments which can be readily realised to meet liquidity demands. The Company's liquidity risk is managed on a daily basis by the Investment Adviser in accordance with established policies and procedures in place. Liquidity risk is not significant as the majority of the Company's assets are investments in quoted equities that are expected to be readily realisable under normal conditions.

(e) Credit risks

Cash and other assets held by the custodian

Cash and other assets that are required to be held in custody will be held by the custodian or its sub-custodians. Cash and other assets may not be treated as segregated assets and will therefore not be segregated from any custodian's own assets in the event of the insolvency of a custodian.

Cash held with any custodian will not be treated as client money subject to the rules of the FCA and may be used by a custodian in the course of its own business. The Company will therefore be subject to the creditworthiness of its custodians. In the event of the insolvency of a custodian, the Company will rank as a general creditor in relation thereto and may not be able to recover such cash in full, or at all.

Management of credit risks

The Company has appointed The Northern Trust Company as its custodian. The credit rating of Northern Trust was reviewed at the time of appointment and is reviewed on a regular basis by the Investment Adviser and/or the Board.

The Investment Adviser monitors the Company's exposure to its counterparties on a regular basis, and the position is reviewed by the Directors at Board meetings.

12. POST PERIOD-END EVENTS

Other than those included in these financial statements, there have been no significant events since the period end which would require revision of the figures or disclosure in the financial statements.

13. STATUS OF THIS REPORT

These interim financial statements are not the Company's statutory accounts for the purposes of section 434 of the Companies Act 2006. They are unaudited. The unaudited half-yearly report will be made available to the public at the registered office of the Company. The report will also be available in electronic format on the Company's website.

The information for the year ended 31 December 2025 has been extracted from the last published audited financial statements, unless otherwise stated. The audited financial statements have been delivered to the Registrar of Companies. The Company's Auditor reported on those accounts, and their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006.

The half-yearly report was approved by the Board of Directors on 15 September 2026.