Final Results

RNS Number : 0670A

Baillie Gifford Shin Nippon PLC

15 March 2013

 



RNS Announcement: Preliminary Results

Baillie Gifford Shin Nippon PLC

Results for the year to 31 January 2013

¾ Over the year the Company's net asset value per share (after deducting borrowings at fair value) rose 20.2%, whilst the comparative index^* rose by 3.3% in sterling terms. The share price rose 34.0% and moved to a 5.9% premium to net asset value.

¾ In sterling terms over three years, the Company's comparative index is up 23.7%, whilst the net asset value and share price are up by 51.6% and 94.5% respectively.

¾ The Managers continue to find a wide range of attractive companies that enjoy a combination of entrepreneurial management, innovative new business models and strong competitive advantages.

¾ During the year, the Company issued 5% of its pre-existing issued share capital at an average premium to net asset value per share of 3%. Subsequent to the Company's year end, shareholders approved an additional 5% non-pre-emptive issuance authority. 1,300,000 of the 1,632,775 shares available under this authority have subsequently been issued as at 14 March 2013. The Board is seeking authorisation at the AGM for a facility to issue new shares of up to 10% of the Company's issued share capital for cash on a non pre-emptive basis, but only at a premium to net asset value.

¾ Many of the portfolio's top performing stocks were those associated with the buoyant healthcare and recovering real estate markets.

¾ Several new holdings with exciting growth prospects were identified during the year, portfolio turnover remained low at 15.9% (2012: 19.7%). Examples of new holdings include: Asahi Intecc, a world leading medical equipment manufacturer; Infomart, an online ordering platform that significantly enhances efficiency for the restaurant industry; SMS, a nursing website which streamlines healthcare recruitment; and Poletowin Pitcrew, which provides testing services for the booming mobile gaming industry.

¾ The election in December of Shinzo Abe as prime minister caused the market to rally strongly. Investors were encouraged by his proposed policies which aim to boost economic growth.

¾ With effect from 1 April 2013, the management fee will be reduced to 0.95% on the first £50m of net assets and 0.65% thereafter.

^* The Company's comparative index for the year to 31 January 2013 was the MSCI Japan Small Cap Index (total return in sterling terms).

Shin Nippon aims to achieve long term capital growth through investment principally in small Japanese companies which are believed to have above average prospects for growth. At 31 January 2013 the Company had total assets of £77.1m (before deduction of bank loan of £7.9m).

The Company is managed by Baillie Gifford & Co, an Edinburgh based fund management group with around £95 billion under management and advice as at 14 March 2013.

Past performance is not a guide to future performance. The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. The Company has borrowed money to make further investments. This is commonly referred to as gearing. The risk is that, when this money is repaid by the Company, the value of these investments may not be enough to cover the borrowing and interest costs, and the Company makes a loss. If the Company's investments fall in value, gearing will increase the amount of this loss. The more highly geared the Company, the greater this effect will be.

Investment in investment trusts should be regarded as medium to long term. You can find up to date performance information about Shin Nippon at www.shinnippon.co.uk.

14 March 2013

For further information please contact:

Anzelm Cydzik, Baillie Gifford & Co

Tel: [phone]

Roland Cross, Director, Broadgate Mainland

Tel: [phone]

Chairman's Statement

Performance

The Board reviews performance principally over rolling three year periods. I am pleased to report that in the three year period to 31 January 2013 Shin Nippon's net asset value per share rose 51.6%, significantly more than the 23.7% increase in the Company's comparative index (MSCI Japan Small Cap Index total return in sterling terms). The share price rose by 94.5% over this period. Our borrowings were beneficial to performance and stock selection was strong.

Over the year to 31 January 2013 Shin Nippon's net asset value per share rose 20.2%, also significantly above the 3.3% rise in the Company's comparative index. The share price rose by 34% in the year. Stock selection was good and borrowings were helpful to performance in the year. The Yen weakening by 16.8% against Sterling was adverse but its weakness has improved sentiment towards Japanese companies which will most likely have benefited the share prices of the Company's holdings.

This strong record of performance was recognised at the Investment Week 'Investment Trust of the Year' awards where the Company won the 'Best Single Country Trust' category.

Share Issuance

During the year the share price moved from a discount of 4.9% to a premium of 5.9%. The share price stood at a premium to net asset value for last 6 weeks of the year to 31 January 2013. During this period the opportunity was taken to issue 1,555,020 shares (5% of our share capital at 31 January 2012) raising £3.28m. These shares were all issued at a premium to net asset value, which averaged 3%. This resulted in an enhancement of net asset value for existing shareholders. In approving these share issues the Board is mindful that by increasing the size of the Company the liquidity of the shares is likely to increase and the attractiveness to new shareholders should improve.

At the General Meeting held on 1 March 2013 shareholders approved the authority to issue up to 5% of issued share capital at a premium on a non pre-emptive basis until the AGM on 17 May 2013.

Borrowing and Hedging

The Company's borrowings were unchanged at ¥1.15bn (approximately £7.95m at 31 January 2013) during the year. The Company undertook no currency hedging in the period, but the Board continues to monitor the situation.

Revenue and Management Fee

The Company's revenue earnings per share declined from 0.32p to (0.07p). Despite continued dividend growth from the portfolio, investment income fell by 4.4% owing to Yen weakness. Furthermore, the uplift in net asset value over the year resulted in higher management charges. The Board continues to monitor the Company's expenses carefully. I am pleased to report that with effect from 1 April 2013, the management fee will be reduced to 0.95% on the first £50m of net assets and 0.65% thereafter.

AGM

At this year's AGM the Board is seeking authorisation for a facility to issue new shares (and to reissue any shares held in treasury, of which there are none currently), of up to 10% of the Company's issued share capital for cash, on a non pre-emptive basis, but only at a premium to net asset value. Such shares would be used to feed natural demand and would enhance the net asset value for existing shareholders.

Approval will also be sought to renew the authority to buy back shares. This would enable the Board to buy back shares if the discount to net asset value is substantial in absolute terms or in relation to its peers, should that be deemed to be appropriate. Any such activity would be net asset value enhancing for remaining shareholders.

Finally, a resolution is proposed to permit dividend distributions to be made out of realised capital profits. This would bring the Articles of Association up to date following recent changes in legislation. It should be noted that, currently, the Board has no intention to announce a dividend.

Outlook

The Japanese political environment had a rare positive impact on the market over the last year. Shinzo Abe of the LDP, who was re-elected as prime minister in December, has been unusually forthright in his pro growth views, and his pressure on the Bank of Japan to target an inflation rate of 2% contrasts sharply with the deflation of recent times. This greatly encouraged investors and the year ended with very strong market rises.

It is far too soon to know whether there will be political consensus to pursue consistent growth policies, and given my sceptical comments about Japanese politics in previous years' statements I am probably not qualified to comment. However, what I can say is that we continue to be impressed by the interesting range of companies that our Manager is able to identify. These usually have strong competitive advantages, able managements and good potential to increase their market share. Indeed, it is a recurring theme that there are many young and talented entrepreneurs coming through in Japan. The share price ratings of the Companies we invest in continue to be reasonable. More information about our portfolio appears in the Manager's Report.

With this background your Board and Manager have an optimistic outlook for the portfolio, and for Japanese smaller companies in general. We expect to maintain a reasonably high level of gearing.

Barry M Rose

Chairman

14 March 2013

Past performance is not a guide to future performance.

Managers' Report

The Japanese small cap universe has become an increasingly rich hunting ground for investors looking for innovative, entrepreneurial companies. For many years most Japanese innovation remained hidden within obscure divisions of many of the vast conglomerates that dominated R&D budgets. It has now been more than a decade since the traditional "job-for-life" culture at those older, larger Japanese companies came to an end. Despite unemployment remaining relatively low, the lack of job certainty has resulted in more individuals taking what had, until recently, been the unusual step of setting up their own company. Business start-up costs have been falling thanks to advances such as cloud computing and 3D printing. Importantly, the emergence of inspirational, role-model entrepreneurs who have successfully challenged the orthodoxy and built several new, large businesses has further encouraged the more dynamic members of the younger generation to develop their promising ideas. These young entrepreneurs remain in the minority. Changing collective mindsets with regard to fostering greater societal tolerance of people trying something and failing (a necessary feature of most entrepreneurial, creative cultures) takes time. However, the initial signs are promising.

New companies with high growth potential are constantly being created within this vibrant and expanding subset of the Japanese economy. Often utilising the internet, some of these companies are forming entirely new niche markets or developing new business models, that are disrupting existing industries and gaining market share from sleepy incumbents. Many of these new companies benefit from ease of access to the large, discerning, online and wealthy populace in Japan. It is exactly these sorts of companies, those that have matured enough to list but when they are still at an early stage of expansion, that Shin Nippon focuses on to create a portfolio representing the new face of corporate Japan.

Performance

The MSCI Japan Small Cap index (total return in sterling terms) rose by 3.3% over the year while Shin Nippon's net asset value per share (after deducting borrowings at fair value) rose by 20.2%. The broader Japanese market generally lagged markets elsewhere in the world despite a late rally in the year caused by increased expectations that the more aggressive economic growth policies proposed by the new prime minister will stimulate inflation. The yen weakness that accompanied these developments proved to be a welcome relief for Japanese exporters but dampened returns for sterling investors.

Many companies are able to grow irrespective of the vagaries of the Japanese economy. A case in point was Shin Nippon's strongest performing holding last year, MonotaRO. The company runs a website that allows small businesses to order their everyday supplies cheaply and have them delivered efficiently. As the product range increases allowing MonotaRO to negotiate improved terms with suppliers and consequently reduce prices, the appeal of the website to customers rises. Despite the sluggish economy, the company has grown rapidly by winning market share from traditional wholesalers that focus on a narrow product offering and remain wedded to a costly "bricks and mortar" distribution model.

A relatively recent purchase, Endo Lighting, was another notable strong contributor to performance over the period. The company specialises in energy efficient LED lighting systems for commercial properties and Japan is leading the world in terms of early adoption. Profitability has increased rapidly in recent years because the company switched to focus aggressively on LED lighting just before the earthquake and tsunami caused a spike in power prices. Many businesses including retailers, restaurant chains and office developers have therefore been installing LED systems to reduce their power consumption and the outlook for orders remains strong.

In common with many countries around the world, Japan has an aging population. This backdrop provides several of our healthcare related holdings with fantastic opportunities to expand. The pharmacy industry is growing in Japan with several leading chains establishing strong positions as they consolidate the market. Shin Nippon holding Cosmos Pharmaceutical is gaining market share by expanding from its core region in the far West of Japan into neighbouring areas where competition is fairly limited and fragmented. Contract research organisation EPS was another strong performer as demand for its outsourced pharmaceutical trial services continued to rise.

One segment of the market that would clearly benefit from some inflation is housing and the share prices of several of our holdings in this area benefited as investors anticipated the improvement in conditions. Next, a real estate advertising website that lists the largest selection of properties for sale or for rent in Japan, and Tokyo condominium developer Takara Leben, which is benefiting after several key rivals went out of business in the previous downturn, both outperformed.

Start Today, the e-commerce apparel company and one of last year's best performers, was the weakest performing holding over the year as the growth rate in new users slowed. We believe that top fashion brands will continue to be very selective in which companies they choose to partner with online and that Start Today, as market leader, should be able to grow in the future as online apparel shopping continues to increase in popularity in Japan.

Portfolio

Shin Nippon retains a long term investment horizon with current turnover within the portfolio implying an average holding period for stocks of over six years. However, several new holdings with attractive growth prospects were bought during the year.

One stock that was purchased early in the period was one of the biggest contributors to performance. Asahi Intecc manufactures and sells extremely accurate guidewires that are used in non-surgical procedures for patients suffering from heart disease. This type of treatment is gaining in popularity globally because it is cheaper and less risky than full heart surgery. Further, Asahi Intecc has been strengthening its international sales network to exploit rising global demand for its medical equipment.

More recently several relatively young companies with high growth potential have been identified and subsequently holdings acquired. Infomart operates an internet-based platform that allows restaurants to connect electronically with their suppliers. The proportion of catering supplies that are ordered online is rising quickly, from a very low base in Japan, as restaurants try to cut costs in what is a very competitive marketplace. Infomart is by far the largest player in this niche and there is potential for the company to increase its charges in the long term as it secures its place as the dominant ordering system.

SMS runs a website that provides useful information and services to Japanese nurses. Over 250,000 nurses have signed up to the site and this online community has proved to be very attractive to hospitals struggling to fill vacant positions. SMS earns a fee for every nurse recruited through the website. The company should continue to grow over the next decade as the number of nurses increases to meet demand.

Finally, Poletowin Pitcrew Holdings provides a trusted service to games software companies, testing new games before they are launched. Demand for their services is benefiting from the rapid growth globally in mobile gaming. Poletowin Pitcrew also provides exposure to another growth area, website monitoring services which benefits from the trend towards more oversight of online behaviour.

Outlook

Recent weakness in the Japanese economy may well result in more aggressive stimulus from the new prime minister and the next governor of the Bank of Japan. While an improvement in the economic situation in Japan would of course be welcome, it must be stressed that the operations of most of Shin Nippon's holdings are driven by long term secular trends. We remain encouraged at the increasing regularity with which we are meeting with dynamic, inspiring, young management teams in Japan which are building exciting, sustainable businesses with the potential for high returns. Shin Nippon's portfolio will continue to focus on this very specific and attractive subset within the broad Japanese smaller companies' universe.

Baillie Gifford & Co

14 March 2013

Past performance is not a guide to future performance.

Portfolio Performance Attribution for the Year to 31 January 2013*

Computed relative to the comparative index^†

	Index		Shin Nippon		Performance#		Contribution	Contribution attributable to:
	asset allocation		asset allocation		Shin		to relative	Stock	Asset
	31.01.12	31.01.13	31.01.12	31.01.13	Nippon	Index	return	selection	allocation
Portfolio Breakdown	%	%	%	%	%	%	%	%	%
Consumer Discretionary	20.8	20.2	25.1	22.1	2.2	(0.8)	0.6	0.7	-
Consumer Staples	10.1	9.9	10.4	7.9	39.4	2.9	3.6	3.5	0.1
Energy	0.7	0.5	1.3	1.3	28.9	(6.9)	0.4	0.4	(0.1)
Financials	18.1	19.7	7.1	10.3	27.9	16.9	(0.6)	0.6	(1.2)
Healthcare	4.6	5.0	14.6	15.2	23.3	13.2	2.7	1.3	1.3
Industrials	22.9	22.8	24.2	22.7	35.1	1.1	6.8	6.8	-
Information Technology	10.2	10.5	14.6	18.0	(11.5)	0.9	(1.6)	(1.7)	-
Materials	12.3	11.2	2.7	1.7	8.9	(7.4)	1.4	0.5	1.0
Telecommunication       Services	-	-	-	0.8	-	-	(0.3)	-	(0.3)
Utilities	0.3	0.2	-	-	-	(13.1)	-	-	-
Total (excluding gearing)	100.0	100.0	100.0	100.0	17.2	3.3	13.4	12.4	0.9
Impact of gearing					3.5		3.5
Total (including gearing) **	100.0	100.0	100.0	100.0	21.4	3.3	17.4	12.4	0.9

Past performance is not a guide to future performance.

Source: Baillie Gifford & Co/Statpro.

Contributions cannot be added together, as they are geometric; for example to calculate how a return of 17.2% against an index return of 3.3% translates into a relative return of 13.4%, divide the portfolio return of 117.2 by the index return of 103.3 and subtract one.

*      The performance attribution table is based on total assets

†      The comparative index for the year to 31 January 2013 was the MSCI Japan Small Cap index, total return and in sterling terms.

#      The returns are total returns (net income reinvested), calculated on a monthly linked method.

**    The total return performance of 21.4% excludes expenses and therefore differs from the NAV return (after deducting borrowings at fair value) of 20.2% as a result.

Income statement

The following is the unaudited preliminary statement for the year to 31 January 2013 which was approved by the Board on 14 March 2013. No dividend is payable.

	For the year ended 31 January 2013 (unaudited)			For the year ended 31 January 2012 (audited)
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains/(losses) on investments*	-	9,688	9,688	-	(256)	(256)
Currency gains/(losses) (note 2) †	-	1,378	1,378	-	(703)	(703)
Income	1,165	-	1,165	1,219	-	1,219
Investment management fee (note 3)	(621)	-	(621)	(546)	-	(546)
Other administrative expenses	(283)	-	(283)	(272)	-	(272)
Net return before finance costs and taxation	261	11,066	11,327	401	(959)	(558)
Finance costs of borrowings (note 4)	(201)	-	(201)	(218)	-	(218)
Net return on ordinary activities before taxation	60	11,066	11,126	183	(959)	(776)
Tax on ordinary activities	(82)	-	(82)	(85)	-	(85)
Net return on ordinary activities after taxation	(22)	11,066	11,044	98	(959)	(861)
Net return per ordinary share (note 6)	(0.07p)	35.53p	35.46p	0.32p	(3.08p)	(2.76p)

*      Gains/(losses) on investments include gains and losses on disposals and holding gains and losses on the investment portfolio resulting from: i) changes in the local currency fair value of the investments and, ii) movements in the yen/sterling exchange rate.

†      Currency gains/(losses) include: i) currency exchange gains and losses on yen bank loans, ii) exchange differences on the settlement of investment transactions and, iii) other exchange differences arising from the retranslation of cash balances.

The total column of this statement is the profit and loss account of the Company.

All revenue and capital items in this statement derive from continuing operations. No operations were acquired or discontinued during the year.

A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement.

Balance sheet

	At 31 January 2013 (unaudited)		At 31 January 2012 (audited)
	£'000	£'000	£'000	£'000
Fixed assets
Investments		75,817		62,698
Current assets
Debtors	432		182
Cash and short term deposits	2,378		1,712
	2,810		1,894
Creditors
Amounts falling due within one year (note 7)	(1,553)		(230)
Net current assets		1,257		1,664
Total assets less current liabilities		77,074		64,362
Creditors
Amounts falling due after more than one year (note 7)		(7,948)		(9,557)
Total net assets		69,126		54,805
Capital and reserves
Called up share capital		3,266		3,110
Share premium		10,795		7,674
Capital redemption reserve		21,521		21,521
Capital reserve		37,998		26,932
Revenue reserve		(4,454)		(4,432)
Shareholders' funds		69,126		54,805
Net asset value per ordinary share (after deducting borrowings at fair value)		211.6p		176.0p
Net asset value per ordinary share (after deducting borrowings at par value)		211.7p		176.2p

Reconciliation of movements in shareholders' funds

For the year ended 31 January 2013 (unaudited)

	Called up share capital £'000	Share premium £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 February 2012	3,110	7,674	21,521	26,932	(4,432)	54,805
Ordinary shares issued	156	3,121	-	-	-	3,277
Net return on ordinary activities after taxation	-	-	-	11,066	(22)	11,044
Shareholders' funds at 31 January 2013	3,266	10,795	21,521	37,998	(4,454)	69,126

* Capital reserve as at 31 January 2013 included investment holding gains of £21,361,000.

For the year ended 31 January 2012 (audited)

	Called up share capital £'000	Share premium £'000	Capital  redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 February 2011	3,110	7,674	21,521	27,891	(4,530)	55,666
Net return on ordinary activities after taxation	-	-	-	(959)	98	(861)
Shareholders' funds at 31 January 2012	3,110	7,674	21,521	26,932	(4,432)	54,805

* Capital reserve as at 31 January 2012 included investment holding gains of £12,621,000.

Cash flow statement

	For the year ended 31 January 2013 (unaudited)		For the year ended 31 January 2012  (audited)
	£'000	£'000	£'000	£'000
Net cash inflow from operating activities (note 9)		309		342
Servicing of finance
Interest and breakage costs paid	(209)		(255)
Net cash outflow from servicing of finance		(209)		(255)
Taxation
Overseas tax paid	(82)		(80)
Total tax paid		(82)		(80)
Financial investment
Purchases of investments	(13,173)		(12,120)
Sales of investments	10,775		12,401
Exchange differences on settlement of investment transactions	(83)		16
Net cash (outflow)/inflow from financial investment		(2,481)		297
Financing
Ordinary shares issued	3,277		-
Net cash inflow from financing		3,277		-
Increase in cash		814		304
Reconciliation of net cash flow to movement in net debt
Increase in cash		814		304
Exchange movement on bank loans		1,609		(794)
Exchange differences on cash		(148)		75
Movement in net debt in the year		2,275		(415)
Opening net debt		(7,845)		(7,430)
Closing net debt		(5,570)		(7,845)

Twenty largest equity holdings at 31 January 2013 (unaudited)

Name	Business	2013 Value £'000	2013 % of total assets	2012 Value £'000
MonotaRO	Supplies small machinery parts	3,007	3.9	1,689
Don Quijote	Discount store chain	2,372	3.1	2,514
EPS	Clinical testing services	2,034	2.6	1,418
Nabtesco	Hydraulic equipment	2,011	2.6	2,060
Hamakyorex	Third party logistics	1,995	2.6	1,911
Message	Provides nursing services for the elderly	1,989	2.6	2,883
Cocokara Fine	Drugstore chain	1,906	2.5	1,766
First Juken	Builds and sells residential buildings	1,772	2.3	1,461
Nakanishi	Dental equipment	1,758	2.3	1,494
Nihon M&A Center	M&A advisory services	1,697	2.2	1,191
Asics	Sports shoes and clothing	1,627	2.1	984
M3	Online medical database	1,606	2.1	1,583
Takara Leben	Leasing and management of real estate	1,594	2.1	574
Nikkiso	Industrial pumps and medical equipment	1,553	2.0	951
Endo Lighting	Energy efficient lighting	1,532	2.0	808
Start Today	Internet fashion retailer	1,438	1.9	2,925
Japan Exchange Group	Stock exchange operator	1,409	1.8	-
Asahi Intecc	Specialist medical equipment	1,391	1.8	-
Unipres	Manufactures automotive components	1,349	1.8	1,460
OSG Corp	Cutting tool manufacturer	1,333	1.7	-
		35,373	46.0

Notes to the condensed financial statements (unaudited)

1.		The financial statements for the year to 31 January 2013 have been prepared on the basis of the same accounting policies used for the year to 31 January 2012. The financial statements are prepared on a going concern basis under the historical cost convention, modified to include the revaluation of fixed asset investments and derivative financial instruments, and on the assumption that approval as an investment trust under section 1158 of the Corporation Tax Act 2010 will be retained. After making enquiries, the financial statements have been prepared on the going concern basis as it is the Directors' opinion that the Company will continue in operational existence for the foreseeable future. The Directors consider the Company's functional currency to be sterling as the Company's shareholders are predominantly based in the UK and the Company is subject to the UK's regulatory environment.
2.		Currency gains/(losses)	31 January 2013 £'000			31 January 2012 £'000
		Exchange differences on bank loans	1,609			(794)
		Other exchange differences	(231)			91
			1,378			(703)
3.		Investment management fee - all charged to revenue	31 January 2013 £'000			31 January 2012 £'000
		Investment management fee	621			546
		Baillie Gifford & Co are employed by the Company as Managers and Secretaries under a management agreement which is terminable on not less then six months' notice or on shorter notice in certain circumstances. The fee in respect of each quarter is 0.25% of the total net assets of the Company attributable to its shareholders on the last day of that quarter.
4.		The Company paid interest on bank loans of £201,000 (2012 - £218,000).
5.		No dividend will be declared.
6.	Net return per ordinary share		31 January 2013 £'000	31 January 2012 £'000
	Revenue return		(22)	98
	Capital return		11,066	(959)
	Total return		11,044	(861)
	The returns per ordinary share set out below are based on the above returns and on 31,146,303 ordinary shares (2012 - 31,100,497), being the weighted average number of ordinary shares in issue during the year. There are no dilutive or potentially dilutive shares in issue.
	Revenue return		(0.07p)		0.32p
	Capital return		35.53p		(3.08p)
	Total return		35.46p		(2.76p)

Notes to the condensed financial statements (unaudited) (ctd)

7.		The Company has fully drawn down a fixed rate 3 year ¥1,150 million loan at 2.24% with The Royal Bank of Scotland plc maturing on 8 August 2014.
8.		At 31 January 2013 the Company had authority to buy back 4,661,964 shares. No shares were bought back during the year. Share buy-backs are funded from the capital reserve. During the year the Company issued 1,555,020 shares on a non pre-emptive basis at a premium to net asset value for proceeds of £3.28m.
9.	Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities		31 January 2013 £'000	31 January 2012 £'000
	Net return before finance costs and taxation		11,327	(558)
	(Gains)/losses on investments		(9,688)	256
	Currency (gains)/losses		(1,378)	703
	Increase in accrued income and prepayments		(6)	(67)
	Decrease in other debtors		-	14
	Increase/(decrease) in creditors		54	(6)
	Net cash inflow from operating activities		309	342
10.		The Report and Accounts will be available on the Company's website www.shinnippon.co.uk† on or around 8 April 2013.
11.		The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 January 2013. The financial information for 2012 is derived from the statutory accounts for 2012, which have been delivered to the Registrar of Companies. The Auditors have reported on the 2012 accounts, their report was unqualified and did not contain a statement under section 495 to 497 of the Companies Act 2006. The statutory accounts for 2013 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held on 17 May 2013. None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

†    Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

- ends -

 

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