Interim Results

Baillie Gifford Shin Nippon PLC 25 August 2000 Results for the six months to 31 July 2000 Salient points * Net asset value per share down by 28.9% to 203.7p on a diluted basis (FRS14) compared to sterling adjusted falls of 26.8% in the Jasdaq OTC Index and 9.0% in the Tokyo Stock Exchange Second Section Index. However the NAV over the year from July 1999 rose by 10.6%. * Sharp retreat caused by several factors. These included the large correction in the US Nasdaq market and global technology stocks, market concern about potential government policy error, managerial and operational disappointment by some high profile New Japan stocks, aggressive unwinding of cross shareholdings and further sales of government owned stock such as NTT. * Positive economic news. A domestic cyclical recovery is underway, with strong industrial production, tentative signs of consumption picking up and robust information technology spending. * Economic growth of 1.5% to 2% anticipated by the Managers, reflected by the decision of the Bank of Japan to end the Zero Interest Rate Policy with short term rates rising to 0.25%. * Positive long term outlook. The Board believes that many of the market concerns have been reflected in share prices and has invested some of the liquidity raised during the interim period. Longer term positives for Japan, such as reform of the corporate sector, economic and profits recovery, structural change and shareholder friendly equity culture remain intact. * Share buy back authority approved. The Board has received shareholders approval to buy back up to 14.99% of the Company's shares. This authority will only be used when the share price is at a discount to NAV and will therefore enhance NAV for continuing shareholders. * Supporters of the AITC's 'its' campaign. Shin Nippon has contributed to the second year of 'its' and the Managers are increasing their marketing to derive maximum spin-off advantage. Baillie Gifford Shin Nippon PLC (Shin Nippon) aims to achieve capital growth through investment in smaller Japanese companies including those quoted on the Over-The-Counter market. The Company has total assets of £82 million. An ISA and Share Plan are available. Shin Nippon is managed by Baillie Gifford & Co., the leading independent Edinburgh based fund management group with £22 billion under management and advice. For further information please contact: Sarah Whitley, Manager, Baillie Gifford Shin Nippon PLC 0131 222 4000 Mike Lord, Director, Broadgate Marketing 020 7726 6111 Baillie Gifford & Co. is regulated by IMRO. The following is an interim statement for the six months ended 31 July 2000 which has been neither reviewed nor audited by the auditors. This statement is being printed and will be sent to all shareholders on 8 September 2000. Copies will be available for inspection at the Registered Office of the Company or may be obtained on request from the Managers and Secretaries after that date. BAILLIE GIFFORD SHIN NIPPON PLC STATEMENT OF TOTAL RETURN (unaudited and incorporating the revenue account*) for the six months ended 31 July 2000 Revenue Capital Total £'000 £'000 £'000 Realised gains on investments - 8,791 8,791 Unrealised (losses)/gains on investments - (35,129) (35,129) Currency losses (note 1) - (830) (830) Income 239 - 239 Investment management fee (364) - (364) Other administrative expenses (86) - (86) Net return before finance costs and taxation (211) (27,168) (27,379) Finance costs of borrowings (180) - (180) Return on ordinary activities before taxation (391) (27,168) (27,559) Tax on ordinary activities (36) - (36) Return on ordinary activities after taxation (427) (27,168) (27,595) Transfer (from)/to reserves (427) (27,168) (27,595) Return per ordinary share (1.34p) (85.42p) (86.76p) (note 3) for the six months ended 31 July 1999 Revenue Capital Total £'000 £'000 £'000 Realised gains on investments - 48 48 Unrealised (losses)/gains on investments - 33,670 33,670 Currency losses (note 1) - (494) (494) Income 283 - 283 Investment management fee (259) - (259) Other administrative expenses (49) - (49) Net return before finance costs and taxation (25) 33,224 33,199 Finance costs of borrowings (92) - (92) Return on ordinary activities before taxation (117) 33,224 33,107 Tax on ordinary activities (27) - (27) Return on ordinary activities after taxation (144) 33,224 33,080 Transfer (from)/to reserves (144) 33,224 33,080 Return per ordinary share (0.45p) 104.46p 104.01p (note 3) for the year ended 31 January 2000 Revenue Capital Total £'000 £'000 £'000 Realised gains on investments - 6,062 6,062 Unrealised (losses) /gains on investments - 62,911 62,911 Currency losses (note 1) - (1,322) (1,322) Income 415 - 415 Investment management fee (694) - (694) Other administrative expenses (150) - (150) Net return before finance costs and taxation (429) 67,651 67,222 Finance costs of borrowings (255) - (255) Return on ordinary activities before taxation (684) 67,651 66,967 Tax on ordinary activities (47) - (47) Return on ordinary activities after taxation (731) 67,651 66,920 Transfer (from)/to reserves (731) 67,651 66,920 Return per ordinary share (2.30p) 212.71p 210.41p (note 3) * 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 continuing operations. BAILLIE GIFFORD SHIN NIPPON PLC SUMMARISED BALANCE SHEET at 31 July 2000 (unaudited) 31 July 2000 31 January 2000 £'000 £'000 NET ASSETS Listed overseas equities 39,059 68,529 Unlisted equities - traded on the Japanese OTC market 24,032 37,196 Total fixed asset investments 63,091 105,725 Net liquid assets 19,378 3,382 Total assets (before deduction of bank loans) 82,469 109,107 Bank loans (note 4) (17,671) (16,714) 64,798 92,393 CAPITAL AND RESERVES Called-up share capital 3,181 3,181 Capital reserves 64,287 91,455 Revenue reserve (2,670) (2,243) EQUITY SHAREHOLDERS' FUNDS 64,798 92,393 NET ASSET VALUE PER ORDINARY SHARE (note 5): Basic 203.7p 290.5p Diluted (FRS 14) 203.7p 286.3p Fully diluted 203.5p 283.9p Ordinary shares in issue (note 6) 31,805,492 31,805,357 Warrants in issue (note 6) 2,517,896 2,518,031 BAILLIE GIFFORD SHIN NIPPON PLC SUMMARISED CASH FLOW STATEMENT (unaudited) Six months to Year to 31 July 2000 31 January 2000 £'000 £'000 £'000 £'000 NET CASH OUTFLOW FROM OPERATING ACTIVITIES (307) (206) NET CASH OUTFLOW FROM SERVICING OF FINANCE (144) (192) TOTAL TAX (PAID)/REPAID (36) 67 FINANCIAL INVESTMENT Acquisitions of investments (19,754) (26,370) Disposals of investments 35,967 22,182 Realised currency gains/(losses) 126 (274) NET CASH INFLOW/(OUTFLOW) FROM FINANCIAL INVESTMENT 16,339 (4,462) NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 15,852 (4,793) FINANCING Net proceeds from bank loans drawn down - 7,755 NET CASH INFLOW FROM FINANCING - 7,755 INCREASE IN CASH 15,852 2,962 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT) Increase in cash 15,852 2,962 Net cash received from bank loans - (7,755) Exchange movement on bank loans (956) (1,107) MOVEMENT IN NET FUNDS/(DEBT) 14,896 (5,900) NET DEBT AT 1 FEBRUARY 2000 (12,973) (7,073) NET FUNDS AT 31 JULY 2000 1,923 (12,973) BAILLIE GIFFORD SHIN NIPPON PLC TWENTY LARGEST EQUITY HOLDINGS at 31 July 2000 Name Business Market value % of total £'000 assets Fast Retailing Casual wear retailer 3,346 4.1 * Yamada Denki Consumer electronics retailer 3,263 4.0 Aiful Consumer finance 2,749 3.3 Aeon Credit Service Credit card company 2,370 2.9 Paris Miki Retailer of spectacles 2,337 2.8 Koa Electronic resistor manufacturer 2,329 2.8 Hirose Electric Electrical and optical connectors 2,124 2.6 Nissin Consumer loans and business finance 1,976 2.4 Nippon Thompson Needle roller bearings 1,973 2.4 * Okinawa Cellular Telephone Mobile phone operator 1,905 2.3 * People Operator of fitness clubs 1,885 2.3 Ushio Specialist lighting 1,874 2.3 Taiyo Yuden Capacitors and electronic parts 1,821 2.2 * H.I.S. Discount travel agency 1,711 2.1 OBIC Computer systems and software 1,570 1.9 Nidec Special industrial components 1,510 1.8 Towa Semiconductor production equipment 1,457 1.8 * Yamaichi Test sockets for Electronics integrated circuits 1,438 1.7 * Fuji Seal Packaging materials and machinery 1,389 1.7 * Kose Cosmetics 1,277 1.5 40,304 48.9 * Denotes holding traded on the Japanese OTC market. BAILLIE GIFFORD SHIN NIPPON PLC NOTES 31 July 31 July 31 January 2000 1999 2000 £'000 £'000 £'000 1. Currency losses Realised exchange differences 126 (343) 360 Movement in unrealised exchange differences (956) (151) (1,682) (830) (494) (1,322) 2. No interim dividend will be declared. 3. Return per ordinary share Revenue return (427) (144) (731) Capital return (27,168) 33,224 67,651 Return per ordinary share is based on the above totals of revenue and capital and on 31,805,425 (31 July 1999 and 31 January 2000 - 31,805,357) ordinary shares, being the weighted average number of ordinary shares in issue during the period. There was no dilution of the above returns. 4. Bank loans of £17.7 million (Y2.9 billion) have been drawn down under yen loan facilities which are repayable between December 2000 and May 2005 (31 January 2000 - £16.7 million (Y2.9 billion)). 5. The diluted net asset value per ordinary share has been calculated in accordance with FRS 14 'Earnings per share'. The calculation determines the potential number of dilutive shares which would be issued on the exercise of warrants by reference to the share price (fair value) at each period end. Under this method there was no dilution at 31 July 2000. The fully diluted net asset value per ordinary share has been calculated on the assumption that the warrants in issue were fully exercised at 200p at each period end. 6. During the period 135 ordinary shares were issued in respect of warrants exercised on 2 May 2000. Each warrant entitles the holder to subscribe for one ordinary share at 200p on 30 April in the years 2001 to 2005. 7. The financial information for the year ended 31 January 2000 has been extracted from the full accounts, which have been filed with the Registrar of Companies and which contain an unqualified Auditors' Report. 8. The accounting policies applied in calculating the interim figures are consistent with those used in the Annual Financial Statements. The Interim Report was approved by the Board on 24 August 2000.

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