Preliminary announcement

Baring Emerging Europe PLC
10 November 2004

                           BARING EMERGING EUROPE PLC

                       Preliminary unaudited announcement
               in respect of the year ended 30th September, 2004



STATEMENT OF TOTAL RETURN
                                                                         Year ended 30th September, 2004
                                                        Revenue             Capital                Total
                                                           £000                £000                 £000

Gains on investments                                          -              30,116               30,116
Losses on foreign exchange                                    -                (333 )               (333 )
Income                                                    3,434                   -                3,434
Investment management fee                                (1,171 )              (116 )             (1,287 )
Other expenses                                             (693 )                 -                 (693 )
Net return before interest payable and                    1,570              29,667               31,237
taxation

Interest payable                                            (18 )                 -                  (18 )
Net return before taxation                                1,552              29,667               31,219

Taxation                                                   (467 )                 -                 (467 )
Return attributable to ordinary shareholders              1,085              29,667               30,752

Dividend                                                   (887 )                 -                 (887 )
Transfers to reserves                                       198              29,667               29,865


                                                        Revenue             Capital                Total

Return per ordinary share                                  2.45 p             66.88 p              69.33 p

Dividend per ordinary share                                2.00 p                 - p               2.00 p




STATEMENT OF TOTAL RETURN
                                                                          Period from 11th October, 2002
                                                                                 to 30th September, 2003
                                                        Revenue             Capital                Total
                                                           £000                £000                 £000

Gains on investments                                          -              30,384               30,384
Gains on foreign exchange                                     -                   7                    7
Income                                                    2,283                   -                2,283
Investment management fee                                  (714 )              (329 )             (1,043 )
Other expenses                                             (507 )                 -                 (507 )
Net return before interest payable and                    1,062              30,062               31,124
taxation

Interest payable                                             (1 )                 -                   (1 )
Net return before taxation                                1,061              30,062               31,123

Taxation                                                   (307 )                 -                 (307 )
Return attributable to ordinary shareholders                754              30,062               30,816

Dividend                                                   (488 )                 -                 (488 )
Transfers to reserves                                       266              30,062               30,328


                                                        Revenue             Capital                Total

Return per ordinary share                                  1.68 p             67.01 p              68.69 p

Dividend per ordinary share                                1.10 p                 - p               1.10 p








BALANCE SHEET


                                                                               30th                  30th
                                                                         September,            September,
                                                                               2004                  2003
                                                                               £000                  £000

Fixed assets
Investments                                                                 146,674               116,548

Current assets
Debtors                                                                       1,745                 3,396
Cash at bank and in hand                                                        285                     -
                                                                              2,030                 3,396
Creditors: Amounts falling due within one year                               (2,395 )              (3,500 )
Net current liabilities                                                        (365 )                (104 )
Net assets                                                                  146,309               116,444

Capital and reserves
Called-up share capital                                                       4,436                 4,436
Share premium account                                                         1,411                 1,411
Special Reserve                                                              79,917                79,917
Redemption reserve                                                              352                   352
Capital reserve-realised                                                     29,904                 5,656
Capital reserve-unrealised                                                   29,825                24,406
Revenue reserve                                                                 464                   266
Total equity shareholders' funds                                            146,309               116,444


Net asset value per share                                                    329.82 p              262.50 p








CASHFLOW STATEMENT


                                                                                              Period from
                                                                                            11th October,
                                                                          Year ended                 2002
                                                                                30th              to 30th
                                                                          September,           September,
                                                                                2004                 2003
                                                                                £000                 £000

Operating activities
Investment income received                                                     3,917                1,227
Deposit interest received                                                         22                    1
Investment management fees paid                                               (1,050 )               (638 )
Other cash payments                                                           (1,195 )               (348 )
Net cash inflow from operating activities                                      1,694                  242


Servicing of finance
Interest paid                                                                    (18 )                  -


Taxation
Overseas tax paid                                                               (467 )               (307 )


Financial investment
Purchases of investments                                                    (133,816 )            (65,953 )
Sales of investments                                                         135,427               66,420
Net cash inflow from financial investments                                     1,611                  467


Equity dividends paid                                                           (488 )                  -
Net cash inflow before financing                                               2,332                  402


Financing
Issue of share capital                                                             -                4,585
Buyback of ordinary shares                                                         -               (6,708 )
Net cash outflow from financing                                                    -               (2,123 )
Increase/(decrease) in cash                                                    2,332               (1,721 )






NOTES



1. Current year's information

The abridged figures for 2004 are an extract from the latest financial
statements and do not constitute statutory financial statements. The financial
statements have not yet been delivered to the Registrar of Companies, nor have
the Auditors yet reported on them.



2. Comparative information

The figures and financial information for the period ended 30th September, 2003
are an extract from the latest published accounts and do not constitute
statutory accounts. Full accounts for that period have been delivered to the
Registrar of Companies and included the report of the auditors which was
unqualified and did not contain a statement under section 237 of the Companies
Act 1985.



3. Posting of Annual Report

The Annual Report will be posted to shareholders on 8th December, 2004.



4. Annual General Meeting

The Annual General Meeting will be held at 155 Bishopsgate, London EC2 on Monday
24th January, 2005 at 2.30pm.



5. Dividend

Subject to the approval of the Annual General Meeting, the annual dividend will
be paid on 18th February, 2005 to members on the register at the close of
business on 21st January, 2005. The shares will be marked ex-dividend on 19th
January, 2005.






CHAIRMAN'S STATEMENT



Company performance

The Company's net asset value increased by 25.6% during the year under review
compared with an increase in the benchmark of 25.3%. Since the Company's launch
on 17th December 2002 the net asset value has increased by 70.1% compared with
an increase in the benchmark during the same period of 66.2%.



The emergence of a significant dividend stream from companies in the region that
we saw in the prior period has been maintained which has enabled the Company to
report net income per ordinary share of 2.45p. The Directors have decided to
recommend an annual dividend of 2p per share (1.1p per share for the period
ended 30th September 2003).



Discount management

The Board continues to monitor closely the market rating of the Company's shares
in the context of its policy to limit the discount to NAV at which the Company's
shares trade to a level significantly below 12%. At 30th September 2004 the
discount to NAV was 9.4% and during the year under review the average discount
to NAV has been below 10%. No shares have been repurchased during the year.



The Board

On 5th July 2004 we appointed Josephine Dixon and Saul Estrin as Directors of
the Company. We are very pleased to welcome Josephine and Saul to the Board.
They bring with them a wealth of experience and we expect them to participate
vigorously in our deliberations.



Investment Manager

During the year Klaus Bockstaller, who has been responsible for managing the
Company's portfolio, resigned from the Investment Manager. Stuart Richards, who
has worked closely with Mr Bockstaller over the last four years, has assumed
primary responsibility for managing the portfolio. Stuart has eight years
experience in the sector and his appointment should ensure the continuity of the
investment policy which has been successful in the past.



Annual General Meeting

The Annual General Meeting is being held on Monday 24th January 2005 at 155
Bishopsgate, London EC2 commencing at 2.30 pm. The formal business will be
followed by a presentation from the Investment Manager, after which there will
be an opportunity for shareholders to raise any specific issues with the
Investment Manager or any member of the Board.



Outlook

The performance during the year under review has been good and we continue to
see value in the region.





Iain Saunders
Chairman
10th November, 2004




155 Bishopsgate, London, EC2M 3XY
020 7628 6000


For further information please contact:


James McDonald, Citigate Dewe Rogerson, 020 7282 2921 or
Jonathan Flint, Citigate Dewe Rogerson, 020 7282 2861


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