Final Results

Scottish Oriental Smlr Co Tst PLC
18 October 2006



               THE SCOTTISH ORIENTAL SMALLER COMPANIES TRUST PLC

             Preliminary Results for the year ended 31 August 2006
                     (Extracted from the Audited Accounts)

The Board of The Scottish Oriental Smaller Companies Trust PLC is pleased to
announce the results for the year ended 31 August 2006.

These results are presented in a format which summarises the information which
will be given in the forthcoming Annual Report.

Financial Highlights

   • The share price rose by 15.4% from 212.75p to 245.50p.
   • The warrant price rose by 28.0% from 112.50p to 144.00p.
   • Fully diluted net asset value per ordinary share rose by 16.5% from
     219.95p to 256.22p and undiluted net asset value rose by 15.6% from 241.56p
     to 279.24.
   • This compares with a rise of 18.6% in the benchmark index - the MSCI AC
     Asia (ex Japan) Index.
   • The Nomura Asia Small Cap Index rose 17.8% and the FTSE All-Share Index
     rose 16.8% respectively over the same period.
   • A final dividend of 3.6p net is recommended to be paid on 26th January
     2007 to shareholders registered on 22nd December 2006.



Income Statement for the year ended 31 August 2006

                                 2006                           2005
                Income*   Capital    Total   Income*    Capital          Total
                  £'000     £'000    £'000     £'000        £'000        £'000
                                                       (Restated)   (Restated)

Gains on      
investments           -    10,413   10,413         -       14,737       14,737

Income from
investments       2,199         -    2,199     2,080            -        2,080

Other income        217         -      217       182            -          182

Investment        
management fee     (371)        -     (371)     (562)           -         (562)

Currency
(losses)/gains        -       (42)     (42)        -          100          100

Other
administrative   
expenses           (277)        -     (277)     (297)           -         (297)
                 --------  -------- --------  --------     --------     --------

Net return before
finance costs   
and taxation      1,768    10,371   12,139     1,403       14,837       16,240

Finance costs
of borrowing        (12)       (5)     (17)      (36)           -          (36)
                 --------  -------- --------  --------     --------     --------

Return on
ordinary
activities      
before
taxation          1,756    10,366   12,122     1,367       14,837       16,204

Tax on ordinary
activities         (517)        1     (516)     (407)          29         (378)
                 --------  -------- --------  --------     --------     --------

Return
attributable to   
equity
shareholders      1,239    10,367   11,606       960       14,866       15,826
                 --------  -------- --------  --------     --------     --------

Return per
ordinary share    4.78p    39.99p   44.77p     3.77p       58.33p       62.10p

Fully diluted
return
per ordinary
share (in          
accordance with
FRS 14)           4.36p    36.48p   40.84p     3.47p       53.73p       57.20p


* The total column of this statement is the Profit and Loss Account of the
Company.

All income and capital items derive from continuing operations.

The financial statements for the year ended 31st August 2005 have been restated
to reflect the change to accounting policies as set out in note 2 at the end of 
this document.



Summary Balance Sheet as at 31 August 2006

                                               2006                 2005
                                      £'000        £'000        £'000        £'000
                                                           (Restated)   (Restated)

Total investments                                 68,722                    56,995
Current Assets:
  Debtors                               487                     1,090
  Cash and deposits                   4,825                     7,486
                                     --------                  --------
                                      5,312                     8,576
Current Liabilities (due within one
year)
  Creditors                            (695)                     (569)
                                     --------                  --------
                                       (695)                     (569)
Net current assets                                 4,617                     8,007
                                                  --------                  --------
                                                  73,339                    65,002
Creditors (due after one year)
  Foreign currency loan                                -                    (3,353)
Provision for liabilities and
charges
  Deferred tax                                       (78)                      (78)
                                                  --------                  --------
Equity shareholders' funds                        73,261                    61,571
                                                  ========                  ========

Capital and reserves
Ordinary share capital                             6,559                     6,372
Share premium account                             18,354                    17,794
Warrant reserve
  unexercised                                      1,105                     1,313
  exercised                                          214                         6
Capital Reserves
  realised                                        32,609                    21,219
  unrealised                                      11,785                    12,809
Revenue Reserve                                    2,635                     2,058
                                                  --------                  --------
                                                  73,261                    61,571
                                                  ========                  ========

Net asset value per share -                      
undiluted                                         279.24p                   241.56p
Net asset value per share - fully                 
diluted                                           256.22p                   219.95p

Reconciliation of Movements in
Shareholders Funds
Opening shareholders' funds                       61,571                    46,140
Total return attributable to                     
shareholders                                      11,606                    15,826
Warrants exercised                                   747                         6
Dividend paid                                       (663)                     (401)
                                                  --------                  --------
Closing shareholders' funds                       73,261                    61,571
                                                  ========                  ========



Summary Cash Flow Statement for the year ended 31 August 2006

                                                             2006        2005
                                                            £'000       £'000

Net cash inflow from operating activities                   1,683       1,334
Interest paid on borrowings                                   (13)        (36)
Taxation                                                     (415)       (233)
Net cash (outflow)/inflow from capital expenditure and
financial investment                                         (700)      3,913
Equity dividend paid                                         (663)       (401)
Financing                                                  (2,553)          6
                                                         ----------  ----------
(Decrease)/increase in cash                                (2,661)      4,583
                                                         ==========  ==========

(a) Reconciliation of total income to net cash inflow from operating activities

                                                              2006        2005
                                                             £'000       £'000

Income                                                       2,416       2,261
Administration expenses                                       (648)       (859)
Decrease/(Increase) in debtors                                  14          (8)
Increase in dividends accounted for but not yet received       (37)       (100)
(Decrease)/Increase in creditors                               (62)         40
                                                          ----------  ----------
Net cash inflow from operating activities                    1,683       1,334
                                                          ==========  ==========

(b) Analysis of changes in cash and net debt during the year

                                                   
                  At the start of       Cash            Currency   At the end of      
                         the year      Flows           Movements        the year
                            £'000     £'000                £'000           £'000

Cash                        7,486    (2,661)                   -           4,825

Foreign
Currency Loan              (3,353)    3,300                   53               -
                         ---------- ---------            ---------    ----------
Net cash                    4,133       639                   53           4,825
                         ========== =========            =========    ==========
BOARD STATEMENT

This has been in some respects a testing year for Scottish Oriental. Asian
stockmarkets in general rose strongly; however, as the year progressed it became
increasingly difficult for our Manager to find good value in smaller companies.
Because of this we repaid our yen borrowings in January with a modest capital
profit produced by the weakness of the yen over the period of the loan; taking
its low interest rate into account, this loan contributed to returns during its
existence.

The net asset value per share (fully diluted) increased by 16.5%, slightly
behind the MSCI AC Asia (ex Japan) Index and the Nomura Asia Small Cap Index
which rose by 18.6% and 17.8% respectively. Given our comparatively cautious
view during the year, this is a satisfactory result for our shareholders.

As this is written, 5.7% (£4.3m) of the portfolio is in cash. When the warrants
expire in January 2007, assuming all outstanding warrants are exercised, further
cash of approximately £4.0m will be available for investment. This money,
together with borrowings if we consider the circumstances to be appropriate,
will be used to take advantage of market volatility to buy good quality smaller
companies at attractive prices. We continue to be optimistic about the prospects
for the companies in our portfolio.

Performance for the year ended 31 August 2006 (Total Return)

Net Asset Value - fully diluted    +16.5%  MSCI AC Asia (ex Japan)      +18.6%
                - undiluted        +15.6%  Index (£)
                                           Nomura Asia Small Cap        +17.8%
Share Price                        +15.4%  Index (£)
Warrant Price                      +28.0%  FTSE All-Share Index (£)     +16.8%

Performance for the period 31st August 1996 to 31st August 2006

Net Asset Value - fully diluted   +142.0%  MSCI AC Asia (ex Japan)      +5.45%
                - undiluted       +161.1%  Index (£)
                                           FTSE All-Share Index (£)    +110.8%


Summary Data at 31 August 2006

Shares in issue               26,235,601   Shareholders' Funds         £73.26m
Warrants in issue              3,978,049   Market Capitalisation       £64.41m

Net Asset Value per share -
fully diluted                    256.22p  Share Price Discount to        4.2%
                                          Net Asset Value - 
                                          fully diluted
Net Asset Value per share - 
undiluted                        279.24p  Share Price Discount to       12.1%
                                          Net Asset Value -       
                                          undiluted
Share Price                      245.50p

Warrant Price                    144.00p


Review by Investment Manager

Asian stockmarkets continued to rise in the year ending 31st August 2006. A
strong appetite for risk amongst the international investment community resulted
in a substantial flow of funds into the Region. This euphoria lasted until May
when markets fell owing to concerns that higher interest rates, particularly in
the US and Japan, would cause a slowdown in global economic growth. For the
remainder of the year, regional markets provided more limited returns, with only
subdued foreign inflows returning to the Region.

Indonesia was the best performing market over the period as inflation peaked and
interest rates began to fall. India was also strong as it continued to benefit
from the large flow of portfolio investment attracted by the strong growth in
corporate earnings. The Philippines performed surprisingly well driven by
positive economic data as well as strong overseas workers' remittances.

Asian smaller companies underperformed their larger counterparts over the
period. This underperformance was exacerbated by the decline in investors'
appetite for risk after the markets' correction in May.

Outlook by Investment Manager

Susie Rippingall, Portfolio Manager for Scottish Oriental said, 'In the short
term, the uncertain outlook for inflation and interest rates will continue to
overshadow Asian stockmarkets. Valuations are no longer attractive though they
are still much more attractive than those that prevailed in the mid 1990s.
Corporate earnings remain vulnerable to high commodity prices and rising wage
costs, particularly in China. Rising wages throughout the Region may create
inflationary pressures given Asia's position as the world's manufacturing base.
The companies most likely to benefit from this are those selling to Asian
consumers.

We remain optimistic about the long-term outlook for the Region in absolute and,
even more so, in relative terms. The combination of favourable demographics,
sound fiscal/monetary policies, competitive cost structures and rapidly
expanding domestic consumption is a powerful one. More specifically, the
developed world continues to outsource its manufacturing to Asia, most notably
to China; outsourcing in service industries has also become more commonplace,
with India being the main beneficiary.

In Asia in general, individuals tend to have high levels of savings. The
corporate sector has reduced its debt exposure in recent years. A dividend
culture has emerged in many parts of the Region. As elsewhere, controlling
families and other major stakeholders of listed entities do not always treat
minorities with respect, but corporate governance and stockmarket regulation
have undoubtedly improved over the last ten years.'

Dividend

The Board is proposing a final dividend of 3.6p net (2005: 2.6p net),
representing an increase of 38% on last year. Scottish Oriental's primary
investment objective has been and continues to be capital growth, and dividends
have been restricted so as to build up a reasonable revenue reserve but it is
our intention to at least maintain the proposed level of dividend.

Notes:

(1) The financial information contained within this Preliminary Announcement
does not constitute statutory accounts as defined in Section 240 of the
Companies Act 1985. The results for the years ended 31st August 2006 and 2005
are an abridged version of the statutory accounts for those years, which
received unqualified audit reports and did not contain statements under sections
237(2) or (3) of the Companies Act 1985. Statutory accounts for 2005 have been
filed with the Registrar of Companies and those for 2006 will be delivered in
due course.

(2) Accounting Policies
The new Financial Reporting Standards, issued as part of the programme to enable
United Kingdom Generally Accepted Accounting Practice ('UK GAAP') to converge
with International Financial Reporting Standards, were applicable for the year
ended 31 August 2006 and the accounts for the year ended 31 August 2005 have
also been restated. The main changes arising from these revisions to UK GAAP, in
relation to the Company's accounts, are that dividends to shareholders declared
after the balance sheet date are now shown in the period of payment rather than
in the reporting period, and investments are fair valued at bid price having
previously been valued on a mid basis. Dividends were previously recognised in
the Statement of Total Return (now the Income Statement) but these are now dealt
with as an appropriation of equity and are taken directly through equity in the
Reconciliation of Movements in Shareholders' Funds.

The Board has elected to adopt UK Generally Accepted Accounting Principles (UK
GAAP) and therefore complies with the new Financial Reporting Standards issued
as part of the programme to converge UK GAAP with IFRS. Figures for the years
ended 31st August 2004 and 31st August 2005 have been restated and the impact of
these changes is shown below:

Reconciliation of Balance Sheet

Effect of adjustments
                                                                  2005      2004
                                                                  £000      £000  
                                                                          
(i.) Revaluation of portfolio from mid market to bid 
     market pricing                                               (295)    (258)
                                                                          
(ii.) Final dividend no longer accrued as at 31st August           663      401
                                                                   368      143
Previously reported Total Equity Shareholders' Funds            61,203   45,997
Total Equities and Liabilities                                  61,571   46,140

(a) Restatement for first time adoption of revised UK GAAP
(i) Under FRS 26 - 'Financial Instruments: Recognition and Measurement',
investments are classified as held at fair value through profit and loss under
the Statement of Recommended Practice and are carried at bid prices which
equates to their value of £46,476,000 (2004) and £56,995,000 (2005). These were
previously carried at mid prices. The resultant difference of £258,000 (2004)
and £295,000 (2005) is included in retained earnings.

(ii)Under FRS 21 - 'Events after the Balance Sheet Date', no provision has been
made for the final dividend on ordinary shares for the year ended 31st August
2004 of £401,000 and for the year ended 31st August 2005 of £663,000 as these
were not declared until after the balance sheet date. Under the Statement of
Recommended Practice, the dividend is not recognised until it becomes payable.
This is not therefore added to retained earnings.

Reconciliation of the Income Statement to the Statement of Total Return for the
year to 31st August 2005
                                                                          £000
Total transfer from reserve per original Statement of Total Return      15,200
Add back dividends on ordinary shares                                      663
Change from mid to bid basis as at 31st August 2004                        258
Change from mid to bid basis at 31st August 2005                          (295)
Net profit per Income Statement as restated                             15,826

Notes to the reconciliation

1. All dividends authorised and paid during the year are dealt with in the
Statement of Changes in Equity

2. The portfolio valuations at 31st August 2004 and 2005 require to be valued at
fair value under the Statement of Recommended Practice.
These values differ from the previous valuations by £258,000 and £295,000
respectively.

(3) The terms of the Preliminary Announcement were approved by the Board on 18
October 2006.

(4) Copies of the Annual Report will be posted to shareholders shortly and
further copies may be obtained from the registered office at 23 St Andrew Square, 
Edinburgh, EH2 1BB.

Enquiries:      Gillian Davies,
                First State Investments, Ph: 44 (0) 131 473 2224

                Susie Rippingall, Portfolio Manager,
                First State Investments, Ph: 00 852 2846 7526

                Angus Tulloch, Portfolio Manager
                First State Investments, Ph 44 (0) 131 473 2271

18 October 2006



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