Final Results

Baillie Gifford Shin Nippon PLC 03 March 2006 BAILLIE GIFFORD SHIN NIPPON PLC Results for the year to 31 January 2006 The 12 months to 31 January 2006 was a good year for small capitalisation equities in Japan, with the Company's comparative index* up 44.7%. The Company performed significantly better than this with the net asset value per share up 60.6%. Furthermore, the share price rose 83.4%+ and moved from a discount to a premium. The Board and Managers are of the opinion that the fundamental outlook for the Japanese economy and corporate sector appears better than it has for many years. â€¢ Good relative performance was achieved through strong stock selection and overweight positions in the Real Estate & Construction and Retail sectors. â€¢ Gearing was managed actively during the year to the Company's advantage. Net gearing was increased from 9% to around 15% of shareholders' funds for most of the year, before being reduced back to 9% by the year end. â€¢ In the six months to 31 January 2006, the Company's net asset value per share rose 46.7% compared to a 32.1% rise in the comparative index*. During this period, the Company's share price rose 76.2%+. â€¢ The Japanese economy has progressively improved since 2002 and the most important recent economic development has been the transition from export-led to domestically-driven growth. â€¢ Corporate Japan's attitude to shareholder returns is improving with dividends expected to grow by over 20% this fiscal year. * The Company's comparative index is a composite index of the Tokyo Second Section Index, the TOPIX Small Index and the JASDAQ Index, weighted by market capitalisation, in sterling terms. Shin Nippon aims to achieve long-term capital growth principally through investment in small Japanese companies which are believed to have above average prospects for capital growth. At 31 January 2006 the Company had total assets of Â£101.0m (before deduction of bank loans of Â£13.9m). +Past performance is no guarantee of 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. This is because the share price is determined by the changing conditions in the relevant stockmarkets in which the Company invests and by the supply and demand for the Company's shares. You can find up to date performance information about Shin Nippon on the Baillie Gifford website at www.bailliegifford.com. The Company is managed by Baillie Gifford & Co, an Edinburgh based fund management group with around Â£45 billion under management and advice as at 2 March 2006. - ends - For further information please contact: Alistair Way, Manager, Baillie Gifford & Co 0131 275 2000 Mike Lord, Director, Broadgate Marketing 020 7726 6111 BAILLIE GIFFORD SHIN NIPPON PLC The following is the unaudited preliminary statement for the year to 31 January 2006 which was approved by the Board on 2 March 2006. No dividend is payable. INCOME STATEMENT* (unaudited) For the year ended For the year ended 31 January 2006 31 January 2005 Revenue Capital Total* Revenue Capital Total* Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Gains on investments - 32,668 32,668 - 10,270 10,270 Currency gains (note 2) - 538 538 - 253 253 Income (note 3) 780 - 780 598 - 598 Investment management fee (675) - (675) (531) - (531) Other administrative expenses (207) - (207) (199) - (199) Net return before finance costs and taxation (102) 33,206 33,104 (132) 10,523 10,391 Finance costs of borrowings (216) - (216) (226) - (226) Return on ordinary activities before taxation (318) 33,206 32,888 (358) 10,523 10,165 Tax on ordinary activities (47) - (47) (34) - (34) Return on ordinary activities after taxation (365) 33,206 32,841 (392) 10,523 10,131 Return per ordinary share+ (1.20p) 108.52p 107.32p (1.28p) 34.39p 33.11p (note 5) + There was no dilution of the above returns in either year. * The total column of the Income Statement is the profit and loss account of the Company. All revenue and capital items in this statement derive from continuing operations. BAILLIE GIFFORD SHIN NIPPON PLC SUMMARISED BALANCE SHEET at 31 January 2006 (unaudited) 31 January 2006 31 January 2005 Â£'000 Â£'000 NET ASSETS Listed overseas equities 90,696 58,459 Unlisted - traded on the Hercules Japan market 1,605 - - other unlisted 1,419 1,035 Total equities 93,720 59,494 Net liquid assets 7,295 9,092 Total assets (before deduction of bank loans) 101,015 68,586 Bank loans (note 6) (13,938) (14,350) Net assets 87,077 54,236 CAPITAL AND RESERVES Called-up share capital 3,060 3,060 Capital reserves 88,912 55,706 Revenue reserve (4,895) (4,530) Equity shareholders' funds 87,077 54,236 Net asset value per ordinary share (note 7) 284.6p 177.2p There was no dilution of net asset value at either year end. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (unaudited) 2006 2005 Â£'000 Â£'000 Shareholders' funds at 1 February 54,236 44,105 Total recognised gains and (losses) for the year 32,841 10,131 Shareholders' funds at 31 January 87,077 54,236 BAILLIE GIFFORD SHIN NIPPON PLC SUMMARISED CASH FLOW STATEMENT (unaudited) Year to Year to 31 January 2006 31 January 2005 Â£'000 Â£'000 Â£'000 Â£'000 NET CASH OUTFLOW FROM OPERATING ACTIVITIES (35) (226) (Note 9) NET CASH OUTFLOW FROM SERVICING OF FINANCE (235) (174) TOTAL TAX PAID (46) (35) FINANCIAL INVESTMENT Acquisitions of investments (36,327) (20,940) Disposals of investments 33,014 21,275 Realised currency (loss)/gain (324) 367 NET CASH (OUTFLOW)/INFLOW FROM FINANCIAL INVESTMENT (3,637) 702 NET CASH (OUTFLOW)/INFLOW BEFORE FINANCING (3,953) 267 FINANCING Bank loans drawn down 4,988 9,423 Bank loans repaid (4,538) (2,453) NET CASH INFLOW FROM FINANCING 450 6,970 (DECREASE)/INCREASE IN CASH (3,503) 7,237 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (Decrease)/increase in cash in the year (3,503) 7,237 Net inflow from bank loans (450) (6,970) Exchange movement on bank loans 862 (114) MOVEMENT IN NET DEBT IN THE YEAR (3,091) 153 NET DEBT AT 1 FEBRUARY (5,069) (5,222) NET DEBT AT 31 JANUARY (8,160) (5,069) BAILLIE GIFFORD SHIN NIPPON PLC TWENTY LARGEST EQUITY HOLDINGS at 31 January 2006 (unaudited) 2006 2005 Market % of total Market Name Business value assets value Â£'000 Â£'000 Park 24 Car park operator 2,492 2.5 1,048 Nabtesco Hydraulic equipment 2,248 2.2 - Japan Asia Investment Venture capital company 2,168 2.1 801 Hamakyorex Trucking and warehousing 2,157 2.1 904 H.I.S. Discount travel agency 2,155 2.1 869 Arrk Design consulting 2,118 2.1 1,427 Plenus Sells take-away boxed meals 2,066 2.0 - Seijo Drugstore chain 2,065 2.0 - Fullcast Blue collar staffing services 2,058 2.0 1,333 Ryobi Manufacturer of auto parts 2,053 2.0 1,101 Sumisho Lease Specialist leasing operator 2,047 2.0 1,485 Moshi Moshi Hotline Call centre operator 2,011 2.0 1,029 Tokyu Livable Real estate business 1,967 1.9 1,184 USS Company Second-hand car auctioneer 1,952 1.9 1,537 Sankyo Pachinko machines 1,944 1.9 1,148 Colowide Restaurant business 1,916 1.9 908 Nishimatsuya Chain Baby clothing retailer 1,877 1.9 820 Goldcrest Condominium developer 1,832 1.8 1,716 Juki Sewing machines and electrical equipment 1,806 1.8 1,029 CKD Pneumatic machinery 1,791 1.8 1,303 40,723 40.0 19,642 BAILLIE GIFFORD SHIN NIPPON PLC NOTES (unaudited) 1. The financial statements for the year to 31 January 2006 have been prepared on the basis of the same accounting policies used for the year to 31 January 2005 except for the valuation of investments. FRS 26' Financial Instruments: Measurement' has been adopted in full; listed investments are now valued at fair value through profit or loss. Previously, listed investments were valued on a mid-market basis, as represented by last traded prices (official mid-market prices are not available in Japanese markets). As last traded prices are also the best measure of fair values of listed investments, there has been no impact on the valuation of the Company's listed investments. The implementation of the 2005 Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (SORP) has resulted in changes in the presentation of total returns. Previously the revenue column of the Statement of Total Return was deemed to be the profit and loss account of the Company. We now present an Income Statement which still shows information on capital and revenue returns, although it is the total return column which is regarded as the profit and loss account of the Company. FRS 22 'Earnings per Share' and FRS 23 'The Effects of Changes in Foreign Exchange Rates' have both been adopted in full but have had no impact on the results for the year and no prior year adjustment has been required. FRS 25 'Financial Instruments: Disclosure and Presentation' has been adopted and the Accounts reflect the revised disclosures. 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. 31 January 2006 31 January 2005 Â£'000 Â£'000 2. Currency gains Realised exchange differences 243 603 Unrealised exchange differences 295 (350) 538 253 3. Income includes stock lending fee income of Â£106,000 (2005 - Â£107,000). 4. No dividend will be declared. 5. Return per ordinary share Revenue return (365) (392) Capital return 33,206 10,523 Return per ordinary share is based on the above returns and on 30,600,497 (2005 - 30,600,496) ordinary shares, being the weighted average number of ordinary shares in issue during the year. 6. Bank loans of Â£13.9 million (Y2.9 billion) have been drawn down under yen loan facilities which are repayable between March 2007 and October 2012 (31 January 2005 - Â£14.3 million (Y2.8 billion)). 7. There was no dilution to net asset value per share at either date. At 31 January 2006 there were no warrants in issue (2005 - 2,517,891). No warrants were exercised during the period to the final exercise date on 30 April 2005; the remaining warrants therefore lapsed and were subsequently cancelled. 8. At 31 January 2006 the Company had authority to buy back 4,587,014 shares. No shares were bought back during the year under review. BAILLIE GIFFORD SHIN NIPPON PLC NOTES (Ctd) (unaudited) 2006 2005 Â£'000 Â£'000 9. Reconciliation of Net Return before Finance Costs and Taxation to Net Cash Outflow from Operating Activities Net return on ordinary activities before finance costs and taxation 33,104 10,391 Gains on investments (32,668) (10,270) Currency gains (538) (253) Increase in accrued income (9) (3) Increase in other debtors (7) (23) Increase/(decrease) in creditors 83 (68) (35) (226) 10. The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 January 2006 under section 240 of the Companies Act 1985. The financial information for 2005 is derived from the statutory accounts for 2005, which have been delivered to the Registrar of Companies. The Auditors have reported on the 2005 accounts, their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for 2006 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. None of the views expressed in this document should be construed as advice to buy or sell a particular investment. This information is provided by RNS The company news service from the London Stock Exchange SEED

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