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.