Interim Results

Baillie Gifford Shin Nippon PLC
21 August 2001



                       BAILLIE GIFFORD SHIN NIPPON PLC

                  Results for the six months to 31 July 2001

                                21 August 2001

 Baillie Gifford Shin Nippon returned a strong relative half-year performance
                by focusing on domestic secular growth areas.

 The longer term outlook for smaller Japanese companies remains positive and
                    current share prices offer good value.

Salient points

      NAV per share up 0.6% compared with sterling adjusted falls of 6.5% in
      the Tokyo Stock Exchange Second Section Index and 3.9% in the weighted
      average index of the Second Section, JASDAQ OTC and TOPIX Small indices.
      This continues the Company's good long-term track record within its peer
      group.

      Outperformance achieved by focusing on domestic secular growth areas
      which are largely immune to global weakness. Many smaller companies are
      exploiting societal changes in Japan such as the rise of outsourcing or
      the freeing up of the labour market and possess the ability to grow
      sales, profits and cash flows despite the cyclical economic downturn.

      Long-term outlook for smaller Japanese companies remains positive and
      current valuation levels are attractive. The Company has steadily
      increased its gearing into the market over the last six months from a 4%
      cash balance at the end of January to 9% geared at the end of July. Its
      biggest weighting lies in the service area of the economy, which is
      continuing to enjoy growth.

      The Japanese economy is slowing but not imploding, with overall
      consumption flat. Industrial Japan was hit by the contraction of activity
      in major overseas markets such as the USA and Asia and is close to
      recession. The Bank of Japan returned to its zero interest rate policy in
      April. The popular new Prime Minister, Yunichiro Koizumi, is committed to
      delivering structural economic reforms with details likely to emerge over
      the next few months. Many companies are continuing to restructure,
      exiting underperforming areas.


Baillie Gifford Shin Nippon PLC (Shin Nippon) aims to achieve capital growth
principally through investment in small Japanese companies, including those
quoted on the Over-The-Counter market. The Company has total assets of £60
million. An ISA and Share Plan are available.


                                                                        -/more


Shin Nippon is managed by Baillie Gifford & Co., the leading independent
Edinburgh based fund management group with around £21 billion under management
and advice.

                                   - ends -

For further information please contact:

Mark Urquhart, Manager

Baillie Gifford Shin Nippon PLC  0131 222 4000

Mike Lord, Director

Broadgate Marketing   0171 726 6111

Baillie Gifford & Co. is regulated by IMRO.


                       BAILLIE GIFFORD SHIN NIPPON PLC


                                Interim Report


The six months to 31 July 2001 saw Shin Nippon's diluted net asset value per
share rise by 0.6%. This compares to a sterling-adjusted fall of 6.5% in the
Tokyo Stock Exchange Second Section Index and a 3.9% decline in the weighted
average index of the Second Section, Jasdaq OTC and Topix Small indices. Shin
Nippon has outperformed by focusing on domestic secular growth areas which are
largely immune to global weakness. This strong relative half year performance
continues the Company's good long-term track record within its peer group.
During the period, the Company bought back 205,000 ordinary shares adding
0.15% to net asset value per share.


The outlook for smaller Japanese stocks remains positive with many companies
continuing to enjoy good growth in both revenues and profits as they exploit
changes in Japanese society. Examples of stocks we have been buying over the
last six months include : Moshi Moshi Hotline - a call centre operator which
is benefiting from larger companies' moves to outsource in this area; Venture
Link - an innovative company which provides franchise support services for
budding entrepreneurs; and Goodwill Group which is well placed to benefit from
changing employment patterns as Japan's largest temporary labour company. We
have also invested in Japan's first activist shareholder fund - an unquoted
vehicle called M&A Consulting. They aim to put pressure on cash rich companies
to improve shareholder returns by raising their dividends or conducting share
buybacks and we see it as another sign of positive change in Japanese
corporate culture.


Similar to other markets, Japanese equities have remained weak over the last
six months as evidence of a world slowdown has continued to mount. The
electricals and components areas in particular have seen a sharp drop in
demand due to the bursting of the world-wide technology boom and remain in a
painful inventory correction phase. The Japanese economy has been hit by the
contraction of activity in major overseas markets such as the USA and Asia
with the industrial side of the economy close to recession. Japan, however, is
slowing rather than imploding, with overall consumption flat. With price
deflation still present, real wages have actually been rising. The Bank of
Japan returned to its zero interest rate policy in April and has said it will
retain this policy until there is 'price stability' in Japan.


On the more positive side, many companies are continuing to restructure their
businesses by exiting underperforming areas and are increasingly driven by
returns rather than sales maximisation. At the political level, the new Prime
Minister, Yunichiro Koizumi, is very popular and is committed to trying to
deliver the structural reforms which Japan has needed for so long. He received
public approval in winning the partial Upper House election at the end of July
and we expect reform announcements to be made over the coming months. Whilst
measures such as cutting government spending and reforming the taxation system
would hurt economic growth in the short-term, we believe they would exert
long-term positive influences on Japan and should be beneficial to
shareholders as companies could no longer ignore their returns on capital and
equity.


The last six months have remained a difficult time for investing in most
global equity markets. Against this backdrop there are considerable
opportunities in small Japanese companies, many of which are exploiting
societal changes in Japan such as the rise of outsourcing or the freeing up of
the labour market as described above. Many such companies possess the valuable
ability to grow their sales, profits and cash flows regardless of the economic
cycle. As Japan reforms structurally, many nascent industries continue to
develop and the Company's biggest weighting lies in the service area of the
economy which is continuing to enjoy growth whilst the manufacturing area
struggles. We have been steadily increasing the Company's gearing into the
market over the last six months. This reflects our belief that the long-term
outlook for smaller Japanese companies remains positive and that current
valuation levels are attractive.



                                                         By order of the Board

                                                         Baillie Gifford & Co.

                                                                20 August 2001

The following is an interim statement for the six months ended 31 July 2001
which has been neither reviewed nor audited by the auditors. This statement is
being printed and will be sent to all shareholders on 5 September 2001. 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      for the six months        for the year 
                    ended                ended                  ended  
                31 July 2001          31 July 2000         31 January 2001
          Revenue Capital  Total Revenue Capital   Total Revenue Capital   Total

            £'000   £'000  £'000  £'000    £'000    £'000  £'000  £'000    £'000
Realised gains
on investments  -     872    872      -    8,791    8,791    -    9,611   9,611

Unrealised      -    (470)  (470)     -  (35,129) (35,129)   -  (49,791)(49,791)
losses on
investments
Currency        -      (4)    (4)     -     (830)    (830)   -     (963)   (963)
losses (note 1)
Income        319       -    319    239        -      239  418        -     418
Investment   (263)      -   (263)  (364)       -     (364 (636)       -    (636)
management fee
Other         (90)      -    (90)   (86)       -      (86)(177)       -    (177)
administrative
expenses
Net return
before finance(34)    398    364   (211) (27,168) (27,379)(395)(41,143) (41,538)
costs and
taxation
Finance costs(107)      -   (107)  (180)       -     (180)(345)      -     (345)
of borrowings
Return on
ordinary     (141)    398    257   (391) (27,168) (27,559)(740)(41,143) (41,883)
activities
before
taxation
Tax on        (32)      -    (32)   (36)       -      (36) (55)      -      (55)
ordinary
activities
Return on
ordinary     (173)    398    225   (427) (27,168) (27,595)(795)(41,143) (41,938)
activities
after taxation
Transfer
(from)/to    (173)    398    225   (427) (27,168) (27,595)(795)(41,143) (41,938)
reserves
Return per                                                 
ordinary 
share      (0.55p)  1.27p 0.72p (1.34p)(85.42p)(86.76p)(2.50p)(129.37p)(131.87p)
(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 2001

                                 (unaudited)


                                                        31 July     31 January
                                                           2001           2001
                                                          £'000          £'000
NET ASSETS
Listed overseas equities                                 42,282         36,972
Unlisted equities - traded on the OTC/ Nasdaq Japan      11,101         10,213
markets
Unlisted equities - Directors' valuation                  1,451            753
Total fixed asset investments                            54,834         47,938
Net liquid assets                                         5,795         13,243
Total assets (before deduction of bank loans)            60,629         61,181
Bank loans (note 4)                                     (10,675)       (11,183)
                                                         49,954         49,998
CAPITAL AND RESERVES
Called-up share capital                                   3,125          3,146
Capital reserves                                          50,040        49,890
Revenue reserve                                          (3,211)        (3,038)
EQUITY SHAREHOLDERS' FUNDS                               49,954         49,998

NET ASSET VALUE PER ORDINARY SHARE (note 5)               159.9p         158.9p
Ordinary shares in issue (note 6)                     31,250,492     31,455,492




                       BAILLIE GIFFORD SHIN NIPPON PLC
                        SUMMARISED CASH FLOW STATEMENT

                                 (unaudited)
                                                  Six months to     Year to
                                                   31 July 2001  31 January 2001
                                                                          
                                                    £'000  £'000  £'000  £'000

NET CASH OUTFLOW FROM OPERATING ACTIVITIES                   (80)         (483)
NET CASH OUTFLOW FROM SERVICING OF FINANCE                  (133)         (359)
TOTAL TAX PAID                                               (29)          (55)
FINANCIAL INVESTMENT
Acquisitions of investments                        (14,621)     (36,309)
Disposals of investments                             8,769       53,248
Realised currency losses                              (512)        (300)
NET CASH OUTFLOW/(INFLOW) FROM FINANCIAL
INVESTMENT                                                (6,364)        16,639
NET CASH OUTFLOW/(INFLOW) BEFORE FINANCING                (6,606)        15,742
FINANCING
Bank loans repaid                                      -         (6,194)
Shares purchased for cancellation                   (597)          (129)
NET CASH OUTFLOW FROM FINANCING                             (597)        (6,323)
(DECREASE)/INCREASE IN CASH                               (7,203)         9,419
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET
(DEBT)/FUNDS
(Decrease)/increase in cash in the period         (7,203)         9,419
Bank loans repaid                                       -         6,194
Exchange movement on bank loans                      508           (663)
MOVEMENT IN NET (DEBT)/FUNDS                              (6,695)        14,950
NET FUNDS/(DEBT) AT 1 FEBRUARY 2001                        1,977        (12,973)
NET (DEBT)/FUNDS AT 31 JULY 2001                          (4,718)         1,977




                       BAILLIE GIFFORD SHIN NIPPON PLC

                        TWENTY LARGEST EQUITY HOLDINGS

                                at 31 July 2001

                         Business                                 Market    % of
    Name                                                          value   total
                                                                  £'000  assets

      Fast Retailing     Low-priced casual wear market leader     2,751     4.5
      Nissin             Fast growing consumer and business       2,473     4.1
                         loan company
      Aiful              Expanding consumer credit company        2,357     3.9
      Aeon Credit        Credit card company                      2,096     3.5
      Service
      Yamada Denki       Consumer electronics retailer taking     1,788     2.9
                         market share
      Hokuto             Dominant mushroom producer               1,733     2.9
*     Goodwill Group     Leading temporary employment company     1,696     2.8
      USS Company        Second-hand car auctioneer               1,688     2.8
      Venture Link       Innovative franchise support and         1,669     2.8
                         development
      Konami Sports      Expanding fitness club operator          1,622     2.7
      Corporation
      Kose               Specialist cosmetics company             1,607     2.7
      Sanix              Rapidly expanding environmental          1,390     2.3
                         services company
      Koei               Focused game software writer             1,317     2.2
      Avex               Leading music production company         1,239     2.0
      C Two Network      Supermarket operator consolidating       1,236     2.0
                         fragmented market
      Resorttrust        High-end time-share resorts              1,224     2.0
      Nippon Thompson    Specialist needle roller bearings        1,127     1.9
*     Fuji Seal          World leader in shrink-wrap labels       1,085     1.8
*     Eneserve           Expanding alternative power              1,011     1.7
      Corporation        generation
      Ushio              Specialist lighting and lamps              985     1.6
                                                                 32,094    53.1

* Denotes unlisted holding traded on the OTC/Nasdaq Japan markets.


                       BAILLIE GIFFORD SHIN NIPPON PLC


                                    NOTES
                                               31 July    31 July    31 January
                                                  2001       2000          2001
                                                 £'000      £'000         £'000
1.    Currency losses
      Realised exchange differences              (512)       126           (64)
      Movement in unrealised exchange             508       (956)         (899)
      differences
                                                   (4)      (830)         (963)

2.    No interim dividend will be declared.

3.    Return per ordinary share
      Revenue return                             (173)      (427)         (795)
      Capital return                              398    (27,168)      (41,143)


      Return per ordinary share is based on the above totals of revenue and
      capital and on 31,395,154 (31 July 2000 - 31,805,425) and 31 January 2001
      - 31,802,043) ordinary shares, being the weighted average number of
      ordinary shares in issue during the period.

4.    Bank loans of £10.7 million (Y1.9 billion) have been drawn down under yen
      loan facilities which are repayable between July 2002 and May 2005 (31
      January 2001 - £11.2 million (Y1.9 billion)).

5.    There was no dilution to net asset value per share at either date. The
      2,517,896 outstanding warrants at 31 July 2001 are exercisable at 200p in
      any of the remaining years 2002 to 2005. No warrants were exercised
      during the period.

6.    In February 2001 the Company bought back 205,000 ordinary shares with a
      total nominal value of £20,500 for a consideration of £269,000. The
      Company's authority to buy back its own ordinary shares was renewed at
      the Annual General Meeting in May 2001 in respect of 4,684,448 ordinary
      shares (equivalent to 14.99% of its share capital at that date). No
      ordinary shares have been bought back since the Annual General Meeting
      and, therefore, at 31 July 2001 the Company's authority to buy back its
      own shares remained unchanged at 4,684,448 ordinary shares.

7.    The financial information for the year ended 31 January 2001 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 20 August 2001.