Annual Report and Accounts

Scottish Mortgage & Trust PLC
25 April 2003



                      THE SCOTTISH MORTGAGE AND TRUST PLC

                     Results for the year to 31 March 2003



Scottish Mortgage's final results were broadly in line with its benchmark while
the dividend was increased in real terms for the 21st consecutive year. Over the
21 year period a 523% increase in the dividend has far outstripped 126%
inflation, as measured by the Retail Price Index headline rate.  The Company has
positioned itself to benefit from any improvement in capital values on world
stock markets.




•    Performance broadly in line with benchmark.  Net asset value per share declined by 32.6% compared to a
     32.4% fall in the benchmark index comprised of 50% FTSE All-Share Index and 50% FTSE World Ex. UK Index
     (in sterling terms). The negative effect of carrying gearing in declining markets was offset to a large
     extent by good stock selection, especially in the core UK market, and by some exposure to fixed interest
     markets.


•    21st consecutive dividend increase in real terms.  The final dividend has been increased  to 4.50p
     bringing the total to 6.60p, an increase of 5.6%. The dividend is well covered by earnings of 7.43p.


•    Second half results. During the second half net asset value fell by 2.9% compared to a 1.1% fall in the
     benchmark.


•    Outlook. While global economic problems will not be resolved easily, yields on many equities are now at
     historically attractive levels. The Managers are finding sound investment opportunities at company level
     in many parts of the world.



The Scottish Mortgage and Trust PLC aims to maximise total return to
shareholders at the same time as generating real dividend growth through
investment in UK and international markets.  The trust has total assets of £1.1
billion.  An ISA, Share Plan and Children's Savings Plan are available.



Scottish Mortgage is managed by Baillie Gifford & Co., the leading Edinburgh
based fund management group with over £20 billion under management and advice.

                                    - ends -

For further information please contact:


James Anderson, Manager,
The Scottish Mortgage and Trust PLC                 07730 412007


Mike Lord, Director,
Broadgate Marketing                                 020 7726 6111



Baillie Gifford & Co. is authorised  and  regulated by the Financial Services
Authority.



                      THE SCOTTISH MORTGAGE AND TRUST PLC



The following is the unaudited preliminary statement for the year to 31 March
2003 which was approved by the Board on 24 April 2003.  The Board of The
Scottish Mortgage and Trust PLC is recommending to the Annual General Meeting of
the Company to be held on 3 July 2003 the payment of a final dividend of 4.50p
(4.25p last year) per ordinary share making 6.60p (6.25p last year) for the year
ended 31 March 2003.





                                                              STATEMENT OF TOTAL RETURN

                                               (unaudited and incorporating the revenue account*)

                                          For the year ended                      For the year ended
                                             31 March 2003                           31 March 2002

                                    Revenue       Capital       Total         Revenue     Capital       Total
                                      £'000         £'000       £'000           £'000       £'000       £'000

Losses on investments                     -     (421,063)   (421,063)              -     (89,951)    (89,951)
Currency (losses)/gains                   -         (701)       (701)              -       3,447       3,447
Income (note 2)                      33,909            -      33,909          36,377           -      36,377
Investment management fee            (2,053)      (2,053)     (4,106)         (2,695)     (2,695)     (5,390)
Other administrative expenses        (1,185)           -      (1,185)         (1,103)          -      (1,103)
Net return before finance costs
and taxation                         30,671     (423,817)   (393,146)         32,579     (89,199)    (56,620)

Finance costs of borrowings          (7,119)      (7,119)    (14,238)         (7,396)     (7,393)    (14,789)
Return on ordinary activities
before taxation                      23,552     (430,936)   (407,384)         25,183     (96,592)    (71,409)

Tax on ordinary activities             (955)           -        (955)           (970)          -        (970)
Return on ordinary activities
after taxation                       22,597     (430,936)   (408,339)         24,213     (96,592)    (72,379)


Dividends in respect of equity
shares                              (19,730)           -     (19,730)        (19,453)          -     (19,453)


Transfer to/(from) reserves           2,867     (430,936)   (428,069)          4,760     (96,592)    (91,832)
Return per ordinary share
(note 3)                               7.43p    (141.69p)   (134.26p)           7.56p    (30.17p)    (22.61p)
Dividend per ordinary share
(note 4)                               6.60p                                    6.25p



* 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.



                      THE SCOTTISH MORTGAGE AND TRUST PLC

                            SUMMARISED BALANCE SHEET
                                at 31 March 2003
                                  (unaudited)


                                                                        31 March 2003             31 March 2002
                                                                                £'000                     £'000
NET ASSETS

Fixed asset investments                                                     1,050,748                 1,493,041
Net liquid assets                                                                 797                    16,846
Total assets (before deduction of loans and debentures)                     1,051,545                 1,509,887
Loans and debentures (note 5)                                                (207,225)                 (206,899)
                                                                              844,320                 1,302,988


CAPITAL AND RESERVES
Called-up share capital                                                        74,501                    77,296
Capital reserves                                                              718,930                 1,177,670
Revenue reserve                                                                50,889                    48,022
Equity shareholders' funds                                                    844,320                 1,302,988


NET ASSET VALUE PER ORDINARY SHARE
(after deduction of prior charges at par)                                       285.5p                    423.6p
Ordinary shares in issue (note 6)                                          298,005,115               309,184,688





                                                DISTRIBUTION OF ASSETS
                                                   at 31 March 2003
                                                      (unaudited)

                                                        31 March 2003              31 March 2002
                                                                    %                          %

Equities:    United Kingdom                                      44.8                       45.9
             Continental Europe                                   8.8                       12.7
             North America                                       24.0                       24.2
             Japan                                                4.5                        4.4
             Asia Pacific                                         5.0                        4.1
             Other Emerging Markets                               3.8                        2.6
Total equities                                                   90.9                       93.9
United Kingdom bonds                                              6.3                        2.8
European bonds                                                    2.4                        2.2
North American bonds                                              0.3                          -
Net liquid assets                                                 0.1                        1.1
Total assets (before deduction of loans and debentures)         100.0                      100.0


                                                THE SCOTTISH MORTGAGE AND TRUST PLC
                                                   SUMMARISED CASH FLOW STATEMENT
                                                           (unaudited)


                                                               For the year ended          For the year ended
                                                                  31 March 2003               31 March 2002
                                                                £'000       £'000           £'000       £'000


NET CASH INFLOW FROM OPERATING ACTIVITIES                                  27,837                      29,925

NET CASH OUTFLOW FROM SERVICING OF FINANCE                                (14,287)                    (15,012)

TOTAL TAX PAID                                                             (1,009)                     (1,032)

FINANCIAL INVESTMENT
Acquisitions of investments                                  (347,442)                   (495,639)
Disposals of investments                                      371,734                     539,802
Realised currency loss                                           (323)                       (552)


NET CASH INFLOW FROM FINANCIAL INVESTMENT                                  23,969                      43,611

EQUITY DIVIDENDS PAID                                                     (19,460)                    (19,791)

NET CASH INFLOW BEFORE FINANCING                                           17,050                      37,701


FINANCING
Shares purchased for cancellation                             (31,414)                    (67,249)
Loans repaid                                                        -                     (79,350)
Loans drawn down                                                    -                      94,423
Realised currency loss on multi-currency loans                      -                         (26)

NET CASH OUTFLOW FROM FINANCING                                           (31,414)                    (52,202)

DECREASE IN CASH                                                          (14,364)                    (14,501)


RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

Decrease in cash in the period                                            (14,364)                    (14,501)
Increase in bank loans                                                          -                     (15,047)
Exchange movement                                                            (378)                      3,999
Other non-cash changes                                                         52                          42
MOVEMENT IN NET DEBT IN THE PERIOD                                        (14,690)                    (25,507)


NET DEBT AT 1 APRIL                                                      (188,620)                   (163,113)

NET DEBT AT 31 MARCH                                                     (203,310)                   (188,620)




                                       THE SCOTTISH MORTGAGE AND TRUST PLC



                                                      NOTES


1.   The financial statements for the year to 31 March 2003 have been prepared on the basis of the accounting
     policies set out in the Company's financial statements as at 31 March 2002.


                                                                   31 March 2003                 31 March 2002
                                                                           £'000                         £'000
2.   Income

     Income from investments and interest receivable                      33,727                        36,368
     Other income                                                            182                             9


3.   Return per ordinary share

     Revenue return                                                       22,597                        24,213
     Capital return                                                    (430,936)                      (96,592)


     Return per ordinary share is based on the above returns and on 304,134,148 (2002 - 320,181,479)
     ordinary shares, being the weighted average number of ordinary shares in issue during the year.


4.   The total cost of the dividend for the year is £19,730,000 (2002 - £19,453,000).  If approved the
     final dividend will be paid on 9 July 2003 to all shareholders on the register at the close of
     business on 13 June 2003.


5.   Loans and debentures include Y5,900 million drawn down under a three year multi-currency loan
     facility and Y4,400 million under a short term yen loan facility (2002 - Y5,900 million and Y4,400
     million, drawn down under the three year and the short term facilities).



     Net asset value per share with debenture stocks at market value was 268.0p (2002 - 409.4p).  The
     market value of debenture stocks at 31 March 2003 was £197,936,000 (2002- £189,398,000).


6.   At the Annual General Meeting on 4 July 2002 the Company renewed its authority to purchase shares in
     the market, in respect of 46,065,722 ordinary shares (equivalent to 14.99% of its issued share
     capital at that date).  In the year to 31 March 2003 a total of 11,179,573 (2002 - 19,533,200)
     ordinary shares with a nominal value of £2,795,000 were bought back at a total cost of £30,599,000
     (2002 - £69,469,000).  At 31 March 2003 the Company had authority to buy back a further 36,761,149
     ordinary shares.


7.   The financial information set out above does not constitute the Company's statutory accounts for the
     year ended 31 March 2003.  The financial information for 2002 is derived from the statutory accounts
     for 2002 which have been delivered to the Registrar of Companies.  The Auditors have reported on the
     2002 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 2003 are unaudited, however it is expected
     that the Auditors will issue an unqualified opinion. The statutory accounts for 2003 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.





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