Interim Results - 6 Months to 29 February 2000

Baillie Gifford Japan Trust PLC 6 April 2000 The Baillie Gifford Japan Trust PLC Results for the six months to 29 February 2000 The Baillie Gifford Japan Trust PLC, aims to pursue long term capital growth through investment in medium and smaller Japanese companies. The Company is managed by Baillie Gifford & Co., the leading Edinburgh based fund management group with around £22 billion funds under management and advice. Salient points: NAV up 41.4% to 1,447p per share compared with gains of 19.9% in TOPIX and 28.3% in the Tokyo Stock Exchange Second Section (sterling adjusted). Company benefits from significant New Japan holdings. The Company has had large holdings in the telecom, Internet and technology companies which have risen strongly over the period Japanese economy on a recovery path. Despite two quarters of negative GDP growth, the managers believe the Japanese economy is recovering, with the expansion likely to accelerate later this year. Net gearing 10.6%. With positive economic news and profits rising the Company continues to use borrowed funds for further investment. The Company currently has no currency hedging. Supporters of the AITC's its campaign. Baillie Gifford Japan Trust PLC has contributed to its and is increasing its marketing to derive maximum spin-off advantage. Increased enquiries have already been noted. For further information please contact: Sarah Whitley, Manager, The Baillie Gifford Japan Trust PLC 0131 222 4000 Mike Lord, Director, Broadgate Marketing, 0171 726 6111 Baillie Gifford & Co. is regulated by IMRO. THE BAILLIE GIFFORD JAPAN TRUST PLC INTERIM REPORT Over the past six months the net asset value per share has risen by 41.4% which compares with gains of 19.9% in TOPIX and 28.3% in the Tokyo Stock Exchange Second Section Index, both indices adjusted for the 1.7% gain in the yen. The market has risen strongly over the period, particularly in the telecom, Internet and technology companies, referred to as New Japan companies. This has helped the performance of the Company considerably as we have had large holdings in these sectors. The split in the market between the old and the new companies mirrors, to some extent, the underlying differences in the economic fundamentals. According to the GDP figures released recently Japan is back in recession, with two negative quarters of growth. However economy-wide profits rose sharply during the period and we believe that the economy is actually on a gradual recovery path, with the expansion likely to accelerate later in the year. Japan is likely to spend significantly more on IT related capital spending and this factor alone will add to growth. So far economic data for the first quarter of 2000 shows further strong expansion in the new economy areas. There has been a change of Prime Minister in Japan, with Mr Mori replacing Mr Obuchi who is seriously ill, but with most of the cabinet remaining in place, major policy changes are unlikely. During March we reduced our holdings in Internet stocks significantly and there has since been bad news on a few individual companies which has led to sharp price falls. However, we believe that the fundamentals for the new economy overall remain strong, and we have reinvested the proceeds in other technology areas, mainly equipment suppliers. With news flows on the economy improving, profits rising and interest in the market by individuals increasing we continue to use borrowed funds with net gearing currently standing at 10.6%. Our yen currency exposure remains unhedged. By order of the Board Baillie Gifford & Co. 5 April 2000 The following is an interim statement for the six months ended 29 February 2000 which has been neither reviewed nor audited by the auditors. This statement is being printed and will be sent to all shareholders on 19 April 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. THE BAILLIE GIFFORD JAPAN TRUST PLC STATEMENT OF TOTAL RETURN (unaudited and incorporating the revenue account*) for the six months ended 29 February 2000 Revenue Capital Total £'000 £'000 £'000 Realised gains/(losses) on investments - 22,060 22,060 Unrealised gains on investments - 33,348 33,348 Currency losses (note 1) - (491) (491) Income 334 - 334 Investment management fee (918) - (918) Other administrative expenses (123) - (123) Net return before finance costs and taxation (707) 54,917 54,210 Finance costs of borrowings (172) - (172) Return on ordinary activities before taxation (879) 54,917 54,038 Tax on ordinary activities (50) - (50) Return on ordinary activities after taxation (929) 54,917 53,988 Transfer (from)/to reserves (929) 54,917 53,988 Return per ordinary share (7.29p) 430.72p 423.43p (note 3) for the six months ended 28 February 1999 Revenue Capital Total £'000 £'000 £'000 Realised gains/(losses) on investments - (1,272) (1,272) Unrealised gains on investments - 17,007 17,007 Currency losses (note 1) - (2,339) (2,339) Income 752 - 752 Investment management fee (376) - (376) Other administrative expenses (136) - (136) Net return before finance costs and taxation 240 13,396 13,636 Finance costs of borrowings (108) - (108) Return on ordinary activities before taxation 132 13,396 13,528 Tax on ordinary activities (36) - (36) Return on ordinary activities after taxation 96 13,396 13,492 Transfer (from)/to reserves 96 13,396 13,492 Return per ordinary share 0.73p 101.48p 102.21p (note 3) for the year ended 31 August 1999 Revenue Capital Total £'000 £'000 £'000 Realised gains/(losses) on investments - 3,356 3,356 Unrealised gains on investments - 75,737 75,737 Currency losses (note 1) - (4,009) (4,009) Income 1,149 - 1,149 Investment management fee (933) - (933) Other administrative expenses (213) - (213) Net return before finance costs and taxation 3 75,084 75,087 Finance costs of borrowings (243) - (243) Return on ordinary activities before taxation (240) 75,084 74,844 Tax on ordinary activities (85) - (85) Return on ordinary activities after taxation (325) 75,084 74,759 Transfer (from)/to reserves (325) 75,084 74,759 Return per ordinary share (2.47p) 571.16p 568.69p (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. THE BAILLIE GIFFORD JAPAN TRUST PLC SUMMARISED BALANCE SHEET at 29 February 2000 (unaudited) 29 February 31 August 2000 1999 £'000 £'000 NET ASSETS Listed overseas equities 190,467 139,230 Unlisted equities - traded on the 17,578 15,386 Japanese OTC market Total fixed asset investments (note 4) 208,045 154,616 Net liquid assets/(liabilities) 89 (857) Total assets (before deduction of bank loans) 208,134 153,759 Bank loans (note 5) (23,642) (23,255) 184,492 130,504 CAPITAL AND RESERVES Called-up share capital 3,188 3,188 Capital reserves 185,896 130,979 Revenue reserve (4,592) (3,663) EQUITY SHAREHOLDERS' FUNDS 184,492 130,504 NET ASSET VALUE PER ORDINARY SHARE 1,447.0p 1,023.6p Ordinary shares in issue (note 6) 12,750,000 12,750,000 THE BAILLIE GIFFORD JAPAN TRUST PLC SUMMARISED CASH FLOW STATEMENT (unaudited) Six months to Year to 29 February 31 August 2000 1999 £'000 £'000 £'000 £'000 NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (620) 465 NET CASH OUTFLOW FROM SERVICING OF (126) (269) FINANCE TOTAL TAX REPAID/(PAID) 56 (184) FINANCIAL INVESTMENT Acquisitions of investments (33,358) (48,812) Disposals of investments 38,578 39,136 Realised currency (losses)/gains (533) 390 NET CASH INFLOW/(OUTFLOW) FROM FINANCIAL INVESTMENT 4,687 (9,286) NET CASH INFLOW/(OUTFLOW) BEFORE 3,997 (9,274) FINANCING FINANCING Net proceeds from bank loans drawn down 12 9,968 Shares repurchased (881) (2,650) NET CASH (OUTFLOW)/INFLOW FROM FINANCING (869) 7,318 INCREASE/(DECREASE) IN CASH 3,128 (1,956) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Increase/(decrease) in cash in period 3,128 (1,956) Net cash received from bank loans (12) (9,968) Exchange movement on bank loans (375) (3,982) MOVEMENT IN NET DEBT 2,741 (15,906) NET DEBT AT 1 SEPTEMBER 1999 (22,734) (6,828) NET DEBT AT 29 FEBRUARY 2000 (19,993) (22,734) THE BAILLIE GIFFORD JAPAN TRUST PLC TWENTY LARGEST EQUITY HOLDINGS at 29 February 2000 Name Business Market % of value total £'000 assets Hikari Tsushin Telecoms and Internet 13,618 6.5 NTT DoCoMo Mobile telecommunications 10,218 4.9 Softbank Diverse Internet business 10,149 4.9 Taiyo Yuden Capacitors and electronic 7,421 3.6 parts * H.I.S. Discount travel agency 7,192 3.5 Nippon Broadcasting System Radio and TV broadcasting 6,353 3.1 Rohm Specialist semiconductors 5,756 2.8 Benesse Education by correspondence 5,709 2.7 Matsushita Communications Mobile phone manufacturer 5,684 2.7 Itochu Tech-Science Internet infrastructure provider 5,296 2.5 Promise Consumer finance 4,976 2.4 Capcom Games software 4,942 2.4 Kobayashi Pharmaceuticals Household products 4,909 2.4 Takefuji Consumer finance 4,857 2.3 Nichicon Capacitors 4,700 2.3 Fast Retailing Casual wear retailer 4,505 2.2 Japan Telecom Telecom operator 4,489 2.2 Sumitomo Bakelite Specialist electronic materials 4,325 2.1 * OBIC Business Consultants Accounting software 4,100 2.0 World Women's apparel manufacturer 4,062 2.0 123,261 59.5 * Denotes holding traded on the Japanese OTC market. THE BAILLIE GIFFORD JAPAN TRUST PLC NOTES 29 February 28 February 31 August 2000 1999 1999 £'000 £'000 £'000 1. Currency losses Realised exchange differences (104) 203 (69) Movement in unrealised exchange differences (387) (2,542) (3,940) (491) (2,339) (4,009) 2. No interim dividend will be declared. 3. Return per ordinary share Revenue return (929) 96 (325) Capital return 54,917 13,396 75,084 Return per ordinary share is based on the above totals of revenue and capital and on 12,750,000 (28 February 1999 - 13,200,000; 31 August 1999 - 13,146,027) ordinary shares, being the weighted average number of ordinary shares in issue during the period. 4. Total fixed asset investments include £5,647,000 (31 August 1999 - £5,334,000) of convertible issues. 5. Bank loans of £23.6 million (YEN4.1 billion) have been drawn down under yen loan facilities which are repayable between November 2000 and November 2001 (31 August 1999 - £23.3 million (YEN4.1 billion)). 6. At the AGM in November 1999 authority was granted to the Company to buy back 1,911,225 ordinary shares (equivalent to 14.99% of its issued share capital at that date). No ordinary shares were bought back in the period under review and, therefore, at 29 February 2000 the Company's authority to buy back ordinary shares remained unchanged at 1,911,225 shares. During the year to 31 August 1999 450,000 ordinary shares were bought back in accordance with the authority granted at the AGM in November 1998. 7. The financial information for the year ended 31 August 1999 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 in calculating the interim figures are consistent with those used in the Annual Financial Statements. The Interim Report was approved by the Board on 5 April 2000.

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