Interim Results

Baillie Gifford Shin Nippon PLC
30 August 2002



                        BAILLIE GIFFORD SHIN NIPPON PLC

                   Results for the six months to 31 July 2002


Net Asset Value per share rose by 3.8% compared to an increase of 6.4% in its
comparative index in sterling terms (a weighted index of the Tokyo Stock
Exchange Second Section, TOPIX Small and JASDAQ OTC). Over the period the
discount narrowed to 13.0% giving a return to shareholders of 10.9% whilst
the main TOPIX index rose only 0.4% and most global markets saw substantial
falls.

  •  The Japanese economy is showing signs of recovery and smaller companies are 
     performing well. The Japanese economy has been recovering from the slowdown 
     experienced in 2001. Smaller companies continue to perform better 
     operationally than larger ones being able to take advantage of domestic
     growth opportunities whist at the same time continuing to cut costs.

  •  Portfolio Structure: The structure of the portfolio has remained stable 
     over the past six months with the largest overweight position being in the 
     service sector where there continues to be genuine growth opportunities. 
     The portfolio is also overweight in the non-bank financial and specialty
     retailer sectors and underweight in smokestack manufacturing.

     The outlook for smaller Japanese companies remains positive. Valuations in 
     Japan are now more in line with international markets than they have been 
     since the mid 1980s. Smaller companies sell on significant discounts to 
     their larger peers and possess the ability to grow sales, profits and cash
     flows throughout the economic cycle. The Managers are optimistic about 
     achieving good returns from this area of the Japanese stockmarket. 
     Reflecting this outlook, net gearing at the end of July stood at 19.1%.


29th August 2002

Baillie Gifford Shin Nippon PLC (Shin Nippon) aims to achieve capital growth
principally through investment in small Japanese companies which are believed to
have above average prospects for capital growth. The Company has total assets of
£50 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 over £20 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 since January 2002 have seen a rise of 3.8% in Shin Nippon's Net
Asset Value which compares to a 6.4% increase in sterling terms in the weighted
index of the Tokyo Stock Exchange Second Section, TOPIX Small and JASDAQ OTC.
Over the same period the broad TOPIX Index rose 0.4% in sterling terms. With the
discount on the shares narrowing over the six months from 18.6% to 13.0%, the
share price return to shareholders was 10.9%.

Japan has performed better than other global markets over these six months. Some
of the explanation for Japan's resilience may lie in the lack of new accounting
concerns which have blighted other markets: with a small number of mergers and
acquisitions having occurred in Japan, there are far fewer financial skeletons
in the cupboard and there are fewer worries over option dilution on Japanese
earnings with very few companies having any significant exposure. Small
companies have performed better than large ones. Many of them are immune to the
vagaries of the global economy and can benefit from domestic growth
opportunities whilst continuing to cut costs yielding robust profit growth in
the fiscal year to March 2002.

The Japanese economy has been recovering from the significant slowdown
experienced in 2001. Manufacturing companies reacted to the fall in demand by
cutting capacity significantly with a fall in excess of 4% in 2001. Whilst the
data has shown that Japan has passed a cyclical bottom, the pace of the recovery
is difficult to discern with much depending on whether the US avoids a double
dip recession. The service sector continues to show positive growth and accounts
for the largest sectoral weighting in Shin Nippon with many companies enjoying
secular growth independent of overall economic activity. Real consumption is
roughly flat when price deflation is factored in and there have been several
pieces of data suggesting that deflationary pressures are easing which could
have a significant effect on nominal profits.

The biggest area of disappointment over the last six months has been the
continued lack of reform under Prime Minister Koizumi with a delay to the
removal of deposit insurance and a watering down of proposals to privatise the
Post Office. There have, however, been several ad-hoc announcements which are
encouraging such as severing the link between taxes and spending in areas such
as roads and the announcement that the Housing Loan Corporation will be
abolished removing an anachronistic presence from the housing market. Companies,
on the other hand, continue to restructure their own operations and there
remains a significant opportunity for self-generated earnings growth through
cost cutting.

The structure of the portfolio has remained fairly stable over the course of the
last six months with the largest overweight position in the service sector where
we continue to find genuine growth stocks and other overweights in non-bank
financials and speciality retailers. We remain underweight in the smokestack
manufacturing sector where many Japanese companies are facing intense Asian
competition and in the food sector where deflation is still intense. That said,
we have been increasing the cyclicality of the portfolio with selected additions
such as Hokuetsu Paper where we believe there is a significant industry
improvement and Kurita Water - a water purification company - which should
benefit from the move to tighter environmental regulations.

In terms of the stockmarket, valuations in Japan are now more in line with
international markets than they have been since the mid 1980s especially when
one takes into account potential options dilution in other markets. Small
companies in Japan continue to sell on significant discounts to their larger
peers. Many such companies possess the valuable ability to grow their sales,
profits and cash flows throughout the economic cycle and we are optimistic about
continued good returns from this area of the Japanese stockmarket. Reflecting
this outlook, net gearing at the end of July stood at 19.1%.

The following is an interim statement for the six months ended 31 July 2002
which has been neither reviewed nor audited by the auditors. This statement is
being printed and will be sent to all shareholders on 12 September 2002. 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       for the six months ended           for the year ended

                                  31 July 2002                   31 July 2001                   31 January 2002
                           Revenue   Capital    Total     Revenue    Capital    Total    Revenue   Capital     Total
                            £'000     £'000     £'000      £'000      £'000     £'000     £'000     £'000      £'000
Realised (losses)/ gains
on investments                   -    (1,862)   (1,862)          -       872        872        -      (378)      (378)  
                             
Unrealised gains/(losses)
on investments                   -     3,466      3,466          -      (470)     (470)        -    (10,755)   (10,755)
Currency gains/(losses)          -         2          2          -        (4)       (4)        -         391       391
(note 1)
Income                         244         -        244        319         -       319       451           -       451
Investment management fee     (208)        -      (208)       (263)        -      (263)     (473)          -      (473)
Other administrative           (63)        -       (63)        (90)        -       (90)     (168)          -      (168)
expenses
Net return before finance
costs and taxation             (27)    1,606      1,579        (34)      398       364      (190)   (10,742)   (10,932)
Finance costs of              (107)        -      (107)       (107)        -      (107)     (214)          -      (214)
borrowings
Return on ordinary
activities before             (134)     1,606     1,472       (141)      398       257      (404)   (10,742)   (11,146)
taxation
Tax on ordinary                (36)         -      (36)        (32)        -       (32)      (51)          -       (51)
activities
Return on ordinary
activities after taxation     (170)     1,606     1,436       (173)      398        225     (455)   (10,742)   (11,197)
Transfer (from)/to
reserves                      (170)     1,606     1,436       (173)      398        225     (455)   (10,742)   (11,197)
Return per ordinary share                                                                
                            (0.55p)     5.20p     4.65p     (0.55p)     1.27p     0.72p   (1.46p)   (34.37p)   (35.83p)
(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 2002

                                  (unaudited)


                                                                        31 July 2002     31 July 2001   31 January 2002
                                                                               £'000            £'000             £'000
NET ASSETS
Listed Japanese equities                                                       34,504          42,282            32,693
Unlisted equities - traded on the OTC/ Nasdaq                                  12,262          11,101             9,819
Japan markets
Unlisted equities - Directors' valuation                                         694            1,451             1,085
Total fixed asset investments                                                 47,460           54,834            43,597
Net liquid assets                                                              2,842            5,795             4,629
Total assets (before deduction of bank loans)                                 50,302           60,629            48,226
Bank loans (note 4)                                                          (10,690)        (10,675)           (10,050)
                                                                              39,612           49,954            38,176
CAPITAL AND RESERVES
Called-up share capital                                                        3,090            3,125             3,090
Capital reserves                                                              40,185           50,040            38,579
Revenue reserve                                                               (3,663)         (3,211)            (3,493)
EQUITY SHAREHOLDERS' FUNDS                                                    39,612           49,954            38,176
NET ASSET VALUE PER ORDINARY SHARE (note 5)                                    128.2p          159.9p             123.5p
Ordinary shares in issue (note 6)                                          30,900,492      31,250,492         30,900,492



                          BAILLIE GIFFORD SHIN NIPPON PLC
                           SUMMARISED CASH FLOW STATEMENT

                                    (unaudited)

                                                                                     
                                                                     Six months       Six months to             Year to 
                                                                to 31 July 2002        31 July 2001     31 January 2002 
                                                                          £'000               £'000               £'000 
NET CASH OUTFLOW FROM OPERATING ACTIVITIES                                 (52)                (80)               (226)
NET CASH OUTFLOW FROM SERVICING OF FINANCE                                (126)               (133)               (224)
TOTAL TAX PAID                                                             (34)                (29)                (51)
FINANCIAL INVESTMENT
Acquisitions of investments                                            (10,693)            (14,621)            (29,046)
Disposals of investments                                                 9,098               8,769               22,379
Realised currency gains/(losses)                                            98                (512)               (742)
NET CASH OUTFLOW FROM FINANCIAL INVESTMENT
                                                                        (1,497)             (6,364)             (7,409)
NET CASH OUTFLOW BEFORE FINANCING                                       (1,709)             (6,606)             (7,910)
FINANCING
Net inflow from bank loans                                                  544                  -                   -
Shares purchased for cancellation                                             -               (597)               (953)
NET CASH INFLOW/(OUTFLOW) FROM FINANCING                                    544               (597)               (953)
DECREASE IN CASH                                                        (1,165)             (7,203)             (8,863)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Decrease in cash in the period                                          (1,165)             (7,203)             (8,863)
Net inflow from bank loans                                                (544)                  -                   -
Exchange movement on bank loans                                           (96)                 508                1,133
MOVEMENT IN NET DEBT IN THE PERIOD                                      (1,805)             (6,695)             (7,730)
NET (DEBT)/FUNDS AT START OF PERIOD                                    (5,753)               1,977               1,977
NET DEBT AT END OF PERIOD                                               (7,558)             (4,718)             (5,753)




                      BAILLIE GIFFORD SHIN NIPPON PLC

                      TWENTY LARGEST EQUITY HOLDINGS

                               at 31 July 2002

                                         Business
                                                                                              Market value    % of total
      Name                                                                                           £'000        assets
                                                                                                    
      Kose                               Cosmetics                                                   1,643           3.2
      USS Company                        Second-hand cars                                            1,543           3.1
*     Cawachi                            Drugstore chain                                             1,455           2.9
      Nissin                             Consumer loans and business finance                         1,437           2.9
      Yamada Denki                       Consumer electronics retailer                               1,397           2.8
*     Kappa Create                       Revolving sushi restaurants                                 1,354           2.7
*     Goodwill Group                     Nursing care and temporary workers                          1,317           2.6
*     Fuji Seal                          Packaging and shrink-wrap materials                         1,279           2.5
      Aeon Credit Service                Credit card company                                         1,270           2.5
      Bandai                             Makers of toys, cartoons and character goods                1,173           2.3
      Hokuto                             Mushroom cultivator                                         1,103           2.2
      Eneserve Corporation               Alternative power generation                                1,084           2.2
      Koei                               Games software                                              1,078           2.1
*     LeoPalace21                        Condominium developer and renter                            1,035           2.0
      Takuma                             Waste incinerator manufacturer                                983           2.0
      Daiei OMC                          Credit card company                                           909           1.8
*     Nissin Healthcare Food             Food catering for hospitals                                   889           1.8
      Sumisho Lease                      Specialist leasing operator                                   884           1.8
      C Two Network                      Supermarket chain                                             884           1.7
      Taiyo Ink Manufacturing            Maker of specialist inks                                      864           1.7
                                                                                                    23,581          46.8

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


                        BAILLIE GIFFORD SHIN NIPPON PLC


                                     NOTES
                                                                  31 July 2002         31 July 2001      31 January 2002
                                                                         £'000                £'000                £'000
1.     Currency gains/(losses)
       Realised exchange differences                                       64                 (512)                (742)
       Movement in unrealised exchange differences                        (62)                 508                1,133
                                                                            2                   (4)                 391
2.     No interim dividend will be declared.

3.     Return per ordinary share
       Revenue return                                                    (170)                (173)                (455)
       Capital return                                                   1,606                  398              (10,742)

       Return per ordinary share is based on the above totals of revenue and 
       capital and on 30,900,492 (31 July 2001 - 31,395,154; 31 January 2002 - 
       31,253,095) ordinary shares, being the weighted average number of 
       ordinary shares in issue during the period.

4.     Bank loans of £10.7 million (Y2.0 billion) have been drawn down under yen 
       loan facilities which are repayable between August 2004 and July 2007 
       (31 July 2001 - £10.7 million (Y1.9 billion); 31 January 2002 - £10.1 
       million (Y1.9 billion)).

5.     There was no dilution to net asset value per share at any date. The 
       2,517,896 outstanding warrants at 31 July 2002 are exercisable at 200p in 
       any of the remaining years 2003 to 2005. No warrants were exercised 
       during the period.

6.     The Company's authority to buy back its own ordinary shares was renewed 
       at the AGM in May 2002 in respect of 4,631,983 ordinary shares 
       (equivalent to 14.99% of its share capital at that date). No ordinary 
       shares have been bought back since the year end and, therefore, at 31 
       July 2002 the Company's authority to buy back its own shares remained 
       unchanged at 4,631,983 ordinary shares.

7.     The financial information for the year ended 31 January 2002 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 29 August 2002.


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