Final Results
Scottish Mortgage Inv Tst PLC
27 April 2006
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
Results for the year to 31 March 2006
The continuing success of Scottish Mortgage's global investment approach was
demonstrated by a 46% increase in net asset value(1) per share over the year.
The share price rose 57%, handsomely outperforming the benchmark index(2) which
increased 26%.
• Continuing success of the Global Approach.
The Chairman, Sir Donald MacKay commented:
'These outstanding results reflect the continuing success of the truly global
approach embraced by the Managers three years ago. The approach acknowledges
that where a company is listed is of secondary importance compared to where it
actually carries out its business. Scottish Mortgage allocates funds to
companies not to countries or indices. This approach allows the Managers to
have the courage of their convictions and to think long term.'
• Longer Term View
Focus is to a considerable extent on the 3 to 5 year record in line with the
long term investment horizon. The table below shows share price performance
against the benchmark and the average of other global funds over one and three
years.
Total Return(3) to 31 March 2006
1 year 3 years
Scottish Mortgage share price 60% 138%
Benchmark 30% 85%
AITC Global Growth Average(4) 41% 110%
IMA Global Growth Average. (5) 32% 85%
Past performance is no guarantee of future performance.
• 24th successive year of dividend growth in excess of inflation
The proposed total dividend for the year of 8.50p is 15.6% higher than the
previous year and compares to an inflation rate of 2.4% as measured by the
Retail Price Index. Earnings per share were 8.82p (2005 - 7.37p). This reflects
a strong income stream. The Board will continue to increase dividends ahead of
inflation.
• Second half
In the second half of the year, net asset value1 rose by 18.5% compared to a
11.6% rise in the benchmark. A final dividend of 4.65p is being recommended.
• Outlook
The Managers commented that at the moment they were finding a good supply of
suitable investment opportunities in a number of different areas which is a
positive indicator.
Scottish Mortgage Investment Trust PLC is a low cost investment trust that aims
to maximise total returns from a focused and actively managed portfolio of
equities. It invests globally, with a core exposure to the UK, looking for
strong businesses with above-average returns. The trust has total assets of
£2.0 billion (before deduction of debentures, long and short-term borrowings of
£232 million).
Scottish Mortgage is managed by Baillie Gifford & Co, the Edinburgh based fund
management group with over £47 billion under management and advice as at 26
April 2006.
Scottish Mortgage Investment Trust PLC - Your low cost choice for global
investment.
27 April 2006
- ends -
For further information please contact:
Robert O'Riordan, 0131 275 3181
Baillie Gifford & Co 07730 412007
Mike Lord, Director,
Broadgate Marketing 020 7726 6111
07831 401311
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
Chairman's Statement
Scottish Mortgage has returned outstanding results this year. The share price
rose by 57% ending the year at an all time high while net asset value per share
rose by 46%. By comparison, the benchmark index (50% FTSE All-Share Index and
50% FTSE World Ex UK in sterling terms) rose by 26%. These results reflect the
continuing success of the truly global stock selection approach embraced
enthusiastically by the Managers three years ago.
Market Background
Stock markets were strong during the year largely on the back of good results
from a broad range of companies. The rises in market values should be seen in
the context of a continuation of the recovery period: it is only now that old
peaks are being reached in many markets. While interest rates have risen in
some countries, they are generally still relatively low. Rising inflation does
not appear to be an issue of major concern at the moment and economic growth at
present is partly fuelled by the increase in wealth and activity in large
countries, such as China and India, whose economies are growing rapidly.
Investment Approach
A benign global economic background will help the Managers to achieve the
shareholders' requirement for growth. However, deliberations about the progress
of economies will not create value for shareholders, this depends on the
Managers' ability to choose companies which will flourish over the longer term.
It was with this view in mind that our investment approach has evolved over the
past three years. To reiterate, we have encouraged the Managers to:
1. Take a global view. The country where a company is listed on a Stock
Exchange is of secondary importance compared with where it actually carries out
its business. Customers and businesses are becoming more and more global in
their reach. It is important not to limit investment thinking and decisions by
allocating funds to countries and not to companies.
2. Have the courage of their convictions. The choice and size of the
investments should mirror the Managers' view of the companies' prospects not
their position in any index. Scottish Mortgage is an active fund and not a
passive index tracker. The portfolio has progressively become more concentrated
and there are now 86 equity holdings as opposed to 129 three years ago. The
floor is likely to be around 70 to 80 companies.
3. Think long term. The Board expects holdings to be bought and held and
not to be traded frenetically. An aspiration is to have a typical holding period
of at least five years but preferably even longer.
Three Year Performance
The three year record is worthy of examination as it is over this period that
the global approach has been honed. The table below shows the performance of
Scottish Mortgage shares against its Benchmark and the average of other global
funds over one and three years.
Total Return(6) to 31 March 2006
1 year 3 years
Scottish Mortgage share price 60% 138%
Benchmark 30% 85%
AITC Global Growth Average(7) 41% 110%
IMA Global Growth Average. (8) 32% 85%
Past performance is no guarantee of future performance.
However, in its regular assessments, the Board is now focusing to a greater
extent on the three to five year performance record. This is in line with the
long term investment horizon adopted.
Dividend and Earnings
Earnings per share were stronger than anticipated, rising to a figure of 8.82p
per share (2004/2005 - 7.37p). The Company has benefited from substantial
dividend growth from overseas equities, particularly from those investments in
the emerging markets. As a result, a final dividend of 4.65p has been
recommended which, if approved, will make for a total of 8.50p, an increase of
15.6% compared to the previous year. During the year the inflation rate was 2.4%
as measured by the Retail Price Index. It is the Board's intention to continue
to increase the dividend at a rate in excess of inflation. Revenue reserves
stand at around 20p per share and, if required, these will be used to smooth the
rate of growth should there be an earnings shortfall in future years.
Discount, Buyback Policy and Treasury Shares
The discount narrowed from 16.5% to 10.7%. The Board is very conscious of the
fact that it is the share price performance that is of primary interest to
investors and to this end a statement about the discount policy has been
released along with these results.
The Board believes that performance is the key driver of discounts over the long
term. The Directors realise that discount volatility is not in the interests of
most shareholders and that the threat of such volatility could be a deterrent to
attracting new shareholders. While a discount target is not being set, as has
been done by other large trusts, the consideration of future buybacks will be
made with reference to Scottish Mortgage's discount relative to those of its
peer group. The Directors also believe that superior performance justifies a
narrow discount.
During the year, a total of 7,530,000 shares were bought back at a total cost of
£30.26m which increased net asset value per share by 0.44%. It is a source of
some frustration that during this period of good performance greater demand for
the Company's shares has not been encountered, thus necessitating the need to
buy back shares. The Managers are aware of this frustration and are devoting
considerable thought and resources to the marketing of Scottish Mortgage.
The Board is seeking powers at the AGM to be able to take into treasury any
shares that have been bought back for subsequent reissue but only at a premium
to net asset value. This ensures that the interests of existing shareholders
will not be diluted.
Balance Sheet
During the year borrowings have been deployed to good effect as markets have
risen. The Company has short term borrowings of Y5.9bn (£ equivalent £29m) and
€73m (£ equivalent £51m) in place. The latter replaces a $60m facility that has
been repaid. The level of gearing into equity markets at 111% or 11% of
shareholders' funds(9) is not excessive and will be adjusted as circumstances
dictate.
Costs
I am happy to report that the Total Expense Ratio (TER) remains at 0.52%. An
advantage of funds of the size of Scottish Mortgage is the dilution of costs and
our low TER (in comparison to other investment trusts and open ended funds) is a
further considerable attraction for shareholders and potential investors. The
beneficial effect of lower costs on compounded returns over long periods of time
can be considerable.
Board and AGM
The AGM will be held on Wednesday 28 June 2006 in Edinburgh. I do hope you will
come and meet the Board. The Managers will make a short presentation and there
will be an opportunity for questions.
Outlook
I am happy to report that the Managers are finding no shortage of suitable
investment opportunities at the moment which is a positive indicator.
The Board is very pleased with the Managers' exceptional performance over the
past three years which is the result of a combination of hard work and sound
thinking. Achieving sustainable long term growth through direct investment in
equities on a global basis, remains our highest priority. I consider that
Scottish Mortgage is very well placed to deliver these returns to shareholders
over time.
Sir Donald MacKay
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
The following is the unaudited preliminary statement for the year to 31 March
2006 which was approved by the Board on 26 April 2006. The Board of Scottish
Mortgage Investment Trust PLC is recommending to the Annual General Meeting of
the Company to be held on 28 June 2006 the payment of a final dividend of 4.65p
(5.05p last year) per ordinary share making 8.50p (7.35p last year) for the year
ended 31 March 2006.
INCOME STATEMENT
(unaudited*)
For the year ended For the year ended
31 March 2006 31 March 2005
Revenue Capital Total Revenue Capital Total
Restated+ Restated+
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 554,074 554,074 - 116,181 116,181
Currency (losses)/gains - (4,098) (4,098) - 1,534 1,534
Income (note 2) 41,456 - 41,456 35,456 - 35,456
Investment management fee (3,062) (3,062) (6,124) (2,385) (2,385) (4,770)
Other administrative expenses (1,714) - (1,714) (1,382) - (1,382)
Net return before finance costs
and taxation 36,680 546,914 583,594 31,689 115,330 147,019
Finance costs of borrowings (7,722) (7,722) (15,444) (7,385) (7,385) (14,770)
Return on ordinary activities
before taxation 28,958 539,192 568,150 24,304 107,945 132,249
Tax on ordinary activities (3,220) 2,057 (1,163) (2,495) 392 (2,103)
Return on ordinary activities
after taxation 25,738 541,249 566,987 21,809 108,337 130,146
Return per ordinary share
(note 3) 8.82p 185.58p 194.40p 7.37p 36.58p 43.95p
+ Various changes in accounting policies, as described in note 1, have had the
cumulative effect of increasing reported net assets by £13,185,000 for the
year ended 31 March 2005.
* The total 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.
A Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the above statement.
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
SUMMARISED BALANCE SHEET
at 31 March 2006
(unaudited)
31 March 31 March
2006 2005
Restated+
£'000 £'000
FIXED ASSETS
Investments held at fair value 1,956,580 1,448,352
CURRENT ASSETS
Debtors 9,922 9,293
Cash and short term deposits 22,650 10,892
32,572 20,185
CREDITORS
Amounts falling due within one year (note 5) (54,918) (44,586)
NET CURRENT LIABILITIES (22,346) (24,401)
TOTAL ASSETS LESS CURRENT LIABILITIES 1,934,234 1,423,951
CREDITORS
Amounts falling due after more than one year (note 5) (180,881) (181,330)
1,753,353 1,242,621
CAPITAL AND RESERVES
Called-up share capital 72,019 73,901
Capital redemption reserve 18,161 16,279
Capital reserve - realised 892,063 773,424
Capital reserve - unrealised 702,315 309,966
Revenue reserve 68,795 69,051
EQUITY SHAREHOLDERS' FUNDS 1,753,353 1,242,621
NET ASSET VALUE PER ORDINARY SHARE 584.1p 398.8p
(After deducting debentures at market value)
NET ASSET VALUE PER ORDINARY SHARE 610.9p 422.6p
(After deducting debentures at par)
+ See note 1.
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
(unaudited)
Share Capital Capital Capital Revenue Total
capital redemption reserve - reserve - reserve shareholders'
reserve realised unrealised funds
£'000 £'000 £'000 £'000 £'000 £'000
Shareholders' funds at
1 April 2005 as previously
reported 73,901 16,279 773,424 311,709 54,123 1,229,436
Prior year adjustments:
Revaluation of investments
at bid prices - - - (1,743) - (1,743)
Reversal of provision of
final dividend - - - - 14,928 14,928
Shareholders' funds at
1 April 2005 restated 73,901 16,279 773,424 309,966 69,051 1,242,621
Return on ordinary
activities after taxation - - 148,900 392,349 25,738 566,987
Shares purchased for
cancellation (1,882) 1,882 (30,261) - - (30,261)
Dividends paid during the
year - - - - (25,994) (25,994)
Shareholders' funds at 31
March 2006 72,019 18,161 892,063 702,315 68,795 1,753,353
Share Capital Capital Capital Revenue Total
capital redemption reserve - reserve - reserve shareholders'
reserve realised unrealised funds
£'000 £'000 £'000 £'000 £'000 £'000
Shareholders' funds at
1 April 2004 as previously
reported 74,326 15,854 777,982 205,578 54,041 1,127,781
Prior year adjustments:
Revaluation of investments
at bid prices - - - (3,599) - (3,599)
Reversal of provision of
final dividend - - - - 1,189 1,189
Shareholders' funds at
1 April 2004 restated 74,326 15,854 777,982 201,979 55,230 1,125,371
Return on ordinary
activities after taxation - - 350 107,987 21,809 130,146
Shares purchased for
cancellation (425) 425 (4,908) - - (4,908)
Dividends paid during the
year - - - - (7,988) (7,988)
Shareholders' funds at 31
March 2005 73,901 16,279 773,424 309,966 69,051 1,242,621
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
SUMMARISED CASH FLOW STATEMENT
(unaudited)
For the For the
year ended year ended
31 March 2006 31 March 2005
£'000 £'000
Net cash inflow from operating activities 32,386 30,443
Servicing of finance (15,655) (14,766)
Total tax paid (1,150) (1,024)
Net cash inflow from financial investment 37,326 14,424
Equity dividends paid (25,994) (21,069)
NET CASH INFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING 26,913 8,008
Net cash inflow from use of liquid resources 359 107
Shares purchased for cancellation (30,261) (4,908)
Net cash inflow/(outflow) from bank loans 14,747 (12,709)
INCREASE/(DECREASE) IN CASH 11,758 (9,502)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Increase/(decrease) in cash in the period 11,758 (9,502)
(Increase)/decrease in bank loans (14,747) 12,709
Exchange movement on bank loans (4,064) 1,695
Increase in short term deposits (359) (107)
Exchange movement on short term deposits 359 107
Other non-cash changes 85 73
MOVEMENT IN NET DEBT IN THE YEAR (6,968) 4,975
NET DEBT AT 1 APRIL (202,191) (207,166)
NET DEBT AT 31 MARCH (209,159) (202,191)
RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND TAXATION TO NET
CASH INFLOW FROM OPERATING ACTIVITIES
Net return on ordinary activities before finance costs and taxation 583,594 147,019
Gains on investments (549,976) (117,715)
Amortisation of fixed income book cost 48 -
Changes in debtors and creditors (1,280) 1,139
NET CASH INFLOW FROM OPERATING ACTIVITIES 32,386 30,443
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
DISTRIBUTION OF ASSETS
at 31 March 2006
(unaudited)
31 March 2006 31 March 2005
Restated+
% %
Equities: United Kingdom 35.0 41.7
Continental Europe 10.5 9.7
North America 24.5 21.5
Japan 3.9 4.8
Asia Pacific 8.8 9.0
Emerging Markets 12.6 7.7
Total equities 95.3 94.4
United Kingdom bonds 1.7 3.9
Overseas bonds 1.6 1.2
Net liquid assets 1.4 0.5
Total assets (before deduction of debentures, long and short-term 100.0 100.0
borrowings)
+ See note 1.
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
THIRTY LARGEST EQUITY HOLDINGS AND EQUITY PERFORMANCE
at 31 March 2006
Market
value 31
March 2005 Performance +
Market £'000 % of
value total
Name Business £'000 assets Absolute Relative
% %
Petrobras Oil company 69,950 31,127 3.5 136.08 81.99
Gazprom Gas producer 65,338 19,412 3.3 198.56 130.14
Royal Bank of Scotland Banking 52,444 42,555 2.6 15.73 (10.79)
Samsung Electronics Electronics manufacturer 52,063 31,119 2.6 43.85 10.89
SAP Business software 48,269 24,030 2.4 46.87 13.22
Barclays Banking 45,701 36,737 2.3 29.87 0.11
Atlas Copco Engineering 44,919 23,581 2.3 108.34 60.60
British American Tobacco Tobacco 44,259 29,607 2.2 54.76 19.29
eBay Internet trading company 41,058 - 2.1 (1.35)* (16.12)*
GlaxoSmithKline Pharmaceuticals 40,635 32,751 2.0 28.02 (1.32)
Omnicom Advertising agency 38,395 20,411 1.9 3.41 (20.28)
Man Group Hedge fund manager and asset 36,975 20,580 1.9 84.08 41.89
gatherer
EOG Resources Gas and oil exploration and 36,693 22,783 1.8 61.28 24.32
production
Rio Tinto Diversified mining 35,064 13,664 1.8 77.45 36.79
Wolseley Builders' merchant 34,619 16,886 1.7 29.32 (0.32)
Canon Printers, copiers and cameras 33,876 10,962 1.7 35.70 4.61
CVRD Iron ore mining 32,085 14,895 1.6 83.14 41.17
Golden West Financial Savings and loans 31,306 25,588 1.6 22.71 (5.41)
Northern Rock Mortgage banking 30,784 20,631 1.6 54.42 19.03
Sandvik Engineering 30,268 16,557 1.5 57.23 21.20
Carnival Cruise ship operator 28,945 15,138 1.5 (1.43)* (24.02)*
The Hershey Company Confectionery 28,427 15,609 1.4 (5.00) (26.77)
Teva Pharmaceuticals Generic drugs manufacturer 28,301 19,554 1.4 45.67 12.29
Moody's Bond rating agency 27,351 20,819 1.4 93.76 49.36
Standard Chartered Banking 26,506 17,612 1.3 54.56 19.14
Reed Elseveier Publisher 25,975 - 1.3 10.83* (16.86)*
ConocoPhillips Integrated oil company 25,480 19,962 1.3 30.02 0.22
Vodafone Mobile telecommunication 25,252 66,486 1.3 (11.28) (31.61)
services
Porsche Automobiles 25,139 12,808 1.3 43.60 10.69
Microsoft Software products 25,117 10,165 1.3 23.81 (4.56)
1,111,194 652,029 55.9
+ Absolute and relative performance has been calculated over the period 1 April
2005 to 31 March 2006.
Absolute performance is in sterling terms; relative performance is against
the benchmark: 50% FTSE All-Share
Index and 50% FTSE World Ex UK Index (in sterling terms).
* Figures relate to part-period returns relating to the holding period of the
relevant stock.
(Source: Baillie Gifford & Co, StatPro)
Past performance is no guarantee of future performance.
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
NOTES
1. A number of new UK Financial Reporting Standards have been introduced with which the Company must comply
this year. These standards are part of the UK convergence programme with International Accounting
Standards and as such have required most UK listed companies to restate prior year figures to reflect
the new accounting treatment. The financial statements for the year to 31 March 2006 have been prepared
on the basis of the accounting policies set out in the Company's Annual Financial Statements at 31 March
2005 except as detailed below:
a) investments have been valued at fair value through profit or loss in accordance with FRS 26 '
Financial Instruments: Measurement'. The effect is to move from a mid to a bid basis of valuation,
resulting in a reduction in the value of investments and unrealised capital reserves of £2,341,000
(2005- £1,743,000);
b) in compliance with FRS 21 'Events after the Balance Sheet Date', dividends declared after the
period end are no longer treated as a liability at the period end. The effect is to reduce creditors
and increase revenue reserves by £13,395,000 (2005 - £14,928,000);
c) income from fixed interest securities has been calculated using the effective interest rate
method. The net effect of this change in the year to 31 March 2006 is to increase unrealised capital
reserves by £31,000, increase realised capital reserves by £17,000 and reduce revenue reserves by
£48,000 respectively. Comparative figures have not been restated as the effect on prior periods is
immaterial;
d) the implementation of FRS 25 and the revision of the Statement of Recommended Practice '
Financial Statements of Investment Trust Companies' (SORP) in 2005 has resulted in changes in the
presentation of total returns. Previously dividend distributions in respect of a year were disclosed on
the face of the Statement of Total Return and the revenue column of that statement was deemed to be the
profit and loss account of the Company. We now present an Income Statement which does not show on its
face the distribution in respect of equity shares and, whilst it still shows information on capital and
revenue returns, it is the total column which is regarded as the profit and loss account of the company.
Dividend distributions are now shown in the Reconciliation of Movements in Shareholders' Funds and in
the Notes to the Accounts.
The overall effect of these changes on shareholders' funds and reserves is detailed below:
31 March 2006 31 March 2005
£'000 £'000
Effect on shareholders' funds:
Investments (2,341) (1,743)
Creditors: dividends payable 13,395 14,928
11,054 13,185
Effect on reserves:
Capital reserve - realised 17 -
- unrealised (2,310) (1,743)
Revenue reserve 13,347 14,928
11,054 13,185
31 March 2006 31 March 2005
£'000 £'000
2. Income
Income from investments and interest receivable 41,391 35,386
Other income 65 70
41,456 35,456
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
NOTES (Ctd)
31 March 2006 31 March 2005
Restated+
3. Return per ordinary share
Revenue return 8.82p 7.37p
Capital return 185.58p 36.58p
Revenue return per ordinary share is based on the net revenue on ordinary activities after taxation of
£25,738,000 (2005 - £21,809,000), and on 291,656,348 (2005 - 296,098,814) ordinary shares, being the
weighted average number of ordinary shares in issue during the year.
Capital return per ordinary share is based on the net capital gain for the financial year of
£541,249,000 (2005 - net capital gain of £108,337,000), and on 291,656,348 (2005 - 296,098,814) ordinary
shares, being the weighted average number of ordinary shares in issue during the year.
2006 2005 2006 2005
Restated Restated
£'000 £'000
4. Ordinary Dividends
Amounts recognised as distributions in the
period:
Previous year's final (paid 6 July 2005) 5.05p 0.40p 14,876 1,189
Interim (paid 25 November 2005) 3.85p 2.30p 11,118 6,799
8.90p 2.70p 25,994 7,988
We also set out below the total dividends paid and proposed in respect of the financial year, which is
the basis on which the requirements of section 842 of the Income and Corporation Taxes Act 1988 are
considered. The revenue available for distribution by way of dividend for the year is £25,738,000 (2005
- £21,809,000).
2006 2005 2006 2005
£'000 £'000
Dividends paid and proposed in the period:
Interim dividend per ordinary share (paid
25 November 2005) 3.85p 2.30p 11,118 6,799
Proposed final dividend per ordinary share
(payable 5 July 2006) 4.65p 5.05p 13,395 14,928
Adjustment to provision for 2005 final
dividend re shares bought back (52) -
8.50p 7.35p 24,461 21,727
If approved the final dividend will be paid on 5 July 2006 to all shareholders on the register at the close
of business on 9 June 2006. The ex-dividend date is 7 June 2006.
5. Amounts falling due within one year include Euro 73 million drawn down under a short term facility (31 March
2005 - US$60 million). Loans and debentures falling due after more than one year include Y5,900 million
drawn down under a three year multi-currency loan facility (31 March 2005 - Y5,900).
Net asset value per share (after deducting debentures at market value) was 584.1p (2005 - 398.8p). The
market value of debenture stocks at 31 March 2006 was £222,728,000 (2005 - £215,808,000).
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
NOTES (Ctd)
6. On 11 February 1999 authority was first granted to the Company to buy back its ordinary shares (equivalent to
14.99% of its issued share capital at that date). The authority has been renewed at each subsequent AGM and
was last reviewed at the AGM on 30 June 2005 in respect of 44,066,869 ordinary shares (equivalent to 14.99%
of its issued share capital at that date). In the year to 31 March 2006 a total of 7,530,000 ordinary shares
with a nominal value of £1,882,000 were bought back at a total cost of £30,261,000. At 31 March 2006 the
Company had authority to buy back a further 38,166,869 ordinary shares.
7. The financial information set out above does not constitute the Company's statutory accounts for the year
ended
31 March 2006. The financial information for 2005 is derived from the statutory accounts for 2005 which have
been delivered to the Registrar of Companies. The Auditors have reported on the 2005 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 2006 are unaudited, however it is expected that the Auditors will issue an unqualified
opinion. The statutory accounts for 2006 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.
8. None of the views expressed in this document should be construed as advice to buy or sell a particular
investment.
--------------------------
(1) Net asset value (after deducting debentures at market value).
(2) 50% FTSE All-Share Index and 50% FTSE World Ex UK (in sterling terms).
(3) Total return includes both capital growth and income reinvested.
(4) AITC is the Association of Investment Trusts and shown here is the average
of other investment trusts in the same AITC sector as Scottish Mortgage.
(5) IMA is the Association of Investment Managers and these figures shown are
for open ended funds (unit trusts and Open Ended Investment Companies or
OEICs in a similar sector).
(6) Total return includes both capital growth and income reinvested.
(7) AITC is the Association of Investment Trusts and shown here is the average
of other investment trusts in the same AITC sector as Scottish Mortgage.
(8) IMA is the Association of Investment Managers and these figures shown are
for open ended funds (unit trusts and Open Ended Investment Companies or
OEICs in a similar sector).
(9) With the debentures valued at their market price.
This information is provided by RNS
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