AGM Statement

At the Company's Annual General Meeting held on 21 July 2004, all resolutions
were duly passed. The resolution passed under Special Business was as follows:

The Company's authority to purchase its own shares for cancellation has been
renewed. This authority is limited to 14.99% of the Company's issued share
capital at the date of the meeting.

At the Annual General Meeting, the Chairman made the following comments:

Before inviting you to ask questions on the accounts or more generally on the
Board's stewardship of the Company, I would like to say a few words about the
Company's progress and to highlight some aspects of my Chairman's statement.

The Board has positioned the Company as a vehicle for long term saving by
investing in the UK equity market. We have two key objectives:-

 1. To increase the capital value of the Trust by more than the growth in the
    FTSE All Share Index.
   
 2. To increase dividends by more than inflation.
   
As regards capital performance, we have done well in the past year but much
less well over the longer term. The poor long term performance was the major
reason for the change of Manager to Fidelity, almost 2 years ago. Performance
last year (to March 2003) suffered from the need to dispose of some of the
stocks which were inherited from the previous Manager in a period of market
weakness. Over the 12 months to March this year, performance was well ahead of
our benchmark and net asset value increased by 30%. This performance gave us
our second best year in the last ten. In the 3 months to June 2004 the net
asset value was just ahead of the benchmark index.

Turning to dividends, the position is the converse of capital performance. We
have done well over ten years, increasing payments by 50%, much more than the
36% inflation. Against this background many are disappointed that we have been
unable to recommend an increase this year. As I explained in the Statement, the
payment was not fully covered and we do not think it right to pay an increase
out of reserves at this time. The Board is working hard to squeeze more income
from the portfolio, but not at the expense of capital performance.

This issue of income apart, the Board has three other matters of major
immediate concern:-

 1. Portfolio Risk - We have given the Managers a very low risk mandate. I
    think this is right in the short term, given recent history. The Board is
    continually reviewing the risk structure of the portfolio and, is prepared
    in the right environment, to increase the risk parameters and thereby
    increase potential returns although this might well also increase the
    volatility of performance.
   
 2. Balance Sheets - We have two debenture stocks, with coupons which are much
    higher than currently prevailing interest rates. This of course is a drag
    on both capital and revenue performance. If we repay debt we will save
    immediate interest payments, but the premiums we would have to pay to do so
    will reduce our asset base by almost £90m, and restrict the potential for
    future growth. The decision to repay involves careful judgments about inter
    alia equity growth, interest rates, and inflationary outlook. We look at
    this very regularly, and as we describe in the Statement, do not feel that
    now is the appropriate time to change our position. Had we bought back debt
    a year ago, when it was much more expensive, we would now face criticism.
   
 3. Share Price - The share price, as does that of our peer group of larger
    trusts, continues to trade at a substantial discount to net asset value,
    reflecting reduced market interest in the investment trust sector, as a
    whole. Your Board believes that good performance, and Fidelity's marketing
    efforts which they will describe later, will lead to increased demand for
    the Company's shares, and hence a steady share price improvement.
   
In conclusion, we have an extremely strong Board, and employ a Manager,
Fidelity, which is acknowledged to be one of the strongest in Europe. We are
all committed to our Company's success and to growing value for shareholders.

Mr Roy Summers retired as a director at the conclusion of the Annual General
Meeting.