Final Results

To: Stock Exchange For immediate release 10 October 2002 MARTIN CURRIE HIGH INCOME TRUST plc Annual results for the 12 months to 31 July 2002 The three-year decline in the UK stockmarket and the specific difficulties of the split capital investment company sector - in which the company holds a number of investments - have had a devastating effect on the company. Gross assets fell from £54.3 million at 31 July 2001 to £7.5 million at the end of July 2002 which, due to the highly geared structure of the company, resulted in a fall in net asset value to 0.09p per ordinary share. In order to achieve a high income for shareholders, it had been necessary to invest in split capital investment companies, which generated yields significantly above those available from traditional equities. However, the overall market environment, compounded by the structure of a number of these companies, produced a situation whereby not only were dividends unsustainable, but significant capital losses were being experienced. Having paid a first quarterly dividend of 1.75p per share in December, it soon thereafter became apparent that the company would not be in a position to continue to pay dividends. On 20 March 2002, your board decided that it was in the best interests of shareholders that future payments should be suspended. Over the year the company has repaid £29.1m of borrowings, changed the company's accounting policy to charge 100% of interest charges and management expenses to revenue, and reduced management and directors' fees. Nonetheless, the company's financial position continued to deteriorate and the Board has requested - and been granted - a temporary suspension of the company's listing on the London Stock Exchange, with effect from 25 July 2002. Although the company is in breach of its banking covenant, Bank of Scotland ('the Bank') has formally granted the company the ability to operate in default for a further period of three months unless there is a significant fall in the value of its investments. The Bank has not however waived any of its rights under the loan agreement and retains the ability to demand repayment of the loan at any time. As a condition of the waiver, the company repaid a further £ 2.3m of borrowings on 18 September 2002, leaving outstanding debt of £5.0m maturing on 4 August 2008, on which interest is payable at an annual rate of 7.51%. One course of action currently available to the board would be to invite the Bank to appoint a receiver. If the company were to be placed in receivership or liquidation, shareholders would currently receive nothing. Even on the assumption that all of the company's assets were realisable at market value, the Bank would receive less than the outstanding amount of its loan. Your board believes that enabling the company to remain in existence will hold out for shareholders the possibility of achieving some value for their shares in due course if market conditions recover, as opposed to receiving nothing if the company were to be placed in receivership or liquidation now. A stabilisation in the split capital investment sector, together with an increase in liquidity, would undoubtedly help the company. This requires a more stable performance from equity and bond markets in the short term and an improvement over the medium term for growth in net assets to be achieved. There can however be no assurance that this course of action will result in any value being realised for shareholders at any time. Your board continues to monitor the financial position of the company on a daily basis. - ends - For further information, please contact: Mike Woodward Martin Currie Investment Management Ltd 0131 229 5252 martin currie high income trust plc Statement of total return (incorporating the revenue account)* for the year ended 31 July 2002 Unaudited Note Revenue Capital Total £000 £000 £000 (Losses)/ gains on - realised - (16,563) (16,563) investments - unrealised - 1,793 1,793 Income 1,964 - 1,964 Investment management (152) - (152) fee Administrative expenses (192) - (192) _____ _____ _____ Net return on ordinary activities before 1,620 (14,770) (13,150) finance costs Interest payable and similar charges (1,121) (1,011) (2,132) _____ _____ _____ Return on ordinary activities before and 499 (15,781) (15,282) after taxation Dividends in respect of ordinary shares (656) - (656) _____ _____ _____ Transfer from reserves (after aggregate (157) (15,781) (15,938) dividends paid of 1.75p) _____ _____ _____ Returns per ordinary share 1.33p (42.08p) (40.75p) *The revenue column of this statement is the profit and loss account of the company. All revenue and capital items derive from continuing operations. No operations were acquired or discontinued in the year. With effect 1 August 2001, the management and finance costs have been allocated 100% to revenue, previously 75% of these costs were allocated to capital. The prior year figures have been restated to reflect the change in policy. The auditors have not reported on accounts for the year ended 31 July 2002, nor have such accounts been delivered to the Registrar of Companies. The accounts for 2002 will be delivered to the Registrar of Companies following the company's AGM. The latest published accounts which have been delivered to the Registrar of Companies are for the year ended 31 July 2001; the report of the auditors thereon was unqualified and did not contain a statement under section 237 of the Companies Act 1985; the abridged financial statements shown herein are an extract from those accounts. martin currie high income trust plc Statement of total return (incorporating the revenue account)* for the year ended 31 July 2001 Audited (restated) Note Revenue Capital Total £000 £000 £000 Losses on investments - realised - (1,734) (1,734) - unrealised - (6,157) (6,157) Income 4,120 19 4,139 Investment management (368) - (368) fee Administrative (240) - (240) expenses _____ _____ _____ Net return on ordinary activities before 3,512 (7,872) (4,360) finance costs Interest payable and similar charges (2,568) - (2,568) _____ _____ _____ Return on ordinary activities before and 944 (7,872) (6,928) after taxation Dividends in respect of ordinary shares (3,075) - (3,075) _____ _____ _____ Transfer from reserves (after aggregate (2,131) (7,872) (10,003) dividends paid and proposed of 8.20p) _____ _____ _____ Returns per ordinary share 2.52p (20.99p) (18.47p) *The revenue column of this statement is the profit and loss account of the company. All revenue and capital items derive from continuing operations. No operations were acquired or discounted in the year. martin currie high income trust plc BALANCE SHEET As at 31 As at 31 July 2002 July 2001 Unaudited Audited (restated) £000 £000 £000 £000 Investments at market value Listed on the Stock Exchange in 4,706 48,639 the UK Current assets Debtors 62 326 Short term deposits and bank 2,727 5,305 balances _______ _______ 2,789 5,631 Creditors Amounts falling due within one (7,463) (1,880) year _______ _______ Net current liabilities/ assets (4,674) 3,751 _______ _______ Total assets less current 32 52,390 liabilities Creditors Amounts falling due outwith one - (36,400) year _______ _______ Total net assets 32 15,990 _______ _______ Capital and reserves Called up share capital 1,875 9,375 Share premium - 25,875 Capital reserves (5,925) (17,477) Revenue reserve 68 (1,783) Special reserve 4,014 - _______ _______ Total shareholders' funds 32 15,990 _______ _______ Net asset value per ordinary 0.09p 42.64p share martin currie high income trust plc STATEMENT OF CASH FLOW for the year ended 31 July 2002 (unaudited) £000 £000 Operating activities Net dividends and interest received 1,990 from investments Interest received from deposits 137 Investment management fee (257) Other cash payments (1,240) ______ Net cash inflow from operating 630 activities Servicing of finance Interest paid (1,610) ______ Net cash outflow from servicing of (1,610) finance Taxation Net taxation received 101 ______ Net cash inflow from taxation 101 Capital expenditure Payments to acquire investments (2,883) Receipts from disposal of investments 32,046 ______ Net cash inflow from capital 29,163 expenditure and investing activities Dividends paid (1,762) ______ Net cash inflow before financing 26,522 Financing Movement in long-term borrowings (29,100) Net cash outflow from financing (29,100) ______ Decrease in cash for year (2,578) ______ martin currie high income trust plc STATEMENT OF CASH FLOW for the year ended 31 July 2001 (audited) £000 £000 Operating activities Net dividends and interest received from 4,137 investments Interest received from deposits 109 Investment management fee (367) Other cash payments (227) ______ Net cash inflow from operating 3,652 activities Servicing of finance Interest paid (2,563) ______ Cash outflow from servicing of finance (2,563) Taxation Net taxation received 69 ______ Net cash inflow from taxation 69 Capital expenditure Payments to acquire investments (6,282) Receipts from disposal of investments 11,325 ______ Net cash outflow from capital 5,043 expenditure and investing activities Dividends paid (3,000) ______ Net cash inflow before financing 3,201 Financing Movement in long-term borrowings - Net cash from financing - ______ Increase in cash for period 3,201 ______

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