Final Results

CHAIRMAN'S STATEMENT The total return on the net assets of Temple Bar during 2006 was 17.7%, which compares with a total return for the FTSE All-Share Index of 16.8%. The return achieved is a combination of underlying portfolio performance and the effect of the capital gearing of the Trust. While it is always pleasant to report positively on short-term performance, the Board is primarily focused on longer time periods. The five year track record, over which the fund manager is principally judged, demonstrates sustained positive performance. The Board is recommending a final dividend of 19.88p, to produce a total increase for the year of 5.0%. This dividend will be payable on 30 March 2007 to shareholders on the register as at 16 March 2007. This is the 23rd consecutive year that the dividend has been increased. The revenue reserve, which, after adjusting for the proposed final dividend for 2006, represents 84.2% of the 2006 dividend, should provide shareholders with additional comfort regarding the security of the dividend. Post-tax revenue earnings increased by 3.2%. The proposed dividend was more than covered by net earnings generated on the portfolio during the year. The level of capital gearing, 11.9% at year end, again contributed positively to performance during the period. The price of Temple Bar shares traded at a small discount to their underlying asset value throughout the year, once again supported by the steady demand created within the Company's Savings Scheme. The Board has encouraged the Manager to maintain a regular dialogue with our larger shareholders and investment intermediaries. Strategy At the Board's strategy review this year, in conjunction with the Manager, the strategy behind the Temple Bar portfolio was assessed against both the latest market developments and shareholders' expectations. Investment restrictions on the manager were also reviewed. Overall, the conclusion of this discussion was that major changes were not warranted but that the relaxation of selective constraints would provide the Manager with greater flexibility and increase the potential for out-performance of both our benchmark, the FTSE All-Share Index, and our peer group, without a significant increase in long-term risk. Inter alia, it was decided that the fund manager should have the authority to invest up to 50% of the portfolio in stocks outside the FTSE 100 (against 30% previously) and that the Board would consider requests to extend the non-FTSE 100 component beyond this point. To reflect this greater flexibility, the Board has agreed a new investment policy with the Manager as follows:- 'The Company's investment objective is to provide growth in income and capital to achieve a long term total return greater than the benchmark FTSE All-Share Index, through investment in UK securities.. The Company's policy is to invest in a broad spread of securities with typically the majority of the portfolio selected from the constituents of the FTSE 100 Index.' The fund manager has no immediate plans to make use of this increased flexibility as he currently sees greater value in the largest stocks in the market. The Board also decided to ask the Manager to secure an overdraft facility of £ 25m, to consider the use of options as part of an overall hedging strategy, in particular market conditions, and to be aware of the potential for investing in 'special situations', such as high yield debt, in line with his contrarian principles. It was further felt that the Manager should have greater flexibility with regard to balancing potential revenue and capital growth opportunities and it was agreed, therefore, that in any one year, up to 7.5% of the revenue reserve could be used to fund the dividend, if necessary. Outlook The bull market is now over four years old and over that time some dramatic returns have been achieved. The FTSE 100 has more than doubled (after reinvesting income) and the FTSE 250 (the 250 largest stocks in the UK market after the FTSE 100) has risen by over 200%. Corporate profit margins are generally high, which many would regard as unsustainable, and the valuations of most companies are well above the lows they reached during the bear market. The Manager believes that much of the value that remains in the market is to be found amongst the largest companies as these offer an impressive combination of low valuations, strong balance sheets, a greater security of earnings and better prospects for dividend growth. As a result of this view, the portfolio is more concentrated than has been the norm historically. Any interruption to the earnings momentum that has driven the market in the last few years is likely to increase volatility and thus provide an enhanced number of contrarian opportunities for our Manager to investigate. Currently, our Manager prefers to hold a portfolio more biased towards security than risk. Annual General Meeting The AGM will be held on Monday 26 March at the Managers' office in London. In addition to the formal business of the meeting, the Managers will make a presentation to shareholders reviewing the past year and commenting on the outlook. I look forward to welcoming as many of you as possible. Shareholders who are unable to attend the meeting are encouraged to use their proxy votes. 20 February 2007 John Reeve TWENTY LARGEST INVESTMENTS as at 31 December 2006 Total assets Valuation less current liabilities COMPANY £'000 % Royal Dutch Shell 42,893 7.17 BP 41,615 6.95 HSBC 39,280 6.56 Vodafone 35,906 6.00 GlaxoSmithKline 35,763 5.98 Royal Bank of Scotland 29,496 4.93 BT 21,231 3.55 AstraZeneca 19,433 3.25 Unilever 18,295 3.06 Signet 16,590 2.77 HBOS 15,649 2.61 Prudential 14,752 2.46 Centrica 14,180 2.37 Legal & General 14,175 2.37 Amvescap 12,814 2.14 Kingfisher 11,329 1.89 Daily Mail & General 10,545 1.76 Trust ITV 10,330 1.73 HMV 10,033 1.68 Taylor Nelson Sofres ­­­ 9,061 1.51 423,370 70.74 Consolidated income statement for the year ended 31 December 2006 2006 2005 Revenue Capital Revenue Capital return return Total return return Total £'000 £'000 £'000 £'000 £'000 £'000 Investment income 20,410 - 20,410 19,637 - 19,637 Other operating income 390 - 390 483 - 483 Total Income 20,800 - 20,800 20,120 - 20,120 Gains on investments Gains on fair value through profit or loss assets - 69,689 69,689 - 72,123 72,123 20,800 69,689 90,489 20,120 72,123 92,243 Expenses Management fees (921) (1,382) (2,303) (804) (1,207) (2,011) Other expenses (426) (1,172) (1,598) (441) (1,679) (2,120) Profit before finance costs and tax 19,453 67,135 86,588 18,875 69,237 88,112 Finance costs (1,833) (2,749) (4,582) (1,799) (2,735) (4,534) Profit before tax 17,620 64,386 82,006 17,076 66,502 83,578 Tax - - - - - - Profit for the year 17,620 64,386 82,006 17,076 66,502 83,578 EARNINGS PER SHARE (BASIC & DILUTED) 30.20p 110.36p 140.56p 29.35p 114.32p 143.68p The total column of this statement represents the Group's Income Statement prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance issued by the Association of Investment Companies. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. There are no minority interests. Consolidated statement of changes in equity for the year ended 31 December 2006 Ordinary Share Capital Capital share premium reserve reserve Retained Total capital account realised unrealised earnings equity £'000 £'000 £'000 £'000 £'000 £'000 BALANCE AT 1 JANUARY 14,478 2,193 283,133 75,489 23,587 398,880 2005 CHANGES IN EQUITY FOR 2005 Profit for the year - - 49,908 16,594 17,076 83,578 14,478 2,193 333,041 92,083 40,663 482,458 Dividends paid to equity - - - - (15,834) (15,834) shareholders Issue of share capital 107 2,890 - - - 2,997 BALANCE AT 31 DECEMBER 14,585 5,083 333,041 92,083 24,829 469,621 2005 CHANGES IN EQUITY FOR 2006 Profit for the year - - 49,441 14, 945 17,620 82,006 14,585 5,083 382,482 107,028 42,449 551,627 Dividends paid to equity - - - - (16,499) (16,499) shareholders BALANCE AT 31 DECEMBER 14,585 5,083 382,482 107,028 25,950 535,128 2006 Consolidated balance sheet as at 31 December 2006 31 December 2006 31 December 2005 £'000 £'000 £'000 £'000 NON-CURRENT ASSETS Investment held at fair value through 579,105 513,012 profit or loss CURRENT ASSETS Cash and cash equivalents 15,750 26,663 Other receivables 4,335 8,953 20,085 35,616 TOTAL ASSETS 599,190 548,628 CURRENT LIABILITIES Other payables (705) (15,663) TOTAL ASSETS LESS CURRENT LIABILITIES 598,485 532,965 NON-CURRENT LIABILITIES Interest bearing borrowings (63,357) (63,344) NET ASSETS 535,128 469,621 EQUITY ATTRIBUTABLE TO EQUITY HOLDERS Ordinary share capital 14,585 14,585 Share premium 5,083 5,083 Capital reserve - realised 382,482 333,041 Capital reserve - unrealised 107,028 92,083 Retained earnings 25,950 24,829 535,128 469,621 TOTAL EQUITY 535,128 469,621 NET ASSET VALUE PER SHARE 917.25p 804.96p Consolidated Group and Company cash flow statement for the year ended 31 December 2006 2006 2005 £'000 £'000 £'000 £'000 CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 82,006 83,578 Adjustments for: Purchases of investments¹ (168,918) (210,423) Sales of investments¹ 172,514 203,662 3,596 (6,761) Gains on investments (69,689) (72,123) Financing costs 4,582 4,534 Operating cash flows before 20,495 9,228 movements in working capital Increase/(decrease) in accrued 505 (592) income and prepayments Increase/(decrease) in 4,113 (5,160) receivables (Increase)/decrease in (14,958) 15,107 payables NET CASH FLOW FROM OPERATING 10,155 18,583 ACTIVITIES BEFORE AND AFTER INCOME TAX CASH FLOWS FROM FINANCING ACTIVITES Equity shares issued - 2,997 Interest paid on borrowings (4,559) (4,559) Bank interest paid (10) (5) Equity dividends paid (16,499) (15,834) NET CASH USED IN FINANCING (21,068) (17,401) ACTIVITIES NET (DECREASE)/INCREASE IN (10,913) 1,182 CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 26,663 25,481 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 15,750 26,663 1. Purchases and sales of investments are considered to be operating activities of the Company, given its purpose, rather than investing activities. Dividend The directors will recommend to shareholders at the annual general meeting to be held on 26 March 2007 that a final dividend of 19.88p per ordinary share be paid on 30 March 2007 to shareholders on the Register at the close of business on 16 March 2007. Notes The figures set out above are derived from the audited consolidated accounts of Temple Bar Investment Trust Plc and its subsidiaries for the years ended 31 December 2005 and 31 December 2006. The 2006 accounts will be sent to shareholders shortly. The financial information contained in this announcement does not constitute full accounts within the meaning of section 254 of the Companies Act 1985. The 2006 accounts, on which the report of the auditors is unqualified, will be filed with the Registrar of Companies in due course. The audited accounts for the year ended 31 December 2005 on which the report of the auditors was unqualified and did not contain a statement under either Section 237(2) or 237 (3) of the Companies Act 1985, have been filed with the Registrar of Companies. 20 February 2007 Contact: Alastair Mundy Telephone 020 7597 2000 Investec Investment Management Limited

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