Final Results

Deutsche Equity Income Trust PLC 24 October 2003 DEUTSCHE EQUITY INCOME TRUST PLC PRELIMINARY ANNOUNCEMENT OF RESULTS Extract from the Chairman's Statement I am delighted to report another good year for your Company, with a gain in our net asset value per share of 13.8% over the financial year. This compares with a rise of 12.6% in the FTSE All-Share Index in the same period and is the third consecutive year that we have been ahead of our benchmark. Markets have recovered since the weakness in the first quarter of the year, bolstered by prospects of economic revival in the US economy, which has had a positive effect on markets globally. The UK continues to perform well against its peers and remains one of the stronger economies within the OECD. Your Board has undertaken a review of your Company's accounting treatment and, after taking advice, has decided to change the basis on which investment management fees are charged to the Income and Capital Accounts. In future, investment management fees and finance costs will be charged 50% to the Revenue Account and 50% to the Capital Account as compared to the existing arrangement of 70% to the Revenue Account and 30% to the Capital Account. This brings the accounting treatment into line with the Board's expectations of returns from the portfolio and is in accordance with the investment trust industry's Statement of Recommended Practice (SORP). After careful consideration your Board has also decided to introduce the policy of modestly gearing the portfolio on a flexible basis, up to a maximum of 10% of its equity assets. Your Board believes these changes will enhance the position of your Company as a leading investment trust within the UK growth and income sector and should enhance returns to shareholders over time. Our gross revenue has increased by 18.3% over the financial year despite a difficult background for dividends. The inclusion of the Canary Wharf special dividend has helped our revenue account over the period. We are proposing to pay an increased final dividend of 5.50p per share, which will make with the interim dividend of 2.50p per share already paid, a total dividend per share for the year of 8.00p, 5.3% higher than last year. J. Leigh Pemberton, Chairman The final dividend of 5.50p per share will be paid on 30 December 2003 to shareholders on the register at the close of business on 14 November 2003. The financial information set out overleaf does not constitute the Company's statutory accounts for the years ended 30 September 2003 or 2002. The financial information for 2002 is derived from the statutory accounts for 2002 which have been delivered to the Registrar of Companies. The Auditors have reported on the 2002 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 2003, which have not yet been reported on by the Auditors, will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The annual report will be sent to shareholders and will also be made available to the public at the Company's registered office. ANNUAL GENERAL MEETING The Annual General Meeting will be held on Wednesday, 17 December 2003 at 11.00 a.m. One Appold Street, London EC2. By order of the Board M Pope Joint Company Secretary Registered Office: One Appold Street London EC2A 2UU 24 October 2003 For further information please contact John Murray at Deutsche Asset Management Tel: 020 7545 6000 STATEMENT OF TOTAL RETURN (incorporating the revenue account*) Year to 30 September 2003 Year to 30 September 2002 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised and unrealised gains/(losses) - 10,089 10,089 - (15,322) (15,322) on investments Income 4,207 - 4,207 3,555 - 3,555 Investment management fee (467) (200) (667) (589) (252) (841) Other expenses (181) - (181) (185) - (185) ----------------------------------------------------------------------------- Net return before finance costs and 3,559 9,889 13,448 2,781 (15,574) (12,793) taxation Interest payable (2) - (2) (2) - (2) ----------------------------------------------------------------------------- Return on ordinary activities before tax 3,557 9,889 13,446 2,779 (15,574) (12,795) Tax on ordinary activities (25) - (25) - - - Return on ordinary activities after tax for the financial year attributable to equity 3,532 9,889 13,421 2,779 (15,574) (12,795) shareholders Dividend in respect of equity shares (3,181) - (3,181) (3,022) - (3,022) Transfer to reserves after aggregate dividend ----------------------------------------------------------------------------- paid and proposed of 8.00p (2002 - 7.60p per share) 351 9,889 10,240 (243) (15,574) (15,817) ----------------------------------------------------------------------------- Return per ordinary share 8.88 p 24.87 p 33.75 p 6.99 p (39.17) p (32.18)p *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. No operations were acquired or discontinued in the period. BALANCE SHEET as at 30 as at 30 September 2003 September 2002 £'000 £'000 Fixed assets Investments 86,023 74,599 Current assets Debtors 1,264 1,514 Cash at bank and in hand 279 1,219 ------------------------------------------- 1,543 2,733 Creditors: amounts falling due (2,953) (2,959) within one year ------------------------------------------- Net current liabilites (1,410) (226) ------------------------------------------- Net assets 84,613 74,373 ------------------------------------------- Capital and reserves Called-up share capital 9,941 9,941 Share premium account 20,373 20,373 Other reserves Capital redemption reserve 12,609 12,609 Capital reserve - realised 47,784 54,928 Capital reserve - unrealised (6,695) (23,728) Revenue reserve 601 250 ------------------------------------------- Total equity shareholders' funds 84,613 74,373 ------------------------------------------- Net asset value per ordinary share Basic 212.8 p 187.0 p Cash Flow Statement Year ended Year ended 30 September 2003 30 September 2002 £'000 £'000 Operating activities Cash received from investments 4,296 3,420 Interest received 29 36 Cash received from stocklending and underwriting 3 3 Investment management fees paid (683) (845) Cash paid to and on behalf of directors (54) (49) Other cash payments (142) (134) ------------------------------------------- --------------- Net cash inflow from operating activities 3,449 2,431 ------------------------------------------- --------------- Servicing of finance Interest paid (2) (2) ------------------------------------------- --------------- Net cash outflow from servicing of finance (2) (2) ------------------------------------------- --------------- Taxation Overseas tax received/(paid) (25) 18 Income tax received - 13 ------------------------------------------- --------------- Taxation received/(paid) (25) 31 ------------------------------------------- --------------- Financial investment Purchase of investments (60,000) (59,935) Sale of investments 58,660 60,574 ------------------------------------------- --------------- Net cash (outflow)/inflow from financial investment (1,340) 639 ------------------------------------------- --------------- Equity dividends paid (3,022) (3,002) ------------------------------------------- --------------- (Decrease)/increase in cash (940) 97 ------------------------------------------- --------------- This information is provided by RNS The company news service from the London Stock Exchange

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