Final Results - Year Ended 31 January 2000

Foreign & Col. Pacific Inv Tst PLC 25 April 2000 Contact: Charles Brock Claire Barry Foreign & Colonial Financial Dynamics Tel: 0207 628 8000 Tel: 0207 831 3113 FOREIGN & COLONIAL PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Statement of Results for the year ended 31 January 2000 Highlights - Share price has increased by 95% to 204.3p in twelve months to 31 January 2000 (104.8p at 31 January 1999); - Net asset value per share increased by 77.4% to 242.3p, while the *benchmark rose by 56.7% (*a 50/50 combination of the FT/S&P Japan and the MSCI AC Asia Pacific ex Japan indices); - The Japanese stock market and economy performed positively during the year. Our exposure to well managed and well positioned companies that offered above average growth and profitability led to significant out-performance of underlying Japanese indices; - Other markets performed well across Asia, with economic recovery boosted by surging exports, corporate restructuring and buoyant international and local liquidity combining to produce high returns in most markets. The Company will continue to focus on blue chip companies that are poised to deliver significant profit growth as recovery in the region continues; - Dividend per share for the year is unchanged at 1.85p. Future revenues are expected to be lower mainly as a result of re investment of cash and bond holdings into regional equity markets. Future dividends are expected to be significantly lower and it is expected that there will no future interim dividend payments; - Reflecting this, the Board has decided to change the Company's objective to 'maximise shareholders' total return , predominately through growth in capital, by investing in the Asia Pacific region' (previously 'To secure growth in capital and income through investment in countries around the Pacific Ocean'); - The narrowing of the discount remains a key objective and a combination of marketing, savings plans and share buy-back initiatives are underway. Gillian Nott, one of 3 new directors, has the specific liaison role of developing the Company's marketing efforts through the management company. Breaking new ground, the Company's shares have been listed on the Frankfurt stock exchange; - The Company has bought back 2.46% of its shares and is seeking renewal of the authority from shareholders; - The Company believes that the outlook for Asian markets is encouraging, as the economic recovery is spreading across the region coupled with significant corporate restructuring. The region is fully participating in the technological revolution, and prospects for traditional manufacturing industries are also encouraging. With international investors now seeking to diversify their portfolios by building their exposure to the region, Asia is in an advantageous position; FOREIGN & COLONIAL PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Statement of Results for the year ended 31 January 2000 SUMMARY OF CONSOLIDATED RESULTS 31 Jan 31 Jan 1999 % change 2000 Attributable to equity shareholders: Consolidated net assets £554.1m £314.5m +76.2 Consolidated net asset 242.3p 136.6p +77.4 value per share Consolidated net asset value per share 233.5p - - - diluted* Consolidated net revenue £3.00m £6.73m -55.4 Consolidated earnings per 1.30p 2.93p -55.6 share Dividends per share 1.85p 1.85p - Ordinary share price 204.3p 104.8p +94.9 + Diluted for potential conversion of the convertible bonds; no dilution as at 31 January 1999. Chairman's Statement The past year has been a rewarding one for investors in the Asian markets after a period of exceptional difficulties and the Company has been able to take full advantage of the improving situation. Over the twelve months ended 31 January 2000 our share price rose by 94.9% and our net asset value per share by 77.4%. These numbers represent significant outperformance versus our benchmark, which rose by 56.7%. % change over the year ending 31 January 2000, in sterling terms. Share price + 94.9 Share price total return + 97.0 Net asset value per share (undiluted) + 77.4 Benchmark* + 56.7 FT/S&P Japan index + 65.2 MSCI AC Asia Pacific Free Index + 48.2 *The Company's benchmark is a combination of 50% FTSE Japan and 50% MSCI AC Asia Pacific Free ex Japan. All index numbers are on a total return basis. Our Japanese and Asia ex Japan portfolios also both beat their respective benchmark indices. Astute stock picking meant that our Japanese portfolio returned 109.2%, whilst good country allocation led to a return of 54.6% from our Asia ex Japan portfolio. Our move to an overweight position in Japan also added value. Investment Strategy The Company started the year with significant cash positions that had been built up during the Asian crisis. As it became clear that the Asian recovery was sustainable, we moved quickly to reinvest this liquidity in the markets and to modestly gear the portfolio. Whilst we increased our exposure in a number of markets, buying was concentrated in Japan, South Korea and Malaysia. Towards the end of the year we also started to commit more funds to Taiwan. Whilst the performance of the Manager is measured against a benchmark, the Board encourages them to take significant positions, not necessarily in line with the benchmark. For example, our Japanese portfolio is heavily weighted towards 'New Japan' stocks - companies that are poised to reap the benefits of reform, restructuring and recovery in the Japanese economy. Against consensus opinion, the Japanese stock market and economy performed positively during the year under review. Whereas economists were forecasting economic contraction, they are now forecasting growth. As far as the stock market is concerned, restructuring was the theme in the first half of 1999. Investor attention shifted to the 'new' Japan, leading to extremely concentrated stock and sector performance within the overall market. This restructuring theme was given added credence by the announcement of mergers within the troubled banking industry. Our exposure to well managed and well positioned companies that offered above average growth and profitability led to significant out-performance of underlying Japanese indices. The stock market recovery in the rest of Asia that began late in our previous financial year continued into the year under review. Economic recovery boosted by surging exports, corporate restructuring and buoyant international and local liquidity combined to produce high returns in most of our markets. The only exceptions were Australia, New Zealand and The Philippines. Amongst the leaders were Korea (+91.2%), India (+87.9%) and Malaysia (+81.5%). Our portfolio continues to focus on blue chip companies that are poised to deliver significant profit growth as the recovery in the region continues. Revenue, expenses and change of dividend policy Our revenue account was lower than last year, partly as a result of our cash and bond holdings being re-invested into regional equity markets, and partly due to prior-year revenues from Australia being inflated by one-off land sales in our property development subsidiary, Gold Estates of Australia. Over time, the property portfolio has provided a good source of income, but a maturing Perth property market means that future revenue returns from this source are likely to be eroded. Accordingly, we are reducing our exposure to Perth property and, since the year-end, have completed the sale of our half share in 190 St George's Terrace. Management fees have declined 6%, despite the 76% increase in our net assets in the year, due in large part to the beneficial effect of the three-year rolling average calculation basis for the fee. Other expenses incurred in the UK have increased significantly, principally as a result of the costs of supporting our Private Investor Plan holders and of our contribution to the current AITC 'its' campaign. Costs of running the Company and the Australian property operations are, at 1.3% of average shareholders' funds, below those of the unit trust peer group. Excluding the Australian property operations, the cost of running the Company, as a percentage of average shareholders' funds, amounted to 0.8%. This is significantly lower than unit trusts specialising in Far East and Japanese equities, which have average expense ratios of 1.78% and 1.65% respectively (Source: Fitzrovia UK Fund Charges survey, January 2000). Over recent years the Manager has adopted a defensive investment policy, reflecting the poor investment climate in Asian markets. This meant that we had large holdings of cash and bonds and benefited from the associated rise in investment income. The more positive outlook for the region is now reflected in our fully invested portfolio, meaning that revenue is likely to be lower in the years to come due to the lower yield available from investment in Asian equities. The Board believes that the primary objective of most investors in Asia is capital growth rather than income, and that the Managers should manage the portfolio on that basis. This also entails investing in lower-yielding shares of growth companies and means that income will inevitably fall below the level required to meet our present rate of dividend payment. Whilst we recommend the payment of an unchanged final dividend of 1.05p for the year ending 31 January 2000, it is likely that future dividends will be significantly lower and it is intended that there will be no interim dividend in future. Dividends will be paid on an annual basis and are likely to fluctuate depending on the Company's revenue position. Objective Since the Company established its Pacific investment remit back in 1984, its stated objective has been 'to secure growth in capital and income through investment in countries around the Pacific Ocean'. This has been handsomely achieved. In the light of the anticipated lower dividends that I refer to above, the Board has decided to change the objective to 'maximise shareholders' total return, predominantly through growth in capital, by investing in the Asia Pacific region'. Discount The Board will continue its efforts to reduce the discount to net asset value at which the Company's shares trade and has pursued a number of initiatives over the course of the year. Although the discount to undiluted net asset value per share narrowed from 23.3% to 15.7%, it remains a key objective of the Board to reduce this further. Marketing The past year has seen initiatives both in the marketing of the Investment Trust industry and in the marketing of the Company. The Company has supported the AITC's 'its' campaign with a contribution of £81,000 and plans to continue to do so. The Board believes that this campaign, supplemented by the management company's own efforts, will play a major role in increasing demand for Investment Trusts in general and Foreign & Colonial Pacific in particular. As the largest trust in its sector and with its broad investment mandate, we are confident that the Company can become the fund of choice for investors in the Asia Pacific region. Foreign & Colonial - which created the world's first collective investment vehicle in 1868 - has always taken a lead in identifying new sources of investor demand for investment trusts. The past year has been no exception and the number of investors in the Company via the Foreign & Colonial savings plans has continued to increase, as has the level of individual ownership of the Company. The Savings Plan, Pension Plan and Individual Savings Account continue to offer a low cost and efficient way of buying shares in the Company. Anyone wishing to receive details of these savings plans can find out more by calling 0845 600 30 30 or by emailing 'info@fandc.co.uk' Foreign & Colonial Pacific, along with four other Foreign & Colonial trusts, has broken new ground by listing its shares on the Frankfurt Stock Exchange. We believe that, in time, investment trusts with their low cost structures, will appeal to the rapidly growing German savings market and that our initiative in Germany will complement our ongoing marketing efforts in the UK market. Share buy-backs At last year's Annual General Meeting shareholders gave the Board authority to buy back shares for cancellation. This authority was subject to the approval of the Trustee of our Convertible Bonds, which was received later in the year. The Company has since bought back 2.46% of the shares. Evidence that share buy-backs narrow discounts to net asset value per share is inconclusive, but the purchase of shares for cancellation at a discount indisputably increases net asset value per share, enhancing shareholder returns. Coupled with the measures, mentioned above, to improve demand for our shares the Board believes that over the longer term share buy-backs will help to improve the supply/demand imbalance for investment trust shares and will again seek authority at the forthcoming Annual General Meeting to buy back up to 14.9% of the Company's issued share capital. The Board, Advisers and Manager The structure of The Board continues to evolve and a number of further directorship changes are planned. Toby de Lotbinisre and I shall retire following the Annual General Meeting. Toby has loyally served as a director of the Company for 29 years during which time the net assets of the Company have increased from £10m to £554m. Toby's stockbroking and investment background has provided a valuable insight into the requirements of private investors and his steady presence and influence will be much missed. Christopher Weston and our three Senior Advisers, Tatsuya Tamuru, Wee Sin Tho and Sir Hugh Cortazzi retired during the course of the year. They are to be thanked for their worthy contributions and we wish them well for the future. After 6 years as Chairman I will pass the reins to Christopher Purvis, who has extensive experience of Asian financial markets, particularly Japan. I have very much enjoyed my time as a director and as Chairman of a company specialising in such an exciting area of the world and wish Christopher every success in taking the Company forward. Despite my retirement, I shall for a short while act as an adviser to the Board regarding the Company's Australian property interests. Three new directors joined during the year; Kevin Jones, Leslie Atkinson and Gillian Nott. Both Kevin and Leslie have considerable knowledge and experience of Asia through their respective careers, whilst Gill brings to us her understanding of the needs of private investors. Gill has been given a specific marketing liaison role in order to develop further the Company's marketing efforts with the management company. Our new management team of Charles Brock and Stefan Rheinwald are to be congratulated on their outstanding investment performance in their first year. The Board will continue to guide and encourage Charles and Stefan to develop and build on this success. Prospects The economic recovery in Japan and Asia looks set to continue and deepen. Coupled with significant corporate restructuring, the potential for strong profit growth across Asia looks promising. The region is fully participating in the technological revolution occurring throughout the world and the prospects for traditional manufacturing industries are also encouraging thanks to the regional economic recovery and continued buoyant global economic growth. We shall continue to review the balance between these new and traditional industries. Whilst there are obviously concerns about the volatility and strength of global markets, this could be to Asia's advantage as international investors seek to diversify their portfolios by building their exposure to the region. With our positive investment strategy and focus on marketing, the Company is well placed to benefit from this ongoing recovery and to secure further capital growth for shareholders in the years ahead. Alan Davis April 2000 FOREIGN & COLONIAL PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Statement of Results for the year ended 31 January 2000 SUMMARY OF CONSOLIDATED NET ASSETS at 31 Jan at 31 Jan 2000 1999 £'000s £'000s Consolidated total assets less current 597,473 367,000 liabilities Loans (43,227) - Yen convertible bonds - (52,349) Deferred taxation (101) (136) Consolidated net assets attributable to equity shareholders 554,145 314,515 Net asset value per ordinary share 242.3p 136.6p Net asset value per ordinary share - 233.5p N/A diluted Geographical distribution of consolidated total assets less current liabilities (excluding loans and convertible bonds) at 31 January 2000 was Japan 55.0%, Australasia 6.9%, Hong Kong 3.6%, Other Far-East 32.6%, North America 2.3%, United Kingdom (0.4)%. Geographical distribution of currency exposure at 31 January 2000 was Japan 45.2%, Australasia 8.4%, Hong Kong 4.4%, Other Far- East 39.7%,North America 2.8%, United Kingdom (0.5)%. FOREIGN & COLONIAL PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Statement of Results for the year ended 31 January 2000 Consolidated Statement of Total Return (incorporating the revenue account) 2000 Revenue Capital Total £'000s £'000s £'000s Gains on tangible fixed assets - 11 11 Gains on investments - 254,795 254,795 Exchange gains/(losses) 91 (10,868) (10,777) Income 12,620 - 12,620 Management fee (2,722) - (2,722) Other expenses (3,182) (57) (3,239) Net return before finance costs and taxation 6,807 243,881 250,688 Interest payable and similar charges (2,488) - (2,488) Return on ordinary activities before taxation 4,319 243,881 248,200 Taxation on ordinary activities (1,321) - (1,321) Return attributable to equity shareholders 2,998 243,881 246,879 Dividends on ordinary shares (equity): Interim of 0.80p (1999 - 0.80p) (1,842) - (1,842) Proposed final of 1.05p (1999:1.05p) (2,361) - (2,361) Amount transferred (from)/to reserves (1,205) 243,881 242,676 Return per ordinary share - pence 1.30p 105.93p 107.23p Return per ordinary share (diluted) - pence N/A 92.56p 94.17p 1999 (restated)* Revenue Capital Total £'000s £'000s £'000s Gains on tangible fixed - 245 245 assets Gains on investments - 6,773 6,773 Exchange gains/(losses) (317) (10,195) (10,512) Income 16,953 - 16,953 Management fee (2,906) - (2,906) Other expenses (1,767) (62) (1,829) Net return before finance costs and taxation 11,963 (3,239) 8,724 Interest payable and similar (2,060) - (2,060) charges Return on ordinary activities before taxation 9,903 (3,239) 6,664 Taxation on ordinary activities (3,171) - (3,171) Return attributable to equity shareholders 6,732 (3,239) 3,493 Dividends on ordinary shares (equity): Interim of 0.80p (1999 - 0.80p) (1,842) - (1,842) Proposed final of 1.05p (1999:1.05p) (2,418) - (2,418) Amount transferred (from)/to reserves 2,472 (3,239) (767) Return per ordinary share - pence 2.93p (1.41)p 1.52p Return per ordinary share (diluted) - pence N/A N/A N/A The revenue column of this statement is the profit and loss account of the Group. *Restated to comply with FRS16 'Current Taxation' FOREIGN & COLONIAL PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Statement of Results for the year ended 31 January 2000 Consolidated Cash Flow Statement 2000 1999 £'000s £'000s Net cash inflow from operating 7,645 12,630 activities Cash outflow from servicing of (2,412) (2,025) finance Total tax paid (1,974) (1,926) Net cash outflow from financial (21,020) (29,272) investment Equity dividends paid (4,260) (4,260) Net cash outflow before use of liquid resources (22,021) (24,853) Decrease in short-term deposits 12,261 11,659 Net cash inflow from financing 19,186 - Increase/(decrease) in cash 9,426 (13,194) During the year the Company purchased for cancellation 1,575,000 ordinary shares (0.68% of issued share capital) of 25p at prices ranging from 183p to 196p per share. Since the year end the Company has bought back a further 4,090,000 shares(1.78% of issued share capital). The Directors propose a final dividend of 1.05p per share payable on 1 June 2000 to shareholders registered on 8 May 2000 making a total for the year of 1.85p (1999 - same). The Annual General Meeting will be held at Stationers' Hall, Ave Maria Lane, Ludgate Hill, London EC4 on Wednesday, 31 May 2000 at 12 noon. The Audited Report and Accounts will be posted to shareholders on or around 28 April 2000. Copies may be obtained during normal business hours from the Company's Registered Office, Exchange House, Primrose Street, London EC2A2NY. By order of the Board Foreign & Colonial Management Limited - Secretary 20 April 2000

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