Final Results

Edinburgh Investment Trust PLC
23 May 2001


23 May 2001

                      THE EDINBURGH INVESTMENT TRUST plc

              PRELIMINARY RESULTS FOR THE YEAR TO 31 MARCH 2001

The £1.6 billion Edinburgh Investment Trust plc is the UK's largest investment
trust focussed solely on UK quoted companies.  The objectives of The Edinburgh
Investment Trust plc are the achievement of capital growth at a higher rate
than the FTSE All-Share Index and dividend growth above the rate of UK
inflation.


                                  Highlights


*        Net asset value (NAV): fell by 12.5% compared to a fall in the FTSE
         All-Share Index of 12.8%, the trust's benchmark

*        Dividend: up 2.5% to 12.45p for the year against a rise of 1.9% in
         inflation over the same period

*        Gearing: 11.5% at year end

*        Share buybacks: the company bought back 10.98 million shares (4.2% of
         equity capital), enhancing NAV by 0.6%

*        Portfolio Performance: The acquisition of Robert Fleming Holdings by
         Chase Manhattan contributed 2.9% to the company's overall performance

*        Marketing Initiative: The company intends to continue to support the
         Association of Investment Trust Companies' marketing campaign

*        Website: Details of savings plans relating to the company's shares
         are available on the company's website:  www.itseit.com

For further information, please contact:

Mike Balfour  (Office) 0131 313 1000

Chief Investment Officer, Edinburgh Fund Managers plc   (Mobile) 07899 875 887

Julian Polhill 0207 369 9333

Polhill Communications



Please note that past performance is not necessarily a guide to the future and
that the value of investments and the income from them may fall as well as
rise.  Investors may not get back the amount they originally invested.


CHAIRMAN'S STATEMENT



Chairman's Statement

I am glad to report that, despite extremely challenging conditions, the
company's objectives of beating the FTSE All-Share Index and delivering
dividend growth above the rate of UK inflation have both again been met.



During the year, the net asset value fell by 12.5% compared with a fall of
12.8% in the FTSE All-Share Index.  As the share price discount to net asset
value was slightly lower at 31 March 2001 than it was at the start of the
year, the share-price also outperformed the Index, although falling by 11%.
The board is proposing a final dividend of 8.45p per share which, if approved,
will give a total distribution for the year of 12.45p per share, an increase
of 2.5%. The UK's underlying rate of inflation over the same period was 1.9%.



Portfolio Performance

The performance of the UK equity market during the period was in stark
contrast to that of the previous year. Not only did the index fall by 12.8% as
opposed to the previous increase of 7.5%, but, coinciding almost exactly with
the start of the company's financial year, investors began to desert the
companies involved in telecommunications or the providers of information
technology which had been very strong performers in the previous year. By
contrast, shares in companies previously seen as relatively dull and 'low
growth' performed more strongly as doubts emerged over the earnings potential
of the telecom and technology sectors.  Subsequent concern over rates of
global economic growth exacerbated these trends.



This two-year background has provided a testing environment for the fund
management industry - those who over-committed to the technology boom did well
in the first year only to perform poorly in the second, and, conversely the
wholly 'value-oriented' investor underperformed in the first period.  Our
manager, working within the relatively low-risk parameters which the Board
sets has achieved a satisfactory performance in each of these two years of
volatile market conditions.  I have already reported that our portfolio
outperformed the benchmark Index, albeit marginally, in the year to 31 March
2001.  Within this overall result, that part of the portfolio made up by the
UK's largest companies (approximately 95% of the company's assets at the
year-end) performed well.  Conversely the smaller company portfolio which had
proved highly successful in the previous year underperformed the FTSE SmallCap
Index (ex Investment Companies).



The Interim Report last October referred to the completion of the acquisition
of Robert Fleming Holdings by Chase Manhattan at a price significantly higher
than the historic valuation. This transaction was also an important
contributor to this year's results and added 2.9% to the company's overall
performance.



Taking the past two very different years as a whole, the company performed
creditably with net asset value per share falling only 2.9% over the two years
to 31 March 2001 compared with the benchmark FTSE All-Share Index which lost
6.3% of its value during the same period.  Perhaps more importantly, despite
the fall in asset value and reflecting, I believe, increased investor
confidence, the company's share price rose by 2.4% over these two most
turbulent years.



Gearing

The company has long term borrowings which, at the beginning of the year,
amounted to 12% of shareholders' funds and, typically, these were fully
utilised in UK equities during the year. Over many years of rising markets
gearing has been highly beneficial in adding value for shareholders but when
the market falls performance can be lost. This was the case last year and the
contribution of the gearing to the results was negative to the extent of 1.6%.
Reflecting the manager's positive medium term view of the market, gearing at
the end of the year was 11.5%.



The board is presently exploring the possibility of increasing the level of
potential gearing by way of a £75 million short term loan.  This loan is
unlikely to have a duration of more than one year, but will be renewable.  The
board believes this is a flexible way of taking advantage of the present low
interest rate environment in the UK to the benefit of shareholders.  This
loan, if taken out, will be invested in the equity market over the summer
months.



Share Buy-Back Programme

During the year the company bought back and cancelled 10,978,930 ordinary
shares, representing 4.2% of the share capital at the beginning of the year.



This activity increased the net asset value per share for remaining
shareholders by 0.6% and has also substantially reduced the volatility of the
discount to net assets on which the shares have been trading. This increased
stability in the level of the discount is particularly welcome given that the
volatility of the stock market as a whole has never been higher.



The board continues to believe that its ability to buy back shares for
cancellation is to the benefit of all shareholders. As in recent years, a
Special Resolution proposing an extension of this facility will be put to the
annual general meeting on 4 July 2001.



Dividends

The board is recommending a final dividend of 8.45p per share which will make
a total for the year of 12.45p per share, a rise of 2.5%. Earnings per share
for the year were 12.07p and therefore revenue reserves have again been drawn
on modestly to meet the company's dividend objective. The board is comfortable
with this policy as the level of revenue reserves presently represents more
than a full year's dividend and also because it anticipates that future
dividend growth will not rely to a material extent on the use of these
reserves.



Marketing Initiatives

The Company has for the last two years supported the marketing programme
organised by the Association of Investment Trust Companies (AITC) whose
objective has been to increase the awareness and knowledge of investment
trusts amongst a target audience of potential investors and their advisors.
The Board believes that this marketing campaign has to date been successful
and intends to continue to give it support, subject to like support from other
major investment trusts.  This would involve an annual contribution of £
235,000 compared to £344,000 in the financial year ending 31 March 2001.



The board also believes that the generic advertising campaign carried out by
the AITC must be supplemented by the more specific promotion of vehicles
through which investors can invest in The Edinburgh Investment Trust. The
manager's marketing initiative aims to increase investor awareness of these
vehicles such as monthly savings schemes, ISAs, PEP transfers and pension
products. The success and attraction of these initiatives is such that
together they represented at the year-end 7.0% of issued share capital (up
from 6.4% at the end of the previous year).  The company contributes to this
initiative, believing it is an effective, low cost way, to encourage
investment in the company.



The Board

Sir Chips Keswick will retire from the board at the conclusion of the
forthcoming annual general meeting.  Sir Chips has been a director for nine
years and his advice has been of much benefit to the board and shareholders
over the years. We all wish him well.



Directors' Remuneration

A resolution will be proposed at the annual general meeting to increase the
aggregate directors' remuneration, which was last determined at £150,000 per
annum in 1995, to £250,000.  This is to provide flexibility for the future;
the board does not currently intend to increase fees for existing directors to
this level.



Prospects

It is encouraging to see some recovery in world stockmarkets since the end of
the financial year.  Initiatives to reduce interest rates and the present
healthy money supply growth rates should reduce the harshness, particularly in
the US, of the anticipated economic slowdown.  The global corporate sector
will not be immune from stress especially in the technology-related industries
in which over investment has occurred.  Your company's theatre of activity is
of course the UK whose economy and corporate sector are, I believe, strong.
Against this background, the UK equity market is currently attractively
valued, and although positive sentiment could be temporarily deflected by
weakness in overseas economies I would expect the UK equity market to produce
a reasonably attractive return over the next twelve months.





STATEMENT OF TOTAL RETURN FOR THE YEAR ENDED 31 MARCH


                           2001                          2000
                Revenue   Capital    Total    Revenue   Capital    Total
                 £000      £000      £000      £000      £000      £000

Realised gains        -   183,567   183,567         -   203,110    203,110
on investments
Decrease in           -  (373,754) (373,754)        -   (37,117)  (37,117)
unrealised
appreciation   
               --------- --------- --------- --------- --------- ---------
        
Total capital         -  (190,187) (190,187)        -   165,993   165,993
gains
on investments
Currency gains        -       866       866         -        13        13
Income from      38,454         -    38,454    39,707         -    39,707
investments
Interest          1,889         -     1,889     1,010         -     1,010
receivable on
short term
deposits
Underwriting         53         -        53        62         -        62
commission
Investment       (1,874)   (4,372)   (6,246)   (3,232)   (3,232)   (6,464)
management fee
Administrative   (1,707)        -    (1,707)   (1,806)        -    (1,806)
expenses
Share buyback         -         -         -         -       (31)      (31)
expenses
               --------- --------- --------- --------- --------- ---------      
      
Net return
before           36,815  (193,693) (156,878)   35,741   162,743   198,484
finance costs
and taxation

Interest         (5,850)  (13,651)  (19,501)   (9,751)   (9,751)  (19,502)
payable and
similar
charges
               --------- --------- --------- --------- --------- ---------
               
Return on
ordinary         30,965  (207,344) (176,379)   25,990   152,992   178,982
activities
before
taxation

Taxation             (1)        -        (1)       (1)        -        (1)
               --------- --------- --------- --------- --------- ---------
Return on
ordinary         30,964  (207,344) (176,380)   25,989   152,992   178,981
activities
after taxation
Preference
stock
dividends
- non equity          -         -         -       (10)        -       (10)
               --------- --------- --------- --------- --------- ---------
Return
attributable     30,964  (207,344) (176,380)   25,979   152,992   178,971
to
equity
shareholders
Dividends in    (31,177)        -   (31,177)  (32,829)        -   (32,829)
respect of
equity shares
               --------- --------- --------- --------- --------- ---------
Transfer           (213) (207,344) (207,557)   (6,850)  152,992   146,142
(from)/to
reserves
               --------- --------- --------- --------- --------- ---------
Return per
ordinary share    12.07p  (80.81p)  (68.74p)     9.15p    53.86p    63.01p
               --------- --------- --------- --------- --------- ---------
Total dividend
per ordinary      12.45p                        12.15p
share
               ---------                     ---------
               
The revenue column of this statement represents the revenue account of the
company.

All revenue and capital items in the above statement derive from continuing
operations.

No operations were acquired or discontinued during the year.


BALANCE SHEET AT 31 MARCH

                                 2001                            2000
                         £000            £000            £000            £000
Fixed Assets
Investments                         1,530,594                       1,830,650

Current
Assets
Debtors                13,087                          26,259
UK Treasury            54,605                               -
Bills
Cash and                5,138                          13,625
short term
deposits
                    ---------                       ---------
                       72,830                          39,884
Creditors:
Amounts                35,542                          39,244
falling
due within
one year
                    ---------                       ---------
Net Current                            37,288                             640
Assets                              ---------                       ---------
                                   
Total Assets                        1,567,882                       1,831,290
less current
liabilities

creditors:
amounts                               194,599                         194,348
falling
due after
more than on
year
                                    ---------                       ---------   
                                

Capital and
Reserves
Called up                              63,215                          65,960
share capital
- equity
Share premium                           6,639                           6,639
Capital                                10,240                           7,495
redemption
reserve
Capital                               960,727                         850,419
reserve -
realised
Capital                               291,201                         664,955
reserve -
unrealised
Revenue                                41,261                          41,474
reserve
                                    ---------                       ---------
                                    
Total Equity                        1,373,283                       1,636,942
Shareholders'
funds                               ---------                       ---------
                                   
Net asset                             540.96p                         618.29p
value per
ordinary 25p
share




CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH


                                      2001                          2000
                              £000           £000           £000           £000

Net Cash Inflow                            30,799                        36,135
From Operating
Activities

Servicing of
Finance
Interest paid             (19,250)                      (19,250)
Preference                      -                           (10)
dividends paid
                         ---------                     ---------
                        
Net Cash Outflow                         (19,250)                      (19,260)
from servicing of
finance

taxation
UK tax recovered              234                           480
Overseas tax paid              (1)                           (2)
                         ---------                     ---------
                         
Net Cash inflow                              233                           478
from taxation

Financial
investment
Purchase of              (398,102)                     (516,312)
investments
Sale of investments       519,251                       688,559
                         ---------                     ---------
Net Cash inflow
from financial                           121,149                       172,247
investment

Equity Dividends                         (31,577)                      (34,714)
paid
                                        ---------                     ---------
Net Cash inflow
before                                   101,354                       154,886
use of liquid
resources and
financing

Net cash (outflow)/                      (54,605)                        9,890
inflow from
Management of
liquid resources

Financing
Repayment of                    -                        (1,700)
preferred stock
Buyback of ordinary       (56,102)                     (151,793)
shares
                         ---------                     ---------
Net Cash outflow                         (56,102)                     (153,493)
from financing
                                        ---------                     ---------
(decrease)/increase                       (9,353)                       11,283
in cash
                                        ---------                     ---------
                                        

Notes:

1.     The directors recommend that a final dividend of 8.45p (2000 - 8.25p)
per ordinary share be paid. The final dividend will be paid on 5 July 2001 to
shareholders on the register on 8 June 2001.  The ex dividend date is
6 June 2001.

2.     The financial information for the year ended 31 March 2000 has been
extracted from the annual report and accounts of the company which has been
filed with the Registrar of Companies and on which the auditors' report was
unqualified.

        The accounts have been prepared under the same accounting policies
used for the year to 31 March 2000.

3.     The statutory accounts for 2001 contain an unqualified audit report and
will be delivered to the Registrar of Companies following the company's Annual
General Meeting which will be held at The Caledonian Hilton Hotel, Princes
Street, Edinburgh on Wednesday 4 July 2001 at 12.00 noon.

4.     The statement of total return (incorporating the revenue account),
balance sheet and cashflow set out above do not represent full accounts in
accordance with Section 240 of the Companies Act 1985. The accounts have been
prepared in accordance with the Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies'.

5.     The annual report will be posted to shareholders on 4 June 2001 and
copies will be available at the head office of the Secretary - Edinburgh Fund
Managers plc, Donaldson House, 97 Haymarket Terrace, Edinburgh EH12 5HD