Final Results

To:Stock Exchange For immediate release: 22 March 2004 MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc Annual results for the 12 months to 31 January 2004 - Net asset value per share rose by 27.5% in comparison to the benchmark, the FTSE All-Share index, which gained 27.0%. - A final dividend of 1.37p per share. This makes a total of 1.87p for the financial year, an increase of 20.6% on last year. - Share price total return of 40.0% as discount narrowed from 11.4% to 4.8%. - The outlook for the UK is still promising and this is where we invest the major part of our portfolio. Chairman's statement Performance The company's net asset value per share (NAV) rose by 27.5% in the year to 31 January 2004, just ahead of the 27.0% gain registered by the benchmark FTSE All- Share index ("the index"). Over the same period, the share price increased by 36.9%, as the discount to NAV narrowed significantly, from 11.4% to 4.8%. According to figures produced by The Association of Investment Trust Companies, the company's share price total return of negative 16.8% over the three years to 31 January 2004 compares with the size-weighted average return for the global growth sector of negative 24.8%. Over the 12-month period to 31 January the "average" return was 34.4%, while the company's return was a positive 40.0%. Earnings per share increased sharply, for the second year in succession, to stand 26.1% above the level achieved in 2002/03. The board is thus recommending a final dividend of 1.37p per share. This makes a total of 1.87p for the year, an increase of 20.6% on last year. We believe that this level of dividend is sustainable, but will depend upon our income in future years. Our primary objective remains growth in capital. Share price When the company was launched in March 1999, a right to redeem shares was built into its Articles of Association. The first opportunity to redeem follows this year's AGM. As I said in my letter which accompanied the notice of EGM in November, discounts to NAV and the volatility of these discounts are unfortunately a feature of many investment trusts and can detract from the Board and manager's primary task of ensuring an excellent performance of the investment portfolio and thus returns to shareholders. I am therefore glad that shareholders approved the Board's proposal that, in addition to the five-yearly redemption opportunity, we should operate a 'trigger' whereby, if the average discount exceeds 7.5% over the twelve-week period prior to each financial year end, a further redemption opportunity should become available. The average discount in the 12 weeks prior to 31 January 2004 was 7.0% and at the time of writing this report the discount was 2.4%. Your board believes that the discount should be maintained, where possible, in single figures. Our experience since setting this target is that very limited use of share buybacks, combined with good relative performance, can achieve this end. In the entire 12 months to 31 January 2004, the company bought back only 0.5% (1,613,235 shares) of the shares outstanding at the beginning of the financial year. Although the law has recently changed to permit it, we have no plans to take such shares into treasury and re-issue them at even a reduced discount. Thus we expect the share price to reflect more accurately the underlying investment performance and, as Tom Walker says in his review which follows, we view the prospects with confidence. The Board There have in the past year been significant changes to the Combined Code on Corporate Governance for all companies, and to the Listing Rules for investment companies. The Association of Investment Trust Companies has also produced its own Code specifically for investment trusts. We believe that we comply in all material respects with these standards. Since the company's inception your board has had in place a structure of committees and mechanisms to achieve a rigorous review of the company's affairs and the performance of the investment managers, and to evaluate the board's own mix of skills and its performance. I believe the blend of skills and experience of individual directors has given strength to the board during a testing period for investors. John Plant, who is resident in the USA, is now CEO of one of the world's largest automotive equipment manufacturers which has just achieved an independent listing. He feels he must stand down at the AGM, having served the company since its foundation in 1999. He has brought a valuable perspective and has maintained great commitment to the company; we are most grateful to him. Outlook The simultaneous rise in global stockmarkets over the last 12 months contrasts with a somewhat more variable economic picture. Fiscal and monetary stimuli are supporting the US economy, particularly in an election year, and China continues, almost single-handedly, to fuel the remarkable surge in demand for, and prices of, commodities. While there has been some 'irrational exuberance' in China's stockmarkets, intra-Asian trade has developed strongly since the 1997 collapse, underpinning company performance elsewhere in South-East Asia and the Japanese economy is improving slowly. Europe continues to stutter, with the weakness of the dollar exacerbating concerns, but the UK looks more promising and this is where we invest the major part of our portfolio. Stockmarkets have moved in distinct phases as economic prospects have shifted. 2002 was a year for defensive stocks, while 2003 saw recovery stocks outperform, mostly on a re-rating. Now, with equity valuations generally high, it is likely that earnings growth will dictate market leadership this year. Finding stocks anywhere in the world with strong profit potential, and careful use of borrowings to 'gear' on these opportunities, will be the key to outperformance. Manager's review The 12 months to 31 January 2004 have seen a dramatic recovery in world stockmarkets. The net asset value of your shares rose by 27.5%, compared to a 27.0% rise in the index. We have invested in a broad spread of industries and geographies, used gearing and currency hedges and selectively bought back the trust's own shares to achieve this performance. The assets of the trust include a core portfolio of UK shares and a focussed selection of overseas shares. The trust also has a commitment to private equity, principally through its investment in Martin Currie Capital Return Trust (MCCRT), a quoted fund-of-funds investment trust. UK shares The largest proportion of our portfolio is invested in a balanced selection of companies quoted in the UK. We look for companies where positive changes are happening which we believe have not yet been recognised by the market. Take the revenue growth and margin improvements being enjoyed by UK housebuilder Persimmon Holdings, for example. The market has felt for some months that these were about to collapse. They continue to improve. Another example is Man Group. It specialises in alternative investment strategies, sometimes known as hedge funds, does it well and is growing very strongly. We believe that these vehicles are still in the early stages of development, and so Man Group's valuation should discount many more years of growth than it does. Meanwhile, we believe that commodity prices are going to continue rising for longer than many people think. The large UK-based metal and mining companies, BHP, Anglo American, Rio Tinto and Xstrata, all of which we have held during the year, have done very well. The UK market has been led in the last year by recovery stocks like Cable and Wireless and Colt Telecom. Because of their fundamentals, I have not bought into many of these stocks. However, we have also seen strong performances from sectors where earnings have continued to grow well. Construction and basic industries have been areas where tight supply and robust demand have kept earnings buoyant. There have also been stocks where management has got it right and results have remained good - despite the struggle felt by many competitors. Retailer Next, which we held for much of the year, is one example. Our UK portfolio rose strongly. Overseas shares While we do focus predominantly on the UK, it would be naive to think that UK companies are the best in the world; or that the UK economy is. Why then should we restrict ourselves to investing only in the UK? For this reason, we bring our best ideas around the globe together in a focussed portfolio of overseas shares. These may be companies that are more attractive than their UK counterparts. For example, we hold North American energy stock, Encana. Natural gas is in short supply in North America and, while BP and Encana have vast natural gas reserves there, 90% of Encana's reserves are in natural gas, against only 50% of BP's. Equally, UK-quoted Wolseley distributes construction materials in Europe and North America. It has done very well and we rate its management highly. Operating in a similar sector, but based in Thailand is Siam Cement. Thailand's economy is growing at twice the rate of mature western economies. That backdrop has allowed Siam Cement to do even better. Over the reporting period, the shares that we hold in overseas markets have performed particularly well, rising by 40.7%. Especially strong have been a number of Asian stocks, but European companies have also provided good returns. With the benefit of our hedging of the US dollar, our investments in the US have also done well. Private equity An investment in private equity is longer term than one in a quoted stock. Typically, there is a five-year period between making the investment and selling it. During that period the investment's valuation moves in a steadier fashion than the prices of quoted shares. This explains why, in a year when the index leapt 27.0%, our principal private equity investment, MCCRT, has done less well, rising by 13.6%. But this has barely detracted from its excellent long-term record. I expect steady appreciation over coming months as MCCRT continues to sell its underlying investments. Private equity is certainly an asset class to which this trust will remain committed and this is an attractive stage in the cycle as corporate activity is picking up so dramatically. Outlook A year ago, the war with Iraq was imminent and confidence in the economic recovery was fragile. Investors in equities, having just ended a year in which the index fell by 31.0%, had lost confidence. Now, despite the end of the ground war in Iraq, winning the peace is not as advanced as many would have hoped. Security against terrorism remains an issue that will not go away for many years. There are some signs that we are coming to terms with this fact. I am more confident in the state of the world economy now. Concerns remain over debts, the weakness of the dollar and, related to that, the escalation in the US trade deficit. But the stimulus from fiscal and monetary policy seems likely to stay in place for most of this year. Two very important economies, China and the US, have considerable positive momentum. Meanwhile, the UK looks good, and Europe should improve shortly. Of course, much of this good news has been reflected in the 27.0% stockmarket gain that we have just enjoyed. But I do believe that growth in earnings will surprise positively in many areas this year. With bonds still unattractive and interest rates and inflation still close to historic lows, I believe we can continue to make money in equities in the year ahead. - ends - For further information, please contact: Tom Walker/Mike Woodward 0131 229 5252 Martin Currie Investment Management Ltd twalker@martincurrie.com/mwoodward@martincurrie.com MARTIN CURRIE PORTFOLIO INVESTMENT TRUST PLC Statement of total return (incorporating the revenue account) for the year ended 31 January 2004 (Unaudited) Revenue Capital Total £000 £000 £000 Gains on investments - - 1,599 1,599 realised - - 49,770 49,770 unrealise d Currency losses - (218) (218) Income - franked 6,802 4,071 10,873 - 1,809 14 1,823 unfranked Investment management fee (528) (1,055) (1,583) Performance fee - (454) (454) Other expenses (416) - (416) _______ _______ _______ Net return before finance costs 7,667 53,727 61,394 and taxation Interest payable and similar (795) (1,590) (2,385) charges _______ _______ _______ Return on ordinary activities 6,872 52,137 59,009 before taxation Taxation on ordinary activities (82) - (82) _______ _______ _______ Return on ordinary activities 6,790 52,137 58,927 after taxation Dividend in respect of equity (5,573) - (5,573) shares _______ _______ _______ Transfer to reserves 1,217 52,137 53,354 _______ _______ _______ Return per ordinary share 2.27p 17.44p 19.71p Subject to approval at the forthcoming Annual General Meeting, the directors have declared a final dividend on the ordinary shares of the company for the year ending 31 January 2004 of 1.37p per share (2003: 1.05p) to be paid on 11 June 2004 to shareholders on the register on 21 May 2004. These are not full statutory accounts in terms of Section 240 of the Companies Act 1985. The full audited accounts for the year to 31 January 2003, which were unqualified, have been lodged with the Registrar of Companies. The annual results will be circulated to shareholders in the form of an annual report, copies of which will be available at the company's registered office, Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES. MARTIN CURRIE PORTFOLIO INVESTMENT TRUST PLC Statement of total return (incorporating the revenue account) for the year ended 31 January 2003 (Audited) Revenue Capital Total £000 £000 £000 Losses on - realised - (26,248) (26,248) investments - unrealised - (55,333) (55,333) Currency gains - 224 224 Income - franked 6,038 5,909 11,947 - unfranked 1,731 - 1,731 Investment management fee (677) (1,354) (2,031) Performance fee - (138) (138) Other expenses (562) - (562) _______ _______ _______ Net return before finance costs 6,530 (76,940) (70,410) and taxation Interest payable and similar (796) (1,592) (2,388) charges _______ _______ _______ Return on ordinary activities 5,734 (78,532) (72,798) before taxation Taxation on ordinary activities (167) - (167) _______ _______ _______ Return on ordinary activities 5,567 (78,532) (72,965) after taxation Dividend in respect of equity (4,689) - (4,689) shares _______ _______ _______ Transfer to/(from) reserves 878 (78,532) (77,654) _______ _______ _______ Return per ordinary share 1.80p (25.40p) (23.60p) MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc BALANCE SHEET As at 31 As at 31 Jan January 2004 2003 (Audited) (Unaudited) £000 £000 £000 £000 Investments at market value Listed on The Stock 209,348 171,559 Exchange in the UK Listed on stock exchanges 55,990 35,328 abroad Unlisted at directors' 140 - valuation ______ ______ 265,478 206,887 Current assets Debtors 4,489 907 Cash at bank 24,376 33,882 _____ _____ 28,865 34,789 Creditors Amounts falling due within (46,529) (10,642) one year _____ _____ Net current (17,664) 24,147 (liabilities)/assets ______ ______ Total assets less current 247,814 231,034 liabilities Creditors Amounts falling due after - (35,553) one year ______ ______ Net assets 247,814 195,481 ______ ______ Capital and reserves Called up ordinary capital 14,928 15,009 Share premium account 159,208 159,208 Capital redemption reserve 1,089 1,008 Special distributable 134,146 135,167 reserve Realised capital reserve (54,875) (57,242) Unrealised capital reserve (10,145) (59,915) Revenue reserve 3,463 2,246 ______ ______ Equity shareholders' funds 247,814 195,481 ______ ______ Net asset value per 83.00p 65.12p ordinary share MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc STATEMENT OF CASH FLOW Year ended Year ended 31 31 January January 2003 2004 Audited Unaudited £000 £000 £000 £000 Operating activities Net dividends and interest received 11,846 12,515 from investments Underwriting commission received 54 27 Interest received from deposits 891 845 Investment management fee (2,228) (2,115) Cash paid to and on behalf of (117) (139) directors Bank charges (21) (35) Net taxation (paid)/recovered (66) 70 Other cash payments (428) (929) Net cash inflow from operating 9,931 10,239 activities Servicing of finance Interest paid (2,397) (2,776) Net cash outflow from (2,397) (2,776) servicing of finance Capital expenditure and financial investment Payments to acquire (71,361) (89,584) investments Receipts from disposal of 59,980 106,802 investments Net cash (outflow)/inflow from capital expenditure and (11,381) 17,218 financial investment Equity dividends paid (4,635) (4,663) Net cash (outflow)/inflow (8,482) 20,018 before financing Financing Repurchase of ordinary share (1,024) (7,758) capital Net cash outflow from (1,024) (7,758) financing (Decrease)/increase in cash (9,506) 12,260 for the period

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