Final Results

Henderson TR Pacific Inv. Trust PLC 17 February 2006 Page 1 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 17 February 2006 Henderson TR Pacific Investment Trust plc announces preliminary results for the year ended 31 December 2005. Henderson TR Pacific Investment Trust plc seeks a high rate of total return from companies operating primarily in the Pacific region excluding Japan and Australasia. Key Points: • New Portfolio Manager, Andrew Beal, took over management of Henderson TR Pacific Investment Trust plc on 22 September 2005. • Portfolio subsequently restructured to reflect the new Portfolio Manager's investment approach and stock preferences, contributing to a more aggressive investment stance in anticipation of continued market strength. • In the month of December the company recorded its strongest performance this year both in absolute terms and relative to the benchmark. • First investment in India made, following April's shareholder approval but the portfolio remains underweight due to the comparative valuation levels of the Indian market. • The NAV total return per share rose 32.1% over the year compared with a return of 36.3% (sterling adjusted) for the MSCI All Country Far East (Free) ex-Japan Index reflecting an overly defensive positioning which was corrected towards the end of the year with positive results. • Final dividend of 1.85p per share to be paid to shareholders in April. • Annual management charge to be reduced from 0.9% to 0.6% and performance fee to be introduced. Key Extracts from the Preliminary Statement (Audited and restated)+ (Unaudited) 31 December 2004 31 December 2005 Net Asset Value per Ordinary Share 114.8p 88.5p Share price 99.5p 76.8p Discount to NAV 13.3% 13.2% Proposed Final Dividend per Ordinary Share 1.85p 1.40p Total Return Performance for 12 Months to 31 December 2005 Net Asset Value (i) +32.1% Share price (i) +31.9% MSCI AC Far East (Free) ex-Japan Index (ii) +36.3% (i) Source: AITC Services Ltd. (net dividends reinvested) (ii) Source: Thomson Financial, Datastream (gross dividend reinvested) + Restated (see note 4) - MORE - Page 2 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Commenting on the results Chairman, David Robins, said: '2005 was another positive year for Asian markets following strong returns for the region in 2003 and 2004. Markets performed well despite a relatively challenging backdrop of rising interest rates, strong global commodity prices and generally anaemic earnings growth, particularly in the technology sector. As sterling based investors, currency strength in the region also provided additional gains for us.' Extracts from the Chairman's Statement Performance Our portfolio provided a net asset value total return of 32.1% over the year compared with a return of 36.3% (sterling adjusted) for the MSCI All Country Far East (Free) ex-Japan Index. Most of this underperformance occurred in the second half of the year as markets rallied. The largest detractors from performance were stock selection in Singapore and Hong Kong together with asset allocation to South Korea, where the portfolio was underweight the benchmark for much of the year. In general, as indicated at the interim stage, the portfolio was rather too defensively positioned in anticipation of weaker markets. The stance was corrected towards the end of the year with positive results. New Portfolio Manager Andrew Beal took over management of your company on 22 September 2005. The Board would like to thank Michael Watt, who retired from the company in September, for his significant contribution, both as the Portfolio Manager and as a director since its inception. During October and November the portfolio was restructured to reflect the new Portfolio Manager's investment approach and stock preferences. In general these changes contributed to a more aggressive investment stance in anticipation of continued market strength. This included taking the portfolio from net cash to a geared position. As a result your company recorded in December its strongest performance this year both in absolute terms and relative to the benchmark. Management Fee Your Board has agreed with Henderson changes to the management fee arrangements which are to be effective from 1 January 2006. These include a reduction in the base fee from 0.9% to 0.6% and the introduction of a performance fee. The full terms of the agreement are contained in appendix 1. We believe these terms more closely align the interests of the Manager with the interests of shareholders. - MORE - Page 3 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Objective Your Board has taken the decision to make a further minor, but important, amendment to the objective of the company. This is to make it clear that investments may be directed to companies which, although the majority of their business is carried out in the Pacific region, excluding Japan and Australia, maintain a Stock Exchange listing elsewhere. Examples of this would be technology related stocks, many of which are listed on Nasdaq in the USA rather than in the Pacific region, or indeed Chinese companies which are seeking listings outside the region on a variety of markets. We do not consider this a material change as the primary business of all investee companies is, and will continue to be, carried out in the Pacific region. At the same time, from 1 January 2006 the company has changed the benchmark against which performance is measured to the MSCI All Country Asia ex Japan Index, to reflect the fact that during the past year India has been added to the company's investment universe. India The Board is pleased to report that an investment has been made in India following the granting of authority for investment in this market by shareholders in April. Though the Portfolio Manager continues to seek further opportunities in India, the portfolio remains underweight due to the challenging valuation of the Indian market compared with other markets in the region. Share Repurchases Over the year to 31 December 2005 6,850,000 shares were repurchased and cancelled at an average discount of 12.1%. Revised UK Accounting Standards In common with other UK companies, we adopted revised UK Accounting Standards last year. The interim accounts reflected the new accounting standards as do the year end accounts. The notes to the accounts include reconciliations of the figures for the comparative periods to those reported previously. There are a number of changes but only two of the new requirements have an effect on the net asset value per share. First, our investments are now described as 'held at fair value through profit or loss'. As such they are valued at bid (or selling) prices rather than at mid-market prices. The effect on the valuation of the portfolio as at 31 December 2005 is a reduction of £614,000. Second, dividends are no longer included in the accounts as payable until they have been approved by shareholders. Accordingly, the dividend payable in respect of the year ended 31 December 2005 is not accrued as a liability and is therefore included within assets at that date. There are other presentational changes, following our adoption of the revised SORP, including the renaming of the Statement of Total Return to the Income Statement and a new primary statement has been added, a Reconciliation of Movements in Shareholders' Funds. Dividend A final dividend of 1.85p per share, which compares with a dividend of 1.40p per share paid last year, will be paid to shareholders in April reflecting the change in the objective of the company last year to seek a high rate of total return rather than simply growth. - MORE - Page 4 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Outlook While four successive years of positive returns in Asia have no precedent, we feel that the region continues to be well placed to deliver attractive returns to investors. We expect the economic backdrop to benefit from a peaking in US interest rates in the early part of the year and a moderation in the rate of increase in oil and commodity prices. Asian growth is typically closely linked to the industrial cycle in the developed world and the signs are that this should remain firm in 2006. We believe that these factors are likely to support further company earnings growth. Headline stock valuations are in line with long term historic averages but continue to look very attractive when adjusted for historically low levels of company debt and increasingly efficient use of capital. The coming years should see Asia deliver to equity investors returns commensurate with the economic dynamism of the region. David Robins, Chairman 17 February 2006 - MORE - Page 5 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Income Statement For the year ended 31 December 2005 (Unaudited) (Audited and restated) + Year ended 31 December 2005 Year ended 31 December 2004 Revenue Capital Revenue Capital Return Return Total Return Return Total £'000 £'000 £'000 £'000 £'000 £'000 Gains/(losses) from investments held at fair value through profit or loss - 49,508 49,508 - (6,116) (6,116) Income from investments held at fair value through profit or loss 6,709 - 6,709 5,525 - 5,525 Other interest receivable and similar income 102 - 102 66 - 66 ------- --------- --------- --------- ---------- ---------- Gross revenue and capital gains /(losses) 6,811 49,508 56,319 5,591 (6,116) (525) Management fee (633) (1,148) (1,781) (593) (1,015) (1,608) Other administrative expenses (587) - (587) (630) - (630) ------- -------- -------- -------- ----------- ---------- Net return/(loss) on ordinary activities before interest payable and taxation 5,591 48,360 53,951 4,368 (7,131) (2,763) Interest payable (85) (255) (340) (72) (214) (286) ------- -------- -------- ---------- ----------- ---------- Net return/(loss) on ordinary activities before taxation 5,506 48,105 53,611 4,296 (7,345) (3,049) Taxation on net return/(loss) on ordinary (1,853) 421 (1,432) (1,423) 727 (696) activities -------- -------- -------- ----------- ---------- ----------- Net return/(loss) on ordinary activities after taxation 3,653 48,526 52,179 2,873 (6,618) (3,745) ===== ===== ====== ====== ======= ======= Return/(loss) per ordinary share (note 2) 1.92p 25.52p 27.44p 1.45p (3.33p) (1.88p) The total column of this statement represents the profit and loss account of the company. All revenue and capital items in the above statement derive from continuing operations. + (See notes 1(b) and (e)) - MORE - Page 6 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Reconciliation of Movements in Shareholders' Funds For the years ended 31 December 2005 and 31 December 2004 Year ended 31 December 2005 Capital Other redemption Share reserve Special Capital Revenue capital reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 At 31 December 2004 (as restated see notes 1 (b) and 4) 9,660 6,246 92,410 53,913 8,682 170,911 Adjustment to bid valuation (see note 1 (d)) - - - (686) - (686) Net return from ordinary activities - - - 48,526 3,653 52,179 Dividend paid in respect of year ended 31 December 2004 (paid 20 April 2005) - - - - (2,705) (2,705) Purchase of own shares (342) 342 (5,747) - - (5,747) --------- -------- -------- ---------- -------- --------- At 31 December 2005 9,318 6,588 86,663 101,753 9,630 213,952 ===== ===== ===== ====== ===== ===== Year ended 31 December 2004 Capital Other redemption Capital Share reserve Special reserve Revenue capital reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 At 31 December 2003 (as restated see notes 1(b) and 4) 10,180 5,726 99,492 60,531 7,845 183,774 Net (loss)/return from ordinary activities - - - (6,618) 2,873 (3,745) Dividend paid in respect of year ended 31 December 2003 (paid 8 April 2004) - - - - (2,036) (2,036) Purchase of own shares (520) 520 (7,082) - - (7,082) -------- -------- -------- --------- -------- --------- At 31 December 2004 9,660 6,246 92,410 53,913 8,682 170,911 ===== ===== ===== ===== ===== ====== - MORE - Page 7 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Balance Sheet At 31 December 2005 (Audited and Restated)+ (Unaudited) 31 December 2004 31 December 2005 £'000 £'000 --------------------- -------------------- Fixed asset investments held at fair value through profit or loss Listed at market value - overseas 237,730 181,221 ---------- ---------- Current assets Debtors 200 142 Bank balances and short term deposits 803 5,685 ---------- ---------- 1,003 5,827 Creditors: amounts falling due within one year (24,729) (16,137) ---------- ---------- Net current liabilities (23,726) (10,310) ---------- ---------- Total assets less current liabilities 214,004 170,911 Provisions for liabilities and charges (52) - ---------- ---------- Total net assets 213,952 170,911 ====== ====== Capital and reserves Called up share capital 9,318 9,660 Capital redemption reserve 6,588 6,246 Special reserve 86,663 92,410 Other capital reserves 101,753 53,913 Revenue reserve 9,630 8,682 ---------- ---------- Equity shareholders' funds 213,952 170,911 ====== ====== Net asset value per ordinary share (note 3) 114.8p 88.5p + (See note 4) - MORE - Page 8 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Cash Flow Statement For the year ended 31 December 2005 (Unaudited) (Audited) Year ended Year ended 31 December 2005 31 December 2004 £'000 £'000 £'000 £'000 -------------- ------------- -------------- ------------ Net cash inflow from operating activities 3,043 2,182 Servicing of finance Interest paid (314) (309) ----------- ----------- Net cash outflow from servicing of finance (314) (309) Taxation Withholding tax paid (123) (118) ---------- ---------- Net tax paid (123) (118) Financial investment Purchases of investments (210,203) (89,906) Sales of investments 202,141 120,705 ------------- ------------- Net cash (outflow)/inflow from financial investment (8,062) 30,799 Equity dividends paid (2,705) (2,036) --------- ----------- Net cash (outflow) /inflow before financing (8,161) 30,518 Financing Repurchases of ordinary shares (5,747) (7,082) Drawdown/(repayment) of multi-currency loan facility 9,157 (21,278) ----------- ----------- Net cash inflow/(outflow) from financing 3,410 (28,360) ---------- ---------- (Decrease)/increase in cash (4,751) 2,158 ====== ====== Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash as above (4,751) 2,158 Cash (inflow)/outflow from debt financing (9,157) 21,278 --------- ---------- Change in net debt resulting from cash flows (13,908) 23,436 Exchange movements (688) 124 -------- ---------- (14,596) 23,560 Net debt at 1 January (8,600) (32,160) ---------- ---------- Net debt at 31 December (23,196) (8,600) ====== ====== - MORE - Page 9 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Notes: 1. Accounting Policies a) Basis of accounting The accounts are prepared on the historical cost basis of accounting, modified to include the revaluation of fixed asset investments, and in accordance with applicable accounting standards and with the Revised Statement of Recommended Practice - 'Financial Statements of Investment Trust Companies' dated December 2005 (the Revised SORP). All of the company's operations are of continuing nature. The same accounting policies used for the year ended 31 December 2004 have been applied with the exceptions listed in b), c), d) and e) below. b) Changes in presentation The company has adopted the provisions of the Revised SORP and revised UK Accounting Standards which has resulted in some changes to the presentation of the company's accounts. The Statement of Total Return is now called the Income Statement. Dividends payable to equity shareholders are no longer reflected in the Income Statement, although they continue to be shown in the Reconciliation of Movements in Shareholders' Funds which is now presented as a primary statement. c) Changes in accounting policies The company has changed its accounting policy for the valuation of listed investments and the recognition of dividends payable to equity shareholders in accordance with the provisions of FRS 26 - Financial instruments: Recognition and Measurement ('FRS 26') and FRS 21 - Events after the balance sheet date ('FRS 21') respectively. These changes in policy and the associated impact on the results of the company are referred to below. d) Valuation of fixed asset investments Investments - prior to 1 January 2005, listed investments were valued at middle market prices. Following the introduction of FRS 26, listed investments have been designated by the Board as held at fair value through profit or loss and accordingly are valued at fair value, deemed to be bid market prices. In accordance with the exemption conferred by FRS 26, comparatives have not been restated for this change in accounting policy and therefore listed investments shown at 31 December 2004 are stated at middle market prices. The adoption of bid market prices at 1 January 2005 decreased the value of listed investments by £686,000. The effect of this change in accounting policy is to decrease the value of investments at 31 December 2005 by £614,000 and increase the net return on ordinary activities after taxation for the period then ended by £72,000. Unquoted investments are valued by the directors using primary valuation techniques such as earnings, multiples, recent transactions and net assets. Where fair value cannot reliably be measured the investment will be carried at the previous reporting date value unless there is evidence that the investment has since been impaired, in which case the value will be reduced. Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Income Statement as 'Gains or losses on investments held at fair value through profit or loss'. Also included within this caption are transaction costs in relation to the purchase or sale of investments, including the difference between the purchase price of an investment and its bid price at the date of purchase. All purchases and sales are accounted for on a trade date basis. - MORE - Page 10 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 e) Dividends payable to equity shareholders Under FRS21 dividends should not be accrued in the accounts unless they have been approved by shareholders before the Balance Sheet date. Dividends payable to equity shareholders are recognised in the Reconciliation of Movements in Shareholders' Funds when they have been approved by shareholders and become a liability of the company. There is no impact from this change on the recognised gains and losses in either 2004 or 2005. However, the net assets at 31 December 2005 and 31 December 2004 have been impacted as disclosed in note 4. The effect of this change is to increase net assets at 31 December 2005 by £3,448,000 (or 1.85p per share) (31 December 2004: £2,705,000 or 1.4p per share). 2. Return/(loss) per Ordinary Share Revenue returns per ordinary share are based on earnings attributable to the ordinary shares of £3,653,000 (year ended 31 December 2004: £2,873,000) and on the weighted average number of ordinary shares in issue during the year to 31 December 2005, being, 190,186,373 (year ended 31 December 2004: 198,788,181). Capital gains/(losses) per ordinary share are based on net capital gains attributable to the ordinary shares of £48,526,000 (year ended 31 December 2004: losses of £6,618,000) and on the weighted average number of ordinary shares in issue during the year, as shown above. 3. Net Asset Value per Ordinary Share The net asset value per ordinary share is based on net assets attributable to ordinary shares of £213,952,000 (2004 restated: £170,911,000) and on the 186,353,359 (2004: 193,203,359) ordinary shares in issue at 31 December 2005. The movements during the year of the company's assets attributable to the ordinary shares were as follows: £'000 Total net assets at 1 January 2005 (restated note 4) 170,911 Adjustment to record investments at bid value (see note 1(d)) (686) Net return on ordinary activities after taxation 52,179 Final dividend paid in respect of year ended 31 December 2004 (paid 20 April 2005) (2,705) Repurchase of 6,850,000 ordinary shares (see note 5) (5,747) ----------- Total net assets at 31 December 2005 213,952 ====== - MORE - Page 11 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 4. Final Dividends a) Change in presentation and restatement The Income Statement no longer reflects payment of dividends; these are now shown in the Reconciliation of Movements in Shareholders' Funds during the period in which they are approved by shareholders. The Income Statement, Revenue Reserve and Reconciliation of Movements in Shareholders' Funds for the year ended 31 December 2004 have been restated accordingly. Per ordinary share The effect on the Balance Sheet at 31 December 2004 £'000 Net assets as at 31 December 2004 as previously stated 168,206 87.1p Add back 2004 final dividend declared on 8 February 2005 2,705 1.4p ---------- -------- Restated net assets as at 31 December 2004 170,911 88.5p ---------- -------- Per ordinary share The effect on the Balance Sheet at 31 December 2003 £'000 Net assets as at 31 December 2003 as previously stated 181,738 89.3p Add back 2003 f 2,036 1.0p inal dividend declared on 2 February 2004 ---------- ------- 183,774 90.3p Restated net assets as at 31 December 2003 ----------- -------- b) Proposed Final Dividend In respect of the year ended 31 December 2005, a final dividend of 1.85p per share has been declared and is subject to approval by shareholders at the forthcoming Annual General Meeting. The aggregate cost of this dividend based on the number of shares in issue at the balance sheet date is estimated to be £3,448,000. In accordance with the revised accounting policies of the company this dividend will be reflected in the 2006 accounts when it has been approved by shareholders. 5. Share Repurchases The company was granted authority to repurchase up to 28,961,183 ordinary shares at the Annual General Meeting held on 15 April 2005. During the year to 31 December 2005 the company purchased 6,850,000 Ordinary shares for cancellation at an average discount of 12.1%, at a cost of £5,747,000. The net asset value was enhanced by approximately £742,000. - MORE - Page 12 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 6. 2004 Accounts The figures and financial information for the year ended 31 December 2004 (as restated) are an extract of the latest published accounts of the company and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under Section 237(2) or 237(3) of the Companies Act 1985. 7. 2005 Accounts The preliminary figures for the year ended 31 December 2005, which do not constitute statutory accounts, are an extract from the latest draft company accounts. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 8. Dividend A final dividend of 1.85p per ordinary share will, if approved by shareholders, be paid on 7 April 2006 to shareholders recorded on the Register of Members on 3 March 2006. The company's shares go ex-dividend on 1 March 2006. 9. Annual General Meeting The annual report will be posted to shareholders in February 2006 and thereafter copies will be available at the registered office at 4 Broadgate, London EC2M 2DA. The Annual General Meeting of the company will be held at 4 Broadgate, London EC2M 2DA on Thursday 30 March 2006 at 12.30 pm. - MORE - Page 13 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Geographical Distribution of the Investment Portfolio As at 31 December 2005 As at 31 December 2004 % % South Korea 30.5 16.5 Taiwan 22.0 15.9 China 9.3 14.6 Hong Kong 15.4 19.8 Thailand 4.0 9.9 The Philippines - - Malaysia 5.3 6.9 Singapore 9.6 10.3 Indonesia - 4.6 Vietnam 1.8 1.5 India 2.1 - ------- ------ 100.0 100.0 ==== ==== Sector Analysis of Investments As at 31 December 2005 As at 31 December 2004 % % Consumer Discretionary 4.5 11.7 Consumer Staples 2.6 3.5 Energy 4.8 3.4 Financials and Property 39.1 44.0 Healthcare - - Industrials and Transport 14.4 7.9 Information Technology 29.4 11.2 Materials 1.1 4.8 Telecommunication Services 2.6 10.3 Utilities 1.5 3.2 ------- -------- 100.0 100.0 ==== ==== - MORE - Page 14 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Top Twenty Investments as at 31 December 2005 Company Country Sector Value of Investment £'000 Samsung Electronics South Korea Information Technology 10,975 Taiwan Semiconductor Taiwan Information Technology 9,619 Kookmin Bank South Korea Financials and Property 8,020 Hyundai Motor South Korea Industrials and Transport 7,850 Hynix Semiconductor South Korea Information Technology 7,820 China Mobile China Telecommunication Services 6,262 Industrial Bank of Korea South Korea Financials and Property 6,240 Siliconware Precision Industries Taiwan Information Technology 6,149 Henderson Land Development Hong Kong Financials and Property 6,065 Sun Hung Kai Properties Hong Kong Financials and Property 5,987 Cheung Kong Hong Kong Financials and Property 5,756 United Micro Electronic Taiwan Information Technology 5,618 Samsung Fire & Marine South Korea Financials and Property 5,392 Cathay Finanical Taiwan Financials and Property 5,314 Asustek Computer Taiwan Information Technology 5,293 LG Electronics South Korea Consumer Discretionary 5,190 Tata Motors India Industrials and Transport 5,106 Hon Hai Precision Industry Taiwan Information Technology 4,789 Singapore Airlines Singapore Industrials and Transport 4,740 LG Card South Korea Financials and Property 4,647 ------------ 126,832 ------------ Total Investments 237,730 ------------ Top 20 as a percentage of total investments 53.4% - MORE - Page 15 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 Appendix I - New Management Fee Arrangements effective 1 January 2006 Changes have been agreed with the Manager to the management fee arrangements. With effect from 1 January 2006, the investment management fee will comprise a base fee and a performance fee. The company will retain as its benchmark the MSCI All Country Asia ex Japan Index. In calculating any performance fees payable, the company's performance and the benchmark performance will both be measured on a total return basis. The Base Fee The base fee will be calculated in the first instance at the rate of 0.60% per annum of gross assets, calculated and paid at the rate of 0.15% per quarter. Gross assets are defined as the net asset value per ordinary share on the calculation date at the end of the period multiplied by the weighted average number of shares in issue throughout the relevant period, plus bank borrowings less, where relevant, provision for dividends to be paid out. The base fee will be subject to potential claw back. A claw back can arise in two circumstances; if there is an absolute fall in net asset value ('NAV') and if there is underperformance relative to the benchmark. In the case of an absolute fall in NAV, if, at the end of an annual period, the closing NAV per share is lower than the opening NAV per share by more than 2.5%, the 'First Claw Back' provision applies. If underperformance relative to the benchmark exceeds 2.5%, the 'Second Claw Back' provision applies. The First Claw Back will apply if the fall in NAV in any single year exceeds 2.5%. The Second Claw Back will apply to the extent that rolling underperformance exceeds 2.5%. Rolling performance will be based on three year averages, following 2006 and 2007 when it will be based on a single year and a two year average respectively. The amount of the claw back will be the greater of the fall in value or the value of underperformance, subject to a maximum claw back in any accounting period of half the basic fee for that period. The Performance Fee A performance fee will be payable if changes in the value of the company's assets outperform changes in the benchmark. The amount of the performance fee will depend on the degree of this outperformance, which will be measured in three 'bands'. The Band 1 performance fee will be payable on outperformance of between zero and 2.0%, at the rate of 0.3% of net assets. The Band 2 performance fee will be payable on outperformance of between 2.0% and 8.0% at the rate of 10% of outperformance in excess of 2.0%, and a further Band 3 performance fee on outperformance in excess of 8.0% at the rate of 20% of outperformance in excess of 8.0%. - MORE - Page 16 of 16 HENDERSON TR PACIFIC INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 December 2005 For any annual period, the combined total of the base fee plus any performance fees will be capped at 2.5% of the gross assets of the Company as at the end of that period. Band 1 performance fees will be calculated annually. However, Band 2 and Band 3 performance fees will be calculated on a rolling three year basis, except that current year performance will be measured in the financial year 2006, rolling two year performance will be measured in the financial year 2007 and rolling three year performance will be measured for financial periods thereafter. For further information contact: Andrew Beal Portfolio Manager Tel 020 7818 4314 David Masters Lansons Communications Tel 020 7490 8828 - ENDS - This information is provided by RNS The company news service from the London Stock Exchange

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