Final Results

Witan Pacific Investment Trust PLC 22 April 2008 WITAN PACIFIC INVESTMENT TRUST PLC Unaudited preliminary announcement for the year ended 31 January 2008 Chairman's Statement I am delighted that, for the second year running, I can report that the Company outperformed its benchmark. The Company's Net Asset Value ('NAV') total return of 4.7% outperformed the MSCI AC Asia Pacific Free Index by just over 2.0% in the year. Since adoption of the multi-manager structure in May 2005 the Company is 1.9% ahead of the benchmark index's return. When your Board implemented the multi-manager structure it was designed to lead to outperformance of the index with low levels of volatility relative to the index, bearing in mind the markets in which it invests. As I noted last year, the pattern of returns from both the managers during the course of this year reflects their individual strengths. For the year ended 31 January 2008, Nomura outperformed the benchmark by 1.9%, with a return of 4.6%, and Aberdeen outperformed by 3.0%, with a 5.7% return. Nomura's outperformance showed greater consistency through the year whereas Aberdeen's was more volatile. For an Asia Pacific Manager the weighting to Japan is the single biggest decision they make and, both your managers maintained an underweight position during the year. We believe that the structure of the fund which gives investors access to all of Asia, and where our two investment managers use their expertise to make the asset allocation between countries, makes this Company particularly suitable for those who want broad exposure to the area but who do not wish to make the asset allocation decision themselves. Your Board brings a diverse range of skills and experience to bear when reviewing critically the investment managers' policies and results. They interact with the managers regularly to understand the consistency of the implementation of the managers' styles and logic in their investment process. During the year both managers have regularly attended our Board meetings in person and by video link. I spent time with the managers in Singapore, where I went on company visits and attended investment team meetings. This was highly informative as I saw how each manager's process worked in action. The executive managers and the directors also met informally with the investment managers when they were visiting the UK. It is pleasing to report a slight reduction in the total expense ratio ('TER'), year on year, excluding performance fees, to 0.7%. The Board is committed to running your Company in the most cost effective and efficient way as possible and this low TER demonstrates that an Investment Trust structure is a highly effective way to run a multi-manager vehicle at a low cost. We continue our policy of distributing as much income as may be prudent. This year we are recommending a final dividend of 1.65p per share, an increase of 10% compared with last year's dividend. This dividend is payable on 27June 2008 to shareholders on the register at the close of business on 30 May 2008. Your Board believes that it is in shareholders' interests to buy back the Company's shares when they are standing at a substantial discount to their NAV. During the year the Company bought back 5,344,472 shares which had the effect of enhancing the NAV by approximately 0.8%. It is intended to seek renewal of the buy back authority at the forthcoming Annual General Meeting ('AGM'). In addition, the Board proposes to seek the renewal of authority to take shares into treasury for re-sale to the market at a later date. This power will be used to issue shares only at NAV or at a premium to NAV. As a result of the outcome of various court cases over the last twelve months regarding the historic imposition of VAT on Investment Management Fees some Investment Trusts may eventually be able to reclaim significant amounts of VAT. However, as the Company conducts virtually all of its business outside the UK, and indeed the EU, it has very little VAT to reclaim. After the migration of savings schemes to Witan Wealthbuilder in late 2006 it is pleasing that 3,206 investors now participate in the Company through these savings schemes. Regular updates on your Company can be found on www.witanpacific.com As to the future, while the effects of the US sub-prime crisis work themselves out in the credit markets and in the economies as a whole, the question will be how far might the contagion spread. The overall outlook for the Asia-Pacific region will be dependant on whether its economies have now truly decoupled from the major western economies. But even if the economies have separated from the US and Europe, the stockmarkets may not be immune from what is happening to other world markets. Integration in Asia continues apace: many Japanese companies for example are now driven by Asian demand, not just domestic factors. An important strength in the structure of the Company is the location of the managers within the region. Each one has offices in both Tokyo and Singapore (and other countries) and both are well placed to determine the asset allocation between Japan and the other countries in the region and to judge in which companies are the best to invest. The AGM will be held on 12 June 2008 at 12 noon at Cazenove Auditorium, 20 Moorgate, London, EC2R 6DA. I look forward to welcoming all of those able to attend. Gillian Nott Chairman 22 April 2008 Business Review The review which follows is designed to provide shareholders with information about your Company's business and results for the year ended 31 January 2008. The Business Review is addressed only to shareholders as a body and no liability can be admitted by the Directors to any other party in connection herewith. Any forward looking statements contained in the Business Review reflect the knowledge and information available to Directors at the time the Business Review was prepared. This Business Review has been prepared in accordance with the requirements of Sections 416 and 417 of the Companies Act 2006 and current best practice. All of the matters previously dealt with in the Executive Manager's Review are now included in this review which covers the following: • Objective and Strategy • Management arrangements • Portfolio Review • Investment Manager review process • Buy back policy • Third party service providers review process • Principal Risks • Key performance indicators • Your Board's priorities for 2008 • Outlook Objective and Strategy The Company's investment objective are to provide shareholders with a balanced portfolio of investments in the Asia-Pacific region designed to outperform the MSCI AC Asia Pacific Free Index ('MSCI Index') in sterling terms. From an investment perspective this means that your Company will seek to provide steady above average performance compared with the relevant MSCI Index in sterling terms predominantly aiming to achieve this through growth in capital. Your Company aims to outperform by using an active multi-manager approach. Currently the Board has appointed two investment managers but their performance is subject to regular review and the Board has the ability, should it wish, to change the managers and to increase/decrease the number of managers used. The Company has a policy of deploying gearing in a tactical sense, giving its Investment Managers discretion to hold up to 10% of their portfolio in cash or borrow up to 10%. Your Company will distribute as much income as may be prudent on an annual basis to shareholders. The Board employs share buy-backs to manage the discount appropriately expecting that the level will be comparable to most of its peers. Share buy-backs provide liquidity and enhance the NAV of the Company. In addition, your Company sponsors an ongoing marketing programme provided by Witan Investment Services Limited. This programme reaches out to both the private and professional investor using a blend of targeted marketing disciplines. Your Board aims to provide the best possible return to shareholders. The unbundling of the investment management services and other necessary services has provided greater transparency of the Company's cost base. Your Board applies strict controls on costs and expenses, maintaining a total expense ratio for the Company of less than 1%. Management Arrangements The management of the Company's assets is entirely outsourced to third parties. Witan Investment Services Limited acts as Executive Manager to manage and control the outsourced structure and relationships and to assist the Board on investment strategy and marketing. In summary, the Board sets the Company's strategy and the Executive Manager monitors and implements this same strategy. The following table shows the investment management arrangements: Equity Mandate Investment Manager Mandate Benchmark (£) % of Initial Portfolio Asia-Pacific Aberdeen MSCI AC Asia Pacific Free 50% Index Asia-Pacific Nomura MSCI AC Asia Pacific Free 50% Index Your Company has also appointed third parties for the various supporting services it requires. The principal ones are JPMorgan Chase for global custody, BNP Paribas Fund Services UK Limited for investment accounting and administration and BNP Paribas Secretarial Services Limited for company secretarial services. From time to time, as required, the Company also buys in services for legal, investment consulting, financial and tax advice. Although multi-manager arrangements can prove expensive, the Company's careful cost control has resulted in a total expense ratio of 0.7% which is much lower than any retail open-ended funds with this regional mandate. Portfolio Review For the second year running returns from the Asia-Pacific markets, as a whole, were relatively modest at 2.6% for the year ended 31 January 2008. Also, like last year this return masks a great deal of volatility both within markets as the year progressed and across markets. There was a nervous start to the year as a result of a sharp drop in Chinese equities as the Chinese authorities moved to curb runaway lending. Sentiment rebounded on upbeat corporate earnings and macroeconomic news flow, but markets suffered a second sell-off when the first signs of US mortgage lending troubles surfaced in August 2007. Emergency funding by the major central banks and US interest rate cuts to boost liquidity helped ameliorate the downswing in sentiment, but fear was never far away and resurfaced again in January 2008 when the extent of the sub-prime mortgage crisis became more apparent. Across the region there was once again a great dispersion of returns; from Indonesia which was up 57.1%, India (+42.4%) and Thailand (+34.6%) to Japan (-10.7%) and Taiwan (-1.1%). Although markets were volatile, economies maintained their momentum throughout the year, with Japan a notable exception. A change in prime minister there did little to dispel policy dithering, while weak incomes and jobs growth left household spending flat. Elsewhere, the twin growth engines remained China and India, with a stronger Euro helping to boost demand from Europe. India's growth was precipitated by continued strong domestic demand, while Singapore benefited from a construction boom as did Hong Kong. However, set against these positive developments, rising prices continued to worry policymakers. China, India, Japan, South Korea and Taiwan tightened monetary policy, while Australia did the same to cool consumer spending. In contrast, Indonesia and the Philippines were able to cut already high interest rates to boost growth; Thailand also eased policy. Meanwhile, the political order changed in many countries. In Australia, the Labour Party's sweeping victory ended John Howard's eleven year rule while, in Thailand, People Power Party's leader Samak Sundaravej was appointed prime minister, paving the way for return of populist policies and former leader Thaksin Shinawatra. Both South Korea's conservative candidate Lee Myung-Bak and Taiwan's opposition nationalist Kuomintang Party scored strong wins at the polls. In Japan, Liberal Democrat Party stalwart Yasuo Fukudo replaced Shinzo Abe as prime minister as noted above. Pakistan postponed its national elections after opposition leader Benazir Bhutto was assassinated in December 2007. Your Company is managed in two approximately equal-sized portfolios by Aberdeen and Nomura. Each is expected to outperform the MSCI AC Asia Pacific Free Index in sterling over the medium to long-term. Although both have strong investment philosophies based on fundamental research and a long term track record of outperformance, they manage their portfolios in very different ways. Aberdeen is a pure stockpicker, investing in a relatively small number of stocks that have met their exacting research criteria. They do not take top down country or even sector views - instead these become a reflection of the individual stock preferences. They focus on 'well-managed businesses with strong balance sheets and cashflows, sensible management with regard for minority shareholders and attractive valuations'. They pay little regard to Index construction and therefore will deviate significantly from the Index returns. Their track record built up over a very long time period does suggest that they have the capability to outperform the Index substantially. During the year under review, the Aberdeen portfolio returned 5.7% in sterling terms, compared with the benchmark Asia-Pacific Index's, return of 2.6%. The main reason for this outperformance was that Aberdeen's stock positions resulted in them being overweight in India and Hong Kong, markets which did very well, and underweight in Japan which, as noted above, performed poorly. New holdings in their portfolio included four Japanese holdings: Shin-etsu Chemical Company, which produces and distributes chemical and fertiliser products, Mitsubishi Estate, the premier landlord in the prime Marunouchi district of Tokyo, Sapporo Hokuyo, which has a strong banking franchise in the northern province of Sapporo and Toyota Motor Corporation which has a strong product range and a different geographical emphasis from rival Honda Motor, which Aberdeen also hold. Aberdeen also started positions in Singapore-listed Fraser & Neave, a regional food and beverages company with additional interests in property and publishing. To fund these purchases Aberdeen sold chemicals manufacturer Kaneka and transportation logistics group Seino Holdings on business concerns, as well as MUFJ Financial Group, Japan's largest bank. On the outlook for the region Aberdeen say: 'The sub-prime fallout may have some way to go, with credit markets continuing to shrink. For this reason, investor confidence in Asia remains fragile. A decline in export demand, which is already setting in, is likely to deepen, given that the US is facing recession and the European Union recently lowered its growth outlook. In Japan, the central bank has become increasingly worried about the economy. Consumer prices have been rising, but not to levels that would spur the Bank of Japan to normalise interest rates. Across the rest of Asia, inflation is likely to remain a thorn in the side of policymakers. However, corporate fundamentals remain strong. One positive effect of a slowing global economy has been the skimming of the froth from markets, such as China and India. As a result, the gap between these outperfomers and laggard markets, such as Thailand, has narrowed. But nowhere are valuations especially cheap, which is why further consolidation is desirable. We see earnings at best in single digits this year, but in a tougher environment there will be as much focus on balance sheet strength. So saying, we remain cautious over the short term and committed to our approach of investing only in companies with quality management that are conservatively run.' Nomura regard themselves as a 'core' or 'flexible' manager in terms of style. They focus on identifying stocks, through fundamental research, which are trading at less than fair value. Nomura also take top down country and sector views and control the size of positions they take against the index. Their relative approach is designed to add value in all market conditions over the medium to longer term. Their long term track record supports this claim. During the year under review, the Nomura portfolio returned 4.6%; they therefore outperformed the index by 1.9%. Country allocation and stock selection both contributed positively to the relative performance. In terms of country allocation, the underweight position in Japan and the overweight position in Hong Kong and China added value to the portfolio. In terms of stock selection, the value added from the Asia excluding Japan portfolio was able to overcome the negative contribution from the Japanese holdings. The Australian portfolio contributed significantly to the outperformance helped by a large overweight position in resource companies including BHP Billiton and Rio Tinto. Both companies benefited from the surging commodity prices that led to the prospect of significant earnings upgrades. In addition, news of BHP Billiton's approach to Rio Tinto with a merger proposal sent Rio Tinto's stock price to a record high. Stock selection in China was also positive. Zijing Mining in the materials sector contributed positively as the stock rallied on the back of strong global gold prices. In Japan lack of exposure to Nintendo had a negative effect as sales of the new games consoles boomed. On the outlook, Nomura say: 'Asian stock markets are likely to continue to exhibit high levels of volatility amidst the uncertainty in the US. We should begin to see some earnings downgrades across the region, which will keep investor sentiment on the cautious side and could cause some re-evaluation of assumptions. Balance sheets of most Asian economies are healthy and they are therefore well placed to withstand an economic slowdown. Nevertheless, since these economies do rely on exports to a certain extent, they would also be vulnerable to slowing US and European economies. Against this background we are happy to remain underweight in Japan and cautiously overweight in Hong Kong and China. India is our most favoured market as it is the least correlated with the rest of Asia and offers ample stock selection opportunities.' Performance for the year 31 January 2007 to 31 January 2008 and from inception of the multi-manager structure to 31 January 2008 Investment Value of funds % of the Performance in Benchmark Performance in Benchmark Manager under management Company's the year performance the period performance £m at 31.01.08 assets under 31.01.07 to 31.01.07 to 31.05.05 to 31.05.05 to management at 31.01.08 31.01.08 31.01.08 31.01.08 31.01.08 % % % (annualised) % (annualised) Aberdeen 65.2 49.9 5.7 2.6 16.1 14.0 Nomura 65.3 50.0 4.6 2.6 15.1 14.0 Investment Manager Review Process During the year ended 31 January 2008, as in the previous year, the Board reviewed the Company's benchmark and the investment management structure to ensure that they were still appropriate for your Company's objectives. The Board have appointed Witan Investment Services to monitor and review the performance of the respective investment managers, Aberdeen and Nomura. In addition, the Board met with the investment managers four times during the year under review. At these meetings the investment managers were asked, among other things, to: • explain their asset allocation within the region; • explain their choice of investments, which enabled the Board to check that these were within the Company's mandate guidelines and in accordance with the Investment Manager's own investment philosophies; • provide a detailed analysis of their performance to date and the reasons behind it; • report on any significant changes to the organisation; and • re-affirm their investment strategy and philosophy. If the Board had felt any dissatisfaction on any of these points then this would have led to a formal review. Buy back Policy Your Board believes that it is in shareholder's interests to buy back the Company's shares when they are standing at a substantial discount to NAV. Any purchase of shares at a discount to their NAV will lead to an increase in that NAV and will support an increase in the Company's share price, all other things being equal. In the year ended 31 January 2008 the Company bought back and cancelled a total of 5,344,472 of its ordinary shares at a cost of £9,334,000 including stamp duty. The result of this in terms of performance enhancement was to add just under 0.8% to the NAV per share as at 31 January 2008. Third Party Service Providers As described in Management Arrangements above, the Company has outsourced all of its operational infrastructure to third party organisations. Contracts and service level agreements have been defined to ensure that the service provided by each of the third party organisations is of a sufficiently professional and technically high standard required. All third party service providers are reviewed by the Audit and Management Engagement committee on an annual basis. Principal Risks Because the Company is essentially a vehicle for overseas equity investment, your Board is unlikely, in normal conditions to be anything other than fully invested subject to the tactical positions of the Investment Managers. The prime risk, therefore, of investing in the Company, remains a fall in equity prices. The other generic risks associated with any international or regional equity portfolio are those of strategy and of country, currency, industrial sector and stock selection. There are also risks associated with the selection of Investment Managers. Your Board seeks to manage these risks through the appropriate application of gearing, liquidity and investment mandates and by monitoring the stock selection activities of your Investment Managers. Moreover, the adverse effects of a failure, however defined, by an individual Investment Manager are reduced significantly by the multi-manager structure, and the different styles of each of the two Investment Managers. Further, your Board regularly reviews the Investment Managers for this reason. In addition, your Company also faces the risk that its objective and strategy become inappropriate in a rapidly changing financial services and savings market. This is a matter which is reviewed regularly at meetings of your Board. These reviews focus on investment policy, the role of marketing and the Witan Wealthbuilder savings schemes and discount control policies, as well as wider industry trends. Finally, there are operational and regulatory risks, and the risk of errors and omissions. These are regularly reviewed by the Company's Audit Committee. Your Board also takes professional legal, accounting and tax advice in advance, concerning any proposed activity of your Company. Operationally, the multi-manager structure is robust as each of the Investment Managers, the custodian and the fund accountants keep their own records which are reconciled on a monthly basis. In addition, our Executive Manager, Witan Investment Services Limited monitors the activities of all third parties and escalates any issues to the Board. Comprehensive contractual obligations and indemnification provisions have been put in place with each of the third party service providers. Key Performance Indicators Your Board assesses its performance in meeting the Company's objective against the following key performance indicators: • Net asset value return • Share price return • Performance against the benchmark • Discount to net asset value • Dividend payout • The level of buy-back activity • Total expense ratio • Growth in number of private investors The Board also reviews both absolute and relative volatility and risk statistics for the portfolio. Your Board's Priorities for 2008 At the beginning of every year, your Board has an 'away day' at which it sets its priorities for the next twelve months. In January 2008 the Board agreed that it would progress discussions around the strategic direction of the Company, strengthen relationships with existing shareholders, enhance the Company's marketing activities and seek to generate new shareholders. Outlook Since the multi-manager arrangements were put in place in May 2005 markets in the Asia-Pacific region (and around the world) have continued to perform well and the Company has outperformed its benchmark. The outlook for the Asia-Pacific region is still very attractive over the medium to long term. Nevertheless, the problems of the developed economies and markets are likely to impact on Asia-Pacific markets. We can expect volatility to remain high. By order of the Board BNP Paribas Secretarial Services Limited, Secretary 22 April 2008 UNAUDITED INCOME STATEMENT for the year ended 31 January 2008 Year ended 31 January 2008 Year ended 31 January 2007 Revenue Capital Revenue Capital return return Total return return Total £'000 £'000 £'000 £'000 £'000 £'000 Gains/(losses) on investments held at fair value through profit or loss - 4,262 4,262 - (966) (966) Exchange losses - (71) (71) - (144) (144) Investment income (note 2) 3,183 - 3,183 3,491 - 3,491 Management fees (335) - (335) (323) - (323) Performance fees - (165) (165) - (134) (134) Other expenses (603) (37) (640) (826) (40) (866) --------- --------- --------- --------- --------- --------- Net return/(loss) before finance charges and taxation 2,245 3,989 6,234 2,342 (1,284) 1,058 Finance charges (189) - (189) (173) - (173) --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities before taxation 2,056 3,989 6,045 2,169 (1,284) 885 Taxation on ordinary activities (note 3) (649) 49 (600) (739) 40 (699) --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities after taxation 1,407 4,038 5,445 1,430 (1,244) 186 ====== ====== ====== ====== ====== ====== Return/(loss) per ordinary share - pence (note 4) 2.00 5.74 7.74 1.75 (1.52) 0.23 ====== ====== ====== ====== ====== ====== All revenue and capital items in the above statement derive from continuing operations. The total columns of this statement represent the Income Statement of the Company. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. The Company had no recognised gains or losses other than those disclosed in the Income Statement and Reconciliation of Movements in Shareholders' Funds. UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the year ended 31 January 2008 Called up Share Capital share premium redemption Capital Revenue capital account reserve reserves reserve Total £'000 £'000 £ '000 £'000 £'000 £'000 Year ended 31 January 2008 At 31 January 2007 18,223 5 39,348 66,387 8,586 132,549 Net return from ordinary activities after taxation - - - 4,038 1,407 5,445 Dividends paid in respect of year ended 31 January 2007 - - - - (1,077) (1,077) Purchase of own shares (1,336) - 1,336 (9,334) - (9,334) --------- --------- --------- --------- --------- --------- At 31 January 2008 16,887 5 40,684 61,091 8,916 127,583 ====== ====== ====== ====== ====== ====== Year ended 31 January 2007 At 31 January 2006 21,701 5 35,870 89,691 8,286 155,553 Net (loss)/return from ordinary activities after taxation - - - (1,244) 1,430 186 Dividends paid in respect of year ended 31 January 2006 - - - - (1,130) (1,130) Purchase of own shares (3,478) - 3,478 (22,060) - (22,060) --------- --------- --------- --------- --------- --------- At 31 January 2007 18,223 5 39,348 66,387 8,586 132,549 ====== ====== ====== ====== ====== ====== UNAUDITED BALANCE SHEET at 31 January 2008 2008 2007 £'000 £'000 Fixed assets Investments designated as held at fair value through profit or loss 128,721 133,353 ------------ ------------ Current assets Debtors 1,434 673 Cash at bank and short term deposits 2,311 2,903 ------------ ------------ 3,745 3,576 ------------ ------------ Creditors: amounts falling due within one year Bank loan (3,000) (3,000) Other (1,840) (1,334) ------------ ------------ (4,840) (4,334) ------------ ------------ Net current liabilities (1,095) (758) ------------ ------------ Total assets less current liabilities 127,626 132,595 ------------ ------------ Provision for liabilities and charges (43) (46) ------------ ------------ Net assets 127,583 132,549 ====== ====== Capital and reserves Called up share capital 16,887 18,223 Share premium account 5 5 Capital redemption reserve 40,684 39,348 Capital reserves 61,091 66,387 Revenue reserve 8,916 8,586 ------------ ------------ Equity shareholders' funds 127,583 132,549 ====== ====== Net asset value per ordinary share - pence (note 5) 188.88 181.85 ====== ====== Authorised and approved by the Board on 22 April 2008 and signed on its behalf by: Gillian Nott Chairman UNAUDITED CASH FLOW STATEMENT for the year ended 31 January 2008 2008 2008 2007 2007 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 1,913 2,109 Servicing of finance Bank and loan interest paid (159) (162) ------------ ------------ Net cash outflow from servicing of finance (159) (162) Taxation UK Corporation tax paid (428) (490) Withholding tax deducted from dividends (179) (206) ------------ ------------ Net tax paid (607) (696) Capital expenditure and financial investment Purchases of investments (40,041) (36,748) Sales of investments 48,883 56,651 Capital expenses and performance fee payments (94) (155) ------------ ------------ Net cash inflow from financial investment 8,748 19,748 Equity dividends paid (1,077) (1,130) ------------ ------------ Net cash inflow before financing 8,818 19,869 Financing Repurchase of own shares/tender offer (9,339) (22,055) ------------ ------------ Net cash outflow from financing (9,339) (22,055) ------------ ------------ Decrease in cash (521) (2,186) ====== ====== Reconciliation of net cash flow to movements in net funds/(debt) Decrease in cash as above (521) (2,186) Exchange movements (71) (144) ------------ ------------ Movement in net debt in the year (592) (2,330) Net (debt)/funds at 1 February (97) 2,233 ------------ ------------ Net debt at 31 January (689) (97) ====== ====== NOTES TO THE ACCOUNTS for the year ended 31 January 2008 1 Basis of preparation The financial statements have been prepared on the basis of the accounting policies set out in the Company's financial statements for the year ended 31 January 2007. 2 Investment income 2008 2007 £'000 £'000 Income from investments held at fair value through profit or loss Overseas dividends 2,975 3,204 UK dividends 40 27 Overseas scrip dividends 14 81 -------- -------- 3,029 3,312 -------- -------- Other income Bank interest 121 155 Stock lending fees 33 24 -------- -------- 154 179 -------- -------- Total income 3,183 3,491 ===== ===== Total income comprises: Dividends 3,029 3,312 Other income 154 179 -------- -------- 3,183 3,491 ===== ===== Income from investments comprises: Listed overseas 2,989 3,285 UK listed 40 27 -------- -------- 3,029 3,312 ===== ===== 3 Taxation on ordinary activities Analysis of tax charge for the year 2008 2008 2007 2007 Revenue Capital 2008 Revenue Capital 2007 return return Total return return Total £'000 £'000 £'000 £'000 £'000 £'000 Corporation tax payable at 30% (2007: 30%) 615 (49) 566 680 (40) 640 Relief for overseas taxation (142) - (142) (170) - (170) --------- --------- --------- --------- --------- --------- 473 (49) 424 510 (40) 470 Overseas taxation 179 - 179 221 - 221 --------- --------- --------- --------- --------- --------- Total current taxation charge 652 (49) 603 731 (40) 691 Deferred tax On accrued income (3) - (3) 8 - 8 --------- --------- --------- --------- --------- --------- Taxation on ordinary activities 649 (49) 600 739 (40) 699 ===== ===== ===== ===== ===== ===== 4 Return/(loss) per ordinary share The total return per ordinary share is based on the net return attributable to the ordinary shares of £5,445,000 (2007: £186,000) and on 70,319,982 ordinary shares (2007: 81,701,101) being the weighted average number of shares in issue during the year. The total return can be further analysed as follows: 2008 2007 £'000 £'000 Revenue return 1,407 1,430 Capital return/(loss) 4,038 (1,244) -------- -------- Total 5,445 186 ===== ===== Weighted average number of ordinary shares 70,319,982 81,701,101 Revenue return per ordinary share - pence 2.00 1.75 Capital return/(loss) per ordinary share - pence 5.74 (1.52) ---------- ---------- Total per ordinary share - pence 7.74 0.23 ====== ====== The Company does not have any dilutive securities. 5 Net asset value per ordinary share Net asset values are based on net assets of £127,583,000 (2007: £132,549,000) and on 67,545,851 (2007: 72,890,323) ordinary shares in issue at the year end. 6 Dividends A final dividend of 1.65p per share for the year ended 31 January 2008 will be paid on 27 June 2008 to ordinary shareholders on the register at close of business on 30 May 2008. The ex-dividend date is 28 May 2008. The total cost of this dividend, based on the number of shares in issue as at 22 April 2008, is £1,114,000. For the year ended 31 January 2007, 1.50p per share was paid to ordinary shareholders. 7 Financial Statements The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31 January 2008 or 31 January 2007. The financial information for the year ended 31 January 2007 has been extracted from the audited statutory accounts for that year. The auditors report on those accounts was unqualified and did not contain a statement under either Section 237(2) or Section 237(3) of the Companies Act 1985. The statutory accounts for the year ended 31 January 2008 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. Copies of the annual report and accounts will be sent to shareholders in May 2008 and will be available from the Company Secretary at the registered office of 55 Moorgate, London, EC2R 6PA. For further information, please contact: BNP Paribas Secretarial Services Limited Tel: 0141 225 3009 22 April 2008 This information is provided by RNS The company news service from the London Stock Exchange

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