Preliminary Results

Edinburgh Dragon Trust plc
17 October 2005

17 October 2005


                           EDINBURGH DRAGON TRUST PLC
               PRELIMINARY RESULTS FOR THE YEAR TO 31 AUGUST 2005

Edinburgh Dragon Trust's objective is long-term capital growth through
investment in the Far East (excluding Japan and Australasia).  The Company's
benchmark is the MSCI All Country Asia (ex Japan) Index.
          
•    A 45.0% rise in the share price, accompanying a sharp narrowing in the
     discount from 16.8% to 6.9%.

•    A 29.6% increase in the Company's net asset value was ahead of the
     company's benchmark, which rose 28.7%

•    The Company's net asset value of 109.07p is its highest year end NAV
     value for 12 years

For further information please contact:-

Jeremy Whitley, Investment Manager                            0065 6395 2700

Ian Massie, Director  - Investment Trusts                     0131 313 1000


Edinburgh Dragon Trust Plc
Chairman's Statement 31 August 2005

Background

I am happy to report that, in a difficult period for markets characterised by
persistently high oil prices and rising interest rates, during the year to 31
August 2005 your Company's net asset value on a total return basis rose to
109.07p, a very satisfactory 29.6%, ahead of the Company's benchmark, the MSCI
All Country Asia (ex Japan) Index, which ended the year 28.7% higher in sterling
terms on a total return basis.  The share price rose 45.0%, reflecting a
substantial narrowing of the discount from 16.8% to 6.9%.   The outperformance
of the net asset value was the result both of asset allocation, stock selection
and gearing, partly mitigated by the exercise of warrants.  Being overweight in
India and underweight in Taiwan were the two key asset allocation decisions,
whilst stock selection was good in China, including Hong Kong.

Overview

Asian markets performed extremely well during the review period. The main
drivers were better than expected economic growth and continued improvement in
the quality of company earnings. Strong inflows from foreign institutional
investors also supported markets, in keeping with the region's improved growth
prospects and rising standards of corporate governance.

The best performing market was India, with the lead BSE Sensex Index achieving
an all-time high of more than 8,000 points at the time of writing, a rise of
54.1% over the year.  Much of the market optimism can be traced to stronger
economic growth, but liquidity driven inflows have also played an important role
in steering prices higher.

South Korean markets also performed well, up 43.5%, where domestic demand showed
signs of stabilising - aided, we believe, by the government's lowering of
interest rates. In South East Asia, Indonesia was the market of choice for
investors for most of the period, underpinned by hopes that the new leader and
ex security minister, Susilo Bambang Yudhoyono, would remain committed to
economic reform. Some of the gloss, however, has been removed in recent weeks by
concerns that the rising oil price will further strain the country's finances,
which have been exacerbated by governmental subsidies on energy.

There have been some laggards. Thailand, for one, has underperformed its peers
due to a range of domestic problems, such as rising violence in the Muslim south
and weak consumer confidence, although the biggest dampener has been the
continued firm oil price and its knock-on impact on inflation.

The runaway oil price also prompted central banks in the region to begin raising
interest rates - although the tightening cycle had already commenced in 2003,
led by the US Federal Reserve and European Central Bank. Countries that have
raised interest rates in the past 12 months included Thailand, Indonesia, Hong
Kong and Taiwan. However, this trend was not universal, with South Korea cutting
interest rates in the face of sluggish domestic demand.

Movements in the currency markets also came under close scrutiny in the period.
China moved to end its currency link with the US dollar and onto a managed float
which measures its currency against a basket of international currencies
including the US dollar, the Yen and the Euro as well as a range of Asian
currencies.  Effectively, this has revalued the renminbi by around 3% and is a
welcome move by the authorities.  Malaysia quickly followed in a move which was
also unsurprising.  The peg which had fixed the ringgit to the US dollar at the
rate of Rgt 3.80 per US dollar since 1998 was abandoned and Bank Negara has
stated that it will allow market fundamentals to determine the rate.

On the economic front, China's boom showed little sign of slowing down, despite
widespread predictions to the contrary. Full-year GDP growth for 2004 stood at
9.5%, driven by higher-than-expected growth in exports and fixed asset
investment. However, in our view, indiscriminate fixed asset investment may
threaten the pace of expansion given that, over time, excessive capacity may
restrict pricing power and with it corporate profitability.  Other regional
economies have also enjoyed a rebound in growth, albeit the outlook has
moderated over the past few months.

Gearing

Net gearing at the end of the period was 9.8% compared to 4.5% in the previous
year.  The graph on page 8 details the level of gearing throughout the year.
The Board regularly reviews the borrowing facilities of the Company, and its
strategy, whereby the manager has discretion to operate the portfolio with
effective gearing up to 20% of shareholder funds, has been maintained.

Revenue account

The revenue return per share continued to improve and showed a positive return
of 1.50p per share, compared to a return of 0.04p in the previous year.  There
was a significant increase in investment income from £6.2m to £9.5m, reflecting
the greater dividend paying capabilities of Asian companies, given the higher
level of cash generation.

Capital appreciation remains the principal objective of the Company.  Despite
the increased revenue returns in recent years, there remains a deficit on the
revenue reserves and accordingly no dividend is payable for the year to 31
August 2005.

Warrants

The final exercise date for the warrants was 31 January 2005.  As a result of
the final warrant conversion exercise, 10.5 million new ordinary shares were
issued and listed, and rank pari passu with the existing ordinary shares.

Outlook

Looking ahead, Asia is unlikely to repeat its economic success of the past year.
A sustained rise in oil prices, higher interest rates and inflationary pressures
at the macro-economic level could all blunt growth. On the corporate front,
domestic demand is likely to be the dynamo for earnings expansion, with personal
spending on an improving trend. Although valuations are no longer as cheap as
they were, given the rise in share prices, corporate balance sheets within Asia
are much stronger and corporate governance has improved. However, we are wary of
increased costs, not just of raw materials but also of labour and associated
cost rises, which may add margin pressure and contain profitability over the
next twelve months. Nonetheless, looking further out, we believe that Asian
markets will continue to offer good value in comparison with their more
developed counterparts and that the longer term prospects for the region remain
encouraging.

Annual General Meeting

The Company's annual general meeting will take place at Donaldson House,
Edinburgh on 14 December 2005.  On behalf of the Board, I encourage shareholders
to attend.

Tony Cassidy
Chairman


STATEMENT OF TOTAL RETURN
for the year ended 31 August 2005 (audited)                                       Revenue     Capital       Total
                                                                                     £000        £000        £000
Realised gains on investments                                                           -      20,995      20,995
Unrealised gains on investments                                                         -      37,987      37,987
Currency gain on repayment of currency loan                                             -           -           -
Repayment penalty on currency loan                                                      -           -           -
Currency gains/(losses)                                                                 -       (897)       (897)
Investment income                                                                   9,482           -       9,482
Interest receivable                                                                   414           -         414
Other income                                                                          163           -         163
Investment management fee                                                         (2,298)           -     (2,298)
Administrative expenses                                                             (733)           -       (733)
                                                                                 ________    ________    ________
Net return before finance costs and taxation                                        7,028      58,085      65,113
Interest payable and similar charges                                              (3,130)           -     (3,130)
                                                                                 ________    ________    ________
Return on ordinary activities before taxation                                       3,898      58,085      61,983
Taxation on ordinary activities                                                     (407)           -       (407)
                                                                                 ________    ________    ________
Return attributable to equity shareholders after taxation                           3,491      58,085      61,576
                                                                                 ________    ________    ________
Return per ordinary share                                                           1.50p      24.97p      26.47p
                                                                                 ________    ________    ________

____________________________________________________________________________________________________________________


for the year ended 31 August 2004 (audited)                                       Revenue     Capital       Total
                                                                                     £000        £000        £000
Realised losses on investments                                                         -      14,402      14,402
Unrealised losses on investments                                                       -     (17,267)    (17,267)
Currency gain on repayment of currency loan                                            -       1,237       1,237
Repayment penalty on currency loan                                                     -      (1,105)     (1,105)
Currency gains/(losses)                                                                -          33          33
Investment income                                                                  6,198           -       6,198
Interest receivable                                                                  266           -         266
Other income                                                                         166           -         166
Investment management fee                                                         (1,970)          -      (1,970)
Administrative expenses                                                             (674)          -        (674)
                                                                                 ________    ________    ________
Net return before finance costs and taxation                                       3,986      (2,700)      1,286
Interest payable and similar charges                                              (3,493)          -      (3,493)
                                                                                 ________    ________    ________
Return on ordinary activities before taxation                                        493      (2,700)     (2,207)
Taxation on ordinary activities                                                     (415)        (40)       (455)
                                                                                 ________    ________    ________
Return attributable to equity shareholders after taxation                             78      (2,740)     (2,662)
                                                                                 ________    ________    ________
Return per ordinary share                                                           0.04p     (1.21p)     (1.17p)
                                                                                 ________    ________    ________

____________________________________________________________________________________________________________________


BALANCE SHEET (audited)
                                                             At 31 August 2005         At 31 August 2004
                                                            £000           £000        £000         £000
Fixed assets
Investments                                                             284,256                  199,463


Current assets
Debtors                                                      812                        610
US Treasury Bills                                              -                     31,028
Cash - foreign currency                                   19,770                      5,850
                                                        ________                    ________
                                                          20,582                     37,488
Creditors: amounts falling due within one year             1,556                      1,591
                                                        ________                    ________
Net current assets                                                       19,026                   35,897
                                                                       ________                  ________
Total assets less current liabilities                                   303,282                  235,360

Creditors: amounts falling due after more than
one year                                                                 44,388                   44,347
                                                                       ________                  ________
                                                                        258,894                  191,013
                                                                       ________                  ________

Capital and reserves
Share capital                                                            47,455                   45,354
Share premium                                                             4,285                       81
Capital redemption reserve                                                8,752                    8,752
Special reserve                                                          85,520                   85,520
Warrant reserve                                                           1,047                    1,047
Capital reserve - unrealised                                             71,285                   33,933
Capital reserve - realised                                               43,598                   22,865
Revenue reserve                                                         (3,048)                   (6,539)
                                                                       ________                  ________
Total equity shareholders' funds                                        258,894                  191,013
                                                                       ________                  ________

Adjusted net asset value per share                                      109.07p                    84.18p
                                                                       ________                  ________
Adjusted diluted net asset value per share                                  n/a                    83.11p
                                                                       ________                  ________




CASHFLOW STATEMENT (audited)
                                                                          For the year ended  For the year ended
                                                                            31 August 2005       31 August 2004
                                                                            £000      £000       £000      £000

Net cash inflow from operating activities                                            6,979                4,386

Servicing of finance                                                     (3,099)              (3,761)
Interest paid
                                                                         _______              _______
Net cash outflow from servicing of finance                                         (3,099)               (3,761)

Taxation
Overseas tax paid                                                          (467)                (475)
                                                                         _______              _______
Net tax paid                                                                         (467)                 (475)

Financial Investment
Purchase of investments                                                (145,430)             (59,713)
Sale of investments                                                      119,491              76,255
                                                                         _______              _______
Net cash (outflow)/inflow from financial investment                               (25,939)               16,542
                                                                                   _______               _______
Net cash (outflow)/inflow before financing                                        (22,526)               16,692

Net cash inflow/(outflow) from financing                                             6,305               (9,016)

Management of liquid resources                                                      30,425               (2,368)
                                                                                   _______               _______
Increase in cash and cash equivalents                                               14,204                5,308
                                                                                   _______               _______


Reconciliation of net cashflow to movement in net debt
Increase in cash                                                          14,204               5,308
Net change in liquid resources                                          (30,425)               2,368
                                                                         _______              _______
Change in net debt resulting from cashflows                                       (16,221)                7,676
Amortised Loan Note expenses                                                          (31)                  (31)
Loan Repayment                                                                           -                7,995
Foreign exchange differences on loan repayments                                          -                1,237
Other foreign exchange differences                                                   (897)                   33
                                                                                   _______               _______
Movement in net debt in year                                                      (17,149)               16,910
Opening net debt                                                                   (7,469)              (24,379)
                                                                                   _______               _______
Closing net debt                                                                  (24,618)               (7,469)
                                                                                   _______               _______

NOTES:
     
1.   The accounts have been prepared in accordance with the Statement of
     Recommended Practice 'Financial Statements of Investment Trust Companies'. 
     The accounts are prepared under the same accounting policies used for the 
     year to 31 August 2004.
     
2.   The directors propose that no final dividend be paid in respect of the
     year ended 31 August 2005.
     
3.   The statement of total return, balance sheet and cashflow statement set
     out above do not represent full statutory accounts in accordance with 
     Section 240 of the Companies Act 1985. The financial information for the 
     year ended 31 August 2004 has been extracted from the Annual Report and 
     Accounts of the company which have been filed with the Registrar of 
     Companies. The auditors' report on those accounts was unqualified. The 
     statutory accounts for 2005 contain an unqualified auditors' report and 
     will be delivered to the Registrar of Companies following the company's 
     Annual General Meeting which will be held at Donaldson House, 97 Haymarket 
     Terrace, Edinburgh on 14 December 2005 at 11.00am.
     
4.   The Annual Report will be posted to shareholders in early November 2005
     and copies will be available from the registered office.

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
and may be affected by exchange rate movements.  Investors may not get back the
amount they originally invested. Where investment is made in emerging markets,
their potential volatility may increase the risk to the value of the investment.

For Edinburgh Dragon Trust plc
Edinburgh Fund Managers plc, Secretary


END

                      This information is provided by RNS
            The company news service from the London Stock Exchange