Final Results

Progressive Euro Alt. Portfolio Ltd
05 December 2003

PROGRESSIVE EUROPEAN ALTERNATIVE PORTFOLIO LMITED

Preliminary announcement of results for the period from 9 July 2002 to 30
September 2003.

KEY FEATURES


INVESTMENT OBJECTIVE

The Company's objectives are to achieve:

•       Positive annual returns in all market conditions

•       Significantly higher returns than the composite European equity market* 
        over the medium term, with less variability of returns

* as measured by the FTSE Eurotop 300 Index in Euros.


PERFORMANCE
                                                              At 30 September 2003             At launch
Net asset value ('NAV') per share                                           99.30p              97.21p**
Share price                                                                 98.50p              100.00p

** after share issue expenses

Over the period from launch on 19 December 2002 to 30 September 2003, the
Company returned 2.2% compared to a gain of 2.8% in the Eurotop 300 Index
(income reinvested).  In annualised volatility terms the Index had a volatility
of 17.7% while the Company's was only 2.2%.




CHAIRMAN'S STATEMENT


This is the first Annual Report to the shareholders of Progressive European
Alternative Portfolio Limited ('PEAPL') which was incorporated on 9 July 2002
and listed on the London Stock Exchange on 19 December 2002.



Over the nine and a half month period since its launch, the Company achieved its principal objective of creating a
portfolio of investments in hedge funds, which have been selected by your Manager in accordance with the prospectus, to
produce absolute gains irrespective of the direction of the underlying European stock markets in which these funds
invest and with less volatility of returns.



The collapse of stock markets in the early part of 2003 produced a difficult background against which to produce gains.
In one of the most severe market falls in living memory, the portfolio held its ground and at the nadir of the markets,
around 12 March 2003, it had preserved the value of your investment into the Company.





Performance and Current Status

During 2003 European hedge funds produced a mixed set of results in a period with two distinct halves. In the early
part of the year the majority of funds performed relatively well and avoided losing money for investors, despite the
adverse market background. From mid-March onwards their performance relative to the markets was less inspiring as
managers tended to adopt a very cautious approach with both low gross and net exposure. Overall the result was
satisfactory with a small gain and a very low level of volatility in the net asset value per share.



Despite this background the Company's NAV has performed well. The Company's NAV of GBP15.8 million at launch after
share issue expenses had risen to GBP16.2 million at 30 September 2003. This represents an increase of 2.15% from the
NAV at launch of 97.21p per share to 99.30p per share at the end of the period.



In recent months, from the low point in mid March, we have seen a significant rally in global stock markets. Initially
the rally was fuelled by a belief that shares had fallen to artificially low levels as a result of anxiety over the
looming Iraqi war and were due to rally, even if solely on valuation grounds.



Following the gains of the initial rally the rises of the past few months have been more a reflection of a pick up in
corporate profitability. This has prompted upgrades to brokers' GDP forecasts and raised hopes that increasing
operating profits will reflect a durable economic upturn and a return to investment for growth. These recovery hopes
have lifted all markets to new multi-month highs with Wall Street heading the pack, led by Nasdaq on the 'tech' and
media spending revival argument.



At the margin, expectations are improving, markets are rising and it is easy to conclude there is more to come on the
upside. For the time being, this is the safest path. This is especially the case because the US Federal Reserve
continues to stress that US interest rates are not going up in the near future. Bears are clinging to the fact that
equities, at best, already look fairly valued and, with interest rates likely to rise next year, this will prove to be
a drag on growth. Any interest rate tightening will restrain the already stretched householder who is reluctant to
descend further into the debt trap.



Dividend



The Company's investments aim to provide capital growth rather than pay dividends.  As a result, the Company received a
limited amount of income during the period and incurred a net revenue loss of £148,000.  Therefore the directors do not
recommend that the Company pays a final dividend.



Management arrangements



The Board has reviewed whether to retain Progressive Alternative Investments Limited ('PAIL') as the Manager of PEAPL.
We have concluded that, given the solid performance of the Company in its first reporting period, it is in the best
interests of shareholders to continue with PAIL's appointment.



Outlook



Economic recovery is occurring in Europe. Beyond this initial recovery phase, we are still in a dis-inflationary
environment with companies relying on cost cutting rather than sales growth. This in itself ultimately carries risks
for an over-borrowed consumer. Eventually, support will be removed from the markets via higher interest rates,  but
later than expected, and until then the outlook is encouraging.



The Company will continue to invest in well-managed hedge funds which have strong risk control mechanisms in place.
Given a more stable environment with a degree of sector rotation within the markets, good absolute returns should be
achieved in the coming months.



Annual General Meeting



The Annual General Meeting of the Company will be held on 14 January 2004 at 10 a.m. at 1 Le Marchant Street, St Peter
Port, Guernsey.

Christopher Clark
4 December 2003




STATEMENT OF TOTAL RETURN
(incorporating the profit and loss account*)
For the period from 9 July 2002 to 30 September 2003

                                                                                 2003
                                                                     Revenue      Capital        Total
                                                                       £'000        £'000        £'000
Gains/(losses) on  investments

- realised                                                                 -          (8)          (8)
- unrealised                                                               -          698          698
Capital losses on currency movements                                       -         (43)         (43)
Net gains                                                                  -          647          647
Income                                                                    25            -           25
Investment management fee                                                  -        (158)        (158)
Other expenses                                                         (166)            -        (166)
Return on ordinary activities before finance                           (141)          489          348
costs and taxation
Interest payable and similar charges                                     (7)            -          (7)
Return on ordinary activities before taxation                          (148)          489          341
Taxation                                                                   -            -            -
Return on ordinary activities after taxation                           (148)          489          341
Dividends payable                                                          -            -            -
Transfer (from)/to reserves                                            (148)          489          341

Return per Redeemable Preference Share                               (0.91)p        3.00p        2.09p


* The revenue column of this statement is the profit and loss account of the
Company.

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

There are no comparatives as this is the Company's first period of operations.





BALANCE SHEET
At 30 September 2003
                                                                                            2003
                                                                                           £'000

FIXED ASSETS
Investments                                                                               15,582

CURRENT ASSETS
Amounts due from brokers                                                                     422
Other debtors                                                                                 35
Cash at bank and in hand                                                                     252
                                                                                             709

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Accrued liabilities                                                                        (104)
                                                                                           (104)


NET CURRENT ASSETS                                                                           605


TOTAL NET ASSETS                                                                          16,187


CAPITAL AND RESERVES

Share capital                                                                                163
Share premium account                                                                      7,614
Share purchase reserve                                                                     8,069
Realised capital reserve                                                                   (157)
Unrealised capital reserve                                                                   646
Revenue reserve                                                                            (148)
SHAREHOLDERS' FUNDS                                                                       16,187

Net assets per Redeemable Preference Share                                                99.30p




CASH FLOW STATEMENT

For the period from 9 July 2002 to 30 September 2003

                                                                                                   2003
                                                                                                  £'000

NET CASH OUTFLOW FROM OPERATING ACTIVITIES                                                        (624)

SERVICING OF FINANCE
Interest paid on overdraft facility                                                                 (7)

FINANCIAL INVESTMENT
Payments to acquire fixed asset investments                                                    (23,815)
Receipts on disposal of fixed asset investments                                                   8,852

NET CASH FLOW FROM INVESTING ACTIVITIES                                                        (14,963)


NET CASH FLOW BEFORE FINANCING                                                                 (15,594)

FINANCING
Issue of Share Capital (net of expenses)                                                         15,846

NET CASH FLOW FROM FINANCING                                                                     15,846


INCREASE IN CASH                                                                                    252

There are no comparatives as this is the Company's first period of operations.




NOTES

The Company is a closed-ended investment company incorporated and resident in Guernsey.



The Company's investments are in hedge funds which may be denominated in or exposed to either Euros or US dollars. The
Company uses foreign exchange forward currency contracts to seek to ensure that its net exposure to currency other than
sterling does not at any time exceed 15 per cent. of the Company's net assets.



This report has been prepared in accordance with applicable United Kingdom accounting standards and with the Statement
of Recommended Practice 'Financial Statements of Investment Trust Companies ('SORP').  The accounts have been prepared
in accordance with the SORP as it is considered best practice.  The Company is not an investment trust and as an
overseas company does not meet all the criteria set out in the SORP.



These financial statements are not the Company's statutory accounts.  The annual report will be sent to shareholders
and copies will be made available to the public at the registered office of the Company and at the address of the UK
Administration Agent.



The Company was incorporated on 9 July 2002.  Business operations commenced on 19 December 2002.





SECRETARY, ADMINISTRATOR & REGISTERED OFFICE
Legis Corporate Services Limited
1 Le Marchant Street
St Peter Port
Guernsey
GY1 4HP


UK ADMINISTRATION AGENT
Cavendish Administration Limited
Crusader House
145-157 St John Street
London
EC1V 4RU


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