Final Results

To: Stock Exchange For immediate release: 6 March 2006 MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc Annual results for the year to 31 January 2006 · An excellent performance - NAV per share rose by 27.8% during the year, comfortably beating the 20.0% gain of the benchmark FTSE All-Share index. · Our active policy of discount management means that NAV performance translates directly into share price returns. The share price rose by 28.2% during the year. Chairman's statement Performance The company's performance for the year ended 31 January 2006 was excellent. NAV per share rose by 27.8%, comfortably beating the 20.0% gain of the benchmark FTSE All-Share index. With the discount narrowing marginally, from 7.1% at last year-end to 6.8% this, the share price gained 28.2%. Earnings and dividends Shareholders may recall that, last year, revenue return per share (RRPS) was boosted by an interim dividend from F&C Private Equity Trust (F&CPET, formerly Martin Currie Capital Return Trust) which was paid to shareholders as a special interim dividend. This year, ignoring this special dividend, underlying RRPS is a little ahead of last year. In addition, last year's final dividend was increased by technical factors arising from the June 2004 redemption, so that a special dividend was paid out with the final dividend. The board is recommending a final dividend of 1.70p, which, together with the interim dividend of 0.50p, amounts to 2.20p, an increase of 10.6% for the year. If approved by shareholders at the AGM, this dividend will be paid on 19 May 2006 to those on the register on 5 May 2006. The board and managers We have recently appointed David Kidd to the board, to fill the vacancy created by last year's retirement of Joe Scott Plummer. As chief investment officer of Arbuthnot Latham, David brings a keen practitioner's eye to our deliberations; he stands for election at the AGM. Gill Nott - who has recently been appointed Deputy Chairman of the Association of Investment Trust Companies (AITC) - and Ben Thomson, chairman of the company's Audit Committee, are required to retire from the board by rotation. I commend David, Gill and Ben to you. Tom Walker has continued to lead the company's investment management team. This has been the first year of operation of the new performance fee arrangements that I outlined to shareholders last year. Essentially, the managers now earn a lower base fee but with the prospect of an enhanced performance fee. The board is pleased that, with this incentive, the managers have delivered significant outperformance this year and, as a consequence, the managers have earned a performance fee of approximately £1.5 million from the £9.8 million total outperformance, or 0.8% of year-end net assets. Discount We regard the fluctuating discount to their NAVs, at which investment trust shares tend to trade, as a distraction from the real business of the company, excellent investment performance; we have therefore an active policy of discount management. This incorporates three key elements. First, the utilisation of the company's share buyback powers to maintain the discount of the share price to NAV per share (as calculated on the AITC basis) in single figures, where possible. In the twelve months to 31 January 2006, the company bought back 10,542,053 shares, some 6.5% of the share capital as at 31 January 2005. This added approximately 0.6p to NAV per share. Second, to set a target for the average discount over the 12-week period prior to each financial year-end of not greater than 7.5%. If this target is not met, shareholders should have the right to redeem their shares. This year, the average discount in this period was 7.2%, precisely the same as in the same period last year. Finally, every five years there is a mandatory redemption opportunity; this next occurs in 2009. The board is pleased to have achieved stability in the discount such that investment performance is properly reflected in the share price. Corporate governance Shareholders will note the changes to the accounting policies and presentation of the financial statements. In particular, investments are now valued at bid price and the final dividend is not shown as a liability until approved by shareholders. These changes are a consequence of the convergence of UK accounting standards with international practice and our implementation of the recently updated industry Statement of Recommended Practice. An explanation of the impact of these changes is included within Note 1 to this announcement. Outlook The company's portfolio is distributed into three parts: UK stocks, overseas stocks and private equities. All three have performed well. The UK portfolio delivered a gain of 26.7%, ahead of the index; F&CPET increased by an impressive 53.6%; and the manager's overseas stocks gained 40.3%, comfortably ahead of the 26.9% rise recorded by the FTSE World (ex UK) index. Our expectation is that this three-pronged approach will continue to deliver superior returns for shareholders and the board believes that our discount management policy will continue to allow increases in the value of the portfolio to be translated directly into share price returns. Manager's review We have enjoyed another year of strong returns from global equity markets. This has occurred in an environment of good economic growth, low interest rates, especially long-term rates and abundant liquidity. Merger and acquisition activity has continued throughout the year and corporate earnings have been enhanced by share buybacks, while total returns have also benefited from good dividend growth. Some of the best performance occurred in Asia, where Japan's equity market has been highly sought by foreign, and now also local, investors. Emerging markets also fared well as investors' risk appetite increased. By sector, resources have been very strong as commodity prices have risen. At the other extreme, banks and retailers have tended to underperform. We have produced good outperformance this year, having favoured sectors like resources, and also benefited from strong private equity returns and exposure to some excellent overseas stocks. Even so, we have been surprised at the strength of markets at a time when, amongst other concerns, central banks, especially in the USA, have been raising interest rates. UK Shares The core of our portfolio is invested in a balanced selection of companies quoted in the UK. We look for companies where positive changes are happening which we believe have not been recognised by the market. The UK economy deteriorated as the year progressed. The Government's finances have become increasingly stretched following recent budgetary spending increases. The consumer, too, has high levels of debt. As a result, the economy is increasingly reliant on overseas demand to fuel growth. Happily, the UK stock market is dominated by companies whose earnings flow predominantly from outside the UK. During the year we sold out of Kingfisher; Tesco is now our only remaining UK retailer. We also sold out of BSkyB as we believe the landscape has become more competitive for that company. We realised, at a healthy premium, our holding in BPB when the company was taken over by Saint Gobain. Amongst new holdings are outsourcing company, Capita, medical devices manufacturer, Smith & Nephew and South African based financial group, Old Mutual. Performance of our UK-listed stocks has been good, led by our Indian mining company Vedanta Resources, which has more than doubled over the year. BHP Billiton also flourished as high coal and oil prices enhanced its profitability. Housebuilder Persimmon also thrived, demonstrating an area where domestic earnings have continued to prosper. At the other end of the scale, the two large UK telecom stocks have had a bad year. Although we have not held BT, we have held Vodafone, which has disappointed investors in a number of its markets. It now appears inexpensive and offers a supportive dividend yield. Overseas Shares The Martin Currie team brings its best ideas around the globe which I condense into a portfolio of some 30 overseas shares. My focus is on companies where there is positive change indicating upward earnings' revisions and potential for greater recognition from the market place. The most encouraging aspects of overseas economies have been the green shoots of recovery in Japan and indications that continental Europe may be turning the corner. The North American economy and China have continued to grow strongly. Despite the steady march of higher US interest rates during the year, overseas markets, driven by strong earnings growth, performed well and the FTSE World (ex UK) index did even better than the UK market. The new chairman of the US Federal Reserve (the Fed), Ben Bernanke, has told Congress that future interest rate moves will depend on economic data but it seems that much of the work is done and that the Fed will end the process of raising short rates during 2006. Although interest rates in other regions, notably Japan, will rise, the monetary back-drop is looking reasonably supportive. Our overseas portfolio outperformed. Our investments in energy companies like Canadian gas company, Encana, and US driller, Global Santa Fe, rose very strongly and our holdings in Japan, like Tokyu and Mizuho Financial, were some of the best performers in that market. Outside Japan and resources, Wellpoint, the US health management company, continues to perform very well, growing both organically and through acquisition. Anglo Irish Bank and National Bank of Greece (the latter being a new holding this year) are examples of overseas banks which are growing strongly, in contrast to many UK banks. Private Equity Our long-term commitment to this asset class has been well rewarded during the last year. There has been a huge volume of activity in the private equity world and our investments have enjoyed strong uplift in valuations as a result. While the investment cycle is competitive, with lots of money chasing every deal, the realisation cycle clearly benefits. Our private equity portfolio has a good balance of maturity to benefit from this. Specifically, the majority of our private equity portfolio is invested in F&CPET whose "A" shares are "realisation" shares. They are in the sweet spot of the current environment. Outlook It is my view that this might be another good year for global equities, although there are substantial risks. The slowdown in the UK's domestic economy may well be counter-balanced by overseas activity, while the low inflation and interest rate environment that has encouraged so much borrowing seems likely to continue in 2006. So, despite some reservations, I believe we can make good returns from global equities in the year ahead. - ends - For further information, please contact: Tom Walker/Mike Woodward 0131 229 5252 Martin Currie Investment Management Ltd twalker@martincurrie.com/mwoodward@martincurrie.com MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc Income statement for the year ended 31 January 2006 Unaudited Revenue Capital Total £000 £000 £000 Gains on - realised - 7,028 7,028 investments - unrealised - 29,498 29,498 Currency losses - (69) (69) Income - franked 4,113 4,526 8,639 - unfranked 768 - 768 Investment management fee (279) (558) (837) Performance fee - (1,551) (1,551) Other expenses (575) - (575) _______ _______ _______ Net return before finance costs and 4,027 38,874 42,901 taxation Finance costs: debt - - - Finance costs: shareholders' funds (4,635) (39,140) (43,775) Finance costs: repurchase of ordinary - 919 919 shares _______ _______ _______ Return on ordinary activities before (608) 653 45 taxation Taxation on ordinary activities (45) - (45) _______ _______ _______ Return attributable to shareholders (653) 653 - _______ _______ _______ *The total 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. A Statement of Total Recognised Gains and Losses is not required, as all gains and losses of the company have been reflected in the above statement. On 6 March 2006, the Board declared a final dividend of 1.70p per share. The dividend will be paid on 19 May 2006 to shareholders on the register on 5 May 2006. The total amount of the distribution, calculated with reference to the number of shares in issue at 6 March 2006 is £2,558,000. This results in a total dividend payable in respect for the year of 2.20p per share. This compares to the total dividend declared with respect to the financial year ended 31 January 2005 of 1.99p per share, together with two special dividends totalling 1.61p per share. The financial information contained within this preliminary announcement does not constitute the company's statutory financial statements as defined in section 240 of the Companies Act 1985 for the years ended 31 January 2006 or 2005, but is derived from those financial statements. Statutory financial statements for 2005 have been delivered to the Registrar of Companies and those for 2006 will be delivered following the company's annual general meeting. The terms of the preliminary announcement were approved by the board on 6 March 2006. MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc Income statement for the year ended 31 January 2005 Audited Restated* Restated* Restated* Revenue Capital Total £000 £000 £000 (Losses)/gains - realised - (18,974) (18,974) on investments - unrealised - 20,744 20,744 Currency gains - 71 71 Income - franked 6,584 13,528 20,112 - unfranked 1,451 64 1,515 Investment management fee (360) (721) (1,081) Performance fee - (243) (243) Other expenses (484) - (484) _______ _______ _______ Net return before finance costs and 7,191 14,469 21,660 taxation Finance costs: debt (274) (550) (824) Finance costs: shareholders' funds (6,059) (14,981) (21,040) Finance costs: repurchase of - 247 247 ordinary shares _______ _______ _______ Return on ordinary activities 858 (815) 43 before taxation Taxation on ordinary activities (43) - (43) _______ _______ _______ Return attributable to shareholders 815 (815) 0 _______ _______ _______ * Details of the restatement are included within note 1 to this announcement. MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc BALANCE SHEET As at 31 January As at 31 January 2006 2005 (Unaudited) (Audited) Fixed assets Restated* Restated * £000 £000 £000 £000 Investments at market value Listed on The Stock Exchange in the UK 142,373 118,087 Listed on stock exchanges 36,834 30,565 abroad _______ _______ 179,207 148,652 Current assets Debtors 242 1,395 Cash at bank 2,145 2,636 _______ _______ 2,387 4,031 Creditors Amounts falling due within (1,943) (661) one year _______ _______ Net current assets 444 3,370 _______ _______ Net assets attributable to shareholders 179,651 152,022 _______ _______ Net asset value per 118.9p 94.1p ordinary share AITC net asset value per 116.9p 91.5p share * Details of the restatement are included within note 1 to this announcement. MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc STATEMENT OF CASH FLOW Year ended Year ended 31 January 2006 31 January 2005 (Unaudited) (Audited) Restated* £000 £000 £000 £000 Operating activities Net dividends and interest 9,520 20,713 received from investments Underwriting commission - 2 received Interest received from 208 715 deposits Investment management fee (925) (1,503) Cash paid to and on behalf of (111) (122) directors Bank charges (24) (42) Net taxation paid (16) (30) Other cash payments (354) (202) _______ _______ Net cash inflow from operating 8,298 19,531 activities Servicing of finance Finance costs: debt - (1,221) Finance costs: shareholders' (4,635) (6,056) funds _______ _______ Net cash outflow from (4,635) (7,277) servicing of finance Capital expenditure and financial investment Payments to acquire (57,578) (155,932) investments Receipts from disposal of 64,085 276,237 investments _______ _______ Net cash inflow from capital 6,507 120,305 expenditure and financial investment _______ _______ Net cash inflow before 10,170 132,559 financing Financing Repurchase of ordinary share (10,592) (112,972) capital Movement in short-term - (41,421) borrowings _______ _______ Net cash outflow from (10,592) (154,393) financing _______ _______ Decrease in cash for the year (422) (21,834) _______ _______ * Details of the restatement are included within note 1 to this announcement. Notes 1. Restatement These statements have incorporated the requirements of FRS 21 "Events after the Balance Sheet Date", FRS 25 "Financial Instruments: Disclosure and Presentation", FRS 26 "Financial Instruments: Measurement" and the Statement of Recommended Practice of the AITC issued in 2005. There have been three significant changes arising from these: · Previously interim dividends were reported in the financial period to which they related. FRS 21 recommends that they are accounted as a liability in the period in which they are declared. As at 31 January 2005, the impact of this change is to increase net asset value by £3,860,000. · In relation to FRS 26, the company's investments are classified as "financial assets at fair value through profit or loss" and are therefore valued at bid price. In prior years, investments were valued at middle market price. As at 31 January 2005, the impact of this change has been to reduce net asset value by £727,000. · Under FRS 25, the ordinary share capital of the company is classified as a liability rather than equity. This classification arises from the five-yearly opportunity that shareholders have to redeem their shares at net asset value less costs. The comparative accounting period for the year ended 31 January 2005 has been restated for these changes. 2. Returns and net asset value (as defined by the Articles) The return and net asset value per ordinary share are calculated with reference to the following figures: Year ended Year ended Revenue return 31 January 2006 31 January 2005 per share Revenue return attributable to £(653,000) £815,000 ordinary shareholders Finance costs: shareholders' £4,635,000 £6,059,000 funds £3,982,000 £6,874,000 Average number of shares in 158,911,813 216,255,943 issue during period Revenue return per ordinary 2.51p 3.18p share Capital return per share Capital return attributable to £653,000 £(815,000) ordinary shareholders Finance costs: £39,140,000 £14,981,000 shareholders' funds Finance costs: repurchase of £(919,000) (£247,000) shares £38,874,000 £13,919,000 Average number of shares in 158,911,813 216,255,943 issue during period Capital return per ordinary 24.46p 6.44p share Total return 26.97p 9.62p per share Net asset value As at 31 As at 31 per share January 2006 January 2005 Net assets £179,651,000 £152,022,000 attributable to shareholders Number of shares in issue 151,090,401 161,632,454 at period end Net asset value 118.9p 94.1p per share During the year ended 31 January 2005, the company received an additional interim dividend from its holding in F&CPET. The amount, equivalent to 0.71p per share, was paid to shareholders as a special interim dividend. 3. Reconciliation of accounting and AITC net asset values As at 31 As at 31 January 2006 January 2005 Accounting net 118.9p 94.1p asset value per share Adjustment per - 0.4p share from bid to mid price valuation of investments Exclusion of (2.0p) (3.0p) non distributed current period revenue AITC net asset 116.9p 91.5p value per share

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