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)
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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.
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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.
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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
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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))
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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
===== ===== ===== ===== ===== ======
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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)
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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)
====== ======
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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.
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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
======
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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.
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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.
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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
==== ====
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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%
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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%.
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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 -
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