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Witan Pacific InvTst (WPC)

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Friday 27 April, 2007

Witan Pacific InvTst

Final Results

Witan Pacific Investment Trust PLC
27 April 2007


WITAN PACIFIC INVESTMENT TRUST PLC

Unaudited preliminary announcement for the year ended 31 January 2007


Extracts from the Chairman's Statement


It is a pleasure to present my first Annual Report and Accounts to shareholders
since being appointed Chairman of Witan Pacific Investment Trust plc (the '
Company'), particularly as the Company has now been in existence for 100 years.



At the end of the Company's first complete year under the new management
arrangements it is pleasing to report that the Company's Net Asset Value ('NAV')
outperformed its Index, the MSCI AC Asia Pacific Free Index ( the 'Index'), for
the first time in several years and did so by 1.7%. However this was against a
less positive background for UK investors as the Index returned 0.4% in sterling
terms. The Company's discount widened in line with the sector over the year from
6.3% to 11.2% and this led to a fall in the share price to 161.5p giving a share
price total return for the year of -3.0% (with dividends reinvested).



Our objective as a Company is to provide investors with a balanced portfolio of
investments in the Asia Pacific region designed to give returns ahead of general
market performance. Despite the region's modest result this year, we continue to
believe that an exposure to it through a vehicle such as the Company is
appropriate for many investors, particularly individuals, who do not wish to
make their own asset allocation within the region. It is noteworthy that over
the last three years the region's stock markets on average have risen by 46%
when viewed in sterling. However this has masked wide variations in return, for
example over the same period Japan rose 34% in sterling terms whilst India rose
131% again in sterling terms. Growth throughout Asia is being driven strongly by
China and India, whose economies grew by around 11% and 9% respectively last
year. As the region becomes more interdependent we believe this will benefit
many of the other countries in which we invest and provide the capital growth we
seek to deliver to our shareholders.



The arrangements for the management of your Company which were put in place in
May 2005 are working well. These are outlined in some detail in the new section
in the annual report and accounts, the Business Review which follows my
Statement, and I urge you to read it to gain a closer understanding of how your
Board runs the Company.



The two Investment Managers, Aberdeen Asset Managers Limited ('Aberdeen') and
Nomura Asset Management U.K. Limited ('Nomura') have very different investment
styles. We regard this as a strength as it should substantially reduce
volatility in our performance. For example Aberdeen are well known for their
stock picking ability and are generally very underweight in Japan compared with
the Index, both of which can at times lead to considerable swings in
performance. By contrast Nomura are more conservative in their approach.  They
pay more attention to regional weightings and overlay them with a stock
selection bias. They have a particularly strong investment team in Japan where
they maintain a higher exposure than Aberdeen. Over this year Nomura have
delivered lower returns than Aberdeen but during the course of the year there
were times when they were ahead and their returns during the year have been much
less volatile compared with our benchmark than have Aberdeen's. At the end of
the year Aberdeen had outperformed the benchmark by 4.2%, mainly due to a
relatively low weighting in Japan, whilst Nomura had underperformed by 0.7%,
partially as a result of their overweight position in resource companies. Since
inception Aberdeen has outperformed the benchmark at an annualised rate of 1.1%
and Nomura by 0.3% per annum.



The Company aims to keep its expense ratio below 1% and I am pleased to say that
last year our expense ratio was 0.8%. Investment trust expense ratios are much
lower than comparable unit trusts which are often in excess of 2%.



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 13,914,940 shares which had the effect
of enhancing the NAV by approximately 1.6%.  During the year those shareholders
who held their shares through the F&C share plans were offered the opportunity
to transfer their holdings from F&C to Witan Wealthbuilder following F&C's
decision to remove the Company as one of the options on their platform.  Those
who did not transfer had their shares sold giving rise to the unusually large
number of shares bought back. 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-issuance at a later date. This power will be used to issue shares only at NAV
or at a premium to NAV.



However, many shareholders did transfer their savings plans from F&C to Witan
Wealthbuilder. Shareholders wishing to add to their shareholding can now invest
in the Company in a straight forward savings plan or in a tax sheltered ISA.



In line with our policy of distributing as much income as may be prudent, we are
recommending a final dividend of 1.50p per share, an increase of 12.8% compared
with last year's dividend. This dividend is payable on 27 June 2007 to
shareholders on the register at the close of business on 11 May 2007.



Mr Kevin Jones has indicated his desire to stand down at the forthcoming AGM. I
take this opportunity to thank him for his valuable service since he was
appointed in 1999.



Looking ahead both Investment Managers remain optimistic for the coming year
although they both recognise that in some markets valuations may be somewhat
high. They will be taking this into account in the asset allocation between
markets and in their stock selection seeking to invest in those areas that will
deliver most value to shareholders. Despite some concerns, they and the Board
are confident of the region's long term attractiveness.



The AGM will be held on Wednesday, 13 June 2007 at noon in the Main Reception,
Chartered Accountants' Hall, One Moorgate Place, London EC2R 6EA. I will present
my report and the Executive Manager will give a review of the Investment
Managers' performance for the year. I look forward to welcoming you to my first
AGM as Chairman.


Gillian Nott
CHAIRMAN


27 April 2007



Business Review


The Business Review which follows is designed to provide shareholders with
information about the Company's business and results for the year ended 31
January 2007.  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
Section 234 ZZB of the Companies Act 1985, Schedule 7, Part 1 of the Companies
Act 1985 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:

•    Objectives and Strategy;

•    Management Arrangements;

•    Portfolio Review;

•    Investment Manager review process;

•    Share buy-back policy;

•    Third Party Service Providers review process;

•    Principal Risks;

•    Key performance indicators;

•    Your Board's priorities for the current financial year; and

•    Outlook.


Objective and Strategy

The Company's investment objective is 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 through growth in capital.

Your Company aims to outperform by using an active multi-manager approach. 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 to costs and only undertakes expenditure when necessary. It is
your Board's aim to control the level of 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 it.

The following table shows the investment management arrangements:

Equity Mandate    Investment    Mandate Benchmark (£)            % of portfolio
                  Manager

Asia Pacific      Aberdeen      MSCI All Country Asia            50%
                                Pacific Index
Asia Pacific      Nomura        MSCI All Country Asia            50%
                                Pacific Index


Your Company has also appointed third parties for the various support services
it requires.  The principal ones of these 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 0.8% which is much lower
than any open ended fund with this regional mandate.



Portfolio Review

At first glance, the year ended 31 January 2007 would appear to have been a dull
one for UK-based investors in the Asia Pacific region. The MSCI Index in
sterling terms gave a total return of only 0.4% which means that excluding
income the markets fell by 1.6%. This, however, masks two important factors.
First, the strength of sterling over the year dramatically reduced the returns
to UK investors. In local currency terms these markets returned a much more
acceptable 11.9% as measured by the Index. Secondly, this year's most notable
feature was the volatility of the underlying markets. Indeed the year could also
be viewed as a year of mainly strong markets punctuated by a period of extreme
weakness - in May and June of 2006, caused by inflationary fears and heightened
risk aversion in the face of geopolitical tensions. There was also a great deal
of variability across markets. In sterling terms, the best performer was the
relatively minor market of the Philippines which returned 52.2% whilst China,
Indonesia, Malaysia, Singapore and India all returned in excess of 30%.
Conversely, Japan, Korea and Thailand all gave negative returns.

Economies across the region made healthy progress over the period, led by China
and India. However, the rapid pace of economic expansion stoked inflationary
pressures and prompted a further tightening of monetary policy by Asian central
banks, most notably in China, Taiwan and India. Indonesia and Japan were the
economic laggards, with the former making multiple interest rate cuts to spur
GDP growth. Japanese private consumption remained patchy which partially
explains why the Bank of Japan left monetary policy unchanged after its July
hike, which followed nearly six years of zero interest rates.

Thailand's political upheaval was the main blemish in an otherwise positive
year. After a protracted period of political uncertainty, triggered by the then
prime minister Thaksin Shinawatra's tax-free sale of Shin Corp, the military
seized power in a bloodless coup on September 19 and installed former army chief
Surayud Chulanont as premier. However, the initial steps taken by the new
government have given foreign investors cause for concern; in particular, a
bungled attempt to stem the appreciation of the baht through indirect capital
controls in December 2006. Although most of the measures were rescinded within
24 hours, the volte-face poses further questions over the credibility of the
military regime.

In Japan, the key political development was the election of Shinzo Abe as
successor to Junichiro Koizumi as head of the ruling Liberal Democratic Party
and the country's new prime minister. Although the news was generally well
received by the market, the prime minister's approval ratings have taken a slide
since taking office last September, in turn raising the stakes of the upper
house parliamentary elections this July.

As noted above, your Company is now managed in two approximately equal-sized
portfolios by Aberdeen and Nomura. Each is expected to outperform the MSCI Index
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 4.6% against the
benchmark MSCI Index increase of 0.4% in sterling terms, an outperformance of
4.2%. The main reason for this outperformance was that Aberdeen stock positions
had resulted in them being overweight in Singapore and India, where market
indices continued to post new records, and underweight in Japan, a market that
lagged the rest of the region.



New holdings in their portfolio included Hong Kong's Hang Lung Group and its
subsidiary Hang Lung Properties which is expected to benefit from its exposure
to China's commercial property market, Bumiputra-Commerce Holdings, which is
expected to benefit from domestic growth in Malaysia and Mitsubishi UFS
Financial Group, one of Japan's leading banks. These purchases were financed by
the sale of Astellas Pharmaceutical (Japan) and a reduction in weightings of
Leighton Holdings (Australia), Shinsegae (Korea), Samsung (Korea) and China
Mobile.



On the outlook for the region Aberdeen comment: 'Looking ahead, the widely
anticipated slowdown in the global economy is likely to affect Asian corporate
earnings' growth, which is estimated to ease marginally to around 10% this year.
Corporate fundamentals, however, remain intact as company balance sheets are
generally strong and there has been substantial improvement in corporate
governance standards. Meanwhile, excess profits are increasingly being paid out
to shareholders in the form of higher dividends and share buy-backs. Japan's
economy is expected to improve gradually, led by capital expenditure and
exports, the latter given a boost by the depreciation of the yen against the
major currencies, most notably the euro and the US dollar. However, a
sustainable recovery still hinges on a turnaround in consumer spending, which
has been elusive so far. Overall, valuations across the region continue to be
reasonable, despite the sharp rise in share prices in recent years. However,
this masks a disparity in performance: there are signs of frothiness in markets
such as India and China, while the laggard markets, such as Thailand and Korea,
appear undervalued. We remain comfortable with our holdings and feel that a
pause at current levels is healthy, and even welcome, if only to allow earnings
to catch up with the gains in share prices.'

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 -0.3%; an
underperformance of the Index by 0.7%. All of this underperformance came from
stock selection within markets. Poor relative selection in Japan, Australia and
India was only partially offset by positive contributions from China, Korea and
Taiwan.

Nomura have a positive view on domestic economic momentum in China and
consequently are overweight in consumer oriented stocks like China Life and
China Mobile. Given the strong demand for the products of these companies, those
stocks were significant outperformers in the period. Similarly in Singapore, the
domestic economy has been enjoying significant momentum and property stocks have
seen significant rises in their net asset values. These stocks performed very
well as did stocks related to the marine industry which includes activities such
as oil exploration and shipbuilding. Exposure to stocks like Hon Hai Precision
and Johnson Health, and financials in South Korea, in addition to stocks like
Dacom and GS Construction, also helped outperformance.

On the other hand Nomura also have a very positive stance on diversified
resources on the premise that due to a shortage of long term investment in
mining the prices of base materials like iron ore and coal will remain high.
These stocks were extremely volatile through the year but ultimately contributed
negatively to performance.

In Japan, Nomura are underweight the infrastructure sector which includes the
defensive utilities and the high beta real estate stocks. Although these areas
have performed well any rise in interest rates would be negative for the outlook
for this area of the market.

On the outlook, Nomura say: 'Economic growth in the region remains robust, led
by China. Interest rates have stabilised in most countries at relatively low
levels and asset prices and bank lending is accelerating throughout the region.
We do acknowledge that the corporate result season to date has been slightly
disappointing in some markets like Korea, but this has been due largely to the
appreciation of most Asian currencies versus the US dollar. We had already
anticipated that and have been readjusting our positions towards stocks that
benefit from rising domestic demand. We are becoming more positive towards both
Hong Kong and China. Property prices in Hong Kong are beginning to move ahead
again; Hong Kong interest rates are more than 100bp below US rates despite the
currency peg, whilst liquidity from mainland China is finding its way into Hong
Kong. As such, we are increasing the overweight exposure to this market.
Japanese stocks are now looking fairly priced, and therefore offer less
attractive opportunity compared with markets in the rest of Asia, and we will be
progressively reducing exposure to this market.'



Performance for the year 1 February 2006 to 31 January 2007 and from inception
to 31 January 2007
Investment Manager      Value of funds        % of the Performance in      Benchmark    Performance in         Benchmark
                      under management       Company's       the year    performance        the period       performance
                                    £m    assets under    01.02.06 to    01.02.06 to       01.05.05 to       01.05.05 to
                                         management at       31.01.07       31.01.07          31.01.07          31.01.07
                           at 31.01.07       31.01.07
                                                                    %              %    (% annualised)    (% annualised)
Aberdeen                          67.2            49.6            4.6            0.4              22.8              21.5
Nomura                            67.6            49.9           -0.3            0.4              21.9              21.5



Investment Manager Review Process

During the year ended 31 January 2007, 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 objective.

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 choice of investments, which enabled the Board to check that
     these were within the Company's mandate guidelines and in accordance with 
     the Investment Managers' 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 shareholders' 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 2007, the Company bought back and cancelled a total
of 13,914,940 of its ordinary shares at a cost of £22,060,000 including stamp
duty. The result of this in terms of performance enhancement was to add just
over 1.6% to the NAV per share as at 31 January 2007.

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 investment 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.



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 unavoidable risks
of errors and omissions. These are regularly reviewed by the Company's Audit
Committee and the external auditors. Your Board also takes professional legal,
accounting and tax advice in advance if there is a doubt concerning any proposed
activity of your Company. Operationally, the multi-manager structure is a fairly
robust one 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; and

•    Growth in number of investors.

The Board also reviews both absolute and relative volatility and risk statistics
for the portfolio.


Your Board's Priorities for 2007

Every year in January your Board has an 'away day' at which it sets its
priorities for the next twelve months. In January 2007 the Board agreed that it
would: continue to strengthen its working relationships with the Investment and
Executive Managers; improve its knowledge of the Company's shareholder base; and
develop a succinct marketing message.


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.
The outlook for the Asia Pacific region is still very attractive over the medium
to long term but, as the Investment Managers have indicated, these markets are
no longer cheap and will be vulnerable to any negative event elsewhere in the
world.


By order of the Board
BNP Paribas Secretarial Services Limited
Secretary
27 April 2007


UNAUDITED INCOME STATEMENT
for the year ended 31 January 2007

                                            Year ended 31 January 2007        Year ended 31 January 2006
                                               Revenue     Capital               Revenue    Capital
                                                return      return      Total     return     return      Total
                                                 £'000       £'000      £'000      £'000      £'000      £'000
(Losses)/gains on investments held at fair
value through profit or loss                         -       (966)      (966)          -     40,221     40,221
Exchange (losses)/gains                              -      (144)       (144)          -         82         82
Investment income (note 2)                       3,491           -      3,491      3,825          -      3,825
Management fees                                 (323)            -     (323)       (598)          -      (598)
Performance fees                                     -       (134)      (134)          -       (92)       (92)
Other expenses                                   (826)        (40)      (866)      (788)       (58)      (846)
                                             --------- ---------    ---------  ---------  ---------  ---------
Net return before finance charges and
taxation                                         2,342     (1,284)      1,058      2,439     40,153     42,592
Finance charges                                  (173)           -      (173)      (208)          -      (208)
                                             ---------   ---------  ---------  ---------  ---------  ---------
Net return on ordinary activities before
taxation                                         2,169     (1,284)        885      2,231     40,153     42,384
Taxation on ordinary activities (note 3)         (739)          40      (699)      (786)       (63)      (849)
                                             ---------   ---------   --------   --------   --------   --------
Net return on ordinary activities after
taxation                                         1,430     (1,244)        186      1,445     40,090     41,535
                                                ======       =====      =====      =====      =====      =====
Return per ordinary share - pence (note 4)        1.75      (1.52)       0.23       1.33      36.84      38.17
                                                ======       =====      =====      =====      =====      =====


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 2007


                                    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 2007
At 31 January 2006                     21,701           5        35,870      89,691      8,286     155,553
Net return from ordinary                    -           -             -     (1,244)      1,430         186
activities after tax
Dividends paid in respect of year           -           -             -           -    (1,130)     (1,130)
ended 31 January 2006                                                                  
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
                                        =====       =====         =====       =====      =====       =====
Year ended 31 January 2006
At 31 January 2005                     38,420           5        19,151     133,148      8,455     199,179
Net return from ordinary                    -           -             -      40,090      1,445      41,535
activities after tax
Dividends paid in respect of year           -           -             -           -    (1,614)     (1,614)
ended 31 January 2005
Tender offer (including costs)       (15,547)           -        15,547    (77,451)          -    (77,451)
Purchase of own shares                (1,172)           -         1,172     (6,096)          -     (6,096)
                                    ---------  ---------      ---------   ---------  ---------  ---------
At 31 January 2006                     21,701           5        35,870      89,691      8,286     155,553
                                        =====       =====         =====       =====      =====       =====



UNAUDITED BALANCE SHEET
at 31 January 2007
                                                                                    2007            2006
                                                                                   £'000           £'000

Fixed assets
Investments designated as held at fair value through profit or loss              133,353         153,733
                                                                            ------------    ------------
Current assets
Debtors                                                                              673           2,384
Cash at bank and short term deposits                                               2,903           5,233
                                                                             -----------     -----------
                                                                                   3,576           7,617
                                                                             -----------     -----------
Creditors: amounts falling due within one year
Bank loan                                                                        (3,000)         (3,000)
Other                                                                            (1,334)         (2,759)
                                                                             -----------      ----------
                                                                                 (4,334)         (5,759)
                                                                             -----------      ----------
Net current (liabilities)/assets                                                   (758)           1,858
                                                                             -----------      ----------
Total assets less current liabilities                                            132,595         155,591
                                                                             -----------      ----------
Provision for liabilities and charges                                               (46)            (38)
                                                                             -----------      ----------
Net assets                                                                       132,549         155,553
                                                                                  ======         =======
Capital and reserves
Called up share capital                                                           18,223          21,701
Share premium account                                                                  5               5
Capital redemption reserve                                                        39,348          35,870
Capital reserves                                                                  66,387          89,691
Revenue reserve                                                                    8,586           8,286
                                                                              ----------      ----------
Equity shareholders' funds                                                       132,549         155,553
                                                                                  ======          ======
Net asset value per ordinary share - pence (note 5)                               181.85          179.20
                                                                                  ======          ======


Authorised and approved by the Board on 27 April 2007 and signed on its behalf
by:

Gillian Nott
Chairman


UNAUDITED CASH FLOW STATEMENT
for the year ended 31 January 2007
                                                                 2007         2007         2006         2006
                                                                £'000        £'000        £'000        £'000
Net cash inflow from operating activities                                    2,109                     2,609
Servicing of finance
Bank and loan interest paid                                     (162)                     (181)
                                                         ------------               -----------
Net cash outflow from servicing of finance                                   (162)                     (181)

Taxation
UK Corporation tax paid                                         (490)                     (678)
Withholding tax paid                                            (206)                     (350)
                                                         ------------               -----------
Net tax paid                                                                 (696)                   (1,028)

Financial investment
Purchases of investments                                     (36,748)                 (138,449)
Sales of investments                                           56,651                   234,037
Capital expenses and performance fee (payments)/                (155)                       590
receipts
                                                         ------------               -----------

Net cash inflow from financial investment                                   19,748                    96,178
Equity dividends paid                                                      (1,130)                   (1,614)
                                                                       -----------               -----------
Net cash inflow before use of liquid resources and
financing
                                                                            19,869                    95,964
Management of liquid resources
Cash withdrawn from deposit                                                      -                     2,621

Financing
Repurchase of own shares/tender offer                        (22,055)                  (84,456)
Drawdown of sterling loan                                           -                     3,000
Repayment of US dollar loans                                        -                  (15,205)
                                                         ------------               -----------
Net cash outflow from financing                                           (22,055)                  (96,661)
                                                                       -----------               -----------
(Decrease)/increase in cash                                                (2,186)                     1,924
                                                                            ======                    ======
Reconciliation of net cash flow to movements in net
funds/(debt)
(Decrease)/increase in cash as above                                       (2,186)                     1,924
Cash inflow from short term deposits                                             -                   (2,621)
Cash outflow from movement in debt financing                                     -                    12,205
                                                                       -----------               -----------
Change in net (debt)/funds resulting from cash flows                       (2,186)                    11,508
Exchange movements                                                           (144)                        82
                                                                       -----------               -----------
Movement in net (debt)/funds in the year                                   (2,330)                    11,590
Net funds/(debt) at 1 February                                               2,233                   (9,357)
                                                                       -----------                ----------
Net (debt)/funds at 31 January                                                (97)                     2,233
                                                                            ======                    ======



NOTES TO THE ACCOUNTS

For the year ended 31 January 2007


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

                                                                                         2007         2006
                                                                                        £'000        £'000
Income from investments held at fair value through profit or loss
Overseas dividends                                                                      3,204        3,445
UK dividends                                                                               27            3
Overseas scrip dividends                                                                   81          116
                                                                                     --------     --------
                                                                                        3,312        3,564
                                                                                        -----        -----
Other income
Interest on loans and deposits                                                            155          225
Stock lending fees                                                                         24           36
                                                                                      -------      -------
                                                                                          179          261
                                                                                      -------      -------
Total income                                                                            3,491        3,825
                                                                                         ====         ====
Total income comprises :
Dividends                                                                               3,312        3,564
Other income                                                                              179          261
                                                                                      -------     --------
                                                                                        3,491        3,825
                                                                                        =====        =====
Income from investments comprises:
Listed overseas                                                                         3,285        3,557
UK listed                                                                                  27            -
Unlisted overseas                                                                           -            7
                                                                                     --------     --------
                                                                                        3,312        3,564
                                                                                        =====        =====

3    Taxation on ordinary activities

Analysis of tax charge for the year

                                   2007        2007                     2006          2006        2006 
                                Revenue     Capital       2007       Revenue       Capital       Total
                                 return      return      Total        return        return       
                                  £'000       £'000      £'000         £'000         £'000       £'000
Corporation tax payable at
30% (2006: 30%)                     680        (40)        640           646            35         681
Relief for overseas               (170)           -      (170)         (185)             -       (185)
taxation
                             ----------   ---------  ---------    ----------     ---------  ----------

                                    510        (40)        470           461            35         496
Under provision in prior              -           -          -             5             -           5
years
Overseas taxation                   221           -        221           316            28         344
                             ----------  ----------  ---------   -----------    ----------  ----------
Total current taxation              731        (40)        691           782            63         845
charge
Deferred tax
On accrued income                     8           -          8             4             -           4
                             ----------  ----------  ---------   -----------   -----------  ----------

Taxation on ordinary                739        (40)        699           786            63         849
activities
                                  =====       =====      =====         =====         =====       =====

     
4    Return per ordinary share

The total return per ordinary share is based on the net return attributable to
the ordinary shareholders of £186,000 (2006: £41,535,000) and on 81,701,101
ordinary shares (2006: 108,816,460) being the weighted average number of shares
in issue during the year.

The total return can be further analysed as follows:

                                                                                    2007             2006
                                                                                   £'000            £'000

Revenue return                                                                     1,430            1,445
Capital return                                                                   (1,244)           40,090
                                                                                --------         --------
Total                                                                                186           41,535
                                                                                   =====            =====
Weighted average number of ordinary shares                                    81,701,101      108,816,460
Revenue return per ordinary share - pence                                           1.75             1.33
Capital return per ordinary share - pence                                         (1.52)            36.84
                                                                              ----------        ---------
Total per ordinary share - pence                                                    0.23            38.17
                                                                                  ======           ======

The Company does not have any dilutive securities

     
5.   Net asset value per ordinary share

Net asset values are based on net assets of £132,549,000 (2006: £155,553,000)
and on 72,890,323 (2006: 86,805,263) ordinary shares in issue at the year end.


6.   Dividends

A final dividend of 1.50p per share for the year ended 31 January 2007 will be
paid on 27 June 2007 to ordinary shareholders on the register at close of
business on 11 May 2007.  The ex-dividend date is 9 May 2007.  For the year
ended 31 January 2006, 1.33p per share was paid to ordinary shareholders.

Copies of the annual report and accounts will be sent to shareholders in May
2007 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: 020 7410 3132
27 April 2007



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