REG-Edinburgh Inv. Trust: Half-yearly Report

The Edinburgh Investment Trust plc

Half-Yearly Financial Report

Six Months to 30 September 2009

Financial Information and Performance Statistics

The Edinburgh Investment Trust plc (the `Company') is a UK investment trust
listed on the London Stock Exchange.

Investment Objective of the Company

The Company invests primarily in UK securities with the long term objective of
achieving:

1. an increase of the Net Asset Value per share by more than the growth in the
FTSE All-Share Index; and

2. growth in dividends per share by more than the rate of UK inflation.

Performance Statistics

At At
30 September 31 March %
2009 2009 Change

Capital Return

Net asset value (`NAV') - debt at 392.89p 326.99p +20.2
par

- debt at market value 363.82p 293.56p +23.9

FTSE All-Share index 2634.79 1984.17 +32.8

Share price 352.40p 292.50p +20.5

Discount - debt at par 10.3% 10.5%

- debt at market value 3.1% 0.4%

Gearing - actual(1) 25.6% 31.2%

- potential(2) 26.0% 31.2%

%
For the six months to 30 september 2009 2008 Change

Revenue Return

First interim dividend(3) 4.75p 4.75p

Revenue return per share 10.4p 12.0p -13.3

Retail price index +1.9% +2.9%

Total Return (capital growth with
income reinvested)

NAV - debt at par +24.0

- debt at market value +28.3

FTSE All-Share Index +35.7

Share price +24.7

Notes:

1. Actual gearing: borrowings less cash and investments in money market funds ÷
shareholders' funds.

2. Potential gearing: borrowings ÷ shareholders' funds.

3. Dividends recommended in respect of the financial year.

INTERIM MANAGEMENT REPORT INCORPORATING THE CHAIRMAN'S STATEMENT

Chairman's Statement

Introduction - The UK Equity Market

It is now just over a year since the Company appointed a new manager, Invesco
Asset Management Limited (`Invesco') where Neil Woodford is responsible for
management of the portfolio. He is a long-term investor prepared to take often
substantial positions in companies which he believes, in the light of expected
economic conditions, have the potential to generate above-average increases in
earning and dividends. In my statement six months ago in the 2009 Annual
Financial Report I explained that Mr Woodford believed that expectations of
economic recovery were premature and that he had therefore adopted a defensive
posture, investing in companies expected to be resilient to a weak global
economy. The Board was strongly supportive of this approach, in particular
because it believed that this strategy will help to sustain the Company's
income stream, an issue of major importance to shareholders.

In the event, as outlined in the Manager's Report, the UK equity market
performed very strongly in the period April - September 2009, when the
benchmark FTSE All-Share Index (`The Index') increased by 32.8%. This growth
was prompted by increasing investor optimism of economic recovery and was led
by the financial, mineral and auto-related sectors.

Company Performance

Capital: Against this background, which was unsympathetic to the Company's
portfolio positioning, capital performance was significantly weaker than that
of the benchmark index, albeit strong in absolute terms. The Net Asset Value
(`NAV') increased by 20.2% (debt at par) or 23.9% (debt at market value), both
measures being well below the benchmark index return of 32.8%. Total return
(comprising income and capital) was 24.0% and 28.3% respectively with debt at
par and market value. The index total return was 35.7%. The Manager's Report
provides detail of this performance.

Share Price: The share price increased by 20.5% in the six months under review:
this represented a small increase - from 0.4% at 31 March to 3.1% at 30
September - in the discount to NAV, with debt at market value.

Income Performance: The Board's position on dividend payments was set out in
detail in my statement in the last Report and Accounts. I am pleased to report
that, with the exception of only one or two holdings, dividends paid by
companies in the

Company's portfolio were the same or higher in the period under review than in
the equivalent period in 2009. The Board does not at this stage expect a
material change in this position in the remainder of the year to March 2010.

Interim Dividend: In the meantime, the Board has declared an unchanged first
interim dividend of 4.75 pence per share. This declared dividend will be paid
on 27 November 2009 to shareholders on the Company's register on 20 November
2009

(ex dividend date, 18 November 2009).

Outlook

Despite the disappointing capital performance relative to the index in the six
months under review, the Board continues strongly to support the Manager's
portfolio positioning. Although UK financial markets, stimulated at least in
part by the Bank of England's programme of quantitative easing, have performed
strongly, there is yet no clear sign of a rise in activity in the broader
economy. Further, there is concern that markets will be adversely affected by
the removal of the Bank's stimulus and, longer term, that inflation and
interest rates will show upward trends. The companies in our portfolio have
been selected on the basis that they will continue to produce profit growth in
a difficult economic environment. Their share prices should be relatively
resilient to any general market weakness. Moreover, given that many holdings
are rated at historically low levels, there is a reasonable expectation that,
within the time horizon in which the Manager operates, they will enjoy strong
relative share price performance. In the meantime, the Board believes that the
investment portfolio will continue to provide an income flow to enable your
Company to meet its own dividend objectives.

Scott Dobbie
Chairman
11 November 2009

Investment Manager's Report

Market Review

The period under review saw the UK equity market experience an almost
uninterrupted rally from the lows hit early in March. The market's strength was
partly the result of stocks being over-sold in the first quarter of the year
but the improvement was sustained by growing hopes that a sharp rebound in
economic activity could be achieved. This saw economically sensitive areas of
the market lead the advance as investors predicted that a potential `V-shaped'
recovery could translate into a strong recovery in corporate profits,
particularly for cyclical businesses. While the economic backdrop did improve
during the period, supported by emergency monetary and fiscal measures,
prevailing data in the UK was mixed. Manufacturing and service sector activity
strengthened, albeit from low levels, and retail sales were relatively
resilient as falling mortgage costs provided a boost to disposable incomes.
However, unemployment rose and by the end of the period had reached 7.9%, or
just under 2.5 million people. Growth in the money supply also failed to
materialise as consumers joined the corporate sector in paying down debt and as
banks remained reluctant to lend. This saw the Bank of England extend its
programme of Quantitative Easing by £50bn in August, taking the total to £
175bn.

Car related sectors, industrial metals and financials were among the leading
gainers as risk appetite returned to the UK equity market. With cyclical
sectors most in demand, the traditionally more defensive areas trailed the
wider market's rise. Corporate earnings announcements provided additional
impetus to stock prices as profits generally came in ahead of forecasts,
although expectations had previously been revised significantly lower. A return
of merger and acquisition activity also supported sentiment, as Resolution
agreed to buy fellow insurer Friends Provident and Cadbury received an
unsolicited offer from US rival Kraft.

Portfolio Strategy and Review

The Company's net asset value, including reinvested dividends, rose by 24.0%
during the period, compared to a rise of 35.7% (total return) for the FTSE
All-Share Index. The disappointing relative return was a function of the
market's belief in rapid economic recovery and its resultant bias towards
cyclical market sectors, which contrasted with my view. I believe the outlook
for the UK and global economies is more challenging and portfolio positioning
reflects this view. Consequently, the Company's performance lagged the market's
rise, although returns were strong in absolute terms. My investment preferences
are biased towards genuine growth companies with sustainable business models,
reliable earnings and rising dividends. At the current time, I am able to find
such opportunities in the tobacco, pharmaceuticals, utilities and telecoms
sectors. In my view, stocks in these areas have effectively been de-rated as
more economically sensitive sectors have led the market higher, creating
attractive opportunities for the long-term investor.

Portfolio activity was characterised by the building of positions in favoured
companies at what I believe to be compelling levels. These included AstraZeneca
and GlaxoSmithKline, tobacco groups Altria and Reynolds American and BAE
Systems, as well as other quality growth companies such as Capita and Reckitt
Benckiser.

I continued to build the position in BAE Systems, as I believe it remains
significantly undervalued. In my view, the company has a stronger spread of
earnings across business units and geographies than was historically the case,
providing greater diversification of earnings. In addition to being a key
partner in government defence contracts globally, significant revenues are
being generated by maintenance and support services, which are activities with
strong and sustainable margins. The group's involvement in the Joint Strike
Fighter also has significant potential to boost earnings over the long-term.
Although the ongoing SFO investigation may cause some short-term volatility, I
believe the current share price clearly undervalues the group's long-term
potential.

AstraZeneca and GlaxoSmithKline are highly cash generative, have dependable
earnings profiles, and secure, rising dividends. Despite these fundamental
qualities, these companies are among the cheapest in the market, which
represents an exceptional buying opportunity in my view. New earnings streams
from expanding markets in areas like Asia and Latin America, together with
significantly improved drug pipelines, represent future growth drivers and in
my view more than outweigh concerns about patent expiries and US healthcare
reforms. I believe the share prices of these groups are unjustifiably low and I
actively added to the Company's exposure.

With regard to disposals, these were focused largely on oil and gas related
companies. Oil majors BP and Royal Dutch Shell, as well as oil services group
Amec, were sold as I had concerns about the future viability of their
dividends. In my view, the global economy will continue to experience
significant challenges in the years ahead and I expect this to result in muted
demand for oil. As such, I expect the oil price to come under pressure,
creating doubt about the ability of these companies to maintain existing
dividend levels. It is becoming increasingly expensive to find and extract new
oil and gas reserves and with oil prices potentially weakening from current
levels so I believe that these companies may fail to generate sufficient cash
to cover both capital expenditure and dividend payments to shareholders.

The position in Reed Elsevier was sold, as my level of conviction in the
company's ability to improve returns diminished during the period and I
believed that more compelling opportunities were available in other areas of
the market. The holding of Rexam was sold as disappointing trading performance,
combined with the announcement of a rights issue, reduced my conviction in the
outlook for the company.

Outlook

In my view the UK economy has experienced some improvement from the trough seen
earlier this year, but I believe that this is unsurprising given the scale of
monetary and fiscal support provided by UK authorities. In this environment, I
remain cautious about the current outlook, believing that the economy is still
some way from being able to deliver independent growth. Banks remain reluctant
to lend, businesses and consumers have little appetite to borrow and with
unemployment likely to continue rising, I believe there is little prospect of
the economy returning to sustainable levels of growth in the short term.
Looking into next year, I expect to see public sector job losses begin to put
further pressure on the economy and in my view uncertainty surrounding the
election in the UK is also likely to be negative for both corporate and
consumer confidence.

With regard to the equity market and the positioning of the Company's
portfolio, my conviction in the assets held remains high. Consequently, I am
happy to maintain the Company's current level of financial gearing, believing
that the portfolio's long-term return potential will comfortably exceed the
cost of the gearing. I believe that the businesses in which the Company is
invested will provide leadership to the UK equity market as the extent of the
economy's remaining challenges become clear and I expect them to regain the
premium rating relative to the market that they have historically enjoyed. In
my opinion, these companies are currently significantly undervalued and I am
positive about their potential to deliver very attractive returns over the long
term.

Neil Woodford
Investment Manager
11 November 2009

Related Party

Invesco Asset Management Limited (`IAML'), a wholly owned subsidiary of Invesco
Limited, acts as Manager, Company Secretary and Administrator to the Company.
Details of the management fee arrangements are given in notes 2 and 3.

Principal Risks and Uncertainties

The principal risks and uncertainties that could affect the Company's business
can be divided into various areas:

• market risk;

• performance risk;

• gearing risk;

• income/dividend risk;

• share price risk;

• control system risk; and

• other risks.

A detailed explanation of these principal risks and uncertainties can be found
on pages 19 to 21 of the 2009 annual financial report, which is available on
the Company's website at www.invescoperpetual.co.uk/investmenttrusts.

In the view of the Board, these principal risks and uncertainties are as much
applicable to the remaining six months of the financial year as they were to
the six months under review.

Directors' Responsibility Statement

In respect of the Preparation of the Half-Yearly Financial Report

The Directors are responsible for preparing the half-yearly financial report
using accounting policies consistent with applicable law and UK Accounting
Standards.

The Directors confirm that to the best of their knowledge:

- the condensed set of financial statements contained within the half-yearly
financial report have been prepared in accordance with the Accounting Standards
Board's Statement `Half-Yearly Financial Reports';

- the interim management report includes a fair review of the information
required by 4.2.7R and 4.2.8R of the FSA's Disclosure and Transparency Rules;
and

- the interim management report includes a fair review of the information
required on related party transactions.

Signed on behalf of the Board of Directors.

Scott Dobbie
Chairman
11 November 2009

Top Twenty Holdings

At 30 September 2009

UK listed and ordinary shares unless otherwise stated

Market %
Value of
Investment Sector £'000 Portfolio

AstraZeneca Pharmaceuticals & 83,075 8.6
Biotechnology

GlaxoSmithKline Pharmaceuticals & 81,015 8.4
Biotechnology

Vodafone Mobile Telecommunications 67,977 7.0

British American Tobacco Tobacco 61,228 6.4

Imperial Tobacco Tobacco 52,908

- ordinary

- 9% notes 17 February 7,380
2022

60,288 6.3

BG Oil & Gas Producers 56,060 5.8

BT Fixed Line 48,403 5.0
Telecommunications

Tesco Food & Drug Retailers 47,382 4.9

National Grid Gas & Water Multiutilities 44,255 4.6

Reynolds American -

US common stock Tobacco 39,891 4.1

Top Ten holdings 589,574 61.1

BAE Systems Aerospace & Defence 30,635 3.2

Reckitt Benckiser Household Goods 28,363 2.9

Capita Support Services 25,894 2.7

Rolls Royce Aerospace & Defence 25,844 2.7

Altria - US common stock Tobacco 24,249 2.5

Centrica Gas & Water Multiutilities 22,173 2.3

Scottish & Southern Energy Electricity 21,700 2.2

Drax Electricity 19,046 2.0

Tate & Lyle Food Producers 17,691 1.8

International Power Electricity 15,012 1.6

Top Twenty holdings 820,181 85.0

Aggregate value of other 145,143 15.0
investments

Total investments 965,324 100.0

Condensed Income Statement

Six Months to 30 September
2009

(Unaudited)

Revenue Capital Total

£'000 £'000 £'000

Gains on investments - 137,595 137,595

Gains on foreign exchange - 27 27

Income

UK dividends 21,231 - 21,231

Scrip dividends 541 - 541

Overseas dividends 2,138 - 2,138

Income from money market funds 5 - 5

UK unfranked investment

income - interest 401 - 401

Deposit interest 1 - 1

Interest on VAT recovered on

management fees - - -

Underwriting and other income 61 - 61

24,378 137,622 162,000

Operating costs

Investment management fee - note 2 (571) (1,332) (1,903)

Performance fee - note 3 - - -

VAT recovered on management fees - - -

Other expenses (363) (6) (369)

Net return before finance costs

and taxation 23,444 136,284 159,728

Finance costs - note 2 (2,925) (6,825) (9,750)

Return on ordinary activities before 20,519 129,459 149,978
tax

Tax on ordinary activities (256) - (256)

Return on ordinary activities after 20,263 129,459 149,722
tax

Return per ordinary share - note 4 10.4p 66.3p 76.7p

The total column of this statement represents the Company's Income Statement,
prepared in accordance with UK Accounting Standards. The supplementary revenue
and capital columns are presented for information purposes in accordance with
the Statement of Recommended Practice issued by the Association of Investment
Companies. All items in the above statement derive from continuing operations
and the Company has no other gains or losses. No operations were acquired or
discontinued in the period.

Year ended
31 March
Six months to 30 September 2008 2009

(Unaudited) (Audited)

Revenue Capital Total Total

£'000 £'000 £'000 £'000

Losses on investments - (136,577) (136,577) (274,429)

Losses on foreign - (60) (60) (4)
exchange

Income

UK dividends 23,518 - 23,518 42,307

Scrip dividends 768 - 768 1,269

Overseas dividends 738 - 738 1,883

Income from money 1,379 - 1,379 1,416
market funds

UK unfranked investment

income - interest - - - 116

Deposit interest 825 - 825 854

Interest on VAT
recovered on

management fees - - - 251

Underwriting and other 24 - 24 145
income

27,252 (136,637) (109,385) (226,192)

Operating costs

Investment management (433) (1,009) (1,442) (3,311)
fee - note 2

Performance fee - note - (1,382) (1,382) (3,422)
3

VAT recovered on - - - 1,969
management fees

Other expenses (361) (43) (404) (783)

Net return before
finance costs

and taxation 26,458 (139,071) (112,613) (231,739)

Finance costs - note 2 (2,937) (6,853) (9,790) (19,501)

Return on ordinary 23,521 (145,924) (122,403) (251,240)
activities before tax

Tax on ordinary (20) - (20) (134)
activities

Return on ordinary 23,501 (145,924) (122,423) (251,374)
activities after tax

Return per ordinary 12.0p (74.6)p (62.6)p (128.5)p
share - note 4

Condensed Reconciliation of Movements in Shareholders' Funds

Share Share Capital Capital Revenue
Redemption
Capital Premium Reserve Reserve Reserve Total

£'000 £'000 £'000 £'000 £'000 £'000

For the six months to 30
September 2009

(Unaudited)

At 31 March 2009 48,779 6,639 24,676 501,670 59,636 641,400

Dividends paid

- third interim - - - - (9,268) (9,268)

- final - - - - (12,000) (12,000)

Net return on ordinary

activities - - - 129,459 20,263 149,722

At 30 September 2009 48,779 6,639 24,676 631,129 58,631 769,854

For the year ended 31
March 2009 (Audited)

At 31 March 2008 49,574 6,639 23,881 807,375 57,569 945,038

Dividends paid

- third interim - - - - (9,441) (9,441)

- final - - - - (11,085) (11,085)

Net return on ordinary

activities - - - (292,503) 41,129 (251,374)

Repurchase of shares (795) - 795 (13,202) - (13,202)

Dividends paid

- first interim - - - - (9,268) (9,268)

- second interim - - - - (9,268) (9,268)

At 31 March 2009 48,779 6,639 24,676 501,670 59,636 641,400

For the six months to 30
September 2008

(Unaudited)

At 31 March 2008 49,574 6,639 23,881 807,375 57,569 945,038

Dividends paid

- third interim - - - - (9,441) (9,441)

- final - - - - (11,085) (11,085)

Net return on ordinary

activities - - - (145,924) 23,501 (122,423)

Repurchase of shares (795) - 795 (13,202) - (13,202)

At 30 September 2008 48,779 6,639 24,676 648,249 60,544 788,887

Condensed Balance Sheet

At At At
30 31 March 30 September
September
2009 2009 2008

(Unaudited) (Audited) (Unaudited)

£'000 £'000 £'000

Fixed assets

Investments held at fair
value

through profit or loss 965,324 839,462 980,725

Current assets

Amounts due from brokers 5,573 - 2,347

Prepayments and accrued 3,856 5,698 3,577
income

Cash and cash funds 2,558 5 5,367

11,987 5,703 11,291

Creditors: amounts falling due

within one year

Amounts due to brokers (5,609) (15) (1,949)

Accruals (3,402) (5,432) (3,314)

(9,011) (5,447) (5,263)

Net current assets 2,976 256 6,028

Total assets less current 968,300 839,718 986,753
liabilities

Creditors: amounts falling due
after

more than one year

Debenture stock (196,735) (196,607) (196,484)

Provision for performance fee (1,711) (1,711) (1,382)

Net assets 769,854 641,400 788,887

Capital and reserves

Share capital 48,779 48,779 48,779

Share premium 6,639 6,639 6,639

Capital redemption reserve 24,676 24,676 24,676

Capital reserve 631,129 501,670 648,249

Revenue reserve 58,631 59,636 60,544

Shareholders' funds 769,854 641,400 788,887

Net asset value per share -
note 6

Basic 392.89p 326.99p 402.51p

Condensed Cash Flow Statement

Six Months Six Months
To to Year ended
30 30 31 March
September September
2009 2008 2009

(Unaudited) (Unaudited) (Audited)

£'000 £'000 £'000

Total return before finance

costs and taxation 159,728 (112,613) (231,739)

Scrip dividends (541) (768) (1,269)

(Gains)/losses on investments (137,595) 136,577 274,429

Foreign exchange (gains)/losses (27) 60 4

Decrease in debtors 1,857 5,742 3,620

(Decrease)/increase in (2,031) 1,139 3,544
creditors

Overseas Tax paid (256) (20) (134)

Net cash inflow from operating 21,135 30,117 48,455
activities

Servicing of finance (9,625) (9,625) (19,250)

Financial investment

Purchase of investments (122,607) (688,758) (871,506)

Sale of investments 134,903 631,965 819,120

Equity dividends paid (21,268) (20,526) (39,062)

Net cash inflow/(outflow)
before

management of liquid
resources

and financing 2,538 (56,827) (62,243)

Net cash (outflow)/inflow from

management of liquid (1,500) 47,269 52,601
resources

Financing - repurchase of - (15,794) (15,793)
ordinary shares

Increase/(decrease) in cash 1,038 (25,352) (25,435)

Cashflow from movement in 1,500 (47,269) (52,601)
liquid resources

Exchange movements 15 (60) (4)

Debenture stock non-cash (128) (125) (251)
movement

Net debt at beginning of period (196,602) (118,311) (118,311)

Net debt at end of period (194,177) (191,117) (196,602)

Analysis of changes in net
debt:

Brought forward:

Cash and cash funds 5 78,045 78,045

Debenture stock (196,607) (196,356) (196,356)

Net debt brought forward (196,602) (118,311) (118,311)

Movements in the period:

Cash inflow/(outflow) from
cash and

cash funds 2,538 (72,621) (78,036)

Exchange movements 15 (60) (4)

Debenture stock non-cash (128) (125) (251)
movement

Net debt carried forward (194,177) (191,117) (196,602)

Notes to the Condensed Financial Statements

1. Basis of preparation

The condensed financial statements of the Company have been prepared using the
same accounting policies as those adopted in the 2009 annual financial report,
which are consistent with applicable United Kingdom Accounting Standards, and
with the Statement of Recommended Practice `Financial Statements of Investment
Trust Companies and Venture Capital Trusts'.

2. Investment management fee and finance costs

Invesco Asset Management Limited (`IAML') acts as Manager and Secretary to the
Company under an investment management agreement dated 15 September 2008. The
agreement is terminable by either party by giving not less than 3 months'
notice.

The management fee is payable monthly in arrears and is equal to 0.05% of the
market capitalisation of the Company's ordinary shares at each month end.

Investment management fee and finance costs are allocated 30% to revenue and
70% to capital.

3. Performance fee

IAML is entitled to a performance fee in respect of each rolling three year
period in which the Company outperforms its benchmark, the FTSE All-Share
Index, plus a hurdle rate, being the equivalent of 1.25% per annum, as adjusted
for shorter periods.

Transitional arrangements apply for the periods up to 31 March 2011, under
which half of any performance fee for each period is paid at the end of that
period and half deferred. Any deferred portion becomes payable after 31 March
2011, if and when performance meets or exceeds the benchmark plus hurdle rate.

Any performance fee earned will be the lower of 15% of the out-performance
based on the average quarterly net asset value (with debt at par) of the
Company over the relevant performance period and 1% of net asset value, as
adjusted for shorter periods where required.

Performance fees are allocated wholly to capital.

4. Return per ordinary share

Six months Six months Year ended
to to
30 30 31 March
September September
2009 2008 2009

(Unaudited) (Unaudited) (Audited)

£'000 £'000 £'000

Returns after tax:

Revenue 20,263 23,501 41,129

Capital 129,459 (145,924) (292,503)

Total return after tax 149,722 (122,423) (251,374)

Weighted average number
of shares

during the period 195,116,734 195,657,784 195,657,784

5. Dividends

A first interim dividend of 4.75p (2009: 4.75p) for the year ended 31 March
2010 will be paid on 27 November 2009 to shareholders on the register on 20
November 2009.

6. Net asset value (`NAV') per ordinary share

(a) Debt at par

The shareholders' funds in the balance sheet are accounted for in accordance
with accounting standards, however, this does not reflect the rights of
shareholders on a return of assets under the Articles of Association. These
rights are reflected in the net assets with debt at par and the corresponding
NAV per share.

30 September 31 March 30
September
2009 2009 2008

(Unaudited) (Audited) (Unaudited)

(pence) (Pence) (Pence)

NAV per ordinary share 394.56 328.73 404.31

Less: unamortised (1.67) (1.74) (1.80)
discount and expenses
arising from debenture
issue

NAV - debt at par 392.89 326.99 402.51

(b) Debt at market value

30 September 31 March 30
September
2009 2009 2008

(Unaudited) (Audited) (Unaudited)

(pence) (Pence) (Pence)

NAV - debt at par 392.89 326.99 402.51

Debt at par 102.50 102.50 102.50

Debt at market value (131.57) (135.93) (124.71)

NAV - debt at market 363.82 293.56 380.30
value

7. Share capital

Six Months Year ended Six Months
to to
30 September 31 March 30
September
2009 2009 2008

(Unaudited) (Audited) (Unaudited)

Number of ordinary
shares of 25p each:

Brought forward 195,116,734 198,294,748 198,294,748

Bought back and - (3,178,014) (3,178,014)
cancelled

In issue at period end 195,116,734 195,116,734 195,116,734

Average price of shares n/a 415.43p 415.43p
bought back

8. It is the intention of the Directors to conduct the affairs of the Company
so that it satisfies the conditions for approval as an investment trust company
set out in section 842 of the Income and Corporation Taxes Act 1988.

9. The financial information contained in this half-yearly financial report,
which has not been audited, does not constitute statutory accounts as defined
in section 434 of the Companies Act 2006. The financial information for the
half years ended 30 September 2009 and 2008 has not been audited. The figures
and financial information for the year ended 31 March 2009 are extracted and
abridged from the latest published accounts and do not constitute the statutory
accounts for that year. Those accounts have been delivered to the Registrar of
Companies and included the Report of the Independent Auditors, which was
unqualified.

By order of the Board

Invesco Asset Management Limited

Secretary

11 November 2009

Independent Review Report

Introduction

We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2009 which comprises the condensed income statement, condensed
reconciliation of movement in shareholders' funds, condensed balance sheet,
condensed cash flow statement and the related explanatory notes. We have read
the other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.

This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the Disclosure
and Transparency Rules (the `DTR') of the UK's Financial Services Authority
(the `UK FSA'). Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work, for
this report, or for the conclusions we have reached.

Directors' Responsibilities

The half-yearly report is the responsibility of, and has been approved by, the
Directors. The Directors are responsible for preparing the half-yearly
financial report in accordance with the DTR of the UK FSA. As disclosed in note
1, the annual financial statements of the Company are prepared in accordance
with UK Accounting Standards and applicable law (UK Generally Accepted
Accounting Practice). The condensed set of financial statements included in
this half-yearly financial report has been prepared in accordance with the
Statement `Half-Yearly Financial Reports' as issued by the UK Accounting
Standards Board.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.

Scope of Review

We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 `Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently does
not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2009 is not prepared, in
all material respects, in accordance with the Statement `Half-Yearly Financial
Reports' as issued by the UK Accounting Standards Board and the DTR of the UK
FSA.

Salim Tharani

For and on behalf of KPMG Audit Plc

Chartered Accountants

Edinburgh

11 November 2009

Directors, Investment Manager and Administration

Directors

Scott Dobbie, Chairman

Jim Pettigrew, Audit Committee Chairman

Richard Barfield, Senior Independent Director

Nicola Ralston

William Samuel

Sir Nigel Wicks

Manager, Company Secretary

Invesco Asset Management Limited

30 Finsbury Square

London EC2A 1AG

Company Secretary contact: Carolyn Ladd

Registered Office

Quartermile One

15 Lauriston Place

Edinburgh EH3 9EP

Registered in Scotland: No. SC1836

Registrars

Equiniti Limited

PO Box 28448

Finance House

Orchard Brae

Edinburgh EH4 1WQ

Tel: 0871 384 2431

Calls cost 8p per minute plus network charges.

Fax: 0871 384 2100

www.shareview.co.uk

Invesco Perpetual Customer Services

Invesco Perpetual has a Customer Services Team available to assist you from
8.30 a.m. to 6.30 p.m. every working day on:

Tel: 0800 085 8677

www.invescoperpetual.co.uk/investmenttrusts

You can now invest in the shares of the Company through an Invesco Perpetual
savings plan and ISA

Invesco Perpetual Investment Trust Series 1: Savings and Investment Plan

c/o The Bank of New York Europe Limited

12 Blenheim Place

Edinburgh EH7 5JH

Tel: 0844 892 0998

Fax: 0131 525 9900

Invesco Perpetual Investment Trust Series 1: ISA

Invesco Perpetual

Perpetual Park

Perpetual Park Drive

Henley-on-Thames

Oxfordshire RG9 1HH

Tel: 0800 085 8677

Textphone: 01491 576104

Fax: 01491 416000

END