The Monks Investment Trust PLC

The Monks Investment Trust PLC
Annual Report and Financial Statements 30 April 2010
Contents
1 Company Summary 2 One Year Summary 3 Five Year Summary 4 Chairmans Statement 6 Managers Portfolio Review 9 Distribution of Portfolio 9 Investment Changes 0 Thirty Largest Equity Holdings 1 1 Classification of Investments 1 12 List of Investments 17 Ten Year Record 18 Directors and Management 19 Directors Report
5 Statement of Directors Responsibilities 2 6 Directors Remuneration Report 2 7 Independent Auditors Report 2 8 Income Statement 2 9 Balance Sheet 2 0 Reconciliation of Movements in Shareholders Funds 3 1 Cash Flow Statement 3 2 Notes to Financial Statements 3 5 Notice of Annual General Meeting 4 7 Further Shareholder Information 4 7 Analysis of Shareholders 4 48 Cost-effective Ways to Buy and Hold Shares in Monks 9 Communicating with Shareholders 4
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 immediately. If you have sold or otherwise transferred all of your ordinary shares in The Monks Investment Trust PLC, please forward this document and the accompanying form of proxy as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was or is being effected for delivery to the purchaser or transferee.
COMPANY SUMMARY
Company Summary
Monks objective is to invest internationally to achieve capital growth, which takes priority over income and dividends.
Investment Policy
Monks invests principally in a portfolio of international quoted equities. The Company is prepared to move freely between different markets as opportunities arise. Asset classes other than equities may be purchased from time to time including fixed interest holdings, unquoted securities and derivatives. The equity portfolio may be relatively concentrated for a global fund. Further details of the Companys investment policy are given in the Directors Report.
Capital Structure
At the year end the Companys share capital consisted of 261,014,859 fully paid ordinary shares of 5p each. The Company has been granted authority to buy back a limited number of its own ordinary shares for cancellation. Long term gearing has been secured by the issue of 80 million (nominal value) of debenture stocks together with a 40 million one year variable rate loan facility and a 30 year interest rate swap.
AIC
The Company is a member of the Association of Investment Companies.
Comparative Index
The principal index against which performance is measured is the FTSE World Index (in sterling terms). The composition of the portfolio is likely to vary substantially from that of the index.
Savings Vehicles
Monks shares can be held through a variety of savings vehicles (see page 48 for details).
Management Details
Baillie Gifford & Co are appointed as investment managers and secretaries to the Company. The management contract can be terminated on 6 months notice.
Notes
None of the views expressed in this document should be construed as advice to buy or sell a particular investment. Investment trusts are UK public listed companies and as such comply with the requirements of the UK Listing Authority. They are not authorised or regulated by the Financial Services Authority.
Management Fee
Baillie Gifford & Cos annual remuneration is 0.45% of total assets less current liabilities, calculated on a quarterly basis.
THE MONKS INVESTMENT TRUST PLC 1
ONE YEAR SUMMARY
One Year Summary

30 April 2010 30 April 2009 760.3m 79.5m 680.8m 255.0p 258.0p 236.5p 6.00p 6.97p* 0.62% (7.3%) (8.3%) 42.8 42.2 32.3 31.5 (50.0) (42.3) % change
Total assets (before deduction of borrowings) Borrowings Shareholders funds Net asset value per ordinary share (after deducting borrowings at fair value) Net asset value per ordinary share (after deducting borrowings at par) Share price FTSE World Index (in sterling terms) Dividends paid and payable in respect of the financial year Revenue earnings per ordinary share Total expense ratio Premium/(discount) (after deducting borrowings at fair value) Premium/(discount) (after deducting borrowings at par)
1,077.9m 119.6m 958.3m 364.1p 367.0p 313.0p 3.00p 4.02p 0.62% (14.0%) (14.7%)
Year to 30 April 2010
Year to 30 April 2009 High 375.8p 417.6p 421.0p 2.3% 0.5% Low 185.5p 207.6p 212.3p (15.9%) (17.4%)
Years high and low
Share price Net asset value (after deducting borrowings at fair value) Net asset value (after deducting borrowings at par) Premium/(discount) (after deducting borrowings at fair value) Premium/(discount) (after deducting borrowings at par)
High 320.5p 370.1p 373.7p (5.7%) (6.9%)
Low 224.0p 250.7p 254.2p (18.7%) (19.6%)
30 April 2010
30 April 2009 6.97p* (134.79p) (127.82p)*
Net return per ordinary share
Revenue Capital
Total
4.02p 111.99p 116.01p
* The revenue return per ordinary share for 2009 includes 0.77p (net of tax) in respect of recoverable VAT and interest thereon (see note 21 on page 40 for further details).
One Year Performance (capital only)

(figures rebased to 100 at 30 April 2009)
150 140 130 120 110 100 90 80
2009
Source: Thomson Financial Datastream/Baillie Gifford & Co. NAV (after deducting borrowings at fair value) Share price FTSE World Index (in sterling terms)
2010
Past performance is not a guide to future performance.
2 ANNUAL REPORT 2010
FIVE YEAR SUMMARY
Five Year Summary

The following charts indicate how an investment in Monks has performed relative to its comparative index and its underlying net asset value over the five year period to 30 April 2010.
5 Year Total Return Performance
220 200 180 160 140 120 100 80 2005 2006 2007 2008 2009 2010
CUMULATIVE TO 30 APRIL
Discount to Net Asset Value

(plotted on a monthly basis)
-4 -6 -8 -10 -12 -14 -16 -18
2005
2006
2007
2008
2009
2010
Source: Thomson Financial Datastream. Dividends are reinvested. NAV (par) total return Share price total return FTSE World Index total return
YEARS TO 30 APRIL
Source: Thomson Financial Datastream/ Baillie Gifford & Co. Monks discount (after deducting borrowings at fair value) Monks discount (after deducting borrowings at par) The discount is the difference between Monks quoted share price and its underlying net asset value.
Annual Net Asset Value and Share Price Total Returns

60% 50% 40% 30% 20% 10% 0% (10%) (20%) (30%) (40%) 2006 2007 2008 2009 2010
YEARS TO 30 APRIL
Relative Annual Net Asset Value and Share Price Total Returns (relative to the FTSE World Index total return)
30% 25% 20% 15% 10% 5% 0% (5%) (10%) (15%) (20%) 2006 2007 2008 2009 2010
YEARS TO 30 APRIL
Source: Thomson Financial Datastream. Dividends are reinvested. NAV (par) total return Share price total return
Source: Thomson Financial Datastream. Dividends are reinvested. NAV (par) total return Share price total return
CHAIRMANS STATEMENT
Chairmans Statement
Performance
In the year to 30 April 2010 net asset value per share, with borrowings at fair value, rose by 42.8% and the FTSE World Index in sterling terms rose by 31.5%. During the first half of the year net asset value per share rose by 20.8% while the comparative index rose by 12.4% and during the second half net asset value per share rose by a further 18.2% and the index advanced by another 17.0%. The share price ended the Companys year at 313p, 32.3% higher than at the end of the previous year. Over the five years to 30 April 2010 the net asset value per share rose by 67.1% and the share price by 69.6% while the comparative index rose by 40.2%. Markets rallied as the financial system appeared to have been stabilised, greatly reducing the risk of a complete meltdown and, after a severe shock, economic growth resumed in most parts of the world. Over and above the general rise in equity markets around the world the largest positive contributions to performance were made by our equity holdings in Emerging Markets and Europe. The Managers Portfolio Review on pages 6 to 8 contains more detail on the individual investments that made the greatest positive and negative contributions to performance. Of particular note was the performance of our holdings of bonds, which in aggregate exceeded that of the comparative index during a period of strong equity markets.
Long Term Borrowing

The Board takes a long term and strategic view of the Companys capital structure. The 11% debenture stock will mature in 2012 and the 63/8% debenture stock in 2023. Current long term interest rates are low relative to past history and, on balance, it seems more likely that they will rise than that they will fall. Locking in current long term rates is therefore an attractive option. Such funding is, however, difficult to obtain in practice owing to the unwillingness of banks to lend and the limited market for investment trust debentures. After examining the options available, we entered into a thirty year interest rate swap for 40m which locks in the rate banks charge to each other. We then borrowed this amount under a shorter term facility with the margin over the rate at which banks lend to each other fixed for one year. The net effect of these two transactions is that part of the cost of borrowing over the next thirty years has been locked in at attractive rates but the smaller element that is determined by the additional margin banks charge non-bank customers has only been fixed for a year. This margin is currently high compared to past levels and so may well decline in future, making it unattractive to fix this element of the borrowing cost. Taking the two transactions together the current interest rate on the 40m of additional borrowing is 5.4%. More details on the interest rate swap are to be found on page 44. The funds were invested in a diversified basket of equities with an initial yield of more than 6%.
Earnings and Dividend

Earnings per share was 4.02p compared to last years exceptionally high 6.97p, a decrease of 42.3%, mainly as a result of lower income from shares and a reduced amount of deposit income. Earnings last year also included an amount for the recovery of VAT paid in previous years together with interest thereon (see note 21 to the financial statements), excluding which the decrease in earnings per share was 35.2%. Monks invests with the aim of achieving capital growth rather than income and all costs are charged to the Revenue Account. As a result earnings fluctuate from year to year. The year before was an exceptional period in terms of income received from investments as many of the companies in which we invest increased their dividends despite the deteriorating economic background, and we also received a relatively large amount of income from bonds. Since then, companies have become more cautious in their dividend policies in response to an increase in uncertainty about future revenues and the availability of financing from banks. As a consequence, a number of the companies in our portfolio cut their dividends. Interest income from bonds with variable coupons also declined owing to the downward trend of short term interest rates and we also reduced the holdings of bonds and cash during the year, with an adverse effect on income. The Board has taken the decline in the Companys income and its investment objective of capital growth into account in recommending a final dividend of 0.50p, which together with the regular interim (0.50p) and second exceptional interim (2.00p) already paid, would make the total dividend for the year 3.00p, a decline of 50% from the much higher than normal 6.00p paid last year. Past performance is not a guide to future performance.
Investment Activity
Over the course of the year there were significant changes to the portfolio. In the latter half of the previous year we were able to purchase a number of corporate bonds trading at distressed prices owing to the dysfunctional nature of the market following the collapse of Lehman Brothers. During the course of the year to 30 April 2010 this investment paid off and the majority of these bonds were sold for substantially higher prices and some matured. The proceeds were largely reinvested in equities resulting in net sales of 125.6m of bonds. The cash balance at the start of the year was also almost entirely invested by the year end as were the funds raised by additional borrowing of 40m. Net purchases of equities amounted to 206.3m and overall there was a net investment of 80.7m in the combination of shares and bonds. At the year end, equities as a percentage of shareholders funds were 102% and equities and bonds together were 110%. This represents both a substantial increase in exposure to equities from 74% at the end of the previous year and an increase in exposure to the combination of equities and bonds from 98%. The funds raised by additional borrowing were, however, invested in a basket of shares of companies with what appear to be sustainable dividends and relatively high yields, and this may to some extent mitigate the increase in the sensitivity of shareholders funds to fluctuations in the general level of equity markets.
CHAIRMANS STATEMENT
Discount and Buybacks

The discount (at fair value) widened to 14.0% from 7.3% over the course of the year. The Board considers the level of discount and has authorised the repurchase of shares when this will be of benefit to continuing shareholders as well as being in the interest of those shareholders who may need to sell some or all of their shares. During the year to 30 April 2010 7.3m was spent on the repurchase of 2,630,000 shares. Since the power to buy back shares was first granted in 1999, 126.9m shares have been bought back and cancelled, representing 33% of the share capital at the start of that period. The Board will continue to buy back shares if suitable opportunities appear.
Overall global demand has also been greatly assisted by the success of efforts to stimulate the Chinese economy in the face of the collapse of export markets. This has boosted demand for commodities in general and helped to stimulate the more resource based economies such as Australia and Brazil. While fears of mal-investment on a grand scale in China may well be exaggerated, the authorities are clearly concerned and measures aimed at property speculation may have an adverse effect on demand for commodities in the short term. Interest rates have also risen in some of the faster growing economies and may have further to rise if inflation is not to get out of control. With so many forces pulling in different directions the immediate outlook is unclear and after the rises of the last year there are fewer pockets of value. In general terms, however, equities appear more attractive than government and corporate bonds, while the value of cash is falling in real terms. Taking a longer term view, the prospects for achieving capital growth through exposure to the areas of most rapid growth in demand remain bright.
Outlook
The magnitude of the decline in output makes this the worst recession in the post war period and unemployment has risen sharply in many countries. It has been unusual in that it was not triggered by the need to raise interest rates to control inflation and instead interest rates were slashed to record low levels. This has meant that for the majority of those with jobs and mortgages disposable income has held up or actually risen. This in turn means that consumers in the heavily indebted countries have been able to maintain relatively high spending levels and at the same time save more or pay down debt. Companies have been able to cut costs by reducing employment and have also cut back on investment while their revenues have been higher than anticipated. This has enabled companies to pay down debt and increase earnings. Unfortunately, the improvements in the balance sheets and cash flows of companies and individuals have been achieved at the cost of a dramatic deterioration in public finances. In effect, the parcel of debt that caused the problem is still there and has just been passed to the public sector. In many parts of the world the period of fiscal stimulus is coming to an end as governments are discovering the limits to their ability to borrow. This will create a headwind for growth.
AGM
I hope shareholders will come to the Annual General Meeting, which will be held on 3 August 2010 at 11.00am at the Institute of Directors (see map on page 45). Our manager will give a short presentation and there will be an opportunity to ask questions.
James Ferguson 15 June 2010
MANAGERS PORTFOLIO REVIEW
Managers Portfolio Review

We started the year with quite a large cash position and a relatively low weighting in equities with the balance of assets in bonds. We had anticipated that an upturn in markets would be led by a recovery in corporate bonds, as this was the market exhibiting the greatest degree of dysfunction and where prices were cheap relative to long run historical averages. As it turned out, the rally started with equities and, having been on the point of starting to buy in early March 2009 had the market fallen any further, we found ourselves buying into a rising market, albeit one that was still well below its high in October 2007. Fortunately, many of our holdings in oil and gas related companies and in Emerging Markets rose by more than the general rise in markets and then, at the end of March, the anticipated recovery in corporate bonds began. Over the course of the year the corporate bond holdings were reduced as valuations returned to a more normal range and the proceeds recycled mainly into further purchases of equities. Two of the main background assumptions guiding our selection of investments have been that growth would rapidly resume its prior pace in Emerging Market economies such as China and Brazil and that growth in most developed countries would be constrained by the high level of debt and need to rebuild bank balance sheets. Mindful of the risks should this prove incorrect, we also sought out investments for which the case is independent of this view of the world. An example is our investment in a basket of biotech companies. We believe that the de-rating of the entire biotech sector as a consequence of investors concerns about US healthcare reform has created a buying opportunity in companies with the potential to achieve very rapid growth in profits. We also believe that there are still opportunities in the area of securitised debt but liquidity in this market remains a problem. Toward the end of the year we also invested newly borrowed funds into a basket of relatively high yielding shares which we hope will be less sensitive than most to the general moves in equity markets but provide sufficient income to cover the interest cost on the borrowing. Our increased equity weighting is largely a consequence of the diminished attractions of the alternatives of cash, the value of which is being eroded in real terms, and bonds, where corporate bonds now only look fairly valued relative to expensive government bonds. It may be that the turmoil in the Eurozone, fears of a hard landing in China and the desire to take profits in investments that have performed well in the last year will create opportunities to redeploy these funds into investments with greater potential to generate large gains. If not, and markets instead grind sideways, the high yield basket should generate a better total return than the market. The ten largest positive and negative contributors to performance are described below. In aggregate the positive contributions outweighted the negative contributions by a comfortable margin. Four of the largest positive contributors to performance, OGX, the Credit Suisse 0% Swap Rate Linked Note 2013, Brazil CPI linked bonds 2045 and Dragon Oil were also in the top ten positive contributors last year. One of this years largest positive contributors, BG Pacific Fund, was in the list of largest negative contributors for the previous year and none of the investments in the list of negative contributors for the year to 30 April 2010 were among the top ten negative contributors for the previous year.
Returns From Markets

for the year ended 30 April 2010 Geographical performance* against FTSE World Index in sterling terms
80% 70% 60% 50% 40% 30% 20% 10% 0%
UK CONTINENTAL EUROPE NORTH AMERICA JAPAN ASIA PACIFIC OTHER EMERGING MARKETS
Source:
Baillie Gifford & Co Monks portfolio FTSE World Index
* All figures are calculated on a total return basis with net income reinvested.
Largest positive contributions to performance:

OGX is a Brazilian oil and gas exploration company and our largest single stock position. It also made the single largest positive contribution to performance the year before. It is a relatively new company established by a leading Brazilian business man, Eike Batista, who hired some of the most successful and knowledgeable staff from the exploration department of the state oil company, Petrobras, for his new company. Armed with their knowledge of offshore areas explored by Petrobras in the past it was successful in acquiring at auction some highly prospective acreage at a low cost and their IPO in 2008 raised sufficient funds to finance their planned exploration and development work. During the last year they have carried out a successful drilling programme that has demonstrated the presence of commercially viable oil and gas deposits in the areas so far drilled. Their success rate has exceeded expectations and there have been upgrades to estimates of recoverable reserves as a result. We took profits on a number of occasions during the year but we still see scope for further upside in the share price based on prices paid in deals in the industry during the last year. Baillie Gifford Pacific Fund is a pooled fund though which Monks has the bulk of its exposure to the markets of the Asia-Pacific region excluding Japan, Australia and New Zealand, and for which the manager receives no additional fees. It has a large exposure to China and to economically sensitive stocks elsewhere in the region. It performed well in the year to 30 April 2010 as confidence grew in the success of the Chinese authorities in stimulating domestic demand to offset weakness in export markets and as the prospects for growth elsewhere improved. The holding was trimmed back during the year after a period of strong performance from its underlying holdings.
Seadrill is a Norwegian oil services company with a large fleet of modern deepwater drilling rigs. It has benefited more than most other drilling companies from the growth in demand for rigs capable of drilling in deep water owing to its managements astute timing of the market cycle and it has used the opportunity provided by the global financial crisis to buy assets cheaply. Petrobras is a Brazilian state-owned integrated oil company. A recovery in the oil price and the strength of the Brazilian currency contributed to a rise in the sterling value of our holding in Petrobras. The company is embarking on a large capital expenditure programme to develop major new fields lying below a layer of salt far beneath the seabed in extremely deep water and, as this will involve cutting-edge technology, the execution risks are high and the company will need to raise additional funds. In the light of these risks the holding in what has been a very successful investment was reduced during the year. Aggreko rents out mobile electricity generators and temperature control equipment in more than twenty countries. High profile examples of its services include the Olympic Games and the World Cup in South Africa. It has successfully identified the growing need for temporary power and established the infrastructure and systems necessary to meet this need making it into a global leader within its niche and has exceeded market expectations despite weakness in the US market. Credit Suisse 0% Swap Rate Linked Note 2013. This is a bond whose value on maturity in 2013 is linked to the 30-year sterling interest rate at that time. It was purchased in 2006 and rose in value during the last two years despite falling long term interest rates, largely as a result of increased volatility in markets. We still believe that long rates in the UK are likely to rise in due course but this may not happen during the remaining life of the bond. We therefore sold it back to Credit Suisse during the year and replaced it with a smaller position in a similar bond maturing in 2017. Petrofac designs, builds, operates and manages oil and gas facilities, mainly in the Middle East and the UK. It has continued to win contracts and generate excellent profits despite a slow down in investment on the part of many oil companies in response to the uncertain outlook for economic growth and hence oil demand and financing constraints. Towards the end of the year it merged its North Sea exploration and production business with that of Lupe of Sweden and the combined entity was spun out to shareholders of both companies as Enquest. Brazil CPI linked Bonds 2045 are Brazilian index-linked government bonds denominated in the local currency. Real interest rates are high in Brazil and are likely to continue to fall over time, which should increase the value of these bonds. Dragon Oil is an oil and gas exploration and production company whose principal assets are in Turkmenistan. Production is expected to grow by 15% a year this year and next. It was subject to a takeover bid from its majority shareholder, Emirates National Oil Company, which we opposed as we believed it undervalued the companys very attractive assets. The bid was rejected and the share price subsequently rose.
Athena Debt Opportunities Fund is a fund set up to make selective investments in oversold securitised debts. The market for this type of securities became dysfunctional following the collapse of Lehman Brothers and the fund suffered from the marking down of many of its underlying investments without trading actually taking place. We made a modest addition to the holding during the course of the year and, as the market improved the market value of its holdings rose. Its net asset value rose by 89% over the year and we continue to believe that there are opportunities to make money from the mispricing of this type of debt security.
Largest negative contributions to performance:

Credit Suisse 0% Swap Rate Linked Note 2017. This is a bond whose value on maturity in 2017 is linked to the 30-year sterling interest rate at that time. It was purchased as a replacement for the similar note maturing in 2013 described above in the list of largest positive contributors. Its subsequent decline in value can be partially attributed to a fall in long term swap rates (the rates banks charge each other in interest rate swaps). We believe that this is a result of a temporary dislocation in markets, as the desire of pension funds to lengthen the maturity of their bond portfolios through the use of swaps has pushed swap rates substantially below the interest rate on long term government bonds. Fastenal is a distributor of fastenings and similar products to the industrial and construction markets, mainly in North America. The holding was sold in June 2009. The company had been successful in increasing efficiency but we were concerned that it would not be able to maintain the rate of efficiency improvements and thought that the shares looked expensive in the light of its prospects despite a decline in its share price. Drax is an electricity generating company that owns a large coalfired power station in the UK. The marginal price of electricity in the UK is determined by the price of natural gas, which is currently low, and profitability for Drax depends on the difference between the cost of burning coal (including carbon credits) and the selling price for its electricity. It has one of the most efficient coal-fired power stations in Europe and a large amount of other capacity would become uneconomic before Drax was forced to shut down. It is being valued at a fraction of the cost to replicate the plant and in the event that gas and electricity prices rise in future Drax could become extremely profitable. The share price was weak from the point of purchase to the end of the year on concerns about the short term outlook and the expiry of hedging contracts. Kroger is a US supermarket operator. We had hoped that it would improve margins through the expansion of own label products but it has made less progress than we expected and these efforts have been overwhelmed by the impact of the recession and strong competition within the supermarket sector. We sold the holding during the year. Proshares Ultrashort 20+Year Treasury is an exchange-traded fund that rises in value if long term US Treasury bonds fall in value (corresponding to a rise in yields). We held this fund in order to benefit from an expected increase in US yields from very low levels but sold out as it appeared less likely that yields would rise as quickly as we initially anticipated.
OSX is a newly established Brazilian shipyard company established by the major shareholder of OGX (described above) in order to allow OGX and other companies operating in the oil and gas industry in Brazil to meet local content requirements for rigs, platforms and associated infrastructure. The company has a guaranteed stream of work from OGX and a partner with an established track record in building such equipment in the form of Hyundai Heavy, who will manage the yard. The company came to the market at a difficult time and the shares fell on listing. We took a holding in the aftermarket in March as we believe it has considerable potential, but the share price fell further over the remainder of the year. China Vanke is a Chinese property developer. It has a broad geographical spread rather than focusing on one or two Chinese cities and it has adopted a cautious approach to the market in recent years. While we believe it to be one of the soundest and best placed of the quoted Chinese property developers it is not immune from negative sentiment towards the sector arising from actions to counteract speculation and deflate property bubbles in certain cities. Over the country as a whole property prices have not seen the same increase as in the hot-spots and the longer term outlook remains positive Heritage Oil is an oil and gas exploration and production company with interests in Africa, the Middle East, Russia and Kurdistan. The investment case was based on its activities in Iraqi Kurdistan. Iraq is one of the few places in the world where, from a geological and technical perspective, oil is easy to find and cheap to produce. Security in the Kurdish region is also less of a problem than in most of the rest of the country and it is relatively easy to link new fields into existing export pipelines. Unfortunately the company became involved in a merger with a Turkish company that had to be abandoned owing to improper dealing on the part of directors of the proposed merger partner. We sold the holding during the year but we have exposure to similar assets through the Norwegian company DNO International, and this has performed well.
Allied Irish Banks is a leading Irish Bank with significant stakes in M&T Bank in the US and Bank Zachodni in Poland. The Irish banking regulator has ordered a more rapid strengthening of Irish Banks capital positions than anticipated. This is likely to mean greater dilution for existing shareholders and a more aggressive timetable for the disposal of its valuable holdings in the US and Poland than we expected. The decline in the share price on this news may prove to have been excessive, and so we have held on to the position having unfortunately added to it during the year. Monsanto is a US seed and agricultural chemicals business. It has issued a number of profit warnings and the holding was sold during the year. Some weakness in its Round-up herbicide business was expected, as generic competition is increasing, but of greater concern is the mounting evidence of a loss of pricing power in its genetically modified seed business. The company appears to have been slow to recognise this and to adjust its business model.
DISTRIBUTION OF PORTFOLIO AND INVESTMENT CHANGES
Distribution of Portfolio as at 30 April

Geographical 2010 (2009)
Net Liquid Assets 2.2% (12.6%) Bonds 7.2% (20.6%) Other Emerging Markets 20.8% (12.0%) UK 13.1% (7.8%) Technology 5.2% (2.1%) Continental Europe 15.1% (10.8%) Financials 25.7% (21.9%) North America 22.1% (21.2%) Japan 2.8% (3.6%)
By Sector 2010 (2009)

Bonds 7.2% (20.6%) Net Liquid Assets 2.2% (12.6%) Oil and Gas 17.9% (19.4%) Basic Materials 6.8% (5.2%) Industrials 8.6% (8.0%) Consumer Goods 6.6% (4.3%) Utilities 1.6% (nil%) Telecommunications 1.6% (nil%) Health Care 10.1% (3.0%) Consumer Services 6.5% (2.9%)
Asia Pacific 16.7% (11.4%)
Investment Changes
Valuation at 30 April 2009 000 Net acquisitions/ (disposals) 000 54,248 44,365 19,634 (5,742) 42,656 51,132 206,293 (38,637) (31,420) (41,479) (11,752) (123,288) 83,005 (59,445) 23,560 Appreciation/ (depreciation) 000 28,492 37,057 57,844 7,386 51,255 80,680 262,714 21,611 5,291 10,231 5,583 941 43,657 306,371 (12,318) 294,053 Valuation at 30 April 2010 000 141,329 163,292 238,199 29,546 180,033 223,619 976,018 30,718 2,769 27,281 17,217 77,985 1,054,003 23,915 1,077,918
Equities*: UK Continental Europe North America Japan Asia Pacific Other Emerging Markets Total equities Bonds#: Sterling bonds Euro bonds US dollar bonds Brazilian real bonds Japanese yen bonds Total bonds Total investments Net liquid assets
Total assets
58,589 81,870 160,721 27,902 86,122 91,807 507,011 47,744 28,898 58,529 11,634 10,811 157,616 664,627 95,678 760,305
The figures above for total assets are made up of total net assets before deduction of borrowings. * Equities include convertible securities ,warrants, limited partnerships, OEICs and Unit Trusts. # Bonds include a sterling swap rate linked note (for further details see note 23 on page 42).
THIRTY LARGEST EQUITY HOLDINGS
Thirty Largest Equity Holdings

2010 Name Baillie Gifford Pacific Fund OGX Aggreko McDonalds Seadrill Dragon Oil Eldorado Gold Petrofac Meditek Novozymes Petrobras TKI Garanti BSKI Solera Holdings Vale Healthspring LG Electronics Atlas Copco Berkshire Hathaway Kunlun Energy Company DNO International Marine Harvest BHP Billiton The Biotech Growth Trust Naspers Nestl Kellogg Noble Capitalsource Taiwan Semicon Manufacturing BIM Birlesik Magazalar Region Asia Pacific Other Emerging Markets United Kingdom North America Continental Europe Other Emerging Markets North America United Kingdom Asia Pacific Continental Europe Other Emerging Markets Other Emerging Markets North America Other Emerging Markets North America Asia Pacific Continental Europe North America Asia Pacific Continental Europe Continental Europe Asia Pacific United Kingdom Other Emerging Markets Continental Europe North America North America North America Asia Pacific Other Emerging Markets Business Investment fund Oil and gas exploration and production Temporary power units Fast food restaurants Contract drilling services Oil and gas exploration and production Gold mining Oilfield services company Electronic components Enzyme producer Integrated oil Bank Transactional software Diversified mining group Health maintenance organisation Electronic goods Industrial compressors and mining equipment Insurance Oil and gas company Oil and gas exploration and production Salmon farmer Diversified resources Investment trust Media company Food and consumer products Food manufacturer Offshore drilling company Commercial lending Semiconductor manufacturer Discount food and consumer goods Value 000 49,708 46,533 21,773 19,158 18,804 13,419 13,271 13,162 13,060 13,042 12,833 12,722 12,501 12,321 12,290 11,520 11,271 11,067 10,937 10,873 10,849 10,842 10,744 10,530 10,524 10,473 10,420 10,395 10,340 10,337 445,719 % of total assets 4.6 4.3 2.0 1.8 1.7 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.1 1.1 1.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 41.3 2009 Value 000 54,593 30,726 10,290 8,469 7,218 6,650 3,801 22,071 7,575 6,496 6,702 9,086 3,756 7,624 3,961 10,262 8,281 207,561
CLASSIFICATION OF INVESTMENTS
Classification of Investments
Continental UK Europe % % 0.6 2.1 2.7 0.7 2.6 3.3 0.7 0.7 0.2 0.2 1.1 0.5 1.6 0.4 0.5 3.7 4.6 1.0 2.3 3.3 1.7 0.6 2.3 2.0 2.0 0.6 2.3 2.9 0.4 0.4 1.4 0.8 0.8 0.7 3.7 0.5 0.5 15.1 10.8 0.2 (0.7) 14.6 North America % 1.0 2.6 3.6 0.7 0.8 1.2 2.7 1.0 1.3 2.3 2.6 2.9 5.5 1.8 2.2 4.0 1.8 1.0 2.8 1.2 1.2 22.1 21.2 2.5 (3.3) 21.3 Asia Pacific % 1.6 1.6 0.3 0.5 1.0 1.8 0.2 0.3 0.5 1.1 1.1 0.5 0.5 2.4 5.8 8.2 3.0 3.0 16.7 11.4 0.2 16.9 Other Emerging Markets % 6.7 6.7 2.3 2.3 0.9 1.6 2.5 0.8 0.8 1.0 1.0 1.0 1.0 2.0 1.0 1.0 2.0 0.6 1.9 4.5 2010 Total % 10.9 7.0 17.9 1.0 0.8 0.5 4.5 6.8 0.9 0.7 0.2 1.7 2.5 2.6 8.6 0.8 3.0 1.1 0.4 1.3 6.6 4.2 5.9 10.1 3.3 2.2 1.0 6.5 1.4 0.2 1.6 1.1 0.5 1.6 5.2 1.4 5.7 3.2 10.2 25.7 1.2 4.0 5.2 90.6 7.2 2.2 100.0 66.8 20.6 12.6 2009 Total % 10.4 9.0 19.4 2.6 2.6 5.2 0.6 0.6 0.5 2.0 1.4 2.9 8.0 0.6 2.9 0.8 4.3 1.7 1.3 3.0 1.5 1.4 2.9 4.2 2.6 3.0 1.0 11.1 21.9 1.0 1.1 2.1
Classification
Japan % 0.4 0.4 1.9 1.9 0.5 0.5 2.8 3.6 (0.4) 2.4
Equities*: Oil and gas producers Oil equipment, services and distribution Oil and Gas Chemicals Forestry and paper Industrial metals Mining Basic Materials Construction and materials Aerospace and defence General industrials Electronic and electrical equipment Industrial engineering Industrial transportation Support services Industrials Beverages Food producers Household goods Leisure goods Tobacco Consumer Goods Health care equipment and services Pharmaceuticals and biotechnology Health Care Food and drug retailers General Retailers Media Consumer Services Fixed line telecommunications Mobile telecommunications Telecommunications Electricity Gas, water and multiutilities Utilities Banks Nonlife insurance Real estate General financial Equity investment instruments Financials Software and computer services Technology hardware and equipment Technology
Total Equities*

13.1 7.8 2.9 8.6 24.6

20.8 12.0 1.6 (2.2) 20.2
Total Equities* 2009 Bonds Net Liquid Assets

Total Assets
(before deduction of borrowings)

100.0 (10.5) 89.5 75
Total Assets 2009 Borrowings

Shareholders Funds
14.3 (11.1) 13.5 3.8 24
21.1 14.6 21.1 19
33.6 21.3 33.6 29
5.1 2.4 5.1 6
12.4 16.9 12.4 21
13.5 20.2 13.5 24
(11.1) 88.9
Shareholders Funds 2009

Number of equity investments*
123
*Equities includes convertible securities, warrants, limited partnerships, OEICs and unit trusts.
LIST OF INVESTMENTS AS AT 30 APRIL 2010
Classification United Kingdom Oil and gas producers Oil equipment, services and distribution Aerospace and defence Support services Pharmaceuticals and biotechnology Mobile telecommunications Electricity Gas, water and multiutilities Nonlife insurance General financial Equity investment instruments Total United Kingdom Equities
*denotes unlisted security. denotes holding in warrants.
Name
Business
Value 000
Borders & Southern Enquest Falkland Oil and Gas Petrofac Wellstream Holdings Rolls Royce Group Aggreko Capita Genus Vodafone Group Drax Group Scottish & Southern Energy National Grid Catlin RSA Insurance IG Group * Aberforth Limited Partnership Altus Resource Capital Better Capital Burford Capital Finsbury Worldwide Pharmaceutical Trust International Biotechnology Juridica The Biotech Growth Trust
Oil and gas exploration and production Oil and gas exploration and production Oil and gas exploration and production Oilfield services company Flexible pipes manufacturer Engine manufacturer Temporary power units Business process outsourcer Agricultural services Mobile telecommunications Electricity Electricity Multiutilities Property and casualty insurance Property and casualty insurance Spread betting Active value fund Investment fund Private equity Investment fund Investment trust Investment trust Investment trust Investment trust
2,642 1,143 2,778 6,563 13,162 9,874 23,036 7,324 21,773 6,093 27,866 7,250 2,061 6,355 5,772 12,127 5,856 2,034 1,842 3,876 4,962 2 4,790 5,126 6,445 25 4,237 9,039 10,744 40,408 141,329 2.6 0.7 0.2 1.1 0.5 0.4 0.5 3.7 13.1 2.1 0.7 0.6
LIST OF INVESTMENTS
Classification Continental Europe Oil and gas producers Oil equipment, services and distribution Industrial engineering Industrial transportation Food producers Health care equipment and services Pharmaceuticals and biotechnology Fixed line telecommunications Banks Real estate General financial Equity investment instruments Total Continental European Equities
Name
Business
Value 000
DNO International Seadrill Sevan Marine Alstom Atlas Copco DSV Marine Harvest Nestl Essilor International Basilea Pharmaceutica Novozymes Roche Holding Deutsche Telekom Allied Irish Banks Banco Santander Atrium European # Marfin Investment Group Holding Reinet Investments SCA
Oil and gas exploration and production Norway Contract drilling services Norway Oil platforms Norway Power generation and transport equipment France Industrial compressors and mining equipment Sweden Global transport and logistics Denmark Salmon farmer Norway Food and consumer products Switzerland Opthalmic lenses France Pharmaceuticals and biotechnology Switzerland Enzyme producer Denmark Pharmaceuticals Switzerland Telecommunications services Germany Bank Ireland International bank Spain Real estate Austria Investment holding company Greece Investment holding company Luxembourg Computer equipment Switzerland
10,873 18,804 6,121 24,925 7,360 11,271 18,631 6,093 10,849 10,524 21,373 6,919 4,750 13,042 7,201 24,993 4,718 5,880 8,546 14,426 8,674 8,745 7,883 5,039 163,292
1.0 2.3 1.7 0.6 2.0 0.6 2.3 0.4
1.4 0.8 0.8 0.7 0.5 15.1
Technology hardware and equipment Logitech
#includes a holding in convertible loan notes.
LIST OF INVESTMENTS
Classification North America Oil and gas producers Oil equipment, services and distribution Chemicals Forestry and paper Mining Food producers Tobacco Health care equipment and services Pharmaceuticals and biotechnology Food and drug retailers General retailers Banks Nonlife insurance Software and computer services Total North American Equities
Name
Business
Value 000
Noble Diamond Offshore Drilling National Oilwell Varco Pride International Praxair Sino Forest Eldorado Gold Kellogg Altria Philip Morris Healthspring Intuitive Surgical Medco Health Solutions Celgene Curis Genzyme Gilead Sciences Seattle Genetics Techne Vanda Pharmaceuticals McDonalds OReilly Automotive TJX Wal Mart Stores Capitalsource Goldman Sachs Berkshire Hathaway Solera Holdings
Offshore drilling company Offshore drilling Drilling equipment manufacturer Offshore drilling Industrial gas producer Forestry and paper Canada Gold mining Canada Food manufacturer Tobacco Tobacco production and retail Health maintenance organisation Medical equipment Pharmacy benefit manager Biotechnology Biotechnology Biotechnology Biotechnology Biotechnology Biotechnology Biotechnology Fast food restaurants Auto parts supplier Clothing store General retailer Commercial lending Diversified banking Insurance Transactional software
10,420 8,659 9,975 9,331 27,965 8,045 8,602 13,271 10,473 5,147 8,093 13,240 12,290 6,386 10,042 28,718 5,572 5,376 5,177 4,232 3,271 7,328 414 31,370 19,158 8,152 9,046 6,931 24,129 10,395 8,845 19,240 11,067 12,501 238,199
1.0 2.6 0.7 0.8 1.2 1.0 1.3 2.6
2.9 1.8
2.2 1.8 1.0 1.2 22.1
LIST OF INVESTMENTS
Classification Japan Leisure goods Real estate Total Japanese Equities Asia Pacific Oil and gas producers Chemicals Industrial metals Mining Industrial transportation Household goods Food and drug retailers Real estate Equity investment instruments Technology hardware and equipment Total Asian Pacific Equities
Name
Business
Value 000
Funai Electric Japan Retail Fund Investment Kenedix Realty Investment Premier Investment Corp United Urban
Consumer electronics company Real estate investment trust Real estate investment trust Real estate investment trust Real estate investment trust Technology
4,316 4,878 5,429 4,590 5,547 20,444 4,786 29,546
0.4 1.9 0.5 2.8
Technology hardware and equipment Toshiba Tec
Kazmunaigas Exploration Kunlun Energy Company Jain Irrigation Systems China Steel BHP Billiton Hopewell Pacific Basin Shipping LG Electronics Woolworths Ascendas Real Estate Champion REIT China Vanke Unitech Westfield Group
Oil and gas exploration and production Kazakhstan Oil and gas company Hong Kong Plastics and agriculture India Steel products China Diversified resources Australia Computers and peripherals Taiwan Transportation infrastructure China Marine transportation Hong Kong Electronic goods Korea Retailer Australia Real estate investment trusts Singapore Real estate investment trusts Hong Kong Real estate developers China Real estate developers India Shopping centres Australia
6,546 10,937 17,483 3,219 5,196 10,842 2,390 924 2,667 3,591 11,520 4,855 2,012 5,128 3,065 9,396 5,674 25,275 49,708 6,027 7,780 63,515 13,060 8,747 10,340 32,147 180,033 3.0 16.7 5.8 2.4 0.3 1.1 0.5 1.6 0.3 0.5 1.0 0.2
Electronic and electrical equipment HTC
Baillie Gifford Pacific Fund Investment fund Asia Vietnam Enterprise Investment Fund Investment fund Vietnam Vision Opportunity China Fund Investment fund China
Meditek Electronic components Taiwan Samsung Electronics Electronic goods Korea Taiwan Semicon Manufacturing Semiconductor manufacturer Taiwan
LIST OF INVESTMENTS
Classification Other Emerging Markets Oil and gas producers Mining Construction and materials Industrial transportation Beverages Health care equipment and services Food and drug retailers Media Fixed line telecommunications Banks Real estate General financial Total Other Emerging Markets Equities Total Equity Investments Fixed Interest Sterling denominated Euro denominated US dollar denominated Brazilian real denominated Total Fixed Interest Total Investments Net Liquid Assets
Name
Value 000
Dragon Oil OGX Petrobras Antofagasta Impala Platinum Vale Arabtec Holding Cemex Orascom Construction All America Latina Logistica OSX Brasil Santos Anadolu Efes Odontoprev BIM Birlesik Magazalar Naspers Telekomunikacja Polska
Oil and gas exploration and production Turkmenistan Oil and gas exploration and production Brazil Integrated oil Brazil Copper miner Chile Platinum miner South Africa Diversified mining group Brazil Construction and engineering UAE Cement Mexico Building and construction Egypt Freight transportation Brazil Marine transportation Brazil Transportation infrastructure Brazil Beverages Turkey Health care providers and services Brazil Discount food and consumer goods Turkey Media company South Africa Diversified telecommunication services Poland
13,419 46,533 12,833 72,785 5,800 7,400 12,321 25,521 3,609 4,733 2,628 10,970 6,463 8,170 2,411 17,044 8,472 10,253 10,337 10,530 10,279 8,057 12,722 20,779 6,107 7,512 4,675 4,174 4,181 20,542 223,619 976,018 1.9 20.8 90.6 2.0 0.6 1.6 0.8 1.0 1.0 1.0 1.0 0.9 2.3 6.7
Itau Unibanco Banco Multiplo Bank - Brazil TKI Garanti BSKI Bank Turkey Aldar Properties BMF Bovespa Cetip EFG-Hermes GP Investments Real estate holding and development UAE Brazilian stock exchange operator Brazil Investment services Brazil Investment services Egypt Financial services Brazil
Amlin 6.5% 2016/26 Cairngorm Ltd Class E CQS Rig Finance Fund Credit Suisse 0% Swap Rate Linked Note 2017 Lloyds TSB 7.421% 2017 Perp *Pantheon International Participations loan notes RSA 6.701% 2017 Perp Adagio ii Clo Class F 2021 Duchess V F 2021 Semper Finance FRN 2015
1,328 810 2,736 16,875 3,547 3,150 2,272 30,718 413 391 1,965 2,769 20,590 2,188 3,515 988 27,281 17,217 77,985 1,054,003 23,915 1,077,918 2.5 1.6 7.2 97.8 2.2 100.0 0.2 2.9
Athena Debt Opportunitites Fund CTCDO 20051A A Tamweel Funding CV 4.31% 23/01/12 Vega Capital C FRN 2011 Brazil CPI Linked 2045
Total Assets (before deduction of borrowings) 16 ANNUAL REPORT 2010
*denotes unlisted security.
TEN YEAR RECORD
Capital
At 30 April 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total assets 000 926,450 866,759 786,628 606,604 692,159 731,300 1,094,620 1,112,379 1,110,368 760,305 1,077,918 Shareholders Borrowings funds 000 000 108,373 110,269 110,237 112,917 79,386 79,419 159,422 148,942 79,516 79,549 119,582 818,077 756,490 676,391 493,687 612,773 651,881 935,198 963,437 1,030,852 680,756 958,336 Shareholders funds per share p 241.3 247.9 221.7 167.7 208.2 223.7 325.4 343.3 390.2 258.2 367.2 NAV per share (fair) * p 235.7 243.7 217.9 162.5 203.7 217.9 319.6 338.4 386.5 255.0 364.1 NAV per share (par) * p 241.0 247.7 221.5 167.5 208.0 223.5 325.3 343.1 390.0 258.0 367.0 Share price p 201.9 219.2 195.3 143.0 173.0 184.5 290.0 300.2 348.0 236.5 313.0 Discount (fair) % 14.3 10.1 10.4 12.0 15.1 15.3 9.3 11.3 10.0 7.3 14.0 Discount (par) % 16.2 11.5 11.8 14.6 16.8 17.4 10.9 12.5 10.8 8.3 14.7
Revenue
Gross revenue 000 17,560 20,758 18,497 15,646 15,611 16,955 20,085 25,738 28,735 33,949 23,887 Available for ordinary shareholders 000 5,070 5,894 4,909 3,060 3,001 5,064 6,352 11,182 12,285 18,384 10,569 Revenue earnings per ordinary share p 1.38 1.83 1.61 1.04 1.02 1.73 2.20 3.91 4.53 6.97 4.02 Dividend paid and proposed per share net p 1.94 1.80 1.60 1.05 1.05 1.70 1.90 3.15 3.70 6.00 3.00 Total expense ratio % 0.63 0.70 0.60 0.63 0.75 0.65 0.70 0.59 0.62 0.62 0.62
Gearing Ratios
Actual gearing % 88 92 97 113 106 100 107 98 89 74 103 Potential gearing ll % 113 115 116 123 113 112 117 115 108 112 112
Year to 30 April 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Cumulative Performance (taking 2000 as 100)

At 30 April 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 NAV per share (par) 100 103 92 70 86 93 135 142 162 107 152 NAV total return (par) 100 104 93 71 89 96 140 149 170 113 167 11.7% 5.3% Share price 100 109 97 71 86 91 144 149 172 117 155 11.2% 4.5% Share price total Comparative return index 100 110 99 73 89 95 151 158 184 127 173 12.7% 5.6% 100 93 78 60 69 70 91 95 94 75 98 7.0% (0.2%) Index total return 100 94 80 63 74 77 102 110 111 91 122 9.6% 2.0% Dividend paid Revenue and proposed earnings per share per share (net) 100 133 117 75 74 125 159 283 328 505 291 18.4% 11.3% 100 93 82 54 54 88 98 162 191 309 155 12.0% 4.5% Retail price index 100 102 103 107 110 113 116 121 126 126 131 3.0% 2.7%
Compound annual returns 5 year 10.4% 10 year 4.3%
* Net asset value (NAV) per share has been calculated after deducting borrowings at either par value or fair value (see note 17, page 39). Discount is the difference between Monks quoted share price and its underlying net asset value with borrowings at either par value or fair value. The figures prior to 2005 have not been restated for the changes in accounting policies implemented in 2006. The calculation of revenue earnings per share is based on the revenue from ordinary activities after taxation and the weighted average number of ordinary shares in issue (see note 7, page 34). Ratio of total operating costs to average shareholders funds. The 2008 and 2009 figures exclude the impact of recoverable VAT (see note 21, page 40). Total assets (including all debt used for investment purposes) less all cash and fixed interest securities divided by shareholders funds. ll Total assets (including all debt used for investment purposes) divided by shareholders funds. Source: Thomson Financial Datastream.

DIRECTORS AND MANAGEMENT
Directors and Management

Directors
JGD Ferguson
James Ferguson was appointed a Director in 2002 and became Chairman in 2005. He is also Chairman of the Audit Committee. He is chairman of Value and Income Trust plc, The Scottish Oriental Smaller Companies Trust Plc, Edinburgh U.S. Tracker Trust and Northern 3 VCT Plc. He is a director of The Independent Investment Trust PLC and Audax Properties PLC. He joined Stewart Ivory in 1970, becoming chairman and chief executive in 1989 and retiring in 2000. He is a former deputy chairman of the Association of Investment Companies.
Directors Service Details

Date of appointment Due date for re-election
JGD Ferguson CC Ferguson EM Harley DCP McDougall
03/01/02 01/09/03 03/06/03 30/11/99
AGM 2011 AGM 2010 AGM 2012 AGM 2010
Managers and Secretaries

Monks is managed by Baillie Gifford & Co, an investment management firm formed in 1927 out of the legal firm Baillie & Gifford, WS, which had been involved in investment management since 1908. Baillie Gifford are one of the largest investment trust managers in the UK and currently manage eight investment trusts. Baillie Gifford also manage unit trusts and Open Ended Investment Companies, together with investment portfolios on behalf of pension funds, charities and other institutional clients, both in the UK and overseas. Funds under the management or advice of Baillie Gifford total around 60 billion as at 11 June 2010. Based in Edinburgh, they are one of the leading privately owned investment management firms in the UK, with 35 partners and a staff of around 600. The manager of Monks portfolio is Gerald Smith. Gerald is a partner of Baillie Gifford and is the head of Baillie Giffords Global Opportunities Team. He is also Baillie Giffords Deputy Chief Investment Officer, is a member of their Investment Policy Committee and Chairman of their Emerging Markets Investment Policy Committee. Baillie Gifford & Co are authorised and regulated by the Financial Services Authority.
CC Ferguson
Carol Ferguson was appointed a Director in 2003. A qualified Chartered Accountant, she began her investment career with Ivory & Sime, an Edinburgh fund management group. Thereafter, she moved to Wood Mackenzie, stockbrokers, becoming a partner in 1984. Her most recent position was as Finance Director for Timney Fowler, a textiles company. She is a non-executive director and chairs the audit committees of BlackRock Greater Europe Investment Trust plc and Vernalis plc. She is a director of Invesco Asia Trust plc, Standard Life UK Smaller Companies Investment Trust PLC, the Chartered Accountants Compensation Scheme and is chairman of the Association of Investment Companies.
EM Harley
Edward Harley was appointed a Director in 2003. He joined Cazenove in 1983, becoming a partner in 1994. He has considerable experience of overseas markets, having worked in New York and latterly with responsibility for the firms business in Latin America, S.E. Asia and Australia. He is currently a director at Cazenove Capital Management and is president of the Historic Houses Association. He is also involved with the charitable sector both as a trustee and as a member of investment committees.
DCP McDougall
Douglas McDougall was appointed a Director in 1999 and is the Senior Independent Director. He is chairman of The Scottish Investment Trust plc, The Law Debenture Corporation plc, The Independent Investment Trust PLC and The European Investment Trust plc. He is a director of Stramongate Assets PLC, Herald Investment Trust plc and Pacific Horizon Investment Trust PLC and is a member of the University of Cambridge Investment Board. From 1969 to 1999 he was a partner in Baillie Gifford & Co and from 1989 to 1999 was joint senior partner and chief investment officer. He is a former chairman of the Investment Management Regulatory Organisation, the Fund Managers Association and the Association of Investment Companies. All Directors are members of the Audit Committee.
DIRECTORS REPORT
Directors Report
The Directors submit their Annual Report together with the results of the Company for the year to 30 April 2010.
Business Review
Business and Status
The Company is an investment company within the meaning of section 833 of the Companies Act 2006. The Company carries on business as an investment trust. In the opinion of the Directors, the Company conducts its affairs so as to enable it to obtain approval by HM Revenue & Customs as an investment trust under section 842 of the Income and Corporation Taxes Act 1988. The Company was approved as an investment trust for the year ended 30 April 2009, subject to matters that may arise from any subsequent enquiry by HM Revenue & Customs into the Companys tax return. The Company will continue to seek approval under section 842 of the Income and Corporation Taxes Act 1988 each year.
levels, and the extent of equity gearing, are discussed by the Board and Managers at every Board meeting and adjusted accordingly with regard to the outlook. New borrowings will not be taken out if this takes the level of effective equity gearing to over 30% of shareholders funds. Equity exposure will, on occasions, be below 100% of shareholders funds.
Performance
At each Board meeting, the Directors consider a number of performance measures to assess the Companys success in achieving its objectives. The key performance indicators used to measure the progress and performance of the Company over time are established industry measures and are as follows: the movement in net asset value per ordinary share on a total return basis; the movement in the share price on a total return basis; the discount; and the total expense ratio. The five year record for the net asset value and share price performance compared to the FTSE World Index can be found on page 3 along with the five year record for the discount. Details of the total expense ratio can be found in the ten year record on page 17 along with other financial highlights. In addition to the above, the Board also considers peer group comparative performance.
Objective
The Companys objective is to invest internationally to achieve capital growth, which takes priority over income and dividends.
Investment Policy
Monks seeks to meet its objective of achieving capital growth through investment principally in a portfolio of international quoted equities. Equities are selected for their inclusion within the portfolio solely on the basis of the strength of the investment case. When investing, the Company is prepared to move freely between different markets as opportunities arise. There are no limits to geographical or sector exposures, but these are reported to, and monitored by, the Board in order to ensure that adequate diversification is achieved. The equity portfolio is relatively concentrated for a global fund and, as at the financial year end, it contained 123 equity holdings including 19 investments in funds. The number of holdings in equities and funds will typically be between 70 and 200. A portfolio review by the Managers is given on pages 6 to 8 and the investments held at the year end are listed on pages 12 to 16. Investment may also be made in funds (open and closed-ended) including those managed by Baillie Gifford & Co. The maximum permitted investment in UK listed investment companies in aggregate is 15% of gross assets. Asset classes other than equities will be purchased from time to time including fixed interest holdings, unquoted securities and derivatives. The Company may use derivatives for the purpose of efficient portfolio management (including reducing, transferring or eliminating investment risk in its investments and protection against currency risk) and to achieve capital growth. While there is a comparative index for the purpose of measuring performance, no attention is paid to the composition of this index when constructing the portfolio and the composition of the portfolio is likely to vary substantially from that of the index. A long term view is taken and there may be periods when the net asset value per share declines both in absolute terms and relative to the comparative index. Payment of dividends is secondary to achieving capital growth. The shares are not considered to be a suitable investment for those seeking a regular or rising income. Borrowings are invested in equity and other markets when this is considered to be appropriate on investment grounds. Gearing
Financials
The net asset value per share (after deducting borrowings at fair value) increased by 42.8% during the year, compared to an increase in the comparative index of 31.5%, and the discount of the share price to net asset value widened from 7.3% to 14.0%.
Review of the Year and Future Trends
A review of the year and the investment outlook is contained in the Chairmans Statement and the Managers Portfolio Review on pages 4 to 8.
Principal Risks and Uncertainties
The Companys assets consist mainly of listed securities and its principal risks are therefore market related and include market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. An explanation of those risks and how they are managed are contained in note 23 to the financial statements on pages 40 to 44. Other risks faced by the Company include the following:
Regulatory Risk failure to comply with applicable legal and
regulatory requirements could lead to suspension of the Companys Stock Exchange Listing, financial penalties or a qualified audit report. Breach of section 842 of the Income and Corporation Taxes Act 1988 could lead to the Company being subject to tax on capital gains. Baillie Giffords Heads of Business Risk & Internal Audit and Regulatory Risk provide regular reports to the Audit Committee on Baillie Giffords monitoring programmes. The Managers monitor investment movements and the level of forecast income and expenditure to ensure the provisions of section 842 are not breached.
DIRECTORS REPORT
Operational/Financial Risk failure of the Managers accounting
systems or those of other third party service providers could lead to an inability to provide accurate reporting and monitoring or a misappropriation of assets. The Board reviews the Managers Report on Internal Controls and the Reports by other third party providers are reviewed by the Managers on behalf of the Board.
The Board believes it is appropriate for Mr Ferguson to be Chairman of the Audit Committee as he is considered to be independent and there are no conflicts of interest. The Association of Investment Companies (AIC) has published its own Code of Corporate Governance which provides a framework of best practice for investment companies. The Board is of the opinion that the Company has complied with the principles of the AIC Code, in all material respects, except that Mr JGD Ferguson is Chairman of the Audit Committee.
Discount Volatility the discount at which the Companys shares
trade can widen. The Board monitors the level of discount and the Company has authority to buy back its own shares.
Gearing Risk the Company may borrow money for investment
The Board
purposes (sometimes known as gearing). If the investments fall in value, any borrowings will magnify the extent of this loss. If borrowing facilities are not renewed, the Company may have to sell investments to repay borrowings. All borrowings require the prior approval of the Board and gearing levels are discussed by the Board and Managers at every meeting. The majority of the Companys investments are in quoted securities that are readily realisable.
The Board has overall responsibility for the Companys affairs. It has a number of matters reserved for its approval including strategy, investment policy, currency hedging, gearing, treasury matters, dividend and corporate governance policy. A separate strategy session is held annually. The Board also reviews the financial statements, investment transactions, revenue budgets and performance. Full and timely information is provided to the Board to enable it to function effectively and to allow Directors to discharge their responsibilities. The Board currently comprises four Directors all of whom are nonexecutive. The executive responsibility for investment management has been delegated to the Companys Managers and Secretaries, Baillie Gifford & Co, and, in the context of a Board comprising only non-executive Directors, there is no chief executive officer. The Senior Independent Director is Mr DCP McDougall. The Directors believe that the Board has a balance of skills and experience that enables it to provide effective strategic leadership and proper governance of the Company. Information about the Directors, including their relevant experience, can be found on page 18. There is an agreed procedure for Directors to seek independent professional advice, if necessary, at the Companys expense.
Employees
The Company has no employees.
Social and Community Issues
As an investment trust, the Company has no direct social or community responsibilities. The Company however believes that it is in the shareholders interests to consider environmental, social and governance factors when selecting and retaining investments. Details of the Companys policy on socially responsible investment are set out on page 22.
Dividends
The Board recommends a final dividend of 0.50p per ordinary share which, together with the interims already paid, makes a total of 3.00p for the year. If approved, the recommended final dividend on the ordinary shares will be paid on 6 August 2010 to shareholders on the register at the close of business on 9 July 2010. The ex-dividend date is 7 July 2010. The Companys Registrar offers a Dividend Reinvestment Plan (see page 47) and the final date for elections for this dividend is 16 July 2010.
Terms of Appointment
Letters which specify the terms of appointment are issued to new Directors. The letters of appointment are available for inspection on request. A Director appointed during the year is required to retire and seek election by shareholders at the next Annual General Meeting. Directors are required to submit themselves for re-election every three years and Directors who are also directors of another investment trust managed by Baillie Gifford, or who have served for more than nine years, submit themselves for re-election annually.
Corporate Governance
The Board is committed to achieving and demonstrating high standards of Corporate Governance. This statement outlines how the principles of the Combined Code on Corporate Governance published in 2008 (the Combined Code) were applied throughout the financial year.
Independence of Directors
Compliance
The Company has complied throughout the year under review with the provisions set out in section 1 of the Combined Code except that a Nomination Committee has not been established and Mr JGD Ferguson, Chairman of the Board, is Chairman of the Audit Committee. As the Board comprises only non-executive Directors, all of whom are considered to be independent, a Nomination Committee is considered unnecessary. The appointment of new Directors is considered by the Board as a whole and the Board conducts an annual review of its composition having regard to the present and future needs of the Company.
All the Directors are considered by the Board to be independent of the Managers and free of any business or other relationship which could interfere with the exercise of their independent judgement. The Directors recognise the importance of succession planning for company boards and the Boards composition is reviewed annually. The Board is of the view that length of service will not necessarily compromise the independence or contribution of Directors of an investment trust company, where continuity and experience can be a benefit to the Board. The Board concurs with the view expressed in the AIC Code that long serving directors should not be prevented from being considered independent. Mr McDougall was a senior partner of Baillie Gifford & Co until he retired on 30 April 1999. He is a director of Pacific Horizon
DIRECTORS REPORT
Investment Trust PLC which is also managed by Baillie Gifford & Co and he has served on the Board for more than nine years. He therefore offers himself for re-election annually. Mr McDougall and Mr Ferguson are both directors of The Independent Investment Trust PLC. Following a formal performance evaluation the Board has concluded that, not withstanding the above, both Mr McDougall and Mr Ferguson are independent in character and judgement. Their skills and experience add significantly to the strength of the Board.
Directors Attendance at Meetings

Board Audit Committee
Number of meetings JGD Ferguson CC Ferguson EM Harley DCP McDougall
6 6 5 6 5
2 2 2 2 2
Meetings
There is an annual cycle of Board meetings which is designed to address, in a systematic way, overall strategy, review of investment policy, investment performance, marketing, revenue budgets, dividend policy and communication with shareholders. The Board considers that it meets sufficiently regularly to discharge its duties effectively. The table opposite shows the attendance record for the Board and the Audit Committee meetings held during the year. All of the Directors attended the Annual General Meeting.
The Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company in accordance with the guidance Internal Control: Revised Guidance for Directors on the Combined Code. The practical measures to ensure compliance with regulation and company law, and to provide effective and efficient operations and investment management, have been delegated to the Managers and Secretaries, Baillie Gifford & Co, under the terms of the Management Agreement. The Board acknowledges its responsibilities to supervise and control the discharge by the Managers and Secretaries of their obligations. Baillie Gifford & Co have been delegated responsibility for the design, implementation and maintenance of control policies and procedures to safeguard the assets of the Company and to manage its affairs properly. This responsibility also extends to maintaining effective operational and compliance controls and risk management. The Baillie Gifford & Co Heads of Business Risk & Internal Audit and Regulatory Risk provide the Board with regular reports on Baillie Gifford & Cos monitoring programmes. The reporting procedures for these departments are defined and formalised within a service level agreement. Baillie Gifford & Co conduct an annual review of their system of internal controls which is documented within an internal controls report which complies with Technical Release AAF 01/06 Assurance Reports on Internal Controls of Service Organisations made available to Third Parties. This report is independently reviewed by Baillie Gifford & Cos auditors and a copy is submitted to the Audit Committee. The Companys investments are segregated from those of Baillie Gifford & Co and their other clients through the appointment of The Bank of New York Mellon as independent custodian of the Companys investments. A detailed risk map is prepared which identifies the significant risks faced by the Company and the key controls employed to manage these risks. These procedures ensure that consideration is given regularly to the nature and extent of the risks facing the Company and that they are being actively monitored. Where changes in risk have been identified during the year they also provide a mechanism to assess whether further action is required to manage the risks identified. The Board confirms that these procedures have been in place throughout the Companys financial year and continue to be in place up to the date of approval of this Report.
Performance Evaluation
An appraisal of the Chairman, each Director and a performance evaluation and review of the Board as a whole and the Audit Committee was carried out during the year. The performance of each Director was appraised by the Chairman and the Chairmans appraisal was led by Mr DCP McDougall, the Senior Independent Director. The appraisals and evaluations considered, amongst other criteria, the balance of skills of the Board, the contribution of individual Directors and the overall effectiveness of the Board and the Audit Committee. Following this process it was concluded that the performance of each Director, the Chairman, the Board and the Audit Committee continues to be effective and that each Director and the Chairman remain committed to the Company. A review of the Chairmans and other Directors commitments was carried out and the Board is satisfied that they are capable of devoting sufficient time to the Company. There were no significant changes to the Chairmans other commitments during the year.
Induction and Training
New Directors are provided with an induction programme which is tailored to the particular circumstances of the appointee. Regular briefings are provided on changes in regulatory requirements that could affect the Company and Directors. Directors receive other relevant training as necessary.
Remuneration
As all the Directors are non-executive, the provisions of the Combined Code in respect of Directors remuneration are not relevant to the Company except to the extent that they relate specifically to non-executive directors. Consequently there is no requirement for a separate Remuneration Committee. Directors fees are considered by the Board as a whole within the limits approved by shareholders. The Companys policy on remuneration is set out in the Directors Remuneration Report on page 26.
Internal Controls and Risk Management
The Directors acknowledge their responsibility for the Companys system of internal controls and for reviewing its effectiveness. The system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable but not absolute assurance against material misstatement or loss. The Directors confirm that they have reviewed the effectiveness of the system and they have procedures in place to review its effectiveness on a regular basis. No significant weaknesses were identified in the year under review.
DIRECTORS REPORT
Internal Audit
The Audit Committee carries out an annual review of the need for an internal audit function. The Audit Committee continues to believe that the Managers compliance and internal control systems and internal audit function provide sufficient assurance that a sound system of internal control, which safeguards shareholders investment and the Companys assets, is maintained. An internal audit function, specific to the Company, is therefore considered unnecessary.
Directors Interests
Name Nature of interest Ordinary 5p shares held at 30 April 2010 30 April 2009 220,000 50,000 200,000 1,383,148 220,000 50,000 200,000 1,382,500
JGD Ferguson CC Ferguson EM Harley CP McDougall D
Beneficial Beneficial Beneficial Beneficial
Accountability and Audit
The responsibilities of the Directors and the Auditors in connection with the Financial Statements are set out on pages 25 and 27 respectively.
Going Concern
The Companys principal risks are market related and include market risk, liquidity risk and credit risk. An explanation of these risks and how they are managed is contained in note 23 to the financial statements. The Companys assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. Accordingly, the financial statements have been prepared on the going concern basis as it is the Directors opinion that the Company will continue in operational existence for the foreseeable future.
The Directors at the end of the year under review, and their interests in the Company, are as shown above. During the period from 1 May 2010 to 11 June 2010 Mrs C J McDougall, wife of DCP McDougall, sold 17,500 shares. There have been no other changes intimated in the Directors interests up to 11 June 2010. partner and staff and the nature of services provided, the Committee remains satisfied with the Auditors effectiveness. The audit partners responsible for the audit are rotated every 5 years and the current lead partner has been in place for 3 years. There are no contractual obligations restricting the Companys choice of external auditor. The Committee receives confirmation from the auditors that they have complied with the relevant UK professional and regulatory requirements on independence. Non-audit fees for the year to 30 April 2010 were 36,000, comprising 1,000 in relation to the certification of financial information for the debenture trustees and 35,000 in relation to professional services provided in connection with a case brought against HMRC for recovery of VAT suffered in prior years (see note 21 on page 40). The Committee does not believe that this has impaired the Auditors independence.
Audit Committee
An Audit Committee has been established consisting of all Directors. Its authority and duties are clearly defined within its written terms of reference which are available on request and on the Companys page of the Managers website: www.monksinvestmenttrust.co.uk. Mr JGD Ferguson is Chairman of the Audit Committee. The Board believes it is appropriate for Mr Ferguson to be Chairman of the Committee as he is considered to be independent and there are no conflicts of interest. The Committees responsibilities which were discharged during the year include: monitoring the integrity of the half-yearly and annual financial statements and any formal announcements relating to the Companys financial performance; reviewing standards of internal control and risk management; making recommendations to the Board in relation to the appointment of the external auditors and approving the remuneration and terms of their engagement; developing and implementing policy on the engagement of the external auditors to supply non-audit services; reviewing and monitoring the independence, objectivity and effectiveness of the external auditors; reviewing the arrangements in place within Baillie Gifford & Co whereby its staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters insofar as they may affect the Company; reviewing annually the terms of the Investment Management Agreement; and considering annually whether there is a need for the Company to have its own internal audit function. PricewaterhouseCoopers LLP are engaged as the Companys Auditors. Having considered the experience and tenure of the audit
Relations with Shareholders
The Board places great importance on communication with shareholders. The Companys Managers meet regularly with shareholders and report shareholders views to the Board. The Chairman is available to meet with shareholders as appropriate. Shareholders wishing to communicate with any members of the Board may do so by writing to them at the Secretaries address on the back cover. The Companys Annual General Meeting provides a forum for communication with all shareholders. The level of proxies lodged for each resolution is announced at the AGM and is published on the Companys page of the Managers website www.monksinvestmenttrust.co.uk subsequent to the meeting. Shareholders and potential investors may obtain up-to-date information on the Company from the Managers website.
Voting Policy and Socially Responsible Investment
The Company has given discretionary voting powers to the investment managers, Baillie Gifford & Co. The Managers vote against resolutions they consider may damage shareholders rights or economic interests. The Company believes that it is in the shareholders interests to consider environmental, social and governance factors when selecting and retaining investments and have asked the Managers to take these issues into account as long as the investment objectives are not compromised. The Managers do not exclude companies from their investment universe purely on the grounds of environmental, social and governance issues but adopt a positive engagement approach whereby matters are discussed with management with the aim of improving the relevant policies and management systems. The Managers policy has been reviewed and endorsed by the Board.
DIRECTORS REPORT
The Managers are signatories of the United Nations Principles for Responsible Investment and the Carbon Disclosure Project.
Major Interests in the Companys Shares

Name No. of ordinary 5p shares held % of issue 4.9 4.0 3.8
Conflicts of Interest
Each Director submits a list of potential conflicts of interest to the Board on an annual basis. The Board considers these carefully, taking into account the circumstances surrounding them and, if considered appropriate, they are approved for a period of one year. Having considered the lists of potential conflicts there were no actual direct or indirect interests of a Director which conflicted with the interests of the Company.
U.S. Steel and Carnegie Pension Plan 12,820,000 Rensburg Sheppards Investment Management Limited 10,505,532 Legal and General Group Plc 9,975,424
The above information has been intimated to the Company as at 11 June 2010.
connection with criminal proceedings in which the Director is convicted or civil proceedings brought by the Company in which judgement is given against him/her. In addition, the indemnity does not apply to any liability to the extent that it is recovered from another person.
Investment Managers
The Board as a whole fulfils the function of the Management Engagement Committee. An Investment Management Agreement between the Company and Baillie Gifford & Co sets out the matters over which the Managers have authority in accordance with the policies and directions of, and subject to restrictions imposed by, the Board. In line with best industry practice, and with the agreement of the Managers, the notice period for terminating the Management Agreement has been reduced from one year to six months with effect from 1 May 2010. Careful consideration has been given by the Board as to the basis on which the management fee is charged. The Board considers that maintaining a relatively low total expense ratio is in the best interest of all shareholders. The Board is also of the view that calculating the fee with reference to performance would be unlikely to exert a positive influence over the long term performance. Details of the fee arrangements with Baillie Gifford & Co are shown in note 3 on page 33. The Board considers the Companys investment management and secretarial arrangements on an ongoing basis and a formal review is conducted annually. The Board considers, amongst others, the following topics in its review: the quality of the personnel assigned to handle the Companys affairs; the investment process and the results achieved to date; investment performance; the administrative services provided by the Secretaries; and the marketing efforts undertaken by the Managers. Following the most recent review it is the opinion of the Directors that the continuing appointment of Baillie Gifford & Co as Managers, on the terms agreed, is in the interests of shareholders as a whole.
The Company also maintains Directors and Officers Liability insurance.
Share Capital
Capital Structure
The Companys capital structure consists of 261,014,859 ordinary shares of 5p each at 30 April 2010. There are no restrictions concerning the holding or transfer of the Companys ordinary shares and there are no special rights attached to any of the shares.
Dividends
The ordinary shares carry a right to receive dividends. Interim dividends are determined by the Directors, whereas the proposed final dividend requires shareholder approval.
Capital entitlement
On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to ordinary shareholders in proportion to their shareholdings.
Voting
Each ordinary shareholder present in person or by proxy is entitled to one vote on a show of hands and, on a poll, to one vote for every share held. Information on the deadlines for proxy appointments can be found on page 46.
Directors
Information about the Directors, including their relevant experience, can be found on page 18. Ms Ferguson retires and offers herself for re-election. Mr McDougall, being a director of another investment trust managed by Baillie Gifford, and having served for more than nine years, retires and offers himself for re-election. Following formal performance evaluation, the Board considers that the performance of Ms Ferguson and Mr McDougall continues to be effective and that they remain committed to the Company. The Board therefore recommends their re-election to shareholders.
Purchase of Shares
During the year to 30 April 2010 the Company bought back 2,630,000 ordinary shares (nominal value 131,500) on the London Stock Exchange for cancellation. The total consideration for these shares was 7,312,000. As at 11 June 2010, the Company had not bought back any shares since the year end. The principal reason for share buy-backs is to enhance net asset value for continuing shareholders by purchasing shares at a discount to the prevailing net asset value. The shares were purchased at a price (after allowing for costs) below the net asset value and subsequently cancelled, thereby reducing the issued share capital (see note 14 on page 38). As a result of such purchases since April 1999, the net asset value of the Company is approximately 6% higher now than it would otherwise have been.
Directors Indemnity and Insurance
The Company has entered into deeds of indemnity in favour of each of its Directors. The deeds cover any liabilities that may arise to a third party, other than the Company, for negligence, default or breach of trust or duty. The Directors are not indemnified in respect of liabilities to the Company, any regulatory or criminal fines, any costs incurred in
DIRECTORS REPORT
The Directors are seeking shareholders approval at the Annual General Meeting to renew the authority to purchase up to 14.99% of the Companys ordinary shares in issue at the date of passing of the resolution, such authority to expire at the Annual General Meeting of the Company to be held in respect of the year ending 30 April 2011. In accordance with the Listing Rules of the UK Listing Authority, the maximum price (excluding expenses) that may be paid on the exercise of the authority must not exceed the higher of: (i) 5 per cent above the average closing price on the London Stock Exchange of an ordinary share over the five business days immediately preceding the date of purchase; and (ii) the higher of the price of the last independent trade and the highest current independent bid on the London Stock Exchange. The minimum price (exclusive of expenses) that may be paid is 5p per share. Purchases of shares will be made within guidelines established, from time to time, by the Board. The Company does not have any warrants or options in issue. Your attention is drawn to Resolution 8 in the Notice of Annual General Meeting.
Disclosure of Information to Auditors

The Directors confirm that so far as each of the Directors is aware there is no relevant audit information of which the Companys auditors are unaware and the Directors have taken all the steps that they might reasonably be expected to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Companys auditors are aware of that information.
Independent Auditors
Resolutions to reappoint PricewaterhouseCoopers LLP as independent auditors to the Company and to authorise the Directors to determine their remuneration will be proposed at the AGM.
Recommendation
The Directors unanimously recommend you vote in favour of the resolutions to be proposed at the Annual General Meeting as it is their view that the resolutions are in the best interests of shareholders as a whole. By order of the Board JGD FERGUSON Chairman 15 June 2010
Creditor Payment Policy

It is the Companys payment policy to obtain the best terms for all business. In general, the Company agrees with its suppliers the terms on which business will take place and it is its policy to abide by these terms. The Company had no trade creditors at either 30 April 2009 or 30 April 2010.
STATEMENT OF DIRECTORS RESPONSIBILITIES
Statement of Directors Responsibilities in Respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report, the Directors Remuneration Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards, (United Kingdom Generally Accepted Accounting Practice). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to: elect suitable accounting policies and then apply them s consistently; make judgements and accounting estimates that are reasonable and prudent; state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements respectively; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Companys transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors have delegated responsibility to the Managers for the maintenance and integrity of the Companys page of the Managers website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Each of the Directors, whose names and functions are listed within the Directors and Management section confirm that, to the best of their knowledge: he financial statements, which have been prepared in t accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), give a true and fair view of the assets, liabilities, financial position and profit of the Company; and the Directors Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
By order of the Board JGD FERGUSON Chairman 15 June 2010
DIRECTORS REMUNERATION REPORT
Directors Remuneration Report

The Board has prepared this report, in accordance with the requirements of the Companies Act 2006. An ordinary resolution for the approval of this report will be put to the members at the forthcoming Annual General Meeting. The law requires the Companys auditors to audit certain of the disclosures provided. Where disclosures have been audited, they are indicated as such. The auditors opinion is included in their report on page 27.
Directors Emoluments for the Year (audited)

2010 2009
Remuneration Committee
The Company has four Directors, all of whom are non-executive. There is no separate remuneration committee and the Board as a whole considers changes to Directors fees from time to time. Baillie Gifford & Co, who have been appointed by the Board as Managers and Secretaries, provide advice and comparative information when the Board considers the level of Directors fees.
Directors who served during the year JGD Ferguson CC Ferguson EM Harley DCP McDougall
33,000 22,000 22,000 22,000 99,000
31,500 21,000 21,000 21,000 94,500
The Directors who served during the financial year received the above emoluments in the form of fees.
Company Performance
The following graph compares the share price total return (assuming all dividends are reinvested) to Monks ordinary shareholders compared with the total shareholder return on a notional investment made up of shares in the component parts of the FTSE All-Share Index. This index was chosen for comparison purposes as it is a widely used measure of performance for UK listed companies (FTSE World Index, which is the Companys comparative index, is provided for information purposes only).
Policy on Directors Fees

The Boards policy is that the remuneration of Directors should be set at a reasonable level that is commensurate with the duties and responsibilities of the role and consistent with the requirement to attract and retain Directors of the appropriate quality and experience. It should also reflect the experience of the Board as a whole, be fair and should take account of the level of fees paid by comparable investment trusts. This policy will continue for the year ended 30 April 2011 and subsequent years. The fees for the non-executive Directors are determined within an aggregate limit set out in the Companys Articles of Association, which currently stands at 200,000. Non-executive Directors are not eligible for any other remuneration apart from the reimbursement of allowable expenses. The Board reviewed Directors fees during the year and concluded that they should remain unchanged at 33,000 for the Chairman and 22,000 for the other Directors. Directors fees were last increased on 1 November 2008.
Performance Graph
220 200 180 160 140 120 100 80 2005 2006 2007 2008 2009 2010
CUMULATIVE TO 30 APRIL
Directors Service Contracts

It is the Boards policy that none of the Directors has a service contract. All of the Directors have been provided with appointment letters and the terms of their appointment provide that Directors shall retire and be subject to election at the first Annual General Meeting after their appointment. Thereafter they are obliged to retire every three years, and may, if they wish, offer themselves for re-election. The Board has also resolved that Directors who have served on the Board for more than nine years will submit themselves for re-election annually. Directors who are also a director of another investment trust managed by Baillie Gifford & Co submit themselves for reelection annually. There is no notice period and no provision for compensation upon early termination of appointment.
Source: Thomson Financial Datastream Monks share price FTSE All-Share FTSE World Index All figures are total returns (assuming net dividends are reinvested).
Approval
The Directors Remuneration Report was approved by the Board of Directors and signed on its behalf on 15 June 2010. JGD FERGUSON Chairman
INDEPENDENT AUDITORS REPORT
Independent Auditors Report

to the members of The Monks Investment Trust PLC (the Company)
We have audited the financial statements of The Monks Investment Trust PLC for the year ended 30 April 2010 which comprise the Income Statement, the Balance Sheet, the Reconciliation of Movements in Shareholders Funds, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Opinion on other matters prescribed by the Companies Act 2006

In our opinion: the part of the Directors Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and the information given in the Directors Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Respective responsibilities of Directors and Auditors

As explained more fully in the Directors Responsibilities Statement set out on page 25, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Boards Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the Companys members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Matters on which we are required to report by exception

We have nothing to report in respect of the following: Under the Companies Act 2006 we are required to report to you if, in our opinion: adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements and the part of the Directors Remuneration Report to be audited are not in agreement with the accounting records and returns; or certain disclosures of directors remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Under the Listing Rules we are required to review: the Directors Statement, set out on page 22, in relation to going concern; and the parts of the Corporate Governance Statement relating to the Companys compliance with the nine provisions of the June 2008 Combined Code specified for our review.
Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Companys circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements.
Opinion on financial statements

In our opinion the financial statements: give a true and fair view of the state of the Companys affairs as at 30 April 2010 and of its profit and cash flows for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006.
Notes The following notes relate to financial statements published on a website and are not included in the printed version of the Annual Report and Financial Statements: The Directors have delegated responsibility to the Managers for the maintenance and integrity of the Companys page of the Managers website; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website; and Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Karyn Lamont (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Edinburgh 15 June 2010
INCOME STATEMENT
Income Statement
Notes For the year ended 30 April 2010 Revenue Capital Total 000 000 000 23,887 (4,186) (1,062) 305,723 (11,670) 305,723 (11,670) 23,887 (4,186) (1,062) For the year ended 30 April 2009 Revenue Capital Total 000 000 000 33,949 (3,637) 1,738 (914) (361,428) 6,011 (361,428) 6,011 33,949 (3,637) 1,738 (914)
Gains/(losses) on investments Currency (losses)/gains Income Investment management fee Recoverable VAT Other administrative expenses
9 15 2 3 21 4
Net return before finance costs and taxation

Finance costs of borrowings
5
18,639 (7,483)
294,053
312,692 (7,483)
31,136 (6,982)
(355,417)
(324,281) (6,982)
Net return on ordinary activities before taxation

Tax on ordinary activities
6
11,156 (587)
294,053
305,209 (587)
24,154 (5,770)
(355,417)
(331,263) (5,770)
Net return on ordinary activities after taxation Net return per ordinary share*
Note: Dividends per share paid and payable in respect of the year
7
10,569 4.02p
294,053 111.99p
304,622 116.01p
18,384 6.97p
(355,417) (134.79p)
(337,033) (127.82p)
3.00p
6.00p
*Net revenue return per ordinary share for 2009 includes 0.77p (net of tax) in respect of recoverable VAT and interest thereon (see note 21 on page 40). The total column of this statement is the profit and loss account of the Company. All revenue and capital items in this statement derive from continuing operations. A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement. The accompanying notes on pages 32 to 44 are an integral part of the financial statements.
BALANCE SHEET
Balance Sheet
Notes At 30 April 2010 000 000 000 At 30 April 2009 000
Fixed assets
Investments at fair value through profit or loss
9 1,054,003 664,627
Current assets
Debtors Cash and deposits
10 23 26,589 14,449 41,038 9,438 98,958 108,396
Creditors
Amounts falling due within one year
11 (57,066) (16,028) 1,037,975 (11,895) 96,501 761,128
Net current (liabilities)/assets Total assets less current liabilities Creditors

Amounts falling due after more than one year
12
(79,582)
(79,549)
Provisions for liabilities and charges

Deferred taxation
13 (57) 958,336 (823) 680,756
Total net assets Capital and reserves

Called-up share capital Share premium Capital redemption reserve Capital reserve Revenue reserve
14 15 15 15 15 16 17
13,051 11,100 6,347 898,228 29,610 958,336 364.1p
13,182 11,100 6,216 611,487 38,771 680,756 255.0p
Shareholders funds Net asset value per ordinary share

(after deducting borrowings at fair value)
Net asset value per ordinary share

(after deducting borrowings at par)
17
367.0p
258.0p
The financial statements of The Monks Investment Trust PLC (Company registration number 236964) were approved and authorised for issue by the Board and were signed on 15 June 2010. JGD FERGUSON Chairman
The accompanying notes on pages 32 to 44 are an integral part of the financial statements.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS
Reconciliation of Movements in Shareholders Funds

For the year ended 30 April 2010
Share capital 000 Share premium 000 11,100 11,100 Capital redemption reserve 000 6,216 131 6,347 Capital reserve 000 611,487 294,053 (7,312) 898,228 Total Revenue shareholders reserve funds 000 000 38,771 10,569 (19,730) 29,610 680,756 304,622 (7,312) (19,730) 958,336
Notes
Shareholders funds at 1 May 2009 Net return on ordinary activities after taxation Shares purchased for cancellation Dividends paid during the year
15 14 8
13,182 (131) 13,051
Shareholders funds at 30 April 2010
For the year ended 30 April 2009

Share capital 000 Share premium 000 11,100 11,100 Capital redemption reserve 000 6,189 27 6,216 Capital reserve 000 968,894 (355,417) (1,990) 611,487 Total Revenue shareholders reserve funds 000 000 31,460 18,384 (11,073) 38,771 1,030,852 (337,033) (1,990) (11,073) 680,756
Notes
Shareholders funds at 1 May 2008 Net return on ordinary activities after taxation Shares purchased for cancellation Dividends paid during the year
13,209 (27) 13,182
Shareholders funds at 30 April 2009
CASH FLOW STATEMENT
Cash Flow Statement

Notes For the year ended 30 April 2010 000 000 19,921 For the year ended 30 April 2009 000 000 29,056
Net cash inflow from operating activities Servicing of finance

Interest paid
18
(6,990)

(6,990)
(6,950) (6,950)
Net cash outflow from servicing of finance Taxation

Corporation tax paid Overseas tax incurred Income tax (incurred)/refunded
(2,332) (1,278) (35)

(3,645)
(3,458) (1,114) 41 (4,531)
Total tax paid Financial investment

Acquisitions of investments Disposals of investments Forward currency contracts Currency (losses)/gains
(493,377) 398,939 (6,161) (3,900)

(104,499) (19,730)
(414,273) 414,692 2,117 2,536 (11,073)
Net cash (outflow)/inflow from financial investment Equity dividends paid Net cash (outflow)/inflow before use of liquid resources and financing Liquid resources
Decrease in short term deposits
8
(114,943)
9,038
43,924
19,638
Net cash inflow from use of liquid resources Financing

Shares purchased for cancellation Bank loans drawn

43,924
19,638
(7,312) 40,000

32,688 (38,331)
(1,990) (1,990) 26,686
Net cash inflow/(outflow) from financing (Decrease)/increase in cash Reconciliation of net cash flow to movement in net (debt)/funds
(Decrease)/increase in cash in the year Decrease in short term deposits Exchange movement on short term deposits Net cash inflow from bank loans Other non-cash changes
19
19
(38,331) (43,924) (2,254) (40,000) (33) (124,542) 19,409
26,686 (19,638) 3,894
(33) 10,909 8,500
Movement in net (debt)/funds in the year Net funds at 1 May Net (debt)/funds at 30 April
(105,133)
19,409
NOTES TO FINANCIAL STATEMENTS
1 Principal Accounting Policies

A summary of the principal accounting policies, which are unchanged from the prior year and have been applied consistently, are set out below.
(e) Income
(i) Income from equity investments, is brought into account on the date on which the investments are quoted ex-dividend or, where no ex-dividend date is quoted, when the Companys right to receive payment is established. Equity investment income includes distributions from Collective Investment Schemes, other than those that relate to equalisation which are treated as capital items. (ii) Interest from fixed interest securities (including the zero coupon element of the swap rate linked note) is recognised on an effective yield basis. (iii) Unfranked investment income and overseas dividends include the taxes deducted at source. (iv) Franked investment income is stated net of tax credits. (v) Underwriting commission and interest receivable on deposits are recognised on an accruals basis. (vi) If scrip is taken in lieu of dividends in cash, the net amount of the cash dividend declared is credited to the revenue account. Any excess in the value of the shares received over the amount of the cash dividend foregone is recognised as capital.
(a) Basis of Accounting

The financial statements are prepared on a going concern basis under the historical cost convention, modified to include the revaluation of fixed asset investments and derivatives which are recorded at fair value, and on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared in accordance with The Companies Act 2006, applicable UK accounting standards and with the Statement of Recommended Practice Financial Statements of Investment Trust Companies issued in January 2009. In order to better reflect the activities of the trust and in accordance with guidance issued by the AIC, supplementary information which analyses the profit and loss account between items of a revenue and capital nature has been presented in the Income Statement. Financial assets and financial liabilities are recognised in the Companys balance sheet when it becomes a party to the contractual provisions of the instrument. The Directors consider the Companys functional currency to be sterling as the Companys shareholders are predominantly based in the UK and the Company is subject to the UKs regulatory environment.
(f) Expenses
All expenses are accounted for on an accruals basis and are charged through the revenue column of the Income Statement except where they relate directly to the acquisition or disposal of an investment, in which case they are added to the cost of the investment or deducted from the sale proceeds.
(b) Investments
Investment purchases and sales are recognised on a trade date basis. Expenses incidental to acquisition are included in purchase cost and expenses incidental to sale are deducted from proceeds of sale. Gains and losses on investments are recognised in the Income Statement as capital items. Investments are designated as held at fair value through profit or loss on initial recognition and are measured at subsequent reporting dates at fair value. The fair value of listed investments is bid value, or in the case of FTSE 100 constituents, at last traded prices issued by the London Stock Exchange. Listed investments include Open Ended Investment Companies (OEICs) authorised in the UK; these are valued at closing prices and are classified in the list of investments according to the principal geographical area of the underlying holdings. The fair value of unlisted investments uses valuation techniques, determined by the Directors, based upon latest dealing prices, stockbroker valuations, net asset values and other information, as appropriate.
(g) Long Term Borrowings and Finance Costs

Long term borrowings are carried in the balance sheet at amortised cost, representing the cumulative amount of net proceeds after issue, plus accrued finance costs. The finance costs of such borrowings are allocated to the revenue column of the Income Statement at a constant rate on the carrying amount. Issue costs are written off at a constant rate over the life of the borrowings. Gains and losses on the repurchase or early settlement of debt is wholly charged to capital.
(h) Deferred Taxation

Deferred taxation is provided on all timing differences which have originated but not reversed by the balance sheet date, calculated at the tax rates expected to apply when the timing differences reverse, based on what has been enacted or substantively enacted, relevant to the benefit or liability. Deferred tax assets are recognised only to the extent that it is more likely than not that there will be taxable profits from which underlying timing differences can be deducted.
(c) Derivatives
The Company may use derivatives for the purpose of efficient portfolio management (including reducing, transferring or eliminating risk in its investments and protection against currency risk) and to achieve capital growth. Such instruments are recognised on the date of the contract that creates the Companys obligation to pay or receive cash flows and are measured as financial assets or liabilities at fair value at subsequent reporting dates, while the relevant contracts remain open. The fair value is determined by reference to the open market value of the contract. Where the investment rationale for the use of derivatives is to hedge specific risks pertaining to the Companys portfolio composition, hedge accounting will only be adopted where the derivative instrument relates specifically to a single item, or group of items, of equal and opposite financial exposure, and where the derivative instrument has been explicitly designated as a hedge of such item(s) at the date of initial recognition. In all other circumstances changes in the fair value of derivative instruments are recognised immediately in the Income Statement as capital or revenue as appropriate.
(i) Dividend Distributions

Interim dividends are recognised in the period in which they are paid and final dividends are recognised in the period in which the dividends are approved by the Companys shareholders.
(j) Foreign Currencies

Transactions involving foreign currencies are converted at the rate ruling at the time of the transaction. Monetary assets and liabilities and fixed asset investment in foreign currencies are translated at the closing rates of exchange at the balance sheet date. Forward foreign exchange contracts are valued at the forward rate ruling at the balance sheet date. Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is included as an exchange gain or loss in the Income Statement as capital or revenue as appropriate.
(d) Cash and Liquid Resources

Cash and liquid resources includes cash in hand, deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less.
(k) Capital Reserve Gains and losses on realisation of investments, changes in the fair value of investments held, exchange differences of a capital nature and the amount by which the market value of assets and liabilities differs from their book value are dealt with in this reserve. Purchases of the Companys own shares for cancellation are also funded from this reserve.
2 Income
2010 000 2009 000 2,741 5,903 14,653 7,235 30,532 2,280 1,078 59 3,417 33,949 20,065 10,467 3,358 59 33,949
Income from investments Franked investment income UK unfranked investment income Overseas dividends Overseas interest Other income Deposit interest Interest on VAT recovered (see note 21) Underwriting commission Total income
1,832 3,399 12,537 5,967 23,735
107 45 152 23,887
Total income comprises: Dividends from financial assets designated at fair value through profit or loss Interest from financial assets designated at fair value through profit or loss Interest from financial assets not at fair value through profit or loss Other income not from financial assets
Includes dividends from OEICs.
15,261 8,474 107 45 23,887
3 Investment Management Fee all charged to revenue

2010 000 2009 000 3,637
Investment management fee
4,186
I nvestment management fees, net of the recoverable VAT recognised during the year of nil (2009 1,738,000) as detailed in note 21 on page 40, amounted to 4,186,000 (2009 1,899,000). Baillie Gifford & Co are employed by the Company as Managers and Secretaries under a management agreement which is terminable on not less than 6 months notice. The fee in respect of each quarter is 0.1125% of the total assets less current liabilities. The management fee is levied on all assets, including holdings in collective investment schemes (OEICs) managed by Baillie Gifford & Co. However, the class of shares in OEICs held by the Company does not attract a management fee.
4 Other Administrative Expenses all charged to revenue

2010 000 2009 000 797 94 20 3 914
General administrative expenses Directors fees (see Directors Remuneration Report on page 26) Auditors remuneration statutory audit of annual financial statements Auditors non-audit remuneration: Other services relating to taxation (see note 21) All other services
906 99 21 35 1 1,062
5 Finance Costs of Borrowings all charged to revenue

2010 000 2009 000 6,982 6,982
Bank loans Interest rate swap Debenture stocks
133 368 6,982 7,483
6 Tax on Ordinary Activities

2010 000 2009 000 5,914 1,068 (1,113) 28 5,897 (127) 5,770
Analysis of charge in year UK corporation tax at an average rate of 28% Overseas tax Double tax relief Adjustment in respect of previous years Total current tax Deferred taxation (see note 13) Tax on profits on ordinary activities
536 1,285 (468) 1,353 (766) 587
Factors affecting current tax charge for year The tax assessed for the year is lower (2009 higher) than the average standard rate of corporation tax in the UK of 28%. The differences are explained below: Net return on ordinary activities before taxation 305,209 Net return on ordinary activities multiplied by the average standard rate of corporation tax in the UK of 28% Capital returns not taxable Income not taxable Income taxable in different periods Overseas tax Adjustments in respect of previous years Current tax charge for the year
85,458 (82,335) (2,587) 817 1,353

(331,263) (92,754) 99,517 (1,049) 200 (45) 28 5,897
As an investment trust, the Companys capital returns are not taxable. Factors that may affect future tax charges Due to the Companys status as an investment trust, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided for deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.
7 Net return per Ordinary Share

Revenue 2010 Capital 111.99p Total 116.01p Revenue 6.97p 2009 Capital (134.79p) Total (127.82p)
Net return per ordinary share
4.02p
R evenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of 10,569,000 (2009 18,384,000) and on 262,582,039 (2009 263,678,571) ordinary shares of 5p, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share is based on the net capital gain for the financial year of 294,053,000 (2009 loss of 355,417,000) and on 262,582,039 (2009 263,678,571) ordinary shares, being the weighted average number of ordinary shares in issue during the year. There are no dilutive or potentially dilutive shares in issue.
8 Ordinary Dividends
2010 2009 2010 000 13,182 1,310 5,238 19,730 2009 000 8,437 2,636 11,073
Amounts recognised as distributions in the year: Previous years final (paid 7 August 2009) Interim (paid 29 January 2010) Second interim (paid 1 April 2010)
5.00p 0.50p 2.00p 7.50p
3.20p 1.00p 4.20p
We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 842 of the Income and Corporation Taxes Act 1988 are considered. The revenue available for distribution by way of dividend for the year is 10,569,000 (2009 18,384,000).
2010 2009 2010 000 2009 000
Dividends paid and payable in respect of the financial year: Adjustment to previous years final dividend re shares bought back Interim (paid 29 January 2010) Second interim (paid 1 April 2010) Proposed final (payable 6 August 2010)
0.50p 2.00p 0.50p 3.00p
1.00p 5.00p 6.00p
1,310 5,238 1,305 7,853
(17) 2,636 13,182 15,801
9 Fixed Assets Investments

At 30 April 2010 Level 1 000 Level 2 000 18,205 18,205 Level 2 000 20,600 20,600 Level 3 000 43,232 2 3,150 46,384 Level 3 000 36,396 736 3,564 40,696 Total 000 973,719 2,297 74,835 2 3,150 1,054,003 Total 000 506,275 154,052 736 3,564 664,627
Listed equities Listed convertible securities Listed debt securities Unlisted equities Unlisted debt securities Total financial asset investments
973,719 2,297 13,398 989,414 Level 1 000
At 30 April 2009
Listed equities Listed debt securities Unlisted equities Unlisted debt securities Total financial asset investments
506,275 97,056 603,331
Investments in securities are financial assets designated at fair value through profit or loss on initial recognition. In accordance with Financial Reporting Standard 29 Financial Instruments: Disclosures, the above tables provide an analysis of these investments based on the fair value hierarchy described below, which reflects the reliability and significance of the information used to measure their fair value. Fair Value Hierarchy The fair value hierarchy used to analyse the fair values of financial assets is described below. The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows: Level 1 nvestments with quoted prices in an active market; i Level 2 nvestments whose fair value is based directly on observable current market prices or is indirectly being derived from market i prices; and Level 3 investments whose fair value is determined using a valuation technique based on assumptions that are not supported by observable current market prices or are not based on observable market data.
9 Fixed Assets Investments (continued)

Listed equities* 000 Listed debt 000 176,314 (22,262) 154,052 29,067 (153,605) 19,836 2,344 (1,093) 24,234 74,835 72,863 1,972 74,835 Unlisted 000 18,396 (14,096) 4,300 (807) (13,134) 12,793 3,152 4,455 (1,303) 3,152 Total 000 669,508 (4,881) 664,627 499,286 (418,629) 59,411 2,348 246,960 1,054,003 811,924 242,079 1,054,003
Cost of investments at 1 May 2009 Investment holding gains/(losses) at 1 May 2009 Fair value of investments at 1 May 2009 Movements in year: Purchases at cost Sales proceeds ealised gains/(losses) on sales r Amortisation of fixed interest book cost Change in category Changes in investment holding gains/(losses) Fair value of investments at 30 April 2010 Cost of investments at 30 April 2010 Investment holding gains at 30 April 2010 Fair value of investments at 30 April 2010 *Equities includes convertible securities.
474,798 31,477 506,275 470,219 (264,217) 52,709 4 1,093 209,933 976,016
734,606 241,410 976,016
The purchases and sales proceeds figures above include transaction costs of 1,016,000 (2009 581,000) and 252,000 (2009 376,000) respectively. Of the realised gains on sales of fixed asset investments during the year of 59,411,000 (2009 losses of 83,336,000), a net gain of 578,000 (2009 gain of 151,491,000) was included in investment holding gains/(losses) at the previous year end. The following table shows a reconciliation from the opening balances to the closing balances for fair value measurements in level 3 of the fair value hierarchy:
Value at 1 May 2009 000 Purchases/ amortisation* 000 21,561 21,561 Gains on Sales 000 7,377 (13,134) (5,757) Holding gains 000 12,448 13,207 (414) 25,241 Value at 30 April 2010 000 43,232 2 3,150 46,384
Sales 000 (34,550) (807) (35,357)
Listed debt securities Unlisted equities Unlisted debt securities
36,396 736 3,564 40,696
* Purchases/amortisation for listed debt includes amortisation of fixed income securities of 218,000. The gains and losses included in the above table have all been recognised in the Income Statement on page 28. The Company believes that other reasonably possible alternative valuations for its Level 3 holdings would not be significantly different from those included in the financial statements.
2010 000 2009 000
Gains/(losses) on investments Fixed asset investments: Realised gains/(losses) on sales Changes in investment holding gains/(losses) Interest rate swap: Changes in investment holding gains/(losses)
59,411 246,960 306,371
(83,336) (278,092) (361,428) (361,428)
(648) 305,723
9 Fixed Assets Investments (continued)

During the year the Company held shares in Open Ended Investment Companies (OEICs) managed by Baillie Gifford & Co, the Companys investment manager. The share class held in the OEIC does not attract a management fee. At 30 April the Company held:
2010 % of share class held 100.0 2009 % of share class held 100.0
Shares held
Shares held 33,587,697
Baillie Gifford Pacific Fund
19,702131
The total value of the Companys holding in investments managed by Baillie Gifford & Co at 30 April 2010 was 49,708,000 (2009 54,593,000).
10 Debtors
2010 000 2009 000 7,215 1,407 412 347 57 9,438
Amounts falling due within one year: Income accrued (net of withholding tax) Sales for subsequent settlement UK income taxation recoverable Overseas taxation recoverable Unrealised gain on forward currency contracts Amounts due from swap brokers collateral Other debtors and prepayments
4,035 20,192 447 319 645 905 46 26,589
None of the above debtors are financial assets designated at fair value through profit or loss apart from the unrealised gain on forward currency contracts, which is classified as Level 2 in the fair value hierarchy described on page 35. The carrying amount of debtors is a reasonable approximation of fair value.
11 Creditors Amounts falling due within one year

2010 000 2009 000 6,912 2,332 2,651 11,895
Purchases for subsequent settlement Bank loan Corporation tax Unrealised loss on interest rate swap Other creditors and accruals
12,821 40,000 67 648 3,530 57,066
None of the above creditors are financial liabilities designated at fair value through profit or loss apart from the unrealised loss on interest rate swap, which is classified as Level 2 in the fair value hierarchy described on page 35. Included in other creditors is 612,000 (2009 256,000) in respect of the investment management fee. During the year, the Company entered into a one year 40m multi-currency variable rate loan facility with Lloyds TSB. The loan, which expires on 2 March 2011, was fully drawn down at 30 April 2010 in sterling at an interest rate of 2.0%. During the year the Company also entered into a 30 year interest rate swap for 40m which locks in the rate banks charge to each other. The net effect of these two transactions is that part of the cost of borrowing over the next thirty years has been locked in but the smaller element that is determined by the additional margin banks charge non-bank customers has only been fixed for a year. Taking the two transactions together, the interest rate on the 40m of additional borrowing at the year end was 5.3%. More details of the interest rate swap are shown on page 44. The main covenants relating to the loan are: (i) total borrowings shall not exceed 30% of the Companys adjusted investment portfolio value; (ii) the Companys investment portfolio value shall not fall below 550m; (iii) the Company shall not have fewer than 50 investments; and (iv) the Company shall not change its investment manager without prior written consent of the lender. There were no breaches of loan covenants during the year.
12 Creditors Amounts falling due after more than one year

Nominal rate Effective rate 11.0% 6.5% 2010 000 40,000 39,582 79,582 2009 000 40,000 39,549 79,549
Debenture stocks: 40 million 11% debenture stock 2012 40 million 63/8% debenture stock 2023 Debenture stocks
11.0% 6.375%
The debenture stocks are stated at amortised cost (see note 1 on page 32); the cumulative effect is to decrease the carrying amount of borrowings by 418,000 (2009 451,000). The debenture stocks are secured by a floating charge over the assets of the Company. Under the terms of the Debenture Agreement, total borrowings should not exceed net assets and the Company cannot undertake share buy-backs if this would result in total borrowings exceeding 66.67%. The weighted average interest rate of the debenture stocks is 8.7% (2009 8.7%).
13 Deferred Taxation
Income taxable in a later period Overseas withholding tax claimable as a deduction in a later period

2010 000
2009 000 894 (71) 823 (200) 73 (127) 950 823
80 (23) 57 (814) 48 (766) 823 57
Movement in deferred taxation charge on income taxable in a later period for the year Movement in deferred taxation credit on overseas withholding tax claimable in a later period Net movement in deferred taxation provision for year (see note 6) Deferred taxation provision at 1 May Deferred taxation provision at 30 April
14 Called-up Share Capital

Number
2010 000 13,051 Number 263,644,859 261,014,859
2009 000 13,182
Allotted, issued and fully paid ordinary shares of 5p each
In the year to 30 April 2010 the Company bought back 2,630,000 ordinary shares with a nominal value of 131,500 at a total cost of 7,312,000. At 30 April 2010 the Company had authority to buy back a further 36,890,364 ordinary shares, being 14.1% of the shares in issue at the year end. Under the provisions of the Companys Articles of Association share buy-backs are funded from the capital reserve.
15 Capital and Reserves

Share capital 000 Share premium 000 11,100 11,100
Capital redemption reserve 000 6,216 131 6,347
Capital reserve 000 611,487 306,371 (648) (5,516) (6,154) (7,312) 898,228
Total Revenue Shareholders reserve Funds 000 000 38,771 10,569 (19,730) 29,610 680,756 306,371 (648) (5,516) (6,154) 10,569 (7,312) (19,730) 958,336
At 1 May 2009 Gains on fixed asset investments Holding loss on interest rate swap Currency losses on forward currency contracts Other currency losses Revenue return on ordinary activities after taxation Shares purchased for cancellation Dividends paid in the year At 30 April 2010
13,182
(131) 13,051
The capital reserve balance at 30 April 2010 includes investment holding gains on fixed asset investments of 246,960,000 (2009 losses of 4,881,000) as detailed in note 9. The revenue reserve is distributable by way of dividend.
16 Total Shareholders Funds

2010 000 2009 000 680,756
Total shareholders funds
958,336
Total shareholders funds have been calculated in accordance with the provisions of FRS 26. However, the net asset value per share figures in note 17 have been calculated on the basis of shareholders rights to reserves as specified in the Articles of Association of the Company. A reconciliation of the two figures is as follows: Shareholders funds per ordinary share Expenses of debenture issue Net asset value per ordinary share
367.2p (0.2p) 367.0p 258.2p (0.2p) 258.0p
17 Net Asset Value per Ordinary Share

The net asset value per ordinary share and the net assets attributable to the ordinary shareholders at the year end calculated in accordance with the Articles of Association were as follows:
2010 2009 258.0p 2010 000 957,918 2010 000 2009 000 680,305 2009 000 1,030,368 (337,033) (11,073) 33 (1,990) 680,305
Ordinary shares
367.0p
The movements during the year of the assets attributable to the ordinary shares were as follows: Total net assets at 1 May Return on ordinary activities after taxation Dividends paid in the year Amortisation of debenture issue expenses Shares purchased for cancellation Total net assets at 30 April
680,305 304,622 (19,730) 33 (7,312) 957,918
Net asset value per ordinary share is based on net assets (adjusted to reflect the deduction of the debentures at par) and on 261,014,859 (2009 263,644,859) ordinary shares of 5p, being the number of ordinary shares in issue at the year end. Shareholders funds as reported in the balance sheet has been computed in accordance with the provisions of FRS 26. A reconciliation of the two sets of figures under these two conventions is given in note 16. Deducting borrowings at fair value would have the effect of reducing net asset value per ordinary share from 367.0p to 364.1p. Taking the market price of the ordinary shares at 30 April 2010 of 313.0p, this would have given a discount to net asset value of 14.0% as against 14.7% on a traditional basis. At 30 April 2009 the effect would have been to reduce net asset value per ordinary share from 258.0p to 255.0p. Taking the market price of the ordinary shares at 30 April 2009 of 236.5p, this would have given a discount to net asset value of 7.3% as against 8.3% on a traditional basis.
18 Reconciliation of Net Return before Finance Costs and Taxation to Net Cash Inflow from Operating Activities
2010 000 2009 000 (324,281) 361,428 (6,011) (1,855) (922) 1,089 (392) 29,056
Net return before finance costs and taxation (Gains)/losses on investments Currency losses/(gains) Amortisation of fixed interest book cost Decrease/(increase) in accrued income Decrease in debtors Increase/(decrease) in creditors Net cash inflow from operating activities
312,692 (305,723) 11,670 (2,348) 3,172 40 418 19,921
19 Analysis of Change in Net Funds

At 1 May 2009 000 Cash flows 000 (38,331) (43,924) (40,000) (122,255) Other non-cash changes 000 (33) (33) Exchange movement 000 (2,254) (2,254) At 30 April 2010 000 14,449 (40,000) (79,582) (105,133)
Cash at bank and in hand Short term deposits Loans due within one year Debenture stocks
52,780 46,178 (79,549) 19,409
20 Contingent Liabilities, Guarantees and Financial Commitments

At 30 April 2010 the Company had a contingent liability of 9,045,000 (2009 9,045,000) in respect of a subscription agreement relating to participating unsecured loan notes which expire on 31 December 2010.
21 Recoverable VAT
In 2007 the European Court of Justice ruled that investment management fees should be exempt from VAT. Since then, HMRC has accepted the Managers repayment claims for the periods from 1990 to 1996 and from 2000 to 2007. During the year ended 30 April 2009 the Company received a reimbursement of 2,902,000 in this regard of which 1,164,000 had been recognised in the year to 30 April 2008, with the balance of 1,738,000 being recognised in that year together with interest thereon of 1,078,000. A case has been recently brought against HMRC to seek to recover the amounts relating to the intervening period, 1997 to 2000, together with interest on a compound basis. The Companys Auditors, PwC, have provided services in connection with this case for a fee of 35,000 (see note 4). Additional fees may become payable to PwC in the event of a successful outcome to the case. No amounts have been accrued in this regard. The potential recoveries of VAT and interest would be a significant multiple to the potential additional fees payable to PwC. No VAT or related interest recovery has been accrued or recognised as a contingent asset as the outcome of the case is expected to remain uncertain for several years.
22 Related Party Transactions

The Directors fees for the year are detailed in the Directors Remuneration Report on page 26. No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006. The details of the management fee are set out in note 3, and the management fee due to Baillie Gifford as at 30 April 2010 is disclosed in note 11.
23 Financial Instruments
As an investment trust, the Company invests in equities and makes other investments so as to secure its investment objective of capital growth. The Company borrows money when the Board and Managers have sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost of borrowing. In pursuing its investment objective, the Company is exposed to a variety of risks that cause short term variation in the Companys net assets and could result in either a reduction in the Companys net assets or a reduction in the profits available for dividend. These risks are categorised here as market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. The Board monitors closely the Companys exposures to these risks but does so in order to reduce the likelihood of a permanent reduction in the Companys net assets rather than to minimise the short term volatility. The risk management policies and procedures outlined in this note have not changed substantially from the previous accounting period. Market Risk The fair value or future cash flows of a financial instrument or other investment held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements currency risk, interest rate risk and other price risk. The Board reviews and agrees policies for managing these risks and the Companys Investment Manager both assesses the exposure to market risk when making individual investment decisions and monitors the overall level of market risk across the investment portfolio on an ongoing basis. Details of the Companys investment portfolio are shown in note 9. Details of derivative financial instruments outstanding at the balance sheet date are shown on page 44. Currency Risk Certain of the Companys assets, liabilities and income are denominated in currencies other than sterling (the Companys functional currency and that in which it reports its results). Consequently, movements in exchange rates may affect the sterling value of those items.
23 Financial Instruments (continued)

Currency Risk (continued) The Investment Manager monitors the Companys exposure to foreign currencies and reports to the Board on a regular basis. The Investment Manager assesses the risk to the Company of the foreign currency exposure by considering the effect on the Companys net asset value and income of a movement in the rates of exchange to which the Companys assets, liabilities, income and expenses are exposed. However, the currency in which a companys share price is quoted is not necessarily the one in which it earns its profits. The movement in exchange rates on overseas earnings may have a more significant impact upon a companys valuation than a simple translation of the currency in which the share price of the company is quoted. Foreign currency borrowings and forward currency contracts are used periodically to limit the Companys exposure to anticipated future changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments. Where appropriate, they are used also to achieve the portfolio characteristics that assist the Company in meeting its investment objectives. The main change to net currency exposure during the year has been a reduction in the US dollar, euro and Japanese yen exposures relative to other overseas currencies, mainly due to the relative increase in the Companys Asia Pacific and Emerging Markets assets. Exposure to currency risk through asset allocation, which is calculated by reference to the currency in which the asset or liability is quoted, is shown below.
Investments 000 310,074 74,913 29,546 99,245 301,828 815,606 238,397 1,054,003 Cash and Deposits 000 4,858 826 7,029 12,713 1,736 14,449 Forward currency contracts 000 (49,669) (12,963) (4,484) (23,665) (90,781) 91,426 645 Loans and Debentures 000 (119,582) (119,582) Other debtors and creditors * 000 9,821 219 536 (1,302) 651 9,925 (1,104) 8,821 Net exposure 000 275,084 62,169 25,598 75,104 309,508 747,463 210,873 958,336
At 30 April 2010
US dollar Euro Japanese yen Brazillian real Other overseas currencies Total exposure to currency risk Sterling
* ncludes non-monetary assets of 30,000. I

Cash and Deposits 000 40,583 1,645 55,474 97,702 1,256 98,958 Forward currency contracts 000 Loans and Debentures 000 (79,549) (79,549) Other debtors and creditors * 000 (5,003) 775 616 368 274 (2,970) (310) (3,280) Net exposure 000 297,554 71,049 39,329 47,159 128,500 583,591 97,165 680,756
At 30 April 2009
Investments 000 261,974 68,629 38,713 46,791 72,752 488,859 175,768 664,627
US dollar Euro Japanese yen Brazillian real Other overseas currencies Total exposure to currency risk Sterling
* ncludes non-monetary assets of 50,000. I Currency Risk Sensitivity At 30 April 2010, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had an equal but opposite effect on the financial statement amounts. The analysis is performed on the same basis for 2009.
2010 000 2009 000 14,878 3,552 1,966 2,358 6,425 29,179
US dollar Euro Japanese Yen Brazillian real Other overseas currencies
13,754 3,108 1,280 3,755 15,476 37,373

Interest Rate Risk Interest rate movements may affect directly: the fair value of the investments in fixed interest rate securities; the level of income receivable on cash deposits; the fair value of derivative instruments linked to interest rates; the fair value of the Companys fixed-rate borrowings; and the interest payable on any variable rate borrowings which the Company may take out. Interest rate movements may also impact upon the market value of the Companys investments other than its fixed income securities. The effect of interest rate movements upon the earnings of a company may have a significant impact upon the valuation of that companys equity. The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment decisions and when entering borrowing agreements. The Board reviews on a regular basis the amount of investments in cash and fixed income securities and the income receivable on cash deposits, floating rate notes and other similar investments. The Company finances part of its activities through borrowings at approved levels. The amount of such borrowings and the approved levels are monitored and reviewed regularly by the Board. Movements in interest rates, to the extent that they affect the fair value of the Companys fixed rate borrowings, may also affect the amount by which the Companys share price is at a discount or a premium to the net asset value (assuming that the Companys share price is unaffected by movements in interest rates). During the year the Company drew down a 40 million short term variable rate bank loan and entered into a 30 year interest rate swap for 40m (see note 11 and the table on page 44 for further details). The interest rate risk profile of the Companys financial assets and liabilities at 30 April is shown below. Financial Assets
Fair value 000 2010 Weighted average interest rate 2009 Fair value 000 19,490 9,909 22,563 12,062 3,654 18,989 11,634 26,704 10,811 12,538 Weighted average interest rate 16.8% 11.1% 28.0% 5.6% 3.1% 10.7% 11.6% 6.2% 3.2% n/a
Weighted average period until maturity
Weighted average period until maturity
Fixed rate: UK bonds European bonds* US bonds UK swap rate linked note Floating rate: UK bonds (interest rate linked to sterling LIBOR) European bonds (interest rate linked to Euro LIBOR) Brazilian bonds (interest rate linked to Brazilian CPI) US bonds (interest rate linked to US dollar LIBOR) Japanese bond (interest rate linked to Japanese CPI) UK swap rate linked note Fixed interest collective investment schemes: UK fund US dollar denominated fund

7,147 2,297 3,515 3,732

8.3% 6.7% 12.7%

9 years 5 years 3 years 7 years

9 years 16 years 8 years 4 years
7.2%
1.6% 33.6% 6.1% 4.1% n/a

3,960 2,769 17,217 3,176 13,143

2 years 7 years 35 years 28 years 7 years

2 years 8 years 36 years 13 years 9 years 4 years
2,736 20,590
2.9%
n/a n/a
9,262
8.0%
n/a n/a
The main change to the interest rate risk profile of the Companys financial assets during the year has been net sales of bonds of 126 million, including a 50% reduction in the Companys UK swap rate linked note holding.
* Includes a convertible security which has been classified as an equity holding.
This instrument comprises a zero coupon note issued by Credit Suisse and an option on sterling interest rate swaps. The zero coupon element has a redemption value of 6.25 million (fair value 3.7 million) and the redemption value of the interest rate swap element (fair value 13.1 million) is based on a formula linked to thirty year sterling interest swap rates with higher amounts payable as rates rise. Prior to redemption, the value of the interest rate swap element will vary depending on several factors such as the level of swap rates and the implied volatility of interest rate swap options.

Financial Liabilities
2010 000 2009 000 79,549
The interest rate risk profile of the Companys financial liabilities at 30 April was: Fixed rate sterling The maturity profile of the Companys financial liabilities at 30 April was: In one year or less In two to five years In more than five years (13 years)
119,582
40,000 40,000 39,582 119,582
40,000 39,549 79,549
Interest Rate Risk Sensitivity An increase of 100 basis points in bond/swap yields as at 30 April 2010 would have increased total net assets and total return on ordinary activities by 14,867,000 (2009 2,145,000) and would have increased the net asset value per share (with debentures at fair value) by 7.4p (2009 2.6p). A decrease of 100 basis points would have decreased total net assets and total return on ordinary activities by 12,252,000 (2009 2,145,000) and would have decreased net asset value per share (with debentures at fair value) by 6.4p (2009 2.6p). Other Price Risk Changes in market prices other than those arising from interest rate risk or currency risk may also affect the value of the Companys net assets. The Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant information from the Investment Manager. The Board meets regularly and at each meeting reviews investment performance, the investment portfolio and the rationale for the current investment positioning to ensure consistency with the Companys objective and investment policy. Other Price Risk Sensitivity A full list of the Companys investments is shown on pages 12 to 16. In addition, a geographical analysis of the portfolio, an analysis of the portfolio by broad industrial or commercial sector and a list of the 30 largest equity investments are contained in the Managers Portfolio Review section. 101.8% of the Companys net assets are invested in quoted equities (2009 74.4%). A 5% increase in quoted equity valuations at 30 April 2010 would have increased total assets and total return on ordinary activities by 48,801,000 (2009 25,314,000). A decrease of 5% would have had an equal but opposite effect. Liquidity Risk This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk is not significant as the majority of the Companys assets are investments in quoted securities that are readily realisable. The Board also sets parameters for the degree to which the Companys net assets are invested in quoted equities. The Company has the power to take out borrowings, which give it access to additional funding when required. The Companys current borrowing facilities are detailed in notes 11 and 12 and the maturity profile of its borrowings is set out above. Credit Risk This is the risk that a failure of a counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss. This risk is managed as follows: where the Investment Manager makes an investment in a bond or other security with credit risk, that credit risk is assessed and then compared to the prospective investment return of the security in question; the Companys listed investments are held on its behalf by Bank of New York Mellon, the Companys custodian. Bankruptcy or insolvency of the custodian may cause the Companys rights with respect to securities held by the custodian to be delayed. The Investment Manager monitors the Companys risk by reviewing the custodians internal control reports and reporting its findings to the Board; investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Investment Manager. Transactions are ordinarily done on a delivery versus payment basis whereby the Companys custodian bank ensures that the counterparty to any transaction entered into by the Company has delivered on its obligations before any transfer of cash or securities away from the Company is completed; the credit worthiness of the counterparty to transactions involving derivatives, structured notes and other arrangements, wherein the creditworthiness of the entity acting as broker or counterparty to the transaction is likely to be of sustained interest, are subject to rigorous assessment by the Investment Manager; and cash is only held at banks that have been identified by the Managers as reputable and of high credit quality.

Credit Risk Exposure Exposure to credit risk at 30 April was:
2010 000 2009 000 157,616 98,958 9,438 266,012
Fixed interest investments Cash and short term deposits Debtors and prepayments

77,985 14,449 26,589 119,023
None of the Companys financial assets are past due or impaired. Fair value of financial assets and financial liabilities The Directors are of the opinion that the financial assets and liabilities of the Company are stated at fair value in the balance sheet with the exception of the long term borrowings which are stated at amortised cost in accordance with FRS 26. The fair values of the long term borrowings are shown below.
2010 Book 000 40,000 39,582 79,582 2009 Book 000 40,000 39,549 79,549
Nominal 000
Fair 000 46,500 41,084 87,584
Nominal 000 40,000 40,000 80,000
Fair 000 48,036 39,904 87,940
11% debenture stock 2012 63/8% debenture stock 2023
40,000 40,000 80,000
All short term borrowings are stated at fair value. Gains and losses on forward currency contracts The following forward currency contracts were in position at 30 April 2010:
At 30 April 2010 Currency sold Currency amount sold ($76,020,000) (14,920,000) (645,000,000) (R$63,030,000) Currency bought Sterling Sterling Sterling Sterling Currency amount bought 50,075,000 13,521,000 4,701,000 23,129,000 Settlement date 20/5/10 20/5/10 20/5/10 27/5/10 Fair value 000 406 558 217 (536) 645
US dollar Euro Japanese yen Brazillian real

Gains and losses on interest rate swaps The following interest rate swap was in position at 30 April 2010:
At 30 April 2010 Notional amount 40,000,000 Payments received 6 months sterling LIBOR Payments made 4.2025% Termination date 19/1/2040 Counter party Royal Bank of Scotland PLC Fair value 000 (648)
Hedge accounting was not adopted for this derivative. Capital Management The Company does not have any externally imposed capital requirements other than the loan and debenture covenants outlined in notes 11 and 12 on pages 37 and 38. The capital of the Company is the ordinary share capital as detailed in note 14. It is managed in accordance with its investment policy in pursuit of its investment objective, both of which are detailed on page 19. Shares may be repurchased as explained on page 23.
NOTICE OF ANNUAL GENERAL MEETING
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Notice is hereby given that the eighty-first Annual General Meeting of The Monks Investment Trust PLC will be held at the Institute of Directors, 116 Pall Mall, London SW1Y 5ED on Tuesday, 3 August 2010, at 11.00 am for the following purposes:
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To consider and, if thought fit, pass the following resolutions as ordinary resolutions. 1. To receive and adopt the Financial Statements of the Company for the year to 30 April 2010 with the Reports of the Directors and of the Independent Auditors thereon. 2. To approve the Directors Remuneration Report for the year to 30 April 2010. 3. To declare a dividend. 4. To re-elect Ms CC Ferguson as a Director. 5. To re-elect Mr DCP McDougall as a Director. 6. To reappoint PricewaterhouseCoopers LLP as Independent Auditors. 7. To authorise the Directors to determine the remuneration of the Independent Auditors. To consider and, if thought fit, pass resolution 8 as a special resolution: 8. That, in substitution for any existing authority, but without prejudice to the exercise of any such authority prior to the date hereof, the Company be authorised, in accordance with section 701 of the Companies Act 2006 (the Act), to make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares of 5p each in the capital of the Company (Shares), provided that: (a) the maximum aggregate number of Shares hereby authorised to be purchased is being approximately 14.99% of the issued ordinary share capital on the date on which this resolution is passed; (b) he minimum price which may be paid for a Share shall be t 5p (exclusive of expenses); (c) the maximum price (exclusive of expenses) which may be paid for a Share shall not be more than the higher of: (i) 5 per cent above the average closing price on the London Stock Exchange of an ordinary share over the five business days immediately preceding the date of purchase; and (ii) the higher of the price of the last independent trade and the highest current independent bid on the London Stock Exchange; and
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The Annual General Meeting of the Company will be held at the Institute of Directors, 116 Pall Mall, London SW1Y 5ED on 3 August 2010 at 11.00 am. If you have any queries as to how to vote or how to attend the meeting, please call us on 0800 027 0133. Baillie Gifford may record your call.
(d) nless previously varied, revoked or renewed by the u Company in general meeting, the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be held in respect of the financial year ending 30 April 2011, save that the Company may, prior to such expiry, enter into a contract to purchase Shares under such authority which will or might be completed or executed wholly or partly after the expiration of such authority and may make a purchase of Shares pursuant to any such contract. By order of the Board BAILLIE GIFFORD & CO Managers and Secretaries 30 June 2010
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NOTICE OF ANNUAL GENERAL MEETING
Notes 1. As a member you are entitled to appoint a proxy or proxies to exercise all or any of your rights to attend, speak and vote at the AGM. A proxy need not be a member of the Company but must attend the AGM to represent you. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You can only appoint a proxy using the procedure set out in these notes and the notes to the proxy form. You may not use any electronic address provided either in this notice or any related documents (including the circular and proxy form) to communicate with the Company for any purpose other than those expressly stated. 2. To be valid any proxy form or other instrument appointing a proxy, together with any power of attorney or other authority under which it is signed or a certified copy thereof, must be received by post or (during normal business hours only) by hand at the Registrars of the Company at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY or www.eproxyappointment.com no later than 48 hours (excluding nonworking days) before the time of the meeting or any adjourned meeting. 3. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual and/or by logging on to the website www.euroclear.com/CREST. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. 4. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limiteds specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the Companys registrar (ID 3RA50) no later than 48 hours (excluding non-working days) before the time of the meeting or any adjournment. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the Companys registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. 5. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. 6. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
7. The return of a completed proxy form or other instrument of proxy will not prevent you attending the AGM and voting in person if you wish. 8. Shareholders participating in the Baillie Gifford Investment Trust Share Plan, Childrens Savings Plan or the Baillie Gifford Investment Trust ISA who wish to vote and/or attend the meeting must complete and return the enclosed reply-paid Form of Direction. 9. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 and Section 311 of the Companies Act 2006 the Company specifies that to be entitled to attend and vote at the Annual General Meeting (and for the purpose of the determination by the Company of the votes they may cast), shareholders must be registered in the Register of Members of the Company no later than 48 hours (excluding non-working days) prior to the commencement of the AGM or any adjourned meeting. Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting. 10. ny person to whom this notice is sent who is a person nominated under A Section 146 of the Companies Act 2006 to enjoy information rights (a Nominated Person) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights. 11. he statement of the rights of shareholders in relation to the appointment of T proxies in notes 1 and 2 above does not apply to Nominated Persons. The rights described in those notes can only be exercised by shareholders of the Company. 12. he members of the Company may require the Company to publish, on T its website, (without payment) a statement (which is also passed to the auditors) setting out any matter relating to the audit of the Companys accounts, including the auditors report and the conduct of the audit. The Company will be required to do so once it has received such requests from either members representing at least 5% of the total voting rights of the Company or at least 100 members who have a relevant right to vote and hold shares in the Company on which there has been paid up an average sum per member of at least 100. Such requests must be made in writing and must state your full name and address and be sent to the Company at Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN. 13. nformation regarding the Annual General Meeting, including information I required by Section 311A of the Companies Act 2006, is available from the Companys page of the Managers website at www.monksinvestmenttrust.co.uk. 14. embers have the right to ask questions at the meeting in accordance with M Section 319A of the Companies Act 2006. 15. As at 11 June 2010 (being the last practicable date prior to the publication of this notice) the Companys issued share capital consisted of 261,014,859 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at 11 June 2010 were 261,014,859 votes. 16. ny person holding 3% or more of the total voting rights of the Company A who appoints a person other than the Chairman of the meeting as his proxy will need to ensure that both he and his proxy complies with their respective disclosure obligations under the UK Disclosure and Transparency Rules. 17. o Director has a contract of service with the Company. N
FURTHER SHAREHOLDER INFORMATION
Further Shareholder Information

Monks is an investment trust. Investment trusts offer investors the following:
participation in a diversified portfolio of shares; constant supervision by experienced professional managers; and the Company is free from capital gains tax on capital profits realised within its portfolio although investors are still liable for capital gains tax on profits when selling their investment.
Analysis of Shareholders
At 30 April 2010 Number % 34.4 48.5 8.7 7.3 1.1 100.0 At 30 April 2009 Number 97,711,696 117,306,874 28,744,772 17,916,738 1,964,779 263,644,859 % 37.1 44.5 10.9 6.8 0.7 100.0
How to Invest
The Companys shares are traded on the London Stock Exchange. They can be bought by placing an order with a stockbroker, by asking a professional adviser to do so, or through the Baillie Gifford savings vehicles (see page 48 for details). If you are interested in investing directly in Monks, you can do so online. There are a number of companies offering real time online dealing services find out more by visiting the investment trust pages at www.bailliegifford.com.
Institutions 89,877,043 Intermediaries 126,587,158 Individuals 22,702,282 Baillie Gifford Share Plan/ISA 19,020,899 Marketmakers 2,827,477
261,014,859
register to receive communications from the Company, including the Annual Report, in electronic format; update bank mandates and change address details; use online dealing services; and pay dividends directly into your overseas bank account in your chosen local currency. To take advantage of this service, please log in at www-uk.computershare.com/investor and enter your Shareholder Reference Number and Company Code (this information can be found on the last dividend voucher or your share certificate).
Sources of Further Information on the Company

The price of shares is quoted daily in the Financial Times and can also be found on the Companys website at www.monksinvestmenttrust.co.uk, Trustnet at www.trustnet.co.uk and on other financial websites.
Key Dates
Ordinary shareholders normally receive two dividends in respect of each financial year. An interim dividend is paid in January and a final dividend is paid in August. The AGM is normally held at the start of August.
Divided Reinvestment Plan

Computershare operate a Dividend Reinvestment Plan which can be used to buy additional shares instead of receiving your dividend via cheque or into your bank account. For further information log on to www-uk.computershare.com/investor and follow the instructions or telephone 0870 707 1694.
Capital Gains Tax

For Capital Gains Tax indexation purposes, the market value of an ordinary share in the Company as at 31 March 1982 (as adjusted for the five for one share split in July 2001) was 14.1p.
Electronic Proxy Voting

If you hold stock in your own name you can choose to vote by returning proxies electronically at www.eproxyappointment.com If you have any questions about this service please contact Computershare on 0870 707 1170.
Share Register Enquiries

Computershare Investor Services PLC maintains the share register on behalf of the Company. In the event of queries regarding shares registered in your own name, please contact the Registrars on 0870 707 1170. This helpline also offers an automated selfservice functionality (available 24 hours a day, 7 days a week) which allows you to: hear the latest share price; confirm your current share holding balance; confirm your payment history; and order Change of Address, Dividend Bank Mandate and Stock Transfer forms. You can also check your holding on the Registrars web site at www-uk.computershare.com/investor. They also offer a free, secure share management website service which allows you to: view your share portfolio and see the latest market price of your shares; calculate the total market price of each shareholding; view price histories and trading graphs;
CREST Proxy Voting

If you are a user of the CREST system (including a CREST Personal Member), you may appoint one or more proxies or give an instruction to a proxy by having an appropriate CREST message transmitted. For further information please refer to the CREST Manual. The financial statements have been approved by the Directors of The Monks Investment Trust PLC. Baillie Gifford Savings Management Limited is the ISA Manager of the Baillie Gifford Investment Trust ISA, and the Manager of the Baillie Gifford Investment Trust Share Plan and Childrens Savings Plan. Baillie Gifford Savings Management Limited is wholly owned by Baillie Gifford & Co. Both are authorised and regulated by the Financial Services Authority. Baillie Gifford only provides information about its products and does not provide investment advice. The staff of Baillie Gifford and Monks Directors may hold shares in Monks and may buy or sell such shares from time to time.
COST-EFFECTIVE WAYS TO BUY AND HOLD SHARES IN MONKS
Cost-effective Ways to Buy and Hold Shares in Monks

WITH KIDS
Our Childrens Savings Plan is proving a big hit with children, parents, godparents, grandparents, aunts and uncles alike. Thats probably because it allows you to take such a grown-up, long-term, view of the investment world.
Quite simply, our Childrens Savings Plan is designed for you to invest for children under 18 and offers access to global stockmarkets through investment trusts with special opportunities to invest in regions such as China, Japan and the Far East. Here at Baillie Gifford we are always working extremely hard to understand the long-term themes of the future and to prot from them over time. For example, we believe that China really will emerge as an economic superpower, that resources will become harder to nd and will be concentrated in the emerging nations and that alternative energy is both a practical and a political must. Weve been picking stocks intelligently for the last 100 years thats
BIG
Online Management Service

You can also open and manage your Share Plan and/or ISA online, through our secure Online Management Service (OMS) which can be accessed through the Baillie Gifford website www.bailliegifford.com. OMS enables you to apply for, open and administer a Baillie Gifford Investment Trust Share Plan or Investment Trust ISA online. As well as being able to view the details of your plan online, the service also allows you to:
The Share Plan and ISA brochure available at www.monksinvestmenttrust.co.uk
get current valuations; make lump sum investments; switch between investment trusts (except where there is more than one holder); set up a direct debit to make regular investments; and Childrens Savings Plan brochure available update certain personal details.
about offers real potential for income or capital growth. Take a closer look at the plan at www.bgchildsavings.com and were sure youll nd out why were so big with kids. Please remember, your investment can be affected by changing stock market conditions and by currency exchange rates. The value of you may not get back the amount invested. Minimum investment limits apply. your investment and any income from it can fall as well as rise, and
why were condent that the fund you choose for the child you care
Call 0800 027 2928 or visit www.bgchildsavings.com
We may record your call. Baillie Gifford Savings Management Limited (BGSM) is the manager of the Baillie Gifford Childrens Savings Plan and is wholly owned by Baillie Gifford & Co, which is the manager and secretary of the investment trusts offered within the plan. Your personal data is held and used by BGSM in accordance with data protection legislation. We may use your information to send you information about Baillie Gifford products, funds or special offers and to contact you for business research purposes. We will only disclose your information to other companies within the Baillie Gifford group and to agents appointed by us for these purposes. You can withdraw your consent to receiving further marketing communications from us and to being contacted for business research purposes at any time. You also have the right to review and amend your data at any time.
at www.monksinvestmenttrust.co.uk
Further information
If you would like more information on any of the plans described, please contact the Baillie Gifford Client Relations Team. (See contact details on page 49).
Baillie Gifford & Co offers a number of plans that enable you to buy and hold shares in Monks cost-efficiently. Purchases and sales are normally subject to a dealing price spread and Government stamp duty of 0.5% is payable on purchases.
The Baillie Gifford Investment Trust Share Plan

No initial charge No annual wrapper charge Normally cheaper than dealing through a stockbroker Invest a lump sum from 250 or monthly from just 30 No maximum investment limits Stop and start saving at any time with no charge Twice weekly dealing (usually Tuesday and Friday) A withdrawal charge of just 22
Risks
Past performance is not a guide to future performance. Monks is listed on the stock market. As a result, the value of the shares, and any income from those shares, is not guaranteed and could go down as well as up. You may not get back the amount you invested. As Monks invests in overseas securities, changes in the rates of exchange may also cause the value of your investment (and any income it may pay) to go down or up. Monks can borrow money to make further investments (sometimes known as gearing). The risk is that when this money is repaid by the Company, the value of the investments may not be enough to cover the borrowing and interest costs, and the Company will make a loss. If the Companys investments fall in value, any borrowings will increase the amount of this loss. Monks can buy back and cancel its own shares. The risks from borrowing are increased when the Company buys back and cancels its shares. Monks can make use of derivatives. Where derivatives are used to compensate for possible unfavourable currency and market movements there is a risk that potential gains may be restricted in a rising market. Where derivatives are used for investment purposes there could be a high risk of loss to the Company due to the large and quick price movements of these contracts. The generation of income is less important than Monks aim of achieving capital growth. You should not expect a significant, or steady, annual income from the shares. The favourable tax treatment of ISAs may change. Details of other risks that apply to investment in these savings vehicles are contained in the product brochures.
The Baillie Gifford Investment Trust ISA

Tax-efficient investment No set-up charge Flat rate annual management charge currently of 32.50 + VAT Lump sum investment from 2,000 currently up to a maximum of 10,200 each year Save monthly from 100 A withdrawal charge of just 22
ISA Transfers
Transfer existing ISAs from other plan managers into the Baillie Gifford ISA Consolidate your plans into a managed global investment Minimum transfer value 2,000
The Baillie Gifford Childrens Savings Plan

An excellent way for parents, grandparents or other adults to invest for a child No initial charge No annual wrapper charge The option of a designated account or a bare trust in favour of the child Flexible investment options: lump sum from 100 or monthly saving from just 25 A withdrawal charge of just 22
COMMUNICATING WITH SHAREHOLDERS
Communicating with Shareholders

Suggestions and Questions
Any suggestions on how communications with shareholders can be improved are welcomed, so please contact the Baillie Gifford Client Relations Team and give them your suggestions. They will also be very happy to answer questions that you may have, either about Monks or the plans described on page 48.
Literature in Alternative Formats

It is possible to provide copies of the literature in alternative formats, such as large print or on audio tape. Please contact the Baillie Gifford Client Relations Team for more information.
A Monks web page at www.monksinvestmenttrust.co.uk Trust magazine available at www.bgtrustonline.com
Client Relations Team Contact Details

You can contact the Baillie Gifford Client Relations Team by telephone, email, fax or post: Client Relations Team Baillie Gifford Savings Management Limited Calton Square 1 Greenside Row EDINBURGH EH1 3AN Tel: 0800 027 0133 We may record your call E-mail: trustenquiries@bailliegifford.com Website: www.bailliegifford.com Fax: 0131 275 3955 Please note that Baillie Gifford is not permitted to give financial advice. If you would like advice or if you have any questions about the suitability of these plans for you, please ask an authorised intermediary.
Trust Magazine
Trust is the Baillie Gifford investment trust magazine which is published three times a year. It provides an insight to our investment approach by including interviews with our fund managers, as well as containing investment trust news, investment features and articles about the trusts managed by Baillie Gifford, including Monks. Trust plays an important role in helping to explain our products so that readers can really understand them. For a copy of Trust, please contact the Baillie Gifford Client Relations Team. An online version of Trust can be found at www.bgtrustonline.com.
Guides to Investment Trusts

Baillie Gifford has produced three educational guides on investment trusts. The first Understanding Investment Trusts is designed to explain how investment trusts work on a general level. There is also a guide on Investing for children which explains how investment trusts can be used to invest on behalf of a child. The third guide has been written by two of the UKs leading investment writers, it gives a detailed overview of emerging markets and explains the various ways you can invest in them. If you would like copies of any of these guides, please contact the Baillie Gifford Client Relations Team.
Monks on the Web

Up-to-date information about Monks, including a monthly commentary, recent portfolio information and performance figures, can be found on the Companys page of the Managers website at www.monksinvestmenttrust.co.uk. You can also find a brief history of Monks, an explanation of the effects of gearing and a flexible performance reporting tool.
Directors
Chairman: JGD Ferguson CC Ferguson EM Harley DCP McDougall
Registered Office
Computershare Investor Services PLC 2nd Floor Vintners Place 68 Upper Thames Street London EC4V 3BJ
Registrar
Computershare Investor Services PLC PO Box 82 The Pavilions Bridgwater Road Bristol BS99 7NH Tel: 0870 707 1170 Company registration No. 236964
Independent Auditors
PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Erskine House PO Box 90 6873 Queen Street Edinburgh EH2 4NH
Managers and Secretaries

Baillie Gifford & Co Calton Square 1 Greenside Row Edinburgh EH1 3AN Tel: 0131 275 2000
Website: www.bailliegifford.com

The Monks Investment Trust PLC

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The Monks Investment Trust PLC

Annual Report and Financial Statements 30 April 2010

THE MONKS INVESTMENT TRUST PLC 1

ONE YEAR SUMMARY

One Year Summary

Year to 30 April 2010

Years high and low

High 320.5p 370.1p 373.7p (5.7%) (6.9%)

Low 224.0p 250.7p 254.2p (18.7%) (19.6%)

30 April 2009 6.97p* (134.79p) (127.82p)*

Net return per ordinary share

4.02p 111.99p 116.01p

One Year Performance (capital only)

Past performance is not a guide to future performance.

2 ANNUAL REPORT 2010

FIVE YEAR SUMMARY

Five Year Summary

Discount to Net Asset Value

Annual Net Asset Value and Share Price Total Returns

Past performance is not a guide to future performance.

THE MONKS INVESTMENT TRUST PLC 3

Long Term Borrowing

Earnings and Dividend

Discount and Buybacks

James Ferguson 15 June 2010

THE MONKS INVESTMENT TRUST PLC 5

MANAGERS PORTFOLIO REVIEW

Managers Portfolio Review

Returns From Markets

Baillie Gifford & Co Monks portfolio FTSE World Index

Past performance is not a guide to future performance.

Largest positive contributions to performance:

6 ANNUAL REPORT 2010

MANAGERS PORTFOLIO REVIEW

Largest negative contributions to performance:

THE MONKS INVESTMENT TRUST PLC 7

MANAGERS PORTFOLIO REVIEW

8 ANNUAL REPORT 2010

DISTRIBUTION OF PORTFOLIO AND INVESTMENT CHANGES

Distribution of Portfolio as at 30 April

By Sector 2010 (2009)

Asia Pacific 16.7% (11.4%)

THE MONKS INVESTMENT TRUST PLC 9

THIRTY LARGEST EQUITY HOLDINGS

Thirty Largest Equity Holdings

10 ANNUAL REPORT 2010

Total Equities* 2009 Bonds Net Liquid Assets

Total Assets 2009 Borrowings

14.3 (11.1) 13.5 3.8 24

21.1 14.6 21.1 19

33.6 21.3 33.6 29

5.1 2.4 5.1 6

12.4 16.9 12.4 21

13.5 20.2 13.5 24

Shareholders Funds 2009

THE MONKS INVESTMENT TRUST PLC 11

LIST OF INVESTMENTS AS AT 30 APRIL 2010

12 ANNUAL REPORT 2010

1.0 2.3 1.7 0.6 2.0 0.6 2.3 0.4