Audited Statement of Results for year ended 31.12.16

Please see attachment for full announcement. FOREIGN & COLONIAL INVESTMENT TRUST PLC Audited Statement of Results for the year ended 31 December 2016 Summary of Results Share price total return of 23.7% Strong performance with 23.9% net asset value total return with debt at market value Discount closed the year at 7.4% Proposed full year dividend of 9.85p - 46th consecutive annual increase The Chairman's Statement Dear Shareholder, 2016 was an extraordinary year in terms of political events, stock market returns and sterling weakness. Despite the upheaval, I am delighted to report that your Company had a very strong year, achieving a total shareholder return of 23.7%. Our Net Asset Value ("NAV") total return with debt at market value rose at its strongest annual rate for over a decade, gaining 23.9%. The proposed total dividend for 2016 is 9.85 pence per share, an increase of 2.6% on the year - our forty-sixth consecutive annual rise in dividends. These results further strengthen our long-term record of delivering growth in both capital and income for our shareholders. Over ten years the share price total return is 141%, equivalent to 9.2% per annum and over twenty years is 443%, which equates to 8.8% per annum. Performance Our NAV per share with debt at market value rose from 483.4 pence to 587.2 pence per share while the share price increased from 449.2 pence to 544.0 pence. In sterling terms, investors enjoyed the strongest annual returns from global equity markets since 1999 with your Company ending the year at a new record high for both the share price and NAV. Volatility was a notable feature throughout the year, with few predicting the combined outcomes of the US Presidential elections and the UK's Brexit Referendum. While we delivered NAV total returns of 23.9% this fell short of the 29.6% delivered by our benchmark, the FTSE All-World Index. This shortfall was largely due to a significant reversal in performance within equity markets, with a substantial rally in areas previously out of favour, such as resources and economically sensitive stocks. Our underweight position in the highly performing North American region and underperformance from stock selection there also detracted from returns as did our exposure to private equity which, despite posting strong returns, lagged benchmark returns over the year. While we underperformed listed markets over the year, we performed well relative to our peer group and continue to deliver excess shareholder total returns over the longer term. Earnings and dividends We have made strong progress in our earnings over recent years. Revenue per share of 10.6 pence earned in 2016 represents a rise of 26% by comparison to 2015. This improvement in earnings was helped by the receipt of ?4.4m of special dividends from our investments. Subject to shareholder approval at the Annual General Meeting ("AGM"), shareholders will receive a final dividend of 2.70 pence per share on 2 May 2017 bringing the total dividend for the year to 9.85 pence. That represents an increase of 2.6% over 2015 which compares with an increase of 1.6% in the Consumer Price Index. After the full year dividend, which is fully covered, our revenue reserve will stand at about one year's worth of dividends. A rising income stream in real terms is important for our shareholders and it is a clear focus of the Board that we maintain our record of long-term dividend growth ahead of the rate of inflation. As ever, there remains a great deal of uncertainty over the global economic outlook but the Board is planning another dividend increase ahead of inflation for 2017. Our direct and indirect costs, expressed as the ongoing charge, were 0.79%, down from 0.80% in 2015. Gearing Gearing levels ended 2016 modestly lower on the year. In June, we secured ?75m of new long-term debt in two tranches with twelve and fifteen year maturities. The borrowings were undertaken ahead of the Brexit Referendum and replaced short-dated foreign currency denominated debt. At a blended rate of 3.04%, we locked in interest costs for these borrowings at some of the lowest levels seen in many generations. Our range of fixed rate borrowings is complemented by access to short term funding when required. Private Equity Our private equity holdings delivered strong returns of 24.7% in 2016 and generated ?69.6m of net cashflow. Our past commitments have now been repaid in full and we retain ?264m of value in exposure at the year end. We expect further profits to be realised for shareholders as these holdings mature, further enhancing shareholder returns. The Board has agreed to recommit capital to a new private equity programme taking a more focused, opportunistic and direct approach that is flexible and will ultimately be considerably cheaper. We are doing this by making good use of the internal expertise at F&C. New commitments to this programme have been made over the course of the year. Buyback and share issue policies The year saw a general widening in investment trust discount levels. This deterioration in rating was driven by reduced investor demand as a function of uncertainty arising from Brexit as well as a perceived overhang from institutional sellers in the investment trust sector as a whole. For most of the year our discount traded wider than the 7.5% average level that the Board has set for the purpose of discount control. Our desire to meet our discount control objective led us to increase the pace of buybacks from the lowest level in a decade and purchase 12.4m shares. The discount closed the year at 7.4%. It remains the aspiration of your Board to reach a point where our share price trades at or around the NAV of the Company. Contributors to total return in 2016 % Portfolio return 24.3 Management fees (0.4) Interest and other Expenses (0.3) Buy-backs 0.2 Change of value of debt (0.1) Gearing 0.2 Net Asset Value total return 23.9 Increase in discount (0.2) Share price total return 23.7 FTSE All-World Total Return 29.6 Source: F&C Your Board We continue to ensure that proper succession arrangements are in place. Edward Knapp was appointed during the year and brings to us his experience in board advisory and business transformation, including deep expertise in financial services and risk. Stephen Burley will retire immediately following the AGM in April having served nine years. Our thanks are extended to Stephen whose investment insight and experience have been particularly helpful in recent years as the Company's strategy has evolved. Our strategy At the start of 2013 your Board made the strategic decision to allocate more capital to overseas markets, creating a truly global growth portfolio. This decision has helped to significantly improve returns to shareholders; over the following four years, we have seen the domestic market, represented by the FTSE All-Share Index, deliver a healthy 44.1% return but well behind the 81.6% delivered from global equities. We carry out a review of the Manager's overall investment performance and services following each year end with continual monitoring throughout the year. As a consequence it has again been decided that F&C be reappointed as our Manager. Outlook Long running trends in inflation and interest rates may well have turned on a secular basis, with significant implications for investment opportunities across and within stock markets. Despite longer term uncertainty and the unclear political environment, we enter 2017 with some renewed impetus in the global economy and signs of improvement in corporate earnings for the first time in several years. Markets have responded with enthusiasm and the US economy continues to be very resilient. Your Company therefore faces a year of challenges and opportunities as it has on numerous occasions since it was launched as the very first investment trust in 1868. Not only are we proud of our heritage but also of our relevance for investors in today's world. We will continue to adapt and innovate. Our corporate structure enables us to take a long term view, borrowing in different currencies to invest and providing a rising income stream in real terms to our shareholders over time. As we move towards the celebration of your Company's 150th anniversary in 2018, you can be assured that we will remain focused on extending our record of delivering growth in capital and income to you over the longer term from our globally diversified equity portfolio. Simon Fraser Chairman 6 March 2017 End CA:00297948 For:FCT Type:FLLYR Time:2017-03-08 08:30:27