Company Progress Report

EDINBURGH LEVERAGED INCOME TRUST PLC The Company declared a first interim dividend on the convertible income shares and ordinary shares in respect of the year ending 28 February 2003 on 25 June 2002; at that time the trust satisfied the requirements of Section 264 of the Companies Act 1985. Due to significant falls in the stock market since the declaration this is no longer the case and the directors therefore announce with regret that the first interim dividend for the convertible income shares and ordinary shares will not be paid. In April 2002, following a review from its financial advisers, HSBC, the Company announced various policy decisions to reduce costs and so conserve cash. The principal cost reductions were a reduced management fee payable to Edinburgh Fund Managers and a 50% cut in director's fees. In addition the allocation of expenses was changed and 80% of management costs are now charged against revenue and 20% against capital reserves. As reported, gearing has been reduced through the repayment of £5.75m of the debt to the Bank of Scotland. Further sales of equities have been made to increase cash balances to approximately £9.0m representing 29.0% of gross assets as at 15 June 2002. The board has agreed with the Bank of Scotland that in calculating the asset cover over the loan the level of cash deposited with them may be offset against the loan liability. However, despite these measures the fall in the value of the Company's assets has also led to net assets being less than half paid up share capital. Under Section 142 of the Companies Act the directors are required to convene a meeting for the purpose of considering whether any, and if so what, steps should be taken to deal with the situation. Accordingly, the board intends to hold that meeting on Tuesday 20 August. Documents setting out the details of the meeting will be posted shortly. For further information please contact: Alex Gowans, Director - Edinburgh Fund Managers plc, 0131 313 1000 ------------------------------------------------------------ This information was brought to you by Waymaker The following files are available for download: