SIT interim management statement

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15 February 2008

The Scottish Investment Trust PLC
Interim Management Statement - Three Months to 31 January 2008

Objectives

To provide investors, over the longer term, with above average returns through a diversified portfolio of international equities and to achieve dividend growth ahead of UK inflation.

Review of the first quarter to 31 January 2008

Stockmarkets around the world have been weak since the end of October 2007 reflecting widespread concerns over first, the near-term outlook for the US economy and consequent impact on corporate profits worldwide and second, the impact of the sub-prime mortgage crisis on financial services companies.

In the three months to 31 January 2008, the net asset value per ordinary stock unit (NAV) fell by 12.5% (with borrowings at par).The company’s principal comparator indices, the FTSE All-World Index^TM and the UK FTSE All-Share Index^TM fell by 9.4% and 13.1% respectively.The company’s stock price fell by 12.0% and the stock price discount to NAV narrowed from 9.9% at the year-end to 9.5% (with borrowings at market value).

At the AGM in January, stockholders approved the declaration of a final dividend of 4.80p and a special dividend of 2.00p per ordinary stock unit. These were both paid on 7 February 2008.

Stockholders also voted to renew the company’s authority to repurchase its own stock. These powers are used as part of the stock buyback scheme which is intended to maintain the company’s stock price discount to NAV (after deducting dividends proposed but not paid) with borrowings taken at market value at 9% or less. Over the three months, the company repurchased for cancellation 1.7m stock units at an average discount of 9.6% and a cost of £8.6m. The average daily discount over the three months was 8.8%.

Effective gearing was increased to 108.7% from the year-end level of 105.2%. Effective gearing increased as a result of the fall in markets and a net investment of £16.9m made in January to take advantage of depressed stock market valuations.

The Board is not aware of any significant events or transactions which have occurred between 31 January 2008 and the date of publication of this statement which would have a material impact on the financial position of the Company or its subsidiary undertakings.

In line with our reporting policy, the Net Asset Values are calculated taking the valuation of investments at closing bid or last price, as the case may be. The Net Asset Values are unaudited, exclude accrued income for the current financial year and are calculated after deducting dividends proposed or approved but not yet paid.

Market value is the company's estimate of the fair value of its borrowings.

Par value is the nominal value of the borrowings less any unamortised issue expenses.

Total assets means total assets less current liabilities.

All percentage distributions are of total assets.