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9 February 2006

ANNOUNCEMENT RELATING TO THE PROPOSED PURCHASE BY THE SCOTTISH INVESTMENT TRUST PLC OF UP TO £42,000,000 OF THE £150,000,000 5 3/4 PER CENT SECURED BONDS DUE 2030 (THE "BONDS"), ISIN GB0002616471

Following the buyback of 57,972,303 ordinary stock units representing 27.75% of the issued ordinary stock of The Scottish Investment Trust PLC (the "Company") on 7 February 2006 as a result of a tender offer, the Company today announces an invitation to bondholders to sell back to the Company up to £42,000,000 nominal of the Bonds. The invitation will remain open from 11:00 am London time on 10 February 2006 to 3:00 pm London time on 20 February 2006 (the "Expiration Date") or such other period as may be notified by the Company (the "Offer Period"). The Company reserves the right to withdraw the invitation to sell at any time during the Offer Period upon giving twenty-four hours notice. Pricing for the sale is expected to occur on or around 11:00 am London time on 21 February 2006 (the "Pricing Date"). The Bonds are listed on the London Stock Exchange ("LSE").

The purpose of the purchase by the Company is to maintain an appropriate level of potential gearing following completion of the tender offer and the related stock buyback. This is in line with the Company's stated policy of maintaining a strategic ceiling for effective gearing of 120 per cent. Further information regarding the tender offer and stock buyback can be found in the announcement distributed by the Regulatory News Service ("RNS") dated 13 December 2005 and entitled "Tender Offer and New Stock Buyback Policy" and the Circular dated 21 December 2005.

The purchase will be limited to a maximum of £42,000,000 in aggregate principal amount of Bonds (the "Maximum Purchase Amount"). In the event that offers to sell are received in respect of an aggregate principal amount of Bonds which is greater than the Maximum Purchase Amount, a pro rata reduction will be applied. All bonds purchased by the Company will be cancelled.

The price payable for each Bond will be determined by reference to a fixed spread of 0.25 per cent. over the yield to maturity of the 6% Treasury Stock 2028 (the "Reference Bond"), based on the average of the bid and the offer price of the Reference Bond as reported by Bloomberg (page PXUB) at or around 11:00 am London time on the Pricing Date, plus accrued and unpaid interest from, and including 17 October 2005 to, but excluding, the Pricing Date (further details on the calculation set out below).

Payment for Bonds will be made on the third business day following the Pricing Date (the "Payment Date"). References to a business day herein are to a day (other than Saturday or Sunday) on which commercial banks are generally open for business in London.

For further information or to offer Bonds for sale, holders should contact the Transaction Manager.

Adviser and Transaction Manager: Dresdner Kleinwort Wasserstein

Attention: Tim Cartmell Hugh Carter
Telephone: +44 (0) 20 7444 9003 +44 (0) 20 7475 3400

Notes on calculation of the purchase price:

The purchase price will be expressed as a percentage of the par value (rounded to three decimal places, 0.0005 per cent. being rounded upwards), as reported in writing by Dresdner Kleinwort Wasserstein to the Company, at which the Redemption Yield on the Bonds if they were purchased at such a price would be equal to 0.25 per cent. plus the Redemption Yield at or around 11:00 am London time on that date of the Reference Bond, based on the average of the bid and the offer price of the Reference Bond as reported by Bloomberg (page PXUB).

The Redemption Yield means a yield calculated on the basis set out by the United Kingdom Debt Management Office in the paper "Formulae for Calculating Gilt Prices from Yields" page 4, Section one: Price/Yield Formulae "Conventional Gilts; Double-dated and Undated Gilts with Assumed (or Actual) Redemption on a Quasi-Coupon Date" (published 8/6/1998 and updated 15/1/2002), together with accrued and unpaid interest from, and including 17 October 2005 to, but excluding, the Payment Date.

This communication has been issued by the Company (which is not an authorised person for the purposes of the Financial Services and Markets Act 2000). This communication is directed only at existing holders of the Bonds in accordance with Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

Dresdner Kleinwort Wasserstein (and its respective directors, employees and affiliates) makes no representation or recommendation whatsoever regarding this announcement (or any invitation or offer contained in it) or any purchase or sale following from it and it excludes any and all liability in respect of such announcement, invitation, offer, sale or purchase.