Baring Asset Management Limited 155 Bishopsgate, London EC2M 3XY Authorised and regulated by the Financial Services Authority Tel: +44 (0)20-7628 6000 Fax: +44 (0)20-7638 7928

www.barings.com

INVESTMENT EXCELLENCE IN EUROPEAN EQUITIES

James Buckley

Europe – economic overview

Economic growth forecasts have been upgraded yoy January ‘07 Forecasts 2007 October ‘06 Forecasts 2007 GDP 2.0

1.9

Unemployment Rate (%) Industrial Production CPI 7.5

2.2

2.1

7.6

2.0

2.2

Interest rates have begun to rise Eastern Europe provides a boost Unemployment rates are declining Domestic demand is picking up Business sentiment has plateaued

Source: Consensus Economics Inc, January 2007

Pan European M&A – Here to stay

600 500 400 300 200 100 0 Pending Shares Cash 1999 2000 2001 2002 2003 2004 2005 2006 2007 M&A Activity has been a key theme in the last year

Source: Citigroup Investment Research and Datastream, Jan 2007

Growth theme in Peripheral Europe intact

6 5 4 3 2 1 0 2005 2006 Eurozone Ireland Greece 2007 Economic growth in the euro zone has improved Peripheral euro zone economies are even more attractive

Source: Consensus Forecast December 11th, 2006

Traditional Investing

Performance by country is not linked to index weight

30 Index Weight (%) 12m Return (%) 20 10 0 Spain Ireland Portugal Norway Sweden Austria Denmark Belgium Germany Greece Europe ex UK France Italy Finland Netherlands Switzerland

Source: MSCI Europe in € at 29 December 2006

Traditional Investing

Sector performance doesn’t help either

35 30 25 20 15 10 Index Weight (%) 12m Return (%) 5 0 Utilities Materials Industrials Consumer Discretionary Financials Telecommunication Consumer Staples Services Energy Health Care Information Technology

Source: MSCI Europe in € at 29 December 2006

Stock picking is the only tool left Opportunity for active managers to benefit from market inefficiencies

Investment Process

Fundamental Research – strong idea generation

GROWTH Pace and duration Competitive position Opportunities for real growth Quality of earnings Culture of innovation Four Key Measures MANAGEMENT VALUE CREATION Clear, credible strategy Company culture Corporate governance Demonstrable track record Acquisitions and disposals Cashflow returns Improving returns Economic value added Capital allocation Balance sheet structure VALUATION EV/EBITDA* Price/cash flow Price/earnings Asset undervaluation Sector/market/cross border comparison Unrecognised growth Credible management Enhanced shareholder value Favourable risk / reward

*Enterprise Value/Earnings Before Interest, Tax, Depreciation and Amortisation

Research augmented by regular contact with target companies

Buy & Sell Disciplines

We buy when we identify: Earnings growth prospects better than consensus estimates Undervaluation, based on comprehensive understanding of corporate strategy, fundamentals and peer comparables Catalysts that will lead to the stock being re-rated within a defined time frame Triggers for a sell: Stock achieves absolute valuation target We detect deterioration in fundamental outlook Changes in strategic/economic overlay Best and worst performing stocks review A disciplined approach to investment

Baring Europa Fund

Portfolio Characteristics as at 31

th

January 2007

Fund Size (USD million) Number of holdings in portfolio Large-cap eur>5bn+ (%) Mid-cap eur2-5bn (%) Small Cap eur<2bn (%) Tracking Error 382.1

58 59.72

13.48

23.27

4.05

Source: Baring Asset Management, data as 31/01/2007

Baring Europa Top 10 holdings

Top 10 current overweight stocks* Autonomy Corp. PLC Standard Chartered PLC CGG Veritas Tullow Oil PLC Ryanair Holdings PLC Puma AG Shire PLC BK of Cyprus D. Carnegie & Co. AB Hexagon AB % 1.80

1.80

1.76

1.76

1.76

1.75

1.75

1.74

1.73

1.72

For Comparative Purposes Only Top 10 current underweight stocks* HSBC Holdings PLC BP PLC GlaxoSmithKline Vodafone Group Total S.A.

Nestle S.A

Novartis AG Royal Bank of Scotland Royal Dutch Shell PLC Banco Santander Central % -2.35

-2.33

-1.74

-1.72

-1.65

-1.65

-1.50

-1.43

-1.42

-1.27

Source: Baring Asset Management as at 31/01/07 * Relative to MSCI Europe index

Baring Europa Fund

Performance as at 31

st

January 2007

36.4

26.9

23.9

21.2

Fund % Index % 17.8

16.8

Rank Quartile 1 Year 7/367 1 st 3 Years* 26/301 1 st 5 Years* 49/236 1 st

Source: Baring Asset Management, Standard & Poor’s. (bid to bid, in sterling, with net income reinvested).

An Offshore Fund recognised under the Laws of the UK, managed by Baring International Fund Managers (Ireland) Limited and marketed by Baring Asset Management Limited (Authorised and regulated by the Financial Services Authority). * Annualised Returns. Index is MSCI Europe. ** Micropal, UK Registered Investment Funds Equity Europe ex UK Reference to the index is for comparative purposes only.

Important Information

This document is issued by Baring Asset Management Limited and in jurisdictions other than the UK it is provided by its investment advisory affiliates. It has been produced for, and is intended for receipt by, professional investors/advisers and must not be relied on by any other category of recipient.

The value of any investments and any income generated may go down as well as up and is not guaranteed.

Past performance is not a guide to future performance. Quoted yields are not guaranteed. We reasonably believe that the information contained herein from 3rd party sources, as quoted, is accurate as at the date of publication. This document must not be relied on for purposes of any investment decisions.

This document may include forward-looking statements which are based on our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. The information in this document does not constitute investment, tax, legal or other advice or recommendation or, an offer to sell or an invitation to apply for any product or service of Baring Asset Management.

Research Material Baring Asset Management only produces research for its own internal use. Where details of research are provided in this document it is provided as an example of research undertaken by Baring Asset Management and must not be used, or relied upon, for the purposes of any investment decisions. The information and opinions expressed herein may change at anytime.

Complied (London): 14 th February 2007