STRATEGIC INVESTMENT PORTFOLIO

The strategic portfolio contains investments in smaller companies quoted on UK stock markets. Western's holding in these companies is more substantial, but less liquid than its holdings in the general portfolio. In addition Western often has board representation in the investee company.

The Company's current strategic investments consist of: Creston PLC (Creston), a marketing services company, Swallowfield plc (Swallowfield), a leading manufacturer of cosmetics, toiletries and household products. Northbridge Industrial Services PLC (Northbridge) which was formed for the purpose of acquiring companies that hire and sell specialist industrial equipment and Hartim Limited, the holding company for Tudor Rose International Limited, a leading UK export management company representing many famous British brands around the world.

Creston PLC

Creston is a marketing services group whose strategy is to grow within its sector both by organic growth and through selective acquisition to become a substantial, diversified marketing services group. The audited results for the year to 31st March 2009, show a profit after tax of £6,597,000 (2008 - £4,782,000), equivalent to earnings of 12.2p per share (2008 – 8.7p). On 7th July 2009 Creston announced a placing of new shares, raising approximately £3.3 million (gross). Western did not participate in the placing and maintained it’s holding of 3,000,000 shares in Creston. Following the placing, this represents 4.9% of Creston’s issued share capital with a value at 30th June 2009 of £1,920,000 (2008 - £1,425,000) being 21% (2008 - 14%) of Western’s assets.

Mr Marshall is the non-executive chairman of Creston.

Northbridge Industrial Service

Northbridge was formed for the purpose of acquiring companies that hire and sell specialist industrial equipment supplying a non-cyclical customer base including utility companies, the public sector and the oil and gas industries. In particular it will seek to acquire specialist businesses that have the potential for expansion into complete outsourcing providers. Sales are made to the U.K., U.S.A., Brazil, Singapore, Germany, UAE and Korea; Northbridge also has subsidiaries operating in Dubai and Azerbaijan.

The company announced profits of £1,918,000 for the year ended 31st December 2008 (2007 - £1,154,000) and declared a final dividend of 2.6p per share, making 3.9p for the year (2007 – 3.0p). In June 2009, Northbridge raised approximately £2 million by way of an open offer in order to finance the expansion of its hire fleet. Western took up 375,000 shares in that offer at a cost of £413,000 and now holds 1,875,000 shares in Northbridge (21.0%). The value of the investment at 30th June 2009 was £2,156,000 (2008 - £2,558,000) being 24% (2008 - 25%) of Western’s assets.

Mr Marshall is a non-executive director of Northbridge.

Swallowfield PLC

Swallowfield is a market leader in the development, formulation, manufacture and supply of cosmetics, toiletries and related household products for global brands and retailers operating in the cosmetics, personal care and household goods market. Since our year end their results for their year to 30th June 2009 have been announced showing maintained profits of £1,522,000 (2008 - £1,537,000) and an increase of dividend from 5.5p to 5.9 p per share. Their board indicated progress for the next 12 months.

Western increased its holding in Swallowfield during the year and now owns 1,331,500 shares which is 11.8% of the issued share capital. The market value of the Company’s holding in Swallowfield on 30th June 2009 was £999,000 (2008 - £971,000), being 11% (2008 - 9%) of Westerns’ net assets.

We would like to see the Swallowfield Board strengthened and remain in discussions with the company and other major shareholders about the composition of the Swallowfield board.

Hartim Limited

Hartim is the unquoted holding company for Tudor Rose International Limited (“TRI”) which was founded in 1984. It works closely with a number of leading UK branded fast moving consumer goods companies, offering a complete sales, marketing and logistical service. Based in Stroud, Gloucestershire, TRI sells into 78 countries worldwide including USA, Spain, Portugal, Italy, Czech Republic, Russia, Turkey, South Africa, Saudi Arabia, UAE, Malaysia, Australia and China.

Western holds 49.5% of Hartim, which has a 31st December year end and achieved profits in 2008 of £443,000 on turnover of £16,809,000. Western’s share of the consolidated profit after tax for the twelve months to 30th June 2009 was £181,000 (2008 – three months £69,000) and the book value of the investment at 30th June 2009 was £979,000 (2008 - £797,000), being 11% (2008 - 8%) of Western’s assets.

Western has two nominees on the board of Hartim, Mr E. J. Beale and Mr L. H. Marshall.