Interim Management Statement

Montanaro UK Smaller Companies Investment Trust PLC ("MUSCIT")

Interim Management Statement - 3 months to 31 December 2011

Investment Objective

MUSCIT's investment objective is capital appreciation through investing in
small quoted companies listed on the London Stock Exchange or traded on the
Alternative Investment Market ("AIM") and to achieve relative outperformance of
its benchmark, the FTSE SmallCap (excluding Investment Companies) Index
("SmallCap").

No unquoted investments are permitted.

Benchmark

FTSE SmallCap (excluding Investment Companies) Index

Net Asset Value Performance

                    3 months      1 year     3 years   5 years       Launch
                                                                           
MUSCIT                (1.6%)      (5.9%)       91.2%      9.7%       285.8%
(excluding                                                                 
current period                                                             
revenue)                                                                   
                                                                           
Benchmark             (4.4%)     (17.7%)       42.0%    (43.6%)       27.7%
                                                                           
Outperformance         2.8%       11.8%        49.2%     53.3%       258.1%

Performance Summary (capital only)

                         As at 31        As at 30       Movement
                    December 2011       September               
                                             2011               
                                                                
Gross assets         £144,681,124    £146,591,508          (1.3%)
                                                                
Net asset value            386.23p         390.32p         (1.0%)
per share                                                       
                                                                
Share price                300.50p         326.00p         (7.8%)
                                                                
Discount                     22.2%           16.5%               
                                                                
Net gearing                  11.2%           10.8%               


Period Review
For the 3 months ended 31 December 2011:

The NAV declined by 1.6% over the 3 months to the end of December 2011,
compared with a 4.4% decline of its benchmark, the FTSE SmallCap.

As announced on 19 December 2011 the Company agreed a new five-year £15 million
loan facility with ING Bank N.V., London Branch at an effective fixed interest
rate of 4.30% per annum. This replaced the existing £15 million Revolving
Credit Facility.

Outlook

Despite the prevailing gloom, there are good reasons to expect the weakness of
the British and European economies to be offset by stronger growth in the US
and pro-growth policy shifts in Emerging Markets, where policymakers appear to
have made headway in their battle against inflation. Companies continue to
report significant - and growing - cash balances which we believe will
increasingly be spent on acquisitions. Large companies in particular may start
looking at acquisitions to offset slowing earnings growth. With the Dollar
showing signs of strengthening against Sterling, smaller companies in the UK
could once again become targets for large American trade buyers.

At the start of 2012, investors appear to be positioned defensively with large
cash allocations and limited exposure to UK SmallCap. However, the asset class
is currently trading on multiples well below historical averages and on low
price / book valuations, with well-covered and rising dividends, which we
believe should limit the downside risk. Under-owned and unloved, UK SmallCap
could well surprise on the upside this year.

The prevailing context of high uncertainty should translate into further
outperformance of the "quality growth" theme - well-managed companies offering
secure earnings growth and good visibility. Balance sheet strength is also
crucial at a time when bank lending may be restricted. MUSCIT is well
positioned to take advantage of the expected continued outperformance of the
highest quality "blue-chip" small companies.

We look forward to the coming year with cautious optimism.

Montanaro Asset Management Limited

7 February 2012

Top Ten Holdings as at 31 December 2011

Company                   Sector                                     % of total
                                                                      portfolio
                                                                               
NCC Group                 Software and Computer Services                    3.8
                                                                               
Fenner                    Industrial Engineering                            3.3
                                                                               
Oxford Instruments        Electronic and Electrical Equipment               3.3
                                                                               
Victrex                   Chemicals                                         3.0
                                                                               
Devro                     Food Producers                                    2.9
                                                                               
SDL                       Software and Computer Services                    2.9
                                                                               
Domino Printing Sciences  Electronic and Electrical Equipment               2.8
                                                                               
Genus                     Pharmaceuticals and Biotechnology                 2.8
                                                                               
Latchways                 Support Services                                  2.7
                                                                               
Dialight                  Electronic and Electrical Equipment               2.7
                                                                               
                                                                           30.2

Sector Breakdown

Sector                                     % of total   % of market  
                                            portfolio                        
                                                                   
Aerospace & Defence                               1.4           1.4
                                                                   
Alternative Energy                                0.0           0.1
                                                                   
Automobiles & Parts                               0.0           0.3
                                                                   
Beverages                                         2.1           0.0
                                                                   
Chemicals                                         7.1           0.9
                                                                   
Construction & Materials                          2.2           4.7
                                                                   
Electronic & Electrical Equipment                12.4           5.6
                                                                   
Food & Drug Retailers                             1.0           0.0
                                                                   
Food Producers                                    5.1           3.4
                                                                   
General Financial                                 6.4           4.1
                                                                   
General Retailers                                 2.3           4.0
                                                                   
Health Care Equipment & Services                  3.3           1.4
                                                                   
Household Goods                                   0.0           2.3
                                                                   
Industrial Engineering                            4.5           3.4
                                                                   
Industrial Transportation                         5.9           3.1
                                                                   
Leisure Goods                                     0.0           0.9
                                                                   
Life & Non-life Insurance                         0.0           2.6
                                                                   
Media                                             0.7           5.9
                                                                   
Mining                                            0.5           0.7
                                                                   
Oil & Gas Producers                               4.0           2.7
                                                                   
Other                                             0.0           0.8
                                                                   
Pharmaceuticals & Biotechnology                   6.8           2.8
                                                                   
Real Estate                                       5.4          16.3
                                                                   
Software & Computer Services                     13.8           6.6
                                                                   
Support Services                                 12.7          15.7
                                                                   
Technology, Hardware & Equipment                  0.0           2.8
                                                                   
Travel & Leisure                                  2.4           7.5
                                                                   
                                                100.0         100.0

Other than as stated above, the Directors are not aware of any significant
events or transactions which have occurred between 31 December 2011 and the
date of publication of this statement which have had a material impact on the
financial position of the Company. For latest performance information, please
refer to the Company's website.

This Interim Management Statement and up to date NAV and share price are
available at the Company's website www.montanarouksmaller.co.uk

Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.

END