Interim Management Statement

Montanaro UK Smaller Companies Investment Trust PLC
("MUSCIT") or ("the Company")

Interim Management Statement - 3 months to 31 December 2013

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 Numis Smaller Companies Index (excluding Investment
Companies) ("NSCI").

No unquoted investments are permitted.


Benchmark

Numis Smaller Companies Index (excluding Investment Companies) ("NSCI").

NAV Performance vs Benchmark*

                          3 months     1 year    3 years   5 years       Launch
                                                                               
MUSCIT (excluding             5.2%      20.8%      40.0%    184.5%       474.1%
current period                                                                 
revenue)                                                                       
                                                                               
Benchmark*                    7.7%      26.9%      39.5%    126.8%       105.9%
                                                                               
Out/(under)performance       (2.5)%     (6.1)%      0.5%     57.7%       368.2%
                                                                               
* Previous benchmark of FTSE SmallCap (excluding Investment Companies) to 31
March 2013 and Numis Smaller Companies Index (excluding Investment Companies)
from 1 April 2013.


Performance Summary

                                     As at              As at                  
                          31 December 2013  30 September 2013    Movement          
                                                                           
Gross Assets                  £207,245,798       £197,792,142         4.8%
                                                                           
Net asset value per share           572.76p            543.79p        5.3%
(including current period                                                  
revenue)                                                                   
                                                                           
Share price                         494.00p            486.00p        1.7%
                                                                           
Discount                              13.8%              10.6%                
                                                                           
Net Gearing                            6.0%               1.4%                


Period Review

The NAV (excluding current period revenue) increased by 5.2% over the 3 months
to the end of December 2013 compared with a 7.7% increase of its benchmark, the
Numis Smaller Companies Index (excluding ICs).

Outlook

UK SmallCap continued to build on previous quarterly gains as the recovery of
the UK economy gained further momentum. Macroeconomic and financial indicators
were positive during the period, including rising house prices, lower
inflation, greater credit availability and falling unemployment. In addition,
British exporters benefited from signs of economic recovery in the Euro Area,
the UK's main trading partner. This favourable backdrop has helped the Numis
Smaller Companies Index (excluding ICs) outperform the FTSE All Share by 2.9%
over the final quarter of 2013.

This positive environment continued to favour lower quality and recovery
situations over quality growth stocks, leading to further relative
underperformance by MUSCIT. Montanaro remains committed to investing only in
the highest quality UK quoted smaller companies and will happily leave more
speculative names to others.

An absolute return of 20.8% over calendar year 2013 would normally be greeted
with some satisfaction. However, Montanaro's "Quality Growth" style resulted in
significant relative underperformance. "Quality Growth", with the benefit of
hindsight, was fully priced in the summer of 2012. This was justified at the
time by the prevailing uncertainty about the outlook for Europe. However,
investor confidence has returned and most are positive about the outlook for
global stock markets. The resulting recovery in "Value" appears overdone today
in the absence of a recovery in earnings sorely needed to support recent price
moves. Quality Growth should return to favour as markets return to
fundamentals. Therefore, we look forward to 2014 with cautious optimism and
greater confidence that sticking to our long-standing investment approach will
be vindicated.

Montanaro Asset Management Limited
13 February 2014


Top Ten Holdings as at 31 December 2013

Company                Sector                                      % of total
                                                                    portfolio 
                                                                             
Consort Medical        Health Care Equipment and Services                 2.9
                                                                             
Mears Group            Support Services                                   2.8
                                                                             
James Fisher           Industrial Transportation                          2.7
                                                                             
Berendsen              Support Services                                   2.5
                                                                             
Big Yellow Group       Real Estate/Real Estate Investment Trusts          2.4
                                                                             
RPS Group              Support Services                                   2.3
                                                                             
NCC Group              Software and Computer Services                     2.3
                                                                             
Dechra Pharmaceuticals Pharmaceuticals & Biotechnology                    2.3
                                                                             
Victrex                Chemicals                                          2.2
                                                                             
Brewin Dolphin         General Financials                                 2.2


Sector Breakdown

Sector                         % of total    
                                portfolio    % of NSCI         
                                                      
Oil & Gas                             3.1          4.5
                                                      
Basic Materials                       4.8          5.1
                                                      
Industrials                          34.3         29.1
                                                      
Consumer Goods                       13.6          7.8
                                                      
Health Care                           6.8          3.2
                                                      
Consumer Services                    14.0         24.7
                                                      
Telecommunications                    3.6          2.3
                                                      
Utilities                             0.0          0.2
                                                      
Financials                           11.3         18.0
                                                      
Technology                            8.5          5.1
                                                      
                                    100.0        100.0


Change in Investment Manager's fee

As mentioned in the half-yearly report, with effect from 1 April 2014, the
investment management fee will decrease from 1% p.a. to 0.85% p.a. of gross
assets. In addition, the performance fee will be removed. Your Board believes
that these fee reductions will provide a more competitive and simpler
management fee structure. In addition, this will make fee comparisons with
other investment vehicles easier. Montanaro Asset Management Limited
("Montanaro") has a very successful long-term track record as an independent
quoted small company specialist investing in high quality growth companies.
Investment ideas for MUSCIT will continue to be generated internally by
Montanaro through detailed and skilled due diligence on companies they consider
to be undervalued.

Other than as stated above, the Directors are not aware of any significant
events or transactions which have occurred between 31 December 2013 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.