Interim Results

SVM UK EMERGING FUND plc Unaudited results for the six months to 30 September 2004 KEY POINTS * Revised mandate to allow Managers to hold investments in unquoted, OFEX and AIM as well as invest up to 20% in other securities and instruments * Net asset value per ordinary share is 32.2p * Portfolio currently has a 38% exposure to AIM listed companies. * Broader investment remit should provide the Managers with increased opportunities to generate attractive investment returns for shareholders. - Ends - For further information, please contact: David Stevenson SVM Asset Management 0131 226 6699 Roland Cross Broadgate 020 7726 6111 SVM UK EMERGING FUND PLC Chairman's Statement Unaudited results for the six months to 30 September 2004 "At the AGM on 3 September 2004, shareholders voted in favour of a new investment objective for the Fund together with a new name, SVM UK Emerging Fund plc. The Managers are now able to hold investments in unquoted, OFEX and Alternative Investment Market (AIM) companies and may also invest up to 20% of the Fund in other securities and instruments. The Fund's benchmark has also been changed to the AIM index, reflecting a new focus to the portfolio. These changes were introduced at the very end of the period under review and consequently were not able to have an immediate impact on the Fund's performance. At 30 September 2004, the Fund's NAV was 32.2p. Poor investor appetite and dealing liquidity remain major issues for the OFEX market, which has itself been forced to refinance and restructure recently. During the quarter to September, there were positive announcements from a number of holdings. Shares in healthcare facility developer, Ashley House, rose 85% after it reported reduced losses and a corporate restructuring giving shareholders exposure to its underlying property portfolio. Genomics technology company, Molecular Sensing, rose more than 40% after it was bid for by AIM-listed Osmetech. IT outsourcer, Red Squared, responded well to positive trading news and a move to AIM, gaining 76%. Other AIM promotions during the period involved printer Printing.com, environmental services group TEG and biotech company Disperse. In October, music copyright manager MCS was also promoted. However, these positive developments were more than offset by share price declines in hospital equipment manufacturer, Dawmed, which fell 18% on a delayed launch for its new benchtop product; smoke alarm manufacturer, Sprue Aegis, which fell 50% on weaker year-on-year sales but better news regarding the granting of US patent rights; and TEG which had a discounted AIM fundraising and dropped 48%. The managers do not believe such devaluations reflect the underlying fundamental strengths of these businesses. Subsequent to the change in remit, successful investments have been made in a number of new companies. In particular, AIM-listed oil & gas explorer Petrel Resources and money transfer provider NETeller made gains of 16% and 40%, respectively, in September. To provide funds for this re-investment, the managers are selectively selling from the portfolio where liquidity allows and valuations are attractive. Positions in Disperse, LoQ and Eden Research have been realised, whilst holdings in Printing.com, Britannia Finance and Symphony Plastics have been reduced. Adjusting for MCS's promotion in October, the portfolio had a 38% exposure to AIM at the period end. Under the wider remit, this has subsequently been increased further and the managers are now able to exploit an increased number of opportunities to generate attractive investment returns for shareholders." Peter Dicks Chairman 19 November 2004 . Summarised Unaudited Statement of Total Return 6 months to 30 September 6 months to 30 September 2004 2003 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Losses on sale of - (19) (19) - (103) (103) investments Movement in - (225) (225) - (154) (154) unrealised depreciation -------- -------- -------- -------- -------- -------- Losses on - (244) (244) - (257) (257) investments Income 1 - 1 2 - 2 Investment - - - - (12) (12) management fees Other expenses (29) - (29) (46) - (46) -------- -------- -------- -------- -------- -------- Transfer from (28) (244) (272) (44) (269) (269) reserves -------- -------- -------- -------- -------- -------- Return per ordinary (0.51p) (4.46p) (4.97p) (0.81p) (4.93p) (5.74p) Share . Unaudited Balance Sheet As at As at 30 September 30 September 2004 2003 £'000 £'000 Investments 1,706 2,649 Net current assets 50 76 --------- --------- Ordinary shareholders funds 1,756 2,725 --------- --------- Net asset value per ordinary share 32.17p 49.91p . Summarised Unaudited Cash Flow 6 months to 6 months to Statement 30 September 30 September 2004 2003 £'000 £'000 Net cash flow from operating (38) (48) activities Capital expenditure and financial 2 (214) investment Servicing of finance - (1) -------- -------- Decrease in cash (36) (263) -------- -------- . Notes 1. The results reflect the adoption in the accounts of the Statement of Recommended Practice (SORP) issued by the Association of Investment Trust Companies. 2. Returns per Ordinary Share are based on 5,460,000 shares in issue during the period (30 September 2003 - same). The number of shares in issue at 30 September 2004 was 5,460,000. (30 September 2003- same). 3. The above figures do not constitute full accounts in terms of Section 240 of the Companies Act 1985. The accounts for the year to 31 March 2004, which were unqualified, have been lodged with the Registrar of Companies. The interim report will be mailed to shareholders towards the end of November 2004. Copies will be available for inspection at 7 Castle Street, Edinburgh, the registered office of the Company. ENDS

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