Half Yearly Financial Report

RNS Number : 0018T

New India Investment Trust PLC

30 November 2011

NEW INDIA INVESTMENT TRUST PLC

UNAUDITED HALF-YEARLY FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2011

HIGHLIGHTS

Financial Summary	30 September 2011	31 March 2011	% change
Total equity shareholders' funds (£'000)	141,052	158,842	- 11.2
Share price (mid-market)	212.4p	243.5p	- 12.8
Net asset value per share	238.8p	268.9p	- 11.2
Discount to net asset value	11.1%	9.4%
Rupee to Sterling exchange rate	76.3	71.5	- 6.7

Performance (total return)	Six months ended 30 September 2011 %	Year ended 31 March 2011 %
Share price	- 12.8	+ 11.1
Net asset value	- 11.2	+ 12.3
MSCI India Index (Sterling adjusted)	- 20.5	+ 3.6

INTERIM BOARD REPORT

Overview

During the six months to 30 September 2011, the Company's net asset value fell by 11.2% to 238.8p. The Ordinary share price declined 12.8% to end the period at 212.4p, reflecting a widening of the discount to net asset value from 9.4% to 11.1%. The performance is well ahead of the benchmark, the MSCI India Index, which fell by 20.5% on a total return basis.

It is worthwhile to note that the decline was not unique to India as losses were seen across Asia, with the MSCI AC Asia Pacific Index falling by around 12.9% in sterling terms. Concerns that rising inflation - a corollary of robust economic growth - and further monetary tightening would crimp corporate profits gave investors the chance to take profits during the review period. The worsening debt crises in both Europe and the US also contributed to a global sell-off in risk assets, exacerbating the decline in local equities.

Economic growth in India, however, remains relatively healthy and will continue to outpace much of the region. The country is seeing millions emerge out of poverty each year. The country has a low dependency ratio. Against this, there are perennial problems, corruption being one. The banking and telecom scandals involving public officials are not expected to be resolved any time soon and this dented investor sentiment during the half year.

At the corporate level as well, India's progress has been extraordinary. The best companies are leaders in their field, possessing sustainable business models, robust finances, leadership positions and pricing power. Their defensive characteristics are what helped them stay resilient amid the global equity rout. A detailed performance review follows in the Manager's Report.

Outlook

These are tough times for global markets. Europe's debt problems appear insurmountable in the short term. Economic growth in much of the developed world is faltering and deleveraging continues at the corporate and consumer levels. While Asia is making good progress in building up domestic demand in the face of weakening overseas growth, a further correction in India should not be unexpected given that it remains heavily reliant on foreign fund flows.

Despite the bleak global outlook, I am upbeat about India's future and, by extension, the holdings in the Company. I am further encouraged by the Manager's bottom-up investment style of stock-picking.

William Salomon

Chairman

29 November 2011

Risks and Uncertainties

The Board seeks to set out below its view of the principal key risks affecting its business. The Board is aware that, apart from those issues it can identify, there are likely to be matters about which it does not or cannot know which may also affect the Company.

With that reservation, the Board believes that the factors which could have the most significant adverse impact on shareholders would be likely to include:

· falls in the prices of securities in Indian companies, which may be themselves determined by local and international economic, political and financial factors and management actions;

· adverse movements in the exchange rate between sterling and the rupee as well as between other currencies affecting the overall value of the portfolio;

· a lack of skill by the Company's investment management team;

· factors which affect the discount to net asset value at which the Ordinary shares of the Company trade. These may include the popularity of the investment objective of the Company, the popularity of investment trust shares in general and the ease with which the Company's Ordinary shares can be traded on the London Stock Exchange;

· changes in or breaches of the complicated set of statutory, tax and regulatory rules within which the Company seeks to conduct its business; this includes the impact on the Company of the introduction of the European Commission's Directive on Alternative Investment Fund Managers; and

· insolvency of a custodian or sub-custodian combined with a shortfall in the assets held by that custodian or sub-custodian arising from fraud, operational errors or settlement difficulties resulting in a loss of assets owned by the Company.

Some of these risks can be mitigated or managed to a greater or lesser extent by the actions of the Board in appointing competent Managers and custodians. In addition, the Board seeks to put in place, through its contractual arrangements and through various monitoring processes, controls which should avert (but do not guarantee the avoidance of) what might be regarded as operational mistakes. However, investment tends to involve both risk and opportunity regarding future prospects, and the Board cannot avoid either in the Company's search for returns.

Going Concern

In accordance with the Financial Reporting Council's guidance on Going Concern and Liquidity Risk, the Directors have undertaken a review of the Company's ability to continue as a going concern. The Company's assets consist of a diverse portfolio of listed equity shares which in most circumstances are realisable within a short timescale. The Directors are mindful of the principal risks and uncertainties outlined above and have reviewed forecasts detailing revenue and liabilities; accordingly, the Directors believe that the Company has adequate financial resources to continue in operational existence for the foreseeable future and at least 12 months from the date of this Report.

This is also based on the assumption that the Ordinary resolution, that the Company continues as an investment trust, which will be proposed at the next Annual General Meeting of the Company, is passed as it has been in the years since it was put in place.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Half-Yearly Financial Report, in accordance with applicable law and regulations. The Directors confirm that, to the best of their knowledge:

· the condensed set of financial statements within the Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'; and

· the Interim Management Report includes a fair review of the information required by 4.2.7R (indication of important events during the first six months of the year) and 4.2.8R (disclosure of related party transactions and changes therein) of the FSA's Disclosure and Transparency Rules.

The Half-Yearly Financial Report for the six months ended 30 September 2011 comprises the Interim Management Report in the form of the Interim Board Report, the Statement of Directors' Responsibilities and a condensed set of financial statements, and has not been audited or reviewed by the Independent Auditor pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information. The Manager's Report is provided for information only, and is the responsibility of Aberdeen Asset Management Asia Limited.

By order of the Board

William Salomon

Chairman

29 November 2011

MANAGER'S REPORT

Overview

Equities in the Indian stockmarket fell during the half-year under review, with the benchmark MSCI India Index posting a decline of more than 20% in sterling terms. Domestically, aggressive monetary policy tightening sowed fears of deteriorating economic growth and corporate earnings, while corruption scandals in the telecom and mining sectors, implicating both government ministers and captains of industry, deterred foreign inflows. Sentiment was dented further by external headwinds that included the widening European debt crisis and America's unprecedented credit-rating downgrade, as risk aversion and volatility heightened. Understandably, the rupee weakened sharply against the US dollar amid the global rout.

While GDP growth rates did moderate, the economy continued expanding at a respectable pace of 7.7% year-on-year in the June-quarter. The slowdown was the consequence of the central bank's dogged focus on containing price increases. It raised interest rates 12 times in 18 months, the most sustained stretch of monetary tightening in a decade. Higher rates, in turn, curtailed consumer discretionary spending and businesses were forced to defer their planned investments. Although corporate earnings stayed resilient, companies were indeed feeling the impact of higher costs, as well as the slowdown in final demand, which was borne out by sluggish manufacturing data and a contraction in capital goods produced.

Rising fuel and food prices were the main culprits behind high inflation. While the Reserve Bank of India may be commended for being proactive, the government's decision to mitigate the losses of state-owned oil companies by lifting energy prices proved counterproductive. As a result, the wholesale price index remained stubbornly high. It must be noted that interest rates alone seemed unable to counter price increases because not all of the drivers of inflation were cyclical or interest rate sensitive. Rather, there are structural factors, particularly supply-side bottlenecks, that can only be overcome with much needed investments to expand capacity and improve infrastructure. Ironically, these are being thwarted by higher borrowing costs.

On the political front, corruption scandals forced the prime minister to reshuffle his cabinet twice but this appeared to do little to jolt policymakers from their inertia. It took 74-year-old activist Anna Hazare's 12-day hunger strike to get government to consider tougher anti-graft legislation. On a positive note, there seemed to be some focus on the need for greater equitability, with lawmakers passing a new bill for adequate compensation in compulsory land acquisitions. Elsewhere, the stockmarket regulator's move to raise the mandatory takeover threshold was seen as bringing the market in line with regional norms, while levelling the playing field for minority shareholders.

Performance Attribution Analysis

The portfolio fell 10.7% in sterling terms for the six months to end-September, but still outperformed the benchmark MSCI India Index, which fell by a steeper 20.5%.

At the sectoral level, the top contributors to relative performance were our holdings in materials as well as consumer staples and discretionary segments. Even information technology, the worst performing sector, added positively to relative performance.

In the materials sector, Grasim Industries' shares posted strong gains on signs of firming product prices as capacity utilisation in the sector improved after aggressive expansion by producers over the last two to three years. At the same time, Ambuja Cements rebounded from the underperformance in the previous period even though its net profits fell on the back of higher operating costs.

Consumer sector holdings Hero MotoCorp and Bosch India, along with Godrej Consumer Products and Nestle India, as well as drugmakers Aventis Pharma and Glaxo SmithKline Pharmaceutical did well during the period. For Hero, the uncertainty over its breakup with long-time collaborator Honda Motor was finally removed after the Munjal family completed the acquisition of its partner's 26% stake. For our consumer staples holdings, demand for their products was resilient, as management seemed able to contain their cost structures and did not give in to predatory pricing, which would have caused consumption to shrink.

Elsewhere, our financial holdings, such Housing Development Finance Corp, were also resilient during the half year, buttressed by robust loan growth, while not holding Reliance Industries proved beneficial as the index heavyweight continued to grapple with lower-than-expected profit growth and worries over the erosion of refining margins.

Portfolio Activity

During the half year, we sold Sun Pharmaceutical in favour of better prospects elsewhere, making the most of the run-up in its share price after the announcement of its annual results. Despite its strength as a producer of generic drugs, the company was bogged down by a hostile takeover in Israel, as well as the tough regulatory environment in the US.

Outlook

Political inaction is likely to continue capping the country's growth prospects and limiting private investment. More market reforms are needed to remove existing structural rigidities, not just lip service. It remains to be seen if the reshuffled government will follow through in implementing these reforms.

The good news is that India is likely to be buffered from the global economic slowdown because of its low dependence on exports. Falling commodity prices should ease inflation and alleviate pressure on the central bank to hike rates further. Given the high interest rate environment and soft consumer demand, however, credit growth may ease while industrial activity is likely to stay subdued for the rest of the year. This is likely to have an impact on corporate bottom lines. Nevertheless, our holdings tend to be helmed by management who have weathered previous downturns and are more than able to steer their companies through these challenging times.

Aberdeen Asset Management Asia Limited

Manager

29 November 2011

Manager's performance

The table below compares the net asset value per Ordinary share total return to the total return of the benchmark MSCI India Index (Sterling adjusted) -

Cumulative performance for periods ended 30 September 2011	Net asset value per Ordinary share %	MSCI India Index (Sterling-adjusted) %
6 months	- 11.2	- 20.5
Calendar year to date	- 17.4	- 26.4
1 year	- 13.5	- 24.2
3 years	+ 67.9	+ 44.1
5 years	+ 74.3	+ 53.4

INVESTMENT PORTFOLIO - GROUP

As at 30 September 2011

		Valuation	Net assets
Company	Sector	£'000	%
Infosys Technologies{A}	Information Technology	13,824	9.8
Housing Development Finance Corporation	Financials	13,700	9.7
ICICI Bank	Financials	11,449	8.1
Tata Consultancy Services	Information Technology	11,249	8.0
Hero Motocorp	Consumer Discretionary	7,523	5.3
Gujarat Gas	Utilities	5,180	3.7
Hindustan Unilever	Consumer Staples	5,170	3.7
Bosch	Consumer Discretionary	5,146	3.6
ITC	Consumer Staples	4,999	3.5
Grasim Industries {A}	Materials	4,931	3.5
Top ten investments		83,171	58.9
HDFC Bank	Financials	4,890	3.5
Godrej Consumer Products	Consumer Staples	4,844	3.4
Ambuja Cements {A}	Materials	4,718	3.4
GlaxoSmithKline India	Healthcare	4,493	3.2
MphasiS	Information Technology	4,369	3.1
Nestlé India	Consumer Staples	3,820	2.7
Gail (India) GDR	Utilities	3,649	2.6
Container Corporation of India	Industrials	3,646	2.6
Bharti Airtel	Telecommunication Services	3,568	2.5
Aventis Pharma	Healthcare	3,420	2.4
Top twenty investments		124,588	88.3
Piramal Healthcare	Healthcare	3,059	2.2
Kansai Nerolac Paints	Materials	2,971	2.1
Tata Power	Utilities	2,537	1.8
ABB India	Industrials	2,515	1.8
CMC	Information Technology	1,730	1.2
Ultratech Cement{A}	Materials	1,578	1.1
Castrol India	Materials	1,216	0.9
Total investments		140,194	99.4
Net current liabilities		858	0.6
Net assets		141,052	100.0
{A} Comprises equity and listed or tradeable ADR and GDR holdings.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		Six months ended			Six months ended
		30 September 2011			30 September 2010
		(unaudited)			(unaudited)
		Revenue	Capital		Revenue	Capital
		return	return	Total	return	return	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Total revenue	3	1,888	-	1,888	1,590	-	1,590
(Losses)/gains on investments held at fair value		-	(18,490)	(18,490)	-	22,174	22,174
Currency losses		-	(11)	(11)	-	(136)	(136)
		_______	_______	_______	_______	_______	_______
		1,888	(18,501)	(16,613)	1,590	22,038	23,628
		_______	_______	_______	_______	_______	_______

Expenses
Investment management fees		(755)	-	(755)	(696)	-	(696)
Performance fees		-	-	-	-	(828)	(828)
Other administrative expenses		(398)	-	(398)	(410)	(2)	(412)
		_______	_______	_______	_______	_______	_______
Profit/(loss) before taxation		735	(18,501)	(17,766)	484	21,208	21,692
Taxation	4	(25)	-	(25)	(20)	-	(20)
		_______	_______	_______	_______	_______	_______
Profit/(loss) for the period		710	(18,501)	(17,791)	464	21,208	21,672
		_______	_______	_______	_______	_______	_______
Return per Ordinary share (pence)	5	1.20	(31.31)	(30.11)	0.91	41.81	42.72
		_______	_______	_______	_______	_______	_______

The Group does not have any income or expense that is not included in profit for the period, and therefore the "Profit for the period" is also the "Total comprehensive income for the period", as defined in International Accounting Standard 1 (revised).

The total column of this statement represents the Statement of Comprehensive Income of the Group, prepared in accordance with International Financial Reporting Standards ("IFRS"). The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of New India Investment Trust PLC. There are no minority interests.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Cont'd)

		Year ended
		31 March 2011
		(audited)
		Revenue	Capital
		return	return	Total
	Notes	£'000	£'000	£'000
Total revenue	3	2,338	-	2,338
Gains on investments held at fair value		-	18,679	18,679
Currency losses		-	(131)	(131)
		_______	_______	_______
		2,338	18,548	20,886
		_______	_______	_______

Expenses
Investment management fees		(1,487)	-	(1,487)
Performance fees		-	(1,225)	(1,225)
Other administrative expenses		(775)	-	(775)
		_______	_______	_______
Profit before taxation		76	17,323	17,399
Taxation	4	7	-	7
		_______	_______	_______
Profit for the period		83	17,323	17,406
		_______	_______	_______
Return per Ordinary share (pence)	5	0.15	31.56	31.71
		_______	_______	_______

All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of New India Investment Trust PLC. There are no minority interests.

CONSOLIDATED BALANCE SHEET

		As at	As at	As at
		30 September	30 September	31 March
		2011	2010	2011
		(unaudited)	(unaudited)	(audited)
	Notes	£'000	£'000	£'000
Non-current assets
Investments held at fair value through profit or loss		140,194	160,835	157,540
		__________	__________	__________
Current assets
Cash at bank		710	3,395	2,923
Other receivables		1,190	80	600
		__________	__________	__________
Total current assets		1,900	3,475	3,523
		__________	__________	__________
Total assets		142,094	164,310	161,063

Current liabilities
Other payables		(1,042)	(1,202)	(2,221)
		__________	__________	__________
Total current liabilities		(1,042)	(1,202)	(2,221)
		__________	__________	__________
Net assets		141,052	163,108	158,842
		__________	__________	__________

Capital and reserves
Ordinary share capital	8	14,768	14,768	14,768
Share premium account		25,406	21,377	25,406
Special reserve		15,778	15,778	15,778
Warrant exercise reserve		-	4,029	-
Capital redemption reserve		4,484	4,484	4,484
Capital reserve	9	78,982	101,368	97,483
Revenue reserve		1,634	1,304	923
		__________	__________	__________
		141,052	163,108	158,842
		__________	__________	__________
Net asset value per Ordinary share (pence)	10	238.79	276.13	268.90
		__________	__________	__________

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Six months ended 30 September 2011 (unaudited)
				Share		Capital
			Share	premium	Special	redemption	Capital	Revenue
			capital	account	reserve	reserve	reserve	reserve	Total
			£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2011			14,768	25,406	15,778	4,484	97,483	923	158,842
Net (loss)/gain on ordinary activities after taxation			-	-	-	-	(18,501)	710	(17,791)
Return of unclaimed dividends			-	-	-	-	-	1	1
			______	______	______	______	______	______	______
Balance at 30 September 2011			14,768	25,406	15,778	4,484	78,982	1,634	141,052
			______	______	______	______	______	______	______

Six months ended 30 September 2010 (unaudited)
		Share			Warrant	Capital
	Share	premium	Special	Warrant	exercise	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2010	11,739	12,290	15,778	3,801	228	4,484	80,160	840	129,320
Net gain on ordinary activities after taxation	-	-	-	-	-	-	21,208	464	21,672
Issue of share capital upon exercise and expiry of warrants	3,029	9,087	-	(3,801)	3,801	-	-	-	12,116
	______	______	______	______	______	______	______	______	______
Balance at 30 September 2010	14,768	21,377	15,778	-	4,029	4,484	101,368	1,304	163,108
	______	______	______	______	______	______	______	______	______

Year ended 31 March 2011 (audited)
		Share			Warrant	Capital
	Share	premium	Special	Warrant	exercise	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2010	11,739	12,290	15,778	3,801	228	4,484	80,160	840	129,320
Net gain on ordinary activities after taxation	-	-	-	-	-	-	17,323	83	17,406
Issue of share capital upon exercise of warrants	3,029	9,087	-	(3,801)	3,801	-	-	-	12,116
Transfer following final exercise of warrants	-	4,029	-	-	(4,029)	-	-	-	-
	______	______	______	______	______	______	______	______	______
Balance at 31 March 2011	14,768	25,406	15,778	-	-	4,484	97,483	923	158,842
	______	______	______	______	______	______	______	______	______

CONSOLIDATED CASH FLOW STATEMENT

	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2011	2010	2011
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Operating activities
(Loss)/profit before taxation	(17,766)	21,692	17,399
Losses/(gains) on investments held at fair value through profit or loss	18,490	(22,174)	(18,679)
Net losses on foreign exchange	11	136	131
Net purchases of investments held at fair value through profit or loss	(1,144)	(9,552)	(9,751)
Increase in amounts due from brokers	(863)	-	(266)
Decrease/(increase) in other receivables	254	128	(107)
Increase in amounts due to brokers	239	-	575
(Decrease)/increase in other payables	(1,424)	896	1,347
	__________	__________	__________
Net cash outflow from operating activities	(2,203)	(8,874)	(9,351)

Financing activities
Exercise of warrants	-	12,116	12,116
Return of unclaimed dividends	1	-	-
	__________	__________	__________
Net cash inflow from financing activities	1	12,116	12,116
	__________	__________	__________
Net (decrease)/increase in cash and cash equivalents	(2,202)	3,242	2,765

Cash and cash equivalents at the start of the period	2,923	289	289
Effect of foreign exchange rate changes	(11)	(136)	(131)
	__________	__________	__________
Cash and cash equivalents at the end of the period	710	3,395	2,923
	__________	__________	__________

Notes to the Half-Yearly Financial Report

1.	Principal activity
	The principal activity of the Company is that of an investment trust company within the meaning of Section 1158 of the Corporation Tax Act 2010.

	The principal activity of its foreign subsidiary is similar in all relevant respects to that of its United Kingdom parent.

Accounting policies

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) 34 - 'Interim Financial Reporting', as adopted by the International Accounting Standards Board (IASB), and interpretations issued by the International Reporting Interpretations Committee of the IASB (IFRIC). The Group's financial statements have been prepared using the same accounting policies applied for the year ended 31 March 2011 financial statements, which received an unqualified audit report.

		Six months ended	Six months ended	Year ended
		30 September 2011	30 September 2010	31 March 2011
3.	Income	£'000	£'000	£'000
	Income from investments
	Overseas dividends	1,886	1,586	2,333
	Other operating income
	Deposit & other interest	2	4	5
		__________	__________	__________
	Total income	1,888	1,590	2,338
		__________	__________	__________

			Six months ended	Six months ended	Year ended
			30 September 2011	30 September 2010	31 March 2011
4.	Tax on ordinary activities		£'000	£'000	£'000
	(a)	Current tax:
		Overseas tax	25	20	(7)
			__________	__________	__________

	(b)	Factors affecting the tax charge for the year or period
		The tax charged for the period can be reconciled to the profit per the Consolidated Statement of Comprehensive Income as follows:

			Six months ended	Six months ended	Year ended
			30 September 2011	30 September 2010	31 March 2011
			£'000	£'000	£'000
		(Loss)/profit before tax	(17,766)	21,692	17,399

		Corporation tax on (loss)/profit at the standard rate of 26% (30 September 2010 and 31 March 2011 - 28%)	(4,619)	6,074	4,872
		Effects of:
		Losses/(gains) on investments held at fair value through profit or loss not taxable	4,807	(6,209)	(5,230)
		Currency losses not taxable	3	38	37
		Movement in excess expenses	299	542	974
		Non taxable dividend income	(490)	(445)	(653)
		Overseas tax	25	20	(7)
			__________	__________	__________
		Current tax charge	25	20	(7)
			__________	__________	__________

		The Company is exempt from corporation tax on capital gains provided it obtains agreement from HM Revenue & Customs that the tests within Sections 1158-1159 of the Corporation Tax Act 2010 have been met. Under Mauritian taxation laws, no Mauritian capital gains tax is payable on profits arising from the sale of securities.

5.	Return per Ordinary share
	The basic earnings per Ordinary share is based on the net loss after taxation of £17,791,000 (30 September 2010 - net profit of £21,672,000; 31 March 2011 - net profit of £17,406,000), and on 59,070,140 (30 September 2010 - 50,727,978; 31 March 2011 - 54,882,122) Ordinary shares, being the weighted average number of Ordinary shares in issue during the period.

	The earnings per Ordinary share can be further analysed between revenue and capital as follows:

		Six months ended	Six months ended	Year ended
		30 September 2011	30 September 2010	31 March 2011
		p	p	p
	Revenue return per share	1.20	0.91	0.15
	Capital return per share	(31.31)	41.81	31.56
		__________	__________	__________
	Total	(30.11)	42.72	31.71
		__________	__________	__________

		Six months ended	Six months ended	Year ended
		30 September 2011	30 September 2010	31 March 2011
		£'000	£'000	£'000
	Revenue return total	710	464	83
	Capital return total	(18,501)	21,208	17,323
		__________	__________	__________
	Total	(17,791)	21,672	17,406
		__________	__________	__________
	Weighted average number of Ordinary shares in issue	59,070,140	50,727,978	54,882,122
		_____________	_____________	_____________

6.	Dividends on equity shares
	No interim dividend has been declared in respect of either the six months ended 30 September 2011 or 30 September 2010.

	During the year ended 31 March 2011, a dividend of £150,000 was paid up from the subsidiary company to the parent company.

7.	Transaction costs
	During the period expenses were incurred in acquiring or disposing of investments classified as fair value though profit or loss. These have been expensed through capital and are included within (losses)/gains on investments in the Consolidated Statement of Comprehensive Income. The total costs were as follows:

		Six months ended	Six months ended	Year ended
		30 September 2011	30 September 2010	31 March 2011
		£'000	£'000	£'000
	Purchases	29	65	85
	Sales	27	28	38
		__________	__________	__________
		56	93	123
		__________	__________	__________

8.	Ordinary share capital
	In the year to 31 March 2011, the remaining 12,115,997 Warrants were exercised at a price of 100p each, creating 12,115,997 new Ordinary Shares which were issued for a total consideration of £12,115,997. As a result of this, £3,801,033 was transferred from the warrant reserve to the warrant exercise reserve.

	As at 30 September 2011 there were 59,070,140 (30 September 2010 and 31 March 2011 - 59,070,140) Ordinary shares in issue.

9.	Capital reserve
	The capital reserve reflected in the Consolidated Balance Sheet at 30 September 2011 includes gains of £58,993,000 (30 September 2010 - gains of £87,548,000; 31 March 2011 - gains of £81,788,000) which relate to the revaluation of investments held at the reporting date.

10.	Net asset value per Ordinary share
	The basic net asset value per Ordinary share is based on a net asset value of £141,052,000 (30 September 2010 - £163,108,000; 31 March 2011 - £158,842,000) and on 59,070,140 (30 September 2010 and 31 March 2011 - 59,070,140) Ordinary shares, being the number of Ordinary shares in issue at the period end.

11.	Half-Yearly Financial Report
	The financial information contained in this Half-Yearly Financial Report does not constitute statutory accounts as defined in Sections 434 - 436 of the Companies Act 2006. The financial information for the six months ended 30 September 2011 and 30 September 2010 has not been audited.

	The information for the year ended 31 March 2011 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 237 (2), (3) or (4) of the Companies Act 2006.

	The Half-Yearly Financial Report has not been reviewed or audited by the Company's Independent Auditor.