Interim Results

AURORA INVESTMENT TRUST plc
Results for the six months ended 31 August 2005
CHAIRMAN'S REVIEW

Net Asset Value Returns:  NAV 218.10p p sh (- 5.16%)


The first half of the current year has not been a good one for your
Company, the net asset value having declined by 5% to 218.1p per
share.  It is our stated objective to make money for our shareholders
and that we did not do.  Of course we cannot expect to make money
every year yet alone every half-year period but it is nevertheless
disappointing when we don't.  It adds to the disappointment when we
lose money at the same time as the stock market rises, which it did;
the FTSE All-share index, our benchmark, rose 6.6%.

The period has been dominated by the Oil & Gas Sector; the FTSE Oil &
Gas sub-sector index rose by 13.8% and was by far the largest
influence on the performance of the benchmark index.  The rest of the
market by contrast performed a lot less well.  We had rather too
little exposed to the sector, resulting in our rather poor
performance.  There were other reasons for it which included the
performance of the shares of our smaller companies - particularly
those involved in the technology sector - and our exposure to growth
stocks as opposed to defensive ones.

I should draw to the attention of shareholders note 3 of this report,
which explains the consequences for the Company of the change to
International Financial Reporting Standards (IFRS), with which we
must now comply, in common with all listed companies producing
consolidated accounts.  It means that the net asset values per share
we are reporting in this half year and for last year's corresponding
period are respectively 1.98p and 2.34p lower - at 218.10p and
172.47p per share - than they would have been or actually were under
the standards that applied previously.

As Shareholders are aware, our investment strategy centres on our
belief that we live in a deflationary world.  However, like the
course of true love, the course of deflation, or inflation for that
matter, never runs true.  There will always be times when there are
periods of reaction to the longer-term trend and such is the case
now.  At present we are in a period of rising inflation and it is not
an environment that suits our strategy.  Nevertheless, providing
central banks generally - and in the USA and China particularly  -
keep control of the supply of money, rising prices and rising
interest rates will act like tax increase, slow economies down and
encourage rather than discourage deflation.  However even if we are
in a period that doesn't suit our strategy, we could have had better
stock selection.

Our share price fell by 8.0% to 194.5p, that fall causing the
discount to rise from 8.0% (as restated under IFRS) to 10.8%.  It is
hardly surprising that this would happen, given that we are going
through a "soft patch".

Prospects:

The prospects for the economy would appear to be rather mixed.  The
economy's growth is clearly slowing down with the difficulties of the
high street, consumer expenditure being the main reason for it.
Consumers and companies are being hit with higher petrol prices,
higher energy costs generally, higher interest rates and higher
taxes, all of which detract from their ability to afford an increase
in the real consumption of goods and services.

However, companies in the UK are able to manage their businesses in
the interest of profitability; indeed over half of the profits of
quoted British companies are earned abroad (and are benefiting from
the fall in the value of the Pound).  Despite the economic
difficulties and the slow down, corporate cash flow is strong,
balance sheet strength is rising and profits and dividends are
increasing.  It may or may not be a great environment for the economy
but it seems to be one that companies can thrive in.  In any event,
James Barstow's stock selection concentrates on choosing companies
for investment that are not overly exposed to the UK economy.  He has
proved in the past that he can choose sectors and companies that
perform well in the portfolio; indeed the stocks that have not
performed well in this six month period are expected to do well in
the longer-term.  His colleagues on the Board believe that they will
do so, that the period of "soft" performance will pass and that we
will go on to make significant returns for shareholders.

Alex Hammond-Chambers
Chairman
28 October 2005



CONSOLIDATED INCOME STATEMENT


                     6 months to 6 months to 6 months to   6 months to 6 months to 6 months to
                         31 Aug.     31 Aug.     31 Aug.       31 Aug.     31 Aug.     31 Aug.
                            2005        2005        2005          2004        2004        2004
                     (unaudited) (unaudited) (unaudited)   (unaudited) (unaudited) (unaudited)
                                                            (restated)  (restated)  (restated)
                         Revenue     Capital       Total       Revenue     Capital       Total
               Notes       £'000       £'000       £'000         £'000       £'000       £'000

Gains and
losses on
investments
Gains/(losses)             (375)       (632)     (1,007)          (47)     (1,594)     (1,641)
on fair value
through profit
or loss
investments

Income
Investment                   335           -         335           414           -         414
income
Other              4           5           -           5             3           -           3
operating
income
                             340           -         340           417           -         417

Expenses
Investment                  (85)        (85)       (170)          (73)        (73)       (146)
management
fees
Other expenses             (142)        (48)       (190)          (91)        (17)       (108)
                           (227)       (133)       (360)         (164)        (90)       (254)

(Loss)/Profit              (262)       (765)     (1,027)           206     (1,684)     (1,478)
before finance
costs and tax

Finance costs              (104)       (104)       (208)          (72)        (72)       (144)
Exchange                       -       (115)       (115)             -        (67)        (67)
differences on
overdraft
                           (104)       (219)       (323)          (72)       (139)       (211)

(Loss)/Profit              (366)       (984)     (1,350)           134     (1,823)     (1,689)
before tax

Tax                          (6)           -         (6)             -           -           -

(Loss)/Profit              (372)       (984)     (1,356)           134     (1,823)     (1,689)
for the period

Earnings per       5                              (8.97)                              (11.18p)
share




The total column of this statement represents the Group's Income
Statement, prepared in accordance with IFRS.  The supplementary
revenue return and capital return columns are both prepared under
guidance published by the Association of Investment Trust Companies.
All items in the above statement derive from continuing operations.
All income is attributable to the equity holders of the parent
company.  There are no minority interests.


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


                               Six months    Six months
                                    ended         Ended    Year ended
                                31 August     31 August   28 February
                                     2005          2004          2005
                        Notes
                              (unaudited)   (unaudited)   (unaudited)
                                    £'000         £'000         £'000

Opening balance           3        34,743        28,175        28,175

Profit/(loss) for the
financial period/year     3       (1,356)       (1,689)         6,999

Dividends paid or
legally committed to be
paid on ordinary shares   6         (438)         (431)         (431)

Closing balance                    32,949        26,055        34,743



CONSOLIDATED BALANCE SHEET


                         At 31 August   At 31 August   At 28 February
                                 2005           2004             2005
                                          (restated)       (restated)
                          (unaudited)    (unaudited)      (unaudited)
                                £'000          £'000            £'000
Non-current assets
Investments - fair value       39,619         32,437           41,531
through profit or loss

Current assets
Investments                     1,238            143                -
Other receivables                 116             79              507
Cash and cash                      40            108              745
equivalents
                                1,394            330            1,252

Current liabilities
Bank loan                     (7,942)        (6,578)          (6,751)
Other payables                  (122)          (134)          (1,289)
                              (8,064)        (6,712)          (8,040)

Net current liabilities       (6,670)        (6,382)          (6,788)

Net assets                     32,949         26,055           34,743

Equity attributable to
equity holders
Share capital                   3,777          3,777            3,777
Share premium account          10,997         10,997           10,997
Capital reserves               17,759         10,481           18,743
Revenue reserve                   416            800            1,226

                               32,949         26,055           34,743





CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 August 2005


                                                       2005      2004
                                                      £'000     £'000

Cash flows from Operating Activities
Operating loss                                      (1,027)   (1,427)

Movement in non-current operating assets              1,912     2,060
Movement in receivables                               (847)     (148)
Movement in payables                                (1,167)     (798)

Interest paid                                         (208)      (85)

Tax paid                                                (6)       (7)

Net cash from operating activities                  (1,343)     (405)

Financing
Equity dividends Paid                                 (438)     (431)

Net cash from financing activities                    (438)     (431)

Net increase/(decrease) in cash and cash            (1,781)     (836)
equivalents

Cash and cash equivalents at beginning of period    (6,006)   (5,567)

Effect of foreign exchange rate changes               (115)      (67)

Cash and cash equivalents at end of period          (7,902)   (6,470)



NOTES

1.       Status of the financial statements

These financial statements are not the Group's statutory accounts as
defined in section 240 of the Companies Act 1985. The financial
information for the half years ended 31 August 2005 and 31 August
2004 has not been audited.

The information for the year ended 28 February 2005 has been
extracted from the latest published audited financial statements, as
restated to comply with IFRS (see note 3).  The audited financial
statements for the year ended 28 February 2005 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)
or (3) of the Companies Act 1985.

The directors approved the interim report on 28 October 2005.  This
interim report is being sent to shareholders and copies will be made
available to the public at the registered office of the Group.



2.   Accounting policies

The interim financial information has been prepared on the basis of
the recognition and measurement requirements of International
Financial Reporting Standards (IFRS), which are the accounting
policies to be used in the Report and Financial Statements of the
Group for the year ended 28 February 2006, as required for the
consolidated financial statements of listed companies.  Previously,
the consolidated financial statements were prepared in accordance
with United Kingdom Generally Accepted Accounting Principles (UK
GAAP) up to and including the year ended 28 February 2005.  UK GAAP
differs in some respects from IFRS.  In accordance with the rules of
IFRS, the date of transition to IFRS is deemed to be 1 March 2004, so
that the comparative information is also prepared under IFRS and has
been restated where necessary.  The accounting policies are unchanged
from those used in the last annual financial statements except where
otherwise stated.

The relevant changes of accounting policies are as follows:
(a)     The Group has elected to treat its investments as assets held
at fair value through profit or loss.  Under IFRS, the fair value for
quoted investments is deemed to be the market bid price.  Under UK
GAAP, investments were valued at mid market prices.
(b)     When investments are treated as assets held at fair value
through profit or loss, transaction costs on acquisition such as
brokers' commissions and stamp duty are recognised under IFRS as an
item of expense rather than, as in UK GAAP, being added to cost.
Transaction costs on sales of investments are recognised as an item
of expense rather than, as in UK GAAP, being deducted from realised
gains.  This has no overall effect on net assets.
(c)     Dividends payable are no longer treated as liabilities until
a legal obligation to pay them has arisen, which is deemed to be when
the dividend is declared.  Final dividends, which are approved and
thus declared by the Company in general meeting, are not therefore
reflected in the financial statements until the time of the Annual
General Meeting.  The Company does not pay interim dividends and
therefore no restatement is necessary in respect of interim
dividends.


3.   IFRS transition reconciliation

The restatements required by the changes in accounting policy, as set
out in note 2 above, are as follows:





(a) Profit after taxation
                                 Six months ended   Year ended
                                   31 August 2004   28 February  2005
                                      (unaudited)         (unaudited)
                                            £'000               £'000

Profit / (loss) for the
financial period/year, as
previously stated under UK
GAAP                                      (1,638)               7,001

Revaluation of investments to
bid prices                                   (51)                 (2)

As reported under IFRS                    (1,689)               6,999




(b) Net assets
                       At 31 August   At 28 February   At 29 February
                               2004             2005             2004
                        (unaudited)      (unaudited)      (unaudited)
                              £'000            £'000            £'000

Opening net assets, as
previously stated            26,409           34,610           28,047
under UK GAAP

Effect of valuation of        (354)            (305)            (303)
investments at bid
prices
Proposed dividends                -              438              431
written back (see note
2)

As reported under IFRS       26,055           34,743           28,175



(c)  Transaction costs


                                 Six months ended          Year ended
                                   31 August 2004   28 February  2005
                                      (unaudited)         (unaudited)
                                            £'000               £'000

Transaction costs added back to                18                  70
gains on investments and
included in other expenses (with
no net effect)



4.   Other operating income
Other operating income comprises bank interest.

 5.   Earnings per share

Earnings per share are based on 15,107,250 shares in issue throughout
the period and at the Balance Sheet date (2004: 15,107,250 shares).


6.   Dividends

In accordance with the stated policy of the Group, the directors do
not recommend an interim dividend.

The final dividend in respect of the year ending on 28 February 2005
was declared by the Annual General Meeting on 29 June 2005 and was
paid on 12 July 2005.  As explained in notes 2 and 3 above, this
dividend is no longer reflected in the financial statements as at 28
February 2005, but is reflected in the financial statements as at 31
August 2005.


7.   Net assets per share



                                   At 31 August   At 31 August
                                           2005           2004

Net asset value per ordinary share       218.10        172.47p




Secretary and registered office:
Cavendish Administration Limited
Crusader House
145-157 St John Street
London EC1V 4RU




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