Final Results

India Capital Growth Fund Limited
13 March 2008


13 March 2008

INDIA CAPITAL GROWTH FUND LIMITED


PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007


CHAIRMAN'S STATEMENT


The Company has now completed two years of its life. On its first anniversary I
wrote that it was well placed to fulfil the optimism inherent in its name. In
2007 the Company translated that potential into reality. The first six months of
the year produced a rise in Net Asset Value of 25%. In the second half of the
year, NAV rose by a further 41%, giving a total rise of 75.9% for the year. This
rise follows generally strong markets, but also reflects consistent and highly
profitable growth from a number of the investee companies.


My Board colleagues and I again visited India in September 2007 and visited 10
companies in a range of sectors and in three cities, Mumbai, Chennai and Rajkot.
This first hand experience of the energy and ambition of the investee companies
reinforced our belief that, while stock markets may continue to be volatile, the
opportunity for these companies is substantial, as is their willingness and
ability to achieve. We continue to be extremely positive about the prospects for
our investee companies.


The India Capital Growth Fund Limited has a different focus and investment style
to that found in the vast majority of India funds. The Company's focus is on
small and mid sized companies (up to 25% in unlisted securities), and is
relatively highly concentrated in a few investments (25 as on 31 December). This
contrasts with other funds which tend to invest in the larger and more liquid
stocks and generally have a broader portfolio of over 50 stocks. This focus and
concentration enables the Company and its manager to help investee companies to
realise value, either through attracting a wider and better shareholder base,
non executive board level support or guidance on organic and inorganic (M&A)
growth. It is particularly pleasing that we have seen a number of our small-cap
investments become mid-cap companies during the year.


Risks remain, as they do in all endeavours, but it is our belief that the small
and mid sized companies in our portfolio epitomise the growth and wealth
creation occurring in India. It is these types of companies that are providing
the impetus for much of the growth that is resulting in India obtaining a
greater share of global GDP.


The first two months of 2008 have demonstrated that volatility and contagion are
a feature of the global economy and Indian equity markets have been affected as
much as any others. However, as the Investment Manager's report states, India
has a low ratio of exports to GDP (15.6%) and its local markets continue to grow
very strongly. GDP growth for the quarter ended 31 December 2007 was at an
annualised rate of 9.6% and company earnings and profits are expected to
continue to rise at a healthy pace. The Indian stock market reached an all time
high on 11th January, by which time most world markets were already in retreat.
For a while it looked as though India, with its fast growing domestic economy,
could remain immune to the contagion of American sub-prime problems. However
this proved a false hope, but we believe India is capable of shaking off the
malaise faster than most. We are convinced that this market is trading in the
foothills of a mighty range and although such setbacks will continue to occur
they will appear insignificant in years to come.


It is at times such as this that the Company reaps the benefits of its
closed-end status, with no danger of the manager being forced to liquidate
cherished holdings at distressed prices - rather opportunities arise to buy at
attractive levels. It is disappointing that at times such as these our discount
widens; but this seems a small price to pay for the stability we enjoy and
presents shareholders with the opportunity to buy further shares at an
attractive discount.


Micky Ingall
Chairman
13 March 2008



SUMMARY INVESTMENT MANGER'S REPORT


The Market Environment

Indian equity markets had an excellent year in 2007. The BSE Sensex, the BSE Mid
Cap Index and the BSE Small Cap Index rose 45.5%, 66.7%, and 90.6% respectively.
This was on the back of continued corporate growth, low inflation and strong
investment inflows by Foreign Institutional Investors ('FII's') who invested a
net US$17.2 bn during the year.


India appeared to be 'de-coupled' from troubles in the US, and the BSE Sensex
reached a peak on the 11th January 2008. FII's however then withdrew US$3.2bn
from the market in January, in contrast to their net investment of US$1.4bn in
December 2007, and liquidity was further constrained by the Reliance Power IPO
(which received applications totalling US$190bn for the US$3 bn of shares on
offer). Positions in Indian futures and options became untenable and the BSE
Sensex fell 23.5% between its peak and 7 March 2008. The fall in mid- and
small-cap stocks was magnified with the BSE mid-cap index falling 32.7% and the
BSE small-Cap index falling 39.8% in that period.


Despite these highly volatile market movements we continue to remain positive
about the Indian economy and believe market sentiment will recover as it did
after falls in May 2006 and February 2007. There are four main reasons behind
our positive outlook.


• Growth remains robust and inflation under control. From a growth rate of 3.5%
between 1960 and 1980 and 6.0% in the 1980s, GDP is now growing at between 8%
and 9% per annum.


• Corporate earnings and performance continue to be positive. Corporate profits
have grown by over 20% year on year in recent years. The average debt-equity
ratio for the Bombay Stock Exchange (BSE) 500 companies (excluding banks)
declined from 120% in the first half of the 1990s to 54% over FY04-FY07.
Annualised PAT (profit after taxes) growth for the trailing twelve months to 31
December 2007 was 29.5%, 43.6% and 40.0% for the BSE Sensex, BSE mid Cap and BSE
small Cap companies.

• India has a low ratio of exports to GDP at 15.2%, compared to 36.6% for China
and 100% for Hong Kong and Singapore. Domestic consumption is driving growth and
there is no evidence of a slow down despite US sub prime problems.


• While FII's have recently reduced their exposure to Indian markets they remain
long term buyers. Local savings are also high. Gross domestic investment, as a
percentage of GDP, has increased from 28.0% in 2004 to 35% in 2007, while gross
domestic savings have risen from 29.7% to 34% of GDP. This shows that there is
sufficient capital for both Indian primary and secondary markets to sustain the
pace of growth.


Thus, while in the short term Indian markets may continue to be volatile, the
prospects for a sustained, high rate of real economic growth is good and both
company fundamentals and the Indian stock market should perform very well over
the medium to long term.


Portfolio Performance and Investment Strategy
1 January 2007 to 31 December 2007


The Company's undiluted NAV increased by 75.9% and fully diluted NAV increased
by 64.5% in 2007, benefiting from strong and profitable growth in portfolio
company businesses, buoyant equity markets and a strengthening of the Rupee
against Sterling (up 9.4%). The first two months of 2007 were relatively flat,
but March saw a sharp fall in the market. This correction proved relatively
short lived, and for the balance of the year there was a strong upward momentum.
In this period small and mid-cap companies outperformed their large-cap
counterparts.


Summary of Activity in 2007


During the year we have retained or increased our stake in selected investee
companies where we back the promoters and management teams and believe the
business plans and developments are on track. We remain an active and supportive
shareholder in core companies in the portfolio, assisting investee companies in
a number of ways. These might include shareholder communications, introductions
to potential new investors, providing an external perspective on management
information systems and internal audit processes, and views on capital raising
and M&A activity. In some cases we have representation on investee company
boards in a non-executive capacity. In companies where we have a significant
weighting we have selectively top-sliced our holdings, and sold out of some
other holdings in order to release cash for new investments and to take
advantage of new opportunities. We continue to see a regular flow of interesting
companies and have added new investments to the portfolio where these meet our
criteria and are available at attractive valuations.


Long Term Capital Appreciation


Our premise is that well managed companies with sound business models, that show
growth, high return on capital and strong cash flows, will over time become
recognised by the investment community and that by investing early in such
companies substantial capital appreciation can be achieved. The objective is a
3x to 4x return in a time period of 3 to 5 years.


• We are patient with the investments, although this does not mean inactivity as
we proactively provide these companies with support in a variety of ways.


• Promoters and management teams of good companies are difficult to find and
that over the next couple of years particularly those companies will continue to
grow rapidly as will their share prices.


• While we have top sliced in a few companies (in order to generate cash for new
investments and manage overall portfolio risk) we expect to maintain our
interest in most investments for the immediate future.


Unlisted Investments


The principal unlisted investment is in Marwadi Shares and Finance Limited.


The fair value of the investment was reappraised in December 2007 in accordance
with the Group accounting policies, and as a result the valuation was increased
by 13.2% in INR terms.


Looking Forward


Since the end of the year turmoil in global markets, driven by large sub prime
losses in the US, has affected Indian equity markets and the Company's NAV has
declined sharply. In this environment we have been balancing our positive views
on the longer term fundamentals for a number of ICGF portfolio companies with
weakening of share prices and the need for ICGF to generate some cash for new
opportunities.


ICGF is substantially fully invested and we will continue our close relationship
with existing Investee companies in our efforts to help them continue their
profitable growth. At the same time we continue to meet and invest in new
companies where we see substantial long-term value.


ICGF has a portfolio of attractive companies that have the potential for
continued and sustained growth, high return on capital and strong cash flows. We
remain positive about the prospects for the Company's investments and in the
general economic environment in India.


India Investment Partners Limited
13 March 2008






PRINCIPAL GROUP INVESTMENTS
AS AT 31 DECEMBER 2007

HOLDING               TYPE       SECTOR                      VALUE        % of
                                                            £000'S   PORTFOLIO

S Kumars Nationwide
Limited               Mid Cap    Textiles                   13,340       10.85

Prime Focus Limited   Mid Cap    Media                      12,107        9.84

IOL Netcom Limited    Mid Cap    Media                      11,927        9.69

Prime Securities
Limited               Small Cap  Financial services          8,933        7.26

Asian Electronics     Mid Cap    Electricals & lighting      7,892        6.41
Limited                          systems

Logix Microsystems
Limited               Small Cap  IT                          6,220        5.06

Arihant Foundations
and Housing Limited   Small Cap  Housing & construction      5,456        4.43

Varun Shipping
Limited               Mid Cap    Shipping                    5,005        4.07

SpiceJet Limited      Mid Cap    Airlines                    4,780        3.89

Gruh Finance Limited  Small Cap  Financial services          4,533        3.68
                                                             -------  ----------
Total top 10
investments                                                 80,193       65.18

Other Large Cap (2
companies)                                                   5,173        4.20

Other Small and Mid
Cap (11 companies)                                          28,435       23.11

Other Unlisted (2
companies)                                                   4,134        3.36
                                                             -------  ----------
Total invested
assets                                                     117,935       95.85

Cash and other net
current assets                                               5,105        4.15
                                                             -------  ----------
Total Portfolio                                            123,040      100.00
                                                             -------  ----------


CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007

                                                     01.01.07 to  11.11.05 to
                                                        31.12.07     31.12.06
                        Revenue £000   Capital £000   Total £000   Total £000

Income
Fixed deposit
interest                         187              -          187          866
Bank interest
income                            32              -           32          496
Investment income                625              -          625          696
                              --------       --------      -------      -------
                                 844              -          844        2,058

Net gains/(losses) on financial assets at fair value through profit and loss
Market movements                   -         60,629       60,629         (741)
Foreign exchange
movements                          -          2,180        2,180       (2,796)
                              --------       --------      -------      -------
Total income                     844         62,809       63,653       (1,479)

Expenses
Management fee                (1,274)             -       (1,274)      (1,075)
Performance fee                    -         (8,280)      (8,280)           -
Cost of
acquisitions and
disposal of
investments                        -           (317)        (317)        (464)
Other expenses                  (610)           (30)        (640)        (674)
                              --------       --------      -------      -------
Total expenses                (1,884)        (8,627)     (10,511)      (2,213)

Profit/(loss) for
the year/period
before taxation               (1,040)        54,182       53,142       (1,634)
Taxation                         (18)             -          (18)         (19)
                              --------       --------      -------      -------
Profit/(loss) for
the year/period
after taxation                (1,058)        54,182       53,124       (1,653)

Earnings/(Loss) per
Ordinary Share -
Basic (pence)                                              70.83        (4.95)

Earnings/(Loss) per
Ordinary Share -
Diluted (pence)                                            70.63        (4.95)


The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS. The supplementary revenue and capital columns
are both prepared under guidance published by The Association of Investment
Companies.


All the items in the above statement derive from continuing operations.


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2007

                                Capital Reserve      
                                                                   Other
              Share   Share                        Revenue Distributable        
            Capital Premium  Realised Unrealised  Reserve       Reserve     Total
              £000     £000      £000       £000     £000          £000      £000

Balance as
at
1 January      750        -     (285)    (3,913)      487        72,877    69,916
2007

Gain on
investments      -        -    6,002     54,627         -             -    60,629

Revenue
loss
for the
year
after
taxation
(excluding       
foreign
exchange
losses)          -        -        -          -    (1,058)            -    (1,058)

Cost of
acquisition
and
disposal        
of
investments      -        -     (136)      (181)        -             -      (317)

(Loss)/gain
on
foreign          
currency         -        -      (30)     2,180         -             -     2,150

Other
expenses
charged to       
Capital          -        -   (8,280)         -         -             -    (8,280)
             -------  -------  -------   --------   -------     ---------   -------
Balance as
at
31 December   
2007           750        -   (2,729)    52,713      (571)       72,877   123,040
             -------  -------  -------   --------   -------     ---------   -------


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD FROM 11 NOVEMBER 2005 TO 31 DECEMBER 2006


                                  Capital Reserve      
                                                                      Other
               Share      Share                       Revenue Distributable        
             Capital    Premium  Realised Unrealised  Reserve       Reserve     Total
                £000       £000      £000       £000     £000          £000      £000

Balance as at      -          -        -          -        -             -         -
11 November
2005

Loss on
investments*       -          -      (15)      (757)       -             -      (772)

Revenue
profit
for the
period
after
taxation
(excluding         
foreign
exchange
losses)            -          -        -          -      487             -       487

Cost of
acquisition
and disposal
of                
investments        -          -     (104)      (360)       -             -      (464)

Loss on
foreign
currency*          -          -     (166)    (2,796)       -             -    (2,962)

Issue of         
shares           750     74,250        -          -        -             -    75,000

Issue costs
relating to
the issue of
shares             -     (1,373)       -          -        -             -    (1,373)

Transfer to
distributable
reserves           -    (72,877)       -          -        -        72,877         -
               -------    -------  -------   --------  -------    ----------   -------
Balance as at
31 December
2006             750          -     (285)    (3,913)     487        72,877    69,916
               -------    -------  -------   --------  -------    ----------   -------


*The realised exchange gain in 2006 of £31,000 has been reclassified from Loss
on investments to Loss on foreign currency.


CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
AS AT 31 DECEMBER 2007

                                                       31.12.07       31.12.06
                                                           £000           £000
Non-current assets
Financial assets designated at fair value through
profit and loss                                         117,935         61,255

Current assets
Cash and cash equivalents                                 9,944          9,082
Receivables                                               3,203             73
                                                        ---------      ---------
                                                         13,147          9,155
Current liabilities
Payables                                                 (8,042)          (494)
                                                        ---------      ---------

Net current assets                                        5,105          8,661
                                                        ---------      ---------

Total assets less current liabilities                   123,040         69,916
                                                        ---------      ---------

Equity
Ordinary share capital                                      750            750
Reserves                                                122,290         69,166
                                                        ---------      ---------

Total equity                                            123,040         69,916
                                                        ---------      ---------

Number of Ordinary Shares in issue                   75,000,000     75,000,000
                                                        ---------      ---------

Undiluted Net Asset Value per Ordinary Share
(pence)                                                  164.05          93.22
                                                        ---------      ---------

Fully diluted Net Asset Value per Ordinary Share
(pence)                                                  153.38          93.22
                                                        ---------      ---------




CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007
                                                    01.01.07 to    11.11.05 to
                                                       31.12.07       31.12.06
                                                           £000           £000
Cash flows from operating activities
Investment income                                           648            672
Fixed deposit interest                                      187            866
Bank interest                                                29            496
Management fee                                           (1,196)          (986)
Performance fees                                           (626)             -
Other cash payments                                        (561)          (432)
                                                         --------       --------
Net cash (outflow)/inflow from operating
activities                                               (1,519)           616
                                                         --------       --------

Cash flows from investing activities
Purchase of investments                                 (37,908)       (94,081)
Sale of investments                                      40,629         29,312
Transaction charges relating to the purchase and
sale of investments                                        (316)          (402)
                                                         --------       --------
Net cash inflow/(outflow) from investing
activities                                                2,405        (65,171)
                                                         --------       --------

Cash flows from financing activities
Proceeds from issue of shares                                 -         75,000
Issue costs                                                   -         (1,373)
                                                         --------       --------
Net cash inflow from financing activities                     -         73,627
                                                         --------       --------

Net increase in cash and cash equivalents during
the year/period                                             886          9,072

Cash and cash equivalents at the start of the
year/period                                               9,082              -
Exchange (losses)/gains on cash and cash
equivalents                                                 (24)            10
                                                         --------       --------
Cash and cash equivalents at the end of the
year/period                                               9,944          9,082
                                                         --------       --------


The full Annual Report together with the audited accounts for the year is
expected to be mailed to shareholders on 19 March 2008 and a copy will be posted
on the Company's website www.indiacapitalgrowth.com.


Enquiries:

India Capital Growth Fund Limited

Northern Trust International Fund Administration 
Services (Guernsey) Limited (Secretary)
Andrew Maiden                01481 745368

India Investment Partners Limited (Manager)
James Winterbotham           020 7802 8902

Arbuthnot Securities Limited (NOMAD)
Alastair Moreton             020 7012 2138




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