Interim Results

India Capital Growth Fund Limited
03 September 2007


INDIA CAPITAL GROWTH FUND LIMITED

CHAIRMAN'S REPORT

The net asset value of the Company rose by just under 25% in the six months to
30th June 2007. I concluded my report at the end of last year by expressing the
view that the Company was well placed to fulfil the optimism in the name India
Capital Growth fund. It is gratifying to report that in this six month period
that optimism appears to have been well founded. The Share price has, however,
not increased at the same rate, and in line with many other emerging market
funds, the shares are trading at a discount to the fully diluted net asset
value.

The Company's objective is to invest for long term capital growth by investing
as long term shareholders in a limited number of small and medium sized Indian
companies. Such companies take time to identify and evaluate and often
shareholdings take time to build. This was apparent in the Company's first year
of operation but by the beginning of the current year a core portfolio was
largely in place.

The Manager's strategy is to seek out companies whose business plans have the
potential for sustained growth, high return on capital and strong cash flows.
The share prices of these companies will be driven by the success and
achievement of these plans but also by the Stock Market evaluation of these
fundamentals, which can be fickle. With some 50% of the value of the fund
concentrated in 6 stocks, the NAV of the fund is likely to remain volatile as
demonstrated by a 32% increase in NAV between 31 March 2007 and 30 June 2007.
Nevertheless I am confident that the quality of the companies in the portfolio
should ensure that your Company is well positioned to achieve its long term
objectives.

Economically, India continues to be a success with GDP growth at 9.4% for the
year to 31 March 2007, slightly higher than the earlier estimates and a similar
growth forecast for the current financial year. At the same time, inflation has
reduced to a more manageable level.

In the Indian equity markets generally, the smaller cap stocks have been much
slower to recover from the May 2006 crash than their large cap counterparts. The
BSE Sensex passed its May 2006 peak in October 2006; the BSE Small Cap Index
only recovered to its May 2006 peak level in early July 2007. Since 31 March
Indian equity markets have been generally positive with the BSE Sensex rising by
5.6% and the BSE Small Cap Index rising by 10.5%.

The Company's policy of not hedging the exposure to the Indian Rupee had an
adverse effect in 2006, but in the six months to 30 June 2007, the Rupee
appreciated by 6.1%. Even so, the Rupee remained 4.8% below its level against
sterling when the Company was launched.

Since the end of the period, markets have continued to be volatile. Sharp rises
in share prices in the portfolio in July were to a large extent offset by
subsequent net falls in August. These swings have

not deflected us from our fundamental policy of investing for longer term value.


Micky Ingall

Chairman


3 September 2007







PRINCIPAL GROUP INVESTMENTS

AS AT 30 JUNE 2007

HOLDING                    TYPE      SECTOR                     VALUE        % of
                                                                £000'S  PORTFOLIO

IOL Broadband Limited      Small Cap Media                     11,602   13.28

S Kumars Nationwide        Mid Cap   Textiles                  8,065    9.23
Limited

Asian Electronics Limited  Small Cap Electricals / Lighting    7,709    8.82
                                     Systems

Prime Focus Limited        Small Cap Media                     7,322    8.38

Aban Offshore Limited      Large Cap Oil Drilling, Equipment & 5,970    6.83
                                     Services

SpiceJet Limited           Mid Cap   Airlines                  3,870    4.43

Logix Microsystems Limited Small Cap IT                        3,493    4.00

Gruh Finance Limited       Small Cap Financial Services        3,291    3.77

Grabal Alok Impex Limited  Small Cap Textiles                  3,137    3.59

Marwadi Shares and Finance Unlisted  Financial Services        3,026    3.46
Limited

Total top 10 investments                                       57,485   65.79

Other Small and Mid Cap (14                                    23,413   26.81
companies)

Other Unlisted (2                                              1,408    1.61
companies)

Total invested assets                                          82,306   94.21

Cash and other net assets                                      5,058    5.79

Total Portfolio                                                87,364   100.00









UNAUDITED CONSOLIDATED INCOME STATEMENT

FOR THE PERIOD FROM 1 JANUARY 2007 TO 30 JUNE 2007

                                                         unaudited unaudited   audited
                                                          01.01.07  11.11.05  11.11.05
                                                                to        to        to
                                                          30.06.07  30.06.06  31.12.06
                                       Revenue   Capital     Total     Total     Total
                                          £000      £000      £000      £000      £000

Income

Fixed deposit interest                      71         -        71       655       866
Bank interest income                        22         -        22       395       496
Dividend income                            238         -       238       281       696

                                           331         -       331     1,331     2,058
Net gains/(losses) on financial
assets at fair
value through profit or loss

Market movements                             -    19,560    19,560   (8,184)     (741)
Foreign exchange movements                   -     (841)     (841)   (2,116)   (2,796)

Total income/(expense)                     331    18,719    19,050  (10,300)   (3,537)

Expenses
Management fee                           (558)         -     (558)     (560)   (1,075)
Performance fee                              -     (626)     (626)         -         -
Cost of acquisitions and disposal            -     (126)     (126)     (244)     (464)
of investments
Other expenses                           (282)      (10)     (292)     (315)     (674)

Total expenses                           (840)     (762)   (1,602)   (1,119)   (2,213)

(Loss)/profit for the period             (509)    17,957    17,448  (10,088)   (3,692)
before taxation

Taxation                                     -         -         -      (10)      (19)

(Loss)/profit for the period after       (509)    17,957    17,448  (10,098)   (3,711)
taxation

Earnings per Ordinary Share -           (0.68)     23.94     23.27   (13.46)    (4.95)
Basic and Diluted (pence)



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
Trust Companies.


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







UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD FROM 1 JANUARY 2007 TO 30 JUNE 2007

                                                                                
                           Share    Share  Capital Reserve     Revenue  Other
                         Capital  Premium Realised Unrealised  Reserve  Distributable  Total
                            £000     £000     £000       £000     £000  Reserve £000    £000
                                                                                
                                                  
Balance as at 1 January      750        -     (285)    (3,913)     487        72,877  69,916
2007

(Loss)/gain on                 -        -   (2,101)     21,661       -            -   19,560
investments

Loss for the period            -        -     (626)              (509)            -  (1,135)
after taxation
(excluding foreign
exchange losses)

Cost of acquisition and        -        -      (61)       (65)       -            -    (126)
disposal
of investments

(Loss)/gain on foreign         -        -   (1,477)        626       -            -    (851)
currency

Balance as at 30 June        750        -   (4,550)     18,309    (22)        72,877  87,364
2007






FOR THE PERIOD FROM 11 NOVEMBER 2005 TO 30 JUNE 2006 (UNAUDITED)

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

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

Gain/(loss) on                   -        -       281    (8,465)       -            -  (8,184)
investments

Profit for the period            -        -         -          -     446            -      446
after taxation
(excluding foreign
exchange losses)

Cost of acquisition and          -        -      (48)      (196)       -            -    (244)
disposal
of investments

(Loss)/gain on foreign           -        -     (112)    (2,004)       -            -  (2,116)
currency

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

Issue costs relating to          -                  -          -       -            -        -
the
issue of shares                     (1,379)                                             (1,379)

Transfer to                      -                  -          -       -            -        -
distributable reserves

Balance as at 30 June          750   72,871       121   (10,665)     446            -   63,523
2006






FOR THE PERIOD FROM 11 NOVEMBER 2005 TO 31 DECEMBER 2006 (AUDITED)

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

Balance as at 11                          -                                                 -
November 2005

Gain/(loss) on                   -        -     (15)      (757)       -            -    (772)
investments

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

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

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

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

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

Transfer to                      - (72,877)        -          -       -       72,877        -
distributable reserves

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





UNAUDITED CONSOLIDATED STATEMENT OF ASSETS AND

LIABILITIES AS AT 30 JUNE 2007



                                              unaudited     unaudited       audited
                                               30.06.07      30.06.06      31.12.06
                                                   £000          £000          £000

Non-current assets
Financial assets at fair value through           82,306        41,666        61,255
profit or loss

Current assets
Cash and cash equivalents                         6,067        22,128         9,082
Receivables                                          93           237            73
                                                  6,160        22,365         9,155

Current liabilities
Payables                                        (1,102)         (508)         (494)

Net current assets                                5,058        21,857         8,661

Total assets less current liabilities            87,364        63,523        69,916

Equity

Ordinary share capital                              750           750           750
Reserves                                         86,614        62,773        69,166

Total equity                                     87,364        63,523        69,916

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

Net Asset Value per Ordinary Share               116.48         84.70         93.22
(pence)






UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2007

                                                 unaudited     unaudited     audited
                                               01.01.07 to   11.11.05 to 11.11.05 to
                                                  30.06.07      30.06.06    31.12.06
                                                                            
                                                     Total         Total       Total
                                                      £000          £000        £000

Cash flows from operating activities
Investment income                                      198            54         672
Fixed deposit interest                                  71           655         866
Bank interest                                           22           388         496
Management fee                                       (539)         (481)       (986)
Other cash payments                                  (320)         (382)       (432)

Net cash outflow from operating activities           (568)           234         616

Cash flows from investing activities
Purchase of investments                           (19,887)      (57,509)    (94,081)
Sale of investments                                 17,566         6,068      29,312
Transaction charges relating to the                  (126)         (244)       (402)
purchase and sale of investments

Net cash outflow from investing activities         (2,447)      (51,685)    (65,171)

Cash flows from financing activities
Proceeds from issue of shares                            -        75,000      75,000
Issue costs                                              -       (1,371)     (1,373)

Net cash outflow from financing activities               -        73,629      73,627

Net (decrease)/increase in cash and cash           (3,015)        22,178       9,072
equivalents during the period

Cash and cash equivalents at the start of            9,082             -           -
the period

Exchange (losses)/gains on cash and cash                 -          (50)          10
equivalents

Cash and cash equivalents at the end of the          6,067        22,128       9,082
period







It is expected that the full Interim Statement will be mailed to shareholders on
6 September 2007 and a copy will be available on the Company's website
www.indiacapitalgrowth.com



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