Half-yearly report

IMPAX ENVIRONMENTAL MARKETS PLC

HALF-YEARLY FINANCIAL REPORT

FOR THE PERIOD
1 JANUARY 2009 TO 30 JUNE 2009



KEY FEATURES

INVESTMENT OBJECTIVE

The Company's objective is to enable investors to benefit from  rapid
and sustained growth  in the  markets for cleaner  or more  efficient
delivery of basic services of  energy, water and waste.   Investments
are made predominantly  in quoted companies  which provide,  utilise,
implement  or  advise  upon  technology-based  systems,  products  or
services in environmental markets, particularly those of  alternative
energy and energy efficiency, water treatment and pollution  control,
and waste technology and resource management.

FINANCIAL INFORMATION





                                   At 30 June At 31 December % change
                                   2009       2008
Net assets                         £314.4m    £304.9m        +3.1%

Net asset value ("NAV") per
Ordinary Share
-          Undiluted               103.1p     99.8p          +3.3%
-          Diluted                 102.7p     99.6p          +3.1%

NAV per Ordinary Share (excluding
current year net revenue)
-          Undiluted               102.5p     99.0p          +3.5%
-          Diluted                 102.1p     98.8p          +3.3%

MSCI World Index (sterling)        -          -              -7.3%
MSCI World Small Cap Index         -          -              +0.4%
(sterling)

Ordinary Share price               96.0p      85.0p          +12.9%
Warrant price                      15.0p      21.5p          -30.2%

Ordinary Share price (discount)    (6.5%)     (14.7%)        -
/premium to diluted NAV





HALF-YEARLY MANAGEMENT REPORT AND CHAIRMAN'S REVIEW

The first half of 2009 has  been a volatile period for global  equity
markets and investors  have generally been  concerned about both  the
depth and duration of the recession and the long-term effects of  the
credit crunch.  Against this  backdrop, the environmental sector  has
been the beneficiary of targeted government stimulus expenditure  and
further legislation, and  Impax Environmental Markets  plc ("IEM"  or
"the Company")  has  profited  from the  general  out-performance  of
environmental markets.

Over the six  months period from  1 January until  30 June 2009,  the
Company's  diluted  net  asset  value  ("NAV")  per  Ordinary   Share
increased from 98.8p  to 102.1p,  a rise of  3.3%,   while the  share
price rose 12.9%, from  85.0p  to 96.0p.   Over the same period,  the
MSCI World Index (priced in  Pounds Sterling) declined by 7.3%  while
the MSCI World  Small Cap Index  rose by 0.4%.   The warrants in  the
Company that were issued in December 2005 were priced at 21.5p at the
start of 2009 and 15.0p at the end of June.

Having generally traded at  a premium since the  middle of 2005,  the
Company's share price started to trade at a discount to NAV following
the market  upheaval  in the  middle  of last  year.   This  discount
widened during  the  period and  the  Board responded  by  buying  in
shares.  In aggregate the Company  has bought back 716,505 shares  at
an average discount to NAV of 12%, with these shares currently  being
held in treasury.  During the period the IEM shares traded in a range
of between a 15% discount and  a 2% premium with an average  discount
of around 7%.

A circular was sent  to shareholders on 13  May 2009 which  contained
proposals for the cancellation of the Company's share premium account
and for  the amount  standing  to the  credit  of the  share  premium
account to be treated as a distributable reserve available to be used
for the purchase of the  Company's own shares.  These proposals  were
approved by shareholders at a General  Meeting held on 4 June  2009.
Following Court confirmation, the share premium account  cancellation
became effective on 15 July 2009 and  on this date an amount of  £246
million was credited to  distributable reserves.  The Board  believes
that the above steps will give  the Company added flexibility to  use
its powers to repurchase Ordinary Shares at a discount to NAV when it
is considered appropriate.

In the last IEM Annual Report, the potential positive implications of
the election of Barack Obama as  President of the United States  were
highlighted.  As described in the Manager's Report, the US is already
moving forward  on a  number of  initiatives, including  the  further
development  of  domestic   energy  policy,   stimulus  funding   for
environmental markets and climate change policy.  In parallel,  Asian
counties  are   also   making   significant   progress   to   develop
environmental policy.  In  addition to  the substantial  part of  the
Chinese stimulus packages that were targeted at environmental markets
during the  first  half  of 2009,  the  government  has  dramatically
increased targets for renewable energy as well as announcing  support
and feed-in tariffs for both wind  and solar.  In Japan, momentum  on
environmental issues is building in the run up to the election,  with
both parties committing  to increased spending  on energy  efficiency
and renewable  energy,  as  well as  more  stringent  greenhouse  gas
emissions targets.   The  environmental investment  opportunities  in
Asia in general and China in  particular are expected to continue  to
increase during the coming years.  With the Manager's local  presence
established in Asia, the Company is well positioned to capitalise  on
this growth opportunity.

Equity markets have strengthened since the end of the period and,  as
at 21 August 2009,  the MSCI World and  MSCI World Small Cap  Indices
have risen  11.9% and  14.4%  respectively since  1 July  2009.   The
diluted NAV per Ordinary  Share of IEM has  increased 8.9% to  111.1p
while the share  price has risen  9.0% to 104.7p.   While the  global
economy does appear to have stabilised, the outlook and the timing of
any recovery  remain  very uncertain.   Nevertheless,  the  Directors
believe that the strengthening fundamental backdrop for environmental
markets  positions  the  Company  well  as  and  when   macroeconomic
conditions improve.

Richard Bernays
26 August 2009



MANAGER'S REPORT

After a challenging start to the year, which saw the NAV down 12%  at
the end of March,  the NAV experienced a  strong rally in the  second
quarter, resulting in first  half performance that was  significantly
ahead of global markets.  This strong relative performance was driven
by continued positive momentum  in environmental legislation,  backed
by  significant  stimulus  package  funding.   It  also  reflected  a
material easing of credit markets, a recovery in commodity prices and
an anticipated stabilisation of  construction and other  economically
cyclical  markets;  all  key  factors  that  negatively  impacted  on
performance in 2008.

Investment Approach & Portfolio Structure
The Impax investment  process continues to  focus on bottom-up  stock
picking, informed by a thematic  analysis of key developments in  the
environmental markets.   Asian  companies  and  sectors  with  strong
exposure to stimulus funding remain active themes.

The Company  started  the  year  with  88  listed  companies  in  the
portfolio.  Subsequently, we made 4 new investments and sold out of 8
stocks, leaving 84 listed companies in the portfolio on 30 June 2009,
plus 6 unlisted investments.  The  portfolio structure data shown  at
the end  of this  report indicates  that the  portfolio structure  by
sector, profitability  and  market  capitalisation  has  not  changed
substantially.  However, the regional exposure shows a redistribution
of funds into Asia, leading to an  increase in the Rest of the  World
exposure from 12 to 15%.

Alternative Energy and Energy Efficiency
Following the election of President Obama, energy policy developments
have been favourable in  the US. Towards the  end of the period,  the
House of  Representatives passed  a major  bill that  would create  a
Federal cap-and-trade  system for  greenhouse gas  reduction, plus  a
national target for 20% renewable  electricity in the overall  supply
mix  by  2020  (including  a  5%  carve-out  for  energy   efficiency
improvements).  The Senate  is expected to  produce their version  of
the bill in September,  and although we  expect some modification  to
the provisions, we are confident that the underlying trend in the  US
towards  tackling  climate  change  and  energy  supply  issues  will
continue.  Meanwhile, in  China, long term  renewable energy  targets
for 2020 were revised  upwards for both wind  (100 GW) and solar  (20
GW)  which  has   subsequently  been  supported   by  subsidies   and
feed-in-tariffs for solar installations as well as a unified national
wide feed-in-tariff for wind power.

Notable positive  contributors  to  investment  performance  included
early-cycle companies,  for  example Epistar  (light-emitting  diodes
(LEDs), Taiwan) that saw volume increases as new end markets for LEDs
accelerated. Nibe (heat  pumps, Sweden) also  performed well  largely
reflecting the  stabilisation  of European  residential  construction
markets and new  subsidy announcements.   Renewable energy  companies
were generally strong, buoyed by strong news flow on legislation  and
stimulus funding, in particular EDP Renovaveis (renewable independent
power producer,  Portugal), Ormat  (geothermal,  US) and  China  High
Speed Transmission (wind turbine equipment, Hong Kong).  However,  it
was a disappointing period for Itron (automated meter reading, US) as
certain projects were  delayed, the management  team was changed  and
the company raised additional equity to strengthen its balance sheet.

Water Treatment and Pollution Control
Global stimulus announcements were an  important theme for the  water
infrastructure sector during the period.  In the US, around US$  18bn
was allocated for environmental  infrastructure projects relating  to
drinking water, rural water provision, flood control and  remediation
of contaminated land.  In  China, the figure was  close to US$  30bn.
 Highlighting the  importance of  spending on  water  infrastructure,
President Obama announced that he would like to allocate US$ 4bn  per
annum to  fund more  than 1,700  water projects,  in excess  of  that
already  committed  via  the  stimulus  programme.  Meanwhile,  water
scarcity issues continued  to be  at the  forefront of  policy-makers
minds, and  droughts  in Australia,  California  and China  made  the
headlines.  A report  by the European  Commission found that  climate
change could cause rainfall to drop by up to 40% across the Union  by
the end of the century, with food harvests falling by up to 30% as  a
result.

At the stock  level, companies  that performed well  were those  with
exposure to the anticipated cyclical recovery of automotive and water
infrastructure markets such as Japanese companies Horiba (testing and
monitoring), and Kurita (water treatment).  Chinese stimulus  funding
led to the finalisation of a  number of water and waste projects  for
China Everbright (water  infrastructure, Hong  Kong).  Mueller  Water
(water infrastructure, US) was weak due to a slower than  anticipated
recovery in the company's end  markets accompanied by a weak  balance
sheet.

Waste Technologies and Resource Management
Innovative vehicle 'scrappage' legislation was introduced in a number
of countries (e.g. the US, Japan  and the UK) to encourage  motorists
to trade old cars  for new.  The  effect of the  schemes has been  to
generate significant  business for  the vehicle  and metal  recycling
companies as well as to encourage the purchase of smaller, more  fuel
efficient vehicles.  Recycling  companies, particularly  Lee and  Man
(paper  recycling,  Hong  Kong),  LKQ  (auto-parts  recycling,   US),
Metalico (metals  recycling, US)  and Sims  Group (metals  recycling,
Australia) have also benefited from the recovery in global  commodity
prices.  The resource management sector, in particular  environmental
consultants such as  Stantec (Canada),  have been  helped during  the
period from  increased  stimulus funding  for  larger  infrastructure
projects.

During 2008, a number of waste-related companies came under  pressure
due to their  inability to refinance  debt.  This year,  it has  been
encouraging to see these  companies, notably Transpacific  Industries
(hazardous waste,  Australia)  and  Shanks  (waste  management,  UK),
restructure their balance sheets.   As credit markets recover,  there
has  also  been  a  resurgence  of  corporate  activity  including  a
conditional   offer   for   Energy   Developments   (waste-to-energy,
Australia).  On the  downside, the hazardous  waste industry has  not
been immune to  slowing industrial  activity and  both Clean  Harbors
(US),  and  Seche  Environnement  (France)  have  experienced   lower
volumes.

Unquoted Companies
Our investments in  unquoted companies  have not been  immune to  the
current recession.  During  the first  half, one  holding was  forced
into administration  and the  valuations of  two others  were  marked
down.  Notwithstanding  this,  several  companies  in  the  portfolio
continued to make  good commercial progress  and successfully  raised
additional finance, with IEM  contributing to two fundraisings.   The
net effect of these changes is  that the total portfolio of  unquoted
companies was valued at £11.8m as of 30 June 2009, representing a 34%
discount to cost and 3.7% of IEM's net assets.

Following the end of the reporting period, the valuation of a further
holding has been marked down by £0.6m.  Given the current challenging
environment, we continue to maintain close contact with the  unquoted
companies in our portfolio.

Outlook
The outlook  for  the portfolio  remains  positive as  global  policy
developments and  stimulus packages  continue to  favour the  sector,
with particular momentum  in Asia.  The  ongoing earnings season  has
reinforced our  view  that earnings  expectations  for  environmental
companies are at realistic levels and there is potential for surprise
on the upside.  In addition, we expect corporate funding  initiatives
and  acquisition  activity  to  provide  catalysts  for  share  price
increases and are encouraged that  portfolio valuations are still  at
the lower end of the historic range.

We will continue to post monthly updates on the Company's performance
and sector news on www.impax.co.uk.


Impax Asset Management Ltd.
26 August 2009



TEN LARGEST HOLDINGS

AS AT 30 JUNE 2009
Ormat Technologies (Israel / US)
Ormat is  a leading  player  in the  geothermal power  markets.   The
company has a  dual strategy  of owning and  operating power  plants,
with ca. 500 MW in operations and a large pipeline under  development
as well as selling geothermal generation equipment to third  parties.
The company stands  to benefit from  increasing governmental  support
for renewables, the particular appeal  of geothermal for large  scale
base-load generation, and from  stimulus funding in  the US.  As  the
clear market leader in its  sector, Ormat is well-positioned to  grow
as global  geothermal  resources  continue to  be  developed  and  is
considered an attractive long term asset for the Company.

Clean Harbors (United States)
Clean Harbors is North America's leading provider of hazardous  waste
management services.  The core US  business benefits from a  national
network and  high  market  share of  disposal  facilities,  which  is
expected to provide  pricing power.   The company  will also  benefit
from the gradual closure  of industrial customers' in-house  disposal
facilities, which  today represent  a significant  proportion of  the
market but are becoming uneconomical due to their inability to comply
with  increasingly  strict  environmental  regulations.   The  recent
acquisition of Eveready, a Canadian industrial services company, also
offers growth potential by expanding Clean Harbors' reach into Canada
and opening up cross selling opportunities.

Regal Beloit (United States)
Regal Beloit is  a leading US  manufacturer of  commercial/industrial
electric motors,  HVAC (heating,  ventilation and  air  conditioning)
motors, electric  generators  and mechanical  motion  controls.   The
company continues to benefit from legislation driving a shift towards
higher efficiency motors,  where it has  a strong presence  following
its acquisition of the GE HVAC businesses.  The company is also a key
beneficiary  of  stimulus  funding  in  the  US  which  is  targeting
increased  energy  efficiency  in  public  buildings.   Finally,  the
company will benefit  from an  eventual recovery  in US  construction
activity.  With these  characteristics, Regal Beloit  remains a  core
holding for the Company.

Gamesa Corp (Spain)
Gamesa is the world number three manufacturer of wind turbines with a
global market share  of 11%.   Wind remains  the prominent  renewable
energy technology,  with 122  GW  cumulative installed  capacity  and
market expectations of strong growth of 15% p.a., especially in China
and the US.  Gamesa has 4,000 MW of manufacturing capacity and  plans
to expand to 6,000 MW by 2011 and is well positioned to benefit  from
market growth with a broad exposure to key markets.  Project  finance
markets for smaller developers are still challenging but Gamesa  also
benefits from its strong links to larger utilities such as  Iberdrola
Renovables which are able  to finance projects  on their own  balance
sheet.

EDP Renovaveis (Portugal)
EDP Renovaveis is a wind farm  developer and operator.  Its 5.3GW  of
assets make  it the  world's fourth  largest independent  wind  power
producer. The company was spun out of Portuguese utility Energias  de
Portugal  (EDP)  in  June  2008  with  EDP  remaining  the   majority
shareholder. This relationship  provides the company  with access  to
relatively  low-cost  funding,  which  gives  it  a  key  competitive
advantage.  Other than funding, the  company's key attractions are  a
strong management team with a track record of execution and a  strong
pipeline and exposure to the US  markets, which are poised for  rapid
growth in  2010, assisted  by the  anticipated increase  in  stimulus
funding.

Horiba (Japan)
Horiba is a manufacturer of measuring instruments and systems for the
automotive, environmental,  medical  and  semiconductor  industries.
Automotive is the largest of the four business segments, where Horiba
enjoys an  80%  global  market share  in  engine  emission  measuring
systems.  Growth will be  driven by tightening emissions  regulations
for  the  automotive  space  and  an  anticipated  recovery  in   the
automotive space, which should lead to a recovery in capex by the car
manufacturers.  The other key driver  is the anticipated recovery  of
the semiconductor market  to which Horiba  has some exposure  through
its air  monitoring  and  water  quality  products.   With  a  strong
management team and a strong balance sheet, Horiba is well positioned
to grow.

Chloride Group (UK)
Chloride is the leading European  specialist in the power  protection
marketplace. The company's  range of  Uninterruptible Power  Supplies
("UPS") and  software  protects mission-critical  applications  in  a
variety of sectors worldwide.  As these UPS markets continue to grow,
Chloride is  also  gaining  market share  through  a  combination  of
superior  technology  and  an  innovative  service-oriented   product
offering.  Asia  also  represents  a  key area  for  growth  and  now
represents just under 20% of sales.  Chloride's strong technology and
market position  led to  a bid  approach by  Emerson (the  US  market
leader) in  2008 at  a significant  premium.  Although  this bid  was
rejected, Chloride remains an attractive acquisition target and, with
merger and  acquisition activity  on  the rise,  the company  may  be
subject to further bids.

LKQ (United States)
LKQ is the largest provider of recycled light vehicle OEM products in
the US. It employs 9,600  people across 280 facilities and  generated
revenue of  $1.9  billion in  2008.   The insurance  industry  is  an
important driver of  LKQ's business  as its focus  on reducing  claim
costs provides  favourable  industry dynamics.   This  initiative  to
reduce costs has seen  the market share of  alternative parts in  the
mechanical replacement market  rise from 20%  to 80% in  the last  30
years.  Collision replacement parts are poised for similar growth and
have increased their market share by  1-2% per annum over the last  7
years to reach 32% in 2007.  Growth is set to escalate, driven by the
current turmoil in the  automotive supply chain.   Finally, LKQ is  a
beneficiary of  good  pricing power  and  the recovery  of  commodity
prices.

Pentair (United States)
Pentair is  a  global  diversified company  serving  the  commercial,
municipal and residential markets.  The water segment represents  65%
of revenues,  focussed on  filtration and  flow control  technologies
used in operations  throughout the  entire water cycle,  with the  US
represents 74% of group sales.  It is well positioned to benefit from
US stimulus  funding  into the  water  sector and  from  an  eventual
recovery of the US construction market.  In addition, following a key
partnership with GE  in 2008,  Pentair has greater  global reach  and
access to  new  technologies,  which  should  contribute  to  further
growth.   Finally,  the   company  is   benefiting  from   aggressive
restructuring and consequent cost reduction.

Sims Group (Australia)
Sims Group  is  a metal  recycling  company focussed  on  collection,
processing and marketing  of ferrous and  non-ferrous metals and  the
provision of  other  recycling solutions  e.g.  to the  end  of  life
vehicle and  waste electronic  goods markets.   Sims operations  were
historically centred in Australasia but achieved a truly global reach
following its merger with the  US company Metal Management.   Ongoing
sector consolidation, renewed Asian growth, increasing pricing  power
and recovering commodity prices are key drivers for the company.



TOP TEN HOLDINGS IN COMPANIES
AS AT 30 JUNE 2009


                                         Cost Valuation Percentage of
                                        £'000     £'000     Portfolio

Ormat Technologies                      6,183     7,977          2.64
Clean Harbors                           5,596     7,308          2.42
Regal Beloit                            6,334     7,081          2.35
Gamesa Corp                             7,673     6,814          2.26
EDP Renovaveis                          5,785     6,600          2.19
Horiba                                  7,013     6,593          2.18
Chloride Group                          5,048     6,537          2.17
LKQ                                     3,792     6,476          2.15
Pentair                                 7,233     6,448          2.14
Sims Group                              6,365     6,428          2.13

Top ten holdings                       61,022    68,262         22.63
Other holdings                        275,132   233,355         77.37
Total holdings                        336,154   301,617        100.00


 Note:  All the top ten holdings are
         of ordinary shares




STRUCTURE OF PORTFOLIO
as at 30 June 2009


BREAKDOWN BY REGION (country of quotation or in the case of unquoted
investments, country of incorporation)


                  2009 2008
Europe            45%  46%
North America     40%  42%
Rest of the World 15%  12%



BREAKDOWN BY SECTOR


       2009 2008
Energy 44%  42%
Water  25%  26%
Waste  31%  32%



BREAKDOWN BY PROFITABILITY


             2009 2008
Profitable   92%  94%
Unprofitable 8%   6%



BREAKDOWN BY MARKET CAPITALISATION


           2009 2008
> £1bn     36%  35%
£100m-£1bn 54%  58%
< £100m    6%   4%
Unquoted   4%   3%



Note:  The comparative figures are as at 30 June 2008.



DIRECTORS' STATEMENT OF RESPONSIBILITY
FOR THE HALF-YEARLY REPORT

The Directors confirm to the best of their knowledge that:



  * The condensed set of financial statements contained within the
    half yearly financial report has been prepared under the guidance
    issued by the Accounting Standards Board on "Half-yearly
    financial reports".




  * The interim management report includes a fair review of the
    information required by 4.2.7R and 4.2.8R of the FSA's Disclosure
    and Transparency Rules.



Richard Bernays
Chairman



INCOME STATEMENT



                        6       6       6         6        6        6
                  months  months  months    months   months   months
                       to      to      to        to       to       to
                  30 June 30 June 30 June   30 June  30 June  30 June
                     2009    2009    2009      2008     2008     2008
                  Revenue Capital   Total   Revenue  Capital    Total
                    £'000   £'000   £'000     £'000    £'000    £'000

Gains/(losses)on
investments             -  11,522  11,522         - (14,146) (14,146)

Income
  - from            2,739       -   2,739     2,645        -    2,645
investments
  - interest            7       -       7       219        -      219
receivable

Investment          (352) (1,056) (1,408)     (438)  (1,313)  (1,751)
management fees
Other expenses      (312)       -   (312)     (421)        -    (421)

Return         on
ordinary                           12,548                    (13,454)
activities before
taxation            2,082  10,466             2,005 (15,459)

Taxation            (308)       -   (308)     (272)        -    (272)
Return         on
ordinary
activities  after                  12,240                    (13,726)
taxation            1,774  10,466             1,733 (15,459)


Return per
Ordinary Share                      4.01p                     (4.54p)
(see note 4)        0.58p   3.43p             0.57p  (5.11p)



The total  column of  the Income  Statement is  the profit  and  loss
account of the Company.

All capital  and revenue  items in  the above  statement derive  from
continuing operations.  No operations  were acquired or  discontinued
during the period.

A Statement of Total Recognised Gains and Losses is not required,  as
all gains and losses of the Company have been reflected in the  above
statement.



BALANCE SHEET


                          At 30 June 2009 At 30 June 2008   At 31 Dec
                                    £'000           £'000        2008
                                                                £'000

  Fixed assets
  Investments at fair             301,617         367,947     294,468
  value through profit
  and loss (see note 3)

  Current assets
  Income receivable                   134             148         261
  Sales for future                    765             852         385
  settlement
  Taxation recoverable                 18              23           9
  Other debtors                        11              35         377
  Cash at bank and in              13,104          13,615      10,374
  hand
                                   14,032          14,673      11,406


  Creditors: amounts
  falling due within one
  year
  Purchases for future              (840)           (916)       (278)
  settlement
  Accrued liabilities               (360)           (528)       (666)
                                  (1,200)         (1,444)       (944)

  Net current assets               12,832          13,229      10,462

  Total net assets                314,449         381,176     304,930

  Capital and reserves:
  Equity
  Share capital                    30,585          30,390      30,541
  Share premium                   246,487         244,857     246,110
  Share purchase reserve           43,573          44,125      44,125
  Capital reserve                 (8,340)          59,768    (18,806)
  Revenue reserve                   2,144           2,036       2,960
  Shareholders' funds             314,449         381,176     304,930

  Net asset value per
  share

  Net asset value per
  share (see note 5)
  -          Undiluted            103.06p         125.43p      99.84p
  -
  -          Diluted              102.65p         123.69p      99.62p
  -


  Ordinary Shares in          305,126,783     303,905,220 305,405,220
  issue (excluding
  treasury shares)

  Ordinary Shares held in         716,505               -           -
  treasury

  Warrants in issue            18,666,085      19,104,153  19,104,153




CASH FLOW STATEMENT


                                             6 months        6 months
                                      to 30 June 2009 to 30 June 2008
                                                £'000           £'000
Operating activities
Cash inflow from investment income              2,894           2,877
and bank interest
Cash outflow from management expenses         (2,033)         (2,793)
Cash inflow from recovery of VAT on               343               -
management fees
Cash inflow from disposal of                   33,468          51,335
investments
Cash outflow from purchase of                (28,634)        (52,103)
investments
Cash outflow from net foreign                   (279)            (89)
exchange losses
Foreign tax paid                                (308)           (278)
Net cash flow from operating                    5,451         (1,051)
activities

Equity dividends paid                         (2,590)           (908)

Financing
Issue of share capital                            420           3,098
Purchases of own shares                         (551)               -
Net cash flow from financing                    (131)           3,098

Increase in cash                                2,730           1,139

                                                 2009            2008
                                                £'000           £'000
Opening balance at 1 January                   10,374          12,476
Cash inflow                                     2,730           1,139
Balance at 30 June                             13,104          13,615




RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS


                                    6 months   6 months Year ended 31
                                  to 30 June to 30 June      Dec 2008
                                        2009       2008
                                       £'000      £'000         £'000

Profit for year                       12,240   (13,726)      (91,375)
Final dividend (see note 7)          (2,590)      (908)         (909)
Issue of new shares                        -      3,098         3,934
Exercise of warrants (see note 8)        420          -           633
Share issue expenses                       -          -          (65)
Purchases of own shares                (551)          -             -

Net increase in shareholders'          9,519   (11,536)      (87,782)
funds

Opening shareholders' funds          304,930    392,712       392,712

Closing shareholders' funds          314,449    381,176       304,930





NOTES TO THE ACCOUNTS

1              Accounting standards

The Half-yearly financial report has been prepared in accordance with
applicable UK accounting standards.

2              Investment company status

These financial statements  have been  presented using  UK GAAP.  The
Company manages its affairs to enable it to qualify as an  investment
trust for  taxation purposes  under  section 842  of the  Income  and
Corporation Taxes Act.  The  Company therefore presents its  accounts
in  accordance  with  the  Statement  of  Recommended  Practice   for
Investment Companies.

3              Investments

Investments have been  classified as "fair  value through profit  and
loss".  Securities of companies  quoted on regulated stock  exchanges
are valued by  reference to  their market  bid prices  at the  period
end.  Unquoted  investments  are  measured at  fair  value  which  is
determined by  the directors  in  accordance with  the  International
Private Equity and Venture Capital guidelines.

Since the period  end the valuation  of one of  the unquoted  company
investments has been marked down by £626,115.

Transaction  costs  incurred  on  the  acquisition  and  disposal  of
investments are charged to the Income Statement as a capital item.

4              Return per share

Return per share is based on the net return attributable on  ordinary
activities after  taxation attributable  to the  weighted average  of
305,031,137 (2008: 302,423,378) Ordinary  Shares in issue during  the
period.

There was no dilution to return per share in the period.

5              Net assets per share

Undiluted net assets per share figures are based on the net assets of
the Company attributable to the number of Ordinary Shares in issue at
the end of the period.

Diluted net assets per share figures  are based on the net assets  of
the Company  plus the  amount  which would  have been  subscribed  by
Warrantholders had all the outstanding warrants been exercised at the
end of the  period divided  by the  number of  Ordinary Shares  which
would have been in issue had  all the Warrants been exercised at  the
end of the period.  No adjustment is made if the potential effect  of
the exercise of Warrants is anti-dilutive.

6              VAT

As a  result  of  the developments  of  a  legal test  case,  VAT  on
management fees paid  in previous years  has become recoverable.   An
amount of £343,270  in respect of  VAT recovered by  the Manager  was
accrued in the financial  statements for the  year ended 31  December
2008.  This amount was subsequently received by the Company in  March
2009.   In  aggregate  the  amount  reclaimed  under  the   Company's
voluntary VAT registration in previous years and the above  repayment
represents 97 per cent of the total VAT paid on management fees  paid
to the Manager.

A further amount  of interest on  this repayment is  expected in  due
course; no amount  in respect of  this interest has  been accrued  in
these accounts.

7              Dividend

The final dividend for the year  ended 31 December 2008 of 0.85p  per
share was paid on 18 May  2009 (year ended 31 December 2007  dividend
of 0.3p per share was  paid on 14 May  2008).  In accordance with  UK
accounting standards the dividend for the year ended 31 December 2008
has been recognised in the  Half-yearly financial report for the  six
months ended 30 June 2009.

8              New share issues

438,068 Warrants  were exercised  on 15  June 2009  resulting in  the
issue of 438,068 Ordinary Shares.  The subscription price was 96p per
share. The new ordinary shares were admitted to trading on the London
Stock Exchange on 22 June 2009.

The number of Ordinary Shares in issue (excluding treasury shares) as
at 30  June 2009  was  305,126,783.  The  Company also  held  716,505
Ordinary Shares in treasury at that time.

The number of Warrants in issue as at 30 June 2009 was 18,666,085.

9              Purchase of own Shares

During the period to 30 June 2009 716,505 Ordinary Shares were bought
back at an aggregate cost of  £551,306.  These Shares are being  held
in treasury.

10            Related party transactions

Fees payable to the Manager are shown in the Income Statement. At 30
June 2009 the fee accrual outstanding to the Manager was £250,639.

11            Cancellation of share premium account

As described in the circular dated  13 May 2009, the Company  applied
to the Court for  the cancellation of its  share premium in order  to
create additional distributable reserves which would be available for
the buy  back  of its  own  Ordinary Shares.   The  cancellation  was
approved by shareholders on 4 June 2009, confirmed by the Court on  8
July 2009  and  became effective  on  15  July 2009.   An  amount  of
£246,486,789 was transferred from the share premium account to  share
purchase reserves on the effective date.

12            Status of this report

These financial statements are  not the Company's statutory  accounts
for the purposes of section 240 of the Companies Act 1985.  They  are
unaudited.   The  Half-yearly  financial  report  will  be  sent   to
shareholders and copies will be made  available to the public at  the
registered office of the Company.    The report will be available  in
electronic format on the Manager's website (www.impax.co.uk).

The Half-yearly  financial report  was approved  by the  Board on  26
August 2009.

The Company's statutory accounts for the year ended 31 December  2008
received an unqualified  audit report  and have been  filed with  the
registrar of companies at Companies House.



DIRECTORS, MANAGER AND ADVISERS



DIRECTORS                            INVESTMENT MANAGER
Richard Bernays (Chairman)           Impax Asset Management Limited
Dr Robert Arnott                     Pegasus House
Charles Berry                        Mezzanine Floor
William Brown                        37-43 Sackville Street
Keith Niven                          London W1S 3EH

BROKER                               SECRETARY AND ADMINISTRATOR
Collins Stewart                      Cavendish Administration Limited
9th Floor, 88 Wood Street            145-157 St. John Street
London EC2V 7QR                      London EC1V 4RU

SOLICITOR                            REGISTRAR
CMS Cameron McKenna                  Capita Registrars
Mitre House                          The Registry
160 Aldersgate Street                34 Beckenham Road
London EC1A 4DD                      Beckenham
                                     Kent BR3 4TU
CUSTODIAN
The Northern Trust Company           AUDITOR
50 Bank Street                       Ernst & Young LLP
Canary Wharf                         1 More London Place
London E14 5NT                       London SE1 2AF

REGISTERED OFFICE*                   BANKER
145-157 St. John Street              Lloyds TSB Bank Plc
London EC1V 4RU                      Moorgate Branch
                                     34 Moorgate
                                     London EC2R 6PL



* Registered in England and Wales
No. 4348393