Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 30 June 2006 and unaudited

DATA AND PERFORMANCE


Data                          Pricing & Performance
                                                  IEM    MSCI  Impax
                                                  Net   World   ET50
Share Price                                      Asset
(pence)                 106.5                    Value
Warrants (pence)         35.5
Total Fund Size     GBP 135.1        Diluted NAV 102.1   n/a    n/a
(m)                                      (pence)
Market              GBP 139.4   Premium/discount  +4.3
Capitalisation                               (%)
(m)
Management fee            1.0      Undiluted NAV 103.1
(%)                                      (pence)
Established       22 February        Performance
                         2002
Fund structure     Investment        1 month (%)  -4.1   +1.0   -1.4
                        Trust
Number of stocks           74       3 Months (%)  -8.1   -7.3  -12.9
held
Exchange               London         1 year (%) +25.9  +11.3  +24.4
Currency                  GBP         3 year (%) +83.4  +35.2  +62.0
ISIN Number      GB0031232498   Year to date (%) +11.4   -2.6  +10.1
Sedol                 3123249
Reuters RIC Code        IEM.L NB1 Performance data is for undiluted
                              NAV.
                              NB2 To comply with guidelines issued by
Bloomberg Code         IEM LN the AITC, portfolio valuation moved to
                              bid from mid price with effect from 31
                              December 2005.


TOP TEN HOLDINGS


Company             Holding %   Description                   Country
Itron Inc           2.8         Meters & software             US
Vestas Wind Systems 2.6         Wind                          Denmark
                                High efficiency electric
Regal Beloit        2.6         motors                        US
Gamesa              2.5         Wind                          Spain
RPS Group Plc       2.4         Environmental consulting      UK
Chloride Group      2.4         UPS systems                   UK
Esco Tech Inc       2.4         Filtration & meters           US
LKQ Corp            2.3         Automotive recycling          US
Kurita Water Ind    2.3         Water treatment               Japan
Canadian Hydro
Developers          2.2         Renewable energy IPP          Canada

Total               24.4


PORTFOLIO ANALYSIS*


+------------------------------------------------+
| Geographical            | Company Size         |
|-------------------------+----------------------|
| North America     | 44% | >£500m         | 46% |
|-------------------+-----+----------------+-----|
| Europe            | 49% | £100-500m      | 38% |
|-------------------+-----+----------------+-----|
| Rest of the World | 7%  | <£100m         | 16% |
|-------------------------+----------------+-----|
|                         |                |     |
|-------------------------+----------------------|
| Sectoral                | Profitability        |
|-------------------------+----------------------|
| Energy            | 40% | Profitable     | 88% |
|-------------------+-----+----------------+-----|
| Water             | 29% | Pre-Profitable | 12% |
|-------------------+-----+----------------+-----|
| Waste             | 31% |                |     |
|------------------------------------------------|
| * of funds invested as of 30 June 2006         |
+------------------------------------------------+














MANAGER'S COMMENTARY (June 2006)


+-------------------------------------------------------------------+
| During June there was pressure on environmental stocks in general |
| and the IEM portfolio in particular.  This follows the            |
| outperformance that we have seen during the first five months of  |
| the year.  The Company NAV was down 4.1% over the month compared  |
| with the MSCI World, which increased by 1.0%, and the Impax ET50, |
| which declined by 1.4% over the same period.  In the broader      |
| markets, information technology and energy services and equipment |
| again were the worst performing sectors, with small cap stocks    |
| bearing the brunt of the market correction.                       |
|                                                                   |
| During the month, the US and the EU agreed to work more closely   |
| to address the threat posed by climate change. The announcement   |
| was made at the annual EU-US summit meeting in Vienna, together   |
| with plans for a "High Level Dialogue on Climate Change, Clean    |
| Energy and Sustainable Development".  In the US, key developments |
| continue to be made at the state level, with the authorisation of |
| the AB 1969 in California and the Solar Utilization Now Act of    |
| 2006 in Texas.  Both pieces of legislation will increase the      |
| production of renewable energy and are to be considered in each   |
| State Senate.  At the Federal level four senators pledged to      |
| support a nonbinding bipartisan resolution calling for 25 percent |
| of the nation's energy to come from renewable sources like        |
| ethanol and solar power by 2025.  In the water sector, France     |
| declared a drought in 15 departments, due to below average        |
| rainfall between October 2005 and March 2006.  Restrictions,      |
| including a ban on the use of hosepipes for watering gardens,     |
| were put in place in nine departments, echoing measures taken in  |
| the UK.  At the corporate level ITT Corporation acquired F.B.     |
| Leopold, a company providing filtration and clarification         |
| systems, as part of the conglomerate's efforts to cover all       |
| aspects of the growing water and wastewater treatment market.     |
| Within the waste sector, Brambles sold Cleanaway UK to Veolia     |
| Environmental for £595 million, in order to focus on its pallet   |
| and document management businesses.  The Australian and New       |
| Zealand waste management businesses were sold to Kohlberg Kravis  |
| Roberts under the same divestment programme, demonstrating the    |
| continued appetite for waste management within private equity.    |
|                                                                   |
| There was a general derating of the portfolio during the month    |
| with three companies announcing disappointing results - Casella   |
| Waste (waste management, US), CDS Technologies (stormwater        |
| management, Australia) and Biopetrol (biofuels, Germany).  In     |
| addition, the pre-profitable energy technology companies quoted   |
| on Nasdaq and AIM tended to underperform in volatile market       |
| conditions.  In contrast, the Austrian water treatment companies  |
| Christ Water and BWT both rallied after share price weakness      |
| during May.                                                       |
|                                                                   |
| During the month we sold our position in Biopetrol and increased  |
| our exposure to Insituform (trenchless sewer repair, US).         |
+-------------------------------------------------------------------+


Latest information available at: www.impax.co.uk/asset/iemdown.htm

25 July 2006

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