Final Results

India Capital Growth Fund Limited
23 March 2007


INDIA CAPITAL GROWTH FUND LIMITED

CHAIRMAN'S REPORT


The Company has now completed its first full year and I would like to welcome
all shareholders who joined the company both at its launch and subsequently.


The Company's objective is to invest for long term capital growth in Indian
securities with the focus on small and mid-cap listed stocks together with up to
25% in unlisted securities.


The first year was always going to be a challenging one, given that by
definition the fund started with 100% in cash. Difficulties were exacerbated by
a very exuberant market in the first four months of the year followed by a sharp
setback particularly in small caps. The second half saw a recovery principally
in larger stocks. In addition a Sterling based fund has had to cope with an
11.6% depreciation of the Rupee against Sterling.


Whilst it is disappointing to report a decline in asset value (5% in Sterling),
2006 has been a year of solid achievement. Over 80% of the Company's funds have
now been invested in small and mid-cap companies, both listed and unlisted.
Holdings have been acquired, both through subscription and market purchase in a
range of companies, selected to benefit from the continuing strength of the
Indian domestic economy and India's increasing share of export markets.


The sharp market fall in May which had a significant effect on market values was
reported at the interim stage. In the second half of the year the net asset
value rose by over 10%. In December we took our first Board seat in a portfolio
company, and expect to play a more active role going forward. The early months
of 2007 have seen continued volatility in markets, and at 28 February 2007 the
net asset value was 89.03 pence per share, a decline of 4.49% since the year
end.


India continues to be a country of opportunity. I and my Board colleagues
visited India during the year and met with a number of investee companies in a
variety of sectors and locations. This gave us the opportunity to see at first
hand the quality of the management in these companies and to discuss with them
their plans for the development of their businesses. We were most impressed with
what we saw and heard and came away extremely enthusiastic about the prospects
for these companies and for your Company as an investor in them.


The Company has made a solid, if unspectacular start, and from here is well
placed to fulfil the optimism inherent in the name India Capital Growth Fund.



Micky Ingall

Chairman

23 March 2007




PRINCIPAL GROUP INVESTMENTS

AS AT 31 DECEMBER 2006

Holding                               Type       Sector               Value       % of
                                                                             Portfolio
                                                                     £000's
S Kumars Nationwide Limited           Small Cap  Textiles             4,778       6.83
Industrial Development Bank of India  Large Cap  Banks                3,333       4.77
Limited
Spicejet Limited                      Small Cap  Airlines             3,185       4.55
Mahindra Ugine Steel Company Limited  Small Cap  Auto component       3,157       4.51
Prime Focus Limited                   Small Cap  Media                3,097       4.43
Asian Electronic Limited              Small Cap  Electricals &        3,076       4.40
                                                 lighting systems
Marwadi Shares and Finance Limited    Unlisted   Financial            3,026       4.33
                                                 services
Varun Shipping Company Limited        Small Cap  Shipping             2,865       4.10
Arihant Foundations and Housing       Small Cap  Housing &            2,692       3.85
Limited                                          construction
Logix Microsystems Limited            Small Cap  Software             2,642       3.78
Total top 10 investments                                             31,851     45.55%
Other Large Cap (3 companies)                                           830      1.19%
Other Small and Mid Cap (25                                          28,574     40.87%
companies)
Total invested assets                                                61,255     87.61%
Cash and other net assets                                             8,661     12.39%
Total Portfolio                                                      69,916     100.0%



CONSOLIDATED INCOME STATEMENT

FOR THE PERIOD FROM 11 NOVEMBER 2005 TO 31 DECEMBER 2006

                                                       Revenue    Capital      Total
                                                          £000       £000       £000

Income                                                     866          -        866
Fixed deposit interest                                     496          -        496
Bank interest income                                       696          -        696
Investment income                                        2,058          -      2,058

Net losses on financial assets at fair value
through profit or loss
Market movements                                             -      (741)      (741)
Foreign exchange movements                                   -    (2,796)    (2,796)
Total income                                             2,058    (3,537)    (1,479)

Expenses
Management fee                                         (1,075)          -    (1,075)
Cost of acquisitions and disposal of investments             -      (464)      (464)
Other expenses                                           (477)      (197)      (674)
Total expenses                                         (1,552)      (661)    (2,213)

Profit/(loss) for the period before taxation               506    (4,918)    (3,692)
Taxation                                                  (19)          -       (19)

Profit/(loss) for the period after taxation                487    (4,198)    (3,711)

Earnings per Ordinary Share - Basic (pence)               0.65     (5.60)     (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
Trust Companies.


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



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD FROM 11 NOVEMBER 2005 TO 31 DECEMBER 2006

                                                                              Other
                         Share     Share   Capital Reserve    Revenue Distributable
                       Capital   Premium Realised Unrealised  Reserve       Reserve   Total
                          £000      £000     £000       £000     £000          £000    £000
Balance as at 11             -         -        -          -        -             -       -
November 2005
Gains/(Loss) on              -         -       16      (757)        -             -   (741)
investments
Revenue profit for the       -         -        -          -      487             -     487
period after taxation
(excluding foreign
exchange losses)
Cost of acquisition          -         -    (104)      (360)        -             -   (464)
and disposal of
investments
Gain/(loss) on foreign       -         -    (197)    (2,796)        -             - (2,993)
currency
Issue of shares            750    74,250        -          -        -             -  75,000
Issue costs relating         -   (1,373)        -          -        -             - (1,373)
to the issue of shares
Transfer to                  -  (72,877)        -          -        -        72,877       -
distributable reserves

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




CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

AS AT 31 DECEMBER 2006

                                                                     £000       £000
Non-current assets
Financial assets at fair value through profit or loss                         61,255

Current assets
Cash and cash equivalents                                           9,082
Receivables                                                            73
                                                                    9,155

Current liabilities
Payables                                                            (494)

Net current assets                                                             8,661
TOTAL ASSETS LESS CURRENT LIABILITIES                                         69,916

EQUITY
Ordinary share capital                                                           750
Reserves                                                                    (69,166)
Total equity                                                                  69,916

Number of Ordinary Shares in issue                                        75,000,000

Net Asset Value per Ordinary Share (pence)                                     93.22




CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD FROM 11 NOVEMBER 2005 TO 31 DECEMBER 2006

                                                                                 £000
Cashflows from operating activities
Investment income                                                                 672
Fixed deposit interest                                                            866
Bank interest                                                                     496
Investment management fee                                                       (986)
Other cash payments                                                             (432)
Net cash inflow from operating activities                                         616

Cashflows from investing activities
Purchase of investments                                                      (94,081)
Sale of investments                                                            29,312
Transaction charges relating to the purchase and sale of                        (402)
investments
Net cash outflow from investing activities                                   (65,171)

Cashflows 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 period                     9,072

Cash and cash equivalents at the beginning of the period                            -
Exchange gains on cash and cash equivalents                                        10

Cash and cash equivalents at the end of the period                              9,082





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