Half-yearly report

Securities Trust of Scotland Plc

Half-yearly financial report
Six months to 30 September 2008

Growing long-term,
delivering high income

A copy of this half-year report can be downloaded at www.securitiestrust.com

Financial highlights

Key data      As at          As at          % change
              30 September   31 March 2008
              2008
Net asset     100.7p         123.92p        - 18.7
value per
share*
FTSE All-     2,483.67       2,927.05       - 15.1
Share index
Share price   90.00p         116.00p        - 22.4
Discount      10.63%         6.39%

*Calculated in accordance with the requirements of the AIC.  (Following a recent
review by the AIC, the net asset value is inclusive of current year revenue).


Total returns†     Six months ended    Six months ended
                   30 September 2008   30 September 2007
Net asset value    -16.5%              -0.4%
per share
FTSE All-Share     -13.5%              2.7%
index
Share price        -19.7%              -2.0%

†The combined effect of any dividend paid, together with the rise or fall in the
share price, net asset value or index.


Income        Six months      Six months   % change
              ended           ended
              30 September    30
              2008            September
                              2007
Revenue       3.04p           2.78p        +9.4%
return per
share


Total expenses††   Six months ended    Six months ended
                   30 September 2008   30 September 2007
As a percentage of 0.6%                0.6%
shareholders'
funds (prior to
shareholders'
redemption
liability)

††Annualised

Key facts
£102.7m Shareholders' funds (prior to shareholders' redemption liability)

Share price
90.00p (down 22.4%)

Interim dividend per share
1.15p (up 4.5%)

Objective
Rising income and long-term capital growth
Portfolio focus
UK

Benchmark
FTSE All-Share index

Capital structure
101,970,223 ordinary shares of 1p each entitled to one vote

Dividends paid
March, June, September and December



Chairman's statement
The investment objective of Securities Trust of Scotland plc ("the Trust") is to
achieve rising income and long-term capital growth by investment in the UK. In
an exceptionally difficult environment for investing, the Trust continued to
deliver income in excess of that available from the UK equity market.

However, after five years of rising stock markets, the past six months has seen
a significant fall in capital values, with high yielding shares among the
hardest hit.

Income and capital growth
In addition to the well-publicised problems in the banking sector and subsequent
dividend cuts by HBOS, RBS and Lloyds TSB, dividend growth from other companies
is also likely to be subject to downward pressure during the next 12 months.
This would inevitably have an impact on the Trust's income, and while some
companies in the portfolio could disappoint in these extremely challenging times
the manager remains confident that overall the revenue generated by companies
within the portfolio will meet expectations.

Currency movements, in particular the strength of the US dollar against
Sterling, should help mitigate dividend reductions by investee companies.

The first interim dividend of 1.15p per share has already been paid in respect
of the period to 31 March 2009, a 4.5% rise on the 1.10p paid in the same period
in the previous financial year.

The Board has declared a second interim dividend of 1.15p per share payable on
15 December to shareholders on the register on 14 November.

Going forward the company will continue its popular policy of paying dividends
quarterly in September, December, March and June.

During the period capital values of high yielding stocks have been particularly
badly affected by the fallout from the global financial crisis. In the six
months to 30 September, the total return of the net asset value per share fell
by 16.5%, compared with the 13.5% fall in the FTSE All-Share Index.

Outlook
The UK market has been subject to some extremely challenging conditions in 2008,
and it can be hard to remain calm when some of Britain's best-known high-street
lenders are being challenged and house prices are facing a sharp downturn.

After the market's recent rapid and extensive fall, valuations have also fallen
to their lowest levels in many years.   The Board will actively monitor the
dividend growth potential of the holdings in the portfolio to strive to maintain
a progressive dividend policy going forward.

In the half-yearly management report, Ross Watson explains the recent
performance in more detail and gives his views on the prospects for the Trust in
2009.

The Board echoes the Manager's view that, despite the weak economic backdrop,
there is good value to be found in UK equities, particularly those offering a
reliable, growing income for shareholders.

Neil Donaldson
17 November 2008





Half-yearly management report

The six months to 30 September 2008 were poor ones for equities worldwide,
including the UK. The FTSE All-Share Index fell by 15.1% and the equity
portfolio of Securities Trust of Scotland fell by 14.4%. There have been two
concurrent themes driving the weakness in equity prices. The enormous problems
in the world financial system of huge losses and latterly a significant
contraction in the availability of credit have received widespread publicity.
The capital raised only a few months ago is now proving to be insufficient
particularly in the UK where the authorities have significantly increased the
amount of required capital.

At the same time industry and consumers worldwide have been struggling to adapt
to the impact of higher fuel, electricity and food prices. Even without the
impact of reduced credit availability economic activity was already on a
downward trend. Now recession is inevitable in much of the developed world.
Corporate profits generally follow economic activity but despite this outlook
the estimates of many analysts remain too high and will have to be reduced.
However given the very difficult financial background and the weak economic
outlook it is no surprise that the fall in equity markets has already discounted
weaker corporate profits in many sectors.

Dividend income has traditionally been far more secure than the level of profits
as many companies try to deliver a relatively smooth stream of income to
shareholders across a number of years. This still holds and the outlook for
dividend payments is better than that for profits. The capital raised by a
number of UK banks has however been highly dilutive to shareholders and those
banks that receive capital from the Government will be precluded from paying
ordinary dividends. It could be a number of years before RBS, Lloyds and HBOS
are able to pay dividends again. This is clearly bad news for shareholders in
these banks and has affected to a modest extent the revenue forecasts for
Securities Trust of Scotland.

One mitigating factor has however been the weakness of sterling, particularly
against the US dollar in which over 20% of the portfolio income is declared.
This has increased the income expected from these holdings including BP, Royal
Dutch Shell and HSBC. The dividend payments of these companies look secure.

The portfolio has had an underweight position in the banks sector for some time.
At the end of the period part of the existing position was switched into HBOS
following the announcement of its agreed merger with Lloyds TSB. The key
positive is the ability of the merged group to deliver significant cost savings
ahead of those announced at the time of the deal. This will become apparent in
profits once the UK economy recovers from its current weakness and give a
significant boost to profits and dividend paying ability.

A new holding was established in Unilever, a global consumer products business,
as the outlook for its profits appear relatively secure. The future growth of
this company will come from the many emerging markets in which it operates. The
recent announcement of a new chief executive from outside the group was well
received by the market. In difficult times it is good to be invested in a
company that has a secure earnings stream for the next few years.

BAE Systems has done much in recent years to improve the quality of its earnings
by reducing the risks on many of the long term programmes in which it is
involved. It recently increased its interim dividend by 16%, reflecting its
confidence in the future, and the holding was therefore increased.

A new holding was established in Petrofac, an oil services company that has long
term contracts with major oil companies.

The holding in Go-Ahead, a UK bus and rail stock, was increased as the industry
continues to see passenger and revenue growth.

Wolseley has been affected by the very weak US housing industry but is now
facing weaker conditions in the UK and Europe. The balance sheet is not strong
and the holding was sold. The strong balance sheet and international spread of
HSBC mean that it has fared relatively well compared to other banks but this is
reflected in the rating and the holding was reduced. Informa, in the media
sector, was the subject of a takeover and the holding was reduced before the bid
was rejected by the board.

Slower rental growth from its property portfolio as the UK economy weakens means
that Land Securities will find it difficult to increase its dividend whilst the
planned demerger of the group becomes less likely. The holding was reduced.

After its recent rapid and extensive fall the UK stock market is already
discounting a fall in corporate profits during 2009 and the prospective PE
multiple of only 9 times has fallen to its lowest level in many years.
Confidence is very low amongst investors and the turmoil in the banking sector
is certainly not helping. At these levels there is value to be found despite the
expected continuation of weak economic news. However in the current environment
we shall focus upon the security of income in what are likely to be volatile
markets in the months to come.


Ross Watson
17 November 2008




Risks and uncertainties
The principal risks and uncertainties that the Company faces can be found in the
table below, with further information on page 12, and pages 34 and 35 of the
Company's full annual report for the year to 31 March 2008, which can be
obtained free of charge from Martin Currie and is available on the website
www.securitiestrust.com.

Risk                        Mitigation
Loss of s842 status         In order to qualify as an investment
                            trust, the Company must comply with
                            Section 842 of the Income and
                            Corporation Taxes Act 1988.
                            Section 842 qualification criteria are
                            continually monitored by Martin Currie.
Operational disruption at   Martin Currie has in place a full
the Manager's premises      disaster recovery and business
                            continuity plan which facilitates
                            continued operation of the business
                            should the Manager's premises be
                            subject to operational disruption. The
                            plan was last tested in October 2008
                            with successful results. The Manager
                            maintains a fully operational off-site
                            disaster recovery centre for use by key
                            staff during any disruption.
Regulatory, accounting/     The Company must comply with the
internal control breach     Companies Act 1985 and 2006 and the
                            UKLA Listing Rules. The Board relies on
                            the services of its company secretary
                            and its professional advisers to ensure
                            compliance.
Loss of investment team or  The Manager takes steps to reduce the
Investment Manager          likelihood of such an event by ensuring
                            appropriate succession planning and the
                            adoption of a team based approach, as
                            well as special efforts to retain key
                            personnel.
Failure to manage the       The Board regularly discusses discount
discount                    policy and has set parameters for the
                            Manager and the Company's broker to
                            follow.
Investment underperformance The Board manages the risk of
                            investment underperformance by
                            diversification of investments and
                            through a set of investment
                            restrictions and guidelines that are
                            monitored and reported on by the
                            Manager.
                            The Board monitors the implementation
                            and results of the investment process
                            with the Investment Manager, who
                            attends all Board meetings, and reviews
                            data that show statistical measures of
                            the Company's risk profile.
Gearing/Interest rate risk  From time to time the Company finances
                            its operations through bank borrowings.
                            However, the Board monitors such
                            borrowings (gearing) closely and takes
                            a prudent approach. The amount of such
                            borrowings will not exceed 15% of the
                            Company's total assets.
Currency risk               The Board regularly monitors the impact
                            of currency rate risk.
Counterparty risk           Martin Currie has a counterparty risk
                            committee. It meets regularly to
                            consider all aspects of counterparty
                            risk. Any recommendations are then made
                            to the Board.


Related party transactions
There have been no related party transactions during the first half of the year.

Directors' responsibility
In accordance with Chapter 4 of the Disclosure and Transparency Rules, and to the
best of their knowledge, each Director of Securities Trust plc ("the Company")
confirms that the financial statements have been prepared in accordance with the
applicable set of accounting standards and with the Statement of Recommended
Practice `financial statements of Investment Trust companies', and give a true
and fair view of the assets, liabilities, financial position and profit or loss
of the Company. Furthermore, each Director certifies that the half-yearly
management report includes an indication of important events that have occurred
during the first six months of the financial year, and their impact on the
financial statements, together with a description of the principal risks and
uncertainties that the Company faces. In addition each Director of Securities
Trust plc confirms that there have been no related party transactions during the
first half of the year.

By order of the Board
Martin Currie Investment Management Limited
Secretaries
Edinburgh
17 November 2008


Portfolio summary

Portfolio
distribution
as at 30
September

By asset class        2008     2007
                         %        %
Equities               109      106

Fixed interest           4        4

Cash                     1        -

Less borrowings        (14)     (10)

                       100      100



By sector             2008     2007
(excluding cash)
                         %        %

Financials              26       31

Oil and gas             15       12

Consumer goods          13       10

Industrials              9       10

Basic materials          8       10

Consumer services        8       10

Healthcare               7        3

Telecommunications       7        9

Utilities                6        5

Technology               1        -

                       100      100



Portfolio summary

Largest holdings
as at 30 September
                        2008      2008      2007      2007
                      Market      % of    Market      % of
                       value     total     value     total
                        £000 portfolio      £000  portfolio

British American       8,235      7.15     7,862      4.80
Tobacco
BP                     8,081      7.02     9,883      6.04
Royal Dutch Shell      7,162      6.22     9,132      5.58
HSBC                   6,096      5.30    10,028      6.12
GlaxoSmithKline        4,852      4.22     5,196      3.17
Aviva                  4,623      4.02     4,250      2.60
Vodafone               4,525      3.93     7,968      4.87
BAE Systems            3,496      3.04     2,764      1.69
Scottish and           3,388      2.94     4,005      2.45
Southern Energy
National Grid          3,223      2.80     3,874      2.37
AstraZeneca            3,148      2.74         -         -
Imperial Tobacco       2,961      2.57     2,462      1.50
BT                     2,873      2.50     4,030      2.46
Royal Bank of          2,619      2.28     6,769      4.13
Scotland
Barclays               2,428      2.11     4,428      2.70
Rio Tinto              2,409      2.09         -         -
Xstrata                2,307      2.00     2,803      1.71
Intermediate           2,030      1.76     2,451      1.50
Capital
BHP Billiton           1,922      1.67     5,897      3.60
Unilever               1,886      1.64         -         -



Unaudited income statement


                  Six months to            Six months to
                  30 September 2008        30 September 2007
                  Revenue  Capital  Total  Revenue  Capital   Total

           Note      £000     £000   £000     £000     £000    £000

Loss on                 -  (23,064)(23,064)     -    (3,543) (3,543)
investments

Currency                -        -       -      -        10      10
gains
Income -   3        2,948        -   2,948  3,019       635   3,654
Franked
-Unfranked 3          509        -     509    225         -     225
- Deposit  3           37        -      37     49         -      49
interest
- Other    3           25        -      25      2         -       2
income
Investment            (50)     (93)   (143)   (85)     (158)   (243)
Management fee

Other                (224)       -    (224)  (224)        -    (224)
expenses
Net                 3,245  (23,157)(19,912) 2,986    (3,056)    (70)
return
before
finance
costs and
taxation
Finance              (137)    (254)   (391)  (150)     (277)   (427)
Costs -
Debt
-          4       (3,365)       -  (3,365)(4,126)        -  (4,126)
Shareholders
funds
Net                  (257) (23,411)(23,668)(1,290)   (3,333) (4,623)
return on
ordinary
activities
before
taxation
Taxation   5           (5)       -      (5)    (3)        -      (3)
on
Ordinary
Activities

Return               (262) (23,411)(23,673)(1,293)   (3,333) (4,626)
attributable
to ordinary
redeemable
shareholders

Return     2         3.04p (22.96p)(19.92p) 2.78p    (3.27p) (0.49p)
per
ordinary
redeemable
share



Unaudited income
statement
                                                             (Audited)
                                Six months to                Year to
                                30 September 2007            31 March 2008
                                Revenue   Capital   Total    Revenue  Capital    Total
                          Note     £000      £000    £000       £000     £000     £000

Losses on investments                 -    (3,543) (3,543)         -  (26,985) (26,985)

Currency                              -        10      10          -       10       10
gains
Income      - franked      3      3,019       635   3,654      6,160      635    6,795
            - unfranked    3        225         -     225        400        -      400
            - deposit      3         49         -      49        106        -      106
            interest
            - other        3          2         -       2         16        -       16
            income
Investment management              (85)      (158)   (243)     (142)     (264)    (406)
fee
Other                             (224)         -    (224)     (441)        -     (441)
expenses
Net return before                2,986     (3,056)    (70)    6,099   (26,604) (20,505)
finance costs and
taxation
Finance     - debt                (150)      (277)   (427)     (301)     (558)    (859)
costs       - shareholders 4    (4,126)         -  (4,126)   (6,368)        -   (6,368)
              funds

Net return on ordinary          (1,290)    (3,333) (4,623)     (570)  (27,162) (27,732)
activities before
taxation
Taxation on ordinary       5        (3)         -      (3)       (3)        -       (3)
activities
Return attributable to          (1,293)    (3,333) (4,626)     (573)  (27,162) (27,735)
ordinary redeemable
shareholders

Return per ordinary        2     2.78p     (3.27p) (0.49p)    5.68p   (26.64p) (20.96p)
redeemable share


The total columns of this statement are the profit and loss accounts of the
Company.
The revenue and capital items are presented in accordance with the Association
of Investment Companies (AIC) SORP.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the year.
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.

Unaudited balance sheet



                                 As at               As at           (Audited)
                                 30                  30               As at
                                 September           September        31 March
                                 2008                2007             2008
                         Note    £000     £000       £000   £000      £000  £000

Non-current assets
Investments at fair
value through profit or
loss
Listed on Exchanges in   6             115,080           163,757          137,823
the UK

Current assets
Loans and receivables    7        717             1,837            1,994

Cash at bank                    1,233               593              451

                                1,950             2,430            2,445

Creditors
Amounts falling due      8    (14,345)          (16,720)         (13,910)
within one year

Net Current Liabilities                (12,395)          (14,290)         (11,465)


Shareholders' funds                    102,685           149,467          126,358
(prior to shareholders'
redemption liability)

Creditors
Distributable capital    9             (99,945)         (147,185)        (123,356)
and reserves
attributable to
shareholders on
redemption
                                         2,740             2,282            3,002

Distributable capital
and reserves
Revenue reserves                         2,740             2,282            3,002

Net asset value per      2             100.70p           146.58p          123.92p
ordinary redeemable
share (prior to
shareholders' redemption
liability)




Unaudited statement of
cash flow
                                                                        (Audited)
                                     Six months          Six            Year to
                                     to 30               months to 30   31 March
                                     September           September      2008
                                     2008                2007
                            Note     £000    £000        £000   £000    £000   £000

Net cash inflow from        10              4,155              3,603          5,836
operating activities

Servicing of finance
Finance costs      - debt            (339)              (432)           (878)
                   - equity        (3,365)            (4,126)         (6,368)

Net cash outflow from                      (3,704)            (4,558)        (7,246)
servicing of finance

Taxation
Overseas taxation paid                 (5)                (3)             (3)
Net cash outflow from                          (5)                (3)            (3)
taxation

Capital expenditure and
financial investment
Payments to acquire               (13,950)           (19,108)         (44,647)
investments
Receipts from disposal of          13,786             17,733           45,335
investments
Net cash (outflow)/inflow                    (164)            (1,375)           688
from investing activities



Net cash inflow/(outflow) before use          282             (2,333)         (725)
of liquid resources and financing

Financing
Movement in short-term                500              1,300            (450)
borrowings
Net cash inflow/(outflow)                    500               1,300          (450)
from financing

Increase/(decrease) in                       782              (1,033)       (1,175)
cash for the period

Reconciliation of net cash  11
flow to movements in net
debt
Increase/(decrease) in                782             (1,033)         (1,175)
cash as above
(Drawdown)/repayment of             (500)             (1,300)            450
short term borrowings
Change in net cash /                         282              (2,333)         (725)
(debt) resulting from cash
flows
Foreign exchange movements                     -                  10            10
Movement in net debt in                      282              (2,323)         (715)
the period

Opening net debt                         (13,099)            (12,384)      (12,384)

Closing net debt                         (12,817)            (14,707)      (13,099)





Reconciliation of movements in shareholders' funds

                     Called up     Capital     Special         Realised    Unrealised    Revenue    Total
                     ordinary      redemption  distributable   capital     capital       Reserve
                     share         reserve     capital         reserve     reserve
                     capital                   reserve
For the six     Note    £000          £000         £000           £000         £000         £000     £000
months to 30
September 2008
As at 31 March         1,019            62      111,145         18,640       (7,510)       3,002  126,358
2008
Realised                   -             -            -         (5,320)           -            -   (5,320)
losses on
investments
during the
period
Unrealised                 -             -            -              -      (17,744)           -  (17,744)
depreciation
on investments
Capitalised                -             -            -           (347)           -            -     (347)
expenses
Return                     -             -            -              -            -         (262)    (262)
attributable
to
shareholders
Balance at 30          1,019            62      111,145         12,973      (25,254)       2,740  102,685
September 2008


For the six
months to 30
September 2007
As at 31 March         1,019            62      111,145          9,500       28,792        3,575  154,093
2007
Realised gains             -             -            -          3,599            -            -    3,599
on investments
during the
period
Realised                   -             -            -             10            -            -       10
currency gains
during the
period
Unrealised                 -             -            -              -       (7,142)           -   (7,142)
depreciation on
investments
Franked Income  3          -             -            -            635            -            -      635
Capitalised                -             -            -           (435)           -            -     (435)
expenses
Return                     -             -            -              -            -       (1,293)  (1,293)
attributable to
shareholders
Balance at 30          1,019            62      111,145         13,309       21,650        2,282  149,467
September 2007



For the year
ended 31 March
2008
As at 31 March        1,019             62      111,145          9,500       28,792        3,575  154,093
2007
Realised gains            -              -            -          9,317            -            -    9,317
on investments
during the year
Realised                  -              -            -             10            -            -       10
currency gains
during the year
Unrealised                -              -            -              -      (36,302)           -  (36,302)
depreciation on
investments
Franked income  3         -              -            -            635            -            -      635
Capitalised               -              -            -           (822)           -            -     (822)
expenses
Return                    -              -            -              -            -         (573)    (573)
attributable to
shareholders
Balance at 31         1,019             62      111,145         18,640       (7,510)       3,002  126,358
March 2008

The revenue reserve represents the amount of the Company's reserves
distributable by way of dividend.


1 Accounting policies

(a) The financial statements have been prepared in accordance with UK Generally
Accepted Accounting Practice (UK GAAP) and the Statement of Recommended Practice
for Financial Statements of Investment Trust Companies (SORP), issued in 2005.

Dividends - In accordance with FRS 21: "Events after the balance sheet date",
dividends are included in the financial statements in the period in which they
are paid.

Functional currency - In accordance with FRS 23: "The effects of changes in
foreign currency", the Company is required to nominate a functional currency,
being the currency in which the Company predominately operates. The Board has
determined that Sterling is the Company's functional currency, which is also the
currency in which these financial statements are prepared.

(b) Income from equity investments is determined on the date on which the
investments are quoted ex-dividend, or where no ex-dividend date is quoted, when
the Company's right to receive payment is established. Income from fixed
interest securities is recognised on an effective yield basis.  UK dividends
received are accounted for at the amount receivable and are not grossed up for
any tax credit. Other income includes any taxes deducted at source. Gains and
losses arising from the translation of income denominated in foreign currencies
are recognised in the revenue reserve.

Scrip dividends are treated as unfranked investment income; any excess in value
of shares received over the amount of the cash dividend is recognised in capital
reserves.

(c) Interest receivable and payable and management expenses are treated on an
accruals basis.

(d) The management fee and interest costs are allocated 65% to capital and 35%
to revenue in accordance with the Board's expected long-term split of returns in
the form of capital gains and income, respectively. The performance fee is
wholly allocated to capital.

(e) Realised and unrealised gains and losses on investments and exchange
adjustments to overseas currencies are taken to capital reserve.

(f) Foreign currencies are translated at the rates of exchange ruling on the
balance sheet date. Investments are recognised initially as at the trade date of
a transaction. Subsequent to this, the disposal of an investment is accounted
for once again as at the trade date of a transaction.

(g) Revenue received and interest paid in foreign currencies are translated at
the rates of exchange ruling on the transaction date. Any exchange differences
relating to revenue items are taken to the revenue account.

(h) The Company's investments are classified as "financial assets at fair value
through profit or loss" and are therefore valued at bid price. Gains and losses
arising from changes in fair value are included in the capital return for the
period.

(i) All financial assets and liabilities are recognised in the financial
statements.

(j) Deferred tax is recorded in accordance with Financial Reporting Standard 19
(Deferred Tax). Deferred tax is provided on all timing differences that have
originated but not reversed by the balance sheet date. A deferred tax asset is
only recognised to the extent that it is regarded as recoverable.

Due to the Company's status as an investment trust company, and the intention to
continue meeting the conditions required to obtain approval in the foreseeable
future, the Company has not provided for deferred tax on any capital gains and
losses arising on the revaluation or disposal of investments.

(k) Transaction costs incurred on the purchase and disposal of investments are
recognised as a capital item in the income statement.

(l) Shareholders funds - Under FRS25 "Financial instruments: Disclosure and
presentation", when shares are issued, any component that creates a financial
liability in the balance sheet is measured initially at fair value net of
transaction costs and thereafter at amortised cost until extinguished on
redemption. The corresponding dividends relating to the liability component are
charged as finance costs in the income statement.

(m) Share buy backs are funded through the capital reserve.

2.

               Six months to  Six months to   Year to 31
               30 September   30 September    March 2008
               2008           2007
Returns and
net asset
value
The returns
and net asset
value per
share are
calculated
with
reference to
the following
figures:
Revenue
Return
Revenue        (£262,000)     (£1,293,000)    (£573,000)
Return
attributable
to ordinary
redeemable
shareholders
Add back       £3,365,000     £4,126,000      £6,368,000
finance costs
-
shareholders'
funds
               £3,103,000     £2,833,000      £5,795,000

Average        101,970,223    101,970,223     101,970,223
number of
shares in
issue during
the period
Revenue        3.04p          2.78p           5.68p
return per
ordinary
redeemable
share
Capital
Return
Capital        (£23,411,000)  (£3,333,000)    (£27,162,000)
return
attributable
to ordinary
redeemable
shareholders
Average        101,970,223    101,970,223     101,970,223
number of
shares in
issue during
the period
Capital        (22.96p)       (3.27p)         (26.64p)
return per
ordinary
redeemable
share
Total return
Total return   (19.92p)       (0.49p)         (20.96p)
per ordinary
redeemable
share



               As at 30       As at 30        As at 31
               September      September       March 2008
               2008           2007
Net asset
value per
share
Net assets     £102,685,000   £149,467,000    £126,358,000
attributable
to
shareholders
Number of      101,970,223    101,970,223     101,970,223
shares in
issue at
period end
Net asset      100.70p        146.58p         123.92p
value per
ordinary
redeemable
share


Reconciliatio As at 30       As at 30       As at 31
n of ex-      September      September      March 2008
income and    2008           2007
cum-income
net asset
value per
share
Cum-income    100.70p        146.58p        123.92p
net asset
value per
share
Exclusion of  (1.89p)        (1.68p)        (2.39p)
undistributed
current
period
revenue
Ex-income net 98.81p         144.90p        121.53p
asset value
per share


3.

              Six months to  Six months to  Year to 31
              30 September   30 September   March 2008
              2008           2007           £000
              £000           £000
Income
Income from
investments
Equities      3,272          3,053          6,187
Fixed         185            191            373
interest and
convertibles
              3,457          3,244          6,560
Other income
Interest on   37             49             106
deposits
Underwriting  25             2              16
commission
              3,519          3,295          6,682


During the six months to 30 September 2008 the Company received no capital
dividends (31 March 2008 - £635,000 from Smiths Group).

4.

              Six months to  Six months to  Year to 31
              30 September   30 September   March 2008
              2008           2007           £000
              £000           £000
Finance Costs
-
Shareholders'
funds
Year ended 31 -              1,071          1,071
March 2007 -
third interim
dividend of
1.05p
Year ended 31 -              1,937          1,937
March 2007 -
fourth
interim
dividend of
1.90p
Year ended 31 -              1,122          1,122
March 2008 -
first interim
dividend of
1.10p
Year ended 31 -              -              1,122
March 2008 -
second
interim
dividend of
1.10p
Year ended 31 -              -              1,122
March 2008 -
third interim
dividend of
1.10p
Year ended 31 2,192          -              -
March 2008 -
fourth
interim
dividend of
2.15p
Year ended 31 1,173          -              -
March 2009 -
first interim
dividend of
1.15p
Refund of     -              (4)            (6)
unclaimed
dividends by
the registrar
              3,365          4,126          6,368


5.

Taxation      Six months to  Six months to  Year to 31
              30 September   30 September   March 2008
              2008           2007           £000
              £000           £000
Withholding   5              3              3
tax on income
from overseas
investments


6.

Investments    Six months to Six months to  Year to 31
               30 September  30 September   March 2008
               2008          2007           £000
               £000          £000
Fair value
through
profit or
loss
Opening        137,823       166,595        166,595
valuation
Add:           7,510         (28,792)       (28,792)
unrealised
depreciation/
(appreciation
)
Opening cost   145,333       137,803        137,803
Add:           13,801        19,341         43,854
additions at
cost
Less:          (18,800)      (15,037)       (36,324)
disposals at
cost
Closing cost   140,334       142,107        145,333
Add:           (25,254)      21,650         (7,510)
unrealised
(depreciation
)/appreciatio
n
Closing        115,080       163,757        137,823
Valuation


Transaction costs
During the period expenses were incurred in acquiring or disposing of
investments classified as fair value through profit or loss.  These have been
expensed through capital and are included within gains and losses on investments
in the income statement.  The total costs were as follows:

              Six months to  Six months to  Year to 31
              30 September   30 September   March 2008
              2008           2007           £000
              £000           £000
Acquisitions  53             103            261
Disposals     20             34             76
              73             137            337


7.

              As at 30       As at 30       As at 31
              September      September      March 2008
              2008           2007           £000
              £000           £000
Loans and
receivables
Dividends     648            879            1,620
receivable
Interest      33             32             35
accrued
Due from      -              903            306
brokers
Tax           12             7              7
recoverable
Other debtors 24             16             26
              717            1,837          1,994


8.

              As at 30       As at 30       As at 31
              September      September      March 2008
              2008           2007           £000
              £000           £000
Amounts
falling due
within one
year
Interest      68             30             16
accrued
Due to        -              1,175          149
brokers
Sterling bank 14,050         15,300         13,550
loan
Other         227            215            195
creditors
              14,345         16,720         13,910

The company has a £20,000,000 loan facility with Lloyds TSB which expires in
June 2009.  Under this agreement £14,050,000 was drawn at 30 September 2008 at a
rate of 5.8712%.  On 1 October 2008 the loan was rolled-over at a rate of
6.5215% with a maturity date of 3 November 2008.
The fair value of the sterling loan is not materially different from its
carrying value.  The interest rate is set at each roll-over date at LIBOR plus a
margin of 0.5115%.

9.

              Six months to  Six months to  Year to 31
              30 September   30 September   March 2008
              2008           2007           £000
              £000           £000
Distributable
capital and
reserves
attributable
to
shareholders
on redemption
Called-up     1,019          1,019          1,019
share capital
Capital       62             62             62
redemption
reserve
Special       111,145        111,145        111,145
distributable
capital
reserve
Realised      12,973         13,309         9,500
capital
reserve
Unrealised    (25,254)       21,650         28,792
capital
reserve
              99,945         147,185        150,518


10.

              Six months to  Six months to  Year to 31
              30 September   30 September   March 2008
              2008           2007           £000
              £000           £000
Reconciliatio
n of net
return before
finance costs
and taxation
to net cash
inflow from
operating
activities
Net return    (19,912)       (70)           (20,505)
before
finance costs
and taxation
Decrease/(inc 976            460            (294)
rease) in
accrued
income and
other debtors
Increase/(dec 32             (317)          (337)
rease) in
creditors
Currency      -              (10)           (10)
movements
Net losses on 23,064         3,543          26,985
investments
Taxation      (5)            (3)            (3)
withheld from
income on
investments
Net cash      4,155          3,603          5,836
inflow from
operating
activities


11.

              At 31 March    Cash flow      At 30
              2008           £000           September
              £000                          2008
                                            £000
Analysis of
debt
Cash at bank  451            782            1,233
Bank          (13,550)       (500)          (14,050)
borrowings -
Sterling loan
Net debt      (13,099)       282            (12,817)


12.
Contingent Assets
On 5 November 2007, the European Court of Justice ruled that management fees
should be exempt from VAT.  HMRC has announced its intention not to appeal
against this case to the UK VAT Tribunal and therefore protective claims which
have been made in relation to the Company will be processed in due course.

The Board continues to make progress in quantifying the potential repayment to
the Company however they do not believe that the payment will be significant and
hence the Company has made no provision in these financial statements.

Martin Currie stopped charging VAT as of 1 November 2007.