North Atl.smlr Regulatory News (NAS)

North Atlantic Smaller Companies Investment Trust plc

Half Yearly Report for the period ended 31 July 2012

The Directors of North Atlantic Smaller Companies Investment Trust plc report the unaudited results of the Company for the six months ended 31 July 2012.

* Including retained revenue for the period.

** Sterling adjusted.

CHIEF EXECUTIVE'S REVIEW

During the six month period under review, the fully diluted net asset value of the Company rose a modest 1.8%. This compares with a rise in the Sterling adjusted Standard & Poors Composite Index of 5.6% and a rise in the FTSE Small Cap Index of 2.9%.

Income for the period amounted to a loss of £307,000 (31 July 2011: loss of £1,122,000). Consistent with past policy, the directors do not propose to pay a dividend.

quoted portfolio

Generally, the performance of the quoted portfolio has been satisfactory. Interxion, Gleeson, CVS and RPC are doing particularly well, whilst Oryx International Growth Fund rose a further 5%. It is also encouraging to see that AssetCo has resolved some of its problems and the share price rose 10% during the period. However, the impact on the overall portfolio value was limited by the fact that quoted stocks only amount to approximately 40% of the Company's overall assets.

unquoted portfolio

Unquoted assets now amount to over 45% of total assets and will be key to the performance of the Company over the balance of the year.

During the first six months of the year there was little change in the overall value of the unquoted portfolio. The valuation of Telos was written up reflecting outstandingly good performance and the generation of excess cash which is being used to redeem the unquoted preference shares held by the Company. It is now the largest and most profitable independent business in the USA providing cyber-security services to the Defense Department. Against this, it was necessary to write off Indicant, reflecting continued weak trading.

outlook

The prospects for the second six months of the year are materially different. Forefront, Bionostics, Orthoproducts and a division of Celsis/Nastor are all up for sale. If these sales were to complete, there would be a substantial uplift in the values of these investments. The impact on the Company's Net Asset Value and cash position would be particularly significant although there can be no guarantees whatsoever that, despite all of these businesses being highly profitable with market leading positions, any transactions will in fact close.

The Company continues to hold substantial liquid assets reflecting our continuing caution about major world economies. Furthermore, this could increase very significantly if the sales referred to above are successful.

It is, however, hard to find attractive new investment opportunities which meet our requirement for a substantial discount to private market value.

Notwithstanding this, we continue to look at a number of new opportunities and remain optimistic that even if market conditions are unfavourable, the Company's Net Asset Value should continue to rise over the remainder of the year.

C H B Mills

Chief Executive

11 September 2012

TOP TEN INVESTMENTS

as at 31 July 2012

* Incorporated in Guernsey

† Oryx is accounted for in the Group accounts as an Associate under the equity method of accounting. The valuation shown above is the Group's share of Oryx's net assets. All other investments are valued at fair value.

†† Hampton Investment Properties Limited is accounted for in the Group accounts as a Subsidiary.

INTERIM MANAGEMENT REPORT

investment objective

The objective of North Atlantic Smaller Companies Investment Trust PLC ("the Company") is to provide capital appreciation through investment in a portfolio of smaller companies principally based in countries bordering the North Atlantic Ocean.

material events

The Board do not consider that there were any material events during the period ended 31 July 2012.

material transactions

The Board do not consider that there were any material transactions during the period ended 31 July 2012.

risk profile

The principal risks and uncertainties for the remaining six months of the year continue to be as described in the Annual Report for the year ended 31 January 2012 on page 18 and pages 63 to 71. The principal risks arising from the Company's financial instruments are market price risk, including currency risk, liquidity risk and credit/ counterparty risk. The Directors review and agree policies with the Manager for managing these risks. The policies have remained substantially unchanged in the six months since the year end.

The Group does not have any significant exposure to credit risk arising from any one individual party. Credit risk is spread across a number of companies, each having a modest effect on the Group's cash flows, should a default occur. The Group assesses the credit worthiness of its debtors from time to time to ensure that they are neither past due or impaired.

To support its investment in unquoted companies, the Group may periodically agree to guarantee all or part of the borrowings of investee companies. Provision is made for any costs that may be incurred when the Directors consider it likely that the guarantee will crystallise.

The Group's exposure to market price risk comprises mainly movements in the value of the Group's investments. It should be noted that the prices of options tend to be more volatile than the prices of the underlying securities. The Joint Managers assess the exposure to market risk when making each investment decision and monitor the overall level of market risk on the whole of the investment portfolio on an ongoing basis.

The functional and presentational currency of the Group is Sterling, and therefore, the Group's principal exposure to foreign currency risk comprises investments priced in other currencies, principally US Dollars.

The Group invests in equities and other investments that are readily realisable.

related party transactions

These are listed in note 10 to the half yearly condensed financial statements below.

CULS

The Convertible Unsecured Loan Stock ('CULS') were issued in units of 5p each. The units are redeemable at par on 31 May 2013, unless previously redeemed, purchased by the Company, or converted at the option of the holder. Interest is payable to holders of the CULS at a rate of 0.5p gross per 5p unit per annum on 31 January each year. The CULS units are convertible into Ordinary Shares of 5p each at a rate of one Ordinary Share for every 5p unit, one month after despatch of the audited accounts in 2013.

During the six month period ended 31 July 2012, 245,554 (2011: 171,301) units of CULS were converted into Ordinary Shares of 5p each at the rate of one 5p Ordinary Share for every unit of 5p. The Company did not purchase any units of CULS for cancellation during the period under review (2011: nil).

As at 31 July 2012, there were 1,553,945 units of CULS outstanding.

By Order of the Board

The Hon. P D E M Moncreiffe

Chairman11 September 2012

RESPONSIBILITY STATEMENT

The Directors confirm to the best of their knowledge that:

·; The condensed set of financial statements contained within this half yearly financial report have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union and gives a true and fair view of the assets, liabilities, financial position and profit of the Group; and

·; The half yearly financial report includes a fair review of the information required by the FSA's Disclosure and Transparency Rule 4.2.7R being disclosure of important events that have occurred during the first six months of the financial year, their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the year; and

·; The half yearly financial report includes a fair review of the information required by the FSA's Disclosure and Transparency Rule 4.2.8R being disclosure of related party transactions during the first six months of the financial year, how they have materially affected the financial position of the Group during the period and any changes therein.

The half yearly financial report was approved by the Board on 6 September 2012 and the above responsibility statement was signed on its behalf by:

The Hon. P D E M Moncreiffe

Chairman

11 September 2012

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

The total column of the statement is the Statement of Comprehensive Income of the Group prepared in accordance with IFRS. The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies.

All items in the above Statement derive from continuing operations. No operations were acquired or discontinued in the period.

* The amounts at 31 July 2011 have been restated to reflect the consolidation of the subsidiary undertaking, Hampton Investment Properties Limited.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

* The amounts at 31 July 2011 have been restated to reflect the consolidation of the subsidiary undertaking, Hampton Investment Properties Limited and the reallocation of reserves.

CONDENSED CONSOLIDATED BALANCE SHEET

* The amounts at 31July 2011 have been restated to reflect the consolidation of the subsidiary undertaking, Hampton Investment Properties Limited and the reallocation of reserves.

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

* The amounts at 31July 2011 have been restated to reflect the consolidation of the subsidiary undertaking, Hampton Investment Properties Limited.

NOTES

1. general information and basis of preparation

North Atlantic Smaller Companies Investment Trust plc ("NASCIT") is a Company incorporated and registered in England and Wales under the Companies Acts 1948 to 1967.

The Company operates as an investment trust company within the meaning of Section 833 of the Companies Act 2006 and is managed in such a way to ensure the Company meets the requirements of Sections 1158 and 1159 of the Corporation Tax Act 2010 for which the Company seeks annual approval from HM Revenue and Customs.

The condensed consolidated interim financial statements for the six months ended 31 July 2012 have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all financial information required for full annual financial statements and have been prepared using the accounting policies adopted in the audited financial statements for the year ended 31 January 2012. Those financial statements were prepared in accordance with International Financial Reporting Standards and with the Statement of Recommended Practice ('SORP') for Investment Companies and Venture Capital Trusts issued by the Association of Investment Companies in January 2009.

The condensed consolidated interim financial information includes the financial statements of the Company its wholly owned Subsidiary, Consolidated Venture Finance Limited and its 68.1% ownership of Hampton Investment Properties Limited, for the six months ended 31 July 2012. The interim financial information for the six months ended 31 July 2011 have been restated to include the financial statements of Hampton Investment Properties Limited, as disclosed in note 1(c) of the annual financial statements for the year ended 31 January 2012.

The Company has adequate financial resources and no significant investment commitments and as a consequence, the Directors believe that the Company is well placed to manage its business risks successfully. After making appropriate enquiries, the Directors have a reasonable expectation that the Company has adequate available financial resources to continue in operational existence for the foreseeable future and accordingly have concluded that it is appropriate to continue to adopt the going concern basis in preparing this half yearly financial report.

2. investment management and performance fees

A Performance Fee is only payable if the investment portfolio outperforms the Sterling adjusted Standard & Poor's 500 Composite Index at the end of each financial year and is limited to a maximum payment of 0.5% of Shareholders' Funds.

In accordance with the Statement of Recommended Practice ("SORP") for investment trust companies, an amount is included in these financial statements for the Performance Fee that could be payable based on investment performance to 31 July 2012.

At that date, no Performance Fee has been accrued for in the accounts (31 July 2011: £163,000; 31 January 2012: £ nil) and is allocated 100% to capital.

3. taxation

The Company has an effective tax rate of 0%. The estimated effective tax rate is 0% as investment gains are exempt from tax owing to the Company's status as an Investment Trust and there is expected to be an excess of management expenses over taxable income and thus there is no charge for corporation tax.

4. earnings per ordinary share

Basic return per Ordinary Share has been calculated using the weighted average number of Ordinary Shares in issue during the period.

* Net return on ordinary activities attributable to Ordinary Shareholders.

** CULS interest cost and excess of the total number of potential shares on CULS conversion over the number that could be issued at the average market price from the conversion proceeds, as calculated in accordance with IAS 33: Earnings per share.

*** The amounts at 31 July 2011 have been restated to reflect the consolidation of the subsidiary undertaking, Hampton Investment Properties Limited.

5. net asset value per ordinary share

The basic net asset value per Ordinary Share is based on net assets of £225,749,000 (31 July 2011: £227,808,000; 31 January 2012: £221,611,000) and on 14,359,107 Ordinary Shares (31 July 2011: 14,113,553; 31 January 2012: 14,113,553) being the number of Ordinary Shares in issue at the period end.

The diluted net asset value per Ordinary Share is calculated on the assumption that the outstanding 2013 CULS are fully converted at par and that all 460,000 (31 July 2011: 430,000; 31 January 2012: 430,000) Share Options in-the-money were exercised at the prevailing exercise prices, giving a total of 16,373,052 issued Ordinary Shares (31 July 2011: 16,343,052; 31 January 2012: 16,343,052).

6. debenture loan - convertible unsecured loan stock ('CULS') 2013

On 30 June 2012 245,554 CULS units were converted into 245,554 Ordinary shares of 5p each at a rate of one 5p Ordinary share for every unit of 5p.

At 31 July 2012, 1,553,945 CULS units remained outstanding.

7. share based remuneration

On 6 July 2012 other employees of the Joint Manager, Harwood Capital LLP, were granted 30,000 share options under the NASCIT 2011 Executive Share Option Scheme at an exercise price of 1,396.24p per share. These are exercisable providing the necessary performance requirements are met between 9 July 2015 and 9 July 2022.

 8. bank loans

Hampton Investment Properties Limited has a five year facility with RBS which commenced on 2 February 2011 and is secured over the investment property. The loan bears interest at the rate of LIBOR plus 2.76%. During the period Hampton Investment Properties Limited made two repayments totalling £424,000, leaving a facility of £21,446,000 remaining.

9. reconciliation of total return from ordinary activities before finance costs and taxation to cash received/(expended) from operations

* Including share of net return of associate.

** The amounts at 31 July 2011 have been restated to reflect the consolidation of the subsidiary undertaking, Hampton Investment Properties Limited.

10. related party transactions

There have been no changes to the related party arrangements or transactions as reported in the Statutory Annual Financial Report for the year ended 31 January 2012.

The Joint Manager, Harwood Capital LLP, is regarded as a related party of the Company. The amounts payable to the Joint Manager and Growth Financial Services Limited ("GFS") in respect of investment management for the six months to 31 July 2012 are as follows:

In addition to the management fees disclosed above, Harwood Capital LLP is also paid an investment management related fee of £125,000 per annum.

Shareholders should also note the payments made under share based remuneration as disclosed in note 7 to these financial statements.

11. financial information

The annual financial information contained in this half yearly report does not constitute full Statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the periods ended 31 July 2012 and 31 July 2011 is not a financial year and has not been audited. The statutory accounts for the financial year ended 31 January 2012 have been delivered to the Registrar of Companies.

SHAREHOLDER INFORMATION

financial calendar

Preliminary results MayAnnual Report MayAnnual General Meeting JuneHalf-Yearly figures announced SeptemberHalf-Yearly Report posted September

share price

The Company's mid-market share price is quoted daily in the Financial Times appearing under "Investment Companies".

They also appear on:

Reuters: Convertible Loan Stock NASp.L

Bloomberg: NAS. LN

SEAQ Ordinary Shares: NAS

Trustnet: www.trustnet.ltd.uk

net asset value The latest net asset value of the Company can be found on the Harwood Capital LLP website: www.harwoodcapital.co.uk

share dealing

Investors wishing to purchase more Ordinary Shares or dispose of all or part of their holding may do so through a stockbroker. Many banks also offer this service.

The Company's registrars are Capita Registrars. In the event of any queries regarding your holding of shares, please contact the registrars on: 0871 664 0384, or by email on ssd@capitaregistrars.com

Changes of name or address must be notified to the registrars in writing at: Capita RegistrarsThe Registry34 Beckenham RoadBeckenhamKent BR3 4TU

The Half Yearly Report will be posted to Shareholders and loan stock holders very shortly. It will also be available on the

Harwood Capital LLP website www.harwoodcapital.co.ukor in hard copy format from the Company's Registered Office which

is: Ground Floor, Ryder Court, 14 Ryder Street, London SW1Y 6QB.