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SR Euro Inv Trust (SR.)

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Wednesday 10 August, 2011

SR Euro Inv Trust

Half-yearly Report



For the six months ended 30 June 2011

Investment objective

SR Europe Investment Trust plc invests in an actively managed portfolio of
quoted companies and debt instruments in the United Kingdom and continental
Europe, including emerging Europe, Russia and Turkey, with the objective of
generating capital growth without neglecting income.

Capital structure

Issued share capital at 30 June 2011              £
28,974,928 Ordinary shares of 10 pence    2,879,493
5,937,927 Subscription shares of 1           59,379
pence each                                         

The Articles of Association of the Company provide that at the Annual General
Meeting of the Company held to approve the Company's financial statements in
respect of the financial year ending 31 December 2011, the Directors will
propose an Ordinary Resolution for the continuation of the Company in its
current form. If this resolution is passed, a similar resolution will be
proposed at every third Annual General Meeting thereafter.

If such a resolution is not passed, a General Meeting of the Company will be
convened within the following four months to consider proposals for the
liquidation, reorganisation or reconstruction of the Company.

Subscription shares

Registered holders of Subscription shares will have the opportunity to convert
their Subscription shares at a rate of 1 Ordinary share per Subscription share
and a conversion price of 244p in the thirty days preceding the Annual General
Meeting in 2012.

Investment policy

SR Europe Investment Trust plc invests in an actively managed portfolio of
quoted companies and, occasionally, debt instruments in the United Kingdom and
continental Europe, including emerging Europe, Russia and Turkey.

The objective is to generate capital growth without neglecting income rather
than holding a portfolio of shares to try to outperform the European equity

The portfolio will be made up of stocks priced mainly in Euros and Sterling,
but also in a variety of other currencies. The Investment Managers are
authorised to hedge against anticipated weakness in any of these currencies,
including Sterling, the currency in which we report.

Asset allocation and risk diversification

The Company's investment policy is to concentrate on sectors, investment themes
and individual companies that have a pan-European perspective, but including
companies operating outside Europe. The Investment Managers' initial
consideration is to identify reasonable absolute upside on any individual
investment, whilst also paying particular attention to possible absolute
downside risks, irrespective of potential return relative to an index.

Limited attention is paid to geographical weightings of the portfolio, either
in absolute terms or relative to the MSCI Europe (including UK) Total Return
Index. However, for risk purposes, the Investment Managers monitor individual
country allocations to ensure that these do not become unreasonably high.
Whilst there is no prescribed single country limit, outside of the core markets
of the UK, Germany and France, exposure to any single country would normally
not exceed 30% of the portfolio at the time of investment. In the case of
emerging markets, the comparable figure would be 20%.

Up to 5% of shareholders' funds at the time of investment may be committed to
companies quoted outside of Europe, as defined above. Some of the companies
selected in this category may not have substantial interests in Europe.

The Investment Managers' aim is to capture the upside in European equity
markets over longer time periods, whilst trying to avoid major loss of value
when medium-term market prospects are poor. They believe that risk reduction
and the delivery of attractive absolute returns over time are best achieved by
finding several independent and uncorrelated investment themes where valuations
look attractive. Whilst not specifically proscribed, it is unlikely that
exposure to any single investment sector will exceed 30% of the portfolio at
the time of acquisition.

The portfolio is invested across the full spectrum size of individual
companies, from small, higher risk emerging businesses up to the largest quoted
European multinationals. Maximum exposure to any single share is capped at 15%
of gross assets at the time of investment, though in practice it would not
normally exceed 7%.


The Investment Managers enjoy a high degree of flexibility in balance sheet
deployment, individual stock choices and size of positions in the Company's
portfolio. They may reduce the exposure to equities, if they believe that
prospects for equity markets are unfavourable, by one or more of: increasing
the cash position, investing in bonds and using appropriate hedging strategies.
Investors should note that hedging activities may not be perfectly correlated
to the underlying portfolio's equity positions; hence undertaking hedging
positions is not a `risk free' exercise and can result in further losses if
both positions were to move in opposite directions. This ought to be a rare
event as the Investment Managers seek to use hedging instruments that
realistically match the portfolio and generally hedging positions are used only
at irregular intervals.

The Investment Managers try to be pragmatic in their balance sheet positioning,
taking into account the general global outlook and liquidity environment. The
Company has authority to borrow up to a maximum of 50% of shareholder's funds,
but the Directors and Investment Managers have for the time being agreed a
maximum figure of 22% at the time the borrowings are made (though any cash
margin held may be offset against borrowings).

Even in negative market conditions a minimum gross level of equity exposure of
at least 40% is likely to be maintained, although the net exposure could be
reduced by, for example, hedging in extreme circumstances. Shareholders will
not be immune to weak markets and currencies, or to poor stock selection, but
the overall aim is to cushion the worst effects.

Financial summary

                              1 January 2011    1 January 2010   1 January 2010
                                           to               to               to
                                 30 June 2011     30 June 2010 31 December 2010
Net return after taxation            £772,000        £713,000         £842,000   
Return per Ordinary share -              2.64p           2.41p            2.86p  
basic and fully diluted                                                        
Dividend declared/paid in                1.00p           1.00p            2.40p  
respect of period                                                              
Net return after taxation            £477,000     £(9,246,000)     £(2,442,000)  
Return per Ordinary share -              1.63p         (31.28)p          (8.29)p
basic and fully diluted                                                         

                                    As at            As at              As at  
                             30 June 2011     30 June 2010   31 December 2010  
Assets (investments valued                                                     
at bid-market prices):                                                         
Net assets                    £68,440,000      £61,722,000        £68,362,000  
Net asset value per Ordinary                                                   
share (`NAV')                                                                  
-basic and fully diluted           236.20p          210.46p            233.10p 
Middle market quotation:                                                       
Ordinary shares                    211.25p          183.00p            194.50p 
Subscription shares                  3.50p           13.50p              9.00p 
Discount to basic NAV:                                                         
Ordinary shares                      10.56%           13.05%             16.56%

                             1 January 2011 1 January 2010      1 January 2010
                                         to             to                  to       
                               30 June 2011   30 June 2010    31 December 2010
SR Europe Total Return *               1.87%       (12.12)%              (2.21)%
MSCI Europe (including UK)             6.35%        (9.67)%               8.22%
Total Return Index                                                            
* includes dividends reinvested as at the ex-dividend date.                   

Investment Manager's Report

In the first half of 2011 the NAV rose by 1.33% in Sterling terms, against a
background characterised by macro risk, volatility and sector rotation. In the
past six months markets have seemingly lurched from crisis to crisis: an
inflationary scare in the emerging world (impacting global growth stocks); a
brief but substantial rally in financials in the early part of the year which
then gave way to continued underperformance as concerns about the
capitalisation of the sector returned to the fore; a tragic natural disaster in
Japan causing fears for the global supply chain and changing the outlook for
power generation the world over; hopes for economic recovery in the US wavering
as data began to indicate further weakness in housing and persistent
unemployment; and finally renewed fears about the Sovereign debt crisis in the
Eurozone, the health of the Eurozone's banking system and the sustainability of
the single currency project. In local currencies, European markets retreated
marginally in the first half, offset in Sterling terms by the declining value
of the UK's currency. Against this backdrop, we have focused on bottom-up stock
selection with some use of derivative overlays to hedge the portfolio at times
of stress.

The top five performers for the Company in the period have been:
Alcatel-Lucent, Michelin, Edenred, BMW and Adidas, which contributed a combined
6.46%. Alcatel started 2011 as an out of favour stock which had performed
poorly for years following a badly executed merger and ferocious competition in
the telecoms equipment market driven by the entry of the Chinese. The change,
not properly understood by the market, was the need for significant network
infrastructure upgrades driven by increased Smartphone penetration and data
usage, coupled by a convergence of fixed and mobile network technologies onto
common, IP-based fibre infrastructure. This shift put Alcatel in a structurally
stronger position and, combined with new management finally executing on the
merger and cutting costs, enabled the company to return to profit. The stock
price has doubled in the year to date and the Company has now exited its
position. Michelin, Edenred, BMW and Adidas all remain core holdings.

The bottom five performers were: Temenos, Aixtron, Assa Abloy, Credit Suisse
and Antofagasta, losing a combined 3.96%. The main drag was Temenos, a leading
provider of software solutions for banks. This should be an exciting market.
Most banks are running antiquated and often segregated software platforms, a
legacy of past consolidation, and these platforms frequently are not compatible
with new regulatory standards, requiring a much deeper knowledge of customers,
exposures and management of risk. However, the crisis has meant banks
postponing investment and Temenos has issued disappointing results for three
consecutive quarters. Coupled with management change and some inconsistent
comment from the company, this causes concern and a loss of conviction, so we
have exited the position.

The net revenue after tax increased to £772,000 in the first half of 2011
against £713,000 in the comparable period in 2010, resulting in an earnings per
share of 2.64p against 2.41p. The Directors have declared an interim dividend
of 1.00p per Ordinary share payable on 30 September 2011 to shareholders on the
register on 19 August 2011.

We continue to find many good quality, global leading businesses in Europe with
good prospects, in our view not properly understood by the market, and at cheap
valuations. However, real macro concerns remain. Inflationary pressures and
excess growth in emerging economies combined with lacklustre growth and high
unemployment in much of the OECD as well as a continuing debt and currency
crisis in the Eurozone provide a challenging backdrop for markets.

In response we have reduced our balance sheet exposure to about 50% at the time
of writing, concentrating the portfolio further from around 30 stocks to circa
20 names in which we have high conviction.  We will continue to focus on
bottom-up stock selection and use derivative overlays to hedge the portfolio in
times of stress.

Sloane Robinson LLP

10 August 2011

Interim management report and responsibility statement of the Directors

Interim management report

The important events that have occurred during the period under review, the key
factors influencing the financial statements and principal uncertainties for
the remaining six months of the financial year are all set out in the
Investment Manager's report.

The principal risks facing the Company are substantially unchanged since the
date of the annual report for the year ended 31 December 2010 and continue to
be as set out in that report. Risks faced by the Company include, but are not
limited to, liquidity/marketability risk, interest rate risk, gearing risk,
currency risk, maturity risk, market price and discount volatility risk, risks
associated with non-compliance with Section 1158/9 of the Corporation Tax Act
2010, risks associated with hedging, credit risk and risks associated with the
engagement of third parties.

Responsibility Statement

The Directors confirm that to the best of their knowledge:

- the condensed set of financial statements has been prepared in accordance
with IAS 34 `Interim Financial Reporting' and gives a true and fair view of the
assets, liabilities, financial position and profit of the Company and the
subsidiary undertaking included in the consolidation taken as a whole; and

- this Half Yearly Financial Report includes a fair review of the information
required by:

a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the
financial year and 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

b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the Company during that period; and any changes in the related
party transactions described in the last annual report that could do so.

This Half Yearly Financial Report was approved by the Board of Directors on 10
August 2011 and the above responsibility statement was signed on its behalf by
Martin Riley, Chairman.


(unaudited) for the six months ended 30 June 2011

                    1 January 2011       1 January 2010        1 January 2010  
                                to                   to                    to         
                      30 June 2011         30 June 2010      31 December 2010  
                       (unaudited)          (unaudited)             (audited)     

                  Revenue  Capital  Total  Revenue  Capital   Total  Revenue  Capital   Total 
             Note   £'000    £'000  £'000    £'000    £'000   £'000    £'000    £'000   £'000 
Income and                                                                                    
Net gains/              -      643    643        -   (8,731) (8,731)       -   (2,020) (2,020)
(losses) on                                                                                   
at fair                                                                                       
profit or                                                                                     
Foreign                 -      247    247        -    1,131   1,131        -     1,586  1,586 
gains on                                                                                      
Losses on               -     (948)  (948)       -   (1,486) (1,486)       -   (1,719) (1,719)
Dividends     2     1,171      685  1,856    1,140        -   1,140    1,569        -   1,569 
and other                                                                                     
Return              1,171      627  1,798    1,140   (9,086) (7,946)   1,569   (2,153)   (584)
costs and                                                                                     
Investment    3      (137)    (137)  (274)    (136)    (136)   (272)    (272)    (272)   (544)
Other                (134)       -   (134)    (170)       -    (170)    (307)       -    (307)
Return                900      490  1,390      834   (9,222) (8,388)     990   (2,425) (1,435)
costs and                                                                                     
Finance       3       (13)     (13)   (26)     (24)     (24)    (48)     (26)     (26)    (52)
Return on             887      477  1,364      810   (9,246) (8,436)     964   (2,451) (1,487)
Taxation      4      (115)       -   (115)     (97)       -     (97)    (122)       9    (113)
Return to     5       772      477  1,249      713   (9,246) (8,533)     842   (2,442) (1,600)
for the                                                                                       
                     pence    pence  pence    pence    pence   pence    pence    pence   pence
Return per                                                                                    
- Basic and   5      2.64     1.63   4.27     2.41   (31.28) (28.87)    2.86    (8.29)  (5.43)

The Group does not have any income or expenses that are not included in the
return for the period, and therefore the "Return to Equity Shareholders for the
period" is also the "Total comprehensive income for the period", as defined in
International Accounting Standard (`IAS') 1 (revised). All of the return for
the period and the total comprehensive income for the period is attributable to
the Shareholders of the Group.

The total column of this statement is the statement of comprehensive income of
the Group which incorporates the trading subsidiary, Frankrate Limited,
prepared under International Financial Reporting Standards (`IFRS'). The
supplementary revenue and capital return columns are presented for information
purposes as recommended by the Statement of Recommended Practice (`SORP')
issued by the Association of Investment Companies (`AIC'). All revenue and
capital items in the above statement derive from continuing operations. These
accounts are unaudited and are not the Group's statutory accounts.


(unaudited) for the six months ended 30 June 2011

                     Share     Share   redemption   Capital   Retained         
                   capital   premium      reserve  reserves   earnings   Total 
                     £'000     £'000       £'000      £'000      £'000   £'000 
For the six months                                                             
ended 30 June 2011                                                             
31 December 2010     2,992    26,127          36     37,216      1,991  68,362 
Total                    -         -           -        477        772   1,249 
income for the                                                                 
Shares purchased       (35)        -          35       (761)         -    (761)
for cancellation                                                               
Dividends paid:                                                                
Final dividend for       -         -           -          -       (410)   (410)
the year ended                                                               
31 December 2010                                                                  
30 June 2011         2,957    26,127          71     36,932      2,353  68,440 

For the six months                                                             
ended 30 June 2010                                                             
31 December 2009     3,028     26,127           -     40,441     2,407  72,003 
Total                    -          -           -     (9,246)      713  (8,533)
income for the                                                                 
Shares purchased       (36)         -          36       (783)        -    (783)
for cancellation                                                               
Dividends paid:                                                                
Second interim           -          -           -          -      (965)   (965)
dividend for the                                                               
year ended                                                                   
31 December 2009                                                                  
30 June 2010         2,992     26,127          36     30,412     2,155  61,722 

For the year ended                                                             
31 December 2010                                                               
31 December 2009     3,028     26,127           -     40,441     2,407  72,003 
Total                    -          -           -     (2,442)      842  (1,600)
income for the                                                                 
Shares purchased       (36)         -          36       (783)        -    (783)
for cancellation                                                               
Dividends paid:                                                                
Second interim           -          -           -          -      (965)   (965)
dividend for the                                                               
year ended                                                                   
31 December 2009                                                                  
First interim            -          -           -          -      (293)   (293)
dividend for the                                                               
year ended                                                                  
31 December 2010                                                                  
31 December 2010     2,992     26,127          36     37,216     1,991  68,362 


(unaudited) as at 30 June 2011

                                      30 June       30 June   31 December
                                         2011          2010          2010
                                  (unaudited)   (unaudited)     (audited)
                            Note       £'000         £'000         £'000 
Non-current assets                                                       
Fair value through profit             52,242        50,770        65,385 
or loss                                                                  
Current assets                                                           
Amount due on derivative                 469         2,238           435 
financial instruments                                                    
Other receivables                        564         3,788         2,764 
Cash and cash equivalents             15,989        16,065           391 
                                      17,022        22,091         3,590 
Total assets                          69,264        72,861        68,975 
Current liabilities                                                      
Amount due on derivative                 (18)            -          (424)
financial instruments                                                    
Bank overdraft                             -       (10,906)            - 
Other payables                          (806)         (233)         (189)
Current and total                       (824)      (11,139)         (613)
Net assets                            68,440        61,722        68,362 
Shareholders' equity                                                     
Share capital                6         2,957         2,992         2,992 
Share premium                         26,127        26,127        26,127 
Capital redemption reserve                71            36            36 
Capital reserves                      36,932        30,412        37,216 
Retained earnings                      2,353         2,155         1,991 
Total Shareholders' equity            68,440        61,722        68,362 
                                       pence         pence         pence 
Net asset value per                                                      
Ordinary share                                                           
Basic                        8        236.20        210.46        233.10 
Diluted                      8        236.20        210.46        233.10 

The consolidated balance sheet incorporates the trading subsidiary, Frankrate


(unaudited) for the six months ended 30 June 2011

                            Six months ended  Six months ended      Year to 31 
                                30 June 2011      30 June 2010   December 2010 
                                  (unaudited)       (unaudited)       (audited)
                                       £'000             £'000           £'000 
Cash flows from operating                                                      
Net return before taxation             1,364            (8,436)         (1,487)
Adjustments to reconcile:                                                      
Less: (gains)/losses on                 (643)             8,731          2,020 
Less: dividends reinvested                 -               (19)            (35)
Realised exchange gains                 (247)           (1,131)         (1,586)
Losses on forward foreign                948             1,486           1,719 
exchange contracts                                                             
Realised exchange (gains)/               (18)               19               2 
losses on income                                                               
Plus: finance costs                       26                48              52 
Decrease in other                          2               200             214 
(Decrease)/increase in                    (2)               (8)              2 
other payables                                                                 
Tax deducted from                       (237)             (202)           (227)
unfranked income                                                               
Cash generated from                    1,193               688             674 
Overdraft interest paid                  (34)              (50)            (62)
Tax credits recovered on                  29                 -               8 
unfranked income                                                               
Corporation tax paid                       -                 -              (6)
Net cash flows generated               1,188               638             614 
from operating activities                                                      
Cash flows from investing                                                      
Purchases of investments             (67,531)          (72,971)       (126,555)
Sales of investments                  83,758            95,112         142,751 
Exchange (losses)/gains on               (71)               18               6 
Exchange losses on                      (638)             (566)           (375)
Exchange gains/(losses) on                26               (94)            (54)
futures contracts                                                              
Losses on index futures                  (81)           (1,057)         (1,081)
Open futures and option                  118              (759)            540 
contracts deposits                                                             
Net cash flows from                   15,581            19,683          15,232 
investing activities                                                           
Cash flows used in                                                             
financing activities                                                           
Shares repurchased for                  (761)             (783)           (783)
Equity dividends paid                   (410)             (965)         (1,258)
Net cash flows used in                (1,171)           (1,748)         (2,041)
financing activities                                                           
Net increase in cash and              15,598            18,573          13,805 
cash equivalents for                                                           
Cash and cash equivalents                391           (13,414)        (13,414)
at start of period                                                             
Cash and cash equivalents             15,989             5,159             391 
at end of period                                                               


for the six months ended 30 June 2011

1. Basis of preparation and accounting policies

The half year condensed consolidated financial statements for the six months
ended 30 June 2011 have been prepared in accordance with the Disclosure and
Transparency Rules (`DTR') of the Financial Services Authority and with IAS 34
'Interim Financial Reporting'. The half year condensed consolidated financial
statements do not include all the information and disclosures required in the
annual financial statements and should be read in conjunction with the Group's
annual financial statements as at 31 December 2010, which have been prepared in
accordance with IFRSs as adopted by the European Union. This condensed
consolidated half year financial information does not comprise statutory
accounts within the meaning of Section 434 of the Companies Act 2006. Statutory
accounts for the year ended 31 December 2010 were approved by the Board of
Directors on 6 April 2011 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement under Section
498 of the Companies Act 2006. The half year condensed consolidated financial
statements for the six months ended 30 June 2011 have not been audited or
reviewed by the auditors pursuant to the Auditing Practices Board guidance on
Review of Interim Financial Information.

The Company has considerable financial resources together with assets that
consist principally of a diversified portfolio of listed equity shares which
are readily realisable and exceed its liabilities by a significant amount. As a
consequence, the Directors believe the Company is well placed to manage its
business risks successfully.

After making enquiries and in accordance with the FRC's "Going Concern and
Liquidity Risk: Guidance for Directors of UK Companies 2009", the Directors
have a reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the half year condensed
consolidated financial statements.

The accounting policies and presentation applied to the half yearly figures are
consistent with those applied in the statutory accounts for the year to 
31 December 2010.

2. Dividends and other income

                                      Six months   Six months           Year 
                                              to           to             to    
                                         30 June      30 June    31 December
                                            2011         2010           2010
                                           £'000        £'000          £'000 
Income from listed investments:                                              
UK dividends                                 207          241            322 
UK dividends reinvested                        -           19             35 
Overseas dividends                           935          740            865 
Fixed interest                                 8          191            366 
Other income:                                                                
Dealing losses of subsidiary                   -          (28)           (31)
Interest on short-term bank                    2            8             21 
Other                                         19          (31)            (9)
Total income                               1,171        1,140          1,569 

3. Management fees and interest payable

Management fees and interest charged on borrowings are allocated 50% to revenue
and 50% to capital in the income statement. The performance fee (when payable)
is allocated 100% to capital. Tax relief in respect of such allocations is
credited to capital to the extent that such relief can be utilised in reducing
the Company's overall liability to taxation.

4. Taxation

The estimated effective corporation 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. The
total tax assessed is however higher than 0% due to irrecoverable withholding
tax paid on overseas investment income.

5. Group return per Ordinary share

                   Six months ended          Six months ended              Year ended     
                     30 June 2011              30 June 2010             31 December 2010 
                       Weighted                  Weighted                   Weighted       
                        average                   average                    average          
                      number of                 number of                  number of       
               Net     Ordinary   Per     Net    Ordinary    Per     Net    Ordinary   Per 
            return       shares share  return      shares  share  return      shares share 
             £'000              pence   £'000              pence   £'000             pence 
Basic and                                                                                  
Return per     772   29,261,533  2.64     713  29,561,130   2.41     842  29,443,221  2.86 
Return per     477  29,261,533   1.63  (9,246) 29,561,130 (31.28) (2,442) 29,443,221 (8.29)
Total        1,249   29,261,533  4.27  (8,533) 29,561,130 (28.87) (1,600) 29,443,221 (5.43)

6. Called-up share capital

                                           30 June      30 June    31 December
                                              2011         2010           2010
Allotted, called-up and fully-paid:                                           
Number of Ordinary shares of 10p each  28,974,928   29,327,234     29,327,234 
in issue with full voting rights                                              
Number of Subscription shares of 1p     5,937,927    5,937,927      5,937,927 
each in issue with no voting rights                                           
                                       34,912,855   35,265,161     35,265,161 
                                            £'000        £'000          £'000 
Nominal value of Ordinary shares of         2,898        2,933          2,933 
10p each in issue with full voting                                            
Nominal value of Subscription shares           59           59             59 
of 1p each in issue with no voting                                            
                                            2,957        2,992          2,992 

During the six-month period to 30 June 2011, the Company repurchased 352,306
Ordinary shares at a cost of £761,000. No Ordinary shares were held in treasury
during the period or at the period end.

Since the period end the Company has purchased 136,336 Ordinary shares for
cancellation at a cost of £288,000 and representing 0.47% of the Company's
issued Ordinary share capital as at 30 June 2011.

7. Dividends

In accordance with International Accounting Standard 10: Events After the
Balance Sheet Date, dividends are not accounted for until paid. The following
table summarises the amounts recognised as distributions to Equity holders in
the relevant period:

                             Six months ended  Six months ended     Year ended
                                      30 June           30 June    31 December
                                         2011              2010           2010
                                        £'000             £'000          £'000
2010 Final dividend of                    410                 -              -
1.40p paid on 31 May 2011                                                     
2010 First interim dividend                 -                 -            293
of 1.00p paid on 30                                                           
September 2010                                                                
2009 Second interim                         -               965            965
dividend of 3.25p paid on 1                                                   
April 2010                                                                    
                                          410               965          1,258

The Directors have declared an interim dividend for 2011 of 1.00p per Ordinary
share, to be paid on 30 September 2011 to shareholders on the register on 
19 August 2011.

8. Net asset value (`NAV') per share

                                       30 June        30 June    31 December
                                          2011           2010           2010
                                   (unaudited)    (unaudited)      (audited)
                                         pence          pence          pence
Ordinary share                                                              
- Basic                                 236.20         210.46         233.10
- Fully diluted                         236.20         210.46         233.10

The NAVs per share have been calculated in accordance with the Articles of
Association and are based on:

                                               £'000         £'000       £'000
Net assets attributable to Ordinary           68,440        61,722      68,362
Number of Ordinary shares in issue at     28,974,928    29,327,234  29,327,234
the period end                                                                
Subscription shares outstanding at the     5,937,927     5,937,927   5,937,927
period end                                                                    

The fully diluted NAVs are shown as the same figure as the basic NAV because
the conversion price of the Subscription shares of 244p is above the basic NAV
per Ordinary share.

9. Related party transactions

Transactions between the Company and its subsidiary, Frankrate Limited, which
is a related party, have been eliminated on consolidation and are not disclosed
in this note.

The Investment Manager, Sloane Robinson LLP, is regarded as a related party of
the Company. The total charge to the Company for investment management fees and
performance fees is disclosed in the consolidated income statement. Amounts
payable to the Investment Manager as at 30 June 2011 for investment management
fees totalled £136,000 (30 June 2010: £124,000) (31 December 2010: £139,000).
Amounts payable in respect of the performance fee totalled £nil (30 June 2010:
£nil) (31 December 2010: £nil).

A performance fee is payable in 2012 based on performance over a period of
approximately 5 1/4 years. With assets only marginally increasing in the six
months, there is no performance fee owing at 30 June 2011.

as at 30 June 2011

Company             Country          Sector                 Market   % of total
                                                             value  investments
Fiat Industrial     Italy            Industrials             3,991         7.64
International Power United Kingdom   Utilities               3,520         6.74
SAP                 Germany          Information             3,459         6.62
Bayer Motoren Werk  Germany          Consumer                3,434         6.57
Michelin            France           Consumer                3,375         6.46
Virgin Media        United Kingdom   Consumer                3,356         6.42
Edenred             France           Industrials             3,355         6.42
Novo-Nordisk        Denmark          Healthcare              3,237         6.20
Adidas              Germany          Consumer                3,059         5.85
GEA Group           Germany          Industrials             2,977         5.70
Publicis Groupe     France           Consumer                2,921         5.59
ENI                 Italy            Energy                  2,659         5.09
Temenos Group       Switzerland      Information             2,569         4.92
Prudential          United Kingdom   Financials              2,339         4.48
Amadeus Global      Spain            Information             2,300         4.40
Swatch Group        Switzerland      Consumer                2,292         4.39
Wirecard            Germany          Information             2,004         3.84
Thyssenkrupp        Germany          Materials               1,395         2.67
Total investments                                           52,242       100.00

There were no holdings in the subsidiary as at 30 June 2011.

as at 30 June 2011

Portfolio breakdown*

Country                                            %  
Denmark                                          6.2
France                                          18.5
Germany                                         31.3
Italy                                           12.7
Spain                                            4.4
Switzerland                                      9.3
UK                                              17.6

Sector breakdown*

Sector                                             %
Consumer Discretionary                          35.3
Information Technology                          19.8
Industrials                                     19.7
Utilities                                        6.7
Healthcare                                       6.2
Energy                                           5.1
Financials                                       4.5
Materials                                        2.7

* as a percentage of the total portfolio of investments at 30 June 2011:



M R Riley (Chairman)*

I C S Barby*

D S Boyle*

T W N Guinness*

H P Sloane

* Independent of the Investment Manager

Secretary and Registered Office

Capita Sinclair Henderson Limited

(trading as Capita Financial Group - Specialist Fund Services)

Beaufort House

51 New North Road

Exeter EX4 4EP

Telephone: 01392 412122

Investment Manager

Sloane Robinson LLP

Den Norske Bank Building

20 St Dunstan's Hill

London EC3R 8ND

Telephone: 0207 929 2771

Registered Auditor

Grant Thornton UK LLP

30 Finsbury Square

London EC2P 2YU


J.P. Morgan Cazenove Limited

20 Moorgate

London EC2R 6DA


Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS13 6ZZ

Telephone: 0870 707 1313


Morgan Stanley & Co. International plc

Canary Wharf

25 Cabot Square

London E14 4QA

Registered in England

Company Number 04223875

An investment company as defined under Section 833 of the Companies Act 2006


The Company is a member of the Association of Investment Companies

A copy of the SR Europe Investment Trust plc Half Yearly Report for the period
ended 30 June 2011 can be found on the Company's website,


Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.