Interim Management Statement

Montanaro UK Smaller Companies Investment Trust PLC

Interim Management Statement - 3 months to 30 June 2011

Investment Objective

MUSCIT's investment objective is capital appreciation through investing in
small quoted companies listed on the London Stock Exchange or traded on the
Alternative Investment Market ("AIM") and to achieve relative outperformance of
its benchmark, the FTSE SmallCap (excluding Investment Companies) Index
("SmallCap").

No unquoted investments are permitted.

Benchmark

FTSE SmallCap (excluding Investment Companies)

Net Asset Value Performance

                    3 months      1 year     3 years   5 years       Launch
                                                                           
MUSCIT                  6.4%       43.5%       49.9%     53.4%       346.9%
(excluding                                                                 
current period                                                             
revenue)                                                                   
                                                                           
Benchmark               1.1%       20.6%        6.6%   (19.3%)        56.8%
                                                                           
Outperformance          5.3%       22.9%       43.3%     72.7%       290.1%

Performance Summary (capital only)

                        As at 30        As at 31       Movement
                                                               
                       June 2011      March 2011               
                                                               
Gross Assets        £166,186,432    £157,419,675           5.6%
                                                               
Net asset value          449.67p         421.65p           6.6%
per share                                                      
                                                               
Share price              371.50p         355.00p           4.6%
                                                               
Discount                   17.4%           15.8%               
                                                               
Actual Gearing             10.0%           10.6%               
                                                               
Net Gearing                 8.5%           10.3%               

Period Review

For the 3 months ended 30 June 2011:

The NAV rose by 6.4% over the 3 months to the end of June 2011 compared with an
increase of 1.1% by its benchmark, the FTSE-SmallCap Index (ex ICs).

During the period we saw strong performances from a number of the larger
holdings. Latchways, which designs, manufactures and sells a range of fall
arrest safety systems, announced better than expected results leading to a
number of broker upgrades. Similarly, Immunodiagnostic Systems, which provides
diagnostics kits for blood tests to detect vitamin-C deficiency, reported
excellent progress. It is also pleasing to report particularly strong
performance by a recent investment Oxford Instruments, which specialises in the
design, manufacture and support of hi-tech tools and systems for industry
research and rose by over 30%.

On the down side, the Company's exposure to the oil sector through holdings in 
Premier Oil and Enquest suffered as the UK government introduced new taxes on
North Sea oil production and the oil price retreated from earlier highs. One
disappointment was WSP, an engineering consultancy business, which has suffered
due to cut backs in UK government consultancy work.

Outlook

Overall, equity markets are broadly unchanged over the first half of 2011.
Earnings comparisons for most companies should become easier as we enter the
final quarter of the year. There are signs that policy makers finally
appreciate the importance of tackling the PIGS crisis which, if successful,
would have a positive impact on investor sentiment.

Investors are cautious about the macro-economic outlook. Montanaro are much
more positive about the potential of our investments and believe that we are in
the early stages of a multi-year Bull Market. We will be increasing the net
gearing gradually over the summer. We believe that the portfolio is well
positioned for a good second half and that a strong final quarter lies ahead.

Montanaro Asset Management Limited

2 August 2011

Top Ten Holdings as at 30 June 2011

Company                      Sector                                  % of total
                                                                      portfolio
                                                                               
Oxford Instruments           Electronic and Electrical                      3.6
                             Equipment                                         
                                                                               
NCC Group                    Software and Computer Services                 3.1
                                                                               
Brooks Macdonald Group       General Financials                             3.1
                                                                               
Domino Printing Sciences     Electronic and Electrical                      3.0
                             Equipment                                         
                                                                               
Fenner                       Industrial Engineering                         3.0
                                                                               
Brammer                      Support Services                               2.9
                                                                               
Latchways                    Support Services                               2.9
                                                                               
Victrex                      Chemicals                                      2.9
                                                                               
Dialight                     Electronic and Electrical                      2.8
                             Equipment                                         
                                                                               
SDL                          Software and Computer Services                 2.7
                                                                               
                                                                           30.0

Sector Breakdown

Sector                                            % of total      % of market 
                                                   portfolio                       
                                                                      
Aerospace & Defence                                   2.1          1.2
                                                                      
Alternative Energy                                    0.0          1.2
                                                                      
Automobiles & Parts                                   0.0          0.3
                                                                      
Beverages                                             2.0          0.0
                                                                      
Chemicals                                             6.6          0.7
                                                                      
Construction & Materials                              2.1          5.4
                                                                      
Electronic & Electrical Equipment                     9.9          6.3
                                                                      
Food & Drug Retailers                                 1.7          0.0
                                                                      
Food Producers                                        4.0          3.7
                                                                      
General Financial                                     6.8          3.7
                                                                      
General Retailers                                     2.2          4.6
                                                                      
Health Care Equipment & Services                      4.6          1.0
                                                                      
Household Goods & Home Construction                   0.0          2.0
                                                                      
Industrial Engineering                                4.4          3.3
                                                                      
Industrial Transportation                             7.0          3.6
                                                                      
Leisure Goods                                         0.0          1.0
                                                                      
Life & Nonlife Insurance                              0.0          3.4
                                                                      
Media                                                 0.9          5.5
                                                                      
Mining                                                0.9          1.0
                                                                      
Oil & Gas Producers                                   4.0          2.6
                                                                      
Other                                                 0.0          1.7
                                                                      
Pharmaceuticals & Biotechnology                       6.1          2.9
                                                                      
Real Estate                                           6.4         16.3
                                                                      
Software & Computer Services                         12.4          4.0
                                                                      
Support Services                                     13.9         17.5
                                                                      
Technology, Hardware and Equipment                    0.0          1.8
                                                                      
Travel & Leisure                                      2.0          5.3
                                                                      
                                                   100.0%       100.0%

Other than as stated above, the Directors are not aware of any significant
events or transactions which have occurred between 30 June 2011 and the date of
publication of this statement which have had a material impact on the financial
position of the Company. For latest performance information, please refer to
the Company's website.

This Interim Management Statement and up to date NAV and Share Price are
available at the Company's website www.montanarouksmaller.co.uk.

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