Interim Management Statement

Montanaro UK Smaller Companies Investment Trust PLC ("MUSCIT")

Interim Management Statement - 3 months to 31 December 2012

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) Index

Net Asset Value Performance

                    3 months      1 year     3 years   5 years       Launch
                                                                           
MUSCIT                  2.7%       23.2%       65.2%     45.7%       375.3%
(excluding                                                                 
current period                                                             
revenue)                                                                   
                                                                           
Benchmark               7.5%       32.3%       23.0%    (6.9)%        68.9%
                                                                           
Outperformance        (4.8)%      (9.1)%       42.2%     52.6%       306.4%

Performance Summary

                                 As at 31       As at 30     Movement
                            December 2012      September             
                                                    2012             
                                                                     
Gross assets                 £174,292,129   £170,397,487         2.3%
                                                                     
Net asset value per share          473.65p        460.65p       2.8%
(including current period                                            
revenue)                                                             
                                                                     
Share price                        396.00p        369.00p       7.3%
                                                                     
Discount                             16.4%          19.9%             
                                                                     
Net gearing                           8.3%           6.3%             


Period Review

For the 3 months ended 31 December 2012:

The NAV increased by 2.7% over the 3 months to the end of December 2012,
compared with a 7.5% increase of its benchmark, the FTSE SmallCap.

Outlook

UK equity markets made good progress during the quarter, driven by the positive
political momentum during the summer which culminated with the ECB's policy
decision to buy peripheral bonds and a softening of Germany's pro-austerity
rhetoric.  Recently released fund flow data in the UK confirmed that, after
four years of selling Europe, investors have started buying once again.  UK
SmallCap may benefit from institutions increasing their weightings in UK and
Europe this year.

Improving macro-economic data in the US and Developing Countries supports our
view that global activity is recovering.  Together with a more stable inflation
environment, the improving economic outlook should support a continued
re-rating of the stock market.  Furthermore, after a year of earnings
contraction, profits may improve as the year unfolds.  We would expect this
year that investors will see "normal" positive returns for UK SmallCap after a
very strong 2012.

The by-product of restored confidence since last summer has been an undisputed
leadership of Value over Growth and of Low Quality over High Quality. 
Investors who are familiar with Montanaro will know that this is not a
particularly favourable environment for our investment style which has
performed well over many years.  However, we remain firmly committed to
investing only in the highest quality UK smaller companies and will happily
leave more speculative names to others.  While the clouds may be dispersing,
credit remains largely unavailable to the weak.  As always, quality will
(should) eventually return to favour.  We look forward to 2013 with cautious
optimism.

Montanaro Asset Management Limited

14 February 2013



Top Ten Holdings as at 31 December 2012

Company                   Sector                                     % of total
                                                                      portfolio
                                                                               
Victrex                   Chemicals                                         3.8
                                                                               
Dignity                   General Retailers                                 3.6
                                                                               
Brammer                   Support Services                                  3.5
                                                                               
James Fisher              Industrial Transportation                         3.3
                                                                               
Domino Printing Sciences  Electronic and Electrical Equipment               3.3
                                                                               
Genus                     Pharmaceuticals and Biotechnology                 3.2
                                                                               
Dechra Pharmaceuticals    Pharmaceuticals and Biotechnology                 3.1
                                                                               
Devro                     Food Producers                                    3.1
                                                                               
Renishaw                  Electronic and Electrical Equipment               3.0
                                                                               
Fenner                    Industrial Engineering                            3.0
                                                                               
                                                                           32.9

Industry Breakdown

Sector                     % of total  % of market 
                            portfolio                       
                                                    
Oil & Gas                         4.4          4.4
                                                    
Basic Materials                   8.7          5.7
                                                    
Industrials                      39.9         35.8
                                                    
Consumer Goods                    6.5          7.9
                                                    
Health Care                       9.4          3.4
                                                    
Consumer Services                 7.6         21.3
                                                    
Financials                       11.5         15.5
                                                    
Technology                       12.0          6.0
                                                    
                                100.0        100.0

Other than as stated above, the Directors are not aware of any significant
events or transactions which have occurred between 31 December 2012 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.