Half-yearly report

AURORA INVESTMENT TRUST plc

Half Yearly Report

For the six months ended 31 August 2008


INTERIM MANAGEMENT REPORT
AND CHAIRMAN'S REVIEW

The Financial Crisis:


It is a very  difficult time to  be making any  comment on the  stock
market, the economy or on Aurora Investment Trust because events  are
moving so fast as to change the nature of what we, the Directors, can
reasonably say to  shareholders - almost  on an hourly  basis.  As  I
write we  are in  the middle  of a  stock market  storm reflecting  a
financial crisis  of  unprecedented proportions  -  unprecedented  at
least in  the lives  of your  Directors, three  of whom  were  active
investors in the 1973/74 debacle.  Comparisons with the past are,  we
suspect, futile and I will not attempt  to do so.  Suffice it to  say
that  all  storms  peter  out  eventually  but,  depending  on  their
severity, they leave varying amounts  of debris behind.  Finding  our
way through all of this is what we, Board and Management, are focused
on.

In early  September  the Board,  together  with John  Luetchford  our
Company Secretary,  conducted our  annual  review of  our  investment
policy, the purpose of which was to address the issues of the times.
We started  off  considering  the  themes  that  James  Barstow,  our
Manager, has been investing  in.  They were  those prevailing at  the
time Aurora was launched  in 1997 and were  based on a world  economy
that was enjoying the benefits of the falling rates of inflation  and
of gains in productivity stemming from the development of electronics
technology, including notably the internet.  They included such areas
as house building,  Ireland and  latterly mining; they  proved to  be
very  successful  but,  like  so  many  success  stories,  they   got
overplayed by the stock market.  We took good profits in them but  we
were a bit slow to sell all of our exposures.  Anyway that was in the
past.  Our task was to think about the future and about those  themes
that remain valid in today's  economic and financial world and  those
that are new.

We also looked back and attempted to learn lessons from both our past
successes and our failures.  We did very well for the first seven  or
so years but  not well in  the last three.   Those lessons are  being
brought to bear on our current  portfolio management; most of all  we
learnt to stick  to our last.   We questioned whether  we could  make
money for shareholders over the next  five years because, if we  felt
that we couldn't, we should say so to shareholders and return to them
their investment in cash.  We believed that, given the then state  of
markets, it was highly likely that  we would do so; today, six  weeks
further on  and an  even lower  stock market,  that seems  even  more
likely.



The Half Year Returns:


I am not going  to dwell unduly  on the returns  for the half  year.
They were not good and subsequent events have only made them  worse.
For the record the  net asset value declined  by 3.3% to 196.31p  per
share, which compares with that  of our benchmark of 4.8%.   However,
this figure includes a  payment that we have  since received in  cash
for the principal amount  of our claim for  the repayment of VAT  and
that we expect  to receive  in respect of  interest thereon;  without
that boost our NAV would have declined by 4.9%.

Virtually all holdings in the  portfolio contributed to the  decline,
much as might be expected  in such circumstances.  There was  nowhere
to hide, except in cash.  Indeed  we had paid off all our  borrowings
and our cash represented 5.4% of our net assets at the end of  August
2008; as I write today it represents 12.4%.


Michael Heathcoat Amory:


I have  to  report that  Michael  Heathcoat  Amory, who  has  been  a
director since the launch of the Company, has retired from the  Board
as of 1 October.   It is sad for  his erstwhile colleagues, who  have
greatly enjoyed working with him; he has made a valuable contribution
to the deliberations  of and to  the governance by  the Board -  most
particularly with his wisdom and  insight.  He will be sorely  missed
and we wish him long life and happiness in his retirement.


Prospects:


+-------------------------------------------------------------------+
| The brave new world that the financial crisis has ushered in will |
| be very different from that of the past fifteen or so years.   It |
| will be one of  recession to start with  and thereafter very  low |
| rates of economic growth; inflation and interest rates will  also |
| be very low - indeed there  could be periods of deflation.   Much |
| higher levels of savings will be  the order of the day -  savings |
| not only of money but of waste and of the environment.  It is not |
| sensible to say that  the worst is over  or that the bear  market |
| has run its course.  We  do not look for  short term gain in  the |
| stock market.  But once share prices generally have settled  down |
| and the bear market has burnt itself out - which it surely will - |
| there will be plenty of good themes and thence stocks and  shares |
| to invest in profitably.  Good profits can be made from such dire |
| circumstances and in the fullness of time we expect to do so.     |
+-------------------------------------------------------------------+


Alex Hammond-Chambers
Chairman
31 October 2008



DIRECTORS STATEMENT OF RESPONSIBILITY
FOR THE HALF YEARLY REPORT


The Directors confirm to the best of their knowledge that:


  * The condensed set of financial statements contained within the
    half yearly financial report has been prepared in accordance with
    International Accounting Standard 34 "Interim Financial
    Reporting"; and
  * The interim management report includes a fair review of the
    information required by 4.2.7R and 4.2.8R of the FSA's Disclosure
    and Transparency Rules.


The half yearly financial report was approved by the Board on 31
October 2008 and the above responsibility statement was signed on its
behalf by:


Alex Hammond-Chambers
Chairman


SECTOR BREAKDOWN
 versus FTSE All-Share Index
As at 31 August 2008


                                 SECTOR                                    AURORA            FTSE
                                                                                  All-Share
                                                                             %                %

Oil & Gas                                                                  15.84            18.19

Industrials                                                                  0               7.10

Consumer Services                                                           6.65             9.27

Support Services                                                           11.46            17.39

Information Technology                                                      5.24             7.19

Financials                                                                 16.62            24.91

Resources (Mining)                                                         31.25            11.53

Utilities                                                                   8.13             4.42


Investment Cash                                                             4.81              -

                                                                           100.00           100.00

Ordinary                                                                   98.16              -

Fixed Interest Securities                                                   1.84              -

                                                                           100.00           100.00



TOP TEN HOLDINGS
at 31 August 2008


            Stock                Description      Valuation   % of
  All holdings shown are of                         £'000   Portfolio
ordinary shares, unless shown
          otherwise

BTG                           Pharmaceuticals &     2,811     12.04
                              Biotechnology
Rio Tinto                     Mining                2,091     8.96
Xstrata                       Mining                1,838     7.87
Scottish & Southern Energy    Electricity           1,806     7.74
Antofagasta                   Mining                1,393     5.97
Arriva                        Travel & Leisure      1,389     5.95
Venture Production            Oil & Gas             1,236     5.29
BP                            Oil & Gas             1,189     5.09
BHP Billiton                  Mining                1,030     4.41
British Gas Group             Oil & Gas              916      3.91

Total top ten holdings                             15,699     67.23
Other investments                                   7,645     32.77
Total fixed asset investments                      23,344    100.00



CONSOLIDATED INCOME STATEMENT


                    6 months to 6 months to 6 months to   6 months to 6 months to 6 months to
                        31 Aug.     31 Aug.     31 Aug.   31 Aug.2007     31 Aug.     31 Aug.
                           2008        2008        2008                      2007        2007
                    (unaudited) (unaudited) (unaudited)   (unaudited) (unaudited) (unaudited)

                        Revenue     Capital       Total       Revenue     Capital       Total
              Notes       £'000       £'000       £'000         £'000       £'000       £'000

Gains and
losses on
investments
Losses on                  (40)     (1,424)     (1,464)          (22)     (2,393)     (2,415)
fair value
through
profit or
loss
investments

Income
Investment                  593           -         593           721           -         721
income
VAT reclaim       4          48           -          48
interest
Other             3          13           -          13            11           -          11
operating
income
                            654           -         654           732           -         732

Expenses
Investment                 (49)        (49)        (98)         (100)       (100)       (200)
management
fees
VAT reclaim       4         184         184         368             -           -           -
Other                     (116)           -       (116)         (170)           -       (170)
expenses
                             19         135         154         (270)       (100)       (370)

Profit/(loss)               633     (1,289)       (656)           440     (2,493)     (2,053)
before
finance costs
and tax

Finance costs              (16)        (16)        (32)         (152)       (152)       (304)
Exchange                      -         (8)         (8)             -          28          28
differences
                           (16)        (24)        (40)         (152)       (124)       (276)

Profit/(loss)               617     (1,313)       (696)           288     (2,617)     (2,329)
before tax

Tax                          11           -          11           (4)           -         (4)

Profit/(loss)               628     (1,313)       (685)           284     (2,617)     (2,333)
for the
period

Earnings per      6       4.82p    (10.07p)     (5.25p)         1.90p    (17.51p)    (15.61p)
share



The total  column of  this statement  represents the  Group's  Income
Statement, prepared  in  accordance  with  IFRS.   The  supplementary
revenue return and  capital return  columns are  both prepared  under
guidance published by the  Association of Investment Companies.   All
items in the above statement derive from continuing operations.   All
income is attributable to the equity holders of the parent  company.
There are no minority interests.



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


                              Six months    Six months
                                 Ended         Ended      Year ended
                               31 August     31 August    29 February
                                 2008          2007          2008
                        Notes
                              (unaudited)   (unaudited)    (audited)
                                 £'000         £'000         £'000

Opening balance                 27,618        37,297        37,297

Profit/(loss) for the
financial period/year            (685)        (2,333)       (6,380)

Purchase of own shares    5     (1,099)        (581)        (2,839)

Dividends paid or
legally committed to be
paid on ordinary shares   7      (408)         (453)         (460)

Closing balance                 25,426        33,930        27,618



CONSOLIDATED BALANCE SHEET


                         At 31 August   At 31 August   At 29 February
                                 2008           2007             2008
                          (unaudited)    (unaudited)        (audited)
                                £'000          £'000            £'000
Non-current assets
Investments - fair value       23,344         40,544           28,527
through profit or loss

Current assets
Investments held for              206            398                -
trading
Other receivables                 552            227              409
Cash and cash                   1,373            262              322
equivalents
                                2,131            887              731

Current liabilities
Bank overdraft                      -        (7,357)          (1,067)
Other payables                   (49)          (144)            (573)
                                 (49)        (7,501)          (1,640)


Total assets less              25,426         33,930           27,618
current liabilities

Equity attributable to
equity holders
Share capital                   3,598          3,777            3,777
Share premium account          10,997         10,997           10,997
Capital reserves               10,909         19,227           13,144
Revenue reserve                  (78)           (71)            (300)

                               25,426         33,930           27,618




    Net asset value per ordinary    196.31p      228.37p      203.04p
share

    No. of ordinary shares in    12,952,250   14,857,250   13,602,250
issue (excluding shares
    held in
Treasury)
    No. of ordinary shares held   1,439,139      250,000    1,505,000
in Treasury




CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 August 2008


                                                   2008          2007
                                                  £'000         £'000
                                            (unaudited)   (unaudited)
Cash flows from Operating Activities
Cash inflow from disposal of non-current         11,340         4,446
operating assets
Cash outflow from purchase of non-current       (7,735)       (2,639)
operating assets

Cash inflow from revenue income                     573           586
Cash outflow from trading current asset           (246)         (420)
investments
Cash outflow from revenue expenses                (243)         (377)

Tax recovered/(paid)                                 24           (4)

Net cash flow from operating activities           3,713         1,592

Financing
Purchase of own shares                          (1,099)         (581)
Equity dividends Paid                             (408)         (453)
Interest paid                                      (80)         (277)
Decrease in bank borrowings                     (1,067)         (383)

Net cash flow from financing activities         (2,654)       (1,694)

Net decrease)/increase in cash and cash           1,059         (102)
equivalents

Cash and cash equivalents at beginning of           322           337
period

Increase/(decrease) in cash                       1,059         (102)
Effect of foreign exchange rate changes             (8)            27

Cash and cash equivalents at end of period        1,373           262



NOTES


1.   Status of the financial statements
These financial statements are not the Group's statutory accounts as
defined in section 240 of the Companies Act 1985. The financial
information for the half years ended 31 August 2008 and 31 August
2007 has not been audited.

The information for the year ended 29 February 2008 has been
extracted from the latest published audited financial statements.
The audited financial statements for the year ended 29 February 2008
have been filed with the Registrar of Companies.  The report of the
auditors on those accounts contained no qualification or statement
under section 237(2) or (3) of the Companies Act 1985.

The directors approved the half-yearly report on 31 October 2008.
This report is being sent to shareholders and copies will be made
available to the public at the registered office of the Group.

2.   Accounting policies
The half-yearly financial information has been prepared on the basis
of the recognition and measurement requirements of International
Financial Reporting Standards (IFRS).  The accounting policies are
unchanged from those used in the last annual financial statements
except where otherwise stated.

3.   Other operating income
Other operating income comprises bank interest.

4.    VAT reclaim
The Company's claim for reimbursement of VAT has been agreed by HMRC
at the principal sum of £367,168.  HMRC has also given notice that
interest of £48,892 is to be paid.

5.   Purchase of own shares
During the period ended 31 August 2008, the Company purchased 650,000
of its own shares.  715,861 shares were cancelled.  A total of
1,439,139 shares are being held in Treasury and are available for
re-sale.

6.   Earnings per share
Returns for  the  period  ended  on 31  August  2008  are  stated  by
reference to  the  weighted average  of  13,037,141 shares  in  issue
during the period, excluding shares held in Treasury (2007:  weighted
average of  14,941,489  shares in  issue,  excluding shares  held  in
Treasury).

7.   Dividends
In accordance with the stated policy  of the Group, the directors  do
not recommend an interim dividend.

The final dividend in respect of the year ending on 29 February  2008
was declared by  the Annual General  Meeting on 2  July 2008 and  was
paid on  11  July 2008.   This  dividend  was not  reflected  in  the
financial statements as at 29 February 2008, but is reflected in  the
financial statements as at 31 August 2008.

8.   Related party transactions
Fees payable  to the  Manager are  shown in  the Consolidated  Income
Statement.  £19,368 was  payable to the  Administrator in respect  of
the period.  Fees were accrued of  £15,374 to the Manager and  £3,011
to the Administrator at 31 August 2008.



DIRECTORS AND ADVISERS


DIRECTORS                                  INVESTMENT MANAGER
RA Hammond-Chambers (chairman)             Mars Asset Management
                                           Limited
MJ Barstow FCA                             Audrey House
MF Heathcoat Amory (retired 1October 2008) Ely Place
DH Hunter                                  London EC1N 6SN
R Robinson                                 Tel:  [phone]


STOCKBROKER                                SECRETARY & REGISTERED
                                           OFFICE
Cenkos Securities plc                      Cavendish Administration
                                           Limited
6,7,8 Tokenhouse Yard                      145-157 St John Street
London EC2R 7AS                            London EC1V 4RU


BANKERS                                    ADMINISTRATORS
Lloyds TSB Bank plc                        Cavendish Administration
                                           Limited
34 Moorgate                                145-157 St John Street
London EC2R 6PL                            London EC1V 4RU


CUSTODIAN                                  AUDITORS
The Northern Trust Company                 Grant Thornton UK LLP
50 Bank Street                             30 Finsbury Square
London E14 5NT                             London EC2P 2YU


REGISTRARS                                 SOLICITORS
Capita Registrars                          CMS Cameron McKenna
Northern House                             Mitre House
Woodsome Park                              160 Aldersgate Street
Fenay Bridge                               London EC1A 4DD
Huddersfield HD8 0LA

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