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10 February 2009

NAYA BHARAT PROPERTY COMPANY PLC (the 'Company')

Fourth Quarter 2008 Summary

The unaudited Net Asset Value ('NAV') of the Naya Bharat Property Company plc (the 'Company') stood at USD 0.28 per share on 31 December 2008. This represents a fall of 36.4% over the fourth quarter. The Naya Bharat share price fell 71.9% over the same period as its discount to asset value widened. Over the past 12 months, the NAV of Naya Bharat has fallen 85.8%, whereas its share price is down 91.1%.

Indian equities had a very weak year in 2008, with the broad market falling by 61%, and the real estate sector falling by 85% (as measured by the Sensex and BSE Realty Index, in US dollar terms). This significant fall provides some context for the performance of Naya Bharat over the year, with the fourth quarter seeing the sharpest share price falls.

This performance came in spite of a mixed economic backdrop. The Reserve Bank of India cut its key interest rates, to help bolster domestic economic activity. In so doing it was helped by a fall in the rate of inflation, which dropped below 6% at the end of December, having been as high as 12% as recently as September. The government also introduced various fiscal measures similarly designed to ensure that the global economic downturn did not impact the Indian economy too harshly. GDP growth was reported as a stronger than expected 7.6% over the year to the third quarter of 2008, though it can be expected to moderate from here. The impact of the terrorist attacks in Mumbai is not expected to be significant, in economic or financial terms. In the property sector, the developers have started to reduce prices by around 25%, but volumes have yet to pick up.

Over the quarter, several of the holdings added to the portfolio over the third quarter performed well relative to the market. DLF, the largest real estate company in India, fell 24%. The company is well-diversified both geographically and by sector. Indiabulls Real Estate, another of the larger real estate companies, with an especially strong balance sheet, fell a comparatively modest 26%. The Company increased its exposure to these companies over the quarter.

On the downside, some of the smaller companies within the portfolio tended to underperform with DSK Developers down 62% and Orbit Corporation falling 64%. Over the quarter the Company also divested its holding in Arihant Foundations, a property developer with residential and office park projects in Chennai.

Although current market conditions remain challenging, there is little doubt that the structural case for Indian property remains strong. Rising levels of wealth and favourable demographics will ensure a constant demand for residential property. Economic activity is well supported, with the current trend for lower commodity prices clearly beneficial, providing support to the real estate sector  The recent easing of monetary policy on the part of the Reserve Bank may also offer some support to Indian property companies over the near term.

The Company's largest investments as at 31 December 2008 are given in the table below, together with their weight within the overall portfolio at that time. The Company currently holds no unlisted or pre-IPO investments.

 

Enquiries

Charlemagne Capital Varda Lotan / Christopher Fitzwilliam Lay	020 7518 2100 marketing@charlemagnecapital.com www.charlemagnecapital.com
Panmure Gordon Hugh Morgan / Stuart Gledhill	020 7459 3600
Smithfield Consultants John Kiely / Gemma Froggatt	020 7360 4900

www.nayabharat.org

Disclaimer

This document does not constitute an offer to sell or solicitation of an offer to buy shares in the Company and subscriptions for shares in the Company may only be made on the terms and subject to the conditions (and risk factors) contained in the prospectus of the Company. Potential investors should carefully read the prospectus issued by the Company which contains significant additional information needed to evaluate an investment in the Company.  This document has not been approved by a competent supervisory authority and no supervisory authority has consented to the issue of this document. The information in this document is confidential and it should not be distributed or passed on, directly or indirectly, by the recipient to any other person without the prior written consent of Charlemagne Capital (UK) Limited. This document and shares in the Company shall not be distributed, offered or sold in any jurisdiction in which such distribution, offer or sale would be unlawful and until the requirements of such jurisdiction have been satisfied. This document is not intended for public use or distribution. The purchase of shares in the Company constitutes a high risk investment and investors may lose a substantial portion or even all of the money they invest in the Company. An investment in the Company is, therefore, suitable only for financially sophisticated investors who are capable of evaluating the risks and merits of such investment and who have sufficient resources to bear any loss that might result from such investment. If you are in any doubt about the contents of this document you should consult an independent financial adviser. Investors in the Company should note that: past performance should not be seen as an indication of future performance; investments denominated in foreign currencies result in the risk of loss from currency movements as well as movements in the value, price or income derived from the investments themselves; and there are additional risks associated with investments (made directly or through investment vehicles which invest) in emerging or developing markets. Charlemagne Capital (UK) Limited does not guarantee the accuracy, adequacy or completeness of any information contained herein and is not responsible for any omissions or for the results obtained from such information. The information is indicative only and is for background purposes and is subject to material updating, revision, amendment and verification. All quoted returns are illustrative. No representation or warranty, express or implied, is made as to the matters stated in this document and no liability whatsoever is accepted by Charlemagne Capital (UK) Limited or any other person in relation thereto.

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