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30 October 2009

NAYA BHARAT PROPERTY COMPANY PLC (the "Company")

Third Quarter 2009 Summary

The net asset value ("NAV") of Naya Bharat Property Company Plc (the "Company") stood at USD 0.61 per share on 30 September 2009. This represents a rise of 32.6% over the third quarter.  The Company's share price increased by 28.1% over the same period. 

The share prices of Indian property companies continued their recovery over the third quarter, supported by positive economic newsflow and renewed investor interest in the sector. Many of the published statistics are now showing an improvement in underlying activity and the government is forecasting that GDP growth will have rebounded by the end of this year. India therefore seems to have avoided the worst consequences of the global financial crisis. The new government is embarking upon a programme of reform intended to bring real benefits to the country over the medium term and this, allied with a variety of fiscal stimulus measures and lower interest rates over the short term, lies behind the performance of the stockmarket over the third quarter.

The signing of a free trade agreement with ASEAN nations, after several years of negotiation, was a further positive development, though not one which will have an immediate impact. Amongst other measures, import tariffs on more than 80% of traded goods will be lifted between 2013 and 2016, helping to boost trade and economic activity across the region. Earlier concerns with respect to the monsoon, which has been unusually weak this year, seem to have been misplaced, with little impact on economic activity.

The residential property market seems to have stabilized with prices in Mumbai at least showing some signs of recovery. Affordable housing for the new mass affluent remains the focus for developers and demand here is picking up on the back of rising employment and cheaper mortgage finance. The realisation that prices are unlikely to drop from current levels is also generating increasing interest. Although the office and commercial sectors remain depressed, most commentators expect these to follow the residential sector into recovery.

Renewed optimism in the outlook for Indian economic activity was reflected in the share price movement of Phoenix Mills, a Mumbai-based real estate developer that, in its own words, is "set to take on the challenge of redefining life style in Indian cities". Having just come into the portfolio during the second quarter, its share price appreciated by almost 80% over the third quarter as investors began to appreciate the potential of its aggressive targeting of the shopping and entertainment sectors.

Some changes were made to the composition of the portfolio over the third quarter. These included new holdings in Hirco and Indiabulls Property Investment Trust (IPIT). Hirco is one of India's largest property companies and is currently developing a large-scale mixed use township in Chennai, targeting India's growing young and affluent working population. IPIT was spun out of Indiabulls Real Estate last year and is a Singapore-listed real estate investment trust. The company has recently announced plans for a rights issue to help bolster its balance sheet. Both investments were purchased on attractive valuations and were funded from existing cash balances, though the small rump holding in DSK Developers was divested over the quarter.

At the recent AGM, the Company was granted authority for 12 months to purchase in the market up to 14.99 per cent of its own ordinary shares of US$0.01 each ("Ordinary Shares") in issue. The Company may use that authority to purchase Ordinary Shares at a discount to the prevailing NAV per share if suitable occasions arise and the Company has funds available for that purpose. During the last financial year the Company purchased at a discount and cancelled a total of 5,925,957 Ordinary Shares of the Company at an average price of US 16.98 cents per share. The Board will continue to actively use this program to buy back shares at a discount thus enhancing shareholder value

The outlook for the property market in India remains encouraging, with high rates of urbanisation and household formation combining with the prospect of strong growth in economic activity over the years ahead to support not only the residential sector but also the office and commercial sectors. The share prices of Indian property companies remain significantly below their previous highs, and continue to discount the true value of their assets. There is therefore every prospect of a further appreciation from current levels.

Top 10 holdings:

Unitech                         17.3%

Indiabulls Real Estate    15.9%

DLF                              15.0%

HDIL                             14.6%

Orbit Corporation             6.2%

Phoenix Mills                  6.1%

Mahindra Lifespaces        4.0%

Unitech Corporate Parks  3.7%

Peninsula Land               3.3%

Ascendas India Trust       2.8%

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

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 to be 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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