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Monday 30 November, 2009

Perpetual Inc&Growth

Half-yearly Report


               Perpetual Income and Growth Investment Trust plc                

     Half-Yearly Financial Report for the Six Months to 30 September 2009      

Key Facts

Perpetual Income and Growth Investment Trust plc (`the Company') is an
investment trust company listed on The London Stock Exchange. The Company is
managed by Invesco Asset Management Limited.

Objective of the Company

The objective of the Company is to generate capital growth with a higher than
average income from investment mainly in the UK equity market. It is intended
that the Company will provide real dividend growth over the medium term.

Full details of the Company's investment policy and risk and investment limits
can be found on pages 14 and 15 of the Company's 2009 annual financial report.

Performance Statistics

The Benchmark index of the Company is the FTSE All-Share Index.

                                                  At                 At        
                                                                               
                                                  30           31 March       %
                                                  September                    
                                                                               
                                                  2009             2009  Change
                                                                               
Total return (all income reinvested):                                          
                                                                               
Diluted net assets(1)                                                     +25.9
                                                                               
Benchmark(1)                                                              +35.7
                                                                               
Diluted net asset value per share:                                             
                                                                               
- after charging first interim dividend (capital       216.8p    176.0p   +23.2
NAV)                                                                           
                                                                               
- as balance sheet                                     220.2p    182.0p   +21.0
                                                                               
Shareholders' funds (£'000)                           462,485   379,256   +21.9
                                                                               
Mid-market price:                                                              
                                                                               
- ordinary shares                                      203.2p    171.0p   +18.8
                                                                               
- subscription shares                                   31.5p     27.5p   +14.5
                                                                               
Discount per ordinary share                              7.7%      6.0%        
                                                                               
Capital return - Benchmark(1)                                             +32.8
                                                                               
Actual gearing                                            117       117        
                                                                               
Asset gearing                                             117       116        

Note: (1) Source: Datastream and Fundamental Data.

                                                    Six months ended           
                                                                               
                                                 30                   30       
                                                 September     September       
                                                                               
                                                 2009               2008       
                                                                               
Revenue                                                                        
                                                                               
Diluted revenue return per share                        5.1p        5.0p   +2.0
                                                                               
Dividends per share                                     3.4p        3.3p   +3.0

INTERIM MANAGEMENT REPORT INCORPORATING CHAIRMAN'S STATEMENT

Chairman's Statement

Performance

During the six months to 30 September 2009, the total return for the period
(comprising the movement in the net asset value (`NAV') plus net income
reinvested) was 25.9% compared to the 35.7% return from the FTSE All-Share
Index. The mid-market price per share rose by 18.8% to 203.2p and the discount
to NAV per ordinary share widened from 6.0% to 7.7%.

Dividend

The Board has declared an interim dividend of 3.4p per share in respect of the
six months to 30 September 2009. This dividend is payable on 29 December 2009
to shareholders registered at the close of business on 11 December 2009. This
increase in dividend of 3% continues the Board's policy of sustained real
increases in dividend.

VAT Recovered on Management Fees

As reported in my Chairman's Statement in the 2009 annual financial report, the
Board has been in discussions with the Manager in relation to the recovery of
VAT and interest arising from the recovery of VAT previously paid by the
Company on management fees.

I am pleased to advise shareholders that as a result of these discussions the
Company, in the period being reported on, has received further VAT of £291,000
in this respect, being £140,000 relating to the period 2001 to 2007 and £
151,000 for the period 1990 to 1996. These amounts have been credited £101,000
to revenue and £190,000 to capital, in the same proportion as originally
charged to the income statement.

No further amounts of VAT are recoverable from the Manager. The Company is
however engaged with other investment trusts in a collective legal action to
seek to recover further amounts of VAT directly from HMRC.

Subscription Share Exercise and Issued Share Capital

During the period under review, 1,357,905 ordinary shares were issued at a
price of 184.50p per share on 9 July 2009 and 250,000 ordinary shares were
issued at a price of 188.625p per share on 15 July 2009.

Subscription shareholders had their fourth opportunity to exercise their right
to subscribe for one ordinary share of the Company at a price of 218.94p. The
subscription period ended on 31 August 2009. As a result, 38,492 ordinary
shares were allotted in mid-September 2009. Subscription shareholders will have
further opportunities to convert their holdings in each of the years 2010 to
2013.

As a result of the above transactions, the issued share capital of your Company
at the period end was 210,051,017 ordinary shares of 10p each and 17,682,432
subscription shares.

William Alexander

Chairman

30 November 2009

Investment Management Report

Market Review

A combination of better-than-expected corporate results, improving economic
data, low interest rates and government stimulus measures amounted to a helpful
backdrop for the UK equity market in the six months to 30 September 2009,
resulting in record double-digit gains for the FTSE All-Share Index. Reflecting
investors' renewed appetite for riskier assets, market performance was
dominated by share price appreciation of companies in cyclical sectors of the
market such as mining and financials. By contrast, defensive sectors
underperformed the wider UK equity market, with the result that the small-cap
FTSE SmallCap Index and the mid-sized FTSE 250 Index experienced better
share-price performance than that generated by the large-cap FTSE 100 Index. At
the stock level, the best performing companies in the FTSE 100 Index included
mining companies Kazakhmys and Vedanta Resources, and Rentokil Initial. By
contrast, the worst performing companies included Reed Elsevier, United
Utilities and Thomas Cook. Several milestones were recorded during the review
period, the FTSE 100 Index rallied through the 5000 level for the first time
since October 2008; the price of gold rose above US$1000 an ounce; and 15
September marked the first anniversary of the collapse of Lehman Brothers.

The Bank of England's Monetary Policy Committee (MPC) kept interest rates on
hold at 0.5% during the review period. However, the MPC continued to extend the
Quantitative Easing Asset-Purchase programme by a further £50 billion to £175
billion.

Economic data released during the review period supported the market's view
that the low point of the recession may have passed. For instance, the latest
data on house prices continued to point to a recovery in the housing market,
and second-quarter 2009 GDP in the UK was slightly better than expected.
Meanwhile, inflation, as measured by the Consumer Prices Index, fell to 1.6%
year-on-year during the period, which was higher than the most pessimistic
economic forecasts. It was not all good news on the economy, however, as the
latest labour-market data continued to show little sign of improvement. During
the period, the number of people unemployed rose to 2.47 million, which is a
14-year high.

Portfolio Strategy and Review

The Company's net asset value, including reinvested dividends, rose by 25.9%
during the six months to the end of September 2009, compared to a rise of 35.7%
from the FTSE All Share Index (total return).

The Company generated healthy absolute returns over the review period but on a
relative basis was not able to keep pace with the performance of the FTSE
All-Share Index. This was largely attributable to a bias towards defensive
sectors of the market, such as utilities, tobacco and pharmaceuticals, which
fell out of favour in an environment where investors continued to sell
defensives to buy cyclical companies.

Some of the Company's defensive holdings provided a meaningful contribution
despite the cyclical-led rally, for instance, holdings in British American
Tobacco, pharmaceutical companies AstraZeneca and GlaxoSmithKline, and the
power generator International Power. However, the most prominent positive
contributor to the Company's performance was telecommunications company BT.
Investors have reacted positively to the efforts being implemented by
management to address the problems at the Global Services division and there is
positive sentiment in the market concerning the pension-fund deficit, which now
appears to be quantifiable.

There were several significant transactions within the Company over the review
period. For instance, Royal Dutch Shell and British Airways were removed from
the portfolio following a period of strong performance as the Manager wanted to
take advantage of better opportunities for investment in other parts of the
market. This led to a number of new holdings being introduced into the Company.
For example, positions were initiated in Compass Group, Bunzl, VT Group and
KCOM.

A dip in Compass Group's share price during the review period presented an
attractive entry point to purchase the shares at a favourable valuation. The
decline in the share price was caused by some disappointment in the market with
regard to the latest results. The company remains a resilient business which is
benefiting from the global growth in outsourcing of catering services in both
the public and private sectors. Similarly, Bunzl was acquired after a decline
in its share price presented a good opportunity to invest in a high-quality
business at attractive levels.

The Manager believes that VT Group is implementing the necessary measures to
improve its structure. The company is towards the end of the process of
reshaping itself from a conglomerate business, which used to be dominated by
military shipbuilding, to a business focused on providing support services to
the Ministry of Defence. As a result of this transformation, the company should
be well-placed to benefit from further long-term government contracts. Similar
to VT Group, KCOM is also a company which exhibits a good restructuring story.
The company is reorganising its businesses to focus on two key areas - namely,
the management and maintenance of the telecoms network in the City of Hull and
the supply of telecommunications services to medium-sized companies in the UK.
As a result, KCOM is reducing its cost base and improving the quality of its
earnings by disposing of areas that are not a strategic fit in its business.

Outlook

The recent improvement in macroeconomic data, despite weak Q3 GDP figures, has
led some market participants to subscribe to the view that the UK economy is
emerging from recession. The Manager, however, is not convinced. There are
uncertainties over the strength and sustainability of the recovery that is
being anticipated by the market. Businesses and households are still in the
process of tempering their former exuberance and rebuilding their balance
sheets. While this process of deleveraging continues, which could take years to
run its course, the economy is likely to face substantial challenges, such as
rising unemployment and a subdued housing market, which will pose obstacles to
a solid and sustained recovery. Notwithstanding this sombre outlook for the UK
economy, the Manager believes that there are selected areas of opportunity in
the stockmarket that look interesting, particularly in an environment where
economic growth is lacklustre. These areas are typically found in defensive
sectors and display such characteristics as strong balance-sheets, visible
cash-generation, robust business models and, most importantly, growing dividend
streams.

The Manager is acutely aware that although the portfolio has generated positive
returns in the first half of the current year, the performance has lagged the
benchmark by a wide margin. Whilst the Manager is disappointed with this level
of relative performance, he believes that given the long-term nature of his
investment time-frame, and the substantial valuation anomalies which have
arisen in the recent market environment, it is definitely in the best interests
of the shareholders to retain the current investment strategy as described and
remain patient in the knowledge that "value will out". The Manager is confident
that this is the best method to deliver superior risk-adjusted investment
returns to shareholders over the long term.

Mark Barnett

Investment Manager

30 November 2009

Related Party

Invesco Asset Management Limited (`IAML'), a wholly owned subsidiary of Invesco
Limited, acts as Manager and Company Secretary to the Company. Details of
IAML's services and fee arrangements are given in the latest annual financial
report, which is available on the Company's website.

Principal Risks and Uncertainties

The principal risks and uncertainties that could affect the Company's business
can be divided into various areas:

• Investment Objective and Policy;

• Investment Process;

• Market Movements and Portfolio Performance;

• Ordinary Shares;

• Gearing; and

• Regulatory.

A detailed explanation of these principal risks and uncertainties can be found
on pages 18 to 20 of the 2009 annual financial report, which is available on
the Company's website.

In the view of the Board, these principal risks and uncertainties are equally
applicable to the remaining six months of the financial year as they were to
the six months under review.

DIRECTORS' RESPONSIBILITY STATEMENT

In respect of the preparation of the half-yearly financial report

The Directors are responsible for preparing the half-yearly financial report
using accounting policies consistent with applicable law and UK Accounting
Standards.

The Directors confirm that to the best of their knowledge:

- the condensed set of financial statements contained within the half-yearly
financial report have been prepared in accordance with the Accounting Standards
Board's Statement "Half-Yearly Financial Report";

- the interim management report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R of the FSA's Disclosure and Transparency
Rules; and

- the interim management report includes a fair review of the information
required on related party transactions.

The half-yearly financial report has not been audited or reviewed by the
Company's auditors.

Signed on behalf of the Board of Directors.

William Alexander

Chairman

30 November 2009

Investment Portfolio Statement AT 30 SEPTEMBER 2009

UK ordinary shares unless stated otherwise

                                                               Market          
                                                                               
                                                                Value      % of
                                                                               
Company                       Sector                            £'000 Portfolio
                                                                               
Equity investments                                                             
                                                                               
Imperial Tobacco              Tobacco                          28,485       5.2
                                                                               
BG                            Oil & Gas Producers              28,072       5.2
                                                                               
AstraZeneca                   Pharmaceutical and               27,558       5.1
                              Biotechnology                                    
                                                                               
Reynolds American                                                              
                                                                               
  (US common stock)           Tobacco                          27,394       5.0
                                                                               
Vodafone                      Mobile Telecommunications        27,083       5.0
                                                                               
British American                                                               
                                                                               
  Tobacco                     Tobacco                          25,526       4.7
                                                                               
GlaxoSmithKline               Pharmaceutical and               25,122       4.6
                              Biotechnology                                    
                                                                               
Tesco                         Food and Drug Retailers          22,492       4.1
                                                                               
BT                            Fixed Line Communications        21,005       3.9
                                                                               
BP                            Oil & Gas Producers              17,075       3.2
                                                                               
Top ten holdings                                              249,812      46.0
                                                                               
Capita                        Support Services                 17,068       3.1
                                                                               
National Grid                 Gas, Water and Multiutilities    17,005       3.1
                                                                               
International Power           Electricity                      14,572       2.7
                                                                               
Centrica                      Gas, Water and Multiutilities    14,414       2.7
                                                                               
Hiscox                        Insurance                        13,687       2.5
                                                                               
BAE Systems                   Aerospace and Defence            13,421       2.5
                                                                               
Drax                          Electricity                      12,405       2.3
                                                                               
Reckitt Benckiser             Healthcare                       12,394       2.3
                                                                               
Scottish & Southern                                                            
                                                                               
  Energy                      Electricity                      11,913       2.2
                                                                               
Provident Financial           Financial                        10,526       1.9
                                                                               
Top twenty holdings                                           387,217      71.3
                                                                               
Balfour Beatty                Construction and Materials        9,370       1.7
                                                                               
Pennon                        Gas, Water and Multiutilities     9,165       1.7
                                                                               
Sage                          Technology Services               8,811       1.6
                                                                               
BTG                           Pharmaceutical and                8,716       1.6
                              Biotechnology                                    
                                                                               
Compass Group                 Support Services                  8,712       1.6
                                                                               
UK Coal                       Mining                            8,389       1.5
                                                                               
Tate & Lyle                   Food Producers                    7,999       1.5
                                                                               
Northumbrian Water            Water                             7,464       1.4
                                                                               
VT Group                      Support Services                  7,073       1.3
                                                                               
Beazley                       Property                          6,374       1.2
                                                                               
Top thirty holdings                                           469,290      86.4
                                                                               

                                                               Market          
                                                                               
                                                                Value      % of
                                                                               
Company                       Sector                            £'000 Portfolio
                                                                               
Rentokil Initial              Support Services                  6,096       1.1
                                                                               
Homeserve                     Support Services                  6,047       1.1
                                                                               
Just Retirement               Insurance                         5,613       1.0
                                                                               
Impax Environmental           Equity Investment Instruments                    
                                                                               
  - ordinary                                                    5,188          
                                                                               
  - warrants                                                      204       1.0
                                                                               
Bunzl                         Support Services                  5,147       0.9
                                                                               
KCOM                          Communications                    4,545       0.8
                                                                               
Vectura                       Pharmaceutical and                4,542       0.8
                              Biotechnology                                    
                                                                               
Altus Resource                Oil & Gas Producers               3,806       0.7
                                                                               
Rolls Royce                   Aerospace and Defence             3,456       0.7
                                                                               
Trading Emissions             Equity Investment Instruments     3,324       0.7
                                                                               
Top forty holdings                                            517,258      95.2
                                                                               
Climate Exchange              Equity Investment Instruments     3,043       0.6
                                                                               
Puricore                      Personal Goods                    2,897       0.5
                                                                               
Barclays Bank - Nuclear                                                        
                                                                               
  Power Notes 28 Feb                                                           
                                                                               
  2019                        Electricity                       2,685       0.5
                                                                               
Ecofin Water & Power          Water                                            
                                                                               
  - ordinary                                                    2,327          
                                                                               
  - rights                                                         37       0.4
                                                                               
ITV                           Media                             2,153       0.4
                                                                               
Lombard Medical               Healthcare                        2,060       0.4
                                                                               
Helphire                      Finance                           1,966       0.4
                                                                               
Macau Property                Property                          1,909       0.4
                                                                               
DSG                           General Retailers                 1,847       0.3
                                                                               
Renovo                        Pharmaceutical and                  953       0.2
                              Biotechnology                                    
                                                                               
Top fifty holdings                                            539,135      99.3
                                                                               
Landkom                       Food Producers                      925       0.2
                                                                               
Fusion                        Finance                             911       0.2
                                                                               
Imperial Innovations          Finance                             646       0.1
                                                                               
William Hill                  General Retailers                   618       0.1
                                                                               
Xcounter AB                   Healthcare                          130         -
                                                                               
XTL Biopharmaceutical (US     Pharmaceutical and                   89         -
ADR)                          Biotechnology                                    
                                                                               
Napo Pharmaceutical (US       Pharmaceutical and                   61         -
common stock)                 Biotechnology                                    
                                                                               
Mirada                        Technology Software                  45         -
                                                                               
Total equity investments (58)                                 542,560      99.9
                                                                               
Fixed interest investments                                                     
                                                                               
Ecofin Water & Power                                                           
                                                                               
  6% May 2016                 Water                               494       0.1
                                                                               
Total investments (59)                                        543,054     100.0

Condensed Income Statement

                        Six Months to                 Six Months to         Year to
                                                                                   
                           30 September 2009        30 September 2008      31 March
                                                                                   
                                                                               2009
                                                                                   
                        Revenue Capital   Total Revenue  Capital    Total     Total
                                                                                   
                        £'000     £'000   £'000   £'000    £'000    £'000     £'000
                                                                                   
Gains/(losses) on             -  83,284  83,284       - (44,991) (44,991) (119,109)
investments at fair                                                                
value through profit or                                                            
loss                                                                               
                                                                                   
Foreign exchange losses       -    (25)    (25)       -  (2,591)  (2,591)   (7,989)
                                                                                   
Income                                                                             
                                                                                   
UK dividends             11,592       -  11,592  11,719        -   11,719    19,592
                                                                                   
Overseas dividends          972       -     972     876        -      876     2,033
                                                                                   
Unfranked investment        197       -     197       -        -        -       262
income                                                                             
                                                                                   
Other income                 66       -      66       -        -        -       830
                                                                                   
Gross return             12,827  83,259  96,086  12,595 (47,582) (34,987) (104,381)
                                                                                   
Investment management     (581) (1,354) (1,935)   (500)  (1,500)  (2,000)   (3,720)
fee - note 2                                                                       
                                                                                   
Performance fee - note        -       -       -       -  (1,678)  (1,678)     (853)
2                                                                                  
                                                                                   
VAT recoverable on          101     190     291       -        -        -     5,252
management fees - note                                                             
3                                                                                  
                                                                                   
Other expenses            (258)     (2)   (260)   (232)      (5)    (237)     (500)
                                                                                   
Net return before        12,089  82,093  94,182  11,863 (50,765) (38,902) (104,202)
finance costs and                                                                  
                                                                                   
  taxation                                                                         
                                                                                   
Finance costs - note 2    (384)   (897) (1,281)   (503)  (1,508)  (2,011)   (3,834)
                                                                                   
Return on ordinary       11,705  81,196  92,901  11,360 (52,273) (40,913) (108,036)
activities before                                                                  
                                                                                   
  taxation                                                                         
                                                                                   
Tax on ordinary           (146)       -   (146)   (131)        -    (131)     (306)
activities                                                                         
                                                                                   
Return on ordinary       11,559  81,196  92,755  11,229 (52,273) (41,044) (108,342)
activities after                                                                   
                                                                                   
  taxation for the                                                                 
financial period                                                                   
                                                                                   
Return per ordinary                                                                
share - note 4                                                                     
                                                                                   
Basic                      5.5p   38.8p   44.3p    5.4p  (25.2)p  (19.8)p   (52.2)p
                                                                                   
Diluted                    5.1p   35.8p   40.9p    5.0p  (23.2)p  (18.2)p   (48.1)p

The total column of this statement represents the Company's income statement,
prepared in accordance with UK Accounting Standards. The supplementary revenue
and capital columns are presented for information purposes in accordance with
the Statement of Recommended Practise issued by the Association of Investment
Companies. All items in the above statement derive from continuing operations
and the Company has no other gains or losses. No operations were acquired or
discontinued in the period.

Condensed Balance Sheet

                                                         At       At         At
                                                                               
                                                30          31 March         30
                                                September             September
                                                                               
                                                2009            2009       2008
                                                                               
                                                £'000          £'000      £'000
                                                                               
Fixed assets                                                                   
                                                                               
Investments held at fair value through profit       543,054  440,850    526,818
or loss                                                                        
                                                                               
Current assets                                                                 
                                                                               
Amounts due from brokers                              2,292    1,984          -
                                                                               
Recoverable VAT and interest                              -    6,024          -
                                                                               
Prepayments and accrued income                        1,867    2,008      1,735
                                                                               
                                                      4,159   10,016      1,735
                                                                               
Creditors: amounts falling due within one year                                 
                                                                               
Bank overdraft                                     (49,367) (36,269)   (37,818)
                                                                               
Amounts due to brokers                              (4,065)  (3,408)    (4,242)
                                                                               
Accruals and deferred income                        (1,575)  (1,376)    (1,458)
                                                                               
Accrual for performance fee                               -    (853)          -
                                                                               
Unrealised loss on forward currency contracts             -        -    (2,514)
                                                                               
                                                   (55,007) (41,906)   (46,032)
                                                                               
Net current liabilities                            (50,848) (31,890)   (44,297)
                                                                               
Total assets less current liabilities               492,206  408,960    482,521
                                                                               
Creditors: amounts falling due after one year                                  
                                                                               
Debenture 2014                                     (29,721) (29,704)   (29,686)
                                                                               
Provision for performance fee                             -        -    (1,678)
                                                                               
Net assets                                          462,485  379,256    451,157
                                                                               
Capital and reserves                                                           
                                                                               
Share capital - note 6                               21,005   20,840     20,728
                                                                               
Share premium                                       185,691  182,794    180,656
                                                                               
Capital reserve                                     233,803  152,607    229,303
                                                                               
Revenue reserve                                      21,986   23,015     20,470
                                                                               
Shareholders' funds                                 462,485  379,256    451,157
                                                                               
Net asset value per ordinary share - note 5                                    
                                                                               
Basic                                                220.2p   182.0p     217.7p
                                                                               
Diluted                                              220.2p   182.0p     217.7p

Condensed Cash Flow Statement

                                   Six months to        Year to   Six months to
                                                                               
                                   30 September   31 March 2009    30 September
                                   2009                                    2008
                                                                               
                                   £'000                  £'000           £'000
                                                                               
Net return before finance costs            94,182     (104,202)        (38,902)
 and taxation                                                                  
                                                                               
(Gains)/losses on investments            (83,284)       119,109          44,991
                                                                               
Foreign exchange losses                        25         7,989           2,591
                                                                               
Scrip dividends                             (279)             -               -
                                                                               
Decrease/(increase) in debtors              6,165       (5,237)           1,060
                                                                               
(Decrease)/increase in creditors            (601)           590           1,550
                                                                               
Tax on overseas income                      (146)         (306)           (131)
                                                                               
Net cash flow from operating               16,062        17,943          11,159
 activities                                                                    
                                                                               
Servicing of finance                      (1,317)       (4,038)         (2,287)
                                                                               
Capital expenditure and financial                                              
investment                                                                     
                                                                               
Purchase of investments                  (84,187)     (188,630)        (69,869)
                                                                               
Sale of investments                        65,895       214,079          86,287
                                                                               
Equity dividends paid                    (12,588)      (16,593)         (9,740)
                                                                               
Net cash (outflow)/inflow before         (16,135)        22,761          15,550
management of liquid resources and                                             
financing                                                                      
                                                                               
Financing                                   3,062         2,351             101
                                                                               
(Decrease)/increase in cash in the       (13,073)        25,112          15,651
period                                                                         
                                                                               
Exchange movements                           (25)       (7,465)             447
                                                                               
Debenture stock non-cash movement            (17)          (36)            (18)
                                                                               
Movement in net debt in the period       (13,115)        17,611          16,080
                                                                               
Net debt at beginning of period          (65,973)      (83,584)        (83,584)
                                                                               
Net debt at end of period                (79,088)      (65,973)        (67,504)
                                                                               
Analysis of changes in net debt:                                               
                                                                               
Brought forward:                                                               
                                                                               
  Bank overdraft                         (36,269)      (53,916)        (53,916)
                                                                               
  Debenture 2014                         (29,704)      (29,668)        (29,668)
                                                                               
Net debt brought forward                 (65,973)      (83,584)        (83,584)
                                                                               
Movements in the period:                                                       
                                                                               
  Cash (outflow)/inflow from bank        (13,073)        25,112          15,651
                                                                               
  Exchange movements                         (25)       (7,465)             447
                                                                               
  Debenture non-cash movement                (17)          (36)            (18)
                                                                               
Net debt at end of period                (79,088)      (65,973)        (67,504)

Condensed Reconciliation of movements in Shareholders' funds

                                       Share   Share   Capital  Revenue          
                                                                                 
                                     Capital Premium   Reserve  Reserve     Total
                                                                                 
                                       £'000   £'000     £'000    £'000     £'000
                                                                                 
For the six months ended 30                                                      
September 2008                                                                   
                                                                                 
Shareholder's funds at 1 April 2008   20,723 180,560   281,576   18,981   501,840
                                                                                 
Return on ordinary activities              -       -  (52,273)   11,229  (41,044)
                                                                                 
Second interim dividend for 2008           -       -         -  (9,740)   (9,740)
                                                                                 
Subscription shares exercised              5      96         -        -       101
                                                                                 
At 30 September 2008                  20,728 180,656   229,303   20,470   451,157
                                                                                 
For the year ended 31 March 2009                                                 
                                                                                 
Shareholder's funds at 1 April 2008   20,723 180,560   281,576   18,981   501,840
                                                                                 
Return on ordinary activities              -       - (128,969)   20,627 (108,342)
                                                                                 
Second interim dividend for 2008 and       -       -         - (16,593)  (16,593)
first interim for 2009                                                           
                                                                                 
Ordinary shares issued                   112   2,138         -        -     2,250
                                                                                 
Subscription shares exercised              5      96         -        -       101
                                                                                 
At 31 March 2009                      20,840 182,794   152,607   23,015   379,256
                                                                                 
For the six months ended 30                                                      
September 2009                                                                   
                                                                                 
Shareholder's funds at 1 April 2009   20,840 182,794   152,607   23,015   379,256
                                                                                 
Return on ordinary activities              -       -    81,196   11,559    92,755
                                                                                 
Second interim and special dividends       -       -         - (12,588)  (12,588)
for 2009                                                                         
                                                                                 
Ordinary shares issued                   161   2,817         -        -     2,978
                                                                                 
Subscription shares exercised              4      80         -        -        84
                                                                                 
At 30 September 2009                  21,005 185,691   233,803   21,986   462,485

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

1. Basis of Preparation

The condensed financial statements of the Company have been prepared using the
same accounting policies as those adopted in the 2009 annual financial report,
which are consistent with applicable United Kingdom Accounting Standards and
with the Statement of Recommended Practice: `Financial Statements of Investment
Trust Companies and Venture Capital Trusts'.

2. Investment Management Fees and Finance Costs

Investment management fees and finance costs are allocated 70% to capital and
30% to revenue. A provision for a performance-related fee is recognised if the
Company's performance exceeds the FTSE All-Share Index. No fee has been
provided for the six months under review. This is allocated wholly to capital.

3. VAT Recoverable on Management Fees

As reported in the 2009 annual financial report, the Company recognised £
5,252,000 of VAT due from

HM Revenue and Customs for the period 2001-2007, together with interest of £
772,000.

As disclosed in the Chairman's Statement, a further £291,000 of VAT refunds has
been recognised and received in the period under review. This was credited £
101,000 to revenue and £190,000 to capital in the same proportion as originally
charged, and is the equivalent of 0.14p per share in total, and 0.05p to
revenue.

4. Return per Ordinary Share

                                  Six months to     Year to Six months to
                                                                         
                                  30 September     31 March  30 September
                                                                         
                                  2009                 2009          2008
                                                                         
                                    (Unaudited)   (Audited)   (Unaudited)
                                                                         
                                  £'000               £'000         £'000
                                                                         
Returns after tax:                                                       
                                                                         
Revenue                                  11,559      20,627        11,229
                                                                         
Capital                                  81,196   (128,969)      (52,273)
                                                                         
Total                                    92,755   (108,342)      (41,044)
                                                                         
Weighted average number of                                               
ordinary shares in issue                                                 
                                                                         
during the period:                                                       
                                                                         
  - basic                           209,138,685 207,591,806   207,068,259
                                                                         
  - diluted                         226,859,609 225,333,317   224,997,004

5. Basis of Net Asset Value per Ordinary Share

                                     Six months       Year to  Six months
                                     to                                to
                                                                         
                                     30 September    31 March          30
                                                                September
                                                                         
                                     2009                2009        2008
                                                                         
                                      (Unaudited)   (Audited) (Unaudited)
                                                                         
                                     £'000              £'000       £'000
                                                                         
Shareholders' funds :                                                    
                                                                         
- basic                                   462,485     379,256     451,157
                                                                         
- diluted                                 462,485     379,256     451,157
                                                                         
Ordinary shares in issue at period                                       
end:                                                                     
                                                                         
  - basic                             210,051,017 208,404,620 207,276,080
                                                                         
  - diluted                           210,051,017 208,404,620 207,276,080

The exercise price of the subscription shares of 218.94p was greater than the
share price and therefore there is no dilution.

6. Movements in Share Capital

(a) Ordinary shares of 10p each

                                     Six months       Year to  Six months
                                     to                                to
                                                                         
                                     30 September    31 March          30
                                                                September
                                                                         
                                     2009                2009        2008
                                                                         
                                      (Unaudited)   (Audited) (Unaudited)
                                                                         
Number of ordinary shares:                                               
                                                                         
Brought forward                       208,404,620 207,229,981 207,229,981
                                                                         
Ordinary shares issued for cash         1,607,905   1,128,540           -
                                                                         
Subscription shares exercised              38,492      46,099      46,099
                                                                         
Carried forward                       210,051,017 208,404,620 207,276,080

(b) Subscription Shares

The subscription shares carry the right to subscribe for one ordinary share at
a price of 218.94p on 31 August in each of the years 2010 to 2013. During the
period 38,492 subscription shares were exercised leaving 17,682,432
subscription shares remaining at the period end.

7. Dividend

The Directors have declared an interim dividend of 3.4p (2008: 3.3p) per
ordinary share in respect of the year ending 31 March 2010 payable on 29
December 2009 to shareholders registered on 11 December 2009.

8. Investment Trust Status

It is the intention of the Directors to conduct the affairs of the Company so
that it satisfies the conditions for approval as an investment trust company
set out in section 842 of the Income and Corporation Taxes Act 1988.

9. Status of Half-Yearly Financial Report

The financial information contained in this half-yearly report, which has not
been audited or reviewed by the independent auditors, does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. The
financial information for the half years ended 30 September 2009 and 30
September 2008 has not been audited. The figures and financial information for
the year ended 31 March 2009 are extracted and abridged from the latest
published accounts and do not constitute the statutory accounts for that year.
Those accounts have been delivered to the Registrar of Companies and included
the Report of the Independent Auditors, which was unqualified.

By order of the Board

Invesco Asset Management Limited

Company Secretary

30 November 2009

Directors, Advisers and Principal Service Providers

Directors

Bill Alexander, Chairman

Sir Martyn Arbib

Vivian Bazalgette

Antony Hardy

Robert Yerbury

Manager, Company Secretary and Registered Office

Invesco Asset Management Limited

30 Finsbury Square

London EC2A 1AG

 020 7065 4000

Company Secretarial contact: Karina Bryant

Company Number

Registered in England and Wales: No. 3156676

Registrars

Capita Registrars

Northern House

Woodsome Park

Fenay Bridge

Huddersfield

West Yorkshire HD8 0LA

If you hold your shares directly rather than through an ISA or savings scheme,
and have any queries relating to your shareholding you should contact the
registrars on 0871 664 0300. Calls cost 10p per minute plus network extras.
Lines are open from 8.30a.m. to 5.30p.m. every working day.

Shareholders holding shares directly, can also access their holding details via
Capita's website www.capitaregistrars.com or www.capitashareportal.com

Capita provide an on-line and telephone share dealing service to existing
shareholders who are not seeking advice on buying or selling. This service is
available at www.capitadeal.com or by calling 0870 664 0364. Calls cost 10p per
minute plus network extras. Lines are open from 8.00a.m. to 4.30p.m. every
working day.

Invesco Perpetual Customer Services

Invesco Perpetual has a Customer Services Team available to assist you from
8.30 a.m. to 6.30 p.m. every working day on: 0800 085 8677 or visiting
www.invescoperpetual.co.uk/investmenttrusts

Invesco Asset Management Limited

30 Finsbury Square

London EC2A 1AG

020 7065 4000



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