(ERE) Eredene Capital

Date:                            25 November 2011

On behalf of:                  Eredene Capital PLC ("Eredene", "Company", the "Group" or the "Eredene Group")

Embargoed until:            0700hrs

EREDENE CAPITAL PLC

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2011

Eredene Capital PLC (AIM: ERE), the AIM quoted investor in Indian infrastructure, is pleased to announce its interim results for the six month period ended 30 September 2011.

Highlights

·      Uplift in the Indian Rupee value of investments in India of 7.3% - Sterling value of investments down by 0.3%

·      Eredene raised £30m (before costs) in a share placing during the period

·      Net Asset Value of 20.7 pence per share as at 30 September 2011 (30 September 2010: 22.8 pence, 31 March 2011: 23.3 pence)

·      Loss for the six month period of £1.5m (30 September 2010: profit £0.2m)

·      Six of Eredene's 11 investments in India are earning revenue

·      Two investee companies are paying dividends

·      Debt finance yet to be finalised by the Group's investee company developing the Ennore Container Terminal project, and there is no certainty that acceptable terms will be reached due to issues regarding the offered financing package

·      Company Law Board in Mumbai ruled in favour of Eredene's investee company, Matheran Realty, in dispute with another Matheran shareholder - positive development for Eredene though may be appealed.

Commenting on the results, Alastair King, Chief Executive and founder of Eredene, said:

"Eredene's investments have continued to perform well during the period against a backdrop of global financial and economic turmoil. India remains one of the fastest growing economies in the world despite these global difficulties, and Eredene will continue to explore options to realise value from its investments for shareholders."

For further information contact:

Notes to Editors

• Eredene Capital PLC is a leading UK-based AIM quoted investor in infrastructure projects in India. It focuses primarily on ports, port services, logistics and transportation.

• The Eredene Group has made investments in eleven projects in India - nine in ports and port services, logistics and distribution warehouses, one in an IT office and one in a large scale, affordable housing development. Six of its investee companies are revenue generating, of which two are dividend paying.

• Eredene trades on the Alternative Investment Market ("AIM") of the London Stock Exchange.

CHAIRMAN'S STATEMENT

Summary

During the six months to 30 September 2011, the Eredene Group's core investments in India in container handling, port services, logistics and warehousing continued to make steady progress. Six of Eredene's 11 investee companies are generating revenue from a broad base of customers who include a number of international blue-chip names, and two of the companies are profitable and paying dividends. The Group reported a loss for the period of £1.5m (30 September 2010: profit £0.2m) and a net asset value ("NAV") per share at 30 September 2011 of 20.7p (30 September 2010: 22.8p, 31 March 2011: 23.3p) with the reduction in NAV being due primarily to unrealised foreign exchange movements and the dilutive effect of the share placing.

In May 2011, Eredene Capital PLC raised £30m (before expenses) by placing an additional 166,666,667 shares at 18p per share - a small premium to the share price at the time.

Post the six-month period, the Company Law Board in Mumbai ruled in favour of Eredene's investee company, Matheran Realty, on all claims in a previously disclosed dispute with another Matheran shareholder over the low-cost housing development at Matheran. While this is a positive development, the ruling may be appealed.

Eredene and its consortium partners are in delayed but on-going negotiations with State Bank of India ("SBI") regarding the debt financing of the Ennore Container Terminal project, however there is no certainty that acceptable terms will be reached with SBI as there are issues with the offered financing package.

Despite signs of a slowdown and concerns about inflation, India's economy remained a beacon of growth in a world battered by deepening financial crisis and threat of recession. Indian GDP grew by 7.7% p.a in the second quarter of 2011, down from 7.8% p.a in the first quarter. However, inflation in September was 9.72% p.a, well above the Reserve Bank of India's target of 4% to 4.5%, and this rising trend is putting unwelcome upward pressure on interest rates. The Indian Rupee has also suffered significant depreciation in the period.

Financial Highlights

During the six month period to 30 September 2011, Eredene made a loss after tax of £1.5m (30 September 2010: profit of £0.2m) representing a loss of 0.37p per share (30 September 2010: profit of 0.07p per share).

The Group had administrative expenses of £1.7m in the period (30 September 2010: £1.9m), which included £0.3m (30 September 2010: £0.3m) of expenses relating to the Group's subsidiaries, MJ Logistic Services and Sattva Conware.

As at 30 September 2011, the Group had a NAV attributable to equity shareholders of £92.5m (30 September 2010: £64.0m, 31 March 2011: £65.4m) representing 20.7p per share (30 September 2010: 22.8p, 31 March 2011: 23.3p).

Eredene's NAV per share has fallen by 2.6p (11.2%) in the six months to 30 September 2011 with the reduction in NAV being due primarily to unrealised foreign exchange movements and the dilutive effect of the share placing.

Eredene's investments have increased in value in Indian Rupee terms by 7.3% during the period however that gain has been counteracted by the unrealised translation effect of the depreciation of the Indian Rupee of 7.6% against Sterling. This adverse movement in the Indian Rupee accounted for approximately 0.6p of the NAV reduction. The share placing was carried out at a price of 18p per share which was less than the then NAV per share of 23.3p and so led to a dilution in NAV per share of approximately 2.1p per share.

Investee Companies

During the six months to 30 September 2011, Eredene's core investee companies continued to make steady progress and to develop broadly in line with forecast. Below are the main developments:

•           Negotiations continue with SBI to attempt to agree terms for local debt funding of the Ennore Container Terminal project, however there is no certainty that acceptable terms will be reached with SBI as there are issues with the offered financing. The Concession Authority, Ennore Port Ltd, had granted an extension of the deadline to close financing until 31 October 2011, and it is expected that a further extension may be granted.

•           MJ Logistic Services, a third party logistics and warehousing business based at Palwal near Delhi in which Eredene has an 88% stake, has reached full capacity at its high-tech ambient and temperature controlled warehouse, and has invited tenders for construction of a second series of cold storage chambers. Customers include Tata Motors, Unilever, Danisco, McCain and Walmart.

•           Sattva Vichoor Container Freight Station ("CFS") near Chennai, one of two investments in Tamil Nadu State with the Sattva Business Group, continued its strong performance, posting an increase in profit before tax of more than 50% compared to the same six month period in 2010. Customers include South Korean machinery manufacturer Doosan, NYK Line, Maersk, CMA-CGM, and MSC Shipping. The CFS paid a dividend for the third successive year.

•           Sattva Conware CFS near Ennore, the second investment with the Sattva Business Group in Tamil Nadu State, started generating revenue from a 32,000 sq foot warehouse in April 2011. Its first anchor customer is Ford Motors India.

•           Pipavav CFS, one of two projects operated by Contrans Logistic in Gujarat State, handled 9,800 TEUs for the six months to 30 September 2011, a 37% increase over the same period last year. Pipavav Port is the third largest container-handling port on the Indian west coast. The value of Eredene's investment in Contrans Logistic has increased in Indian Rupee terms by 0.3% however the negative foreign exchange movement has led to the Sterling value declining by 6.7%.

•           Baroda Inland Container Depot ("ICD"), the second project by Contrans Logistic, is a planned 140-acre greenfield site to service road and rail freight on the Delhi-Mumbai corridor. The ICD has now received both in-principle approval to set up a Private Freight Terminal and authorisation from the Ministry of Railways to construct a siding to connect to the main railway network. Construction is not expected to commence until an anchor customer has been identified.

•           Haldia Logistics Park in West Bengal, operated by Apeejay Infra-Logistics as a joint venture with tea, shipping and hospitality conglomerate Apeejay Surrendra Group, has been earning open storage revenue since October 2010. Most infrastructure development works, including access roads, site boundary wall and administration building, are completed, and a warehouse and container yard are nearing completion. The multi-service park will provide logistics and storage facilities for the local petrochemical industry and for shippers using Haldia Port.

•           Kalinganagar Logistics Park in Orissa State, the second joint investment with the Apeejay Surrendra Group operated by Apeejay Infra-Logistics, is also nearing completion of the first phase of construction of warehousing, access roads and surfaced storage and working area. The multi-service facility is targeted to go operational in 2012 and will support the region's growing steel industry and the transport and logistics businesses which supply it.

•           Ocean Sparkle Limited ("OSL"), India's leading ports services operator which provides harbour towage, mooring, pilotage, ship-to-ship transfer of cargo, and control tower management to major container lines and bulk shippers using Indian ports, again declared a dividend for the financial year ended 31 March 2011. Eredene currently holds a 7.69% stake in OSL. Business is growing in line with expectations.

•           Matheran Realty and Gopi Resorts low-cost housing development at Tanaji Malusare City near Mumbai had sold 3,600 units at the end of September 2011. Post the six-month period, the Company Law Board in Mumbai ruled in favour of Matheran Realty in a long-running and previously disclosed shareholder dispute with another Matheran Realty shareholder. The judgement rejected all claims by the other party, but the decision may be appealed. A separate ruling is also pending from an arbitration court in London.

•           Sribha Infrastructure's office tower in Bangalore remains on hold pending further funding from a third party. Eredene has no further obligations and has written the stake down from £469,000 to £nil due to the long period without progress and the remote chance of realising value from this investment.

India's Economy

Amid deepening turmoil in the world's financial markets and the threat of global recession, India's economy managed to record an impressive 7.7% p.a growth in the first six months of 2011. Although this is down from the 7.8% p.a GDP growth in the first quarter of 2011 and from the 8% increase in GDP achieved over full year 2010, it demonstrates that India appears to be better placed than many other nations to ride out the storm. However, inflation, which is putting unwelcome upward pressure on interest rates, remains a concern. The official rate rose to 9.72% in September 2011, well above the Reserve Bank of India's ("RBI") target of 4% to 4.5%. The RBI is expected to sustain the high interest rate environment until inflation comes within the target. The Indian Rupee has also suffered significant depreciation in the period, and this has had an impact on India's cost of imports, especially the cost of oil.

Growth in port infrastructure and the logistics sectors remains robust. According to Shipping Ministry estimates, total cargo volumes at Indian ports will breach the one billion tonne mark in the 2011-2012 financial year and will double to two billion tonnes by 2016-2017. An increasing volume of India's international and domestic freight is containerised, and according to official estimates container traffic at the country's 13 major ports is forecast to increase from a current 7.5 million TEUs annually to 15 million TEUs annually over the same five-year period. This will require sustained high levels of investment in the ports, container handling and logistics sectors in which Eredene primarily operates.

Outlook

Eredene's investments have performed well during another difficult period for the world economy. Eredene successfully raised £30m during the period to ensure the Company is well capitalised and the Company will continue to explore options to realise value from its investments for shareholders.

Struan Robertson

Non-Executive Chairman

25 November 2011

Investment Portfolio Summary

Eredene Capital PLC

Statement of Comprehensive Income

for the six month period ended 30 September 2011

Eredene Capital PLC

Consolidated Balance Sheet

As at 30 September 2011

Eredene Capital PLC

Consolidated Statement of Changes in Equity for the six months ended 30 September 2011

Eredene Capital PLC

Consolidated Cash Flow Statement

for the six month period ended 30 September 2011

Eredene Capital PLC

Notes to the Interim Statement

1.    Basis of preparation

The interim financial information for the periods ended 30 September 2011 and 30 September 2010 has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board and does not constitute statutory accounts within the meaning of the Companies Act 2006. The statutory accounts for the period ended 31 March 2011, which were prepared in accordance with International Financial Reporting Standards as endorsed by the European Union ("IFRS") and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, have been delivered to the Registrar of Companies. The auditors' opinion on those accounts was unqualified, did not include any references to any matters to which the auditors drew attention without qualifying their report, and did not contain a statement made under Section 498(2) or Section 498(3) of the Companies Act 2006.

The financial information in this report comprises the Group balance sheets as at 30 September 2011, 31 March 2011 and 30 September 2010 and related statements of comprehensive income, cash flow, changes in equity and related notes for the period then ended ("financial information"). The financial information has been prepared in accordance with the Group's principal accounting policies as set out in the Annual Report for the period ended 31 March 2011. There have been no changes in the existing policies. It has been prepared on the historical cost basis, except for the revaluation of certain investments.

The Group adopted IFRS3 'Revised' "Business Combinations" and IAS 27 "Amended Consolidated and Separate Financial Statements" in the previous period. As permitted, the Group has not applied IAS34 "Interim Reporting" in preparing this interim report.

2.    Critical accounting judgements and estimates

The preparation of the Group's financial statements requires the directors to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

The directors consider that the following estimates and judgements are likely to have the most significant effect on the amounts recognised in the financial statements.

Accounting for investments

Investments in which the Group has a long-term interest and over whose operating and financial policies it exerts significant influence, but which are held as part of an investment portfolio, the value of which is through their marketable value as part of a basket of investments, are not regarded as joint ventures or associated undertakings. The treatment adopted is in accordance with IAS 39 "Financial Instruments: Recognition and Measurement" and the exemptions applying to venture capital organisations in IAS 28 "Investments in Associates" and IAS 31 "Interests in Joint Ventures".

Value of investments

The Group's investments held at fair value through profit or loss are valued based on the International Private Equity and Venture Capital Guidelines. The valuations are made based on market conditions and information about the investment. These estimates are subjective in nature and involve uncertainties and matters of significant judgement (e.g interest rates, volatility and estimated cash flows).

Share-based payments

The charge for share-based payments is calculated using an option valuation model which requires highly subjective assumptions to be made including the future volatility of the Company's share price, expected dividend yields, risk-free interest rates and expected staff turnover. The directors draw on external sources to aid them in the determination of the appropriate data to use in such calculations.

3.    Earnings per share and net asset value per share

The calculation of the basic earnings per share is based on the loss for the period attributable to equity shareholders of £1,496,000 and the weighted average number of shares in issue during the period of 408,655,332. There was no difference between the basic earnings per share and diluted earnings per share as the dilutionary effect of the shares under option was less than 0.01p per share. The calculation of net asset value per share is based on the net assets attributable to equity shareholders of £92,536,000 and the number of shares in issue at the period end of 446,906,698.

4.    Forward-looking statements

This document may contain forward-looking statements with respect to certain of the plans and current goals and expectations relating to the future financial condition, business performance and results of Eredene Capital PLC. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of Eredene Capital PLC including, amongst other things, UK, Indian and global economic and business conditions, market related risks such as fluctuations in interest rates, foreign exchange rates, inflation, the impact of competition, delays in implementing proposals, the timing, impact and other uncertainties of future investments, the impact of tax or other legislation and other regulations in the jurisdictions in which Eredene Capital PLC and its affiliates operate. As a result, Eredene Capital PLC's actual future condition, business performance and results may differ materially from the plans, goals and expectations expressed or implied in these forward-looking statements.

5.    Interim Results

Copies of the Interim Results will be posted to shareholders and will also be available from www.eredene.com.