Dunedin Smaller Cos. Investment Trust PLC Regulatory News (DNDL)

DUNEDIN SMALLER COMPANIES INVESTMENT TRUST PLC

HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 APRIL 2014

The objective of Dunedin Smaller Companies Investment Trust PLC is the achievement of long-term growth from a portfolio of smaller companies in the United Kingdom.

· Net asset value per share up by 1.7%.

· The Board is declaring an increase in the interim dividend to 2.10p (2013 - 2.05p).

For further information, please contact:-

Ed Beal

Aberdeen Asset Managers Limited 0131 528 4000

Andrew Leigh

Aberdeen Asset Managers Limited 0207 463 6312

Please note that past performance is not necessarily a guide to the future and the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested.

CHAIRMAN'S STATEMENT

During the six months to the end of April 2014 the net asset value increased by 1.65%. This compares to an increase of 5.19% from the FTSE Small Cap Index (excluding Investment Companies). The Board and your Manager take a long term approach to investing and regard six months as too short a timescale to make meaningful judgments regarding performance. The Company aims to deliver growth in income as well as capital and the revenue return per share showed a pleasing increase, rising from 2.06p to 2.51p. An element of this was due to the timing of investment decisions and ex dividend dates. However, the portfolio did deliver underlying growth in earnings and this has enabled the Board to declare an increased interim dividend of 2.10p (2013 - 2.05p). This will be paid on 25 July 2014 to shareholders on the register on 4 July 2014.

Both absolute and relative valuations of UK smaller companies have moved ahead strongly over the last year and, through the period, equity markets generally moved higher as the economic recovery in developed markets has strengthened. Growth in profits, however, has been rather more anaemic and, for Europe as a whole, it has been negative for the last three years. Although 2014 started the year with an expectation of near double digit earnings growth, such expectations have reduced in recent months as analysts have factored in the increasing strength of sterling across the market.

Whilst capital markets have been very active, many IPOs during the period are now trading below their flotation prices. Despite this, there continues to be ample evidence of rising corporate confidence especially among larger companies with so called mega deals back in vogue. Having had the Vodafone and Verizon deal, the GSK/Novartis asset rearrangement is in prospect and until recently the possibility of Pfizer bidding for AstraZeneca has been in the public eye. Although this interest in corporate activity could be as a result of muted earnings growth, it is interesting that many management teams have remained disciplined with respect to the prices they are prepared to pay, for instance, in the Company's portfolio, Weir Group stepped away from their bid for Metso.

The Company did not repurchase any ordinary shares during the period. The Directors will continue to monitor the Company's discount with that of its peer group and will use the Company's share buyback powers, subject to market conditions, when it feels this to be appropriate. The price per ordinary share as at 30 April 2014 was 215p per share and the net asset value at such date (inclusive of income) was 229.73p, representing a discount of 6.4% which compares with an average of 7.5% for the Association of Investment Companies UK Smaller Companies sector.

Economic recovery is happening and whilst it could be de-railed by the resurgence of concerns about sovereign debt that issue seems to have moved out of focus for the time being. However, a move to some form of quantitative easing by the European Central Bank might serve to return it to the fore.

There are also signs that investors are becoming more discerning with respect to the businesses they want to invest in. Such an environment should suit your Manager's bottom-up approach even if it does take time for earnings to catch up with valuations.

Referendum on Scottish Independence

The Company is registered in Scotland and the Board notes the uncertainty arising in relation to the forthcoming referendum on Scottish independence. In the event of a "Yes" vote in favour of independence this uncertainty may be prolonged until the implications for the Company are clearer, especially relating to the economic, legislative and regulatory backdrop.

Directors' Responsibility Statement

The Directors are responsible for preparing the half-yearly financial report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

- the condensed set of financial statements within the half-yearly financial report has been prepared in accordance with the statement "Half-Yearly Financial Reports" issued by the UK Accounting Standards Board;

- the Chairman's Statement (constituting the interim management report) includes a fair review of the information required by rule 4.2.7R of the Disclosure and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last annual report that could so do).

The Half-Yearly Financial Report for the six months to 30 April 2014 comprises the Interim Board Report, the Directors' Responsibility Statement and a condensed set of financial statements. The Independent Review Report of the Auditor is attached.

Risks and Uncertainties

The Board has adopted a matrix of the key risks that affect its business. The principal risks associated with the Company are:

(i) Performance risk: The performance of the portfolio relative to the benchmark (FTSE SmallCap Index (ex Investment Companies)) and the underlying stock weightings in the portfolio against their index weightings are monitored closely by the Board.

(ii) Discount volatility: The Company's shares can trade at a discount to the underlying net asset value per share. The Company operates a share buyback programme, and any shares repurchased may be either cancelled or held in treasury. The programme is reviewed on an ongoing basis.

(iii) Regulatory risk: The Company operates in a complex regulatory environment and faces a number of regulatory risks. Breaches of regulations, such as Sections 1158-1159 of the Corporation Tax Act 2010, the UKLA Listing Rules and the Companies Act, could lead to a number of detrimental outcomes and reputational damage. The Audit Committee monitors compliance with regulations by reviewing risk and internal control reports from the Manager.

(iv) Gearing risk: The Company has the ability to utilise gearing in the form of a three year credit facility. Gearing has the effect of accentuating market falls and market gains. The Board is responsible for determining the gearing policy of the Company. The current guidelines from the Board authorise the Manager to invest up to £5 million of borrowings without reference to the Board. The Board has stated previously that the maximum level of gearing is 20%.

Going Concern

The Company's assets consist substantially of equity shares in companies listed on the London Stock Exchange and in most circumstances are realisable within a short timescale. The Board has set limits for borrowing and regularly reviews actual exposures, cash flow projections and compliance with banking covenants. Borrowings of £5 million are committed to the Company until 26 November 2014. The Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future and for the above reasons, they continue to adopt the going concern basis in preparing the accounts.

The Earl of Dalhousie

Chairman

13 June 2014

Performance to 30 April 2014

\* The total return for share price and net asset value is calculated on the basis of reinvesting dividends to shareholders on the ex-dividend date.

Source: Aberdeen Asset Management, Morningstar & Factset

INDEPENDENT REVIEW REPORT TO DUNEDIN SMALLER COMPANIES INVESTMENT TRUST PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 April 2014 which comprises the Income Statement, Balance Sheet, Reconciliation of Movements in Shareholders' Funds, Cash Flow Statement and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules (the "DTR") of the UK's Financial Conduct Authority (the "UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the Statement Half-Yearly Financial Reports as issued by the UK Accounting Standards Board.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 April 2014 is not prepared, in all material respects, in accordance with the Statement Half-Yearly Financial Reports as issued by the UK Accounting Standards Board and the DTR of the UK FCA.

Philip Merchant

For and on behalf of KPMG LLP

Chartered Accountants

Edinburgh

13 June 2014

INCOME STATEMENT

INCOME STATEMENT

BALANCE SHEET

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

CASH FLOW STATEMENT

Notes to the Financial Statements

For Dunedin Smaller Companies Investment Trust PLC

Aberdeen Asset Management PLC SECRETARY

Please note that past performance is not necessarily a guide to the future and the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested.