Interim Results

Foreign & Colonial U.S.Smllr.Co PLC
13 March 2002



Date: Embargoed for 7.00am Wednesday 13 March 2002

Contact: Robert Siddles, F&C Management, Tel: [phone]/Emma Chilvers,
Lansons Communications, Tel: [phone]



                 FOREIGN & COLONIAL U.S. SMALLER COMPANIES PLC

                 Unaudited Interim Statement of Results for the

                        half year ended 31 December 2001

Highlights


  • Diluted net assets fell 2.1% in six months to 31 December 2001 compared to
    a fall of 8.0% in the benchmark, the sterling-adjusted value of the Russell
    2000 Index.

  • The company took advantage of improved prices to take profits in banks and
    insurance stocks.

  • The discount narrowed from 10.7% to 9.0% in the six months to 31 December
    2001 and as at 8 March the discount was 5.45%.


                                          6 months ended              6 months ended                  Year ended
                                             31 December                 31 December                     30 June
                                                    2001                        2000                        2001

Net Assets                                       £83.56m                     £81.49m                     £86.74m
Net Asset value per share                        254.41p                     250.94p                     267.11p
Diluted Net Asset value per                      244.04p                     235.12p                     249.22p
share
Share price                                      222.00p                     206.50p                     222.50p
Warrant price                                    122.00p                     105.00p                     120.00p




Extracts from Chairman's Statement

In a poor stock market environment your Company outperformed its benchmark, the
Russell 2000 Index, in the six months to 31 December 2001, the first half of the
Company's financial year to 30 June 2002.

Diluted net assets per share fell 2.1% in the same period, compared to a drop of
8.0% in our benchmark, the sterling-adjusted value of the Russell 2000 Index.
With the negative impact of a warrant repurchase during the period, undiluted
net assets per share fell by 4.8%.

Market Review

The fall in stock markets was particularly marked in the first three months of
the period and this was followed by a partial recovery. The weakness was caused
by a further slump in technology shares, weakening of the US economy over the
summer and the economic and psychological impact resulting from the terrorist
attacks on 11 September. In the six-month period small companies performed
relatively well: in dollar terms the Russell 2000 Index fell by 4.7% compared to
falls of 6.2% for the S&P 500 Index of large companies and 9.8% for the
technology-dominated Nasdaq Composite Index. The superior performance of smaller
stocks reflects the dual attractions of lower valuation and better profits
performance. This trend has been in place for three years.

Portfolio Review

Overweight positions in economically sensitive areas such as the auto &
transportation and consumer discretionary sectors helped performance, as did an
underweight position in technology. The overweight position in the energy sector
detracted from performance.

The broad disposition of the portfolio remains unchanged. Within the financial
sector your managers took advantage of improved prices to take profits in banks
and insurance stocks. Falling interest rates helped bank stocks while insurance
stocks are reflecting the optimism about a further improvement in industry
pricing.

Buy backs and discount

The Board is committed to buying back shares and warrants at appropriate times
to boost asset value per share. During the period under review no shares were
re-purchased but 1,327,213 warrants were re-purchased for cancellation at a
market price of 96 pence.



During the same period the discount narrowed from 10.7% to 9.0% and as at 8
March 2002 the discount was 5.45%.

Shareholder vote

I mentioned in my last report the vote to offer shareholders an exit at a price
which fairly reflects the then net asset value. Your Board is examining the
alternatives with our financial advisers and will be writing to you in due
course.

Outlook

Your managers believe the outlook is bright for the US smaller company sector:
its valuation is cheap compared to large companies and historically it has
performed well following interest rate cuts. The Russell 2000 Index of small
companies has outperformed the S&P 500 for three years and past cycles of small
company outperformance have typically lasted seven years. Although technology
stocks have bounced from their September lows, your managers are concerned about
the sustainability of the recovery, and remain cautious about the prospects for
this sector.



Gordon Grender

March 2002



Statement of Total Return (incorporating the Revenue Account*)

for the half year ended
                                             31 December 2001                             31 December 2000
                                       Revenue     Capital £'         Total Revenue £'000's        Capital         Total
                                                        000's
                                       £'000's                       £'000s                        £'000's        £'000s

(Losses)/gains on                            -        (2,115)       (2,115)               -          2,391         2,391
Investments

Exchange gains/ (losses on                   -            (2)           (2)               -             73            73
currency balances)

Income                                     249              -           249             263              -           263

Management fee                           (303)              -         (303)           (332)              -         (332)

Loss on warrants purchased for               -          (837)         (837)               -              -             -
cancellation

Other expenses                            (71)            (2)          (73)            (73)            (2)          (75)

Net return before finance
Costs and taxation                       (125)        (2,956)       (3,081)           (142)          2,462         2,320

Interest payable and similar                 -              -             -             (3)              -           (3)
charges

Return on ordinary activities
before taxation                          (125)        (2,956)       (3,081)           (145)          2,462         2,317
                                         
Taxation on ordinary                      (35)              -          (35)            (24)              -          (24)
activities
Return attributable to equity            (160)        (2,956)       (3,116)           (169)          2,462         2,293
shareholders
Dividend on ordinary shares                  -              -             -               -              -             -
Amount transferred                       (160)        (2,956)       (3,116)           (169)          2,462         2,293

(from) / to reserves
Return per ordinary share -             (0.49)         (9.08)        (9.57)          (0.51)           7.49          6.98
pence
Diluted Return per ordinary
share -pence
                                             +              +             +               +           7.02          6.54

*The revenue column of this statement is the profit and loss account of the
Company.

+ Not applicable

All revenue and capital items in the above statement derive from continuing
operations.

BALANCE SHEET
                                                       31 December 2001         31 December 2000                 30 June
                                                                 £'000s                   £'000s                    2001
                                                                                                                  £'000s
Fixed assets
Investments                                                      81,851                   80,381                  86,028
Current assets
Debtors                                                              22                      159                      37
Taxation recoverable                                                  5                        9                       5
Cash at bank                                                      1,865                    1,436                     932
                                                                  1,892                    1,604                     974
Current liabilities
Creditors: amounts falling due within one year:                   (185)                    (496)                   (259)
Net current assets                                                1,707                    1,108                     715
Net assets                                                       83,558                   81,489                  86,743

Capital and reserves
Called up equity share capital                                    8,211                    8,119                   8,119
Capital redemption reserve                                        4,507                    4,507                   4,507
Share premium                                                       566                      165                     165
Warrant reserve                                                     841                    1,403                   1,403
Special reserve                                                  26,088                   26,088                  26,088
Capital reserve                                                  44,578                   42,092                  47,534
Revenue reserve                                                 (1,233)                    (885)                 (1,073)
Total equity shareholders' funds                                 83,558                   81,489                  86,743

Net asset value per ordinary share - pence                       254.41                   250.94                  267.11
Diluted Net asset value per ordinary share -pence                244.04                   235.12                  249.22


*Geographical distribution of the investments at 31 December 2001 was:

United States 100%

Cash Flow Statement for the year half ended 31 December 2001
                                                                             31 December               31 December
                                                                                    2001                      2000
                                                                                  £'000s                    £'000s

Net cash outflow from operating activities                                         (127)                     (129)
Total tax (paid)/recovered                                                          (37)                        11
Net cash inflow from financial investment                                          2,005                       836
Net cash inflow before use of liquid resources and                                 1,841                       718
financing
Increase in short-term deposits                                                        -                   (1,004)
Net cash outflow from financing                                                    (906)                   (1,750)
Decrease in cash                                                                     935                   (2,036)



Notes

No dividend is recommended for payment on the ordinary shares.

The Interim Report will be posted to all shareholders on or around 22 March
2002. Copies may be obtained during normal office hours from the Company's
Registered Office, Exchange House, Primrose Street, London EC2A 2NY, thereafter.

By order of the Board

F&C Management Limited

Secretary

12 March 2002


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