Final Results

Edinburgh Small Companies Trust PLC
20 August 2001


20 August 2001



                        EDINBURGH SMALL COMPANIES TRUST

Edinburgh Small Companies Trust plc, the investment trust with an investment
objective to achieve long term capital growth by investing in small UK quoted
companies mainly with a market capitalisation below £150 million, announces
its preliminary results for the year ended 30 June 2001.



           PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2001


*   Exposure to TMT stocks during the period resulted in a fall in net asset    
    value of  32.4%.

*   Over 2 years to June 2001 the NAV appreciated by 13.4% compared to a rise of

    7.4% in its benchmark.

*   Dividend remains unchanged at 0.75p per share. 

*   Good longer term prospects for many of the smaller growth companies in the 
    portfolio.



For further information, please contact:


Alex Gowans, Director,
Edinburgh Fund Managers plc                  0131 313 1000


Alistair Currie, Director
Edinburgh Fund Managers plc                  0131 313 1000


Please note that past performance is not necessarily a guide to the future and
that 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


Performance

The period under review has proved to be difficult for investing in the
smaller companies' sector and many of the exceptional gains which were
achieved over the previous twelve months were reversed as a number of
companies failed to meet short term growth projections.  The fall in share
prices became most acute for companies operating in the technology, media and
telecoms (TMT) sectors many of which had become burdened with excessive short
term expectations.  During the year, the Techmark 100 Index which monitors the
performance of technology companies fell by 47.2%.  Value companies, on the
other hand, performed better as investors focussed on their more modest
historic valuations.

Edinburgh Small Companies Trust has a significant exposure to technology and
media stocks, representing around 42.7% of the assets as at 30 June 2001 and
was not immune to the sharp falls in share prices as investors took profits
following the strong gains most of which occurred during our previous
accounting period.  The exposure to value stocks, many of which did produce
healthy returns, was not sufficient, however, to compensate for the
significant fall in value from the growth stocks.

In the period under review, the net asset value fell by 32.4% from 252.48p to
170.6p compared to a decline of 7.4% from the extended Hoare Govett Smaller
Companies Index, excluding investment trusts.    Over the same period the
share price has fallen by 32.2% from 198.5p to 134.5p whilst the warrants have
fallen by 49% from 121.5p to 62p.  The underperformance of the net asset value
in relation to the benchmark was exacerbated by the use of gearing during a
period when share prices were falling and is in direct contrast to the
positive returns which were achieved during the previous financial year when
share prices were rising.

Over the two years to 30 June 2001, which initially encompassed a period of
rising share prices and latterly the corrections over the past twelve months,
the net asset value has appreciated by 13.4%, compared to a rise of 7.4% by
the benchmark.  Investment in small companies needs to be judged over the
longer term, and whilst it is disappointing to report a fall in the net asset
value for the current financial period, when set against the turmoil the
sector has experienced, the returns over the past two years are positive.


Gearing

The company has gearing in the form of a long term debenture repayable in
2023.  In October 2000, a further £10m tranche of the existing debenture was
issued at £107.017. In addition, it has an overdraft facility, which can be
utilised to purchase securities.

As at 30 June 2001, £35m of the £40m debenture issue was committed to the
stockmarket, representing a gearing ratio equivalent to 29.4% of shareholders'
funds.  The balance of the loan is currently held on short term deposit.
Throughout the period under review, gearing has ranged between 16.2% and 29.4%
of shareholders' funds and has averaged 22.8% for the whole year.

The board continues to believe that gearing can enhance returns to
shareholders over the longer term but during periods of declining share prices
can exacerbate a fall in the net asset value. Over the past twelve months, the
use of gearing has contributed approximately 16p to the fall in the net asset
value.  In contrast, over the previous twelve months, the use of gearing
enhanced the net asset value by approximately 12p.



Revenue Account

The company has produced a loss of 0.34p per share for the twelve months to 30
 June 2001 compared to positive earnings of 0.81p for the previous year.  The
loss is due to a fall in the level of investment income receivable, the
non-recurrence of interest on treasury bills and interest receivable, which
boosted last year's income and a rise in interest payable on the enlarged
debenture issue.  Partially offsetting these figures was the fall in the
management fee payable to Edinburgh Fund Managers, which is calculated on the
value of assets.

Although a loss in earnings is being declared for the current financial year,
the company has accumulated revenue reserves equivalent to 3.08p per share.
The board is proposing utilising part of these reserves to declare an
unchanged dividend of 0.75p per share.  If approved the final dividend will be
paid on 26 October 2001 to shareholders on the register at close of business
on 28 September 2001.


Share and Warrant Buybacks

No shares or warrants were purchased by the company for cancellation over the
twelve-month period.  Since 30 June 2001, 2.2m shares were bought back for
cancellation.  The board is seeking permission from shareholders to renew the
authority to purchase up to 14.99% of the shares in issue.  Details of the
special resolution are set out on page 30 of the Annual Report.


Marketing Initiatives

The board has been supportive of the AITC's 'its' marketing initiative over
the past two years to raise awareness of the attraction of investment trusts.
Following consultation with members, the next phase of the 'its' campaign will
centre around the core marketing programme, consisting of the development of
public relations, consumer information including utilising the internet and
its plans to promote better understanding in the IFA market.

The campaign is being funded by the investment trust sector and the board
remains supportive of the proposals.

The company also contributes towards the Edinburgh Fund Managers Investment
Trust Initiative, which enables shareholders to invest in Edinburgh Small
Companies Trust in a cost effective manner through various saving products
such as regular savings schemes, ISAs, Pension Scheme and PEP Transfers.
Further details of the products available can be found on page 32 of the
Annual Report.  Additional information is also available on the Edinburgh Fund
Manager website www.edfd.com.  Shareholders can also access more up to date
information on the performance and strategy being adopted by the company
through The Inside Line, a monthly publication also published on the website.


Prospects

The slowdown in the US economy is having an impact on the expectations of
growth around the world.  Authorities have responded by reducing interest
rates and it is to be hoped that the US is now close to the bottom of the
current economic cycle.

The UK has to date been relatively less affected by the international
developments, with the domestic economy appearing to be more robust than a
number of its international competitors.  Nevertheless it is likely that there
will be further pressure on corporate profitability over the next twelve
months.

It is important for the world economy that the slowdown in the US is not
prolonged.  In particular, the technology sector, which has suffered, more
than most from the cancellation or deferment of orders, is likely to be a
prime beneficiary once capital investment plans are resumed.

The bursting of the dot.com bubble has led to a return of realism for
technology company valuations.  The board is encouraged by the longer term
prospects of many of the smaller growth companies in the portfolio.  These
companies differ from the dot.coms as they have a real business and are
producing goods and services, which will have an important role to play in the
development of segments of the economy over the next decade.  Some of their
short term prospects have undoubtedly been hindered by the slowdown in
economic growth but longer term potential remains intact.

The past twelve months have been disappointing for investing, in TMT in
particular.  However, it does not detract from their longer term potential.
The board remains confident that a pick up in world economic activity will
help these companies to achieve their potential and that positive investor
sentiment towards them will return.



STATEMENT OF TOTAL RETURN
for the year ended 30 June 2001               Revenue      Capital       Total
(audited)
                                                 £000         £000        £000
Realised net gains on investments                   -       14,282       14,282
Unrealised net losses on investments                -      (68,440)     (68,440)

TOTAL CAPITAL LOSSES ON INVESTMENTS                        (54,158)     (54,158)

Loss on early sales of treasury bills               -            -            -
Buyback of warrants                                 -            -            -
Investment Income                               2,343            -        2,343
Interest receivable                               220            -          220
Other income                                       10            -           10
Investment management fee                      (1,083)      (1,083)      (2,166)
Administrative expenses                          (276)          (2)        (278)


Net return before finance costs and             1,214      (55,243)     (54,029)
taxation
Interest payable and similar charges           (1,449)      (1,421)      (2,870)


Return on ordinary activities before             (235)     (56,664)     (56,899)
taxation
Taxation                                           (2)           -           (2)


Return on ordinary activities after             (237)     (56,664)      (56,901)
taxation
Dividends in respect of equity shares           (522)            -         (522)


Transfer from reserves                          (759)     (56,664)      (57,423)


Return per ordinary share                     (0.34p)     (81.43p)      (81.77p)


Diluted return per ordinary share             (0.33p)     (79.88p)     (80.21p)


Dividends per ordinary share                   0.75p            -        0.75p




for the year ended 30 June 2000               Revenue      Capital        Total
(audited)
                                                 £000         £000         £000
Realised net gains on investments                   -       30,596       30,596
Unrealised net gains on investments                 -       43,770       43,770

TOTAL CAPITAL GAINS ON INVESTMENTS                          74,366       74,366

Loss on early sales of treasury bills               -           (4)          (4)
Buyback of warrants                                 -         (521)        (521)
Investment Income                               2,763            -        2,763
Interest receivable                               444            -          444
Other income                                       31            -           31
Investment management fee                      (1,168)      (1,168)      (2,336)
Administrative expenses                          (337)        (120)        (457)


Net return before finance costs and             1,733       72,553       74,286
taxation
Interest payable and similar charges           (1,141)      (1,141)      (2,282)


Return on ordinary activities before              592       71,412       72,004
taxation
Taxation                                          (30)          26           (4)


Return on ordinary activities after               562       71,438       72,000
taxation
Dividends in respect of equity shares            (522)           -         (522)


Transfer to reserves                               40       71,438       71,478


Return per ordinary share                        0.81p      102.73p      103.54p


Diluted return per ordinary share                0.79p      100.64p      101.43p


Dividends per ordinary share                     0.75p            -        0.75p




BALANCE SHEET
(audited)
                                                       At 30 June    At 30 June
                                                             2001          2000
                                                             £000          £000
Fixed assets
Investments                                               153,601       205,292

Current assets                                              8,905         3,406
Current liabilities                                         3,763         3,110

Net current assets                                          5,142           296

                                                          158,743       205,588
Creditors: amounts falling due after more than one
year                                                       41,474        30,954
                                                           
                                                          117,269       174,634


Capital and reserves
Called up share capital                                    17,400        17,386
Reserves                                                   99,869       157,248

Total equity shareholders' funds                          117,269       174,634


Adjusted net asset value per share                        170.60p       252.48p

Fully diluted net asset value per share                   167.66p       245.99p



CASHFLOW STATEMENT

(audited)
                                          For the year ended For the year ended


                                               30 June 2001       30 June 2000
                                                       £000               £000

Net cash inflow from operating activities               190                630


Net cash outflow from servicing of                   (2,737)            (2,324)
finance


Total tax paid                                            -                 (2)


Net cash outflow from financial                      (1,871)            (1,167)
investment


Equity dividend paid                                   (522)              (279)

Net cash outflow before financing                    (4,940)            (3,142)


Net cash inflow from financing                       10,645             (1,059)

Management of liquid resources                            -              5,963

INCREASE IN CASH                                      5,705              1,762




NOTES:

1.   The accounts are prepared under the same accounting policies used for the  
     year to 30 June 2000.

2.   The financial information for the year ended 30 June 2000 has
     been extracted from the Annual Report and Accounts of the company, which 
     have been filed with the Registrar of Companies and contained an 
     unqualified auditors' report. The statutory accounts for 2001 are          

     unqualified and will be delivered to the Registrar of Companies following 
     the company's Annual General Meeting which will be held at the registered 
     office of the company, Donaldson House, 97 Haymarket Terrace, Edinburgh, 
     EH12 5HD on Thursday 25 October 2001 at 11.00am.

3.   The statement of total return (incorporating the revenue account) and 
     balance sheet set out above do not represent full accounts in accordance 
     with Section 240 of the Companies Act 1985. 

4.   The investment management fee in each case includes irrecoverable VAT 
     calculated at 17.5%. 

5.   The final dividend, subject to shareholder approval, will be paid on 26 
     October 2001 to shareholders on the register at the close of business on 28

     September 2001. The ex-dividend date is 26 September 2001.

6.   The Annual Report will be posted to shareholders on 6 September 2001 and 
     copies will be available from the registered office of the company.


For Edinburgh Small Companies Trust plc
Edinburgh Fund Managers plc, Secretary
Amanda Fraser
Company Secretary


END