Final Results

British Smaller Companies VCT PLC
19 June 2001







                      BRITISH SMALLER COMPANIES VCT plc

          Unaudited preliminary results for the year ended 31 March 2001



                 *   40% increase in the rate of investments

    *  £3.2m invested in 10 companies - 9 of which are new to the portfolio

                         *   Board strengthened

        *   Portfolio broadened to enhance potential shareholder value



British Smaller Companies VCT plc ('the Company') today announces preliminary
results for the 12 months to 31 March 2001



FINANCIAL HIGHLIGHTS



                                              Unaudited               Audited
                                             Year ended            Year ended
                                               31 March        31 March  2000
  
                                                2001

Income:                                          £730,000              £860,000
Net revenue return before tax:                   £424,000              £556,000
Net revenue return after tax:                    £376,000              £502,000
Revenue return per share:                           2.38p                 3.17p
Total return per share:                           (4.38p)               (5.79)p
Total dividend (net):                               2.30p                 3.15p
Net assets:                                       £13.09m               £14.19m
Net asset value per share:                          82.9p                 89.6p
Number of qualifying investments:                      28                    19
Value of qualifying investments:                   £9.61m                £8.40m





Announcing the results, the Chairman, Sir Andrew Hugh Smith, reported that the
investment rate during the year had increased by 40% to £3.2m, with a good
proportion of  these investments being made in early stage innovative
businesses, following the widening of the Company's investment policy earlier
in the year.



INVESTMENTS



The extension of the Company's investment policy, to include opportunities in
the development and application of new technologies, reflects the Board's
concern over depressed demand and margin pressures which have troubled British
business in recent years.  These pressures have weighed heavy on small,
established industrial companies which were the principal targets of the
Company at its inception.  In addition, the Board, and its investment adviser,
Yorkshire Fund Managers Limited, have devoted much effort during these
difficult times to extending its supervisory activities and providing active
advice and assistance wherever possible, which in many cases has been highly
effective and led to a greatly improved performance. In a few cases, the
difficulties have proved too great.



A total of £3.2m was invested in ten companies during the period. Of this
total, £1m has been invested in three companies which meet the new extended
investment criteria - Voxar Limited, a company that has developed software for
the high speed rending of 3 dimensional computer images; Imerge Limited, which
has developed a software system and hardware that together form the next
generation of home media servers; and Primal Pictures Limited, which designs
and produces 3D computer graphic models of human anatomy aimed at healthcare
professionals.



The Company has comfortably exceeded the target set down by venture capital
trust legislation that at least 70% of investments held at the end of the
initial qualifying period, 31 March 2001, are in qualifying investments.



A further £1.225m has already been invested since the year end. £500,000 has
been invested in Weston Antennas Limited, a company that designs and
manufactures satellite earth station antennas. £500,000 was invested in Cozart
Bioscience Limited as part of a larger syndicated funding package led by
Yorkshire Fund Managers Limited. The company manufactures and supplies
immunoassays and hand-held readers for the detection of drugs abuse. A recent
investment of £225,000 has been made in Tikit Group plc at the time of its
admission to AIM.



REALISATIONS



International Resources Group Limited, which redeemed its loan stock together
with substantial premium last May, and in which the Company has a 7% equity
stake, continues to progress satisfactorily.



In December RMF Engineering Limited redeemed a further tranche of preference
shares at a 20% premium resulting in a small profit to the Company.



Since the year end, further realisation opportunities have been identified and
two are in the advanced stages of negotiation. Shareholder value will increase
marginally as a result of these disposals, should they complete.



During the past year, two companies have gone into receivership and another
was placed into administration, with a total loss amounting to £2.6m.  No
receivership proceeds are anticipated and these investments have been written
down in full.



PERFORMANCE



The Chairman said the overall return per share was a loss of 4.38p per share
due largely to the receiverships and offset by net realised and unrealised
gains on the balance of the portfolio.  The lower return on revenue is a
short-term consequence of switching a proportion of new investments into early
stage innovative businesses which are typically structured to provide medium
to long-term capital growth.



'Whilst the effect is initially to reduce the level of dividend payable by
your Company, these investments offer the potential of significant capital
gains that will considerably enhance longer term shareholder value,' he said.



DIVIDEND



A final dividend of 1.1p per share is being recommended, bringing the total
dividend payout for the year to 2.3p (2000: 3.15p)



OUTLOOK



Commenting on the Company's prospects for the current year, the Chairman said:



'Your Board will continue to invest in a balanced portfolio across a range of
industry sectors, retaining a broad range of old economy businesses, but with
an increasing level of new, innovative businesses. In the second half of the
year your Board has been working with Yorkshire Fund Mangers Limited to
actively look for realisation opportunities from the existing portfolio so
that the liquid resources released can be made available to companies offering
significantly higher overall returns.  This will allow us to make further
changes to the make-up of the portfolio.  I believe this course of action will
lead to a significant improvement in medium to long-term shareholder value.'





For further information, please contact:
Phil Cammerman              Yorkshire Fund Managers Ltd      Tel: [phone]
David Hardy/Simon Ellis               Binns & Co PR Ltd      Tel: [phone]
Simon Mountford          Simon Mountford Communications      Tel:  [phone]



Chairman's Statement



I am pleased to report a 40% increase in the rate of investments during the
year to £3.2m. A good proportion of these investments was in early stage
innovative businesses, following the widening of your Company's investment
policy early in the year.  The balance was committed to more mature 'old
economy' companies.



Stock markets and confidence in the economy in general deteriorated in the
year and this was reflected in the FT-SE All Share index falling 14% in that
period.  Our net asset value (adjusted for the final proposed dividend of
1.1p) fell 7% in the year to 84p per share - 82.9p per share after adjusting
for the proposed dividend.



The total of money held awaiting investment has fallen during the year to £
2.7m. Given the need to retain a modest proportion of the portfolio in liquid
investments to meet any opportunity for follow-on investments in existing
investee companies, future investment in new opportunities will increasingly
come from the proceeds of disposals of existing investments.



Investments



In my interim statement I explained the reasons for extending our investment
policy to include opportunities in the development and application of new
technologies.  During the second half of the year your Board has implemented
this policy.   To help us in the implementation of this decision the Board
invited Bob Pettigrew, a director of  The Generics Group Limited, to join them
and he agreed to accept the invitation.  He has already made significant
contributions to the Board's decision making process.  A resolution will be
proposed to shareholders at the AGM on 23 July 2001 to confirm his
appointment.



This extension of our investment policy and an earlier extension reported to
shareholders in November 1999, reflect the Board's concern to counter the
extended period of depressed demand and margin pressures which have troubled
British business in recent years.  These resulted mainly from the
over-valuation of Sterling and have particularly affected large areas of
industry in the UK since shortly after the Company's flotation.



These pressures have been particularly heavy on the small established
industrial companies which were the principal targets of the Company at its
inception.  As these difficulties have gained force the Board and its
Investment Adviser have devoted much effort to extending its supervisory
activities and providing active advice and assistance wherever possible.  In a
number of cases this has been highly effective and has led to greatly improved
performance; in others, unfortunately, the difficulties have proved too great.



During the year, a total of £3.2m was invested in 10 companies, compared to £
2.3m in 7 companies in the previous year.  Of the total monies invested, £1m
was invested into companies meeting the new extended investment criteria.



31 March 2001 represents the end of the initial qualifying period for all
monies raised for the purposes of meeting the investment compliance targets
contained in the venture capital trust legislation.  The legislation requires
that at least 70% of investments held at this date, and subsequently, are in
qualifying investments.  I am pleased to report that this target has been
comfortably exceeded.



The new financial year has started well with a further £1.225m already
invested.  At 31 March 2001 a further £500,000 had been committed to one
company, Weston Antennas Limited, and this has now been completed.  An
additional £1.1m has been committed to three companies since that date, of
which two have been completed, totalling £725,000.  Your Board's Investment
Adviser, Yorkshire Fund Managers Limited, continues to report a good flow of
enquiries for finance from your Company.



Realisations



As previously reported, on 31 May 2000 the loan stock in International
Resources Group Limited was repaid in full producing an annualised compound
return of 32.5%.  Your Company retains a 7% equity stake in this investment,
valued at £600,000 against a cost of £47,000. The group continues to progress
satisfactorily.



On 31 December 2000 RMF Engineering Limited redeemed a further tranche of
preference shares at a 20% premium resulting in a small profit to your Company
of £14,000.



I can also report that since the year end agreement has been reached for the
disposal of an investee company in a trade sale at a value above that included
in these accounts.  Shareholder value will increase marginally as a result.



Your Board has also approved the disposal of a further investment, which is at
the advanced stages of negotiation.  This will also result in enhanced
shareholder value.  Yorkshire Fund Managers Limited is actively pursuing other
divestment opportunities where the potential for further progress is felt to
be limited.



Unfortunately, I have to report that 2 investments, Eagle Marketing Limited
and Morgan Machine Knife Limited, went into receivership during the last year
and another, First Stop Stationery Limited, was placed in administration.  The
total loss amounted to £2.6m against provisions of £500,000 which had been
made in previous accounting periods.  No receivership proceeds are anticipated
and these investments have been written down in full.



Financial Statements and Dividend



The net revenue return after taxation was £376,000, equivalent to 2.38p per
share.  The total return, after the inclusion of movements on capital account,
was a loss of 4.38p per share.



The loss on capital account represents the receiverships mentioned above,
offset by net realised and unrealised gains on the balance of the portfolio.
The lower return on revenue account is the short-term consequence of switching
a proportion of new investments into early stage innovative businesses.
Investments in these companies are typically structured to provide medium to
long-term capital growth rather than short term revenue returns.  Whilst the
effect is initially to reduce the level of dividend payable by your Company
these investments offer the potential of significant capital gains that will
considerably enhance longer term shareholder value.



An interim dividend of 1.2p per share was paid to eligible shareholders in
December 2000.  Your Board recommends a final dividend of 1.1p per share.
This will be paid, subject to shareholder approval, on 6 August 2001 to
shareholders on the register on 29 June 2001.



Shareholder Liquidity



In furtherance of your Board's policy of facilitating shareholder liquidity in
your VCT shares the Company purchased a total of 62,000 shares during the
year, which were then cancelled. As these purchases were made at a discount to
net asset value, remaining shareholders' net asset value per share increased.
This was done by virtue of the new arrangements approved by shareholders at
the 1999 Annual General Meeting and does not affect revenue reserves available
for distribution.  The existing authority to purchase the Company's own shares
expires on 30 June 2001.  A resolution will be put to shareholders at the
Annual General Meeting to extend this authority to 23 January 2003.



Outlook



Your Board will continue to invest in a balanced portfolio across a range of
industry sectors, retaining a broad range of old economy businesses, but with
an increasing level of new innovative businesses.  In the second half of the
year your Board has been working with Yorkshire Fund Managers Limited to
actively look for realisation opportunities from the existing portfolio so
that the liquid resources released can be made available to companies offering
significantly higher overall returns.  This will allow us to make further
changes to the make-up of the portfolio.



I believe that the course of action outlined above will lead to a significant
improvement in medium to long-term shareholder value.



Sir Andrew Hugh Smith

Chairman





Unaudited Statement of Total Return
(Incorporating the Revenue Account)

For the year ended 31 March 2001








                           Notes          2001                   2000
                                  Revenue Capital Total  Revenue Capital  Total
                                                                          
                                    £'000   £'000 £'000    £'000   £'000  £'000
                                                                           


Net losses on investments              -     (868) (868)       -  (1,216)(1,216)
                                                                       
Income                                730       -   730      860       -    860
                                                            
Investment advisory fee               (81)   (243) (324)     (86)   (259)  (345)

Other expenses                       (225)       - (225)    (218)       -  (218)

                                 ------   ------- ------   ------ ------- ------

Net return on ordinary
activities before taxation           424  (1,111) (687)     556  (1,475)  (919)
Tax on ordinary activities     2     (48)     42    (6)     (54)     56      2

                                   ------  ------ ------   ------  ------  -----
Net return on ordinary
activities after taxation            376  (1,069) (693)     502  (1,419)  (917)

Dividends in respect of        3    (363)      -  (363)    (499)      -   (499)
equity shares                                     

                                   ------  ------ ------   ------  ------ ------
Transfer to/(from)                     13 (1,069)(1,056)       3 (1,419) (1,416)
reserves
                                     ====    ====  ====     ====    ====   ====



Return per Ordinary share:

Basic and fully diluted        4    2.38p (6.76)p (4.38)p  3.17p (8.96)p (5.79)p
                                                                             


Notes

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

All activity has arisen from continuing operations.

There is no difference between the net revenue return on ordinary activities
before taxation and the transfer to/(from) revenue reserves for the financial
year and their historic cost equivalents.


Unaudited Balance Sheet
At 31 March 2001

                                                             2001          2000
                                             Notes          £'000         £'000
Fixed Assets

Investment portfolio                                        9,605         8,399
                                                         --------      --------

Current Assets

Investments                                                 2,698         5,472
Debtors                                                       353           610
Cash                                                          665            21
                                                         --------      --------
                                                            3,716         6,103

Creditors: amounts payable within one
year                                                        (235)         (314)
                                                         --------      --------
Net Current Assets                                          3,481         5,789
                                                         --------      --------
Total Net Assets                                           13,086        14,188
                                                            =====         =====

Capital and Reserves

Called up share capital                                     1,578         1,584
Capital redemption reserve                                      9             3
Capital reserve                                           (2,287)       (1,218)
Special reserve                                            13,769        13,815
Revenue reserve                                                17             4
                                                         --------      --------
Equity shareholders' funds                                 13,086        14,188
                                                            =====         =====

Net asset value per Ordinary share                5         82.9p         89.6p
                                                            =====         =====


Unaudited Cash Flow Statement
For the year ended 31 March 2001

                                                                 2001     2000
                                                                 £000     £000

Net cash inflow from operating activities                         362      140
                                                             -------- --------
Taxation
Tax repayments received                                            70        -
Advance corporation tax paid                                        -     (40)

                                                             -------- --------
Net Tax Received (Paid)                                            70     (40)
                                                             -------- --------
Investing activities
Purchase of investments                                       (3,237)  (2,338)
Proceeds from disposal of investments                           1,147      986
                                                             -------- --------
Net cash outflow from investing activities                    (2,090)  (1,352)
                                                             -------- --------
Equity dividends paid to shareholders                           (442)    (284)
                                                             -------- --------

Net cash outflow before use of liquid resources and           (2,100)  (1,536)
financing
                                                             -------- --------
Management of liquid resources
Purchase of fixed interest government stocks                        -    (456)
Proceeds from the sale of fixed interest government stocks      2,790    1,556
                                                             -------- --------
Net cash inflow from management of liquid resources             2,790    1,100
                                                             -------- --------
Financing
Purchase of own shares                                           (46)        -
                                                             -------- --------
Net cash outflow from financing                                  (46)        -

                                                             -------- --------
Increase (Decrease) in cash                                       644    (436)
                                                                =====    =====





Notes To The Financial Statements

1.       Basis of Reporting

Other than the results for the prior year the financial information in these
statements is unaudited and does not constitute the Company's statutory
accounts for the year ended 31 March 2001.  The audited accounts for the year
ended 31 March 2000 have been reported upon without qualification by the
auditors and filed with the Registrar of Companies.


2.       Taxation Charge


                                   2001                             2000

                     Revenue    Capital      Total    Revenue    Capital  Total
                        £000       £000       £000       £000       £000   £000

Corporation tax           48       (48)          -         61       (56)      5
payable at
20% (2000: 22%)

Under provision in         -         6           6          -         -       -
prior year                            
ACT written back           -         -           -         (7)        -      (7)
                                 
                     --------   --------   --------   --------   -------- ------
                          48        (42)         6         54        (56)    (2)
                                                   
                       =====      =====      =====      =====      =====  =====


3.       Dividends


                                                             2001         2000
                                                             £000         £000
Interim paid        -  1.20p per share (2000: 1.55p)          189          246
Final proposed      -  1.10p per share (2000: 1.60p)          174          253
                                                         --------     --------
                                                              363          499

                                                            =====         ====



4.      Return per Ordinary share

The basic return per Ordinary share is based on net revenue from ordinary
activities after tax of £376,000 (2000:

£502,000) and on 15,798,161 shares (2000: 15,839,838), being the weighted
average number of shares in issue during the year.



There is no difference between the basic return per Ordinary share and the
fully diluted return per Ordinary share.


5.      Net asset value per Ordinary share

The net asset value per Ordinary share is calculated on attributable assets of
£13,086,000 (2000: £14,188,000) and 15,777,838 shares in issue at the year end
(2000:15,839,838)


6.      Annual General Meeting

Copies of the full financial statements for the year ended 31 March 2001 are
expected to be posted to shareholders on 22 June 2001 and will be available to
the public at the registered office of the Company at Saint Martins House,
210-212 Chapeltown Road, Leeds, LS7 4HZ thereafter.  The Company's AGM is due
to be held at 12.00 noon on 23 July 2001 at 28 Grosvenor Street, London, W1X
9FE.