Final Results

British Smaller Companies VCT PLC
10 June 2004


                        BRITISH SMALLER COMPANIES VCT PLC

                UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED
                                  31 MARCH 2004

      * 20% asset growth
      * First distribution of capital profits
      * Dividend of 4.8p per share resulting in an 11% return based on current
        share price
      * Share buy-back policy amended to net asset value basis.

British Smaller Companies VCT plc ('the Company') today announces its unaudited
preliminary results for the year ended 31 March 2004.

Financial highlights

                                                    Unaudited        Restated
                                                         2004            2003
Income                                               £364,000        £452,000
Loss per share                                          (4.88)p         (6.60)p
Total recognised gain (loss) per share                  12.87p          (2.13)p
Total dividend per share                                 4.80p           0.85p
Net assets                                             £11.35m         £10.14m
NAV per share                                            73.5p           65.3p
Number of qualifying investments                           32              32
Value of qualifying investments                         £9.22m          £8.35m

In his overview of the year, the Chairman, Sir Andrew Hugh Smith, said that the
progress reported at the half year had continued. Net asset value, before the
proposed dividend distribution, was nearly 20% higher than the previous year.

In light of the continuing promising developments in a number of portfolio
companies, the Board had taken the necessary steps to enable capital gains to be
paid to Shareholders as tax free dividends. The Board is adopting a policy of
spreading the distribution of historic realised gains to avoid an unnecessarily
volatile fluctuation in the level of dividends. A dividend of 4.8p per share is
proposed in respect of the year to 31 March 2004. This represents a return of
11% on the current share price of 43.5p.

Investments

New investments continue to be made on a selective basis. There were two new
investments in the year and both are progressing to plan.

Turning to the current portfolio, Sir Andrew said that significant management
effort had continued in working with these companies to build their businesses.
He added, 'This activity has played a part in a number of strong performances
from investee companies and your Board has felt justified in increasing the
valuations of these businesses to reflect this.'

Looking to the short to medium term future, Sir Andrew commented that, 'rising
activity in the corporate finance market indicates increasing opportunities for
the realisation of portfolio companies, whether through trade sale or
flotation.'

On this same subject, David Hall, Managing Director of the Company's Investment
Adviser, Yorkshire Fund Managers Limited, added, 'The improved tax breaks which
apply to new VCT fund raising over the next two years will create new exit
opportunities at enhanced valuations for unquoted companies held in this
portfolio.'

Financial Results and Dividend

Although the results for the year show a loss of 4.88p per share, after
adjusting for unrealised gains on the valuation of investments, the total
recognised gain per share was 12.9p. After taking account of the 4.8p per share
dividend, net asset value per share rose to 73.5p. Following the payment of this
dividend, a total of 24.2p per share will have been distributed to Shareholders
since the Company's inception and this equates to a total return to date of
97.7p per share.

The 4.8p per share dividend will be paid on the 9 August 2004 to Shareholders on
the register on 18 June 2004.

Commenting on the level of liquid resources, which stood at just over £2.8m at
31 March 2004, Mr Hall said, 'We believe that the Company has adequate remaining
funds to support those businesses which merit further support, and to make new
investments on a selective basis as suitable opportunities arise.'

Shareholder Relations

Following last year's AGM resolution to grant the Board increased flexibility in
pricing the buy back by the Company of its own shares, Sir Andrew said that the
price to be paid is intended to be at a 10% discount to the most recently
published net asset value per share. However, the directors will retain
discretion to ensure that such purchases are in the interests of Shareholders as
a whole.

Following feedback from Shareholders, the Board is actively considering the
introduction of a dividend reinvestment scheme.

Future Fundraising

In light of the recent budget announcement to improve tax benefits accruing to
investors in VCTs, Sir Andrew said the Board was currently looking at a number
of fundraising options for this Company.

He said, 'The ability for Shareholders to benefit from 40% income tax relief,
regardless of their own marginal rate of tax, and the raising of the ceiling for
maximum investment in any one year to £200,000, whilst still retaining the tax
free status of dividend distributions, makes VCTs even more attractive as part
of an individual's balanced investment portfolio.'

Outlook

Commenting on the outlook for the Company, Sir Andrew said, 'There is plenty of
potential for further value growth within the portfolio and your Board is now in
a position to distribute a level of tax free dividends to Shareholders.'

For further information, please contact:

David Hall     Yorkshire Fund Managers Limited     Tel: [phone]
Phil Cammerman Yorkshire Fund Managers Limited     Tel: [phone]
Stuart Andrews Evolution Beeson Gregory            Tel: [phone]




Chairman's Statement

The progress in the investment portfolio reported in my interim statement has
continued through the second half of the year. Over the year as a whole, net
asset value, before the proposed dividend distribution, rose 19.9%.

We have now reached a new phase in the development of the Company and can begin
to distribute capital profits by way of dividends. In recognition of this
progress and of continuing promising developments in a number of portfolio
companies, your Board has taken the necessary steps to enable capital gains to
be paid to Shareholders as dividends.

It is the Board's intention to distribute realised profits over a three-year
period so as to avoid an unnecessarily volatile fluctuation in the level of
dividends. The amount originally invested will be retained for reinvestment. In
accordance with this policy the Board proposes a dividend of 4.8p of which 4.3p
is attributable to profits on investments.

Investment Portfolio

We continue to look at investment opportunities on a selective basis and, over
the past year, invested just over £858,000 in two new, and three follow-on,
opportunities. I am pleased to confirm that the new investments made during the
year, Harlands of Hull Limited and AIM quoted Straight plc, are both progressing
to plan.

We have continued to devote significant management effort on working with
portfolio companies to build their businesses and capitalise on market
competitiveness. Although there have, inevitably, been some setbacks, this
activity has played a part in a number of strong performances from investee
companies and your Board has felt justified in increasing the valuations of
these businesses to reflect this.

The investment valuations have been prepared in accordance with the revised
guidelines issued by the British Venture Capital Association (BVCA) last June.
This revision to the valuation methodology represents a change in the basis of
measurement and not a change in accounting policy. Therefore, the prior year
comparative figures have not been restated because of this.

There were no full realisations in the second half of the year. However, partial
realisations continued with the scheduled redemption of loans and preference
shares, some of which were at a premium and resulted in a small, realised,
capital gain. There was also a further small amount received from the disposal
of T&D Packaging Limited that took place in the first half of the year.

Looking ahead, rising activity in the corporate finance market indicates
increasing opportunities for the realisation of portfolio companies, whether
through trade sales or flotation. I am pleased to announce that one such company
is in the advanced stages of negotiation with a potential trade buyer. There can
be no assurance that this realisation will occur but, since the transaction is
at an advanced stage, your Board has reflected most of the impact on the
reported net asset value at 31 March 2004.

Against this optimism, the recent increase in oil prices, rising interest rates
and the ongoing uncertainty in the Middle East makes the current economic
climate fragile and it is not clear how long the current favourable market
conditions will continue.

Financial Results and Dividend

On 29 March 2004, the directors agreed to revoke investment company status and
this decision was given effect prior to the financial year end. The purpose of
this action was to enable the Company to start distributing realised capital
gains to Shareholders in the form of tax free dividends.

As explained in last year's Annual Report, a consequence of this action to
revoke investment company status is that the accounts can no longer be prepared
in accordance with the provisions of the Statement of Recommended Practice,
Financial Statements of Investment Trust Companies. In particular, the Statement
of Total Return previously presented to shareholders in the Annual Report is now
replaced by a profit and loss account and Statement of Total Recognised Gains
and Losses in accordance with the Companies Act 1985. As required by the
Companies Act 1985 and Accounting Standards, the prior year comparatives have
been restated on the same basis.

The Statement of Total Recognised Gains and Losses, which takes into account the
unrealised gains on investment valuations shows a total recognised gain in the
year of £1,991,000, equivalent to 12.9p per share. The profit and loss account
shows a loss for the year of £755,000. This is after charging £766,000 of net
unrealised losses.

A dividend of 4.8p per share is proposed. There is currently an amount
equivalent to just under 11p per share available to distribute from realised
capital gains. If the proposed dividend of 4.8p is approved, a total of 24.2p
per share will have been distributed to Shareholders since inception. Added to
the current net asset value of 73.5p per share, this equates to a total return
to date of 97.7p per share.

Shareholder Relations and Fundraising

The series of workshops organised by Yorkshire Fund Managers Limited, the
Investment Adviser to the Company, and held throughout 2003, were well received
and are planned to continue. The first event in 2004 was held on 21 April at The
British Museum and, again, was well attended. Further events are planned in the
remainder of the year.

Following feedback from previous workshops and a questionnaire circulated to
investors by Yorkshire Fund Managers, your Board is actively considering the
introduction of a dividend reinvestment scheme. We continue to look at other
initiatives aimed at improving communication, liquidity and Shareholder value.

In our continuing efforts to improve share liquidity, the Shareholders last year
approved a resolution to grant the Board increased flexibility in pricing
purchases in the market by the Company of its own shares. Your Board intends
that the price to be paid will be at a 10% discount to the most recently
published net asset value per share, subject to the maximum permitted by the
Listing Rules. Net asset values will continue to be announced on a quarterly
basis. Purchases made will still be at the discretion of the directors, who will
only do so in circumstances that are of benefit to Shareholders as a whole.

Following approval at the last AGM for the Company to continue as a VCT, and in
light of the Chancellor's announcement in the Budget to improve the tax benefits
to Shareholders investing in VCTs, your Board is actively exploring fundraising
opportunities. The ability for Shareholders to benefit from 40% income tax
relief, regardless of their own marginal rate of tax, and the raising of the
ceiling for maximum investment in any one year to £200,000, whilst still
retaining the tax free status of dividend distributions, makes VCTs even more
attractive as part of an individual's balanced investment portfolio.

There are a number of options open to your Board that will enable Shareholders
to take advantage of these tax incentives and I will report further once we have
decided on the best option in the circumstances.

Outlook

The optimism contained in my recent reports has now started to flow through to
the financial results. There is plenty of potential for further value growth
within the portfolio and, with the revocation of investment company status, your
Board is now in a position to distribute a level of tax free dividends to
Shareholders in the short to medium term. Longer term dividend policy will
depend upon the pattern and timing of realisations of the maturing companies in
the portfolio.

The economic environment has remained healthy over the past couple of years and
allowed a number of companies within the portfolio to show their potential, with
an increasing number offering exit opportunities. With the economy now entering
a new period of uncertainty, both economic and political, the ability for your
Company's investment portfolio to maintain its rate of growth will be largely
dependent upon how the corporate finance market responds in these circumstances.


Sir Andrew Hugh Smith
Chairman





Unaudited Profit and Loss Account

for the year ended 31 March 2004

                                                    Unaudited         Restated
                                            Notes        2004             2003
                                                         £000             £000

Income                                                    364              452
Administrative fee: 
   Investment management fee                             (250)            (233)
   Other expenses                                        (214)            (269)
                                                       ------           ------
                                                         (464)            (502)
Gain (loss) on realisation of investments                 111              (13)
Impairment of investments                                (766)            (964)
                                                       ------           ------
Loss on ordinary activities before taxation              (755)          (1,027)
Tax on loss on ordinary activities              2           -                - 
                                                       ------           ------
Loss on ordinary activities after taxation               (755)          (1,027)
Dividends paid and proposed                              (741)            (132)
                                                       ------           ------
Deficit for the year                                   (1,496)          (1,159)
                                                       ======           ======

Loss per Ordinary share basic and diluted       5       (4.88)p          (6.60)p
                                                       ======           ======

Notes

All activity has arisen from continuing operations.

Unaudited Statement of Total Recognised Gains and Losses

for the year ended 31 March 2004

                                                    Unaudited         Restated
                                                         2004             2003
                                                         £000             £000

Loss for the financial year                              (755)          (1,027)
Unrealised gain on valuation of investments             2,746              696
                                                       ------           ------
Total recognised gains (losses) for the year            1,991             (331)
                                                       ======           ======


Unaudited Note of Historical Cost Profits and Losses

for the year ended 31 March 2004

                                                    Unaudited         Restated
                                                         2004             2003
                                                         £000             £000

Loss for the financial year                              (755)          (1,027)
Realisation of investment losses of previous years       (194)          (1,107)
                                                       ------           ------
Historical cost loss on ordinary activities 
before taxation                                          (949)          (2,134)
                                                       ------           ------
Historical cost loss for the year 
after taxation and dividends                           (1,690)          (2,266)
                                                       ======           ======


Unaudited Balance Sheet

at 31 March 2004

                                                    Unaudited         Restated
                                            Notes        2004             2003
                                                         £000             £000
Fixed Assets

Investment portfolio                                    9,216            8,349
                                                       ------           ------

Current Assets

Debtors                                                   101              156
Investments                                             2,656            1,485
Cash                                                      184              317
                                                       ------           ------
                                                        2,941            1,958
Creditors: amounts payable within one year               (805)            (170)
                                                       ------          ------
Net Current Assets                                      2,136            1,788
                                                       ------           ------
Total Net Assets                                       11,352           10,137
                                                       ======           ======

Capital and Reserves

Called-up share capital                                 1,544            1,552
Capital redemption reserve                                 43               35 
Revaluation reserve                                     5,039            2,099
Special reserve                                         3,871           13,647
Profit and loss account                                   855           (7,196) 
                                                       ------           ------
Equity shareholders' funds                             11,352           10,137
                                                       ======           ======

Net asset value per Ordinary share             5         73.5p            65.3p
                                                       ======           ======



Unaudited Cash Flow Statement

for the year ended 31 March 2004


                                                    Unaudited         Audited
                                                         2004            2003
                                                         £000            £000

Net cash outflow from operating activities                (58)           (114)
                                                       ------          ------
Investing activities
Purchase of fixed asset investments                      (858)         (1,028)
Proceeds from disposal of fixed asset investments       2,159           1,001
                                                       ------          ------
Net cash outflow before management of liquid
resources and financing                                 1,301             (27)
                                                       ------          ------
Equity dividends to Shareholders                          (93)           (181)
                                                       ------          ------
Net cash inflow (outflow) before management of liquid
resources and financing                                 1,150            (322)
                                                       ------          ------
Management of liquid resources
Purchase of fixed interest government stocks           (2,733)           (880)
Proceeds from the sale of fixed interest 
Government stocks                                       1,485           1,325
                                                       ------          ------
Net cash (outflow) inflow from management 
of liquid resources                                    (1,248)            445
                                                       ------          ------
Financing
Purchase of own shares                                    (35)            (81)
                                                       ------          ------

(Decrease) increase in cash in the year                  (133)             42
                                                       ======          ======





Notes to Financial Statements


for the year ended 31 March 2004

1. Basis of reporting

This preliminary announcement, which has been prepared on a basis consistent
with the previous year, with the exception of the adoption of the revised
British Venture Capital Association guidelines, does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. This
announcement has been agreed with the company's auditors for release.

In order to enable the Company to make capital distributions, the Company has
revoked its investment company status. A consequence of the revocation is that
the Company is now required to prepare accounts in accordance with the
requirements of Schedule 4 of the Companies Act 1985 and not in accordance with
the Statement of Recommended Practice 'Financial Statements of Investment Trust
Companies' as was previously the case.

The information for the year ended 31 March 2003 is an extract from the
statutory accounts to that date which have been delivered to the Registrar of
Companies, restated following the revocation of investment company status as
described in the Chairman's Statement. Those accounts included an audit report
which was unqualified and which did not contain a statement under Section 237(2)
or (3) of the Companies Act 1985. The statutory accounts for the year ended 31
March 2004, upon which the auditors have still to report, will be delivered to
the Registrar following the Company's annual general meeting.

2. Tax on Ordinary activities
                                                       2004               2003
                                                       £000               £000

Corporation tax payable at 19%                            -                  -
(2003: 19%)                                          ------             ------

3. Dividends
                                                       2004               2003
                                                       £000               £000

Interim paid - nil per share (2003: 0.25p)                -                 39
Final proposed - 4.8p per share (2003: 0.60p)           741                 93
                                                     ------             ------
                                                        741                315
                                                     ======             ======

4. Loss per Ordinary Share

The loss per Ordinary share is based on net loss from ordinary activities after
tax of £755,000 (2003: £1,027,000 loss) and 15,457,000 (2003: 15,556,000)
shares, being the weighted average number of shares in issue during the year.
The Company has no securities that would have a dilutive effect in either period
and hence the basic and diluted loss per share are the same.

5. Net Asset Value per Ordinary Share

The net asset value per Ordinary share is calculated on attributable assets of
£11,352,000 (2003: £10,137,000) and 15,435,838 (2003: 15,517,838) shares in
issue at the year end.

The Company has no securities that would have a dilutive effect in either period
and hence the basic and diluted net asset value per share are the same.

6. Annual General Meeting

Copies of the full financial statements for the period ended 31 March 2004 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 12.45 pm on 22 July 2004 at 23 Berkeley Square, London,
W1J 6HE.




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