Treasury Stock

F&C Smaller Companies PLC
19 July 2004


It has come to the notice of the Board that the Chairman's comments on the issue
of Treasury shares in the most recent Report and Accounts have, in some
quarters, been interpreted incorrectly. This has led to speculation that if the
authority is granted at the forthcoming Annual General Meeting, shares bought-in
would be sold back into the market at a discount to net asset value.

The opportunity to utilise a treasury facility has become possible in the past
12 months and the Board felt it was appropriate to request authority to take
advantage of the potential to enhance value for shareholders. However, it was
mindful that the Articles of Association of the Company preclude the issuance of
new shares at a discount to net asset value.

The Board would like to make it clear that any stock bought into treasury
following the granting of the authority would not then be sold at a discount to
net asset value during the current financial year. It will review the position
on an annual basis and prior shareholder approval would be sought if it were
ever felt that issuance at a price lower than net asset value was appropriate.


Name of contact and telephone number for any queries:

Sandy Fleming, F&C Management (020 7628 8000)



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