Final Results

3i Smaller Quoted Co's Trust PLC
29 April 2003

3i Smaller Quoted Companies Trust plc
Annual results for the year to 28 February 2003


29 April 2003

"Adopting a more active stance in challenging markets"

The Board of 3i Smaller Quoted Companies Trust plc ("the Trust") today announces
the annual results for the year to 28 February 2003.

Results overview

-          During the year to 28 February 2003, the net asset value ("NAV") per
share of the Trust fell by 33.3% to 141.1p. This compares to a fall of 30.3% in
the benchmark index (the FTSE SmallCap Index excluding Investment Companies)
over the same period.

-          The share price discount to NAV per share as at 28 February 2003 was
22.2% (28 February 2002: 19.7%), having varied between 17% and 26% over the
year.

-          The Board is recommending a final dividend of 2.62p per share (2002:
2.62p) making a total dividend for the year of 4.33p (2002: 4.33p). Despite a
fall in underlying earnings, the dividend remains covered by earnings for the
year.

-          The Trust bought in for cancellation a total of 770,000 shares during
the year.  This represents 1.3% of the equity at the start of the year.  A
further 795,000 shares have been bought in since 28 February 2003.

Commenting on the results, Mike Prentis, Fund Manager, 3i Asset Management said:

"The markets in which the Trust is invested have continued to be difficult. We
have responded to this by adopting a more active management stance, which we
consider to be appropriate to the current market conditions.

UK smaller companies have tended to outperform the wider market during periods
of economic recovery, in part due to their greater cyclicality.  Given that they
currently trade at a discount to the wider market, and with more valuations now
looking attractive, we expect outperformance again as the UK economy recovers
over the next few years. "

For further information, please contact:

Mike Prentis                         or       Kate Inverarity / William Davidson
Fund Manager                                  Tulchan Communications
3i Asset Management
(a division of 3i Investments plc, the Manager)

020 7975 3527                                 020 7353 4200



Notes to editors

The Trust's objective is to achieve long term capital growth for shareholders in
excess of the growth in the FTSE SmallCap Index excluding Investment Companies
through investment mainly in smaller UK quoted companies.

3i Smaller Quoted Companies Trust plc is managed by the Asset Management
division of 3i Investments plc which is an active fund manager seeking to
achieve returns in excess of benchmark indices through the use of fundamental
analysis.  The Manager aims to use the skills and information base gained
through being part of the 3i Group.  A significant proportion of the Trust's
portfolio by value is in companies formerly backed by the 3i Group.

3i Investments plc is authorised and regulated by the Financial Services
Authority and is a wholly owned subsidiary of 3i Group plc, Europe's leading
venture capital company.  The relationship with the 3i Group brings several
important benefits to 3i Investments plc and the funds managed by its Asset
Management division, including access to 3i Group's specialist teams across its
international network.

In addition to the management of 3i Smaller Quoted Companies Trust plc, the
Asset Management division of 3i Investments plc is involved in the management of
the 3i Group's own portfolio of quoted investments and manages 3i Bioscience
Investment Trust plc, 3i European Technology Trust plc and the 3i Group Pension
Plan.




Chairman's statement



Review of the year to 28 February 2003

The Trust's net asset value ("NAV") per share fell by 33.3% over the year,
compared with a fall in the FTSE SmallCap Index excluding Investment Companies
of 30.3%. This underperformance is mainly attributable to the effects of gearing
in a falling market.

These are exceptionally difficult times for equity investment with the
continuance of one of the most severe and prolonged stock market falls since
World War II. Company profits have been squeezed, and this has been particularly
damaging to manufacturing industries.

Falling interest rates, rising house prices and low unemployment have enabled
the consumer to continue to spend, although the level of consumer debt has risen
significantly. Government spending has also remained strong, financed by higher
taxes on business and, increasingly, on individuals.

These factors have affected the Trust's portfolio. Many underlying investments
have performed well, but some have failed to meet market expectations and in
these cases the share price reaction has invariably been harsh. In the past, the
Trust's performance has benefited from making new investments in selected
initial public offerings ("IPOs"), however, during the year the IPO market was
very quiet.

Earnings and dividends

Earnings per share for the year to 28 February 2003 were 4.32p and included a
special dividend without which earnings per share would have been 4.06p. Many
portfolio companies increased dividends during the year, but some reduced them.

The Board is recommending an unchanged final dividend of 2.62p per share,
bringing the total for the year to 4.33p per share. The total full year
dividend, which is payable on a reduced share capital base following share
buybacks during the year, is covered by earnings for the year.

Gearing policy

Net borrowing was reduced during the first half of the year and has remained
between £4 million and £5 million in recent months. This reduction was deemed
appropriate by your Board as uncertainties grew during the early part of the
year, and with hindsight it would have been better if gearing had been
eliminated altogether during the year.

Looking forward, consideration is now being given to the timing and manner of an
increase in net borrowing towards the £10 million level which your Board
considers appropriate in more normal market conditions.

Discount and share buybacks

During the year the Trust's shares traded at a discount to NAV per share of
between 17% to 26%, finishing the year at 22%. This discount is in line with
most companies in the Trust's peer group of UK smaller companies investment
trusts.

The Trust bought in for cancellation a total of 770,000 shares, representing
1.3% of the equity at the start of the year. These were bought in at discounts
ranging from 22% to 26%. Since 28 February 2003, the Trust has bought in a
further 795,000 shares at a discount of 22%.

Board changes

After serving as a Director for more than 10 years, Mr Keith Falconer has
decided not to stand for re-election at the Annual General Meeting. His wisdom
and experience has been of great help to me as well as the rest of the Directors
and the Investment Manager, and I would like to extend my thanks to him for his
invaluable contribution.

The Board has decided to appoint Mr Richard Brewster as Deputy Chairman with
effect from 29 April 2003.

Outlook

The build-up to war in Iraq created considerable uncertainty towards the end of
the financial year. The war appears now to be over, although achieving stability
in the Middle East could be more challenging. Whilst uncertainties remain, after
the sharp falls of the last few years, we believe that valuations of many
smaller companies are now attractive on all but the shortest timescales. Yields
on many companies are higher than on cash deposits or bonds. Active stock
selection remains a critical part of the Trust's investment approach. This has
been a core strength of the Investment Manager in recent years and should reward
shareholders in the future. Now is also a good time for investment in unquoted
companies. We expect that the new investments being made, and to be made over
the year ahead, by the 3i Group will generate an attractive flow of IPOs in
which the Trust may participate in due course.

During periods of economic recovery, throughout much of the 1980s, and in the
mid 1990s, shares in smaller companies outperformed the wider market.  Over the
last seven years, however, shares in smaller companies have underperformed. This
is not really surprising as these companies are more exposed at the margin if
trading conditions are weak, and share price falls after profit warnings have
been severe. We are now closer to the time when smaller companies will produce
positive surprises and when economic recovery comes through, smaller company
shares should again outperform the wider market.


William Govett

28 April 2003


Investment Manager's review



Investment approach

The Trust invests in companies that we consider have fundamental attractions
which should allow them to grow and create value for shareholders. Typically
they have top three positions in the markets in which they operate, and these
markets will be showing some growth. Generally these companies are protected by
strong barriers to entry which may, for instance, be in the form of brands,
technology or know-how, high levels of investment required by new entrants, or
interdependence with customers. It is important to invest in companies which are
attractively valued. We look to own stocks trading at price earnings ratios
which are reasonable in the context of our estimates of likely medium term
earnings growth, and which are good cash generators comfortably supporting debt
levels.

These companies can be in any sector and will usually have market
capitalisations of £30 million to £600 million. We will rarely hold more than 3%
of the Trust's net assets in any one stock, and aim to have at least 1% of its
net assets in each of 50 stocks. We intend to reduce the number of investments
from 119 to around 100.

Whilst we consider ourselves primarily to be stock pickers, we also weigh up the
fundamentals of each of the main sectors. Our aim is to be 2% to 4% overweight
in the sectors we believe to be most attractive, provided stocks can be found at
reasonable valuations within these sectors. Similarly we are prepared to be
heavily underweight in sectors we feel have poor fundamentals. Price targets are
identified for each holding as well as for companies considered for potential
investment.

Overall performance

The Trust sought to take a fairly defensive stance during the year, but markets
were so weak that the Trust's NAV per share still fell by 33.3%. At the
portfolio level, the Trust underperformed by 0.1%. Stock selection contributed
1.2% to overall performance whilst stock sector allocation had a negative
contribution of 1.3%. Of the 3.0% underperformance against the Trust's benchmark
index, 2.2% was attributable to the effects of gearing.

Portfolio performance

The sectors which produced the greatest positive contribution to relative
performance during the year were pharmaceuticals, construction & building
materials, speciality & other finance and food producers & processors. The most
significant adverse impact came from the leisure & hotels, software & computer
services and oil & gas sectors.

Our good performance in the pharmaceuticals sector reflects our stock selection
in this area. Within construction & building materials, the strongest performer
was Westbury which, like many housebuilders, benefited from strong demand and
rising prices. The good performance was partially offset by a poor share price
performance from Alfred McAlpine, although trading at the latter has remained
strong.

Intermediate Capital Group, the leading mezzanine provider in buyouts, continued
to perform well within the speciality & other finance sector, as did our other
lending related investments. By contrast, given weak primary and secondary
markets, investments in equity market related companies, such as Brewin Dolphin,
performed poorly.

Within food producers, the Trust was helped by a bid for Brake Brothers and a
strong improvement in trading from Robert Wiseman which follows on from its
major capital investment in a new dairy at Droitwich.

Our leisure & hotels investments performed poorly with LA Fitness suffering from
greater price competition within the fitness clubs sector, and Regent Inns and
Po Na Na from lower ratings afforded to pub and nightclub chains. Regent Inns
has continued to trade well through its Walkabout and Jongleurs chains.

The value of the Trust's software investments in IDS, Marlborough Stirling and
royalblue fell sharply, the first two of these issuing profit warnings caused by
weakening demand and contract problems respectively. royalblue continues to
trade well although its customer base, the investment banking sector, is
minimising capital expenditure.

Activity

Major investments in the year included Dairy Crest, Parkdean Holidays, Amlin,
BRIT Insurance, Goshawk Insurance, Alba, Aga Foodservice and Wyevale Garden
Centres.

Dairy Crest is a leading supplier of dairy products and has strong brands, long
standing relationships with most UK supermarkets and an attractive valuation and
dividend yield as well as good cash generation.

Parkdean Holidays, an IPO of an unquoted company which had been backed by 3i, is
an owner and operator of UK caravan parks. Its management knows the sector very
well and has a successful track record. We believe the business is well placed
as people increasingly look to take holidays in the UK rather than fly overseas.

Amlin, BRIT and Goshawk are all Lloyd's underwriters, benefiting from much
higher premiums as well as a benign claims environment in 2002.

Alba has an excellent long term record supplying its branded electrical consumer
products through UK supermarkets and major electrical retailers.

Aga Foodservice is a leading manufacturer of branded cast iron stoves which are
increasingly being sold internationally. In addition, it has a successful
foodservice business supplying, primarily, the in-store bakeries of many large
supermarket chains. It has a very strong balance sheet with net cash equating to
about 20% of its market capitalisation.

Wyevale is the UK's leading chain of garden centres and benefits from favourable
long term demographics. We first acquired a small holding in September 2002,
sold it in November 2002 realising a good profit, and then bought a larger
holding at a lower price in January 2003.

As a result of the poor market conditions during the year there were few IPOs.
However, those we took did well. Parkdean, Corin and Property Fund Management
were all 3i backed and each has outperformed. Beazley, another Lloyd's
underwriter, and Mouchel have also fared well. Profits have been taken on Corin
and Beazley.

Portfolio companies subject to takeovers during the year included Brake
Brothers, Dixon Motors, Saville Gordon, Clydeport, T & S Stores and Azlan.
Holdings in the latter two, although small, were purchased by the Trust during
the second half of the year.

Major disposals included holdings in Roxboro and Meggitt, due to concerns over
likely demand levels in their main end markets. A number of holdings were sold
or reduced on valuation grounds. Portfolio turnover has been increased slightly
in recent months and this has had a beneficial effect on performance.

Portfolio positioning

The Trust is currently most overweight in companies focused on specialist
lending, Lloyd's underwriters, and housebuilders and companies supplying the
home improvements market. The most underweight sector is real estate.

Valuations are attractive for many of the specialist lenders such as Kensington,
sub-prime mortgages, and Paragon, buy-to-let mortgages. These companies are
conservatively run, continue to see good demand and trade on price earnings
multiples of between 5 and 7.

We expect the firm insurance rating market to continue to help Lloyd's
underwriters. This is beginning to be reflected in strong profits growth.

New household formation levels support the need for additional housing stock,
and housebuilders' valuations remain modest, with most companies trading on
price earnings multiples of between 5 and 7, and dividend yields above 4%. We
also prefer home improvements companies such as Ultraframe, a supplier of
conservatory roofing systems, and Marshalls, a supplier of stone for drives and
patios, which have delivered good results and continue to see good demand.

Valuations generally look attractive after the sharp falls of the last few
years. Many stocks trade on less than 12 times achievable prospective earnings
and should generate good earnings growth over the medium term. In addition, we
expect to see more acquisition activity, particularly of smaller companies.

Mike Prentis
Fund Manager
3i Investments plc
28 April 2003






Statement of total return
for the year ended 28 February 2003 (incorporating the revenue account)

                                    Revenue     Capital       Total      Revenue     Capital        Total
                                       2003        2003        2003         2002        2002         2002
                                      £'000       £'000       £'000        £'000       £'000        £'000

Losses on investments
Net realised losses over
previous valuation                              (3,804)     (3,804)                  (7,347)      (7,347)
Net unrealised value movement                  (35,489)    (35,489)              (32,323)        (32,323)
                                               
                                               (39,293)    (39,293)                 (39,670)     (39,670)
Income                                3,623                   3,623        3,813                    3,813
Investment management
fee                                   (242)       (725)       (967)        (331)       (993)      (1,324)
Other expenses                        (342)                   (342)        (277)                    (277)
Net return before finance
costs                                 3,039    (40,018)    (36,979)        3,205    (40,663)     (37,458)
Interest payable and similar
charges                               (568)       (609)     (1,177)        (511)       (712)      (1,223)
Return on ordinary activities
for the financial year                2,471    (40,627)    (38,156)        2,694    (41,375)     (38,681)
                                     
Dividends                           (2,441)                 (2,441)      (2,490)                  (2,490)
Transfer to/(from) reserves              30    (40,627)    (40,597)          204    (41,375)     (41,171)
                                         
Return per ordinary share
(pence)                               4.32p    (71.02)p    (66.70)p        4.68p    (71.82)p     (67.14)p



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

No operations were acquired or discontinued during the year.


Balance sheet

as at 28 February 2003


                                                                                  2003             2002

                                                                                 £'000            £'000
Fixed assets
Investments                                                                     86,567          128,901
Current assets
Debtors                                                                            514              185
Cash, short term deposits and money market funds                                10,628            9,777
                                                                                11,142            9,962
Creditors: amounts falling due within one year                                 (2,921)          (2,506)
Net current assets                                                               8,221            7,456
Total assets less current liabilities                                           94,788          136,357
Creditors: amounts falling due after more than one year                       (14,718)         (14,703)
                                                                              
Net assets                                                                      80,070          121,654
Capital and reserves
Called-up share capital                                                         14,184           14,376
Share premium                                                                   38,952           38,952
Capital redemption reserve                                                         296              104
Capital reserve - realised                                                      60,355           67,435
                          - unrealised                                        (36,429)          (1,895)
Revenue reserve                                                                  2,712            2,682
Total equity shareholders' funds                                                80,070          121,654
Net asset value per ordinary share (pence)                                      141.1p           211.6p



The financial statements were approved by the Board on 28 April 2003 and were
signed on its behalf by:



William Govett
Director


Cash flow statement
for the year ended 28 February 2003
                                                                                  2003               2002
                                                                                 £'000              £'000
Operating activities
Investment income received                                                       3,221              3,453
Income from money market funds                                                     210                  -
Deposit interest received                                                          129                270
Underwriting commission received                                                    14                 21
Investment management fees paid                                                (1,150)            (1,974)
Secretarial fees paid                                                             (59)               (59)
Other cash payments                                                              (341)              (233)
Net cash inflow from operating activities                                        2,024              1,478
Servicing of finance
Interest paid                                                                  (1,162)            (1,332)
Net cash outflow from servicing of finance                                     (1,162)            (1,332)
Financial investment
Purchase of investments                                                       (44,640)           (36,165)
Sale of investments                                                             48,097             49,115
Net cash inflow from financial investment                                        3,457             12,950
Equity dividends paid                                                          (2,481)            (2,496)
Financing
Purchase of ordinary shares for cancellation                                     (987)              (401)
Repayment of short term loan                                                         -            (3,500)
Net cash outflow from financing                                                  (987)            (3,901)
Increase in cash                                                                   851              6,699



Notes to the financial statements


1. Reconciliation of net revenue before finance costs to net cash inflow        2003         2002
  from operating activities
                                                                               £'000        £'000
Net revenue before finance costs                                               3,039        3,205
Scrip dividends                                                                    -         (63)
Investment management fee allocated to capital reserve - realised              (725)        (993)
Increase in accrued income                                                      (49)          (6)
Decrease in creditors                                                          (241)        (664)
Increase in debtors                                                                -          (1)
Net cash inflow from operating activities                                      2,024        1,478

2. Reconciliation of net cash flow to movement in net debt                      2003         2002
                                                                               £'000        £'000
Increase in cash in the year                                                     851        6,699
Cash outflow from change in debt                                                   -        3,500
Amortised Debenture stock issue expenses                                        (15)         (15)
Movement in net debt in the year                                                 836       10,184
Opening net debt                                                             (4,926)     (15,110)
Closing net debt                                                             (4,090)      (4,926)

3. Analysis of changes in net debt


                                                                           Amortised
                                                                 Cash          issue
                                                  Opening       flows       expenses     Closing
                                                     £'000      £'000          £'000       £'000
                                                   
Cash, short term deposits and money market         9,777          851              -       10,628
funds
Debt due after more than one year               (14,703)            -           (15)     (14,718)
                                                 (4,926)          851           (15)      (4,090)





Notes to the announcement



1        A final dividend of 2.62p per ordinary share is recommended and,
subject to its approval at the Annual General Meeting on 5 June 2003, will be
paid on 19 June 2003 to shareholders on the register at 16 May 2003.



2        The Report and Accounts will be posted to shareholders on 7 May 2003
and the Annual General Meeting will be held at 12 noon on 5 June 2003 at the
offices of 3i plc, 91 Waterloo Road, London SE1 8XP.



3        The statutory accounts for the year ended 28 February 2003 have not yet
been delivered to the Registrar of Companies.  The statutory accounts for the
year ended 28 February 2002 have been filed with the Registrar of Companies.
The auditors' reports on both sets of statutory accounts were unqualified and
did not contain any statements under Section 237 (2) or (3) of the Companies Act
1985.  This announcement does not constitute statutory accounts.




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