Final Results

British Smaller Companies VCT PLC
10 June 2003


10 June 2003

                       BRITISH SMALLER COMPANIES VCT plc

         Unaudited preliminary results for the year ended 31 March 2003



              # •Significant increase in unquoted portfolio valuation
              # •Early signs of realisation opportunities


British Smaller Companies VCT plc ('the Company') today announces its unaudited
preliminary results for the year to 31 March 2003

FINANCIAL SUMMARY



                                           Unaudited           Audited

                                          Year ended        Year ended

                                       31 March 2003      31 March 2002



Income:                                     £452,000          £667,000

Net revenue return before tax:              £125,000          £346,000

Net revenue return after tax:               £125,000          £323,000

Revenue return per share:                       0.80p             2.05p

Total return per share:                        (2.13)p          (13.02p)

Total dividend per share (net):                 0.85p             2.00p

Net assets:                                   £10.14m           £10.68m

Net asset value per share:                      65.3p             68.0p

Number of qualifying investments:                 32                32

Value of qualifying investments:               £8.35m            £8.61m

Announcing the results, the Chairman, Sir Andrew Hugh Smith, reported that,
despite difficult market conditions in the period under review, there were a
number of unquoted companies in the portfolio that continued to show a
sustainable increase in earnings. In certain cases the valuations of these
companies had been increased accordingly. In others, the valuation had been held
constant due to concerns over the macro economic environment and the uncertainty
this brings to particular markets in which some of the companies operate and
thus the longer term stability of earnings. Nevertheless, the Board is
encouraged by the general trend of the portfolio's development.

The unquoted portfolio showed a net increase in valuation of £0.85m in the year.
The AIM investments, which comprise just over 20% at cost of the current
portfolio, had a disappointing year, falling in value by some £1.14m which
reflected the general quoted market downturn in that same period.

Overall, the net asset value per share, before the payment of dividends, fell by
just 2.6% in the year comparing favourably with the much larger falls in the
quoted stock market indices.

Investments

With the Company fully invested for the purposes of meeting the VCT legislative
targets the Board and its Investment Adviser, Yorkshire Fund Managers Limited,
are able to be selective in the evaluation of new investment opportunities. Just
over £1m was invested in the year, of which £874,000 was into 3 new investments.
The remainder was as follow-on finance into the existing portfolio to fund
further growth in those companies.

Portfolio and Realisations

In the current economic climate realisation opportunities remain limited,
particularly for unquoted companies and the generally cautious financial markets
in the period impacted on the liquidity of small cap stocks, particularly AIM
quoted stocks.

During the year, the Company disposed of two AIM holdings, CRC Group plc and
Honeycombe Leisure plc. Part of the Company's holding in Spring Grove Property
Maintenance plc was also disposed of when that company's share price
strengthened sharply six months after flotation. Since the year end part of the
Company's holding in Cardpoint plc was realised at a profit of £47,000 over the
31 March 2003 carrying value.

Although there were no realisations in the unquoted portfolio during the year,
Sir Andrew commented that, 'With a number of companies now maturing we are
beginning to see some corporate activity in this area and we remain focused on
achieving capital appreciation for our Shareholders.'

Echoing these comments, Phil Cammerman, Managing Director of Yorkshire Fund
Managers Limited, said that, 'The early signs of increased corporate activity
should result in opportunities not only to achieve realisations at greater value
but will allow other portfolio companies to improve their positions within their
own markets.'

Results and Dividend

A final dividend of 0.6p per share is being recommended, bringing the total
dividend payout for the year to 0.85p per share. If approved, this will be paid
on 4 August 2003 to Shareholders on the register on 20 June 2003.

Continuation of the Company

As stated in the original and subsequent Prospectus' of the Company, the
directors considered it desirable that Shareholders should have the opportunity
to review the future of the Company at appropriate intervals. Thus, at the
forthcoming Annual General Meeting a proposal will be put to Shareholders that
the Company continues as a VCT.

The directors have given careful consideration to this resolution and are
unanimous in recommending support for the proposal.

Sir Andrew commented that, 'It is the Board's view that the interests of
Shareholders would be best served by a continuation of the Company. This will
enable the potential of the portfolio to be developed over an appropriate
timescale.'

Full details of the reasons why the directors consider it to be in the best
interests of Shareholders to continue the Company as a VCT will be set out in
the Annual Report, which is expected to be posted to Shareholders on 12 June.

Outlook

Referring to the Company's prospects for the current year, Sir Andrew said, 'On
the assumption that there are no adverse developments in the economy and that
business confidence slowly improves, we expect further progress from many of our
investee companies.'





For further information, please contact:

Phil Cammerman          Managing Director              Tel: [phone]
                        Yorkshire Fund Managers Ltd                    

Alan Davies             Finance Director               Tel: [phone]
                        Yorkshire Fund Managers Ltd                             



Chairman's Statement

The UK economic environment in which your Company operates has continued to be
difficult in the second half of the financial year and has followed the general
trend that I reported on in my interim statement. Over recent months the markets
have shown some signs of stabilising but, inevitably, at a much lower level than
that of this time last year.

Market sentiment toward the technology sector remains particularly depressed and
valuations of companies operating in these markets, of which your Company has a
number, are forced to reflect this even though individual businesses may be
performing satisfactorily. In the year under review the FTSETM All Share
Index fell some 32% and the TechMARKTM All Share Index fell 47%. After
allowing for dividend distributions paid and proposed, the fall of 3% in your
Company's net asset value per share in that same period compares very favourably
with these quoted stock market indices.

Despite these difficult conditions, a number of companies within the portfolio
continue to show earnings increases on a sustainable basis and your Board has
felt it appropriate to increase valuations accordingly. In other cases, despite
improvements in operating and financial performance, your Board has not
increased the carrying value of the investment due to concerns as to the macro
economic environment and the uncertainty this brings as to sustainability of
current growth. Nevertheless, your Board is encouraged by the general trend of
the portfolio's development and a few early signs of realisation opportunities.

Investment Portfolio

Given that your Company is fully invested for the purposes of meeting the VCT
legislative targets for qualifying investments, your Board and its Investment
Adviser, Yorkshire Fund Managers Limited, have been selective in the evaluation
of investment opportunities throughout the last year. A total of £1.03m was
invested in the year, of which £874,400 was into three new investments. All of
these completed in the first half of the year and were covered in my interim
report.

During the second half of the year a further £42,500 was invested in Imerge
Limited as part of the staged funding of this business which is a recognised
world leader in internet connected hard disk-based audio products and media
appliances. Imerge's potential has been widely recognised. Most recently, it was
placed 39th in The Sunday Times' Tech Track 100 in 2002, and qualified as the
8th fastest growing technology company in the eastern region in the Deloitte &
Touche Eastern Fast 50 Programme. A further £7,500 has been invested as part of
this same commitment since the year end.

The valuation movement on the investment portfolio was a net decrease of
£290,000. Of the 28 trading companies in the portfolio, three are new additions
this year and, of the remainder, four have increased in value during the year,
14 have decreased and seven have been kept at their March 2002 value. The
unquoted venture capital portfolio has performed relatively well with a net
increase of £846,000 whilst the AIM quoted portfolio fell in value by
£1,136,000. On a like-for-like basis the fall in the value of the AIM portfolio
was 36%.

There were two full realisations from the AIM quoted portfolio during the year,
CRC Group plc and Honeycombe Leisure plc, and a partial realisation of your
Company's holding in Spring Grove Property Maintenance plc. Although these
realisations resulted in a net loss of £40,000 on carrying value in the year,
they represented a profit on historic cost of £127,000. There were no
realisations of unquoted investments in the year although there were a number of
scheduled redemptions of Preference shares and loans. Most notably, The JDA
Group Limited repaid its loan well ahead of schedule and redeemed 75% of its
Preference shares. A total of £245,000 was repaid by JDA in the year including
£17,000 of premium on the Preference shares.

Your Board and Yorkshire Fund Managers continue to look for realisation
opportunities although these remain limited in the current economic climate.
Nevertheless, with a number of companies now maturing we are beginning to see
some corporate activity in this area and we remain focused on achieving capital
appreciation for our Shareholders.

Your Company has maintained its VCT qualifying company ratios throughout the
year. These ratios are continually monitored by your Board whose policy is to
maintain an adequate margin above the minimum levels to allow for contingencies
and operating flexibility.

Financial Results

The net revenue return for the year was £125,000 equating to 0.8p per share.
Current returns are depressed by the earlier stage technology investments in the
portfolio that still have negative distributable reserves and, therefore, cannot
service the investment at this stage in their life cycle. Subject to any capital
realisations that the Board may decide to distribute, this trend is expected to
continue in the immediate future. However, the aim of investment in these
earlier stage companies was always to generate significant capital gains in the
longer term and your Board is satisfied that there remains the potential for
capital growth in a number of these investments, albeit it is not possible under
the BVCA guidelines to reflect this potential through increased valuations at
this time.

Chairman's Statement

An interim dividend of 0.25p per share was paid on 3 January 2003. In line with
the previous policy of distributing the majority of revenue profits, your Board
is recommending the payment of a final dividend of 0.6p per share. If approved,
this will be paid on 4 August 2003 to Shareholders on the register on 20 June
2003.

The total return for the year, after taking into account capital movements on
the valuation of investments and expenses allocated to capital account was a
loss of £331,000, or 2.13p per share (2002: £2,049,000, or 13.02p per share
respectively). The net asset value at 31 March 2003 was 65.3p per share (2002:
68.0p).

Shareholder Relations

Your Board and Yorkshire Fund Managers Limited have continued to explore ways in
which liquidity in your Company's shares can be improved. In an attempt to both
improve information and stimulate interest in the sector we now announce net
asset values quarterly and we are continuing to talk to our brokers and market
makers to explore other opportunities in creating improved liquidity.

Shareholders will recall that some time ago arrangements were put in place to
convert the Share Premium Account to a Special Distributable Reserve to enable
the Company to purchase its own shares in the market without affecting its
ability to pay tax free dividends to Shareholders. The Board believes that it
will be in Shareholders' interests if the use of the Special Distributable
Reserve is extended for other corporate purposes of the Company. In particular,
the reserve is available to eliminate accumulated losses on the capital reserve
prior to 1 April 2003 to facilitate the distribution of future capital profits
on the realisation of investments.

As a means of extending our communication with Shareholders, Yorkshire Fund
Managers Limited is hosting a series of presentations to Shareholders of all
three VCTs under its management. The first of these was held in London on 6
March and was very well attended. David Cartwright of PricewaterhouseCoopers
LLP, our VCT status adviser, updated attendees on current and proposed VCT
legislation and there were presentations from two unquoted portfolio companies,
CCCoutdoors Limited and Cozart Bioscience Limited. The next presentation will be
held in Leeds on 24 June. Further presentations are planned in London,
Birmingham and Edinburgh.

Continuation of the Company's Activities

It was stated in the Prospectus of the Company dated 28 February 1996 and
similarly in the Prospectus' dated 12 February 1997 and 13 February 1998 that
the directors considered it desirable that Shareholders should have an
opportunity to review the future of the Company at appropriate intervals.
Accordingly, the Articles of Association of the Company require that at the
forthcoming Annual General Meeting, the Directors place before Shareholders a
resolution to the effect that the Company continues as a venture capital trust.

In recommending this proposal, the Directors have given the most careful
consideration to the advantages and disadvantages for Shareholders of a
continuation of the Company and the alternatives of a corporate reorganisation
or a voluntary winding up. Your Board has also recognised that any decision to
wind up the Company would result in Shareholders suffering a crystalisation of
any capital gains tax that had been deferred at the time of investment.

It is the Board's view that the interests of Shareholders would be best served
by a continuation of the Company. This will enable the potential of the
portfolio to be developed over an appropriate timescale and under the continuing
supervision of your investment managers, not least in overseeing the key
strategic planning decisions faced by the management teams of the investee
companies. The Board accordingly recommends the Shareholders to vote in favour
of the continuation of the Company as a venture capital trust and intend to
support the resolution in respect of their aggregate beneficial holdings of 1.6%
of the issued share capital of the Company. Yorkshire Enterprise Limited, the
ultimate holding company of Yorkshire Fund Managers Limited, and a holder of
3.4% of the voting rights in this Company, has expressed its intention to
support the recommendation.

Outlook

Your Board remains encouraged by the overall development of the portfolio with a
number of potential realisation opportunities beginning to present themselves.
On the assumption that there are no further adverse developments in the economy
and that business confidence slowly improves, we expect further progress from
many of our investee companies.




Sir Andrew Hugh Smith

Chairman



Unaudited Statement of Total Return

(incorporating the Revenue Account)

for the year ended 31 March 2003



                                   Unaudited                            Audited

                                   Year ended                          Year ended

                                 31 March 2003                       31 March 2002

               Notes     Revenue     Capital       Total     Revenue     Capital      Total

                            £000        £000        £000        £000        £000       £000



Net losses on                  -        (281)       (281)          -      (2,164)    (2,164)
investments

Income                       452           -         452         667           -        667

Investment                   (58)       (175)       (233)        (77)       (231)      (308)
advisory
fee

Other                       (269)          -        (269)       (244)          -       (244)
expenses
                        --------    --------    --------    --------    --------   --------

Net return on
ordinary
activities
before
taxation                     125        (456)       (331)        346      (2,395)    (2,049)

                             

Tax on             
ordinary
activities         2           -           -           -         (23)         23          -
                        --------    --------    --------    --------    --------   --------

Net return on
ordinary
activities
after
taxation                     125        (456)       (331)        323      (2,372)    (2,049)


Dividends in       
respect of
equity
shares             3        (132)          -        (132)       (315)          -       (315)
                        --------    --------    --------    --------    --------   --------

Transfer                      (7)       (456)       (463)          8      (2,372)    (2,364)
(from) to
reserves
                        ========    ========    ========    ========    ========   ========

Return per
Ordinary
share

Basic and          4        0.80p      (2.93)p     (2.13)p      2.05p     (15.07)p  (13.02)p
diluted




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 revenue reserves for the financial year and
their historic cost equivalents.




Unaudited Balance Sheet

at 31 March 2003



                                                 Unaudited     Audited



                                         Note         2003        2002

                                                      £000        £000

Fixed assets



Investment portfolio                                 8,349       8,612
                                                   -------     -------

Current Assets

Investments                                          1,485       1,921

Debtors                                                156          68

Cash                                                   317         275
                                                   -------     -------

                                                     1,958       2,264



Creditors: amounts payable within one                 (170)       (195)
year
                                                   -------     -------

Net Current Assets                                   1,788       2,069
                                                   -------     -------



Total Net Assets                                    10,137      10,681
                                                   =======     =======



Capital and Reserves



Called-up share capital                              1,552       1,571

Capital redemption reserve                              35          16

Capital reserve                                     (5,115)     (4,659)

Special reserve                                     13,647      13,728

Revenue reserve                                         18          25
                                                  --------    --------

Equity shareholders' fund                           10,137      10,681
                                                  ========    ========



Net asset value per Ordinary share          5         65.3p       68.0p
                                                  ========    ========







Unaudited Cash Flow Statement

for the year ended 31 March 2003



                                             Unuadited         Audited

                                            Year ended      Year ended

                                         31 March 2003   31 March 2002

                                                  £000            £000



Net cash (outflow) inflow from                    (114)            206
operating activities
                                               -------         -------



Taxation

Tax repayments received                              -             186
                                               -------         -------



Investing activities

Purchase of investments                         (1,028)         (2,327)

Proceeds from disposal of investments            1,001           1,188
                                               -------         -------

Net cash outflow from investing                    (27)         (1,139)
activities
                                               -------         -------



Equity dividends to Shareholders                  (181)           (346)
                                               -------         -------



Net cash outflow before management of
liquid

resources and financing                           (322)         (1,093)
                                               -------        --------



Management of liquid resources

Purchase of fixed interest government             (880)           (437)
stocks

Proceeds from the sale of fixed                  1,325           1,182
interest government stocks
                                               -------         -------

Net cash inflow from management of                 445             745
liquid resources
                                               -------         -------



Financing

Purchase of own shares                             (81)            (42)
                                               -------         -------

Net cash outflow from financing                    (81)            (42)
                                               -------         -------



Increase (decrease) in cash                         42            (390)
                                               =======         =======









Notes

 1. Basis of Reporting

    This preliminary announcement, which has been prepared on a basis consistent
    with the previous year, does not constitute statutory accounts within the
    meaning of Section 240 of the Companies Act 1985. The announcement has been
    agreed with the Company's auditors for release.

    The information for the year ended 31 March 2002 is an extract from the
    statutory accounts to that date which have been delivered to the Registrar
    of Companies. Those accounts included an audit report which was unqualified
    and which did not contain a statement under Sections 237(2) or 273(3) of the
    Companies Act 1985. The statutory accounts for the year ended 31 March 2003,
    upon which the auditors still have to report, will be delivered to the
    Registrar following the Company's Annual General Meeting.

 2. Taxation Charge (Credit)



                           Year ended 31 March            Year ended 31 March
                                 2003                           2002

                    Revenue    Capital    Total    Revenue    Capital    Total

                       £000       £000     £000       £000       £000     £000



       Corporation       
       tax at 19%
       (2002: 20%)        -          -        -         23        (23)       -

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

3. Dividends



                                                        2003      2002

                                                        £000      £000



Interim paid     -    0.25p per share (2002: 1.10p)       39       173

Final            -    0.60p per share (2002: 0.90p)       93       142
proposal
                                                        ----      ----

                                                         132       315
                                                        ====      ====



4. Revenue Return per Ordinary Share

    The basic revenue return per Ordinary share is based on net revenue return
    from ordinary activities after tax of £125,000 (2002: £323,000) and
    15,556,000 (2002: 15,740,000) 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 the year
    to 31 March 2003 and hence basic and diluted return 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 £10,137,000 (2002: £10,681,000) and 15,517,838 (2002: 15,707,838) shares
    in issue at the year-end.


6. Annual General Meeting

    Copies of the full financial statements for the year ended 31 March 2003
    will be available to the public at the registered office of the Company at
    Saint Martins House, 210-212 Chapeltown Road, Leeds, LS7 4HZ. The Company's
    AGM is due to be held at 12.00 noon on 11 July 2003 at 23 Berkeley Square,
    London, W1J 6HE.





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