Preliminary Results

Foresight Technology VCT PLC
21 December 2001

Foresight Technology VCT plc


Preliminary Announcement of results for the year ended 30 September 2001


Chairman's Statement


Introduction


The year under review has been a disappointing one for stock markets in
general. With technology spending declining, share prices of technology
companies fell dramatically on a world wide basis from the high points reached
in early 2000. At the same time fears of a recession, led by the USA, mounted
in many economies around the world. The UK economy and share prices have not
been immune to these trends, although have weathered the storm reasonably
well. Currently, there are signs of the situation stabilising, but the outlook
remains uncertain.


Results


The results for the year from 1 October 2000 to 30 September 2001 are set out
in the following pages. The total return (after tax) attributable to the
Ordinary Shareholders was a loss of £14,951,636 (2000: profit of £28,335,728)
and the net asset value per Ordinary Share as at 30 September 2001 was 96.09p
(2000: 210.71p). It will be remembered that a dividend of 100p was paid during
the previous year. With regard to the holders of 'C' Shares the attributable
loss (after tax) before the payment of dividends during the year was £
3,028,312 (2000: £89,857) and the net asset value per 'C' Share as at 30
September 2001 was 80.06p (2000: 93.50p).


The after tax revenue return for the year (before capital losses) per Ordinary
Share was a loss of 0.09p and a profit of 2.81p per 'C' Share for the year to
30 September 2001.


Dividend


In relation to 'C' Shares, the Company paid an interim dividend in July of
2.00p net (2000: nil pence) per 'C' Share on the basis of the results for the
six months ended 31 March 2001. The Board is recommending a further dividend
of 2.50p per 'C' Share giving total dividends of 4.50p per 'C' Share for the
year ended 30 September 2001. The Board is not recommending a dividend on the
Ordinary Shares (2000: 100.00p).


Share issues


The Company has issued 493,600 Ordinary Shares and 920,066 'C' Shares pursuant
to a public offer for subscription of 'C' Shares and the 2001 warrant
exercise. The next warrant exercise date is 31 January 2002.


Ordinary Shares fund


There have been a number of significant changes in the valuations of our
investments since reporting on the interim period ending 31 March 2001. As
reported in the update dated 30 October, shares in e-district net plc, an
investment made by the Ordinary Shares fund, have been re-listed for dealings
on AIM. The financial statements show a write down of the investment in
e-district of £17 million since 30 September 2000 when the investment was
valued at £17.95 million. The holding has been valued to reflect the
re-listing giving a valuation of £926,000. Given the continued trading
progress by Advanced Composites Group Limited, another Ordinary Shares fund
investment, our investment advisers, VCF Partners, have valued this investment
on a PE basis using an index of comparable companies, after an appropriate
discount, in accordance with BVCA guidelines. This has resulted in a valuation
of £6.8 million compared with a cost of £1.6 million. We have also increased
the provision against the investment in Survey and Development Services
Limited due to the company's continuing difficulties.


As at 30 September 2001 £9.9 million had been invested or approved for
investment in 12 companies. This represented approximately 90% of the Ordinary
Shares fund, the balance being invested in fixed interest securities and cash
deposits. As at 30 September 2001, the capital reserves show, on a capital
base of £10.8 million, a net unrealised capital gain of £1.9 million which is
net of provisions in respect of investments in Survey and Development Services
Limited and Creature Laboratories Limited and capitalised management expenses
(net of tax relief).


'C' Shares fund


In light of the current market conditions and in particular the severity of
the technology slowdown the valuations of a number of the investments in the
'C' Shares fund have been reduced. It should be borne in mind that many of the
companies in which the 'C' Shares fund has invested are at an earlier stage in
their development than companies in the more established Ordinary Shares fund
which can make them more susceptible to a downturn.


As at 30 September 2001 £12.8 million had been invested or approved for
investment in 15 companies. This represented approximately 50% of the 'C'
Shares fund, the balance being invested in fixed interest securities and cash
deposits. Several further investments are also being considered at present by
your advisers, VCF Partners, and the Board. There have been a number of
provisions made against, and reductions in, the valuations of investments
since the interim report for the six months ended 31 March 2001 totalling £1.8
million including unlisted companies Travelstore.com plc, KeepAhead Limited
and iDesk plc and listed companies FFastFill plc, UK Directory (Holdings)
Limited and themutual.net plc. The OFEX share facility for UK Directory
(Holdings) Limited was suspended on 29 November 2001 following an announcement
that the company would cease trading via a voluntary solvent liquidation with
the expectation that some capital will be returned to shareholders. However,
VCF Partners, are encouraged by the quality and number of new investment
opportunities and new investments are generally being made in companies at a
more mature stage of development and at lower valuations than was common a
year ago. As at 30 September 2001, the reserves show, on a capital base of £
31.3 million, an unrealised capital loss of £4.7 million which is net of
provisions in respect of investments in Travelstore.com plc, KeepAhead Limited
and iDesk plc, reduced valuations for UK Directory (Holdings) Limited,
FFastFill plc and themutual.net plc and capitalised management expenses (net
of tax relief).


Details of the Company's investments are given in the Advisers' and Managers'
Report.


Valuation policy


The unquoted investments held by the Company have been valued in accordance
with the British Venture Capital Association guidelines under which unquoted
investments are not normally revalued above cost for at least 12 months after
the date of acquisition. The investments which are traded on AIM, OFEX or the
London Stock Exchange and the fixed interest securities are carried at
mid-market value. The Board and the Advisers, in any event, always attempt to
follow a consistent and prudent valuation policy.


CREST


The Companies securities entered CREST, a paperless settlement system, on 27
September 2001 which enables the Company's securities to be held in an
uncertificated form. CREST is a voluntary system and those shareholders and
warrantholders who wish to retain their certificates may do so.


Recent investments


In October 2001, the Company invested £1 million in Aquasium Technologies
Limited which is engaged in the design, manufacture and servicing of electron
beam welding and vacuum furnace equipment.


Also in October 2001, the Company invested £1 million in Blue Curve
Research.net Limited, a software company that sells its products to investment
banks and fund managers to automate the production and distribution of
research materials.


On 19 December 2001 themutual.net plc entered into a conditional agreement to
acquire the whole of the issued share capital of KeepAhead Limited. The 'C'
Shares fund has investments in both companies. A further announcement will be
made when the acquisition becomes unconditional.


Finally, I would like to take this opportunity to thank all shareholders and
warrantholders for their continued support and I look forward to welcoming you
at the Annual General Meeting on 26 February 2002.





Peter Dicks

Chairman


20 December 2001


THE VENTURE CAPITAL FUNDS


VCF Partners advise the Company in respect of investments made within the
Ordinary Shares fund and the 'C' Shares fund. During the year ended 30
September 2001, two further investments were made in existing investee
companies from the Ordinary Shares fund at a cost of £350,000 and seven new
investments and two further investments were made from the 'C' Shares fund at
a cost of £6.3 million. The full investment portfolio of both funds as at 30
September 2001 is detailed below.




ORDINARY SHARES FUND


Sapphire International Limited

Owns the established 'DataEase' family of computer database software products
and has a worldwide base of several hundred thousand users. The Company now
combines a consulting/professional services organisation with the sale of
DataEase software products.

Results from the latest audited accounts for the year ended 31 December 1999:
profit before tax £251,000 net assets £1,761,000.

  Date of    Amount invested  Valuation % Equity/      Loan       % of Ordinary
 investment     including                Voting        Stock         Shares
                Loan Stock               Rights                     Portfolio

 July 1988     £1,190,000*      Cost      18.6%    £440,000 10%       9.94%

 July 2000,                                       Unsecured Loan

October 2000                                           Stock

& July 2001


* including further investment of £150,000 in October 2000 and including 
£20,000 unpaid interest capitalised as further loan stock in each of October
2000 and July 2001.


Actimax plc

Supplies digital telecommunications systems to small and medium sized
customers. The company installs complex computer and telephone combined
systems using components from suppliers such as Ascom, Lucent and Intertel.
The company has also won the Comms Dealer of the year award and is now trading
at break even.


Results from the latest audited accounts for the period ended 31 December
2000: loss before tax £171,600, net liabilities £502,880.

   Date of     Amount invested  Valuation % Equity/     Loan     % of Ordinary
  Investment      including                Voting      Stock         Shares
                  Loan Stock               Rights                  Portfolio

November 1998      £600,000       Cost       42%    £120,000 10%     5.01%

 & March 2000                             (plus 6%   Unsecured

                                          Warrants)  Loan Stock


Survey and Development Services Limited

Is a specialist geo-spatial data software products and services company which
serves the growing market for digital mapping and geographical information
system databases. The products include a software system which creates digital
maps and a system that uses satellite positioning in conjunction with video
for recording facilities for utilities. The company converts existing maps
into digital format.


Following the difficult trading conditions experienced by the company this
year, a new injection of capital was requested from its investors; due to
uncertainty at the time of writing this report the valuation of this
investment has been written down to £100,000.


Results from the latest audited accounts for the year ended 30 June 2000: loss
before tax £79,773, net assets £837,152.

   Date of     Amount invested  Valuation % Equity/    Loan     % of Ordinary
  Investment      including                Voting      Stock        Shares
                  Loan Stock               Rights                 Portfolio

December 1998     £700,000*     £100,000    29.3%    £200,000       0.84%

   December                                         Redeemable

 2000 & April
     2001

* includes further investments of £100,000 in loan stock in each of December
2000 and April 2001.


Creature Laboratories Limited (formerly CyberLife Technology Limited)

Is a leading artificial intelligence software company. The range of
entertainment software products under development include games such as '
Beasts' and 'James Pond'. The technology also relates to new platforms such as
toys, mobile phones and digital television. The valuation has been adjusted to
reflect the further round of fundraising in September 2000.


Results from the latest audited accounts for the 16 months ended 31 December
2000: loss before tax £3,956,143, net liabilities £772,426.

   Date of    Amount invested  Valuation % Equity/     Loan     % of Ordinary
 investment      including                Voting      Stock         Shares
                 Loan Stock               Rights                  Portfolio

January 1999     £1,500,000    £746,375    11.1%     £500,000       6.23%

 & September                                       Convertible

    2000


Advanced Composites Group Limited

Is a well established manufacturer of high technology carbon fibre composite
material, with factories in Heanor north of Derby, and Tulsa USA. Successful
markets include F1 racing cars, sports equipment and aerospace applications.
The valuation of the investment has increased from £2.4 million to £6.8
million. After two years of growing profits, the company has now been valued
on a PE basis, using an index of comparable companies after an appropriate
discount. This change in valuation is in accordance with BVCA guidelines.


Results from the latest consolidated audited accounts for the year ended 31
August 2001: profit before tax £2,713,000, net assets £7,127,000.

  Date of     Amount invested   Valuation     % Equity/       % of Ordinary
 investment      including                      Voting            Shares
                Loan Stock                      Rights          Portfolio


March 1999,     £1,622,978      £6,805,754      27.5%             56.83%

October 1999

& July 2000


e-district.net plc (AIM listed)

Operates a portal site which provides an increasing number of facilities
including online games, e-mail, personal home pages and chat available from a
number of platforms. The company was floated on the AIM market in March 2000
at a valuation of £149.7 million - when Foresight sold 6,623,030 shares to
raise £12.4 million net of expenses. The company recently announced that
Michael Sinclair (also chairman of iDesk plc) bought a 29% shareholding and
became executive chairman.


Results from the latest audited accounts for the year ended 31 December 2000:
loss before tax £2,192,853, net assets £12,744,786.



 Date of    Amount invested    Valuation     % Equity/        % of Ordinary
investment                                     Voting            Shares
                                               Rights           Portfolio

March 1999      £341,319        £925,987       18.6%              7.73%


Telecom plus plc (listed on the London Stock Exchange)

Offers low cost telephone services to private subscribers using relationship
marketing as a means of obtaining new customers. Services currently offered
include the provision of fixed wire and cellular phone services with the
company acting as a switchless reseller. This business is now growing rapidly
and Telecom plus has recently been awarded a national gas license for domestic
supply allowing its customers to buy several utility services from one source.
Foresight currently holds 1,250,000 ordinary shares in the company after
converting £250,000 of loan stock, part of it's original investment of £
475,000, into ordinary shares in December 2000.


Results from the latest audited accounts for the year ended 31 March 2001:
profit before tax £2,510,000, net assets £7,537,000.

 Date of    Amount invested    Valuation     % Equity/        % of Ordinary
investment                                     Voting            Shares
                                               Rights           Portfolio

June 1999       £475,000        £893,750        2.5%              7.46%


Clarity Commerce Solutions plc (AIM listed)

Is part of a group of companies that provide EPOS solutions, CRM products and
services to the UK hospitality and leisure markets including the pub market
place and the restaurant and nightclub sector. Foresight invested £500,000 in
a placing in July 2000. Foresight currently holds 400,000 ordinary shares in
the company.


Results from the latest audited accounts for the 15 month period ended: 31
March 2001: loss before tax £1,111,000, net assets £4,398,000.

 Date of    Amount invested    Valuation     % Equity/        % of Ordinary
investment                                     Voting            Shares
                                               Rights           Portfolio

July 2000       £500,000        £346,000        4.2%              2.89%


THE 'C' SHARES FUND

Travelstore.com plc

Provides an online service for making business travel arrangements. It offers
a range of features for corporate and small business travellers including 24
hour telephone support. The company has recently started focusing on
generating sales of its travel booking software to second tier airlines.


The Board believes it is prudent to write down the investment due to difficult
trading conditions.


Results from the latest audited accounts for the year ended 31 March 2001:
loss before tax £11,896,915, net assets £5,678,433.

    Date of      Amount invested    Valuation      % Equity/       % of 'C'
  investment                                        Voting          Shares
                                                    Rights         Portfolio

 December 1999     £1,339,000*       £426,500        3.5%            1.69%
& November 2000


* includes a further investment of £339,000 in November 2000


KeepAhead Limited

Despatches lifestyle email services (e.g. current affairs, astrology, sport)
which approximately 200,000 registered users receive free of charge. Revenue
is generated from targeted e-mail advertising. The board believe it is prudent
to write down this investment due to the downturn in the internet sector.


Results from the latest audited accounts for the year ended 31 March 2001:
loss before tax £709,815, net assets £198,756.

 Date of     Amount invested      Valuation      % Equity/         % of 'C'
investment                                         Voting           Shares
                                                   Rights         Portfolio

April 2000      £1,000,000        £250,000          15%             0.99%


UK Directory (Holdings) Limited (OFEX Listed)

Operates an internet based directory of business websites, available on-line
through the portal www. ukdirectory.co.uk and offline via the publication of a
nationally distributed magazine available from WH Smith. Established in 1995,
the company has developed a database of over 65,000 UK primary domain names,
each of which is manually vetted for content and category classification
providing users with access to over one million web pages. In addition to the
UK operations, the company is joint owner of an Australian company, Oz
Directory Pty Ltd. Foresight currently holds two million ordinary shares in
the company. On 29 November 2001, UK Directory (Holdings) Limited's shares
were suspended from trading on OFEX.


Results from the latest audited accounts for the year ended 31 August 2000:
loss before tax £346,956, net assets £2,375,671.

 Date of     Amount invested      Valuation      % Equity/         % of 'C'
investment                                         Voting           Shares
                                                   Rights         Portfolio

April 2000      £1,000,000        £140,000          10%             0.55%


themutual.net plc (AIM Listed)

Operates a financial information website and sells targeted advertising by
email aimed at their online investors. themutual.net's shares were listed on
the AIM market in June 2000. There were over 200,000 registered users as at 31
March 2001. Foresight currently holds 342,730,249 ordinary shares in the
company.


Results from the latest audited accounts for the year ended 30 April 2001:
loss before tax £1,221,100, net assets £561,928.

 Date of     Amount invested      Valuation      % Equity/         % of 'C'
investment                                         Voting           Shares
                                                   Rights         Portfolio

June 2000        £500,000         £137,092         9.31%            0.54%


FFastFill plc (AIM Listed)

Is a software company that develops sophisticated trading solutions for
futures and options traders, brokers and risk managers. Its system has three
key features; firstly, Windows NT trading screen with sophisticated
proprietary pricing calculation and strategy functions; secondly, N&K
management software allowing management to monitor, limit and even reverse
positions in real time; and thirdly, connectivity to exchanges. Following
trading difficulties, a new CEO has been appointed and other personnel changes
have been made. Foresight currently holds 914,070 ordinary shares in the
company.


Results from the latest audited accounts for the year ended 31 March 2001:
loss before tax £5,105,274, net assets £12,362,446.

 Date of     Amount invested      Valuation      % Equity/         % of 'C'
investment                                         Voting           Shares
                                                   Rights         Portfolio

July 2000        £500,000          £43,418         2.01%            0.17%


Sarantel Limited

Seeks to become a market leader in the design and manufacture of a range of
mobility antenna

products which include GPS antennas, BlueToothTM antennas and 3rd Generation
UMTS antennas. The company's technology enhances the performance of mobile
phones and other wireless devices by reducing the amount of electromagnetic
energy absorbed by the user.


Dormant accounts submitted to 28 September 2000.

  Date of    Amount invested Valuation  % Equity/      Loan         % of 'C'
 investment     including                Voting        Stock         Shares
               Loan Stock                Rights                    Portfolio

 September     £1,000,000*     Cost       7.5%       £900,000        3.96%
    2000
April 2001 &
 June 2001


*including draw-downs of the second and final tranches of committed funds of 
£166,667 in April 2001 and £333,333 in June 2001.


Mondas plc (AIM Listed)

Has developed e-Business technologies to allow securities and investment
houses to deploy new front and back office applications to facilitate straight
through processing. Customers benefit from improved content management,
document management, business process software and service solutions.
Foresight currently holds 200,000 ordinary shares in the company in addition
to the loan stock.


Results from the latest audited accounts for the year ended 30 April 2001:
loss before tax £1,504,042, net assets £3,462,338.

  Date of    Amount invested Valuation % Equity/       Loan         % of 'C'
 investment     including                Voting        Stock         Shares
               Loan Stock                Rights                     Portfolio

October 2000   £1,000,000    £889,000     7.7%       £900,000         1.98%
                                                    Convertible


Callserve Communications plc

Is a voice over IP telecoms network and service provider which enables
telephone calls to be made from a PC via the internet to any phone worldwide.

Results from the latest audited accounts for the 10 month period ended 31
March 2000: loss before tax £1,324,624, net assets £1,598,303.

   Date of      Amount invested    Valuation      % Equity/       % of 'C'
 investment                                        Voting          Shares
                                                   Rights         Portfolio

October 2000       £500,000           Cost          1.27%           3.52%


iDesk plc

Provides telcos, ISPs and other blue chip customers with outsourced technical
help desks, operated from a call centre in London. iDesk also sells its
proprietary and licensed CRM software and provides electronic billing
services. The board believes it is prudent to write down the investment by 50%
due to difficult trading conditions in the company's market.

Results from the latest audited accounts for the 17 month period ended 31
December 1999: loss before tax £1,398,464, net liabilities of £989,723.

   Date of       Amount invested    Valuation      % Equity/       % of 'C'
  investment                                        Voting          Shares
                                                    Rights         Portfolio

November 2000       £500,000         £250,000        1.47%           0.99%


iCore Limited

Is an IT management services company, with services that range from strategic
IT reviews, infrastructure design and management, outsourcing procurement,
through to business process management, interim project management, and
establishing project offices. The company is now trading profitably.

Results from the latest audited accounts for the year ended 30 June 2001: loss
before tax £644,942, net assets £5,942.
 
  Date of       Amount invested    Valuation      % Equity/       % of 'C'
  investment                                        Voting          Shares
                                                    Rights         Portfolio

December 2000       £750,000           Cost          16.7%           2.97%


Heritage Image Partnership

Is creating a library of images available to customers over the internet and
has exclusive access to the content from five heritage institutions including
The British Library and the Science Museum. The images are sold chiefly to
companies in the media, advertising and design sectors.

Results from the latest audited accounts for the 11 month period ended 31
December 2000: loss before tax £1,376,794, net liabilities £1,375,795.
 Date of     Amount invested      Valuation      % Equity/         % of 'C'
investment                                         Voting           Shares
                                                   Rights         Portfolio

March 2001       £950,000           Cost           18.7%            3.76%


Monactive Limited (formerly Xpert Client Systems Limited)

Is a provider of software asset management tools with over 100 customers. The
company's software monitors software usage on PC networks providing corporates
with data for cost reduction and compliance. Its customers are able to reduce
their software licensing costs whilst demonstrating legal compliance.

Results from the latest audited accounts for the year ended 31 July 2000: loss
before tax £320,800, net liabilities £287,249.
 Date of   Amount invested Valuation  % Equity/       Loan         % of 'C'
investment    including                 Voting        Stock         Shares
             Loan Stock                 Rights                     Portfolio

March 2001    £750,000       Cost       17.6%       £375,000         2.97%


ANT Limited

Is a software company that develops embedded browsers to improve users'
interactive communication with digital television sets and other consumer
electronic devices.

Results from the last audited accounts for the year ended 31 December 2000:
loss before tax £848,332, net assets £956,306.
 Date of   Amount invested Valuation  % Equity/       Loan         % of 'C'
investment    including                 Voting        Stock         Shares
             Loan Stock                 Rights                     Portfolio

July 2001    £1,000,000      Cost        5.3%       £900,000         3.96%



Administrative costs for Telecom plus plc, themutual.net plc and FFastFill plc
were previously included in the amount invested. We believe it is more
accurate to show the investment as the figures shown in the investment
agreements. The differences shown in the amount invested to those within the
Report and Financial Statements for the year ended 30 September 2000 are £758,
£2,938 and £6,116 respectively, totalling £9,812.




INVESTMENTS MADE SINCE THE YEAR END - 'C' SHARES FUND


Blue Curve Research.net Limited

Is a software company that sells its products and services to investment banks
and fund managers to automate the production and distribution of research
material.


Results from the latest audited accounts for the year ended 31 December 2000:
profit before tax £82,712, net assets of £46,562.

  Date of investment       Amount invested          % Equity/Voting Rights

     October 2001             £1,000,000                     25%


Aquasium Technologies Limited

Is engaged in the design, manufacture and servicing of electron beam welding
and vacuum furnace equipment.


No audited accounts are available as the company was incorporated in June
2001.

  Date of investment       Amount invested          % Equity/Voting Rights

     October 2001             £1,000,000                    33.3%


ASSOCIATED FUNDS

VCF Partners also advise TriVest VCT plc in respect of investments.
Investments of £300,000, £250,000, £1 million, £500,000 and £500,000 have been
made by TriVest VCT plc in Heritage Image Partnership Limited, Monactive
Limited, ANT Limited, Hillgate (225) Limited, the holding company of Blue
Curve Research.net Limited and Aquasium Technologies Limited respectively.




THE FIXED INTEREST FUNDS

The Ordinary Shares fixed interest portfolio and the 'C' Shares fixed interest
portfolio constitute the balance of the net proceeds from the issues of
Ordinary Shares and 'C' Shares. These funds are invested in fixed interest
securities and cash deposits by Cazenove Fund Management Limited.


Non-Statutory Analysis between the Ordinary Shares and 'C' Shares Funds

Statements of Total Return

for the year ended 30 September 2001


    Ordinary Shares Fund                                 'C' Shares fund
             Revenue     Capital      Total     Revenue     Capital     Total
                  £        £              £           £        £             £
Gains and
losses on
investments       - (14,684,938) (14,684,938)         - (3,506,801) (3,506,801)
Income      192,839           -      192,839  1,656,947         -     1,656,947
Investment
Management (105,908)   (317,722)    (423,630)  (185,820)  (557,461)   (743,281)
fees
Other      (107,760)          -     (107,760)  (315,177)         -    (315,177)
expenses
         ----------    --------   ---------- ----------   ---------  ---------
Return on
ordinary
activities
before
taxation    (20,829) (15,002,660)(15,023,489) 1,155,950 (4,064,262)  (2,908,312)
Tax on
ordinary
activities    8,309        63,544     71,853   (231,494)   111,494     (120,000)
             -------  ----------  ----------  ---------   --------   ---------
Return
attributable
to equity
shareholders (12,520) (14,939,116)(14,951,636)   924,456 (3,952,768) (3,028,312)
Dividends in
respect of
equity
shares             -           -           - (1,500,926)          -  (1,500,926)
             ------- ----------- ----------- ---------- ----------  ----------
Transfer
from
reserves     (12,520) (14,939,116)(14,951,636) (576,470)(3,952,768)  (4,529,238)
           ---------   ---------   ---------     ------- --------- ----------
Return per    (0.09)p   (112.47)p    (112.56)p     2.81p   (11.99)p     (9.18)p
share



Balance Sheets

as at 30 September 2001


 Ordinary Shares Fund                       'C' Shares fund
                                    £            £             £              £
Fixed assets
Investments                             11,908,616                   20,752,835
Monies held pending                         67,046                    4,510,760
investment
                                      ------------                 ------------
                                        11,975,662                   25,263,595
Current assets
Debtors and prepayments       491,660                    677,222
Cash at bank                  499,077                  2,021,398
                         ------------              -------------
                              990,737                  2,698,620
Creditors: amounts          (136,473)                (1,264,934)
falling due within one
year
                         ------------              -------------

Net current assets                         854,264                    1,433,686
                                      ------------               --------------
Net assets                              12,829,926                   26,697,281
                                      ------------               --------------

Capital and reserves
Called up share capital                    133,524                      333,468
Share premium account                    5,654,467                   25,982,908
Cancelled share premium                  2,230,289                    4,033,931
account
Revaluation reserve                      4,674,991                  (3,779,262)
Profit and loss account                    136,655                      126,236
                                      ------------                 ------------
Equity shareholders'                    12,829,926                   26,697,281
funds
                                      ------------                 ------------
Net asset value per                         96.09p                       80.06p
share of 1 pence each:





Profit and Loss Account

for the year ended 30 September 2001


         2001                                     2000 (restated)
          Revenue    Capital    Total      Revenue        Capital          Total
                £          £        £            £              £              £

(Losses)/
gains on        -  (116,655)  (116,655)         -      9,521,057      9,521,057
realisation
of
investments
Income   1,849,786         -  1,849,786   1,632,302            -      1,632,302
Investment(291,728) (875,183)(1,166,911)   (248,723)    (746,169)      (994,892)
management
fees
Other     (422,937)        -   (422,937)   (344,714)           -      (344,714)
expenses
          --------- --------  --------    ---------   -----------   ------------
Profit/
(loss) on
ordinary
activities
before    1,135,121 (991,838)    143,283  1,038,865    8,774,888      9,813,753
taxation
Tax on    (223,185)  175,038     (48,147)  (207,773)     149,233       (58,540)
ordinary
activities
           --------  -------   ----------  ---------   ----------   ------------

Profit/
(loss) on
ordinary
activities
after      911,936  (816,800)     95,136    831,092    8,924,121      9,755,213
taxation
for the
financial
year
Dividends(1,500,926)        -  (1,500,926)        -  (11,889,553)   (11,889,553)
         ---------  ---------- ---------- ----------  ----------- -----------
Retained
profit/
(loss) for
the year
transferred(588,990) (816,800) (1,405,790)   831,092  (2,965,432)    (2,134,340)
to/(from)
reserves
            ------   --------  ---------  ---------   ---------- --------------
Earnings                          
per share:
Ordinary
Shares                            (1.82)p                                78.48p
'C' Shares                         1.02p                                  1.49p

All items in the above statement derive from continuing operations.



Statement of Total Recognised Gains and Losses

for the year ended 30 September 2001

                        2001                                2000 (restated)
         Revenue      Capital        Total      Revenue      Capital    Total
                £           £            £            £            £        £

Profit/   911,936    (816,800)       95,136      831,092   8,924,121   9,755,213
(loss) for
the year
Unrealised
gains
(losses) on
revaluation     - (18,075,084) (18,075,084)            -   18,490,658 18,490,658
of
investments
          -------- ---------- ------------ ----------- ------------ ------------
Total
recognised
gains and
losses    911,936 (18,891,884) (17,979,948)     831,092   27,414,779  28,245,871
during the
year

Return per
share:
Ordinary   (0.09)p   (112.47)p    (112.56)p      1.07p      236.17p      237.24p
Shares
'C' Shares   2.81p    (11.99)p      (9.18)p      2.73p      (3.08)p      (0.35)p


The format of the above statements has changed from that given in prior years.

Note of Historical Cost Profits and Losses

for the year ended 30 September 2001
                                                            2001           2000
                                                           Total          Total
                                                               £              £

Profit on ordinary activities before taxation            143,283      9,813,753
Realisation of revaluation (losses)/gains of            (69,568)        196,761
previous years
                                                  -------------- --------------
Historical cost profit on ordinary activities             73,715     10,010,514
before taxation
                                                  -------------- --------------
Historical cost loss for the year after taxation     (1,475,358)    (1,937,579)
and dividends
                                                  -------------- --------------



Balance Sheet

as at 30 September 2001


                                   2001                                    2000
                                                                     (restated)

                                 £              £              £              £
Fixed assets
Investments                            32,661,451                    49,299,291
Monies held pending                     4,577,806                     7,187,245
investment
                                    -------------                --------------
                                       37,239,257                    56,486,536

Current assets
Debtors and                884,169                     1,350,245
prepayments
Cash at bank             2,520,474                       237,690
                     -------------                 -------------
                         3,404,643                     1,587,935

Creditors: amounts     (1,116,693)                     (182,322)
falling due within
one year
                    --------------                --------------

Net current assets                      2,287,950                     1,405,613
                                   --------------                --------------
Net assets                             39,527,207                    57,892,149
                                   --------------                --------------

Capital and
reserves
Called up share                           466,992                       455,653
capital
Share premium                          31,637,375                    40,532,782
account
Cancelled share                         6,264,220                             -
premium account
Revaluation service                       895,729                    18,901,245
Profit and loss                           262,891                   (1,997,531)
account
                                   --------------                --------------
Equity                                 39,527,207                    57,892,149
shareholders' funds
                                   --------------                --------------
Net asset value per
share of 1 pence
each:-
Ordinary Shares                            96.09p                       210.71p
'C' Shares                                 80.05p                        93.50p




CASHFLOW STATEMENT
For the year ended 30 September 2001
                                      2001                          2000
                                 £            £              £                £

Operating
activities
Dividends                    3,750                           -
received
Deposit and              1,822,205                   1,199,374
similar interest
received
Other cash                 407,768                           -
receipts
Investment             (1,074,318)                 (1,245,699)
management fees
paid
Other cash               (357,255)                   (628,198)
payments
                    --------------              --------------

Net cash inflow/                     802,150                          (674,523)
(outflow) from
operating
activities

Taxation
Tax paid                                      -                               -

Investing
activities
Purchase of
fixed income       (15,898,538)                   (25,368,955)
investments
Purchase of         (6,686,095)                    (7,714,447)
other
investments
Sale of fixed        21,030,734                      9,030,712
income
investments
Sale of other                 -                     12,801,919
investments
                 --------------                   ------------
Net cash outflow                    (1,553,899)                    (11,250,771)
from investing
activities

Equity dividends
Net dividends                         (667,256)                    (11,889,553)
paid
                                ---------------                ----------------
Net cash outflow
before financing
and
liquid resource                     (1,419,005)                    (23,814,847)
management

Management of
liquid resources
Movement in                           2,609,439                     (6,468,213)
money market and
other deposits

Financing
Issue of shares       1,378,234                     30,551,312
(net of
expenses)
Purchase of own       (285,884)                       (62,499)
shares
                 --------------                 --------------
                                      1,092,350                      30,488,813
                                 --------------                  --------------
Net increase in                       2,282,784                         205,753
cash
                                 --------------                  --------------

The Company holds gilts and bonds primarily as investments and not as liquid
resources. Accordingly, movements in the holdings of these investments are
shown within investing activities in the Cashflow Statement rather than within
management of liquid resources.


Notes


 1. Earnings and return per share


    Total earnings after taxation for the year were £95,136 (2000: £9,755,213)
    comprising a loss after taxation on the Ordinary Shares fund of £241,179
    (2000: profit of £9,373,124) and a profit after taxation on the 'C' Shares
    fund of £336,315 (2000: £382,089). The basic earnings per Ordinary Share
    is based on the net loss from Ordinary Shares fund activities and on
    13,282,371 (2000: 11,943,827) Ordinary Shares, being the weighted average
    number of Ordinary Shares in issue during the year. There is no difference
    between the basic earnings per share and diluted earnings per share as the
    'O' Warrants are not considered to be dilutive. The basic earnings per 'C'
    Share is based on the net profit from 'C' Shares fund activities and on
    32,955,624 (2000: 25,695,627) 'C' Shares, being the weighted average
    number of 'C' Shares in issue during the year. There is no difference
    between the basic earnings per share and diluted earnings per share as the
    'C' Warrants are not considered to be dilutive.

    The revenue return per Ordinary Share is based on the net revenue from
    Ordinary Shares fund activities after taxation of £(12,520) (2000: £
    128,386) and on 13,282,371 (2000: 11,943,827) Ordinary Shares, being the
    weighted average number of Ordinary Shares in issue during the year. The
    revenue return per 'C' Share is based on the net revenue from 'C' Shares
    fund activities after taxation of £924,456 (2000: £702,706) and on
    32,955,624 (2000: 25,695,627) 'C' Shares, being the weighted average
    number of 'C' Shares in issue during the year.

    The capital return per Ordinary Share is based on the net realised capital
    losses of £240,916 (2000: gains of £9,441,499), on net unrealised capital
    losses of £14,698,200 (2000: gains of £18,765,843) on the Ordinary Shares
    fund and on 13,282,371 (2000: 11,943,827) Ordinary Shares. The capital
    return per 'C' Share is based on the net realised capital losses of £
    645,452 (2000: £320,617), on net unrealised capital losses of £3,307,316
    (2000: £471,946) on the 'C' Shares fund and on 32,955,624 (2000:
    25,695,627) 'C' Shares.


 2. Dividend


    In July the Company paid an interim dividend of 2.00p net (2000: nil
    pence) per 'C' Share on the basis of the results for the six months ended
    31 March 2001. The Directors recommend a final dividend for 'C' Shares of
    2.50p (2000: nil pence) per 'C' Share to 'C' Shareholders on the register
    on 4 January 2002. This payment, if approved at the annual general
    meeting, will be payable on 11 March 2002. No dividend was paid or is
    recommended on the Ordinary Shares fund (2000: 100.00p). The after tax
    revenue return for the year before capital losses) attributable to
    Ordinary Shareholders was a loss of £12,520 and a profit of £924,546 for
    'C' Shareholders, giving an after tax revenue return (before capital
    losses) per share of (0.09)p and 2.81p respectively.


 3. Net asset value per share


    Net asset value per Ordinary Share is based on net assets of the Ordinary
    Shares fund at the year end, and on 13,352,424 (2000: 13,043,824) Ordinary
    Shares, being the number of Ordinary Shares in issue on that date.


    Net asset value per 'C' Share is based on net assets of the 'C' Shares
    fund at the year end, and on 33,346,819 (2000: 32,521,496) 'C' Shares,
    being the number of 'C' Shares in issue on that date.


 4. Capital and reserves



                  Called            Cancelled
                up share     Share      Share             Profit and
    COMPANY        share   premium    premium Revaluation       loss
                 capital   account    account    reserve     account     Total
                     £           £         £          £          £           £
At 1 October   455,653  40,532,782       -   18,901,245 (1,997,531)  57,892,149
2000
re-stated)
Issued share    14,136   1,399,530       -            -         -     1,413,666
capital
Issue cost           -     (27,000)      -            -         -       (27,000)
Own shares
purchased
during the
year            (2,797)   (267,937)      -            -           -    (270,734)
Transferred
to cancelled
share
premium              -  (10,000,000)10,000,000         -           -          -
account
Realisation
of
previously
unrealised          -             -    (69,568)    69,568          -          -
diminution
Retained            -             -          -         - (1,405,790) (1,405,790)
loss for the
year
Decrease in
unrealised
appreciation        -             -          - (18,075,084)       - (18,075,084)
Write off to
cancelled
share
premium     
account -
 current year       -             -   (816,800)          -  816,800           -
 - prior     
    years                           (2,849,412)           2,849,412
           ----------      --------   ---------  --------   ------- -----------
At 30         466,992    31,637,375  6,264,220    895,729   262,891  39,527,207
September
2001
             --------     --------     -------   --------   -------  ----------


    A special reserve, the cancelled share premium account, to which existing
    and future capital losses can be written off, was created by the reduction
    of the share premium account by £10 million, sanctioned by the Court on 7
    March 2001 and became effective on 14 March 2001.



    ORDINARY SHARES
                                               Cancelled
          Called up       Share       share                Profit and
              share     premium     premium  Revaluation         loss
            capital     account     account      reserve      account    Total
                  £           £           £           £        £              £

At 1 October 130,438   10,360,250        -   19,373,191 (2,379,620)  27,484,259
2000
(re-stated)
Issued share   4,936     488,664         -            -          -      493,600
capital
Own shares
purchased
during the
year         (1,850)   (194,447)         -            -          -     (196,297)
Transferred
to cancelled
share
premium           -   (5,000,000) 5,000,000           -          -            -
account
Realisation
of
previously
unrealised        -           -    (12,257)      12,257           -           -
diminution
Retained          -           -          -            -    (241,179)   (241,179)
loss for the
year
Decrease in
unrealised
appreciation      -          -           - (14,710,457)           - (14,710,457)
Write off to
cancelled
share
premium        
account -
 current year     -          -    (228,659)          -      228,659           -
 - prior years                  (2,528,795)               2,528,795
  
           ------- -------- ----------- ---------- ---------- ------------

At 30      133,524   5,654,467   2,230,289   4,674,991     136,655   12,829,926
September
2001
           ------     --------  ---------  ---------  ----------  ----------

    'C' SHARES
                                            Cancelled
       Called up        Share        share              Profit and
           share      premium      premium  Revaluation       loss
         capital      account      account      reserve    Account        Total 
               £            £            £            £         £             £ 
At 1    325,215    30,172,532          -      (471,946)   382,089    30,407,890
October
2000
(re-stated)
Issued    9,200       910,866           -             -          -      920,066
share
capital
Issue costs   -      (27,000)           -             -          -      (27,000)
Own shares
purchased  (947)     (73,490)           -             -          -      (74,437)
during the
year
Transferred
to
cancelled
share
premium       -   (5,000,000)   5,000,000             -           -           -
account
Realisation
of
previously
unrealised    -            -      (57,311)      57,311                         -
diminution
Retained      -            -            -            - (1,164,611)   (1,164,611)
loss for
the year
Increase in
unrealised
diminution    -            -            -   (3,364,627)         -    (3,364,627)
Write off
to
cancelled
share
premium       -            -    (588,141)            -     588,141            -
 account -
  current
  year
    - prior                     (320,617)                 320,617
    years
          ------ ---------  ----------- ------------  ----------  --------------
At 30    333,468  25,982,908   4,033,931  (3,779,262)     126,236     26,697,281
September
2001
       ---------  ----------  ---------- ----------    ----------    -----------


 5. Summary of investments during the year
             
                                Traded   Unlisted or
                  Listed            on     traded on    Qualifying
             investments           AIM          OFEX         Loans         Total
                       £             £             £             £             £
COMPANY

Cost or      21,764,070     19,562,366     6,952,855     1,020,000    49,299,291
valuation at 30
September 2000
Reclassification     -         506,114      (906,114)      400,000             -
Purchases at 15,898,538        100,000      3,671,095    2,915,000    22,584,633
cost
Disposals 
at cost     (21,147,389)             -             -             -  (21,147,389)
or opening
valuation
Change in    (1,653,894)  (18,681,983)     2,405,793     (145,000)  (18,075,084)
unrealised 
gains/(losses)
             ----------    ----------        -------     --------- ----------
Cost/
valuation    14,861,325     1,486,497     12,123,629     4,190,000    32,661,451
at 30 September
2001
             -----------  -----------   ----------- ------------- -------------
Book cost at 
30           14,506,278     1,950,371    10,974,073     4,335,000    31,765,722
September 2001
Unrealised gains
/(losses) at
30 September    355,047     (463,874)     1,149,556     (145,000)       895,729
    2001
               --------    ----------    ----------   ----------   -------------
             14,861,325     1,486,497    12,123,629     4,190,000    32,661,451
            ----------    -----------   ----------      ---------  -------------

ORDINARY SHARES
Cost or        3,008,395    18,499,902    3,949,353,     1,020,000    26,477,650
valuation at 30
September 2000
Purchases at     756,638             -       150,000       240,000     1,146,638
cost
Disposals at  (1,005,215)            -             -             -   (1,005,215)
cost or opening
valuation
Change in     (1,565,318)  (17,227,915)    4,182,776     (100,000)  (14,710,457)
unrealised gains
/(losses)
              ---------- ------------- ------------- ------------- -------------
Cost/valuation 1,194,500     1,271,987     8,282,129     1,160,000    11,908,616
at 30 September
2001
             ------------ ------------- ------------- ---------- -------------
Book cost at 
30              779,328       841,319     4,352,978     1,260,000     7,233,625
September 2001
Unrealised gains
/(losses) at
30 September    415,172       430,668     3,929,151     (100,000)     4,674,991
2001
                ---------  ----------   ----------    ---------- -------------
              1,194,500     1,271,987     8,282,129     1,160,000    11,908,616
              --------- ------------- ------------- ------------- -------------

    'C' SHARES
    
Cost or      18,755,675     1,062,464     3,003,502             -    22,821,641
valuation at 30
September 2000
Reclassification      -       506,114     (906,114)       400,000             -
Purchases at 15,141,900       100,000     3,521,095     2,675,000    21,437,995
cost
Disposals at(20,142,174)             -             -             -  (20,142,174)
cost or opening
valuation
Change in       (88,576)   (1,454,068)   (1,776,983)   (45,000)      (3,364,627)
unrealised gains
/(losses)
                 ------- ------------- ------------- ------------- -------------
Cost/valuation 13,666,825      214,510     3,841,500     3,030,000    20,752,835
at 30 September
2001
                -------- ------------- ------------- ------------- -------------
Book cost at 
30             13,726,950     1,109,052    6,621,095     3,075,000    24,532,097
September 2001
Unrealised gains
/(losses) at
30 September     (60,125)     (894,542)   (2,779,595)     (45,000)   (3,779,262)
    2001
               ----------    ----------- ---------- ------------- -------------
              13,666,825       214,510     3,841,500     3,030,000   20,752,835
               --------      ---------- ----------- ------------- -------------


    At 30 September 2001 'Listed investments' in the Ordinary Shares fund
    include one investment listed on the London Stock Exchange which cost 
    £475,758 (2000: £475,758) and was valued at £893,750 (2000: £2,456,250).
    All other 'Listed investments' relate to fixed interest securities.


    Monies held on deposit pending investment comprise cash temporarily on
    deposit and available to Cazenove for future investment.


 6. The financial information set out in these statements does not constitute
    the Company's statutory accounts for the years ended 30 September 2001 or
    2000 but is derived from those accounts. Statutory accounts for the year
    ended 30 September 2000 have been delivered to the Registrar of Companies
    and those for 2001 will be delivered following the Company's Annual
    General Meeting. The auditors have reported on those accounts: their
    reports were unqualified and did not contain statements under Section 237
    (2) or (3) of the Companies Act 1985.


 7. The Annual Report will be circulated by post to all shareholders shortly
    and copies will be available thereafter to members of the public from the
    Company's registered office at St Philips House, St Philips Place,
    Birmingham B3 2PP.


 8. The Annual General Meeting will be held at 11.00am on 26 February 2002 at
    the Company's registered office.


R W Blears

Company Secretary


Contacts:


Peter Dicks, Chairman


END